Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020USD ($)shares | |
Document and Entity Information | |
Entity Registrant Name | CNH INDUSTRIAL CAPITAL LLC |
Document Type | 10-K |
Document Period End Date | Dec. 31, 2020 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
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 |
Entity Common Stock, Shares Outstanding | shares | 0 |
Entity Central Index Key | 0001552493 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES | |||||||||||
Interest income on retail notes and finance leases | $ 183,229 | $ 218,454 | $ 201,269 | ||||||||
Interest income on wholesale notes | 53,109 | 67,773 | 66,899 | ||||||||
Interest and other income from affiliates | 324,424 | 345,789 | 345,933 | ||||||||
Rental income on operating leases | 255,878 | 243,044 | 241,582 | ||||||||
Other income | 27,767 | 25,829 | 22,671 | ||||||||
Total revenues | $ 205,212 | $ 209,674 | $ 213,704 | $ 215,817 | $ 225,352 | $ 224,356 | $ 229,112 | $ 222,069 | 844,407 | 900,889 | 878,354 |
Interest expense: | |||||||||||
Interest expense to third parties | 276,390 | 333,147 | 317,747 | ||||||||
Interest expense to affiliates | 3,568 | 14,126 | 7,533 | ||||||||
Total interest expense | 64,456 | 68,840 | 67,974 | 78,688 | 84,866 | 88,779 | 85,247 | 88,381 | 279,958 | 347,273 | 325,280 |
Administrative and operating expenses: | |||||||||||
Fees charged by affiliates | 45,905 | 46,601 | 47,475 | ||||||||
Provision for credit losses | 59,044 | 35,703 | 31,699 | ||||||||
Depreciation of equipment on operating leases | 237,405 | 229,652 | 231,805 | ||||||||
Other expenses | 35,303 | 48,446 | 43,778 | ||||||||
Total administrative and operating expenses | 95,946 | 90,904 | 99,183 | 91,624 | 97,431 | 86,091 | 94,183 | 82,697 | 377,657 | 360,402 | 354,757 |
Total expenses | 657,615 | 707,675 | 680,037 | ||||||||
INCOME BEFORE TAXES | 186,792 | 193,214 | 198,317 | ||||||||
Income tax provision | 10,753 | 11,775 | 10,556 | 10,428 | 7,568 | 12,965 | 11,898 | 11,780 | 43,512 | 44,211 | 41,472 |
NET INCOME | $ 34,057 | $ 38,155 | $ 35,991 | $ 35,077 | $ 35,487 | $ 36,521 | $ 37,784 | $ 39,211 | $ 143,280 | $ 149,003 | $ 156,845 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||
NET INCOME | $ 34,057 | $ 38,155 | $ 35,991 | $ 35,077 | $ 35,487 | $ 36,521 | $ 37,784 | $ 39,211 | $ 143,280 | $ 149,003 | $ 156,845 |
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustment | 11,849 | 21,593 | (48,009) | ||||||||
Pension liability adjustment | 306 | 2,850 | 665 | ||||||||
Change in derivative financial instruments | (7,994) | (1,243) | 508 | ||||||||
Total other comprehensive income (loss) | 4,161 | 23,200 | (46,836) | ||||||||
COMPREHENSIVE INCOME | $ 147,441 | $ 172,203 | $ 110,009 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 392,929 | $ 174,966 |
Restricted cash and cash equivalents | 625,622 | 629,278 |
Receivables, less allowance for credit losses of $136,136 and $72,751, respectively | 8,896,811 | 9,835,274 |
Affiliated accounts and notes receivable | 414,810 | 64,307 |
Equipment on operating leases, net | 1,859,184 | 1,783,283 |
Equipment held for sale | 36,515 | 170,218 |
Goodwill | 110,158 | 109,629 |
Other intangible assets, net | 13,333 | 12,195 |
Other assets | 101,807 | 74,937 |
TOTAL | 12,451,169 | 12,854,087 |
Liabilities: | ||
Short-term debt (including current maturities of long-term debt) | 4,229,428 | 4,790,172 |
Accounts payable and other accrued liabilities | 904,399 | 807,437 |
Affiliated debt | 187,310 | 213,856 |
Long-term debt | 5,869,860 | 5,779,581 |
Total liabilities | 11,190,997 | 11,591,046 |
Commitments and contingent liabilities (Note 13) | ||
Stockholder's equity: | ||
Member's capital | ||
Paid-in capital | 843,234 | 843,749 |
Accumulated other comprehensive loss | (120,235) | (124,396) |
Retained earnings | 537,173 | 543,688 |
Total stockholder's equity | 1,260,172 | 1,263,041 |
TOTAL | $ 12,451,169 | $ 12,854,087 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for credit losses | $ 136,136 | $ 72,751 |
Restricted cash and cash equivalents | 625,622 | 629,278 |
Receivables, less allowance for credit losses of $78,960 and $48,413, respectively | 8,896,811 | 9,835,274 |
TOTAL | 12,451,169 | 12,854,087 |
Short-term debt (including current maturities of long-term debt) | 4,229,428 | 4,790,172 |
Long-term debt | 5,869,860 | 5,779,581 |
Total liabilities | 11,190,997 | 11,591,046 |
Consolidated variable interest entities ("VIEs") | ||
Allowance for credit losses | 78,960 | 48,413 |
Restricted cash and cash equivalents | 625,622 | 629,278 |
Receivables, less allowance for credit losses of $78,960 and $48,413, respectively | 6,364,343 | 6,748,621 |
TOTAL | 6,989,965 | 7,377,899 |
Short-term debt (including current maturities of long-term debt) | 3,017,432 | 3,274,216 |
Long-term debt | 3,262,842 | 3,495,022 |
Total liabilities | $ 6,280,274 | $ 6,769,238 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 143,280 | $ 149,003 | $ 156,845 |
Adjustments to reconcile net income to net cash from (used in) operating activities: | |||
Depreciation on property and equipment and equipment on operating leases | 237,412 | 229,653 | 231,812 |
Amortization of intangibles | 1,562 | 1,790 | 2,114 |
Provision for credit losses | 59,044 | 35,703 | 31,699 |
Deferred income tax expense (benefit) | (12,377) | 38,421 | 28,254 |
Changes in components of working capital: | |||
Change in affiliated accounts and notes receivables | (350,289) | (19,665) | 29,203 |
Change in other assets and equipment held for sale | (40,160) | (5,456) | (50,798) |
Change in accounts payable and other accrued liabilities | 78,646 | 53,235 | (66,248) |
Net cash from (used in) operating activities | 117,118 | 482,684 | 362,881 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Cost of receivables acquired | (10,472,030) | (11,380,427) | (11,802,561) |
Collections of receivables | 11,387,140 | 11,551,430 | 12,072,940 |
Purchase of equipment on operating leases | (598,387) | (715,686) | (680,266) |
Proceeds from disposal of equipment on operating leases | 443,912 | 501,550 | 468,257 |
Change in property and equipment and software, net | (2,700) | (3,819) | (5,427) |
Net cash from (used in) investing activities | 757,935 | (46,952) | 52,943 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from issuance of affiliated debt | 1,078,351 | 1,509,528 | 1,138,573 |
Payment of affiliated debt | (1,108,568) | (1,571,943) | (1,292,749) |
Proceeds from issuance of long-term debt | 3,056,026 | 3,191,270 | 3,240,771 |
Payment of long-term debt | (2,916,765) | (3,409,576) | (3,630,702) |
Change in short-term borrowings, net | (639,790) | 114,362 | 182,596 |
Dividend paid to CNH Industrial America LLC | (130,000) | (265,000) | (130,000) |
Net cash from (used in) financing activities | (660,746) | (431,359) | (491,511) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 214,307 | 4,373 | (75,687) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |||
Beginning of year | 804,244 | 799,871 | 875,558 |
End of year | 1,018,551 | 804,244 | 799,871 |
CASH PAID DURING THE PERIOD FOR INTEREST | 268,080 | 337,199 | 316,675 |
CASH PAID (RECEIVED) DURING THE PERIOD FOR TAXES | $ 56,201 | $ (41,129) | $ 47,577 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY - USD ($) $ in Thousands | Beginning balancePaid-in Capital | Beginning balanceAccumulated Other Comprehensive (Loss) Income | Beginning balanceRetained Earnings | Beginning balance | Net incremental impact of adopting new guidanceRetained Earnings | Net incremental impact of adopting new guidance | Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total |
BALANCE at Dec. 31, 2017 | $ 843,559 | $ (100,163) | $ 632,243 | $ 1,375,639 | ||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||
Net income | 156,845 | 156,845 | ||||||||
Dividend paid to CNH Industrial America LLC | (130,000) | (130,000) | ||||||||
Foreign currency translation adjustment | (48,009) | (48,009) | ||||||||
Stock compensation | 84 | 84 | ||||||||
Pension liability adjustment, net of tax | 665 | 665 | ||||||||
Change in derivative financial instruments, net of tax | 508 | 508 | ||||||||
BALANCE at Dec. 31, 2018 | 843,643 | (146,999) | 659,088 | 1,355,732 | ||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||
Net income | 149,003 | 149,003 | ||||||||
Dividend paid to CNH Industrial America LLC | (265,000) | (265,000) | ||||||||
Foreign currency translation adjustment | 21,593 | 21,593 | ||||||||
Stock compensation | 106 | 106 | ||||||||
Reclassification of certain tax effects | (597) | 597 | ||||||||
Pension liability adjustment, net of tax | 2,850 | 2,850 | ||||||||
Change in derivative financial instruments, net of tax | (1,243) | (1,243) | ||||||||
BALANCE at Dec. 31, 2019 | $ 843,749 | $ (124,396) | $ 543,688 | $ 1,263,041 | $ (19,790) | $ (19,790) | 1,263,041 | |||
Increase (Decrease) in Stockholder's Equity | ||||||||||
BALANCE | 843,749 | (124,396) | 523,898 | 1,243,251 | ||||||
Net income | 143,280 | 143,280 | ||||||||
Dividend paid to CNH Industrial America LLC | (130,000) | (130,000) | ||||||||
Foreign currency translation adjustment | 11,849 | |||||||||
Foreign currency translation adjustment | 11,849 | (5) | 11,844 | |||||||
Stock compensation | (515) | (515) | ||||||||
Pension liability adjustment, net of tax | 306 | 306 | ||||||||
Change in derivative financial instruments, net of tax | (7,994) | (7,994) | ||||||||
BALANCE at Dec. 31, 2020 | $ 843,234 | $ (120,235) | $ 537,173 | $ 1,260,172 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2020 | |
BASIS OF PRESENTATION | |
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 Industrial Capital America”) and CNH Industrial Capital Canada Ltd. (“CNH Industrial Capital Canada”) (collectively, “CNH Industrial Capital” or the “Company”), are each a subsidiary of CNH Industrial America LLC (“CNH Industrial America”), which is an indirect wholly-owned subsidiary of CNH Industrial N.V. (“CNHI” and, together with its consolidated subsidiaries, “CNH Industrial”). CNH Industrial America and CNH Industrial Canada Ltd. (collectively, “CNH Industrial North America”) design, manufacture, and sell agricultural and construction equipment. CNH Industrial Capital provides financial services for CNH Industrial 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 London, England. The common shares of CNHI are listed on the New York Stock Exchange under the symbol “CNHI,” as well as on the Mercato Telematico Azionario managed by Borsa Italiana S.p.A. To support CNH Industrial North America’s sales of agricultural and construction equipment products, the Company offers retail financing to end-use customers and wholesale financing to CNH Industrial North America equipment dealers, all of which are independently owned. The Company provides and administers retail financing, primarily retail installment sales contracts, finance leases and operating leases to end-use customers for the purchase or lease of new and used CNH Industrial North America equipment and other agricultural and construction equipment sold primarily through CNH Industrial North America dealers and distributors. In addition, the Company purchases equipment from dealers that is leased to retail customers under operating lease agreements. Wholesale financing consists primarily of dealer floorplan financing, which allows dealers the ability to maintain a representative inventory of products. In addition, the Company provides financing to dealers for equipment used in dealer-owned rental yards, parts inventory, working capital, and other financing needs. CNH Industrial Capital Canada purchases short-term wholesale receivables at a discount (“wholesale factoring”) from Iveco Argentina S.A. (“Iveco Argentina”), an indirect wholly-owned subsidiary of CNHI, from time to time. The purchase is consistent with factoring arrangements between CNHI’s industrial and financial services companies. 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 Industrial North America, its dealers and end-use customers. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
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. 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. The COVID-19 pandemic has resulted in uncertainties in the Company's business, which may cause actual results to differ materially from the estimates and assumptions used in preparation of the financial statements including, but not limited to, future cash flows associated with the allowance for credit losses, the determination of end-of-lease market values for equipment on operating leases, goodwill and income taxes. Changes in estimates are recorded in results of operations in the period that the events or circumstances giving rise to such changes occur. Revenue Recognition Finance and interest income on retail notes and finance leases and on wholesale notes 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 delinquent, 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. 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. Charge‑offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due are deemed uncollectible. A substantial portion of the Company’s interest income arises from retail sales programs offered by CNH Industrial North America on which finance charges are waived or below-market rate financing programs are offered. When the Company acquires retail installment sales contracts and finance leases subject to below-market interest rates, including waived interest rate financing, the Company receives compensation from CNH Industrial 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 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 Industrial 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 Industrial 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 Industrial North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. The amounts from CNH Industrial 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, and gains and losses from foreign currency transactions are included in net income in the period that they arise. Cash and Cash Equivalents Cash equivalents are highly liquid investments with an original maturity of three months or less. The carrying value of cash equivalents approximates fair value because of the short maturity of these investments. Restricted Cash 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. 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 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 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 Post-Adoption of ASC 326, Financial Instruments – Credit Losses (“ASC 326”) on January 1, 2020 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 receivables include retail and other notes and finance lease products offered for retail purchases of new and used equipment sold through CNH Industrial North America’s dealer network. Wholesale receivables include financing of the sale of goods to dealers and distributors by CNH Industrial North America, and to a lesser extent, the financing of dealer operations. Wholesale factoring receivables represent the short-term receivables purchased from Iveco Argentina S.A. Typically, the Company’s receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. Retail 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 retail 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 GDP and Net Farm Income. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors, such as the potential impact of COVID‑19, 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. Wholesale and retail 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 receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due are deemed uncollectible. Prior to Adoption of ASC 326 on January 1, 2020 The allowance for credit losses was the Company’s estimate of losses on receivables owned by the Company and consisted of two components, and depended on whether the receivable had been individually identified as being impaired. The first component of the allowance for credit losses covered the receivables specifically reviewed by management for which the Company had determined it was probable that it would not collect all the principal and interest payments as per the terms of the contract. Receivables were individually reviewed for impairment based on, among other items, amounts outstanding, days past due and prior collection history. These receivables were subject to impairment measurement at the loan level based either on the fair value of the collateral for collateral dependent receivables or on the present value of expected future cash flows discounted at the receivables’ effective interest rate. The second component of the allowance for credit losses covered all receivables that had not been individually reviewed for impairment. The allowance for these receivables was based on aggregated portfolio evaluations, generally by financial product. The allowance for retail and wholesale credit losses was based on loss forecast models that considered a variety of factors that included, but were not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models were updated on a quarterly basis. In addition, qualitative factors that were not fully captured in the loss forecast models, including industry trends, and macroeconomic factors, were considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors were subjective and required a degree of management judgment. Equipment on Operating Leases The Company purchases leases and equipment from CNH Industrial North America 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. 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 2020 and 2019, 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 five 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, or the derivative is terminated, 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 2020 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which established ASC 326. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”), which superseded existing ASU 2016-13. The ASU introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Additional disclosures about significant estimates and credit quality were also required. The Company adopted ASU 2018-19 on January 1, 2020, using the modified retrospective approach. The impact to the consolidated balance sheet on January 1, 2020 was an increase to the allowance for credit losses of $26 million and an increase to deferred tax assets of $6 million, with the offset to retained earnings, net of tax, of $20 million. In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amended ASC 820, Fair Value Measurement . This ASU modified the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement (“ASU 2018-15”), which expanded the guidance set forth in ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . ASU 2018-15 aligned the requirements for capitalization of implementation costs in a cloud computing service contract with those requirements for capitalization of implementation costs incurred for an internal-use software license. The Company adopted ASU 2018-15 on January 1, 2020. The adoption of this standard did not have a material impact on its consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities (“ASU 2018-17”), which expanded the application of a specific private company alternative related to VIEs and changed the guidance for determining whether a decision-making fee is a variable interest. Under the new guidance, to determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportionate basis, rather than in their entirety. The Company adopted ASU 2018-17 on January 1, 2020. The adoption of this standard did not have a material impact on its consolidated financial statements. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”), which made targeted changes to standards on credit losses, hedging, and recognizing and measuring financial instruments, to clarify them and address implementation issues. The amendments clarified the scope of the credit losses standard and addressed issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other things. On recognizing and measuring financial instruments, the amendments addressed the scope of the guidance, the requirement for remeasurement under ASC 820 when using the measurement alternative, certain disclosure requirements and which equity securities have to be remeasured at historical exchange rates. The Company adopted ASU 2019-04 on January 1, 2020. The adoption of this standard did not have a material impact on its consolidated financial statements. New Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU No. 2019‑12, Simplifying the Accounting for Income Taxes (“ASU 2019‑12”). This ASU eliminates certain exceptions to the general principles in ASC 740, Income Taxes . Specifically, it eliminates the exception to (1) the incremental approach for intraperiod tax allocation where there is a loss from continuing operations, and income or a gain from other items; (2) the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (3) the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. ASU 2019‑12 will be effective for the annual periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020: Currency Unrealized Translation Pension (Losses) Gains Adjustment Liability on Derivatives Total Beginning balance, gross $ (125,133) $ (302) $ 1,335 $ (124,100) Tax asset — 58 (354) (296) Beginning balance, net of tax (125,133) (244) 981 (124,396) Other comprehensive income (loss) before reclassifications 11,849 577 (11,047) 1,379 Amounts reclassified from accumulated other comprehensive income (loss) — (208) 171 (37) Tax effects — (63) 2,882 2,819 Net current-period other comprehensive income (loss) 11,849 306 (7,994) 4,161 Total $ (113,284) $ 62 $ (7,013) $ (120,235) 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, 2019: Currency Unrealized Translation Pension (Losses) Gains Adjustment Liability on Derivatives Total Beginning balance, gross $ (146,726) $ (4,070) $ 3,025 $ (147,771) Tax asset — 1,573 (801) 772 Beginning balance, net of tax (146,726) (2,497) 2,224 (146,999) Other comprehensive income (loss) before reclassifications 21,593 3,408 (1,002) 23,999 Amounts reclassified from accumulated other comprehensive income (loss) — 360 (689) (329) Tax effects — (918) 448 (470) Net current-period other comprehensive income (loss) 21,593 2,850 (1,243) 23,200 Reclassification of stranded tax effects — (597) — (597) Total $ (125,133) $ (244) $ 981 $ (124,396) The reclassifications out of AOCI and the location on the consolidated statements of income for the years ended December 31, 2020 and 2019 are as follows: 2020 2019 Affected Line Item Amortization of defined benefit pension items: $ 208 $ (360) Various line items individually insignificant 208 Income before taxes (36) 88 Income tax effects $ 172 $ (272) Net of tax Unrealized losses on derivatives: $ (171) $ 689 Interest expense to third parties (171) 689 Income before taxes 46 (182) Income tax effects $ (125) $ 507 Net of tax |
RECEIVABLES
RECEIVABLES | 12 Months Ended |
Dec. 31, 2020 | |
RECEIVABLES | |
RECEIVABLES | NOTE 4: RECEIVABLES A summary of receivables included in the consolidated balance sheets as of December 31, 2020 and 2019 is as follows: 2020 2019 Retail $ 833,864 $ 656,518 Wholesale 639,934 813,454 Finance lease 156,161 79,848 Restricted receivables 7,402,988 8,358,205 Gross receivables 9,032,947 9,908,025 Less: Allowance for credit losses (136,136) (72,751) Total receivables, net $ 8,896,811 $ 9,835,274 The Company provides and administers financing for retail purchases of new and used equipment sold through CNH Industrial North America’s dealer network. The terms of retail and other notes and finance leases generally range from two to six years, and interest rates vary depending on prevailing market interest rates and certain incentive programs offered by CNH Industrial North America. Wholesale receivables arise primarily from the financing of the sale of goods to dealers and distributors by CNH Industrial North America, 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 months, with repayment accelerated upon the sale of the underlying equipment by the dealer. During the interest‑free period, the Company is compensated by CNH Industrial North America based on market interest rates. After the expiration of any interest‑free period, interest is charged to dealers on outstanding balances until the Company receives payment in full. The interest‑free periods are determined based on the type of equipment sold and the time of year of the sale. Interest rates are set based on market factors and the prime rate or LIBOR. The Company evaluates and assesses dealers on an ongoing basis as to their creditworthiness. CNH Industrial North America may be obligated to repurchase the dealer’s equipment upon cancellation or termination of the dealer’s contract for such causes as change in ownership, closeout of the business, or default. There were no significant losses in 2020, 2019 or 2018 relating to the termination of dealer contracts. Wholesale factoring receivables represent short-term receivables purchased from Iveco Argentina. Maturities of receivables as of December 31, 2020, are as follows: 2021 $ 4,598,478 2022 1,481,983 2023 1,220,178 2024 890,717 2025 and thereafter 705,455 Total receivables $ 8,896,811 It has been the Company’s experience that substantial portions of retail 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, finance lease and wholesale receivables have significant concentrations of credit risk in the agricultural and construction business sectors. Short-term receivables purchased from Iveco Argentina have significant concentrations of credit risk in the agricultural and commercial vehicles business sectors in Argentina. On a geographic basis, there is not a disproportionate concentration of credit risk in any area of the United States, Canada or Argentina. The Company typically retains, as collateral, a security interest in the equipment associated with retail notes and wholesale receivables. Restricted Receivables and Securitization As part of its overall funding strategy, the Company periodically transfers certain receivables into VIEs that are 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 of the receivables that are directly or indirectly sold or transferred in any of these transactions are available to pay the Company’s creditors until all obligations of the SPE have been fulfilled or the receivables are removed from the SPE. 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, 2020 and 2019: 2020 2019 Retail $ 5,280,423 $ 5,531,885 Wholesale 2,122,565 2,826,320 Total restricted receivables $ 7,402,988 $ 8,358,205 Retail Receivables Securitizations Within the U.S. retail receivables securitization programs, qualifying retail receivables are sold to bankruptcy‑remote SPEs. In turn, these SPEs either establish separate trusts to which the receivables are transferred 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, the receivables are transferred directly to the trusts. These trusts were determined to be VIEs. In its role as servicer, the Company has the power to direct the trusts’ activities. Through its retained interests, the Company has an obligation to absorb certain losses, or the right to receive certain benefits, that could potentially be significant to the trusts. Consequently, the Company has consolidated these retail trusts. During the years ended December 31, 2020 and 2019, the Company executed $1,120,065 and $2,800,356, 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 receivable contracts originated through CNH Industrial North America’s dealer network. As of December 31, 2020 and 2019, $4,012,398 and $5,173,413, respectively, of asset‑backed securities issued to investors were outstanding with weighted average remaining maturities of 30 months and 33 months, respectively. 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. The Company also has $1,592,471 in committed asset‑backed facilities through which it may sell on a monthly basis retail receivables 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 2022 and December 2022, 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, 2020, debt issued through the U.S. master trust facility consists of two short-term series: $700,000 and $300,000. The Canadian master trust facility consists of a C$585,750 ($459,780) facility renewable December 2022 at the discretion of the investor. These trusts were determined to be VIEs. In its role as servicer, CNH Industrial 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 Industrial 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 segments: retail, wholesale and wholesale factoring. A portfolio segment is the level at which the Company develops a systematic methodology for determining its allowance for credit losses. The retail segment includes retail notes and finance lease receivables. The wholesale segment includes wholesale financing to CNH Industrial North America dealers and the wholesale factoring segment represents the short-term receivables purchased from Iveco Argentina. Further, the Company evaluates its retail and wholesale portfolio segments by class of receivable: United States and Canada. Typically, the Company’s receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. These classes align with management reporting. Allowance for credit losses activity for the year ended December 31, 2020 is as follows: Retail Wholesale Total Allowance for credit losses: Beginning balance, as previously reported $ 64,750 $ 8,001 $ 72,751 Adoption of ASC 326 25,877 — 25,877 Beginning balance, as recast $ 90,627 $ 8,001 $ 98,628 Charge-offs (23,147) (1,530) (24,677) Recoveries 2,481 10 2,491 Provision 56,252 2,792 59,044 Foreign currency translation and other 638 12 650 Ending balance $ 126,851 $ 9,285 $ 136,136 Receivables: Ending balance $ 6,270,448 $ 2,762,499 $ 9,032,947 At December 31, 2020, the allowance for credit losses includes a build of reserves primarily due to the expectation of deteriorating credit conditions related to the COVID‑19 pandemic and the adoption of ASC 326. The Company continues to monitor the situation and will update the macroeconomic factors and qualitative factors in future periods, as warranted. Allowance for credit losses activity for the year ended December 31, 2019 is as follows: Retail Wholesale Total Allowance for credit losses: Beginning balance $ 66,944 $ 7,468 $ 74,412 Charge-offs (35,535) (5,102) (40,637) Recoveries 3,046 16 3,062 Provision 30,115 5,588 35,703 Foreign currency translation and other 180 31 211 Ending balance $ 64,750 $ 8,001 $ 72,751 Receivables: Ending balance $ 6,268,251 $ 3,639,774 $ 9,908,025 Allowance for credit losses activity for the year ended December 31, 2018 is as follows: Retail Wholesale Total Allowance for credit losses: Beginning balance $ 73,610 $ 5,586 $ 79,196 Charge-offs (39,375) (1,567) (40,942) Recoveries 4,702 71 4,773 Provision 28,277 3,422 31,699 Foreign currency translation and other (270) (44) (314) Ending balance $ 66,944 $ 7,468 $ 74,412 Receivables: Ending balance $ 6,441,054 $ 3,584,284 $ 10,025,338 The Company assesses and monitors the credit quality of its receivables based on past due information. 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 retail receivables are greater than one year, the past due information is presented by year of origination. The aging of receivables as of December 31, 2020 is as follows: Greater 31 – 60 Days 61 – 90 Days Than Total Total Past Due Past Due 90 Days Past Due Current Receivables Retail United States 2020 $ 3,334 $ 569 $ 3,317 $ 7,220 $ 2,076,477 $ 2,083,697 2019 7,912 1,201 4,243 13,356 1,264,842 1,278,198 2018 5,742 1,261 5,385 12,388 849,397 861,785 2017 3,841 461 2,655 6,957 454,256 461,213 2016 1,699 220 2,894 4,813 223,024 227,837 2015 781 173 2,091 3,045 53,981 57,026 Prior to 2015 256 47 2,874 3,177 15,459 18,636 Total $ 23,565 $ 3,932 $ 23,459 $ 50,956 $ 4,937,436 $ 4,988,392 Canada 2020 $ 1,613 $ 30 $ 707 $ 2,350 $ 588,691 $ 591,041 2019 1,772 249 3,292 5,313 327,716 333,029 2018 1,254 218 1,508 2,980 197,895 200,875 2017 535 474 970 1,979 96,215 98,194 2016 265 127 1,209 1,601 43,480 45,081 2015 91 6 560 657 11,512 12,169 Prior to 2015 126 11 48 185 1,482 1,667 Total $ 5,656 $ 1,115 $ 8,294 $ 15,065 $ 1,266,991 $ 1,282,056 Wholesale United States $ 18 $ — $ 458 $ 476 $ 2,206,690 $ 2,207,166 Canada $ 6 $ — $ — $ 6 $ 555,327 $ 555,333 Total Retail $ 29,221 $ 5,047 $ 31,753 $ 66,021 $ 6,204,427 $ 6,270,448 Wholesale $ 24 $ — $ 458 $ 482 $ 2,762,017 $ 2,762,499 The above aging table is not necessarily reflective of the potential credit risk in the portfolio due to payment schedules changes granted by the Company and government stimulus policies benefiting CNH Industrial North America dealers or the Company’s end-use customers. The aging of receivables as of December 31, 2019 is as follows: Recorded Investment Greater > 90 Days 31 – 60 Days 61 – 90 Days Than Total Total and Past Due Past Due 90 Days Past Due Current Receivables Accruing Retail United States $ 19,781 $ 5,896 $ 29,192 $ 54,869 $ 5,001,400 $ 5,056,269 $ 7,356 Canada $ 4,470 $ 1,063 $ 4,703 $ 10,236 $ 1,201,746 $ 1,211,982 $ 1,167 Wholesale United States $ 2,081 $ 42 $ 551 $ 2,674 $ 2,887,599 $ 2,890,273 $ 189 Canada $ 57 $ 370 $ 571 $ 998 $ 748,503 $ 749,501 $ 4 Total Retail $ 24,251 $ 6,959 $ 33,895 $ 65,105 $ 6,203,146 $ 6,268,251 $ 8,523 Wholesale $ 2,138 $ 412 $ 1,122 $ 3,672 $ 3,636,102 $ 3,639,774 $ 193 Included in the receivables balance at December 31, 2020 is accrued interest of $52,595. 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 delinquent, whichever occurs first. Accrued interest is charged-off to interest income. Interest income charged-off was not material for the year ended December 31, 2020. Interest accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at that time. The receivables on nonaccrual status as of December 31, 2020 and 2019 are as follows: 2020 2019 Retail Wholesale Total Retail Wholesale Total United States $ $ $ $ $ $ Canada $ 8,597 $ — $ 8,597 $ 3,749 $ — $ 3,749 As of December 31, 2020 and 2019, 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, 2020 and 2019 was immaterial. Troubled Debt Restructurings A restructuring of a receivable constitutes a troubled debt restructuring (“TDR”) when the lender grants a concession it would not otherwise consider to a borrower 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 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. The allowance for credit losses attributable to TDRs is based on the most probable source of repayment, which is normally the liquidation of the collateral. In determining collateral value, the Company estimates the current fair market value of the equipment collateral and considers credit enhancements such as additional collateral and third‑party guarantees. Before removing a receivable from TDR classification, a review of the borrower is conducted. If concerns exist about the future ability of the borrower to meet its obligations based on a credit review, the TDR classification is not removed from the receivable. As of December 31, 2020, the Company had 253 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre‑modification value of these contracts was $8,690 and the post‑modification value was $7,841. Additionally, the Company had 362 accounts with a balance of $25,635 undergoing bankruptcy proceedings where a concession has not yet been determined. As of December 31, 2019, the Company had 279 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre‑modification value of these contracts was $10,049 and the post‑modification value was $9,110. Additionally, the Company had 323 accounts with a balance of $14,850 undergoing bankruptcy proceedings where a concession has not yet been determined. As the outcome of the bankruptcy cases is determined by the court based on available assets, subsequent re‑defaults are unusual and were not material for retail and finance lease contracts that were modified in a TDR during the previous 12 months ended December 31, 2020 and 2019. As of December 31, 2020 and 2019, the Company’s wholesale TDRs were immaterial. |
EQUIPMENT ON OPERATING LEASES
EQUIPMENT ON OPERATING LEASES | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019 is as follows: 2020 2019 Equipment on operating leases $ 2,261,703 $ 2,109,682 Accumulated depreciation (402,519) (326,399) Total equipment on operating leases, net $ 1,859,184 $ 1,783,283 Depreciation expense totaled $237,405, $229,652 and $231,805 for the years ended December 31, 2020, 2019 and 2018, respectively. Lease payments owed to the Company for equipment under non‑cancelable operating leases (excluding deferred operating lease subsidy of $116,815) as of December 31, 2020 are as follows: 2021 $ 235,958 2022 152,480 2023 74,203 2024 25,161 2025 and thereafter 7,412 Total lease payments $ 495,214 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019 are as follows: 2020 2019 Balance, beginning of year $ 109,629 $ 108,399 Foreign currency translation adjustment 529 1,230 Balance, end of year $ 110,158 $ 109,629 Goodwill is tested for impairment at least annually. During 2020, 2019 and 2018, 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, 2020 and 2019, the Company’s intangible asset and related accumulated amortization for its software is as follows: 2020 2019 Software $ 37,127 $ 34,427 Accumulated amortization (23,794) (22,232) Total software, net $ 13,333 $ 12,195 The Company recorded amortization expense of $1,562, $1,790 and $2,114 during 2020, 2019 and 2018, 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: $1,684 in 2021; $1,409 in 2022; $1,223 in 2023; $1,100 in 2024; and $969 in 2025. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
OTHER ASSETS | |
OTHER ASSETS | NOTE 7: OTHER ASSETS The components of other assets as of December 31, 2020 and 2019 are as follows: 2020 2019 Derivative assets $ 59,063 $ 39,172 Deferred tax assets 15,239 12,820 Other current assets 27,505 22,945 Total other assets $ 101,807 $ 74,937 |
CREDIT FACILITIES AND DEBT
CREDIT FACILITIES AND DEBT | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020: 2020 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 2022 $ 1,200,000 $ — $ 254,974 $ 944,654 $ 372 Retail - Canada Dec 2022 392,471 — 61,353 300,499 30,619 Wholesale VFN - U.S. Various 1,000,000 1,000,000 — — — Wholesale VFN - Canada Dec 2022 459,780 314,322 — — 145,458 3,052,251 1,314,322 316,327 1,245,153 176,449 Secured Debt Amortizing retail term ABS - N.A. Various 3,414,546 — 1,386,783 2,027,763 — Other ABS financing - N.A. Various 597,852 — 209,376 388,476 — Unamortized issuance costs (9,920) — — (9,920) — 4,002,478 — 1,596,159 2,406,319 — Unsecured Credit Lines and Facilities Credit lines Various — — — — — Revolving credit facilities Various 776,771 — 102,042 78,494 596,235 Unamortized issuance costs (1,217) — — (1,217) — 775,554 — 102,042 77,277 596,235 Unsecured Debt Commercial paper Various — — — — — Notes Various 3,000,000 — 900,000 2,100,000 — Hedging effects, discounts and unamortized issuance costs 41,689 — 578 41,111 — 3,041,689 — 900,578 2,141,111 — Total credit facilities and debt $ 10,871,972 $ 1,314,322 $ 2,915,106 $ 5,869,860 $ 772,684 (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, 2020, for 2022 and thereafter is as follows: 2022 $ 2,228,412 2023 1,612,390 2024 1,195,641 2025 253,284 2026 and thereafter 580,133 Total $ 5,869,860 The following table summarizes the Company’s credit facilities, borrowings thereunder and availability at December 31, 2019: 2019 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 2021 $ 1,200,000 $ — $ 47,658 $ 210,928 $ 941,414 Retail - Canada Dec 2021 384,779 — 39,212 196,262 149,305 Wholesale VFN - U.S. Various 970,000 970,000 — — — Wholesale VFN - Canada Dec 2021 450,768 440,933 — — 9,835 3,005,547 1,410,933 86,870 407,190 1,100,554 Secured Debt Amortizing retail term ABS - N.A. Various 4,879,718 — 1,776,413 3,103,305 — Other ABS financing - N.A. Various 293,695 — 33,200 260,495 — Unamortized issuance costs (15,504) — — (15,504) — 5,157,909 — 1,809,613 3,348,296 — Unsecured Credit Lines and Facilities Credit lines Various 150,000 150,000 — — — Revolving credit facilities Various 846,344 — 346,301 100,043 400,000 Unamortized issuance costs (1,591) — — (1,591) — 994,753 150,000 346,301 98,452 400,000 Unsecured Debt Commercial paper Various 389,300 389,300 — — — Notes Various 2,500,000 — 600,000 1,900,000 — Hedging effects, discounts and unamortized issuance costs 22,798 (2,282) (563) 25,643 — 2,912,098 387,018 599,437 1,925,643 — Total credit facilities and debt $ 12,070,307 $ 1,947,951 $ 2,842,221 $ 5,779,581 $ 1,500,554 (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 receivables 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 $1,592,471. 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 LIBOR plus an applicable margin or fixed rates. Unsecured Credit Line, Facilities and Debt Committed unsecured facilities with banks as of December 31, 2020 totaled $776,771. 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, 2020, the Company had $180,536 outstanding under these credit facilities. The remaining available credit commitments are maintained primarily to provide backup liquidity for commercial paper borrowings, as needed. There was no outstanding commercial paper as of December 31, 2020. As of December 31, 2020, the Company’s outstanding unsecured senior notes were as follows: 4.875% notes, due 2021 $ 500,000 3.875% notes, due 2021 400,000 4.375% notes, due 2022 500,000 1.950% notes, due 2023 600,000 4.200% notes, due 2024 500,000 1.875% notes, due 2026 500,000 Hedging, discounts and unamortized issuance costs 41,689 Total $ 3,041,689 These notes, which are senior unsecured obligations of CNH Industrial Capital LLC, are guaranteed by CNH Industrial Capital America and New Holland Credit. On November 6, 2020, the Company repaid $600,000 of its 4.375% unsecured notes due 2020. 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 Interest Rates The weighted‑average interest rate on total short‑term debt outstanding at December 31, 2020 and 2019 was 1.1% and 2.4%, respectively. The weighted‑average interest rate on total long‑term debt (including current maturities of long‑term debt) at December 31, 2020 and 2019 was 2.5% and 3.1%, respectively. The average rate is calculated using the actual rates at December 31, 2020 and 2019, weighted by the amount of outstanding borrowings of each debt instrument. Support Agreement Effective as of September 29, 2013, in connection with the merger of CNH Global N.V., the former indirect parent of CNH Industrial 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, 2020 | |
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 new parent of Case New Holland Inc., who remains the parent of CNH Industrial 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 tax accounts have been disclosed and the income tax expense is reflective for all of the companies included in the consolidated financial statements. The sources of income before taxes for the years ended December 31, 2020, 2019, and 2018 are as follows, with foreign defined as any income earned outside the United States: 2020 2019 2018 Domestic $ 141,167 $ 134,971 $ 120,375 Foreign 45,625 58,243 77,942 Income before taxes $ 186,792 $ 193,214 $ 198,317 The provision for income taxes for the years ended December 31, 2020, 2019 and 2018 is as follows: 2020 2019 2018 Current income tax expense (benefit): Domestic $ 45,371 $ (4,445) $ (11,719) Foreign 10,518 10,235 24,937 Total current income tax expense 55,889 5,790 13,218 Deferred income tax expense (benefit): Domestic (12,992) 35,125 34,304 Foreign 615 3,296 (6,050) Total deferred income tax expense (12,377) 38,421 28,254 Total tax provision $ 43,512 $ 44,211 $ 41,472 A reconciliation of CNH’s statutory and effective income tax rate for the years ended December 31, 2020, 2019, and 2018 is as follows: 2020 2019 2018 Tax provision at statutory rate 21.0 % 21.0 % 21.0 % State taxes 4.6 4.4 1.8 Foreign taxes (1.4) (1.8) (3.4) Tax contingencies 0.1 0.1 2.5 Withholding taxes and credits — — 1.5 Tax credits and incentives (0.5) (0.7) (0.9) Tax rate and legislative changes — — (1.4) Other (0.5) (0.1) (0.2) Total tax provision effective rate 23.3 % 22.9 % 20.9 % The components of the Company’s net deferred tax liability as of December 31, 2020 and 2019 are as follows: 2020 2019 Deferred tax assets: Pension, postretirement and post-employment benefits $ 2,129 $ 1,964 Marketing and sales incentive programs 50,590 56,569 Allowance for credit losses 32,492 17,242 Other accrued liabilities 26,070 14,501 Tax loss and tax credit carry forwards 1,077 10,693 Total deferred tax assets $ 112,358 $ 100,969 Deferred tax liability: Equipment on operating lease $ 355,020 $ 374,386 Deferred tax liability, net (1) $ (242,662) $ (273,417) (1) In the accompanying consolidated balance sheets, the US net deferred tax position in 2020 and 2019 is included in “Accounts payable and other accrued liabilities” while the Canadian net deferred tax position in 2020 and 2019 is included in “Other assets”. 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. A reconciliation of the gross amounts of tax contingencies at the beginning and end of the year is as follows: 2020 2019 2018 Balance, beginning of year $ 4,274 $ 4,274 $ — Additions based on tax positions related to the current year — — 4,274 Reductions for tax positions of prior years — — — Settlements — — — Balance, end of year $ 4,274 $ 4,274 $ 4,274 The total amount of unrecognized tax benefits that, if recognized, would affect the annual effective income tax rate is $4,274. The Company recognizes interest and penalties accrued related to tax contingencies in income tax expense. During the years ended December 31, 2020, 2019 and 2018, the Company recognized approximately $214, $280 and $686, respectively, in interest and penalties. The Company had approximately $1,180, $966 and $686 for the expected future payment of interest and penalties accrued at December 31, 2020, 2019 and 2018, respectively. The Company has open tax years from 2012 to 2019. 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, 2020, 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, 2020 | |
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 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model‑derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. 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, 2020, 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 48 months. As of December 31, 2020, the after‑tax losses deferred in accumulated other comprehensive income (loss) that will be recognized in interest expense over the next 12 months are approximately $549. 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, 2020, 2019 and 2018. 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 $4,369,574 and $3,004,709 at December 31, 2020 and 2019, respectively. The thirteen‑month average notional amounts as of December 31, 2020 and 2019 were $3,305,539 and $2,967,321, 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” 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, 2020 and 2019 in the consolidated balance sheets are recorded as follows: 2020 2019 Derivatives Designated as Hedging Instruments Other assets: Interest rate derivatives $ 58,008 $ 38,732 Accounts payable and other accrued liabilities: Interest rate derivatives $ 4,882 $ 1,243 Derivatives Not Designated as Hedging Instruments Other assets: Interest rate derivatives $ 1,053 $ 440 Foreign exchange contracts 2 — Total $ 1,055 $ 440 Accounts payable and other accrued liabilities: Interest rate derivatives $ 1,053 $ 440 Foreign exchange contracts 3,815 800 Total $ 4,868 $ 1,240 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, 2020, 2019 and 2018 are recorded in the following accounts: 2020 2019 2018 Cash Flow Hedges Recognized in accumulated other comprehensive income (loss): Interest rate derivatives $ $ (1,002) $ 726 Reclassified from accumulated other comprehensive income (loss): Interest rate derivatives—Interest expense to third parties (171) 689 34 Not Designated as Hedges Foreign exchange contracts—Other expenses $ 1,946 $ 3,098 $ (12,355) 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, 2020 and 2019, all of which are measured as Level 2: 2020 2019 Assets Interest rate derivatives $ 59,061 $ 39,172 Foreign exchange contracts 2 — Total assets $ 59,063 $ 39,172 Liabilities Interest rate derivatives $ 5,935 $ 1,683 Foreign exchange contracts 3,815 800 Total liabilities $ 9,750 $ 2,483 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. Certain equipment held for sale measured at fair value on a nonrecurring basis was $109,088 as of December 31, 2019. 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. For the years ended December 31, 2019 and 2018, the Company recorded impairment losses on equipment held for sale of $2,010 and $2,894, respectively. In addition, the Company recorded net losses on the sale of the equipment held of $10,169, $14,504 and $11,018 for the years ended December 31, 2020, 2019 and 2018, respectively. Both the impairment losses and the losses on the sale of equipment held were included in “Other expenses” in the accompanying consolidated statements of income. Fair Value of Other Financial Instruments The carrying amount of cash and cash equivalents, 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 cash equivalents 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, 2020 and 2019 are as follows: 2020 2019 Carrying Estimated Carrying Estimated Amount Fair Value * Amount Fair Value * Receivables $ 8,896,811 $ 8,987,830 $ 9,835,274 $ 9,870,076 Long-term debt $ 5,869,860 $ 5,992,745 $ 5,779,581 $ 5,830,157 * 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, 2020 | |
GEOGRAPHICAL INFORMATION | |
GEOGRAPHICAL INFORMATION | NOTE 11: GEOGRAPHICAL INFORMATION A summary of the Company’s geographical information is as follows: 2020 2019 2018 Revenues United States $ 682,413 $ 725,529 $ 693,191 Canada 166,802 184,279 192,645 Eliminations (4,808) (8,919) (7,482) Total $ 844,407 $ 900,889 $ 878,354 Interest expense United States $ 234,723 $ 290,861 $ 276,956 Canada 50,043 65,331 55,806 Eliminations (4,808) (8,919) (7,482) Total $ 279,958 $ 347,273 $ 325,280 Net income United States $ 108,788 $ 104,291 $ 97,790 Canada 34,492 44,712 59,055 Total $ 143,280 $ 149,003 $ 156,845 Depreciation and amortization United States $ 193,932 $ 187,964 $ 191,347 Canada 45,042 43,479 42,579 Total $ 238,974 $ 231,443 $ 233,926 Expenditures for equipment on operating leases United States $ 466,288 $ 575,269 $ 533,706 Canada 132,099 140,417 146,560 Total $ 598,387 $ 715,686 $ 680,266 Provision for credit losses United States $ 45,080 $ 32,201 $ 28,932 Canada 13,964 3,502 2,767 Total $ 59,044 $ 35,703 $ 31,699 Total assets United States $ 10,186,808 $ 10,439,737 $ 10,482,805 Canada 2,442,180 2,566,635 2,511,839 Eliminations (177,819) (152,285) (62,732) Total $ 12,451,169 $ 12,854,087 $ 12,931,912 Managed receivables United States $ 7,195,558 $ 7,946,542 $ 8,080,756 Canada 1,837,389 1,961,483 1,944,582 Total $ 9,032,947 $ 9,908,025 $ 10,025,338 |
RELATED - PARTY TRANSACTIONS
RELATED - PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | NOTE 12: RELATED‑PARTY TRANSACTIONS The Company receives compensation from CNH Industrial North America for retail, wholesale and operating lease sales programs offered by CNH Industrial North America on which finance charges are waived or below market rate financing programs are offered. The Company receives compensation from CNH Industrial 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 Industrial North America. In addition, the Company receives income from Iveco Argentina for wholesale factoring receivables purchased at a discount. The summary of sources included in “Interest and other income from affiliates” in the accompanying consolidated statements of income at December 31, 2020, 2019, and 2018 is as follows: 2020 2019 2018 Subsidy from CNH Industrial North America Retail $ 153,990 $ 160,361 $ 149,363 Wholesale 108,479 122,582 123,615 Operating lease 61,328 60,221 60,841 Income from Iveco Argentina Wholesale factoring — 2,187 10,881 Income from affiliated receivables CNH Industrial North America 474 — 1,096 Other affiliates 153 438 137 Total interest and other income from affiliates $ 324,424 $ 345,789 $ 345,933 Interest expense to affiliates was $3,568, $14,126 and $7,533, respectively, for the years ended December 31, 2020, 2019 and 2018. Fees charged by affiliates were $45,905 and $46,601 and $47,475 for the years ended December 31, 2020, 2019 and 2018, respectively, and represents payroll and other human resource services CNH Industrial America performs on behalf of the Company. As of December 31, 2020 and 2019, the Company had various accounts and notes receivable and debt with the following affiliates: 2020 2019 Affiliated receivables CNH Industrial America — $ 391,445 — $ 24,832 CNH Industrial Canada Ltd. — 10,906 — 26,931 Other affiliates — 12,459 — 12,544 Total affiliated receivables $ 414,810 $ 64,307 Affiliated debt CNH Industrial America — — $ — $ 213,856 CNH Industrial Canada Ltd. 187,310 — — — Total affiliated debt $ 187,310 $ 213,856 Accounts payable and other accrued liabilities, including tax payables, of $31,795 and $20,527, respectively, as of December 31, 2020 and 2019, were payable to related parties. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
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 $45,000. The guarantees are in effect for the term of the underlying funding facilities. Commitments The Company has various agreements, on an uncommitted basis, to extend credit for the wholesale and dealer financing managed portfolio. At December 31, 2020, the total credit limit available was $6,137,680, of which $2,650,654 was utilized. |
SUPPLEMENTAL CONDENSED CONSOLID
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION | NOTE 14: SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION CNH Industrial Capital America and New Holland Credit (the “Guarantor Entities”), which are 100%‑owned subsidiaries of CNH Industrial Capital LLC, guarantee certain indebtedness of CNH Industrial Capital LLC. As the guarantees are full, unconditional, and joint and several and because the Guarantor Entities are 100%‑owned by CNH Industrial Capital LLC, the Company has included the following condensed consolidating financial information as of December 31, 2020 and 2019 and for the three years ended December 31, 2020. The condensed consolidating financial information reflects investments in consolidated subsidiaries under the equity method of accounting. Condensed Statements of Comprehensive Income for the Year Ended December 31, 2020 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated REVENUES Interest income on retail notes and finance leases $ — $ 4,335 $ 178,894 $ — $ 183,229 Interest income on wholesale notes — (382) 53,491 — 53,109 Interest and other income from affiliates 19,081 181,309 270,239 (146,205) 324,424 Rental income on operating leases — 199,877 56,001 — 255,878 Other income — 86,234 1,945 (60,412) 27,767 Total revenues 19,081 471,373 560,570 (206,617) 844,407 EXPENSES Interest expense: Interest expense to third parties 148,547 (24,813) 152,656 — 276,390 Interest expense to affiliates — 125,372 24,401 (146,205) 3,568 Total interest expense 148,547 100,559 177,057 (146,205) 279,958 Administrative and operating expenses: Fees charged by affiliates — 37,685 68,632 (60,412) 45,905 Provision for credit losses — 12,164 46,880 — 59,044 Depreciation of equipment on operating leases — 192,364 45,041 — 237,405 Other expenses 24 31,760 3,519 — 35,303 Total administrative and operating expenses 24 273,973 164,072 (60,412) 377,657 Total expenses 148,571 374,532 341,129 (206,617) 657,615 Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method (129,490) 96,841 219,441 — 186,792 Income tax provision (benefit) (31,617) 24,920 50,209 — 43,512 Equity in income of consolidated subsidiaries accounted for under the equity method 241,153 169,232 — (410,385) — NET INCOME $ 143,280 $ 241,153 $ 169,232 $ (410,385) $ 143,280 COMPREHENSIVE INCOME $ 147,441 $ 245,314 $ 171,360 $ (416,674) $ 147,441 Condensed Balance Sheets as of December 31, 2020 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 158,334 $ 234,595 $ — $ 392,929 Restricted cash and cash equivalents — — 625,622 — 625,622 Receivables, less allowance for credit losses — 1,479,161 7,417,650 — 8,896,811 Affiliated accounts and notes receivable 1,303,046 2,538,254 2,819,819 (6,246,309) 414,810 Equipment on operating leases, net — 1,434,253 424,931 — 1,859,184 Equipment held for sale — 30,183 6,332 — 36,515 Investments in consolidated subsidiaries accounted for under the equity method 3,278,397 2,722,781 — (6,001,178) — Goodwill and intangible assets, net — 94,905 28,586 — 123,491 Other assets 5,621 72,600 26,028 (2,442) 101,807 TOTAL $ 4,587,064 $ 8,530,471 $ 11,583,563 $ (12,249,929) $ 12,451,169 LIABILITIES AND STOCKHOLDER’S EQUITY Liabilities: Short-term debt, including current maturities of long-term debt $ 900,578 $ 209,376 $ 3,119,474 $ — $ 4,229,428 Accounts payable and other accrued liabilities 286,215 3,776,490 1,201,653 (4,359,959) 904,399 Affiliated debt — 877,732 1,198,370 (1,888,792) 187,310 Long-term debt 2,140,099 388,476 3,341,285 — 5,869,860 Total liabilities 3,326,892 5,252,074 8,860,782 (6,248,751) 11,190,997 Stockholder’s equity 1,260,172 3,278,397 2,722,781 (6,001,178) 1,260,172 TOTAL $ 4,587,064 $ 8,530,471 $ 11,583,563 $ (12,249,929) $ 12,451,169 Condensed Statements of Cash Flows for the Year Ended December 31, 2020 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash from (used in) operating activities $ 149,830 $ 278,271 $ (87,793) $ (223,190) $ 117,118 CASH FLOWS FROM INVESTING ACTIVITIES: Cost of receivables acquired — (8,598,229) (8,439,636) 6,565,835 (10,472,030) Collections of receivables — 8,620,803 9,333,285 (6,566,948) 11,387,140 Purchase of equipment on operating leases, net — (81,410) (73,065) — (154,475) Change in property and equipment and software, net — (2,700) — — (2,700) Net cash from (used in) investing activities — (61,536) 820,584 (1,113) 757,935 CASH FLOWS FROM FINANCING ACTIVITIES: Intercompany activity — (483,757) 229,237 224,303 (30,217) Net change in indebtedness (19,830) 304,156 (784,855) — (500,529) Dividends paid to CNH Industrial America LLC (130,000) — — — (130,000) Net cash from (used in) financing activities (149,830) (179,601) (555,618) 224,303 (660,746) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — 37,134 177,173 — 214,307 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Beginning of year — 121,200 683,044 — 804,244 End of year $ — $ 158,334 $ 860,217 $ — $ 1,018,551 Condensed Statements of Comprehensive Income for the Year Ended December 31, 2019 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated REVENUES Interest income on retail notes and finance leases $ — $ 15,630 $ 202,824 $ — $ 218,454 Interest income on wholesale notes — (1,051) 68,824 — 67,773 Interest and other income from affiliates 50,877 204,027 202,931 (112,046) 345,789 Rental income on operating leases — 189,019 54,025 — 243,044 Other income — 89,768 2,331 (66,270) 25,829 Total revenues 50,877 497,393 530,935 (178,316) 900,889 EXPENSES Interest expense: Interest expense to third parties 163,358 (28,393) 198,182 — 333,147 Interest expense to affiliates — 82,408 43,764 (112,046) 14,126 Total interest expense 163,358 54,015 241,946 (112,046) 347,273 Administrative and operating expenses: Fees charged by affiliates — 44,700 68,171 (66,270) 46,601 Provision for credit losses — 14,492 21,211 — 35,703 Depreciation of equipment on operating leases — 186,174 43,478 — 229,652 Other expenses 24 35,678 12,744 — 48,446 Total administrative and operating expenses 24 281,044 145,604 (66,270) 360,402 Total expenses 163,382 335,059 387,550 (178,316) 707,675 Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method (112,505) 162,334 143,385 — 193,214 Income tax provision (benefit) (27,470) 38,305 33,376 — 44,211 Equity in income of consolidated subsidiaries accounted for under the equity method 234,038 110,009 — (344,047) — NET INCOME $ 149,003 $ 234,038 $ 110,009 $ (344,047) $ 149,003 COMPREHENSIVE INCOME $ 172,203 $ 257,238 $ 126,963 $ (384,201) $ 172,203 Condensed Balance Sheets as of December 31, 2019 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 121,200 $ 53,766 $ — $ 174,966 Restricted cash and cash equivalents — — 629,278 — 629,278 Receivables, less allowance for credit losses — 1,512,786 8,322,488 — 9,835,274 Affiliated accounts and notes receivable 1,549,666 2,257,928 2,553,665 (6,296,952) 64,307 Equipment on operating leases, net — 1,394,706 388,577 — 1,783,283 Equipment held for sale — 154,050 16,168 — 170,218 Investments in consolidated subsidiaries accounted for under the equity method 3,053,394 2,565,785 — (5,619,179) — Goodwill and intangible assets, net — 93,767 28,057 — 121,824 Other assets 4,236 58,048 16,209 (3,556) 74,937 TOTAL $ 4,607,296 $ 8,158,270 $ 12,008,208 $ (11,919,687) $ 12,854,087 LIABILITIES AND STOCKHOLDER’S EQUITY Liabilities: Short-term debt, including current maturities of long-term debt $ 1,136,455 $ 33,200 $ 3,620,517 $ — $ 4,790,172 Accounts payable and other accrued liabilities 283,748 3,449,690 1,261,411 (4,187,412) 807,437 Affiliated debt — 1,361,490 965,462 (2,113,096) 213,856 Long-term debt 1,924,052 260,496 3,595,033 — 5,779,581 Total liabilities 3,344,255 5,104,876 9,442,423 (6,300,508) 11,591,046 Stockholder’s equity 1,263,041 3,053,394 2,565,785 (5,619,179) 1,263,041 TOTAL $ 4,607,296 $ 8,158,270 $ 12,008,208 $ (11,919,687) $ 12,854,087 Condensed Statements of Cash Flows for the Year Ended December 31, 2019 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash from (used in) operating activities $ 679,561 $ 614,888 $ (112,906) $ (698,859) $ 482,684 CASH FLOWS FROM INVESTING ACTIVITIES: Cost of receivables acquired — (9,177,042) (9,593,836) 7,390,451 (11,380,427) Collections of receivables — 9,122,287 9,819,438 (7,390,295) 11,551,430 Purchase of equipment on operating leases, net — (166,891) (47,245) — (214,136) Change in property and equipment and software, net — (3,819) — — (3,819) Net cash from (used in) investing activities — (225,465) 178,357 156 (46,952) CASH FLOWS FROM FINANCING ACTIVITIES: Intercompany activity — (680,436) (80,682) 698,703 (62,415) Net change in indebtedness (414,561) 293,705 16,912 — (103,944) Dividends paid to CNH Industrial America LLC (265,000) — — — (265,000) Net cash from (used in) financing activities (679,561) (386,731) (63,770) 698,703 (431,359) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — 2,692 1,681 — 4,373 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Beginning of year — 118,508 681,363 — 799,871 End of year $ — $ 121,200 $ 683,044 $ — $ 804,244 Condensed Statements of Comprehensive Income for the Year Ended December 31, 2018 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated REVENUES Interest income on retail notes and finance leases $ — $ 9,170 $ 192,099 $ — $ 201,269 Interest income on wholesale notes — (1,030) 67,929 — 66,899 Interest and other income from affiliates 70,880 200,821 297,443 (223,211) 345,933 Rental income on operating leases — 187,089 54,493 — 241,582 Other income — 87,710 2,842 (67,881) 22,671 Total revenues 70,880 483,760 614,806 (291,092) 878,354 EXPENSES Interest expense: Interest expense to third parties 156,839 (8,767) 169,675 — 317,747 Interest expense to affiliates — 199,890 30,854 (223,211) 7,533 Total interest expense 156,839 191,123 200,529 (223,211) 325,280 Administrative and operating expenses: Fees charged by affiliates — 45,545 69,811 (67,881) 47,475 Provision for credit losses — 8,445 23,254 — 31,699 Depreciation of equipment on operating leases — 189,228 42,577 — 231,805 Other expenses 22 18,249 25,507 — 43,778 Total administrative and operating expenses 22 261,467 161,149 (67,881) 354,757 Total expenses 156,861 452,590 361,678 (291,092) 680,037 Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method (85,981) 31,170 253,128 — 198,317 Income tax provision (benefit) (20,995) 11,010 51,457 — 41,472 Equity in income of consolidated subsidiaries accounted for under the equity method 221,831 201,671 — (423,502) — NET INCOME $ 156,845 $ 221,831 $ 201,671 $ (423,502) $ 156,845 COMPREHENSIVE INCOME $ 110,009 $ 174,995 $ 161,250 $ (336,245) $ 110,009 Condensed Statements of Cash Flows for the Year Ended December 31, 2018 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash from (used in) operating activities $ 142,488 $ 488,329 $ 143,064 $ (411,000) $ 362,881 CASH FLOWS FROM INVESTING ACTIVITIES: Cost of receivables acquired — (9,080,473) (9,991,699) 7,269,611 (11,802,561) Collections of receivables — 8,967,965 10,375,251 (7,270,276) 12,072,940 Purchase of equipment on operating leases, net — (146,618) (65,391) — (212,009) Change in property and equipment and software, net — (5,427) — — (5,427) Net cash from (used in) investing activities — (264,553) 318,161 (665) 52,943 CASH FLOWS FROM FINANCING ACTIVITIES: Intercompany activity — (211,322) (128,802) 185,948 (154,176) Net change in indebtedness (12,488) (54,285) (140,562) — (207,335) Dividends paid to CNH Industrial America LLC (130,000) — (225,717) 225,717 (130,000) Net cash from (used in) financing activities (142,488) (265,607) (495,081) 411,665 (491,511) DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — (41,831) (33,856) — (75,687) CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Beginning of year — 160,339 715,219 — 875,558 End of year $ — $ 118,508 $ 681,363 $ — $ 799,871 |
SUPPLEMENTAL QUARTERLY INFORMAT
SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2020 | |
SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) | |
SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) | NOTE 15: SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) For the Year Ended December 31, 2020 First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year Revenues $ 215,817 $ 213,704 $ 209,674 $ 205,212 $ 844,407 Interest expense 78,688 67,974 68,840 64,456 279,958 Administrative and operating expenses 91,624 99,183 90,904 95,946 377,657 Income tax provision 10,428 10,556 11,775 10,753 43,512 Net income $ 35,077 $ 35,991 $ 38,155 $ 34,057 $ 143,280 For the Year Ended December 31, 2019 First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year Revenues $ 222,069 $ 229,112 $ 224,356 $ 225,352 $ 900,889 Interest expense 88,381 85,247 88,779 84,866 347,273 Administrative and operating expenses 82,697 94,183 86,091 97,431 360,402 Income tax provision 11,780 11,898 12,965 7,568 44,211 Net income $ 39,211 $ 37,784 $ 36,521 $ 35,487 $ 149,003 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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. |
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. The COVID-19 pandemic has resulted in uncertainties in the Company's business, which may cause actual results to differ materially from the estimates and assumptions used in preparation of the financial statements including, but not limited to, future cash flows associated with the allowance for credit losses, the determination of end-of-lease market values for equipment on operating leases, goodwill and income taxes. Changes in estimates are recorded in results of operations in the period that the events or circumstances giving rise to such changes occur. |
Revenue Recognition | Revenue Recognition Finance and interest income on retail notes and finance leases and on wholesale notes 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 delinquent, 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. 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. Charge‑offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due are deemed uncollectible. A substantial portion of the Company’s interest income arises from retail sales programs offered by CNH Industrial North America on which finance charges are waived or below-market rate financing programs are offered. When the Company acquires retail installment sales contracts and finance leases subject to below-market interest rates, including waived interest rate financing, the Company receives compensation from CNH Industrial 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 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 Industrial 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 Industrial 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 Industrial North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. The amounts from CNH Industrial 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, and gains and losses from foreign currency transactions are included in net income in the period that they arise. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents are highly liquid investments with an original maturity of three months or less. The carrying value of cash equivalents approximates fair value because of the short maturity of these investments. |
Restricted Cash | Restricted Cash 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. |
Receivables | 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 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 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 | Allowance for Credit Losses Post-Adoption of ASC 326, Financial Instruments – Credit Losses (“ASC 326”) on January 1, 2020 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 receivables include retail and other notes and finance lease products offered for retail purchases of new and used equipment sold through CNH Industrial North America’s dealer network. Wholesale receivables include financing of the sale of goods to dealers and distributors by CNH Industrial North America, and to a lesser extent, the financing of dealer operations. Wholesale factoring receivables represent the short-term receivables purchased from Iveco Argentina S.A. Typically, the Company’s receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. Retail 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 retail 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 GDP and Net Farm Income. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors, such as the potential impact of COVID‑19, 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. Wholesale and retail 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 receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due are deemed uncollectible. Prior to Adoption of ASC 326 on January 1, 2020 The allowance for credit losses was the Company’s estimate of losses on receivables owned by the Company and consisted of two components, and depended on whether the receivable had been individually identified as being impaired. The first component of the allowance for credit losses covered the receivables specifically reviewed by management for which the Company had determined it was probable that it would not collect all the principal and interest payments as per the terms of the contract. Receivables were individually reviewed for impairment based on, among other items, amounts outstanding, days past due and prior collection history. These receivables were subject to impairment measurement at the loan level based either on the fair value of the collateral for collateral dependent receivables or on the present value of expected future cash flows discounted at the receivables’ effective interest rate. The second component of the allowance for credit losses covered all receivables that had not been individually reviewed for impairment. The allowance for these receivables was based on aggregated portfolio evaluations, generally by financial product. The allowance for retail and wholesale credit losses was based on loss forecast models that considered a variety of factors that included, but were not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models were updated on a quarterly basis. In addition, qualitative factors that were not fully captured in the loss forecast models, including industry trends, and macroeconomic factors, were considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors were subjective and required a degree of management judgment. |
Equipment on Operating Leases | Equipment on Operating Leases The Company purchases leases and equipment from CNH Industrial North America 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. |
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 2020 and 2019, 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 five 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, or the derivative is terminated, 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. |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020: Currency Unrealized Translation Pension (Losses) Gains Adjustment Liability on Derivatives Total Beginning balance, gross $ (125,133) $ (302) $ 1,335 $ (124,100) Tax asset — 58 (354) (296) Beginning balance, net of tax (125,133) (244) 981 (124,396) Other comprehensive income (loss) before reclassifications 11,849 577 (11,047) 1,379 Amounts reclassified from accumulated other comprehensive income (loss) — (208) 171 (37) Tax effects — (63) 2,882 2,819 Net current-period other comprehensive income (loss) 11,849 306 (7,994) 4,161 Total $ (113,284) $ 62 $ (7,013) $ (120,235) 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, 2019: Currency Unrealized Translation Pension (Losses) Gains Adjustment Liability on Derivatives Total Beginning balance, gross $ (146,726) $ (4,070) $ 3,025 $ (147,771) Tax asset — 1,573 (801) 772 Beginning balance, net of tax (146,726) (2,497) 2,224 (146,999) Other comprehensive income (loss) before reclassifications 21,593 3,408 (1,002) 23,999 Amounts reclassified from accumulated other comprehensive income (loss) — 360 (689) (329) Tax effects — (918) 448 (470) Net current-period other comprehensive income (loss) 21,593 2,850 (1,243) 23,200 Reclassification of stranded tax effects — (597) — (597) Total $ (125,133) $ (244) $ 981 $ (124,396) |
Schedule of reclassifications out of AOCI and the location on the consolidated statements of income | 2020 2019 Affected Line Item Amortization of defined benefit pension items: $ 208 $ (360) Various line items individually insignificant 208 Income before taxes (36) 88 Income tax effects $ 172 $ (272) Net of tax Unrealized losses on derivatives: $ (171) $ 689 Interest expense to third parties (171) 689 Income before taxes 46 (182) Income tax effects $ (125) $ 507 Net of tax |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
RECEIVABLES | |
Summary of receivables | 2020 2019 Retail $ 833,864 $ 656,518 Wholesale 639,934 813,454 Finance lease 156,161 79,848 Restricted receivables 7,402,988 8,358,205 Gross receivables 9,032,947 9,908,025 Less: Allowance for credit losses (136,136) (72,751) Total receivables, net $ 8,896,811 $ 9,835,274 |
Maturities of receivables as of December 31, 2017, are as follows: | 2021 $ 4,598,478 2022 1,481,983 2023 1,220,178 2024 890,717 2025 and thereafter 705,455 Total receivables $ 8,896,811 |
Summary of restricted receivables | 2020 2019 Retail $ 5,280,423 $ 5,531,885 Wholesale 2,122,565 2,826,320 Total restricted receivables $ 7,402,988 $ 8,358,205 |
Schedule of allowance for credit losses activity | Allowance for credit losses activity for the year ended December 31, 2020 is as follows: Retail Wholesale Total Allowance for credit losses: Beginning balance, as previously reported $ 64,750 $ 8,001 $ 72,751 Adoption of ASC 326 25,877 — 25,877 Beginning balance, as recast $ 90,627 $ 8,001 $ 98,628 Charge-offs (23,147) (1,530) (24,677) Recoveries 2,481 10 2,491 Provision 56,252 2,792 59,044 Foreign currency translation and other 638 12 650 Ending balance $ 126,851 $ 9,285 $ 136,136 Receivables: Ending balance $ 6,270,448 $ 2,762,499 $ 9,032,947 At December 31, 2020, the allowance for credit losses includes a build of reserves primarily due to the expectation of deteriorating credit conditions related to the COVID‑19 pandemic and the adoption of ASC 326. The Company continues to monitor the situation and will update the macroeconomic factors and qualitative factors in future periods, as warranted. Allowance for credit losses activity for the year ended December 31, 2019 is as follows: Retail Wholesale Total Allowance for credit losses: Beginning balance $ 66,944 $ 7,468 $ 74,412 Charge-offs (35,535) (5,102) (40,637) Recoveries 3,046 16 3,062 Provision 30,115 5,588 35,703 Foreign currency translation and other 180 31 211 Ending balance $ 64,750 $ 8,001 $ 72,751 Receivables: Ending balance $ 6,268,251 $ 3,639,774 $ 9,908,025 Allowance for credit losses activity for the year ended December 31, 2018 is as follows: Retail Wholesale Total Allowance for credit losses: Beginning balance $ 73,610 $ 5,586 $ 79,196 Charge-offs (39,375) (1,567) (40,942) Recoveries 4,702 71 4,773 Provision 28,277 3,422 31,699 Foreign currency translation and other (270) (44) (314) Ending balance $ 66,944 $ 7,468 $ 74,412 Receivables: Ending balance $ 6,441,054 $ 3,584,284 $ 10,025,338 |
Schedule of aging of financing receivables | The aging of receivables as of December 31, 2020 is as follows: Greater 31 – 60 Days 61 – 90 Days Than Total Total Past Due Past Due 90 Days Past Due Current Receivables Retail United States 2020 $ 3,334 $ 569 $ 3,317 $ 7,220 $ 2,076,477 $ 2,083,697 2019 7,912 1,201 4,243 13,356 1,264,842 1,278,198 2018 5,742 1,261 5,385 12,388 849,397 861,785 2017 3,841 461 2,655 6,957 454,256 461,213 2016 1,699 220 2,894 4,813 223,024 227,837 2015 781 173 2,091 3,045 53,981 57,026 Prior to 2015 256 47 2,874 3,177 15,459 18,636 Total $ 23,565 $ 3,932 $ 23,459 $ 50,956 $ 4,937,436 $ 4,988,392 Canada 2020 $ 1,613 $ 30 $ 707 $ 2,350 $ 588,691 $ 591,041 2019 1,772 249 3,292 5,313 327,716 333,029 2018 1,254 218 1,508 2,980 197,895 200,875 2017 535 474 970 1,979 96,215 98,194 2016 265 127 1,209 1,601 43,480 45,081 2015 91 6 560 657 11,512 12,169 Prior to 2015 126 11 48 185 1,482 1,667 Total $ 5,656 $ 1,115 $ 8,294 $ 15,065 $ 1,266,991 $ 1,282,056 Wholesale United States $ 18 $ — $ 458 $ 476 $ 2,206,690 $ 2,207,166 Canada $ 6 $ — $ — $ 6 $ 555,327 $ 555,333 Total Retail $ 29,221 $ 5,047 $ 31,753 $ 66,021 $ 6,204,427 $ 6,270,448 Wholesale $ 24 $ — $ 458 $ 482 $ 2,762,017 $ 2,762,499 The above aging table is not necessarily reflective of the potential credit risk in the portfolio due to payment schedules changes granted by the Company and government stimulus policies benefiting CNH Industrial North America dealers or the Company’s end-use customers. The aging of receivables as of December 31, 2019 is as follows: Recorded Investment Greater > 90 Days 31 – 60 Days 61 – 90 Days Than Total Total and Past Due Past Due 90 Days Past Due Current Receivables Accruing Retail United States $ 19,781 $ 5,896 $ 29,192 $ 54,869 $ 5,001,400 $ 5,056,269 $ 7,356 Canada $ 4,470 $ 1,063 $ 4,703 $ 10,236 $ 1,201,746 $ 1,211,982 $ 1,167 Wholesale United States $ 2,081 $ 42 $ 551 $ 2,674 $ 2,887,599 $ 2,890,273 $ 189 Canada $ 57 $ 370 $ 571 $ 998 $ 748,503 $ 749,501 $ 4 Total Retail $ 24,251 $ 6,959 $ 33,895 $ 65,105 $ 6,203,146 $ 6,268,251 $ 8,523 Wholesale $ 2,138 $ 412 $ 1,122 $ 3,672 $ 3,636,102 $ 3,639,774 $ 193 |
Schedule of receivables on nonaccrual status | 2020 2019 Retail Wholesale Total Retail Wholesale Total United States $ $ $ $ $ $ Canada $ 8,597 $ — $ 8,597 $ 3,749 $ — $ 3,749 |
EQUIPMENT ON OPERATING LEASES (
EQUIPMENT ON OPERATING LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of lease payments owed to the Company for equipment under non-cancelable operating leases | 2021 $ 235,958 2022 152,480 2023 74,203 2024 25,161 2025 and thereafter 7,412 Total lease payments $ 495,214 |
Property Subject to Operating Lease, Lessor | |
Summary of equipment on operating leases | 2020 2019 Equipment on operating leases $ 2,261,703 $ 2,109,682 Accumulated depreciation (402,519) (326,399) Total equipment on operating leases, net $ 1,859,184 $ 1,783,283 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in the carrying amount of goodwill | 2020 2019 Balance, beginning of year $ 109,629 $ 108,399 Foreign currency translation adjustment 529 1,230 Balance, end of year $ 110,158 $ 109,629 |
Schedule of the Company's intangible asset and related accumulated amortization for its software | 2020 2019 Software $ 37,127 $ 34,427 Accumulated amortization (23,794) (22,232) Total software, net $ 13,333 $ 12,195 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
OTHER ASSETS | |
Schedule of components of other assets | 2020 2019 Derivative assets $ 59,063 $ 39,172 Deferred tax assets 15,239 12,820 Other current assets 27,505 22,945 Total other assets $ 101,807 $ 74,937 |
CREDIT FACILITIES AND DEBT (Tab
CREDIT FACILITIES AND DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020: 2020 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 2022 $ 1,200,000 $ — $ 254,974 $ 944,654 $ 372 Retail - Canada Dec 2022 392,471 — 61,353 300,499 30,619 Wholesale VFN - U.S. Various 1,000,000 1,000,000 — — — Wholesale VFN - Canada Dec 2022 459,780 314,322 — — 145,458 3,052,251 1,314,322 316,327 1,245,153 176,449 Secured Debt Amortizing retail term ABS - N.A. Various 3,414,546 — 1,386,783 2,027,763 — Other ABS financing - N.A. Various 597,852 — 209,376 388,476 — Unamortized issuance costs (9,920) — — (9,920) — 4,002,478 — 1,596,159 2,406,319 — Unsecured Credit Lines and Facilities Credit lines Various — — — — — Revolving credit facilities Various 776,771 — 102,042 78,494 596,235 Unamortized issuance costs (1,217) — — (1,217) — 775,554 — 102,042 77,277 596,235 Unsecured Debt Commercial paper Various — — — — — Notes Various 3,000,000 — 900,000 2,100,000 — Hedging effects, discounts and unamortized issuance costs 41,689 — 578 41,111 — 3,041,689 — 900,578 2,141,111 — Total credit facilities and debt $ 10,871,972 $ 1,314,322 $ 2,915,106 $ 5,869,860 $ 772,684 (1) Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility. 2022 $ 2,228,412 2023 1,612,390 2024 1,195,641 2025 253,284 2026 and thereafter 580,133 Total $ 5,869,860 The following table summarizes the Company’s credit facilities, borrowings thereunder and availability at December 31, 2019: 2019 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 2021 $ 1,200,000 $ — $ 47,658 $ 210,928 $ 941,414 Retail - Canada Dec 2021 384,779 — 39,212 196,262 149,305 Wholesale VFN - U.S. Various 970,000 970,000 — — — Wholesale VFN - Canada Dec 2021 450,768 440,933 — — 9,835 3,005,547 1,410,933 86,870 407,190 1,100,554 Secured Debt Amortizing retail term ABS - N.A. Various 4,879,718 — 1,776,413 3,103,305 — Other ABS financing - N.A. Various 293,695 — 33,200 260,495 — Unamortized issuance costs (15,504) — — (15,504) — 5,157,909 — 1,809,613 3,348,296 — Unsecured Credit Lines and Facilities Credit lines Various 150,000 150,000 — — — Revolving credit facilities Various 846,344 — 346,301 100,043 400,000 Unamortized issuance costs (1,591) — — (1,591) — 994,753 150,000 346,301 98,452 400,000 Unsecured Debt Commercial paper Various 389,300 389,300 — — — Notes Various 2,500,000 — 600,000 1,900,000 — Hedging effects, discounts and unamortized issuance costs 22,798 (2,282) (563) 25,643 — 2,912,098 387,018 599,437 1,925,643 — Total credit facilities and debt $ 12,070,307 $ 1,947,951 $ 2,842,221 $ 5,779,581 $ 1,500,554 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 | 2022 $ 2,228,412 2023 1,612,390 2024 1,195,641 2025 253,284 2026 and thereafter 580,133 Total $ 5,869,860 |
Unsecured Debt | |
Schedule of the Company's debt and credit facilities | As of December 31, 2020, the Company’s outstanding unsecured senior notes were as follows: 4.875% notes, due 2021 $ 500,000 3.875% notes, due 2021 400,000 4.375% notes, due 2022 500,000 1.950% notes, due 2023 600,000 4.200% notes, due 2024 500,000 1.875% notes, due 2026 500,000 Hedging, discounts and unamortized issuance costs 41,689 Total $ 3,041,689 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
Schedule of sources of income before taxes | 2020 2019 2018 Domestic $ 141,167 $ 134,971 $ 120,375 Foreign 45,625 58,243 77,942 Income before taxes $ 186,792 $ 193,214 $ 198,317 |
Schedule of provision for income taxes | 2020 2019 2018 Current income tax expense (benefit): Domestic $ 45,371 $ (4,445) $ (11,719) Foreign 10,518 10,235 24,937 Total current income tax expense 55,889 5,790 13,218 Deferred income tax expense (benefit): Domestic (12,992) 35,125 34,304 Foreign 615 3,296 (6,050) Total deferred income tax expense (12,377) 38,421 28,254 Total tax provision $ 43,512 $ 44,211 $ 41,472 |
Schedule of reconciliation of statutory and effective income tax rate | 2020 2019 2018 Tax provision at statutory rate 21.0 % 21.0 % 21.0 % State taxes 4.6 4.4 1.8 Foreign taxes (1.4) (1.8) (3.4) Tax contingencies 0.1 0.1 2.5 Withholding taxes and credits — — 1.5 Tax credits and incentives (0.5) (0.7) (0.9) Tax rate and legislative changes — — (1.4) Other (0.5) (0.1) (0.2) Total tax provision effective rate 23.3 % 22.9 % 20.9 % |
Schedule of components of net deferred tax liability | 2020 2019 Deferred tax assets: Pension, postretirement and post-employment benefits $ 2,129 $ 1,964 Marketing and sales incentive programs 50,590 56,569 Allowance for credit losses 32,492 17,242 Other accrued liabilities 26,070 14,501 Tax loss and tax credit carry forwards 1,077 10,693 Total deferred tax assets $ 112,358 $ 100,969 Deferred tax liability: Equipment on operating lease $ 355,020 $ 374,386 Deferred tax liability, net (1) $ (242,662) $ (273,417) (1) In the accompanying consolidated balance sheets, the US net deferred tax position in 2020 and 2019 is included in “Accounts payable and other accrued liabilities” while the Canadian net deferred tax position in 2020 and 2019 is included in “Other assets”. |
Schedule of reconciliation of the gross amounts of tax contingencies at the beginning and end of the year | 2020 2019 2018 Balance, beginning of year $ 4,274 $ 4,274 $ — Additions based on tax positions related to the current year — — 4,274 Reductions for tax positions of prior years — — — Settlements — — — Balance, end of year $ 4,274 $ 4,274 $ 4,274 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
FINANCIAL INSTRUMENTS | |
Schedule of fair values of derivatives in the consolidated balance sheets | 2020 2019 Derivatives Designated as Hedging Instruments Other assets: Interest rate derivatives $ 58,008 $ 38,732 Accounts payable and other accrued liabilities: Interest rate derivatives $ 4,882 $ 1,243 Derivatives Not Designated as Hedging Instruments Other assets: Interest rate derivatives $ 1,053 $ 440 Foreign exchange contracts 2 — Total $ 1,055 $ 440 Accounts payable and other accrued liabilities: Interest rate derivatives $ 1,053 $ 440 Foreign exchange contracts 3,815 800 Total $ 4,868 $ 1,240 |
Schedule of pre-tax gains (losses) on the consolidated statements of income related to the Company's derivatives | 2020 2019 2018 Cash Flow Hedges Recognized in accumulated other comprehensive income (loss): Interest rate derivatives $ $ (1,002) $ 726 Reclassified from accumulated other comprehensive income (loss): Interest rate derivatives—Interest expense to third parties (171) 689 34 Not Designated as Hedges Foreign exchange contracts—Other expenses $ 1,946 $ 3,098 $ (12,355) |
Schedule of assets and liabilities measured at fair value on a recurring basis | 2020 2019 Assets Interest rate derivatives $ 59,061 $ 39,172 Foreign exchange contracts 2 — Total assets $ 59,063 $ 39,172 Liabilities Interest rate derivatives $ 5,935 $ 1,683 Foreign exchange contracts 3,815 800 Total liabilities $ 9,750 $ 2,483 |
Schedule of carrying amount and estimated fair value of assets and liabilities considered financial instruments | 2020 2019 Carrying Estimated Carrying Estimated Amount Fair Value * Amount Fair Value * Receivables $ 8,896,811 $ 8,987,830 $ 9,835,274 $ 9,870,076 Long-term debt $ 5,869,860 $ 5,992,745 $ 5,779,581 $ 5,830,157 * 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, 2020 | |
GEOGRAPHICAL INFORMATION | |
Summary of geographic information | 2020 2019 2018 Revenues United States $ 682,413 $ 725,529 $ 693,191 Canada 166,802 184,279 192,645 Eliminations (4,808) (8,919) (7,482) Total $ 844,407 $ 900,889 $ 878,354 Interest expense United States $ 234,723 $ 290,861 $ 276,956 Canada 50,043 65,331 55,806 Eliminations (4,808) (8,919) (7,482) Total $ 279,958 $ 347,273 $ 325,280 Net income United States $ 108,788 $ 104,291 $ 97,790 Canada 34,492 44,712 59,055 Total $ 143,280 $ 149,003 $ 156,845 Depreciation and amortization United States $ 193,932 $ 187,964 $ 191,347 Canada 45,042 43,479 42,579 Total $ 238,974 $ 231,443 $ 233,926 Expenditures for equipment on operating leases United States $ 466,288 $ 575,269 $ 533,706 Canada 132,099 140,417 146,560 Total $ 598,387 $ 715,686 $ 680,266 Provision for credit losses United States $ 45,080 $ 32,201 $ 28,932 Canada 13,964 3,502 2,767 Total $ 59,044 $ 35,703 $ 31,699 Total assets United States $ 10,186,808 $ 10,439,737 $ 10,482,805 Canada 2,442,180 2,566,635 2,511,839 Eliminations (177,819) (152,285) (62,732) Total $ 12,451,169 $ 12,854,087 $ 12,931,912 Managed receivables United States $ 7,195,558 $ 7,946,542 $ 8,080,756 Canada 1,837,389 1,961,483 1,944,582 Total $ 9,032,947 $ 9,908,025 $ 10,025,338 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
RELATED-PARTY TRANSACTIONS | |
Summary of the sources included in "Interest and other income from affiliates" in the accompanying consolidated statements of income | 2020 2019 2018 Subsidy from CNH Industrial North America Retail $ 153,990 $ 160,361 $ 149,363 Wholesale 108,479 122,582 123,615 Operating lease 61,328 60,221 60,841 Income from Iveco Argentina Wholesale factoring — 2,187 10,881 Income from affiliated receivables CNH Industrial North America 474 — 1,096 Other affiliates 153 438 137 Total interest and other income from affiliates $ 324,424 $ 345,789 $ 345,933 |
Schedule of various accounts and notes receivable and debt with the affiliates | 2020 2019 Affiliated receivables CNH Industrial America — $ 391,445 — $ 24,832 CNH Industrial Canada Ltd. — 10,906 — 26,931 Other affiliates — 12,459 — 12,544 Total affiliated receivables $ 414,810 $ 64,307 Affiliated debt CNH Industrial America — — $ — $ 213,856 CNH Industrial Canada Ltd. 187,310 — — — Total affiliated debt $ 187,310 $ 213,856 |
SUPPLEMENTAL CONDENSED CONSOL_2
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |
Schedule of condensed statements of comprehensive income | Condensed Statements of Comprehensive Income for the Year Ended December 31, 2020 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated REVENUES Interest income on retail notes and finance leases $ — $ 4,335 $ 178,894 $ — $ 183,229 Interest income on wholesale notes — (382) 53,491 — 53,109 Interest and other income from affiliates 19,081 181,309 270,239 (146,205) 324,424 Rental income on operating leases — 199,877 56,001 — 255,878 Other income — 86,234 1,945 (60,412) 27,767 Total revenues 19,081 471,373 560,570 (206,617) 844,407 EXPENSES Interest expense: Interest expense to third parties 148,547 (24,813) 152,656 — 276,390 Interest expense to affiliates — 125,372 24,401 (146,205) 3,568 Total interest expense 148,547 100,559 177,057 (146,205) 279,958 Administrative and operating expenses: Fees charged by affiliates — 37,685 68,632 (60,412) 45,905 Provision for credit losses — 12,164 46,880 — 59,044 Depreciation of equipment on operating leases — 192,364 45,041 — 237,405 Other expenses 24 31,760 3,519 — 35,303 Total administrative and operating expenses 24 273,973 164,072 (60,412) 377,657 Total expenses 148,571 374,532 341,129 (206,617) 657,615 Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method (129,490) 96,841 219,441 — 186,792 Income tax provision (benefit) (31,617) 24,920 50,209 — 43,512 Equity in income of consolidated subsidiaries accounted for under the equity method 241,153 169,232 — (410,385) — NET INCOME $ 143,280 $ 241,153 $ 169,232 $ (410,385) $ 143,280 COMPREHENSIVE INCOME $ 147,441 $ 245,314 $ 171,360 $ (416,674) $ 147,441 Condensed Statements of Comprehensive Income for the Year Ended December 31, 2019 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated REVENUES Interest income on retail notes and finance leases $ — $ 15,630 $ 202,824 $ — $ 218,454 Interest income on wholesale notes — (1,051) 68,824 — 67,773 Interest and other income from affiliates 50,877 204,027 202,931 (112,046) 345,789 Rental income on operating leases — 189,019 54,025 — 243,044 Other income — 89,768 2,331 (66,270) 25,829 Total revenues 50,877 497,393 530,935 (178,316) 900,889 EXPENSES Interest expense: Interest expense to third parties 163,358 (28,393) 198,182 — 333,147 Interest expense to affiliates — 82,408 43,764 (112,046) 14,126 Total interest expense 163,358 54,015 241,946 (112,046) 347,273 Administrative and operating expenses: Fees charged by affiliates — 44,700 68,171 (66,270) 46,601 Provision for credit losses — 14,492 21,211 — 35,703 Depreciation of equipment on operating leases — 186,174 43,478 — 229,652 Other expenses 24 35,678 12,744 — 48,446 Total administrative and operating expenses 24 281,044 145,604 (66,270) 360,402 Total expenses 163,382 335,059 387,550 (178,316) 707,675 Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method (112,505) 162,334 143,385 — 193,214 Income tax provision (benefit) (27,470) 38,305 33,376 — 44,211 Equity in income of consolidated subsidiaries accounted for under the equity method 234,038 110,009 — (344,047) — NET INCOME $ 149,003 $ 234,038 $ 110,009 $ (344,047) $ 149,003 COMPREHENSIVE INCOME $ 172,203 $ 257,238 $ 126,963 $ (384,201) $ 172,203 Condensed Statements of Comprehensive Income for the Year Ended December 31, 2018 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated REVENUES Interest income on retail notes and finance leases $ — $ 9,170 $ 192,099 $ — $ 201,269 Interest income on wholesale notes — (1,030) 67,929 — 66,899 Interest and other income from affiliates 70,880 200,821 297,443 (223,211) 345,933 Rental income on operating leases — 187,089 54,493 — 241,582 Other income — 87,710 2,842 (67,881) 22,671 Total revenues 70,880 483,760 614,806 (291,092) 878,354 EXPENSES Interest expense: Interest expense to third parties 156,839 (8,767) 169,675 — 317,747 Interest expense to affiliates — 199,890 30,854 (223,211) 7,533 Total interest expense 156,839 191,123 200,529 (223,211) 325,280 Administrative and operating expenses: Fees charged by affiliates — 45,545 69,811 (67,881) 47,475 Provision for credit losses — 8,445 23,254 — 31,699 Depreciation of equipment on operating leases — 189,228 42,577 — 231,805 Other expenses 22 18,249 25,507 — 43,778 Total administrative and operating expenses 22 261,467 161,149 (67,881) 354,757 Total expenses 156,861 452,590 361,678 (291,092) 680,037 Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method (85,981) 31,170 253,128 — 198,317 Income tax provision (benefit) (20,995) 11,010 51,457 — 41,472 Equity in income of consolidated subsidiaries accounted for under the equity method 221,831 201,671 — (423,502) — NET INCOME $ 156,845 $ 221,831 $ 201,671 $ (423,502) $ 156,845 COMPREHENSIVE INCOME $ 110,009 $ 174,995 $ 161,250 $ (336,245) $ 110,009 |
Schedule of condensed balance sheets | Condensed Balance Sheets as of December 31, 2020 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 158,334 $ 234,595 $ — $ 392,929 Restricted cash and cash equivalents — — 625,622 — 625,622 Receivables, less allowance for credit losses — 1,479,161 7,417,650 — 8,896,811 Affiliated accounts and notes receivable 1,303,046 2,538,254 2,819,819 (6,246,309) 414,810 Equipment on operating leases, net — 1,434,253 424,931 — 1,859,184 Equipment held for sale — 30,183 6,332 — 36,515 Investments in consolidated subsidiaries accounted for under the equity method 3,278,397 2,722,781 — (6,001,178) — Goodwill and intangible assets, net — 94,905 28,586 — 123,491 Other assets 5,621 72,600 26,028 (2,442) 101,807 TOTAL $ 4,587,064 $ 8,530,471 $ 11,583,563 $ (12,249,929) $ 12,451,169 LIABILITIES AND STOCKHOLDER’S EQUITY Liabilities: Short-term debt, including current maturities of long-term debt $ 900,578 $ 209,376 $ 3,119,474 $ — $ 4,229,428 Accounts payable and other accrued liabilities 286,215 3,776,490 1,201,653 (4,359,959) 904,399 Affiliated debt — 877,732 1,198,370 (1,888,792) 187,310 Long-term debt 2,140,099 388,476 3,341,285 — 5,869,860 Total liabilities 3,326,892 5,252,074 8,860,782 (6,248,751) 11,190,997 Stockholder’s equity 1,260,172 3,278,397 2,722,781 (6,001,178) 1,260,172 TOTAL $ 4,587,064 $ 8,530,471 $ 11,583,563 $ (12,249,929) $ 12,451,169 Condensed Balance Sheets as of December 31, 2019 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 121,200 $ 53,766 $ — $ 174,966 Restricted cash and cash equivalents — — 629,278 — 629,278 Receivables, less allowance for credit losses — 1,512,786 8,322,488 — 9,835,274 Affiliated accounts and notes receivable 1,549,666 2,257,928 2,553,665 (6,296,952) 64,307 Equipment on operating leases, net — 1,394,706 388,577 — 1,783,283 Equipment held for sale — 154,050 16,168 — 170,218 Investments in consolidated subsidiaries accounted for under the equity method 3,053,394 2,565,785 — (5,619,179) — Goodwill and intangible assets, net — 93,767 28,057 — 121,824 Other assets 4,236 58,048 16,209 (3,556) 74,937 TOTAL $ 4,607,296 $ 8,158,270 $ 12,008,208 $ (11,919,687) $ 12,854,087 LIABILITIES AND STOCKHOLDER’S EQUITY Liabilities: Short-term debt, including current maturities of long-term debt $ 1,136,455 $ 33,200 $ 3,620,517 $ — $ 4,790,172 Accounts payable and other accrued liabilities 283,748 3,449,690 1,261,411 (4,187,412) 807,437 Affiliated debt — 1,361,490 965,462 (2,113,096) 213,856 Long-term debt 1,924,052 260,496 3,595,033 — 5,779,581 Total liabilities 3,344,255 5,104,876 9,442,423 (6,300,508) 11,591,046 Stockholder’s equity 1,263,041 3,053,394 2,565,785 (5,619,179) 1,263,041 TOTAL $ 4,607,296 $ 8,158,270 $ 12,008,208 $ (11,919,687) $ 12,854,087 |
Schedule of condensed statements of cash flows | Condensed Statements of Cash Flows for the Year Ended December 31, 2020 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash from (used in) operating activities $ 149,830 $ 278,271 $ (87,793) $ (223,190) $ 117,118 CASH FLOWS FROM INVESTING ACTIVITIES: Cost of receivables acquired — (8,598,229) (8,439,636) 6,565,835 (10,472,030) Collections of receivables — 8,620,803 9,333,285 (6,566,948) 11,387,140 Purchase of equipment on operating leases, net — (81,410) (73,065) — (154,475) Change in property and equipment and software, net — (2,700) — — (2,700) Net cash from (used in) investing activities — (61,536) 820,584 (1,113) 757,935 CASH FLOWS FROM FINANCING ACTIVITIES: Intercompany activity — (483,757) 229,237 224,303 (30,217) Net change in indebtedness (19,830) 304,156 (784,855) — (500,529) Dividends paid to CNH Industrial America LLC (130,000) — — — (130,000) Net cash from (used in) financing activities (149,830) (179,601) (555,618) 224,303 (660,746) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — 37,134 177,173 — 214,307 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Beginning of year — 121,200 683,044 — 804,244 End of year $ — $ 158,334 $ 860,217 $ — $ 1,018,551 Condensed Statements of Cash Flows for the Year Ended December 31, 2019 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash from (used in) operating activities $ 679,561 $ 614,888 $ (112,906) $ (698,859) $ 482,684 CASH FLOWS FROM INVESTING ACTIVITIES: Cost of receivables acquired — (9,177,042) (9,593,836) 7,390,451 (11,380,427) Collections of receivables — 9,122,287 9,819,438 (7,390,295) 11,551,430 Purchase of equipment on operating leases, net — (166,891) (47,245) — (214,136) Change in property and equipment and software, net — (3,819) — — (3,819) Net cash from (used in) investing activities — (225,465) 178,357 156 (46,952) CASH FLOWS FROM FINANCING ACTIVITIES: Intercompany activity — (680,436) (80,682) 698,703 (62,415) Net change in indebtedness (414,561) 293,705 16,912 — (103,944) Dividends paid to CNH Industrial America LLC (265,000) — — — (265,000) Net cash from (used in) financing activities (679,561) (386,731) (63,770) 698,703 (431,359) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — 2,692 1,681 — 4,373 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Beginning of year — 118,508 681,363 — 799,871 End of year $ — $ 121,200 $ 683,044 $ — $ 804,244 Condensed Statements of Cash Flows for the Year Ended December 31, 2018 CNH Industrial Guarantor All Other Capital LLC Entities Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES: Net cash from (used in) operating activities $ 142,488 $ 488,329 $ 143,064 $ (411,000) $ 362,881 CASH FLOWS FROM INVESTING ACTIVITIES: Cost of receivables acquired — (9,080,473) (9,991,699) 7,269,611 (11,802,561) Collections of receivables — 8,967,965 10,375,251 (7,270,276) 12,072,940 Purchase of equipment on operating leases, net — (146,618) (65,391) — (212,009) Change in property and equipment and software, net — (5,427) — — (5,427) Net cash from (used in) investing activities — (264,553) 318,161 (665) 52,943 CASH FLOWS FROM FINANCING ACTIVITIES: Intercompany activity — (211,322) (128,802) 185,948 (154,176) Net change in indebtedness (12,488) (54,285) (140,562) — (207,335) Dividends paid to CNH Industrial America LLC (130,000) — (225,717) 225,717 (130,000) Net cash from (used in) financing activities (142,488) (265,607) (495,081) 411,665 (491,511) DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — (41,831) (33,856) — (75,687) CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Beginning of year — 160,339 715,219 — 875,558 End of year $ — $ 118,508 $ 681,363 $ — $ 799,871 |
SUPPLEMENTAL QUARTERLY INFORM_2
SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) | |
Schedule of supplemental quarterly information (unaudited) | For the Year Ended December 31, 2020 First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year Revenues $ 215,817 $ 213,704 $ 209,674 $ 205,212 $ 844,407 Interest expense 78,688 67,974 68,840 64,456 279,958 Administrative and operating expenses 91,624 99,183 90,904 95,946 377,657 Income tax provision 10,428 10,556 11,775 10,753 43,512 Net income $ 35,077 $ 35,991 $ 38,155 $ 34,057 $ 143,280 For the Year Ended December 31, 2019 First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year Revenues $ 222,069 $ 229,112 $ 224,356 $ 225,352 $ 900,889 Interest expense 88,381 85,247 88,779 84,866 347,273 Administrative and operating expenses 82,697 94,183 86,091 97,431 360,402 Income tax provision 11,780 11,898 12,965 7,568 44,211 Net income $ 39,211 $ 37,784 $ 36,521 $ 35,487 $ 149,003 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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 | 30 days | |
Goodwill and Intangible Assets | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Amortization period of other intangible assets consisting of software | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Change in Accounting Principle (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for credit losses | $ 136,136 | $ 98,628 | $ 72,751 | $ 74,412 | $ 79,196 |
Retained earnings | $ 537,173 | 543,688 | |||
ASU 2016-13 | |||||
Allowance for credit losses | $ 25,877 | ||||
ASU 2016-13 | Net incremental impact of adopting new guidance | |||||
Allowance for credit losses | 26,000 | ||||
Deferred tax assets | 6,000 | ||||
Retained earnings | $ (20,000) |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME - Change in Components of AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in accumulated other comprehensive income by component | |||
Beginning balance, gross | $ (124,100) | $ (147,771) | |
Tax asset | (296) | 772 | |
Beginning balance, net of tax | $ (124,396) | (146,999) | |
Other comprehensive income (loss) before reclassifications | 1,379 | 23,999 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (37) | (329) | |
Tax effects | 2,819 | (470) | |
Total other comprehensive income (loss) | 4,161 | 23,200 | (46,836) |
Reclassification of stranded tax effects | (597) | ||
Ending balance | (120,235) | (124,396) | (146,999) |
Currency Translation Adjustment | |||
Changes in accumulated other comprehensive income by component | |||
Beginning balance, gross | (125,133) | (146,726) | |
Beginning balance, net of tax | (125,133) | (146,726) | |
Other comprehensive income (loss) before reclassifications | 11,849 | 21,593 | |
Total other comprehensive income (loss) | 11,849 | 21,593 | |
Ending balance | (113,284) | (125,133) | (146,726) |
Pension Liability | |||
Changes in accumulated other comprehensive income by component | |||
Beginning balance, gross | (302) | (4,070) | |
Tax asset | 58 | 1,573 | |
Beginning balance, net of tax | (244) | (2,497) | |
Other comprehensive income (loss) before reclassifications | 577 | 3,408 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (208) | 360 | |
Tax effects | (63) | (918) | |
Total other comprehensive income (loss) | 306 | 2,850 | |
Reclassification of stranded tax effects | (597) | ||
Ending balance | 62 | (244) | (2,497) |
Unrealized (Losses) Gains on Derivative | |||
Changes in accumulated other comprehensive income by component | |||
Beginning balance, gross | 1,335 | 3,025 | |
Tax asset | (354) | (801) | |
Beginning balance, net of tax | 981 | 2,224 | |
Other comprehensive income (loss) before reclassifications | (11,047) | (1,002) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 171 | (689) | |
Tax effects | 2,882 | 448 | |
Total other comprehensive income (loss) | (7,994) | (1,243) | |
Ending balance | $ (7,013) | $ 981 | $ 2,224 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME - Reclassifications out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reclassifications out of accumulated other comprehensive income and the location on the consolidated statements of income | |||||||||||
Interest expense to third parties | $ (276,390) | $ (333,147) | $ (317,747) | ||||||||
Income before taxes | 186,792 | 193,214 | 198,317 | ||||||||
Income tax effects | $ (10,753) | $ (11,775) | $ (10,556) | $ (10,428) | $ (7,568) | $ (12,965) | $ (11,898) | $ (11,780) | (43,512) | (44,211) | $ (41,472) |
Pension Liability | Amounts Reclassified from AOCI | |||||||||||
Reclassifications out of accumulated other comprehensive income and the location on the consolidated statements of income | |||||||||||
Various line items individually insignificant | 208 | (360) | |||||||||
Income before taxes | 208 | (360) | |||||||||
Income tax effects | (36) | 88 | |||||||||
Net income | 172 | (272) | |||||||||
Unrealized (Losses) Gains on Derivative | Amounts Reclassified from AOCI | |||||||||||
Reclassifications out of accumulated other comprehensive income and the location on the consolidated statements of income | |||||||||||
Interest expense to third parties | (171) | 689 | |||||||||
Income before taxes | (171) | 689 | |||||||||
Income tax effects | 46 | (182) | |||||||||
Net income | $ (125) | $ 507 |
RECEIVABLES - Summary of Receiv
RECEIVABLES - Summary of Receivables (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($)item | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Receivables | |||||
Gross receivables | $ 9,032,947 | $ 9,908,025 | $ 10,025,338 | ||
Less: Allowance for credit losses | (136,136) | $ (98,628) | (72,751) | $ (74,412) | $ (79,196) |
Total receivables, net | 8,896,811 | 9,835,274 | |||
Restricted Receivables | 7,402,988 | 8,358,205 | |||
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 | ||||
Maturities of receivables as of December 31, 2020, are as follows: | |||||
2021 | 4,598,478 | ||||
2022 | 1,481,983 | ||||
2023 | 1,220,178 | ||||
2024 | 890,717 | ||||
2025 and thereafter | 705,455 | ||||
Receivables | $ 8,896,811 | 9,835,274 | |||
Number of portfolio segments in which allowance for credit losses is segregated | item | 3 | ||||
Retail receivables | |||||
Receivables | |||||
Gross receivables | $ 833,864 | 656,518 | |||
Restricted Receivables | $ 5,280,423 | 5,531,885 | |||
Retail receivables | Minimum | |||||
Receivables | |||||
Stated original maturities | 2 years | ||||
Retail receivables | Maximum | |||||
Receivables | |||||
Stated original maturities | 6 years | ||||
Wholesale receivables | |||||
Receivables | |||||
Gross receivables | $ 639,934 | 813,454 | |||
Restricted Receivables | $ 2,122,565 | 2,826,320 | |||
Wholesale receivables | Maximum | |||||
Receivables | |||||
Stated original maturities | 24 months | ||||
Interest-free periods | 12 months | ||||
Finance lease receivables | |||||
Receivables | |||||
Gross receivables | $ 156,161 | $ 79,848 |
RECEIVABLES - Allowance for Cre
RECEIVABLES - Allowance for Credit Losses Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for credit losses: | ||||
Beginning balance | $ 72,751 | $ 98,628 | $ 74,412 | $ 79,196 |
Charge-offs | (24,677) | (40,637) | (40,942) | |
Recoveries | 2,491 | 3,062 | 4,773 | |
Provision (benefit) | 59,044 | 59,044 | 35,703 | 31,699 |
Foreign currency translation and other | 650 | 211 | (314) | |
Ending balance | 136,136 | 136,136 | 72,751 | 74,412 |
Receivables: | ||||
Ending balance | 9,032,947 | 9,032,947 | 9,908,025 | 10,025,338 |
ASU 2016-13 | ||||
Allowance for credit losses: | ||||
Beginning balance | 25,877 | |||
Ending balance | 25,877 | |||
Retail | ||||
Allowance for credit losses: | ||||
Beginning balance | 64,750 | 90,627 | 66,944 | 73,610 |
Charge-offs | (23,147) | (35,535) | (39,375) | |
Recoveries | 2,481 | 3,046 | 4,702 | |
Provision (benefit) | 56,252 | 30,115 | 28,277 | |
Foreign currency translation and other | 638 | 180 | (270) | |
Ending balance | 126,851 | 126,851 | 64,750 | 66,944 |
Receivables: | ||||
Ending balance | 6,270,448 | 6,270,448 | 6,268,251 | 6,441,054 |
Retail | ASU 2016-13 | ||||
Allowance for credit losses: | ||||
Beginning balance | 25,877 | |||
Ending balance | 25,877 | |||
Wholesale and wholesale factoring | ||||
Allowance for credit losses: | ||||
Beginning balance | 8,001 | 8,001 | 7,468 | 5,586 |
Charge-offs | (1,530) | (5,102) | (1,567) | |
Recoveries | 10 | 16 | 71 | |
Provision (benefit) | 2,792 | 5,588 | 3,422 | |
Foreign currency translation and other | 12 | 31 | (44) | |
Ending balance | 9,285 | 9,285 | 8,001 | 7,468 |
Receivables: | ||||
Ending balance | $ 2,762,499 | $ 2,762,499 | $ 3,639,774 | $ 3,584,284 |
RECEIVABLES - Receivables Secur
RECEIVABLES - Receivables Securitizations (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2020CAD ($) | Dec. 31, 2020USD ($) | |
Receivables | ||||
Maximum borrowing capacity | $ 12,070,307 | $ 10,871,972 | ||
Number of conduit facilities | item | 2 | |||
Number of portfolio segments in which allowance for credit losses is segregated | item | 3 | |||
Retail committed asset-backed facilities | ||||
Receivables | ||||
Asset-backed transactions securitized | $ 1,120,065 | 2,800,356 | ||
Outstanding amount of transactions securitized | $ 5,173,413 | 4,012,398 | ||
Remaining period of transactions securitized | 30 months | 33 months | ||
Maximum borrowing capacity | 1,592,471 | |||
Term of credit agreement | 2 years | |||
Conduit facilities, $700 million renewable in 2021 | ||||
Receivables | ||||
Maximum borrowing capacity | 700,000 | |||
Conduit facilities, $300 million renewable in 2021 | ||||
Receivables | ||||
Maximum borrowing capacity | 300,000 | |||
Conduit facilities renewable in December 2022 | Canada | ||||
Receivables | ||||
Maximum borrowing capacity | $ 585,750 | $ 459,780 |
RECEIVABLES - Aging of Receivab
RECEIVABLES - Aging of Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Financing receivable, recorded investment | ||
Minimum account delinquency period for an account to be classified as past due | 30 days | 30 days |
Retail | ||
Financing receivable, recorded investment | ||
Total | $ 6,270,448 | $ 6,268,251 |
Recorded Investment > 90 Days and Accruing | 8,523 | |
Retail | Total Past Due | ||
Financing receivable, recorded investment | ||
Total Past Due | 66,021 | 65,105 |
Retail | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 29,221 | 24,251 |
Retail | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 5,047 | 6,959 |
Retail | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 31,753 | 33,895 |
Retail | Current | ||
Financing receivable, recorded investment | ||
Current | 6,204,427 | 6,203,146 |
Retail | United States | ||
Financing receivable, recorded investment | ||
2020 | 2,083,697 | |
2019 | 1,278,198 | |
2018 | 861,785 | |
2017 | 461,213 | |
2016 | 227,837 | |
2015 | 57,026 | |
Prior to 2015 | 18,636 | |
Total | 4,988,392 | 5,056,269 |
Recorded Investment > 90 Days and Accruing | 7,356 | |
Retail | United States | Total Past Due | ||
Financing receivable, recorded investment | ||
2020 | 7,220 | |
2019 | 13,356 | |
2018 | 12,388 | |
2017 | 6,957 | |
2016 | 4,813 | |
2015 | 3,045 | |
Prior to 2015 | 3,177 | |
Total | 50,956 | |
Total Past Due | 54,869 | |
Retail | United States | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
2020 | 3,334 | |
2019 | 7,912 | |
2018 | 5,742 | |
2017 | 3,841 | |
2016 | 1,699 | |
2015 | 781 | |
Prior to 2015 | 256 | |
Total | 23,565 | 19,781 |
Retail | United States | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
2020 | 569 | |
2019 | 1,201 | |
2018 | 1,261 | |
2017 | 461 | |
2016 | 220 | |
2015 | 173 | |
Prior to 2015 | 47 | |
Total | 3,932 | 5,896 |
Retail | United States | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
2020 | 3,317 | |
2019 | 4,243 | |
2018 | 5,385 | |
2017 | 2,655 | |
2016 | 2,894 | |
2015 | 2,091 | |
Prior to 2015 | 2,874 | |
Total | 23,459 | 29,192 |
Retail | United States | Current | ||
Financing receivable, recorded investment | ||
2020 | 2,076,477 | |
2019 | 1,264,842 | |
2018 | 849,397 | |
2017 | 454,256 | |
2016 | 223,024 | |
2015 | 53,981 | |
Prior to 2015 | 15,459 | |
Total | 4,937,436 | |
Current | 5,001,400 | |
Retail | Canada | ||
Financing receivable, recorded investment | ||
2020 | 591,041 | |
2019 | 333,029 | |
2018 | 200,875 | |
2017 | 98,194 | |
2016 | 45,081 | |
2015 | 12,169 | |
Prior to 2015 | 1,667 | |
Total | 1,282,056 | 1,211,982 |
Recorded Investment > 90 Days and Accruing | 1,167 | |
Retail | Canada | Total Past Due | ||
Financing receivable, recorded investment | ||
2020 | 2,350 | |
2019 | 5,313 | |
2018 | 2,980 | |
2017 | 1,979 | |
2016 | 1,601 | |
2015 | 657 | |
Prior to 2015 | 185 | |
Total | 15,065 | |
Total Past Due | 10,236 | |
Retail | Canada | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
2020 | 1,613 | |
2019 | 1,772 | |
2018 | 1,254 | |
2017 | 535 | |
2016 | 265 | |
2015 | 91 | |
Prior to 2015 | 126 | |
Total | 5,656 | 4,470 |
Retail | Canada | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
2020 | 30 | |
2019 | 249 | |
2018 | 218 | |
2017 | 474 | |
2016 | 127 | |
2015 | 6 | |
Prior to 2015 | 11 | |
Total | 1,115 | 1,063 |
Retail | Canada | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
2020 | 707 | |
2019 | 3,292 | |
2018 | 1,508 | |
2017 | 970 | |
2016 | 1,209 | |
2015 | 560 | |
Prior to 2015 | 48 | |
Total | 8,294 | 4,703 |
Retail | Canada | Current | ||
Financing receivable, recorded investment | ||
2020 | 588,691 | |
2019 | 327,716 | |
2018 | 197,895 | |
2017 | 96,215 | |
2016 | 43,480 | |
2015 | 11,512 | |
Prior to 2015 | 1,482 | |
Total | 1,266,991 | |
Current | 1,201,746 | |
Wholesale | ||
Financing receivable, recorded investment | ||
Total | 2,762,499 | 3,639,774 |
Recorded Investment > 90 Days and Accruing | 193 | |
Wholesale | Total Past Due | ||
Financing receivable, recorded investment | ||
Total Past Due | 482 | 3,672 |
Wholesale | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 24 | 2,138 |
Wholesale | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 412 | |
Wholesale | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 458 | 1,122 |
Wholesale | Current | ||
Financing receivable, recorded investment | ||
Current | 2,762,017 | 3,636,102 |
Wholesale | United States | ||
Financing receivable, recorded investment | ||
Total | 2,207,166 | 2,890,273 |
Recorded Investment > 90 Days and Accruing | 189 | |
Wholesale | United States | Total Past Due | ||
Financing receivable, recorded investment | ||
Total Past Due | 476 | 2,674 |
Wholesale | United States | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 18 | 2,081 |
Wholesale | United States | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 42 | |
Wholesale | United States | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 458 | 551 |
Wholesale | United States | Current | ||
Financing receivable, recorded investment | ||
Current | 2,206,690 | 2,887,599 |
Wholesale | Canada | ||
Financing receivable, recorded investment | ||
Total | 555,333 | 749,501 |
Recorded Investment > 90 Days and Accruing | 4 | |
Wholesale | Canada | Total Past Due | ||
Financing receivable, recorded investment | ||
Total Past Due | 6 | 998 |
Wholesale | Canada | 31-60 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 6 | 57 |
Wholesale | Canada | 61-90 Days Past Due | ||
Financing receivable, recorded investment | ||
Total | 370 | |
Wholesale | Canada | Greater than 90 Days | ||
Financing receivable, recorded investment | ||
Total | 571 | |
Wholesale | Canada | Current | ||
Financing receivable, recorded investment | ||
Current | $ 555,327 | $ 748,503 |
RECEIVABLES - Impaired Receivab
RECEIVABLES - Impaired Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Financing receivable, impaired | ||
Accrued interest | $ 52,595 | |
Delinquency period of accounts considered for recognition of income | 90 days | |
United States | ||
Financing receivable, impaired | ||
Receivables on nonaccrual status | $ 64,284 | $ 62,674 |
Canada | ||
Financing receivable, impaired | ||
Receivables on nonaccrual status | 8,597 | 3,749 |
Retail | United States | ||
Financing receivable, impaired | ||
Receivables on nonaccrual status | 28,882 | 33,463 |
Retail | Canada | ||
Financing receivable, impaired | ||
Receivables on nonaccrual status | 8,597 | 3,749 |
Wholesale | United States | ||
Financing receivable, impaired | ||
Receivables on nonaccrual status | $ 35,402 | $ 29,211 |
RECEIVABLES - Troubled Debt Res
RECEIVABLES - Troubled Debt Restructuring of Receivables (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item | |
Troubled Debt Restructurings | ||
Number of cases in which the court has not yet determined the concession | item | 362 | 323 |
Pre-modification value for cases in which the court has not yet determined the concession | $ 25,635 | $ 14,850 |
Retail | ||
Troubled Debt Restructurings | ||
Number of cases in which the court has determined the concession | item | 253 | 279 |
Pre-modification value for cases in which the court has determined the concession | $ 8,690 | $ 10,049 |
Post-modification value for cases in which the court has determined the concession | $ 7,841 | $ 9,110 |
EQUIPMENT ON OPERATING LEASES_2
EQUIPMENT ON OPERATING LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Depreciation | $ 237,405 | $ 229,652 | $ 231,805 |
Lease payments owed to the company for equipment under non-cancelable operating leases | |||
Deferred operating lease subsidy | 116,815 | ||
2021 | 235,958 | ||
2022 | 152,480 | ||
2023 | 74,203 | ||
2024 | 25,161 | ||
2025 and thereafter | 7,412 | ||
Total lease payments | 495,214 | ||
Property Subject to Operating Lease, Lessor | |||
Equipment on operating lease | 2,261,703 | 2,109,682 | |
Accumulated depreciation | (402,519) | (326,399) | |
Total equipment on operating leases, net | 1,859,184 | 1,783,283 | |
Depreciation | $ 237,405 | $ 229,652 | $ 231,805 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the carrying amount of goodwill | |||
Balance, beginning of year | $ 109,629 | $ 108,399 | |
Foreign currency translation adjustment | 529 | 1,230 | |
Balance, end of year | 110,158 | 109,629 | $ 108,399 |
Impairment of goodwill | 0 | 0 | 0 |
Company's intangible asset and related accumulated amortization for its software | |||
Software | 37,127 | 34,427 | |
Accumulated amortization | (23,794) | (22,232) | |
Software, net | 13,333 | 12,195 | |
Amortization expense | 1,562 | $ 1,790 | $ 2,114 |
Estimated annual amortization expense | |||
2021 | 1,684 | ||
2022 | 1,409 | ||
2023 | 1,223 | ||
2024 | 1,100 | ||
2025 | $ 969 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
OTHER ASSETS | ||
Derivative assets | $ 59,063 | $ 39,172 |
Deferred tax assets | 15,239 | 12,820 |
Other current assets | 27,505 | 22,945 |
Total other assets | $ 101,807 | $ 74,937 |
CREDIT FACILITIES AND DEBT (Det
CREDIT FACILITIES AND DEBT (Details) $ in Thousands | Nov. 06, 2020USD ($) | Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) |
Debt | |||
Maximum borrowing capacity | $ 10,871,972 | $ 12,070,307 | |
Short-Term Outstanding | 1,314,322 | 1,947,951 | |
Current Maturities of Long-Term Outstanding | 2,915,106 | 2,842,221 | |
Long-term debt | 5,869,860 | 5,779,581 | |
Available | 772,684 | $ 1,500,554 | |
Minimum annual repayments of long-term debt | |||
2022 | 2,228,412 | ||
2023 | 1,612,390 | ||
2024 | 1,195,641 | ||
2025 | 253,284 | ||
2026 and thereafter | $ 580,133 | ||
Other disclosure | |||
Weighted-average interest rate on total short-term debt outstanding (as a percent) | 1.10% | 2.40% | |
Weighted- average interest rate on total long-term debt (as a percent) | 2.50% | 3.10% | |
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 | 51.00% | ||
Consolidated tangible net worth threshold | $ 50,000 | ||
Unsecured Facilities | |||
Debt | |||
Maximum borrowing capacity | 775,554 | $ 994,753 | |
Short-Term Outstanding | 150,000 | ||
Current Maturities of Long-Term Outstanding | 102,042 | 346,301 | |
Long-term debt | 77,277 | 98,452 | |
Available | 596,235 | 400,000 | |
Uncommitted credit line | |||
Debt | |||
Maximum borrowing capacity | 150,000 | ||
Short-Term Outstanding | 150,000 | ||
Revolving credit facilities | |||
Debt | |||
Maximum borrowing capacity | 776,771 | 846,344 | |
Line of credit, outstanding amount | 180,536 | ||
Current Maturities of Long-Term Outstanding | 102,042 | 346,301 | |
Long-term debt | 78,494 | 100,043 | |
Available | 596,235 | 400,000 | |
Unamortized issuance costs | (1,217) | (1,591) | |
Committed Asset-Backed Facilities | |||
Debt | |||
Maximum borrowing capacity | 3,052,251 | 3,005,547 | |
Short-Term Outstanding | 1,314,322 | 1,410,933 | |
Current Maturities of Long-Term Outstanding | 316,327 | 86,870 | |
Long-term debt | 1,245,153 | 407,190 | |
Available | $ 176,449 | 1,100,554 | |
Committed Asset-Backed Facilities | Maximum | |||
Other disclosure | |||
Maturity period of receivables | 7 years | ||
Retail | Maximum | |||
Debt | |||
Maximum borrowing capacity | $ 1,592,471 | ||
Retail | United States | |||
Debt | |||
Maximum borrowing capacity | 1,200,000 | 1,200,000 | |
Current Maturities of Long-Term Outstanding | 254,974 | 47,658 | |
Long-term debt | 944,654 | 210,928 | |
Available | 372 | 941,414 | |
Retail | Canada | |||
Debt | |||
Maximum borrowing capacity | 392,471 | 384,779 | |
Current Maturities of Long-Term Outstanding | 61,353 | 39,212 | |
Long-term debt | 300,499 | 196,262 | |
Available | 30,619 | 149,305 | |
Wholesale VFN | United States | |||
Debt | |||
Maximum borrowing capacity | 1,000,000 | 970,000 | |
Short-Term Outstanding | 1,000,000 | 970,000 | |
Wholesale VFN | Canada | |||
Debt | |||
Maximum borrowing capacity | 459,780 | 450,768 | |
Short-Term Outstanding | 314,322 | 440,933 | |
Available | 145,458 | 9,835 | |
Secured Debt | |||
Debt | |||
Maximum borrowing capacity | 4,002,478 | 5,157,909 | |
Current Maturities of Long-Term Outstanding | 1,596,159 | 1,809,613 | |
Long-term debt | 2,406,319 | 3,348,296 | |
Unamortized issuance costs | (9,920) | (15,504) | |
Other ABS Financing | |||
Debt | |||
Maximum borrowing capacity | 597,852 | 293,695 | |
Current Maturities of Long-Term Outstanding | 209,376 | 33,200 | |
Long-term debt | 388,476 | 260,495 | |
Amortizing Retail Term ABS | |||
Debt | |||
Maximum borrowing capacity | 3,414,546 | 4,879,718 | |
Current Maturities of Long-Term Outstanding | 1,386,783 | 1,776,413 | |
Long-term debt | 2,027,763 | 3,103,305 | |
Unsecured Debt | |||
Debt | |||
Maximum borrowing capacity | 3,041,689 | 2,912,098 | |
Short-Term Outstanding | 387,018 | ||
Current Maturities of Long-Term Outstanding | 900,578 | 599,437 | |
Long-term debt | 2,141,111 | 1,925,643 | |
Hedging effects, discounts and unamortized issuance costs | 41,689 | 22,798 | |
Heding effects, discounts and unamortized issuance costs, short-term outstanding | (2,282) | ||
Hedging effects, discounts and unamortized issuance costs, current maturities | 578 | (563) | |
Hedging effects, discounts and unamortized issuance costs, long-term | 41,111 | 25,643 | |
Notes | |||
Debt | |||
Maximum borrowing capacity | 3,000,000 | 2,500,000 | |
Current Maturities of Long-Term Outstanding | 900,000 | 600,000 | |
Long-term debt | 2,100,000 | 1,900,000 | |
Commercial paper | |||
Debt | |||
Maximum borrowing capacity | 389,300 | ||
Short-Term Outstanding | 0 | $ 389,300 | |
Unsecured Senior Notes | |||
Debt | |||
Debt amount | 3,041,689 | ||
Hedging effects, discounts and unamortized issuance costs | 41,689 | ||
4.375% unsecured notes due 2020 | |||
Debt | |||
Repayment of debt | $ 600,000 | ||
Interest rate (as a percent) | 4.375% | ||
4.875% unsecured notes due 2021 | |||
Debt | |||
Debt amount | $ 500,000 | ||
Interest rate (as a percent) | 4.875% | ||
3.875% unsecured notes due 2021 | |||
Debt | |||
Debt amount | $ 400,000 | ||
Interest rate (as a percent) | 3.875% | ||
4.375% unsecured notes due 2022 | |||
Debt | |||
Debt amount | $ 500,000 | ||
Interest rate (as a percent) | 4.375% | ||
1.950 % unsecured notes due 2023 | |||
Debt | |||
Debt amount | $ 600,000 | ||
Interest rate (as a percent) | 1.95% | ||
4.200% unsecured notes due 2024 | |||
Debt | |||
Debt amount | $ 500,000 | ||
Interest rate (as a percent) | 4.20% | ||
1.875 % unsecured notes due 2026 | |||
Debt | |||
Debt amount | $ 500,000 | ||
Interest rate (as a percent) | 1.875% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Sources of income before taxes | |||||||||||
Domestic | $ 141,167 | $ 134,971 | $ 120,375 | ||||||||
Foreign | 45,625 | 58,243 | 77,942 | ||||||||
INCOME BEFORE TAXES | 186,792 | 193,214 | 198,317 | ||||||||
Current income tax expense (benefit): | |||||||||||
Domestic | 45,371 | (4,445) | (11,719) | ||||||||
Foreign | 10,518 | 10,235 | 24,937 | ||||||||
Total current income tax expense | 55,889 | 5,790 | 13,218 | ||||||||
Deferred income tax expense (benefit): | |||||||||||
Domestic | (12,992) | 35,125 | 34,304 | ||||||||
Foreign | 615 | 3,296 | (6,050) | ||||||||
Total deferred income tax expense | (12,377) | 38,421 | 28,254 | ||||||||
Total tax provision | $ 10,753 | $ 11,775 | $ 10,556 | $ 10,428 | $ 7,568 | $ 12,965 | $ 11,898 | $ 11,780 | $ 43,512 | $ 44,211 | $ 41,472 |
Reconciliation of statutory and effective income tax rate | |||||||||||
Tax provision at statutory rate (as a percent) | 21.00% | 21.00% | 21.00% | ||||||||
State taxes (as a percent) | 4.60% | 4.40% | 1.80% | ||||||||
Foreign taxes (as a percent) | (1.40%) | (1.80%) | (3.40%) | ||||||||
Tax contingencies (as a percent) | 0.10% | 0.10% | 2.50% | ||||||||
Withholding taxes and credits | 1.50% | ||||||||||
Tax credits and incentives (as a percent) | (0.50%) | (0.70%) | (0.90%) | ||||||||
Tax rate and legislative changes (as a percent) | (1.40%) | ||||||||||
Other (as a percent) | (0.50%) | (0.10%) | (0.20%) | ||||||||
Total tax provision effective rate (as a percent) | 23.30% | 22.90% | 20.90% |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Components of net deferred tax assets | ||
Pension, postretirement and post employment benefits | $ 2,129 | $ 1,964 |
Marketing and sales incentive programs | 50,590 | 56,569 |
Allowance for credit losses | 32,492 | 17,242 |
Other accrued liabilities | 26,070 | 14,501 |
Tax loss and tax credit carry forwards | 1,077 | 10,693 |
Total deferred tax assets | 112,358 | 100,969 |
Deferred tax liabilities: | ||
Equipment on operating lease | 355,020 | 374,386 |
Deferred tax liability, net | $ (242,662) | $ (273,417) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Tax Contingencies and Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of the gross amounts of tax contingencies at the beginning and end of the year | |||
Balance, beginning of year | $ 4,274 | $ 4,274 | |
Additions based on tax positions related to the current year | $ 4,274 | ||
Balance, end of year | 4,274 | 4,274 | 4,274 |
Unrecognized tax benefits | |||
Amount of unrecognized tax benefits that, if recognized, would affect the annual effective income tax rate | 4,274 | ||
Interest and penalties related to unrecognized tax benefits | 214 | 280 | 686 |
Expected future payment of interest and penalties accrued related to unrecognized tax benefits | $ 1,180 | $ 966 | $ 686 |
Income tax examinations | |||
U.S. federal corporate income tax rate (as a percent) | 21.00% | 21.00% | 21.00% |
Undistributed earnings of non-U.S. subsidiaries | $ 0 |
FINANCIAL INSTRUMENTS - General
FINANCIAL INSTRUMENTS - General Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Interest Rate Derivatives | |
Maximum length of time of interest rate derivative instruments designated in cash flow hedge relationships | 48 months |
After-tax losses deferred in accumulated other comprehensive income that will be recognized in interest expense over the next 12 months | $ (549) |
FINANCIAL INSTRUMENTS - Fair Ma
FINANCIAL INSTRUMENTS - Fair Market Value of Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair market value of derivatives | |||
Derivative assets designated as hedging instruments, classified in other assets | $ 58,008 | $ 38,732 | |
Derivative liabilities designated as hedging instruments, classified in accounts payable and other accrued liabilities | 4,882 | 1,243 | |
Interest rate derivatives, derivative assets not designated as hedging instruments, classified in other assets | 1,053 | 440 | |
Foreign exchange contracts, derivatives not designated as hedging instruments, classified in other assets | 2 | ||
Derivative assets not designated as hedging instruments, classified in other assets | 1,055 | 440 | |
Interest rate derivatives, derivative not designated as hedging instruments, classified in accounts payable and other accrued liabilities | 1,053 | 440 | |
Foreign exchange contracts, derivatives not designated as hedging instruments, classified in accounts payable and other accrued liabilities | 3,815 | 800 | |
Derivative liabilities not designated as hedging instruments, classified in accounts payable and other accrued liabilities | 4,868 | 1,240 | |
Cash Flow Hedges, Recognized in accumulated other comprehensive income (loss), Interest rate derivatives | (11,047) | (1,002) | $ 726 |
Cash Flow Hedges, Reclassified from accumulated other comprehensive Income (loss), Interest rate derivatives - Interest expense to third parties | (171) | 689 | 34 |
Foreign exchange contracts, other expenses, not designated as hedges | 1,946 | 3,098 | $ (12,355) |
Interest rate derivatives | |||
Fair market value of derivatives | |||
Total notional amount of interest rate derivatives | 4,369,574 | 3,004,709 | |
Thirteen-month average notional amounts of interest rate derivatives | $ 3,305,539 | $ 2,967,321 |
FINANCIAL INSTRUMENTS - Items M
FINANCIAL INSTRUMENTS - Items Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Foreign exchange contracts | $ 2 | |
Liabilities | ||
Foreign exchange contracts | 3,815 | $ 800 |
Assets transferred between Level 1, Level 2 and Level 3 | 0 | 0 |
Recurring | Level 2 | ||
Assets | ||
Interest rate derivatives | 59,061 | 39,172 |
Foreign exchange contracts | 2 | |
Total assets | 59,063 | 39,172 |
Liabilities | ||
Interest rate derivatives | 5,935 | 1,683 |
Foreign exchange contracts | 3,815 | 800 |
Total liabilities | $ 9,750 | $ 2,483 |
FINANCIAL INSTRUMENTS - Carryin
FINANCIAL INSTRUMENTS - Carrying Amount and Estimated Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financial Instruments Not Carried at Fair Value | ||
Receivables | $ 8,896,811 | $ 9,835,274 |
Long-term debt | 5,869,860 | 5,779,581 |
Carrying Amount | ||
Financial Instruments Not Carried at Fair Value | ||
Receivables | 8,896,811 | 9,835,274 |
Long-term debt | 5,869,860 | 5,779,581 |
Estimated Fair Value | ||
Financial Instruments Not Carried at Fair Value | ||
Receivables | 8,987,830 | 9,870,076 |
Long-term debt | $ 5,992,745 | $ 5,830,157 |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Value on a Nonrecurring Basis and Other Financial Instruments (Details) - Equipment - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets | |||
Impairment on assets held for sale | $ 2,010 | $ 2,894 | |
(Gains) losses on assets held for sale | $ 10,169 | 14,504 | $ 11,018 |
Non recurring basis | Level 3 | |||
Assets | |||
Equipment held for sale | $ 109,088 |
GEOGRAPHICAL INFORMATION (Detai
GEOGRAPHICAL INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Geographical Information | ||||||||||||
Revenues | $ 205,212 | $ 209,674 | $ 213,704 | $ 215,817 | $ 225,352 | $ 224,356 | $ 229,112 | $ 222,069 | $ 844,407 | $ 900,889 | $ 878,354 | |
Interest expense | 64,456 | 68,840 | 67,974 | 78,688 | 84,866 | 88,779 | 85,247 | 88,381 | 279,958 | 347,273 | 325,280 | |
Net income | 34,057 | $ 38,155 | $ 35,991 | $ 35,077 | 35,487 | $ 36,521 | $ 37,784 | $ 39,211 | 143,280 | 149,003 | 156,845 | |
Depreciation and amortization | 238,974 | 231,443 | 233,926 | |||||||||
Expenditures for equipment on operating leases | 598,387 | 715,686 | 680,266 | |||||||||
Provision for credit losses | 59,044 | $ 59,044 | 35,703 | 31,699 | ||||||||
Additional disclosures | ||||||||||||
Total assets | 12,451,169 | 12,854,087 | 12,451,169 | 12,451,169 | 12,854,087 | 12,931,912 | ||||||
Managed receivables | 9,032,947 | 9,908,025 | 9,032,947 | 9,032,947 | 9,908,025 | 10,025,338 | ||||||
Eliminations | ||||||||||||
Geographical Information | ||||||||||||
Revenues | (4,808) | (8,919) | (7,482) | |||||||||
Interest expense | (4,808) | (8,919) | (7,482) | |||||||||
Additional disclosures | ||||||||||||
Total assets | (177,819) | (152,285) | (177,819) | (177,819) | (152,285) | (62,732) | ||||||
United States | ||||||||||||
Geographical Information | ||||||||||||
Revenues | 682,413 | 725,529 | 693,191 | |||||||||
Interest expense | 234,723 | 290,861 | 276,956 | |||||||||
Net income | 108,788 | 104,291 | 97,790 | |||||||||
Depreciation and amortization | 193,932 | 187,964 | 191,347 | |||||||||
Expenditures for equipment on operating leases | 466,288 | 575,269 | 533,706 | |||||||||
Provision for credit losses | 45,080 | 32,201 | 28,932 | |||||||||
Additional disclosures | ||||||||||||
Managed receivables | 7,195,558 | 7,946,542 | 7,195,558 | 7,195,558 | 7,946,542 | 8,080,756 | ||||||
United States | Operating segment | ||||||||||||
Geographical Information | ||||||||||||
Interest expense | 234,723 | 290,861 | 276,956 | |||||||||
Additional disclosures | ||||||||||||
Total assets | 10,186,808 | 10,439,737 | 10,186,808 | 10,186,808 | 10,439,737 | 10,482,805 | ||||||
Canada | ||||||||||||
Geographical Information | ||||||||||||
Revenues | 166,802 | 184,279 | 192,645 | |||||||||
Interest expense | 50,043 | 65,331 | 55,806 | |||||||||
Net income | 34,492 | 44,712 | 59,055 | |||||||||
Depreciation and amortization | 45,042 | 43,479 | 42,579 | |||||||||
Expenditures for equipment on operating leases | 132,099 | 140,417 | 146,560 | |||||||||
Provision for credit losses | 13,964 | 3,502 | 2,767 | |||||||||
Additional disclosures | ||||||||||||
Managed receivables | 1,837,389 | 1,961,483 | 1,837,389 | 1,837,389 | 1,961,483 | 1,944,582 | ||||||
Canada | Operating segment | ||||||||||||
Geographical Information | ||||||||||||
Interest expense | 50,043 | 65,331 | 55,806 | |||||||||
Additional disclosures | ||||||||||||
Total assets | $ 2,442,180 | $ 2,566,635 | $ 2,442,180 | $ 2,442,180 | $ 2,566,635 | $ 2,511,839 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
RELATED-PARTY TRANSACTIONS | |||
Total interest and other income from affiliates | $ 324,424 | $ 345,789 | $ 345,933 |
Affiliated receivables | 414,810 | 64,307 | |
Affiliated debt | 187,310 | 213,856 | |
Other information | |||
Interest expense to related affiliates | 3,568 | 14,126 | 7,533 |
Fees charged by affiliates | 45,905 | 46,601 | 47,475 |
Accounts payable and other accrued liabilities payable to related parties | 31,795 | 20,527 | |
CNH Industrial North America | |||
RELATED-PARTY TRANSACTIONS | |||
Retail | 153,990 | 160,361 | 149,363 |
Wholesale | 108,479 | 122,582 | 123,615 |
Operating lease | 61,328 | 60,221 | 60,841 |
Lending funds | 474 | 1,096 | |
CNH Industrial America | |||
RELATED-PARTY TRANSACTIONS | |||
Affiliated receivables | $ 391,445 | $ 24,832 | |
Rate of accounts and notes receivable (as a percent) | 0.00% | 0.00% | |
Rate of debt due (as a percent) | 1.76% | ||
Affiliated debt | $ 213,856 | ||
CNH Industrial Canada Ltd. | |||
RELATED-PARTY TRANSACTIONS | |||
Affiliated receivables | $ 10,906 | $ 26,931 | |
Rate of accounts and notes receivable (as a percent) | 0.00% | 0.00% | |
Rate of debt due (as a percent) | 1.41% | ||
Affiliated debt | $ 187,310 | ||
Iveco Argentina | |||
RELATED-PARTY TRANSACTIONS | |||
Wholesale factoring | $ 2,187 | 10,881 | |
Other affiliates | |||
RELATED-PARTY TRANSACTIONS | |||
Lending funds | 153 | 438 | $ 137 |
Affiliated receivables | $ 12,459 | $ 12,544 | |
Rate of accounts and notes receivable (as a percent) | 0.00% | 0.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Guarantees | |
Payment guarantees on the financial debt of various foreign financial services subsidiaries | $ 45,000 |
Wholesale and dealer financing | |
Guarantees | |
Total credit limit | 6,137,680 |
Utilized | $ 2,650,654 |
SUPPLEMENTAL CONDENSED CONSOL_3
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES | |||||||||||
Interest income on retail notes and finance leases | $ 183,229 | $ 218,454 | $ 201,269 | ||||||||
Interest income on wholesale notes | 53,109 | 67,773 | 66,899 | ||||||||
Interest and other income from affiliates | 324,424 | 345,789 | 345,933 | ||||||||
Rental income on operating leases | 255,878 | 243,044 | 241,582 | ||||||||
Other income | 27,767 | 25,829 | 22,671 | ||||||||
Total revenues | $ 205,212 | $ 209,674 | $ 213,704 | $ 215,817 | $ 225,352 | $ 224,356 | $ 229,112 | $ 222,069 | 844,407 | 900,889 | 878,354 |
Interest expense: | |||||||||||
Interest expense to third parties | 276,390 | 333,147 | 317,747 | ||||||||
Interest expense to affiliates | 3,568 | 14,126 | 7,533 | ||||||||
Total interest expense | 64,456 | 68,840 | 67,974 | 78,688 | 84,866 | 88,779 | 85,247 | 88,381 | 279,958 | 347,273 | 325,280 |
Administrative and operating expenses: | |||||||||||
Fees charged by affiliates | 45,905 | 46,601 | 47,475 | ||||||||
Provision for credit losses | 59,044 | 35,703 | 31,699 | ||||||||
Depreciation of equipment on operating leases | 237,405 | 229,652 | 231,805 | ||||||||
Other expenses | 35,303 | 48,446 | 43,778 | ||||||||
Total administrative and operating expenses | 95,946 | 90,904 | 99,183 | 91,624 | 97,431 | 86,091 | 94,183 | 82,697 | 377,657 | 360,402 | 354,757 |
Total expenses | 657,615 | 707,675 | 680,037 | ||||||||
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method | 186,792 | 193,214 | 198,317 | ||||||||
Income tax provision (benefit) | 10,753 | 11,775 | 10,556 | 10,428 | 7,568 | 12,965 | 11,898 | 11,780 | 43,512 | 44,211 | 41,472 |
NET INCOME | $ 34,057 | $ 38,155 | $ 35,991 | $ 35,077 | $ 35,487 | $ 36,521 | $ 37,784 | $ 39,211 | 143,280 | 149,003 | 156,845 |
COMPREHENSIVE INCOME | 147,441 | 172,203 | 110,009 | ||||||||
CNH Industrial Capital LLC | |||||||||||
REVENUES | |||||||||||
Interest and other income from affiliates | 19,081 | 50,877 | 70,880 | ||||||||
Total revenues | 19,081 | 50,877 | 70,880 | ||||||||
Interest expense: | |||||||||||
Interest expense to third parties | 148,547 | 163,358 | 156,839 | ||||||||
Total interest expense | 148,547 | 163,358 | 156,839 | ||||||||
Administrative and operating expenses: | |||||||||||
Other expenses | 24 | 24 | 22 | ||||||||
Total administrative and operating expenses | 24 | 24 | 22 | ||||||||
Total expenses | 148,571 | 163,382 | 156,861 | ||||||||
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method | (129,490) | (112,505) | (85,981) | ||||||||
Income tax provision (benefit) | (31,617) | (27,470) | (20,995) | ||||||||
Equity in income of consolidated subsidiaries accounted for under the equity method | 241,153 | 234,038 | 221,831 | ||||||||
NET INCOME | 143,280 | 149,003 | 156,845 | ||||||||
COMPREHENSIVE INCOME | 147,441 | 172,203 | 110,009 | ||||||||
Guarantor Entities | |||||||||||
REVENUES | |||||||||||
Interest income on retail notes and finance leases | 4,335 | 15,630 | 9,170 | ||||||||
Interest income on wholesale notes | (382) | (1,051) | (1,030) | ||||||||
Interest and other income from affiliates | 181,309 | 204,027 | 200,821 | ||||||||
Rental income on operating leases | 199,877 | 189,019 | 187,089 | ||||||||
Other income | 86,234 | 89,768 | 87,710 | ||||||||
Total revenues | 471,373 | 497,393 | 483,760 | ||||||||
Interest expense: | |||||||||||
Interest expense to third parties | (24,813) | (28,393) | (8,767) | ||||||||
Interest expense to affiliates | 125,372 | 82,408 | 199,890 | ||||||||
Total interest expense | 100,559 | 54,015 | 191,123 | ||||||||
Administrative and operating expenses: | |||||||||||
Fees charged by affiliates | 37,685 | 44,700 | 45,545 | ||||||||
Provision for credit losses | 12,164 | 14,492 | 8,445 | ||||||||
Depreciation of equipment on operating leases | 192,364 | 186,174 | 189,228 | ||||||||
Other expenses | 31,760 | 35,678 | 18,249 | ||||||||
Total administrative and operating expenses | 273,973 | 281,044 | 261,467 | ||||||||
Total expenses | 374,532 | 335,059 | 452,590 | ||||||||
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method | 96,841 | 162,334 | 31,170 | ||||||||
Income tax provision (benefit) | 24,920 | 38,305 | 11,010 | ||||||||
Equity in income of consolidated subsidiaries accounted for under the equity method | 169,232 | 110,009 | 201,671 | ||||||||
NET INCOME | 241,153 | 234,038 | 221,831 | ||||||||
COMPREHENSIVE INCOME | $ 245,314 | 257,238 | 174,995 | ||||||||
CNH Industrial Capital America LLC | |||||||||||
Condensed Statements of Comprehensive Income | |||||||||||
Ownership percentage | 100.00% | 100.00% | |||||||||
New Holland Credit Company LLC | |||||||||||
Condensed Statements of Comprehensive Income | |||||||||||
Ownership percentage | 100.00% | 100.00% | |||||||||
All Other Subsidiaries | |||||||||||
REVENUES | |||||||||||
Interest income on retail notes and finance leases | $ 178,894 | 202,824 | 192,099 | ||||||||
Interest income on wholesale notes | 53,491 | 68,824 | 67,929 | ||||||||
Interest and other income from affiliates | 270,239 | 202,931 | 297,443 | ||||||||
Rental income on operating leases | 56,001 | 54,025 | 54,493 | ||||||||
Other income | 1,945 | 2,331 | 2,842 | ||||||||
Total revenues | 560,570 | 530,935 | 614,806 | ||||||||
Interest expense: | |||||||||||
Interest expense to third parties | 152,656 | 198,182 | 169,675 | ||||||||
Interest expense to affiliates | 24,401 | 43,764 | 30,854 | ||||||||
Total interest expense | 177,057 | 241,946 | 200,529 | ||||||||
Administrative and operating expenses: | |||||||||||
Fees charged by affiliates | 68,632 | 68,171 | 69,811 | ||||||||
Provision for credit losses | 46,880 | 21,211 | 23,254 | ||||||||
Depreciation of equipment on operating leases | 45,041 | 43,478 | 42,577 | ||||||||
Other expenses | 3,519 | 12,744 | 25,507 | ||||||||
Total administrative and operating expenses | 164,072 | 145,604 | 161,149 | ||||||||
Total expenses | 341,129 | 387,550 | 361,678 | ||||||||
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method | 219,441 | 143,385 | 253,128 | ||||||||
Income tax provision (benefit) | 50,209 | 33,376 | 51,457 | ||||||||
NET INCOME | 169,232 | 110,009 | 201,671 | ||||||||
COMPREHENSIVE INCOME | 171,360 | 126,963 | 161,250 | ||||||||
Eliminations | |||||||||||
REVENUES | |||||||||||
Interest and other income from affiliates | (146,205) | (112,046) | (223,211) | ||||||||
Other income | (60,412) | (66,270) | (67,881) | ||||||||
Total revenues | (206,617) | (178,316) | (291,092) | ||||||||
Interest expense: | |||||||||||
Interest expense to affiliates | (146,205) | (112,046) | (223,211) | ||||||||
Total interest expense | (146,205) | (112,046) | (223,211) | ||||||||
Administrative and operating expenses: | |||||||||||
Fees charged by affiliates | (60,412) | (66,270) | (67,881) | ||||||||
Total administrative and operating expenses | (60,412) | (66,270) | (67,881) | ||||||||
Total expenses | (206,617) | (178,316) | (291,092) | ||||||||
Equity in income of consolidated subsidiaries accounted for under the equity method | (410,385) | (344,047) | (423,502) | ||||||||
NET INCOME | (410,385) | (344,047) | (423,502) | ||||||||
COMPREHENSIVE INCOME | $ (416,674) | $ (384,201) | $ (336,245) |
SUPPLEMENTAL CONDENSED CONSOL_4
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||||
Cash and cash equivalents | $ 392,929 | $ 174,966 | ||
Restricted cash and cash equivalents | 625,622 | 629,278 | ||
Receivables, less allowance for credit losses | 8,896,811 | 9,835,274 | ||
Affiliated accounts and notes receivable | 414,810 | 64,307 | ||
Equipment on operating leases, net | 1,859,184 | 1,783,283 | ||
Equipment held for sale | 36,515 | 170,218 | ||
Goodwill and intangible assets, net | 123,491 | 121,824 | ||
Other assets | 101,807 | 74,937 | ||
TOTAL | 12,451,169 | 12,854,087 | $ 12,931,912 | |
Liabilities: | ||||
Short-term debt, including current maturities of long-term debt | 4,229,428 | 4,790,172 | ||
Accounts payable and other accrued liabilities | 904,399 | 807,437 | ||
Affiliated debt | 187,310 | 213,856 | ||
Long-term debt | 5,869,860 | 5,779,581 | ||
Total liabilities | 11,190,997 | 11,591,046 | ||
Stockholder's equity | 1,260,172 | 1,263,041 | $ 1,355,732 | $ 1,375,639 |
TOTAL | 12,451,169 | 12,854,087 | ||
Eliminations | ||||
ASSETS | ||||
Affiliated accounts and notes receivable | (6,246,309) | (6,296,952) | ||
Investments in consolidated subsidiaries accounted for under the equity method | (6,001,178) | (5,619,179) | ||
Other assets | (2,442) | (3,556) | ||
TOTAL | (12,249,929) | (11,919,687) | ||
Liabilities: | ||||
Accounts payable and other accrued liabilities | (4,359,959) | (4,187,412) | ||
Affiliated debt | (1,888,792) | (2,113,096) | ||
Total liabilities | (6,248,751) | (6,300,508) | ||
Stockholder's equity | (6,001,178) | (5,619,179) | ||
TOTAL | (12,249,929) | (11,919,687) | ||
CNH Industrial Capital LLC | ||||
ASSETS | ||||
Affiliated accounts and notes receivable | 1,303,046 | 1,549,666 | ||
Investments in consolidated subsidiaries accounted for under the equity method | 3,278,397 | 3,053,394 | ||
Other assets | 5,621 | 4,236 | ||
TOTAL | 4,587,064 | 4,607,296 | ||
Liabilities: | ||||
Short-term debt, including current maturities of long-term debt | 900,578 | 1,136,455 | ||
Accounts payable and other accrued liabilities | 286,215 | 283,748 | ||
Long-term debt | 2,140,099 | 1,924,052 | ||
Total liabilities | 3,326,892 | 3,344,255 | ||
Stockholder's equity | 1,260,172 | 1,263,041 | ||
TOTAL | 4,587,064 | 4,607,296 | ||
Guarantor Entities | ||||
ASSETS | ||||
Cash and cash equivalents | 158,334 | 121,200 | ||
Receivables, less allowance for credit losses | 1,479,161 | 1,512,786 | ||
Affiliated accounts and notes receivable | 2,538,254 | 2,257,928 | ||
Equipment on operating leases, net | 1,434,253 | 1,394,706 | ||
Equipment held for sale | 30,183 | 154,050 | ||
Investments in consolidated subsidiaries accounted for under the equity method | 2,722,781 | 2,565,785 | ||
Goodwill and intangible assets, net | 94,905 | 93,767 | ||
Other assets | 72,600 | 58,048 | ||
TOTAL | 8,530,471 | 8,158,270 | ||
Liabilities: | ||||
Short-term debt, including current maturities of long-term debt | 209,376 | 33,200 | ||
Accounts payable and other accrued liabilities | 3,776,490 | 3,449,690 | ||
Affiliated debt | 877,732 | 1,361,490 | ||
Long-term debt | 388,476 | 260,496 | ||
Total liabilities | 5,252,074 | 5,104,876 | ||
Stockholder's equity | 3,278,397 | 3,053,394 | ||
TOTAL | 8,530,471 | 8,158,270 | ||
All Other Subsidiaries | ||||
ASSETS | ||||
Cash and cash equivalents | 234,595 | 53,766 | ||
Restricted cash and cash equivalents | 625,622 | 629,278 | ||
Receivables, less allowance for credit losses | 7,417,650 | 8,322,488 | ||
Affiliated accounts and notes receivable | 2,819,819 | 2,553,665 | ||
Equipment on operating leases, net | 424,931 | 388,577 | ||
Equipment held for sale | 6,332 | 16,168 | ||
Goodwill and intangible assets, net | 28,586 | 28,057 | ||
Other assets | 26,028 | 16,209 | ||
TOTAL | 11,583,563 | 12,008,208 | ||
Liabilities: | ||||
Short-term debt, including current maturities of long-term debt | 3,119,474 | 3,620,517 | ||
Accounts payable and other accrued liabilities | 1,201,653 | 1,261,411 | ||
Affiliated debt | 1,198,370 | 965,462 | ||
Long-term debt | 3,341,285 | 3,595,033 | ||
Total liabilities | 8,860,782 | 9,442,423 | ||
Stockholder's equity | 2,722,781 | 2,565,785 | ||
TOTAL | $ 11,583,563 | $ 12,008,208 |
SUPPLEMENTAL CONDENSED CONSOL_5
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash from (used in) operating activities | $ 117,118 | $ 482,684 | $ 362,881 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cost of receivables acquired | (10,472,030) | (11,380,427) | (11,802,561) |
Collections of receivables | 11,387,140 | 11,551,430 | 12,072,940 |
Purchase of equipment on operating leases, net | (154,475) | (214,136) | (212,009) |
Change in property and equipment and software, net | (2,700) | (3,819) | (5,427) |
Net cash from (used in) investing activities | 757,935 | (46,952) | 52,943 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Intercompany activity | (30,217) | (62,415) | (154,176) |
Net change in indebtedness | (500,529) | (103,944) | (207,335) |
Dividend paid to CNH Industrial America LLC | (130,000) | (265,000) | (130,000) |
Net cash from (used in) financing activities | (660,746) | (431,359) | (491,511) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 214,307 | 4,373 | (75,687) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |||
Beginning of year | 804,244 | 799,871 | 875,558 |
End of year | 1,018,551 | 804,244 | 799,871 |
Eliminations | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash from (used in) operating activities | (223,190) | (698,859) | (411,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cost of receivables acquired | 6,565,835 | 7,390,451 | 7,269,611 |
Collections of receivables | (6,566,948) | (7,390,295) | (7,270,276) |
Net cash from (used in) investing activities | (1,113) | 156 | (665) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Intercompany activity | 224,303 | 698,703 | 185,948 |
Dividend paid to CNH Industrial America LLC | 225,717 | ||
Net cash from (used in) financing activities | 224,303 | 698,703 | 411,665 |
CNH Industrial Capital LLC | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash from (used in) operating activities | 149,830 | 679,561 | 142,488 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net change in indebtedness | (19,830) | (414,561) | (12,488) |
Dividend paid to CNH Industrial America LLC | (130,000) | (265,000) | (130,000) |
Net cash from (used in) financing activities | (149,830) | (679,561) | (142,488) |
Guarantor Entities | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash from (used in) operating activities | 278,271 | 614,888 | 488,329 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cost of receivables acquired | (8,598,229) | (9,177,042) | (9,080,473) |
Collections of receivables | 8,620,803 | 9,122,287 | 8,967,965 |
Purchase of equipment on operating leases, net | (81,410) | (166,891) | (146,618) |
Change in property and equipment and software, net | (2,700) | (3,819) | (5,427) |
Net cash from (used in) investing activities | (61,536) | (225,465) | (264,553) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Intercompany activity | (483,757) | (680,436) | (211,322) |
Net change in indebtedness | 304,156 | 293,705 | (54,285) |
Net cash from (used in) financing activities | (179,601) | (386,731) | (265,607) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 37,134 | 2,692 | (41,831) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |||
Beginning of year | 121,200 | 118,508 | 160,339 |
End of year | 158,334 | 121,200 | 118,508 |
All Other Subsidiaries | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash from (used in) operating activities | (87,793) | (112,906) | 143,064 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cost of receivables acquired | (8,439,636) | (9,593,836) | (9,991,699) |
Collections of receivables | 9,333,285 | 9,819,438 | 10,375,251 |
Purchase of equipment on operating leases, net | (73,065) | (47,245) | (65,391) |
Net cash from (used in) investing activities | 820,584 | 178,357 | 318,161 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Intercompany activity | 229,237 | (80,682) | (128,802) |
Net change in indebtedness | (784,855) | 16,912 | (140,562) |
Dividend paid to CNH Industrial America LLC | (225,717) | ||
Net cash from (used in) financing activities | (555,618) | (63,770) | (495,081) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 177,173 | 1,681 | (33,856) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |||
Beginning of year | 683,044 | 681,363 | 715,219 |
End of year | $ 860,217 | $ 683,044 | $ 681,363 |
SUPPLEMENTAL QUARTERLY INFORM_3
SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) | |||||||||||
Revenues | $ 205,212 | $ 209,674 | $ 213,704 | $ 215,817 | $ 225,352 | $ 224,356 | $ 229,112 | $ 222,069 | $ 844,407 | $ 900,889 | $ 878,354 |
Interest expense | 64,456 | 68,840 | 67,974 | 78,688 | 84,866 | 88,779 | 85,247 | 88,381 | 279,958 | 347,273 | 325,280 |
Administrative and operating expenses | 95,946 | 90,904 | 99,183 | 91,624 | 97,431 | 86,091 | 94,183 | 82,697 | 377,657 | 360,402 | 354,757 |
Income tax provision | 10,753 | 11,775 | 10,556 | 10,428 | 7,568 | 12,965 | 11,898 | 11,780 | 43,512 | 44,211 | 41,472 |
NET INCOME | $ 34,057 | $ 38,155 | $ 35,991 | $ 35,077 | $ 35,487 | $ 36,521 | $ 37,784 | $ 39,211 | $ 143,280 | $ 149,003 | $ 156,845 |