CNH Industrial N.V 6-K, filed Jul 30, 2021
CNH Industrial N.V. (CNH)
About this 6-K
CNH Industrial N.V filed this 6-K on July 30, 2021.
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 July 2021
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 July 2021
The following exhibits are furnished herewith:
| Exhibit 99.1 | Press release, dated July 30, 2021, titled: “CNH Industrial reports strong second quarter performance. Consolidated revenues of $8.9 billion (up 60% compared to Q2 2020), net income of $699 million, adjusted diluted EPS of $0.42, and adjusted EBIT of Industrial Activities of $699 million (up $757 million). $1.0 billion free cash flow of Industrial Activities.” | |
| Exhibit 99.2 | CNH Industrial N.V. Second Quarter 2021 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 | |
July 30, 2021
Index of Exhibits
| Exhibit Number |
Description of Exhibit | |
| Exhibit 99.1 | Press release, dated July 30, 2021, titled: “CNH Industrial reports strong second quarter performance. Consolidated revenues of $8.9 billion (up 60% compared to Q2 2020), net income of $699 million, adjusted diluted EPS of $0.42, and adjusted EBIT of Industrial Activities of $699 million (up $757 million). $1.0 billion free cash flow of Industrial Activities.” | |
| Exhibit 99.2 | CNH Industrial N.V. Second Quarter 2021 Results Review Presentation | |
Exhibit 99.1
|
2021 SECOND QUARTER RESULTS | PRESS RELEASE |
2021 SECOND QUARTER RESULTS
CNH Industrial reports strong second quarter performance. Consolidated revenues of $8.9 billion (up 60% compared to Q2 2020), net income of $699 million, adjusted diluted EPS of $0.42, and adjusted EBIT of Industrial Activities of $699 million (up $757 million). $1.0 billion free cash flow of Industrial Activities.
Financial results presented under U.S. GAAP
“I am extremely proud of the outstanding execution of our CNH Industrial team in the second quarter, especially for their commitment to delivering for our customers and dealers around the world. Despite ongoing supply chain challenges and inflationary pressures, the continued strength of our end markets in conjunction with aggressive pricing activity, margin expansion initiatives, and solid teamwork propelled us to record second quarter earnings. Our industry is clearly in a cyclical upturn and the sound fundamental performance of our businesses and operations is enabling us to capture much of the benefit. This robust environment contributed to growth across AG, CE, and C&SV order books, which also reflected the excellent Q2 performance of each of these businesses. With the acquisition of Raven Industries, the largest in our company’s history, we are adding significantly to our precision agriculture capabilities and establishing the foundation for building this into a sustainable competitive advantage. We also began the first phase of our organization redesign, directed both at eliminating bureaucratic obstacles to customer centricity and to positioning each business in preparation for the spin. Both SpinCo and RemainCo remain laser focused on delivering for our customers throughout these activities, and with market demand and customer sentiment rising, our production facilities moving mountains to satisfy customer needs, and a comprehensive plan being nimbly executed by our dedicated team, CNH Industrial is poised for a noteworthy second half and an even brighter future.”
Scott Wine, Chief Executive Officer
2021 Second Quarter Results
(all amounts $ million, unless otherwise stated – comparison vs Q2 2020)
|
US GAAP |
NON GAAP(1) |
|||||||||||||||||||||||
| Consolidated revenues |
8,911 | +60 | % | +51%c.c.(*) | Adjusted EBIT of Industrial Activities | 699 | +1,305 | % | ||||||||||||||||
| of which Net sales of Industrial Activities |
8,490 | +65 | % | +55%c.c. | Adjusted EBIT Margin of Industrial Activities | 8.2 | % | +930 | bps | |||||||||||||||
| Net income |
699 | +338 | Adjusted net income | 583 | +668 | |||||||||||||||||||
| Diluted EPS $ |
0.51 | +0.25 | Adjusted diluted EPS $ | 0.42 | +0.49 | |||||||||||||||||||
| Cash flow from operating activities |
999 | -68 | Free cash flow of Industrial Activities | 1,008 | +911 | |||||||||||||||||||
| Cash and cash equivalents |
7,820 | +761 | (**) | Available liquidity | 14,423 | +537 | (**) | |||||||||||||||||
(*) c.c. means at constant currency (**) comparison vs March 31, 2021
| Refer to section “Notes” at page 4 for an explanation of the items referenced on this page and to page 12 onwards for the reconciliations (*) Net sales reflecting the exchange rate of 1.20 EUR/USD |
1 |
|
PRESS RELEASE |
|
AGRICULTURE |
|
In North America, tractor demand was up 3% for tractors under 140 HP, and up 49% for tractors over 140 HP; combines were up 10%. In Europe, tractor and combine demand were up 31% and 13%, respectively. South America tractor and combine demand were up 38%. In Rest of World tractor and combine demand increased 38% and 12%, respectively.
Net sales were up 56%, mainly due to higher industry demand, better mix in all regions, and favorable price realization.
Adjusted EBIT was $582 million, with Adjusted EBIT margin at 14.7%. The $379 million increase was driven by higher volume, favorable mix and positive price realization, partially offset by higher raw material and freight costs, higher SG&A and R&D spend from the low levels of previous year, as well as higher variable compensation. | ||||||||||||||||||||||
| Q2 2021 | Q2 2020 | Change | Change at c.c.(*) |
|||||||||||||||||||||
| Net sales ($ million) | 3,970 | 2,541 | +56.2% | +49.2% | ||||||||||||||||||||
| Adjusted EBIT ($ million) | 582 | 203 | +379 | |||||||||||||||||||||
| Adjusted EBIT margin | 14.7% | 8.0% | +670 | bps | ||||||||||||||||||||
|
CONSTRUCTION |
|
Global demand for construction equipment increased in both Heavy and Light sub-segments, with Heavy up 6% and Light up 21%. Demand increased 42% in North America, 36% in Europe and 102% in South America, but decreased 4% in Rest of World.
Net sales were up 92%, as a result of higher volumes driven by industry demand, channel destocking actions in 2020, and better price realization.
Adjusted EBIT increased $111 million due to favorable volume and mix, positive price realization and favorable quality performance, partially offset by higher material and freight costs. Adjusted EBIT margin at 3.0%. | ||||||||||||||||||||||
| Q2 2021 | Q2 2020 | Change | Change at c.c.(*) |
|||||||||||||||||||||
| Net sales ($ million) | 808 | 420 | +92.4% | +86.2% | ||||||||||||||||||||
| Adjusted EBIT ($ million) | 24 | (87 | ) | +111 | ||||||||||||||||||||
| Adjusted EBIT margin | 3.0% | (20.7 | )% | +2,370 | bps | |||||||||||||||||||
| COMMERCIAL AND SPECIALTY VEHICLES |
|
|
European truck market was up 45% year over year, with light-duty trucks (“LCV”) up 40%, while medium and heavy trucks (“M&H”) were up 61%. South American truck market was up 73% in LCV and up 80% in M&H. Order book is strong across all regions. Bus registrations increased 21% in Europe and 91% in South America.
Net sales were up 85%, primarily driven by higher truck volumes.
Adjusted EBIT was $100 million, with Adjusted EBIT margin at 3.1%. The $256 million increase was driven by favorable volume and mix, and positive price realization, partially offset by higher material costs, higher SG&A and R&D spend from low levels of prior year, as well as higher variable compensation. | |||||||||||||||||||||
| Q2 2021 | Q2 2020 | Change | Change at c.c.(*) |
|||||||||||||||||||||
| Net sales ($ million) | 3,220 | 1,739 | +85.2% | +71.4% | ||||||||||||||||||||
| Adjusted EBIT ($ million) | 100 | (156 | ) | +256 | ||||||||||||||||||||
| Adjusted EBIT margin | 3.1% | (9.0 | )% | +1,210 | bps | |||||||||||||||||||
|
POWERTRAIN |
|
Net sales were up 69% due to higher sales volume with both captive and external customers. Sales to external customers accounted for 42% of total net sales (63% in Q2 2020).
Adjusted EBIT increased $42 million to $74 million, with Adjusted EBIT margin at 5.7%. Favorable volume and mix, and positive price realization more than offset higher freight costs and higher spending for regulatory and new programs. | ||||||||||||||||||||||
| Q2 2021 | Q2 2020 | Change | Change at c.c.(*) |
|||||||||||||||||||||
| Net sales ($ million) | 1,287 | 763 | +68.7% | +55.0% | ||||||||||||||||||||
| Adjusted EBIT ($ million) | 74 | 32 | +42 | |||||||||||||||||||||
| Adjusted EBIT margin | 5.7% | 4.2% | +150 | bps | ||||||||||||||||||||
| FINANCIAL SERVICES |
|
Revenues were flat due to lower average portfolio in North America and lower loan yields, offset by the positive impact of currency translation. Retail loan and leases originations were up 21% on the back of higher industrial sales.
Net income increased $46 million to $99 million, primarily due to lower risk costs and improved pricing on used equipment sales.
The managed portfolio (including unconsolidated joint ventures) was $27.0 billion at the end of the quarter, up $2.4 billion compared to June 30, 2020 (up $1.2 billion on a constant currency basis). The receivable balance greater than 30 days past due as a percentage of receivables was 2.0% (2.8% as of June 30, 2020). | ||||||||||||||||||||||
| Q2 2021 | Q2 2020 | Change | Change at c.c.(*) |
|||||||||||||||||||||
| Revenues ($ million) | 439 | 441 | -0.5% | -4.1% | ||||||||||||||||||||
| Net income ($ million) | 99 | 53 | +46 | |||||||||||||||||||||
| Equity at quarter-end ($ million) |
3,030 | 2,693 | +337 | |||||||||||||||||||||
| Retail loan originations ($ million) |
2,878 | 2,372 | +21% | |||||||||||||||||||||
| Refer to section “Notes” at page 4 for an explanation of the items referenced on this page and to page 12 onwards for the reconciliations | 2 |
|
|
PRESS RELEASE |
RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2021
Consolidated revenues of $16.4 billion (up 48% year on year), net income of $1,124 million, with adjusted diluted EPS of $0.74, adjusted EBIT of Industrial Activities of $1,244 million, and $0.6 billion free cash flow of Industrial Activities, as a result of the strong operating performance.
Results for the Six Months Ended June 30, 2021
(all amounts $ million, unless otherwise stated – comparison vs six months ended June 30, 2020)
|
US GAAP |
NON GAAP(1) |
|||||||||||||||||||||||
| Consolidated revenues |
16,384 |
+48 | % | +42%c.c. | (*) | Adjusted EBIT of Industrial Activities | 1,244 | +704 | % | |||||||||||||||
| of which Net sales of Industrial Activities |
15,533 |
+53 | % | +46%c.c. | Adjusted EBIT Margin of Industrial Activities | 8.0 | % | +1,000 | bps | |||||||||||||||
| Net income |
1,124 |
+817 | Adjusted net income | 1,037 | +1,188 | |||||||||||||||||||
| Diluted EPS $ |
0.81 |
+0.60 | Adjusted diluted EPS $ | 0.74 | +0.87 | |||||||||||||||||||
| Cash flows from operating activities |
1,371 |
+836 | Free cash flow of Industrial Activities | 637 | +2,063 | |||||||||||||||||||
| Cash and cash equivalents |
7,820 |
-965 | (**) | Available liquidity | 14,423 | -1,448 | (**) | |||||||||||||||||
(*) c.c. means at constant currency (**) comparison vs December 31, 2020
| Refer to section “Notes” at page 4 for an explanation of the items referenced on this page and to page 12 onwards for the reconciliations | 3 |
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|
PRESS RELEASE |
| Notes | |
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.
| (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. 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. |
| (*) | c.c. means at constant currency. |
| 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 of Industrial Activities under U.S. GAAP: is defined as net income (loss) before income taxes, Financial Services’ results, Industrial Activities’ interest expenses, net, foreign exchange gains/losses, finance and non-service component of pension and other post-employment benefit costs, restructuring expenses, 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 EBIT of Industrial Activities under EU-IFRS: is defined as profit/(loss) before taxes, Financial Services’ results, Industrial Activities’ financial expenses, restructuring costs, and certain non-recurring items. |
| • | 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 Cash (Debt) and Net Cash (Debt) of Industrial Activities: Net Cash (Debt) is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets (primarily current securities, short-term deposits and investments towards high-credit rating counterparties) and derivative hedging debt. CNH Industrial provides the reconciliation of Net Cash (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 Cash (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, undrawn medium-term unsecured committed facilities and other current financial assets (primarily current securities, short-term deposits and investments towards high-credit rating counterparties). |
| • | 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 under “2021 Outlook” and 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 pandemic, 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, including any assumptions regarding strategic plans, 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;
| 4 |
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|
PRESS RELEASE |
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, embargoes, and 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; price pressure on new and 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 pandemic on our operations, supply chains, distribution network, and level of demand for 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 realize the anticipated benefits from our business initiatives as part of our strategic plan; the impact of significant or unanticipated material extraordinary transactions or any business combinations and other similar transaction on our businesses, our 2021 Outlook and other financial or business projections; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or divestitures, including our proposed acquisition of Raven Industries, Inc.; expected benefits and costs of the proposed spin-off of the Company’s On-Highway business; the expected timing of completion of the spin-off transaction; the ability of the Company to complete the spin-off transaction considering the various conditions to the completion of the spin-off transaction (some of which are outside the Company’s control); business disruption during the pendency of or following the spin-off transaction, diversion of management time on the spin-off transaction-related issues, 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, 2020, prepared in accordance with U.S. GAAP and in the Company’s EU Annual Report at December 31, 2020, prepared in accordance with EU-IFRS. 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, whether as a result of new developments or otherwise. 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.
| 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 2021 second quarter and first half results to financial analysts and institutional investors. The call can be followed live online at https://bit.ly/CNH_Industrial_Q2_2021 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.
| London, | July 30, 2021 |
| CONTACTS | |
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PRESS RELEASE |
CNH INDUSTRIAL N.V.
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020
(Unaudited, U.S. GAAP)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| ($ million) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Revenues |
||||||||||||||||
| Net sales |
8,490 | 5,150 | 15,533 | 10,143 | ||||||||||||
| Finance, interest and other income |
421 | 428 | 851 | 896 | ||||||||||||
| TOTAL REVENUES |
8,911 | 5,578 | 16,384 | 11,039 | ||||||||||||
| Costs and Expenses |
||||||||||||||||
| Cost of goods sold |
6,867 | 5,114 | 12,600 | 9,528 | ||||||||||||
| Selling, general and administrative expenses |
622 | 484 | 1,162 | 1,010 | ||||||||||||
| Research and development expenses |
329 | 203 | 592 | 417 | ||||||||||||
| Restructuring expenses |
8 | 7 | 10 | 12 | ||||||||||||
| Interest expense |
147 | 170 | 308 | 351 | ||||||||||||
| Goodwill impairment charge |
|
- |
|
585 | |
- |
|
585 | ||||||||
| Other, net(1) |
81 | (1,295 | ) | 298 | (1,098 | ) | ||||||||||
| TOTAL COSTS AND EXPENSES |
8,054 | 5,268 | 14,970 | 10,805 | ||||||||||||
| INCOME BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES |
857 | 310 | 1,414 | 234 | ||||||||||||
| Income tax (expense) benefit |
(188 | ) | 40 | (345 | ) | 63 | ||||||||||
| Equity in income of unconsolidated subsidiaries and affiliates |
30 | 11 | 55 | 10 | ||||||||||||
| NET INCOME |
699 | 361 | 1,124 | 307 | ||||||||||||
| Net income attributable to noncontrolling interests |
9 | 11 | 26 | 22 | ||||||||||||
| NET INCOME ATTRIBUTABLE TO CNH INDUSTRIAL N.V. |
690 | 350 | 1,098 | 285 | ||||||||||||
| (in $) | ||||||||||||||||
| Earnings per share attributable to common shareholders |
||||||||||||||||
| Basic |
0.51 | 0.26 | 0.81 | 0.21 | ||||||||||||
| Diluted |
0.51 | 0.26 | 0.81 | 0.21 | ||||||||||||
| Cash dividends declared per common share |
0.132 | - | 0.132 | |
- |
| ||||||||||
Notes:
| (1) | In the three and six months ended June 30, 2020, Other, net included the pre-tax gain of $1,475 million from the remeasurement at fair value of the investment in Nikola Corporation (pre-tax gain of $107 million and $72 million in the three and six months ended June 30, 2021, respectively). |
These Condensed Consolidated Statements of Operations should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2020 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Operations represent the consolidation of all CNH Industrial N.V. subsidiaries.
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PRESS RELEASE |
CNH INDUSTRIAL N.V.
Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020
(Unaudited, U.S. GAAP)
| ($ million) | June 30, 2021 | December 31, 2020 | ||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
7,820 | 8,785 | ||||||
| Restricted cash |
764 | 844 | ||||||
| Trade receivables, net |
522 | 506 | ||||||
| Financing receivables, net |
18,729 | 18,457 | ||||||
| Inventories, net |
7,471 | 6,022 | ||||||
| Property, plant and equipment, net |
4,667 | 4,923 | ||||||
| Investments in unconsolidated subsidiaries and affiliates |
504 | 529 | ||||||
| Investments at fair value through profit and loss |
464 | 392 | ||||||
| Equipment under operating leases |
1,910 | 1,978 | ||||||
| Goodwill, net |
1,925 | 1,924 | ||||||
| Other intangible assets, net |
763 | 772 | ||||||
| Deferred tax assets |
1,418 | 1,451 | ||||||
| Derivative assets |
136 | 160 | ||||||
| Other assets |
2,129 | 1,976 | ||||||
| TOTAL ASSETS |
49,222 | 48,719 | ||||||
| LIABILITIES AND EQUITY |
||||||||
| Debt |
24,512 | 26,053 | ||||||
| Trade payables |
7,103 | 6,357 | ||||||
| Deferred tax liabilities |
106 | 112 | ||||||
| Pension, postretirement and other postemployment benefits |
1,531 | 1,617 | ||||||
| Derivative liabilities |
171 | 139 | ||||||
| Other liabilities |
9,725 | 9,412 | ||||||
| Total Liabilities |
43,148 | 43,690 | ||||||
| Redeemable noncontrolling interest |
44 | 40 | ||||||
| Equity |
6,030 | 4,989 | ||||||
| TOTAL LIABILITIES AND EQUITY |
49,222 | 48,719 | ||||||
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, 2020 included in the Annual Report on Form 20-F. These Condensed Consolidated Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.
| 7 |
|
|
PRESS RELEASE |
CNH INDUSTRIAL N.V.
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020
(Unaudited, U.S. GAAP)
| Six Months Ended June 30, | ||||||||
| ($ million) | 2021 | 2020 | ||||||
| Operating activities: |
||||||||
| Net income |
1,124 | 307 | ||||||
| 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 |
306 | 307 | ||||||
| Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments |
271 | 259 | ||||||
| Loss on repurchase of notes |
8 | - | ||||||
| Undistributed income of unconsolidated subsidiaries |
27 | 21 | ||||||
| Goodwill impairment charge |
- | 585 | ||||||
| Other non-cash items(1) |
- | (978 | ) | |||||
| Changes in operating assets and liabilities: |
||||||||
| Provisions |
151 | (152 | ) | |||||
| Deferred income taxes |
(1 | ) | (161 | ) | ||||
| Trade and financing receivables related to sales, net |
(344 | ) | 984 | |||||
| Inventories, net |
(1,205 | ) | 299 | |||||
| Trade payables |
806 | (954 | ) | |||||
| Other assets and liabilities |
228 | 18 | ||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES |
1,371 | 535 | ||||||
| Investing activities: |
||||||||
| Additions to retail receivables |
(2,398 | ) | (2,069 | ) | ||||
| Collections of retail receivables |
2,397 | 2,129 | ||||||
| Proceeds from sale of assets, net of assets under operating leases and assets sold under buy-back commitments |
13 | 5 | ||||||
| Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments |
(203 | ) | (132 | ) | ||||
| Expenditures for assets under operating leases and assets sold under buy-back commitments |
(606 | ) | (482 | ) | ||||
| Other |
32 | (86 | ) | |||||
| NET CASH USED IN INVESTING ACTIVITIES |
(765 | ) | (635 | ) | ||||
| Financing activities: |
||||||||
| Net increase (decrease) in debt |
(1,298 | ) | 372 | |||||
| Dividends paid |
(183 | ) | (3 | ) | ||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
(1,481 | ) | 369 | |||||
| Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash |
(170 | ) | (174 | ) | ||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
(1,045 | ) | 95 | |||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR |
9,629 | 5,773 | ||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
8,584 | 5,868 | ||||||
Notes:
| (1) | In the six months ended June 30, 2020, this item included the pre-tax gain of $1,475 million from the remeasurement at fair value of the investment in Nikola Corporation (pre-tax gain of $72 million in the six months ended June 30, 2021). |
These Condensed Consolidated Statements of Cash Flows should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2020 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Cash Flows represent the consolidation of all CNH Industrial N.V. subsidiaries.
| 8 |
|
|
PRESS RELEASE |
CNH INDUSTRIAL N.V.
Supplemental Statements of Operations for the three months ended June 30, 2021 and 2020
(Unaudited, U.S. GAAP)
| Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||
| ($ million) | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | ||||||||||||||||||||||||||
| Revenues |
||||||||||||||||||||||||||||||||||
| Net sales |
8,490 | |
- |
|
|
- |
|
8,490 | 5,150 | |
- |
|
|
- |
|
5,150 | ||||||||||||||||||
| Finance, interest and other income |
17 | 439 | (35 | ) (2) | 421 | 13 | 441 | (26 | ) (2) | 428 | ||||||||||||||||||||||||
| TOTAL REVENUES |
8,507 | 439 | (35 | ) | 8,911 | 5,163 | 441 | (26 | ) | 5,578 | ||||||||||||||||||||||||
| Costs and Expenses |
||||||||||||||||||||||||||||||||||
| Cost of goods sold |
6,867 | |
- |
|
6,867 | 5,114 | |
- |
|
|
- |
|
5,114 | |||||||||||||||||||||
| Selling, general and administrative expenses |
580 | 42 | |
- |
|
622 | 396 | 88 | |
- |
|
484 | ||||||||||||||||||||||
| Research and development expenses |
329 | |
- |
|
|
- |
|
329 | 203 | |
- |
|
|
- |
|
203 | ||||||||||||||||||
| Restructuring expenses |
8 | |
- |
|
|
- |
|
8 | 7 | |
- |
|
|
- |
|
7 | ||||||||||||||||||
| Interest expense |
76 | 106 | (35 | ) (3) | 147 | 72 | 124 | (26 | ) (3) | 170 | ||||||||||||||||||||||||
| Goodwill impairment charge |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
585 | |
- |
|
|
- |
|
585 | ||||||||||||||
| Other, net |
(87 | ) | 168 | |
- |
|
81 | (1,455 | ) | 160 | |
- |
|
(1,295 | ) | |||||||||||||||||||
| TOTAL COSTS AND EXPENSES |
7,773 | 316 | (35 | ) | 8,054 | 4,922 | 372 | (26 | ) | 5,268 | ||||||||||||||||||||||||
| INCOME BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES | 734 | 123 | |
- |
|
857 | 241 | 69 | |
- |
|
310 | ||||||||||||||||||||||
| Income tax (expense) benefit |
(158 | ) | (30 | ) | |
- |
|
(188 | ) | 60 | (20 | ) | |
- |
|
40 | ||||||||||||||||||
| Equity in income of unconsolidated subsidiaries and affiliates |
24 | 6 | |
- |
|
30 | 7 | 4 | |
- |
|
11 | ||||||||||||||||||||||
| NET INCOME (LOSS) |
600 | 99 | |
- |
|
699 | 308 | 53 | |
- |
|
361 | ||||||||||||||||||||||
Notes:
| (1) | Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture, Construction, Commercial and Specialty Vehicles and Powertrain segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services. |
| (2) | Elimination of Financial Services’ interest income earned from Industrial Activities. |
| (3) | Elimination of Industrial Activities’ interest expense to Financial Services. |
CNH INDUSTRIAL N.V.
Supplemental Statements of Operations for the six months ended June 30, 2021 and 2020
(Unaudited, U.S. GAAP)
| Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||
| ($ million) | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | ||||||||||||||||||||||||||
| Revenues |
||||||||||||||||||||||||||||||||||
| Net sales |
15,533 | - | - | 15,533 | 10,143 | - | - | 10,143 | ||||||||||||||||||||||||||
| Finance, interest and other income |
33 | 887 | (69 | ) (2) | 851 | 28 | 930 | (62 | ) (2) | 896 | ||||||||||||||||||||||||
| TOTAL REVENUES |
15,566 | 887 | (69 | ) | 16,384 | 10,171 | 930 | (62 | ) | 11,039 | ||||||||||||||||||||||||
| Costs and Expenses |
||||||||||||||||||||||||||||||||||
| Cost of goods sold |
12,600 | - | - | 12,600 | 9,528 | - | - | 9,528 | ||||||||||||||||||||||||||
| Selling, general and administrative expenses |
1,066 | 96 | - | 1,162 | 860 | 150 | - | 1,010 | ||||||||||||||||||||||||||
| Research and development expenses |
592 | - | - | 592 | 417 | - | - | 417 | ||||||||||||||||||||||||||
| Restructuring expenses |
10 | - | - | 10 | 12 | - | - | 12 | ||||||||||||||||||||||||||
| Interest expense |
158 | 219 | (69 | ) (3) | 308 | 146 | 267 | (62 | ) (3) | 351 | ||||||||||||||||||||||||
| Goodwill impairment charge |
- | - | - | - | 585 | - | - | 585 | ||||||||||||||||||||||||||
| Other, net |
(33 | ) | 331 | - | 298 | (1,440 | ) | 342 | - | (1,098 | ) | |||||||||||||||||||||||
| TOTAL COSTS AND EXPENSES |
14,393 | 646 | (69 | ) | 14,970 | 10,108 | 759 | (62 | ) | 10,805 | ||||||||||||||||||||||||
| INCOME BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES |
1,173 | 241 | - | 1,414 | 63 | 171 | - | 234 | ||||||||||||||||||||||||||
| Income tax (expense) benefit | (282 | ) | (63 | ) | - | (345 | ) | 113 | (50 | ) | - | 63 | ||||||||||||||||||||||
| Equity in income of unconsolidated subsidiaries and affiliates |
43 | 12 | - | 55 | (2 | ) | 12 | - | 10 | |||||||||||||||||||||||||
| NET INCOME |
934 | 190 | - | 1,124 | 174 | 133 | - | 307 | ||||||||||||||||||||||||||
Notes:
| (1) | Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture, Construction, Commercial and Specialty Vehicles and Powertrain segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services. |
| (2) | Elimination of Financial Services’ interest income earned from Industrial Activities. |
| (3) | Elimination of Industrial Activities’ interest expense to Financial Services. |
| 9 |
|
|
PRESS RELEASE |
CNH INDUSTRIAL N.V.
Supplemental Balance Sheets as of June 30, 2021 and December 31, 2020
(Unaudited, U.S. GAAP)
| June 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||
| ($ million) | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | ||||||||||||||||||||||||||||
| ASSETS |
||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents |
7,306 | 514 | - | 7,820 | 8,017 | 768 | - | 8,785 | ||||||||||||||||||||||||||||
| Restricted cash |
125 | 639 | - | 764 | 99 | 745 | - | 844 | ||||||||||||||||||||||||||||
| Trade receivables, net |
524 | 18 | (20 | ) (2) | 522 | 508 | 23 | (25 | ) (2) | 506 | ||||||||||||||||||||||||||
| Financing receivables, net |
1,309 | 19,944 | (2,524 | ) (3) | 18,729 | 902 | 19,428 | (1,873 | ) (3) | 18,457 | ||||||||||||||||||||||||||
| Inventories, net |
7,450 | 21 | - | 7,471 | 5,981 | 41 | - | 6,022 | ||||||||||||||||||||||||||||
| Property, plant and equipment, net |
4,666 | 1 | - | 4,667 | 4,922 | 1 | - | 4,923 | ||||||||||||||||||||||||||||
| Investments in unconsolidated subsidiaries and affiliates |
265 | 239 | - | 504 | 256 | 273 | - | 529 | ||||||||||||||||||||||||||||
| Investments at fair value through profit and loss |
464 | - | - | 464 | 392 | - | - | 392 | ||||||||||||||||||||||||||||
| Equipment under operating leases |
62 | 1,848 | - | 1,910 | 65 | 1,913 | - | 1,978 | ||||||||||||||||||||||||||||
| Goodwill, net |
1,768 | 157 | - | 1,925 | 1,767 | 157 | - | 1,924 | ||||||||||||||||||||||||||||
| Other intangible assets, net |
747 | 16 | - | 763 | 755 | 17 | - | 772 | ||||||||||||||||||||||||||||
| Deferred tax assets |
1,405 | 177 | (164 | ) (4) | 1,418 | 1,422 | 189 | (160 | ) (4) | 1,451 | ||||||||||||||||||||||||||
| Derivative assets |
84 | 65 | (13 | ) (5) | 136 | 103 | 76 | (19 | ) (5) | 160 | ||||||||||||||||||||||||||
| Other assets |
2,081 | 168 | (120 | ) (2) | 2,129 | 1,919 | 172 | (115 | ) (2) | 1,976 | ||||||||||||||||||||||||||
| TOTAL ASSETS |
28,256 | 23,807 | (2,841 | ) | 49,222 | 27,108 | 23,803 | (2,192 | ) | 48,719 | ||||||||||||||||||||||||||
| LIABILITIES AND EQUITY |
||||||||||||||||||||||||||||||||||||
| Debt |
7,454 | 19,581 | (2,523 | ) (3) | 24,512 | 8,288 | 19,638 | (1,873 | ) (3) | 26,053 | ||||||||||||||||||||||||||
| Trade payables |
6,947 | 178 | (22 | ) (2) | 7,103 | 6,167 | 220 | (30 | ) (2) | 6,357 | ||||||||||||||||||||||||||
| Deferred tax liabilities |
11 | 259 | (164 | ) (4) | 106 | 14 | 258 | (160 | ) (4) | 112 | ||||||||||||||||||||||||||
| Pension, postretirement and other postemployment benefits |
1,510 | 21 | - | 1,531 | 1,597 | 20 | - | 1,617 | ||||||||||||||||||||||||||||
| Derivative liabilities |
140 | 44 | (13 | ) (5) | 171 | 102 | 56 | (19 | ) (5) | 139 | ||||||||||||||||||||||||||
| Other liabilities |
9,150 | 694 | (119 | ) (2) | 9,725 | 8,842 | 680 | (110 | ) (2) | 9,412 | ||||||||||||||||||||||||||
| Total Liabilities |
25,212 | 20,777 | (2,841 | ) | 43,148 | 25,010 | 20,872 | (2,192 | ) | 43,690 | ||||||||||||||||||||||||||
| Redeemable noncontrolling interest |
44 | - | - | 44 | 40 | - | - | 40 | ||||||||||||||||||||||||||||
| Equity |
3,000 | 3,030 | - | 6,030 | 2,058 | 2,931 | - | 4,989 | ||||||||||||||||||||||||||||
| TOTAL LIABILITIES AND EQUITY |
28,256 | 23,807 | (2,841 | ) | 49,222 | 27,108 | 23,803 | (2,192 | ) | 48,719 | ||||||||||||||||||||||||||
Notes:
| (1) | Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture, Construction, Commercial and Specialty Vehicles and Powertrain segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services. |
| (2) | Eliminations of primarily receivables/payables between Industrial Activities and Financial Services. |
| (3) | Eliminations of financing receivables/payables between Industrial Activities and Financial Services. |
| (4) | Reclassification of deferred tax assets/liabilities in the same jurisdiction and reclassification needed for appropriate consolidated presentation. |
| (5) | Elimination of derivative assets/liabilities between Industrial Activities and Financial Services. |
| 10 |
|
|
PRESS RELEASE |
CNH INDUSTRIAL N.V.
Supplemental Statements of Cash Flows for the six months ended June 30, 2021 and 2020
(Unaudited, U.S. GAAP)
| Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
| ($ million) | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | ||||||||||||||||||||||||||||
| Operating activities: |
||||||||||||||||||||||||||||||||||||
| Net income (loss) |
934 | 190 | - | 1,124 | 174 | 133 | - | 307 | ||||||||||||||||||||||||||||
| 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 |
304 | 2 | - | 306 | 306 | 1 | - | 307 | ||||||||||||||||||||||||||||
| Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments |
136 | 135 | - | 271 | 132 | 127 | - | 259 | ||||||||||||||||||||||||||||
| Loss on repurchase of notes |
8 | - | - | 8 | - | - | - | - | ||||||||||||||||||||||||||||
| Undistributed income (loss) of unconsolidated subsidiaries |
121 | (12 | ) | (82 | ) (2) | 27 | 123 | (12 | ) | (90 | ) (2) | 21 | ||||||||||||||||||||||||
| Goodwill impairment charge |
- | - | - | - | 585 | - | - | 585 | ||||||||||||||||||||||||||||
| Other non-cash items |
(14 | ) | 14 | - | - | (1,055 | ) | 77 | - | (978 | ) | |||||||||||||||||||||||||
| Changes in operating assets and liabilities: |
||||||||||||||||||||||||||||||||||||
| Provisions |
140 | 11 | - | 151 | (151 | ) | (1 | ) | - | (152 | ) | |||||||||||||||||||||||||
| Deferred income taxes |
(1 | ) | - | - | (1 | ) | (155 | ) | (6 | ) | - | (161 | ) | |||||||||||||||||||||||
| Trade and financing receivables related to sales, net |
(14 | ) | (326 | ) | (4 | ) (3) | (344 | ) | (91 | ) | 1,075 | - | (3) | 984 | ||||||||||||||||||||||
| Inventories, net |
(1,425 | ) | 220 | - | (1,205 | ) | 75 | 224 | - | 299 | ||||||||||||||||||||||||||
| Trade payables |
843 | (44 | ) | 7 | (3) | 806 | (929 | ) | (30 | ) | 5 | (3) | (954 | ) | ||||||||||||||||||||||
| Other assets and liabilities |
191 | 40 | (3 | ) (3) | 228 | 13 | 10 | (5 | ) (3) | 18 | ||||||||||||||||||||||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
1,223 | 230 | (82 | ) | 1,371 | (973 | ) | 1,598 | (90 | ) | 535 | |||||||||||||||||||||||||
| Investing activities: |
||||||||||||||||||||||||||||||||||||
| Additions to retail receivables |
- | (2,398 | ) | - | (2,398 | ) | - | (2,069 | ) | - | (2,069 | ) | ||||||||||||||||||||||||
| Collections of retail receivables |
- | 2,397 | - | 2,397 | - | 2,129 | - | 2,129 | ||||||||||||||||||||||||||||
| Proceeds from sale of assets, net of assets sold under operating leases and assets sold under buy-back commitments |
13 | - | - | 13 | 5 | - | - | 5 | ||||||||||||||||||||||||||||
| Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments |
(202 | ) | (1 | ) | - | (203 | ) | (132 | ) | - | - | (132 | ) | |||||||||||||||||||||||
| Expenditures for assets under operating leases and assets sold under buy-back commitments |
(345 | ) | (261 | ) | - | (606 | ) | (173 | ) | (309 | ) | - | (482 | ) | ||||||||||||||||||||||
| Other |
(109 | ) | 133 | 8 | (4) | 32 | (178 | ) | 83 | 9 | (4) | (86 | ) | |||||||||||||||||||||||
| NET CASH USED IN INVESTING ACTIVITIES |
(643 | ) | (130 | ) | 8 | (765 | ) | (478 | ) | (166 | ) | 9 | (635 | ) | ||||||||||||||||||||||
| Financing activities: |
||||||||||||||||||||||||||||||||||||
| Net increase (decrease) in debt |
(914 | ) | (384 | ) | - | (1,298 | ) | 1,774 | (1,402 | ) | - | 372 | ||||||||||||||||||||||||
| Dividends paid |
(183 | ) | (82 | ) | 82 | (2) | (183 | ) | (3 | ) | (90 | ) | 90 | (2) | (3 | ) | ||||||||||||||||||||
| Other |
- | 8 | (8 | ) (4) | - | - | 9 | (9 | ) (4) | - | ||||||||||||||||||||||||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
(1,097 | ) | (458 | ) | 74 | (1,481 | ) | 1,771 | (1,483 | ) | 81 | 369 | ||||||||||||||||||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash |
(168 | ) | (2 | ) | - | (170 | ) | (132 | ) | (42 | ) | - | (174 | ) | ||||||||||||||||||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
(685 | ) | (360 | ) | - | (1,045 | ) | 188 | (93 | ) | - | 95 | ||||||||||||||||||||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR |
8,116 | 1,513 | - | 9,629 | 4,527 | 1,246 | - | 5,773 | ||||||||||||||||||||||||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
7,431 | 1,153 | - | 8,584 | 4,715 | 1,153 | - | 5,868 | ||||||||||||||||||||||||||||
Notes:
| (1) | Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture, Construction, Commercial and Specialty Vehicles and Powertrain segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services. |
| (2) | This item includes the elimination of dividends from Financial Services to Industrial Activities, which are included in Industrial Activities net cash used in operating activities. |
| (3) | This item includes the elimination of certain minor activities between Industrial Activities and Financial Services. |
| (4) | This item includes the elimination of paid in capital from Industrial Activities to Financial Services. |
| 11 |
|
|
PRESS RELEASE |
Other Supplemental Financial Information
(Unaudited)
| Reconciliation of Consolidated Net Income to Adjusted EBIT of Industrial Activities by segment under U.S. GAAP ($ million)
|
||||||||||||||||||||||||||||
| Three Months ended June 30, 2021 | ||||||||||||||||||||||||||||
| Agriculture | Construction | Commercial and Specialty Vehicles |
Powertrain | Unallocated items, eliminations |
Total | |||||||||||||||||||||||
| Consolidated Net income |
699 | |||||||||||||||||||||||||||
| Less: Consolidated Income tax (expense) benefit |
(188 | ) | ||||||||||||||||||||||||||
| Consolidated Income before taxes |
887 | |||||||||||||||||||||||||||
| Less: Financial Services |
||||||||||||||||||||||||||||
| Financial Services Net income |
99 | |||||||||||||||||||||||||||
| Financial Services Income taxes |
30 | |||||||||||||||||||||||||||
| Add back of the following Industrial Activities items: |
||||||||||||||||||||||||||||
| Interest expenses, net of interest income and eliminations |
59 | |||||||||||||||||||||||||||
| Foreign exchange (gains) losses, net |
4 | |||||||||||||||||||||||||||
| Finance and non-service component of Pension and other post-employment benefit costs(1) |
(36 | ) | ||||||||||||||||||||||||||
| Adjustments for the following Industrial Activities items: |
||||||||||||||||||||||||||||
| Restructuring expenses |
2 | 3 | 2 | 1 | - | 8 | ||||||||||||||||||||||
| Other discrete items |
- | - | - | - | 13 | 13 | ||||||||||||||||||||||
| Nikola investment fair value adjustment |
- | - | - | - | (107 | ) | (107 | ) | ||||||||||||||||||||
| Adjusted EBIT of Industrial Activities |
582 | 24 | 100 | 74 | (81 | ) | 699 | |||||||||||||||||||||
| Three Months ended June 30, 2020 | ||||||||||||||||||||||||||||
| Agriculture | Construction | Commercial Vehicles |
Powertrain | Unallocated items, eliminations and other |
Total | |||||||||||||||||||||||
| Consolidated Net income |
361 | |||||||||||||||||||||||||||
| Less: Consolidated Income tax (expense) benefit |
40 | |||||||||||||||||||||||||||
| Consolidated Income before taxes |
321 | |||||||||||||||||||||||||||
| Less: Financial Services |
||||||||||||||||||||||||||||
| Financial Services Net income |
53 | |||||||||||||||||||||||||||
| Financial Services Income taxes |
20 | |||||||||||||||||||||||||||
| Add back of the following Industrial Activities items: |
||||||||||||||||||||||||||||
| Interest expenses, net of interest income and eliminations |
59 | |||||||||||||||||||||||||||
| Foreign exchange (gains) losses, net |
7 | |||||||||||||||||||||||||||
| Finance and non-service component of Pension and other post-employment benefit costs(1) |
(26 | ) | ||||||||||||||||||||||||||
| Adjustments for the following Industrial Activities items: |
||||||||||||||||||||||||||||
| Restructuring expenses |
5 | 1 | 1 | - | - | 7 | ||||||||||||||||||||||
| Goodwill impairment charge |
- | - | - | - | 585 | 585 | ||||||||||||||||||||||
| Other discrete items |
176 | 72 | 289 | - | - | 537 | ||||||||||||||||||||||
| Nikola investment fair value adjustment |
- | - | - | - | (1,475 | ) | (1,475 | ) | ||||||||||||||||||||
| Adjusted EBIT of Industrial Activities |
203 | (87 | ) | (156 | ) | 32 | (50 | ) | (58 | ) | ||||||||||||||||||
|
|
(1) In the three months ended June 30, 2021 and 2020, this item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of a healthcare plan in the U.S.
|
|
||||||||||||||||||||||||||
| 12 |
|
|
PRESS RELEASE |
Other Supplemental Financial Information
(Unaudited)
| Reconciliation of Consolidated Net Income to Adjusted EBIT of Industrial Activities by segment under U.S. GAAP ($ million)
|
||||||||||||||||||||||||||||
| Six Months ended June 30, 2021 | ||||||||||||||||||||||||||||
| Agriculture | Construction | Commercial and Specialty Vehicles |
Powertrain | Unallocated items, eliminations |
Total | |||||||||||||||||||||||
| Consolidated Net income |
1,124 | |||||||||||||||||||||||||||
| Less: Consolidated Income tax (expense) benefit |
(345 | ) | ||||||||||||||||||||||||||
| Consolidated Income before taxes |
1,469 | |||||||||||||||||||||||||||
| Less: Financial Services |
||||||||||||||||||||||||||||
| Financial Services Net income |
190 | |||||||||||||||||||||||||||
| Financial Services Income taxes |
63 | |||||||||||||||||||||||||||
| Add back of the following Industrial Activities items: |
||||||||||||||||||||||||||||
| Interest expenses, net of interest income and eliminations |
125 | |||||||||||||||||||||||||||
| Foreign exchange (gains) losses, net |
22 | |||||||||||||||||||||||||||
| Finance and non-service component of Pension and other post-employment benefit costs(1) |
(70 | ) | ||||||||||||||||||||||||||
| Adjustments for the following Industrial Activities items: |
||||||||||||||||||||||||||||
| Restructuring expenses |
4 | 2 | 3 | 1 | - | 10 | ||||||||||||||||||||||
| Other discrete items |
- | - | - | - | 13 | 13 | ||||||||||||||||||||||
| Nikola investment fair value adjustment |
- | - | - | - | (72 | ) | (72 | ) | ||||||||||||||||||||
| Adjusted EBIT of Industrial Activities |
981 | 49 | 176 | 189 | (151 | ) | 1,244 | |||||||||||||||||||||
| Six Months ended June 30, 2020 | ||||||||||||||||||||||||||||
| Agriculture | Construction | Commercial Vehicles |
Powertrain | Unallocated items, eliminations and other |
Total | |||||||||||||||||||||||
| Consolidated Net income |
307 | |||||||||||||||||||||||||||
| Less: Consolidated Income tax (expense) benefit |
63 | |||||||||||||||||||||||||||
| Consolidated Income before taxes |
244 | |||||||||||||||||||||||||||
| Less: Financial Services |
||||||||||||||||||||||||||||
| Financial Services Net income |
133 | |||||||||||||||||||||||||||
| Financial Services Income taxes |
50 | |||||||||||||||||||||||||||
| Add back of the following Industrial Activities items: |
||||||||||||||||||||||||||||
| Interest expenses, net of interest income and eliminations |
118 | |||||||||||||||||||||||||||
| Foreign exchange (gains) losses, net |
5 | |||||||||||||||||||||||||||
| Finance and non-service component of Pension and other post-employment benefit costs(1) |
(56 | ) | ||||||||||||||||||||||||||
| Adjustments for the following Industrial Activities items: |
||||||||||||||||||||||||||||
| Restructuring expenses |
7 | 2 | 3 | - | - | 12 | ||||||||||||||||||||||
| Goodwill impairment charge |
- | - | - | - | 585 | 585 | ||||||||||||||||||||||
| Other discrete items |
176 | 72 | 289 | - | 7 | 544 | ||||||||||||||||||||||
| Nikola investment fair value adjustment |
- | - | - | - | (1,475 | ) | (1,475 | ) | ||||||||||||||||||||
| Adjusted EBIT of Industrial Activities |
227 | (170 | ) | (212 | ) | 63 | (114 | ) | (206 | ) | ||||||||||||||||||
|
|
(1) In the six months ended June 30, 2021 and 2020, this item includes the pre-tax gain of $60 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of a healthcare plan in the U.S.
|
|
||||||||||||||||||||||||||
| 13 |
|
|
PRESS RELEASE |
Other Supplemental Financial Information
(Unaudited)
| Reconciliation of Total (Debt) to Net Cash (Debt) under U.S.
GAAP ($ million) |
||||||||||||||||||||||||||||||||
|
Consolidated |
Industrial Activities | Financial Services | ||||||||||||||||||||||||||||||
| June 30, 2021 |
December 31, 2020 |
June 30, 2021 |
December 31, 2020 |
June 30, 2021 |
December 31, 2020 |
|||||||||||||||||||||||||||
| Third party (debt) | (24,512 | ) | (26,053 | ) | (6,184 | ) | (7,271 | ) | (18,328 | ) | (18,782 | ) | ||||||||||||||||||||
| Intersegment notes payable | - | - | (1,270 | ) | (1,017 | ) | (1,253 | ) | (856 | ) | ||||||||||||||||||||||
| Total (Debt)(1) | (24,512 | ) | (26,053 | ) | (7,454 | ) | (8,288 | ) | (19,581 | ) | (19,638 | ) | ||||||||||||||||||||
| Cash and cash equivalents | 7,820 | 8,785 | 7,306 | 8,017 | 514 | 768 | ||||||||||||||||||||||||||
| Restricted cash | 764 | 844 | 125 | 99 | 639 | 745 | ||||||||||||||||||||||||||
| Intersegment notes receivable | - | - | 1,253 | 856 | 1,270 | 1,017 | ||||||||||||||||||||||||||
| Other current financial assets(2) | 162 | 94 | 162 | 94 | - | - | ||||||||||||||||||||||||||
| Derivatives hedging debt | 1 | 8 | 1 | 8 | - | - | ||||||||||||||||||||||||||
| Net Cash (Debt)(3) | (15,765 | ) | (16,322 | ) | 1,393 | 786 | (17,158 | ) | (17,108 | ) | ||||||||||||||||||||||
|
(1) Total (Debt) of Industrial Activities includes Intersegment notes payable to Financial Services of $1,270 million and $1,017 million as of June 30, 2021 and December 31, 2020, respectively. Total (Debt) of Financial Services includes Intersegment notes payable to Industrial Activities of $1,253 million and $856 million as of June 30, 2021 and December 31, 2020, respectively. (2) This item includes short-term deposits and investments towards high-credit rating counterparties. (3) The net intersegment receivable/(payable) balance recorded by Financial Services relating to Industrial Activities was $17 million and $161 million as of June 30, 2021 and December 31, 2020, respectively.
|
| |||||||||||||||||||||||||||||||
| Reconciliation of Cash and cash equivalents to Available liquidity under U.S. GAAP ($ million)
|
||||||||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||||||
| Cash and cash equivalents | 7,820 | 7,059 | 8,785 | |||||||||||||
| Restricted cash | 764 | 908 | 844 | |||||||||||||
| Undrawn committed facilities | 5,677 | 5,755 | 6,148 | |||||||||||||
| Other current financial assets(1) | 162 | 164 | 94 | |||||||||||||
| Available liquidity | 14,423 | 13,886 | 15,871 | |||||||||||||
|
(1) This item includes short-term deposits and investments towards high-credit rating counterparties. | ||||||||||||||||
| Change in Net Cash (Debt) of Industrial Activities under U.S. GAAP ($ million)
|
||||||||||||||||||||||
| Six Months ended June 30, | Three Months ended June 30, | |||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| 786 | (854 | ) | Net Cash (Debt) of Industrial Activities at beginning of period | 591 | (2,310 | ) | ||||||||||||||||
| 1,244 | (206 | ) | Adjusted EBIT of Industrial Activities | 699 | (58 | ) | ||||||||||||||||
| 304 | 306 | Depreciation and Amortization | 154 | 151 | ||||||||||||||||||
| 136 | 132 | Depreciation of assets under operating leases and assets sold with buy-back commitments |
68 | 67 | ||||||||||||||||||
| (263 | ) | (117 | ) | Cash interest and taxes | (178 | ) | (38 | ) | ||||||||||||||
| 50 | (332 | ) | Changes in provisions and similar(1) | 121 | (166 | ) | ||||||||||||||||
| (601 | ) | (924 | ) | Change in working capital | 272 | 369 | ||||||||||||||||
| 870 | (1,141 | ) | Operating cash flow of Industrial Activities | 1,136 | 325 | |||||||||||||||||
| (202 | ) | (132 | ) | Investments in property, plant and equipment, and intangible assets(2) | (132 | ) | (69 | ) | ||||||||||||||
| (31 | ) | (153 | ) | Other changes | 4 | (159 | ) | |||||||||||||||
| 637 | (1,426 | ) | Free cash flow of Industrial Activities | 1,008 | 97 | |||||||||||||||||
| (183 | ) | (3 | ) | Capital increases and dividends | (182 | ) | (2 | ) | ||||||||||||||
| 153 | (24 | ) | Currency translation differences and other(3) | (24 | ) | (92 | ) | |||||||||||||||
| 607 | (1,453 | ) | Change in Net Cash (Debt) of Industrial Activities | 802 | 3 | |||||||||||||||||
| 1,393 | (2,307 | ) | Net Cash (Debt) of Industrial Activities at end of period | 1,393 | (2,307 | ) | ||||||||||||||||
|
|
(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) In the six months ended June 30, 2021, this item also includes the charge of $8 million related to the repurchase of Notes.
|
|
||||||||||||||||||||
| 14 |
|
|
PRESS RELEASE |
Other Supplemental Financial Information
(Unaudited)
| Reconciliation of Net cash provided by (used in) Operating Activities | ||||||||||||||||
| to Free cash flow of Industrial
Activities under U.S.-GAAP ($ million) |
||||||||||||||||
|
Six Months ended June 30, |
Three Months ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| 1,371 | 535 | Net cash provided by (used in) Operating Activities | 999 |
1,067 |
||||||||||||
| 148 | 1,508 | Less: Cash flows from Operating Activities of Financial Services net of eliminations | (324) |
667 | ||||||||||||
| (8) | 5 | Change in derivatives hedging debt of Industrial Activities and other | 3 | - | ||||||||||||
| (345) |
(173) | Investments in assets sold under buy-back commitments and operating lease assets of Industrial Activities |
(190) | (75) | ||||||||||||
| 870 | (1,141) | Operating cash flow of Industrial Activities | 1,136 |
325 | ||||||||||||
| (202) |
(132) |
Investments in property, plant and equipment, and intangible assets of Industrial Activities |
(132) |
(69) | ||||||||||||
| (31) | (153) | Other changes(1) | 4 | (159) | ||||||||||||
| 637 | (1,426) | Free cash flow of Industrial Activities | 1,008 | 97 | ||||||||||||
| (1) This item primarily includes change in intersegment financial receivables and capital increases in intersegment investments. |
||||||||||||||||
| Reconciliation of Adjusted net income and Adjusted income tax (expense) benefit to Net income (loss) and | ||||||||||||||||
| Income tax (expense) benefit and
calculation of Adjusted diluted EPS and Adjusted ETR under U.S.-GAAP ($ million, except per share data) |
||||||||||||||||
|
Six Months ended June 30, |
Three Months ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| 1,124 | 307 | Net income | 699 |
361 | ||||||||||||
| (101) | (394) | Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) | (116) |
(376 | ) | |||||||||||
| 14 | (64) | Adjustments impacting Income tax (expense) benefit (b) | - |
(70 | ) | |||||||||||
| 1,037 | (151) | Adjusted net income (loss) | 583 |
(85 | ) | |||||||||||
| 1,011 | (176) | Adjusted net income (loss) attributable to CNH Industrial N.V. | 574 |
(99 | ) | |||||||||||
| 1,360 | 1,350 | Weighted average shares outstanding – diluted (million) | 1,361 |
1,350 | ||||||||||||
| 0.74 | (0.13) | Adjusted diluted EPS ($) | 0.42 |
(0.07 | ) | |||||||||||
| 1,414 | 234 | Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates | 857 |
310 | ||||||||||||
| (101) | (394) | Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) | (116) |
(376 | ) | |||||||||||
| 1,313 | (160) | Adjusted income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (A) | 741 |
(66 | ) | |||||||||||
| (345) | 63 | Income tax (expense) benefit | (188) |
40 | ||||||||||||
| 14 |
(64) |
Adjustments impacting Income tax (expense) benefit (b) | - |
(70 | ) | |||||||||||
| (331) |
(1) |
Adjusted income tax (expense) benefit (B) | (188) |
(30 | ) | |||||||||||
| 25% |
(1)% |
Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A) | 25% |
(45 | )% | |||||||||||
| a) Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates |
|
|||||||||||||||
| (72) | (1,475) | Nikola investment fair value adjustment | (107) |
(1,475 | ) | |||||||||||
| 10 | 12 | Restructuring expenses | 8 |
7 | ||||||||||||
| 8 | - | Loss on repurchase of notes | - |
- | ||||||||||||
| (60) | (60) | Pre-tax gain related to the modification of a healthcare plan in the U.S. | (30) |
(30 | ) | |||||||||||
| - | 585 | Goodwill impairment charge | - | 585 | ||||||||||||
| - | 255 | Other assets impairment charges | - | 255 | ||||||||||||
| - | 282 | Optimization charges on asset portfolio relating to vehicles sold under buy-back commitments | - | 282 | ||||||||||||
| 13 |
7 |
Other discrete items | 13 |
- | ||||||||||||
| (101) |
(394) |
Total | (116) |
(376 | ) | |||||||||||
| b) Adjustments impacting Income tax (expense) benefit |
|
|||||||||||||||
| 14 |
(65) |
Tax effect of adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates | 7 |
(71 | ) | |||||||||||
| - | 1 | Other | (7) |
1 | ||||||||||||
| 14 | (64) | Total | - |
(70 | ) | |||||||||||
| Refer to section “Notes” at page 3 for an explanation of the items referenced on this page and to page 12 onwards for the reconciliations |
15 |
|
|
PRESS RELEASE |
Other Supplemental Financial Information
(Unaudited)
| Revenues by Segment under EU-IFRS | ||||||||||||||||||||||||||||||||||||
| ($ million)
|
||||||||||||||||||||||||||||||||||||
| Six Months ended June 30, | Three Months ended June 30, |
|||||||||||||||||||||||||||||||||||
| 2021 | 2020 | % change | % change at c.c. | 2021 | 2020 | % change | % change at c.c. | |||||||||||||||||||||||||||||
| 7,018 | 4,780 | 46.8 | 43.5 | Agriculture | 3,979 | 2,537 | 56.8 | 51.1 | ||||||||||||||||||||||||||||
| 1,464 | 842 | 73.9 | 70.7 | Construction | 808 | 420 | 92.4 | 86.3 | ||||||||||||||||||||||||||||
| 6,029 | 3,759 | 60.4 | 51.2 | Commercial and Specialty Vehicles | 3,224 | 1,738 | 85.5 | 73.5 | ||||||||||||||||||||||||||||
| 2,526 | 1,516 | 66.6 | 56.3 | Powertrain | 1,291 | 763 | 69.2 | 57.8 | ||||||||||||||||||||||||||||
| (1,484 | ) | (757 | ) | - | - | Eliminations and other | (794 | ) | (310 | ) | - | - | ||||||||||||||||||||||||
| 15,553 | 10,140 | 53.4 | 47.4 | Total Industrial Activities | 8,508 | 5,148 | 65.3 | 57.1 | ||||||||||||||||||||||||||||
| 884 | 925 | -4.4 | -5.4 | Financial Services | 437 | 437 | - | -3.1 | ||||||||||||||||||||||||||||
| (55 | ) | (53 | ) | - | - | Eliminations and other | (27 | ) | (23 | ) | - | - | ||||||||||||||||||||||||
| 16,382 | 11,012 | 48.8 | 43.2 | Total | 8,918 | 5,562 | 60.3 | 52.6 | ||||||||||||||||||||||||||||
| Adjusted EBIT of Industrial Activities(1) by Segment under EU-IFRS | ||||||||||||||||||||||||||||||||||||||||||||
| ($ million)
|
||||||||||||||||||||||||||||||||||||||||||||
| Six Months ended June 30, | Three Months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ change | |
2021 adjusted EBIT margin |
|
|
2020 adjusted EBIT margin |
|
2021 | 2020 | $ change | |
2021 adjusted EBIT margin |
|
|
2020 adjusted EBIT margin |
|
|||||||||||||||||||||||||||
| 963 | 229 | 734 | 13.7 | % | 4.8 | % | Agriculture | 573 | 213 | 360 | 14.4 | % | 8.4 | % | ||||||||||||||||||||||||||||||
| 47 | (169 | ) | 216 | 3.2 | % | (20.1 | )% | Construction | 23 | (86 | ) | 109 | 2.8 | % | (20.5 | )% | ||||||||||||||||||||||||||||
| 184 | (242 | ) | 426 | 3.1 | % | (6.4 | )% | Commercial and Specialty Vehicles | 113 | (176 | ) | 289 | 3.5 | % | (10.1 | )% | ||||||||||||||||||||||||||||
| 179 | 41 | 138 | 7.1 | % | 2.7 | % | Powertrain | 71 | 28 | 43 | 5.5 | % | 3.7 | % | ||||||||||||||||||||||||||||||
| (162 | ) | (142 | ) | -20 | - | - | Unallocated items, eliminations and other | (89 | ) | (73 | ) | -16 | - | - | ||||||||||||||||||||||||||||||
| 1,211 | (283 | ) | 1,494 | 7.8 | % | (2.8 | )% | Adjusted EBIT of Industrial Activities | 691 | (94 | ) | 785 | 8.1 | % | (1.8 | )% | ||||||||||||||||||||||||||||
|
|
(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.
|
|
||||||||||||||||||||||||||||||||||||||||||
| Other key data under EU-IFRS | ||||||||||||||||
| ($ million)
|
||||||||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||||||
| Total Assets | 51,016 | 48,457 | 50,556 | |||||||||||||
| Total Equity | 7,726 | 7,130 | 6,735 | |||||||||||||
| Equity attributable to CNH Industrial N.V. | 7,620 | 7,029 | 6,651 | |||||||||||||
| Net Cash (Debt) | (16,327 | ) | (16,220 | ) | (16,874 | ) | ||||||||||
| of which Net Cash (Debt) of Industrial Activities(1) |
882 | 118 | 297 | |||||||||||||
| Net Income of Financial Services | 197 | 98 | 288 | |||||||||||||
| (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.
|
|
|||||||||||||||
| Net income (loss) reconciliation U.S. GAAP to EU-IFRS | ||||||||||||||||
| ($ million)
|
||||||||||||||||
| Six Months ended June 30, | Three Months ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| 1,124 | 307 | Net income (loss) in accordance with U.S. GAAP | 699 | 361 | ||||||||||||
| Adjustments to conform with EU-IFRS: |
||||||||||||||||
| (9 | ) | (131 | ) | Development costs |
11 | (100) | ||||||||||
| (72 | ) | (1,475 | ) | Nikola investment fair value adjustment |
(107) | (1,475) | ||||||||||
| (83 | ) | (48 | ) | Other adjustments(1) |
(44) | (22) | ||||||||||
| 19 | 53 | Tax impact on adjustments and other income tax differences |
7 | 41 | ||||||||||||
| (145 | ) | (1,601 | ) | Total adjustments |
(133) | (1,556) | ||||||||||
| 979 | (1,294 | ) | Profit (loss) in accordance with EU-IFRS | 566 | (1,195) | |||||||||||
| (1) This item also includes the different accounting impacts from the modification of a healthcare plan in the U.S. |
||||||||||||||||
| 16 |
|
|
PRESS RELEASE |
Other Supplemental Financial Information
(Unaudited)
| Total Equity reconciliation U.S. GAAP to EU-IFRS ($ million) |
||||||||||||||
| June 30, 2021 |
December 31, 2020 |
|||||||||||||
| Total Equity under U.S. GAAP |
6,030 | 4,989 | ||||||||||||
|
|
Adjustments to conform with EU-IFRS: |
|||||||||||||
| Development costs |
2,133 | 2,193 | ||||||||||||
| Other adjustments |
14 | 34 | ||||||||||||
| Tax impact on adjustments and other income tax differences |
(451 | ) | (481 | ) | ||||||||||
| Total adjustments |
1,696 | 1,746 | ||||||||||||
| Total Equity under EU-IFRS |
7,726 | 6,735 | ||||||||||||
Translation of financial statements denominated in a currency other than the U.S. dollar
The principal exchange rates used to translate into U.S. dollars the financial statements prepared in currencies other than the U.S. dollar were as follows:
|
Six Months Ended June 30, 2021 |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||
| Average | At June 30 | At December 31, 2020 | Average | At June 30 | ||||||||||||||||||||||||
| Euro |
0.830 | 0.841 | 0.815 | 0.907 | 0.893 | |||||||||||||||||||||||
| Pound sterling |
0.720 | 0.722 | 0.733 | 0.794 | 0.815 | |||||||||||||||||||||||
| Swiss franc |
0.908 | 0.924 | 0.880 | 0.966 | 0.951 | |||||||||||||||||||||||
| Polish zloty |
3.764 | 3.804 | 3.716 | 4.003 | 3.979 | |||||||||||||||||||||||
| Brazilian real |
5.384 | 4.969 | 5.194 | 4.909 | 5.458 | |||||||||||||||||||||||
| Canadian dollar |
1.247 | 1.239 | 1.274 | 1.364 | 1.368 | |||||||||||||||||||||||
| Turkish lira |
7.900 | 8.685 | 7.427 | 6.487 | 6.855 | |||||||||||||||||||||||
CNH INDUSTRIAL N.V.
Condensed Consolidated Income Statement for the three and six months ended June 30, 2021 and 2020
(Unaudited, EU-IFRS)
| Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||
| ($ million) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net revenues |
8,918 | 5,562 | 16,382 | 11,012 | ||||||||||||
| Cost of sales |
7,135 | 5,393 | 13,130 | 10,122 | ||||||||||||
| Selling, general and administrative costs |
622 | 431 | 1,147 | 933 | ||||||||||||
| Research and development costs |
321 | 307 | 608 | 555 | ||||||||||||
| Result from investments: |
32 | 12 | 60 | 12 | ||||||||||||
| Share of the profit/(loss) of investees accounted for using the equity method |
32 | 12 | 60 | 12 | ||||||||||||
| Gain/(loss) on the disposal of investments |
(1 | ) | - | (1 | ) | - | ||||||||||
| Restructuring costs |
10 | 7 | 12 | 12 | ||||||||||||
| Goodwill impairment loss |
- | 576 | - | 576 | ||||||||||||
| Other income/(expenses) |
(61 | ) | (61 | ) | (97 | ) | (107 | ) | ||||||||
| Financial income/(expenses) |
(53 | ) | (75 | ) | (142 | ) | (129 | ) | ||||||||
| PROFIT/(LOSS) BEFORE TAXES |
747 | (1,276 | ) | 1,305 | (1,410 | ) | ||||||||||
| Income tax (expense) benefit |
(181 | ) | 81 | (326 | ) | 116 | ||||||||||
| PROFIT/(LOSS) FROM CONTINUING OPERATIONS |
566 | (1,195 | ) | 979 | (1,294 | ) | ||||||||||
| PROFIT/(LOSS) FOR THE PERIOD |
566 | (1,195 | ) | 979 | (1,294 | ) | ||||||||||
| PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO: |
||||||||||||||||
| Owners of the parent |
556 | (1,206 | ) | 952 | (1,316 | ) | ||||||||||
| Non-controlling interests |
10 | 11 | 27 | 22 | ||||||||||||
| (in $) |
||||||||||||||||
| BASIC EARNINGS/(LOSS) PER COMMON SHARE |
0.41 | (0.89 | ) | 0.70 | (0.97 | ) | ||||||||||
| DILUTED EARNINGS/(LOSS) PER COMMON SHARE |
0.41 | (0.89 | ) | 0.70 | (0.97 | ) | ||||||||||
This Condensed Consolidated Income Statement should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2020 included in the EU Annual Report. This Condensed Consolidated Income Statement represents the consolidation of all CNH Industrial N.V. subsidiaries.
| 17 |
|
|
PRESS RELEASE |
CNH INDUSTRIAL N.V.
Condensed Consolidated Statement of Financial Position as of June 30, 2021 and December 31, 2020
(Unaudited, EU-IFRS)
| ($ million) | June 30, 2021 | December 31, 2020 | ||||||
| ASSETS |
||||||||
| Intangible assets |
4,767 | 4,832 | ||||||
| Property, plant and equipment |
5,136 | 5,414 | ||||||
| Investments and other non-current financial assets: |
1,075 | 1,021 | ||||||
| Investments accounted for using the equity method |
532 | 569 | ||||||
| Equity investments measured at fair value through other comprehensive income |
464 | 392 | ||||||
| Other investments and non-current financial assets |
79 | 60 | ||||||
| Leased assets |
1,910 | 1,978 | ||||||
| Defined benefit plan assets |
22 | 25 | ||||||
| Deferred tax assets |
1,042 | 1,061 | ||||||
| Total Non-current assets |
13,952 | 14,331 | ||||||
| Inventories |
7,465 | 6,000 | ||||||
| Trade receivables |
520 | 503 | ||||||
| Receivables from financing activities |
18,812 | 18,529 | ||||||
| Current tax receivables |
122 | 160 | ||||||
| Other current receivables and financial assets |
1,247 | 1,041 | ||||||
| Prepaid expenses and other assets |
169 | 189 | ||||||
| Derivative assets |
136 | 160 | ||||||
| Cash and cash equivalents |
8,584 | 9,629 | ||||||
| Total Current assets |
37,055 | 36,211 | ||||||
| Assets held for sale |
9 | 14 | ||||||
| TOTAL ASSETS |
51,016 | 50,556 | ||||||
| EQUITY AND LIABILITIES |
||||||||
| Issued capital and reserves attributable to owners of the parent |
7,620 | 6,651 | ||||||
| Non-controlling interests |
106 | 84 | ||||||
| Total Equity |
7,726 | 6,735 | ||||||
| Provisions: |
5,367 | 5,239 | ||||||
| Employee benefits |
1,795 | 1,864 | ||||||
| Other provisions |
3,572 | 3,375 | ||||||
| Debt: |
25,038 | 26,618 | ||||||
| Asset-backed financing |
11,013 | 11,923 | ||||||
| Other debt |
14,025 | 14,695 | ||||||
| Derivative liabilities |
171 | 139 | ||||||
| Trade payables |
7,100 | 6,355 | ||||||
| Tax liabilities |
293 | 186 | ||||||
| Deferred tax liabilities |
196 | 203 | ||||||
| Other current liabilities |
5,125 | 5,081 | ||||||
| Total Liabilities |
43,290 | 43,821 | ||||||
| TOTAL EQUITY AND LIABILITIES |
51,016 | 50,556 | ||||||
These 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, 2020 included in the EU Annual Report. This Condensed Consolidated Statement of Financial Position represents the consolidation of all CNH Industrial N.V. subsidiaries.
| 18 |
|
|
PRESS RELEASE |
CNH INDUSTRIAL N.V.
Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2021 and 2020
(Unaudited, EU-IFRS)
| Six Months Ended June 30, | ||||||||
| ($ million) | 2021 | 2020 | ||||||
| A) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
9,629 | 5,773 | ||||||
| B) CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES: |
||||||||
| Profit/(loss) for the period |
979 | (1,294 | ) | |||||
| Amortization and depreciation (net of vehicles sold under buy-back commitments and operating leases) |
596 | 581 | ||||||
| Goodwill impairment loss |
- | 576 | ||||||
| Other non-cash items |
(19 | ) | 383 | |||||
| Loss on repurchase of notes |
8 | - | ||||||
| Dividends received |
81 | 31 | ||||||
| Change in provisions |
218 | (100 | ) | |||||
| Change in deferred income taxes |
(14 | ) | (219 | ) | ||||
| Change in items due to buy-back commitments(1) |
12 | 89 | ||||||
| Change in operating lease items(2) |
88 | 44 | ||||||
| Change in working capital |
(528 | ) | (814 | ) | ||||
| TOTAL |
1,421 | (723 | ) | |||||
| C) CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES: |
||||||||
| Investments in: |
||||||||
| Property, plant and equipment and intangible assets (net of vehicles sold under buy-back commitments and operating leases) |
(412 | ) | (288 | ) | ||||
| Consolidated subsidiaries and other equity investments |
(18 | ) | (145 | ) | ||||
| Proceeds from the sale of non-current assets (net of vehicles sold under buy-back commitments) |
13 | 5 | ||||||
| Net change in receivables from financing activities |
(386 | ) | 1,034 | |||||
| Change in other current financial assets |
(78 | ) | - | |||||
| Other changes |
137 | 128 | ||||||
| TOTAL |
(744 | ) | 734 | |||||
| D) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES: |
||||||||
| Net change in debt and derivative assets/liabilities |
(1,366 | ) | 272 | |||||
| Dividends paid |
(183 | ) | (3 | ) | ||||
| Purchase of ownership interests in subsidiaries |
- | (9 | ) | |||||
| TOTAL |
(1,549 | ) | 260 | |||||
| Translation exchange differences |
(173 | ) | (176 | ) | ||||
| E) TOTAL CHANGE IN CASH AND CASH EQUIVALENTS |
(1,045 | ) | 95 | |||||
| F) CASH AND CASH EQUIVALENTS AT END OF PERIOD |
8,584 | 5,868 | ||||||
Notes:
| (1) | Cash generated from the sale of vehicles under buy-back commitments 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, 2020 included in the EU Annual Report. This Condensed Consolidated Statement of Cash Flows represents the consolidation of all CNH Industrial N.V. subsidiaries.
| 19 |
CNHI | Q2 2021 Results Review July 30th, 2021 Exhibit 99.2
Safe Harbor Statement and Disclosures All statements other than statements of historical fact contained in this presentation including statements under “2021 Outlook” and 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 pandemic, 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, including any assumptions regarding strategic plans, 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, embargoes, and 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; price pressure on new and 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 pandemic on our operations, supply chains, distribution network, and level of demand for 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 realize the anticipated benefits from our business initiatives as part of our strategic plan; the impact of significant or unanticipated material extraordinary transactions or any business combinations and other similar transaction on our businesses, our 2021 Outlook and other financial or business projections; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or divestitures, including our proposed acquisition of Raven Industries, Inc.; expected benefits and costs of the proposed spin-off of the Company’s On-Highway business; the expected timing of completion of the spin-off transaction; the ability of the Company to complete the spin-off transaction considering the various conditions to the completion of the spin-off transaction (some of which are outside the Company’s control); business disruption during the pendency of or following the spin-off transaction, diversion of management time on the spin-off transaction-related issues, 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, 2020, prepared in accordance with U.S. GAAP and in the Company’s EU Annual Report at December 31, 2020, prepared in accordance with EU-IFRS. 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. Reconciliations of non-GAAP measures to the most directly comparable GAAP measure are presented in our earning releases, which are available in 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, whether as a result of new developments or otherwise. 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.
Second Quarter | Summary Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated. Top line and Profit, solid net sales performance and margin improvements across all segments on the back of strong market demand in all regions Supply Chain, multiple disruptions and raw material inflation has continued, offset by positive pricing and extraordinary measures performed by our supply chain and manufacturing teams Inorganic Growth, entered into an agreement to acquire 100% of the capital stock of Raven Industries, Inc., to enhance precision agriculture capabilities and scale Free Cash Flow, strong cash generation driven by solid operating performance Record Second Quarter for Profit, Adj EPS and Free Cash Flow Spin-off, process is proceeding apace, confirmed for first quarter 2022
Second Quarter | Industry Unit Performances vs. Q2 2020 NOTE: Total Industry Volume % change Q2 2021 vs. Q2 2020 reflecting aggregate for key markets where Company competes. Regional split definition in Appendix North America Europe South America Rest of World Worldwide Tractors 3% 31% 38% 38% 28% 49% Combines 10% 13% 38% 12% 14% Light 42% 33% 83% (2%) 21% Heavy 40% 43% 114% (6%) 6% LCV - 40% 73% 33% 39% M&H - 61% 80% 56% 62% Buses - 21% 91% 8% 32% 0-140 HP 140+ HP
Second Quarter | WW CNH Industrial Unit Statistics Order book in AG up 2.5x vs last year (Tractors up 2.4x and Combines up 3.3x). North America HHP Tractors up 5.6x and Combines up 4.6x COMPANY INVENTORY DEALER INVENTORY TRACTORS COMBINES LIGHT Heavy Light Duty Trucks Medium & Heavy Order book up 2.8x vs. a year ago with Light up 2.9x and Heavy up 2.6x Truck order intake in Europe up 2.5x year-over-year, with LCV up 2.4x, and M&H up 2.7x. Book-to-Bill for Europe Trucks at 1.22 (LCV at 1.07 and M&H at 1.74) RETAIL PRODUCTION
Second Quarter | Financial Highlights (1) Non-GAAP measures (definition and reconciliation in appendix) Industrial Activities Net Sales % chg. y-o-y Net Sales at $8.5bn up 55% at constant currency, with solid performance from all segments Higher volumes driven by strong industry demand and favorable price realization $8.5bn +65% Gross Margin bps chg. y-o-y Gross Margin up sequentially. Improvement across all industrial segments Higher production and positive pricing offsetting higher supply chain cost 19.1% +800 bps Adjusted EBIT (1) $ chg. y-o-y Adjusted EBIT up $757mn (loss of $58mn in Q2 2020), with all segments up year-over-year Adjusted EBIT margin at 8.2% up 930 bps $699mn +$757mn Free Cash Flow (1) $ chg. y-o-y Cash inflow of $1.0bn, driven by strong operating performance Industrial Activities net cash at $1.4bn, an increase of $0.8bn from March 31, 2021 $1,008mn +$911mn Consolidated Adjusted Diluted EPS (1) $ chg. y-o-y Adjusted Net Income $583mn (adjusted net loss of $85mn in Q2 2020) $0.42 +$0.49 Available Liquidity (1) $ chg. vs. March 31, 2021 Available Liquidity at $14.4bn (liquidity on LTM revenues ratio at 46%) $14.4bn $537mn
Second Quarter | Industrial Activities Net Sales vs. Q2 2020 AG CE C&SV PT Industrial Activities (1) $3,970mn $808mn $3,220mn $1,287mn $8,490mn +56% +49% @CC +92% +86% @CC +85% +71% @CC +69% +55% @CC +65% +55% @CC By Region As reported By Region As reported By Region As reported By Region As reported By Region As reported By Product As reported By Product As reported By Product As reported By Product As reported By Segment As reported (1) Net Sales | Excluding Other Activities, Unallocated Items and Adjustment & Eliminations Note | % change y-y and @CC means at constant currency Q2 2020 Q2 2021 Q2 2019
Second Quarter | Ind. Activities Adj EBIT walk (Driver & Segment) (1) Note: Adj EBIT is a Non-GAAP measures (definition and reconciliation in appendix) (*) PT Pricing net within Volume & Mix (58) 799 375 (205) (128) (108) 55 (31) 699 Adj. EBIT (1) Q220 VOL & MIX PRICING NET PROD COST SG&A R&D FX | OTHER UNALLOCATED, ELIM & OTHER Adj. EBIT (1) Q221 AG CE C&SV PT (*) 8.2% (1.1%) 361 68 268 102 226 81 68 (131) (19) (24) (31) (52) (14) (48) (13) (46) (6) (34) (21) 21 2 27 6 AG 24.1% 14.7% CE 12.4% 3.0% C&SV 12.5% 3.1% PT (*) 13.0% 5.7% Gross Margin Adj EBIT Margin Walk by Segment +5.4 p.p. +20.5 p.p. +10.0 p.p. +2.1 p.p. +6.7 p.p. +23.7 p.p. +12.1 p.p. +1.5 p.p. Note: Numbers may not add due to rounding Note | p.p. change vs. Q2 2020
Second Quarter | Financial Services Net Income ($mn) (**) RoA defined as: EBIT / average managed assets annualized Profitability Ratios Managed Portfolio (*) & Retail Originations (*) $24.6bn $27.0bn June 30, 2020 June 30, 2021 Retail Wholesale Operating Lease Delinquencies on Book (>30 Days) (*) Including unconsolidated JVs Q2 2021 Q2 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 Gross Margin / Average Assets on Book ROA (**) 3.5% 3.4% 3.3% 3.3% 2.2% 1.9% 1.2% 2.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 3.3% 3.1% 2.8% 2.0% Q2 ’21 retail originations at $2.9bn, up $0.5bn compared to June 30, 2020 Managed portfolio* at $27.0bn, up $2.4bn compared to June 30, 2020 (up $1.2bn on a constant currency basis)
Second Quarter | Free Cash Flow and Debt Maturity Profile (*) Non-GAAP measures (reconciliation in appendix) (1) Including other cash flow items related to operating lease and buy-back activities. (2) Excluding assets sold under buy-back commitments and assets under operating leases. Industrial Activities | Free Cash Flow (*) Δ vs. Q2 2020 921 (178) 272 121 (132) 4 1,008 IA | ADJ EBITDA CASH INTEREST AND TAXES CHG IN WORKING CAPITAL CHG IN PROVISIONS. & OTHERS (1) PP&E CAPEX (2) OTHER CHANGES IA FREE CASH FLOW 761 (140) (97) 287 (63) 163 911 Change in Working Capital TRADE RECEIVABLES INVENTORIES TRADE PAYABLES OTHER CHG IN WORKING CAPITAL Q2 2021 Q2 2020 Cash inflow Cash outflow 0.3 ($mn) ($bn) (**) Represents cash portion of debt maturities as of June 30th , 2021 (***) Of which $0.8bn Restricted Cash Debt Maturity Profile 14.4 2.2 2.5 2.2 1.7 1.1 3.8 Jun-end ‘21 6M 21 2022 2023 2024 2025 Beyond Debt Maturity Schedule (**) ($13.5bn) Available Liquidity (***) ($bn) Undrawn M/T unsecured Committed Lines Cash Bank Debt Capital Market Other
FY 2021E Updated Guidance
Full Year 2021E | Industry Unit Performances vs. FY 2020 NOTE: Total Industry Volume % change FY 2021 vs. FY 2020 reflecting aggregate for key markets where Company competes Regional split definition in Appendix North America Europe South America Rest of World Worldwide Tractors ~ 15% 10-15% ~ 20% 10-15% ~ 15% 20% Combines 20% ~ 5% 15-20% 15% 15% Light ~ 25% 10% 40 - 45% ~ FLAT ~ 10% Heavy 15-20% 15-20% ~ 55% ~ 5% ~ 10% LCV - 15-20% ~ 25% 10% 15 - 20% M&H - 35-40% ~ 25% ~ 20% ~ 30% Buses - ~ (5%) ~ 10% 5-10% FLAT - 5% 0-140 HP 140+ HP
(*) Net Sales outlook reflecting €/$ at 1.20 This guidance assumes no further significant disruptions due to lockdown policies in main jurisdictions FY 2021E Guidance Previous Guidance (As of May 5th, 2021) Updated Guidance Industrial Activities Net Sales (*) (including currency translation effects) Up between 14% and 18% Up between 24% and 28% SG&A ≤ 7.5% of Net Sales Confirmed Free Cash Flow (1) Positive between $0.6bn / $1.0bn Positive in excess of $1.0bn R&D At ~ $2.0bn Up slightly from previous guidance Capex FY 2021E impact from raw material and logistics at around $1.0bn (1) FCF definition in Appendix
Q2 2021 Final Remarks
Agriculture | Raven Industries, Inc. Acquisition Acquisition strengthens CNHI as a leader in Precision Agriculture Expands on long partnership built between CNHI and Raven Leading innovation capabilities focused on autonomous and precision Ag technology Leverage Raven’s capabilities across the entire CNHI platform beyond Ag to accelerate our digital and analytic capabilities Accelerate the development of new advanced precision agriculture features, Spearhead the industry transformation towards autonomous Agriculture Nurture Raven`s distinctive culture of fast-cycle, customer-centric innovation Requisite approvals in process Ensure day-one readiness through an articulated integration plan ¹ Includes recently announced investments in Augmenta and Monarch Tractors Key Levers for Value Creation Maximize Value of Raven’s Existing Technology Accelerate Near-Term Product Development Opportunities Drive Next Generation Precision Ag and Autonomy Developments
IVECO | New product launches New IVECO T-WAY: the toughest vehicle engineered for the most extreme off-road missions IVECO completes the IVECO WAY heavy range with the new off-road truck designed and engineered for the toughest missions in the most extreme conditions, which takes over from the legendary TRAKKER IVECO Driver Pal: IVECO’s pioneering on-board vocal driver companion New IVECO S-Way the 100% connected truck takes fuel efficiency and driver-centricity to the next level IVECO Driver Pal The cutting-edge project from IVECO, built on Amazon Web Services (AWS) New Daily the smart vehicle that future-proofs the customer’s business New Daily Minibus the minibus that takes passenger transport to the next level
Spin-Off Designing organizations with the objective to create two agile companies Scott W. Wine CEO CNH Industrial NV Gerrit Marx Designated CEO On-highway business
Spin-Off – Timeline confirmed for Q1 2022 An On-Highway Event followed by a non-deal road show will be held in November 2020 Q1 ’21 Q2 ’21 Q3 ’21 Q4 ’21 Q1 ’22 SPIN POSTPONED DUE TO COVID EXTRAORDINARY GENERAL MEETING On-Highway Event and non-deal Road Show H2 of November 2021 DAY 1 REGULATORY APPROVALS QUARTERLY RESULTS & ANALYSTS’ CALL CONFERENCE (May 5th) QUARTERLY RESULTS & ANALYSTS’ CALL CONFERENCE (November 4th) QUARTERLY RESULTS & ANALYSTS’ CALL CONFERENCE (July 30th) ANNUAL GENERAL MEETING (April 15th) Off-Highway On-Highway
Investing to evolve and improve business Solid orders/macro indicators suggest strong demand will continue in all segments Expect additional costs in H2 2021 as we ramp production Continued focus on managing supply chain, mitigating inflation, improving logistics Updated guidance reflects our confidence in ongoing profitable growth FY 2021E | CEO Takeaway messages
Appendix
Second Quarter 2021 | 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 Q2 2021 Q2 2020 Δ U.S. GAAP Revenues ($mn) 8,911 5,578 60% Net Sales | Industrial Activities ($mn) 8,490 5,150 65% Net Income ($mn) 699 361 338 Diluted EPS ($) 0.51 0.26 0.25 Non – GAAP (1) Net Sales | Industrial Activities @CC ($mn) 8,005 5,150 55% Adjusted EBIT | Industrial Activities ($mn) 699 (58) 1,305% Adjusted EBIT Margin | Industrial Activities (%) 8.2% (1.1%) 930 bps Adjusted income (loss) before income tax benefit (expense) and equity in income of unconsolidated subsidiaries and affiliates 741 (66) 807 Adjusted Effective Tax Rate 25% (45%) 70 pp Adjusted Net Income ($mn) 583 (85) 668 Adjusted net income attributable to CNH Industrial N.V. 574 (99) 673 Weighted average shares outstanding – diluted (million) 1,361 1,350 1% Adjusted Diluted EPS ($) 0.42 (0.07) 0.49 Free Cash Flow | Industrial Activities ($bn) 1,008 97 911 Jun 30,2021 Mar 31,2021 Δ Net Industrial Cash (Debt) ($bn) 1.4 0.6 136% Available Liquidity ($bn) 14.4 13.9 4%
Second Quarter 2021 | Financials by Segment REVENUES GROSS PROFIT Adj. EBIT Adj. EBIT Margin % D&A Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 AG 3,970 2,541 955 474 582 203 14.7% 8.0% 65 62 CE 808 420 100 (34) 24 (87) 3.0% (20.7%) 9 12 C&SV 3,220 1,739 402 43 100 (156) 3.1% (9.0%) 116 112 PT 1,287 763 167 83 74 32 5.7% 4.2% 31 30 E&O (795) (313) (1) 7 (81) (50) 1 2 IA 8,490 5,150 1,623 573 699 (58) 8.2% (1.1%) 222 218 FS 439 441 171 158 E&O (18) (13) - 0 Total 8,911 5,578 1,794 731 Note: Adj EBIT and Adj EBIT Margin % are Non-GAAP measures (definition and reconciliation in appendix)
Second Quarter 2021 | Net Sales and Adj EBIT breakdown Note: Adj EBIT is a Non-GAAP measures (definition and reconciliation in appendix) Net Sales Split IA | Adj. EBIT Walk Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 NA 1,286 896 NA 372 161 NA n.m. n.m. NA 43 23 EU 1,401 937 EU 171 89 EU 2,557 1,391 EU 906 454 SA 566 312 SA 117 71 SA 296 110 SA 94 24 RoW 717 396 RoW 148 99 RoW 340 220 RoW 244 262 Tractors 57% 52% Heavy 45% 53% Trucks 79% 75% Engines 89% 93% Combines 23% 26% Light 52% 44% Buses 14% 19% Transm. 2% 1% Others 20% 22% Others 3% 3% Others 7% 6% Axles 9% 6% (*) PT Pricing net within Volume & Mix Adj. EBIT (1) Q2 20 VOL & MIX PRICING NET PROD COST SG&A R&D FX | OTHER UNALLOCATED, ELIM & OTHER Adj. EBIT (1) Q2 21 IA (58) 799 375 (205) (128) (108) 56 (31) 699 AG 203 361 226 (131) (52) (46) 21 582 CE (87) 68 81 (19) (14) (6) 2 24 C&SV (156) 268 68 (24) (48) (34) 27 100 PT (*) 32 102 (31) (13) (21) 6 74 AG CE C&SV PT Note: Numbers may not add due to rounding
First Half 2021 | 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 H1 2021 H1 2020 Δ U.S. GAAP Revenues ($mn) 16,384 11,039 48% Net Sales | Industrial Activities ($mn) 15,533 10,143 53% Net Income ($mn) 1,124 307 817 Diluted EPS ($) 0.81 0.21 0.60 Non – GAAP (1) Net Sales | Industrial Activities @CC ($mn) 14,800 10,143 46% Adjusted EBIT | Industrial Activities ($mn) 1,244 (206) 704% Adjusted EBIT Margin | Industrial Activities (%) 8.0% (2.0%) 1,000 bps Adjusted income (loss) before income tax benefit (expense) and equity in income of unconsolidated subsidiaries and affiliates 1,313 (160) 1,473 Adjusted Effective Tax Rate 25% (1%) 26 pp Adjusted Net Income ($mn) 1,037 (151) 1,188 Adjusted net income attributable to CNH Industrial N.V. 1,011 (176) 1,187 Weighted average shares outstanding – diluted (million) 1,360 1,350 1% Adjusted Diluted EPS ($) 0.74 (0.13) 0.87 Free Cash Flow | Industrial Activities ($bn) 637 (1,426) 2,063 Jun 30,2021 Dec 31,2020 Δ Net Industrial Cash (Debt) ($bn) 1.4 0.8 77% Available Liquidity ($bn) 14.4 15.9 (9%)
First Half 2021 | Financials by Segment REVENUES GROSS PROFIT Adj. EBIT Adj. EBIT Margin % D&A H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 AG 7,008 4,785 1,664 817 981 227 14.0% 4.7% 127 126 CE 1,464 842 194 (43) 49 (170) 3.3% (20.2%) 18 25 C&SV 6,025 3,760 729 210 176 (212) 2.9% (5.6%) 231 226 PT 2,521 1,516 357 167 189 63 7.5% 4.2% 62 59 E&O (1,485) (760) (11) 1 (151) (114) 2 2 IA 15,533 10,143 2,933 1,152 1,244 (206) 8.0% (2.0)% 440 438 FS 887 930 343 323 E&O (36) (34) - - Total 16,384 11,039 3,276 1,475 Note: Adj EBIT and Adj EBIT Margin % are Non-GAAP measures (definition and reconciliation in appendix)
First Half 2021 | Net Sales and Adj EBIT breakdown Note: Adj EBIT is a Non-GAAP measures (definition and reconciliation in appendix) Net Sales Split IA | Adj. EBIT Walk H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 NA 2,344 1,725 NA 652 331 NA n.m. n.m. NA 83 49 EU 2,425 1,720 EU 300 180 EU 4,792 3,022 EU 1,768 1,010 SA 964 602 SA 206 137 SA 487 231 SA 172 72 RoW 1,275 738 RoW 306 194 RoW 696 479 RoW 498 385 Tractors 57% 55% Heavy 46% 50% Trucks 80% 77% Engines 90% 91% Combines 22% 22% Light 50% 46% Buses 13% 17% Transm. 1% 1% Others 21% 23% Others 4% 4% Others 7% 6% Axles 9% 8% (*) PT Pricing net within Volume & Mix Adj. EBIT (1) H1 20 VOL & MIX PRICING NET PROD COST SG&A R&D FX | OTHER UNALLOCATED, ELIM & OTHER Adj. EBIT (1) H1 21 IA (206) 1,246 540 (177) (120) (144) 143 (37) 1,244 AG 227 581 326 (117) (41) (56) 61 981 CE (170) 102 129 (1) (7) (6) 3 49 C&SV (212) 367 85 (21) (56) (46) 60 176 PT (*) 63 196 (38) (15) (35) 19 189 AG CE C&SV PT Note: Numbers may not add due to rounding
Capex and R&D (1) (1) Excluding assets sold under buy-back commitments and assets under operating leases Q2 2021 Q2 2020 H1 2021 H1 2020 Investments in property, plant and equipment, and intangible assets (1) 132 69 202 132 Breakdown by Category NEW PRODUCT & TECHNOLOGY 46% 52% 48% 54% MAINTENANCE & OTHER 47% 46% 46% 44% INDUSTRIAL CAPACITY EXPANSION & LT INVESTMENTS 7% 2% 6% 2% Breakdown by Segment AGRICULTURE 44% 44% 44% 48% CONSTRUCTION 8% 8% 8% 9% COMMERCIAL & SPECIALTY VEHICLES 31% 36% 30% 31% POWERTRAIN 17% 12% 18% 12% Research and Development 329 203 592 417 Total spending (Capex + R&D) in new products 285 140 490 293 Breakdown by Trend DIGITALIZATION; ELECTRIFICATION; AUTONOMOUS & TELEMATICS 52% 64% 50% 55% REGULATORY 18% 16% 18% 18% OTHER NEW PRODUCTS 30% 20% 32% 27% ($mn)
Debt Maturity Schedule | Breakdown Note: Numbers may not add due to rounding ($mn) Outstanding Jun 30, 2021 6M 2021 2022 2023 2024 2025 Beyond 3.1 Bank Debt 0.9 1.4 0.3 0.2 0.1 0.1 10.1 Capital Market 1.2 0.9 1.9 1.5 0.9 3.7 0.3 Other Debt 0.1 0.2 0.0 0.0 0.0 0.0 13.5 Cash Portion of (Debt) Maturities 2.2 2.5 2.2 1.7 1.1 3.8 of which Industrial Activities 0.5 0.3 1.1 0.9 0.9 2.5 of which Financial Services 1.8 2.2 1.1 0.8 0.2 1.3 8.6 Cash & Cash Equivalents 0.8 of which restricted cash 0.2 Other Current Financial Assets (1) 5.7 Undrawn Committed credit lines 14.4 Total Available Liquidity (1) This item includes short-term deposits and investments towards high-credit rating counterparties
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) Q2 2018 2019 2020 2021 MKT SHARE(1) Light (3.5-7.49t) 14.1% 12.6% 9.9% 13.4% M&H (≥7.5t) 8.5% 6.3% 8.3% 9.1% Europe (*) 12.1% 10.2% 9.4% 12.1% B-TO-B Light (3.5-7.49t) 0.80 0.89 1.11 1.07 M&H (≥7.5t) 0.78 0.96 1.17 1.74 Europe (*) 0.79 0.91 1.12 1.22 Δ 18/19 Δ 19/20 Δ 20/21 MKT SHARE(1) Light (3.5-7.49t) (1.5) p.p. (2.7) p.p. 3.5 p.p. M&H (≥7.5t) (2.2) p.p. 2.0 p.p. 0.8 p.p. Europe (*) (1.9) p.p. (0.8) p.p. 2.7 p.p. ORDERS Light (3.5-7.49t) 8.3% (41.5%) 140.6% M&H (≥7.5t) 10.4% (25.6%) 172.3% Europe (*) 8.8% (37.7%) 149.6% DELIVERIES Light (3.5-7.49t) (3.6%) (52.8%) 148.1% M&H (≥7.5t) (9.8%) (38.8%) 82.6% Europe (*) (5.1%) (49.6%) 130.3%
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) H1 2018 2019 2020 2021 MKT SHARE(1) Light (3.5-7.49t) 14.0% 12.8% 10.9% 12.7% M&H (≥7.5t) 8.4% 6.2% 8.4% 8.7% Europe (*) 11.9% 10.3% 10.1% 11.5% B-TO-B Light (3.5-7.49t) 1.04 1.04 1.33 1.47 M&H (≥7.5t) 0.92 1.03 1.22 1.72 Europe (*) 1.01 1.04 1.30 1.53 Δ 18/19 Δ 19/20 Δ 20/21 MKT SHARE(1) Light (3.5-7.49t) (1.2) p.p. (1.9) p.p. 1.8 p.p. M&H (≥7.5t) (2.2) p.p. 2.2 p.p. 0.3 p.p. Europe (*) (1.6) p.p. (0.2) p.p. 1.4 p.p. ORDERS Light (3.5-7.49t) 2.5% (28.4%) 111.6% M&H (≥7.5t) (8.2%) (13.7%) 131.8% Europe (*) 8.8% (37.7%) 116.6% DELIVERIES Light (3.5-7.49t) 2.1% (43.7%) 91.3% M&H (≥7.5t) (18.6%) (27.2%) 64.7% Europe (*) (3.3%) (40.0%) 84.2%
Reconciliations
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) (1) In the three months ended June 30, 2021, 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) Q2 2021 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Consolidated Net income 699 Less: Consolidated Income tax (expense) benefit (188) Consolidated Income before taxes 887 Less: Financial Services Financial Services Net income 99 Financial Services Income taxes 30 Add back of the following Industrial Activities items: Interest expenses, net of interest income and eliminations 59 Foreign exchange (gains) losses, net 4 Finance and non-service component of Pension and other post-employment benefit costs (1) (36) Adjustments for the following Industrial Activities items: Restructuring expenses 2 3 2 1 - 8 Other discrete items - - - - 13 13 Nikola investment fair value adjustment - - - - (107) (107) Adjusted EBIT of Industrial Activities 582 24 100 74 (81) 699
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) ($mn) Q2 2020 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Consolidated Net income (loss) 361 Less: Consolidated Income tax (expense) benefit 40 Consolidated Income (loss) before taxes 321 Less: Financial Services Financial Services Net income 53 Financial Services Income taxes 20 Add back of the following Industrial Activities items: Interest expenses, net of interest income and eliminations 59 Foreign exchange (gains) losses, net 7 Finance and non-service component of Pension and other post-employment benefit costs (1) (26) Adjustments for the following Industrial Activities items: Restructuring expenses 5 1 1 - - 7 Goodwill impairment charges - - - - 585 585 Other discrete items 176 72 289 - - 537 Nikola investment fair value adjustment - - - - (1,475) (1,475) Adjusted EBIT of Industrial Activities 203 (87) (156) 32 (50) (58) In the three months ended June 30, 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.
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) (1)In the six months ended June 30, 2021, this item includes the pre-tax gain of $60 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) H1 2021 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Consolidated Net income 1,124 Less: Consolidated Income tax (expense) benefit (345) Consolidated Income before taxes 1,469 Less: Financial Services Financial Services Net income 190 Financial Services Income taxes 63 Add back of the following Industrial Activities items: Interest expenses, net of interest income and eliminations 125 Foreign exchange (gains) losses, net 22 Finance and non-service component of Pension and other post-employment benefit costs (1) (70) Adjustments for the following Industrial Activities items: Restructuring expenses 4 2 3 1 - 10 Other discrete items - - - - 13 13 Nikola investment fair value adjustment - - - - (72) (72) Adjusted EBIT of Industrial Activities 981 49 176 189 (151) 1,244
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) ($mn) H1 2020 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Consolidated Net income (loss) 307 Less: Consolidated Income tax (expense) benefit 63 Consolidated Income (loss) before taxes 244 Less: Financial Services Financial Services Net income 133 Financial Services Income taxes 50 Add back of the following Industrial Activities items: Interest expenses, net of interest income and eliminations 118 Foreign exchange (gains) losses, net 5 Finance and non-service component of Pension and other post-employment benefit costs (1) (56) Adjustments for the following Industrial Activities items: Restructuring expenses 7 2 3 - - 12 Goodwill impairment charges - - - - 585 585 Other discrete items 176 72 289 - 7 544 Nikola investment fair value adjustment - - - - (1,475) (1,475) Adjusted EBIT of Industrial Activities 227 (170) (212) 63 (114) (206) In the six months ended June 30, 2020, this item includes the pre-tax gain of $60 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of a healthcare plan in the U.S.
Second Quarter 2021 Reconciliation of Adj. net income and Adj. income tax (expense) benefit to Net Income (loss) and Income tax (expense) benefit and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP ($mn) H1 2021 H1 2020 Q2 2021 Q2 2020 1,124 307 Net income 699 361 (101) (394) Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) (116) (376) 14 (64) Adjustments impacting Income tax (expense) benefit (b) - (70) 1,037 (151) Adjusted net income (loss) 583 (85) 1,011 (176) Adjusted net income attributable to CNH Industrial N.V. 574 (99) 1,360 1,350 Weighted average shares outstanding – diluted (million) 1,361 1,350 0.74 (0.13) Adjusted diluted EPS ($) 0.42 (0.07) 1,414 234 Income before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates 857 310 (101) (394) Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) (116) (376) 1,313 (160) Adjusted income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (A) 741 (66) (345) 63 Income Tax benefit (expense) (188) 40 14 (64) Adjustments impacting Income tax (expense) benefit (b) - (70) (331) (1) Adjusted income tax (expense) benefit (B) (188) (30) 25% (1)% Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A) 25% (45)%
Second Quarter 2021 ($mn) Reconciliation of Adj. net income and Adj. income tax (expense) benefit to Net Income (loss) and Income tax (expense) benefit and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP H1 2021 H1 2020 Q2 2021 Q2 2020 (a) Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (72) (1,475) Nikola investment fair value adjustment (107) (1,475) 10 12 Restructuring expenses 8 7 8 - Loss on repurchase of notes - - (60) (60) Pre-tax gain related to the modification of a healthcare plan in the U.S. (30) (30) - 585 Goodwill impairment charge - 585 - 255 Other assets impairment charges - 255 - 282 Optimization charges on asset portfolio relating to vehicles sold under buy-back commitments - 282 13 7 Other discrete items 13 - (101) (394) Total (116) (376) (b) Adjustments impacting Income tax (expense) benefit 14 (65) Tax effect of adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates 7 (71) - 1 Other (7) 1 14 (64) Total - (70)
Reconciliation of Total Debt to Net Debt (US GAAP) Consolidated Industrial Activities Financial Services ($mn) (1)Total (Debt) of Industrial Activities includes Intersegment notes payable to Financial Services of $1,270 million and $1,017 million as of June 30, 2021 and December 31, 2020, respectively. Total (Debt) of Financial Services includes Intersegment notes payable to Industrial Activities of $1,253 million and $856 million as of June 30, 2021 and December 31, 2020, respectively. (2)This item includes short-term deposits and investments towards high-credit rating counterparties. (3)The net intersegment receivable/(payable) balance recorded by Financial Services relating to Industrial Activities was $17 million and $161 million as of June 30, 2021 and December 31, 2020, respectively. June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 Third party debt (24,512) (26,053) (6,184) (7,271) (18,328) (18,782) Intersegment notes payable - - (1,270) (1,017) (1,253) (856) Total (Debt) (1) (24,512) (26,053) (7,454) (8,288) (19,581) (19,638) Cash and cash equivalents 7,820 8,785 7,306 8,017 514 768 Restricted cash 764 844 125 99 639 745 Intersegment notes receivable - - 1,253 856 1,270 1,017 Other current financial assets(2) 162 94 162 94 - - Derivatives hedging debt 1 8 1 8 - - Net Cash (Debt) (3) (15,765) (16,322) 1,393 786 (17,158) (17,108)
Reconciliation of Net cash provided by (used in) Operating Activities to Free cash flow of Industrial Activities under U.S. GAAP ($mn) Q2 2021 Q2 2020 H1 2021 H1 2020 Net cash provided by (used in) Operating Activities 999 1,067 1,371 535 Less: Cash flows from Operating Activities of Financial Services net of eliminations (324) 667 148 1,508 Change in derivatives hedging debt of Industrial Activities and other 3 - (8) 5 Investments in assets sold under buy-back commitments and operating lease assets of Industrial Activities (190) (75) (345) (173) Operating cash flow of Industrial Activities 1,136 325 870 (1,141) Investments in property, plant and equipment, and intangible assets of Industrial Activities (132) (69) (202) (132) Other changes (1) 4 (159) (31) (153) Free cash flow of Industrial Activities 1,008 97 637 (1,426) (1) This item primarily includes change in intersegment financial receivables and capital increases in intersegment investments Second Quarter 2021
Reconciliation of Cash and cash equivalents to Available liquidity under U.S.-GAAP ($mn) June 30, 2021 December 31, 2020 Cash and cash equivalent 7,820 8,785 Restricted cash 764 844 Undrawn committed facilities 5,677 6,148 Other current financial assets(1) 162 94 Available liquidity 14,423 15,871 (1) This item includes short-term deposits and investments towards high-credit rating counterparties Second Quarter 2021
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.
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’s non-GAAP financial measures are defined as follows: Adjusted EBIT of Industrial Activities: is defined as net income (loss) before income taxes, Financial Services’ results, Industrial Activities’ interest expenses, net, foreign exchange gains/losses, finance and non-service component of pension and other post-employment benefit costs, restructuring expenses, 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 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 Cash (Debt) and Net Cash (Debt) of Industrial Activities: Net Cash (Debt) is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets (primarily current securities, short-term deposits and investments towards high-credit rating counterparties) and derivative hedging debt. CNH Industrial provides the reconciliation of Net Cash (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 Cash (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, undrawn committed facilities and other current financial assets (primarily current securities, short-term deposits and investments towards high-credit rating counterparties). 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 presentation provide reconciliations of the non-GAAP measures used in this presentation to the most directly comparable GAAP measures.
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