CNH

CNH Industrial N.V.

NYSE · INDUSTRIALS · CONSTRUCTION MACHINERY & EQUIP

11.49

−0.09 −0.78%

USD · close Oct 23

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MKT CAP $14.2BP/E 46.0DIV YIELD —FCF YIELD —REV TTM $18.2B +0.6%NET INCOME $311M −62.2%NET CASH $1.8B52W 9.22 – 14.40SEC XBRL · TTM TO Invalid Date

How CNH rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Global Business Conditions I n 2025, we operated in a challenging environment characterized by lower industry demand in large agriculture, particularly in the Americas, elevated tariff and input‑cost pressures, and cautious farmer sentiment.
We view 2025 as part of a cyclical downturn in agricultural equipment rather than a structural change in our end markets.
Throughout the year, we prioritized price discipline, production and inventory management, cost‑reduction initiatives, and continued investment in Precision Technology and quality, with the aim of positioning CNH for improved performance as conditions normalize, particularly into 2026 and beyond.
Operating Results The operations, key financial measures, and financial analysis, differ significantly for manufacturing and distribution businesses ("Industrial Activities") and financial businesses ("Financial Services"); therefore, management believes that certain supplemental disclosures are important in understanding our consolidated operations and financial results.
Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated data. 2025 Compared to 2024 Consolidated Results of Operations Years Ended December 31, (in millions of dollars) 2025 2024 Revenues Net sales $ 15,346 $ 17,060 Finance, interest and other income 2,749 2,776 Total Revenues 18,095 19,836 Costs and Expenses Cost of goods sold 12,389 13,350 Selling, general and administrative expenses 1,876 1,712 Research and development expenses 1,025 924 Restructuring expenses 22 118 Interest expense 1,482 1,611 Other, net 681 664 Total Costs and Expenses 17,475 18,379 Consolidated income before income taxes 620 1,457 Income tax expense (184) (336) Equity in income of unconsolidated affiliates 69 138 Net income 505 1,259 Net income (loss) attributable to noncontrolling interests (5) 13 Net income attributable to CNH Industrial N.V. $ 510 $ 1,246 Revenues We recorded revenues of $18,095 million in 2025, a decline of 8.8% compared to 2024.
This decline was mainly due to lower shipments on decreased industry demand.
See "Business Segment Performance." Cost of Goods Sold Cost of goods sold were $12,389 million in 2025 compared to $13,350 million in 2024, a decrease of 7.2% year-over- year.
As a percentage of net sales, cost of goods sold was 80.7% in 2025 (78.3% in 2024), the increase in the percentage from 2024 was due to lower production volumes and tariff costs.
Selling, General and Administrative Expenses Selling, general and administrative expenses ("SG&A") increased to $1,876 million in 2025 (10.4% of revenues) from $1,712 million in 2024 (8.6% of revenues).
The year-over-year increase is primarily due to higher credit risk provisions in the Financial Services segment and higher labor costs.
Research and Development In 2025, R&D expenses were $1,025 million compared to $924 million in 2024.
R&D expenses were higher in 2025 primarily due to a $172 million non-cash impairment charge related to in-process research & development ("IPR&D") acquired as part of the Raven and Bennamann acquisitions.
Restructuring Expenses The Company incurred restructuring costs of $22 million and $118 million in 2025 and 2024, respectively.
These costs primarily relate to the restructuring program announced in November 2023 targeting labor and non-labor SG&A expenses.
This program was substantially complete in 2024, with total costs of $131 million.
Interest Expense Interest expense decreased to $1,482 million in 2025 from $1,611 million in 2024 primarily due to lower external borrowings.
The interest expense attributable to Industrial Activities, net of interest income and eliminations, was $114 million in 2025 compared to $152 million in 2024.
Other, net Other, net expenses were $681 million in 2025 and included a pre-tax gain of $21 million ($16 million after-tax) as a result of the amortization over 4 years of the $101 million positive impact from the 2021 U.S. healthcare plan modification, and a $62 million impairment of investments in unconsolidated affiliates.
Other, net expenses were $664 million in 2024 and included a pre-tax gain of $24 million ($18 million after-tax) as a result of the amortization over 4 years of the $101 million positive impact from the 2021 U.S. healthcare plan modification and a gain of $14 million for investment fair value adjustments, partially offset by a loss of $17 million on the sale of certain non-core product lines.
Income Taxes Years Ended December 31, (in millions of dollars, except percentages) 2025 2024 Consolidated income before income taxes $ 620 $ 1,457 Income tax expense $ 184 $ 336 Effective tax rate 29.7 % 23.1 % In 2025, income taxes were an expense of $184 million, compared to a tax expense of $336 million in 2024.
The effective tax rates for 2025 and 2024 were 29.7% and 23.1%, respectively.
The tax expense in 2025 was reduced as compared to 2024 due to lower profit-before-tax.
However, the 2025 effective tax rate increased due to the year-over-year tax impact of Argentina's highly inflationary economy and the non-recognized tax benefits associated with the non-cash impairment charges related to Monarch Tractors and IPR&D acquired as part of the Raven acquisition.
In 2025, we also recorded a valuation allowance against deferred tax assets generated by Bennamann.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into U.S. law.
The OBBBA includes significant provisions, such as the permanent extension of certain expiring provision of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.
The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.The impacts of the OBBBA legislation did not have a material impact on the Company's financial results during 2025; further, the Company estimates the OBBBA legislation will not have a material impact on the Company’s financial results during 2026.
Equity in Income of Unconsolidated Affiliates Equity in income of unconsolidated affiliates was $69 million in 2025 compared to $138 million in 2024 primarily due to lower sales in our joint venture TürkTraktör ve Ziraat Makineleri A.S.
Business Segment Performance The following table includes total revenues by segment (in millions of dollars, except percentages): Years Ended December 31, 2025 2024 % Change Revenues: Agriculture $ 12,390 $ 14,007 (11.5) % Construction 2,956 3,053 (3.2) % Total Net sales of Industrial Activities 15,346 17,060 (10.0) % Financial Services 2,720 2,774 (1.9) % Eliminations and other 29 2 Total Revenues $ 18,095 $ 19,836 (8.8) % The following table includes Adjusted EBIT of Industrial Activities by segment (in millions of dollars, except percentages): Years Ended December 31, 2025 2024 $ Change 2025 Adj EBIT Margin 2024 Adj EBIT Margin Adjusted EBIT: (1) Agriculture $ 772 $ 1,470 $ (698) 6.2 % 10.5 % Construction 68 169 (101) 2.3 % 5.5 % Eliminations and other (177) (235) 58 Adjusted EBIT of Industrial Activities $ 663 $ 1,404 $ (741) 4.3 % 8.2 % (1) A reconciliation from the most closely related U.S.
GAAP measure to this non-GAAP measure is included on page 56 .
Agriculture Net Sales Net sales for Agriculture were $12,390 million in 2025, an 11.5% decline compared to 2024.
This decline is mainly due to lower shipment volumes on decreased industry demand.
In North America, industry volume was down 33% year over year in 2025 for tractors over 140 hp and was down 7% for tractors under 140 hp; combines were down 26%.
In EMEA, tractor and combine demand was down 13% and 3%, respectively.
South America tractor demand was down 1% and combine demand was down 16%.
Asia Pacific tractor demand was up 12% and combine demand was down 26%.
The following table includes Agriculture net sales by geographic region in 2025 compared to 2024 (in millions of dollars, except percentages): Years Ended December 31, 2025 2024 % Change North America $ 4,296 $ 5,839 (26.4) % Europe, Middle East and Africa 4,614 4,267 8.1 % South America 2,016 2,280 (11.6) % Asia Pacific 1,464 1,621 (9.7) % Total $ 12,390 $ 14,007 (11.5) % Adjusted EBIT Adjusted EBIT was $772 million in 2025, compared to $1,470 million in 2024.
The decline, driven by lower shipment volumes and the impact from tariffs, was partially offset by lower quality costs.
R&D expenses accounted for 7.5% of sales (5.9% in 2024), including a $172 million non-cash impairment charge related to IPR&D acquired as part of the Raven and Bennamann acquisitions.
Construction Net Sales Net sales for Construction were $2,956 million in 2025, a decline of 3.2% compared to 2024, due to lower shipment volumes in North America and continued channel destocking.

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Overview CNH is an equipment and services company engaged in the design, production, marketing, sale, and financing of agricultural and construction equipment.
CNH operates across three business segments: Agriculture, Construction and Financial Services.
CNH refers to its Agriculture and Construction operations as "Industrial Activities".
We generate revenues and cash flows principally from the sale of equipment to dealers and distributors.
Financial Services provides a range of financial products focused on financing the sale and lease of equipment to our dealers and their customers.
Revenues of Industrial Activities are presented net of discounts, allowances, settlement discounts and rebates, as well as costs for sales incentive programs, determined on the basis of historical costs, country by country, and charged against profit for the period in which the corresponding sales are recognized.
Our sales incentive programs may include the granting by Financial Services of retail financing at discounts to market interest rates.
The corresponding cost to Industrial Activities is recognized at the time of the initial sale and the revenues of Financial Services are recognized on a pro rata basis in order to match the cost of funding.
Principal Factors Affecting Results Our operating performance is highly correlated to sales volumes, which are influenced by several different factors that vary across our segments.
For our Agriculture segment, the key factors influencing sales are the level of net farm income, which is influenced by commodity prices, and, to a lesser extent, general economic conditions, interest rates and the availability of financing and related subsidy programs.
Variations by region and product are also attributable to differences in typical climate and farming calendars, as well as extraordinary weather conditions.
For our Construction segment, sales levels for heavy construction equipment are particularly dependent on the expected level of major infrastructure construction and repair projects, which is a function of expected economic growth and government spending.
For light construction equipment, the principal factor influencing demand is the level of residential and commercial construction, remodeling and renovation, which is influenced in turn by interest rates and availability of financing, as well as, in the residential sector, levels of disposable income and, in the commercial sector, the broader economic cycle.
Demand for services and service-related products, including parts, is a function of the nature and extent of the use of the related agricultural and construction equipment.
The after-sales market is historically less volatile than the wholegoods market and, therefore, helps reduce the impact on operating results of fluctuations in new sales.
Our cost base principally comprises the cost of raw materials and personnel costs.
Raw material costs are closely linked to commodity markets and largely outside of our control, although we are making a targeted effort to increase procurement and production efficiencies.
Historically, we have been able to pass on to our customers most of the increase in the cost of raw materials through increases in product pricing.
Nevertheless, even when we are able to do so, there is usually a time lag between an increase in materials cost and a realized increase in product prices and, accordingly, our results are typically adversely affected at least in the short-term until price increases are accepted in the market.
Personnel costs change over time and are impacted by the terms of collective bargaining agreements, inflation and average number of employees.
A significant proportion of our employees are based in countries where labor laws impose significant protection of employees’ rights and, accordingly, we have limited ability to downsize our personnel in response to a decrease in production during periods of market downturn.
Our results are also affected by changes in foreign exchange rates from period to period, mainly due to the difference in geographic distribution between our manufacturing activities and our commercial activities, resulting in cash flows from exports denominated in currencies that differ from those associated with production costs.
In addition, our Consolidated Financial Statements are expressed in U.S. dollars and are therefore subject to movements in exchange rates upon translation of the financial statements of subsidiaries whose functional currency is not the U.S. dollar.
Finally, our results may be materially affected, directly or indirectly, by governmental policies, including monetary and fiscal policies and policies on international trade and investment.
Global Business Conditions The global economy is experiencing volatile disruptions due to a combination of factors, including geopolitical events, shifts in trade and economic policies from the new U.S. presidential administration, change in commodity prices, as well as change in climate conditions.
These disruptions have affected the price and availability of certain products and services used in the Company's operations in 2024, and are expected to persist in 2025.
These factors also affect our customers' profitability, impacting their ability to achieve higher returns on their output, and reducing their purchasing power and demand for our products.
The Company is closely monitoring global economic conditions and the impact that macroeconomic pressures, such as new and retaliatory tariffs, fluctuating currency exchange rates, interest rates and inflation, have on its business, customers, and suppliers.
As of December 31, 2024, CNH’s non-GAAP financial measures are defined as follows: Adjusted EBIT of Industrial Activities Adjusted EBIT of Industrial Activities is defined as net income (loss) before: income taxes, Financial Services' results, Industrial Activities' interest expenses, net, foreign exchange gains/losses, finance and non-service component of pension and other post-confirm this term is employment benefit costs, restructuring expenses, and certain non-recurring items.
CNH provides the reconciliation of Net Cash (Debt) to Total (Debt), which is the most directly comparable measure included in the consolidated balance sheets.
Revenues on a Constant Currency Basis 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 from year to year.
Free Cash Flow 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 property, plant and equipment, intangible assets, and assets sold under operating leases; change in derivatives hedging debt of Industrial Activities; as well as other changes and intersegment eliminations.
Operating Results The operations, key financial measures, and financial analysis differ significantly for manufacturing and distribution businesses (Industrial Activities) and financial services businesses; therefore, management believes that certain supplemental disclosures are important in understanding our consolidated operations and financial results.
Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated data. 2024 Compared to 2023 Consolidated Results of Operations (in millions of dollars) 2024 2023 (1) Revenues Net sales $ 17,060 $ 22,080 Finance, interest and other income 2,776 2,607 Total Revenues 19,836 24,687 Costs and Expenses Cost of goods sold 13,350 16,838 Selling, general and administrative expenses 1,712 1,863 Research and development expenses 924 1,041 Restructuring expenses 118 67 Interest expense 1,611 1,345 Other, net 664 830 Total Costs and Expenses 18,379 21,984 Income (loss) of Consolidated Group before Income Taxes 1,457 2,703 Income tax expense (336) (594) Equity in income of unconsolidated subsidiaries and affiliates 138 178 Net income (loss) 1,259 2,287 Net income attributable to noncontrolling interests 13 12 Net income (loss) attributable to CNH Industrial N.V. $ 1,246 $ 2,275 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements.
Revenues We recorded revenues of $19,836 million in 2024, a decline of 19.6% (down 18.7% on a constant currency basis) compared to 2023.
This decline was mainly due to lower shipment volumes on decreased industry demand and dealer destocking.
Cost of Goods Sold Cost of goods sold were $13,350 million in 2024 compared to $16,838 million in 2023, a decrease of 20.7% year over year.
As a percentage of net sales, cost of goods sold was 78.3% in 2024 (76.3% in 2023), the increase in the percentage from 2023 reflects lower production volumes and unfavorable mix, partially offset by improved purchasing and manufacturing costs.
Selling, General and Administrative Expenses Selling, general and administrative expenses ("SG&A") decreased to $1,712 million in 2024 (8.6% of revenues) from $1,863 million in 2023 (7.5% of revenues).
The year over year decrease is primarily due to lower labor costs, driven by the Company's restructuring program and lower variable compensation, partially offset by higher credit risk provisions in the Financial Services segment.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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