UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2020

Commission File No. 001-36085

 

CNH INDUSTRIAL N.V.

(Translation of Registrant’s Name Into English)

 

 

25 St James’s Street,

London, SW1A 1HA

United Kingdom

Tel. No.: +44 1268 533000

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒     Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


CNH INDUSTRIAL N.V.

Form 6-K for the month of May 2020

The following exhibits are furnished herewith:

 

Exhibit 99.1    Press release, dated May 6, 2020, titled: “CNH Industrial reports 2020 first quarter Consolidated revenues of $5.5 billion, Net loss of $54 million and Net debt of Industrial Activities(2)(3) at $2.3 billion. Available liquidity(2)(3) at $9.9 billion as of March 31, 2020”
Exhibit 99.2    CNH Industrial N.V. First Quarter 2020 Results Review Presentation


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

CNH Industrial N.V.

By:

  /s/    Michael P. Going

Name:

  Michael P. Going

Title:

  Corporate Secretary

May 6, 2020


Index of Exhibits

 

Exhibit

Number

  

Description of Exhibit

Exhibit 99.1    Press release, dated May 6, 2020, titled: “CNH Industrial reports 2020 first quarter Consolidated revenues of $5.5 billion, Net loss of $54 million and Net debt of Industrial Activities(2)(3) at $2.3 billion. Available liquidity(2)(3) at $9.9 billion as of March 31, 2020”
Exhibit 99.2    CNH Industrial N.V. First Quarter 2020 Results Review Presentation
EX-99.1

Exhibit 99.1

 

LOGO

  2020 FIRST QUARTER RESULTS

 

 

 

 

 

LOGO

CNH Industrial reports 2020 first quarter Consolidated revenues of $5.5 billion,

Net loss of $54 million and Net debt of Industrial Activities (2)(3) at $2.3 billion.

Available liquidity (2)(3) at $9.9 billion as of March 31, 2020

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

CONSOLIDATED RESULTS

 

  Consolidated revenues of $5.5 billion in the first quarter of 2020, down 15% compared to the first quarter of 2019 (down 13% at constant currency)

 

  Net loss of $54 million (or $0.05 loss per share) in the first quarter of 2020 compared to net income of $264 million (or $0.19 per share) in the first quarter of 2019

 

  Adjusted net loss(2)(3) of $66 million in the first quarter of 2020 compared to adjusted net income of $248 million in the first quarter of 2019

 

  Adjusted diluted earnings per share(2)(3) was a loss of $0.06 in the first quarter of 2020 compared to adjusted diluted earnings per share of $0.18 in the first quarter of 2019

INDUSTRIAL ACTIVITIES

 

  Net sales of $5.0 billion in the first quarter of 2020, down 17% compared to the first quarter of 2019 (down 14% on a constant currency basis), due to adverse COVID-19 impact on market conditions across all regions, coupled with previously announced actions to reduce dealer inventory levels

 

  Adjusted EBIT(2)(3) loss of $148 million in the first quarter of 2020 compared to adjusted EBIT of $278 million in the first quarter of 2019, strongly impacted by industry demand disruptions in March, negative absorption caused by plant shutdowns, and actions to lower inventory levels

 

  Net debt at March 31, 2020 of $2.3 billion, an increase of $1.5 billion from December 31, 2019, as a result of seasonal working capital absorption and the adverse impact of COVID-19, partially offset by actions to reduce Company inventory and other cash preservation measures

COVID-19 RELATED CORPORATE ANNOUNCEMENTS

 

  Transform2Win strategy, including spin-off of On-Highway activities, confirmed, while original timeline for implementation of such spin-off will be extended because of market conditions

 

  2020 full year guidance withdrawn on March 30, 2020. No new guidance issued

Suzanne Heywood, Chair and Acting Chief Executive Officer of CNH Industrial, said: “CNH Industrial is continuing to implement measures to quickly adapt and react to the extraordinary circumstances of the COVID-19 outbreak. We have prioritized four issues: the health and wellbeing of our employees; the continuity of our business from a liquidity, cost management and market presence perspective; the strength of our dealer network and our supplier base; and supporting our customers and the communities in which we operate. We are dedicated to ensuring we emerge from this public health crisis a stronger and more efficient company, and that our customers and other stakeholders, operating in many end markets essential to the well-being and prosperity of society, know that we have given them the best support possible throughout this extraordinary time. Our available liquidity position was $9.9 billion at March 31, 2020, the second highest level in Company history at the end of the first quarter, providing a solid cash base and headroom within our credit facilities to navigate this uncertain and challenging environment. The Company has recently demonstrated its ability to access funding programs enacted by governments as public responses to the COVID-19 outbreak. Management has modeled a variety of different scenarios on the evolution of the current extraordinary circumstances and is focusing its efforts on selecting the optimal response strategies to each potential scenario. Persisting uncertainties

 

(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.

CNH Industrial N.V.

Corporate Office:

25 St. James’s Street

London, SW1A 1HA

United Kingdom

 

 

1


LOGO   2020 FIRST QUARTER RESULTS

 

in evolving end-market conditions, together with possible further disruptions in our supply chain do not allow us to provide helpful guidance on the second quarter or full year results at this time. The Company will continue to communicate with the financial markets, and with all of its other stakeholders as the short and medium term implications of the evolving business environment for the Company’s operations and performance become clearer.”

CNH INDUSTRIAL

Summary of Results ($ million  except EPS)

 

     Three Months ended March 31,  
     2020      2019      $ change      % change  

Consolidated revenues

     5,461        6,457        -996        -15.4  

Net income (loss)

     (54      264        -318        -120.5  

Adjusted net income (loss)

     (66      248        -314        -126.6  

Basic EPS ($)

     (0.05      0.19        -0.24        -126.3  

Diluted EPS ($)

     (0.05      0.19        -0.24        -126.3  

Adjusted diluted EPS ($)

     (0.06      0.18        -0.24        -133.3  

London (UK)—(May 6, 2020) CNH Industrial N.V. (NYSE:CNHI / MI:CNHI) today reported results for the quarter ended March 31, 2020.

Consolidated revenues were $5.5 billion for the first quarter of 2020, down 15% compared to the first quarter of 2019 (down 13% on a constant currency basis). Net sales of Industrial Activities were $5.0 billion for the first quarter of 2020, down 17% compared to the first quarter of 2019 (down 14% on a constant currency basis).

Net loss was $54 million for the first quarter of 2020 and includes a pre-tax gain of $30 million ($23 million net of tax impact) as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the 2018 U.S. healthcare plan modification, as well as pre-tax restructuring and other discrete charges of $12 million ($11 million after-tax) due to actions included in the “Transform2Win” strategy.

Adjusted net loss was $66 million (adjusted diluted EPS loss of $0.06) in the first quarter of 2020, compared to adjusted net income of $248 million (adjusted diluted EPS of $0.18) in the first quarter of 2019.

Adjusted EBIT of Industrial Activities was a loss of $148 million in the first quarter of 2020 compared to an Adjusted EBIT of $278 million in the first quarter of 2019.

Adjusted EBITDA(1)(2) of Industrial Activities was $72 million for the first quarter of 2020 compared to an Adjusted EBITDA of $525 million for the first quarter of 2019.

In the first quarter of 2020 the Company recorded an income tax benefit of $23 million (income tax expense of $90 million in the first quarter of 2019). Adjusted income taxes(1)(2) for the first quarter of 2020 were a benefit of $29 million compared to an adjusted income tax expense of $84 million in the first quarter of 2019. The adjusted effective tax rate (adjusted ETR(1)(2)) was 31% (26% in the first quarter of 2019) primarily due to the jurisdictional mix of pre-tax results.

Net debt of Industrial Activities was $2.3 billion at March 31, 2020, an increase of $1.5 billion compared to December 31, 2019, as a result of seasonal working capital buildup and the adverse impact of COVID-19,

 

(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.

 

2


LOGO   2020 FIRST QUARTER RESULTS     

 

partially offset by actions on inventory and other cash preservation measures. Total debt was $23.5 billion at March 31, 2020, down $1.3 billion compared to December 31, 2019. The Company continues to maintain solid financial strength and liquidity. At March 31, 2020, available liquidity was $9.9 billion, compared to $11.2 billion at December 31, 2019, the second highest available liquidity level in Company history at the end of the first quarter.

In the month of April 2020, the Company issued £600 million of commercial paper through the Joint HM Treasury and Bank of England’s Covid Corporate Financing Facility (CCFF). Furthermore, in Canada, the Company issued a new retail ABS transaction for a total amount of C$465 million.

COVID-19 Update

During the first quarter of 2020, the continued spread of the COVID-19 pandemic started to impact CNH Industrial’s end-markets and operations.

Worldwide agriculture industry demand was down during the first quarter of 2020, with global demand for tractors down 15% and combines down 11%. The demand slowdown for tractors in the month of March alone was some 36%. In North America, tractor demand was down 9% in the quarter, primarily in the lower horsepower segment (under 140 HP), while combines were down 22%. In Europe, tractor and combine markets were down 10% and 20%, respectively, with tractors down 24% in the month of March alone. South America tractor and combine markets decreased 6% and 30%, respectively. In Rest of World, demand decreased 17% for tractors and 2% for combines, with the tractor market slowdown of 43% in the month of March alone.

In the first quarter of 2020, demand in all sub-segments of construction end-markets were showing double-digit declines in all geographies, with the exception of South America where compact and service equipment was down only 1%, while general construction equipment road building and site preparation equipment were up 12% and 13%, respectively.

The European truck market was down 19% year-over-year in the first quarter, with light duty trucks down 14%, and medium and heavy trucks down 27%, with industry sales of light duty trucks and medium and heavy trucks declining 34% and 38%, respectively, in the month of March alone. The South America truck market was down 17% in light duty trucks and 6% in medium and heavy trucks, with the light duty truck market down 26% in the month of March alone. For buses, the European market decreased 9% in the quarter, with a 30% decline in the month of March alone, and the South American market decreased by 14%, with a 34% decrease in the month of March alone.

At this point in time it is not possible to forecast future short and longer term demand in our key markets.

As previously announced, starting from March 11, the Company temporarily closed its Italian production facilities and, starting from March 20, it suspended the majority of its European assembly operations, during which time additional safety measures were implemented. The Company also temporarily suspended the majority of its manufacturing operations in North and South America starting from March 30.

During the quarter, the Company continued to ensure that most parts depots, service facilities and dealerships remained operational. All the safety, containment and prevention measures mandated by law and agreed with the workforce enabled end use customers to continue to safely operate their fleets of agricultural and construction machinery and commercial vehicles. This decision was taken considering the vital nature to society of the sectors in which the Company operates, especially in emergency situations: agricultural and construction machinery, the transport of goods and people, fire fighting vehicles and those dedicated to public safety.

On April 27, the Company began to restart some of its industrial facilities in Europe within the constraints of applicable emergency regulations. As of May 5, more than two thirds of the Company’s 67 plants are already operational, to varying degrees. On a regional basis, more than 75% of production sites in Europe and some 60% in North America, in South America and in the Rest of the World are already operational. The Company plans to return to full operation at most sites by the end of May.

 

3


LOGO   2020 FIRST QUARTER RESULTS     

 

The Company is working to ensure its business continuity, preserving its liquidity and leveraging on a good access to funding. The Company is currently evaluating and implementing all possible and prudent actions to reduce costs and protect its financial position, its liquidity and capital structure, and its ratings. Specifically, these measures include reviewing every possible and prudent opportunity to eliminate discretionary operating expenses, accessing public measures enacted as a response to the global pandemic, reducing capital expenditures and tightly managing inventories. Senior management, including the Acting Chief Executive Officer, the entire Board of Directors and almost 900 members of our management team, have agreed to reduce their compensation temporarily. Furthermore, as previously announced, in light of the challenges and uncertainties associated with the COVID-19 situation, as a precautionary measure, the Board of Directors decided to withdraw the dividend distribution previously proposed for payment on May 5, 2020. The Company has a solid financial position, good liquidity, and remains confident in its ability to effectively manage through the material market disruptions caused by the pandemic and emerge strong.

2020 Outlook

The COVID-19 pandemic is likely to have a material impact on CNH Industrial’s future financial position, results of operations and liquidity. The extent of the impact cannot be reasonably estimated at this time, due to the rapid evolution and fluidity of the situation. The ultimate impact will also be determined by the duration of the pandemic, its geographic spread, business disruptions and the overall impact on the global economy. While this is expected to have a negative impact on the financial performance of CNH Industrial in 2020, the Company cannot quantify the magnitude and duration of such impact at this time.

In these circumstances, the Company is unable to provide useful guidance for the full year 2020. In addition, depending on the duration and extent of the pandemic, the Company’s results of operations, financial condition and cash flows in 2020 may also be significantly negatively impacted by, among other things, restructuring actions, non-cash asset impairments, price pressure on new and used vehicles, which may give rise to further reserve requirements with respect to vehicles in stock and residual value commitments, excess inventory, difficulties in collecting financial receivables and consequent increased allowances for credit losses.

Conference Call and Webcast

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 2020 first quarter results to financial analysts and institutional investors. The call can be followed live online at http://bit.ly/CNH_Industrial_Q1_2020 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.

 

4


LOGO   2020 FIRST QUARTER RESULTS     

 

Segment Results

CNH INDUSTRIAL

Revenues by Segment ($ million)

 

     Three Months ended March 31,  
     2020      2019      % change      % change excl. FX (1)  

Agriculture

     2,244        2,490        -9.9        -7.2  

Construction

     422        640        -34.1        -31.8  

Commercial and Specialty Vehicles

     2,021        2,414        -16.3        -13.1  

Powertrain

     753        1,036        -27.3        -24.7  

Eliminations and other

     (447      (574      —          —    

Total Industrial Activities

     4,993        6,006        -16.9        -14.1  

Financial Services

     489        474        3.2        6.0  

Eliminations and other

     (21)        (23)        —          —    

Total

     5,461        6,457        -15.4        -12.6  

 

(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

Adjusted EBIT by Segment ($ million)

 

     Three Months ended March 31,  
     2020     2019     $ change      % change      2020 adjusted
EBIT margin
    2019 adjusted
EBIT margin
     bps change  

Agriculture

     24       168       -144        -85.7        1.1     6.7      -560  

Construction

     (83     13       -96        -738.5        (19.7 )%      2.0      -2,170  

Commercial and Specialty Vehicles

     (56     51       -107        -209.8        (2.8 )%      2.1      -490  

Powertrain

     31       96       -65        -67.7        4.1     9.3      -520  

Unallocated items, eliminations and other

     (64     (50     -14        —          —         —          —    
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total Industrial Activities

     (148     278       -426        -153.2        (3.0 )%      4.6      -760  
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Financial Services

     110       131       -21        -16.0        22.5     27.6      -510  

Eliminations and other

     —         —         —          —          —         —          —    

Total

     (38     409       -447        -109.3        (0.7 )%      6.3      -700  
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

CNH INDUSTRIAL

Adjusted EBITDA by Segment ($ million)

 

     Three Months ended March 31,  
     2020     2019     $ change      % change      2020 adjusted
EBITDA margin
    2019 adjusted
EBITDA margin
    bps change  

Agriculture

     88       243       -155        -63.8        3.9     9.8     -590  

Construction

     (70     27       -97        -359.3        (16.6 )%      4.2     -2,080  

Commercial and Specialty Vehicles

     58       177       -119        -67.2        2.9     7.3     -440  

Powertrain

     60       128       -68        -53.1        8.0     12.4     -440  

Unallocated items, eliminations and other

     (64     (50     -14        —          —         —         —    
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Industrial Activities

     72       525       -453        -86.3        1.4     8.7     -730  
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Financial Services

     173       197       -24        -12.2        35.4     41.6     -620  

Eliminations and other

     —         —         —          —          —         —         —    
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total

     245       722       -477        -66.1        4.5     11.2     -670  
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

 

5


LOGO   2020 FIRST QUARTER RESULTS     

 

Agriculture’s net sales totaled $2.2 billion in the first quarter of 2020, down 10% compared to the first quarter of 2019 (down 7% on a constant currency basis). The decrease was driven by lower industry volumes across all geographies and further deterioration linked to the COVID-19 outbreak, coupled with actions to reduce dealer inventories in North America, partially offset by positive price realization across all regions.

Adjusted EBIT was $24 million, a $144 million decrease compared to the first quarter of 2019. Positive price realization, disciplined cost management and favorable purchasing performance were more than offset by lower wholesale volume and market and product mix, negative fixed cost absorption (primarily in Europe) due to plant shutdowns, higher product costs, and costs associated with product quality actions. Foreign exchange impact was negative, primarily from South America. Adjusted EBIT margin was 1.1% (6.7% in the first quarter of 2019).

Construction’s net sales totaled $422 million in the first quarter of 2020, down 34% compared to the first quarter of 2019 (down 32% on a constant currency basis), as a result of deteriorating market conditions across all regions due to the COVID-19 outbreak, particularly severe in the month of March in many key end-markets, including North America and Europe, combined with actions to reduce dealer inventory levels.

Adjusted EBIT loss was $83 million, a $96 million decrease compared to the first quarter profit in 2019. Net pricing was impacted by retail program enhancements in response to COVID-19 impacted market conditions. Product cost was increased by negative fixed cost absorption due to plant shutdowns, and costs associated with continued quality improvement initiatives.

Commercial and Specialty Vehicles net sales totaled $2.0 billion in the first quarter of 2020, down 16% compared to the first quarter of 2019 (down 13% on a constant currency basis), driven by the market slowdown in Europe linked to COVID-19, with key markets for trucks significantly impacted in the month of March.

Adjusted EBIT loss was $56 million in the first quarter of 2020 ($51 million profit in the first quarter of 2019) and was negatively impacted by the critical market conditions, particularly in Europe in the month of March, generating lower volumes and higher product costs due to plant shutdowns, as well as by unfavorable foreign exchange impacts, partially offset by positive price realization.

Powertrain’s net sales totaled $753 million in the first quarter of 2020, down 27% compared to the first quarter of 2019 (down 25% on a constant currency), due to lower sales volume mainly in Europe and Rest of World as a consequence of COVID-19. Sales to external customers accounted for 44% of total net sales (47% in the first quarter of 2019), with 27% captive volume reduction, and 33% non-captive volume reduction.

In the first quarter of 2020 adjusted EBIT was $31 million, a $65 million decrease compared to the first quarter of 2019, mainly due to unfavorable volume and mix, partially offset by positive price realization and product cost efficiencies. Adjusted EBIT margin was 4.1% (9.3% in the first quarter of 2019).

Financial Services’ revenues totaled $489 million in the first quarter of 2020, an increase of 3% compared to the first quarter of 2019 (up 6% on a constant currency basis), primarily due to higher used equipment sales in North America.

In the first quarter of 2020, retail loan originations (including unconsolidated joint ventures) were $2.1 billion, down $0.1 billion compared to the first quarter of 2019 (flat on a constant currency basis). The managed portfolio (including unconsolidated joint ventures) was $24.7 billion as of March 31, 2020 (of which retail was 62% and wholesale 38%), down $1.4 billion compared to March 31, 2019. Excluding the impact of currency translation, the managed portfolio decreased $0.1 billion compared to the first quarter of 2019.

Net income in the first quarter of 2020 was $80 million, a decrease of $15 million compared to the same period in 2019, primarily attributable to higher risk costs due to deteriorating market conditions driven by COVID-19 and the negative impact of currency translation, partially offset by lower income taxes.

 

6


LOGO   2020 FIRST QUARTER RESULTS     

 

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

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 operating results and enhance the readers’ ability to assess CNH Industrial’s 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 under U.S. GAAP or EU-IFRS and are unlikely to be comparable to other similarly titled measures used by other companies and are not intended to be substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP and/or EU-IFRS.

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

 

 

Adjusted EBIT under U.S. GAAP: is defined as net income (loss) before income taxes, interest expenses of Industrial Activities, net, restructuring expenses, the finance and non-service component of pension and other post-employment benefit costs, foreign exchange gains/(losses), and certain non-recurring items. 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 EBITDA under U.S. GAAP: is defined as Adjusted EBIT plus depreciation and amortization (including on assets sold under operating leases and assets sold under buy-back commitments).

 

 

Adjusted EBIT under EU-IFRS: is defined as profit/(loss) before taxes, financial income/(expense) of Industrial Activities, restructuring costs, and certain non-recurring items.

 

 

Adjusted EBITDA under EU-IFRS: is defined as Adjusted EBIT plus depreciation and amortization (including on assets sold under operating leases and assets sold under buy-back commitments).

 

 

Adjusted Net Income (Loss): is defined as net income (loss), less restructuring charges and non-recurring items, after tax.

 

 

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 a 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 or benefits.

 

 

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: Net Debt is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets 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.

 

7


LOGO   2020 FIRST QUARTER RESULTS     

 

 

Free Cash Flow of Industrial Activities (or Industrial Free Cash Flow): refers to Industrial Activities, only, and is computed as consolidated cash flow from operating activities less: cash flow from operating activities of Financial Services; investments of Industrial Activities in assets sold under buy-back commitments, assets under operating leases, property, plant and equipment and intangible assets; change in derivatives hedging debt of Industrial Activities; as well as other changes and intersegment eliminations.

 

 

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 future responses to and effects of the COVID-19 pandemic; 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, liquidity, 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, including those related to the COVID-19 outbreak, 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 they occur with a degree of severity that the Company is unable to predict) 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 unknown duration and economic, operational and financial impacts of the global COVID-19 pandemic and the actions taken or contemplated by governmental authorities or others in connection with the pandemic on our business, our employees, customers and suppliers, including supply chain disruptions caused by mandated shutdowns and the adverse impact on customers, borrowers and other third parties to fulfill their obligations to us; disruption caused by business responses to COVID-19, including remote working arrangements, which may create increased vulnerability to cybersecurity or data privacy incidents; our ability to execute business continuity plans as a result of COVID-19; the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products; including demand uncertainty caused by COVID-19; general economic conditions in each of our markets, including the significant economic uncertainty and volatility caused by COVID-19; travel bans, border closures, other free movement restrictions, and the introduction of social distancing measures in our facilities may affect in the future our ability to operate as well as the ability of our suppliers and distributors to operate; changes in government policies regarding banking, monetary and fiscal policy; legislation, particularly pertaining 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; volatility in international trade caused by the imposition of tariffs, sanctions, trade wars; 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; further developments

 

8


LOGO   2020 FIRST QUARTER RESULTS     

 

of the COVID-19 pandemics not only on our operations, supply chains, distribution network, and level of demands of our products, as well as negative evolutions of the economic and financial conditions at global and regional levels; political and civil unrest; volatility and deterioration of capital and financial markets, including possible effects of “Brexit”, other pandemics, terrorist attacks in Europe and elsewhere, our ability to achieve the targets set out in the Strategic Business Plan announced on September 3, 2019 at our Capital Markets Day event; our ability to successfully and timely implement the planned spin-off of the Company’s On-Highway business; 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, 2019, prepared in accordance with U.S. GAAP and in the Company’s EU Annual Report at December 31, 2019, prepared in accordance with EU-IFRS, as well as in the CNH Industrial N.V. Quarterly Reports for the three months ended March 31, 2020 (prepared respectively in accordance with U.S. GAAP and EU-IFRS, that the Company expects to issue in the first half of May 2020). Investors are expressly invited to refer to and consider the information on risks, factors, and uncertainties incorporated in the above mentioned documents, in addition to the information presented here.

Forward-looking statements are based upon assumptions relating to the factors described in this 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. The impact of COVID-19 has already exacerbated and is expected to further exacerbate all or part of the risks discussed in this section. 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

  

 

9


CNH INDUSTRIAL N.V.

Condensed Consolidated Statements of Operations

For The Three Months Ended March 31, 2020 and 2019

(Unaudited)

(U.S. GAAP)

 

     Three Months Ended March 31,  

($ million)

   2020     2019  

Revenues

    

Net sales

     4,993       6,006  

Finance, interest and other income

     468       451  
  

 

 

   

 

 

 

TOTAL REVENUES

     5,461       6,457  
  

 

 

   

 

 

 

Costs and Expenses

    

Cost of goods sold

     4,414       4,966  

Selling, general and administrative expenses

     526       539  

Research and development expenses

     214       244  

Restructuring expenses

     5       8  

Interest expense

     181       183  

Other, net(1)

     197       168  
  

 

 

   

 

 

 

TOTAL COSTS AND EXPENSES

     5,537       6,108  
  

 

 

   

 

 

 

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

     (76     349  
  

 

 

   

 

 

 

Income tax (expense)

     23       (90

Equity in income of unconsolidated subsidiaries and affiliates

     (1     5  
  

 

 

   

 

 

 

NET INCOME (LOSS)

     (54     264  
  

 

 

   

 

 

 

Net income (loss) attributable to noncontrolling interests

     11       7  
  

 

 

   

 

 

 

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

     (65     257  
  

 

 

   

 

 

 

(in $)

            

Earnings (loss) per share attributable to common shareholders

    

Basic

     (0.05     0.19  

Diluted

     (0.05     0.19  

Cash dividends declared per common share

     —         —    

 

Notes:

(1)

In the three months ended March 31, 2020 and 2019, Other, net includes the pre-tax gain of $30 million related to the modification of a healthcare plan in the U.S.

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, 2019 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.

 

10


CNH INDUSTRIAL N.V.

Condensed Consolidated Balance Sheets

As of March 31, 2020 and December 31, 2019

(Unaudited)

(U.S. GAAP)

 

($ million)

   March 31, 2020 (*)      December 31, 2019  

ASSETS

     

Cash and cash equivalents

     3,850        4,875  

Restricted cash

     854        898  

Trade receivables, net

     346        416  

Financing receivables, net

     17,584        19,428  

Inventories, net

     7,435        7,082  

Property, plant and equipment, net

     4,886        5,269  

Investments in unconsolidated subsidiaries and affiliates

     593        631  

Equipment under operating leases

     1,797        1,857  

Goodwill

     2,514        2,538  

Other intangible assets, net

     790        806  

Deferred tax assets

     1,097        1,134  

Derivative assets

     221        73  

Other assets

     1,946        2,345  
  

 

 

    

 

 

 

TOTAL ASSETS

     43,913        47,352  
  

 

 

    

 

 

 

LIABILITIES AND EQUITY

     

Debt

     23,518        24,854  

Trade payables

     4,907        5,632  

Deferred tax liabilities

     145        172  

Pension, postretirement and other post employment benefits

     1,469        1,578  

Derivative liabilities

     162        121  

Other liabilities

     8,054        8,839  
  

 

 

    

 

 

 

Total Liabilities

     38,255        41,196  
  

 

 

    

 

 

 

Redeemable noncontrolling interest

     36        35  
  

 

 

    

 

 

 

Equity

     5,622        6,121  
  

 

 

    

 

 

 

TOTAL LIABILITIES AND EQUITY

     43,913        47,352  
  

 

 

    

 

 

 

 

Notes:

(*)

On January 1, 2020, CNH Industrial adopted the accounting standard on Financial Instruments—Credit Losses (ASC 326) using the modified retrospective approach, without recasting prior periods. On the adoption of the standard, the impact to the consolidated balance sheet on January 1, 2020 was an increase to the allowance for credit losses of $26 million, a decrease to the investments in unconsolidated subsidiaries and affiliates of $17 million and an increase to deferred tax assets of $7 million, with the offset to retained earnings, net of tax, of $36 million.

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, 2019 included in the Annual Report on Form 20-F. These Condensed Consolidated Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.

 

11


CNH INDUSTRIAL N.V.

Condensed Consolidated Statements of Cash Flows

For The Three Months Ended March 31, 2020 and 2019

(Unaudited)

(U.S. GAAP)

 

     Three Months Ended March 31,  

($ million)

   2020     2019  

Operating activities:

    

Net income (loss)

     (54     264  

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

     155       169  

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

     128       144  

(Gain) Loss from disposal of assets

     —         —    

Undistributed income (loss) of unconsolidated subsidiaries

     7       (4

Other non-cash items

     39       33  

Changes in operating assets and liabilities:

    

Provisions

     (152     (106

Deferred income taxes

     (32     32  

Trade and financing receivables related to sales, net

     644       (293

Inventories, net

     (551     (879

Trade payables

     (504     129  

Other assets and liabilities

     (212     (240
  

 

 

   

 

 

 

NET CASH USED IN OPERATING ACTIVITIES

     (532     (751
  

 

 

   

 

 

 

Investing activities:

    

Additions to retail receivables

     (926     (947

Collections of retail receivables

     1,035       1,225  

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

     5       —    

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

     (63     (79

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

     (256     (285

Other

     127       48  
  

 

 

   

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

     (78     (38
  

 

 

   

 

 

 

Financing activities:

    

Net decrease in debt

     (194     (512

Dividends paid

     (1     (1

Other

     —         —    
  

 

 

   

 

 

 

NET CASH USED IN FINANCING ACTIVITIES

     (195     (513
  

 

 

   

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash

     (264     (42
  

 

 

   

 

 

 

DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

     (1,069     (1,344
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR

     5,773       5,803  
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

     4,704       4,459  
  

 

 

   

 

 

 

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, 2019 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.

 

12


CNH INDUSTRIAL N.V.

Supplemental Statements of Operations

For The Three Months Ended March 31, 2020 and 2019

(Unaudited)

(U.S. GAAP)

 

     Industrial Activities     Financial Services  
     Three Months Ended March 31,     Three Months Ended March 31,  

($ million)

   2020     2019     2020     2019  

Revenues

        

Net sales

     4,993       6,006       —         —    

Finance, interest and other income

     15       30       489       474  
  

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL REVENUES

     5,008       6,036       489       474  
  

 

 

   

 

 

   

 

 

   

 

 

 

Costs and Expenses

        

Cost of goods sold

     4,414       4,966       —         —    

Selling, general and administrative expenses

     464       493       62       46  

Research and development expenses

     214       244       —         —    

Restructuring expenses

     5       8       —         —    

Interest expense

     74       83       143       153  

Other, net

     15       16       182       152  
  

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL COSTS AND EXPENSES

     5,186       5,810       387       351  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     (178     226       102       123  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income tax (expense)

     53       (54     (30     (36

Equity in income of unconsolidated subsidiaries and affiliates

     (9     (3     8       8  

Results from intersegment investments

     80       95       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

     (54     264       80       95  
  

 

 

   

 

 

   

 

 

   

 

 

 

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 Agriculture, Construction, Commercial and Specialty 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.

 

13


CNH INDUSTRIAL N.V.

Supplemental Balance Sheets

As of March 31, 2020 and December 31, 2019

(Unaudited)

(U.S. GAAP)

 

     Industrial Activities      Financial Services  

($ million)

   March 31,
2020
     December 31,
2019
     March 31,
2020
     December 31,
2019
 

ASSETS

           

Cash and cash equivalents

     3,429        4,407        421        468  

Restricted cash

     122        120        732        778  

Trade receivables, net

     344        416        26        28  

Financing receivables, net

     979        1,223        18,998        20,657  

Inventories, net

     7,291        6,907        144        175  

Property, plant and equipment, net

     4,885        5,268        1        1  

Investments in unconsolidated subsidiaries and affiliates

     3,011        3,213        223        237  

Equipment under operating leases

     47        51        1,750        1,806  

Goodwill

     2,363        2,383        151        155  

Other intangible assets, net

     775        790        15        16  

Deferred tax assets

     1,072        1,090        170        178  

Derivative assets

     154        34        84        47  

Other assets

     1,929        2,148        164        319  
  

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

     26,401        28,050        22,879        24,865  
  

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES AND EQUITY

           

Debt

     6,817        6,558        19,093        20,748  

Trade payables

     4,796        5,490        155        191  

Deferred tax liabilities

     12        19        277        286  

Pension, postretirement and other postemployment benefits

     1,450        1,558        19        20  

Derivative liabilities

     130        97        49        32  

Other liabilities

     7,538        8,172        647        771  

Total Liabilities

     20,743        21,894        20,240        22,048  
  

 

 

    

 

 

    

 

 

    

 

 

 

Redeemable noncontrolling interest

     36        35        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Equity

     5,622        6,121        2,639        2,817  
  

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL LIABILITIES AND EQUITY

     26,401        28,050        22,879        24,865  
  

 

 

    

 

 

    

 

 

    

 

 

 

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 Agriculture, Construction, Commercial and Specialty 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.

 

14


CNH INDUSTRIAL N.V.

Supplemental Statements of Cash Flows

For The Three Months Ended March 31, 2020 and 2019

(Unaudited)

(U.S. GAAP)

 

     Industrial
Activities
    Financial
Services
 
     Three Months
Ended March 31,
    Three Months
Ended March 31,
 

($ million)

   2020     2019     2020     2019  

Operating activities:

        

Net income (loss)

     (54     264       80       95  

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

     155       168       —         1  

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

     65       79       63       65  

(Gain) Loss from disposal of assets

     —         —         —         —    

Undistributed income (loss) of unconsolidated subsidiaries

     (25     (84     (8     (8

Other non-cash items

     15       28       24       5  

Changes in operating assets and liabilities:

        

Provisions

     (150     (96     (2     (10

Deferred income taxes

     (27     10       (5     22  

Trade and financing receivables related to sales, net

     46       (65     600       (229

Inventories, net

     (697     (950     146       71  

Trade payables

     (478     171       (28     (41

Other assets and liabilities

     (223     (339     11       99  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

     (1,373     (814     881       70  
  

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities:

        

Additions to retail receivables

     —         —         (926     (947

Collections of retail receivables

     —         —         1,035       1,225  

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

     5       —         —         —    

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

     (63     (77     —         (2

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

     (98     (100     (158     (185

Other

     517       (370     (390     398  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

     361       (547     (439     489  
  

 

 

   

 

 

   

 

 

   

 

 

 

Financing activities:

        

Net increase (decrease) in debt

     245       126       (439     (638

Dividends paid

     (1     (1     (40     (7

Other

     —         —         —         20  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

     244       125       (479     (625
  

 

 

   

 

 

   

 

 

   

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash

     (208     (42     (56     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

     (976     (1,278     (93     (66
  

 

 

   

 

 

   

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR

     4,527       4,553       1,246       1,250  
  

 

 

   

 

 

   

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF THE PERIOD

     3,551       3,275       1,153       1,184  
  

 

 

   

 

 

   

 

 

   

 

 

 

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 Agriculture, Construction, Commercial and Specialty 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.

 

15


CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Reconciliation of Net Income to Adjusted EBIT and Adjusted EBITDA by segment under U.S. GAAP ($ million)

 

     Three Months ended March 31, 2020  
     Agriculture      Construction    Commercial
and
Specialty
Vehicles
    Powertrain      Unallocated
items,
eliminations
and other
    Total
Industrial
Activities
    Financial
Services
     Total  

Net income (loss)(1)

                  (134     80        (54
               

 

 

   

 

 

    

 

 

 

Add back:

                    

Interest expenses of Industrial Activities, net of interest income and eliminations

                  59       —          59  

Foreign exchange (gains) losses, net

                  (2     —          (2

Finance and non-service component of Pension and other post-employment benefit costs(2)

                  (30     —          (30
               

 

 

   

 

 

    

 

 

 

Income tax expense

                  (53     30        (23
               

 

 

   

 

 

    

 

 

 

Adjustments:

                    

Restructuring expenses

     2      1      2       —          —         5       —          5  

Other discrete items

     —        —        —         —          7       7       —          7  
  

 

 

    

 

  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Adjusted EBIT

     24      (83)      (56     31        (64     (148     110        (38
  

 

 

    

 

  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Depreciation and Amortization

     64      13      49       29        —         155       —          155  

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

     —        —        65       —          —         65       63        128  
  

 

 

    

 

  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Adjusted EBITDA

     88      (70)      58       60        (64     72       173        245  
  

 

 

    

 

  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

     Three Months ended March 31, 2019  
     Agriculture      Construction      Commercial
and
Specialty
Vehicles
     Powertrain      Unallocated
items,
eliminations
and other
    Total
Industrial
Activities
    Financial
Services
     Total  

Net income(1)

                   169       95        264  
                

 

 

   

 

 

    

 

 

 

Add back:

                     

Interest expenses of Industrial Activities, net of interest income and eliminations

                   53       —          53  

Foreign exchange (gains) losses, net

                   9       —          9  

Finance and non-service component of Pension and other post-employment benefit costs(2)

                   (15     —          (15
                

 

 

   

 

 

    

 

 

 

Income tax expense

                   54       36        90  
                

 

 

   

 

 

    

 

 

 

Adjustments:

                     

Restructuring expenses

     3        —          5        —          —         8       —          8  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Adjusted EBIT

     168        13        51        96        (50     278       131        409  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Depreciation and Amortization

     75        14        47        32        —         168       1        169  

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

     —          —          79        —          —         79       65        144  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Adjusted EBITDA

     243        27        177        128        (50     525       197        722  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

(1)   For Industrial Activities, net income net of “Results from intersegment investments”.

(2)   In the three months ended March 31, 2020 and 2019, this item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of a healthcare plan in the U.S.

    

    

 

16


CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

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

 

     Consolidated     Industrial Activities     Financial Services  
     March 31,
2020
     December 31,
2019
    March 31,
2020
     December 31,
2019
    March 31,
2020
     December 31,
2019
 

Third party debt

     23,518        24,854       5,326        5,226       18,192        19,628  

Intersegment notes payable

               —         1,491        1,332       901        1,120  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Debt(1)

     23,518        24,854       6,817        6,558       19,093        20,748  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Less:

               

Cash and cash equivalents

     3,850        4,875       3,429        4,407       421        468  

Restricted cash

     854        898       122        120       732        778  

Intersegment notes receivable

               —         901        1,120       1,491        1,332  

Other current financial assets

     51        58       51        58       —          —    

Derivatives hedging debt

     4        (1     4        (1     —          —    
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net debt (cash)(2)

     18,759        19,024       2,310        854       16,449        18,170  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Total Debt of Industrial Activities includes Intersegment notes payable to Financial Services of $1,491 million and $1,332 million as of March 31, 2020 and December 2019, respectively. Total Debt of Financial Services includes Intersegment notes payable to Industrial Activities of $901 million and $1,120 million as of March 31, 2020 and December 2019, respectively.

(2)

The net intersegment (receivable)/payable balance recorded by Financial Services relating to Industrial Activities was $(590) million and $(212) million as of March 31, 2020 and December 2019, respectively.

CNH INDUSTRIAL

Reconciliation of Cash and cash equivalents to Available liquidity under U.S. GAAP ($ million)

 

     March 31,
2020
     December 31,
2019
 

Cash and cash equivalents

     3,850        4,875  
  

 

 

    

 

 

 

Restricted cash

     854        898  

Undrawn committed facilities

     5,176        5,474  
  

 

 

    

 

 

 

Available liquidity

     9,880        11,247  
  

 

 

    

 

 

 

 

17


CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Change in Net industrial debt under U.S. GAAP ($ million)

 

     Three Months
ended March 31,
 
     2020     2019  

Net (debt)/cash of Industrial Activities at beginning of period

     (854     (599

Adjusted EBITDA of Industrial Activities

     72       525  

Cash interest and taxes

     (79     (142

Changes in provisions and similar(1)

     (166     (162

Change in working capital

     (1,293     (1,132
  

 

 

   

 

 

 

Operating cash flow of Industrial Activities

     (1,466     (911
  

 

 

   

 

 

 

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

     (63     (77

Other changes

     6       22  
  

 

 

   

 

 

 

Free cash flow of Industrial Activities

     (1,523     (966
  

 

 

   

 

 

 

Capital increases and dividends

     (1     (1

Currency translation differences and other

     68       91  
  

 

 

   

 

 

 

Change in Net debt of Industrial Activities

     (1,456     (876
  

 

 

   

 

 

 

Net (debt)/cash of Industrial Activities at end of period

     (2,310     (1,475

 

(1)

Including other cash flow items related to operating lease and buy-back activities.

(2)

Excluding assets sold under buy-back commitments and assets under operating leases.

CNH INDUSTRIAL

Reconciliation of Net cash provided by (used in) Operating Activities to Free cash flow of Industrial Activities under U.S. GAAP ($ million)

 

     Three Months
ended
March 31,
 
     2020     2019  

Net cash provided by (used in) Operating Activities

     (532     (751
  

 

 

   

 

 

 

Net cash (provided by) used in Operating Activities of Financial Services

     (881     (70

Intersegment eliminations

     40       7  
  

 

 

   

 

 

 

Net cash provided by (used in) Operating Activities of Industrial Activities

     (1,373     (814
  

 

 

   

 

 

 

Change in derivatives hedging debt of Industrial Activities

     5       3  

Investments in assets sold under buy-back commitments and operating lease assets of Industrial Activities

     (98     (100
  

 

 

   

 

 

 

Operating cash flow of Industrial Activities

     (1,466     (911
  

 

 

   

 

 

 

Investments in property, plant and equipment, and intangible assets of Industrial Activities

     (63     (77

Other changes(1)

     6       22  
  

 

 

   

 

 

 

Free cash flow of Industrial Activities

     (1,523     (966
  

 

 

   

 

 

 

 

(1)

This item primarily includes change in intersegment financial receivables and capital increases in intersegment investments.

 

18


CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Reconciliation of Adjusted net income and Adjusted income tax (expense) to Net income and Income tax (expense) and calculation of Adjusted diluted EPS and Adjusted ETR under U.S. GAAP ($ million, except per share data)

 

     Three Months
ended
March 31,
 
     2020     2019  

Net income (loss)

     (54     264  
  

 

 

   

 

 

 

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

     (18     (22

Adjustments impacting Income tax (expense) (b)

     6       6  
  

 

 

   

 

 

 

Adjusted net income (loss)

     (66     248  
  

 

 

   

 

 

 

Adjusted net income (loss) attributable to CNH Industrial N.V.

     (77     241  

Weighted average shares outstanding – diluted (million)

     1,350       1,356  
  

 

 

   

 

 

 

Adjusted diluted EPS ($)

     (0.06     0.18  
  

 

 

   

 

 

 

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

     (76     349  
  

 

 

   

 

 

 

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

     (18     (22
  

 

 

   

 

 

 

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

     (94     327  
  

 

 

   

 

 

 

Income tax (expense)

     23       (90
  

 

 

   

 

 

 

Adjustments impacting Income tax (expense) (b)

     6       6  
  

 

 

   

 

 

 

Adjusted income tax (expense) (B)

     29       (84
  

 

 

   

 

 

 

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

     31     26
  

 

 

   

 

 

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

 

Restructuring expenses

     5       8  

Pre-tax gain related to the modification of a healthcare plan in the U.S.

     (30     (30

Other discrete items

     7       —    
  

 

 

   

 

 

 

Total

     (18     (22
  

 

 

   

 

 

 

b)    Adjustments impacting Income tax (expense)

 

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

     6       6  
  

 

 

   

 

 

 

Total

     6       6  
  

 

 

   

 

 

 

 

19


CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Revenues by Segment under EU-IFRS ($ million)

 

     Three Months ended
March 31,
 
     2020     2019     % change  

Agriculture

     2,243       2,490       -9.9  

Construction

     422       640       -34.1  

Commercial and Specialty Vehicles

     2,021       2,411       -16.2  

Powertrain

     753       1,033       -27.1  

Eliminations and other

     (447 )      (571     —    
  

 

 

   

 

 

   

 

 

 

Total Industrial Activities

     4,992       6,003       -16.8  
  

 

 

   

 

 

   

 

 

 

Financial Services

     488       472       3.4  

Eliminations and other

     (30 )      (41     —    
  

 

 

   

 

 

   

 

 

 

Total

     5,450       6,434       -15.3  
  

 

 

   

 

 

   

 

 

 

CNH INDUSTRIAL

Adjusted EBIT(1) by Segment under EU-IFRS ($ million)

 

     Three Months ended March 31,  
     2020     2019     $ change      2020 adjusted
EBIT margin
    2019 adjusted
EBIT margin
 

Agriculture

     16       180       -164        0.7     7.2

Construction

     (83 )      9       -92        (19.7 )%      1.4

Commercial and Specialty Vehicles

     (66 )      83       -149        (3.3 )%      3.4

Powertrain

     13       91       -78        1.7     8.8

Unallocated items, eliminations and other

     (69 )      (52     -17        —         —    
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total Industrial Activities

     (189 )      311       -500        (3.8 )%      5.2
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Financial Services

     121       131       -10        24.8     27.8

Eliminations and other

              —         —          —         —    
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total

     (68 )      442       -510        (1.2 )%      6.9
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

(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.

    

 

20


CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Adjusted EBITDA(1) by Segment under EU-IFRS ($ million)

 

     Three Months ended March 31,  
     2020     2019     $ change      2020 adjusted
EBITDA

margin
    2019 adjusted
EBITDA

margin
 

Agriculture

     135       321       -186        6.0 %      12.9

Construction

     (62 )      36       -98        (14.7 )%      5.6

Commercial and Specialty Vehicles

     110       263       -153        5.4 %      10.9

Powertrain

     55       136       -81        7.3 %      13.2

Unallocated items, eliminations and other

     (68 )      (51     -17                 —    
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total Industrial Activities

     170       705       -535        3.4 %      11.7
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Financial Services

     185       197       -12        37.9 %      41.7

Eliminations and other

              —         —                   —    
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total

     355       902       -547        6.5 %      14.0
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

(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)

 

     March 31,
2020
    December 31,
2019
 

Total Assets

     45,711       49,182  

Total Equity

     7,314       7,863  

Equity attributable to CNH Industrial N.V.

     7,267       7,819  

Net debt

     (19,240 )      (19,630

of which Net debt of Industrial Activities(1)

     (2,735 )      (1,403

 

(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.

    

 

21


CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

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

 

     Three Months
ended March 31,
 
     2020      2019  

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

     (54      264  
  

 

 

    

 

 

 

Adjustments to conform with EU-IFRS:

     

Development costs

     (31      (22

Other adjustments(1)

     (26      32  

Tax impact on adjustments and other income tax differences(1)

     12        (3
  

 

 

    

 

 

 

Total adjustments

     (45      7  
  

 

 

    

 

 

 

Profit (loss) in accordance with EU-IFRS

     (99      271  
  

 

 

    

 

 

 

 

(1)

This item also includes the different accounting impact from the modification of a healthcare plan in the U.S.

CNH INDUSTRIAL

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

 

   
     March 31,
2020
    December 31,
2019
 

Total Equity under U.S. GAAP

     5,622       6,121  
  

 

 

   

 

 

 

Adjustments to conform with EU-IFRS:

    

Development costs

     2,169       2,260  

Other adjustments

     (41     (87

Tax impact on adjustments and other income tax differences

     (436     (431
  

 

 

   

 

 

 

Total adjustments

     1,692       1,742  
  

 

 

   

 

 

 

Total Equity under EU-IFRS

     7,314       7,863  
  

 

 

   

 

 

 

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:

 

     Three Months Ended
March 31, 2020
            Three Months Ended
March 31, 2019
 
     Average      March 31,      At
December 31,
2019
     Average      At
March 31,
 

Euro

     0.907        0.913        0.890        0.880        0.890  

Pound sterling

     0.782        0.809        0.757        0.768        0.764  

Swiss franc

     0.968        0.966        0.966        0.997        0.995  

Polish zloty

     3.922        4.154        3.789        3.787        3.828  

Brazilian real

     4.459        5.203        4.020        3.766        3.904  

Canadian dollar

     1.344        1.425        1.299        1.330        1.335  

Turkish lira

     6.115        6.577        5.950        5.380        5.647  

 

22


CNH INDUSTRIAL N.V.

Condensed Consolidated Income Statement

For The Three Months Ended March 31, 2020 and 2019

(Unaudited)

(EU-IFRS)

 

     Three Months Ended
March 31,
 

($ million)

   2020     2019  

Net revenues

     5,450       6,434  

Cost of sales

     4,729       5,165  

Selling, general and administrative costs

     502       533  

Research and development costs

     248       274  

Result from investments:

     —         4  

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

     —         4  

Gains/(losses) on the disposal of investments

     —         —    

Restructuring costs

     5       6  

Other income/(expenses)

     (46     (24

Financial income/(expenses)

     (54     (72
  

 

 

   

 

 

 

PROFIT/(LOSS) BEFORE TAXES

     (134     364  
  

 

 

   

 

 

 

Income tax (expense)

     35       (93
  

 

 

   

 

 

 

PROFIT/(LOSS) FROM CONTINUING OPERATIONS

     (99     271  
  

 

 

   

 

 

 

PROFIT/(LOSS) FOR THE PERIOD

     (99     271  
  

 

 

   

 

 

 

PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO:

    
  

 

 

   

 

 

 

Owners of the parent

     (110     264  

Non-controlling interests

     11       7  
    
(in $)             

BASIC EARNINGS/(LOSS) PER COMMON SHARE

     (0.08     0.19  

DILUTED EARNINGS/(LOSS) PER COMMON SHARE

     (0.08     0.19  

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, 2019 included in the EU Annual Report. This Condensed Consolidated Income Statement represents the consolidation of all CNH Industrial N.V. subsidiaries.

 

23


CNH INDUSTRIAL N.V.

Condensed Consolidated Statement of Financial Position

As of March 31, 2020 and December 31, 2019

(Unaudited)

(EU-IFRS)

 

($ million)

   March 31,
2020
     December 31,
2019
 

ASSETS

     

Intangible assets

     5,395        5,522  

Property, plant and equipment

     5,354        5,769  

Investments and other financial assets:

     683        707  

Investments accounted for using the equity method

     526        550  

Other investments and financial assets

     157        157  

Leased assets

     1,797        1,857  

Defined benefit plan assets

     24        28  

Deferred tax assets

     777        806  
  

 

 

    

 

 

 

Total Non-current assets

     14,030        14,689  
  

 

 

    

 

 

 

Inventories

     7,405        7,065  

Trade receivables

     343        408  

Receivables from financing activities

     17,623        19,429  

Current tax receivables

     239        260  

Other current assets

     1,137        1,475  

Other financial assets

     221        73  

Cash and cash equivalents

     4,704        5,773  
  

 

 

    

 

 

 

Total Current assets

     31,672        34,483  
  

 

 

    

 

 

 

Assets held for sale

     9        10  
  

 

 

    

 

 

 

TOTAL ASSETS

     45,711        49,182  
  

 

 

    

 

 

 

EQUITY AND LIABILITIES

     

Issued capital and reserves attributable to owners of the parent

     7,267        7,819  

Non-controlling interests

     47        44  

Total Equity

     7,314        7,863  

Provisions:

     4,435        4,787  

Employee benefits

     1,532        1,701  

Other provisions

     2,903        3,086  

Debt:

     24,054        25,413  

Asset-backed financing

     10,809        11,757  

Other debt

     13,245        13,656  

Other financial liabilities

     162        121  

Trade payables

     4,908        5,635  

Tax liabilities

     157        181  

Deferred tax liabilities

     260        274  

Other current liabilities

     4,421        4,908  

Liabilities held for sale

     —          —    
  

 

 

    

 

 

 

Total Liabilities

     38,397        41,319  
  

 

 

    

 

 

 

TOTAL EQUITY AND LIABILITIES

     45,711        49,182  
  

 

 

    

 

 

 

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, 2019 included in the EU Annual Report. This Condensed Consolidated Statement of Financial Position represents the consolidation of all CNH Industrial N.V. subsidiaries.

 

24


CNH INDUSTRIAL N.V.

Condensed Consolidated Statement of Cash Flows

For The Three Months Ended March 31, 2020 and 2019

(Unaudited)

(EU-IFRS)

 

     Three Months
Ended March 31,
 

($ million)

   2020     2019  

A) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

     5,773       5,803  

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

    

Profit/(loss) for the period

     (99     271  

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

     295       316  

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

     —         —    

Other non-cash items

     22       15  

Dividends received

     6       —    

Change in provisions(*)

     (179     (243

Change in deferred income taxes

     (41     34  

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

     (96     (26

Change in operating lease items(2)

     50       (49

Change in working capital(*)

     (1,190     (971
  

 

 

   

 

 

 

TOTAL

     (1,232     (653
  

 

 

   

 

 

 

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)

     (142     (168

Consolidated subsidiaries and other equity investments

     (3     —    

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

     5       —    

Net change in receivables from financing activities

     698       —    

Other changes

     104       62  
  

 

 

   

 

 

 

TOTAL

     662       (106
  

 

 

   

 

 

 

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

    

Net change in debt and other financial assets/liabilities

     (224     (539

Capital increase

     —         —    

Dividends paid

     (1     (1

Purchase of ownership interests in subsidiaries

     (9     —    
  

 

 

   

 

 

 

TOTAL

     (234     (540
  

 

 

   

 

 

 

Translation exchange differences

     (265     (45
  

 

 

   

 

 

 

E) TOTAL CHANGE IN CASH AND CASH EQUIVALENTS

     (1,069     (1,344
  

 

 

   

 

 

 

F) CASH AND CASH EQUIVALENTS AT END OF PERIOD

     4,704       4,459  
  

 

 

   

 

 

 

 

Notes:

 

(*)

Following the adoption, on January 1, 2019, of IFRIC Interpretation 23, figures for the three months ended March 31, 2019 have been reclassified due to the change in classification for identified income tax-related risks that were previously recognized as a provision.

(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.

(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, 2019 included in the EU Annual Report. This Condensed Consolidated Statement of Cash Flows represents the consolidation of all CNH Industrial N.V. subsidiaries.

 

25

EX-99.2

Slide 1

Q1 2020 Results Review May 6th, 2020 Exhibit 99.2


Slide 2

Safe Harbor Statement and Disclosures All statements other than statements of historical fact contained in this presentation including statements regarding our future responses to and effects of the COVID-19 pandemic; 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, liquidity, 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, including those related to the COVID-19 outbreak, are neither 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 they occur with a degree of severity that the Company is unable to predict) 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 unknown duration and economic, operational and financial impacts of the global COVID-19 pandemic and the actions taken or contemplated by governmental authorities or others in connection with the pandemic on our business, our employees, customers and suppliers, including supply chain disruptions caused by mandated shutdowns and the adverse impact on customers, borrowers and other third parties to fulfill their obligations to us; disruption caused by business responses to COVID-19, including remote working arrangements, which may create increased vulnerability to cybersecurity or data privacy incidents; our ability to execute business continuity plans as a result of COVID-19; the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products; including demand uncertainty caused by COVID-19; general economic conditions in each of our markets, including the significant economic uncertainty and volatility caused by COVID-19; travel bans, border closures, other free movement restrictions, and the introduction of social distancing measures in our facilities may affect in the future our ability to operate as well as the ability to operate of our suppliers and distributors; changes in government policies regarding banking, monetary and fiscal policy; 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; volatility in international trade caused by the imposition of tariffs, sanctions, trade wars; 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; further developments of the COVID-19 pandemics not only on our operations, supply chains, distribution network, and level of demands of our products, as well negative evolutions of the economic and financial conditions at global and regional level; political and civil unrest; volatility and deterioration of capital and financial markets, including possible effects of “Brexit”, other pandemics, terrorist attacks in Europe and elsewhere, our ability to achieve the targets set out in the Strategic Business Plan announced on September 3, 2019 at our Capital Markets Day event; our ability to successfully and timely implement the planned spin-off of the Company’s On-Highway business; 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, 2019, prepared in accordance with U.S. GAAP and in the Company’s EU Annual Report at December 31, 2019, prepared in accordance with EU-IFRS, as well as in the CNH Industrial N.V. Quarterly Reports for the three months ended March 31, 2020 (prepared respectively in accordance with U.S. GAAP and EU-IFRS, that the Company expects to issue in the first half of May 2020). Investors are expressly invited to refer to and consider the information on risks, factors, and uncertainties incorporated in the above mentioned documents, in addition to the information presented here. . Investors should consider non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Reconciliations of non-GAAP measures to the most comparable GAAP measures are presented in our earnings press releases, which are available on EDGAR on the SEC’s website at www.sec.gov and on our website at www.cnhindustrial.com. Forward-looking statements are based upon assumptions relating to the factors described in this presentation, 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. The impact of COVID-19 has already exacerbated and is expected to further exacerbate all or part of the risks discussed in this section. 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.


Slide 3

Introductory Remarks | Short-Term Priorities and Long-Term Strategy Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated. Confirming Transform2Win strategy and priorities Extending spin-off timeline due to market conditions ENSURING SUSTAINABLE OPERATIONAL AND FINANCIAL BUSINESS CONTINUITY SAFEGUARDING HEALTH AND WELLBEING OF OUR EMPLOYEES MONITORING OUR DEALER NETWORK AND SUPPLIER BASE CONTINUITY SUPPORTING OUR CUSTOMERS AND THE COMMUNITIES WE OPERATE IN Daily Global Executive Committee meetings chaired by Acting CEO


Slide 4

Q1 2020 | Highlights Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated. Non-GAAP measures (definition and reconciliation in appendix) Note: @CC means at constant currency Net sales at $5bn, down 17% vs. Q1 2019, due to COVID-19 impact on market conditions across all regions, coupled with previously announced actions to reduce dealer inventory levels All industrial segments strongly impacted by demand disruption since March Negative absorption caused by temporary Covid-related plant shut downs and actions to lower inventory levels (mainly in AG and CE) Seasonal working capital absorption, partially offset by actions implemented on Company inventory and cash preservation measures Industrial Activities Adj. EBIT loss key driver of Adj. Net Loss Second highest March-end Available Liquidity level since Company’s inception On February 28th, €4bn committed revolving credit facility extended for one additional year through March 2025 Industrial Activities Net Sales (14%) at CC Industrial Activities Adj. EBIT (1) Loss $(148)mn Industrial Activities Net Debt (1) $(2.3)bn Adj. Diluted EPS (1) $(0.06) Available Liquidity (1) $9.9bn


Slide 5

Q1 2020 | Industry Unit Performances TRACTORS COMBINES NA EU SA RoW WW Feb YTD Mar month 0-140 HP (9%) (10%) (6%) (17%) (15%) Flat (36%) 140+ HP (7%) (22%) (20%) (30%) (2%) (11%) (12%) (10%) COMPACT AND SERVICE Eq. NA EU SA RoW WW Feb YTD Mar month (14%) (16%) (1%) (31%) (22%) (6%) (44%) General Construction | Road building and site preparation General CE (16%) (22%) 13% (42%) (36%) (22%) (51%) R&S (26%) (32%) 12% (30%) (28%) (5%) (54%) TRUCKS > 3.5t BUSES - (9%) (14%) Flat (7%) Flat (21%) NA EU SA RoW WW Feb YTD Mar month LCV - (14%) (17%) (17%) (15%) (3%) (33%) M&H - (27%) (6%) (24%) (23%) (16%) (34%) Worldwide Tractors industry was down 36% in March month (with EU and RoW down 24% and 43% respectively) NA HHP Tractors down 13% in March month alone Worldwide Combines down 11% in Q1 2020 NA Combines industry down 25% at February YTD Worldwide Construction industry down 48% in March month NA down 39%, EU down 42% and RoW down 54% All industrial segments down >35% across regions excluding SA Worldwide Truck industry was down 34% in March month (EU and RoW down 35% and 34% respectively) LCV were down 34% in EU and down 26% in SA M&H were down 38% in EU and down 14% in SA Worldwide Buses down 21% in March month EU down 30% and SA down 34% Worldwide


Slide 6

Q1 2020 | Company Unit Statistics Worldwide Tractors and Combines production down 40% and 26% respectively in March month vs. last year NA row crop production down 16% in Q1 ‘20 Worldwide channel inventory for Tractors up 3% and for Combines down 3% vs Q1 2019 NA row crop channel inventory down 11% vs. Q1 ‘19 Worldwide total CE industrial segment production down 23% vs. Q1 2019 (down 29% at March month vs. previous year) Worldwide total CE industrial segment channel inventory up 1% vs. Q1 2019 EU production for LCV and M&H down 28% and 21% respectively vs. Q1 2019 EU channel inventory for Trucks down 9% vs. Q1 ’19 Trucks market share in EU at 10.8% (up 40 bps vs. Q1 2019) LCV at 12.1% and M&H up 250 bps to 8.5% Trucks book-to-bill in EU at 1.44 and SA at 1.04 Retail Production Deliveries Note: % changes vs. Q1 2019 8% (20)% (19)% (16)% (33)% (22)% (15)% (33)% (28)% (9)% (25)% (14)% (19)% (32)% (26)% 6% (5)% (16)% COMPACT AND SERVICE Eq. TRACTORS COMBINES General Construction Road building &site prep. Light Duty Trucks Medium & Heavy (18)% (16)% (18)%


Slide 7

Q1 2020 | Financial Summary (1) Non-GAAP measures (definition and reconciliation in appendix) Note: Numbers may not add due to rounding Note: @CC means at constant currency Q1 2020   Q1 2019   Δ U.S. GAAP           Revenues ($bn) 5,461   6,457   (15.4%) Net Sales | Industrial Activities ($bn) 4,993 6,006 (16.9%) Net Income ($mn) (54)   264   (318) Diluted EPS ($) (0.05)   0.19   (0.24)       Non – GAAP (1)     Net Sales | Industrial Activities @CC ($bn) 5,162   6,006   (14.1%) Adjusted EBIT | Industrial Activities ($mn) (148)   278   (426) Adjusted EBIT Margin | Industrial Activities (%) (3.0%) 4.6% (760) bps Adjusted EBITDA | Industrial Activities ($mn) 72   525   (86.3%) Adjusted EBITDA Margin | Industrial Activities (%) 1.4% 8.7% (730) bps Adjusted Effective Tax Rate 31%    26%     (500) bps Adjusted Net Income ($mn) (66) 248 (314) Adjusted Diluted EPS ($) (0.06)   0.18   (0.24) Free Cash Flow | Industrial Activities ($bn) (1) (1,523)   (966)   (57.7%)             Mar 31,2020   Dec 31,2019   Δ Net Industrial (Debt) ($bn) (2.3)   (0.9)   (1.5) Available Liquidity ($bn) 9.9   11.2   (1.4)


Slide 8

Q1 2020 | Industrial Activities Net Sales (1) Note: Net Sales: Excluding Other Activities, Unallocated Items and Adjustment & Eliminations (*) Note: @CC means at constant currency NA EU SA RoW TRACTORS COMBINES OTHERS NA EU SA RoW NA EU SA RoW N.M. NA EU SA RoW C&S (*) Gen. CE (*) R&S (*) TRUCKS BUSES S. VEHICLES ENGINES TRANSM. AXLES AG CE C&SV PT > (15%) vs. Q1 19 < (15%) vs. Q1 19 ($mn) 6,006 (179) (204) (316) (256) 110 5,162 (169) 4,993 Q1 2019 AG CE C&SV PT ELIM & OTHER Q1 2020 @ CC (*) FX TRANSLATION Q1 2020 CHANGE IN NET SALES @ CC (844) IA Segments | Net Sales by Region & Product (as reported) BY REGION NA (North America) EU (Europe) SA (South America) RoW (Rest of World) BY CURRENCY EUR 47% USD 27% BRL 7% CAD 3% GBP 2% AUD 3% OTHER 12%


Slide 9

Q1 2020 | Adj. EBIT walk and IA Adj. EBIT walk by Segment & driver Non-GAAP measures (definition and reconciliation in appendix) (*) PT Pricing net within Volume & Mix 409 (273) (18) (82) 13 24 (76) (14) (21) (38) Adj. EBIT VOL & MIX PRICING NET (*) PROD COST SG&A R&D FX | OTHER UNALLOCATED, ELIM & OTHER FS Adj. EBIT 2019 2020 6.3% (0.7)% INDUSTRIAL ACTIVITIES CHANGE IN ADJUSTED EBIT (426) ($mn) Q1 IA - Adj. EBIT walk by driver (1)                   Agriculture 168 (91) 21 (49) 13 15 (53) 24 Construction 13 (28) (45) (22) (0) 1 (2) (83) Commercial & Specialty Vehicles 51 (88) 6 (17) (1) 6 (13) (56) Powertrain (**) 96 (66) 6 1 2 (8) 31 Eliminations & Other (50) (64) Total Industrial Activities 278 (148) (1) Industrial Segments’ Adj EBIT walks in appendix


Slide 10

Financial Services (*) Including unconsolidated JVs Managed Portfolio (*) & Retail Originations (*) Q1 ’20 retail originations at $2.1bn, down $0.1bn compared to Q1 ‘19 Managed portfolio* at $24.7bn, down $1.4bn compared to March 31, 2019 (down $0.1bn on a constant currency basis) $26.1bn $24.7bn March 31, 2019 March 31, 2020 Retail Wholesale Operating Lease Delinquencies on Book (>30 Days) (**) RoA defined as: EBIT / average managed assets annualized Net Income ($mn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2018 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2018 2019 2020 Profitability Ratios Gross Margin / Average Assets on Book ROA (**) Net income at $80mn, a decrease of $15mn vs. Q1 2019, primarily attributable to higher risk costs due to deteriorating market conditions driven by COVID-19 and the negative impact of currency translation, partially offset by lower income taxes


Slide 11

Q1 2020 | Net Industrial Debt and Free Cash Flow Non-GAAP measures (reconciliation in appendix) ($bn) (*) Industrial Gross Debt represents third party debt only. Net Industrial Debt includes net intersegment debt, and is offset by cash and cash equivalents, restricted cash and derivative hedging debt Q1 | Net Debt and Free Cash Flow Industrial Activities (1) Change in Working Capital Cash inflow Cash outflow TRADE RECEIVABLES INVENTORIES TRADE PAYABLES OTHER CHG IN WORKING CAPITAL (1.3) Q1 2020 Q1 2019 Net Industrial Debt Net Industrial Cash Flow (2.3) (1.5) (854) 72 (79) (1,293) (166) (63) 6 (1) 68 (2,310) Dec 31, 2019 IA | ADJ EBITDA CASH INTEREST AND TAXES CHANGE IN WORKING CAPITAL CHANGE IN PROVISIONS & OTHERS (1) PP&E CAPEX (2) OTHER CHANGES DIVIDENDS & EQUITY CHANGES (3) FX & OTHER Mar 31, 2020 Free cash flow of Industrial Activities (1,523) (1.0) (1.5)


Slide 12

Q1 2020 | Available Liquidity and Debt Maturity Schedule 1 Represents cash portion of debt maturities as of March 31st, 2020 2 Of which $0.9bn Restricted Cash Undrawn M/T unsecured Committed Lines Cash Bank Debt Capital Market Other Debt Maturity Schedule (1) ($9.4bn) €4bn committed revolving credit facility extended for one additional year through March 2025 Additional funding transactions for $1.1bn equivalent of which $0.8bn drawn in March Available liquidity covers capital markets / bank maturities through 2024 Next 12 months capital market maturities CNH Industrial Capital LLC $600mn bond maturing November 2020 (3.9) (2.2) (1.4) (1.2) (0.7) (3.3) 9M 2020 2021 2022 2023 2024 Beyond 6.5 8.1 7.2 8.2 7.6 7.6 10.0 9.9 Mar-end ‘13 Mar-end ‘14 Mar-end ‘15 Mar-end ‘16 Mar-end ‘17 Mar-end ‘18 Mar-end ‘19 Mar-end ‘20 Available Liquidity ($bn) Liquidity to LTM revenue ratio at 37% Industrial Activities Gross debt (*) to Adj. Ind. EBITDA at 2.8x vs. 2.0x last year Industrial Activities Net debt (*) to Adj. Ind. EBITDA at 1.2x vs. 0.6x last year (*) Industrial Gross Debt represents third party debt only. Net Industrial Debt includes net intersegment debt, and is offset by cash and cash equivalents, restricted cash and derivative hedging debt Drawn remaining portion of the additional $1.1bn Issued a new C$466mn Canadian retail ABS Issued GBP 600mn under the Joint HM Treasury and Bank of England’s Covid Corporate Financing Facility (CCFF) April 2020


Slide 13

Q1 2020 | Debt Maturity Schedule Industrial Activities Financial Services Bank Debt Capital Market Other (0.2) (0.4) (0.5) (1.0) - (3.2) 9M 2020 2021 2022 2023 2024 Beyond (3.7) (1.8) (0.9) (0.2) (0.7) (0.1) 9M 2020 2021 2022 2023 2024 Beyond Short-term maturities concentrated in FS business matched with receivables portfolio


Slide 14

Final Remarks


Slide 15

COVID-19 | Emergency Plan – Executive Summary Extended Health & Safety protocols Plan to start in-house production of PPE Leveraging smart and new ways of working Parts network operating notwithstanding Covid-19 emergency, plants reopening started across jurisdictions Various actions to preserve cash and contain costs implemented Accelerating corporate structure and right-sizing reviews Majority of dealers open / on-call throughout Actively monitoring and supporting dealer and supply base Synchronizing supply base and factory restart schedules 80+ initiatives delivered with focus on healthcare $2mn solidarity fund to support individuals and communities Supporting sustainable restart of communities with focus on food, health, education


Slide 16

Q1 2020 | Organic Investment in Future Growth (1) Excluding assets sold under buy-back commitments and assets under operating leases Capex at $63mn down 18% vs. Q1 2019 Capex at 1.3% of net sales in Q1 2020 CAPEX (1) ($mn) R&D at $214mn down 12% vs. Q1 2019 R&D at 4.3% of net sales in Q1 2020 R&D (1) 77 63 2019 2020 Q1 244 214 2019 2020 Q1 Total spending (Capex + R&D) in new products was $117mn, up 6% vs. Q1 ‘19 Digitalization; Electrification; Autonomous & Telematics Regulatory Other New Products $117mn While adapting our investment priorities to current emergency situation, we remain firmly committed in continuing to invest in our future growth


Slide 17

Q1 2020 | Organic Growth – New Product launches and Awards CASE IH New line of articulated 4WD tractors. Proven power with a redesigned cab. Includes advanced technology for easier operation and ultimate connectivity. Available in EU in Autumn 2020 New Engine New Engine NEW HOLLAND The new WORKMASTER models, available in 95, 105 and 120 horsepower, have been designed to meet a wide range of customer needs and provide unmatched comfort, simplicity and visibility with a low cost of ownership New CASE “Project Zeus” Fully electric backhoe loader will significantly lower daily operating costs, produce zero emissions, reduce maintenance demands and satisfy local/project-based incentives for working with electric equipment/vehicles New FPT INDUSTRIAL F28 engine awarded “diesel of the year”. The F28 is compliant with Stage V and Tier 4 Final emission standards New IVECO BUS IVECO BUS signed an agreement with Otokar Otomotiv ve Savunma Sanayi A.Ş to locally manufacture products under the IVECO BUS brand at its facilities in Sakarya, Turkey New Engine IVECO S-WAY IVECO wins prestigious iF DESIGN AWARD 2020 for the IVECO S-Way heavy duty truck. Recognized as a symbol of design excellence


Slide 18

Q1 2020 | Inorganic Growth IVECO and FPT together with Nikola Motor Company announce future Nikola TRE production in Ulm, Germany The Nikola TRE will be manufactured, through the European Joint Venture, in Ulm, Germany, at the IVECO manufacturing facility In the first stage of the project, €40mn will be invested by the JV to upgrade the manufacturing facility, which will focus on final assembly of the vehicle The Nikola TRE currently in development is based on the new IVECO S-WAY platform and integrates Nikola’s electric power train technologies, controls and infotainment The first models to enter production will be the battery-electric 4x2 and 6x2 articulated trucks with modular and scalable batteries with a capacity of up to 720 kWh and an electric powertrain that delivers up to 480 kW of continuous power output Focus of the collaboration is to leverage each partners’ respective expertise to successfully deploy zero-emission heavy-duty trucks and to disrupt the industry with an entirely new business model On March 11th, FPT Industrial, announced that it has acquired Potenza Technology, a company specialized in the design and development of electric and hybrid powertrain systems. This acquisition represents another step in FPT Industrial’s path towards electrification, one of the pillars of its multi-power strategy FPT Industrial, signed a MoU with Yanmar Marine International, foreseeing a commercial cooperation to develop and supply marine engines.


Slide 19

Final Remarks – Key Takeaways Committed to emerge from this crisis as a stronger and more efficient company $9.9bn available liquidity providing solid cash base and headroom, remaining dedicated to maintain it strong throughout the year Continued positive long term prospects of Agricultural end-markets and sustainable transportation with Company positioned for future success Perform & Simplify and Optimize initiatives even more relevant under current environment, to prepare for a sustainable and profitable growth in the “New Normal”


Slide 20

Appendix


Slide 21

Q1 2020 | Financials by Segment (1) Non-GAAP measures (definition and reconciliation in appendix) Q1 2020 $ Chg. % Chg.  Margin Bps Chg. Adj. EBIT           Agriculture 24 (144) (85.7%) 1.1% (560) Construction (83) (96) (738.5%) (19.7%) (2,170) Commercial & Specialty Vehicles (56) (107) (209.8%) (2.8%) (490) Powertrain 31 (65) (67.7%) 4.1% (520) Eliminations & Other (64) (14) - - - Total Industrial Activities (148) (426) (153.2%) (3.0%) (760) Financial Services 110 (21) (16%) 22.5% (510) Eliminations & Other - - - - - Total (38) (447) (109.3%) (0.7%) (700) Q1 2020 $ Chg. % Chg.  Margin Bps Chg. Adj. EBITDA           Agriculture 88 (155) (63.8%) 3.9% (590) Construction (70) (97) (359.3%) (16.6%) (2,080) Commercial & Specialty Vehicles 58 (119) (67.2%) 2.9% (440) Powertrain 60 (68) (53.1%) 8.0% (440) Eliminations & Other (64) (14) - - - Total Industrial Activities 72 (453) (86.3%) 1.4% (730) Financial Services 173 (24) (12.2%) 35.4% (620) Eliminations & Other - - - - - Total 245 (477) (66.1%) 4.5% (670) Q! 2020 Q1 2019  % Chg % Chg. @cc REVENUES         Agriculture 2,244 2,490 (9.9%) (7.2%) Construction 422 640 (34.1%) (31.8%) Commercial & Specialty Vehicles 2,021 2,414 (16.3%) (13.1%) Powertrain 753 1,036 (27.3%) (24.7%) Eliminations & Other (447) (574) - - Total Industrial Activities 4,993 6,006 (16.9%) (14.1%) Financial Services 489 474 3.2% 6% Eliminations & Other (21) (23) - - Total 5,461 6,457 (15.4%) (12.6%) Q1 2020 $ Chg. Margin % Chg. Gross Profit         Agriculture 343 (185) 15.3% (5.9%) Construction (9) (99) (2.1%) (16.2%) Commercial & Specialty Vehicles 167 (110) 8.3% (3.2%) Powertrain 84 (71) 11.2% (3.8%) Eliminations & Other (6) 4 Total Industrial Activities 579 (461) 11.6% (5.7%) Financial Services 165 (5) 33.7% (2.2%) Eliminations & Other Total 744 (466) 13.6% (5.1%)


Slide 22

Industrial Activities | Q1 2020 Net Sales Split Note: Numbers may not add due to rounding (*) C&S: Compact and Service; General CE: General Construction; R&S : Road building and site preparation Agriculture Q1 2020 | Split Chg. vs. Q1 ’19 Construction Q1 2020 | Split Chg. vs. Q1 ’19 By region: By region: NA 37% (3%) NA 40% (44%) EU 35% (16%) EU 22% (32%) SA 13% (16%) SA 16% (6%) RoW 15% (4%) RoW 22% (29%) By product: By product: TRACTORS 59% (8%) C&S (*) 47% (35%) COMBINES 17% (19%) General CE (*) 41% (38%) OTHERS 24% (7%) R&S (*) 12% (12%) Commercial & Specialty Vehicles Q1 2020 | Split Chg. vs. Q1 ’19 Powertrain Q1 2020 | Split Chg. vs. Q1 ’19 By region: By region: NA n.m. n.m. NA 4% (24%) EU 81% (17%) EU 74% (26%) SA 6% (14%) SA 6% (20%) RoW 13% (11%) RoW 16% (36%) By product: By product: TRUCKS 79% (19%) ENGINES 89% (29%) BUSES 16% (7%) TRANSM. 2% (35%) OTHERS 5% 0% AXLES 9% (23%)


Slide 23

AG | Financial Results Note: at CC means at constant currency Adj. EBITDA & Adj. EBIT walk ($mn) NA EU SA RoW Q1 ’20 Change vs. prior year 243 75 168 (91) 21 (49) 13 15 (53) 24 64 88 Adj. EBITDA D&A Adj. EBIT VOLUME & MIX PRICING NET PROD COST SG&A R&D JV | FX | OTHER Adj. EBIT D&A Adj. EBITDA Q1 2019 Q1 2020 Net Sales 9.8% 6.7% 1.1% 3.9% Lower wholesale volume and, unfavorable market and product mix, negative fixed cost absorption primarily in EU due to plant shutdowns, higher product costs, and costs associated with product quality actions Positive price realization, disciplined cost management and favorable purchasing performance Negative FX exchange primarily from SA Q1 2020 2019 Δ Δ At CC 2,244 2,490 (9.9)% (7.2)% Q1 TRACTORS COMBINES OTHERS Q1 ’20 Change vs. prior year < (15%) vs. Q1 19 > (15%) vs. Q1 19


Slide 24

CE | Financial Results (*) C&S: Compact and Service Equipment; General CE: General Construction; R&S : Road building and site preparation Note: at CC means at constant currency Adj. EBITDA & Adj. EBIT walk ($mn) NA EU SA RoW Q1 ’20 Change vs. prior year 27 14 13 (28) (45) (22) (0) 1 (2) (83) 13 (70) Adj. EBITDA D&A Adj. EBIT VOLUME & MIX PRICING NET PROD COST SG&A R&D JV | FX | OTHER Adj. EBIT D&A Adj. EBITDA Q1 2019 Q1 2020 Net Sales 4.2% 2.0% (19.7)% (16.6)% Negative volume and mix including negative fixed cost absorption Net pricing was impacted by retail program enhancements in response to COVID-19 impacted market conditions and channel destocking actions Product cost increased due to plant shutdowns, and costs associated with continued quality improvement initiatives Q1 2020 2019 Δ Δ At CC 422 640 (34.1)% (31.8)% Q1 C&S (*) General CE (*) R&S (*) Q1 ’20 Change vs. prior year < (15%) vs. Q1 19 > (15%) vs. Q1 19


Slide 25

C&SV | Financial Results Note: at CC means at constant currency ($mn) Adj. EBITDA & Adj. EBIT walk ($mn) NA EU SA RoW N.M. Q1 ’20 Change vs. prior year 177 126 51 (88) 6 (17) (1) 6 (13) (56) 114 58 Adj. EBITDA D&A Adj. EBIT VOLUME & MIX PRICING NET PROD COST SG&A R&D JV | FX | OTHER Adj. EBIT D&A Adj. EBITDA Q1 2019 Q1 2020 Net Sales 7.3% 2.1% (2.8)% 2.9% Q1 Critical market conditions, particularly in EU, generating lower volumes and higher product costs due to plant shutdowns Positive price realization partially reduced by unfavorable foreign exchange 2020 2019 Δ Δ At CC 2,021 2,414 (16.3)% (13.1)% Q1 TRUCKS BUSES SPECIALTY VEHICLES Q1 ’20 Change vs. prior year < (15%) vs. Q1 19 > (15%) vs. Q1 19


Slide 26

PT | Financial Results Note: at CC means at constant currency (*) (*) 3rd Party sales at 44% in 2020 vs. 47% in FY 2019 Adj. EBITDA & Adj. EBIT walk ($mn) NA EU SA RoW Q1 ’20 Change vs. prior year 128 32 96 (66) 6 1 2 (8) 31 29 60 Adj. EBITDA D&A Adj. EBIT VOLUME & MIX | PRICING NET PROD COST SG&A R&D JV | FX | OTHER Adj. EBIT D&A Adj. EBITDA Q1 2019 Q1 2020 Net Sales 12.4% 9.3% 4.1% 8.0% Unfavorable volume and mix, partially offset by positive price realization Product cost efficiencies Q1 2020 2019 Δ Δ At CC 753 1,036 (27.3)% (24.7)% Q1 ENGINES TRANSM. AXLES Q1 ’20 Change vs. prior year < (15%) vs. Q1 19 > (15%) vs. Q1 19


Slide 27

Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (US GAAP) For Industrial Activities, net income net of “Results from intersegment investments”. In the three months ended March 31, 2020, this item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of a healthcare plan in the U.S. ($mn) Q1 2020 AG CE C&SV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (1) Add back:           (134) 80 (54)                 Interest expenses of Industrial Activities, net of interest income and eliminations           59   - 59 Foreign exchange (gains) losses, net (2) - (2) Finance and non-service component of Pension and other post-employment benefit costs(2)           (30) - (30) Income tax expense           (53) 30 (23) Adjustments:                 Restructuring expenses 2 1 2 - - 5 - 5 Other discrete items         7  7    7  Adjusted EBIT 24 (83) (56) 31 (64) (148) 110 (38) Depreciation and Amortization 64 13 49 29 - 155 - 155 Depreciation of assets under operating leases and assets sold with buy-back commitments - - 65 - - 65 63 128 Adjusted EBITDA 88 (70) 58 60 (64) 72 173   245


Slide 28

Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (US GAAP) ($mn) Q1 2019 AG CE C&SV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (1) Add back:           169 95 264                           53     53 Interest expenses of Industrial Activities, net of interest income and eliminations 9 9 Foreign exchange (gains) losses, net           (15)   (15) Finance and non-service component of Pension and other post-employment benefit costs(2)           54 36 90 Income tax expense                 Adjustments: Restructuring expenses 3 -  5 -  -  8 -  8 Adjusted EBIT 168 13 51 96 (50) 278 131 409 Depreciation and Amortization 75 14 47 32   168 1 169 Depreciation of assets under operating leases and assets sold with buy-back commitments     79     79 65 144 Adjusted EBITDA 243 27 177 128 (50) 525 197   722 For Industrial Activities, net income net of “Results from intersegment investments”. In the three months ended March 31, 2019, this item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of a healthcare plan in the U.S.


Slide 29

Q1 2020 Reconciliation of Adj. net income and Adj. income tax (expense) to Net Income (loss) and Income tax (expense) and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP ($mn) Q1 2020  Q1 2019  Net income (loss) (54)   264 Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (a) (18)   (22) Adjustments impacting Income tax (expense) (b) 6   6       Adjusted net income (66)   248 Adjusted net income attributable to CNH Industrial N.V. (77)   241 Weighted average shares outstanding – diluted (million) 1,350   1,356 Adjusted diluted EPS ($) (0.06)   0 .18 Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (76)   349 Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (a) (18)   (22) Adjusted income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (A) (94)   327 Income Tax (expense) 23   (90) Adjustments impacting Income tax (expense) (b) 6   6 Adjusted income tax (expense) (B) 29   (84) Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A) 31%   26%


Slide 30

Q1 2020 ($mn) Reconciliation of Adj. net income and Adj. income tax (expense) to Net Income (loss) and Income tax (expense) and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP Q1 2020   Q1 2019   (a) Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates Restructuring expenses 5 8 Pre-tax gain related to the modification of a healthcare plan in the U.S. (30)   (30) Other discrete items 7 - Total (18)   (22)   (b) Adjustments impacting Income tax (expense) Tax effect of adjustments impacting Income before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates 6 6 Total 6 6


Slide 31

Capex (1) (1) Excluding assets sold under buy-back commitments and assets under operating leases Q1 2020 Q1 2019 Investments in property, plant and equipment, and intangible assets (1) 63 77 Breakdown by Category NEW PRODUCT & TECHNOLOGY 56% 42% MAINTENANCE & OTHER 43% 54% INDUSTRIAL CAPACITY EXPANSION & LT INVESTMENTS 1% 4% Breakdown by Segment AGRICULTURAL 50% 49% CONSTRUCTION 11% 7% COMMERCIAL & SPECIALTY VEHICLES 27% 30% POWERTRAIN 12% 14% ($mn)


Slide 32

Capex (1) (1) Excluding assets sold under buy-back commitments and assets under operating leases Q1 2020 Q1 2019 Investments in property, plant and equipment, and intangible assets (1) 63 77 Breakdown by Category NEW PRODUCT & TECHNOLOGY 56% 42% MAINTENANCE & OTHER 43% 54% INDUSTRIAL CAPACITY EXPANSION & LT INVESTMENTS 1% 4% Breakdown by Segment AGRICULTURAL 50% 49% CONSTRUCTION 11% 7% COMMERCIAL & SPECIALTY VEHICLES 27% 30% POWERTRAIN 12% 14% ($mn)


Slide 33

Reconciliation of Total Debt to Net Debt (US GAAP) Mar 31, 2020 Dec 31, 2019 Mar 31, 2020 Dec 31, 2019 Mar 31, 2020 Dec 31, 2019 Third party debt (23,518) (24,854) (5,326) (5,226) (18,192) (19,628) Intersegment notes payable - - 1,491 1,332 (901) (1,120) Total (Debt) (1) (23,518) (24,854) (6,817) (6,558) (19,093) (20,748) Plus: Cash and cash equivalents 3,850 4,875 3,429 4,407 421 468 Restricted cash 854 898 122 120 732 778 Intersegment notes receivables - - 901 1,120 1,491 1,332 Other current financial assets 51 58 51 58 - - Derivatives hedging debt 4 (1) 4 (1) - - Net (Debt) / Cash (2) (18,759) (19,024) (2,310) (854) (16,449) (18,170) Consolidated Industrial Activities Financial Services ($mn) (1)Total Debt of Industrial Activities includes Intersegment notes payable to Financial Services of $1,491 million and $1,332 million as of March 31, 2020 and December 2019, respectively. Total Debt of Financial Services includes Intersegment notes payable to Industrial Activities of $901 million and $1,120 million as of March 31, 2020 and December 2019, respectively. (2)The net intersegment (receivable)/payable balance recorded by Financial Services relating to Industrial Activities was $(590) million and $(212) million as of March 31, 2020 and December 2019, respectively


Slide 34

From Total Debt to Net Industrial Debt Mar 31, 2020 Dec 31, 2019 Total (Debt) (1) (23,518) (24,854) Financial Services Third Party Debt 18,192 19,628 Intersegment Note Payables (1,491) (1,332) Intersegment Note Receivables 901 1,120 Cash and cash equivalents 3,429 4,407 Restricted cash 122 120 Other current financial assets 51 58 Derivatives hedging debt 4 (1) Net Industrial (Debt) / Cash (2) (2,310) (854) ($mn) (1) Total Debt of Industrial Activities includes Intersegment notes payable to Financial Services of $1,491 million and $1,332 million as of March 31, 2020 and December 2019, respectively. Total Debt of Financial Services includes Intersegment notes payable to Industrial Activities of $901 million and $1,120 million as of March 31, 2020 and December 2019, respectively. (2)The net intersegment (receivable)/payable balance recorded by Financial Services relating to Industrial Activities was $(590) million and $(212) million as of March 31, 2020 and December 2019, respectively Q1 2020 Q1 2019 Net (debt)/cash of Industrial Activities at beginning of period (854) (599) Adjusted EBITDA of Industrial Activities 72 525 Cash interest and taxes (79) (142) Changes in provisions and similar(1) (166) (162) Change in working capital (1,293) (1,132) Operating cash flow of Industrial Activities (1,466) (911) Investments in property, plant and equipment, and intangible assets(2) (63) (77) Other changes 6 22 Free cash flow of Industrial Activities (1,523) (966) Capital increases and dividends(3) (1) (1) Currency translation differences and other 68 91 Change in Net debt of Industrial Activities (1,456) (876) Net (debt)/cash of Industrial Activities at end of period (2,310) (1,475) (1)Including other cash flow items related to operating lease and buy-back activities. (2)Excluding assets sold under buy-back commitments and assets under operating leases. (3)Including share buy-back transactions.


Slide 35

Reconciliation of Net cash provided by (used in) Operating Activities to Free cash flow of Industrial Activities under U.S. GAAP ($mn) Q1 2020 Q1 2019 Net cash provided by (used in) Operating Activities (532) (751) Net cash (provided by) used in Operating Activities of Financial Services (881) (70) Intersegment eliminations 40 7 Net cash provided by (used in) Operating Activities of Industrial Activities (1,373) (814) Change in derivatives hedging debt of Industrial Activities 5 3 Investments in assets sold under buy-back commitments and operating lease assets of Industrial Activities (98) (100) Operating cash flow of Industrial Activities (1,466) (911) Investments in property, plant and equipment, and intangible assets of Industrial Activities (63) (77) Other changes (1) 6 22 Free cash flow of Industrial Activities (1,523) (966) (1) This item primarily includes change in intersegment financial receivables and capital increases in intersegment investments


Slide 36

Debt Maturity Schedule | Breakdown Note: Numbers may not add due to rounding Outstanding Mar 31, 2020 9M 2020 2021 2022 2023 2024 Beyond (4.2) Bank Debt (2.7) (0.8) (0.3) (0.2) (0.1) (0.1) (8.4) Capital Market (1.1) (1.5) (1.0) (1.0) (0.6) (3.2) (0.1) Other Debt (0.1) (0.0) (0.0) (0.0) (0.0) (0.0) (12.7) Cash Portion of (Debt) Maturities (3.9) (2.2) (1.4) (1.2) (0.7) (3.3) (4.8) Cash & Cash Equivalents (0.9) of which restricted cash (5.2) Undrawn Committed credit lines 9.9 Total Available Liquidity ($mn)


Slide 37

Europe Trucks | Company performance (*) Europe: 27 countries reflecting key markets where the segment competes (excluding United Kingdom and Ireland for market share reporting purposes); (1) Company’s estimated market share in the European truck market (GVW ≥3.5 tons) Q1         2017 2018 2019 2020             MKT SHARE(1) Light (3.5-7.49t) 14.2% 13.8% 13.1% 12.1% M&H (≥7.5t) 9.3% 8.2% 6.0% 8.5%   Europe (*) 12.2% 11.6% 10.4% 10.8% B-TO-B Light (3.5-7.49t) 1.25 1.35 1.21 1.50 M&H (≥7.5t) 1.19 1.04 1.12 1.27   Europe 1.23 1.26 1.19 1.44           Δ 17/18 Δ 18/19 Δ 19/20         MKT SHARE(1) Light (3.5-7.49t)   (0.4) p.p. (0.7) p.p. (1.0) p.p. M&H (≥7.5t)   (1.1) p.p. (2.2) p.p. 2.5 p.p.   Europe (*)   (0.6) p.p. (1.2) p.p. 0.4 p.p. ORDERS Light (3.5-7.49t)   17.1% (1.8%) (17.7%) M&H (≥7.5t)   (11.3%) (21.7%) (1.7%)   Europe   8.8% (6.6%) (14.5%) DELIVERIES Light (3.5-7.49t)   8.5% 9.1% (33.6%) M&H (≥7.5t)   1.0% (27.0%) (13.4%)   Europe   6.2% (1.3%) (29.3%)


Slide 38

Geographic Information The composition of our regions part of the geographic information is as follow: North America: United States, Canada and Mexico; Europe: member countries of the European Union, European Free Trade Association, Ukraine, and Balkans; South America: Central and South America, and the Caribbean Islands; and Rest of World: Continental Asia (including Turkey and Russia), Oceania and member countries of the Commonwealth of Independent States (excluding Ukraine), and African continent and Middle East.. Market Share / Market Position Data Certain industry and market share information in this report has been presented on a worldwide basis which includes all countries. In this presentation, management estimates of past market-share information are generally based on retail unit sales data in North America, on registrations of equipment in most of Europe, Brazil, and various Rest of the World markets, and on retail and shipment unit data collected by a central information bureau appointed by equipment manufacturers associations, including the Association of Equipment Manufacturers’ in North America, the Committee for European Construction Equipment in Europe, the ANFAVEA in Brazil, the Japan Construction Equipment Manufacturers Association, and the Korea Construction Equipment Manufacturers Association, as well as on other shipment data collected by an independent service bureau. Not all agricultural or construction equipment is registered, and registration data may thus underestimate, perhaps substantially, actual retail industry unit sales demand, particularly for local manufacturers in China, Southeast Asia, Eastern Europe, Russia, Turkey, Brazil, and any country where local shipments are not reported. For Commercial Vehicles regions are defined as: Europe (the EU 27 countries where Commercial Vehicles competes, excluding United Kingdom and Ireland, for market share and total industry volume “TIV” reporting purpose); South America (Brazil, Argentina and Venezuela) and RoW (Russia, Turkey, South East Asia, Australia, New Zealand). In addition, there may be a period of time between the shipment, delivery, sale and/or registration of a unit, which must be estimated, in making any adjustments to the shipment, delivery, sale, or registration data to determine our estimates of retail unit data in any period.


Slide 39

Non-GAAP Financial Measures 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 operating results and enhance the readers’ ability to assess CNH Industrial’s 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 under U.S. GAAP or EU-IFRS and are unlikely to be comparable to other similarly titled measures used by other companies and are not intended to be 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: Adjusted EBIT: is defined as net income (loss) before income taxes, interest expenses of Industrial Activities, net, restructuring expenses, the finance and non-service component of pension and other postemployment benefit costs, foreign exchange gains/(losses), and certain non-recurring items. 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 EBITDA: is defined as Adjusted EBIT plus depreciation and amortization (including on assets sold under operating leases and assets sold under buy-back commitments). Adjusted Net Income (Loss): is defined as net income (loss), less restructuring charges and non-recurring items, after tax. 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 or benefits. 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, other current financial assets 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. Free Cash Flow of Industrial Activities (or Industrial Free Cash Flow): refers to Industrial Activities, only, and is computed as consolidated cash flow from operating activities less: cash flow from operating activities of Financial Services; investments of Industrial Activities in assets sold under buy-back commitments, assets under operating leases, property, plant and equipment and intangible assets; change in derivatives hedging debt of Industrial Activities; as well as other changes and intersegment eliminations 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. ROIC: applied to Industrial Activities, only, is defined as ratio between Adjusted EBIT after-tax and the average invested capital, which includes third party Debt plus Equity less Goodwill. It is computed using last twelve months figures (twelve months rolling basis). The tables attached to this presentation provide reconciliations of the non-GAAP measures used in this presentation to the most directly comparable GAAP measures.


Slide 40

Investor Relations Team e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com Federico Donati – Head of Global Investor Relations ( +44 (207) 76 - 60386 ( +39 (011) 00 - 71929 Noah Weiss – Investor Relations North America ( +1 (630) 887 - 3745 Giovanni Somajni – Investor Relations Europe ( +44 (207) 76 - 60369