Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Mar. 15, 2024 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Entity File Number | 000-55510 | ||
Entity Registrant Name | CNH INDUSTRIAL CAPITAL LLC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 39-1937630 | ||
Entity Address, Address Line One | 5729 Washington Avenue | ||
Entity Address, City or Town | Racine | ||
Entity Address, State or Province | WI | ||
Entity Address, Postal Zip Code | 53406 | ||
City Area Code | 262 | ||
Local Phone Number | 636-6011 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 0 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Common Stock, Shares Outstanding | 0 | ||
Entity Central Index Key | 0001552493 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | DELOITTE & TOUCHE LLP | ERNST & YOUNG LLP | |
Auditor Firm ID | 42 | 34 | |
Auditor Location | Chicago, IL | Milwaukee, WI |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
REVENUES | |||
Interest income on retail notes and finance leases | $ 288,067 | $ 216,528 | $ 154,994 |
Rental income on operating leases | 237,178 | 248,335 | 267,606 |
Revolving charge account income | 39,568 | ||
Interest income on wholesale notes | 66,015 | 28,659 | 31,011 |
Interest and other income from affiliates | 434,257 | 268,267 | 297,579 |
Other income | 7,568 | 30,046 | 37,994 |
Total revenues | 1,072,653 | 791,835 | 789,184 |
Interest expense: | |||
Interest expense to third parties | 500,493 | 232,446 | 192,092 |
Total interest expense | 534,239 | 241,807 | 195,778 |
Administrative and operating expenses: | |||
Provision (benefit) for credit losses | 11,579 | 11,241 | (7,460) |
Depreciation of equipment on operating leases | 178,969 | 201,582 | 239,331 |
Other expenses, net | 17,034 | (3,655) | 14,016 |
Total administrative and operating expenses | 261,386 | 260,026 | 293,256 |
Total expenses | 795,625 | 501,833 | 489,034 |
INCOME BEFORE TAXES | 277,028 | 290,002 | 300,150 |
Income tax provision | 61,956 | 70,880 | 69,935 |
NET INCOME | 215,072 | 219,122 | 230,215 |
Related Party | |||
Interest expense: | |||
Interest expense to affiliates | 33,746 | 9,361 | 3,686 |
Total interest expense | 33,746 | 9,361 | 3,686 |
Administrative and operating expenses: | |||
Fees charged by affiliates | $ 53,804 | $ 50,858 | $ 47,369 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
NET INCOME | $ 215,072 | $ 219,122 | $ 230,215 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | 8,456 | (38,636) | 666 |
Pension liability adjustment | (757) | 79 | 1,802 |
Change in derivative financial instruments | (7,174) | 12,181 | 6,310 |
Total other comprehensive income (loss) | 525 | (26,376) | 8,778 |
COMPREHENSIVE INCOME | $ 215,597 | $ 192,746 | $ 238,993 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash | $ 390,110 | $ 262,244 |
Restricted cash and cash equivalents | 407,817 | 446,335 |
Receivables, less allowance for credit losses of $114,745 and $125,012, respectively | 13,455,717 | 10,741,820 |
Equipment on operating leases, net | 1,378,384 | 1,472,973 |
Equipment held for sale | 20,215 | 11,685 |
Goodwill | 109,118 | 108,567 |
Other intangible assets, net | 19,352 | 18,388 |
Other assets | 108,147 | 63,958 |
TOTAL | 15,963,527 | 13,179,479 |
Liabilities: | ||
Short-term debt (including current maturities of long-term debt) | 5,519,792 | 4,096,426 |
Accounts payable and other accrued liabilities | 852,638 | 1,046,688 |
Long-term debt | 7,859,629 | 6,387,135 |
Total liabilities | 14,364,551 | 11,871,780 |
Commitments and contingent liabilities (Note 13) | ||
Stockholder's equity: | ||
Member's capital | ||
Paid-in capital | 919,702 | 844,022 |
Accumulated other comprehensive loss | (137,308) | (137,833) |
Retained earnings | 816,582 | 601,510 |
Total stockholder's equity | 1,598,976 | 1,307,699 |
TOTAL | 15,963,527 | 13,179,479 |
Related Party | ||
ASSETS | ||
Affiliated accounts and notes receivable | 74,667 | 53,509 |
Liabilities: | ||
Affiliated debt | $ 132,492 | $ 341,531 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Allowance for credit losses | $ 114,745 | $ 125,012 |
Restricted cash and cash equivalents | 407,817 | 446,335 |
Receivables, less allowance for credit losses of $54,889 and $55,645, respectively | 13,455,717 | 10,741,820 |
TOTAL | 15,963,527 | 13,179,479 |
Short-term debt (including current maturities of long-term debt) | 5,519,792 | 4,096,426 |
Long-term debt | 7,859,629 | 6,387,135 |
Total liabilities | 14,364,551 | 11,871,780 |
Consolidated variable interest entities ("VIEs") | ||
Allowance for credit losses | 54,889 | 55,645 |
Restricted cash and cash equivalents | 407,817 | 446,335 |
Receivables, less allowance for credit losses of $54,889 and $55,645, respectively | 8,103,838 | 6,927,032 |
TOTAL | 8,511,655 | 7,373,367 |
Short-term debt (including current maturities of long-term debt) | 3,824,385 | 3,120,860 |
Long-term debt | 4,086,419 | 3,599,575 |
Total liabilities | $ 7,910,804 | $ 6,720,435 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 215,072 | $ 219,122 | $ 230,215 |
Adjustments to reconcile net income to net cash from (used in) operating activities: | |||
Depreciation on property and equipment and equipment on operating leases | 178,977 | 201,590 | 239,339 |
Amortization of intangibles | 2,939 | 2,159 | 1,910 |
Provision (benefit) for credit losses | 11,579 | 11,241 | (7,460) |
Deferred income tax benefit | (65,432) | (54,452) | (10,041) |
Other non-cash items | 53,012 | ||
Changes in components of working capital: | |||
Change in affiliated accounts and notes receivables | (15,143) | 206,190 | 155,119 |
Change in other assets and equipment held for sale | (47,971) | 39,577 | 14,475 |
Change in accounts payable and other accrued liabilities | (139,998) | 69,939 | 154,200 |
Net cash from (used in) operating activities | 193,035 | 695,366 | 777,757 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Cost of receivables acquired | (19,225,922) | (15,039,779) | (12,527,444) |
Collections of receivables | 16,551,962 | 13,101,247 | 12,485,249 |
Cost of affiliated notes receivables acquired | (14,000) | ||
Collections of affiliated notes receivables | 8,000 | ||
Purchase of equipment on operating leases | (521,144) | (517,623) | (536,401) |
Proceeds from disposal of equipment on operating leases | 444,004 | 533,330 | 457,421 |
Purchase of property, equipment and software | (3,904) | (4,094) | (5,029) |
Net cash from (used in) investing activities | (2,761,004) | (1,926,919) | (126,204) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from issuance of affiliated debt | 1,763,393 | 855,799 | 259,793 |
Payment of affiliated debt | (1,973,415) | (500,617) | (445,003) |
Proceeds from issuance of long-term debt | 4,597,046 | 3,749,914 | 4,393,756 |
Payment of long-term debt | (3,401,638) | (3,361,007) | (3,652,327) |
Change in committed asset-backed facilities, net | 1,382,643 | 1,127 | (947,775) |
Change in short-term borrowings, net | 214,288 | 301,257 | 111 |
Dividends paid to CNH Industrial America LLC | (135,000) | (250,000) | |
Proceeds from capital contribution | 75,000 | ||
Net cash from (used in) financing activities | 2,657,317 | 911,473 | (641,445) |
INCREASE (DECREASE) IN CASH AND RESTRICTED CASH AND CASH EQUIVALENTS | 89,348 | (320,080) | 10,108 |
CASH AND RESTRICTED CASH AND CASH EQUIVALENTS | |||
Beginning of year | 708,579 | 1,028,659 | 1,018,551 |
End of year | 797,927 | 708,579 | 1,028,659 |
COMPONENTS OF CASH AND RESTRICTED CASH AND CASH EQUIVALENTS | |||
Cash | 390,110 | 262,244 | 426,917 |
Restricted cash and cash equivalents | 407,817 | 446,335 | 601,742 |
TOTAL CASH AND RESTRICTED CASH AND CASH EQUIVALENTS | 797,927 | 708,579 | 1,028,659 |
CASH PAID DURING THE YEAR FOR INTEREST | 513,170 | 227,868 | 198,527 |
CASH PAID DURING THE YEAR FOR TAXES | $ 100,687 | $ 126,120 | $ 56,801 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY - USD ($) $ in Thousands | Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total |
BALANCE at Dec. 31, 2020 | $ 843,234 | $ (120,235) | $ 537,173 | $ 1,260,172 |
Increase (Decrease) in Stockholder's Equity | ||||
Net income | 230,215 | 230,215 | ||
Dividends paid to CNH Industrial America LLC | (250,000) | (250,000) | ||
Foreign currency translation adjustment | 666 | 666 | ||
Stock compensation | 235 | 235 | ||
Pension liability adjustment, net of tax | 1,802 | 1,802 | ||
Change in derivative financial instruments, net of tax | 6,310 | 6,310 | ||
BALANCE at Dec. 31, 2021 | 843,469 | (111,457) | 517,388 | 1,249,400 |
Increase (Decrease) in Stockholder's Equity | ||||
Net income | 219,122 | 219,122 | ||
Dividends paid to CNH Industrial America LLC | (135,000) | (135,000) | ||
Foreign currency translation adjustment | (38,636) | (38,636) | ||
Stock compensation | 553 | 553 | ||
Pension liability adjustment, net of tax | 79 | 79 | ||
Change in derivative financial instruments, net of tax | 12,181 | 12,181 | ||
BALANCE at Dec. 31, 2022 | 844,022 | (137,833) | 601,510 | 1,307,699 |
Increase (Decrease) in Stockholder's Equity | ||||
Net income | 215,072 | 215,072 | ||
Foreign currency translation adjustment | 8,456 | 8,456 | ||
Stock compensation | 680 | 680 | ||
Pension liability adjustment, net of tax | (757) | (757) | ||
Change in derivative financial instruments, net of tax | (7,174) | (7,174) | ||
Capital contribution | 75,000 | 75,000 | ||
BALANCE at Dec. 31, 2023 | $ 919,702 | $ (137,308) | $ 816,582 | $ 1,598,976 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2023 | |
NATURE OF OPERATIONS | |
NATURE OF OPERATIONS | NOTE 1: NATURE OF OPERATIONS CNH Industrial Capital LLC and its primary operating subsidiaries, including New Holland Credit Company, LLC (“New Holland Credit”), CNH Industrial Capital America LLC (“CNH Capital America”) and CNH Industrial Capital Canada Ltd. (“CNH Capital Canada”) (collectively, “CNH Capital” or the “Company”), are each a subsidiary of CNH Industrial America LLC (“CNH America”), which is an indirect wholly-owned subsidiary of CNH Industrial N.V. (“CNHI” and, together with its consolidated subsidiaries, “CNH”). CNH America and CNH Industrial Canada Ltd. (“CNH Canada”) (collectively, “CNH North America”) design, manufacture, and sell agricultural and construction equipment. CNH Capital provides financial services for CNH North America dealers and end-use customers primarily located in the United States and Canada. CNHI is incorporated in and under the laws of The Netherlands. CNHI has its corporate seat in Amsterdam, The Netherlands, and its principal office in Basildon, Essex, England. The common shares of CNHI are listed on the New York Stock Exchange under the symbol “CNHI.” To support CNH North America’s sales of agricultural and construction equipment products, the Company offers retail note and lease financing to end-use customers for the purchase of new and used equipment and components sold through CNH North America’s dealer network, as well as revolving charge account financing and other financial services. CNH Capital also provides wholesale financing to CNH North America dealers and distributors, all of which are independently owned and operated. Retail financing products primarily include retail notes, finance leases and operating leases to end-use customers and revolving charge account financing for customers to purchase parts, service, rentals, implements and attachments from CNH North America dealers. Wholesale financing consists primarily of dealer floorplan financing, which gives dealers the ability to maintain a representative inventory of products. In addition, the Company also finances other products, including insurance and equipment protection products underwritten through a third-party insurer. As a captive finance company, the Company is reliant on the operations of CNH North America, its dealers and end-use customers. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the Company and its consolidated subsidiaries. The consolidated financial statements are expressed in U.S. dollars. The consolidated financial statements include the accounts of the Company’s subsidiaries in which the Company has a controlling financial interest and reflect the noncontrolling interests of the minority owners of the subsidiaries that are not fully owned for the periods presented, as applicable. A controlling financial interest may exist based on ownership of a majority of the voting interest of a subsidiary, or based on the Company’s determination that it is the primary beneficiary of a variable interest entity (“VIE”). The primary beneficiary of a VIE is the party that has the power to direct the activities that most significantly impact the economic performance of the entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entity. The Company assesses whether it is the primary beneficiary on an ongoing basis, as prescribed by the accounting guidance on the consolidation of VIEs. The consolidated status of the VIEs with which the Company is involved may change as a result of such reassessments. Certain prior period balances have been reclassified to conform to the current year presentation. These reclassifications did not have an impact on the Company’s results of operations or financial position as of December 31, 2023, 2022 and 2021. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and reported amounts of revenues and expenses. Significant estimates in these consolidated financial statements include the allowance for credit losses and residual values of equipment on operating leases. Actual results could differ from these estimates. Revenue Recognition Finance and interest income on receivables is recorded using the effective yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the effective yield method. Recognition of income on receivables is suspended when management determines that collection of future income is not probable or when an account becomes 90 days past due, whichever occurs earlier. Income accrual is resumed if the receivable becomes contractually current and collection doubts are removed. Previously suspended income is recognized at that time. The Company applies cash received on nonaccrual financing receivables to first reduce any unrecognized interest and then the recorded investment and any other fees. A substantial portion of the Company’s interest income arises from retail sales programs offered by CNH North America on which finance charges are waived or below-market rate financing programs are offered. When the Company acquires retail notes and finance leases subject to below-market interest rates, including waived interest rate financing, the Company receives compensation from CNH North America based on the Company’s estimated costs and a targeted return on equity. This amount is initially recognized as an unearned finance charge and is recognized as interest income over the term of the retail customer receivables (which, as used herein, “retail customer receivables” refers primarily to retail notes and finance leases), and is included in “Interest and other income from affiliates” in the accompanying consolidated statements of income. For selected wholesale receivables, CNH North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. These amounts are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income. The Company is also compensated for lending funds to CNH North America. The amounts earned are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income. Income from operating leases is recognized over the term of the lease on a straight-line basis. For selected operating leases, CNH North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. The amounts from CNH North America recognized as rental income on operating leases are included in “Interest and other income from affiliates.” Foreign Currency Translation The Company’s non-U.S. subsidiaries maintain their books and accounting records using local currency as the functional currency. Assets and liabilities of these non-U.S. subsidiaries are translated into U.S. dollars at period-end exchange rates, and net exchange gains or losses resulting from such translation are included in “Accumulated other comprehensive income” in the accompanying consolidated balance sheets. Income and expense accounts of these non-U.S. subsidiaries are translated at the average exchange rates for the period. Gains and losses from foreign currency transactions are included in net income in the period that they arise. Net foreign currency transaction gains and losses are reflected in “Other expenses, net” in the accompanying consolidated statements of income. Restricted Cash and Cash Equivalents Restricted cash includes principal and interest payments from retail notes and wholesale receivables owned by the consolidated VIEs that are payable to the VIEs’ investors, and cash pledged as a credit enhancement to the same investors. These amounts are held by depository banks in order to comply with contractual agreements. Restricted cash equivalents are highly liquid investments with an original maturity of one month or less. Receivables Receivables are recorded at amortized cost, net of allowances for credit losses and deferred fees and costs. Periodically, the Company sells or transfers retail notes and wholesale receivables to funding facilities or in securitization transactions. In accordance with the accounting guidance regarding transfers of financial assets and the consolidation of VIEs, the majority of the retail notes and wholesale receivables sold in securitizations do not qualify as sales and are recorded as secured borrowings with no gains or losses recognized at the time of securitization. Receivables associated with these securitization transactions and receivables that the Company has the ability and intent to hold for the foreseeable future are classified as held for investment. The substantial majority of the Company’s receivables, which include unrestricted receivables and restricted receivables for securitization investors, are classified as held for investment. Allowance for Credit Losses The allowance for credit losses is the Company’s estimate of the lifetime expected credit losses inherent in the receivables owned by the Company. Retail customer receivables primarily include retail notes and finance leases to end-use customers. Revolving charge accounts represent financing for customers to purchase parts, service, rentals, implements and attachments from CNH North America dealers. Wholesale receivables include dealer floorplan financing, and to a lesser extent, the financing of dealer operations. Typically, the Company’s receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. Retail customer receivables that share the same risk characteristics such as, collateralization levels, geography, product type and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for credit losses on retail customer receivables is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as GDP and Net Farm Income. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Wholesale receivables that share the same risk characteristics such as, collateralization levels, term, geography and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for wholesale credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as industry sales volumes. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Retail customer receivables and wholesale receivables that do not have similar risk characteristics are individually reviewed based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured by considering: the probability-weighted estimates of cash flows and collateral value; the time value of money; current conditions and forecasts of future economic conditions. Expected credit losses are measured as the probability-weighted present value of all cash shortfalls (including the value of the collateral, if appropriate) over the expected life of each financial asset. Charge-offs of principal amounts of retail customer receivables and wholesale receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due are deemed uncollectible. Revolving charge accounts are generally deemed to be uncollectible and charged off to the allowance for credit losses when delinquency reaches 120 days. Equipment on Operating Leases The Company purchases leases and equipment from CNH North America’s dealers and other independent third parties that have leased equipment to retail customers under operating leases. The Company’s investment in operating leases is based on the purchase price paid for the equipment. Income from these operating leases is recognized over the term of the lease. The equipment is depreciated on a straight-line basis over the term of the lease to the estimated residual value at lease termination. Residual values are estimated at the inception of the lease and are reviewed quarterly. Realization of the residual values is dependent on the Company’s future ability to re-market the equipment under then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Management believes that the estimated residual values are realizable. Expenditures for maintenance and repairs are the responsibility of the lessee. The Company evaluates the carrying amount of equipment on operating leases for potential impairment when it determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability identifies a possible impairment, the asset’s fair value is measured in accordance with the fair value measurement framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value. Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded at the lower of net book value or estimated fair value of the equipment, less cost to sell, and is not depreciated. Matured operating lease inventory is reported in “Equipment held for sale.” Goodwill and Intangible Assets Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired. Goodwill is deemed to have an indefinite useful life and is reviewed for impairment at least annually. During 2023 and 2022, the Company performed its annual impairment review as of December 31, and concluded that there was no impairment in either year. Other intangible assets consist of software and are being amortized on a straight-line basis over ten years. Income Taxes The provision for income taxes is determined using the asset and liability method. The Company recognizes a current tax liability or asset for the estimated taxes payable or refundable on tax returns for the current year and tax contingencies estimated to be settled with taxing authorities within one year. A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and tax loss carryforwards. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on available evidence. Derivatives The Company’s policy is to enter into derivative transactions to manage exposures that arise in the normal course of business and not for trading or speculative purposes. The Company records derivative financial instruments in the consolidated balance sheets as either an asset or liability measured at fair value. The fair value of the Company’s interest rate derivatives is based on discounting expected cash flows, using market interest rates, over the remaining term of the instrument. The fair value of the Company’s foreign exchange derivatives is based on quoted market exchange rates, adjusted for the respective interest rate differentials (premiums or discounts). Changes in the fair value of derivative financial instruments are recognized in current income unless specific hedge accounting criteria are met. For derivative financial instruments designated to hedge exposure to changes in the fair value of a recognized asset or liability, the gain or loss is recognized in income in the period of change together with the offsetting loss or gain on the related hedged item. For derivative financial instruments designated to hedge exposure to variable cash flows of a forecasted transaction, the gain or loss is initially reported in accumulated other comprehensive income and is subsequently reclassified into income when the forecasted transaction affects income. For derivative financial instruments that are not designated as hedges but held as economic hedges, the gain or loss is recognized immediately in income. The Company formally documents the hedging relationship to the hedged item and its risk management strategy for all derivative financial instruments designated as hedges. This includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities contained in the consolidated balance sheets and linking cash flow hedges to specific forecasted transactions or variability of cash flow. The Company assesses the effectiveness of its hedging instruments both at inception and on an ongoing basis. If a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer probable of occurring, the hedge accounting described above is discontinued and the derivative is marked to fair value and recorded in income through the remainder of its term. New Accounting Pronouncements Adopted In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2023 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | NOTE 3: ACCUMULATED OTHER COMPREHENSIVE INCOME Accumulated other comprehensive income (“AOCI”) includes net income plus other comprehensive income, which includes foreign currency translation gains and losses, certain changes in pension plans and changes in fair value of certain derivatives designated as cash flow hedges. The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the year ended December 31, 2023: Currency Unrealized Translation Pension (Losses) Gains Adjustment Liability on Derivatives Total Beginning balance, gross $ (151,254) $ 2,563 $ 15,288 $ (133,403) Tax liability — (620) (3,810) (4,430) Beginning balance, net of tax (151,254) 1,943 11,478 (137,833) Other comprehensive income (loss) before reclassifications 8,456 (43) (6,987) 1,426 Amounts reclassified from accumulated other comprehensive income (loss) — (961) (2,624) (3,585) Tax effects — 247 2,437 2,684 Net current-period other comprehensive income (loss) 8,456 (757) (7,174) 525 Total $ (142,798) $ 1,186 $ 4,304 $ (137,308) The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the year ended December 31, 2022: Currency Unrealized Translation Pension (Losses) Gains Adjustment Liability on Derivatives Total Beginning balance, gross $ (112,618) $ 2,451 $ (956) $ (111,123) Tax liability — (587) 253 (334) Beginning balance, net of tax (112,618) 1,864 (703) (111,457) Other comprehensive income (loss) before reclassifications (38,636) 1,067 17,334 (20,235) Amounts reclassified from accumulated other comprehensive income (loss) — (955) (1,090) (2,045) Tax effects — (33) (4,063) (4,096) Net current-period other comprehensive income (loss) (38,636) 79 12,181 (26,376) Total $ (151,254) $ 1,943 $ 11,478 $ (137,833) The reclassifications out of AOCI and the location on the consolidated statements of income for the years ended December 31, 2023 and 2022 were immaterial. |
RECEIVABLES
RECEIVABLES | 12 Months Ended |
Dec. 31, 2023 | |
RECEIVABLES | |
RECEIVABLES | NOTE 4: RECEIVABLES A summary of receivables included in the consolidated balance sheets as of December 31, 2023 and 2022 is as follows: 2023 2022 Retail notes $ 1,291,559 $ 1,241,775 Revolving charge accounts 205,872 207,744 Finance leases 219,386 198,064 Wholesale 1,575,142 875,628 Restricted receivables 10,278,503 8,343,621 Gross receivables 13,570,462 10,866,832 Less: Allowance for credit losses (114,745) (125,012) Total receivables, net $ 13,455,717 $ 10,741,820 The Company provides and administers retail note and lease financing to end-use customers for the purchase of new and used equipment and components sold through CNH North America’s dealer network, as well as revolving charge account financing. The terms of retail customer receivables generally range from two Wholesale receivables arise primarily from dealer floorplan financing, and to a lesser extent, the financing of dealer operations. Under the standard terms of the wholesale receivable agreements, these receivables typically have interest-free periods of up to twelve months and stated original maturities of up to twenty-four Maturities of receivables as of December 31, 2023, are as follows: 2024 $ 7,640,811 2025 1,912,007 2026 1,638,278 2027 1,221,391 2028 and thereafter 1,043,230 Total receivables $ 13,455,717 It has been the Company’s experience that substantial portions of retail customer receivables are repaid before their contractual maturity dates. As a result, the above table should not be regarded as a forecast of future cash collections. Retail customer receivables, revolving charge accounts and wholesale receivables have significant concentrations of credit risk in the agricultural and construction business sectors. On a geographic basis, there is not a disproportionate concentration of credit risk in any area of the United States or Canada. The Company typically retains, as collateral, a security interest in the equipment associated with retail customer receivables and wholesale receivables, while revolving charge accounts are generally unsecured. Restricted Receivables and Securitization As part of its overall funding strategy, the Company periodically transfers certain receivables into special purpose entities (“SPEs”) as part of its asset-backed securitization (“ABS”) programs. SPEs utilized in the securitization programs differ from other entities included in the Company’s consolidated financial statements because the assets they hold are legally isolated from the Company’s assets. For bankruptcy analysis purposes, the Company has sold the receivables to the SPEs in a true sale and the SPEs are separate legal entities. Upon transfer of the receivables to the SPEs, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the SPEs’ creditors. The SPEs have ownership of cash balances that also have restrictions for the benefit of the SPEs’ investors. The Company’s interests in the SPEs’ receivables are subordinate to the interests of third-party investors. None The secured borrowings related to the restricted receivables are obligations that are payable as the receivables are collected. The following table summarizes the restricted receivables as of December 31, 2023 and 2022: 2023 2022 Retail notes $ 6,693,525 $ 5,835,445 Wholesale 3,584,978 2,508,176 Total restricted receivables $ 10,278,503 $ 8,343,621 Retail Notes Securitizations Within the U.S. retail notes securitization programs, qualifying retail notes are sold to bankruptcy-remote SPEs. In turn, these SPEs establish separate trusts, which are VIEs, to either transfer receivables in exchange for proceeds from asset-backed securities issued by the trusts, or pledge the receivables as collateral in exchange for proceeds from a committed asset-backed facility. In Canada, qualifying retail notes are transferred directly to trusts, which are also VIEs. The VIEs are consolidated since the Company has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. During the years ended December 31, 2023 and 2022, the Company executed $2,198,864 and $2,798,457, respectively, in term retail asset-backed transactions in the U.S. and Canada. The securities in these transactions are backed by agricultural and construction equipment retail notes originated through CNH North America’s dealer network. As of December 31, 2023 and 2022, $4,620,565 and $4,927,653, respectively, of asset-backed securities issued to investors were outstanding with weighted average remaining maturities of 39 months for both periods. The Company believes that it is probable that it will continue to regularly utilize the term ABS markets. The Company may retain all or a portion of the subordinated interests in the SPEs. No recourse provisions exist that allow holders of the asset-backed securities issued by the trusts to put those securities back to the Company although the Company provides customary representations and warranties that could give rise to an obligation to repurchase from the trusts any receivables for which there is a breach of the representations and warranties. Moreover, the Company does not guarantee any securities issued by the trusts. The trusts have a limited life and generally terminate upon final distribution of amounts owed to investors or upon exercise of a cleanup-call option by the Company, in its role as servicer. As of December 31, 2023, the Company also has $1,377,339 in committed asset-backed facilities through which it may sell on a monthly basis retail notes generated in the United States and Canada. The Company has utilized these facilities in the past to fund the origination of receivables and has later repurchased and resold the receivables in the term ABS markets or found alternative financing for the receivables. The U.S. and Canadian facilities had an original funding term of two years and are renewable in September 2025 and December 2025, respectively. To the extent these facilities are not renewed, they will be repaid according to the amortization of the underlying receivables. Wholesale Receivables Securitizations With regard to the wholesale receivable securitization programs, the Company sells eligible receivables on a revolving basis to structured master trust facilities, which are bankruptcy-remote SPEs. As of December 31, 2023, debt is issued through a U.S. master trust facility, consisting of three short-term series of $850,000, $400,000 and $300,000 and through a C$500,000 ($377,339) Canadian master trust facility. These trusts were determined to be VIEs. In its role as servicer, CNH Capital has the power to direct the trusts’ activities. Through its retained interests, the Company provides security to investors in the event that cash collections from the receivables are not sufficient to make principal and interest payments on the securities. Consequently, CNH Capital has consolidated these wholesale trusts. Each of the facilities contains minimum payment rate thresholds that, if breached, could preclude the Company from selling additional receivables originated on a prospective basis and could force an early amortization of the debt. Allowance for Credit Losses The Company’s allowance for credit losses is segregated into three portfolio products: retail customer receivables, revolving charge accounts and wholesale receivables. A portfolio product is the level at which the Company develops a systematic methodology for determining its allowance for credit losses. Further, the class of receivables by which the Company evaluates its portfolio’s products is by geographic region. Typically, the Company’s receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. The classes align with management reporting. Allowance for credit losses activity for the year ended December 31, 2023 is as follows: Revolving Retail Charge Customer Accounts Wholesale Total Allowance for credit losses: Beginning balance $ 110,341 $ 8,519 $ 6,152 $ 125,012 Charge-offs (17,624) (6,512) — (24,136) Recoveries 1,785 221 26 2,032 Provision (benefit) 6,920 5,354 (695) 11,579 Foreign currency translation and other 227 12 19 258 Ending balance $ 101,649 $ 7,594 $ 5,502 $ 114,745 Receivables: Ending balance $ 8,204,470 $ 205,872 $ 5,160,120 $ 13,570,462 At December 31, 2023, the allowance for credit losses decreased due to lower specific reserve needs for retail customers and the continued strong outlook for the agricultural industry. The Company will update the macroeconomic factors and qualitative factors in future periods, as warranted. Allowance for credit losses activity for the year ended December 31, 2022 is as follows: Revolving Retail Charge Customer Accounts Wholesale Total Allowance for credit losses: Beginning balance $ 109,742 $ — $ 6,211 $ 115,953 Charge-offs (8,202) (49) (4,631) (12,882) Recoveries 2,262 — 526 2,788 Provision (benefit) 7,311 (169) 4,099 11,241 Foreign currency translation and other (772) 8,737 (53) 7,912 Ending balance $ 110,341 $ 8,519 $ 6,152 $ 125,012 Receivables: Ending balance $ 7,275,284 $ 207,744 $ 3,383,804 $ 10,866,832 At December 31, 2022, the allowance for credit losses included increases in reserves primarily due to the addition of revolving charge accounts. Allowance for credit losses activity for the year ended December 31, 2021 is as follows: Retail Customer Wholesale Total Allowance for credit losses: Beginning balance $ 126,851 $ 9,285 $ 136,136 Charge-offs (14,929) (179) (15,108) Recoveries 2,177 126 2,303 Benefit (4,437) (3,023) (7,460) Foreign currency translation and other 80 2 82 Ending balance $ 109,742 $ 6,211 $ 115,953 Receivables: Ending balance $ 6,722,247 $ 2,345,005 $ 9,067,252 At December 31, 2021, the allowance for credit losses included a release of reserves primarily due to the improved outlook for the agricultural industry and a reduced expected impact on credit conditions from the COVID-19 pandemic. The Company assesses and monitors the credit quality of its receivables based on delinquency status. Receivables are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Delinquency is reported on receivables greater than 30 days past due. As the terms for the retail customer receivables are greater than one year, the past due information is presented by year of origination. The aging of receivables by vintage as of December 31, 2023 is as follows: Greater 31 – 60 Days 61 – 90 Days Than Total Total Gross Past Due Past Due 90 Days Past Due Current Receivables Charge-offs Retail customer United States 2023 $ 9,662 $ 1,415 $ 1,288 $ 12,365 $ 3,111,476 $ 3,123,841 $ 552 2022 10,008 2,583 5,821 18,412 1,755,538 1,773,950 3,221 2021 6,808 2,118 3,554 12,480 1,041,185 1,053,665 2,716 2020 3,270 1,106 32,831 37,207 451,292 488,499 2,987 2019 1,829 529 2,001 4,359 164,634 168,993 3,203 Prior to 2019 631 318 3,831 4,780 56,779 61,559 2,849 Total $ 32,208 $ 8,069 $ 49,326 $ 89,603 $ 6,580,904 $ 6,670,507 $ 15,528 Canada 2023 $ 647 $ 149 $ 420 $ 1,216 $ 667,887 $ 669,103 $ 78 2022 2,395 60 1,236 3,691 395,757 399,448 941 2021 1,090 159 2,361 3,610 291,974 295,584 964 2020 755 — 320 1,075 113,630 114,705 (227) 2019 158 14 201 373 44,042 44,415 253 Prior to 2019 126 152 366 644 10,064 10,708 87 Total $ 5,171 $ 534 $ 4,904 $ 10,609 $ 1,523,354 $ 1,533,963 $ 2,096 Revolving charge accounts United States $ 6,036 $ 2,422 $ 1,089 $ 9,547 $ 182,728 $ 192,275 $ 5,993 Canada $ 374 $ 169 $ 122 $ 665 $ 12,932 $ 13,597 $ 519 Wholesale United States $ — $ — $ — $ — $ 4,271,583 $ 4,271,583 $ — Canada $ — $ — $ — $ — $ 888,537 $ 888,537 $ — Total Retail customer $ 37,379 $ 8,603 $ 54,230 $ 100,212 $ 8,104,258 $ 8,204,470 $ 17,624 Revolving charge accounts $ 6,410 $ 2,591 $ 1,211 $ 10,212 $ 195,660 $ 205,872 $ 6,512 Wholesale $ — $ — $ — $ — $ 5,160,120 $ 5,160,120 $ — The aging of receivables by vintage as of December 31, 2022 is as follows: Greater 31 – 60 Days 61 – 90 Days Than Total Total Past Due Past Due 90 Days Past Due Current Receivables Retail customer United States 2022 $ 6,258 $ 976 $ 350 $ 7,584 $ 2,728,247 $ 2,735,831 2021 6,610 1,269 3,701 11,580 1,610,175 1,621,755 2020 4,490 1,503 32,505 38,498 807,990 846,488 2019 2,365 1,034 4,114 7,513 382,168 389,681 2018 1,579 465 1,493 3,537 186,897 190,434 Prior to 2018 765 131 4,955 5,851 54,566 60,417 Total $ 22,067 $ 5,378 $ 47,118 $ 74,563 $ 5,770,043 $ 5,844,606 Canada 2022 $ 1,544 $ 22 $ 387 $ 1,953 $ 652,576 $ 654,529 2021 2,420 502 2,371 5,293 436,138 441,431 2020 810 128 960 1,898 190,905 192,803 2019 197 114 615 926 90,968 91,894 2018 388 178 262 828 38,477 39,305 Prior to 2018 123 25 257 405 10,311 10,716 Total $ 5,482 $ 969 $ 4,852 $ 11,303 $ 1,419,375 $ 1,430,678 Revolving charge accounts United States $ 12,979 $ 9,965 $ — $ 22,944 $ 169,851 $ 192,795 Canada $ 1,237 $ 759 $ — $ 1,996 $ 12,953 $ 14,949 Wholesale United States $ 7 $ — $ 4 $ 11 $ 2,721,282 $ 2,721,293 Canada $ — $ — $ — $ — $ 662,511 $ 662,511 Total Retail customer $ 27,549 $ 6,347 $ 51,970 $ 85,866 $ 7,189,418 $ 7,275,284 Revolving charge accounts $ 14,216 $ 10,724 $ — $ 24,940 $ 182,804 $ 207,744 Wholesale $ 7 $ — $ 4 $ 11 $ 3,383,793 $ 3,383,804 Included in the receivables balance at December 31, 2023 and 2022 is accrued interest of $83,879 and $57,831, respectively. The Company does not include accrued interest in its allowance for credit losses. Recognition of income is generally suspended when management determines that collection of future finance income is not probable or when an account becomes 90 days past due, whichever occurs first. Accrued interest is charged-off to interest income. Interest income charged-off was not material for the years ended December 31, 2023 and 2022. Interest accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at that time. The retail customer receivables on nonaccrual status as of December 31, 2023 and 2022 are as follows: 2023 2022 United States $ 55,564 $ 48,690 Canada $ 5,321 $ 4,852 As of December 31, 2023, total revolving charge account receivables on nonaccrual status were immaterial and there were no revolving charge account receivables on nonaccrual status as of December 31, 2022. As of December 31, 2023 and 2022, there were no wholesale receivables on nonaccrual status. As of December 31, 2023 and 2022, the Company’s receivables on non-accrual status without an allowance were immaterial. Interest income recognized for receivables on non-accrual status for the years ended December 31, 2023 and 2022 was immaterial. Troubled Debt Restructurings A restructuring of a receivable constitutes a TDR when the lender grants a concession it would not otherwise consider to a customer that is experiencing financial difficulties. As a collateral-based lender, the Company typically will repossess collateral in lieu of restructuring receivables. As such, for retail customer receivables, concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions granted may include extended contract maturities, inclusion of interest-only periods, modification of a contractual interest rate to a below market interest rate and waiving of interest and principal. TDRs are reviewed along with other receivables as part of management’s ongoing evaluation of the adequacy of the allowance for credit losses. As of December 31, 2023 and 2022, the Company’s TDRs were immaterial. |
EQUIPMENT ON OPERATING LEASES
EQUIPMENT ON OPERATING LEASES | 12 Months Ended |
Dec. 31, 2023 | |
EQUIPMENT ON OPERATING LEASES | |
EQUIPMENT ON OPERATING LEASES | NOTE 5: EQUIPMENT ON OPERATING LEASES A summary of equipment on operating leases as of December 31, 2023 and 2022 is as follows: 2023 2022 Equipment on operating leases $ 1,735,626 $ 1,858,912 Accumulated depreciation (357,242) (385,939) Total equipment on operating leases, net $ 1,378,384 $ 1,472,973 Depreciation expense totaled $178,969, $201,582 and $239,331 for the years ended December 31, 2023, 2022 and 2021, respectively. Lease payments owed to the Company for equipment under non-cancelable operating leases (excluding deferred operating lease subsidy of $74,775) as of December 31, 2023 are as follows: 2024 $ 203,767 2025 142,247 2026 78,339 2027 30,916 2028 and thereafter 9,830 Total lease payments $ 465,099 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6: GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 are as follows: 2023 2022 Balance, beginning of year $ 108,567 $ 110,226 Foreign currency translation adjustment 551 (1,659) Balance, end of year $ 109,118 $ 108,567 Goodwill is tested for impairment at least annually. During 2023 and 2022, the Company performed its annual impairment review as of December 31 and concluded that there were no impairments in any year. As of December 31, 2023 and 2022, the Company’s intangible asset and related accumulated amortization for its software is as follows: 2023 2022 Software $ 50,155 $ 46,251 Accumulated amortization (30,803) (27,863) Total software, net $ 19,352 $ 18,388 The Company recorded amortization expense of $2,939, $2,159 and $1,910 during 2023, 2022 and 2021, respectively. Based on the current amount of software subject to amortization, the estimated annual amortization expense for each of the succeeding five years is as follows: $3,035 in 2024; $2,904 in 2025; $2,638 in 2026; $2,274 in 2027; $1,307 in 2028; and $1,855 in 2029 and thereafter. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
OTHER ASSETS | |
OTHER ASSETS | NOTE 7: OTHER ASSETS The components of other assets as of December 31, 2023 and 2022 are as follows: 2023 2022 Derivative assets $ 55,654 $ 35,575 Deferred tax assets 17,772 9,463 Tax receivables 10,260 3,162 Other current assets 24,461 15,758 Total other assets $ 108,147 $ 63,958 |
CREDIT FACILITIES AND DEBT
CREDIT FACILITIES AND DEBT | 12 Months Ended |
Dec. 31, 2023 | |
CREDIT FACILITIES AND DEBT | |
CREDIT FACILITIES AND DEBT | NOTE 8: CREDIT FACILITIES AND DEBT The following table summarizes the Company’s debt and credit facilities, borrowings thereunder and availability at December 31, 2023: Current Maturities of Total Short-Term Long-Term Long-Term Maturity (1) Facility/Debt Outstanding Outstanding Outstanding Available Committed Asset-Backed Facilities Retail - U.S. Sep 2025 $ 1,000,000 $ — $ 227,598 $ 772,052 $ 350 Retail - Canada Dec 2025 377,339 — 74,265 303,074 — Wholesale VFN - U.S. Various 1,550,000 1,550,000 — — — Wholesale VFN - Canada Dec 2025 377,339 377,339 — — — 3,304,678 1,927,339 301,863 1,075,126 350 Secured Debt Amortizing retail term ABS - N.A. Various 4,620,565 — 1,595,183 3,025,382 — Other ABS financing - N.A. Various 388,589 — 136,355 252,234 — Repurchase agreement Sep 2024 226,290 226,290 — — — Unamortized issuance costs (14,089) — — (14,089) — 5,221,355 226,290 1,731,538 3,263,527 — Unsecured Facilities Credit lines Various 100,000 100,000 — — — Revolving credit facilities Various 716,404 — 150,936 165,468 400,000 Unamortized issuance costs (556) — — (556) — 815,848 100,000 150,936 164,912 400,000 Unsecured Debt Commercial paper Various 351,000 351,000 — — — Notes Various 4,128,275 — 726,404 3,401,871 — Hedging effects, discounts and unamortized issuance costs (41,385) (3,110) 7,532 (45,807) — 4,437,890 347,890 733,936 3,356,064 — Total credit facilities and debt $ 13,779,771 $ 2,601,519 $ 2,918,273 $ 7,859,629 $ 400,350 (1) Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility. A summary of the minimum annual repayments of long-term debt as of December 31, 2023, for 2025 and thereafter is as follows: 2025 $ 2,693,669 2026 2,709,582 2027 827,117 2028 1,061,560 2029 and thereafter 567,701 Total $ 7,859,629 The following table summarizes the Company’s credit facilities, borrowings thereunder and availability at December 31, 2022: Current Maturities of Total Short-Term Long-Term Long-Term Maturity (1) Facility/Debt Outstanding Outstanding Outstanding Available Committed Asset-Backed Facilities Retail - U.S. Sep 2024 $ 1,000,000 $ — $ 83,667 $ 227,799 $ 688,534 Retail - Canada Dec 2024 443,186 — 53,130 245,930 144,126 Wholesale VFN - U.S. Various 1,000,000 1,000,000 — — — Wholesale VFN - Canada Dec 2024 295,457 295,457 — — — 2,738,643 1,295,457 136,797 473,729 832,660 Secured Debt Amortizing retail term ABS - N.A. Various 4,829,202 — 1,688,606 3,140,596 — Other ABS financing - N.A. Various 98,451 — 77,644 20,807 — Unamortized issuance costs (14,750) — — (14,750) — 4,912,903 — 1,766,250 3,146,653 — Unsecured Facilities Revolving credit facilities Various 606,820 — — 110,796 496,024 Unamortized issuance costs (1,284) — — (1,284) — 605,536 — — 109,512 496,024 Unsecured Debt Commercial paper Various 300,000 300,000 — — — Notes Various 3,321,593 — 600,000 2,721,593 — Hedging effects, discounts and unamortized issuance costs (66,430) (1,445) (633) (64,352) — 3,555,163 298,555 599,367 2,657,241 — Total credit facilities and debt $ 11,812,245 $ 1,594,012 $ 2,502,414 $ 6,387,135 $ 1,328,684 (1) Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility. Committed Asset-Backed Facilities The Company has access to committed asset-backed facilities with several banks through which it may sell its receivables. The Company utilizes retail facilities to fund the origination of retail notes and has exercised the option to periodically repurchase receivables and resell them in the term ABS markets (shown as “Amortizing retail term ABS - N.A.”) or found alternative financing for the receivables. Under these facilities, the maximum amount of proceeds that can be accessed at one time is $1,377,339. In addition, if the receivables sold are not repurchased by the Company, the related debt is paid only as the underlying receivables are collected. Such receivables have maturities not exceeding seven years. The Company believes it is probable that a majority of these receivables will be repurchased and resold in the ABS markets. Borrowings against these facilities accrue interest based on prevailing money market rates, plus an applicable margin. The Company finances a portion of its wholesale receivable portfolio with the issue of Variable Funding Notes (“VFNs”) which are privately subscribed by certain banks and asset-backed commercial paper conduits. These notes accrue interest based on prevailing money market rates, plus an applicable margin. Secured Debt Secured borrowings bear interest at either floating rates of SOFR plus an applicable margin or fixed rates. Repurchase Agreement On September 26, 2023, the Company entered into a Global Master Repurchase Agreement which expires in September 2024. At December 31, 2023, the Company had C$299,850 ($226,290) outstanding under the repurchase agreement, with an obligation to repurchase the underlying receivables in 30 days. The repurchase agreement is treated as financing arrangements for accounting purposes. Unsecured Credit Line, Facilities and Debt Committed and uncommitted unsecured facilities with banks as of December 31, 2023, totaled $815,848. These credit facilities, which are eligible for renewal at various future dates, are used primarily for working capital and other general corporate purposes. As of December 31, 2023, the Company had $415,848 outstanding under these credit facilities. The remaining available credit commitments are maintained primarily to provide backup liquidity for commercial paper borrowings. The Company's outstanding commercial paper totaled $347,890 as of December 31, 2023. As of December 31, 2023, the Company’s outstanding unsecured senior notes were as follows: Issued by CNH Industrial Capital LLC (the ‘‘U.S. Senior Notes’’): (1) 4.200% notes, due 2024 $ 500,000 3.950% notes, due 2025 500,000 5.450% notes, due 2025 400,000 1.875% notes, due 2026 500,000 1.450% notes, due 2026 600,000 4.550% notes, due 2028 600,000 5.500% notes, due 2029 500,000 Hedging, discounts and unamortized issuance costs (35,937) 3,564,063 Issued by CNH Industrial Capital Canada Ltd. (the ‘‘Canadian Senior Notes’’): (2) 1.500% notes, due 2024 226,404 5.500% notes, due 2026 301,871 Discounts and unamortized issuance costs (2,338) 525,937 Total $ 4,090,000 (1) These notes, which are senior unsecured obligations of CNH Industrial Capital LLC, are guaranteed by CNH Capital America and New Holland Credit. (2) These notes, which are senior unsecured obligations of CNH Capital Canada, are guaranteed by CNH Industrial Capital LLC, CNH Capital America and New Holland Credit. On April 10, 2023, CNH Industrial Capital LLC completed an offering of $600,000 in aggregate principal amount of 4.550% unsecured notes due 2028, with an issue price of 98.857%. On August 11, 2023, CNH Industrial Capital Canada Ltd. completed a private placement offering of C$400,000 ($297,640) in aggregate principal amount of 5.500% unsecured notes due 2026, with an issue price of 99.883%. On September 13, 2023, CNH Industrial Capital LLC completed an offering of $500,000 in aggregate principal amount of 5.500% unsecured notes due 2029, with an issue price of 99.399%. Covenants The indentures and credit agreements governing the Company’s unsecured funding transactions contain covenants that restrict the Company’s ability and/or that of its subsidiaries to, among other things, incur additional debt, make certain investments, enter into certain types of transactions with affiliates, use assets as security in other transactions, enter into sale or leaseback transactions and/or sell certain assets or merge with or into other companies. In addition, the Company is subject to certain financial covenants, with which it is in compliance. Interest Rates The weighted-average interest rate on total short-term debt outstanding at December 31, 2023 and 2022 was 6.1% and 4.8%, respectively. The weighted-average interest rate on total long-term debt (including current maturities of long-term debt) at December 31, 2023 and 2022 was 4.3% and 2.9%, respectively. The average rate is calculated using the actual rates at December 31, 2023 and 2022, weighted by the amount of outstanding borrowings of each debt instrument. Support Agreement Effective as of September 29, 2013, in connection with the business combination transaction of CNH Global N.V., the former indirect parent of CNH Capital (“CNH Global”), with and into CNHI, CNHI assumed all of CNH Global’s obligations under the support agreement, pursuant to which CNHI has agreed to, among other things, (a) make cash capital contributions to the Company, to the extent necessary to cause the ratio of net earnings available for fixed charges to fixed charges to be not less than 1.05 for each fiscal quarter (with such ratio determined, on a consolidated basis and in accordance with U.S. GAAP, for such fiscal quarter and the immediately preceding three fiscal quarters taken as a whole), (b) generally maintain an ownership of at least 51% of the voting equity interests in the Company and (c) cause the Company to have, as of the end of any fiscal quarter, a consolidated tangible net worth of at least $50,000. The support agreement is not intended to be and is not a guarantee by CNHI of any indebtedness or other obligation of the Company. The obligations of CNHI to the Company pursuant to this support agreement are to the Company only and do not run to, and are not enforceable directly by, any creditor of the Company. The support agreement may be modified, amended or terminated, at CNHI’s election, upon thirty days’ prior written notice to the Company and the rating agencies, if (a) the modification, amendment or termination would not result in a downgrade of the Company’s rated indebtedness; (b) the modification, amendment or notice of termination provides that the support agreement will continue in effect with respect to the Company’s rated indebtedness then outstanding; or (c) the Company has no long-term rated indebtedness outstanding. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 9: INCOME TAXES The income and expenses of the Company and certain of its domestic subsidiaries are included in the consolidated income tax return of CNH Industrial U.S. Holdings, Inc., a wholly-owned subsidiary of CNHI. CNH Industrial U.S. Holdings, Inc. is the parent of Case New Holland Inc., who remains the parent of CNH America. The Company’s Canadian subsidiaries file separate income tax returns, as do certain domestic subsidiaries. The Company and certain of its domestic subsidiaries are LLCs and, as a result, incur no federal income tax liabilities on a stand-alone basis. However, for financial reporting, all income tax accounts in the consolidated financial statements have been reported as if the Company and relevant subsidiaries were taxpaying entities. The sources of income before taxes for the years ended December 31, 2023, 2022, and 2021 are as follows, with foreign defined as any income earned outside the United States: 2023 2022 2021 Domestic $ 218,113 $ 232,873 $ 235,309 Foreign 58,915 57,129 64,841 Income before taxes $ 277,028 $ 290,002 $ 300,150 The provision for income taxes for the years ended December 31, 2023, 2022 and 2021 is as follows: 2023 2022 2021 Current income tax expense (benefit): Domestic $ 109,762 $ 112,615 $ 63,346 Foreign 17,626 12,717 16,630 Total current income tax expense 127,388 125,332 79,976 Deferred income tax expense (benefit): Domestic (59,051) (55,494) (9,296) Foreign (6,381) 1,042 (745) Total deferred income tax expense (65,432) (54,452) (10,041) Total tax provision $ 61,956 $ 70,880 $ 69,935 A reconciliation of CNH’s statutory and effective income tax rate for the years ended December 31, 2023, 2022, and 2021 is as follows: 2023 2022 2021 Tax provision at statutory rate 21.0 % 21.0 % 21.0 % State taxes 3.7 4.8 4.1 Foreign taxes (1.3) (0.6) (1.1) Tax contingencies — — — Tax credits and incentives (0.8) (0.6) (0.4) Other (0.2) (0.2) (0.3) Total tax provision effective rate 22.4 % 24.4 % 23.3 % The components of the Company’s net deferred tax liability as of December 31, 2023 and 2022 are as follows: 2023 2022 Deferred tax assets: Pension, postretirement and post-employment benefits $ 1,173 $ 1,180 Marketing and sales incentive programs 75,631 46,587 Allowance for credit losses 23,122 25,627 Other accrued liabilities 38,576 36,805 Tax loss and tax credit carry forwards 1,812 1,076 Total deferred tax assets $ 140,314 $ 111,275 Deferred tax liability: Equipment on operating lease 257,705 297,152 Net deferred tax liabilities $ (117,391) $ (185,877) Deferred taxes are provided to reflect timing differences between the financial and tax basis of assets and liabilities and tax carryforwards using currently enacted tax rates and laws. Management believes it is more likely than not the benefit of the deferred tax assets will be realized. Net deferred tax liabilities are reflected in the accompanying consolidated balance sheets as of December 31, 2023 and 2022 as follows: 2023 2022 Deferred tax assets $ 17,772 $ 9,463 Deferred tax liabilities (135,163) (195,340) Net deferred tax liabilities $ (117,391) $ (185,877) A reconciliation of the gross amounts of unrecognized tax benefits at the beginning and end of the year is as follows: 2023 2022 2021 Balance, beginning of year $ — $ — $ 4,274 Additions based on tax positions related to the current year — — — Reductions for tax positions of prior years — — — Settlements — — (4,274) Balance, end of year $ — $ — $ — In 2021, the Company settled its position with the IRS for the tax year 2014 and 2015 audits. There is no amount of unrecognized tax benefits that, if recognized, would affect the annual effective income tax rate. The Company has open tax years from 2012 to 2021. The Company does not believe the resolution of any outstanding tax examinations will have a material adverse effect on the Company’s financial position, results of operations or cash flows. At December 31, 2023, there are no material deferred tax liabilities on undistributed earnings of subsidiaries outside of the U.S. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2023 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | NOTE 10: FINANCIAL INSTRUMENTS The Company may elect to measure financial instruments and certain other items at fair value. This fair value option would be applied on an instrument-by-instrument basis with changes in fair value reported in earnings. The election can be made at the acquisition of an eligible financial asset, financial liability, or firm commitment or when certain specified reconsideration events occur. The fair value election may not be revoked once made. The Company has not elected the fair value measurement option for eligible items. Fair-Value Hierarchy The hierarchy of valuation techniques for financial instruments is based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy: Level 1 — Level 2 — Level 3 — This hierarchy requires the use of observable market data when available. Determination of Fair Value When available, the Company uses quoted market prices to determine fair value and classifies such items in Level 1. In some cases where a market price is not available, the Company will use observable market-based inputs to calculate fair value, in which case the items are classified in Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters such as interest rates, currency rates, or yield curves. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable. The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified. Where appropriate, the description includes details of the valuation models and the key inputs to those models, as well as any significant assumptions. Derivatives The Company utilizes derivative instruments to mitigate its exposure to interest rate and foreign currency exposures. Derivatives used as hedges are effective at reducing the risk associated with the exposure being hedged and are designated as a hedge at the inception of the derivative contract. The Company does not hold or enter into derivative or other financial instruments for speculative purposes. The credit and market risk related to derivatives is reduced through diversification among various counterparties, utilizing mandatory termination clauses and/or collateral support agreements. Derivative instruments are generally classified as Level 2 in the fair value hierarchy. The cash flows underlying all derivative contracts were recorded in operating activities in the consolidated statements of cash flows. Interest Rate Derivatives The Company has entered into interest rate derivatives in order to manage interest rate exposures arising in the normal course of business. Interest rate derivatives that have been designated as cash flow hedges are being used by the Company to mitigate the risk of rising interest rates related to existing debt and anticipated issuance of fixed-rate debt in future periods. Gains and losses on these instruments are deferred in accumulated other comprehensive income (loss) and recognized in interest expense over the period in which the Company recognizes interest expense on the related debt. As of December 31, 2023, the maximum length of time over which the Company is hedging its interest rate exposure through the use of derivative instruments designated in cash flow hedge relationships is 57 months. As of December 31, 2023, the after-tax gains deferred in accumulated other comprehensive income (loss) that will be recognized in interest expense over the next 12 months are approximately ($2,378). The Company also enters into offsetting interest rate derivatives with substantially similar economic terms that are not designated as hedging instruments to mitigate interest rate risk related to the Company’s committed asset-backed facilities. Unrealized and realized gains and losses resulting from fair value changes in these instruments are recognized directly in income and were insignificant for the years ended December 31, 2023, 2022 and 2021. All of the Company’s interest rate derivatives are considered Level 2. The fair market value of these derivatives is calculated using market data input and can be compared to actively traded derivatives. The total notional amount of the Company’s interest rate derivatives was $4,428,285 and $3,628,725 at December 31, 2023 and 2022, respectively. The thirteen-month average notional amounts as of December 31, 2023 and 2022 were $3,803,373 and $3,715,399, respectively. Foreign Exchange Contracts The Company uses forward contracts to hedge certain assets and liabilities denominated in foreign currencies. Such derivatives are considered economic hedges and are not designated as hedging instruments. The changes in the fair value of these instruments are recognized directly as income in “Other expenses, net” and are expected to offset the foreign exchange gains or losses on the exposures being managed. All of the Company’s foreign exchange derivatives are considered Level 2 as the fair value is calculated using market data input and can be compared to actively traded derivatives. Financial Statement Impact of the Company’s Derivatives The fair values of the Company’s derivatives as of December 31, 2023 and 2022 in the consolidated balance sheets are recorded as follows: 2023 2022 Derivatives Designated as Hedging Instruments Other assets: Interest rate derivatives $ 22,633 $ 3,597 Accounts payable and other accrued liabilities: Interest rate derivatives $ 32,579 $ 42,936 Derivatives Not Designated as Hedging Instruments Other assets: Interest rate derivatives $ 30,420 $ 27,862 Foreign exchange contracts 2,601 4,116 Total $ 33,021 $ 31,978 Accounts payable and other accrued liabilities: Interest rate derivatives $ 30,420 $ 27,862 Foreign exchange contracts — 435 Total $ 30,420 $ 28,297 Pre-tax gains (losses) on the consolidated statements of income and comprehensive income related to the Company’s derivatives for the years ended December 31, 2023, 2022 and 2021 are recorded in the following accounts: 2023 2022 2021 Cash Flow Hedges Recognized in accumulated other comprehensive income (loss): Interest rate derivatives $ (6,987) $ 17,334 $ 7,932 Reclassified from accumulated other comprehensive income (loss): Interest rate derivatives—Interest expense to third parties 2,624 1,090 (653) Not Designated as Hedges Foreign exchange contracts—Other expenses, net $ 1,828 $ (5,784) $ (1,709) Items Measured at Fair Value on a Recurring Basis The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and 2022, all of which are measured as Level 2: 2023 2022 Assets Interest rate derivatives $ 53,053 $ 31,459 Foreign exchange contracts 2,601 4,116 Total assets $ 55,654 $ 35,575 Liabilities Interest rate derivatives $ 62,999 $ 70,798 Foreign exchange contracts — 435 Total liabilities $ 62,999 $ 71,233 There were no transfers between Level 1, Level 2 and Level 3 hierarchy levels during the periods presented. Items Measured at Fair Value on a Nonrecurring Basis The Company may be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from application of lower of cost or market accounting or impairment charges of individual assets. The fair market value of these assets was based on an internal valuation methodology, which used industry guide book values adjusted for recent remarketing history and was classified as Level 3 under the fair value hierarchy. The Company recorded net gains on the sale of the equipment held of $16,896, $27,525 and $12,140 for the years ended December 31, 2023, 2022 and 2021, respectively, and were included in “Other expenses, net” in the accompanying consolidated statements of income. Fair Value of Other Financial Instruments The carrying amount of cash, restricted cash and cash equivalents, floating-rate affiliated accounts and notes receivable, floating-rate short-term debt, interest payable and short-term affiliated debt was assumed to approximate its fair value. Under the fair value hierarchy, cash and restricted cash and cash equivalents are classified as Level 1 and the remainder of the financial instruments listed is classified as Level 2. Financial Instruments Not Carried at Fair Value The carrying amount and estimated fair value of assets and liabilities considered financial instruments as of December 31, 2023 and 2022 are as follows: 2023 2022 Carrying Estimated Carrying Estimated Amount Fair Value * Amount Fair Value * Receivables $ 13,455,717 $ 13,224,506 $ 10,741,820 $ 10,433,949 Long-term debt $ 7,859,629 $ 7,739,874 $ 6,387,135 $ 6,032,997 * Under the fair value hierarchy, receivables measurements are classified as Level 3 and long-term debt measurements are classified as Level 2. Receivables The fair value of receivables was determined by discounting the estimated future payments using a discount rate which includes an estimate for credit risk. Long-term debt The fair values of long-term debt were based on current market quotes for identical or similar borrowings and credit risk. |
GEOGRAPHICAL INFORMATION
GEOGRAPHICAL INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
GEOGRAPHICAL INFORMATION | |
GEOGRAPHICAL INFORMATION | NOTE 11: GEOGRAPHICAL INFORMATION A summary of the Company’s geographical information is as follows: 2023 2022 2021 Revenues United States $ 860,081 $ 626,754 $ 630,848 Canada 214,173 168,909 163,891 Eliminations (1,601) (3,828) (5,555) Total $ 1,072,653 $ 791,835 $ 789,184 Interest expense United States $ 443,629 $ 195,728 $ 161,681 Canada 92,211 49,907 39,652 Eliminations (1,601) (3,828) (5,555) Total $ 534,239 $ 241,807 $ 195,778 Net income United States $ 167,403 $ 175,752 $ 181,259 Canada 47,669 43,370 48,956 Total $ 215,072 $ 219,122 $ 230,215 Depreciation and amortization United States $ 129,247 $ 152,871 $ 190,255 Canada 52,669 50,878 50,994 Total $ 181,916 $ 203,749 $ 241,249 Expenditures for equipment on operating leases United States $ 354,015 $ 354,817 $ 388,665 Canada 167,129 162,806 147,736 Total $ 521,144 $ 517,623 $ 536,401 Provision (benefit) for credit losses United States $ 12,897 $ 9,978 $ (6,431) Canada (1,318) 1,263 (1,029) Total $ 11,579 $ 11,241 $ (7,460) 2023 2022 2021 Total assets United States $ 13,034,959 $ 10,712,413 $ 9,870,766 Canada 3,077,089 2,683,722 2,538,581 Eliminations (148,521) (216,656) (221,579) Total $ 15,963,527 $ 13,179,479 $ 12,187,768 Receivables United States $ 11,134,365 $ 8,758,694 $ 7,121,138 Canada 2,436,097 2,108,138 1,946,114 Total $ 13,570,462 $ 10,866,832 $ 9,067,252 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | NOTE 12: RELATED-PARTY TRANSACTIONS The Company receives compensation from CNH North America for retail customer, wholesale and operating lease sales programs offered by CNH North America on which finance charges are waived or below market rate financing programs are offered. The Company receives compensation from CNH North America based on the Company’s estimated costs and a targeted return on equity. The Company is also compensated for lending funds to CNH North America. The summary of sources included in “Interest and other income from affiliates” in the accompanying consolidated statements of income at December 31, 2023, 2022, and 2021 is as follows: 2023 2022 2021 Subsidy from CNH North America Retail customer $ 140,195 $ 123,874 $ 142,867 Operating lease 40,852 47,194 58,965 Revolving charge accounts 4,106 — — Wholesale 242,062 95,138 94,678 Income from affiliated receivables CNH North America 3,430 713 878 Banco CNH Industrial Capital Brazil 2,864 983 — Other affiliates 748 365 191 Total interest and other income from affiliates $ 434,257 $ 268,267 $ 297,579 Interest expense to affiliates was $33,746, $9,361 and $3,686, respectively, for the years ended December 31, 2023, 2022 and 2021. Fees charged by affiliates were $53,804, $50,858 and $47,369 for the years ended December 31, 2023, 2022 and 2021, respectively, which amounts consist of payroll and other human resource services CNH America performs on behalf of the Company. As of December 31, 2023 and 2022, the Company had various accounts and notes receivable and debt with the following affiliates: 2023 2022 Rate Maturity Amount Rate Maturity Amount Affiliated receivables CNH America 0% — $ 13,377 0% — $ 10 CNH Canada 0% — 704 0% — — Banco CNH Industrial Capital Brazil Various Various 47,997 0% — 40,983 Other affiliates 0% — 12,589 0% — 12,516 Total affiliated receivables $ 74,667 $ 53,509 Affiliated debt CNH America 5.68% 2024 $ 86,234 5.39% 2023 $ 100,195 CNH Canada 5.76% 2024 46,258 5.74% 2023 241,036 Other affiliates 0% — — 5.05% 2023 300 Total affiliated debt $ 132,492 $ 341,531 Accounts payable and other accrued liabilities, including tax payables, of $82,621 and $212,167 were payable to related parties as of December 31, 2023 and 2022, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 13: COMMITMENTS AND CONTINGENCIES Legal Matters The Company is party to various litigation matters and claims arising from its operations. Management believes that the outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position or results of operations. Guarantees The Company provides payment guarantees on the financial debt of various foreign financial services subsidiaries of CNHI for approximately $50,400. The guarantees are in effect for the term of the underlying funding facilities. Commitments As of December 31, 2023, the Company had various agreements, on an uncommitted basis, to extend credit for the following portfolios: Total Credit Limit Utilized Not Utilized Wholesale and dealer financing $ 7,746,096 $ 5,039,432 $ 2,706,664 Revolving charge accounts $ 2,557,662 $ 210,324 $ 2,347,338 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 14: SUBSEQUENT EVENTS On January 16, 2024, the Company repaid the principal amount of $500,000 of its 4.200% unsecured notes due 2024. On January 24, 2024, the Company, through a bankruptcy-remote trust, issued $862,730 of amortizing asset-backed notes secured by U.S. retail receivables. On February 21, 2024, the Company, through a trust, issued C$398,380 ($294,834) of amortizing asset-backed notes secured by Canadian retail receivables. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the Company and its consolidated subsidiaries. The consolidated financial statements are expressed in U.S. dollars. The consolidated financial statements include the accounts of the Company’s subsidiaries in which the Company has a controlling financial interest and reflect the noncontrolling interests of the minority owners of the subsidiaries that are not fully owned for the periods presented, as applicable. A controlling financial interest may exist based on ownership of a majority of the voting interest of a subsidiary, or based on the Company’s determination that it is the primary beneficiary of a variable interest entity (“VIE”). The primary beneficiary of a VIE is the party that has the power to direct the activities that most significantly impact the economic performance of the entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entity. The Company assesses whether it is the primary beneficiary on an ongoing basis, as prescribed by the accounting guidance on the consolidation of VIEs. The consolidated status of the VIEs with which the Company is involved may change as a result of such reassessments. Certain prior period balances have been reclassified to conform to the current year presentation. These reclassifications did not have an impact on the Company’s results of operations or financial position as of December 31, 2023, 2022 and 2021. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and reported amounts of revenues and expenses. Significant estimates in these consolidated financial statements include the allowance for credit losses and residual values of equipment on operating leases. Actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition Finance and interest income on receivables is recorded using the effective yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the effective yield method. Recognition of income on receivables is suspended when management determines that collection of future income is not probable or when an account becomes 90 days past due, whichever occurs earlier. Income accrual is resumed if the receivable becomes contractually current and collection doubts are removed. Previously suspended income is recognized at that time. The Company applies cash received on nonaccrual financing receivables to first reduce any unrecognized interest and then the recorded investment and any other fees. A substantial portion of the Company’s interest income arises from retail sales programs offered by CNH North America on which finance charges are waived or below-market rate financing programs are offered. When the Company acquires retail notes and finance leases subject to below-market interest rates, including waived interest rate financing, the Company receives compensation from CNH North America based on the Company’s estimated costs and a targeted return on equity. This amount is initially recognized as an unearned finance charge and is recognized as interest income over the term of the retail customer receivables (which, as used herein, “retail customer receivables” refers primarily to retail notes and finance leases), and is included in “Interest and other income from affiliates” in the accompanying consolidated statements of income. For selected wholesale receivables, CNH North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. These amounts are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income. The Company is also compensated for lending funds to CNH North America. The amounts earned are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income. Income from operating leases is recognized over the term of the lease on a straight-line basis. For selected operating leases, CNH North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. The amounts from CNH North America recognized as rental income on operating leases are included in “Interest and other income from affiliates.” |
Foreign Currency Translation | Foreign Currency Translation The Company’s non-U.S. subsidiaries maintain their books and accounting records using local currency as the functional currency. Assets and liabilities of these non-U.S. subsidiaries are translated into U.S. dollars at period-end exchange rates, and net exchange gains or losses resulting from such translation are included in “Accumulated other comprehensive income” in the accompanying consolidated balance sheets. Income and expense accounts of these non-U.S. subsidiaries are translated at the average exchange rates for the period. Gains and losses from foreign currency transactions are included in net income in the period that they arise. Net foreign currency transaction gains and losses are reflected in “Other expenses, net” in the accompanying consolidated statements of income. |
Restricted Cash and Cash Equivalents | Restricted Cash and Cash Equivalents Restricted cash includes principal and interest payments from retail notes and wholesale receivables owned by the consolidated VIEs that are payable to the VIEs’ investors, and cash pledged as a credit enhancement to the same investors. These amounts are held by depository banks in order to comply with contractual agreements. Restricted cash equivalents are highly liquid investments with an original maturity of one month or less. |
Receivables and Allowance for Credit Losses | Receivables Receivables are recorded at amortized cost, net of allowances for credit losses and deferred fees and costs. Periodically, the Company sells or transfers retail notes and wholesale receivables to funding facilities or in securitization transactions. In accordance with the accounting guidance regarding transfers of financial assets and the consolidation of VIEs, the majority of the retail notes and wholesale receivables sold in securitizations do not qualify as sales and are recorded as secured borrowings with no gains or losses recognized at the time of securitization. Receivables associated with these securitization transactions and receivables that the Company has the ability and intent to hold for the foreseeable future are classified as held for investment. The substantial majority of the Company’s receivables, which include unrestricted receivables and restricted receivables for securitization investors, are classified as held for investment. Allowance for Credit Losses The allowance for credit losses is the Company’s estimate of the lifetime expected credit losses inherent in the receivables owned by the Company. Retail customer receivables primarily include retail notes and finance leases to end-use customers. Revolving charge accounts represent financing for customers to purchase parts, service, rentals, implements and attachments from CNH North America dealers. Wholesale receivables include dealer floorplan financing, and to a lesser extent, the financing of dealer operations. Typically, the Company’s receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. Retail customer receivables that share the same risk characteristics such as, collateralization levels, geography, product type and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for credit losses on retail customer receivables is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as GDP and Net Farm Income. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Wholesale receivables that share the same risk characteristics such as, collateralization levels, term, geography and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for wholesale credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as industry sales volumes. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Retail customer receivables and wholesale receivables that do not have similar risk characteristics are individually reviewed based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured by considering: the probability-weighted estimates of cash flows and collateral value; the time value of money; current conditions and forecasts of future economic conditions. Expected credit losses are measured as the probability-weighted present value of all cash shortfalls (including the value of the collateral, if appropriate) over the expected life of each financial asset. Charge-offs of principal amounts of retail customer receivables and wholesale receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due are deemed uncollectible. Revolving charge accounts are generally deemed to be uncollectible and charged off to the allowance for credit losses when delinquency reaches 120 days. |
Equipment on Operating Leases | Equipment on Operating Leases The Company purchases leases and equipment from CNH North America’s dealers and other independent third parties that have leased equipment to retail customers under operating leases. The Company’s investment in operating leases is based on the purchase price paid for the equipment. Income from these operating leases is recognized over the term of the lease. The equipment is depreciated on a straight-line basis over the term of the lease to the estimated residual value at lease termination. Residual values are estimated at the inception of the lease and are reviewed quarterly. Realization of the residual values is dependent on the Company’s future ability to re-market the equipment under then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Management believes that the estimated residual values are realizable. Expenditures for maintenance and repairs are the responsibility of the lessee. The Company evaluates the carrying amount of equipment on operating leases for potential impairment when it determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability identifies a possible impairment, the asset’s fair value is measured in accordance with the fair value measurement framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value. Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded at the lower of net book value or estimated fair value of the equipment, less cost to sell, and is not depreciated. Matured operating lease inventory is reported in “Equipment held for sale.” |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired. Goodwill is deemed to have an indefinite useful life and is reviewed for impairment at least annually. During 2023 and 2022, the Company performed its annual impairment review as of December 31, and concluded that there was no impairment in either year. Other intangible assets consist of software and are being amortized on a straight-line basis over ten years. |
Income Taxes | Income Taxes The provision for income taxes is determined using the asset and liability method. The Company recognizes a current tax liability or asset for the estimated taxes payable or refundable on tax returns for the current year and tax contingencies estimated to be settled with taxing authorities within one year. A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and tax loss carryforwards. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on available evidence. |
Derivatives | Derivatives The Company’s policy is to enter into derivative transactions to manage exposures that arise in the normal course of business and not for trading or speculative purposes. The Company records derivative financial instruments in the consolidated balance sheets as either an asset or liability measured at fair value. The fair value of the Company’s interest rate derivatives is based on discounting expected cash flows, using market interest rates, over the remaining term of the instrument. The fair value of the Company’s foreign exchange derivatives is based on quoted market exchange rates, adjusted for the respective interest rate differentials (premiums or discounts). Changes in the fair value of derivative financial instruments are recognized in current income unless specific hedge accounting criteria are met. For derivative financial instruments designated to hedge exposure to changes in the fair value of a recognized asset or liability, the gain or loss is recognized in income in the period of change together with the offsetting loss or gain on the related hedged item. For derivative financial instruments designated to hedge exposure to variable cash flows of a forecasted transaction, the gain or loss is initially reported in accumulated other comprehensive income and is subsequently reclassified into income when the forecasted transaction affects income. For derivative financial instruments that are not designated as hedges but held as economic hedges, the gain or loss is recognized immediately in income. The Company formally documents the hedging relationship to the hedged item and its risk management strategy for all derivative financial instruments designated as hedges. This includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities contained in the consolidated balance sheets and linking cash flow hedges to specific forecasted transactions or variability of cash flow. The Company assesses the effectiveness of its hedging instruments both at inception and on an ongoing basis. If a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer probable of occurring, the hedge accounting described above is discontinued and the derivative is marked to fair value and recorded in income through the remainder of its term. |
New Accounting Pronouncements Adopted | New Accounting Pronouncements Adopted In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 |
New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
Schedule of changes in the components of AOCI and related tax effects | The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the year ended December 31, 2023: Currency Unrealized Translation Pension (Losses) Gains Adjustment Liability on Derivatives Total Beginning balance, gross $ (151,254) $ 2,563 $ 15,288 $ (133,403) Tax liability — (620) (3,810) (4,430) Beginning balance, net of tax (151,254) 1,943 11,478 (137,833) Other comprehensive income (loss) before reclassifications 8,456 (43) (6,987) 1,426 Amounts reclassified from accumulated other comprehensive income (loss) — (961) (2,624) (3,585) Tax effects — 247 2,437 2,684 Net current-period other comprehensive income (loss) 8,456 (757) (7,174) 525 Total $ (142,798) $ 1,186 $ 4,304 $ (137,308) The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the year ended December 31, 2022: Currency Unrealized Translation Pension (Losses) Gains Adjustment Liability on Derivatives Total Beginning balance, gross $ (112,618) $ 2,451 $ (956) $ (111,123) Tax liability — (587) 253 (334) Beginning balance, net of tax (112,618) 1,864 (703) (111,457) Other comprehensive income (loss) before reclassifications (38,636) 1,067 17,334 (20,235) Amounts reclassified from accumulated other comprehensive income (loss) — (955) (1,090) (2,045) Tax effects — (33) (4,063) (4,096) Net current-period other comprehensive income (loss) (38,636) 79 12,181 (26,376) Total $ (151,254) $ 1,943 $ 11,478 $ (137,833) |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
RECEIVABLES | |
Summary of receivables | 2023 2022 Retail notes $ 1,291,559 $ 1,241,775 Revolving charge accounts 205,872 207,744 Finance leases 219,386 198,064 Wholesale 1,575,142 875,628 Restricted receivables 10,278,503 8,343,621 Gross receivables 13,570,462 10,866,832 Less: Allowance for credit losses (114,745) (125,012) Total receivables, net $ 13,455,717 $ 10,741,820 |
Maturities of receivables as of December 31, 2017, are as follows: | 2024 $ 7,640,811 2025 1,912,007 2026 1,638,278 2027 1,221,391 2028 and thereafter 1,043,230 Total receivables $ 13,455,717 |
Summary of restricted receivables | 2023 2022 Retail notes $ 6,693,525 $ 5,835,445 Wholesale 3,584,978 2,508,176 Total restricted receivables $ 10,278,503 $ 8,343,621 |
Schedule of allowance for credit losses activity | Allowance for credit losses activity for the year ended December 31, 2023 is as follows: Revolving Retail Charge Customer Accounts Wholesale Total Allowance for credit losses: Beginning balance $ 110,341 $ 8,519 $ 6,152 $ 125,012 Charge-offs (17,624) (6,512) — (24,136) Recoveries 1,785 221 26 2,032 Provision (benefit) 6,920 5,354 (695) 11,579 Foreign currency translation and other 227 12 19 258 Ending balance $ 101,649 $ 7,594 $ 5,502 $ 114,745 Receivables: Ending balance $ 8,204,470 $ 205,872 $ 5,160,120 $ 13,570,462 At December 31, 2023, the allowance for credit losses decreased due to lower specific reserve needs for retail customers and the continued strong outlook for the agricultural industry. The Company will update the macroeconomic factors and qualitative factors in future periods, as warranted. Allowance for credit losses activity for the year ended December 31, 2022 is as follows: Revolving Retail Charge Customer Accounts Wholesale Total Allowance for credit losses: Beginning balance $ 109,742 $ — $ 6,211 $ 115,953 Charge-offs (8,202) (49) (4,631) (12,882) Recoveries 2,262 — 526 2,788 Provision (benefit) 7,311 (169) 4,099 11,241 Foreign currency translation and other (772) 8,737 (53) 7,912 Ending balance $ 110,341 $ 8,519 $ 6,152 $ 125,012 Receivables: Ending balance $ 7,275,284 $ 207,744 $ 3,383,804 $ 10,866,832 At December 31, 2022, the allowance for credit losses included increases in reserves primarily due to the addition of revolving charge accounts. Allowance for credit losses activity for the year ended December 31, 2021 is as follows: Retail Customer Wholesale Total Allowance for credit losses: Beginning balance $ 126,851 $ 9,285 $ 136,136 Charge-offs (14,929) (179) (15,108) Recoveries 2,177 126 2,303 Benefit (4,437) (3,023) (7,460) Foreign currency translation and other 80 2 82 Ending balance $ 109,742 $ 6,211 $ 115,953 Receivables: Ending balance $ 6,722,247 $ 2,345,005 $ 9,067,252 |
Schedule of aging of financing receivables | The aging of receivables by vintage as of December 31, 2023 is as follows: Greater 31 – 60 Days 61 – 90 Days Than Total Total Gross Past Due Past Due 90 Days Past Due Current Receivables Charge-offs Retail customer United States 2023 $ 9,662 $ 1,415 $ 1,288 $ 12,365 $ 3,111,476 $ 3,123,841 $ 552 2022 10,008 2,583 5,821 18,412 1,755,538 1,773,950 3,221 2021 6,808 2,118 3,554 12,480 1,041,185 1,053,665 2,716 2020 3,270 1,106 32,831 37,207 451,292 488,499 2,987 2019 1,829 529 2,001 4,359 164,634 168,993 3,203 Prior to 2019 631 318 3,831 4,780 56,779 61,559 2,849 Total $ 32,208 $ 8,069 $ 49,326 $ 89,603 $ 6,580,904 $ 6,670,507 $ 15,528 Canada 2023 $ 647 $ 149 $ 420 $ 1,216 $ 667,887 $ 669,103 $ 78 2022 2,395 60 1,236 3,691 395,757 399,448 941 2021 1,090 159 2,361 3,610 291,974 295,584 964 2020 755 — 320 1,075 113,630 114,705 (227) 2019 158 14 201 373 44,042 44,415 253 Prior to 2019 126 152 366 644 10,064 10,708 87 Total $ 5,171 $ 534 $ 4,904 $ 10,609 $ 1,523,354 $ 1,533,963 $ 2,096 Revolving charge accounts United States $ 6,036 $ 2,422 $ 1,089 $ 9,547 $ 182,728 $ 192,275 $ 5,993 Canada $ 374 $ 169 $ 122 $ 665 $ 12,932 $ 13,597 $ 519 Wholesale United States $ — $ — $ — $ — $ 4,271,583 $ 4,271,583 $ — Canada $ — $ — $ — $ — $ 888,537 $ 888,537 $ — Total Retail customer $ 37,379 $ 8,603 $ 54,230 $ 100,212 $ 8,104,258 $ 8,204,470 $ 17,624 Revolving charge accounts $ 6,410 $ 2,591 $ 1,211 $ 10,212 $ 195,660 $ 205,872 $ 6,512 Wholesale $ — $ — $ — $ — $ 5,160,120 $ 5,160,120 $ — The aging of receivables by vintage as of December 31, 2022 is as follows: Greater 31 – 60 Days 61 – 90 Days Than Total Total Past Due Past Due 90 Days Past Due Current Receivables Retail customer United States 2022 $ 6,258 $ 976 $ 350 $ 7,584 $ 2,728,247 $ 2,735,831 2021 6,610 1,269 3,701 11,580 1,610,175 1,621,755 2020 4,490 1,503 32,505 38,498 807,990 846,488 2019 2,365 1,034 4,114 7,513 382,168 389,681 2018 1,579 465 1,493 3,537 186,897 190,434 Prior to 2018 765 131 4,955 5,851 54,566 60,417 Total $ 22,067 $ 5,378 $ 47,118 $ 74,563 $ 5,770,043 $ 5,844,606 Canada 2022 $ 1,544 $ 22 $ 387 $ 1,953 $ 652,576 $ 654,529 2021 2,420 502 2,371 5,293 436,138 441,431 2020 810 128 960 1,898 190,905 192,803 2019 197 114 615 926 90,968 91,894 2018 388 178 262 828 38,477 39,305 Prior to 2018 123 25 257 405 10,311 10,716 Total $ 5,482 $ 969 $ 4,852 $ 11,303 $ 1,419,375 $ 1,430,678 Revolving charge accounts United States $ 12,979 $ 9,965 $ — $ 22,944 $ 169,851 $ 192,795 Canada $ 1,237 $ 759 $ — $ 1,996 $ 12,953 $ 14,949 Wholesale United States $ 7 $ — $ 4 $ 11 $ 2,721,282 $ 2,721,293 Canada $ — $ — $ — $ — $ 662,511 $ 662,511 Total Retail customer $ 27,549 $ 6,347 $ 51,970 $ 85,866 $ 7,189,418 $ 7,275,284 Revolving charge accounts $ 14,216 $ 10,724 $ — $ 24,940 $ 182,804 $ 207,744 Wholesale $ 7 $ — $ 4 $ 11 $ 3,383,793 $ 3,383,804 |
Schedule of receivables on nonaccrual status | 2023 2022 United States $ 55,564 $ 48,690 Canada $ 5,321 $ 4,852 |
EQUIPMENT ON OPERATING LEASES (
EQUIPMENT ON OPERATING LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Schedule of lease payments owed to the Company for equipment under non-cancelable operating leases | 2024 $ 203,767 2025 142,247 2026 78,339 2027 30,916 2028 and thereafter 9,830 Total lease payments $ 465,099 |
Property Subject to Operating Lease, Lessor | |
Summary of equipment on operating leases | 2023 2022 Equipment on operating leases $ 1,735,626 $ 1,858,912 Accumulated depreciation (357,242) (385,939) Total equipment on operating leases, net $ 1,378,384 $ 1,472,973 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in the carrying amount of goodwill | 2023 2022 Balance, beginning of year $ 108,567 $ 110,226 Foreign currency translation adjustment 551 (1,659) Balance, end of year $ 109,118 $ 108,567 |
Schedule of the Company's intangible asset and related accumulated amortization for its software | 2023 2022 Software $ 50,155 $ 46,251 Accumulated amortization (30,803) (27,863) Total software, net $ 19,352 $ 18,388 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
OTHER ASSETS | |
Schedule of components of other assets | 2023 2022 Derivative assets $ 55,654 $ 35,575 Deferred tax assets 17,772 9,463 Tax receivables 10,260 3,162 Other current assets 24,461 15,758 Total other assets $ 108,147 $ 63,958 |
CREDIT FACILITIES AND DEBT (Tab
CREDIT FACILITIES AND DEBT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Schedule of the Company's debt and credit facilities | The following table summarizes the Company’s debt and credit facilities, borrowings thereunder and availability at December 31, 2023: Current Maturities of Total Short-Term Long-Term Long-Term Maturity (1) Facility/Debt Outstanding Outstanding Outstanding Available Committed Asset-Backed Facilities Retail - U.S. Sep 2025 $ 1,000,000 $ — $ 227,598 $ 772,052 $ 350 Retail - Canada Dec 2025 377,339 — 74,265 303,074 — Wholesale VFN - U.S. Various 1,550,000 1,550,000 — — — Wholesale VFN - Canada Dec 2025 377,339 377,339 — — — 3,304,678 1,927,339 301,863 1,075,126 350 Secured Debt Amortizing retail term ABS - N.A. Various 4,620,565 — 1,595,183 3,025,382 — Other ABS financing - N.A. Various 388,589 — 136,355 252,234 — Repurchase agreement Sep 2024 226,290 226,290 — — — Unamortized issuance costs (14,089) — — (14,089) — 5,221,355 226,290 1,731,538 3,263,527 — Unsecured Facilities Credit lines Various 100,000 100,000 — — — Revolving credit facilities Various 716,404 — 150,936 165,468 400,000 Unamortized issuance costs (556) — — (556) — 815,848 100,000 150,936 164,912 400,000 Unsecured Debt Commercial paper Various 351,000 351,000 — — — Notes Various 4,128,275 — 726,404 3,401,871 — Hedging effects, discounts and unamortized issuance costs (41,385) (3,110) 7,532 (45,807) — 4,437,890 347,890 733,936 3,356,064 — Total credit facilities and debt $ 13,779,771 $ 2,601,519 $ 2,918,273 $ 7,859,629 $ 400,350 (1) Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility. 2025 $ 2,693,669 2026 2,709,582 2027 827,117 2028 1,061,560 2029 and thereafter 567,701 Total $ 7,859,629 The following table summarizes the Company’s credit facilities, borrowings thereunder and availability at December 31, 2022: Current Maturities of Total Short-Term Long-Term Long-Term Maturity (1) Facility/Debt Outstanding Outstanding Outstanding Available Committed Asset-Backed Facilities Retail - U.S. Sep 2024 $ 1,000,000 $ — $ 83,667 $ 227,799 $ 688,534 Retail - Canada Dec 2024 443,186 — 53,130 245,930 144,126 Wholesale VFN - U.S. Various 1,000,000 1,000,000 — — — Wholesale VFN - Canada Dec 2024 295,457 295,457 — — — 2,738,643 1,295,457 136,797 473,729 832,660 Secured Debt Amortizing retail term ABS - N.A. Various 4,829,202 — 1,688,606 3,140,596 — Other ABS financing - N.A. Various 98,451 — 77,644 20,807 — Unamortized issuance costs (14,750) — — (14,750) — 4,912,903 — 1,766,250 3,146,653 — Unsecured Facilities Revolving credit facilities Various 606,820 — — 110,796 496,024 Unamortized issuance costs (1,284) — — (1,284) — 605,536 — — 109,512 496,024 Unsecured Debt Commercial paper Various 300,000 300,000 — — — Notes Various 3,321,593 — 600,000 2,721,593 — Hedging effects, discounts and unamortized issuance costs (66,430) (1,445) (633) (64,352) — 3,555,163 298,555 599,367 2,657,241 — Total credit facilities and debt $ 11,812,245 $ 1,594,012 $ 2,502,414 $ 6,387,135 $ 1,328,684 (1) Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility. |
Summary of the minimum annual repayments of long-term debt | 2025 $ 2,693,669 2026 2,709,582 2027 827,117 2028 1,061,560 2029 and thereafter 567,701 Total $ 7,859,629 |
Unsecured Debt | |
Schedule of the Company's debt and credit facilities | As of December 31, 2023, the Company’s outstanding unsecured senior notes were as follows: Issued by CNH Industrial Capital LLC (the ‘‘U.S. Senior Notes’’): (1) 4.200% notes, due 2024 $ 500,000 3.950% notes, due 2025 500,000 5.450% notes, due 2025 400,000 1.875% notes, due 2026 500,000 1.450% notes, due 2026 600,000 4.550% notes, due 2028 600,000 5.500% notes, due 2029 500,000 Hedging, discounts and unamortized issuance costs (35,937) 3,564,063 Issued by CNH Industrial Capital Canada Ltd. (the ‘‘Canadian Senior Notes’’): (2) 1.500% notes, due 2024 226,404 5.500% notes, due 2026 301,871 Discounts and unamortized issuance costs (2,338) 525,937 Total $ 4,090,000 (1) These notes, which are senior unsecured obligations of CNH Industrial Capital LLC, are guaranteed by CNH Capital America and New Holland Credit. (2) These notes, which are senior unsecured obligations of CNH Capital Canada, are guaranteed by CNH Industrial Capital LLC, CNH Capital America and New Holland Credit. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Schedule of sources of income before taxes | 2023 2022 2021 Domestic $ 218,113 $ 232,873 $ 235,309 Foreign 58,915 57,129 64,841 Income before taxes $ 277,028 $ 290,002 $ 300,150 |
Schedule of provision for income taxes | 2023 2022 2021 Current income tax expense (benefit): Domestic $ 109,762 $ 112,615 $ 63,346 Foreign 17,626 12,717 16,630 Total current income tax expense 127,388 125,332 79,976 Deferred income tax expense (benefit): Domestic (59,051) (55,494) (9,296) Foreign (6,381) 1,042 (745) Total deferred income tax expense (65,432) (54,452) (10,041) Total tax provision $ 61,956 $ 70,880 $ 69,935 |
Schedule of reconciliation of statutory and effective income tax rate | 2023 2022 2021 Tax provision at statutory rate 21.0 % 21.0 % 21.0 % State taxes 3.7 4.8 4.1 Foreign taxes (1.3) (0.6) (1.1) Tax contingencies — — — Tax credits and incentives (0.8) (0.6) (0.4) Other (0.2) (0.2) (0.3) Total tax provision effective rate 22.4 % 24.4 % 23.3 % |
Schedule of components of net deferred tax liability | 2023 2022 Deferred tax assets: Pension, postretirement and post-employment benefits $ 1,173 $ 1,180 Marketing and sales incentive programs 75,631 46,587 Allowance for credit losses 23,122 25,627 Other accrued liabilities 38,576 36,805 Tax loss and tax credit carry forwards 1,812 1,076 Total deferred tax assets $ 140,314 $ 111,275 Deferred tax liability: Equipment on operating lease 257,705 297,152 Net deferred tax liabilities $ (117,391) $ (185,877) 2023 2022 Deferred tax assets $ 17,772 $ 9,463 Deferred tax liabilities (135,163) (195,340) Net deferred tax liabilities $ (117,391) $ (185,877) |
Schedule of reconciliation of the gross amounts of tax contingencies at the beginning and end of the year | 2023 2022 2021 Balance, beginning of year $ — $ — $ 4,274 Additions based on tax positions related to the current year — — — Reductions for tax positions of prior years — — — Settlements — — (4,274) Balance, end of year $ — $ — $ — |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
FINANCIAL INSTRUMENTS | |
Schedule of fair values of derivatives in the consolidated balance sheets | 2023 2022 Derivatives Designated as Hedging Instruments Other assets: Interest rate derivatives $ 22,633 $ 3,597 Accounts payable and other accrued liabilities: Interest rate derivatives $ 32,579 $ 42,936 Derivatives Not Designated as Hedging Instruments Other assets: Interest rate derivatives $ 30,420 $ 27,862 Foreign exchange contracts 2,601 4,116 Total $ 33,021 $ 31,978 Accounts payable and other accrued liabilities: Interest rate derivatives $ 30,420 $ 27,862 Foreign exchange contracts — 435 Total $ 30,420 $ 28,297 |
Schedule of pre-tax gains (losses) on the consolidated statements of income related to the Company's derivatives | 2023 2022 2021 Cash Flow Hedges Recognized in accumulated other comprehensive income (loss): Interest rate derivatives $ (6,987) $ 17,334 $ 7,932 Reclassified from accumulated other comprehensive income (loss): Interest rate derivatives—Interest expense to third parties 2,624 1,090 (653) Not Designated as Hedges Foreign exchange contracts—Other expenses, net $ 1,828 $ (5,784) $ (1,709) |
Schedule of assets and liabilities measured at fair value on a recurring basis | 2023 2022 Assets Interest rate derivatives $ 53,053 $ 31,459 Foreign exchange contracts 2,601 4,116 Total assets $ 55,654 $ 35,575 Liabilities Interest rate derivatives $ 62,999 $ 70,798 Foreign exchange contracts — 435 Total liabilities $ 62,999 $ 71,233 |
Schedule of carrying amount and estimated fair value of assets and liabilities considered financial instruments | 2023 2022 Carrying Estimated Carrying Estimated Amount Fair Value * Amount Fair Value * Receivables $ 13,455,717 $ 13,224,506 $ 10,741,820 $ 10,433,949 Long-term debt $ 7,859,629 $ 7,739,874 $ 6,387,135 $ 6,032,997 * Under the fair value hierarchy, receivables measurements are classified as Level 3 and long-term debt measurements are classified as Level 2. |
GEOGRAPHICAL INFORMATION (Table
GEOGRAPHICAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
GEOGRAPHICAL INFORMATION | |
Summary of geographic information | 2023 2022 2021 Revenues United States $ 860,081 $ 626,754 $ 630,848 Canada 214,173 168,909 163,891 Eliminations (1,601) (3,828) (5,555) Total $ 1,072,653 $ 791,835 $ 789,184 Interest expense United States $ 443,629 $ 195,728 $ 161,681 Canada 92,211 49,907 39,652 Eliminations (1,601) (3,828) (5,555) Total $ 534,239 $ 241,807 $ 195,778 Net income United States $ 167,403 $ 175,752 $ 181,259 Canada 47,669 43,370 48,956 Total $ 215,072 $ 219,122 $ 230,215 Depreciation and amortization United States $ 129,247 $ 152,871 $ 190,255 Canada 52,669 50,878 50,994 Total $ 181,916 $ 203,749 $ 241,249 Expenditures for equipment on operating leases United States $ 354,015 $ 354,817 $ 388,665 Canada 167,129 162,806 147,736 Total $ 521,144 $ 517,623 $ 536,401 Provision (benefit) for credit losses United States $ 12,897 $ 9,978 $ (6,431) Canada (1,318) 1,263 (1,029) Total $ 11,579 $ 11,241 $ (7,460) 2023 2022 2021 Total assets United States $ 13,034,959 $ 10,712,413 $ 9,870,766 Canada 3,077,089 2,683,722 2,538,581 Eliminations (148,521) (216,656) (221,579) Total $ 15,963,527 $ 13,179,479 $ 12,187,768 Receivables United States $ 11,134,365 $ 8,758,694 $ 7,121,138 Canada 2,436,097 2,108,138 1,946,114 Total $ 13,570,462 $ 10,866,832 $ 9,067,252 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
RELATED-PARTY TRANSACTIONS | |
Summary of the sources included in "Interest and other income from affiliates" in the accompanying consolidated statements of income | 2023 2022 2021 Subsidy from CNH North America Retail customer $ 140,195 $ 123,874 $ 142,867 Operating lease 40,852 47,194 58,965 Revolving charge accounts 4,106 — — Wholesale 242,062 95,138 94,678 Income from affiliated receivables CNH North America 3,430 713 878 Banco CNH Industrial Capital Brazil 2,864 983 — Other affiliates 748 365 191 Total interest and other income from affiliates $ 434,257 $ 268,267 $ 297,579 |
Schedule of various accounts and notes receivable and debt with the affiliates | 2023 2022 Rate Maturity Amount Rate Maturity Amount Affiliated receivables CNH America 0% — $ 13,377 0% — $ 10 CNH Canada 0% — 704 0% — — Banco CNH Industrial Capital Brazil Various Various 47,997 0% — 40,983 Other affiliates 0% — 12,589 0% — 12,516 Total affiliated receivables $ 74,667 $ 53,509 Affiliated debt CNH America 5.68% 2024 $ 86,234 5.39% 2023 $ 100,195 CNH Canada 5.76% 2024 46,258 5.74% 2023 241,036 Other affiliates 0% — — 5.05% 2023 300 Total affiliated debt $ 132,492 $ 341,531 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
Commitments to Extend Credit | Total Credit Limit Utilized Not Utilized Wholesale and dealer financing $ 7,746,096 $ 5,039,432 $ 2,706,664 Revolving charge accounts $ 2,557,662 $ 210,324 $ 2,347,338 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue Recognition | |||
Delinquency period of accounts considered for recognition of income | 90 days | ||
Minimum account delinquency period for an account to be classified as past due | 30 days | ||
Minimum account delinquency period for revolving charge accounts to be classified as past due | 120 days | ||
Goodwill and Intangible Assets | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Amortization period of other intangible assets consisting of software | 10 years |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME - Change in Components of AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in accumulated other comprehensive income by component | |||
Beginning balance, gross | $ (133,403) | $ (111,123) | |
Tax asset (liability) | (4,430) | (334) | |
Beginning balance, net of tax | $ (137,833) | (111,457) | |
Other comprehensive income (loss) before reclassifications | 1,426 | (20,235) | |
Amounts reclassified from accumulated other comprehensive income (loss) | (3,585) | (2,045) | |
Tax effects | 2,684 | (4,096) | |
Total other comprehensive income (loss) | 525 | (26,376) | 8,778 |
Ending balance | (137,308) | (137,833) | (111,457) |
Currency Translation Adjustment | |||
Changes in accumulated other comprehensive income by component | |||
Beginning balance, gross | (151,254) | (112,618) | |
Beginning balance, net of tax | (151,254) | (112,618) | |
Other comprehensive income (loss) before reclassifications | 8,456 | (38,636) | |
Total other comprehensive income (loss) | 8,456 | (38,636) | |
Ending balance | (142,798) | (151,254) | (112,618) |
Pension Liability | |||
Changes in accumulated other comprehensive income by component | |||
Beginning balance, gross | 2,563 | 2,451 | |
Tax asset (liability) | (620) | (587) | |
Beginning balance, net of tax | 1,943 | 1,864 | |
Other comprehensive income (loss) before reclassifications | (43) | 1,067 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (961) | (955) | |
Tax effects | 247 | (33) | |
Total other comprehensive income (loss) | (757) | 79 | |
Ending balance | 1,186 | 1,943 | 1,864 |
Unrealized (Losses) Gains on Derivatives | |||
Changes in accumulated other comprehensive income by component | |||
Beginning balance, gross | 15,288 | (956) | |
Tax asset (liability) | (3,810) | 253 | |
Beginning balance, net of tax | 11,478 | (703) | |
Other comprehensive income (loss) before reclassifications | (6,987) | 17,334 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (2,624) | (1,090) | |
Tax effects | 2,437 | (4,063) | |
Total other comprehensive income (loss) | (7,174) | 12,181 | |
Ending balance | $ 4,304 | $ 11,478 | $ (703) |
RECEIVABLES - Summary of Receiv
RECEIVABLES - Summary of Receivables (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Receivables | ||||
Gross receivables | $ 13,570,462 | $ 10,866,832 | $ 9,067,252 | |
Less: Allowance for credit losses | (114,745) | (125,012) | $ (115,953) | $ (136,136) |
Total receivables, net | 13,455,717 | 10,741,820 | ||
Restricted receivables | 10,278,503 | 8,343,621 | ||
Receivables directly or indirectly sold or transferred and available to pay the entity's creditors prior to all obligations of the SPE having been fulfilled | $ 0 | |||
Number of portfolio segments in which allowance for credit losses is segregated | item | 3 | |||
Retail notes | ||||
Receivables | ||||
Gross receivables | $ 1,291,559 | 1,241,775 | ||
Restricted receivables | $ 6,693,525 | 5,835,445 | ||
Retail notes | Minimum | ||||
Receivables | ||||
Stated original maturities | 2 years | |||
Retail notes | Maximum | ||||
Receivables | ||||
Stated original maturities | 7 years | |||
Revolving charge accounts | ||||
Receivables | ||||
Gross receivables | $ 205,872 | 207,744 | ||
Finance leases | ||||
Receivables | ||||
Gross receivables | 219,386 | 198,064 | ||
Wholesale | ||||
Receivables | ||||
Gross receivables | 1,575,142 | 875,628 | ||
Restricted receivables | $ 3,584,978 | 2,508,176 | ||
Wholesale | Maximum | ||||
Receivables | ||||
Stated original maturities | 24 months | |||
Interest-free periods | 12 months | |||
Restricted receivables | ||||
Receivables | ||||
Restricted receivables | $ 10,278,503 | $ 8,343,621 |
RECEIVABLES - Allowance for Cre
RECEIVABLES - Allowance for Credit Losses Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for credit losses, Current: | |||
Beginning balance | $ 125,012 | $ 115,953 | $ 136,136 |
Charge-offs | (24,136) | (12,882) | (15,108) |
Recoveries | 2,032 | 2,788 | 2,303 |
Provision (benefit) | 11,579 | 11,241 | (7,460) |
Foreign currency translation and other | 258 | 7,912 | 82 |
Ending balance | 114,745 | 125,012 | 115,953 |
Receivables: | |||
Ending Balance | $ 13,570,462 | 10,866,832 | 9,067,252 |
Minimum account delinquency period for revolving charge accounts to be classified as past due | 120 days | ||
Retail customer | |||
Allowance for credit losses, Current: | |||
Beginning balance | $ 110,341 | 109,742 | 126,851 |
Charge-offs | (17,624) | (8,202) | (14,929) |
Recoveries | 1,785 | 2,262 | 2,177 |
Provision (benefit) | 6,920 | 7,311 | (4,437) |
Foreign currency translation and other | 227 | (772) | 80 |
Ending balance | 101,649 | 110,341 | 109,742 |
Receivables: | |||
Ending Balance | 8,204,470 | 7,275,284 | 6,722,247 |
Revolving charge accounts | |||
Allowance for credit losses, Current: | |||
Beginning balance | 8,519 | ||
Charge-offs | (6,512) | (49) | |
Recoveries | 221 | ||
Provision (benefit) | 5,354 | (169) | |
Foreign currency translation and other | 12 | 8,737 | |
Ending balance | 7,594 | 8,519 | |
Receivables: | |||
Ending Balance | 205,872 | 207,744 | |
Wholesale. | |||
Allowance for credit losses, Current: | |||
Beginning balance | 6,152 | 6,211 | 9,285 |
Charge-offs | (4,631) | (179) | |
Recoveries | 26 | 526 | 126 |
Provision (benefit) | (695) | 4,099 | (3,023) |
Foreign currency translation and other | 19 | (53) | 2 |
Ending balance | 5,502 | 6,152 | 6,211 |
Receivables: | |||
Ending Balance | $ 5,160,120 | $ 3,383,804 | $ 2,345,005 |
RECEIVABLES - Maturities of rec
RECEIVABLES - Maturities of receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
RECEIVABLES | ||
2024 | $ 7,640,811 | |
2025 | 1,912,007 | |
2026 | 1,638,278 | |
2027 | 1,221,391 | |
2028 and thereafter | 1,043,230 | |
Total receivables, net | $ 13,455,717 | $ 10,741,820 |
RECEIVABLES - Aging of Receivab
RECEIVABLES - Aging of Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Financing receivable, recorded investment | ||
Minimum account delinquency period for an account to be classified as past due | 30 days | |
Retail customer | ||
Financing receivable, recorded investment | ||
Total | $ 8,204,470 | $ 7,275,284 |
Charge-offs | ||
Total | 17,624 | |
Retail customer | Total Past Due | ||
Financing receivable, recorded investment | ||
Total | 100,212 | 85,866 |
Retail customer | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 37,379 | 27,549 |
Retail customer | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 8,603 | 6,347 |
Retail customer | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 54,230 | 51,970 |
Retail customer | Current | ||
Financing receivable, recorded investment | ||
Total | 8,104,258 | 7,189,418 |
Retail customer | United States | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 3,123,841 | |
Originated in fiscal year before latest fiscal year | 1,773,950 | 2,735,831 |
Originated two years before latest fiscal year | 1,053,665 | 1,621,755 |
Originated three years before latest fiscal year | 488,499 | 846,488 |
Originated four years before latest fiscal year | 168,993 | 389,681 |
Originated five years before latest fiscal year | 61,559 | 190,434 |
Originated six or more years prior to latest fiscal year | 60,417 | |
Total | 6,670,507 | 5,844,606 |
Charge-offs | ||
2023/2022 | 552 | |
2022/2021 | 3,221 | |
2021/2020 | 2,716 | |
2020/2019 | 2,987 | |
2019/2018 | 3,203 | |
Prior to 2019/Prior to 2018 | 2,849 | |
Total | 15,528 | |
Retail customer | United States | Total Past Due | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 12,365 | |
Originated in fiscal year before latest fiscal year | 18,412 | 7,584 |
Originated two years before latest fiscal year | 12,480 | 11,580 |
Originated three years before latest fiscal year | 37,207 | 38,498 |
Originated four years before latest fiscal year | 4,359 | 7,513 |
Originated five years before latest fiscal year | 4,780 | 3,537 |
Originated six or more years prior to latest fiscal year | 5,851 | |
Total | 89,603 | 74,563 |
Retail customer | United States | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 9,662 | |
Originated in fiscal year before latest fiscal year | 10,008 | 6,258 |
Originated two years before latest fiscal year | 6,808 | 6,610 |
Originated three years before latest fiscal year | 3,270 | 4,490 |
Originated four years before latest fiscal year | 1,829 | 2,365 |
Originated five years before latest fiscal year | 631 | 1,579 |
Originated six or more years prior to latest fiscal year | 765 | |
Total | 32,208 | 22,067 |
Retail customer | United States | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 1,415 | |
Originated in fiscal year before latest fiscal year | 2,583 | 976 |
Originated two years before latest fiscal year | 2,118 | 1,269 |
Originated three years before latest fiscal year | 1,106 | 1,503 |
Originated four years before latest fiscal year | 529 | 1,034 |
Originated five years before latest fiscal year | 318 | 465 |
Originated six or more years prior to latest fiscal year | 131 | |
Total | 8,069 | 5,378 |
Retail customer | United States | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 1,288 | |
Originated in fiscal year before latest fiscal year | 5,821 | 350 |
Originated two years before latest fiscal year | 3,554 | 3,701 |
Originated three years before latest fiscal year | 32,831 | 32,505 |
Originated four years before latest fiscal year | 2,001 | 4,114 |
Originated five years before latest fiscal year | 3,831 | 1,493 |
Originated six or more years prior to latest fiscal year | 4,955 | |
Total | 49,326 | 47,118 |
Retail customer | United States | Current | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 3,111,476 | |
Originated in fiscal year before latest fiscal year | 1,755,538 | 2,728,247 |
Originated two years before latest fiscal year | 1,041,185 | 1,610,175 |
Originated three years before latest fiscal year | 451,292 | 807,990 |
Originated four years before latest fiscal year | 164,634 | 382,168 |
Originated five years before latest fiscal year | 56,779 | 186,897 |
Originated six or more years prior to latest fiscal year | 54,566 | |
Total | 6,580,904 | 5,770,043 |
Retail customer | Canada | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 669,103 | |
Originated in fiscal year before latest fiscal year | 399,448 | 654,529 |
Originated two years before latest fiscal year | 295,584 | 441,431 |
Originated three years before latest fiscal year | 114,705 | 192,803 |
Originated four years before latest fiscal year | 44,415 | 91,894 |
Originated five years before latest fiscal year | 10,708 | 39,305 |
Originated six or more years prior to latest fiscal year | 10,716 | |
Total | 1,533,963 | 1,430,678 |
Charge-offs | ||
2023/2022 | 78 | |
2022/2021 | 941 | |
2021/2020 | 964 | |
2020/2019 | (227) | |
2019/2018 | 253 | |
Prior to 2019/Prior to 2018 | 87 | |
Total | 2,096 | |
Retail customer | Canada | Total Past Due | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 1,216 | |
Originated in fiscal year before latest fiscal year | 3,691 | 1,953 |
Originated two years before latest fiscal year | 3,610 | 5,293 |
Originated three years before latest fiscal year | 1,075 | 1,898 |
Originated four years before latest fiscal year | 373 | 926 |
Originated five years before latest fiscal year | 644 | 828 |
Originated six or more years prior to latest fiscal year | 405 | |
Total | 10,609 | 11,303 |
Retail customer | Canada | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 647 | |
Originated in fiscal year before latest fiscal year | 2,395 | 1,544 |
Originated two years before latest fiscal year | 1,090 | 2,420 |
Originated three years before latest fiscal year | 755 | 810 |
Originated four years before latest fiscal year | 158 | 197 |
Originated five years before latest fiscal year | 126 | 388 |
Originated six or more years prior to latest fiscal year | 123 | |
Total | 5,171 | 5,482 |
Retail customer | Canada | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 149 | |
Originated in fiscal year before latest fiscal year | 60 | 22 |
Originated two years before latest fiscal year | 159 | 502 |
Originated three years before latest fiscal year | 128 | |
Originated four years before latest fiscal year | 14 | 114 |
Originated five years before latest fiscal year | 152 | 178 |
Originated six or more years prior to latest fiscal year | 25 | |
Total | 534 | 969 |
Retail customer | Canada | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 420 | |
Originated in fiscal year before latest fiscal year | 1,236 | 387 |
Originated two years before latest fiscal year | 2,361 | 2,371 |
Originated three years before latest fiscal year | 320 | 960 |
Originated four years before latest fiscal year | 201 | 615 |
Originated five years before latest fiscal year | 366 | 262 |
Originated six or more years prior to latest fiscal year | 257 | |
Total | 4,904 | 4,852 |
Retail customer | Canada | Current | ||
Financing receivable, recorded investment | ||
Originated in current fiscal year | 667,887 | |
Originated in fiscal year before latest fiscal year | 395,757 | 652,576 |
Originated two years before latest fiscal year | 291,974 | 436,138 |
Originated three years before latest fiscal year | 113,630 | 190,905 |
Originated four years before latest fiscal year | 44,042 | 90,968 |
Originated five years before latest fiscal year | 10,064 | 38,477 |
Originated six or more years prior to latest fiscal year | 10,311 | |
Total | 1,523,354 | 1,419,375 |
Wholesale. | ||
Financing receivable, recorded investment | ||
Total | 5,160,120 | 3,383,804 |
Wholesale. | Total Past Due | ||
Financing receivable, recorded investment | ||
Total | 11 | |
Wholesale. | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 7 | |
Wholesale. | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 4 | |
Wholesale. | Current | ||
Financing receivable, recorded investment | ||
Total | 5,160,120 | 3,383,793 |
Wholesale. | United States | ||
Financing receivable, recorded investment | ||
Total | 4,271,583 | 2,721,293 |
Wholesale. | United States | Total Past Due | ||
Financing receivable, recorded investment | ||
Total | 11 | |
Wholesale. | United States | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 7 | |
Wholesale. | United States | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 4 | |
Wholesale. | United States | Current | ||
Financing receivable, recorded investment | ||
Total | 4,271,583 | 2,721,282 |
Wholesale. | Canada | ||
Financing receivable, recorded investment | ||
Total | 888,537 | 662,511 |
Wholesale. | Canada | Current | ||
Financing receivable, recorded investment | ||
Total | 888,537 | 662,511 |
Revolving charge accounts | ||
Financing receivable, recorded investment | ||
Total | 205,872 | 207,744 |
Charge-offs | ||
Total | 6,512 | |
Revolving charge accounts | Total Past Due | ||
Financing receivable, recorded investment | ||
Total | 10,212 | 24,940 |
Revolving charge accounts | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 6,410 | 14,216 |
Revolving charge accounts | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 2,591 | 10,724 |
Revolving charge accounts | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 1,211 | |
Revolving charge accounts | Current | ||
Financing receivable, recorded investment | ||
Total | 195,660 | 182,804 |
Revolving charge accounts | United States | ||
Financing receivable, recorded investment | ||
Total | 192,275 | 192,795 |
Charge-offs | ||
Total | 5,993 | |
Revolving charge accounts | United States | Total Past Due | ||
Financing receivable, recorded investment | ||
Total | 9,547 | 22,944 |
Revolving charge accounts | United States | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 6,036 | 12,979 |
Revolving charge accounts | United States | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 2,422 | 9,965 |
Revolving charge accounts | United States | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 1,089 | |
Revolving charge accounts | United States | Current | ||
Financing receivable, recorded investment | ||
Total | 182,728 | 169,851 |
Revolving charge accounts | Canada | ||
Financing receivable, recorded investment | ||
Total | 13,597 | 14,949 |
Charge-offs | ||
Total | 519 | |
Revolving charge accounts | Canada | Total Past Due | ||
Financing receivable, recorded investment | ||
Total | 665 | 1,996 |
Revolving charge accounts | Canada | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 374 | 1,237 |
Revolving charge accounts | Canada | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 169 | 759 |
Revolving charge accounts | Canada | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 122 | |
Revolving charge accounts | Canada | Current | ||
Financing receivable, recorded investment | ||
Total | $ 12,932 | $ 12,953 |
RECEIVABLES - Receivables Secur
RECEIVABLES - Receivables Securitizations (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2023 CAD ($) | |
Receivables | |||
Maximum borrowing capacity | $ 13,779,771 | $ 11,812,245 | |
Number of conduit facilities | item | 3 | ||
Number of portfolio segments in which allowance for credit losses is segregated | item | 3 | ||
Retail committed asset-backed facilities | |||
Receivables | |||
Asset-backed transactions securitized | $ 2,198,864 | 2,798,457 | |
Outstanding amount of transactions securitized | $ 4,620,565 | $ 4,927,653 | |
Remaining period of transactions securitized | 39 months | ||
Maximum borrowing capacity | $ 1,377,339 | ||
Term of credit agreement | 2 years | ||
Conduit facilities, $850 million renewable in 2024 | |||
Receivables | |||
Maximum borrowing capacity | $ 850,000 | ||
Conduit facilities, $400 million renewable in 2025 | |||
Receivables | |||
Maximum borrowing capacity | 400,000 | ||
Conduit facilities, $300 million renewable in 2024. | |||
Receivables | |||
Maximum borrowing capacity | 300,000 | ||
Conduit facilities renewable in December 2025 | Canada | |||
Receivables | |||
Maximum borrowing capacity | $ 377,339 | $ 500,000 |
RECEIVABLES - Impaired Receivab
RECEIVABLES - Impaired Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Financing receivable, impaired | ||
Accrued interest | $ 83,879 | $ 57,831 |
Delinquency period of accounts considered for recognition of income | 90 days | |
Retail customer | United States | ||
Financing receivable, impaired | ||
Receivables on nonaccrual status | $ 55,564 | 48,690 |
Retail customer | Canada | ||
Financing receivable, impaired | ||
Receivables on nonaccrual status | 5,321 | 4,852 |
Wholesale. | ||
Financing receivable, impaired | ||
Receivables on nonaccrual status | $ 0 | 0 |
Revolving charge accounts | ||
Financing receivable, impaired | ||
Receivables on nonaccrual status | $ 0 |
EQUIPMENT ON OPERATING LEASES_2
EQUIPMENT ON OPERATING LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Depreciation | $ 178,969 | $ 201,582 | $ 239,331 |
Lease payments owed to the company for equipment under non-cancelable operating leases | |||
Deferred operating lease subsidy | 74,775 | ||
2024 | 203,767 | ||
2025 | 142,247 | ||
2026 | 78,339 | ||
2027 | 30,916 | ||
2028 and thereafter | 9,830 | ||
Total lease payments | 465,099 | ||
Property Subject to Operating Lease, Lessor | |||
Equipment on operating lease | 1,735,626 | 1,858,912 | |
Accumulated depreciation | (357,242) | (385,939) | |
Total equipment on operating leases, net | 1,378,384 | 1,472,973 | |
Depreciation | $ 178,969 | $ 201,582 | $ 239,331 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the carrying amount of goodwill | |||
Balance, beginning of year | $ 108,567 | $ 110,226 | |
Foreign currency translation adjustment | 551 | (1,659) | |
Balance, end of year | 109,118 | 108,567 | $ 110,226 |
Impairment of goodwill | 0 | 0 | 0 |
Company's intangible asset and related accumulated amortization for its software | |||
Software | 50,155 | 46,251 | |
Accumulated amortization | (30,803) | (27,863) | |
Software, net | 19,352 | 18,388 | |
Amortization expense | 2,939 | $ 2,159 | $ 1,910 |
Estimated annual amortization expense | |||
2024 | 3,035 | ||
2025 | 2,904 | ||
2026 | 2,638 | ||
2027 | 2,274 | ||
2028 | 1,307 | ||
2029 and thereafter | $ 1,855 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
OTHER ASSETS | ||
Derivative assets | $ 55,654 | $ 35,575 |
Deferred tax assets | 17,772 | 9,463 |
Tax receivables | 10,260 | 3,162 |
Other current assets | 24,461 | 15,758 |
Total other assets | $ 108,147 | $ 63,958 |
CREDIT FACILITIES AND DEBT (Det
CREDIT FACILITIES AND DEBT (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Sep. 13, 2023 USD ($) | Aug. 11, 2023 USD ($) | Apr. 10, 2023 USD ($) | Dec. 31, 2023 USD ($) item | Dec. 31, 2023 CAD ($) | Aug. 11, 2023 CAD ($) | Dec. 31, 2022 USD ($) | |
Debt | |||||||
Maximum borrowing capacity | $ 13,779,771 | $ 11,812,245 | |||||
Short-Term Outstanding | 2,601,519 | 1,594,012 | |||||
Current Maturities of Long-Term Outstanding | 2,918,273 | 2,502,414 | |||||
Long-Term Outstanding | 7,859,629 | 6,387,135 | |||||
Available | 400,350 | $ 1,328,684 | |||||
Minimum annual repayments of long-term debt | |||||||
2025 | 2,693,669 | ||||||
2026 | 2,709,582 | ||||||
2027 | 827,117 | ||||||
2028 | 1,061,560 | ||||||
2029 and thereafter | $ 567,701 | ||||||
Other disclosure | |||||||
Weighted-average interest rate on total short-term debt outstanding (as a percent) | 6.10% | 6.10% | 4.80% | ||||
Weighted- average interest rate on total long-term debt (as a percent) | 4.30% | 4.30% | 2.90% | ||||
CNH | |||||||
Support Agreement | |||||||
Number of preceding fiscal quarters added to the current quarter used in calculating the consolidated fixed charges coverage ratio under support agreement | item | 3 | ||||||
Period of prior written notice | 30 days | ||||||
Long-term rated indebtedness outstanding | $ 0 | ||||||
CNH | Minimum | |||||||
Support Agreement | |||||||
Consolidated fixed charges coverage ratio | 1.05 | ||||||
Ownership percentage required to be maintained in the company | 51% | ||||||
Consolidated tangible net worth threshold | $ 50,000 | ||||||
Unsecured Facilities | |||||||
Debt | |||||||
Maximum borrowing capacity | 815,848 | $ 605,536 | |||||
Short-Term Outstanding | 100,000 | ||||||
Current Maturities of Long-Term Outstanding | 150,936 | ||||||
Long-Term Outstanding | 164,912 | 109,512 | |||||
Available | 400,000 | 496,024 | |||||
Revolving credit facilities | |||||||
Debt | |||||||
Maximum borrowing capacity | 716,404 | 606,820 | |||||
Current Maturities of Long-Term Outstanding | 150,936 | ||||||
Long-Term Outstanding | 165,468 | 110,796 | |||||
Available | 400,000 | 496,024 | |||||
Unamortized issuance costs | (556) | (1,284) | |||||
Committed Asset-Backed Facilities | |||||||
Debt | |||||||
Maximum borrowing capacity | 3,304,678 | 2,738,643 | |||||
Short-Term Outstanding | 1,927,339 | 1,295,457 | |||||
Current Maturities of Long-Term Outstanding | 301,863 | 136,797 | |||||
Long-Term Outstanding | 1,075,126 | 473,729 | |||||
Available | $ 350 | 832,660 | |||||
Committed Asset-Backed Facilities | Maximum | |||||||
Other disclosure | |||||||
Maturity period of receivables | 7 years | ||||||
Retail | Maximum | |||||||
Debt | |||||||
Maximum borrowing capacity | $ 1,377,339 | ||||||
Retail | United States | |||||||
Debt | |||||||
Maximum borrowing capacity | 1,000,000 | 1,000,000 | |||||
Current Maturities of Long-Term Outstanding | 227,598 | 83,667 | |||||
Long-Term Outstanding | 772,052 | 227,799 | |||||
Available | 350 | 688,534 | |||||
Retail | Canada | |||||||
Debt | |||||||
Maximum borrowing capacity | 377,339 | 443,186 | |||||
Current Maturities of Long-Term Outstanding | 74,265 | 53,130 | |||||
Long-Term Outstanding | 303,074 | 245,930 | |||||
Available | 144,126 | ||||||
Wholesale VFN | United States | |||||||
Debt | |||||||
Maximum borrowing capacity | 1,550,000 | 1,000,000 | |||||
Short-Term Outstanding | 1,550,000 | 1,000,000 | |||||
Wholesale VFN | Canada | |||||||
Debt | |||||||
Maximum borrowing capacity | 377,339 | 295,457 | |||||
Short-Term Outstanding | 377,339 | 295,457 | |||||
Secured Debt | |||||||
Debt | |||||||
Maximum borrowing capacity | 5,221,355 | 4,912,903 | |||||
Short-Term Outstanding | 226,290 | ||||||
Current Maturities of Long-Term Outstanding | 1,731,538 | 1,766,250 | |||||
Long-Term Outstanding | 3,263,527 | 3,146,653 | |||||
Unamortized issuance costs | (14,089) | (14,750) | |||||
Other ABS Financing | |||||||
Debt | |||||||
Maximum borrowing capacity | 388,589 | 98,451 | |||||
Current Maturities of Long-Term Outstanding | 136,355 | 77,644 | |||||
Long-Term Outstanding | 252,234 | 20,807 | |||||
Repurchase agreement | |||||||
Debt | |||||||
Maximum borrowing capacity | 226,290 | ||||||
Short-Term Outstanding | 226,290 | ||||||
Uncommitted credit line | |||||||
Debt | |||||||
Maximum borrowing capacity | 100,000 | ||||||
Short-Term Outstanding | 100,000 | ||||||
Amortizing Retail Term ABS | |||||||
Debt | |||||||
Maximum borrowing capacity | 4,620,565 | 4,829,202 | |||||
Current Maturities of Long-Term Outstanding | 1,595,183 | 1,688,606 | |||||
Long-Term Outstanding | 3,025,382 | 3,140,596 | |||||
Unsecured Debt | |||||||
Debt | |||||||
Maximum borrowing capacity | 4,437,890 | 3,555,163 | |||||
Short-Term Outstanding | 347,890 | 298,555 | |||||
Current Maturities of Long-Term Outstanding | 733,936 | 599,367 | |||||
Long-Term Outstanding | 3,356,064 | 2,657,241 | |||||
Hedging effects, discounts and unamortized issuance costs | (41,385) | (66,430) | |||||
Hedging effects, discounts and unamortized issuance costs, short-term outstanding | (3,110) | (1,445) | |||||
Hedging effects, discounts and unamortized issuance costs, current maturities | 7,532 | (633) | |||||
Hedging effects, discounts and unamortized issuance costs, long-term | (45,807) | (64,352) | |||||
Notes | |||||||
Debt | |||||||
Maximum borrowing capacity | 4,128,275 | 3,321,593 | |||||
Current Maturities of Long-Term Outstanding | 726,404 | 600,000 | |||||
Long-Term Outstanding | 3,401,871 | 2,721,593 | |||||
Commercial paper | |||||||
Debt | |||||||
Maximum borrowing capacity | 351,000 | 300,000 | |||||
Short-Term Outstanding | 351,000 | $ 300,000 | |||||
Short-Term Outstanding, net | 347,890 | ||||||
Unsecured Senior Notes | |||||||
Debt | |||||||
Debt amount | 4,090,000 | ||||||
Unsecured Senior Notes | CNH Industrial Capital LLC | |||||||
Debt | |||||||
Debt amount | 3,564,063 | ||||||
Hedging effects, discounts and unamortized issuance costs | (35,937) | ||||||
Unsecured Senior Notes | CNH Industrial Capital Canada Ltd | |||||||
Debt | |||||||
Debt amount | 525,937 | ||||||
Unamortized issuance costs | (2,338) | ||||||
1.500% unsecured notes, due 2024 | CNH Industrial Capital Canada Ltd | |||||||
Debt | |||||||
Debt amount | $ 226,404 | ||||||
Interest rate (as a percent) | 1.50% | 1.50% | |||||
4.200% unsecured notes due 2024 | CNH Industrial Capital LLC | |||||||
Debt | |||||||
Debt amount | $ 500,000 | ||||||
Interest rate (as a percent) | 4.20% | 4.20% | |||||
3.950% unsecured notes due 2025 | CNH Industrial Capital LLC | |||||||
Debt | |||||||
Debt amount | $ 500,000 | ||||||
Interest rate (as a percent) | 3.95% | 3.95% | |||||
5.450 % unsecured notes due 2025 | CNH Industrial Capital LLC | |||||||
Debt | |||||||
Debt amount | $ 400,000 | ||||||
Interest rate (as a percent) | 5.45% | 5.45% | |||||
1.875 % unsecured notes due 2026 | CNH Industrial Capital LLC | |||||||
Debt | |||||||
Debt amount | $ 500,000 | ||||||
Interest rate (as a percent) | 1.875% | 1.875% | |||||
5.500% unsecured notes due 2026 | CNH Industrial Capital Canada Ltd | |||||||
Debt | |||||||
Debt amount | $ 297,640 | $ 301,871 | $ 400,000 | ||||
Interest rate (as a percent) | 5.50% | 5.50% | 5.50% | 5.50% | |||
Issue price of debt (as a percent) | 99.883% | ||||||
5.500% unsecured notes due 2029 | CNH Industrial Capital LLC | |||||||
Debt | |||||||
Debt amount | $ 500,000 | $ 500,000 | |||||
Interest rate (as a percent) | 5.50% | 5.50% | 5.50% | ||||
Issue price of debt (as a percent) | 99.399% | ||||||
1.450% unsecured notes, due 2026 | CNH Industrial Capital LLC | |||||||
Debt | |||||||
Debt amount | $ 600,000 | ||||||
Interest rate (as a percent) | 1.45% | 1.45% | |||||
4.550 % unsecured notes, due 2028 | CNH Industrial Capital LLC | |||||||
Debt | |||||||
Debt amount | $ 600,000 | $ 600,000 | |||||
Interest rate (as a percent) | 4.55% | 4.55% | 4.55% | ||||
Issue price of debt (as a percent) | 98.857% | ||||||
Unsecured Facilities | |||||||
Debt | |||||||
Maximum borrowing capacity | $ 815,848 | ||||||
Line of credit, outstanding amount | 415,848 | ||||||
Secured Debt | Repurchase agreement | |||||||
Debt | |||||||
Debt amount | $ 226,290 | $ 299,850 | |||||
Repurchase receivable obligation term | 30 days |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Sources of income before taxes | |||
Domestic | $ 218,113 | $ 232,873 | $ 235,309 |
Foreign | 58,915 | 57,129 | 64,841 |
INCOME BEFORE TAXES | 277,028 | 290,002 | 300,150 |
Current income tax expense (benefit): | |||
Domestic | 109,762 | 112,615 | 63,346 |
Foreign | 17,626 | 12,717 | 16,630 |
Total current income tax expense | 127,388 | 125,332 | 79,976 |
Deferred income tax expense (benefit): | |||
Domestic | (59,051) | (55,494) | (9,296) |
Foreign | (6,381) | 1,042 | (745) |
Total deferred income tax expense | (65,432) | (54,452) | (10,041) |
Total tax provision | $ 61,956 | $ 70,880 | $ 69,935 |
Reconciliation of statutory and effective income tax rate | |||
Tax provision at statutory rate (as a percent) | 21% | 21% | 21% |
State taxes (as a percent) | 3.70% | 4.80% | 4.10% |
Foreign taxes (as a percent) | (1.30%) | (0.60%) | (1.10%) |
Tax credits and incentives (as a percent) | (0.80%) | (0.60%) | (0.40%) |
Other (as a percent) | (0.20%) | (0.20%) | (0.30%) |
Total tax provision effective rate (as a percent) | 22.40% | 24.40% | 23.30% |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Components of net deferred tax assets | ||
Pension, postretirement and post employment benefits | $ 1,173 | $ 1,180 |
Marketing and sales incentive programs | 75,631 | 46,587 |
Allowance for credit losses | 23,122 | 25,627 |
Other accrued liabilities | 38,576 | 36,805 |
Tax loss and tax credit carry forwards | 1,812 | 1,076 |
Total deferred tax assets | 140,314 | 111,275 |
Deferred tax liabilities: | ||
Equipment on operating lease | 257,705 | 297,152 |
Deferred tax assets | 17,772 | 9,463 |
Deferred tax liabilities | (135,163) | (195,340) |
Deferred tax liability, net | $ (117,391) | $ (185,877) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Tax Contingencies and Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of the gross amounts of tax contingencies at the beginning and end of the year | |||
Balance, beginning of year | $ 4,274 | ||
Settlements | $ (4,274) | ||
Income tax examinations | |||
U.S. federal corporate income tax rate (as a percent) | 21% | 21% | 21% |
Undistributed earnings of non-U.S. subsidiaries | $ 0 |
FINANCIAL INSTRUMENTS - General
FINANCIAL INSTRUMENTS - General Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Interest Rate Derivatives | |
Maximum length of time of interest rate derivative instruments designated in cash flow hedge relationships | 57 months |
After-tax losses deferred in accumulated other comprehensive income (loss) that will be recognized in interest expense over the next 12 months | $ 2,378 |
FINANCIAL INSTRUMENTS - Fair Ma
FINANCIAL INSTRUMENTS - Fair Market Value of Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair market value of derivatives | |||
Derivative assets designated as hedging instruments, classified in other assets | $ 22,633 | $ 3,597 | |
Derivative liabilities designated as hedging instruments, classified in accounts payable and other accrued liabilities | 32,579 | 42,936 | |
Interest rate derivatives, derivative assets not designated as hedging instruments, classified in other assets | 30,420 | 27,862 | |
Foreign exchange contracts, derivatives not designated as hedging instruments, classified in other assets | 2,601 | 4,116 | |
Derivative assets not designated as hedging instruments, classified in other assets | 33,021 | 31,978 | |
Interest rate derivatives, derivative not designated as hedging instruments, classified in accounts payable and other accrued liabilities | 30,420 | 27,862 | |
Foreign exchange contracts, derivatives not designated as hedging instruments, classified in accounts payable and other accrued liabilities | 435 | ||
Derivative liabilities not designated as hedging instruments, classified in accounts payable and other accrued liabilities | 30,420 | 28,297 | |
Cash Flow Hedges, Recognized in accumulated other comprehensive income (loss), Interest rate derivatives | $ (6,987) | $ 17,334 | $ 7,932 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax |
Cash Flow Hedges, Reclassified from accumulated other comprehensive Income (loss), Interest rate derivatives - Interest expense to third parties | $ 2,624 | $ 1,090 | $ (653) |
Foreign exchange contracts, other expenses, net, not designated as hedges | 1,828 | (5,784) | $ (1,709) |
Interest rate derivatives | |||
Fair market value of derivatives | |||
Total notional amount of interest rate derivatives | 4,428,285 | 3,628,725 | |
Thirteen-month average notional amounts of interest rate derivatives | $ 3,803,373 | $ 3,715,399 |
FINANCIAL INSTRUMENTS - Items M
FINANCIAL INSTRUMENTS - Items Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Foreign exchange contracts | $ 2,601 | $ 4,116 |
Liabilities | ||
Foreign exchange contracts | 435 | |
Assets transferred between Level 1, Level 2 and Level 3 | 0 | 0 |
Recurring | Level 2 | ||
Assets | ||
Interest rate derivatives | 53,053 | 31,459 |
Foreign exchange contracts | 2,601 | 4,116 |
Total assets | 55,654 | 35,575 |
Liabilities | ||
Interest rate derivatives | 62,999 | 70,798 |
Foreign exchange contracts | 435 | |
Total liabilities | $ 62,999 | $ 71,233 |
FINANCIAL INSTRUMENTS - Carryin
FINANCIAL INSTRUMENTS - Carrying Amount and Estimated Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Financial Instruments Not Carried at Fair Value | ||
Receivables | $ 13,455,717 | $ 10,741,820 |
Long-term debt | 7,859,629 | 6,387,135 |
Carrying Amount | ||
Financial Instruments Not Carried at Fair Value | ||
Receivables | 13,455,717 | 10,741,820 |
Long-term debt | 7,859,629 | 6,387,135 |
Estimated Fair Value | ||
Financial Instruments Not Carried at Fair Value | ||
Receivables | 13,224,506 | 10,433,949 |
Long-term debt | $ 7,739,874 | $ 6,032,997 |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Value on a Nonrecurring Basis and Other Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equipment | |||
Assets | |||
(Gains) losses on assets held for sale | $ (16,896) | $ (27,525) | $ (12,140) |
GEOGRAPHICAL INFORMATION (Detai
GEOGRAPHICAL INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Geographical Information | |||
Revenues | $ 1,072,653 | $ 791,835 | $ 789,184 |
Interest expense | 534,239 | 241,807 | 195,778 |
Net income | 215,072 | 219,122 | 230,215 |
Depreciation and amortization | 181,916 | 203,749 | 241,249 |
Expenditures for equipment on operating leases | 521,144 | 517,623 | 536,401 |
Provision (benefit) for credit losses | 11,579 | 11,241 | (7,460) |
Additional disclosures | |||
Total assets | 15,963,527 | 13,179,479 | 12,187,768 |
Managed receivables | 13,570,462 | 10,866,832 | 9,067,252 |
Eliminations | |||
Geographical Information | |||
Revenues | (1,601) | (3,828) | (5,555) |
Interest expense | (1,601) | (3,828) | (5,555) |
Additional disclosures | |||
Total assets | (148,521) | (216,656) | (221,579) |
United States. | |||
Geographical Information | |||
Net income | 167,403 | 175,752 | 181,259 |
Depreciation and amortization | 129,247 | 152,871 | 190,255 |
Expenditures for equipment on operating leases | 354,015 | 354,817 | 388,665 |
Provision (benefit) for credit losses | 12,897 | 9,978 | (6,431) |
Additional disclosures | |||
Managed receivables | 11,134,365 | 8,758,694 | 7,121,138 |
United States. | Operating segment | |||
Geographical Information | |||
Revenues | 860,081 | 626,754 | 630,848 |
Interest expense | 443,629 | 195,728 | 161,681 |
Additional disclosures | |||
Total assets | 13,034,959 | 10,712,413 | 9,870,766 |
Canada. | |||
Geographical Information | |||
Net income | 47,669 | 43,370 | 48,956 |
Depreciation and amortization | 52,669 | 50,878 | 50,994 |
Expenditures for equipment on operating leases | 167,129 | 162,806 | 147,736 |
Provision (benefit) for credit losses | (1,318) | 1,263 | (1,029) |
Additional disclosures | |||
Managed receivables | 2,436,097 | 2,108,138 | 1,946,114 |
Canada. | Operating segment | |||
Geographical Information | |||
Revenues | 214,173 | 168,909 | 163,891 |
Interest expense | 92,211 | 49,907 | 39,652 |
Additional disclosures | |||
Total assets | $ 3,077,089 | $ 2,683,722 | $ 2,538,581 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RELATED-PARTY TRANSACTIONS | |||
Retail customer | $ 288,067 | $ 216,528 | $ 154,994 |
Operating lease | 237,178 | 248,335 | 267,606 |
Revolving charge accounts | 39,568 | ||
Wholesale | 66,015 | 28,659 | 31,011 |
Total interest and other income from affiliates | 434,257 | 268,267 | 297,579 |
Other information | |||
Interest expense to affiliates | 534,239 | 241,807 | 195,778 |
Related Party | |||
RELATED-PARTY TRANSACTIONS | |||
Affiliated receivables | 74,667 | 53,509 | |
Affiliated debt | 132,492 | 341,531 | |
Other information | |||
Interest expense to affiliates | 33,746 | 9,361 | 3,686 |
Fees charged by affiliates | 53,804 | 50,858 | 47,369 |
Accounts payable and other accrued liabilities payable to related parties | 82,621 | 212,167 | |
CNH North America | |||
RELATED-PARTY TRANSACTIONS | |||
Retail customer | 140,195 | 123,874 | 142,867 |
Operating lease | 40,852 | 47,194 | 58,965 |
Revolving charge accounts | 4,106 | ||
Wholesale | 242,062 | 95,138 | 94,678 |
CNH North America | |||
RELATED-PARTY TRANSACTIONS | |||
Lending funds | 3,430 | 713 | 878 |
CNH America | |||
RELATED-PARTY TRANSACTIONS | |||
Affiliated receivables | $ 13,377 | $ 10 | |
Rate of accounts and notes receivable (as a percent) | 0% | 0% | |
Rate of debt due (as a percent) | 5.68% | 5.39% | |
Affiliated debt | $ 86,234 | $ 100,195 | |
CNH Canada | |||
RELATED-PARTY TRANSACTIONS | |||
Affiliated receivables | $ 704 | ||
Rate of accounts and notes receivable (as a percent) | 0% | 0% | |
Rate of debt due (as a percent) | 5.76% | 5.74% | |
Affiliated debt | $ 46,258 | $ 241,036 | |
Banco CNH Industrial Capital Brazil | |||
RELATED-PARTY TRANSACTIONS | |||
Lending funds | 2,864 | 983 | |
Affiliated receivables | 47,997 | $ 40,983 | |
Rate of accounts and notes receivable (as a percent) | 0% | ||
Other affiliates | |||
RELATED-PARTY TRANSACTIONS | |||
Lending funds | 748 | $ 365 | $ 191 |
Affiliated receivables | $ 12,589 | $ 12,516 | |
Rate of accounts and notes receivable (as a percent) | 0% | 0% | |
Rate of debt due (as a percent) | 0% | 5.05% | |
Affiliated debt | $ 300 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Guarantees | |
Payment guarantees on the financial debt of various foreign financial services subsidiaries | $ 50,400 |
Wholesale and dealer financing | |
Guarantees | |
Total credit limit | 7,746,096 |
Utilized | 5,039,432 |
Not Utilized | 2,706,664 |
Revolving charge accounts | |
Guarantees | |
Total credit limit | 2,557,662 |
Utilized | 210,324 |
Not Utilized | $ 2,347,338 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Thousands, $ in Thousands | Jan. 16, 2024 USD ($) | Feb. 21, 2024 CAD ($) | Feb. 21, 2024 USD ($) | Jan. 24, 2024 USD ($) | Dec. 31, 2023 USD ($) |
4.200% unsecured notes due 2024 | CNH Industrial Capital LLC | |||||
Subsequent Events | |||||
Interest rate (as a percent) | 4.20% | ||||
Debt amount | $ 500,000 | ||||
Secured Debt | Subsequent event | US Retail receivables | |||||
Subsequent Events | |||||
Debt amount | $ 862,730 | ||||
Secured Debt | Subsequent event | Amortizing Retail Term ABS | |||||
Subsequent Events | |||||
Debt amount | $ 398,380 | $ 294,834 | |||
Unsecured Senior Notes | Subsequent event | 4.200% unsecured notes due 2024 | CNH Industrial Capital LLC | |||||
Subsequent Events | |||||
Repayment of debt | $ 500,000 | ||||
Interest rate (as a percent) | 4.20% |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |