CNH Industrial N.V. — FY2021 Form 20-F
Reporting period: Year ended December 31, 2021. This is an annual report, not a standalone fourth-quarter filing; the supplied text does not provide a clear set of Q4-only financial results. Financial statements are prepared under U.S. GAAP and reported in U.S. dollars. FY2021 results include the On-Highway businesses, which were demerged effective January 1, 2022.
Business context and key financial metrics
| Metric | FY2021 | FY2020 |
|---|---|---|
| Total revenue | $33.428 billion | $26.032 billion |
| Industrial Activities net sales | $31.622 billion | $24.285 billion |
| Net income (loss) | $1.760 billion | $(438) million |
| Net income (loss) attributable to CNH Industrial | $1.723 billion | $(493) million |
| Diluted EPS | $1.27 | $(0.36) |
| Adjusted EBIT, Industrial Activities (non-GAAP) | $2.114 billion; 6.7% margin | $552 million; 2.3% margin |
| Cash from operating activities | $4.082 billion | $5.529 billion |
| Free cash flow, Industrial Activities (non-GAAP) | $1.751 billion | $1.926 billion |
| Capital expenditures | $714 million | $484 million |
| Cash and cash equivalents | $6.006 billion | $8.785 billion |
| Consolidated debt | $23.745 billion | $26.053 billion |
Industrial Activities Adjusted EBIT margin is calculated on Industrial Activities net sales. Total debt includes $19.435 billion attributable to Financial Services. The company reported Industrial Activities net cash of $288 million at year-end, versus $786 million in 2020; Financial Services had net debt of $17.111 billion.
Material changes versus FY2020
- Total revenue rose 28.4% (26.1% at constant currency), reflecting stronger demand and favorable pricing. Industrial Activities net sales rose 30.2% (27.8% at constant currency).
- Industrial Activities Adjusted EBIT increased to $2.114 billion from $552 million. Agriculture led improvement: revenue was $14.721 billion and Adjusted EBIT was $1.810 billion, versus $10.923 billion and $880 million. Construction returned to positive Adjusted EBIT of $90 million from a loss of $184 million; Commercial and Specialty Vehicles improved to $282 million from a loss of $109 million; Powertrain Adjusted EBIT was $256 million versus $233 million.
- Cost of goods sold increased 21.7%, but fell to 82.1% of Industrial Activities net sales from 87.8%, supported by better fixed-cost absorption, partly offset by higher input costs. SG&A increased to $2.443 billion; R&D increased to $1.236 billion.
- Operating cash flow declined despite the return to profitability, with working-capital movements and financing-segment cash flows affecting the comparison. Industrial Activities free cash flow remained strong but declined from $1.926 billion.
- Cash and cash equivalents fell by $2.779 billion. The company cited the Raven acquisition, debt repayments, dividends, and foreign-exchange translation, partly offset by Industrial Activities free cash flow.
Liquidity, debt, and other financial considerations
- Available liquidity, as defined by the company, was $12.149 billion at December 31, 2021, comprising cash, restricted cash, undrawn committed facilities and other current financial assets. Undrawn committed facilities were $5.224 billion.
- Gross consolidated debt was $23.745 billion; $19.435 billion related to Financial Services and $6.163 billion to Industrial Activities before intercompany eliminations. The weighted-average interest rate on consolidated debt was 2.3%.
- Financial Services reported net income of $420 million, up from $249 million. Its managed portfolio, including unconsolidated joint ventures, was $26.7 billion; receivables more than 30 days past due were 1.7%, down from 2.1%.
- Defined-benefit pension, healthcare and other postemployment plans had a combined funded deficit of $1.177 billion at year-end. Guarantees on third-party debt or commitments and affiliate performance guarantees totaled $527 million.
Outlook, management commentary, risks, and unusual items
- Management described 2021 demand and pricing as strong, while identifying global supply-chain disruption as the main operating challenge. Semiconductor and component shortages, logistics constraints, labor availability, and higher raw-material and freight costs affected production and deliveries, particularly late in the year.
- The filing does not provide a clear quantified company-wide FY2022 earnings or revenue guidance. It notes a February 2022 Investor Day and a 2022–2024 strategic plan, but the plan’s detailed targets are not included in the supplied text.
- Effective January 1, 2022, Iveco Group’s Commercial and Specialty Vehicles, Powertrain and related businesses were separated. Management said the separation enables each group to focus on its core markets; CNH Industrial also cautioned that it will be smaller and less diversified after the demerger.
- CNH Industrial completed its $2.1 billion acquisition of Raven Industries in November 2021 and acquired 90% of Sampierana in December. Preliminary purchase accounting included $1.3 billion of Raven goodwill and $0.5 billion of acquired intangible assets; valuations were not finalized. The company planned to sell Raven’s Engineered Films and Aerostar divisions.
- Reported results included a $138 million pre-tax loss from remeasurement of the Nikola investment, $187 million of demerger costs and $57 million of Raven acquisition costs. A $161 million non-cash tax benefit arose from recognizing Brazilian deferred tax assets. FY2020 included a $585 million Construction goodwill impairment.
- Key risks include continued supply disruptions and inflation, COVID-19 effects, cyclical equipment demand, commodity and foreign-exchange volatility, customer/dealer credit risk, funding access, climate and weather impacts, cybersecurity, regulatory and emissions compliance, and legal claims. The filing discusses ongoing European truck antitrust follow-on litigation and an FPT emissions investigation; outcomes cannot be predicted.
- The Board proposed a dividend of €0.28 per common share, subject to shareholder approval. Fitch upgraded CNH Industrial to BBB+ in January 2022 and Moody’s upgraded it to Baa2 in February 2022, both with stable outlooks; Standard & Poor’s rating remained BBB with a stable outlook.
Investor verification priorities
- Confirm post-demerger financial and debt allocation, including how CNH Industrial’s reduced diversification and continuing service arrangements with Iveco Group affect earnings, cash flows and financing.
- Track whether supply-chain constraints, freight and material inflation, and production interruptions ease, and whether pricing continues to offset cost pressure.
- Review Raven and Sampierana purchase-price allocations, Raven’s planned divestitures, and the realized returns on acquisition spending.
- Assess Industrial Activities working capital and free-cash-flow conversion, alongside liquidity needs and debt maturities, especially within Financial Services.
- Monitor credit quality, past-due receivables, residual-value exposure, pension funding, and the outcome or reserve changes for the disclosed legal and regulatory matters.
- Distinguish GAAP results from management’s non-GAAP Adjusted EBIT, adjusted earnings and free-cash-flow measures when comparing periods.