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FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended
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Mar. 31, 2022
Fair Value Disclosures [Abstract] |
Gross Impact of Changes in Fair Value of Derivatives Designated as Cash Flow Hedges on AOCI and Net Income | The following table summarizes the gross impact of changes in the fair value of derivatives designated as cash flow hedges recognized in accumulated other comprehensive income (loss) and net income (loss) during the three months ended March 31, 2022 and 2021 (in millions):
|  |  |  | Recognized in Net Income
For the Three Months Ended March 31, |  | Gain (Loss) Recognized in Accumulated Other Comprehensive Income |  | Classification of Gain (Loss) |  | Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
2022 |  |  |  |  |  |
Foreign exchange contracts |  | $ | (150) |  |  |  |  |
|  |  |  | Net sales |  | 1 |
|  |  |  | Cost of goods sold |  | (17) |
|  |  |  | Other, net |  | (10) |
Interest rate contracts |  | 37 |  |  | Interest expense |  | 8 |
Total |  | $ | (113) |  |  |  |  | $ | (18) |
2021 |  |  |  |  |  |
Foreign exchange contracts |  | $ | (26) |  |  |  |  |
|  |  |  | Net sales |  | (2) |
|  |  |  | Cost of goods sold |  | 25 |
|  |  |  | Other, net |  | (7) |
Interest rate contracts |  | 20 |  |  | Interest expense |  | (2) |
Total |  | $ | (6) |  |  |  |  | $ | 14 |
Significant amounts reclassified out of each component of accumulated other comprehensive income (loss) in the three months ended March 31, 2022 and 2021 consisted of the following:
| Amounts Reclassified from Other Comprehensive Income (Loss) |  | Consolidated Statement of Operations Line
| Three Months Ended March 31, |  |
| 2022 |  | 2021 |  |
| (in millions) |  |
Cash flow hedges | $ | (1) |  |  | $ | 2 |  |  | Net sales
| 17 |  |  | (25) |  |  | Cost of goods sold
| 10 |  |  | 7 |  |  | Other, net
| (8) |  |  | 2 |  |  | Interest expense
| (2) |  |  | 1 |  |  | Income taxes
| $ | 16 |  |  | $ | (13) |  |  |
Change in retirement plans’ funded status: |  |  |  |  |
Amortization of actuarial losses | $ | 5 |  |  | $ | 9 |  |  | *
Amortization of prior service cost | (31) |  |  | (32) |  |  | *
| (7) |  |  | (7) |  |  | Income taxes
| $ | (33) |  |  | $ | (30) |  |  |
Total reclassifications, net of tax | $ | (17) |  |  | $ | (43) |  |  |
(*) These amounts are included in net periodic pension and other postretirement benefit cost. See “Note 6: Employee Benefit Plans and Postretirement Benefits” for additional information.
Summary of Impact of Changes in Fair Value of Fair Value Hedges and Derivatives Not Designated as Hedging Instruments on Earnings | The following table summarizes the activity in accumulated other comprehensive income related to the derivatives held by the Company during the three months ended March 31, 2022 and 2021:
In Millions |  | Before-Tax Amount |  | Income Tax |  | After-Tax Amount
Accumulated derivative net losses as of December 31, 2021 |  | $ | (3) |  |  | $ | (14) |  |  | $ | (17) |
Impact of demerger |  | 19 |  |  | — |  |  | 19 |
Net changes in fair value of derivatives |  | (113) |  |  | 2 |  |  | (111) |
Net losses reclassified from accumulated other comprehensive income into income |  | 18 |  |  | (2) |  |  | 16 |
Accumulated derivative net losses as of March 31, 2022 |  | $ | (79) |  |  | $ | (14) |  |  | $ | (93) |
In Millions |  | Before-Tax Amount |  | Income Tax |  | After-Tax Amount
Accumulated derivative net losses as of December 31, 2020 |  | $ | (5) |  |  | $ | (1) |  |  | $ | (6) |
Net changes in fair value of derivatives |  | (6) |  |  | (1) |  |  | (7) |
Net losses reclassified from accumulated other comprehensive income into income |  | (14) |  |  | 1 |  |  | (13) |
Accumulated derivative net losses as of March 31, 2021 |  | $ | (25) |  |  | $ | (1) |  |  | $ | (26) |
The following tables summarize the impact that changes in the fair value of fair value hedges and derivatives not designated as hedging instruments had on earnings (in millions):
|  |  |  | For the Three Months Ended March 31,
|  | Classification of Gain |  | 2022 |  | 2021
Fair Value Hedges |  |  |  |  |  |
Interest rate derivatives |  | Interest expense |  | $ | (55) |  |  | $ | (21) |
Not Designated as Hedges |  |  |  |  |  |
Foreign exchange contracts |  | Other, Net |  | $ | (47) |  |  | $ | (4) |
Summary of Fair Value of Derivatives | The fair values of CNH Industrial’s derivatives as of March 31, 2022 and December 31, 2021 in the condensed consolidated balance sheets are recorded as follows:
|  | March 31, 2022 |  | December 31, 2021
in millions of dollars |  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value
Derivatives designated as hedging instruments under Subtopic 815-20 |  |  |  |  |  |  |  |
Interest rate contracts |  | Derivative assets |  | 75 |  |  | Derivative assets |  | 65 |
Foreign currency contracts |  | Derivative assets |  | 15 |  |  | Derivative assets |  | 77 |
Total derivative assets designated as hedging instruments |  |  |  | 90 |  |  |  |  | 142 |
Interest rate contracts |  | Derivative liabilities |  | 72 |  |  | Derivative liabilities |  | 28 |
Foreign currency contracts |  | Derivative liabilities |  | 169 |  |  | Derivative liabilities |  | 101 |
Total derivative liabilities designated as hedging instruments |  |  |  | 241 |  |  |  |  | 129 |
Derivatives not designated as hedging instruments under Subtopic 815-20 |  |  |  |  |  |  |  |
Interest rate contracts |  | Derivative assets |  | 48 |  |  | Derivative assets |  | 11 |
Foreign currency contracts |  | Derivative assets |  | 78 |  |  | Derivative assets |  | 29 |
Total derivative assets not designated as hedging instruments |  |  |  | 126 |  |  |  |  | 40 |
Interest rate contracts |  | Derivative liabilities |  | 48 |  |  | Derivative liabilities |  | 12 |
Foreign currency contracts |  | Derivative liabilities |  | 92 |  |  | Derivative liabilities |  | 40 |
Total derivative liabilities not designated as hedging instruments |  |  |  | 140 |  |  |  |  | 52 |
Summary of Investments Measured on Recurring Basis | The following tables present for each of the fair-value hierarchy levels the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021:
| Level 1 |  | Level 2 |  | Total
| March 31, 2022 |  | December 31, 2021 |  | March 31, 2022 |  | December 31, 2021 |  | March 31, 2022 |  | December 31, 2021
| (in millions)
Assets |  |  |  |  |  |  |  |  |  |  |
Foreign exchange derivatives | $ | — |  |  | $ | — |  |  | $ | 93 |  |  | $ | 106 |  |  | $ | 93 |  |  | $ | 106 |
Interest rate derivatives | — |  |  | — |  |  | 123 |  |  | 76 |  |  | 123 |  |  | 76 |
Total Assets | $ | — |  |  | $ | — |  |  | $ | 216 |  |  | $ | 182 |  |  | $ | 216 |  |  | $ | 182 |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Foreign exchange derivatives | $ | — |  |  | $ | — |  |  | $ | 261 |  |  | $ | 141 |  |  | $ | 261 |  |  | $ | 141 |
Interest rate derivatives | — |  |  | — |  |  | 120 |  |  | 40 |  |  | 120 |  |  | 40 |
Total Liabilities | $ | — |  |  | $ | — |  |  | $ | 381 |  |  | $ | 181 |  |  | $ | 381 |  |  | $ | 181 |
Summary of Investments Measured on Nonrecurring Basis | The following tables present the fair value for nonrecurring Level 3 measurements from impairments as of March 31, 2022 and 2021:
| Fair Value |  | Losses
| 2022 |  | 2021 |  | 2022 |  | 2021
| (in millions)
Property, plant and equipment | $ | 7 |  |  | $ | — |  |  | $ | 17 |  |  | $ | — |
Summary of Estimated Fair Market Values | The estimated fair market values of financial instruments not carried at fair value in the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 are as follows:
| March 31, 2022 |  | December 31, 2021
| Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
| (in millions)
Financing receivables | $ | 16,083 |  |  | $ | 16,225 |  |  | $ | 15,376 |  |  | $ | 15,605 |
Debt | $ | 21,335 |  |  | $ | 21,138 |  |  | $ | 20,897 |  |  | $ | 21,091 |

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- Definition Tabular disclosure of liabilities measured at fair value measured on a recurring or nonrecurring basis. Includes, but is not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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- Definition Tabular disclosure of the location and amount of derivative instruments and nonderivative instruments designated as hedging instruments reported before netting adjustments, and the amount of gain (loss) on derivative instruments and nonderivative instruments designated and qualified as hedging instruments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=125515794&loc=SL5624181-113959 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=125515794&loc=SL5618551-113959 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=125515794&loc=SL5624171-113959 + Details
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- Definition Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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