CNH INDUSTRIAL ANNOUNCES RETIREE BENEFITS ALIGNMENT FOLLOWING FAVORABLE U.S. SUPREME COURT RULING
London, April 16, 2018
On February 20, 2018, the Company announced that the United States Supreme Court ruled in its favor in Reese vs. CNH Industrial N.V. and CNH Industrial America LLC. The decision allows CNH Industrial to terminate or modify various retiree healthcare benefits (“Benefits”) previously provided to certain UAW Union represented Company retirees. CNH Industrial has determined to modify the Benefits provided to the applicable retirees to make them consistent with the Benefits provided to current eligible CNH Industrial retirees who had been represented by the UAW.
The Benefits modifications are estimated to result in a reduction of the plan liability by approximately $500 million to $550 million, realizing a corresponding pre-tax income. The actual adjustment to the liability will be finalized using current market assumptions on the applicable measurement date (expected to be in the second quarter, once the retirees have been formally advised). Under U.S. GAAP, this pre-tax income will be amortized from equity to the income statement over approximately 4.5 years. Under IFRS, this pre-tax income will be recorded in the second quarter of 2018 in its entirety.