XML 26 R15.htm IDEA: XBRL DOCUMENT v3.24.2.u1
SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
The operating segments through which the Company manages its operations are based on the internal reporting used by the Company’s Chief Operating Decision Maker (“CODM”) to assess performance and make decisions about resource allocation. The segments are organized based on products and services provided by the Company.
CNH has three operating segments:
Agriculture designs, manufactures and distributes a full line of farm machinery and implements, including two-wheel and four-wheel drive tractors, crawler tractors, combines, grape and sugar cane harvesters, hay and forage equipment, planting and seeding equipment, soil preparation and cultivation implements, and material handling equipment. We are also a leading provider of technology dedicated to Precision Agriculture. Agricultural equipment is sold under the New Holland Agriculture and Case IH brands. Regionally focused brands include: STEYR, for agricultural tractors; Flexi-Coil, specializing in tillage and seeding systems; Miller, manufacturing application equipment. The Raven brand supports Precision Agriculture, digital technology and the development of autonomous systems. Hemisphere, acquired in 2023, provides high-performance satellite positioning technology for the agriculture and construction industries.
Construction designs, manufactures and distributes a full line of construction equipment including excavators, crawler dozers, graders, wheel loaders, backhoe loaders, skid steer loaders, and compact track loaders along with a wide variety of attachments. Construction equipment is sold under the CASE Construction Equipment, New Holland Construction and Eurocomach brands.
Financial Services provides and administers financing to end-use customers for the purchase of new and used agricultural and construction equipment and components sold through CNH's dealer network, as well as revolving charge account financing and other financial services. Financial Services also provides wholesale financing to CNH dealers and distributors primarily to finance inventories of equipment for those dealers. Further, Financial Services provides trade receivables factoring services to CNH subsidiaries. The European Financial Services operations are supported by the Iveco Group's Financial Services segment. Financial Services also provides financial services to Iveco Group companies in the North America, South America and Asia Pacific regions.
Revenues for each reported segment are those directly generated by or attributable to the segment as a result of its business activities and include revenues from transactions with third parties as well as those deriving from transactions with other segments, recognized at normal market prices. Segment expenses represent expenses deriving from each segment’s business activities both with third parties and other operating segments or which may otherwise be directly attributable to it. Expenses deriving from business activities with other segments are recognized at normal market prices.
With reference to the Agriculture and Construction segments, the CODM assesses segment performance and makes decisions about resource allocation based upon Adjusted EBIT. The Company believes Adjusted EBIT more fully reflects Agriculture and Construction segments profitability. Adjusted EBIT of the Agriculture and Construction segments is defined as net income (loss) before income taxes, Financial Services' results, Industrial Activities’ segments interest expenses (net), foreign exchange gains/losses, finance and non-service component of pension and other post-employment benefit costs, restructuring expenses, and certain non-recurring items. In particular, non-recurring items are specifically disclosed
items that management considers rare or discrete events that are infrequent in nature and not reflective of ongoing operational activities.
With reference to Financial Services, the CODM assesses the performance of the segment and makes decisions about resource allocation on the basis of net income prepared in accordance with U.S. GAAP.
The following table includes the reconciliation of Adjusted EBIT for Industrial Activities segments to net income, the most comparable U.S. GAAP financial measure, for the three and six months ended June 30, 2024 and 2023 (in millions of dollars):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Agriculture$536 $821 $957 $1,391 
Construction60 72 111 116 
Unallocated items, eliminations, and other(60)(71)(127)(130)
Financial Services Net Income91 94 209 172 
Financial Services Income Taxes23 26 42 55 
Interest expense of Industrial Activities, net of interest income and eliminations(46)(22)(78)(26)
Foreign exchange (gains) losses, net of Industrial Activities(4)— (4)(6)
Finance and non-service component of Pension and other post-employment benefit costs of Industrial Activities(1)
(1)1 (2)2 
Restructuring expenses of Industrial Activities(51)(2)(81)(3)
Other discrete items of Industrial Activities(2)
(15)(17)(15)(10)
Income (loss) before taxes533 902 1,012 1,561 
Income tax benefit (expense)(95)(192)(172)(365)
Net Income (loss)$438 $710 $840 $1,196 
(1) In the three and six months ended June 30, 2024 and 2023, this item includes the pre-tax gain of $6 million and $12 million, respectively, as a result of the amortization over the 4 years of the $101 million positive impact from the 2021 U.S. healthcare plan modification.
(2) In the three and six months ended June 30, 2024 this item includes a loss of $15 million on the sale of certain non-core product lines. In the three months ended June 30, 2023 this item included a loss of $17 million related to the sale of CNH Industrial Russia. In the six months ended June 30, 2023 this item included a gain of $13 million in relation to the fair value remeasurement of Augmenta and Bennamann, offset by a $23 million loss on the sale of CNH Industrial Russia and CNH Capital Russia