CNH Industrial(CNHI) - 2024 Q2 - Quarterly Report

Financial Performance - Net sales for Q2 2024 were $4,803 million, a decrease of 19.3$5,954 million in Q2 2023[6] - Total revenues for the first half of 2024 were $10,306 million, down 13.4$11,909 million in the same period of 2023[6] - Net income for Q2 2024 was $438 million, a decline of 38.3$710 million in Q2 2023[7] - Earnings per share (EPS) for Q2 2024 were $0.34, compared to$0.53 in Q2 2023, reflecting a decrease of 35.8%[6] - Comprehensive income attributable to CNH Industrial N.V. for Q2 2024 was $292 million, down from$776 million in Q2 2023[7] - Net income for the six months ended June 30, 2024, was $840 million, a decrease of 29.9$1,196 million for the same period in 2023[8] - Total revenues for the three months ended June 30, 2024, were $5,488 million, a decrease of 16.4$6,567 million for the same period in 2023[22] - The company's revenues from sales of goods were $4,789 million for the three months ended June 30, 2024, down from$5,942 million in the same period of 2023, representing a decline of 19.4%[23] Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash at the end of Q2 2024 were $2,647 million, a decrease of 32.6$3,925 million at the end of Q2 2023[8] - The company reported a net cash used by operating activities of $515 million in the first half of 2024, compared to a net cash used of$840 million in the same period of 2023[8] - Proceeds from long-term debt in the first half of 2024 were $8,754 million, significantly higher than$4,408 million in the first half of 2023[8] - Payments of long-term debt rose to $8,362 million, up from$3,485 million in the same period last year[8] - The company reported a net cash used by investing activities of $929 million, an improvement from$1,247 million in the prior year[8] Research and Development - Research and development expenses for the first half of 2024 totaled $465 million, down 7$500 million in the first half of 2023[6] Acquisitions and Investments - CNH Industrial's acquisition of Hemisphere for $181 million aims to enhance its precision, automation, and autonomy technology in agriculture and construction sectors[15] - The company recorded preliminary goodwill of$111 million and intangible assets of $51 million from the Hemisphere acquisition, with adjustments reducing goodwill by$3 million as of June 30, 2024[15] - CNH acquired a controlling interest in Bennamann for approximately $51 million, with preliminary goodwill recorded at$118 million[15] - The acquisition of Augmenta for approximately $80 million included preliminary goodwill of$76 million, with adjustments reducing goodwill by $14 million[16] Equity and Dividends - The total equity balance as of June 30, 2024, was$7,602 million, compared to $7,955 million at March 31, 2024, reflecting a decrease primarily due to treasury stock acquisition[10] - The company paid dividends totaling$591 million in the second quarter of 2024, compared to $527 million in the same period of the previous year[10] Taxation - The effective tax rate for Q2 2024 was 20.9$536 million for Q2 2024, a decrease from $821 million in Q2 2023; for the first half, it was$957 million compared to $1,391 million in 2023[31] - Construction segment Adjusted EBIT was$60 million in Q2 2024, down from $72 million in Q2 2023; for the first half, it was$111 million compared to $116 million in 2023[31] - Financial Services segment net income for Q2 2024 was$91 million, slightly down from $94 million in Q2 2023[31] Credit and Financing - Total financing receivables as of June 30, 2024, were$23.868 billion, a decrease from $24.249 billion as of December 31, 2023[32] - Retail financing receivables were$13.763 billion as of June 30, 2024, down from $13.868 billion at the end of 2023[32] - The allowance for credit losses for retail was$322 million as of June 30, 2024, compared to $330 million at the beginning of the quarter[37] - The provision for credit losses is included in selling, general and administrative expenses, indicating a focus on managing credit risk[38] Derivatives and Risk Management - The total notional amount of CNH's foreign exchange derivatives was$6.3 billion as of June 30, 2024, compared to $6.1 billion at December 31, 2023[69] - CNH's interest rate derivatives totaled approximately$8.7 billion at June 30, 2024, down from $9.0 billion at December 31, 2023[70] - For the three months ended June 30, 2024, CNH recognized a net gain of$32 million from derivatives, with a loss of $15 million from foreign exchange contracts and a gain of$47 million from interest rate contracts[72] Other Comprehensive Income - The total other comprehensive loss for the three months ended June 30, 2024, was $141 million, and for the six months, it was$190 million[84] - As of June 30, 2024, CNH's total other comprehensive loss amounted to $2,564 million, compared to$2,246 million as of June 30, 2023, reflecting an increase of 14.1%[86] Corporate Governance - As of June 30, 2024, EXOR N.V. held 45.2% of CNH's voting power, allowing significant influence over shareholder decisions[89] - CNH and Iveco Group entered into a ten-year Engine Supply Agreement for the design and supply of off-road engines post-Demerger[90]