Group 1 - The article highlights the author's focus on agriculture machinery manufacturers, specifically Deere, CNH Industrial, and AGCO Corporation, indicating a bullish outlook on these companies [1] - The author emphasizes the importance of sustained profitability, characterized by strong margins, stable and expanding free cash flow, and high returns on invested capital, as a more reliable driver of returns than valuation alone [1] - The author manages a portfolio publicly on eToro, where they are recognized as a Popular Investor, allowing others to follow their real-time investment decisions [1] Group 2 - The author's interdisciplinary background in Economics, Classical Philology, Philosophy, and Theology enhances their quantitative analysis and market narrative interpretation [1] - The motivation behind the author's investment strategy is to ensure financial freedom for their family, aiming for a balance between work and personal fulfillment [1]

Core Insights - CNH Industrial reported second-quarter 2025 adjusted earnings per share (EPS) of 17 cents, down from 38 cents in the prior-year quarter, but above the Zacks Consensus Estimate of 16 cents [1][10] - Consolidated revenues for the second quarter declined nearly 14% year-over-year to $4.71 billion, exceeding the Zacks Consensus Estimate of $4.53 billion [2] Segment Performance - Agriculture segment net sales fell 17% year-over-year to $3.25 billion due to lower shipment volume, but exceeded the estimate of $3 billion; adjusted EBIT decreased 48% to $263 million, surpassing the estimate of $235.9 million [3] - Construction segment sales declined 13% year-over-year to $773 million, missing the estimate of $803.5 million; adjusted EBIT fell 42% to $35 million, beating the estimate of $23.2 million [4] - Financial Services segment revenues decreased 0.3% to $685 million, surpassing the estimate of $657.7 million; net income from this segment dropped from $91 million to $87 million [5] Financial Overview - As of June 30, 2025, CNH Industrial had cash and cash equivalents of $2.51 billion, down from $3.19 billion at the end of 2024; total debt increased to $27.41 billion from $26.9 billion [6] - The company reported net cash provided by operating activities of $934 million, compared to a net cash used of $515 million in the prior year [6] - Free cash flow from industrial activities was $451 million, up from $140 million in the second quarter of 2024 [7] Guidance for 2025 - CNH Industrial expects Agriculture sales to decrease by 12-20% year-over-year, with adjusted EBIT margin projected between 7-9%; Construction sales are anticipated to decline by 4-15%, with adjusted EBIT margin expected between 2-4% [8] - The company forecasts free cash flow from industrial activities in the range of $100-$500 million and adjusted EPS between 50 cents and 70 cents for 2025 [8][10]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements and Notes to Consolidated Financial Statements](index=4&type=section&id=Item%201%20Financial%20statements%20and%20notes%20to%20consolidated%20financial%20statements) This section presents the unaudited consolidated financial statements of CNH Industrial N.V. for the periods ended June 30, 2025, and December 31, 2024, along with accompanying notes, providing a detailed view of the company's financial position and performance [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) | (in millions of dollars) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Total Assets | $ 43,687 | $ 42,933 | | Total Liabilities | 35,853 | 35,165 | | Total Equity | 7,779 | 7,713 | - Total Assets increased by **$754 million** from December 31, 2024, to June 30, 2025, primarily driven by an increase in financing receivables and inventories[10](index=10&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) | (in millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $ 4,711 | $ 5,488 | $ 8,539 | $ 10,306 | | Net income (loss) | $ 217 | $ 404 | $ 349 | $ 773 | | Basic EPS | $ 0.17 | $ 0.32 | $ 0.28 | $ 0.61 | | Diluted EPS | $ 0.17 | $ 0.32 | $ 0.27 | $ 0.61 | | Cash dividends declared per common share | $ 0.250 | $ 0.470 | $ 0.250 | $ 0.470 | - Total Revenues decreased by **14.2%** for the three months ended June 30, 2025, and by **17.1%** for the six months ended June 30, 2025, compared to the same periods in 2024[12](index=12&type=chunk) - Net income attributable to CNH Industrial N.V. declined significantly from **$399 million** to **$213 million** for the three-month period and from **$767 million** to **$344 million** for the six-month period[12](index=12&type=chunk) [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) | (in millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $ 217 | $ 404 | $ 349 | $ 773 | | Other comprehensive income (loss), net of tax | (28) | (141) | 32 | (190) | | Comprehensive income (loss) attributable to CNH Industrial N.V. | $ 181 | $ 258 | $ 369 | $ 577 | - Other comprehensive income (loss) improved significantly for the six months ended June 30, 2025, showing a gain of **$32 million** compared to a loss of **$190 million** in the prior year, primarily due to foreign currency translation effects[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | (in millions of dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Net cash provided (used) by operating activities | $ 934 | $ (515) | | Net cash provided (used) by investing activities | $ (622) | $ (929) | | Net cash provided (used) by financing activities | $ (1,261) | $ (820) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $ (719) | $ (2,398) | - Operating activities generated **$934 million** in cash for the six months ended June 30, 2025, a significant improvement from a **$515 million** cash usage in the prior year, primarily driven by changes in working capital[18](index=18&type=chunk)[240](index=240&type=chunk)[245](index=245&type=chunk) - Net cash used in financing activities increased to **$1,261 million** in the first half of 2025, mainly due to a decrease in Financial Services debt and dividend payments[18](index=18&type=chunk)[243](index=243&type=chunk) [Consolidated Statements of Changes in Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) | (in millions of dollars) | Balance at December 31, 2024 | Balance at June 30, 2025 | | :----------------------- | :--------------------------- | :----------------------- | | Common Shares | $ 25 | $ 25 | | Treasury Stock | $ (1,386) | $ (1,343) | | Additional Paid-in Capital | $ 1,415 | $ 1,378 | | Retained Earnings | $ 10,309 | $ 10,340 | | Accumulated Other Comprehensive Income (Loss) | $ (2,712) | $ (2,687) | | Noncontrolling Interests | $ 62 | $ 66 | | Total Equity | $ 7,713 | $ 7,779 | - Total Equity increased from **$7,713 million** at December 31, 2024, to **$7,779 million** at June 30, 2025, primarily influenced by net income and changes in accumulated other comprehensive income, partially offset by dividends paid[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1. Basis of Presentation](index=12&type=section&id=Note%201.%20Basis%20of%20Presentation) This note outlines CNH Industrial N.V.'s incorporation details, its core business in agricultural and construction equipment, and financial services, confirming the use of U.S. GAAP for financial statements presented in U.S. dollars, and highlighting an immaterial revision of prior period financial statements due to an error in highly inflationary accounting for its Turkish subsidiary, TürkTraktör - CNH Industrial N.V. is a leading company in the capital goods sector, designing, producing, and selling agricultural and construction equipment, and offering financial products and services[28](index=28&type=chunk) - The consolidated financial statements are prepared in accordance with **U.S. GAAP** and are expressed in **U.S. dollars**[29](index=29&type=chunk) - An immaterial error related to highly inflationary accounting for TürkTraktör resulted in an overstatement of Equity in income of Unconsolidated Subsidiaries and Affiliates by **$34 million** and **$67 million** for the three and six months ended June 30, 2024, respectively, which has been corrected for comparative purposes[30](index=30&type=chunk) [Note 2. New Accounting Pronouncements](index=13&type=section&id=Note%202.%20New%20Accounting%20Pronouncements) This note details new accounting pronouncements not yet adopted by CNH, including ASUs related to business combinations, expense disaggregation disclosures, and improvements to income tax disclosures, with the company evaluating their potential impact on its financial statements - **ASU 2025-03 (Business Combinations and Consolidations)** clarifies guidance for determining the accounting acquirer in business combinations involving **Variable Interest Entities (VIEs)**, effective for fiscal years beginning after **December 15, 2026**[32](index=32&type=chunk) - **ASU 2024-03 (Expense Disaggregation Disclosures)** aims to improve disclosures about a public business entity's expenses, effective for annual reporting periods beginning after **December 15, 2026**[33](index=33&type=chunk) - **ASU 2023-09 (Improvements to Income Tax Disclosures)** enhances transparency of income tax disclosures, effective for fiscal years beginning after **December 15, 2024**, with CNH expecting to adopt it for its **2025 Form 10-K**[34](index=34&type=chunk) [Note 3. Revenue](index=13&type=section&id=Note%203.%20Revenue) This note summarizes revenues disaggregated by operating segment and major source for the three and six months ended June 30, 2025 and 2024, including information on contract liabilities and remaining performance obligations | (in millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Agriculture | $ 3,248 | $ 3,913 | $ 5,829 | $ 7,286 | | Construction | $ 773 | $ 890 | $ 1,364 | $ 1,648 | | Total Industrial Activities | $ 4,021 | $ 4,803 | $ 7,193 | $ 8,934 | | Financial Services | $ 685 | $ 687 | $ 1,336 | $ 1,372 | | Total Revenues | $ 4,711 | $ 5,488 | $ 8,539 | $ 10,306 | | (in millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues from sales of goods | $ 4,007 | $ 4,789 | $ 7,170 | $ 8,909 | | Finance and interest income | $ 531 | $ 548 | $ 1,041 | $ 1,084 | - Contract liabilities, primarily related to extended warranties, increased to **$93 million** at June 30, 2025, from **$72 million** at December 31, 2024[37](index=37&type=chunk) - CNH expects to recognize revenue on approximately **30%** and **90%** of remaining performance obligations over the next **12** and **36 months**, respectively[37](index=37&type=chunk)[38](index=38&type=chunk) [Note 4. Variable Interest Entities](index=14&type=section&id=Note%204.%20Variable%20Interest%20Entities) This note details CNH's consolidation of various securitization trusts and facilities identified as Variable Interest Entities (VIEs), where the company is the primary beneficiary, with creditors having no recourse to the general credit of CNH - CNH consolidates **VIEs** where it has the power to direct activities and the obligation to absorb losses or right to receive benefits, accounting for them as secured borrowings[39](index=39&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) | (in millions of dollars) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Restricted cash | $ 538 | $ 585 | | Financing receivables | $ 10,436 | $ 10,831 | | Total Assets | $ 10,974 | $ 11,416 | | Debt | $ 10,114 | $ 10,577 | | Total Liabilities | $ 10,114 | $ 10,577 | [Note 5. Earnings Per Share](index=14&type=section&id=Note%205.%20Earnings%20Per%20Share) This note provides a reconciliation of basic and diluted earnings per share (EPS) for CNH Industrial N.V. for the three and six months ended June 30, 2025 and 2024, detailing net income attributable to common shareholders and weighted average shares outstanding | (in millions of dollars and shares, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to CNH Industrial N.V. | $ 213 | $ 399 | $ 344 | $ 767 | | Basic earnings (loss) per share | $ 0.17 | $ 0.32 | $ 0.28 | $ 0.61 | | Diluted earnings (loss) per share | $ 0.17 | $ 0.32 | $ 0.27 | $ 0.61 | | Weighted average common shares outstanding—basic | 1,250 | 1,256 | 1,249 | 1,258 | | Weighted average common shares outstanding—diluted | 1,253 | 1,260 | 1,253 | 1,267 | - Basic and diluted EPS **decreased significantly** for both the three and six months ended June 30, 2025, compared to 2024, reflecting lower net income[42](index=42&type=chunk) [Note 6. Employee Benefit Plans and Postretirement Benefits](index=15&type=section&id=Note%206.%20Employee%20Benefit%20Plans%20and%20Postretirement%20Benefits) This note summarizes the components of net periodic benefit cost for CNH's defined benefit pension plans and postretirement health and life insurance plans, also mentioning the amortization of a $101 million liability reduction from 2021 U.S. retiree medical plan changes | (in millions of dollars) | Pension (3 Months) 2025 | Pension (3 Months) 2024 | Healthcare (3 Months) 2025 | Healthcare (3 Months) 2024 | Other (3 Months) 2025 | Other (3 Months) 2024 | | :----------------------- | :---------------------- | :---------------------- | :------------------------- | :------------------------- | :-------------------- | :-------------------- | | Net periodic benefit cost | $ 9 | $ 8 | $ (3) | $ (4) | $ 1 | $ 1 | | (in millions of dollars) | Pension (6 Months) 2025 | Pension (6 Months) 2024 | Healthcare (6 Months) 2025 | Healthcare (6 Months) 2024 | Other (6 Months) 2025 | Other (6 Months) 2024 | | :----------------------- | :---------------------- | :---------------------- | :------------------------- | :------------------------- | :-------------------- | :-------------------- | | Net periodic benefit cost | $ 17 | $ 15 | $ (5) | $ (8) | $ 2 | $ 3 | - A pre-tax gain of **$6 million** (three months) and **$12 million** (six months) was recorded in 'Other, net' due to the amortization of a **$101 million** positive impact from the 2021 U.S. healthcare plan modification[44](index=44&type=chunk) [Note 7. Income Taxes](index=16&type=section&id=Note%207.%20Income%20Taxes) This note discusses CNH's effective tax rates for the three and six months ended June 30, 2025 and 2024, factors influencing changes, and the potential impact of OECD's Pillar Two global minimum tax and the recently signed U.S. OBBBA | (in millions of dollars, except percentages) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective tax rate | 27.6 % | 20.9 % | 28.1 % | 20.1 % | - The **increase** in the 2025 effective tax rate was due to the impact of the Company's geographic income mix, lower permanent tax benefits, and a smaller rate reduction from Argentina's highly-inflationary economy[45](index=45&type=chunk)[46](index=46&type=chunk) - CNH does not expect the tax impacts of the OECD's Pillar Two global minimum tax legislation to have a **material impact** on its financial results during 2025[47](index=47&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)**, signed into U.S. law on **July 4, 2025**, **reinstates full expensing of R&D expenditures** and **extends bonus depreciation**; CNH is evaluating its financial implications[48](index=48&type=chunk) [Note 8. Segment Reporting](index=16&type=section&id=Note%208.%20Segment%20Reporting) This note details CNH's three reportable operating segments: Agriculture, Construction, and Financial Services, describing their products and services and how the Chief Operating Decision Maker (CODM) assesses performance and allocates resources - CNH has three reportable segments: **Agriculture** (farm machinery), **Construction** (construction equipment), and **Financial Services** (financing for equipment purchases)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - The CODM assesses performance using **Adjusted EBIT** for Agriculture and Construction segments, and **Income before income taxes** for Financial Services[55](index=55&type=chunk)[56](index=56&type=chunk) | (in millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Agriculture Net Sales | $ 3,248 | $ 3,913 | $ 5,829 | $ 7,286 | | Construction Net Sales | $ 773 | $ 890 | $ 1,364 | $ 1,648 | | Financial Services Revenues | $ 685 | $ 687 | $ 1,336 | $ 1,372 | | Agriculture Adjusted EBIT | $ 263 | $ 502 | $ 402 | $ 890 | | Construction Adjusted EBIT | $ 35 | $ 60 | $ 49 | $ 111 | | Financial Services Income before income taxes | $ 112 | $ 114 | $ 230 | $ 251 | | (in millions of dollars) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Agriculture Inventory | $ 4,092 | $ 3,730 | | Construction Inventory | $ 1,063 | $ 983 | | Financial Services Inventory | $ 61 | $ 63 | | Total Inventory | $ 5,216 | $ 4,776 | [Note 9. Receivables](index=24&type=section&id=Note%209.%20Receivables) This note provides a detailed breakdown of CNH's financing receivables, categorized into retail, wholesale, and other, along with the allowance for credit losses, explaining the nature of financing, securitization programs, credit quality monitoring, and highlighting the impact of Brazilian market conditions on retail reserves | (in millions of dollars) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Retail | $ 14,640 | $ 14,297 | | Wholesale | $ 8,699 | $ 8,749 | | Other | $ 48 | $ 39 | | Total Financing Receivables, net | $ 23,387 | $ 23,085 | - Allowance for credit losses **increased** to **$540 million** at June 30, 2025, from **$424 million** at December 31, 2024, with a **significant increase** in retail reserves for Brazil due to market conditions[68](index=68&type=chunk)[78](index=78&type=chunk) - The receivable balance greater than 30 days past due as a percentage of receivables for Financial Services was **3.9%** at June 30, 2025, **up** from **2.5%** at June 30, 2024, mainly due to higher delinquencies in Brazil[193](index=193&type=chunk) [Note 10. Inventories](index=29&type=section&id=Note%2010.%20Inventories) This note provides a breakdown of CNH's inventories as of June 30, 2025, and December 31, 2024, categorized into raw materials, work-in-process, and finished goods | (in millions of dollars) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Raw materials | $ 1,483 | $ 1,372 | | Work-in-process | $ 516 | $ 384 | | Finished goods | $ 3,217 | $ 3,020 | | Total inventories | $ 5,216 | $ 4,776 | - Total inventories **increased by $440 million** from December 31, 2024, to June 30, 2025, with increases across all categories[86](index=86&type=chunk) [Note 11. Leases](index=29&type=section&id=Note%2011.%20Leases) This note outlines CNH's lease activities, primarily operating leases for buildings, plant, machinery, vehicles, and IT equipment as a lessee, and equipment leases to retail customers as a lessor, providing details on lease expenses, right-of-use assets, and lease liabilities - Operating lease expenses for long-term leases were **$27 million** (Q2 2025) and **$52 million** (YTD Q2 2025)[89](index=89&type=chunk) | (in millions of dollars) | June 30, 2025 | June 30, 2024 | | :----------------------- | :------------ | :------------ | | Right-of-use assets | $ 279 | $ 291 | | Lease liabilities | $ 286 | $ 297 | - The weighted average remaining lease term for operating leases was **4.8 years** at June 30, 2025, with a weighted average discount rate of **4.5%**[90](index=90&type=chunk) [Note 12. Investments in Unconsolidated Subsidiaries and Affiliates](index=30&type=section&id=Note%2012.%20Investments%20in%20Unconsolidated%20Subsidiaries%20and%20Affiliates) This note summarizes CNH's investments in unconsolidated subsidiaries and affiliates, distinguishing between equity method investments and other investments at carrying value | (in millions of dollars) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Equity method | $ 414 | $ 403 | | Other investments, at carrying value | $ 91 | $ 87 | | Total | $ 505 | $ 490 | - Total investments in unconsolidated subsidiaries and affiliates **increased by $15 million** from December 31, 2024, to June 30, 2025[93](index=93&type=chunk) [Note 13. Goodwill and Other Intangibles](index=30&type=section&id=Note%2013.%20Goodwill%20and%20Other%20Intangibles) This note details changes in the carrying amount of goodwill by segment and provides a breakdown of other intangible assets, confirming no goodwill impairment was identified in the most recent annual review | (in millions of dollars) | Agriculture | Construction | Financial Services | Total | | :----------------------- | :---------- | :----------- | :----------------- | :---- | | Balance at December 31, 2024 | $ 3,402 | $ 44 | $ 138 | $ 3,584 | | Balance at June 30, 2025 | $ 3,428 | $ 50 | $ 140 | $ 3,618 | - Goodwill **increased by $34 million** from December 31, 2024, to June 30, 2025, primarily due to foreign currency translation and other adjustments[94](index=94&type=chunk) | (in millions of dollars) | June 30, 2025 Net | December 31, 2024 Net | | :----------------------- | :---------------- | :-------------------- | | Other intangible assets subject to amortization | $ 641 | $ 629 | | Other intangible assets not subject to amortization | $ 602 | $ 592 | | Total other intangible assets | $ 1,243 | $ 1,221 | - Amortization expense was **$42 million** for Q2 2025 and **$84 million** for YTD Q2 2025[95](index=95&type=chunk) [Note 14. Supply Chain Finance Programs](index=30&type=section&id=Note%2014.%20Supply%20Chain%20Finance%20Programs) This note describes CNH's supply chain finance (SCF) programs, which allow suppliers to sell receivables to financial institutions, with CNH's responsibility limited to original payment terms and no direct financial relationship with the institutions, also providing the amount of outstanding obligations - Under **SCF programs**, suppliers can sell receivables to financial institutions, with CNH's responsibility limited to original payment terms[96](index=96&type=chunk) - Outstanding obligations confirmed as valid to SCF program administrators were **$110 million** at June 30, 2025, **up from $79 million** at December 31, 2024[97](index=97&type=chunk) [Note 15. Other Liabilities](index=31&type=section&id=Note%2015.%20Other%20Liabilities) This note summarizes CNH's 'Other liabilities,' including warranty and campaign programs, marketing and sales incentive programs, tax payables, accrued expenses, employee benefits, lease liabilities, legal reserves, contract liabilities, and restructuring reserves, detailing activity in basic warranty and campaign program accruals | (in millions of dollars) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Warranty and campaign programs | $ 668 | $ 633 | | Marketing and sales incentive programs | $ 2,023 | $ 2,075 | | Tax payables | $ 274 | $ 243 | | Accrued expenses and deferred income | $ 871 | $ 917 | | Accrued employee benefits | $ 399 | $ 376 | | Lease liabilities | $ 286 | $ 282 | | Legal reserves and other provisions | $ 407 | $ 390 | | Contract liabilities | $ 93 | $ 72 | | Restructuring reserve | $ 26 | $ 30 | | Other | $ 379 | $ 345 | | Total | $ 5,426 | $ 5,363 | - Restructuring expenses were **$5 million** for Q2 2025 (**down from $51 million** in Q2 2024) and **$11 million** for YTD Q2 2025 (**down from $82 million** in YTD Q2 2024), primarily due to employee separation costs[100](index=100&type=chunk) [Note 16. Commitments and Contingencies](index=31&type=section&id=Note%2016.%20Commitments%20and%20Contingencies) This note outlines CNH's exposure to various legal risks, including environmental claims, follow-up on damages claims, the FPT emissions investigation, and SEC subpoenas, providing details on environmental reserves, the conclusion of the SEC inquiry, and guarantees provided by CNH - Environmental reserves of approximately **$24 million** were established at June 30, 2025, to address estimated potential liabilities for environmental matters[108](index=108&type=chunk) - The SEC Staff concluded its inquiry into CNH's revenue recognition and sales practices on **July 25, 2025**, and **does not intend to recommend any enforcement action** to the Commission[111](index=111&type=chunk) - CNH provided guarantees on debt or commitments of third parties and performance guarantees totaling **$73 million** at June 30, 2025[112](index=112&type=chunk) [Note 17. Financial Instruments](index=33&type=section&id=Note%2017.%20Financial%20Instruments) This note describes CNH's policies for financial instruments, including the fair value hierarchy and valuation methodologies, detailing the use of derivative instruments to mitigate market risks, their classification, and financial statement impact - CNH uses **derivative instruments** (foreign exchange forward contracts/swaps and interest rate swaps/caps) to mitigate interest rate and foreign currency exposures, **not for speculative purposes**[119](index=119&type=chunk)[120](index=120&type=chunk)[123](index=123&type=chunk) - All CNH's foreign exchange and interest rate derivatives are generally classified as **Level 2** in the fair value hierarchy[119](index=119&type=chunk)[122](index=122&type=chunk)[126](index=126&type=chunk) | (in millions of dollars) | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :----------------------- | :----------------------- | :--------------------------- | | Derivative assets | $ 168 | $ 196 | | Derivative liabilities | $ 90 | $ 146 | - The total notional amount of CNH's foreign exchange derivatives was **$4.0 billion** at June 30, 2025, and interest rate derivatives was approximately **$9.1 billion**[122](index=122&type=chunk)[126](index=126&type=chunk) [Note 18. Accumulated Other Comprehensive Income (Loss)](index=39&type=section&id=Note%2018.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details the components of CNH's accumulated other comprehensive income (loss) (AOCI), including unrealized gains/losses on cash flow hedges, changes in retirement plans' funded status, foreign currency translation, and equity method investments, providing a breakdown of these components, net of tax, and their changes over the six months ended June 30, 2025 and 2024 | (in millions of dollars) | Six Months Ended June 30, 2025 Net Amount | Six Months Ended June 30, 2024 Net Amount | | :----------------------- | :---------------------------------------- | :---------------------------------------- | | Unrealized gain (loss) on cash flow hedges | $ 9 | $ 51 | | Changes in retirement plans' funded status | $ (5) | $ (1) | | Foreign currency translation | $ — | $ (220) | | Share of other comprehensive income (loss) of entities using the equity method | $ 28 | $ (20) | | Other comprehensive income (loss) | $ 32 | $ (190) | - AOCI **improved significantly**, with a **net gain of $32 million** for the six months ended June 30, 2025, compared to a **loss of $190 million** in the prior year, largely due to a **favorable shift in foreign currency translation**[137](index=137&type=chunk) | (in millions of dollars) | Balance at December 31, 2024 | Balance at June 30, 2025 | | :----------------------- | :--------------------------- | :----------------------- | | Total AOCI | $ (2,712) | $ (2,687) | [Note 19. Related Party Information](index=40&type=section&id=Note%2019.%20Related%20Party%20Information) This note details CNH's related party transactions, primarily with EXOR N.V. (its controlling shareholder), Iveco Group N.V. (post-Demerger), and unconsolidated subsidiaries and affiliates, outlining various agreements and summarizing their financial impact - EXOR N.V. held **45.3%** of CNH's voting power as of June 30, 2025, giving it **significant influence** over shareholder decisions[143](index=143&type=chunk) - CNH has ongoing transactions with **Iveco Group** post-Demerger, including engine supply and various services under **Master Service Agreements**[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) | (in millions of dollars) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenues (Iveco Group) | $ 27 | $ 33 | $ 54 | $ 71 | | Purchases (Iveco Group) | $ 172 | $ 219 | $ 319 | $ 430 | | Net sales (Unconsolidated Subsidiaries) | $ 98 | $ 130 | $ 174 | $ 288 | | Purchases (Unconsolidated Subsidiaries) | $ 102 | $ 117 | $ 192 | $ 259 | [Note 20. Immaterial Revision of Prior Period Financial Statements](index=43&type=section&id=Note%2020.%20Immaterial%20Revision%20of%20Prior%20Period%20Financial%20Statements) This note details the immaterial revision made to prior period financial statements to correct an accounting error related to highly inflationary accounting for CNH's unconsolidated subsidiary in Türkiye, TürkTraktör, primarily impacting Equity in income of Unconsolidated Subsidiaries and Affiliates, leading to adjustments in net income and EPS for comparative periods - An **immaterial error** in highly inflationary accounting for TürkTraktör led to an **overstatement** of Equity in income of Unconsolidated Subsidiaries and Affiliates[152](index=152&type=chunk) | (in millions of dollars and shares, except per share amounts) | Three Months Ended June 30, 2024 (Revision Impacts) | Six Months Ended June 30, 2024 (Revision Impacts) | | :---------------------------------------------------------- | :-------------------------------------------------- | :------------------------------------------------ | | Equity in income of unconsolidated subsidiaries and affiliates | $ (34) | $ (67) | | Net income (loss) attributable to CNH Industrial N.V. | $ (34) | $ (67) | | Basic earnings (loss) per share | $ (0.02) | $ (0.05) | | Diluted earnings (loss) per share | $ (0.02) | $ (0.05) | [Note 21. Subsequent Events](index=44&type=section&id=Note%2021.%20Subsequent%20Events) This note discloses a subsequent event: the signing of the One Big Beautiful Bill Act (OBBBA) into U.S. law on July 4, 2025, with CNH currently evaluating its financial implications, which include changes to R&D expensing, bonus depreciation, and U.S. international tax rules - The **One Big Beautiful Bill Act (OBBBA)** was signed into U.S. law on **July 4, 2025**[155](index=155&type=chunk) - Key provisions of the OBBBA include the **repeal of mandatory capitalization of R&D expenditures (reinstating full expensing)**, **extension of bonus depreciation**, and **revisions to U.S. international tax rules**[155](index=155&type=chunk) - CNH is **evaluating the financial implications** of the OBBBA and will begin reflecting its effects in the **third quarter of 2025**[155](index=155&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on CNH's financial condition and operating results, including a discussion of global business conditions, detailed analysis of consolidated and segment performance, and insights into liquidity, capital resources, and contingencies, also defining non-GAAP financial measures used for reporting [General Information and Non-GAAP Financial Measures](index=44&type=section&id=General%20Information%20and%20Non-GAAP%20Financial%20Measures) - CNH Industrial N.V. manages three reportable segments: **Agriculture**, **Construction**, and **Financial Services**, with worldwide Agriculture and Construction operations, plus corporate functions, collectively referred to as '**Industrial Activities**'[157](index=157&type=chunk) - Non-GAAP financial measures used include **Adjusted EBIT of Industrial Activities**, **Net Cash (Debt)**, and **Revenues on a Constant Currency Basis**, which management believes provide useful and relevant information for assessing financial performance[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) [Operating Results - Three Months Ended June 30, 2025 compared to Three Months Ended June 30, 2024](index=45&type=section&id=Operating%20Results%20-%20Three%20Months%20Ended%20June%2030,%202025%20compared%20to%20Three%20Months%20Ended%20June%2030,%202024) - Total Revenues **declined by 14.2%** (**13.7%** on a constant currency basis) to **$4,711 million**, primarily due to lower shipment volumes from decreased industry demand and continued dealer destocking[167](index=167&type=chunk)[168](index=168&type=chunk) - Net income attributable to CNH Industrial N.V. **decreased to $213 million from $399 million**, impacted by lower shipment volumes, higher credit risk provisions, and a higher effective tax rate[167](index=167&type=chunk)[170](index=170&type=chunk)[176](index=176&type=chunk)[178](index=178&type=chunk) | (in millions of dollars) | 2025 | 2024 | % Change | | :----------------------- | :--- | :--- | :------- | | Agriculture Net Sales | $ 3,248 | $ 3,913 | (17.0)% | | Construction Net Sales | $ 773 | $ 890 | (13.1)% | | Financial Services Revenues | $ 685 | $ 687 | (0.3)% | | Agriculture Adjusted EBIT | $ 263 | $ 502 | (47.6)% | | Construction Adjusted EBIT | $ 35 | $ 60 | (41.7)% | | Financial Services Net Income | $ 87 | $ 91 | (4.4)% | - Agriculture's Adjusted EBIT margin **decreased to 8.1% from 12.8%**, driven by lower shipment volumes, partially offset by favorable net price realization and lower production, warranty, and SG&A expenses[186](index=186&type=chunk) - Financial Services' net income **decreased by $4 million**, primarily due to increased risk costs in Brazil and a higher effective tax rate, partially offset by interest margin improvements and favorable volumes[191](index=191&type=chunk) [Operating Results - Six Months Ended June 30, 2025 compared to Six Months Ended June 30, 2024](index=51&type=section&id=Operating%20Results%20-%20Six%20Months%20Ended%20June%2030,%202025%20compared%20to%20Six%20Months%20Ended%20June%2030,%202024) - Total Revenues **decreased by 17.1%** (**15.5%** on a constant currency basis) to **$8,539 million**, mainly due to lower shipment volumes on decreased industry demand and continued dealer destocking[197](index=197&type=chunk) - Net income attributable to CNH Industrial N.V. **decreased to $344 million from $767 million**, influenced by lower shipment volumes, higher credit risk provisions, and a higher effective tax rate[199](index=199&type=chunk)[206](index=206&type=chunk)[208](index=208&type=chunk) | (in millions of dollars) | 2025 | 2024 | % Change | | :----------------------- | :--- | :--- | :------- | | Agriculture Net Sales | $ 5,829 | $ 7,286 | (20.0)% | | Construction Net Sales | $ 1,364 | $ 1,648 | (17.2)% | | Financial Services Revenues | $ 1,336 | $ 1,372 | (2.6)% | | Agriculture Adjusted EBIT | $ 402 | $ 890 | (54.8)% | | Construction Adjusted EBIT | $ 49 | $ 111 | (55.9)% | | Financial Services Net Income | $ 177 | $ 209 | (15.4)% | - Agriculture's Adjusted EBIT margin was **6.9%**, **down from 12.2%**, primarily due to lower shipment volumes, partially offset by lower production and SG&A expenses[216](index=216&type=chunk) - Financial Services' net income **decreased by $32 million**, mainly due to increased risk costs in Brazil and North America, a higher effective tax rate, and lower recoveries on used equipment sales[221](index=221&type=chunk) [Supplemental Information](index=56&type=section&id=Supplemental%20Information) - Supplemental data is provided to differentiate the operations of **Industrial Activities** (Agriculture and Construction segments) and **Financial Services**, as their financial analyses differ significantly[225](index=225&type=chunk)[226](index=226&type=chunk) | (in millions of dollars) | Industrial Activities (Q2 2025) | Financial Services (Q2 2025) | Consolidated (Q2 2025) | | :----------------------- | :------------------------------ | :--------------------------- | :--------------------- | | Total Revenues | $ 4,060 | $ 685 | $ 4,711 | | Net income (loss) | $ 130 | $ 87 | $ 217 | | (in millions of dollars) | Industrial Activities (YTD Q2 2025) | Financial Services (YTD Q2 2025) | Consolidated (YTD Q2 2025) | | :----------------------- | :-------------------------------- | :------------------------------- | :------------------------- | | Total Revenues | $ 7,262 | $ 1,336 | $ 8,539 | | Net income (loss) | $ 172 | $ 177 | $ 349 | | (in millions of dollars) | Industrial Activities (June 30, 2025) | Financial Services (June 30, 2025) | Consolidated (June 30, 2025) | | :----------------------- | :------------------------------------ | :--------------------------------- | :--------------------------- | | Total Assets | $ 17,538 | $ 26,914 | $ 43,687 | | Total Liabilities | $ 12,611 | $ 24,007 | $ 35,853 | | Total Debt | $ 5,230 | $ 22,744 | $ 27,408 | [Critical Accounting Estimates](index=60&type=section&id=Critical%20Accounting%20Estimates) - There have been **no material changes** to the critical accounting estimates discussed in the Company's 2024 Annual Report on Form 10-K[236](index=236&type=chunk) [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents and Restricted cash **decreased by $719 million to $3,147 million** at June 30, 2025, primarily due to a decrease in Financial Services debt, investments in fixed assets, and dividend payments[238](index=238&type=chunk) - Available liquidity totaled **$9,266 million** at June 30, 2025, including Cash and cash equivalents, Restricted cash, undrawn medium-term unsecured committed facilities, and net financial receivables from Iveco Group[239](index=239&type=chunk) - Net cash provided by operating activities was **$934 million** for the six months ended June 30, 2025, a **significant improvement from $515 million used** in the prior year[240](index=240&type=chunk)[245](index=245&type=chunk) | (in millions of dollars) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Total bonds | $ 10,892 | $ 9,796 | | Asset-backed debt | $ 11,463 | $ 11,965 | | Other debt | $ 5,053 | $ 5,121 | | Total Debt | $ 27,408 | $ 26,882 | - Net Debt (non-GAAP) **increased to $(24,069) million from $(22,947) million** at December 31, 2024[251](index=251&type=chunk) - The Company extended the maturity date of its **€3.25 billion** unsecured, committed revolving credit facility by one year to **April 19, 2030**, and was **in compliance with all covenants** at June 30, 2025[255](index=255&type=chunk)[256](index=256&type=chunk) [Contingencies](index=64&type=section&id=Contingencies) - The SEC Staff concluded its inquiry into CNH's revenue recognition and sales practices on **July 25, 2025**, and **does not intend to recommend any enforcement action** to the Commission[259](index=259&type=chunk) [Safe Harbor Statement](index=65&type=section&id=Safe%20Harbor%20Statement) - This section contains **forward-looking statements**, which are **not guarantees of future performance** and involve known and unknown risks, uncertainties, and other factors that could cause actual results to **differ materially**[260](index=260&type=chunk) - Key risk factors include **economic conditions**, **production and supply chain disruptions**, **government policies**, **commodity prices**, **interest rates**, **inflation**, **litigation**, **cybersecurity attacks**, and the ability to realize benefits from **strategic plans**[261](index=261&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the company's 2024 Annual Report for quantitative and qualitative disclosures about market risk, stating that there have been no material changes to this information - There has been **no material change** in the quantitative and qualitative disclosures about market risk since the 2024 Annual Report[265](index=265&type=chunk) [Item 4. Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that CNH's disclosure controls and procedures were not effective as of June 30, 2025, due to an unremediated material weakness in internal control over financial reporting related to the existence and completeness of raw material and work-in-process inventory, with remediation actions underway - Disclosure controls and procedures were **not effective** as of June 30, 2025, due to a **material weakness** in internal control over financial reporting[266](index=266&type=chunk) - The material weakness relates to deficiencies in the operating effectiveness of internal controls concerning the **existence and completeness of raw material and work-in-process inventory**[267](index=267&type=chunk) - Remediation actions include **engaging consulting professionals**, **planning full-physical inventory counts in Q4 2025**, **developing standard operating procedures**, and **providing training** to plant personnel[269](index=269&type=chunk)[270](index=270&type=chunk) [PART II – OTHER INFORMATION](index=69&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 16, 'Commitments and Contingencies,' for detailed information regarding legal proceedings - For information on legal proceedings, refer to **Note 16: Commitments and Contingencies**[274](index=274&type=chunk) [Item 1A. Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 - **No material changes** to the risk factors disclosed in the Annual Report on Form 10-K for 2024 and the Quarterly Report on Form 10-Q for Q1 2025[275](index=275&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's $500 million share buyback program authorized in February 2024, reporting that CNH did not purchase any common shares under this program during the three months ended June 30, 2025 - The Company's Board of Directors authorized a **$500 million** share buyback program in **February 2024**[276](index=276&type=chunk) - **No common shares were purchased** under the buyback program during the three months ended June 30, 2025[277](index=277&type=chunk) | Period | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Average Price Paid per Share ($) | Approximate USD Value of Shares that May Yet Be Purchased under the Plans or Programs ($) | | :------------------ | :----------------------------------------------------------------- | :------------------------------- | :------------------------------------------------------------------------ | | 4/1/2025 - 4/30/2025 | — | — | 344,690,505 | | 5/1/2025 - 5/31/2025 | — | — | 344,690,505 | | 6/1/2025 - 6/30/2025 | — | — | 344,690,505 | | Total | — | | 344,690,505 | [Item 3. Default Upon Senior Securities](index=69&type=section&id=Item%203.%20Default%20Upon%20Senior%20Securities) This item is marked as not applicable - Not applicable[278](index=278&type=chunk) [Item 4. Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is marked as not applicable - Not applicable[279](index=279&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) This item states that there is no other information to report - None[280](index=280&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, executive agreements, certifications, and XBRL interactive data files, clarifying that the agreements are not intended to provide factual information beyond their terms - Exhibits include **Articles of Association**, **Executive Employment Agreement**, **CEO/CFO certifications (Sarbanes-Oxley Act Sections 302 and 906)**, and **Inline XBRL Taxonomy Extension files**[281](index=281&type=chunk) - The agreements and documents filed as exhibits are **not intended to provide factual information or other disclosures beyond their specific terms**[282](index=282&type=chunk)

HONG KONG, Aug. 04, 2025 (GLOBE NEWSWIRE) -- Nano Labs Ltd (Nasdaq: NA) ("we," the "Company" or "Nano Labs"), a leading Web 3.0 infrastructure and product solution provider in China, today announced receipt of approval from the Kyrgyz Republic to proceed with its proposal (the "Proposal") to issue a stablecoin pegged to the offshore Chinese Yuan (CNH) within the country. According to an official letter from both the National Investment Agency under the President of the Kyrgyz Republic and the National Counc ...

Core Insights - CNH Industrial reported revenue of $4.71 billion for the quarter ended June 2025, a decrease of 14.2% year-over-year, with EPS at $0.17 compared to $0.38 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $4.53 billion by 4.11%, and the EPS also surpassed the consensus estimate of $0.16 by 6.25% [1] Revenue Breakdown - Net Sales were reported at $4.02 billion, exceeding the average estimate of $3.87 billion by analysts, but reflecting a year-over-year decline of 16.3% [4] - Total Industrial Activities in Agriculture generated $3.25 billion, surpassing the $2.97 billion estimate, but down 17% year-over-year [4] - Total Industrial Activities in Construction reported $773 million, slightly below the $783.84 million estimate, marking a 13.2% decrease year-over-year [4] - Finance, interest, and other income reached $690 million, exceeding the $661.32 million estimate, with a year-over-year increase of 0.7% [4] - Financial Services revenue was $685 million, slightly above the $659.73 million estimate, but down 0.3% year-over-year [4] - Total Industrial Activities revenue was $4.06 billion, exceeding the $3.87 billion estimate, but down 16% year-over-year [4] - Eliminations reported a revenue of $-34 million, compared to the $0.47 million estimate, reflecting a year-over-year change of 9.7% [4] Adjusted EBIT Performance - Adjusted EBIT for Industrial Activities in Agriculture was $263 million, surpassing the average estimate of $219.6 million [4] - Adjusted EBIT for Industrial Activities in Construction was $35 million, exceeding the average estimate of $26.18 million [4] - Adjusted EBIT for Unallocated items, eliminations, and other was reported at $-74 million, compared to the average estimate of $-60.92 million [4] - Total Industrial Activities Adjusted EBIT was $224 million, above the average estimate of $197.61 million [4] Stock Performance - CNH shares have returned -5.3% over the past month, contrasting with the Zacks S&P 500 composite's +2.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Consolidated revenues for Q2 were down 14% year over year at $4.7 billion, with adjusted EBIT down 55% to $224 million and EPS at 17% [13][14] - Adjusted net income decreased by about half, with adjusted diluted earnings per share down from $0.35 to $0.17 [18] - Second quarter gross margin was 21.8%, down from 24.4% in Q2 2024, affected by lower production volumes and unfavorable geographic mix [19] Business Line Data and Key Metrics Changes - Agriculture segment sales were down 17% to $3.2 billion, with North America down 36%, representing over 90% of the total decline in ag sales [18][19] - Construction segment net sales were $773 million, down 13% year over year, with gross margin at 15.7%, down from 16.5% in Q2 2024 [22] - Financial Services reported net income of $87 million, with a year-over-year decrease mainly driven by higher risk costs in Brazil [23] Market Data and Key Metrics Changes - Industrial production hours were down 12% year over year, with agriculture down 12% and construction down 15% [8] - North American industry retail demand was down 37% for high horsepower tractors and down 23% for combines [14] - The global industry forecast for agriculture is expected to be down around 10% from 2024, with 2025 representing a trough level of global market demand [32] Company Strategy and Development Direction - The company is focused on reducing channel inventories and aligning production with retail demand, aiming to achieve target levels of newly built machine inventory by year-end [9][32] - Five key strategic pillars were outlined: expanding product leadership, advancing Iron and Tech integration, driving commercial excellence, operational excellence, and quality as a mindset [14] - A new collaboration with Starlink was announced to provide connectivity for farmers, enhancing productivity [11][16] Management's Comments on Operating Environment and Future Outlook - The management noted ongoing complexity and uncertainty in the macroeconomic environment, making forecasting challenging [6][7] - The company expects to produce in line with retail demand in the second half of 2025 and into 2026, while remaining cautious about tariff impacts [10][36] - Management expressed confidence in the long-term strategy and operational improvements, despite current market headwinds [12][13] Other Important Information - The company reaffirmed its capital allocation priorities, focusing on reinvestment while maintaining a healthy balance sheet [24][25] - Free cash flow from industrial activities was $451 million, significantly better compared to 2024 due to improvements in working capital [18] Q&A Session Summary Question: Inventory levels in Agriculture - Management confirmed a reduction of $200 million in excess inventory, with a focus on clearing aged inventories and supporting dealer sales [40][42] Question: 2026 order trends - Management indicated that 2025 is expected to be a trough year, with uncertainty around tariffs impacting 2026 demand forecasts [46][48] Question: Pricing strategies - Management stated that pricing will be positive for the full year, driven by higher value functionality and cost discipline [58][60] Question: North American market challenges - Management acknowledged the pricing differential between new and used equipment and emphasized efforts to align inventory levels [96][100] Question: Timing of tariff impacts - Management expects most tariff impacts to be felt in Q4, with ongoing efforts to mitigate costs through pricing and operational efficiencies [104][106]

Financial Data and Key Metrics Changes - Consolidated revenues for Q2 2025 were down 14% year-over-year at $4.7 billion, with adjusted EBIT down 55% to $224 million and EPS at 17% [12][13] - Adjusted net income decreased by about half, with adjusted diluted earnings per share down from $0.35 to $0.17 [16][17] - Second quarter gross margin was 21.8%, down from 24.4% in Q2 2024, affected by lower production volumes and unfavorable geographic mix [18] Business Line Data and Key Metrics Changes - Agriculture segment sales were down 17% to $3.2 billion, with North America down 36%, representing over 90% of the total decline in ag sales [12][17] - Construction segment net sales were $773 million, down 13% year-over-year, with gross margin at 15.7%, down from 16.5% in Q2 2024 [21] - Financial Services reported net income of $87 million, with a year-over-year decrease mainly driven by higher risk costs in Brazil [22] Market Data and Key Metrics Changes - Industrial production hours were down 12% year-over-year, with agriculture down 12% and construction down 15% [7] - North American industry retail demand was down 37% for high horsepower tractors and down 23% for combines [13] - The global industry forecast for agriculture is expected to be down around 10% from 2024, with 2025 representing a trough level of global market demand [31] Company Strategy and Development Direction - The company is focused on reducing channel inventories while defending market share, with a target to align production with retail demand by the end of 2025 [5][8] - Five key strategic pillars were outlined: expanding product leadership, advancing Iron and Tech integration, driving commercial excellence, operational excellence, and quality as a mindset [13] - A new collaboration with Starlink was announced to provide connectivity for farmers, enhancing productivity [10][14] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions remained soft, with ongoing complexity and uncertainty in the macroeconomic environment [5][6] - The company expects to produce in line with retail demand in the second half of 2025 and into 2026, while maintaining a disciplined approach to capital allocation [12][35] - Management expressed confidence in achieving targeted dealer inventory levels and emphasized the importance of operational excellence and cost-saving initiatives [8][38] Other Important Information - The company reaffirmed its capital allocation priorities, including reinvesting in the business while maintaining a healthy balance sheet [22][23] - The foreign exchange impact on net sales is now forecasted to be minus 1%, an improvement from the previous assumption of minus 3% [24] - Tariff impacts are expected to grow through the second half of the year, with a significant negative effect on EBIT anticipated [105] Q&A Session Summary Question: Inventory levels in Agriculture - Management confirmed a reduction of $200 million in excess inventory, with ongoing efforts to align inventory levels with retail demand [40][41] Question: 2026 order trends - Management indicated that 2025 is expected to be a trough year, with uncertainty around tariffs impacting future demand [46][48] Question: Pricing strategies - Management stated that pricing will be positive for the full year, driven by higher value functionality and cost discipline [58][60] Question: North American market challenges - Management acknowledged the price differential between new and used equipment and emphasized efforts to align inventory levels [96][100] Question: Tariff impacts timing - Management expects most tariff impacts to be felt in Q4 2025, with ongoing efforts to mitigate these costs [104][106]

Financial Performance - Consolidated revenues decreased by 14% year-over-year to $4.7 billion[10] - Net sales for Industrial Activities decreased by 16% year-over-year to $4.0 billion[10] - Adjusted EBIT for Industrial Activities decreased by 55% year-over-year to $224 million[10] - Net income decreased by 46% year-over-year to $217 million[10] - Adjusted diluted EPS decreased by $0.18 year-over-year to $0.17[10] Segment Performance - Agriculture net sales decreased by 17% year-over-year to $3.248 billion, with adjusted EBIT decreasing to $263 million[21] - Construction net sales decreased by 13% year-over-year to $773 million, with adjusted EBIT decreasing to $35 million[24] - Financial Services retail originations decreased by $0.2 billion year-over-year to $2.7 billion, while the managed portfolio increased by $0.2 billion year-over-year to $28.7 billion[27] Outlook - The company reaffirmed its 2025 outlook for Industrial Activities, including net sales decreasing by 11% year-over-year from $17.1 billion, adjusted EBIT margin between 4.5% and 6.5%, and free cash flow between $0.1 billion and $0.5 billion[38] - The company also reaffirmed its 2025 outlook for adjusted diluted EPS between $0.50 and $0.70[38] Other Highlights - Production hours decreased by 12% year-over-year to reduce dealer inventory[8] - The company announced a collaboration with Starlink to expand connectivity for CNH customers[8]

Group 1: Earnings Performance - CNH Industrial reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.16 per share, but down from $0.38 per share a year ago, representing an earnings surprise of +6.25% [1] - The company posted revenues of $4.71 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.11%, compared to $5.49 billion in the same quarter last year [2] - Over the last four quarters, CNH has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] Group 2: Stock Performance and Outlook - CNH shares have increased approximately 14.4% since the beginning of the year, outperforming the S&P 500's gain of 7.8% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.17 on revenues of $4.22 billion, and for the current fiscal year, it is $0.63 on revenues of $17.23 billion [7] Group 3: Industry Context - The Manufacturing - Farm Equipment industry, to which CNH belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of CNH's stock may be influenced by the overall outlook for the industry, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

[Executive Summary & Q2 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Highlights) CNH Industrial N.V. navigated challenging Q2 2025 market conditions with effective operations, despite significant declines in consolidated revenue and net income, while achieving substantial industrial free cash flow growth [CEO Statement](index=1&type=section&id=CEO%20Statement) The CEO affirmed effective operations and strategic focus despite challenging market conditions, emphasizing product excellence and partner support - The company operated effectively and met targets despite challenging market conditions[1](index=1&type=chunk) - Strategic priorities include advancing operational improvements and investments to deliver superior products and technology[1](index=1&type=chunk) - Appreciation for supplier and dealer support in navigating uncertain trade environments and achieving long-term success[1](index=1&type=chunk) [Q2 2025 Consolidated Financial Highlights](index=1&type=section&id=Q2%202025%20Consolidated%20Financial%20Highlights) Consolidated revenue and industrial net sales declined significantly in Q2 2025 due to lower demand, but industrial free cash flow improved substantially Q2 2025 Consolidated Financial Data (US-GAAP) | Indicator | Q2 2025 ($ million) | Q2 2024 ($ million) | Change ($ million) | Change Rate | | :--------------------------------- | :------------- | :------------- | :----- | :------- | | Consolidated Revenue | 4,711 | 5,488 | (777) | (14)% | | Industrial Net Sales | 4,021 | 4,803 | (782) | (16)% | | Net Income | 217 | 404 | (187) | (46)% | | Diluted EPS | 0.17 | 0.32 | (0.15) | - | | Cash Flow from Operating Activities | 772 | 379 | +393 | +103.7% | | Industrial Free Cash Flow | 451 | 140 | +311 | +222.1% | - Consolidated revenue decreased by **14% to $4.711 billion**, and industrial net sales decreased by **16% to $4.021 billion**, primarily due to lower industry demand and dealer destocking[1](index=1&type=chunk)[4](index=4&type=chunk) - Net income and diluted EPS decreased by **46% and $0.15** to **$217 million and $0.17**, respectively[1](index=1&type=chunk)[4](index=4&type=chunk) [Q2 2025 Non-GAAP Financial Highlights](index=1&type=section&id=Q2%202025%20Non-GAAP%20Financial%20Highlights) Non-GAAP metrics for Q2 2025 revealed substantial declines in industrial adjusted EBIT and net income, yet industrial free cash flow saw significant year-over-year improvement Q2 2025 Non-GAAP Financial Data | Indicator | Q2 2025 ($ million) | Q2 2024 ($ million) | Change ($ million) | Change Rate | | :--------------------------------- | :------------- | :------------- | :----- | :------- | | Industrial Adjusted EBIT | 224 | 502 | (278) | (55)% | | Industrial Adjusted EBIT Margin | 5.6% | 10.5% | (490) bps | - | | Adjusted Net Income | 216 | 451 | (235) | (52)% | | Adjusted Diluted EPS | 0.17 | 0.35 | (0.18) | - | | Industrial Free Cash Flow | 451 | 140 | +311 | +222.1% | - Industrial gross margin decreased by **230 basis points to 20.6%**[4](index=4&type=chunk) - Adjusted effective tax rate (ETR) increased from **21.0% in Q2 2024 to 27.7%**[5](index=5&type=chunk) [Segment Performance - Q2 2025](index=3&type=section&id=Segment%20Performance%20-%20Q2%202025) Q2 2025 saw significant declines in net sales and adjusted EBIT for Agriculture and Construction due to weak demand, while Financial Services experienced slight revenue and net income decreases [Agriculture Segment](index=3&type=section&id=Agriculture%20Segment) The Agriculture segment experienced substantial declines in net sales and adjusted EBIT in Q2 2025, driven by weak demand and dealer destocking Q2 2025 Agriculture Segment Financial Data | Indicator | Q2 2025 ($ million) | Q2 2024 ($ million) | Change ($ million) | Change Rate | | :------------------- | :------------- | :------------- | :----- | :------- | | Net Sales | 3,248 | 3,913 | (665) | (17)% | | Gross Margin | 21.8% | 24.4% | (260) bps | - | | Adjusted EBIT | 263 | 502 | (239) | (48)% | | Adjusted EBIT Margin | 8.1% | 12.8% | (470) bps | - | - North American sales of tractors under **140 HP decreased by 7%**, tractors over **140 HP decreased by 37%**, and combine harvesters decreased by **23%**[7](index=7&type=chunk) - R&D investment as a percentage of sales was **6.0%**, up from **5.5% in Q2 2024**[8](index=8&type=chunk) [Construction Segment](index=3&type=section&id=Construction%20Segment) Construction segment net sales and adjusted EBIT declined in Q2 2025, mainly due to lower volumes in North America, despite slight global heavy equipment sales growth Q2 2025 Construction Segment Financial Data | Indicator | Q2 2025 ($ million) | Q2 2024 ($ million) | Change ($ million) | Change Rate | | :------------------- | :------------- | :------------- | :----- | :------- | | Net Sales | 773 | 890 | (117) | (13)% | | Gross Margin | 15.7% | 16.5% | (80) bps | - | | Adjusted EBIT | 35 | 60 | (25) | (42)% | | Adjusted EBIT Margin | 4.5% | 6.7% | (220) bps | - | - Global heavy construction equipment industry sales increased by **3% year-over-year**, while light construction equipment decreased by **2%**[9](index=9&type=chunk) - Total demand in North and South America decreased by **4%**, while EMEA and APAC grew by **1% and 3%**, respectively[9](index=9&type=chunk) [Financial Services Segment](index=3&type=section&id=Financial%20Services%20Segment) Financial Services revenue and net income slightly decreased in Q2 2025, impacted by currency, lower yields, and higher risk costs, partially offset by remarketing sales and improved interest margins Q2 2025 Financial Services Segment Financial Data | Indicator | Q2 2025 ($ million) | Q2 2024 ($ million) | Change ($ million) | Change Rate | | :------------------- | :------------- | :------------- | :----- | :------- | | Revenue | 685 | 687 | (2) | (0.3)% | | Net Income | 87 | 91 | (4) | (4)% | | Equity at Quarter-End | 2,907 | 2,843 | +64 | +2.2% | | Retail Loan Originations | 2,740 | 2,864 | (124) | (4.3)% | - Managed portfolio (including unconsolidated joint ventures) was **$28.7 billion**, an increase of **$0.2 billion year-over-year**[13](index=13&type=chunk) - Receivables past due over **30 days increased from 2.5% in Q2 2024 to 3.9%** of total receivables, primarily due to higher delinquencies in Brazil[13](index=13&type=chunk) [2025 Outlook](index=4&type=section&id=2025%20Outlook) CNH Industrial N.V. anticipates lower 2025 retail sales in agriculture and construction, planning production cuts and cost reductions to mitigate margin erosion, while reaffirming full-year guidance [Market Conditions & Company Strategy](index=4&type=section&id=Market%20Conditions%20%26%20Company%20Strategy) The company expects lower 2025 retail sales in agriculture and construction, planning production cuts to reduce inventory and implementing cost-saving measures to mitigate margin erosion - Global retail sales for agriculture and construction equipment markets are expected to be **lower in 2025 than in 2024**[14](index=14&type=chunk) - The company will reduce production volumes to decrease excess channel inventory, resulting in **lower net sales in 2025**[14](index=14&type=chunk) - Operating costs are being reduced through lean manufacturing, strategic sourcing, and prudent management of SG&A and R&D expenses to partially mitigate margin erosion[15](index=15&type=chunk) - The company is navigating an evolving global trade environment, with uncertainties in U.S. trade policy potentially impacting full-year forecasts[16](index=16&type=chunk) [Reaffirmed Full-Year Guidance](index=4&type=section&id=Reaffirmed%20Full-Year%20Guidance) Full-year 2025 guidance was reaffirmed, anticipating decreased net sales and adjusted EBIT margins for agriculture and construction, but stable industrial free cash flow and adjusted diluted EPS Full-Year 2025 Guidance | Indicator | Full-Year 2025 Guidance | | :--------------------------------- | :------------- | | Agriculture Net Sales | Down 12% to 20% year-over-year | | Agriculture Adjusted EBIT Margin | 7% to 9% | | Construction Net Sales | Down 4% to 15% year-over-year | | Construction Adjusted EBIT Margin | 2% to 4% | | Industrial Free Cash Flow | $100 million to $500 million | | Adjusted Diluted EPS | $0.50 to $0.70 | [Six Months Ended June 30, 2025 Results (YTD Q2 2025)](index=5&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Results%20(YTD%20Q2%202025)) H1 2025 saw double-digit declines in consolidated revenue, industrial net sales, net income, and adjusted EBIT, but operating and industrial free cash flows significantly improved [YTD Q2 2025 Consolidated Financial Highlights](index=5&type=section&id=YTD%20Q2%202025%20Consolidated%20Financial%20Highlights) H1 2025 saw double-digit declines in consolidated revenue, industrial net sales, net income, and adjusted EBIT, but operating and industrial free cash flows significantly improved YTD Q2 2025 Consolidated Financial Data (US-GAAP) | Indicator | H1 2025 ($ million) | H1 2024 ($ million) | Change ($ million) | Change Rate | | :--------------------------------- | :------------- | :------------- | :----- | :------- | | Consolidated Revenue | 8,539 | 10,306 | (1,767) | (17)% | | Industrial Net Sales | 7,193 | 8,934 | (1,741) | (19)% | | Net Income | 349 | 773 | (424) | (55)% | | Diluted EPS | 0.27 | 0.61 | (0.34) | - | | Cash Flow from Operating Activities | 934 | (515) | +1,449 | +281.4% | | Industrial Free Cash Flow | (116) | (1,069) | +953 | +89.1% | - Industrial gross margin decreased by **290 basis points to 19.9%**[19](index=19&type=chunk) - Industrial adjusted EBIT decreased by **63% to $325 million**, with adjusted EBIT margin down **530 basis points to 4.5%**[19](index=19&type=chunk) [YTD Q2 2025 Segment Performance](index=5&type=section&id=YTD%20Q2%202025%20Segment%20Performance) In H1 2025, both Agriculture and Construction segments experienced significant declines in net sales and adjusted EBIT due to persistent weak market demand, while the Financial Services segment also saw slight revenue and net income decreases [YTD Q2 2025 Agriculture Segment](index=5&type=section&id=YTD%20Q2%202025%20Agriculture%20Segment) H1 2025 Agriculture segment net sales decreased by **20%**, adjusted EBIT by **55%**, and adjusted EBIT margin by **530 basis points** YTD Q2 2025 Agriculture Segment Financial Data | Indicator | H1 2025 ($ million) | H1 2024 ($ million) | Change ($ million) | Change Rate | | :------------------- | :------------- | :------------- | :----- | :------- | | Net Sales | 5,829 | 7,286 | (1,457) | (20)% | | Gross Margin | 21.0% | 24.1% | (310) bps | - | | Adjusted EBIT | 402 | 890 | (488) | (55)% | | Adjusted EBIT Margin | 6.9% | 12.2% | (530) bps | - | [YTD Q2 2025 Construction Segment](index=5&type=section&id=YTD%20Q2%202025%20Construction%20Segment) H1 2025 Construction segment net sales decreased by **17%**, adjusted EBIT by **56%**, and adjusted EBIT margin by **310 basis points** YTD Q2 2025 Construction Segment Financial Data | Indicator | H1 2025 ($ million) | H1 2024 ($ million) | Change ($ million) | Change Rate | | :------------------- | :------------- | :------------- | :----- | :------- | | Net Sales | 1,364 | 1,648 | (284) | (17)% | | Gross Margin | 15.3% | 16.9% | (160) bps | - | | Adjusted EBIT | 49 | 111 | (62) | (56)% | | Adjusted EBIT Margin | 3.6% | 6.7% | (310) bps | - | [YTD Q2 2025 Financial Services Segment](index=5&type=section&id=YTD%20Q2%202025%20Financial%20Services%20Segment) H1 2025 Financial Services segment revenue decreased by **3%** to **$1.336 billion**, and net income declined by **15%** to **$177 million** YTD Q2 2025 Financial Services Segment Financial Data | Indicator | H1 2025 ($ million) | H1 2024 ($ million) | Change ($ million) | Change Rate | | :------------------- | :------------- | :------------- | :----- | :------- | | Revenue | 1,336 | 1,372 | (36) | (3)% | | Net Income | 177 | 209 | (32) | (15)% | [Notes & Disclosures](index=6&type=section&id=Notes%20%26%20Disclosures) This section details non-GAAP financial information, outlines forward-looking statements and associated risks, and provides essential contact details for media and investor relations [Non-GAAP Financial Information](index=6&type=section&id=Non-GAAP%20Financial%20Information) Non-GAAP financial measures are used to monitor operations, provide useful insights, and enhance financial performance assessment, with detailed definitions provided - Non-GAAP financial measures are used to identify operating trends, make future spending and resource allocation decisions, and provide additional transparency into core operations[21](index=21&type=chunk) - Non-GAAP financial measures do not have standardized meanings under U.S. GAAP and may not be comparable to similarly titled measures used by other companies[21](index=21&type=chunk) - Prior period financial statements have been revised to reflect non-material corrections for highly inflationary accounting treatment of unconsolidated affiliates in Turkey, leading to an overstatement of equity in earnings of unconsolidated subsidiaries and affiliates in 2023 and H1 2024[22](index=22&type=chunk) [Forward-looking Statements](index=7&type=section&id=Forward-looking%20Statements) This report includes forward-looking statements based on current views and assumptions, subject to known and unknown risks, uncertainties, and other factors - Forward-looking statements are not guarantees of future performance but are based on current views and assumptions, involving known and unknown risks and uncertainties[25](index=25&type=chunk) - Factors that could cause actual results to differ materially include economic conditions, production and supply chain disruptions, government policies, international trade policies, competitor actions, new technology developments, labor relations, and interest and currency rate fluctuations[26](index=26&type=chunk)[28](index=28&type=chunk) - The company expressly disclaims any intention or obligation to update or revise any forward-looking statements[29](index=29&type=chunk) [Contacts](index=8&type=section&id=Contacts) Contact information for media and investor relations, including names, phone numbers, and email addresses, is provided - Media inquiries: Laura Overall (**+44 207 925 1964**) or Rebecca Fabian (**+1 312 515 2249**), email: mediarelations@cnh.com[32](index=32&type=chunk) - Investor Relations: Jason Omerza (**+1 630 740 8079**) or Federico Pavesi (**+39 345 605 6218**), email: investor.relations@cnh.com[32](index=32&type=chunk) [Consolidated Financial Statements](index=9&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for Q2 and H1 2025 reveal declines in revenue and net income, changes in asset and liability composition, and significant improvements in operating cash flow [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated statements of operations reveal year-over-year declines in total revenue and net income for Q2 and H1 2025, with reduced costs and R&D, but high interest expenses Consolidated Statements of Operations Summary | Indicator ($ million) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------------- | :------------- | :------------- | :------------- | :------------- | | Total Revenues | 4,711 | 5,488 | 8,539 | 10,306 | | Cost of Sales | 3,192 | 3,702 | 5,761 | 6,897 | | Selling, General and Administrative Expenses | 478 | 461 | 864 | 872 | | Research and Development Expenses | 218 | 237 | 402 | 465 | | Restructuring Expenses | 5 | 51 | 11 | 82 | | Interest Expense | 360 | 418 | 722 | 812 | | Net Income | 217 | 404 | 349 | 773 | | Diluted EPS | 0.17 | 0.32 | 0.27 | 0.61 | - In Q2 2025, total revenues decreased by **14.1% year-over-year**, and net income decreased by **46.3% year-over-year**[33](index=33&type=chunk) - In H1 2025, total revenues decreased by **17.1% year-over-year**, and net income decreased by **54.9% year-over-year**[33](index=33&type=chunk) [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly increased as of June 30, 2025, primarily due to higher finance receivables and inventories, with corresponding increases in liabilities and equity Consolidated Balance Sheets Summary | Indicator ($ million) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------- | :------------- | | Cash and Cash Equivalents | 2,512 | 3,191 | | Finance Receivables, Net | 23,387 | 23,085 | | Inventories, Net | 5,216 | 4,776 | | Property, Plant, Equipment and Operating Lease Assets, Net | 3,704 | 3,402 | | Intangible Assets, Net | 4,861 | 4,805 | | Total Assets | 43,687 | 42,933 | | Debt | 27,408 | 26,882 | | Other Payables and Liabilities | 8,376 | 8,221 | | Total Liabilities | 35,853 | 35,165 | | Equity | 7,779 | 7,713 | - As of June 30, 2025, cash and cash equivalents decreased by **$679 million** compared to year-end 2024[35](index=35&type=chunk) - Net finance receivables increased by **$302 million**, and net inventories increased by **$440 million**[35](index=35&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw operating cash flow significantly improve from negative to positive, reduced investing outflows, and increased financing outflows due to net debt reduction and dividends Consolidated Statements of Cash Flows Summary | Indicator ($ million) | H1 2025 | H1 2024 | | :--------------------------------------- | :------------- | :------------- | | Net Cash Provided (Used) by Operating Activities | 934 | (515) | | Net Cash Provided (Used) by Investing Activities | (622) | (929) | | Net Cash Provided (Used) by Financing Activities | (1,261) | (820) | | Cash, Cash Equivalents and Restricted Cash at End of Period | 3,147 | 2,647 | - Net cash provided by operating activities increased by **$1.449 billion year-over-year**, turning from a negative **$515 million in H1 2024 to a positive $934 million in H1 2025**[37](index=37&type=chunk) - Cash outflow from financing activities increased by **$441 million**, primarily due to a net debt reduction of **$935 million** and dividend payments of **$321 million**[37](index=37&type=chunk) [Supplemental Segment Financial Statements](index=13&type=section&id=Supplemental%20Segment%20Financial%20Statements) Supplemental segment financial statements for Q2 and H1 2025 detail significant revenue and net income declines for industrial activities, with financial services also showing decreases, alongside changes in balance sheet and cash flow components [Supplemental Statements of Operations - Three Months Ended June 30, 2025 and 2024](index=13&type=section&id=Supplemental%20Statements%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) Q2 2025 saw significant declines in industrial total revenue and net income, with financial services also experiencing slight reductions, impacted by rising costs and increased interest expenses Q2 2025 Industrial Activities and Financial Services Statements of Operations Summary | Indicator ($ million) | Industrial Activities (Q2 2025) | Financial Services (Q2 2025) | Industrial Activities (Q2 2024) | Financial Services (Q2 2024) | | :--------------------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Total Revenues | 4,060 | 685 | 4,832 | 687 | | Cost of Sales | 3,192 | — | 3,702 | — | | Selling, General and Administrative Expenses | 364 | 114 | 374 | 87 | | Research and Development Expenses | 218 | — | 237 | — | | Interest Expense | 65 | 329 | 75 | 374 | | Net Income | 130 | 87 | 313 | 91 | - Industrial net sales decreased by **16.3% year-over-year to $4.021 billion**[39](index=39&type=chunk) - Industrial net income decreased by **58.5% year-over-year to $130 million**[39](index=39&type=chunk) [Supplemental Statements of Operations - Six Months Ended June 30, 2025 and 2024](index=15&type=section&id=Supplemental%20Statements%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) H1 2025 saw significant declines in industrial total revenue and net income due to weak demand, with financial services also experiencing revenue and net income decreases from higher interest and operating costs H1 2025 Industrial Activities and Financial Services Statements of Operations Summary | Indicator ($ million) | Industrial Activities (H1 2025) | Financial Services (H1 2025) | Industrial Activities (H1 2024) | Financial Services (H1 2024) | | :--------------------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Total Revenues | 7,262 | 1,336 | 9,005 | 1,372 | | Cost of Sales | 5,761 | — | 6,897 | — | | Selling, General and Administrative Expenses | 669 | 195 | 716 | 156 | | Research and Development Expenses | 402 | — | 465 | — | | Interest Expense | 120 | 661 | 149 | 734 | | Net Income | 172 | 177 | 564 | 209 | - Industrial net sales decreased by **19.5% year-over-year to $7.193 billion**[43](index=43&type=chunk) - Industrial net income decreased by **69.5% year-over-year to $172 million**[43](index=43&type=chunk) [Supplemental Balance Sheets](index=17&type=section&id=Supplemental%20Balance%20Sheets) Industrial activities' total assets increased due to inventories and PPE, while financial services' total assets slightly decreased, with finance receivables remaining key, and total debt rising for both segments Industrial Activities and Financial Services Supplemental Balance Sheets Summary | Indicator ($ million) | Industrial Activities (Q2 2025) | Financial Services (Q2 2025) | Industrial Activities (Q4 2024) | Financial Services (Q4 2024) | | :--------------------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Cash and Cash Equivalents | 2,106 | 406 | 2,332 | 859 | | Finance Receivables, Net | 273 | 23,604 | 218 | 23,528 | | Inventories, Net | 5,155 | 61 | 4,713 | 63 | | Total Assets | 17,538 | 26,914 | 16,677 | 27,254 | | Debt | 5,230 | 22,744 | 4,499 | 23,173 | | Equity | 4,872 | 2,907 | 4,968 | 2,745 | - Industrial activities' total assets increased from **$16.677 billion at year-end 2024 to $17.538 billion as of June 30, 2025**[47](index=47&type=chunk) - Financial Services total assets decreased from **$27.254 billion at year-end 2024 to $26.914 billion**[47](index=47&type=chunk) [Supplemental Statements of Cash Flows](index=19&type=section&id=Supplemental%20Statements%20of%20Cash%20Flows) H1 2025 saw industrial operating cash flow turn positive with increased investing outflows, while financial services maintained strong operating cash flow but experienced significantly higher financing outflows due to net debt reduction Industrial Activities and Financial Services Supplemental Statements of Cash Flows Summary | Indicator ($ million) | Industrial Activities (H1 2025) | Financial Services (H1 2025) | Industrial Activities (H1 2024) | Financial Services (H1 2024) | | :--------------------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Net Cash Provided (Used) by Operating Activities | 110 | 944 | (837) | 402 | | Net Cash Provided (Used) by Investing Activities | (639) | 17 | 101 | (1,029) | | Net Cash Provided (Used) by Financing Activities | 124 | (1,505) | (1,082) | 181 | | Cash and Cash Equivalents at End of Period | 2,201 | 946 | 1,714 | 933 | - Industrial activities' net cash provided by operating activities increased by **$947 million year-over-year**, turning from a negative **$837 million in H1 2024 to a positive $110 million in H1 2025**[50](index=50&type=chunk) - Financial Services' cash outflow from financing activities increased by **$1.686 billion year-over-year**, primarily due to a net debt reduction of **$1.385 billion**[50](index=50&type=chunk) [Other Supplemental Financial Information & Reconciliations](index=21&type=section&id=Other%20Supplemental%20Financial%20Information%20%26%20Reconciliations) This section provides detailed reconciliations for adjusted EBIT, net cash (debt), and free cash flow, along with adjusted net income, and outlines revisions to prior period financial statements [Adjusted EBIT of Industrial Activities by Segment](index=21&type=section&id=Adjusted%20EBIT%20of%20Industrial%20Activities%20by%20Segment) Agriculture and Construction segments saw significant adjusted EBIT declines in Q2 and H1 2025 due to market challenges, with unallocated items negatively affecting overall industrial adjusted EBIT Adjusted EBIT of Industrial Activities by Segment | Indicator ($ million) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------------- | :------------- | :------------- | :------------- | :------------- | | Agriculture | 263 | 502 | 402 | 890 | | Construction | 35 | 60 | 49 | 111 | | Unallocated Items, Eliminations and Other | (74) | (60) | (126) | (127) | | **Total Industrial Adjusted EBIT** | **224** | **502** | **325** | **874** | - In Q2 2025, Agriculture segment adjusted EBIT decreased by **47.6% year-over-year**, and Construction segment decreased by **41.7%**[53](index=53&type=chunk) - In H1 2025, total industrial adjusted EBIT decreased by **62.9% year-over-year**[53](index=53&type=chunk) [Reconciliation of Consolidated Net Income to Adjusted EBIT of Industrial Activities](index=21&type=section&id=Reconciliation%20of%20Consolidated%20Net%20Income%20to%20Adjusted%20EBIT%20of%20Industrial%20Activities) This reconciliation details the calculation from consolidated net income to industrial adjusted EBIT by excluding taxes, financial services, industrial interest, FX, pension costs, restructuring, and other non-recurring items Reconciliation of Consolidated Net Income to Adjusted EBIT of Industrial Activities Summary | Indicator ($ million) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------------- | :------------- | :------------- | :------------- | :------------- | | Net Income | 217 | 404 | 349 | 773 | | Less: Consolidated Income Tax Expense | (76) | (95) | (123) | (172) | | Less: Financial Services Net Income | (87) | (91) | (177) | (209) | | Less: Financial Services Income Tax | (25) | (23) | (53) | (42) | | Add: Industrial Activities Net Interest Expense | 26 | 46 | 51 | 78 | | Add: Industrial Activities Net Foreign Exchange (Gains) Losses | 9 | 4 | 14 | 4 | | Add: Restructuring Expenses | 5 | 51 | 11 | 81 | | **Total Industrial Adjusted EBIT** | **224** | **502** | **325** | **874** | - In Q2 2025, restructuring expenses were **$5 million**, significantly lower than **$51 million in Q2 2024**[54](index=54&type=chunk) - Q2 2024 included a **$15 million loss** on the sale of a non-core product line, which was absent in Q2 2025[55](index=55&type=chunk) [Reconciliation of Total (Debt) to Net Cash (Debt)](index=22&type=section&id=Reconciliation%20of%20Total%20(Debt)%20to%20Net%20Cash%20(Debt)) This reconciliation details total debt and net cash (debt) as of June 30, 2025, segmented by industrial and financial services, including cash, restricted cash, intercompany notes, Iveco Group finance receivables, and hedging derivatives Reconciliation of Total (Debt) to Net Cash (Debt) Summary | Indicator ($ million) | Consolidated (Q2 2025) | Consolidated (Q4 2024) | Industrial Activities (Q2 2025) | Industrial Activities (Q4 2024) | Financial Services (Q2 2025) | Financial Services (Q4 2024) | | :--------------------------------------- | :------------- | :------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Third-Party (Debt) | (27,408) | (26,882) | (4,989) | (4,043) | (22,419) | (22,839) | | Total (Debt) | (27,477) | (26,944) | (5,233) | (4,503) | (22,810) | (23,231) | | Cash and Cash Equivalents | 2,512 | 3,191 | 2,106 | 2,332 | 406 | 859 | | Restricted Cash | 635 | 675 | 95 | 89 | 540 | 586 | | Intercompany Notes Receivable | — | — | 325 | 334 | 241 | 456 | | Finance Receivables from Iveco Group N.V. | 263 | 168 | 174 | 50 | 89 | 118 | | Hedging Derivatives | (2) | (37) | (20) | (29) | 18 | (8) | | **Net Cash (Debt)** | **(24,069)** | **(22,947)** | **(2,553)** | **(1,727)** | **(21,516)** | **(21,220)** | - As of June 30, 2025, consolidated net cash (debt) was **negative $24.069 billion**, an increase from **negative $22.947 billion as of December 31, 2024**[56](index=56&type=chunk) - Industrial activities' net cash (debt) increased from **negative $1.727 billion at year-end 2024 to negative $2.553 billion**[56](index=56&type=chunk) [Reconciliation of Net Cash Provided (Used) by Operating Activities to Free Cash Flow of Industrial Activities](index=22&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20(Used)%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow%20of%20Industrial%20Activities) This reconciliation details the calculation from operating cash flow to industrial free cash flow by deducting financial services cash flow, hedging derivatives, operating lease asset investments, and PPE/intangible asset investments Reconciliation of Net Cash Provided (Used) by Operating Activities to Free Cash Flow of Industrial Activities Summary | Indicator ($ million) | H1 2025 | H1 2024 | Q2 2025 | Q2 2024 | | :--------------------------------------- | :------------- | :------------- | :------------- | :------------- | | Net Cash Provided (Used) by Operating Activities | 934 | (515) | 772 | 379 | | Less: Net Cash Provided (Used) by Financial Services Operating Activities | (824) | (322) | (186) | (124) | | Less: Industrial Activities Investments in Property, Plant, Equipment and Intangible Assets | (191) | (206) | (88) | (110) | | **Free Cash Flow of Industrial Activities** | **(116)** | **(1,069)** | **451** | **140** | - In H1 2025, industrial free cash flow was **negative $116 million**, a significant improvement from **negative $1.069 billion in H1 2024**[58](index=58&type=chunk) - In Q2 2025, industrial free cash flow was **$451 million**, a substantial increase from **$140 million in Q2 2024**[58](index=58&type=chunk) [Reconciliation of Adjusted Net Income and Adjusted Income Tax (Expense) Benefit](index=24&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Income%20and%20Adjusted%20Income%20Tax%20(Expense)%20Benefit) This reconciliation details the calculation from net income to adjusted net income and adjusted income tax by excluding restructuring, U.S. medical plan benefits, and non-core product sales for comparable performance Reconciliation of Adjusted Net Income and Adjusted Income Tax (Expense) Benefit Summary | Indicator ($ million) | H1 2025 | H1 2024 | Q2 2025 | Q2 2024 | | :--------------------------------------- | :------------- | :------------- | :------------- | :------------- | | Net Income (Loss) | 349 | 773 | 217 | 404 | | Adjusted Net Income (Loss) | 348 | 839 | 216 | 451 | | Adjusted Diluted EPS ($) | 0.27 | 0.66 | 0.17 | 0.35 | | Income Tax (Expense) Benefit | (123) | (172) | (76) | (95) | | Adjusted Income Tax (Expense) Benefit | (123) | (191) | (76) | (108) | | Adjusted Effective Tax Rate | 28.2% | 20.3% | 27.7% | 21.0% | - In H1 2025, adjusted net income was **$348 million**, and adjusted diluted EPS was **$0.27**[59](index=59&type=chunk) - In Q2 2025, the adjusted effective tax rate increased from **21.0% in Q2 2024 to 27.7%**[59](index=59&type=chunk) [Revision of Prior Period Financial Statements](index=25&type=section&id=Revision%20of%20Prior%20Period%20Financial%20Statements) Prior period financial statements were revised to correct non-material errors in highly inflationary accounting for Turkish affiliates, impacting equity in earnings, net income, diluted EPS, and non-GAAP measures - The revision is due to non-material corrections for highly inflationary accounting treatment of unconsolidated affiliates in Turkey[60](index=60&type=chunk) - This correction resulted in an overstatement of equity in earnings of unconsolidated subsidiaries and affiliates by **$96 million in 2023 and $67 million in H1 2024**, respectively[60](index=60&type=chunk) Summary of Prior Period Financial Statement Revision Impact (H1 2024) | Indicator ($ million) | Pre-Revision | Revision Impact | Post-Revision | | :--------------------------------------- | :------- | :------- | :------- | | Equity in Earnings of Unconsolidated Subsidiaries and Affiliates | 156 | (67) | 89 | | Net Income (Loss) | 840 | (67) | 773 | | Diluted EPS | 0.66 | (0.05) | 0.61 | | Adjusted Net Income | 906 | (67) | 839 | | Adjusted Diluted EPS | 0.71 | (0.05) | 0.66 | | Industrial Adjusted EBIT | 941 | (67) | 874 |