Q4 Consolidatedrevenues of $6,943million (up 26.7% compared to Q42021 for continuingoperations)
Net income of $592million, Adjusted Net Income of $486million, with diluted EPSof $0.43and adjusted diluted EPS of $0.36
Adjusted EBIT of Industrial Activities of $680million (up $302million compared to Q42021)
Net cash provided byoperating activities of $1,443million andIndustrialFree Cash Flow of $2,049million
Net sales for Industrial Activities of $6,352 million (up $1,358million compared to Q4 2021)
The board intends to recommendan annual cash dividend of €0.36(approximately $0.38) per share
Financial results presented under U.S. GAAP
The CNH Industrial team delivered a strongfourthquarter contributing to record full year revenue and income. Sharp execution andimprovingsupply chain management generated $1.6B of full year industrial freecash flow. We are pleased to have resolved the UAW strikeand are eager to continue delivering increased value to our dealers and customers. We also announced today our intention tomove to a single listing in New York,withplansto exit the Milan exchange as expeditiouslyas possible. Our precision and autonomy offerings were on full display at our Tech Day in December, and further innovations and integration with Raven will drivethe success of our farm and construction customers. We seecontinuingstrength in most end markets, and with better performing supply chains and moderating inflation we are confident we will build on our robust foundation.
Scott W. Wine, Chief Executive Officer
2022 FourthQuarter Results
(all amounts $ million, comparison vs Q4 2021 continuing operations - unless otherwise stated)
US-GAAP | |||||||
Q42022 | PY(1) | Change | Change at c.c.(3) | ||||
Consolidated revenue | 6,943 | 5,480 | +1,463 | +31% | |||
of which Net sales of Industrial Activities | 6,352 | 4,994 | +1,358 | +31% | |||
Net income | 592 | 464 | +128 | ||||
Diluted EPS $ | 0.43 | 0.34 | +0.09 | ||||
Cash flow from operating activities | 1,443 | 1,724 | (281) | ||||
Cash and cash equivalents(6) | 4,376 | 3,154 | +1,222 | ||||
Gross profit margin of Industrial Activities | 21.6% | 19.0% | +260 bps | ||||
NON-GAAP(2) | |||||||
Q42022 | PY(1) | Change | |||||
Adjusted EBIT of Industrial Activities | 680 | 378 | +302 | ||||
Adjusted EBIT Margin of Industrial Activities | 10.7% | 7.6% | +310 bps | ||||
Adjusted net income | 486 | 425 | +61 | ||||
Adjusted diluted EPS $ | 0.36 | 0.31 | +0.05 | ||||
Free Cash flow of Industrial Activities | 2,049 | 1,225 | +824 | ||||
Available liquidity(6) | 10,632 | 8,645 | +1,987 |
Net sales of Industrial Activities of $6,352 million, up 27.2% mainly due to favorable price realization and higher sales volumes, despite more than 4% adverse currency conversion impacts.
Net income of $592 million, with diluted earnings per share of $0.43 (net income of $464 million in Q4 2021, with diluted earnings per share of $0.34). Adjusted net income of $486 million, with adjusted diluted earnings per share of $0.36 (adjusted net income of $425 million in Q4 2021, with adjusted diluted earnings per share of $0.31).
Adjusted EBIT of Industrial Activities of $680 million ($378 million in Q4 2021), with both segments up year over year. Agriculture adjusted EBIT margin at 13.1% and Construction at 3.5%.
Gross profit margin of Industrial Activities of 21.6%, (19.0% in Q4 2021) with improvement in Agriculture and Construction despite continued cost pressures.
Reported income tax expense of $168 million, which includes a $55 million tax benefit from recognizing certain deferred tax assets, and an effective tax rate (ETR) of 23.2%; both the ETR and the adjusted ETR(1) of 33.6% increased due to the jurisdictional mix of pre-tax profits and discrete items booked in the quarter.
Cash flow from operating activities in the quarter was $1,443 million ($1,724 million in Q4 2021). Free cash flow of Industrial Activities was $2,049 million. Total Debt of $23.0 billion at December 31, 2022 ($20.9 billion at December 31, 2021).
Industrial Activities Net Cash (Debt)(1) position at $362 million, an improvement of $1.5 billion from December 31, 2021, and Available liquidity at $10,632 million as of December 31, 2022. 2.9 million common shares were purchased during the fourth quarter under the first $50 million tranche of the $300 million common share buyback program approved on July 29, 2022.
The Board of CNH Industrial N.V. intends to recommend to the Company’s shareholders an annual cash dividend of €0.36 per common share, totaling approximately €483 million (~$511 million). The proposed dividend remains subject to formal Board approval and the approval of shareholders at the Annual General Meeting on April 14, 2023.
Agriculture | ||||||||
Q42022 | Q42021(1) | Change | Change at c.c.(3) | |||||
Net sales ($ million) | 5,369 | 4,150 | +1,219 | +34% | ||||
Adjusted EBIT ($ million) | 701 | 414 | +287 | |||||
Adjusted EBIT margin | 13.1% | 10.0% | +310 bps |
In North America, industry volume was flat year over year for the fourth quarter 2022 for tractors over 140 HP and was down 14% for tractors under 140 HP; combines were up 44%. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 7% and up 8%, respectively, of which Europe tractor and combine demand was down 1% and up 36%, respectively. South America tractor demand was down 8% and combine demand was up 6%. Asia Pacific tractor demand was up 18% and combine demand was up 296%.
Agriculture net sales were up 29%, due to favorable price realization, higher sales volumes and better product mix, mostly driven by the North America, South America and Europe regions partially offset by negative impact of foreign exchange rates.
Gross profit margin was at 23.1%, with Gross Profit $394 million higher than in Q4 2021, mainly due to favorable price realization in the North America, South America and Europe regions more than offsetting higher manufacturing and purchasing costs across all regions.
Adjusted EBIT was $701 million ($414 million in Q4 2021), with Adjusted EBIT margin at 13.1%. The $287 million (or 3.1 p.p.) increase from Q4 2021 was driven by favorable price realization and better product mix, partially offset by higher manufacturing and purchasing costs, increased SG&A and R&D spend.
Order book in Agriculture was down 23% year over year for tractors worldwide with all regions down except the Asia Pacific region. Order book for combines was down 20%, with declines in all regions except the Asia Pacific region. At above 2.2 times the pre-pandemic levels, order books remain strong in all regions.
Construction | ||||||||
Q42022 | Q42021(1) | Change | Change at c.c.(3) | |||||
Net sales ($ million) | 983 | 844 | +139 | +19% | ||||
Adjusted EBIT ($ million) | 34 | 20 | +14 | |||||
Adjusted EBIT margin | 3.5% | 2.4% | +110 bps |
Global industry volume for construction equipment decreased in both Heavy and Light sub-segments year over year in the fourth quarter, both down 2%. Aggregated demand increased 1% in EMEA, decreased 6% in North America, decreased 9% in South America and decreased 1% for Asia Pacific, particularly in China.
Construction net sales were up 17%, driven by positive sales volume, favorable price realization, and contribution from the Sampierana business, partially offset by negative impact of foreign exchange rates.
Gross profit margin was 13.3%, up 1.0 p.p. compared to Q4 2021, mainly due to favorable price realization and higher volumes in North America, South America, and Europe, contributions from the Sampierana business, partially offset by higher raw material costs.
Adjusted EBIT increased $14 million due to favorable volume and mix and positive price realization, partially offset by higher raw material costs and increased SG&A spend. Adjusted EBIT margin at 3.5%.
Construction order book was down 19% year over year in the Heavy sub-segment and down 10% in the Light sub-segment from elevated levels at the end of 2021. Dealer inventories remain low compared to past performance.
Financial Services | ||||||||
Q42022 | Q42021(1) | Change | Change at c.c.(3) | |||||
Revenue ($ million) | 577 | 478 | +99 | +22% | ||||
Net income ($ million) | 75 | 90 | (15) | |||||
Equity at quarter-end ($ million) | 2,285 | 2,129 | +156 | |||||
Retail loan originations ($ million) | 9,955 | 9,733 | +2.3% |
Revenues were up 21% due to favorable volumes in all regions, higher base rates across all regions, mainly in South America, partially offset by lower used equipment sales.
Net income decreased $15 million to $75 million, primarily due to margin compression in North America, increased labor costs, and higher specific reserves, primarily in China related to Construction customers and dealers, partially offset by favorable volumes in all regions, and higher recoveries on used equipment sales.
The managed portfolio (including unconsolidated joint ventures) was $23.8 billion as of December 31, 2022 (of which retail was 67% and wholesale was 33%), up $3.6 billion compared to December 31, 2021 (up $4.0 billion on a constant currency basis).
The receivable balance greater than 30 days past due as a percentage of receivables was 1.3% (1.2% as of December 31, 2021).
During the quarter, CNH Industrial Capital North America closed on its previously announced purchase of Citibank N.A. and Citi Cards Canada Inc.’s portfolio of revolving charge account (“RCA”) receivables underlying a private-label RCA product offered through CNH Industrial North America dealers.
2023Outlook
The Company is providing the following 2023 outlook for its Industrial Activities:
Results For TheFull Year 2022
Consolidated revenues of $23,551million (up 20.8% year on year, up 24% at constant currency), net income of $2,039million(adjusted net income of $2,004 million, with adjusted diluted EPS of $1.46), adjusted EBIT of Industrial Activities of $2,433million, and Industrial Free Cash Flow generationof $1,596million.
Results for the Full Year 2022
(all amounts $ million, comparison vs FY 2021 continuing operations - unless otherwise stated)
US-GAAP | ||||||||||||||
FY2022 | FY2021(1) | Change | Change at c.c.(3) | |||||||||||
Consolidated revenue | 23,551 | 19,496 | +4,055 | +24% | ||||||||||
of which Net sales of Industrial Activities | 21,541 | 17,802 | +3,739 | +25% | ||||||||||
Net income | 2,039 | 1,801 | +238 | |||||||||||
Diluted EPS $ | 1.49 | 1.32 | +0.17 | |||||||||||
Cash flow from operating activities | 557 | 3,198 | (2,641) | |||||||||||
Cash and cash equivalents(7) | 4,376 | 5,044 | (668) | |||||||||||
Gross profit margin of Industrial Activities | 22.0% | 20.7% | +130 bps | |||||||||||
NON-GAAP(2) | ||||||||||||||
FY 2022 | FY2021(1) | Change | ||||||||||||
Adjusted EBIT of Industrial Activities | 2,433 | 1,763 | +670 | |||||||||||
Adjusted EBIT Margin of Industrial Activities | 11.3% | 9.9% | +140 bps | |||||||||||
Adjusted net income | 2,004 | 1,747 | +257 | |||||||||||
Adjusted diluted EPS $ | 1.46 | 1.28 | +0.18 | |||||||||||
Free Cash flow of Industrial Activities | 1,596 | 1,928 | (332) | |||||||||||
Available liquidity(7) | 10,632 | 10,521 | +111 | |||||||||||
Adjusted gross margin of Industrial Activities | 22.2% | 20.7% | +150 bps |
Agriculture | |||||||||
FY 2022 | FY2021(1) | Change | Change at c.c.(3) | ||||||
Net sales ($ million) | 17,969 | 14,721 | +3,248 | +26% | |||||
Adjusted EBIT ($ million) | 2,456 | 1,810 | +646 | ||||||
Adjusted EBIT margin | 13.7% | 12.3% | +140 bps |
Construction | ||||||||
FY2022 | FY2021(1) | Change | Change at c.c.(3) | |||||
Net sales ($ million) | 3,572 | 3,081 | +491 | +18% | ||||
Adjusted EBIT ($ million) | 124 | 90 | +34 | |||||
Adjusted EBIT margin | 3.5% | 2.9% | +60 bps |
Financial Services | ||||||||
FY2022 | FY2021(1) | Change | Change at c.c.(3) | |||||
Revenues ($ million) | 1,996 | 1,672 | +324 | +20% | ||||
Net income ($ million) | 338 | 349 | (11) |
Notes
CNH Industrial reports quarterly and annual consolidated financial results under U.S. GAAP and 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. Financial results under EU-IFRS are shown in specific tables at the end of this press release.
Non-GAAP Financial Information
CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial’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 Industrial’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 or EU-IFRS 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 and/or EU-IFRS.
CNH Industrial’s non-GAAP financial measures are defined as follows:
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 earning 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 Industrial 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 the war in the Ukraine; the duration and economic, operational and financial impacts of the global COVID-19 pandemic; 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 Industrial 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, terrorist attacks in Europe and elsewhere; our ability to realize the anticipated benefits from our business initiatives as part of our strategic plan; 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 earnings 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 Industrial’s control. CNH Industrial expressly disclaims any intention or obligation to provide, update or revise any forward-looking statements in this announcement to reflect any change in expectations or any change in events, conditions or circumstances on which these forward-looking statements are based. Further information concerning CNH Industrial, including factors that potentially could materially affect CNH Industrial’s financial results, is included in CNH Industrial’s reports and filings with the U.S. Securities and Exchange Commission (“SEC”), the Autoriteit Financiële Markten (“AFM”) and Commissione Nazionale per le Società e la Borsa (“CONSOB”).
All future written and oral forward-looking statements by CNH Industrial or persons acting on the behalf of CNH Industrial are expressly qualified in their entirety by the cautionary statements contained herein or referred to above.
Conference Call and Webcast
Today, at 3:30 p.m. CET / 2:30 p.m. GMT/ 9:30 a.m. ET, management will hold a conference call to present fourth quarter 2022 results to financial analysts and institutional investors. The call can be followed live online at https://bit.ly/CNH_Industrial_Q4FY_2022 and a recording will be available later on the Company’s website www.cnhindustrial.com. A presentation will be made available on the CNH Industrial website prior to the conference call.
London, February 2, 2023
CONTACTS
Media Inquiries – Laura Overall Tel +44 207 925 1964 or Rebecca Fabian Tel +1 312 515 2249 (Email mediarelations@cnhind.com)
Investor Relations – Jason Omerza Tel +1 630 740 8079 or Federico Pavesi Tel +39 345 605 6218 (Email investor.relations@cnhind.com)
CNH INDUSTRIAL N.V.Condensed Consolidated Statements of Operations for the three months and years ended December31, 2022and 2021(Unaudited,U.S.-GAAP)
Three Months Ended December 31, | Years Ended December31, | |||||||
($ million) | 2022 | 2021 | 2022 | 2021 | ||||
Revenues | ||||||||
Net sales | 6,352 | 4,994 | 21,541 | 17,802 | ||||
Finance, interest and other income | 591 | 486 | 2,010 | 1,694 | ||||
TOTAL REVENUES | 6,943 | 5,480 | 23,551 | 19,496 | ||||
Costs and Expenses | ||||||||
Cost of goods sold | 4,978 | 4,045 | 16,797 | 14,109 | ||||
Selling, general and administrative expenses | 528 | 431 | 1,752 | 1,454 | ||||
Research and development expenses | 257 | 189 | 866 | 642 | ||||
Restructuring expenses | 12 | 14 | 31 | 35 | ||||
Interest expense | 244 | 132 | 734 | 549 | ||||
Other, net | 199 | 346 | 689 | 768 | ||||
TOTAL COSTS AND EXPENSES | 6,218 | 5,157 | 20,869 | 17,557 | ||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES | 725 | 323 | 2,682 | 1,939 | ||||
Income tax (expense) benefit | (168) | 118 | (747) | (229) | ||||
Equity in income (loss) of unconsolidated subsidiaries and affiliates | 35 | 23 | 104 | 91 | ||||
Net income (loss) from continuing operations | 592 | 464 | 2,039 | 1,801 | ||||
Net income (loss) from discontinued operations | — | (157) | — | (41) | ||||
NET INCOME (LOSS) | 592 | 307 | 2,039 | 1,760 | ||||
Net income attributable to noncontrolling interests | — | 5 | 10 | 37 | ||||
NET INCOME (LOSS) ATTRIBUTABLE TO CNH INDUSTRIAL N.V. | 592 | 302 | 2,029 | 1,723 | ||||
Basic earnings (loss) per share attributable to common shareholders (in $) | ||||||||
Continuing operations | 0.44 | 0.34 | 1.50 | 1.32 | ||||
Discontinued operations | — | (0.12) | — | (0.05) | ||||
Basic earnings per share attributable to CNH Industrial N.V. | 0.44 | 0.22 | 1.50 | 1.27 | ||||
Diluted earnings (loss) per share attributable to common shareholders (in $) | ||||||||
Continuing operations | 0.43 | 0.34 | 1.49 | 1.32 | ||||
Discontinued operations | — | (0.12) | — | (0.05) | ||||
Diluted earnings per share attributable to CNH Industrial N.V. | 0.43 | 0.22 | 1.49 | 1.27 | ||||
Average shares outstanding (in millions) | ||||||||
Basic | 1,345 | 1,355 | 1,351 | 1,354 | ||||
Diluted | 1,361 | 1,363 | 1,362 | 1,361 | ||||
Cash dividends declared per common share | — | — | 0.302 | 0.132 |
These Condensed Consolidated Statements of Operations should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the year ended December 31, 2021 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Operations represent the consolidation of all CNH Industrial N.V. subsidiaries.CNH INDUSTRIAL N.V.Condensed Consolidated Balance Sheetsas of December31, 2022and December 31, 2021(Unaudited,U.S.-GAAP)
($ million) | December 31, 2022 | December 31, 2021 | ||
ASSETS | ||||
Cash and cash equivalents | 4,376 | 5,044 | ||
Restricted cash | 753 | 801 | ||
Financing receivables, net | 19,260 | 15,376 | ||
Receivables from Iveco Group N.V. | 298 | — | ||
Inventories, net | 4,811 | 4,216 | ||
Property, plant and equipment, net and equipment under operating lease | 3,034 | 3,213 | ||
Intangible assets, net | 4,451 | 4,417 | ||
Other receivables and assets | 2,398 | 2,803 | ||
Assets held for distribution | - | 13,546 | ||
TOTAL ASSETS | 39,381 | 49,416 | ||
LIABILITIES AND EQUITY | ||||
Debt | 22,962 | 20,897 | ||
Payables to Iveco Group N.V. | 156 | 502 | ||
Other payables and liabilities | 9,287 | 9,272 | ||
Liabilities held for distribution | - | 11,892 | ||
Total Liabilities | 32,405 | 42,563 | ||
Redeemable noncontrolling interest | 49 | 45 | ||
Equity | 6,927 | 6,808 | ||
TOTAL LIABILITIES AND EQUITY | 39,381 | 49,416 |
These Condensed 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, 2021 included in the Annual Report on Form 20-F. These Condensed Consolidated Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V.Condensed Consolidated Statement of Cash Flows for the yearsended December31, 2022and 2021(Unaudited,U.S.-GAAP)
Years Ended December 31, | ||||
($ million) | 2022 | 2021 | ||
Net income (loss) | 2,039 | 1,760 | ||
Less: Net income (loss) of Discontinued Operations | — | (41) | ||
Net income (loss) of Continuing Operations | 2,039 | 1,801 | ||
Adjustments to reconcile net income (loss) from Continuing Operations to net cash provided by (used in) operating activities from Continuing Operations: | (1,482) | 1,397 | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS | 557 | 3,198 | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS | — | 884 | ||
TOTAL NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 557 | 4,082 | ||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM CONTINUING OPERATIONS | (3,009) | (4,570) | ||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS | — | (431) | ||
TOTAL NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (3,009) | (5,001) | ||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM CONTINUING OPERATIONS | 1,964 | (1,399) | ||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM DISCONTINUED OPERATIONS | — | (46) | ||
TOTAL NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 1,964 | (1,445) | ||
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash | (228) | (403) | ||
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | (716) | (2,767) | ||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR | 5,845 | 9,629 | ||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | 5,129 | 6,862 | ||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (Discontinued Operations) | — | 1,017 | ||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (Continuing Operations) | 5,129 | 5,845 |
These Condensed 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, 2021 included in the Annual Report on Form 20-F. These Condensed 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 December31, 2022and 2021(Unaudited, U.S.-GAAP)
Three Months Ended December31, 2022 | Three Months Ended December31, 2021 | |||||||||||||||
($ million) | Industrial Activities(1) | Financial Services | Eliminations | Consolidated | Industrial Activities(1) | Financial Services | Eliminations | Consolidated | ||||||||
Revenues | ||||||||||||||||
Net sales | 6,352 | — | — | 6,352 | 4,994 | — | — | 4,994 | ||||||||
Finance, interest, and other income | 43 | 577 | (29) | (2) | 591 | 16 | 478 | (8) | (2) | 486 | ||||||
TOTAL REVENUES | 6,395 | 577 | (29) | 6,943 | 5,010 | 478 | (8) | 5,480 | ||||||||
Costs and Expenses | ||||||||||||||||
Cost of goods sold | 4,978 | — | — | 4,978 | 4,045 | — | — | 4,045 | ||||||||
Selling, general and administrative expenses | 462 | 66 | — | 528 | 391 | 40 | — | 431 | ||||||||
Research and development expenses | 257 | — | — | 257 | 189 | — | — | 189 | ||||||||
Restructuring expenses | 12 | — | — | 12 | 14 | — | — | 14 | ||||||||
Interest expense | 65 | 208 | (29) | (3) | 244 | 42 | 98 | (8) | (3) | 132 | ||||||
Other, net | (14) | 213 | — | 199 | 114 | 232 | — | 346 | ||||||||
TOTAL COSTS AND EXPENSES | 5,760 | 487 | (29) | 6,218 | 4,795 | 370 | (8) | 5,157 | ||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES | 635 | 90 | — | 725 | 215 | 108 | — | 323 | ||||||||
Income tax (expense) benefit | (149) | (19) | — | (168) | 142 | (24) | — | 118 | ||||||||
Equity in income (loss) of unconsolidated subsidiaries and affiliates | 31 | 4 | — | 35 | 17 | 6 | — | 23 | ||||||||
NET INCOME (LOSS) Continuing Operations | 517 | 75 | — | 592 | 374 | 90 | — | 464 | ||||||||
NET INCOME (LOSS) Discontinued Operations | — | — | — | — | (179) | 22 | — | (157) | ||||||||
NET INCOME (LOSS) | 517 | 75 | — | 592 | 195 | 112 | — | 307 |
(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 Statements of Operations for the yearsended December31, 2022and 2021(Unaudited, U.S.-GAAP)
YearEnded December31, 2022 | YearEnded December31, 2021 | |||||||||||||||
($ million) | Industrial Activities(1) | Financial Services | Eliminations | Consolidated | Industrial Activities(1) | Financial Services | Eliminations | Consolidated | ||||||||
Revenues | ||||||||||||||||
Net sales | 21,541 | — | — | 21,541 | 17,802 | — | — | 17,802 | ||||||||
Finance, interest and other income | 95 | 1,996 | (81) | (2) | 2,010 | 59 | 1,672 | (37) | (2) | 1,694 | ||||||
TOTAL REVENUES | 21,636 | 1,996 | (81) | 23,551 | 17,861 | 1,672 | (37) | 19,496 | ||||||||
Costs and Expenses | ||||||||||||||||
Cost of goods sold | 16,797 | — | — | 16,797 | 14,109 | — | — | 14,109 | ||||||||
Selling, general and administrative expenses | 1,549 | 203 | — | 1,752 | 1,327 | 127 | — | 1,454 | ||||||||
Research and development expenses | 866 | — | — | 866 | 642 | — | — | 642 | ||||||||
Restructuring expenses | 31 | — | — | 31 | 35 | — | — | 35 | ||||||||
Interest expense | 214 | 601 | (81) | (3) | 734 | 177 | 409 | (37) | (3) | 549 | ||||||
Other, net | (55) | 744 | — | 689 | 73 | 695 | — | 768 | ||||||||
TOTAL COSTS AND EXPENSES | 19,402 | 1,548 | (81) | 20,869 | 16,363 | 1,231 | (37) | 17,557 | ||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES | 2,234 | 448 | — | 2,682 | 1,498 | 441 | — | 1,939 | ||||||||
Income tax (expense) benefit | (622) | (125) | — | (747) | (122) | (107) | — | (229) | ||||||||
Equity in income (loss) of unconsolidated subsidiaries and affiliates | 89 | 15 | — | 104 | 76 | 15 | — | 91 | ||||||||
NET INCOME (LOSS) Continuing Operations | 1,701 | 338 | — | 2,039 | 1,452 | 349 | — | 1,801 | ||||||||
NET INCOME (LOSS) Discontinued Operations | — | — | — | — | (112) | 71 | — | (41) | ||||||||
NET INCOME (LOSS) | 1,701 | 338 | — | 2,039 | 1,340 | 420 | — | 1,760 |
(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 Sheetsas of December31, 2022and December 31, 2021(Unaudited, U.S.-GAAP)
December31, 2022 | December 31, 2021 | ||||||||||||||||
($ million) | Industrial Activities(1) | Financial Services | Eliminations | Consolidated | Industrial Activities(1) | Financial Services | Eliminations | Consolidated | |||||||||
ASSETS | |||||||||||||||||
Cash and cash equivalents | 3,802 | 574 | — | 4,376 | 4,386 | 658 | — | 5,044 | |||||||||
Restricted cash | 158 | 595 | — | 753 | 128 | 673 | — | 801 | |||||||||
Financing receivables, net | 898 | 19,313 | (951) | (2) | 19,260 | 199 | 15,508 | (331) | (2) | 15,376 | |||||||
Receivables from Iveco Group N.V. | 234 | 64 | — | 298 | — | — | — | — | |||||||||
Inventories, net | 4,798 | 13 | — | 4,811 | 4,187 | 29 | — | 4,216 | |||||||||
Property, plant and equipment, net and equipment on operating lease | 1,561 | 1,473 | — | 3,034 | 1,504 | 1,709 | — | 3,213 | |||||||||
Intangible assets, net | 4,287 | 164 | — | 4,451 | 4,255 | 162 | — | 4,417 | |||||||||
Other receivables and assets | 2,141 | 477 | (220) | (3) | 2,398 | 2,656 | 345 | (198) | (3) | 2,803 | |||||||
Assets held for distribution | — | — | — | — | 9,814 | 4,543 | (811) | 13,546 | |||||||||
TOTAL ASSETS | 17,879 | 22,673 | (1,171) | 39,381 | 27,129 | 23,627 | (1,340) | 49,416 | |||||||||
LIABILITIES AND EQUITY | |||||||||||||||||
Debt | 4,972 | 18,941 | (951) | (2) | 22,962 | 5,485 | 15,743 | (331) | (2) | 20,897 | |||||||
Payables to Iveco Group N.V. | 5 | 151 | — | 156 | 334 | 168 | — | 502 | |||||||||
Other payables and liabilities | 8,211 | 1,296 | (220) | (3) | 9,287 | 8,426 | 1,044 | (198) | (3) | 9,272 | |||||||
Liabilities held for distribution | — | — | — | — | 8,985 | 3,718 | (811) | 11,892 | |||||||||
Total Liabilities | 13,188 | 20,388 | (1,171) | 32,405 | 23,230 | 20,673 | (1,340) | 42,563 | |||||||||
Redeemable noncontrolling interest | 49 | — | — | 49 | 45 | — | — | 45 | |||||||||
Equity | 4,642 | 2,285 | — | 6,927 | 3,854 | 2,954 | — | 6,808 | |||||||||
TOTAL LIABILITIES AND EQUITY | 17,879 | 22,673 | (1,171) | 39,381 | 27,129 | 23,627 | (1,340) | 49,416 |
(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 yearsended December31, 2022and 2021(Unaudited, U.S.-GAAP)
Yearended December31, 2022 | Yearended December31, 2021 | |||||||||||||||
($ million) | Industrial Activities(1) | Financial Services | Eliminations | (3) | Consolidated | Industrial Activities(1) | Financial Services | Eliminations | (3) | Consolidated | ||||||
Net income (loss) | 1,701 | 338 | — | 2,039 | 1,340 | 420 | — | 1,760 | ||||||||
Less: Net income (loss) of Discontinued Operations | — | — | — | — | (112) | 71 | — | (41) | ||||||||
Net income (loss) of Continuing Operations | 1,701 | 338 | — | 2,039 | 1,452 | 349 | — | 1,801 | ||||||||
Adjustments to reconcile net income (loss) from Continuing Operations to net cash provided by (used in) operating activities from Continuing Operations: | 304 | (1,598) | (188) | (2) | (1,482) | 799 | 909 | (311) | (2) | 1,397 | ||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS | 2,005 | (1,260) | (188) | 557 | 2,251 | 1,258 | (311) | 3,198 | ||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS | — | — | — | — | 856 | 31 | (3) | 884 | ||||||||
TOTAL NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 2,005 | (1,260) | (188) | 557 | 3,107 | 1,289 | (314) | 4,082 | ||||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM CONTINUING OPERATIONS | (1,653) | (1,394) | 38 | (3,009) | (3,347) | (1,233) | 10 | (4,570) | ||||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS | — | — | — | — | (523) | 87 | 5 | (431) | ||||||||
TOTAL NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (1,653) | (1,394) | 38 | (3,009) | (3,870) | (1,146) | 15 | (5,001) | ||||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM CONTINUING OPERATIONS | (691) | 2,505 | 150 | 1,964 | (1,629) | (69) | 299 | (1,399) | ||||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM DISCONTINUED OPERATIONS | — | — | — | — | (16) | (30) | — | (46) | ||||||||
TOTAL NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (691) | 2,505 | 150 | (4) | 1,964 | (1,645) | (99) | 299 | (4) | (1,445) | ||||||
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash | (215) | (13) | — | (228) | (372) | (31) | — | (403) | ||||||||
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | (554) | (162) | — | (716) | (2,780) | 13 | — | (2,767) | ||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR | 4,514 | 1,331 | — | 5,845 | 8,116 | 1,513 | — | 9,629 | ||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | 3,960 | 1,169 | — | 5,129 | 5,336 | 1,526 | — | 6,862 | ||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (DISCONTINUED OPERATIONS) | — | — | — | — | 822 | 195 | — | 1,017 | ||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (CONTINUING OPERATIONS) | 3,960 | 1,169 | — | 5,129 | 4,514 | 1,331 | — | 5,845 |
(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.(4) This item includes the elimination of paid in capital from Industrial Activities to Financial Services.
Other Supplemental Financial Information
(Unaudited)
Reconciliation of Consolidated Net Income to Adjusted EBIT of Industrial Activities by segment under U.S.-GAAP | ||||||||
($ million) | Three Months ended December31, 2022 | |||||||
Agriculture | Construction | Unallocated items, eliminations and other | Total | |||||
Consolidated Net income | 592 | |||||||
Less: Consolidated Income tax (expense) benefit | (168) | |||||||
Consolidated Income before taxes | 760 | |||||||
Less: Financial Services | ||||||||
Financial Services Net income | 75 | |||||||
Financial Services Income taxes | 19 | |||||||
Add back of the following Industrial Activities items: | ||||||||
Interest expenses, net of interest income and eliminations | 22 | |||||||
Foreign exchange (gains) losses, net | 45 | |||||||
Finance and non-service component of Pension and other post-employment benefit costs(1) | (12) | |||||||
Adjustments for the following Industrial Activities items: | ||||||||
Restructuring expenses | 5 | 7 | — | 12 | ||||
Other discrete items(2) | — | — | (53) | (53) | ||||
Adjusted EBIT of Industrial Activities | 701 | 34 | (55) | 680 | ||||
Three Months ended December 31, 2021 | ||||||||
Agriculture | Construction | Unallocated items, eliminations and other | Total | |||||
Consolidated Net income | 307 | |||||||
Less: Consolidated Net Income (loss) of Discontinued Operations | (157) | |||||||
Consolidated Net income (loss) of Continuing Operations | 464 | |||||||
Less: Consolidated Income tax (expense) benefit | 118 | |||||||
Consolidated Income (loss) before taxes (continuing operations) | 346 | |||||||
Less: Financial Services | ||||||||
Financial Services Net income | 90 | |||||||
Financial Services Income taxes | 24 | |||||||
Add back of the following Industrial Activities items: | ||||||||
Interest expenses, net of interest income and eliminations | 26 | |||||||
Foreign exchange (gains) losses, net | 7 | |||||||
Finance and non-service component of Pension and other post-employment benefit costs(1) | (41) | |||||||
Adjustments for the following Industrial Activities items: | ||||||||
Restructuring expenses | 12 | 2 | — | 14 | ||||
Other discrete items(2) | — | — | 140 | 140 | ||||
Adjusted EBIT of Industrial Activities | 414 | 20 | (56) | 378 |
(1) In the three months ended December 31, 2022, this item includes the pre-tax gain of $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. In the three months ended December 31, 2021, this item includes the pre-tax gain of $29 million as a result of the 2018 modification of a healthcare plan in the U.S. and a pre-tax gain of $5 million as a result of the amortization over 4 years of the $101 million positive impact from 2021 modifications of a healthcare plan in the U.S.
(2) In the three months ended December 31, 2022, this item included a $65 million gain on the sale of our Canada parts depot, partially offset by $12 million of separation costs incurred in connection with our spin-off of the Iveco Group Business. In the three months ended December 31, 2021, this item also includes $101 million separation and transaction costs incurred in connection with the spin-off of the Iveco Group Business (the Demerger), a charge of $51 million for the transaction costs related to the acquisition of Raven Industries, Inc., as well as a gain of $12 million for the fair value adjustment of Monarch Tractor investment.Other Supplemental Financial Information(Unaudited)
Reconciliation of Consolidated Net Income to Adjusted EBIT of Industrial Activities by segment under US-GAAP | ||||||||
($ million) | YearEnded December31, 2022 | |||||||
Agriculture | Construction | Unallocated items, eliminations and other | Total | |||||
Consolidated Net income | 2,039 | |||||||
Less: Consolidated Income tax (expense) benefit | (747) | |||||||
Consolidated Income before taxes | 2,786 | |||||||
Less: Financial Services | ||||||||
Financial Services Net income | 338 | |||||||
Financial Services Income taxes | 125 | |||||||
Add back of the following Industrial Activities items: | ||||||||
Interest expenses, net of interest income and eliminations | 119 | |||||||
Foreign exchange (gains) losses, net | 59 | |||||||
Finance and non-service component of Pension and other post-employment benefit costs(1) | (124) | |||||||
Adjustments for the following Industrial Activities items: | ||||||||
Restructuring expenses | 21 | 10 | — | 31 | ||||
Other discrete items(2) | — | — | 25 | 25 | ||||
Adjusted EBIT of Industrial Activities | 2,456 | 124 | (147) | 2,433 | ||||
Year Ended December31, 2021 | ||||||||
Agriculture | Construction | Unallocated items, eliminations and other | Total | |||||
Consolidated Net income | 1,760 | |||||||
Less: Consolidated Net Income (loss) of Discontinued Operations | (41) | |||||||
Consolidated Net income (loss) of Continuing Operations | 1,801 | |||||||
Less: Consolidated Income tax (expense) benefit | (229) | |||||||
Consolidated Income (loss) before taxes (continuing operations) | 2,030 | |||||||
Less: Financial Services | ||||||||
Financial Services Net income | 349 | |||||||
Financial Services Income taxes | 107 | |||||||
Add back of the following Industrial Activities items: | ||||||||
Interest expenses, net of interest income and eliminations | 118 | |||||||
Foreign exchange (gains) losses, net | 1 | |||||||
Finance and non-service component of Pension and other post-employment benefit costs(1) | (143) | |||||||
Adjustments for the following Industrial Activities items: | ||||||||
Restructuring expenses | 20 | 15 | — | 35 | ||||
Other discrete items(2) | — | — | 178 | 178 | ||||
Adjusted EBIT of Industrial Activities | 1,810 | 90 | (137) | 1,763 |
(1) In the year ended December 31, 2022, this item includes the pre-tax gain of $90 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the 2018 modification of a healthcare plan in the U.S. and a pre-tax gain of $24 million as a result of the amortization over 4 years of the $101 million positive impact from the 2021 modifications of a healthcare plan in the U.S. In the year ended December 31, 2021, this item includes the pre-tax gain of $119 million as a result of the 2018 modification and a pre-tax gain of $5 million as a result of the amortization over 4 years of the $101 million positive impact from 2021 modifications of a healthcare plan in the U.S.
(2) In the year ended December 31, 2022, this item included $43 million of asset write-downs, $25 million of separation costs incurred in a connection with our spin-off of the Iveco Group Business and $22 million of costs related to the activity of the Raven segments held for sale, including the loss on the sale of the Engineered Films and Aerostar divisions, partially offset by a $65 million dollar gain on the sale of our Canada parts depot. In the year ended December 31, 2021, this item included $133 million separation costs in connection with the spin-off of the Iveco Group business and a charge of $57 million for transaction costs related to the acquisition of Raven Industries, Inc., partially offset by a gain of $12 million for a fair value adjustment of Monarch Tractor investments.
Other Supplemental Financial Information
(Unaudited)
Reconciliation of Total (Debt) to Net Cash (Debt) under US-GAAP | ||||||||||||
($ million) | Consolidated | Industrial Activities | Financial Services | |||||||||
December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | |||||||
Third party (debt) | (22,962) | (20,897) | (4,909) | (5,335) | (18,053) | (15,562) | ||||||
Intersegment notes payable | — | — | (63) | (150) | (888) | (181) | ||||||
Payable to Iveco Group N.V.(4) | (156) | (3,986) | (5) | (3,764) | (151) | (222) | ||||||
Total (Debt)(1) | (23,118) | (24,883) | (4,977) | (9,249) | (19,092) | (15,965) | ||||||
Cash and cash equivalents | 4,376 | 5,044 | 3,802 | 4,386 | 574 | 658 | ||||||
Restricted cash | 753 | 801 | 158 | 128 | 595 | 673 | ||||||
Intersegment notes receivable | — | — | 888 | 181 | 63 | 150 | ||||||
Receivables from Iveco Group N.V.(4) | 298 | 3,484 | 234 | 3,430 | 64 | 54 | ||||||
Other current financial assets(2) | 300 | 1 | 300 | 1 | — | — | ||||||
Derivatives hedging debt | (43) | (3) | (43) | (3) | — | — | ||||||
Net Cash (Debt)(3) | (17,434) | (15,556) | 362 | (1,126) | (17,796) | (14,430) |
(1) Total (Debt) of Industrial Activities includes Intersegment notes payable to Financial Services of $63 million and $150 million as of December 31, 2022 and December 31, 2021, respectively. Total (Debt) of Financial Services includes Intersegment notes payable to Industrial Activities of $888 million and $181 million as of December 31, 2022 and December 31, 2021, respectively.(2) This item includes short-term deposits and investments towards high-credit rating counterparties.(3) The net intersegment receivable/(payable) balance recorded by Financial Services relating to Industrial Activities was ($825) million and ($31) million as of December 31, 2022 and December 31, 2021, respectively.(4) For December 31, 2021, this item is shown net on the CNH Industrial balance sheet.
Reconciliation of Cash and cash equivalents to Available liquidity under US-GAAP | ||||
($ million) | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 |
Cash and cash equivalents | 4,376 | 3,154 | 2,855 | 3,219 |
Restricted cash | 753 | 660 | 729 | 842 |
Undrawn committed facilities | 5,061 | 4,700 | 5,002 | 5,087 |
Receivables from Iveco Group N.V. | 298 | 224 | 281 | 297 |
Payables to Iveco Group N.V. | (156) | (95) | (73) | (47) |
Other current financial assets(1) | 300 | 2 | 1 | 1 |
Available liquidity | 10,632 | 8,645 | 8,795 | 9,399 |
(1) This item includes short-term deposits and investments towards high-credit rating counterparties.
Other Supplemental Financial Information
(Unaudited)
Change in Net Cash (Debt) of Industrial Activities under US-GAAP | ||||||||
Yearsended December31, | Three Months ended December31, | |||||||
2022 | 2021 | ($ million) | 2022 | 2021 | ||||
(1,126) | (893) | Net Cash (Debt) of Industrial Activities at beginning of period | (1,272) | (125) | ||||
2,433 | 1,763 | Adjusted EBIT of Industrial Activities | 680 | 378 | ||||
325 | 293 | Depreciation and Amortization | 75 | 76 | ||||
6 | 2 | Depreciation of assets under operating leases | 4 | 1 | ||||
(646) | (376) | Cash interest and taxes | (135) | (68) | ||||
395 | 395 | Changes in provisions and similar(1) | 101 | 134 | ||||
(510) | 248 | Change in working capital | 1,457 | 904 | ||||
(456) | (360) | Investments in property, plant and equipment, and intangible assets | (213) | (165) | ||||
49 | (37) | Other changes | 80 | (35) | ||||
1,596 | 1,928 | Free cash flow of Industrial Activities – Continuing operations | 2,049 | 1,225 | ||||
(576) | (188) | Capital increases and dividends(2) | (44) | (4) | ||||
468 | (1,973) | Currency translation differences and other(3) | (371) | (2,222) | ||||
1,488 | (233) | Change in Net Cash (Debt) of Industrial Activities – Continuing operations | 1,634 | (1,001) | ||||
362 | (1,126) | Net Cash (Debt) of Industrial Activities at end of period | 362 | (1,126) |
(1) Including other cash flow items related to operating lease.
(2) In the three months and years ended December 31, 2022, this item also includes share buy-back transactions.(3) In the year ended December 31, 2022 this item also includes the proceed of Raven Engineered Films Division for $350 million. In the year ended December 31, 2021, this item includes the cash out of $2,246 million for the acquisition of the 100% interest in Raven and $86 million for the acquisition of the 90% interest in Sampierana, as well as the charge of $8 million related to the repurchase of notes.
Reconciliation of Net cash provided by (used in) Operating Activities to Free cash flow of Industrial Activities under US-GAAP | ||||||||
Years ended December 31, | Three Months ended December 31, | |||||||
2022 | 2021 | ($ million) | 2022 | 2021 | ||||
557 | 3,198 | Net cash provided by (used in) Operating Activities (Continuing Operations) | 1,443 | 1,724 | ||||
1,448 | (947) | Cash flows from Operating Activities of Financial Services net of eliminations | 744 | (399) | ||||
19 | 93 | Change in derivatives hedging debt of Industrial Activities and other | 2 | 101 | ||||
(21) | (19) | Investments in assets sold under operating lease assets of Industrial Activities | (7) | (1) | ||||
(456) | (360) | Investments in property, plant and equipment, and intangible assets of Industrial Activities | (213) | (165) | ||||
49 | (37) | Other changes(1) | 80 | (35) | ||||
1,596 | 1,928 | Free cash flow of Industrial Activities | 2,049 | 1,225 |
(1) This item primarily includes change in intersegment financial receivables and capital increases in intersegment investments.
Other Supplemental Financial Information
(Unaudited)
Reconciliation of Adjusted net income and Adjusted income tax (expense) benefit to Net income (loss) and Income tax (expense) benefit and calculation of Adjusted diluted EPS and Adjusted ETR under US-GAAP | ||||||||
Years ended December31, | Three Months ended December31, | |||||||
2022 | 2021 | ($ million) | 2022 | 2021 | ||||
2,039 | 1,801 | Net income (loss) – Continuing Operations | 592 | 464 | ||||
(41) | 97 | Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) | (46) | 120 | ||||
6 | (151) | Adjustments impacting Income tax (expense) benefit (b) | (60) | (159) | ||||
2,004 | 1,747 | Adjusted net income (loss) | 486 | 425 | ||||
1,994 | 1,738 | Adjusted net income (loss) attributable to CNH Industrial N.V. | 486 | 423 | ||||
1,362 | 1,361 | Weighted average shares outstanding – diluted (million) | 1,361 | 1,363 | ||||
1.46 | 1.28 | Adjusted diluted EPS ($) | 0.36 | 0.31 | ||||
2,682 | 1,939 | Income (loss) from continuing operations before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates | 725 | 323 | ||||
(41) | 97 | Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) | (46) | 120 | ||||
2,641 | 2,036 | Adjusted income (loss) from continuing operations before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (A) | 679 | 443 | ||||
(747) | (229) | Income tax (expense) benefit | (168) | 118 | ||||
6 | (151) | Adjustments impacting Income tax (expense) benefit (b) | (60) | (159) | ||||
(741) | (380) | Adjusted income tax (expense) benefit (B) | (228) | (41) | ||||
28.1% | 18.7% | Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A) | 33.6% | 9.3% | ||||
a) Adjustments impacting Income (loss) from continuing operations before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates | ||||||||
31 | 35 | Restructuring expenses | 12 | 14 | ||||
— | 8 | Loss on repurchase of notes | — | — | ||||
(90) | (119) | Pre-tax gain related to the 2018 modification of a healthcare plan in the U.S. | — | (29) | ||||
(24) | (5) | Pre-tax gain related to the 2021 modification of a healthcare plan in the U.S. | (6) | (5) | ||||
43 | — | Asset write-down: Industrial Activities, Russia Operations | — | — | ||||
17 | — | Asset write-down: Financial Services, Russia Operations | 1 | — | ||||
25 | 133 | Spin related costs | 12 | 101 | ||||
(65) | — | Gain on sale of real estate | (65) | — | ||||
— | (12) | Monarch Tractor investment fair value adjustment | — | (12) | ||||
— | 57 | Other discrete items | — | 51 | ||||
22 | — | Activity of the Raven Segments held for sale, including loss on sale of the Aerostar and Engineered Films Division | — | — | ||||
(41) | 97 | Total | (46) | 120 | ||||
b) Adjustments impacting Income tax (expense) benefit | ||||||||
61 | 10 | Tax effect of adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates(1) | (5) | 2 | ||||
(55) | (161) | Adjustment to valuation allowances on deferred tax assets | (55) | (161) | ||||
6 | (151) | Total | (60) | (159) |
(1) Includes $12 million of increase to the valuation allowances on historical deferred tax assets as a result of the suspension of operations in Russia.
Other Supplemental Financial Information(Unaudited)
Reconciliation of Adjusted gross profit to gross profit under US-GAAP | ||||||||
Yearended December31, | Three Months ended December31, | |||||||
2022 | 2021 | ($ million) | 2022 | 2021 | ||||
21,541 | 17,802 | Net Sales (A) | 6,352 | 4,994 | ||||
16,797 | 14,109 | Cost of goods sold | 4,978 | 4,045 | ||||
4,744 | 3,693 | Gross profit (B) | 1,374 | 949 | ||||
41 | — | Asset write down (Russia operations) | 2 | — | ||||
4,785 | 3,693 | Adjusted gross profit (C) | 1,376 | 949 | ||||
22.0% | 20.7% | Gross profit margin (B ÷ A) | 21.6% | 19.0% | ||||
22.2% | 20.7% | Adjusted gross profit margin (C ÷ A) | 21.7% | 19.0% |
Revenues by Segment under EU-IFRS | |||||||||||||
Yearended December31, | Three Months ended December31, | ||||||||||||
2022 | 2021 | % Change | ($ million) | 2022 | 2021 | % Change | |||||||
17,969 | 14,754 | 21.8% | Agriculture | 5,369 | 4,168 | 28.8% | |||||||
3,572 | 3,081 | 15.9% | Construction | 983 | 844 | 16.5% | |||||||
21,541 | 17,835 | 20.8% | Total Industrial Activities of Continuing Operations | 6,352 | 5,012 | 26.7 | |||||||
1,982 | 1,664 | 19.1% | Financial Services | 571 | 476 | 20.0% | |||||||
(50) | (25) | n.m. | Eliminations and other | (17) | (6) | n.m. | |||||||
23,473 | 19,474 | 20.5% | Total of Continuing Operations | 6,906 | 5,482 | 26.0% |
Adjusted EBIT of Industrial Activities(1)by Segment under EU-IFRS | ||||||||||
Three Months ended December31, | ||||||||||
2022 | 2021 | $ Change | 2022 adjusted EBIT margin | 2021 adjusted EBIT margin | ||||||
Agriculture | 716 | 425 | 291 | 13.3% | 10.2% | |||||
Construction | 38 | 19 | 19 | 3.9% | 2.3% | |||||
Unallocated items, eliminations and other | (49) | (57) | 8 | — | — | |||||
Adjusted EBIT of Industrial Activities of Continuing Operations | 705 | 387 | 318 | 11.1% | 7.7% |
(1) 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.
Adjusted EBIT of Industrial Activities(1)by Segment under EU-IFRS | ||||||||||
Yearended December31, | ||||||||||
2022 | 2021 | $ Change | 2022 adjusted EBIT margin | 2021 adjusted EBIT margin | ||||||
Agriculture | 2,460 | 1,794 | 666 | 13.7% | 12.2% | |||||
Construction | 119 | 83 | 36 | 3.3% | 2.7% | |||||
Unallocated items, eliminations and other | (143) | (148) | 5 | — | — | |||||
Adjusted EBIT of Industrial Activities of Continuing Operations | 2,436 | 1,729 | 707 | 11.3% | 9.7% |
(1) 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.
Other Supplemental Financial Information(Unaudited)
Other key data under EU-IFRS | ||||
December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |
Total Assets | 40,075 | 36,579 | 36,403 | 37,272 |
Total Equity | 7,559 | 6,965 | 6,428 | 6,258 |
Equity attributable to CNH Industrial N.V. | 7,559 | 6,962 | 6,421 | 6,251 |
Net Cash (Debt) of CNH Industrial | (17,940) | (17,392) | (17,422) | (17,454) |
of which Net Cash (Debt) of Industrial Activities(1) | 114 | (1,571) | (1,892) | (2,452) |
Net Income of Financial Services | 319 | 240 | 159 | 73 |
(1) 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.
Net income (loss) reconciliation US-GAAP to EU-IFRS | ||||||||
Yearended December31, | Three Months ended December31, | |||||||
2022 | 2021 | ($ million) | 2022 | 2021 | ||||
2,039 | 1,801 | Net income (loss) in accordance with U.S. GAAP | 592 | 464 | ||||
Adjustments to conform with EU-IFRS: | ||||||||
(8) | (31) | Development costs | 15 | 3 | ||||
(143) | (77) | Other adjustments(1) | (6) | 27 | ||||
(11) | (7) | Tax impact on adjustments and other income tax differences | (31) | (37) | ||||
(162) | (115) | Total adjustments | (22) | (7) | ||||
1,877 | 1,686 | Profit (loss) in accordance with EU-IFRS | 570 | 457 |
(1) This item also includes the different accounting impacts from the modifications of a healthcare plan in the U.S.
Total Equity reconciliation US-GAAP to EU-IFRS | ||||
December 31, 2022 | September 30, 2022 | June 30, 2022 | March 30, 2022 | |
Total Equity under U.S. GAAP | 6,927 | 6,357 | 5,794 | 5,609 |
Adjustments to conform with EU-IFRS: | ||||
Development costs | 763 | 719 | 751 | 783 |
Other adjustments | 39 | 59 | 45 | 41 |
Tax impact on adjustments and other income tax differences | (170) | (170) | (162) | (175) |
Total adjustments | 632 | 608 | 634 | 649 |
Total Equity under EU-IFRS | 7,559 | 6,965 | 6,428 | 6,258 |
Other Supplemental Financial Information(Unaudited)
Translation of financial statements denominated in a currency other than the U.S. dollar | ||||||||||
The principal exchange rates used to translate into U.S. dollars the financial statements prepared in currencies other than the U.S. dollar were as follows: | ||||||||||
Average 2022 | AtDecember 31, 2022 | Average 2021 | AtDecember 31, 2021 | |||||||
Euro | 0.950 | 0.938 | 0.845 | 0.883 | ||||||
Pound sterling | 0.810 | 0.832 | 0.727 | 0;742 | ||||||
Swiss franc | 0.954 | 0.923 | 0.914 | 0.912 | ||||||
Polish zloty | 4.451 | 4.397 | 3.860 | 4.059 | ||||||
Brazilian real | 5.165 | 5.220 | 5.392 | 5.571 | ||||||
Canadian dollar | 1.301 | 1.354 | 1.254 | 1.271 | ||||||
Turkish lira | 16.531 | 18.707 | 8.888 | 13.450 |
Condensed Consolidated Income Statement for the three months and Years ended December31, 2022and 2021 | ||||||||
(Unaudited, EU-IFRS) | Three Months Ended December31, | YearsEnded December31, | ||||||
($ million) | 2022 | 2021 | 2022 | 2021 | ||||
Net revenues | 6,906 | 5,482 | 23,473 | 19,474 | ||||
Cost of sales | 5,400 | 4,393 | 18,167 | 15,231 | ||||
Selling, general and administrative costs | 498 | 419 | 1,678 | 1,425 | ||||
Research and development costs | 244 | 187 | 881 | 677 | ||||
Result from investments: | ||||||||
Share of the profit/(loss) of investees accounted for using the equity method | 36 | 23 | 108 | 92 | ||||
Restructuring costs | 15 | 12 | 34 | 36 | ||||
Other income/(expenses) | 54 | (78) | (9) | (124) | ||||
Financial income/(expenses) | (70) | (40) | (177) | (151) | ||||
PROFIT/(LOSS) BEFORE TAXES | 769 | 376 | 2,635 | 1,922 | ||||
Income tax (expense) benefit | (199) | 81 | (758) | (236) | ||||
PROFIT/(LOSS) FROM CONTINUING OPERATIONS | 570 | 457 | 1,877 | 1,686 | ||||
PROFIT/(LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX | — | (109) | — | 91 | ||||
PROFIT/(LOSS) FOR THE PERIOD | 570 | 348 | 1,877 | 1,777 | ||||
PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS ATTRIBUTABLE TO: | ||||||||
Owners of the parent | 570 | 455 | 1,867 | 1,677 | ||||
Non-controlling interests | — | 2 | 10 | 9 | ||||
(in $) | ||||||||
BASIC EARNINGS/(LOSS) PER COMMON SHARE | 0.42 | 0.25 | 1.38 | 1.28 | ||||
Basic earnings/(loss) per common share from continuing operations | 0.42 | 0.34 | 1.38 | 1.24 | ||||
DILUTED EARNINGS/(LOSS) PER COMMON SHARE | 0.42 | 0.25 | 1.37 | 1.28 | ||||
Diluted earnings/(loss) per common share from continuing operations | 0.42 | 0.33 | 1.37 | 1.23 |
Other Supplemental Financial Information(Unaudited)
Condensed Consolidated Statement of Financial Position as of December31, 2022and December 31, 2021 | ||||
(Unaudited, EU-IFRS) | ||||
($ million) | December31, 2022 | December 31, 2021 | ||
ASSETS | ||||
Intangible assets | 5,172 | 5,159 | ||
Property, plant and equipment and Leased assets | 3,281 | 3,435 | ||
Inventories | 4,848 | 4,228 | ||
Receivables from financing activities | 19,611 | 15,443 | ||
Cash and cash equivalents | 5,129 | 5,845 | ||
Other receivables and assets | 2,034 | 2,535 | ||
Assets held for distribution(*) | — | 14,477 | ||
TOTAL ASSETS | 40,075 | 51,122 | ||
EQUITY AND LIABILITIES | ||||
Issued capital and reserves attributable to owners of the parent | 7,559 | 8,393 | ||
Non-controlling interests | — | 33 | ||
Total Equity | 7,559 | 8,426 | ||
Debt | 23,652 | 21,689 | ||
Other payables and liabilities | 8,864 | 9,148 | ||
Liabilities held for distribution(*) | — | 11,859 | ||
Total Liabilities | 32,516 | 42,696 | ||
TOTAL EQUITY AND LIABILITIES | 40,075 | 51,122 |
(*)The 2021 data have been re-presented following the classification of the Iveco Group Business as Discontinued Operations for the year ended December 31, 2021, as requested by the IFRS 5 - Non-current assets held for sale and discontinued operations.
Condensed Consolidated Statement of Cash Flows for the yearsended December31, 2022and 2021 | ||||
(Unaudited, EU-IFRS) | ||||
($ million) | December31, 2022 | December31, 2021 | ||
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR | 5,845 | 9,629 | ||
Profit/(loss) from Continuing Operations | 1,877 | 1,686 | ||
Adjustment to reconcile profit/(loss) from Continuing Operation to cash flows from/(used in) operating activities from Continuing Operations | 627 | 989 | ||
CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS | 2,504 | 2,675 | ||
CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS | — | 638 | ||
TOTAL | 2,504 | 3,313 | ||
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES FROM CONTINUING OPERATIONS | (5,255) | (4,001) | ||
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS | — | (121) | ||
TOTAL | (5,255) | (4,122) | ||
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES FROM CONTINUING OPERATIONS | 2,268 | (1,447) | ||
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES FROM DISCONTINUED OPERATIONS | — | (104) | ||
TOTAL | 2,268 | (1,551) | ||
Translation exchange differences | (233) | (407) | ||
TOTAL CHANGE IN CASH AND CASH EQUIVALENTS | (716) | (2,767) | ||
Less: | ||||
CASH AND EQUIVALENTS AT END OF THE PERIOD – INCLUDED WITHIN ASSETS HELD FOR DISTRIBUTION AT THE END OF THE PERIOD | — | (1,017) | ||
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 5,129 | 5,845 |
Attachment