Group 1 - CNH's New Holland brand is advancing sustainable farming with the T7 Methane Power tractor, which is designed for farmers to adopt alternative fuel solutions [3][4] - The T7 Methane Power tractor features a gas tank capacity of 657 liters (173 gallons US), allowing it to operate for a full eight-hour silage shift [4] - Biogas is becoming increasingly popular in the agricultural sector, with CNH investing in Bennamann, a UK start-up that provides on-farm fueling stations and micro-digesters for converting cattle manure into fuel [5] Group 2 - CNH Industrial is a global leader in equipment, technology, and services, focusing on innovation, sustainability, and productivity [6] - The company has a diverse portfolio of brands, including Case IH, New Holland, STEYR, Raven, and others, providing a wide range of agricultural and construction solutions [6][7] - CNH has a history of over two centuries as a pioneer in its sectors, with a workforce of over 35,000 employees dedicated to empowering customers [7]

Core Insights - New Holland, a global agriculture brand of CNH, won two silver medals at the 2025 Agritechnica Innovation Awards for its Corn Header Automation and ForageCam™ technologies, both recognized as industry-first innovations [1][2] Group 1: Innovations and Technologies - The Corn Header Automation system utilizes advanced AI and automation to optimize corn harvesting by automatically adjusting header settings, enhancing efficiency, reducing crop loss, minimizing fuel use, and saving time, ultimately leading to higher quality grain [2][3] - ForageCam™ employs a camera for smart crop monitoring during forage harvesting, providing real-time kernel processing scores to assess kernel quality, which is crucial for silage quality and livestock nutrition [3][4] Group 2: Company Overview - CNH Industrial is a leading equipment, technology, and services company focused on innovation, sustainability, and productivity, providing strategic direction and R&D capabilities for its global brands [5][6] - The company has a diverse workforce of over 35,000 employees and emphasizes empowering customers to enhance their operations and contribute to a better world [6]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7][8] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a looming question regarding the energy supply needed to sustain this growth [2] - AI data centers consume vast amounts of energy, comparable to that of small cities, indicating a significant strain on global power grids [2] - The company in focus is positioned to benefit from the surge in demand for electricity driven by AI advancements, making it a unique investment opportunity [3][6] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and benefiting from the onshoring trend due to tariffs [5][6] - It possesses critical nuclear energy infrastructure assets, making it integral to America's future power strategy [7] - The company is noted for its ability to execute large-scale engineering, procurement, and construction projects across various energy sectors, including oil, gas, and renewables [7] Financial Position - The company is completely debt-free and has a significant cash reserve, amounting to nearly one-third of its market capitalization, which positions it favorably compared to other energy firms burdened by debt [8] - It also holds a substantial equity stake in another AI-related company, providing indirect exposure to multiple growth engines in the AI sector [9][10] Market Sentiment - There is a growing interest from hedge funds in this company, which is considered undervalued and off the radar, trading at less than seven times earnings [10][11] - The company is recognized for delivering real cash flows and owning critical infrastructure, making it a compelling investment choice in the context of the AI and energy sectors [11][12]

Core Insights - CNH Industrial is a leading global equipment, technology, and services company focused on innovation, sustainability, and productivity [1][2] - The company operates under various brands, including Case IH, New Holland, CASE, and New Holland Construction Equipment, providing a comprehensive range of agricultural and construction products [1] - CNH has a workforce of over 35,000 employees, emphasizing a diverse and inclusive workplace aimed at empowering customers [2] Company Overview - CNH Industrial is dedicated to breaking new ground through strategic direction, R&D capabilities, and investments [1] - The company offers 360° agriculture applications, from machinery to digital technologies that enhance agricultural efficiency [1] - Regionally focused brands include STEYR for agricultural tractors, Raven for digital agriculture, Hemisphere for satellite-based positioning, Flexi-Coil for tillage systems, Miller for application equipment, and Eurocomach for mini and midi excavators [1] Historical Context - With a history spanning over two centuries, CNH has been a pioneer in its sectors, continuously innovating to drive customer efficiency and success [2]

Core Viewpoint - CNH Industrial N.V. has successfully priced an offering of €500,000,000 in principal amount of 3.875% notes due September 3, 2035, with an issue price of 98.906% of the principal amount [1][2]. Group 1: Offering Details - The closing of the offering is expected on September 3, 2025, and the notes will be issued under CNH's Euro Medium Term Note Programme [2]. - The net proceeds from the offering will be used for general corporate purposes, including repayment of existing debt [2]. - Application will be made for the notes to be admitted to trading on the Global Exchange Market of Euronext Dublin [2]. Group 2: Regulatory and Distribution Information - The notes will be offered and sold only outside the United States to institutional investors that are not "U.S. persons" and will not be registered under the U.S. Securities Act [4][5]. - The offering has not been registered with the Commissione Nazionale per le Societá e la Borsa (CONSOB) under Italian securities legislation, and may only be offered to qualified investors [6]. - This press release is directed only to persons outside the United Kingdom and those with professional experience in investment matters [7]. Group 3: Company Overview - CNH Industrial is a global equipment, technology, and services company focused on innovation, sustainability, and productivity [11]. - The company provides strategic direction and R&D capabilities to its brands, including Case IH, New Holland, CASE, and others, delivering a full lineup of agricultural and construction products [11]. - CNH has a history of over two centuries as a pioneer in its sectors, with a workforce of over 35,000 employees dedicated to customer success [12].

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]

Financial Performance - Total revenues for Q2 2025 were $4,711 million, a decrease of 14.1% compared to $5,488 million in Q2 2024[12] - Net income for Q2 2025 was $217 million, down 46.3% from $404 million in Q2 2024[12] - Earnings per share for Q2 2025 were $0.17, down from $0.32 in Q2 2024[12] - Comprehensive income attributable to CNH Industrial N.V. for Q2 2025 was $181 million, compared to $258 million in Q2 2024[15] - The company reported a total comprehensive income of $189 million for Q2 2025, down from $263 million in Q2 2024[15] - Net income for the six months ended June 30, 2025, was $349 million, down from $773 million in the same period of 2024, representing a decline of 55%[15] - The company reported total revenues of $8,676 million for the first half of 2025, compared to $10,306 million for the same period in 2024, a decrease of 16%[61] Cash and Cash Equivalents - Cash and cash equivalents decreased to $2,512 million as of June 30, 2025, from $3,191 million at the end of 2024[10] - The company’s total cash, cash equivalents, and restricted cash at the end of Q2 2025 was $3,147 million, compared to $2,647 million at the end of Q2 2024[18] Assets and Liabilities - Total assets increased to $43,687 million as of June 30, 2025, compared to $42,933 million at the end of 2024[10] - Total liabilities rose to $35,853 million as of June 30, 2025, compared to $35.165 billion as of December 31, 2024[10] - The carrying amount of financing receivables was $23,387 million as of June 30, 2025, slightly up from $23,264 million as of December 31, 2024[134] Segment Performance - Agriculture segment net sales for Q2 2025 were $3,248 million, a decrease of 17% from $3,913 million in Q2 2024[59] - Construction segment net sales for Q2 2025 were $773 million, down 13% from $890 million in Q2 2024[59] - Financial Services reported income before income taxes of $112 million in Q2 2025, consistent with $114 million in Q2 2024[59] Research and Development - Research and development expenses for Q2 2025 were $218 million, a decrease of 8.0% from $237 million in Q2 2024[12] - Research and development expenses for Agriculture in Q2 2025 were $194 million, compared to $214 million in Q2 2024, a decrease of 9.3%[59] Dividends and Shareholder Returns - The company declared cash dividends of $0.250 per common share for Q2 2025, unchanged from Q2 2024[12] - The company paid dividends totaling $591 million during the second quarter of 2024, compared to $1 million in the previous quarter[25] Debt and Financing - Debt rose to $27,408 million as of June 30, 2025, up from $26,882 million at the end of 2024[10] - The allowance for credit losses at the end of Q2 2025 was $540 million, up from $424 million at the end of 2024, indicating a 27.4% increase[68] Operational Efficiency - The company incurred restructuring expenses of $5 million in Q2 2025, compared to $51 million in Q2 2024[59] - Total expenditures for long-lived assets decreased to $90 million in Q2 2025 from $110 million in Q2 2024, a decline of 18.2%[65] Taxation - The effective tax rate for the three months ended June 30, 2025, was 27.6%, an increase from 20.9% in 2024[45] - The company does not expect the global minimum tax of 15% proposed by the OECD to have a material impact on its financial results during 2025[47] Other Comprehensive Income - For the six months ended June 30, 2025, the total other comprehensive income (loss) was $(28) million, compared to $(141) million for the same period in 2024[138] Regulatory and Compliance - CNH has been cooperating with the SEC's inquiry and was notified that the SEC concluded its inquiry without recommending enforcement action[111] - The company is evaluating the financial implications of the One Big Beautiful Bill Act signed into law on July 4, 2025, which includes significant tax provisions[48]

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]

[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 |