Market Overview

CNH Industrial 2017 second quarter revenues up 3% to $6.9 billion, net income at $247 million, with adjusted net income(2)(3) up 23% to $266 million or $0.19 per share. Net industrial debt at $2.1 billion

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LONDON, July 26, 2017 /PRNewswire/ --

Financial results presented under U.S. GAAP(1)

  • Industrial Activities' revenues up 3.2% (up 4.5% on a constant currency basis) on strengthening agricultural equipment demand in LATAM and positive developments in APAC markets across all segments
  • Operating profit(2)(3) of Industrial Activities increased 6.2% to $481 million, with an operating margin of 7.2% as a result of a solid performance in all segments
  • Adjusted net income increased to $266 million in the second quarter of 2017, with adjusted diluted EPS(2)(3) of $0.19
  • Net industrial debt(2)(3) was $2.1 billion at June 30, 2017, in line with March 31, 2017
  • In June, S&P Global Ratings raised the credit ratings of both CNH Industrial N.V. and CNH Industrial Capital LLC to "investment grade", with stable outlook
  • Full year guidance leading to the high end of the sales and EPS range

 


Summary of Results    ($ million except EPS)






Six Months Ended June 30,


Three Months Ended June 30,



2017

2016

Change


2017

2016

Change



12,629

12,125

4.2%

Revenues

6,948

6,753

2.9%



296

(384)

680

Net income (loss)

247

129

118



324

217

107

Adjusted net income

266

216

50



0.21

(0.28)

0.49

Basic EPS ($)

0.18

0.10

0.08



0.21

(0.28)

0.49

Diluted EPS ($)

0.18

0.10

0.08



0.23

0.16

0.07

Adjusted diluted EPS ($)

0.19

0.16

0.03



CNH Industrial N.V. (NYSE:CNHI / MI:CNHI) today announced consolidated revenues of $6,948 million for the second quarter of 2017, up 2.9% compared to the second quarter of 2016. Net sales of Industrial Activities were $6,655 million in the second quarter of 2017, up 3.2% compared to the second quarter of 2016. Reported net income was $247 million for the second quarter of 2017 and includes a charge of $17 million ($11 million net of tax impact) related to the early redemption, in June 2017, of all outstanding Case New Holland Industrial Inc. 7⅞% Senior Notes due 2017. Adjusted net income was $266 million for the second quarter, with adjusted diluted EPS of $0.19, up 19% compared to the second quarter of 2016.

Operating profit of Industrial Activities was $481 million for the second quarter of 2017, a $28 million increase compared to the second quarter of 2016, with an operating margin of 7.2%, up 0.2 p.p. compared to the second quarter of 2016.

(1)

CNH Industrial reports quarterly and annual consolidated financial results under U.S. GAAP and EU-IFRS. The tables and discussion related to the financial results of the Company and its segments shown in this press release are prepared in accordance with U.S. GAAP. Financial results under EU-IFRS are shown in specific tables at the end of this press release. 

(2)

This item is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Information" section of this press release for information regarding non-GAAP financial measures.

(3)

Refer to the specific table in the "Other Supplemental Financial Information" section of this press release for the reconciliation between the non-GAAP financial measure and the most comparable GAAP financial measure.

Income taxes were $113 million in the second quarter of 2017 ($107 million in the second quarter of 2016). Adjusted income taxes(1)(2) for the second quarter of 2017 were $123 million ($107 million in the second quarter of 2016). The adjusted effective tax rate (adjusted ETR)(1)(2) was 34% (36% in the second quarter of 2016).

Net industrial debt was $2.1 billion at June 30, 2017, in line with March 31, 2017, with cash flow generation from industrial operations of more than $400 million in the second quarter, offset by the payment of $161 million in dividends to shareholders in May 2017 and a foreign exchange impact on euro denominated debt. Total debt was $25.5 billion at June 30, 2017, compared to $24.5 billion at March 31, 2017. At June 30, 2017, available liquidity(1)(2) was $8.3 billion, up $0.8 billion compared to March 31, 2017.

During the quarter, the Company redeemed all of the outstanding $636 million aggregate principal amount of its 7⅞% Senior Notes due 2017 (the "2017 Notes"). The $17 million one-time charge related to the early redemption of the notes will be more than offset by interest cost savings achieved through the remaining original term of the 2017 Notes.

On June 15, 2017, S&P Global Ratings raised its long-term corporate credit rating on both CNH Industrial N.V. and CNH Industrial Capital LLC from "BB+" to "BBB-" with stable outlook. The short-term rating of CNH Industrial N.V. was raised from "B" to "A-3". The issue-level ratings of both CNH Industrial N.V. and CNH Industrial Capital LLC were also raised to "BBB-".

Segment Results

CNH INDUSTRIAL

Revenues by Segment    ($ million)



Six Months Ended June 30,


Three Months Ended June 30,



2017

2016

% change

% change
excl. FX(1)


2017

2016

% change

% change
excl. FX(1)



5,239

4,932

6.2

5.6

Agricultural Equipment

2,893

2,808

3.0

3.3



1,199

1,131

6.0

5.8

Construction Equipment

676

595

13.6

13.5



4,666

4,640

0.6

2.9

Commercial Vehicles

2,575

2,595

-0.8

1.4



2,138

1,905

12.2

15.3

Powertrain

1,136

1,023

11.0

13.8



(1,203)

(1,082)

-

-

Eliminations and other

(625)

(571)

-

-



12,039

11,526

4.5

5.4

Total Industrial Activities

6,655

6,450

3.2

4.5



796

787

1.1

-0.5

Financial Services

400

399

0.3

-



(206)

(188)

-

-

Eliminations and other

(107)

(96)

-

-



12,629

12,125

4.2

4.9

Total

6,948

6,753

2.9

3.8



(1)   "Change excl. FX" or "constant currency" is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Information" section of this press release for information regarding non-GAAP financial measures.

















(1)

This item is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Information" section of this press release for information regarding non-GAAP financial measures.

(2)

Refer to the specific table in the "Other Supplemental Financial Information" section of this press release for the reconciliation between the non-GAAP financial measure and the most comparable GAAP financial measure.



CNH INDUSTRIAL
Operating Profit (loss)(1) by Segment    ($ million)


Six Months Ended June 30,


Three Months Ended June 30,



2017
Profit

2016
Profit

$

change

2017 Margin

2016 Margin


2017
Profit

2016
Profit

$

change

2017
Margin

2016
Margin



462

391

71

8.8%

7.9%

Agricultural Equipment

303

301

2

10.5%

10.7%



(5)

31

-36

(0.4)%

2.7%

Construction Equipment

17

17

-

2.5%

2.9%



119

138

-19

2.6%

3.0%

Commercial Vehicles

91

100

-9

3.5%

3.9%


172

119

53

8.0%

6.2%

Powertrain

98

66

32

8.6%

6.5%


(48)

(48)

-

-

-

Eliminations and other

(28)

(31)

3

-

-



700

631

69

5.8%

5.5%

Total

Industrial Activities

481

453

28

7.2%

7.0%



245

249

-4

30.8%

31.6%

Financial Services

125

119

6

31.3%

29.8%



(165)

(160)

-5

-

-

Eliminations and other

(83)

(84)

1

-

-



780

720

60

6.2%

5.9%

Total

523

488

35

7.5%

7.2%



(1)   Operating profit of Industrial Activities (a non-GAAP financial measure) is defined as net sales less cost of goods sold, selling, general and administrative expenses, and research and development expenses. Operating profit of Financial Services (a non-GAAP financial measure) is defined as revenues less selling, general and administrative expenses, interest expense and certain other operating expenses. 

















Agricultural Equipment's net sales increased 3.0% in the second quarter of 2017 compared to the second quarter of 2016 (up 3.3% on a constant currency basis), as a result of a strong rebound in demand in LATAM. Net sales increased in APAC, mainly driven by favorable volume in Australia, and in the EMEA region. Net sales, as forecast, were down in NAFTA due to unfavorable industry volume in the small grain and hay & forage product lines.

Operating profit was $303 million in the second quarter ($301 million in the second quarter of 2016), with an operating margin of 10.5% (down 0.2 p.p. compared to the second quarter of 2016). Favorable volume in LATAM including improved fixed cost absorption, and disciplined net price realization across all regions, offset negative volume and mix in NAFTA and increased spending on research and development.

Construction Equipment's net sales increased 13.6% in the second quarter of 2017 compared to the second quarter of 2016 (up 13.5% on a constant currency basis), as a result of a strengthening of NAFTA and APAC markets.

Operating profit was $17 million in the second quarter of 2017, flat compared to the second quarter of 2016, with an operating margin of 2.5% (down 0.4 p.p. compared to the second quarter of 2016). The favorable volume trend was offset by foreign exchange impact on product cost. Net pricing was stable across the major markets.

Commercial Vehicles' net sales decreased 0.8% in the second quarter of 2017 compared to the second quarter of 2016 (up 1.4% on a constant currency basis). Higher volumes in APAC and LATAM were more than offset by lower truck and bus volume in EMEA, mainly due to the 2016 Euro VI pre-buy effect in the light vehicle range.

Operating profit was $91 million for the second quarter of 2017 ($100 million in the second quarter of 2016), with an operating margin of 3.5% (down 0.4 p.p. compared to the second quarter of 2016). The decrease was primarily due to lower volume and unfavorable mix in EMEA, partially offset by manufacturing efficiencies and material cost reductions.   

Powertrain's net sales increased 11.0% in the second quarter of 2017 compared to the second quarter of 2016 (up 13.8% on a constant currency basis), as a result of higher volumes. Sales to external customers accounted for 47% of total net sales (46% in the second quarter of 2016).

Operating profit was $98 million for the second quarter of 2017, a $32 million increase compared to the second quarter of 2016, with an operating margin of 8.6%, up 2.1 p.p. compared to the second quarter of 2016 as a result of higher volumes and manufacturing efficiencies.

Financial Services' revenues totaled $400 million in the second quarter of 2017, flat compared to the second quarter of 2016. In the second quarter of 2017, retail loan originations (including unconsolidated joint ventures) were $2.3 billion, flat compared to the second quarter of 2016. The managed portfolio (including unconsolidated joint ventures) was $25.6 billion as of June 30, 2017 (of which retail was 63% and wholesale 37%), up $0.3 billion compared to June 30, 2016.

Net income was $87 million in the second quarter of 2017, flat compared to the second quarter of 2016.

2017 Outlook

During the first half of 2017, market conditions across our major segments have been better than originally expected, despite continued inventory destocking efforts in high horsepower tractors in NAFTA row crop, weakened demand in hay & forage product lines, and persisting end-market weakness in France. Therefore, the Company is leading its 2017 guidance for sales and EPS to the upper end of the range while keeping the net industrial debt guidance unchanged as follows:

  • Net sales of Industrial Activities of approximately $24 billion;
  • Adjusted diluted EPS(1) of approximately $0.41;
  • Net industrial debt at the end of 2017 between $1.4 billion and $1.6 billion.

(1)

Outlook is not provided on diluted EPS, the most comparable GAAP financial measure of this non-GAAP financial measure, as the income or expense excluded from the calculation of adjusted diluted EPS and instead included in the calculation of diluted EPS are, by definition, not predictable and uncertain.

About CNH Industrial

CNH Industrial N.V. (NYSE: CNHI /MI: CNHI) is a global leader in the capital goods sector with established industrial experience, a wide range of products and a worldwide presence. Each of the individual brands belonging to the Company is a major international force in its specific industrial sector: Case IH, New Holland Agriculture and Steyr for tractors and agricultural machinery; Case and New Holland Construction for earth moving equipment; Iveco for commercial vehicles; Iveco Bus and Heuliez Bus for buses and coaches; Iveco Astra for quarry and construction vehicles; Magirus for firefighting vehicles; Iveco Defence Vehicles for defence and civil protection; and FPT Industrial for engines and transmissions. More information can be found on the corporate website: www.cnhindustrial.com

Additional Information

Today, at 3:30 p.m. CEST / 2:30 p.m. BST / 9:30 a.m. EDT, management will hold a conference call to present 2017 second quarter and first half results to financial analysts and institutional investors. The call can be followed live online at: http://bit.ly/CNH_Industrial_Q2_2017 and a recording will be available later on the Company's website (www.cnhindustrial.com). A presentation will be made available on the CNH Industrial website prior to the call.

Non-GAAP Financial Information

CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial's management believes that these non-GAAP financial measures provide useful and relevant information regarding its results and allow management and investors to assess CNH Industrial's operating trends, financial performance and financial position. Management uses these non-GAAP measures to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions as they provide additional transparency with respect to our core operations. These non-GAAP financial measures have no standardized meaning presented in U.S. GAAP or EU-IFRS and are unlikely to be comparable to other similarly titled measures used by other companies due to potential differences between the companies in calculations. As a result, the use of these non-GAAP measures has limitations and they should not be considered as substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP and/or EU-IFRS.

CNH Industrial non-GAAP financial measures are defined as follows:

  • Operating Profit under U.S. GAAP: Operating Profit of Industrial Activities is defined as net sales less cost of goods sold, selling, general and administrative expenses, and research and development expenses. Operating Profit of Financial Services is defined as revenues less selling, general and administrative expenses, interest expense and certain other operating expenses.
  • Trading Profit under EU-IFRS: Trading Profit is derived from financial information prepared in accordance with EU-IFRS and is defined as net revenues less cost of sales, selling, general and administrative costs, research and development costs, and other operating income and expenses.
  • Operating Profit under EU-IFRS: Operating Profit under EU-IFRS is computed starting from Trading Profit under EU-IFRS plus/minus restructuring costs, other income (expenses) that are unusual in the ordinary course of business (such as gains and losses on the disposal of investments and other unusual items arising from infrequent external events or market conditions).
  • Adjusted Net Income (Loss): is defined as net income (loss), less restructuring charges and non-recurring items, after tax. In particular, non-recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent in nature and not reflective of on-going operational activities.
  • Adjusted Diluted EPS: is computed by dividing Adjusted Net Income (loss) attributable to CNH Industrial N.V. by a weighted-average number of common shares outstanding during the period that takes into consideration potential common shares outstanding deriving from the CNH Industrial share-based payment awards, when inclusion is not anti-dilutive.
  • Adjusted Income Taxes: is defined as income taxes less the tax effect of restructuring expenses and non-recurring items and non-recurring tax charges.
  • Adjusted Effective Tax Rate (Adjusted ETR): is computed by dividing a) adjusted income taxes by b) income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates, less restructuring expenses and non-recurring items.
  • Net Debt and Net Debt of Industrial Activities (or Net Industrial Debt): Net Debt is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash and derivative hedging debt. CNH Industrial provides the reconciliation of Net Debt to Total Debt, which is the most directly comparable measure included in the consolidated balance sheets. Due to different sources of cash flows used for the repayment of the debt between Industrial Activities and Financial Services (by cash from operations for Industrial Activities and by collection of financing receivables for Financial Services), management separately evaluates the cash flow performance of Industrial Activities using Net Debt of Industrial Activities.
  • Available Liquidity: is defined as cash and cash equivalents plus restricted cash and undrawn committed facilities.
  • Change excl. FX or Constant Currency: CNH Industrial discusses the fluctuations in revenues on a constant currency basis by applying the prior year average exchange rates to current year's revenues expressed in local currency in order to eliminate the impact of foreign exchange rate fluctuations.

The tables attached to this press release provide reconciliations of the non-GAAP measures used in this press release to the most directly comparable GAAP measures.

Forward-looking statements

All statements other than statements of historical fact contained in this earning release including statements regarding our competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. These statements may include terminology such as "may", "will", "expect", "could", "should", "intend", "estimate", "anticipate", "believe", "outlook", "continue", "remain", "on track", "design", "target", "objective", "goal", "forecast", "projection", "prospects", "plan", or similar terminology. Forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside our control and are difficult to predict. If any of these risks and uncertainties materialize or other assumptions underlying any of the forward-looking statements prove to be incorrect, the actual results or developments may differ materially from any future results or developments expressed or implied by the forward-looking statements. Factors, risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others: the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products; general economic conditions in each of our markets; changes in government policies regarding banking, monetary and fiscal policies; legislation, particularly relating to capital goods-related issues such as agriculture, the environment, debt relief and subsidy program policies, trade and commerce and infrastructure development; government policies on international trade and investment, including sanctions, import quotas, capital controls and tariffs; actions of competitors in the various industries in which we compete; development and use of new technologies and technological difficulties; the interpretation of, or adoption of new, compliance requirements with respect to engine emissions, safety or other aspects of our products; production difficulties, including capacity and supply constraints and excess inventory levels; labor relations; interest rates and currency exchange rates; inflation and deflation; energy prices; prices for agricultural commodities; housing starts and other construction activity; our ability to obtain financing or to refinance existing debt; a decline in the price of used vehicles; the resolution of pending litigation and investigations on a wide range of topics, including dealer and supplier litigation, follow-on private litigation in various jurisdictions after the settlement of the EU antitrust investigation announced on July 19, 2016, intellectual property rights disputes, product warranty and defective product claims, and emissions and/or fuel economy regulatory and contractual issues; our pension plans and other post-employment obligations; political and civil unrest; volatility and deterioration of capital and financial markets, including further deterioration of the Eurozone sovereign debt crisis, possible effects of "Brexit", political evolutions in Turkey, terror attacks in Europe and elsewhere, and other similar risks and uncertainties and our success in managing the risks involved in the foregoing. Further information concerning factors, risks, and uncertainties that could materially affect the Company's financial results is included in our annual report on Form 20-F for the year ended December 31, 2016, prepared in accordance with U.S. GAAP, and in the Company's EU Annual Report at December 31, 2016, prepared in accordance with EU-IFRS. Investors should refer to and consider the incorporated information on risks, factors, and uncertainties in addition to the information presented here.

Forward-looking statements speak only as of the date on which such statements are made. Furthermore, in light of ongoing difficult macroeconomic conditions, both globally and in the industries in which we operate, it is particularly difficult to forecast our results and any estimates or forecasts of particular periods that we provide in this earnings release are uncertain. Accordingly, investors should not place undue reliance on such forward-looking statements. We can give no assurance that the expectations reflected in our forward-looking statements will prove to be correct. Our outlook is based upon assumptions relating to the factors described in the earnings release, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. Our actual results could differ materially from those anticipated in such forward-looking statements. We undertake no obligation to update or revise publicly our outlook or forward-looking statements. Further information concerning CNH Industrial and its businesses, including factors that potentially could materially affect CNH Industrial's financial results, is included in CNH Industrial's reports and filings with the U.S. Securities and Exchange Commission ("SEC"), the Autoriteit Financiële Markten ("AFM") and Commissione Nazionale per le Società e la Borsa ("CONSOB").

All future written and oral forward-looking statements by CNH Industrial or persons acting on the behalf of CNH Industrial are expressly qualified in their entirety by the cautionary statements contained herein or referred to above.

Contacts                 


Media Inquiries                 

Investor Relations



United Kingdom        

United Kingdom



Richard Gadeselli   

Federico Donati

Tel: +44 207 7660 346            

Tel: +44 207 7660 386



Laura Overall   

United States

Tel: +44 207 7660 338    



Noah Weiss


Tel: +1 630 887 3745

E-mail: mediarelations@cnhind.com


www.cnhindustrial.com 



 

CNH INDUSTRIAL N.V.

Condensed Consolidated Statements of Operations

For The Three Months Ended June 30, 2017 and 2016 and For The Six Months Ended June 30, 2017 and 2016

(Unaudited)


(U.S. GAAP)


($ million)

Three Months Ended June 30,

Six Months Ended June 30,

2017


2016

2017


2016

Revenues







Net sales

6,655


6,450

12,039


11,526

Finance and interest income

293


303

590


599

TOTAL REVENUES

6,948


6,753

12,629


12,125

Costs and Expenses







Cost of goods sold

5,427


5,252

9,924


9,490

Selling, general and administrative expenses

575


595

1,117


1,141

Research and development expenses

228


225

419


408

Restructuring expenses

12


10

24


25

Interest expense(1)

234


240

453


470

Other, net(2)

139


190

280


820

TOTAL COSTS AND EXPENSES

6,615


6,512

12,217


12,354

INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES

333


241

412


(229)

Income tax (expense)

(113)


(107)

(161)


(147)

Equity in income of unconsolidated subsidiaries and affiliates(3)

27


(5)

45


(8)

NET INCOME (LOSS)

247


129

296


(384)

Net income (loss) attributable to noncontrolling interests

5


3

8


2

NET INCOME (LOSS) ATTRIBUTABLE TO CNH INDUSTRIAL N.V.

242


126

288


(386)








(in $)







Earnings (loss) per share attributable to common shareholders







Basic

0.18


0.10

0.21


(0.28)

Diluted

0.18


0.10

0.21


(0.28)

Cash dividends declared per common share

0.118


0.148

0.118


0.148





Notes:


(1)

In the three and six months ended June 30, 2017, Interest expense includes the charge of $17 million related to the early redemption of all outstanding Case New Holland Industrial Inc. 7⅞% Senior Notes due 2017.

(2)

In the three and six months ended June 30, 2016, Other, net included the non-recurring charge of $49 million and $551 million, respectively, related to the European Commission settlement.

(3)

In the three and six months ended June 30, 2016, Equity in income of unconsolidated subsidiaries and affiliates included a negative impact of $28 million incurred by the joint venture Naveco Ltd due to its exit from a line of business.




These Condensed Consolidated Statements of Operations should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2016 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Operations represent the consolidation of all CNH Industrial N.V. subsidiaries.



CNH INDUSTRIAL N.V.

Condensed Consolidated Balance Sheets

As of June 30, 2017 and December 31, 2016

(Unaudited)


(U.S. GAAP)


($ million)



June 30, 2017


December 31, 2016

ASSETS






Cash and cash equivalents



4,601


5,017

Restricted cash



690


837

Trade receivables, net



656


623

Financing receivables, net



18,939


18,662

Inventories, net



6,965


5,609

Property, plant and equipment, net



6,794


6,397

Investments in unconsolidated subsidiaries and affiliates



532


487

Equipment under operating leases



1,928


1,907

Goodwill



2,463


2,449

Other intangible assets, net



776


787

Deferred tax assets



1,000


937

Derivative assets



88


95

Other assets



1,832


1,740

TOTAL ASSETS



47,264


45,547

LIABILITIES AND EQUITY






Debt



25,474


25,276

Trade payables



6,129


5,185

Deferred tax liabilities



98


84

Pension, postretirement and other postemployment benefits



2,328


2,276

Derivative liabilities



94


249

Other liabilities



8,661


8,005

Total Liabilities



42,784


41,075

Redeemable noncontrolling interest



23


21

Common shares, €0.01, par value; outstanding 1,364,122,455 common shares and 396,237,285 special voting shares at 06/30/2017; and outstanding 1,361,630,903 common shares and 412,268,203 special voting shares at 12/31/2016



25


25

Treasury stock, at cost: 9,674 common shares at 06/30/2017 and 1,278,708 common shares at 12/31/2016



-


(9)

Additional paid in capital



4,413


4,408

Retained earnings



1,914


1,787

Accumulated other comprehensive loss



(1,902)


(1,767)

Noncontrolling interests



7


7

Equity



4,457


4,451

TOTAL LIABILITIES AND EQUITY



47,264


45,547



These Condensed Consolidated Balance Sheets should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2016 included in the Annual Report on Form 20-F. These Condensed Consolidated Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.



CNH INDUSTRIAL N.V.

Condensed Consolidated Statements of Cash Flows

For The Six Months Ended June 30, 2017 and 2016

(Unaudited)


(U.S. GAAP)

($ million)

Six Months Ended June 30,

2017

2016

Operating activities:



Net income (loss)

296

(384)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:



Depreciation and amortization expense, net of assets under operating leases and assets sold under buy-back commitments

354

358

Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments

280

271

Loss from disposal of assets

12

2

Loss on repurchase/early redemption of Notes

17

-

Undistributed income (loss) of unconsolidated subsidiaries

(10)

65

Other non-cash items

87

116

Changes in operating assets and liabilities:



Provisions

41

507

Deferred income taxes

(85)

9

Trade and financing receivables related to sales, net

(291)

(276)

Inventories, net

(1,057)

(806)

Trade payables

617

394

Other assets and liabilities

6

222

NET CASH PROVIDED BY OPERATING ACTIVITIES

267

478

Investing activities:



Additions to retail receivables

(1,806)

(1,781)

Collections of retail receivables

2,190

2,328

Proceeds from the sale of assets, net of assets under operating leases and

assets sold under buy-back commitments

2

8

Proceeds from the sale of assets previously under operating leases and assets sold under buy-back commitments

377

323

Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments

(165)

(172)

Expenditures for assets under operating leases and assets sold under buy-back commitments

(850)

(669)

Other

145

(148)

NET CASH USED IN INVESTING ACTIVITIES

(107)

(111)

Financing activities:



Proceeds from long-term debt

7,395

5,417

Payment of long-term debt

(8,104)

(5,981)

Net increase (decrease) in other financial liabilities

90

(192)

Dividends paid

(165)

(204)

Other

(5)

(58)

NET CASH USED IN FINANCING ACTIVITIES

(789)

(1,018)

Effect of foreign exchange rate changes on cash and cash equivalents

213

149

DECREASE IN CASH AND CASH EQUIVALENTS

(416)

(502)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

5,017

5,384

CASH AND CASH EQUIVALENTS, END OF PERIOD

4,601

4,882



These Condensed Consolidated Statements of Cash Flows should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2016 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Cash Flows represent the consolidation of all CNH Industrial N.V. subsidiaries.



CNH INDUSTRIAL N.V.

Supplemental Statements of Operations

For The Three Months Ended June 30, 2017 and 2016 and For The Six Months Ended June 30, 2017 and 2016

(Unaudited)


(U.S. GAAP)


Industrial Activities

Financial Services

($ million)

Three Months Ended
June 30,

Six Months Ended
June 30,

Three Months Ended
June 30,

Six Months Ended
June 30,

2017

2016

2017

2016

2017

2016

2017

2016

Revenues









Net sales

6,655

6,450

12,039

11,526

-

-

-

-

Finance and interest income

29

33

65

64

400

399

796

787

TOTAL REVENUES

6,684

6,483

12,104

11,590

400

399

796

787

Costs and Expenses









Cost of goods sold

5,427

5,252

9,924

9,490

-

-

-

-

Selling, general and administrative expenses

519

520

996

997

56

75

121

144

Research and development expenses

228

225

419

408

-

-

-

-

Restructuring expenses

11

9

22

24

1

1

2

1

Interest expense

150

152

289

302

137

132

268

258

Interest compensation to Financial Services

84

85

166

161

-

-

-

-

Other, net

53

116

116

681

85

74

165

140

TOTAL COSTS AND EXPENSES

6,472

6,359

11,932

12,063

279

282

556

543

INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES

212

124

172

(473)

121

117

240

244

Income tax (expense)

(72)

(70)

(82)

(64)

(41)

(37)

(79)

(83)

Equity in income of unconsolidated subsidiaries and affiliates

20

(12)

32

(21)

7

7

13

13

Results from intersegment investments

87

87

174

174

-

-

-

-

NET INCOME (LOSS)

247

129

296

(384)

87

87

174

174



These Supplemental Statements of Operations are presented for informational purposes. The supplemental Industrial Activities data in these statements (with Financial Services on the equity basis) include CNH Industrial N.V.'s Agricultural Equipment, Construction Equipment, Commercial Vehicles and Powertrain segments, as well as Corporate functions. The supplemental Financial Services data in these statements refer to CNH Industrial N.V.'s Financial Services segment. Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated financial statements.



CNH INDUSTRIAL N.V.

Supplemental Balance Sheets

As of June 30, 2017 and December 31, 2016

(Unaudited)


(U.S. GAAP)


Industrial Activities

Financial Services

($ million)

June 30,

2017

December 31,
2016

June 30,
2017

December 31,
2016

ASSETS





Cash and cash equivalents

4,085

4,649

516

368

Restricted cash

6

-

684

837

Trade receivables

626

596

54

58

Financing receivables

1,373

1,592

19,687

19,546

Inventories, net

6,767

5,396

198

213

Property, plant and equipment, net

6,792

6,395

2

2

Investments in unconsolidated subsidiaries and affiliates

3,008

2,886

181

153

Equipment under operating leases

31

17

1,897

1,890

Goodwill

2,309

2,296

154

153

Other intangible assets, net

763

772

13

15

Deferred tax assets

1,161

1,060

205

188

Derivative assets

83

98

16

8

Other assets

1,718

1,505

334

382

TOTAL ASSETS

28,722

27,262

23,941

23,813

LIABILITY AND EQUITY





Debt

7,468

7,691

20,127

20,061

Trade payables

6,020

5,042

137

180

Deferred tax liabilities

157

84

308

310

Pension, postretirement and other postemployment benefits

2,300

2,256

28

20

Derivative liabilities

91

239

14

21

Other liabilities

8,206

7,478

671

669

Total Liabilities

24,242

22,790

21,285

21,261

Redeemable noncontrolling interest

23

21

-

-

Equity

4,457

4,451

2,656

2,552

TOTAL LIABILITIES AND EQUITY

28,722

27,262

23,941

23,813




These Supplemental Balance Sheets are presented for informational purposes. The supplemental Industrial Activities data in these statements (with Financial Services on the equity basis) include CNH Industrial N.V.'s Agricultural Equipment, Construction Equipment, Commercial Vehicles and Powertrain segments, as well as Corporate functions. The supplemental Financial Services data in these statements refer to CNH Industrial N.V.'s Financial Services segment. Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated financial statements.



CNH INDUSTRIAL N.V.

Supplemental Statements of Cash Flows

For The Six Months Ended June 30, 2017 and 2016

(Unaudited)


(U.S. GAAP)


Industrial Activities

Financial Services

($ million)

Six Months Ended June 30,

Six Months Ended June 30,

Operating activities:

2017

2016

2017

2016

Net income (loss)

296

(384)

174

174

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:





Depreciation and amortization expense, net of assets under operating leases and assets sold under buy-back commitments

352

355

2

3

Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments

152

146

128

125

Loss from disposal of assets

12

2

-

-

Loss on repurchase/early redemption of Notes

17

-

-

-

Undistributed income (loss) of unconsolidated subsidiaries

(2)

63

(13)

(13)

Other non-cash items

48

54

39

62

Changes in operating assets and liabilities:





Provisions

45

514

(4)

(7)

Deferred income taxes

(73)

(1)

(12)

10

Trade and financing receivables related to sales, net

(2)

(113)

(284)

(158)

Inventories, net

(1,073)

(791)

16

(15)

Trade payables

658

447

(45)

(58)

Other assets and liabilities

(52)

30

57

192

NET CASH PROVIDED BY OPERATING ACTIVITIES

378

322

58

315

Investing activities:





Additions to retail receivables

-

-

(1,806)

(1,781)

Collections of retail receivables

-

-

2,190

2,328

Proceeds from the sale of assets, net of assets sold under operating leases and assets sold under buy-back commitments

2

8

-

-

Proceeds from the sale of assets previously under operating leases and assets sold under buy-back commitments

144

152

233

171

Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments

(165)

(172)

-

-

Expenditures for assets under operating leases and assets sold under buy-back commitments

(496)

(338)

(354)

(331)

Other

(139)

(91)

255

(57)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

(654)

(441)

518

330

Financing activities:





Proceeds from long-term debt

713

978

6,682

4,439

Payment of long-term debt

(973)

(794)

(7,131)

(5,187)

Net increase (decrease) in other financial liabilities

(67)

(127)

157

(65)

Dividends paid

(165)

(204)

(169)

(159)

Other

(5)

(58)

29

-

NET CASH USED IN FINANCING ACTIVITIES

(497)

(205)

(432)

(972)

Effect of foreign exchange rate changes on cash and cash equivalents

209

103

4

46

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(564)

(221)

148

(281)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

4,649

4,551

368

833

CASH AND CASH EQUIVALENTS, END OF PERIOD

4,085

4,330

516

552





These Supplemental Statements of Cash Flows are presented for informational purposes. The supplemental Industrial Activities data in these statements (with Financial Services on the equity basis) include CNH Industrial N.V.'s Agricultural Equipment, Construction Equipment, Commercial Vehicles and Powertrain segments, as well as Corporate functions. The supplemental Financial Services data in these statements refer to CNH Industrial N.V.'s Financial Services segment. Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated financial statements.






CNH INDUSTRIAL N.V.


Other Supplemental Financial Information


(Unaudited)




CNH INDUSTRIAL
Reconciliation of Operating Profit (loss) to Net Income (loss) under U.S. GAAP   ($ million)



Six Months Ended June 30,


Three Months Ended June 30,




2017

2016


2017

2016




780

720

Total Operating Profit

523

488




24

25

Restructuring expenses

12

10




225

239

Interest expenses of Industrial Activities, net of interest income and eliminations(1)

122

120




(119)

(685)

Other, net(2)

(56)

(117)




412

(229)

Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates

333

241




(161)

(147)

Income tax (expense)

(113)

(107)




45

(8)

Equity in income of unconsolidated subsidiaries and affiliates(3)

27

(5)




296

(384)

Net income (loss)

247

129




(1)  In the three and six months ended June 2017, Interest expenses includes the charge of $17 million related to the early redemption of all outstanding Case New Holland Industrial Inc. 7⅞% Senior Notes due 2017.
(2)  In the three and six months ended June 2016, Other, net included the non-recurring charge of $49 million and $551 million, respectively, related to the European Commission settlement.
(3)  In the three and six months ended June 30, 2016, Equity in income of unconsolidated subsidiaries and affiliates included a negative impact of $28 million incurred by the joint venture Naveco Ltd due to its exit from a line of business.


 

CNH INDUSTRIAL
Reconciliation of Total Debt to Net debt under U.S. GAAP   ($ million)



Consolidated


Industrial Activities


Financial Activities




June 30,

 2017

December 31,

2016


June 30,
2017

December 31,

2016


June 30,
2017

December 31,

2016



Third party debt

25,474

25,276


6,665

6,694


18,809

18,582



Intersegment notes payable

-

-


803

997


1,318

1,479



Total Debt(1)

25,474

25,276


7,468

7,691


20,127

20,061



Less:

Cash and cash equivalents

4,601

5,017


4,085

4,649


516

368



Restricted cash

690

837


6

-


684

837



Intersegment notes receivable

-

-


1,318

1,479


803

997



Derivatives hedging debt

(5)

2


(5)

2


-

-



Net debt (cash)(2)

20,188

19,420


2,064

1,561


18,124

17,859














(1)   Total Debt of Industrial Activities includes Intersegment notes payable to Financial Services of $803 million and $997 million as of June 30, 2017 and December 31, 2016, respectively. Total Debt of Financial Services includes Intersegment notes payable to Industrial Activities of $1,318 million and $1,479 million as of June 30, 2017 and December 31, 2016, respectively.


(2)   The net intersegment receivable/payable balance owed by Financial Services to Industrial Activities was $515 million and $482 million as of June 30, 2017 and December 31, 2016, respectively.

 


CNH INDUSTRIAL

Reconciliation of Cash and cash equivalents to Available liquidity under U.S. GAAP   

($ million)



June 30, 2017

 

March 31, 2017

 

December 31, 2016



Cash and cash equivalents

4,601

3,924

5,017



Restricted cash

690

743

837



Undrawn committed facilities

3,033

2,887

2,890



Available liquidity

8,324

7,554

8,744




 

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)


CNH INDUSTRIAL

Change in Net Industrial Debt under U.S. GAAP    ($ million)


Six Months Ended June 30,


Three Months Ended June 30,



2017


2016


2017


2016



(1,561)


(1,578)

Net industrial (debt)/cash at beginning of period

(2,123)


(2,470)



296


(384)

Net income (loss)

247


129



-


551

Add back European Commission settlement

-


49



17


-

Add back cost of repurchase/early redemption of 2017 Notes(1)

17


-



352


355

Amortization and depreciation(2)

176


178



(49)


99

Changes in provisions and similar(3)

44


137



(597)


(484)

Change in working capital

29


189



(165)


(172)

Investments in property, plant and equipment, and intangible assets(2)

(91)


(92)



36


15

Other changes

1


12



(110)


(20)

Net industrial cash flow

423


602



(170)


(218)

Capital increases and dividends(4)

(169)


(211)



(223)


(319)

Currency translation differences and other(5)

(195)


(56)



(503)


(557)

Change in Net industrial debt

59


335



(2,064)


(2,135)

Net industrial (debt)/cash at end of period

(2,064)


(2,135)


(1)   Add back item to be excluded from the calculation of net industrial cash flow.
(2)   Excluding assets sold under buy-back commitments and assets under operating leases.
(3)   This item also includes changes in items related to assets sold under buy-back commitments, and assets under operating leases.
(4)   This item also includes share buy-back transactions.
(5)   In the three and six months ended June 30, 2017, this item also includes the charge of $17 million related to the early redemption of all outstanding Case New Holland Industrial Inc. 7⅞% Senior Notes due 2017.














 

 

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)


CNH INDUSTRIAL

Reconciliation of Adjusted net income and Adjusted income tax (expense) to the most comparable GAAP financial measure and determination of Adjusted diluted EPS and Adjusted ETR under U.S.GAAP

($ million, except per share data)


 

Six Months Ended June 30,



Three Months Ended June 30,



2017

2016



2017

2016



296

(384)


Net income (loss)

247

129



41

576


Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (a)

29

59



(13)

(3)


Adjustments impacting Income tax (expense) (b)

(10)

-



-

28


Adjustments impacting Equity in income of unconsolidated subsidiaries and affiliates (c)

-

28



324

217


Adjusted net income

266

216



316

215


Adjusted net income attributable to CNH Industrial N.V.

261

213



1,366

1,364


Weighted average shares outstanding – diluted (million)

1,367

1,364



0.23

0.16


Adjusted diluted EPS ($)

0.19

0.16






412

(229)


Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates

333

241



41

576


Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (a)

29

59



453

347


Adjusted income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (A)

362

300






(161)

(147)


Income tax (expense)

(113)

(107)



(13)

(3)


Adjustments impacting Income tax (expense) (b)

(10)

-



(174)

(150)


Adjusted income tax (expense) (B)

(123)

(107)






38%

43%


Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A)

34%

36%






a)      Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates



24

25


Restructuring expenses

12

10



-

551


European Commission settlement

-

49



17

-


Cost of repurchase/early redemption of 2017 Notes

17

-



41

576


Total

29

59


b)     Adjustments impacting Income tax (expense)


(13)

(3)


Tax effect of adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates

(10)

-



(13)

(3)


Total

(10)

-



c)      Adjustments impacting Equity in income of unconsolidated subsidiaries and affiliates



-

28


Negative impact incurred by the joint venture Naveco Ltd due to its exit from a line of business

-

28



-

28


Total

-

28















 


CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)


CNH INDUSTRIAL
Revenues by Segment under EU-IFRS   ($ million)


Six Months Ended June 30,


Three Months Ended June 30,



2017

2016

% change


2017

2016

% change



5,239

4,932

6.2

Agricultural Equipment

2,893

2,808

3.0



1,199

1,131

6.0

Construction Equipment

676

595

13.6



4,778

4,746

0.7

Commercial Vehicles

2,636

2,649

-0.5



2,139

1,909

12.0

Powertrain

1,137

1,025

10.9



(1,203)

(1,082)

-

Eliminations and other

(625)

(571)

-



12,152

11,636

4.4

Total of Industrial Activities

6,717

6,506

3.2



1,017

950

7.1

Financial Services

503

495

1.6



(246)

(225)

-

Eliminations and other

(126)

(115)

-



12,923

12,361

4.5

Total

7,094

6,886

3.0
















CNH INDUSTRIAL
Trading profit/(loss)(1) by Segment under EU-IFRS   ($ million)


Six Months Ended June 30,


Three Months Ended June 30,



2017

2016

Change


2017

2016

Change



309

247

62

Agricultural Equipment

238

228

10



(42)

(9)

-33

Construction Equipment

-

(3)

3



64

93

-29

Commercial Vehicles

67

78

-11



160

110

50

Powertrain

93

64

29



(55)

(48)

-7

Eliminations and other

(34)

(31)

-3



436

393

43

Total of Industrial Activities

364

336

28



242

245

-3

Financial Services

122

118

4



-

-

-

Eliminations and other

-

-

-



678

638

40

Total

486

454

32



(1)   This item is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Information" section of this press release for information regarding non-GAAP financial measures.














CNH INDUSTRIAL

Key Balance Sheet data under EU-IFRS   ($ million)



June 30, 2017

March 31, 2017

December 31, 2016





Total Assets

49,598

47,270

47,834





Total Equity

6,711

6,728

6,634





Equity attributable to CNH Industrial N.V.

6,699

6,717

6,623





Net debt

(20,301)

(20,059)

(19,734)





Of which Net industrial debt(1)

(2,132)

(2,307)

(1,822)





(1)  This item is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Information" section of this press release for information regarding non-GAAP financial measures.













 

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)


CNH INDUSTRIAL

Net income reconciliation U.S. GAAP to EU-IFRS   ($ million)


Six Months Ended June 30,


Three Months Ended June 30,




2017

2016


2017

2016



296

(384)

Net income (loss) in accordance with U.S. GAAP

247

129





Adjustments to conform with EU-IFRS:





(64)

(54)

Development costs

(22)

(14)



26

26

Other adjustments

16

6



8

3

Tax impact on adjustments

(2)

(7)



(9)

2

Deferred tax assets and tax contingencies recognition

(5)

9



(39)

(23)

Total adjustments

(13)

(6)



257

(407)

Profit (loss) in accordance with EU-IFRS

234

123

















 


CNH INDUSTRIAL
Total Equity reconciliation U.S. GAAP to EU-IFRS  ($ million)



June 30, 2017

December 31, 2016



Total Equity under U.S. GAAP

4,457

4,451



Adjustments to conform with EU-IFRS:





Development costs

2,440

2,374



Other adjustments

(136)

(121)



Tax impact on adjustments

(701)

(655)



Deferred tax assets and tax contingencies recognition

651

585



Total adjustments

2,254

2,183



Total Equity under EU-IFRS

6,711

6,634










Translation of financial statements denominated in a currency other than the U.S. dollar
The principal exchange rates used to translate into U.S. dollars the financial statements prepared in currencies other than the U.S. dollar were as follows:

 


Six Months Ended June 30, 2017


At December 31, 2016


Six Months Ended June 30, 2016


Average

At June 30




Average

At June 30

Euro

0.923

0.876


0.949


0.896

0.901

Pound sterling

0.795

0.771


0.812


0.698

0.744

Swiss franc

0.994

0.958


1.019


0.982

0.979

Polish zloty

3.942

3.703


4.184


3.914

3.996

Brazilian real

3.179

3.295


3.254


3.701

3.233

Canadian dollar

1.335

1.296


1.346


1.330

1.296

Argentine peso

15.694

16.476


15.850


14.314

14.951

Turkish lira

3.637

3.517


3.517


2.920

2.888

 


CNH INDUSTRIAL N.V.

Condensed Consolidated Income Statement

For The Three Months Ended June 30, 2017 and 2016 and For The Six Months Ended June 30, 2017 and 2016

(Unaudited)


(EU-IFRS)



Three Months Ended June 30,

Six Months Ended June 30,

($ million)

2017

2016

2017

2016

Net revenues

7,094

6,886

12,923

12,361

Cost of sales

5,778

5,606

10,636

10,142

Selling, general and administrative costs

558

559

1,074

1,073

Research and development costs

255

245

495

470

Other income/(expenses)

(17)

(22)

(40)

(38)

TRADING PROFIT/(LOSS)

486

454

678

638

Gains/(losses) on the disposal of investments

-

-

-

-

Restructuring costs

10

10

23

25

Other unusual income/(expenses)(1)

-

(50)

8

(554)

OPERATING PROFIT/(LOSS)

476

394

663

59

Financial income/(expenses)(2)

(151)

(149)

(292)

(305)

Result from investments(3):

29

(17)

48

(19)

Share of the profit/(loss) of investees accounted for using the equity method

29

(17)

48

(19)

Other income/(expenses) from investments

-

-

-

-

PROFIT/(LOSS) BEFORE TAXES

354

228

419

(265)

Income tax (expense)

(120)

(105)

(162)

(142)

PROFIT/(LOSS) FROM CONTINUING OPERATIONS

234

123

257

(407)

PROFIT/(LOSS) FOR THE PERIOD

234

123

257

(407)






PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO:





Owners of the parent

229

119

249

(410)

Non-controlling interests

5

4

8

3
















(in $)





BASIC EARNINGS/(LOSS) PER COMMON SHARE

0.17

0.09

0.18

(0.30)

DILUTED EARNINGS/(LOSS) PER COMMON SHARE

0.17

0.09

0.18

(0.30)



Notes:


(1)

In the three and six months ended June 30, 2016, Other unusual income/(expenses) included the non-recurring charge of $49 million and $551 million, respectively, related to the European Commission settlement.

(2)

In the three and six months ended June 30, 2017, Financial income/(expenses) includes the charge of $17 million related to the early redemption of all outstanding Case New Holland Industrial Inc. 7⅞% Senior Notes due 2017.

(3)

In the three and six months ended June 30, 2016, Result from investments included a negative impact of $42 million incurred by the joint venture Naveco Ltd due to its exit from a line of business.



This Condensed Consolidated Income Statement should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2016 included in the EU Annual Report. This Condensed Consolidated Income Statement represents the consolidation of all CNH Industrial N.V. subsidiaries.



CNH INDUSTRIAL N.V.

Condensed Consolidated Statement of Financial Position

As of June 30, 2017 and December 31, 2016

(Unaudited)


(EU-IFRS)


($ million)


June 30, 2017

December 31, 2016

ASSETS




Intangible assets


5,578

5,504

Property, plant and equipment


6,636

6,278

Investments and other financial assets:


597

554

Investments accounted for using the equity method


553

505

Other investments and financial assets


44

49

Leased assets


1,928

1,907

Defined benefit plan assets


5

5

Deferred tax assets


994

959

Total Non-current assets


15,738

15,207

Inventories


7,127

5,732

Trade receivables


656

623

Receivables from financing activities


18,939

18,662

Current tax receivables


258

430

Other current assets


1,474

1,209

Current financial assets:


88

95

Current securities


-

-

Other financial assets


88

95

Cash and cash equivalents


5,291

5,854

Total Current assets


33,833

32,605

Assets held for sale


27

22

TOTAL ASSETS


49,598

47,834

EQUITY AND LIABILITIES




Issued capital and reserves attributable to owners of the parent


6,699

6,623

Non-controlling interests


12

11

Total Equity


6,711

6,634

Provisions:


5,972

5,687

Employee benefits


2,522

2,532

Other provisions


3,450

3,155

Debt:


25,586

25,434

Asset-backed financing


11,462

11,784

Other debt


14,124

13,650

Other financial liabilities


94

249

Trade payables


6,129

5,185

Current tax payables


90

229

Deferred tax liabilities


162

188

Other current liabilities


4,854

4,228

Liabilities held for sale


-

-

Total Liabilities


42,887

41,200

TOTAL EQUITY AND LIABILITIES


49,598

47,834



This Condensed Consolidated Statement of Financial Position should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2016 included in the EU Annual Report. This Condensed Consolidated Statement of Financial Position represents the consolidation of all CNH Industrial N.V. subsidiaries.



CNH INDUSTRIAL N.V.

Condensed Consolidated Statement of Cash Flows

For The Six Months Ended June 30, 2017 and 2016

(Unaudited)


(EU-IFRS)



Six Months Ended June 30,

($ million)

2017

2016

A) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

5,854

6,311

B) CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES:



Profit/(loss) for the period

257

(407)

Amortization and depreciation (net of vehicles sold under buy-back commitments and operating leases)

585

599

(Gains)/losses on disposal of non-current assets (net of vehicles sold under buy-back commitments)

-

1

Other non-cash items

(4)

102

Loss on repurchase/early redemption of Notes

17

-

Dividends received

35

57

Change in provisions

(13)

459

Change in deferred income taxes

(77)

32

Change in items due to buy-back commitments(1)

21

84

Change in operating lease items(2)

10

(49)

Change in working capital

(415)

(559)

TOTAL

416

319

C) CASH FLOWS FROM/(USED IN) INVESTMENT ACTIVITIES:



Investments in:



Property, plant and equipment and intangible assets (net of vehicles sold under buy-back commitments and operating leases)

(335)

(363)

Consolidated subsidiaries and other equity investments

(4)

5

Proceeds from the sale of non-current assets (net of vehicles sold under buy-back commitments)

2

8

Net change in receivables from financing activities

176

399

Change in current securities

-

16

Other changes

(105)

(144)

TOTAL

(266)

(79)

D) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES:



Bonds issued

1,141

1,058

Repayment of bonds

(1,153)

(263)

Issuance of other medium-term borrowings (net of repayment)

(24)

(335)

Net change in other financial payables and other financial assets/liabilities

(734)

(1,076)

Capital increase

11

-

Dividends paid

(165)

(204)

(Purchase)/sale of treasury shares

(16)

(14)

(Purchase)/sale of ownership interests in subsidiaries

-

(44)

TOTAL

(940)

(878)

Translation exchange differences

227

143

E) TOTAL CHANGE IN CASH AND CASH EQUIVALENTS

(563)

(495)

F) CASH AND CASH EQUIVALENTS AT END OF PERIOD

5,291

5,816







(1)

Cash generated from the sale of vehicles under buy-back commitments, net of amounts included in Profit/(loss) for the period, is recognized under operating activities in a single line item, which includes changes in working capital, capital expenditure, depreciation and impairment losses. The item also includes gains and losses arising from the sale of vehicles subject to buy-back commitments before the end of the agreement and without repossession of the vehicle.

(2)

Cash from operating lease is recognized under operating activities in a single line item, which includes capital expenditure, depreciation, write-downs and changes in inventory.



These Condensed Consolidated Statement of Cash Flows should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2016 included in the EU Annual Report. This Condensed Consolidated Statement of Cash Flows represents the consolidation of all CNH Industrial N.V. subsidiaries.

 

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SOURCE CNH Industrial N.V.

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