Market Overview

CNH Industrial 2017 third quarter revenues up 15.3% to $6.6 billion, net income at $57 million, with adjusted net income(2)(3) more than doubling to $148 million or $0.11 per share. Net industrial debt(2)(3) at $2.6 billion

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LONDON, Oct. 31, 2017 /PRNewswire/ --

CNH Industrial logo (PRNewsFoto/CNH Industrial N.V.)

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

  • Industrial Activities' revenues up 16% (up 12% on a constant currency basis) led by solid improvements in all segments
  • Operating profit(2)(3) of Industrial Activities increased 41% to $351 million, with an operating margin of 5.5%, with positive performance in Agricultural Equipment, Construction Equipment and Powertrain
  • Adjusted net income increased to $148 million in the third quarter of 2017, with adjusted diluted EPS(2)(3) of $0.11
  • Net industrial debt was $2.6 billion at September 30, 2017, up $0.5 billion compared to June 30, 2017, due to the typical seasonal increase in net working capital
  • In the quarter, the Company repurchased a total of €800 million in principal amount of 6.250% Notes due 2018 and 2.750% Notes due 2019 issued by CNH Industrial Finance Europe S.A., and issued €650 million in principal amount of 1.750% Notes due 2025
  • Today the Company announced the early redemption of all of the outstanding $600 million in principal amount of CNH Industrial Capital LLC 3⅞% Notes due July 2018
  • On October 24, Fitch Ratings initiated coverage of CNH Industrial N.V. and assigned its long-term issuer default rating of "BBB-" with stable outlook; CNH Industrial securities will be eligible for the main investment grade indices in the U.S. market
  • Full year guidance for Industrial Activities revenues increased to $25.0 to $25.5 billion and Adjusted diluted EPS increased to $0.44 to $0.46; year-end net industrial debt increased to $1.5 to $1.7 billion as a result of the strengthening euro to the U.S. dollar

 

Summary of Results    ($ million except EPS)


Nine Months Ended September 30,


Three Months Ended September 30,



2017

2016

Change


2017

2016

Change



19,259

17,874

7.7%

Revenues

6,630

5,749

15.3%



353

(345)

698

Net income (loss)

57

39

18



472

285

187

Adjusted net income

148

68

80



0.25

(0.25)

0.50

Basic EPS ($)

0.04

0.03

0.01



0.25

(0.25)

0.50

Diluted EPS ($)

0.04

0.03

0.01



0.34

0.21

0.13

Adjusted diluted EPS ($)

0.11

0.05

0.06
















CNH Industrial N.V. (NYSE:CNHI / MI:CNHI) today announced consolidated revenues of $6,630 million for the third quarter of 2017, up 15.3% compared to the third quarter of 2016. Net sales of Industrial Activities were $6,331 million in the third quarter of 2017, up 15.9% compared to the third quarter of 2016. Net income was $57 million for the third quarter of 2017 and includes $53 million of restructuring charges as part of the Company's Efficiency Program. It also includes a charge of $39 million related to the September 2017 repurchase of an aggregate nominal amount of €800 million of the outstanding CNH Industrial Finance Europe S.A. Notes due 2018 and 2019. Adjusted net income was $148 million for the third quarter compared to $68 million in the third quarter of 2016. Adjusted diluted EPS in the third quarter was $0.11, up 120% compared to the third 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.

Operating profit of Industrial Activities increased 41% to $351 million for the third quarter of 2017 compared to the $248 million in the third quarter of 2016, with an operating margin of 5.5%, up 1.0 percentage points ("p.p.") compared to the third quarter of 2016.

Income taxes were $64 million in the third quarter of 2017 ($32 million in the third quarter of 2016). Adjusted income taxes(1)(2) for the third quarter of 2017 were $65 million ($47 million in the third quarter of 2016). The adjusted effective tax rate (adjusted ETR)(1)(2) was 34%, down from 46% in the third quarter of 2016, primarily due to favorable changes in our jurisdictional profit mix.

Net industrial debt was $2.6 billion at September 30, 2017, up $0.5 billion compared to June 30, 2017, due to the typical seasonal increase in net working capital. Total debt was $25.5 billion at September 30, 2017, in line with June 30, 2017. At September 30, 2017, available liquidity(1)(2) was $7.9 billion, down $0.4 billion compared to June 30, 2017.

During the quarter, CNH Industrial Finance Europe S.A. issued €650 million in principal amount of 1.750% Notes due 2025. In addition, CNH Industrial Finance Europe S.A. repurchased €347 million of its outstanding €1.2 billion 6.250% Notes due 2018, and €453 million of its outstanding €1.0 billion 2.750% Notes due 2019. The $39 million one-time charge related to the repurchase of the Notes will be offset by interest cost savings achieved through the remaining original term of the notes. In addition, the Company announced today the early redemption of all of the outstanding $600 million in principal amount of CNH Industrial Capital LLC 3⅞% Notes due July 2018.

On October 24, 2017, Fitch Ratings assigned CNH Industrial N.V. and CNH Industrial Capital LLC long-term issuer default ratings of "BBB-". The outlook of both companies is stable. Fitch Ratings also assigned a short-term issuer default rating to CNH Industrial Capital LLC of "F3". This rating action follows the upgrade of Standard and Poor's, on June 15, 2017, of the long-term corporate rating of CNH Industrial N.V. and CNH Industrial Capital LLC to "BBB-" with stable outlook. These two actions will make the Company's securities eligible for the main investment grade indices in the U.S. market.

(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.

Segment Results

CNH INDUSTRIAL

Revenues by Segment    ($ million)


Nine Months Ended September 30,


Three Months Ended September 30,


2017

2016

%
change

% change
excl. FX(1)


2017

2016

%
change

% change
excl. FX(1)



7,890

7,291

8.2

6.8

Agricultural Equipment

2,651

2,359

12.4

9.4



1,841

1,726

6.7

5.9

Construction Equipment

642

595

7.9

6.0



7,203

6,754

6.6

6.6

Commercial Vehicles

2,537

2,114

20.0

14.7



3,213

2,755

16.6

16.8

Powertrain

1,075

850

26.5

20.4


(1,777)

(1,539)

-

-

Eliminations and other

(574)

(457)

-

-


18,370

16,987

8.1

7.5

Total Industrial Activities

6,331

5,461

15.9

12.0


1,205

1,173

2.7

0.8

Financial Services

409

386

6.0

3.4


(316)

(286)

-

-

Eliminations and other

(110)

(98)

-

-


19,259

17,874

7.7

7.0

Total

6,630

5,749

15.3

11.5



(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.














 

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


Nine Months Ended September 30,


Three Months Ended September 30,



2017
Profit

2016
Profit

$

change

2017
Margin

2016
Margin


2017
Profit

2016
Profit

$

change

2017
Margin

2016
Margin



670

546

124

8.5%

7.5%

Agricultural Equipment

208

155

53

7.8%

6.6%



8

32

-24

0.4%

1.9%

Construction Equipment

13

1

12

2.0%

0.2%



178

202

-24

2.5%

3.0%

Commercial Vehicles

59

64

-5

2.3%

3.0%


260

171

89

8.1%

6.2%

Powertrain

88

52

36

8.2%

6.1%


(65)

(72)

7

-

-

Eliminations and other

(17)

(24)

7

-

-



1,051

879

172

5.7%

5.2%

Total Industrial Activities

351

248

103

5.5%

4.5%



365

363

2

30.3%

30.9%

Financial Services

120

114

6

29.3%

29.5%



(248)

(244)

-4

-

-

Eliminations and other

(83)

(84)

1

-

-



1,168

998

170

6.1%

5.6%

Total

388

278

110

5.9%

4.8%



(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 12.4% in the third quarter of 2017 compared to the third quarter of 2016 (up 9.4% on a constant currency basis). Net sales increased in EMEA, primarily due to improved volume for combines and low horsepower tractors and to favorable net price realization. Net sales also increased in APAC, mainly in India, and in LATAM, mainly in Brazil and Argentina. Net sales in NAFTA were flat, as stable row crop market conditions and improved tractor mix were offset by reduced market demand for hay and forage products.

Operating profit was $208 million in the third quarter of 2017, a 34% increase over the $155 million in the third quarter of 2016. Operating margin increased 1.2 p.p. to 7.8% as a result of the favorable volume and product mix, the positive net price realization more than offsetting raw material cost increases, and improved quality costs, while the Company increased its investments in research and development.

Construction Equipment's net sales increased 7.9% in the third quarter of 2017 compared to the third quarter of 2016 (up 6.0% on a constant currency basis), driven by market growth in all regions, particularly in light equipment in NAFTA and in APAC, where we have seen a sustained rebound in demand since last year. The current worldwide order book is over 50% higher than the previous year.

Operating profit was $13 million in the third quarter of 2017, a $12 million increase compared to the third quarter of 2016, with an operating margin of 2.0% (up 1.8 p.p. compared to the third quarter of 2016). The increase was mainly driven by higher volumes and favorable product mix, as well as slightly positive price realization.

Commercial Vehicles' net sales increased 20.0% in the third quarter of 2017 compared to the third quarter of 2016 (up 14.7% on a constant currency basis). In EMEA, net sales increased as a result of price realization, fleet-related sales of heavy tractor trucks and commercial vans, and timing of specialty vehicle deliveries. In LATAM and APAC, net sales improved as a result of favorable industry trends in Argentina, Turkey, and Australia.

Operating profit was $59 million for the third quarter of 2017 ($64 million in the third quarter of 2016), with an operating margin of 2.3% (down 0.7 p.p. compared to the third quarter of 2016), and was affected by unfavorable product and channel mix, more than offsetting the favorable volume impact, as well as increased investments in research and development on new product programs. The price realization achieved was more than offset by Euro 6 emissions content costs and the impact of the devaluation of the British pound. In general, pricing conditions in the main European markets remained very competitive during the quarter.

At the end of the quarter, the Company initiated additional capacity realignments in its firefighting business as part of the Efficiency Program. The Company recognized a total pre-tax restructuring charge of $47 million, of which $14 million is non-cash charge, and will result in $18 million of total annual pre-tax savings which the Company anticipates will be fully realized by 2019.

Powertrain's net sales increased 26.5% in the third quarter of 2017 compared to the third quarter of 2016 (up 20.4% on a constant currency basis), due to higher sales volumes with both captive and external customers. Sales to external customers accounted for 48% of total net sales, in line with the third quarter of 2016.

Operating profit was $88 million for the third quarter of 2017, a $36 million increase compared to the third quarter of 2016 as a result of higher volume, favorable engine mix, and manufacturing efficiencies. Operating margin increased 2.1 p.p. to 8.2%, the highest third quarter margin ever reported in the segment's history, reflecting the profitability of a well-balanced portfolio of engine applications.

Financial Services' revenues totaled $409 million in the third quarter of 2017, an increase of 6.0% compared to the third quarter of 2016 (up 3.4% on a constant currency basis), due to higher activity in LATAM and APAC. Retail loan originations (including unconsolidated joint ventures) were $2.3 billion, flat compared to the third quarter of 2016. The managed portfolio (including unconsolidated joint ventures) was $26.0 billion as of September 30, 2017 (of which retail was 63% and wholesale 37%), up $1.2 billion compared to September 30, 2016 (up $0.5 billion on a constant currency basis).

Net income was $86 million in the third quarter of 2017, an increase of $9 million compared to the third quarter of 2016, primarily due to the higher activity in LATAM and APAC, lower provisions for credit losses, and the positive impact of currency translation.

2017 Outlook

Market conditions across our major segments have been solid year-to-date, despite continued inventory destocking efforts in high horsepower tractors in the NAFTA row crop market segment and weakened demand in hay and forage products. The weakening of the U.S. dollar against most of our trading currencies, especially the euro, has had a positive translation impact on our revenues. However, the strengthening of the euro has had an unfavorable translation impact on the euro-denominated portion of our net industrial debt. The exchange impacts on profit have been less significant due to balanced foreign currency positions between revenue and costs. Therefore, the Company is increasing its 2017 guidance for sales and EPS, and is slightly increasing the net industrial debt guidance as follows:

  • Net sales of Industrial Activities of $25.0 to $25.5 billion;
  • Adjusted diluted EPS(1) of $0.44 to $0.46;
  • Net industrial debt at the end of 2017 at $1.5 to $1.7 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 2:30 p.m. CET / 1:30 p.m. GMT / 9:30 a.m. EDT, management will hold a conference call to present 2017 third quarter and first nine months results. The call can be followed live online at: http://bit.ly/CNH_Industrial_Q3_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 conference 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. When we provide guidance for adjusted diluted EPS, we do not provide guidance on an earnings per share basis because the GAAP measure will include potentially significant items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end.
  • 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", 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 are 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. Forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update or revise publicly our 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 and Nine Months Ended September 30, 2017 and 2016

(Unaudited)


(U.S. GAAP)


($ million)

Three Months Ended September 30,

Nine Months Ended September 30,

2017


2016

2017


2016

Revenues







Net sales

6,331


5,461

18,370


16,987

Finance and interest income

299


288

889


887

TOTAL REVENUES

6,630


5,749

19,259


17,874

Costs and Expenses







Cost of goods sold

5,242


4,524

15,166


14,014

Selling, general and administrative expenses

559


546

1,676


1,687

Research and development expenses

243


211

662


619

Restructuring expenses

53


6

77


31

Interest expense(1)

259


273

712


743

Other, net(2)

174


131

454


951

TOTAL COSTS AND EXPENSES

6,530


5,691

18,747


18,045

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

100


58

512


(171)

Income tax (expense)

(64)


(32)

(225)


(179)

Equity in income of unconsolidated subsidiaries and affiliates(3)

21


13

66


5

NET INCOME (LOSS)

57


39

353


(345)

Net income (loss) attributable to noncontrolling interests

4


-

12


2

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

53


39

341


(347)








(in $)







Earnings (loss) per share attributable to common shareholders







Basic

0.04


0.03

0.25


(0.25)

Diluted

0.04


0.03

0.25


(0.25)

Cash dividends declared per common share

-


-

0.118


0.148



Notes:

(1)

In the three and nine months ended September 30, 2017, Interest expense includes the charge of $39 million and $56 million, respectively, related to the repurchase/early redemption of Notes. In the three and nine months ended September 30, 2016, this item included the charge of $38 million related to the repurchase of Notes.

(2)

In the nine months ended September 30, 2016, Other, net included the non-recurring charge of $551 million related to the European Commission settlement.

(3)

In the nine months ended September 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 September 30, 2017 and December 31, 2016

(Unaudited)


(U.S. GAAP)


($ million)



September 30, 2017


December 31, 2016

ASSETS






Cash and cash equivalents



4,100


5,017

Restricted cash



681


837

Trade receivables, net



557


623

Financing receivables, net



19,182


18,662

Inventories, net



7,283


5,609

Property, plant and equipment, net



6,918


6,397

Investments in unconsolidated subsidiaries and affiliates

560


487

Equipment under operating leases



1,874


1,907

Goodwill



2,472


2,449

Other intangible assets, net



772


787

Deferred tax assets



1,014


937

Derivative assets



89


95

Other assets



2,027


1,740

TOTAL ASSETS



47,529


45,547

LIABILITIES AND EQUITY






Debt



25,518


25,276

Trade payables



5,867


5,185

Deferred tax liabilities



98


84

Pension, postretirement and other postemployment benefits

2,345


2,276

Derivative liabilities



84


249

Other liabilities



9,136


8,005

Total Liabilities



43,048


41,075

Redeemable noncontrolling interest



25


21

Common shares, €0.01, par value; outstanding 1,363,676,503 common shares and 396,237,285 special voting shares at 09/30/2017; 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: 723,693 common shares at 09/30/2017 and 1,278,708 common shares at 12/31/2016

(8)


(9)

Additional paid in capital



4,416


4,408

Retained earnings



1,967


1,787

Accumulated other comprehensive loss



(1,952)


(1,767)

Noncontrolling interests



8


7

Equity



4,456


4,451

TOTAL LIABILITIES AND EQUITY



47,529


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 Nine Months Ended September 30, 2017 and 2016

(Unaudited)


(U.S. GAAP)


($ million)

Nine Months Ended September 30,

2017

2016

Operating activities:



Net income (loss)

353

(345)

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

540

537

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

430

406

Loss from disposal of assets

23

2

Loss on repurchase/early redemption of Notes

56

38

Undistributed income (loss) of unconsolidated subsidiaries

(22)

52

Other non-cash items

130

172

Changes in operating assets and liabilities:



Provisions

163

500

Deferred income taxes

(80)

14

Trade and financing receivables related to sales, net

28

367

Inventories, net

(1,222)

(754)

Trade payables

232

(173)

Other assets and liabilities

(26)

304

NET CASH PROVIDED BY OPERATING ACTIVITIES

605

1,120

Investing activities:



Additions to retail receivables

(2,857)

(2,747)

Collections of retail receivables

3,104

3,287

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

11

8

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

594

429

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

(278)

(290)

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

(1,196)

(1,091)

Other

82

(42)

NET CASH USED IN INVESTING ACTIVITIES

(540)

(446)

Financing activities:



Proceeds from long-term debt

11,096

8,778

Payment of long-term debt

(11,994)

(9,146)

Net increase (decrease) in other financial liabilities

(187)

(451)

Dividends paid

(166)

(205)

Other

(16)

(58)

NET CASH USED IN FINANCING ACTIVITIES

(1,267)

(1,082)

Effect of foreign exchange rate changes on cash and cash equivalents

285

157

DECREASE IN CASH AND CASH EQUIVALENTS

(917)

(251)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

5,017

5,384

CASH AND CASH EQUIVALENTS, END OF PERIOD

4,100

5,133

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 and Nine Months Ended September 30, 2017 and 2016

(Unaudited)


(U.S. GAAP)



Industrial Activities

Financial Services

($ million)

Three Months Ended

September 30,

Nine Months Ended
September 30,

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

2017

2016

2017

2016

Revenues









Net sales

6,331

5,461

18,370

16,987

-

-

-

-

Finance and interest income

28

39

93

103

409

386

1,205

1,173

TOTAL REVENUES

6,359

5,500

18,463

17,090

409

386

1,205

1,173

Costs and Expenses









Cost of goods sold

5,242

4,524

15,166

14,014

-

-

-

-

Selling, general and administrative expenses

495

478

1,491

1,475

64

68

185

212

Research and development expenses

243

211

662

619

-

-

-

-

Restructuring expenses

53

6

75

30

-

-

2

1

Interest expense

173

192

462

494

140

132

408

390

Interest compensation to Financial Services

84

84

250

245

-

-

-

-

Other, net

88

60

204

741

86

73

251

213

TOTAL COSTS AND EXPENSES

6,378

5,555

18,310

17,618

290

273

846

816

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

(19)

(55)

153

(528)

119

113

359

357

Income tax (expense)

(24)

10

(106)

(54)

(40)

(42)

(119)

(125)

Equity in income of unconsolidated subsidiaries and affiliates

14

7

46

(14)

7

6

20

19

Results from intersegment investments

86

77

260

251

-

-

-

-

NET INCOME (LOSS)

57

39

353

(345)

86

77

260

251


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 September 30, 2017 and December 31, 2016

(Unaudited)


(U.S. GAAP)



Industrial Activities

Financial Services

($ million)

September 30,

2017

December 31, 
2016

September 30,
2017

December 31,
2016

ASSETS





Cash and cash equivalents

3,569

4,649

531

368

Restricted cash

-

-

681

837

Trade receivables

549

596

28

58

Financing receivables

1,325

1,592

19,926

19,546

Inventories, net

7,055

5,396

228

213

Property, plant and equipment, net

6,916

6,395

2

2

Investments in unconsolidated subsidiaries and affiliates

3,105

2,886

195

153

Equipment under operating leases

30

17

1,844

1,890

Goodwill

2,316

2,296

156

153

Other intangible assets, net

760

772

12

15

Deferred tax assets

1,127

1,060

209

188

Derivative assets

79

98

19

8

Other assets

1,844

1,505

366

382

TOTAL ASSETS

28,675

27,262

24,197

23,813

LIABILITY AND EQUITY





Debt

7,404

7,691

20,181

20,061

Trade payables

5,715

5,042

188

180

Deferred tax liabilities

98

84

323

310

Pension, postretirement and other postemployment benefits

2,315

2,256

30

20

Derivative liabilities

81

239

12

21

Other liabilities

8,581

7,478

725

669

Total Liabilities

24,194

22,790

21,459

21,261

Redeemable noncontrolling interest

25

21

-

-

Equity

4,456

4,451

2,738

2,552

TOTAL LIABILITIES AND EQUITY

28,675

27,262

24,197

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 Nine Months Ended September 30, 2017 and 2016

(Unaudited)


(U.S. GAAP)



Industrial Activities

Financial Services

($ million)

Nine Months Ended
September 30,

Nine Months Ended
September 30,

Operating activities:

2017

2016

2017

2016

Net income (loss)

353

(345)

260

251

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

536

533

4

4

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

232

215

198

191

Loss from disposal of assets

23

2

-

-

Loss on repurchase/early redemption of Notes

56

38

-

-

Undistributed income (loss) of unconsolidated subsidiaries

(4)

62

(20)

(19)

Other non-cash items

70

83

60

89

Changes in operating assets and liabilities:





Provisions

165

501

(2)

(1)

Deferred income taxes

(84)

(4)

4

18

Trade and financing receivables related to sales, net

89

(61)

(53)

428

Inventories, net

(1,208)

(740)

(14)

(14)

Trade payables

228

(114)

3

(59)

Other assets and liabilities

(100)

161

67

143

NET CASH PROVIDED BY OPERATING ACTIVITIES

356

331

507

1,031

Investing activities:





Additions to retail receivables

-

-

(2,857)

(2,747)

Collections of retail receivables

-

-

3,104

3,287

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

11

8

-

-

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

236

169

358

260

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

(277)

(290)

(1)

-

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

(717)

(600)

(479)

(491)

Other

(156)

496

193

(538)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

(903)

(217)

318

(229)

Financing activities:





Proceeds from long-term debt

1,500

1,705

9,596

7,072

Payment of long-term debt

(2,044)

(1,291)

(9,950)

(7,854)

Net increase (decrease) in other financial liabilities

(72)

(299)

(115)

(152)

Dividends paid

(166)

(205)

(258)

(242)

Other

(16)

(58)

45

-

NET CASH USED IN FINANCING ACTIVITIES

(798)

(148)

(682)

(1,176)

Effect of foreign exchange rate changes on cash and cash equivalents

265

115

20

42

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(1,080)

81

163

(332)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

4,649

4,551

368

833

CASH AND CASH EQUIVALENTS, END OF PERIOD

3,569

4,632

531

501

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)


Nine Months Ended September 30,


Three Months Ended September 30,



2017

2016


2017

2016



1,168

998

Total Operating Profit

388

278



77

31

Restructuring expenses

53

6



370

392

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

145

153



(209)

(746)

Other, net(2)

(90)

(61)



512

(171)

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

100

58



(225)

(179)

Income tax (expense)

(64)

(32)



66

5

Equity in income of unconsolidated subsidiaries and affiliates(3)

21

13



353

(345)

Net income (loss)

57

39



(1)     In the three and nine months ended September 30, 2017, Interest expenses includes the charge of $39 million and $56 million, respectively, related to the repurchase/early redemption of Notes. In the three and nine months ended September 30, 2016, this item included the charge of $38 million related to the repurchase of Notes.
(2)     In the nine months ended September 30, 2016, Other, net included the non-recurring charge of $551 million related to the European Commission settlement.
(3)     In the nine months ended September 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




September 30,

 2017

December 31,

2016


September 30,
2017

December 31,

2016


September 30,
2017

December 31,

2016



Third party debt

25,518

25,276


6,604

6,694


18,914

18,582



Intersegment notes payable

-

-


800

997


1,267

1,479



Total Debt(1)

25,518

25,276


7,404

7,691


20,181

20,061



Less:

Cash and cash equivalents

4,100

5,017


3,569

4,649


531

368



Restricted cash

681

837


-

-


681

837



Intersegment notes receivable

-

-


1,267

1,479


800

997



Derivatives hedging debt

(7)

2


(7)

2


-

-



Net debt (cash)(2)

20,744

19,420


2,575

1,561


18,169

17,859


(1)   Total Debt of Industrial Activities includes Intersegment notes payable to Financial Services of $800 million and $997 million as of September 30, 2017 and December 31, 2016, respectively. Total Debt of Financial Services includes Intersegment notes payable to Industrial Activities of $1,267 million and $1,479 million as of September 30, 2017 and December 31, 2016, respectively.
(2)   The net intersegment receivable/payable balance owed by Financial Services to Industrial Activities was $467 million and $482 million as of September 30, 2017 and December 31, 2016, respectively.

 


CNH INDUSTRIAL

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

($ million)



September 30, 2017

 

June 30, 2017

 

December 31, 2016



Cash and cash equivalents

4,100

4,601

5,017



Restricted cash

681

690

837



Undrawn committed facilities

3,139

3,033

2,890



Available liquidity

7,920

8,324

8,744











 

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)


CNH INDUSTRIAL

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


Nine Months Ended September 30,


Three Months Ended September 30,



2017


2016


2017


2016



(1,561)


(1,578)

Net industrial (debt)/cash at beginning of period

(2,064)


(2,135)



353


(345)

Net income (loss)

57


39



-


551

Add back European Commission settlement

-


-



56


38

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

39


38



536


533

Amortization and depreciation(2)

184


178



67


103

Changes in provisions and similar(3)

116


4



(1,144)


(989)

Change in working capital

(547)


(505)



(277)


(290)

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

(112)


(118)



14


(100)

Other changes

(22)


(115)



(395)


(499)

Net industrial cash flow

(285)


(479)



(182)


(219)

Capital increases and dividends(4)

(12)


(1)



(437)


(377)

Currency translation differences and other(5)

(214)


(58)



(1,014)


(1,095)

Change in Net industrial debt

(511)


(538)



(2,575)


(2,673)

Net industrial (debt)/cash at end of period

(2,575)


(2,673)


(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 nine months ended September 30, 2017, this item also includes the charge of $39 million and $56 million, respectively, related to the repurchase/early redemption of Notes. In the three and nine months ended September 30, 2016, this item included the charge of $38 million related to the repurchase of Notes.














 

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 measures and determination of Adjusted diluted EPS and Adjusted ETR under U.S.GAAP

($ million, except per share data)


 

Nine Months Ended September 30,



Three Months Ended September 30,



2017

2016



2017

2016



353

(345)


Net income (loss)

57

39



133

620


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

92

44



(14)

(18)


Adjustments impacting Income tax (expense) (b)

(1)

(15)



-

28


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

-

-



472

285


Adjusted net income

148

68



460

283


Adjusted net income attributable to CNH Industrial N.V.

144

68



1,366

1,364


Weighted average shares outstanding – diluted (million)

1,367

1,364



0.34

0.21


Adjusted diluted EPS ($)

0.11

0.05






512

(171)


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

100

58



133

620


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

92

44



645

449


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

192

102






(225)

(179)


Income tax (expense)

(64)

(32)



(14)

(18)


Adjustments impacting Income tax (expense) (b)

(1)

(15)



(239)

(197)


Adjusted income tax (expense) (B)

(65)

(47)






37%

44%


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

34%

46%






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



77

31


Restructuring expenses

53

6



-

551


European Commission settlement

-

-



56

38


Cost of repurchase/early redemption of Notes

39

38



133

620


Total

92

44



b)     Adjustments impacting Income tax (expense)







(14)

(18)


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

(1)

(15)



(14)

(18)


Total

(1)

(15)



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


Total

-

-















 


CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)


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


Nine Months Ended September 30,


Three Months Ended September 30,



2017

2016

% change


2017

2016

% change



7,890

7,291

8.2

Agricultural Equipment

2,651

2,359

12.4



1,841

1,726

6.7

Construction Equipment

642

595

7.9



7,376

6,896

7.0

Commercial Vehicles

2,598

2,150

20.8



3,214

2,760

16.4

Powertrain

1,075

851

26.3



(1,777)

(1,539)

-

Eliminations and other

(574)

(457)

-



18,544

17,134

8.2

Total of Industrial Activities

6,392

5,498

16.3



1,498

1,412

6.1

Financial Services

481

462

4.1



(377)

(349)

-

Eliminations and other

(131)

(124)

-



19,665

18,197

8.1

Total

6,742

5,836

15.5















 

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


Nine Months Ended September 30,


Three Months Ended September 30,



2017

2016

Change


2017

2016

Change



438

322

116

Agricultural Equipment

129

75

54



(50)

(26)

-24

Construction Equipment

(8)

(17)

9



96

130

-34

Commercial Vehicles

32

37

-5



246

155

91

Powertrain

86

45

41



(74)

(74)

-

Eliminations and other

(19)

(26)

7



656

507

149

Total of Industrial Activities

220

114

106



361

359

2

Financial Services

119

114

5



-

-

-

Eliminations and other

-

-

-



1,017

866

151

Total

339

228

111



(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)



September 30, 2017

June 30, 2017

December 31, 2016



Total Assets

49,924

49,598

47,834



Total Equity

6,753

6,711

6,634



Equity attributable to CNH Industrial N.V.

6,741

6,699

6,623



Net debt

20,843

(20,301)

(19,734)



Of which Net industrial debt(1)

(2,629)

(2,132)

(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)


Nine Months Ended September 30,


Three Months Ended September 30,



2017

2016


2017

2016



353

(345)

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

57

39





Adjustments to conform with EU-IFRS:





(80)

(91)

Development costs

(16)

(37)



39

44

Other adjustments

13

18



21

18

Tax impact on adjustments

13

15



(32)

(23)

Deferred tax assets and tax contingencies recognition

(23)

(25)



(52)

(52)

Total adjustments

(13)

(29)



301

(397)

Profit (loss) in accordance with EU-IFRS

44

10
















 

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



September 30, 2017

December 31, 2016



Total Equity under U.S. GAAP

4,456

4,451



Adjustments to conform with EU-IFRS:





Development costs

2,489

2,374



Other adjustments

(141)

(121)



Tax impact on adjustments

(701)

(655)



Deferred tax assets and tax contingencies recognition

650

585



Total adjustments

2,297

2,183



Total Equity under EU-IFRS

6,753

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:


Nine Months Ended September 30, 2017


At December 31, 2016


Nine Months Ended September 30, 2016


Average

At September 30




Average

At September 30

Euro

0.898

0.847


0.949


0.896

0.896

Pound sterling

0.784

0.747


0.812


0.719

0.771

Swiss franc

0.983

0.970


1.019


0.980

0.974

Polish zloty

3.829

3.646


4.184


3.904

3.870

Brazilian real

3.173

3.188


3.254


3.545

3.244

Canadian dollar

1.306

1.244


1.346


1.321

1.316

Argentine peso

16.219

17.548


15.850


14.520

15.300

Turkish lira

3.593

3.559


3.517


2.935

3.008


 

CNH INDUSTRIAL N.V.

Condensed Consolidated Income Statement

For The Three and Nine Months Ended September 30, 2017 and 2016

(Unaudited)


(EU-IFRS)



Three Months Ended September 30,

Nine Months Ended September 30,

($ million)

2017

2016

2017

2016

Net revenues

6,742

5,836

19,665

18,197

Cost of sales

5,569

4,824

16,205

14,966

Selling, general and administrative costs

535

515

1,609

1,588

Research and development costs

265

255

760

725

Other income/(expenses)

(34)

(14)

(74)

(52)

TRADING PROFIT/(LOSS)

339

228

1,017

866

Gains/(losses) on the disposal of investments

-

-

-

-

Restructuring costs

53

6

76

31

Other unusual income/(expenses)(1)

-

(6)

8

(560)

OPERATING PROFIT/(LOSS)

286

216

949

275

Financial income/(expenses)(2)

(191)

(178)

(483)

(483)

Result from investments(3):

23

14

71

(5)

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

23

14

71

(5)

Other income/(expenses) from investments

-

-

-

-

PROFIT/(LOSS) BEFORE TAXES

118

52

537

(213)

Income tax (expense)

(74)

(42)

(236)

(184)

PROFIT/(LOSS) FROM CONTINUING OPERATIONS

44

10

301

(397)

PROFIT/(LOSS) FOR THE PERIOD

44

10

301

(397)






PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO:





Owners of the parent

41

11

290

(399)

Non-controlling interests

3

(1)

11

2
















(in $)





BASIC EARNINGS/(LOSS) PER COMMON SHARE

0.03

0.01

0.21

(0.29)

DILUTED EARNINGS/(LOSS) PER COMMON SHARE

0.03

0.01

0.21

(0.29)



Notes:


(1)

In the nine months ended September 30, 2016, Other unusual income/(expenses) included the non-recurring charge of $551 million related to the European Commission settlement.

(2)

In the three and nine months ended September 30, 2017, Financial income/(expenses) includes the charge of $39 million and $56 million, respectively, related to the repurchase/early redemption of Notes. In the three and nine months ended September 30, 2016, this item included the charge of $38 million related to the repurchase of Notes.

(3)

In the nine months ended September 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 September 30, 2017 and December 31, 2016

(Unaudited)


(EU-IFRS)


($ million)


September 30, 2017

December 31, 2016

ASSETS




Intangible assets


5,632

5,504

Property, plant and equipment


6,754

6,278

Investments and other financial assets:


628

554

Investments accounted for using the equity method


586

505

Other investments and financial assets


42

49

Leased assets


1,874

1,907

Defined benefit plan assets


6

5

Deferred tax assets


1,014

959

Total Non-current assets


15,908

15,207

Inventories


7,450

5,732

Trade receivables


557

623

Receivables from financing activities


19,182

18,662

Current tax receivables


329

430

Other current assets


1,609

1,209

Current financial assets:


89

95

Current securities


-

-

Other financial assets


89

95

Cash and cash equivalents


4,781

5,854

Total Current assets


33,997

32,605

Assets held for sale


19

22

TOTAL ASSETS


49,924

47,834

EQUITY AND LIABILITIES




Issued capital and reserves attributable to owners of the parent


6,741

6,623

Non-controlling interests


12

11

Total Equity


6,753

6,634

Provisions:


6,220

5,687

Employee benefits


2,582

2,532

Other provisions


3,638

3,155

Debt:


25,629

25,434

Asset-backed financing


11,552

11,784

Other debt


14,077

13,650

Other financial liabilities


84

249

Trade payables


5,867

5,185

Current tax payables


179

229

Deferred tax liabilities


149

188

Other current liabilities


5,043

4,228

Liabilities held for sale


-

-

Total Liabilities


43,171

41,200

TOTAL EQUITY AND LIABILITIES


49,924

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 Nine Months Ended September 30, 2017 and 2016

(Unaudited)


(EU-IFRS)



Nine Months Ended September 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

301

(397)

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

885

893

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

6

1

Other non-cash items

(2)

134

Loss on repurchase/early redemption of Notes

56

38

Dividends received

42

57

Change in provisions

102

459

Change in deferred income taxes

(87)

38

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

24

98

Change in operating lease items(2)

47

(52)

Change in working capital

(876)

(1,185)

TOTAL

498

84

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)

(550)

(561)

Consolidated subsidiaries and other equity investments

(7)

5

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

10

8

Net change in receivables from financing activities

237

871

Change in current securities

-

33

Other changes

(161)

(145)

TOTAL

(471)

211

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



Bonds issued

1,917

1,714

Repayment of bonds

(2,146)

(751)

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

100

(17)

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

(1,094)

(1,569)

Capital increase

13

-

Dividends paid

(166)

(205)

(Purchase)/sale of treasury shares

(29)

(14)

(Purchase)/sale of ownership interests in subsidiaries

-

(44)

TOTAL

(1,405)

(886)

Translation exchange differences

305

153

E) TOTAL CHANGE IN CASH AND CASH EQUIVALENTS

(1,073)

(438)

F) CASH AND CASH EQUIVALENTS AT END OF PERIOD

4,781

5,873





(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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