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02.05.2024 12:30:06 - dpa-AFX: GNW-Adhoc: CNH Industrial N.V. Reports First Quarter 2024 Results
First quarter consolidated revenue declined 10% on lower industry demand
First quarter diluted EPS at $0.31; adjusted diluted EPS at $0.33 ($0.35 in the
first quarter of 2023)
First quarter Agriculture segment adjusted EBIT margin down 200 bps year-over-
year to 12.5%; Construction up 150 bps to 6.7%
Cost reduction programs on track, helping to mitigate impact of slowing markets
Full-year guidance updated to reflect lower agriculture industry projections
Basildon, UK - May 2, 2024 - CNH Industrial N.V. (NYSE: CNHI) today reported results for the three months ended March 31, 2024, with net income of $402 million and diluted earnings per share of $0.31 compared with net income of $486
million and diluted earnings per share of $0.35 for the three months ended March
31, 2023. Consolidated revenues were $4.82 billion (down approximately 10%
compared to Q1 2023) and Net sales of Industrial Activities were $4.13 billion (down approximately 14% compared to Q1 2023). Net cash used in operating activities was $894 million and Industrial Free Cash Flow absorption was $1,209 million in Q1.
"The CNH team navigated a declining market environment in the first quarter, as lower industry demand persisted especially in South America and Europe. Anticipating these headwinds, we are continuing to improve what we can control -
production efficiency, disciplined commercial execution, judicious SG&A reductions, and thoughtful product and technology investments. As always, the team is meeting challenges head-on and working diligently to deliver solutions for our customers. I would like to thank our employees and dealers for their unwavering support of the world's farmers and builders."
Scott W. Wine, Chief Executive Officer --------------------
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of which Net sales of
Cash flow used in
operating activities (894) (701) (193)
Cash and cash
equivalents(()(2)) 3,236 4,322 (1,086)
Gross profit margin of
-------------------------------------------------------------------------------
Adjusted EBIT margin of Industrial
Net sales of Industrial Activities were $4.13 billion, a decrease of 14% when compared to the corresponding period from the previous year. This decline is mainly due to lower industry demand and dealer inventory management. Price realization continued to be favorable for Agriculture and essentially flat for Construction.
In Q1 2024, Net income was $402 million, with diluted earnings per share of $0.31 ($486 million and $0.35, respectively, in Q1 2023). Adjusted net income was $421 million with adjusted diluted earnings per share of $0.33. In comparison, in Q1 2023, adjusted net income was $475 million with adjusted diluted earnings per share of $0.35.
Gross profit margin of Industrial Activities was 22.7% (24.4% in Q1 2023). The decrease was driven by the Agriculture segment, whose margin was impacted by lower production volumes only partially compensated by price realization and production cost efficiencies. Construction gross profit margin increased across all regions for an aggregate improvement of 150 basis points.
Reported income tax expense was $77 million ($173 million in Q1 2023), and the effective tax rate (ETR) was 19.2% (27.6% in Q1 2023) with an adjusted ETR(()(3)) of 19.4% for the first quarter of 2024 (27.9% in Q1 2023). The Company now forecasts full year 2024 adjusted ETR to be in the range of 24-26%.
Cash flow used in operating activities in the quarter was $894 million ($701 million in Q1 2023). Free cash flow absorption of Industrial Activities was $1,209 million mainly due to seasonal inventory growth. Consolidated third party
debt was $27.8 billion as of March 31, 2024 ($27.3 billion as of December 31, 2023).
The Company's restructuring program continues to progress according to plan, and
CNH expects a run rate reduction of 10-15% on total labor and non-labor SG&A expenses. The Company has incurred a total of $78 million of restructuring charges through Q1 2024, of which $53 million was in 2023, and expects to incur up to $200 million in total.
Agriculture
-------------------------------------------------------------------------------
Adjusted EBIT ($
In North America, industry volume was down 15% year-over-year in the first quarter for tractors under 140 HP and was down 2% for tractors over 140 HP; combines were down 17%. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 15% and down 24%, respectively. South America tractor demand was down 18% and combine demand was down 40% continuing the negative trend of the second half of 2023. Asia Pacific tractor demand was down 12% while
combine demand was up 16% in the region as a whole, but down 22% in Australia and New Zealand.
Agriculture net sales decreased for the quarter by 14% to $3.37 billion primarily due to lower industry volume across all regions and dealer inventory management, partially offset by favorable price realization.
Gross profit margin was 23.8% (26.2% in Q1 2023) down 240 bps as a result of lower production volume and unfavorable mix; partially offset by improved price realization, along with lower purchasing and manufacturing costs.
Adjusted EBIT decreased to $421 million ($570 million in Q1 2023) driven by the lower volumes, partially offset by improved purchasing and manufacturing costs, and a continued reduction in SG&A expenses. R&D investments accounted for 6.0%
of sales (5.3% in Q1 2023). Income from unconsolidated subsidiaries increased $42 million year-over-year. Adjusted EBIT margin was 12.5% (14.5% in Q1 2023).
Construction
-------------------------------------------------------------------------------
Adjusted EBIT ($
Global industry volume for construction equipment decreased 1% year-over-year in
the first quarter for Heavy construction equipment; Light construction equipment
was down 8%. Aggregated demand decreased 14% in EMEA, decreased 6% in North America, decreased 10% in South America and increased 3% in Asia Pacific.
CNH Construction net sales decreased for the quarter by 11% to $758 million, due
to lower volume across all regions driven mainly by lower market demand.
Gross profit margin was 17.4%, up 150 bps compared to Q1 2023, mainly due to better purchasing and manufacturing costs, partially offset by unfavorable mix.
Adjusted EBIT was $51 million, an increase of $7 million from $44 million in Q1 2023, as a result of improved product costs and lower SG&A expenses, partially offset by the lower volumes. Adjusted EBIT margin at 6.7% increased by 150 bps year-over-year.
Financial Services
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Equity at quarter-end ($
million) 2,813 2,346 +467
Retail loan originations
($ million) 2,504 2,249 +11%
Revenues of Financial Services increased 25% due to favorable volumes and yields
across all regions, partially offset by lower used equipment sales due to decreased operating lease maturities.
Net income was $118 million in the first quarter of 2024, an increase of $40 million compared to the same quarter of 2023, primarily due to favorable volumes in all regions, margin improvement in South America, and a favorable effective tax rate due to discrete items in the quarter; partially offset by increased risk costs due to higher aged delinquencies in South America.
The managed portfolio (including unconsolidated joint ventures) was $28.7 billion as of March 31, 2024 (of which retail was 65% and wholesale was 35%), up
$4.2 billion compared to March 31, 2023 (up $4.3 billion on a constant currency basis).
At March 31, 2024, the receivables balance greater than 30 days past due as a percentage of receivables was 1.7% (1.4% as of March 31, 2023).
2024 Outlook
The Company forecasts that 2024 global industry retail sales will be lower in both the agriculture and construction equipment markets when compared to 2023.
In the aggregate for key markets where the Company competes, CNH previously estimated agriculture industry retail sales to be down between 10-15% but now projects industry volumes down approximately 15%, at the low end of the previous
range. Construction equipment industry retail sales are still expected to be down around 10% when compared to 2023.
CNH is continuing its efforts to improve through-cycle margins with its previously announced cost reduction programs focused on product costs and SG&A expenses. Both programs are progressing as planned and are expected to partially
offset the impact of the lower industry demand.
As a result of the lower agriculture industry sales projections, the Company is
updating its 2024 outlook as follows:
* Agriculture segment net sales(()(5)) down between 11% and 15% year-over-year
* Construction segment net sales(()(5)) down between 7% and 11% year-over-year
* Free Cash Flow of Industrial Activities(()(6)) between $1.1 and $1.3 billion
Notes
CNH reports quarterly and annual consolidated financial results under U.S. GAAP and annual consolidated financial results under EU-IFRS. The tables and discussion related to the financial results of the Company and its segments shown in this press release are prepared in accordance with U.S. GAAP.
1. c.c. means at constant currency.
2. Comparison vs. December 31, 2023
3. This item is a non-GAAP financial measure. Refer to the "Non-GAAP Financial
4. Certain financial information in this report has been presented by
b. Europe, Middle East, and Africa: member countries of the European Union,
c. South America: Central and South America, and the Caribbean Islands; and
5. Net sales reflecting the exchange rate of 1.09 EUR/USD.
6. The Company is unable to provide this reconciliation without unreasonable
Non-GAAP Financial Information
CNH monitors its operations through the use of several non-GAAP financial measures. CNH's management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers' ability to assess CNH's financial performance and financial
position. Management uses these non-GAAP measures to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions as they provide additional transparency with respect to our core operations. These non-GAAP financial measures have no standardized meaning under U.S. GAAP and are unlikely to be comparable to other similarly titled measures used by other companies and are not intended to be substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP.
CNH's non-GAAP financial measures are defined as follows:
shares outstanding during the period that takes into consideration potential
have not yet occurred and are difficult to predict with reasonable certainty
(Debt) is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets (primarily
directly comparable measure included in the consolidated balance sheets. Due
under operating leases, property, plant and equipment and intangible assets;
The tables attached to this press release provide reconciliations of the non- GAAP measures used in this press release to the most directly comparable GAAP measures.
Forward-looking Statements
All statements other than statements of historical fact contained in this press release including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. Forward-looking statements also include statements regarding the future performance of CNH and its subsidiaries on a standalone basis. These statements may include terminology such as "may", "will", "expect", "could", "should", "intend", "estimate", "anticipate", "believe", "outlook", "continue", "remain", "on track", "design", "target", "objective", "goal", "forecast", "projection", "prospects", "plan", or similar terminology. Forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties
and other factors, many of which are outside our control and are difficult to predict. If any of these risks and uncertainties materialize (or they occur with
a degree of severity that the Company is unable to predict) or other assumptions
underlying any of the forward-looking statements prove to be incorrect, including any assumptions regarding strategic plans, the actual results or developments may differ materially from any future results or developments expressed or implied by the forward-looking statements.
Factors, risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others: economic conditions in each of our markets, including the significant uncertainty caused by geopolitical events; production and supply chain disruptions, including industry capacity constraints, material availability, and global logistics delays and constraints; the many interrelated
factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products, changes in government policies regarding banking, monetary and fiscal policy; legislation, particularly pertaining to capital goods-related issues such as agriculture, the environment, debt relief and subsidy program policies, trade and commerce and infrastructure development;
government policies on international trade and investment, including sanctions, import quotas, capital controls and tariffs; volatility in international trade caused by the imposition of tariffs, sanctions, embargoes, and trade wars; actions of competitors in the various industries in which we compete; development and use of new technologies and technological difficulties; the interpretation of, or adoption of new, compliance requirements with respect to engine emissions, safety or other aspects of our products; labor relations; interest rates and currency exchange rates; inflation and deflation; energy prices; prices for agricultural commodities and material price increases; housing starts and other construction activity; our ability to obtain financing or to refinance existing debt; price pressure on new and used equipment; the resolution of pending litigation and investigations on a wide range of topics, including dealer and supplier litigation, intellectual property rights disputes,
product warranty and defective product claims, and emissions and/or fuel economy
regulatory and contractual issues; security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of CNH and its suppliers and dealers; security breaches with respect to our products; our pension plans and other post-employment obligations; political and civil unrest; volatility and deterioration of capital
and financial markets, including pandemics (such as the COVID-19 pandemic), terrorist attacks in Europe and elsewhere; the remediation of a material weakness; our ability to realize the anticipated benefits from our business initiatives as part of our strategic plan; including targeted restructuring actions to optimize our cost structure and improve the efficiency of our operations; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or
divestitures and other similar risks and uncertainties, and our success in managing the risks involved in the foregoing.
Forward-looking statements are based upon assumptions relating to the factors described in this press release, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside CNH's control. CNH expressly disclaims any intention or obligation to provide, update or revise any forward-looking statements in this announcement toreflect any
change in expectations or any change in events, conditions or circumstances on which these forward-looking statements are based.
Further information concerning CNH, including factors that potentially could materially affect its financial results, is included in the Company's reports and filings with the U.S. Securities and Exchange Commission ("SEC").
All future written and oral forward-looking statements by CNH or persons acting on the behalf of CNH are expressly qualified in their entirety by the cautionary
statements contained herein or referred to above.
Additional factors could cause actual results to differ from those expressed or implied by the forward-looking statements included in the Company's filings with
the SEC (including, but not limited to, the factors discussed in our 2023 Annual
Report and subsequent quarterly reports).
Conference Call and Webcast
Today, at 9:00 a.m. EDT (2:00 p.m. BST / 3:00 p.m. CEST), management will hold a
conference call to present first quarter 2024 results to financial analysts and
investors. The call can be followed live online at
https://bit.ly/CNH_Q1_2024 and a recording will be available later on the
Company's website www.cnh.com (http://www.cnh.com). A presentation will be made
available on the CNH website prior to the conference call.
CONTACTS
Media Inquiries - Laura Overall Tel +44 207 925 1964 or Rebecca Fabian Tel +1 312 515 2249
(Email mediarelations@cnh.com (mailto:mediarelations@cnh.com))
Investor Relations - Jason Omerza Tel +1 630 740 8079 or Federico Pavesi Tel +39 345 605 6218
(Email investor.relations@cnh.com (mailto:investor.relations@cnh.com))
CNH INDUSTRIAL N.V.
Consolidated Statements of Operations for the Three Months Ended March 31, 2024
and 2023
(Unaudited, U.S. GAAP)
Revenues
Costs and Expenses
Income (loss) of Consolidated Group before Income
Equity in income (loss) of unconsolidated
Net Income (loss) attributable to CNH Industrial
Earnings (loss) per share attributable to CNH
Industrial N.V.
Weighted average shares outstanding (in millions)
These Consolidated Statements of Operations should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2023 included in the Annual Report on Form 10-K. These Consolidated Statements of Operations represent the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V.
Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023
(Unaudited, U.S. GAAP)
Assets
Financial receivables from Iveco Group
Property, plant and equipment, net and
Liabilities and Equity
These Consolidated Balance Sheets should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the year ended
December 31, 2023 included in the Annual Report on Form 10-K. These Consolidated
Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V.
Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2024
and 2023
(Unaudited, U.S. GAAP)
Cash Flows from Operating Activities
Net income (loss) 402 486
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization expense excluding
assets under operating lease 103 86
Depreciation and amortization expense of assets
Undistributed (income) loss of unconsolidated
Changes in operating assets and liabilities:
Trade and financing receivables related to sales,
Cash Flows from Investing Activities
Proceeds from sale of assets, net of assets sold
under operating leases - -
Expenditures for property, plant and equipment and
intangible assets, net of assets under operating
Cash Flows from Financing Activities
Effect of foreign exchange rate changes on cash,
Net increase (decrease) in cash, cash equivalents
and restricted cash (1,086) (1,124)
Cash, cash equivalents and restricted cash,
Cash, cash equivalents and restricted cash, end of
These Consolidated Statements of Cash Flow should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the year ended December 31, 2023 included in the Annual Report on Form 10-K. These Consolidated Statements of Cash Flows represent the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V.
Supplemental Statements of Operations for the Three Months Ended March 31, 2024
and 2023
(Unaudited, U.S. GAAP)
Revenues
Net sales 4,131 - - 4,131 4,776 - - 4,776
Finance,
interest and
Costs and
Expenses
Cost of goods
sold 3,195 - - 3,195 3,611 - - 3,611
Selling,
general and
administrative
expenses 342 69 - 411 387 51 - 438
Research and
development
expenses 228 - - 228 231 - - 231
Restructuring
expenses 30 1 - 31 1 - - 1
Interest
Total Costs
Income (loss)
of
Consolidated
Group before
Income Taxes 270 132 - 402 522 104 - 626
Income tax
(expense)
benefit (58) (19) - (77) (144) (29) - (173)
Equity in
income (loss)
of
unconsolidated
subsidiaries
Net Income
(1)Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)Elimination of Financial Services' interest income earned from Industrial Activities.
(3)Elimination of Industrial Activities' interest expense to Financial Services.
CNH INDUSTRIAL N.V.
Supplemental Balance Sheets as of March 31, 2024 and December 31, 2023
(Unaudited, U.S. GAAP)
Assets
Cash and cash
equivalents 2,666 570 - 3,236 3,532 790 - 4,322
Restricted
cash 94 629 - 723 96 627 - 723
Financing
receivables,
net 281 24,327 (488) ((2)) 24,120 393 24,539 (683) ((2)) 24,249
Financial
receivables
from Iveco
Group N.V. 188 42 - 230 302 78 - 380
Inventories,
net 6,161 28 - 6,189 5,522 23 - 5,545
Property,
plant and
equipment, net
and equipment
on operating
lease 1,934 1,343 - 3,277 1,951 1,379 - 3,330
Intangible
assets, net 4,704 164 - 4,868 4,739 167 - 4,906
Other
receivables
Liabilities
and Equity
Debt 5,109 23,305 (634) ((2)) 27,780 4,433 23,721 (828) ((2)) 27,326
Financial
Payables to
Iveco Group
N.V. 4 66 - 70 6 140 - 146
Other payables
and
Total
Liabilities 13,711 24,818 (815) 37,714 13,796 25,350 (1,029) 38,117
Redeemable
noncontrolling
Total
Liabilities
(1)Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)This item includes the elimination of receivables/payables between Industrial
Activities and Financial Services.
(3)This item primarily represents the reclassification of deferred tax assets/liabilities in the same taxing jurisdiction and elimination of intercompany activity between Industrial Activities and Financial Services.
CNH INDUSTRIAL N.V.
Supplemental Statements of Cash Flows for the Three Months Ended March 31, 2024
and 2023
(Unaudited, U.S. GAAP)
Cash Flows
from Operating
Activities
Net income
(loss) 284 118 - 402 408 78 - 486
Adjustments to
reconcile net
income to net
cash provided
(used) by
operating
activities:
Depreciation
and
amortization
expense
excluding
assets under
operating
lease 102 1 - 103 85 1 - 86
Depreciation
and
amortization
expense of
assets under
operating
lease 2 43 - 45 1 45 - 46
(Gain) loss
from disposal
of assets, net - - - - 6 - - 6
Undistributed
(income) loss
of
unconsolidated
subsidiaries (12) (5) (60) ((2)) (77) 12 (3) - 9
Other non-cash
items, net 20 37 - 57 14 18 - 32
Changes in
operating
assets and
liabilities:
Provisions (40) 1 - (39) 114 (1) - 113
Deferred
income taxes 17 (35) - (18) (56) 4 - (52)
Trade and
financing
receivables
related to
sales, net (25) 6 (3) ((3)) (22) 9 (365) 1 (355)
Inventories,
Other assets
and
Net cash
provided
(used) by
operating
Cash Flows
from Investing
Activities
Additions to
retail
receivables - (1,769) - (1,769) - (1,601) - (1,601)
Collections of
retail
receivables - 1,476 - 1,476 - 1,376 - 1,376
Proceeds from
sale of assets
excluding
assets sold
under
operating
leases - - - - - - - -
Expenditures
for property,
plant and
equipment and
intangible
assets
excluding
assets under
operating
lease (96) - - (96) (90) - - (90)
Expenditures
for assets
under
operating
Net cash
provided
(used) by
investing
Cash Flows
from Financing
Activities
Net increase
(decrease) in
Net cash
provided
(used) by
financing
activities 271 (13) 61 319 (52) 355 - 303
Effect of
foreign
exchange rate
changes on
cash, cash
equivalents
and restricted
Net increase
(decrease) in
cash and cash
equivalents (868) (218) - (1,086) (1,011) (113) - (1,124)
Cash and cash
equivalents,
beginning of
Cash and cash
equivalents,
(1)Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)This item includes the elimination of dividends from Financial Services to Industrial Activities, which are included in Industrial Activities net cash used
in operating activities.
(3)This item includes the elimination of certain minor activities between Industrial Activities and Financial Services.
Other Supplemental Financial Information
(Unaudited)
Adjusted EBIT of Industrial Activities by Segment
------------------------------------------------------------------------
Industrial Activities segments
Reconciliation of Consolidated Net Income under U.S. GAAP to Adjusted EBIT of
Industrial Activities
-------------------------------------------------------------------------------
Less: Financial Services
Add back of the following Industrial Activities
items:
Interest expense of Industrial Activities, net of
Interest income and eliminations 32 4
Foreign exchange (gains) losses, net of Industrial
Activities - 6
Finance and non-service component of Pension and
other post-employment benefit costs of Industrial
Activities ((1)) 1 (1)
Adjustments for the following Industrial Activities
items:
(1) In the three months ended March 31, 2024 and 2023, this item includes the pre-tax gain of $6 million and $6 million as a result of the amortization over the 4 years of the $101 million positive impact from the 2021 modifications of a
healthcare plan in the U.S.
(2) In the three months ended March 31, 2024 this item did not include any discrete items. In the three months ended March 31, 2023 this item included a gain of $13 million in relation to the fair value remeasurement of Augmenta and Bennamann, partially offset by a $6 million loss on the sale of our Russia Financial Services business.
Other Supplemental Financial Information
(Unaudited)
Reconciliation of Total (Debt) to Net Cash (Debt) under U.S. GAAP -----------------------------------------------------------------------------------------------
Third party
(debt) (27,780) (27,326) (4,891) (4,132) (22,889) (23,194)
Intersegment
notes payable - - (218) (301) (416) (527)
Financial
payables to
Iveco Group
Total
(Debt)(()(1)) (27,850) (2
First quarter diluted EPS at $0.31; adjusted diluted EPS at $0.33 ($0.35 in the
first quarter of 2023)
First quarter Agriculture segment adjusted EBIT margin down 200 bps year-over-
year to 12.5%; Construction up 150 bps to 6.7%
Cost reduction programs on track, helping to mitigate impact of slowing markets
Full-year guidance updated to reflect lower agriculture industry projections
Basildon, UK - May 2, 2024 - CNH Industrial N.V. (NYSE: CNHI) today reported results for the three months ended March 31, 2024, with net income of $402 million and diluted earnings per share of $0.31 compared with net income of $486
million and diluted earnings per share of $0.35 for the three months ended March
31, 2023. Consolidated revenues were $4.82 billion (down approximately 10%
compared to Q1 2023) and Net sales of Industrial Activities were $4.13 billion (down approximately 14% compared to Q1 2023). Net cash used in operating activities was $894 million and Industrial Free Cash Flow absorption was $1,209 million in Q1.
"The CNH team navigated a declining market environment in the first quarter, as lower industry demand persisted especially in South America and Europe. Anticipating these headwinds, we are continuing to improve what we can control -
production efficiency, disciplined commercial execution, judicious SG&A reductions, and thoughtful product and technology investments. As always, the team is meeting challenges head-on and working diligently to deliver solutions for our customers. I would like to thank our employees and dealers for their unwavering support of the world's farmers and builders."
Scott W. Wine, Chief Executive Officer --------------------
2024 First Quarter Results
(all amounts $ million, comparison vs Q1 2023 - unless otherwise stated)
US-GAAP
-------------------------------------------------------------------------------
Change at
Q1 2024 Q1 2023 Change c.c.(()(1))
--------- --------- ----------- -------------------
Consolidated revenue 4,818 5,342 (10)% (10)%
of which Net sales of
Industrial Activities 4,131 4,776 (14)% (14)% Net income 402 486 (17)% Diluted EPS $ 0.31 0.35 (0.04)
Cash flow used in
operating activities (894) (701) (193)
Cash and cash
equivalents(()(2)) 3,236 4,322 (1,086)
Gross profit margin of
Industrial Activities 22.7% 24.4% (170) bps
NON-GAAP(()(3))
-------------------------------------------------------------------------------
Q1 2024 Q1 2023 Change
--------- --------- -----------
Adjusted EBIT of Industrial Activities 405 555 (150)
Adjusted EBIT margin of Industrial
Activities 9.8% 11.6% (180) bps Adjusted net income 421 475 (54) Adjusted diluted EPS $ 0.33 0.35 (0.02) Free cash flow of Industrial Activities (1,209) (673) (536)
Net sales of Industrial Activities were $4.13 billion, a decrease of 14% when compared to the corresponding period from the previous year. This decline is mainly due to lower industry demand and dealer inventory management. Price realization continued to be favorable for Agriculture and essentially flat for Construction.
In Q1 2024, Net income was $402 million, with diluted earnings per share of $0.31 ($486 million and $0.35, respectively, in Q1 2023). Adjusted net income was $421 million with adjusted diluted earnings per share of $0.33. In comparison, in Q1 2023, adjusted net income was $475 million with adjusted diluted earnings per share of $0.35.
Gross profit margin of Industrial Activities was 22.7% (24.4% in Q1 2023). The decrease was driven by the Agriculture segment, whose margin was impacted by lower production volumes only partially compensated by price realization and production cost efficiencies. Construction gross profit margin increased across all regions for an aggregate improvement of 150 basis points.
Reported income tax expense was $77 million ($173 million in Q1 2023), and the effective tax rate (ETR) was 19.2% (27.6% in Q1 2023) with an adjusted ETR(()(3)) of 19.4% for the first quarter of 2024 (27.9% in Q1 2023). The Company now forecasts full year 2024 adjusted ETR to be in the range of 24-26%.
Cash flow used in operating activities in the quarter was $894 million ($701 million in Q1 2023). Free cash flow absorption of Industrial Activities was $1,209 million mainly due to seasonal inventory growth. Consolidated third party
debt was $27.8 billion as of March 31, 2024 ($27.3 billion as of December 31, 2023).
The Company's restructuring program continues to progress according to plan, and
CNH expects a run rate reduction of 10-15% on total labor and non-labor SG&A expenses. The Company has incurred a total of $78 million of restructuring charges through Q1 2024, of which $53 million was in 2023, and expects to incur up to $200 million in total.
Agriculture
-------------------------------------------------------------------------------
Q1 2024 Q1 2023 Change Change at c.c.(()(1))
--------- --------- ----------- ----------------------
Net sales ($ million) 3,373 3,927 (14)% (15)%
Adjusted EBIT ($
million) 421 570 (149) Adjusted EBIT margin 12.5% 14.5% (200) bps
In North America, industry volume was down 15% year-over-year in the first quarter for tractors under 140 HP and was down 2% for tractors over 140 HP; combines were down 17%. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 15% and down 24%, respectively. South America tractor demand was down 18% and combine demand was down 40% continuing the negative trend of the second half of 2023. Asia Pacific tractor demand was down 12% while
combine demand was up 16% in the region as a whole, but down 22% in Australia and New Zealand.
Agriculture net sales decreased for the quarter by 14% to $3.37 billion primarily due to lower industry volume across all regions and dealer inventory management, partially offset by favorable price realization.
Gross profit margin was 23.8% (26.2% in Q1 2023) down 240 bps as a result of lower production volume and unfavorable mix; partially offset by improved price realization, along with lower purchasing and manufacturing costs.
Adjusted EBIT decreased to $421 million ($570 million in Q1 2023) driven by the lower volumes, partially offset by improved purchasing and manufacturing costs, and a continued reduction in SG&A expenses. R&D investments accounted for 6.0%
of sales (5.3% in Q1 2023). Income from unconsolidated subsidiaries increased $42 million year-over-year. Adjusted EBIT margin was 12.5% (14.5% in Q1 2023).
Construction
-------------------------------------------------------------------------------
Q1 2024 Q1 2023 Change Change at c.c.(()(1))
--------- --------- ---------- ----------------------
Net sales ($ million) 758 849 (11)% (11)%
Adjusted EBIT ($
million) 51 44 +7 Adjusted EBIT margin 6.7% 5.2% +150 bps
Global industry volume for construction equipment decreased 1% year-over-year in
the first quarter for Heavy construction equipment; Light construction equipment
was down 8%. Aggregated demand decreased 14% in EMEA, decreased 6% in North America, decreased 10% in South America and increased 3% in Asia Pacific.
CNH Construction net sales decreased for the quarter by 11% to $758 million, due
to lower volume across all regions driven mainly by lower market demand.
Gross profit margin was 17.4%, up 150 bps compared to Q1 2023, mainly due to better purchasing and manufacturing costs, partially offset by unfavorable mix.
Adjusted EBIT was $51 million, an increase of $7 million from $44 million in Q1 2023, as a result of improved product costs and lower SG&A expenses, partially offset by the lower volumes. Adjusted EBIT margin at 6.7% increased by 150 bps year-over-year.
Financial Services
-------------------------------------------------------------------------------
Q1 2024 Q1 2023 Change Change at c.c.(()(1))
--------- --------- -------- ----------------------
Revenue ($ million) 685 549 +25% +23%
Net income ($ million) 118 78 +40
Equity at quarter-end ($
million) 2,813 2,346 +467
Retail loan originations
($ million) 2,504 2,249 +11%
Revenues of Financial Services increased 25% due to favorable volumes and yields
across all regions, partially offset by lower used equipment sales due to decreased operating lease maturities.
Net income was $118 million in the first quarter of 2024, an increase of $40 million compared to the same quarter of 2023, primarily due to favorable volumes in all regions, margin improvement in South America, and a favorable effective tax rate due to discrete items in the quarter; partially offset by increased risk costs due to higher aged delinquencies in South America.
The managed portfolio (including unconsolidated joint ventures) was $28.7 billion as of March 31, 2024 (of which retail was 65% and wholesale was 35%), up
$4.2 billion compared to March 31, 2023 (up $4.3 billion on a constant currency basis).
At March 31, 2024, the receivables balance greater than 30 days past due as a percentage of receivables was 1.7% (1.4% as of March 31, 2023).
2024 Outlook
The Company forecasts that 2024 global industry retail sales will be lower in both the agriculture and construction equipment markets when compared to 2023.
In the aggregate for key markets where the Company competes, CNH previously estimated agriculture industry retail sales to be down between 10-15% but now projects industry volumes down approximately 15%, at the low end of the previous
range. Construction equipment industry retail sales are still expected to be down around 10% when compared to 2023.
CNH is continuing its efforts to improve through-cycle margins with its previously announced cost reduction programs focused on product costs and SG&A expenses. Both programs are progressing as planned and are expected to partially
offset the impact of the lower industry demand.
As a result of the lower agriculture industry sales projections, the Company is
updating its 2024 outlook as follows:
* Agriculture segment net sales(()(5)) down between 11% and 15% year-over-year
including currency translation effects (from down 8% to 12% previously)
* Agriculture segment adjusted EBIT margin between 13.5% and 14.5% (from
between 14.0% and 15.0% previously)
* Construction segment net sales(()(5)) down between 7% and 11% year-over-year
including currency translation effects (unchanged) * Construction segment adjusted EBIT margin between 5.0% and 6.0% (unchanged)
* Free Cash Flow of Industrial Activities(()(6)) between $1.1 and $1.3 billion
(from between $1.2 to $1.4 billion previously)
* Adjusted diluted EPS(()(6)) between $1.45 to $1.55 (from between $1.50 to
$1.60 previously)
Notes
CNH reports quarterly and annual consolidated financial results under U.S. GAAP and annual consolidated financial results under EU-IFRS. The tables and discussion related to the financial results of the Company and its segments shown in this press release are prepared in accordance with U.S. GAAP.
1. c.c. means at constant currency.
2. Comparison vs. December 31, 2023
3. This item is a non-GAAP financial measure. Refer to the "Non-GAAP Financial
Information" section of this press release for information regarding non-
GAAP financial measures. Refer to the specific table in the "Other
Supplemental Financial Information" section of this press release for the
reconciliation between the non-GAAP financial measure and the most
comparable GAAP financial measure.
4. Certain financial information in this report has been presented by
geographic area. Our geographical regions are: (a) North America; (b)
Europe, Middle East and Africa ("EMEA"); (c) South America and (d) Asia
Pacific. The geographic designations have the following meanings:
a. North America: United States, Canada, and Mexico;
b. Europe, Middle East, and Africa: member countries of the European Union,
European Free Trade Association, the United Kingdom, Ukraine and
Balkans, Russia, Turkey, Uzbekistan, Pakistan, the African continent,
and the Middle East;
c. South America: Central and South America, and the Caribbean Islands; and
d. Asia Pacific: Continental Asia (including the India subcontinent),
Indonesia and Oceania.
5. Net sales reflecting the exchange rate of 1.09 EUR/USD.
6. The Company is unable to provide this reconciliation without unreasonable
effort due to the uncertainty and inherent difficulty of predicting the
occurrence, the financial impact, and the periods in which the adjustments
may be recognized. For the same reasons, the Company is unable to address
the probable significance of the unavailable information, which could be
material to future results.
Non-GAAP Financial Information
CNH monitors its operations through the use of several non-GAAP financial measures. CNH's management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers' ability to assess CNH's financial performance and financial
position. Management uses these non-GAAP measures to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions as they provide additional transparency with respect to our core operations. These non-GAAP financial measures have no standardized meaning under U.S. GAAP and are unlikely to be comparable to other similarly titled measures used by other companies and are not intended to be substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP.
CNH's non-GAAP financial measures are defined as follows:
* Adjusted EBIT of Industrial Activities under U.S. GAAP is defined as net
income (loss) before the following items: Income taxes, Financial Services'
results, Industrial Activities' interest expenses, net, foreign exchange
gains/losses, finance and non-service component of pension and other post-
employment benefit costs, restructuring expenses, and certain non-recurring
items. In particular, non-recurring items are specifically disclosed items
that management considers rare or discrete events that are infrequent in
nature and not reflective of on-going operational activities.
* Adjusted EBIT Margin of Industrial Activities: is computed by dividing
Adjusted EBIT of Industrial Activities by Net Sales of Industrial
Activities.
* Adjusted Net Income (Loss): is defined as net income (loss), less
restructuring charges and non-recurring items, after tax.
* Adjusted Diluted EPS: is computed by dividing Adjusted Net Income (loss)
attributable to CNH Industrial N.V. by a weighted average number of common
shares outstanding during the period that takes into consideration potential
common shares outstanding deriving from the CNH share-based payment awards,
when inclusion is not anti-dilutive. When we provide guidance for adjusted
diluted EPS, we do not provide guidance on an earnings per share basis
because the GAAP measure will include potentially significant items that
have not yet occurred and are difficult to predict with reasonable certainty
prior to year-end.
* Adjusted Income Tax (Expense) Benefit: is defined as income taxes less the
tax effect of restructuring expenses and non-recurring items, and non-
recurring tax charges or benefits.
* Adjusted Effective Tax Rate (Adjusted ETR): is computed by dividing a)
adjusted income taxes by b) income (loss) before income taxes and equity in
income of unconsolidated subsidiaries and affiliates, less restructuring
expenses and non-recurring items.
* Net Cash (Debt) and Net Cash (Debt) of Industrial Activities: Net Cash
(Debt) is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets (primarily
current securities, short-term deposits and investments towards high-credit
rating counterparties) and derivative hedging debt. CNH provides the
reconciliation of Net Cash (Debt) to Total (Debt), which is the most
directly comparable measure included in the consolidated balance sheets. Due
to different sources of cash flows used for the repayment of the debt
between Industrial Activities and Financial Services (by cash from
operations for Industrial Activities and by collection of financing
receivables for Financial Services), management separately evaluates the
cash flow performance of Industrial Activities using Net Cash (Debt) of
Industrial Activities.
* Free Cash Flow of Industrial Activities (or Industrial Free Cash Flow):
refers to Industrial Activities only, and is computed as consolidated cash
flow from operating activities less: cash flow from operating activities of
Financial Services; investments of Industrial Activities in assets sold
under operating leases, property, plant and equipment and intangible assets;
change in derivatives hedging debt of Industrial Activities; as well as
other changes and intersegment eliminations.
* Change excl. FX or Constant Currency: CNH discusses the fluctuations in
revenues on a constant currency basis by applying the prior year average
exchange rates to current year's revenues expressed in local currency in
order to eliminate the impact of foreign exchange rate fluctuations.
The tables attached to this press release provide reconciliations of the non- GAAP measures used in this press release to the most directly comparable GAAP measures.
Forward-looking Statements
All statements other than statements of historical fact contained in this press release including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. Forward-looking statements also include statements regarding the future performance of CNH and its subsidiaries on a standalone basis. These statements may include terminology such as "may", "will", "expect", "could", "should", "intend", "estimate", "anticipate", "believe", "outlook", "continue", "remain", "on track", "design", "target", "objective", "goal", "forecast", "projection", "prospects", "plan", or similar terminology. Forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties
and other factors, many of which are outside our control and are difficult to predict. If any of these risks and uncertainties materialize (or they occur with
a degree of severity that the Company is unable to predict) or other assumptions
underlying any of the forward-looking statements prove to be incorrect, including any assumptions regarding strategic plans, the actual results or developments may differ materially from any future results or developments expressed or implied by the forward-looking statements.
Factors, risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others: economic conditions in each of our markets, including the significant uncertainty caused by geopolitical events; production and supply chain disruptions, including industry capacity constraints, material availability, and global logistics delays and constraints; the many interrelated
factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products, changes in government policies regarding banking, monetary and fiscal policy; legislation, particularly pertaining to capital goods-related issues such as agriculture, the environment, debt relief and subsidy program policies, trade and commerce and infrastructure development;
government policies on international trade and investment, including sanctions, import quotas, capital controls and tariffs; volatility in international trade caused by the imposition of tariffs, sanctions, embargoes, and trade wars; actions of competitors in the various industries in which we compete; development and use of new technologies and technological difficulties; the interpretation of, or adoption of new, compliance requirements with respect to engine emissions, safety or other aspects of our products; labor relations; interest rates and currency exchange rates; inflation and deflation; energy prices; prices for agricultural commodities and material price increases; housing starts and other construction activity; our ability to obtain financing or to refinance existing debt; price pressure on new and used equipment; the resolution of pending litigation and investigations on a wide range of topics, including dealer and supplier litigation, intellectual property rights disputes,
product warranty and defective product claims, and emissions and/or fuel economy
regulatory and contractual issues; security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of CNH and its suppliers and dealers; security breaches with respect to our products; our pension plans and other post-employment obligations; political and civil unrest; volatility and deterioration of capital
and financial markets, including pandemics (such as the COVID-19 pandemic), terrorist attacks in Europe and elsewhere; the remediation of a material weakness; our ability to realize the anticipated benefits from our business initiatives as part of our strategic plan; including targeted restructuring actions to optimize our cost structure and improve the efficiency of our operations; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or
divestitures and other similar risks and uncertainties, and our success in managing the risks involved in the foregoing.
Forward-looking statements are based upon assumptions relating to the factors described in this press release, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside CNH's control. CNH expressly disclaims any intention or obligation to provide, update or revise any forward-looking statements in this announcement toreflect any
change in expectations or any change in events, conditions or circumstances on which these forward-looking statements are based.
Further information concerning CNH, including factors that potentially could materially affect its financial results, is included in the Company's reports and filings with the U.S. Securities and Exchange Commission ("SEC").
All future written and oral forward-looking statements by CNH or persons acting on the behalf of CNH are expressly qualified in their entirety by the cautionary
statements contained herein or referred to above.
Additional factors could cause actual results to differ from those expressed or implied by the forward-looking statements included in the Company's filings with
the SEC (including, but not limited to, the factors discussed in our 2023 Annual
Report and subsequent quarterly reports).
Conference Call and Webcast
Today, at 9:00 a.m. EDT (2:00 p.m. BST / 3:00 p.m. CEST), management will hold a
conference call to present first quarter 2024 results to financial analysts and
investors. The call can be followed live online at
https://bit.ly/CNH_Q1_2024 and a recording will be available later on the
Company's website www.cnh.com (http://www.cnh.com). A presentation will be made
available on the CNH website prior to the conference call.
CONTACTS
Media Inquiries - Laura Overall Tel +44 207 925 1964 or Rebecca Fabian Tel +1 312 515 2249
(Email mediarelations@cnh.com (mailto:mediarelations@cnh.com))
Investor Relations - Jason Omerza Tel +1 630 740 8079 or Federico Pavesi Tel +39 345 605 6218
(Email investor.relations@cnh.com (mailto:investor.relations@cnh.com))
CNH INDUSTRIAL N.V.
Consolidated Statements of Operations for the Three Months Ended March 31, 2024
and 2023
(Unaudited, U.S. GAAP)
Three Months Ended March
31,
-------------------------
($ million) 2024 2023
------- -----------------
Revenues
Net sales 4,131 4,776
Finance, interest and other income 687 566
------- -----------------
Total Revenues 4,818 5,342
------- -----------------
Costs and Expenses
Cost of goods sold 3,195 3,611
Selling, general and administrative expenses 411 438
Research and development expenses 228 231
Restructuring expenses 31 1
Interest expense 394 272
Other, net 157 163
------- -----------------
Total Costs and Expenses 4,416 4,716
------- -----------------
Income (loss) of Consolidated Group before Income
Taxes 402 626 Income tax (expense) benefit (77) (173)
Equity in income (loss) of unconsolidated
subsidiaries and affiliates 77 33
------- -----------------
Net Income (loss) 402 486
Net income attributable to noncontrolling interests 1 4
------- -----------------
Net Income (loss) attributable to CNH Industrial
N.V. 401 482
------- -----------------
Earnings (loss) per share attributable to CNH
Industrial N.V.
Basic 0.32 0.36 Diluted 0.31 0.35
Weighted average shares outstanding (in millions)
Basic 1,260 1,342 Diluted 1,274 1,359 Cash dividends declared per common share - -
These Consolidated Statements of Operations should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2023 included in the Annual Report on Form 10-K. These Consolidated Statements of Operations represent the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V.
Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023
(Unaudited, U.S. GAAP)
($ million) March 31, 2024 December 31, 2023
---------------- ------------------
Assets
Cash and cash equivalents 3,236 4,322 Restricted cash 723 723 Financing receivables, net 24,120 24,249
Financial receivables from Iveco Group
N.V. 230 380 Inventories, net 6,189 5,545
Property, plant and equipment, net and
equipment under operating lease 3,277 3,330
Intangible assets, net 4,868 4,906
Other receivables and assets 3,083 2,896
---------------- ------------------
Total Assets 45,726 46,351
---------------- ------------------
Liabilities and Equity
Debt 27,780 27,326
Financial payables to Iveco Group N.V. 70 146
Other payables and liabilities 9,864 10,645
---------------- ------------------
Total Liabilities 37,714 38,117
Redeemable noncontrolling interest 57 54
Equity 7,955 8,180
---------------- ------------------
Total Liabilities and Equity 45,726 46,351
---------------- ------------------
These Consolidated Balance Sheets should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the year ended
December 31, 2023 included in the Annual Report on Form 10-K. These Consolidated
Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V.
Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2024
and 2023
(Unaudited, U.S. GAAP)
Three Months Ended March
31,
-------------------------
($ million) 2024 2023
--------- ---------------
Cash Flows from Operating Activities
Net income (loss) 402 486
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization expense excluding
assets under operating lease 103 86
Depreciation and amortization expense of assets
under operating lease 45 46 (Gain) loss from disposal of assets - 6
Undistributed (income) loss of unconsolidated
subsidiaries (77) 9 Other non-cash items 57 32
Changes in operating assets and liabilities:
Provisions (39) 113 Deferred income taxes (18) (52)
Trade and financing receivables related to sales,
net (22) (355)
Inventories, net (681) (1,057)
Trade payables (332) 172
Other assets and liabilities (332) (187)
--------- ---------------
Net cash provided (used) by operating activities (894) (701)
--------- ---------------
Cash Flows from Investing Activities
Additions to retail receivables (1,769) (1,601) Collections of retail receivables 1,476 1,376
Proceeds from sale of assets, net of assets sold
under operating leases - -
Expenditures for property, plant and equipment and
intangible assets, net of assets under operating
lease (96) (90)
Expenditures for assets under operating lease (106) (107)
Other, net 76 (327)
--------- ---------------
Net cash provided (used) by investing activities (419) (749)
--------- ---------------
Cash Flows from Financing Activities
Net increase (decrease) in debt 901 375
Dividends paid (1) (1)
Other (581) (71)
--------- ---------------
Net cash provided (used) by financing activities 319 303
--------- ---------------
Effect of foreign exchange rate changes on cash,
cash equivalents and restricted cash (92) 23
--------- ---------------
Net increase (decrease) in cash, cash equivalents
and restricted cash (1,086) (1,124)
Cash, cash equivalents and restricted cash,
beginning of year 5,045 5,129
--------- ---------------
Cash, cash equivalents and restricted cash, end of
period 3,959 4,005
--------- ---------------
These Consolidated Statements of Cash Flow should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the year ended December 31, 2023 included in the Annual Report on Form 10-K. These Consolidated Statements of Cash Flows represent the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V.
Supplemental Statements of Operations for the Three Months Ended March 31, 2024
and 2023
(Unaudited, U.S. GAAP)
Three Months Ended March 31, 2024 Three Months Ended March 31, 2023
----------------------------------------------------------------- ----------------------------------------------------------------
Industrial Financial Industrial Financial
($ million) Activities(()(1)) Services Eliminations Consolidated Activities(()(1)) Services Eliminations Consolidated
----------------------------------------------------------------------------------------------------------------------------------
Revenues
Net sales 4,131 - - 4,131 4,776 - - 4,776
Finance,
interest and
other income 42 685 (40) ((2)) 687 57 549 (40) ((2)) 566
----------------------------------------------------------------- ----------------------------------------------------------------
Total Revenues 4,173 685 (40) 4,818 4,833 549 (40) 5,342
----------------------------------------------------------------- ----------------------------------------------------------------
Costs and
Expenses
Cost of goods
sold 3,195 - - 3,195 3,611 - - 3,611
Selling,
general and
administrative
expenses 342 69 - 411 387 51 - 438
Research and
development
expenses 228 - - 228 231 - - 231
Restructuring
expenses 30 1 - 31 1 - - 1
Interest
expense 74 360 (40) ((3)) 394 61 251 (40) ((3)) 272
Other, net 34 123 - 157 20 143 - 163
----------------------------------------------------------------- ----------------------------------------------------------------
Total Costs
and Expenses 3,903 553 (40) 4,416 4,311 445 (40) 4,716
----------------------------------------------------------------- ----------------------------------------------------------------
Income (loss)
of
Consolidated
Group before
Income Taxes 270 132 - 402 522 104 - 626
Income tax
(expense)
benefit (58) (19) - (77) (144) (29) - (173)
Equity in
income (loss)
of
unconsolidated
subsidiaries
and affiliates 72 5 - 77 30 3 - 33
----------------------------------------------------------------- ----------------------------------------------------------------
Net Income
(loss) 284 118 - 402 408 78 - 486
----------------------------------------------------------------- ----------------------------------------------------------------
(1)Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)Elimination of Financial Services' interest income earned from Industrial Activities.
(3)Elimination of Industrial Activities' interest expense to Financial Services.
CNH INDUSTRIAL N.V.
Supplemental Balance Sheets as of March 31, 2024 and December 31, 2023
(Unaudited, U.S. GAAP)
March 31, 2024 December 31, 2023
----------------------------------------------------------------- ----------------------------------------------------------------
Industrial Financial Industrial Financial
($ million) Activities(()(1)) Services Eliminations Consolidated Activities(()(1)) Services Eliminations Consolidated
----------------------------------------------------------------- ----------------------------------------------------------------
Assets
Cash and cash
equivalents 2,666 570 - 3,236 3,532 790 - 4,322
Restricted
cash 94 629 - 723 96 627 - 723
Financing
receivables,
net 281 24,327 (488) ((2)) 24,120 393 24,539 (683) ((2)) 24,249
Financial
receivables
from Iveco
Group N.V. 188 42 - 230 302 78 - 380
Inventories,
net 6,161 28 - 6,189 5,522 23 - 5,545
Property,
plant and
equipment, net
and equipment
on operating
lease 1,934 1,343 - 3,277 1,951 1,379 - 3,330
Intangible
assets, net 4,704 164 - 4,868 4,739 167 - 4,906
Other
receivables
and assets 2,882 528 (327) ((3)) 3,083 2,706 536 (346) ((3)) 2,896
----------------------------------------------------------------- ----------------------------------------------------------------
Total Assets 18,910 27,631 (815) 45,726 19,241 28,139 (1,029) 46,351
----------------------------------------------------------------- ----------------------------------------------------------------
Liabilities
and Equity
Debt 5,109 23,305 (634) ((2)) 27,780 4,433 23,721 (828) ((2)) 27,326
Financial
Payables to
Iveco Group
N.V. 4 66 - 70 6 140 - 146
Other payables
and
liabilities 8,598 1,447 (181) ((3)) 9,864 9,357 1,489 (201) ((3)) 10,645
----------------------------------------------------------------------------------------------------------------------------------
Total
Liabilities 13,711 24,818 (815) 37,714 13,796 25,350 (1,029) 38,117
Redeemable
noncontrolling
interest 57 - - 57 54 - - 54
Equity 5,142 2,813 - 7,955 5,391 2,789 - 8,180
----------------------------------------------------------------- ----------------------------------------------------------------
Total
Liabilities
and Equity 18,910 27,631 (815) 45,726 19,241 28,139 (1,029) 46,351
----------------------------------------------------------------- ----------------------------------------------------------------
(1)Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)This item includes the elimination of receivables/payables between Industrial
Activities and Financial Services.
(3)This item primarily represents the reclassification of deferred tax assets/liabilities in the same taxing jurisdiction and elimination of intercompany activity between Industrial Activities and Financial Services.
CNH INDUSTRIAL N.V.
Supplemental Statements of Cash Flows for the Three Months Ended March 31, 2024
and 2023
(Unaudited, U.S. GAAP)
----------------------------------------------------------------- ----------------------------------------------------------------
Three Months Ended March 31, 2024 Three Months Ended March 31, 2023
----------------------------------------------------------------- ----------------------------------------------------------------
Industrial Financial Industrial Financial
($ million) Activities(()(1)) Services Eliminations Consolidated Activities(()(1)) Services Eliminations Consolidated
----------------------------------------------------------------- ----------------------------------------------------------------
Cash Flows
from Operating
Activities
Net income
(loss) 284 118 - 402 408 78 - 486
Adjustments to
reconcile net
income to net
cash provided
(used) by
operating
activities:
Depreciation
and
amortization
expense
excluding
assets under
operating
lease 102 1 - 103 85 1 - 86
Depreciation
and
amortization
expense of
assets under
operating
lease 2 43 - 45 1 45 - 46
(Gain) loss
from disposal
of assets, net - - - - 6 - - 6
Undistributed
(income) loss
of
unconsolidated
subsidiaries (12) (5) (60) ((2)) (77) 12 (3) - 9
Other non-cash
items, net 20 37 - 57 14 18 - 32
Changes in
operating
assets and
liabilities:
Provisions (40) 1 - (39) 114 (1) - 113
Deferred
income taxes 17 (35) - (18) (56) 4 - (52)
Trade and
financing
receivables
related to
sales, net (25) 6 (3) ((3)) (22) 9 (365) 1 (355)
Inventories,
net (761) 80 - (681) (1,150) 93 - (1,057) Trade payables (307) (28) 3 ((3)) (332) 203 (31) -172
Other assets
and
liabilities (372) 40 - (332) (189) 3 (1) ((3)) (187)
----------------------------------------------------------------- ----------------------------------------------------------------
Net cash
provided
(used) by
operating
activities (1,092) 258 (60) (894) (543) (158) - (701)
----------------------------------------------------------------- ----------------------------------------------------------------
Cash Flows
from Investing
Activities
Additions to
retail
receivables - (1,769) - (1,769) - (1,601) - (1,601)
Collections of
retail
receivables - 1,476 - 1,476 - 1,376 - 1,376
Proceeds from
sale of assets
excluding
assets sold
under
operating
leases - - - - - - - -
Expenditures
for property,
plant and
equipment and
intangible
assets
excluding
assets under
operating
lease (96) - - (96) (90) - - (90)
Expenditures
for assets
under
operating
lease (4) (102) - (106) (4) (103) - (107)
Other, net 123 (46) (1) 76 (345) 18 - (327)
------------------- ----------- --------------------------------- ----------------------------------------------------------------
Net cash
provided
(used) by
investing
activities 23 (441) (1) (419) (439) (310) - (749)
------------------- ----------- --------------------------------- ------------------- ----------- --------------------------------
Cash Flows
from Financing
Activities
Net increase
(decrease) in
debt 853 48 - 901 20 355 - 375
Dividends paid (1) (60) 60 ((2)) (1) (1) - - (1)
Other (581) (1) 1 (581) (71) - - (71)
------------------- ----------- --------------------------------- ------------------- ----------- --------------------------------
Net cash
provided
(used) by
financing
activities 271 (13) 61 319 (52) 355 - 303
Effect of
foreign
exchange rate
changes on
cash, cash
equivalents
and restricted
cash (70) (22) - (92) 23 - - 23
------------------- ----------- --------------------------------- ------------------- ----------- --------------------------------
Net increase
(decrease) in
cash and cash
equivalents (868) (218) - (1,086) (1,011) (113) - (1,124)
Cash and cash
equivalents,
beginning of
year 3,628 1,417 - 5,045 3,960 1,169 - 5,129
------------------- ----------- --------------------------------- ------------------- ----------- --------------------------------
Cash and cash
equivalents,
end of period 2,760 1,199 - 3,959 2,949 1,056 - 4,005
------------------- ----------- --------------------------------- ------------------- ----------- --------------------------------
(1)Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)This item includes the elimination of dividends from Financial Services to Industrial Activities, which are included in Industrial Activities net cash used
in operating activities.
(3)This item includes the elimination of certain minor activities between Industrial Activities and Financial Services.
Other Supplemental Financial Information
(Unaudited)
Adjusted EBIT of Industrial Activities by Segment
------------------------------------------------------------------------
Three Months Ended March
31,
-------------------------
($ million) 2024 2023
------ ------------------
Industrial Activities segments
Agriculture 421 570
Construction 51 44
Unallocated items, eliminations and other (67) (59)
------ ------------------
Total Adjusted EBIT of Industrial Activities 405 555
------ ------------------
Reconciliation of Consolidated Net Income under U.S. GAAP to Adjusted EBIT of
Industrial Activities
-------------------------------------------------------------------------------
Three Months Ended March
31,
-------------------------
($ million) 2024 2023
------ ------------------
Net Income 402 486
Less: Consolidated income tax expense (77) (173)
Consolidated income before taxes 479 659
Less: Financial Services
Financial Services Net Income 118 78 Financial Services Income Taxes 19 29
Add back of the following Industrial Activities
items:
Interest expense of Industrial Activities, net of
Interest income and eliminations 32 4
Foreign exchange (gains) losses, net of Industrial
Activities - 6
Finance and non-service component of Pension and
other post-employment benefit costs of Industrial
Activities ((1)) 1 (1)
Adjustments for the following Industrial Activities
items:
Restructuring expenses 30 1
Other discrete items(()(2)) - (7)
------ ------------------
Total Adjusted EBIT of Industrial Activities 405 555
------ ------------------
(1) In the three months ended March 31, 2024 and 2023, this item includes the pre-tax gain of $6 million and $6 million as a result of the amortization over the 4 years of the $101 million positive impact from the 2021 modifications of a
healthcare plan in the U.S.
(2) In the three months ended March 31, 2024 this item did not include any discrete items. In the three months ended March 31, 2023 this item included a gain of $13 million in relation to the fair value remeasurement of Augmenta and Bennamann, partially offset by a $6 million loss on the sale of our Russia Financial Services business.
Other Supplemental Financial Information
(Unaudited)
Reconciliation of Total (Debt) to Net Cash (Debt) under U.S. GAAP -----------------------------------------------------------------------------------------------
Consolidated Industrial Activities Financial Services
-------------------------- -------------------------- -------------------------
March 31, December 31, March 31, December 31, March 31, December 31,
($ million) 2024 2023 2024 2023 2024 2023
----------- -------------- ----------- -------------- ----------- -------------
Third party
(debt) (27,780) (27,326) (4,891) (4,132) (22,889) (23,194)
Intersegment
notes payable - - (218) (301) (416) (527)
Financial
payables to
Iveco Group
N.V. (70) (146) (4) (6) (66) (140)
----------- -------------- ----------- -------------- ----------- -------------
Total
(Debt)(()(1)) (27,850) (2
| Name | WKN | Börse | Kurs | Datum/Zeit | Diff. | Diff. % | Geld | Brief | Erster | Schluss | |
|---|---|---|---|---|---|---|---|---|---|---|---|
 |
CNH INDUSTRIAL EO -,01 | A1W599 | Frankfurt | 9,614 | 03.06.24 08:16:58 | -0,082 | -0,85% | 9,604 | 9,804 | 9,614 | 9,696 |
