EX-99.1 2 d55525dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO    PRESS RELEASE

2020 THIRD QUARTER RESULTS

 

 

CNH Industrial reports strong results, with all divisions performing ahead of earlier expectations. Consolidated revenues were $6.5 billion, adjusted net income was $156 million, and positive free cash flow of Industrial Activities was $1.0 billion. At quarter end, available liquidity was $13.2 billion.

Financial results presented under U.S. GAAP

“CNH Industrial’s Q3 2020 results were positively impacted by a general improvement, versus the first half of 2020, in market demand across most of our businesses and countries and, in particular, in the agriculture sector in North America. Results were also supported by our continued cost containment and cash preservation actions. As a result, we have reduced working capital in a quarter that is usually seasonally weak, have generated positive free cash flow of $1.0 billion, and have increased our available liquidity to $13.2 billion. In the quarter we have continued to prioritize looking after our people, supporting our dealers and customers and managing our supply chain. We expect these issues to remain as priorities during the coming months given the global spiking of COVID-19. However, alongside this, we are also investing in new technologies across all our businesses, embracing new ways of working learned through the pandemic and positioning our businesses for strong and profitable growth. Work on all the elements of the strategy outlined at our 2019 capital markets day has recommenced, including the preparation for the spin-off of our on-highway business. I am pleased with the results obtained in this quarter, and I am grateful for the efforts made by all my colleagues in CNH Industrial to support our dealers and customers through this period. We are now focused on completing the rest of this year strongly, embracing and addressing all the challenges and opportunities it presents and ensuring that we create a solid foundation for 2021.”

Suzanne Heywood, Chair and Acting CEO

 

 

2020 Third Quarter Results

(all amounts $ million, unless otherwise stated – comparison vs Q3 2019)

 

 

US-GAAP

    

 

NON-GAAP(1)

         

Consolidated revenues

    6,492      +2 %                  +3% c.c.  (*)    Adjusted EBIT of Industrial Activities      238       -16 %     
         

of which Net sales of Industrial Activities

    6,107      +4 %      +4% c.c.     Adjusted EBIT Margin of Industrial Activities      3.9 %      -90  bps                        
         

Net loss

    (932)      -245 %            Adjusted net income      156       -29 %         
         

Diluted loss per share $

    (0.70)      -249 %            Adjusted diluted EPS $      0.11       -31 %         

Cash flows from operating activities

    2,228              +1,869             Free cash flow of Industrial Activities      987               +2,067          
         

Cash and cash equivalents

    6,425      +25 %(**)            Available liquidity      13,164       +13  %(**)         

(*) c.c. means at constant currency            (**) comparison vs June 30, 2020

•   Net sales of Industrial Activities up 4% (up 4% at constant currency), primarily driven by an 11% increase in Agriculture.

 

•   Adjusted EBIT of Industrial Activities of $238 million, compared to $284 million in 2019 which included a $50 million gain realized from granting to Nikola Corporation access to certain Iveco technology as in-kind contribution for stock issuance. Positive price realization in Agriculture and Commercial and Specialty Vehicles, and cost containment actions across all segments fully offset negative mix.

 

•   Adjusted net income of $156 million (or adjusted diluted earnings per share of $0.11) after excluding, from the $932 million reported net loss, the $1,207 million negative fair value adjustment of the investment in Nikola Corporation, and a tax benefit of $82 million due to the release of valuation allowances on deferred tax assets in certain jurisdictions.

 

•   Reported income tax benefit of $15 million and adjusted income tax expense of $81 million, with adjusted effective tax rate (adjusted ETR(1)) of 38%, which reflects the impact of pre-tax losses in jurisdictions where tax benefits are not recognized and excludes the release of deferred tax valuation allowances referred to above.

 

•   Positive free cash flow of Industrial Activities of $987 million resulting from a reduction in working capital and a variety of cash preservation measures. Total Debt of $24.7 billion and net debt of Industrial Activities(1) of $1.5 billion, a reduction of $0.8 billion compared to June 30, 2020.

 

•   Available liquidity of $13.2 billion at September 30, 2020. In July, CNH Industrial Capital LLC issued $600 million in aggregate principal amount of 1.950% Notes due 2023. Subsequent to the quarter-end, in October, CNH Industrial Capital LLC also issued $500 million in aggregate principal amount of 1.875% Notes due 2026.
•   General improvement in market demand and in customer sentiment reflected the easing of COVID-19 restrictions. However, uncertainty about the future impacts on CNH Industrial’s end-markets and operations remains considerable as the resurgence of COVID-19 is leading to new restrictions on social interactions and business operations.

 

•   Order book in Agriculture up double-digits in all regions, compared to previous year for both tractors and combines, particularly in South America.

 

•   Order book up year-over-year in Construction driven by increases in compact equipment segment and channel destocking throughout September.

 

•   Truck order intake in Europe up 39%, compared to the third quarter of 2019, with light duty trucks up 41%, and medium & heavy-duty trucks up 35%.

 

•   Nikola Tre BEV production confirmed to start in Q4 2021 at the joint venture plant in Ulm.

2020 Outlook

The Company is providing the following outlook for 2020. This assumes that its end markets are not further impacted by the pandemic during the final weeks of the year and that, with all the health and safety measures they have put in place, its plants and suppliers are able to keep operating with minimal disruptions:

 

•   Net sales of Industrial Activities down between 10% and 15% year on year including currency translation effects

 

•   Free cash flow of Industrial Activities positive between $0.4 billion and $0.7 billion

 

•   Solid available liquidity to be maintained to year-end and into 2021, with the only capital markets maturity in the year for $600 million already covered by the CNH Industrial Capital LLC $500 million 1.875% Notes issued in October.
 

 

Refer to page 4 for an explanation of the items referenced on this page and to page 8 onwards for the reconciliations    1

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AGRICULTURE

 

                         

 

 

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Demand was up in all key regions. In North America, tractor demand was up 24% for  tractors under 140 HP, and up 8% for tractors over 140 HP; combines were up 16%. In Europe, tractor and combine markets were up 5% and 14%, respectively. South America tractor mark ets were up 1% and combine markets were down 17%. Significant increase in demand was also reported in Rest of World

 

Net sales are up 11% (up 14% at constant currency) mainly driven by higher volumes in North America, Europe and Rest of World, and favorable price realization

 

Adjusted EBIT at $274 million and Adjusted EBIT margin over 10%, driven by higher volumes, positive price realization, reduced selling, general and administrative expenses, continued prioritization in research and development spending and improved income from non-consolidated joint ventures

                       
            Q3 2020      Q3 2019      Change      Change
at c.c.(*)		       
     Net sales ($ million)      2,713        2,446        +10.9%        +13.9%      
     Adjusted EBIT ($ million)      274        152        +122               
     Adjusted EBIT margin      10.1%        6.2%        +390        bps      
                                              

 

                                

CONSTRUCTION

 

                         

 

 

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Global demand of construction end-markets showed 10% and 12% increases in compact and service equipment sub-segment and in general construction equipment, respectively, while road building and site preparation equipment decreased 7%. Demand increased 24% in Rest of World (+54% in China) but decreased 15% in Europe. Compact equipment was up 14% in North America

 

Net sales were down 13%, mainly due to continued channel inventory destocking actions and a weaker pricing environment, primarily in North America. Retail deliveries up in North America, bringing the reduction on channel inventory to more than 35% since the beginning of the year

 

Adjusted EBIT loss was $24 million ($10 million profit in the third quarter of 2019) due to lower volumes and negative fixed cost absorption due to destocking actions and unfavorable price realization, partially offset by cost containment actions

                       
            Q3 2020     Q3 2019      Change      Change
at c.c.(*)		       
     Net sales ($ million)      576       664        -13.3%        -10.1%      
     Adjusted EBIT ($ million)      (24 )      10        -34               
     Adjusted EBIT margin      (4.2)%       1.5%        -570        bps      
                                             

 

 

                                

COMMERCIAL AND

SPECIALTY VEHICLES

 

 

                         

 

 

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European truck market was up 7% year-over-year, with light-duty trucks (“LCV”) up 13%, and medium and heavy trucks down 5%. Order book is strong in Europe. South American truck market was up 9% in LCV and down 8% in medium and heavy trucks. European bus market decreased 17%, and South American market decreased 34%

 

Net sales were up 2% and flat at constant currency, with higher volumes and positive price realization primarily in South America and Rest of World offset by lower volumes in LCV and specialty vehicles in Europe

 

Adjusted EBIT loss was $7 million ($70 million profit in the third quarter of 2019). Excluding the 2019 gain realized from granting to Nikola Corporation access to certain Iveco technology, the decrease was $27 million. The reduction was primarily driven by unfavorable mix and the negative impact of fixed cost absorption due to lower production levels, partially offset by net price realization and cost containment actions

                       
            Q3 2020     Q3 2019      Change      Change
at c.c.(*)		       
     Net sales ($ million)      2,371       2,331        +1.7%        +0.2%      
     Adjusted EBIT ($ million)      (7 )      70        -77               
     Adjusted EBIT margin      (0.3)%       3.0%        -330        bps      
                                             

 

 

                                

POWERTRAIN

 

                         

 

 

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Net sales were down 3%, driven by volume reduction, mainly for light and medium engines in Europe, partially offset by an increase in Rest of World. Sales to external customers accounted for 53% of total net sales (51% in the third quarter of 2019)

 

Adjusted EBIT decreased $21 million, mainly due to lower volume, partially offset by product cost efficiencies and cost -containment actions

                       
            Q3 2020      Q3 2019      Change      Change
at c.c.(*)		       
     Net sales ($ million)      909        940        -3.3%        -6.2%      
     Adjusted EBIT ($ million)      60        81        -21               
     Adjusted EBIT margin      6.6%        8.6%        -200        bps      
                                              

 

 

                                

FINANCIAL SERVICES

 

                         

 

 

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Revenues were down 16%, due to lower end of lease inventory, negative impact from currency translation, and lower average portfolios in North America and Europe, partially offset by a higher average portfolio in South America

 

Net income was down $26 million, primarily attributable to higher risk costs due to an expectation of deteriorating credit conditions and the lower average portfolios in North America and Europe, partially offset by cost saving actions and a higher average portfolio in South America

 

The managed portfolio (including unconsolidated joint ventures) was $24.7 billion at the end of the quarter, down 2.9% compared to September 30, 2019. The receivable balance greater than 30 days past due as a percentage of receivables was 2.4% ( 2 . 8 % as of September 30, 2019)

                       
            Q3 2020      Q3 2019      Change      Change
at c.c.(*)		       
     Revenues ($ million)      408        487        -16.2%        -13.3%      
     Net income ($ million)      56        82        -26               
     Equity at quarter-end
($ million)		      2,766        2,830        -2.3               
     Retail loan originations
($ million)		      2,563        2,389        +7.3%               
                                                    

 

Refer to page 4 for an explanation of the items referenced on this page and to page 8 onwards for the reconciliations    2

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RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

 

 

Consolidated revenues were $17.5 billion (down 14% year on year), adjusted net income was $5 million (compared to $899 million in the first nine months of 2019) and free cash flow of Industrial Activities was negative $439 million, primarily as a result of the adverse COVID-19 impact in the first half of the year.

 

   

Results for the Nine Months Ended September 30, 2020

(all amounts $ million, unless otherwise stated – comparison vs nine months ended September 30, 2019)

      
     
US-GAAP     NON-GAAP(1)       
         

Consolidated revenues

    17,531      -14 %      -12 % c.c.(*)        Adjusted EBIT of Industrial Activities      32       -97 %     
         

of which Net sales of Industrial Activities

    16,250      -14 %      -12 % c.c.    Adjusted EBIT Margin of Industrial Activities      0.2 %      -550 bps      
         

Net loss

    (625)      -147 %            Adjusted net income      5       -99 %     
         

Diluted EPS $

    (0.49)      -151 %            Adjusted diluted EPS $      (0.02)           -103 %     
         

Cash flows from operating activities

    2,763      +2,907             Free cash flow of Industrial Activities      (439)       +1,251      
         

Cash and cash equivalents

    6,425      +32 %(**)            Available liquidity      13,164       +16 %(**)     

    (*) c.c. means at constant currency                (**) comparison vs December 31, 2019

 

 

 

 

AGRICULTURE

 

                             
                        
               Q3 YTD
2020		        Q3 YTD
2019		        Change   

    Change

at c.c.(*)

     
    Net sales ($ million)    7,498    8,031    -6.6%    -3.4%    
    Adjusted EBIT ($ million)    501    661    -160         
    Adjusted EBIT margin    6.7%    8.2%    -150    bps    
   

    

                        

 

 

COMMERCIAL AND
SPECIALTY VEHICLES

 

                             
                        
               Q3 YTD
2020		        Q3 YTD
2019		        Change   

    Change

at c.c.(*)

     
    Net sales ($ million)    6,131    7,443    -17.6%    -16.1%    
    Adjusted EBIT ($ million)    (219)    221    -440         
    Adjusted EBIT margin    (3.6)%    3.0%    -660    bps    
   

    

                        

 

 

FINANCIAL SERVICES

 

                             
                        
               Q3 YTD
2020		        Q3 YTD
2019		        Change   

    Change

at c.c.(*)

     
   

Revenues ($ million)

    1,338    1,480    -9.6%    -6.3%    
    Net income ($ million)    189    268    -79         
   

    

                        

 

 

CONSTRUCTION

 

                             
                        
               Q3 YTD
2020		        Q3 YTD
2019		        Change   

    Change

at c.c.(*)

     
    Net sales ($ million)    1,418    2,061    -31.2%    -28.1%    
    Adjusted EBIT ($ million)    (194)    48    -242         
    Adjusted EBIT margin    (13.7)%    2.3%    -1,600    bps    
   

    

                        

 

 

POWERTRAIN

 

                             
                        
               Q3 YTD
2020		        Q3 YTD
2019		        Change   

    Change

at c.c.(*)

     
    Net sales ($ million)    2,425    3,109    -22.0%    -21.3%    
    Adjusted EBIT ($ million)    123    279    -156         
    Adjusted EBIT margin    5.1%    9.0%    -390    bps    
   

    

                        

 

 

 

Refer to page 4 for an explanation of the items referenced on this page and to page 8 onwards for the reconciliations    3

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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 under U.S. GAAP: is defined as net income (loss) before income taxes, interest expenses of Industrial Activities, net, restructuring expenses, the finance and non-service component of pension and other post-employment benefit costs, foreign exchange gains/(losses), and certain non-recurring items. In particular, non-recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent in nature and not reflective of on-going operational activities.

 

•  

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

 

•  

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

 

•  

Adjusted Diluted EPS: is computed by dividing Adjusted Net Income (loss) attributable to CNH Industrial N.V. by a weighted-average number of common shares outstanding during the period that takes into consideration potential common shares outstanding deriving from the CNH Industrial share-based payment awards, when inclusion is not anti-dilutive. When we provide guidance for adjusted diluted EPS, we do not provide guidance on a earnings per share basis because the GAAP measure will include potentially significant items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end.

 

•  

Adjusted Income Taxes: is defined as income taxes less the tax effect of restructuring expenses and non- recurring items, and non-recurring tax charges or benefits.

 

•  

Adjusted Effective Tax Rate (Adjusted ETR): is computed by dividing a) adjusted income taxes by b) income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates, less restructuring expenses and non-recurring items.

 

•  

Net Debt and Net Debt of Industrial Activities: Net Debt is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets (primarily current securities, short-term deposits and investments towards high-rating level counterparts) and derivative hedging debt. CNH Industrial provides the reconciliation of Net Debt to Total Debt, which is the most directly comparable measure included in the consolidated balance sheets. Due to different sources of cash flows used for the repayment of the debt between Industrial Activities and Financial Services (by cash from operations for Industrial Activities and by collection of financing receivables for Financial Services), management separately evaluates the cash flow performance of Industrial Activities using Net Debt of Industrial Activities.

 

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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-rating level counterparts).

 

•  

Change excl. FX or Constant Currency: CNH Industrial discusses the fluctuations in revenues on a constant currency basis by applying the prior year average exchange rates to current year’s revenues expressed in local currency in order to eliminate the impact of foreign exchange rate fluctuations.

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

Forward-looking statements

 

All statements other than statements of historical fact contained in this earning release including statements regarding our future responses to and effects of the COVID-19 pandemic; competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. These statements may include terminology such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “outlook”, “continue”, “remain”, “on track”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “prospects”, “plan”, or similar terminology. Forward-looking statements, including those related to the COVID-19 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, 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

 

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may affect in the future our ability to operate as well as the ability of our suppliers and distributors to operate; changes in government policies regarding banking, monetary and fiscal policy; legislation, particularly pertaining to capital goods-related issues such as agriculture, the environment, debt relief and subsidy program policies, trade and commerce and infrastructure development; government policies on international trade and investment, including sanctions, import quotas, capital controls and tariffs; volatility in international trade caused by the imposition of tariffs, sanctions, trade wars; actions of competitors in the various industries in which we compete; development and use of new technologies and technological difficulties; the interpretation of, or adoption of new, compliance requirements with respect to engine emissions, safety or other aspects of our products; production difficulties, including capacity and supply constraints and excess inventory levels; labor relations; interest rates and currency exchange rates; inflation and deflation; energy prices; prices for agricultural commodities; housing starts and other construction activity; our ability to obtain financing or to refinance existing debt; 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 not only on our operations, supply chains, distribution network, and level of demand of our products, as well as negative evolutions of the economic and financial conditions at global and regional levels; political and civil unrest; volatility and deterioration of capital and financial markets, including possible effects of “Brexit”, other pandemics, terrorist attacks in Europe and elsewhere, our ability to achieve the targets set out in the Strategic Business Plan announced on September 3, 2019 at our Capital Markets Day event; our ability to successfully and timely implement the planned spin-off of the Company’s On-Highway business; and other similar risks and uncertainties and our success in managing the risks involved in the foregoing. Further information concerning factors, risks, and uncertainties that could materially affect the Company’s financial results is included in our annual report on Form 20-F for the year ended December 31, 2019, prepared in accordance with U.S. GAAP and in the Company’s EU Annual Report at December 31, 2019, prepared in accordance with EU-IFRS, as well as in the CNH Industrial N.V. Quarterly Reports for the three months ended March 31, 2020 (prepared respectively in accordance with U.S. GAAP and EU-IFRS). Investors are expressly invited to refer to and consider the information on risks, factors, and uncertainties incorporated in the above-mentioned documents, in addition to the information presented here.

Forward-looking statements are based upon assumptions relating to the factors described in this earnings release, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. Our actual results could differ materially from those anticipated in such forward-looking statements. Forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update or revise publicly our forward-looking statements. The impact of COVID-19 has already exacerbated and is expected to further exacerbate all or part of the risks discussed in this section. Further information concerning CNH Industrial and its businesses, including factors that potentially could materially affect CNH Industrial’s financial results, is included in CNH Industrial’s reports and filings with the U.S. Securities and Exchange Commission (“SEC”), the Autoriteit Financiële Markten (“AFM”) and Commissione Nazionale per le Società e la Borsa (“CONSOB”).

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

Conference Call and Webcast

 

Today, at 3:30 p.m. CET / 2:30 p.m. GMT/ 9:30 a.m. EST, management will hold a conference call to present 2020 third quarter and first nine months results to financial analysts and institutional investors. The call can be followed live online at http://bit.ly/CNH_Industrial_Q3_2020 and a recording will be available later on the Company’s website www.cnhindustrial.com. A presentation will be made available on the CNH Industrial website prior to the call.

 

London,

 November 5, 2020

 

CONTACTS

 

 

Media Inquiries

United Kingdom

Richard Gadeselli

Tel: +44 207 7660 346

Laura Overall

Tel: +44 207 7660 338

E-mail: mediarelations@cnhind.com

www.cnhindustrial.com

Investor Relations

United Kingdom

Federico Donati

Tel: +44 207 7660 386

United States

Noah Weiss

Tel: +1 630 887 3745

 

 

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CNH INDUSTRIAL N.V.

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019

(Unaudited, U.S.-GAAP)

 

     Three Months Ended September 30,     Nine Months Ended September 30,  
($ million)    2020     2019     2020     2019  

Revenues

                                 

Net sales

      6,107       5,892       16,250       18,966  

Finance, interest and other income

      385       468       1,281       1,418  

TOTAL REVENUES

      6,492       6,360       17,531       20,384  

Costs and Expenses

                                 

Cost of goods sold

      5,178       5,015       14,706       15,732  

Selling, general and administrative expenses

      501       540       1,511       1,634  

Research and development expenses

      226       238       643       755  

Restructuring expenses

      7       42       19       78  

Interest expense

      161       192       512       570  

Goodwill impairment charge

      -       -       585       -  

Other, net(1)

      1,388       173       290       552  

TOTAL COSTS AND EXPENSES

      7,461       6,200       18,266       19,321  
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES      (969 )      160       (735 )      1,063  

Income tax benefit (expense)

      15       486       78       261  

Equity in income of unconsolidated subsidiaries and affiliates

      22       (3 )      32       10  

NET INCOME (LOSS)

      (932 )      643       (625 )      1,334  

Net income attributable to noncontrolling interests

      10       6       32       26  

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

      (942 )      637       (657 )      1,308  
(in $)                             

Earnings (loss) per share attributable to common shareholders

                                 

Basic

      (0.70 )      0.47       (0.49 )      0.97  

Diluted

      (0.70 )      0.47       (0.49 )      0.97  

Cash dividends declared per common share

      -       -       -       0.203  

Notes:

(1)

In the three and nine months ended September 30, 2020, Other, net includes the pre-tax loss of $1,207 million and the pre-tax gain of $268 million, respectively, from the remeasurement at fair value of the investment in Nikola Corporation.

These Condensed Consolidated Statements of Operations should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2019 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Operations represent the consolidation of all CNH Industrial N.V. subsidiaries.

CNH INDUSTRIAL N.V.

Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019

(Unaudited, U.S.-GAAP)

 

($ million)    September 30, 2020(*)      December 31, 2019  

ASSETS

                  

Cash and cash equivalents

      6,425        4,875  

Restricted cash

      708        898  

Trade receivables, net

      421        416  

Financing receivables, net

      17,098        19,428  

Inventories, net

      6,744        7,082  

Property, plant and equipment, net

      4,538        5,269  

Investments in unconsolidated subsidiaries and affiliates(1)

      508        631  

Investments at fair value through profit or loss(1)

      526        -  

Equipment under operating leases

      1,828        1,857  

Goodwill, net

      1,936        2,538  

Other intangible assets, net

      720        806  

Deferred tax assets

      1,433        1,134  

Derivative assets

      188        73  

Other assets

      1,996        2,345  

TOTAL ASSETS

      45,069        47,352  

LIABILITIES AND EQUITY

                  

Debt

      24,670        24,854  

Trade payables

      5,112        5,632  

Deferred tax liabilities

      161        172  

Pension, postretirement and other postemployment benefits

      1,502        1,578  

Derivative liabilities

      88        121  

Other liabilities

      8,696        8,839  

Total Liabilities

      40,229        41,196  

Redeemable noncontrolling interest

      41        35  

Equity

      4,799        6,121  

TOTAL LIABILITIES AND EQUITY

      45,069        47,352  

Notes:

(*)

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

(1)

At September 30, 2020, the investment in Nikola Corporation is included in item “Investments at fair value through profit or loss”. At December 31, 2019, this investment was measured at cost and included in item “Investments in unconsolidated subsidiaries and affiliates”.

These Condensed Consolidated Balance Sheets should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2019 included in the Annual Report on Form 20-F. These Condensed Consolidated Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.

 

6

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CNH INDUSTRIAL N.V.

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019

(Unaudited- U.S.-GAAP)

 

     Nine Months Ended September 30,  
($ million)    2020     2019  

Operating activities:

                 

Net income (loss)

      (625 )      1,334  

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

      460       494  

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

      390       419  

(Gain) Loss from disposal of assets

      6       3  

Undistributed income (loss) of unconsolidated subsidiaries

      -       5  

Goodwill impairment charge

      585       -  

Other non-cash items(1)

      276       150  

Changes in operating assets and liabilities:

                 

Provisions

      (127 )      (144 ) 

Deferred income taxes

      (245 )      (445 ) 

Trade and financing receivables related to sales, net

      1,745       55  

Inventories, net

      753       (1,058 ) 

Trade payables

      (543 )      (501 ) 

Other assets and liabilities

      88       (456 ) 

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

      2,763       (144 ) 

Investing activities:

                 

Additions to retail receivables

      (3,235 )      (3,027 ) 

Collections of retail receivables

      2,959       3,218  

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

assets sold under buy-back commitments

      3       10  

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

      (229 )      (325 ) 

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

      (761 )      (944 ) 

Other

      (281 )      41  

NET CASH USED IN INVESTING ACTIVITIES

      (1,544 )      (1,027 ) 

Financing activities:

                 

Net increase in debt

      148       31  

Dividends paid

      (4 )      (280 ) 

Other

      -       (45 ) 

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

      144       (294 ) 

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

      (3 )      (173 ) 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

      1,360       (1,638 ) 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR

      5,773       5,803  

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

      7,133       4,165  

Notes:

(1)

In the nine months ended September 30, 2020, this item includes the pre-tax gain of $268 million from the remeasurement at fair value of the investment in Nikola Corporation.

These Condensed Consolidated Statements of Cash Flows should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2019 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Cash Flows represent the consolidation of all CNH Industrial N.V. subsidiaries.

 

7

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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 September 30, 2020         
           Agriculture    Construction    

Commercial

and Specialty

Vehicles

     Powertrain     

Unallocated

items,

eliminations

and other

     Total        
   

Consolidated Net income (loss)

                                            (932 )     

    

  

Less: Consolidated Income tax benefit (expense)

                                            15      
   

Consolidated Income (loss) before taxes

                                            (947)      
   

Less: Financial Services

                                                   
   

Financial Services Net income

                                            56      
   

Financial Services Income taxes

                                            24      
   

Add back of the following Industrial Activities items:

                                                   
   

Interest expenses, net of interest income and eliminations

                                            63      
   

Foreign exchange (gains) losses, net

                                            17      
   

Finance and non-service component of Pension and other post-employment benefit costs(1)

                                            (29)      
   

Adjustments for the following Industrial Activities items:

                                                   
   

Restructuring expenses

    2      3       1       1        -       7      
   

Nikola investment fair value adjustment

    -      -       -       -        1,207       1,207      
   

Adjusted EBIT of Industrial Activities

    274      (24 )      (7 )      60        (65 )      238      
   
          Three Months ended September 30, 2019        
           Agriculture    Construction    

Commercial

and Specialty

Vehicles

     Powertrain     

Unallocated

items,

eliminations

and other

     Total        
   

Consolidated Net income

                                            643      
   

Less: Consolidated Income tax benefit (expense)

                                            486      
   

Consolidated Income before taxes

                                            157      
   

Less: Financial Services

                                                   
   

Financial Services Net income

                                            82      
   

Financial Services Income taxes

                                            34      
   

Add back of the following Industrial Activities items:

                                                   
   

Interest expenses, net of interest income and eliminations

                                            62      
   

Foreign exchange (gains) losses, net

                                            19      
   

Finance and non-service component of Pension and other post-employment benefit costs(1)

                                            (16)      
   

Adjustments for the following Industrial Activities items:

                                                   
   

Restructuring expenses

    9      18       9       5        -       41      
   

Other discrete items(2)

    -      -       135       -        2       137      
   

Adjusted EBIT of Industrial Activities

    152      10       70       81        (29 )      284      
   
   

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

(2)  In the three months ended September 30, 2019, this item mainly included other asset optimization charges for $135 million due to actions included in the “Transform2Win” strategy.

   

   

 

8

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Other Supplemental Financial Information

(Unaudited)

 

                      

Reconciliation of Consolidated Net Income to Adjusted EBIT of Industrial Activities by segment under U.S.-GAAP

($ million)

 

                
   
           Nine Months ended September 30, 2020        
   
           Agriculture      Construction     Commercial
and Specialty
Vehicles		     Powertrain      Unallocated
items,
eliminations
and other		     Total        
      Consolidated Net income (loss)                                         (625)        
    

Less: Consolidated Income tax benefit (expense)

                                                78      
    

Consolidated Income (loss) before taxes

                                                (703 )     
    

Less: Financial Services

                                                       
    

Financial Services Net income

                                                189      
    

Financial Services Income taxes

                                                74      
    

Add back of the following Industrial Activities items:

                                                       
    

Interest expenses, net of interest income and eliminations

                                                181      
    

Foreign exchange (gains) losses, net

                                                22      
    

Finance and non-service component of Pension and other post-employment benefit costs(1)

                                                (85 )     
    

Adjustments for the following Industrial Activities items:

                                                       
    

Restructuring expenses

      9        5       4       1        -       19      
    

Goodwill impairment charge

      -        -       -       -        585       585      
    

Other discrete items(2)

      176        72       289       -        7       544      
    

Nikola investment fair value adjustment

      -        -       -       -        (268 )      (268 )     
    

Adjusted EBIT of Industrial Activities

      501        (194 )      (219 )      123        (179 )      32      
   
           Nine Months ended September 30, 2019        
   
           Agriculture      Construction     Commercial
and Specialty
Vehicles		     Powertrain      Unallocated
items,
eliminations
and other		     Total        
      Consolidated Net income                                         1,334        
    

Less: Consolidated Income tax benefit (expense)

                                                261      
    

Consolidated Income before taxes

                                                1,073      
    

Less: Financial Services

                                                       
    

Financial Services Net income

                                                268      
    

Financial Services Income taxes

                                                101      
    

Add back of the following Industrial Activities items:

                                                       
    

Interest expenses, net of interest income and eliminations

                                                181      
    

Foreign exchange (gains) losses, net

                                                39      
    

Finance and non-service component of Pension and other post-employment benefit costs(1)

                                                (47 )     
    

Adjustments for the following Industrial Activities items:

                                                       
    

Restructuring expenses

      27        22       20       5        1       75      
    

Other discrete items(2)

      -        -       135       -        2       137      
    

Adjusted EBIT of Industrial Activities

      661        48       221       279        (120 )      1,089      
   
    

(1)  In the nine months ended September 30, 2020 and 2019, this item includes the pre-tax gain of $90 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.

(2)  In the nine months ended September 30, 2020, this item mainly includes impairment of intangible and other long-lived asset optimization charges. In the nine months ended September 30, 2019, this item mainly included other asset optimization assets, as well as asset optimization charges for $135 million due to actions included in the “Transform2Win” strategy.

 

   

   

        

 

9

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Other Supplemental Financial Information

(Unaudited)

 

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

 

                          
              

 

Consolidated

      Industrial Activities      Financial Services         
               

    September 30,

2020

          December 31,
2019		     

    September 30,

2020

          December 31,
2019		     

    September 30,

2020

          December 31,
2019		         
       Third party debt      24,670        24,854        7,484        5,226        17,186        19,628       
       Intersegment notes payable      -        -        972        1,332        998        1,120       
       Total Debt(1)      24,670        24,854        8,456        6,558        18,184        20,748       
      

Less:

    Cash and cash equivalents

      6,425        4,875        5,677        4,407        748        468       
           Restricted cash      708        898        87        120        621        778       
           Intersegment notes receivable      -        -        998        1,120        972        1,332       
           Other current financial assets(2)      141        58        141        58        -        -       
           Derivatives hedging debt      9        (1)        9        (1)        -        -       
       Net debt (cash)(3)      17,387        19,024        1,544        854        15,843        18,170       
        

 

(1)   Total Debt of Industrial Activities includes Intersegment notes payable to Financial Services of $972 million and $1,332 million as of September 30, 2020 and December 31, 2019, respectively. Total Debt of Financial Services includes Intersegment notes payable to Industrial Activities of $998 million and $1,120 million as of September 30, 2020 and December 31, 2019, respectively.

(2)   This item includes short-term deposits and investments towards high-credit rating counterparts.

(3)   The net intersegment (receivable)/payable balance recorded by Financial Services relating to Industrial Activities was $26 million and $(212) million as of September 30, 2020 and December 31, 2019, respectively.

 

 

    

    

    

 

                                    
     

Reconciliation of Cash and cash equivalents to Available liquidity(1) under U.S.-GAAP

($ million)

 

                                
   
                    September 30, 2020                June 30, 2020                December 31, 2019           
   
     Cash and cash equivalents      6,425        5,145        4,875       
   
     Restricted cash      708        723        898       
   
     Undrawn committed facilities      5,890        5,647        5,474       
   
     Other current financial assets(2)      141        106        58       
   
     Available liquidity      13,164        11,621        11,305       
   
    

 

(1)   Starting from September 30, 2020, the Company modified the definition of “Available liquidity” (a non-GAAP financial measure) in order to include also “Other current financial assets”. The Company believes the revised definition better reflects its consolidated liquidity.

(2)   This item includes short-term deposits and investments towards high-credit rating counterparts.

 

 

    

    

         

 

                           
Change in Net debt of Industrial Activities under U.S.-GAAP
($ million)

 

                             
      Nine Months ended September 30,               Three Months ended September 30,         
      2020     2019(*)                 2020     2019(*)         
   
       (854 )      (599 )    Net (debt)/cash of Industrial Activities at beginning of period      (2,307 )      (1,504)       
   
       32       1,089     Adjusted EBIT of Industrial Activities      238       284       
   
       458       492     Depreciation and Amortization      152       162       
   
       198       235     Depreciation of assets under operating leases and assets sold with buy-back commitments      66       77       
   
       (198 )      (328 )    Cash interest and taxes      (81 )      (75)       
   
       (385 )      (366 )    Changes in provisions and similar(1)      (53 )      (177)       
   
       (136 )      (2,370 )    Change in working capital           788       (1,103)       
   
       (31 )      (1,248 )    Operating cash flow of Industrial Activities      1,110       (832)       
   
       (228 )      (323 )    Investments in property, plant and equipment, and intangible assets(2)      (96 )      (143)       
   
       (180 )      (119 )    Other changes           (27 )      (105)       
   
       (439 )      (1,690 )    Free cash flow of Industrial Activities      987       (1,080)       
   
       (4 )      (325 )    Capital increases and dividends(3)      (1 )      (2)       
   
       (247 )      244     Currency translation differences and other      (223 )      216       
   
       (690 )      (1,771 )    Change in Net debt of Industrial Activities      763       (866)       
   
       (1,544 )      (2,370 )    Net (debt)/cash of Industrial Activities at end of period      (1,544 )      (2,370)       
    

 

     

 

   

   

   

 

 

 

(*)    Starting from December 31, 2019, we modified the definition of Net Debt and Net Debt of Industrial Activities in order to include Other current financial assets. As a consequence,
        certain amounts have been recast accordingly.

 

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

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

(3)   Including share buy-back transactions.

 

 

 

     
 

 

    

    

    

 

 

         

 

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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)		                          
    

 

            Nine Months ended September 30,

                          Three Months ended September 30,       
     2020    2019(*)                          2020      2019(*)       
    2,763    (144)    Net cash provided by (used in) Operating Activities         2,228      359     
   
    (2,470)    (705)    Less: Cash flows from Operating Activities of Financial Services net of eliminations         (962)      (1,047)     
    9    5    Change in derivatives hedging debt of Industrial Activities         4      (1)     
    (333)    (404)   

Investments in assets sold under buy-back commitments

and operating lease assets of Industrial Activities

         (160)      (143)     
    (31)    (1,248)    Operating cash flow of Industrial Activities         1,110      (832)     
    (228)    (323)   

Investments in property, plant and equipment,

and intangible assets of Industrial Activities

         (96)      (143)     
    (180)    (119)    Other changes(1)         (27)      (105)     
    (439)    (1,690)    Free cash flow of Industrial Activities         987      (1,080)     
   
   

(*)   Starting from December 31, 2019, we modified the definition of Net Debt and Net Debt of Industrial Activities in order to include Other current financial assets. As a consequence, certain amounts have been recast accordingly.

 

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

 

            Nine Months ended September 30,

                     Three Months ended September 30,         
     2020    2019          2020      2019         
    (625)    1,334    Net income (loss)    (932)        643       
    790    125    Adjustments impacting Income (loss) before income tax benefit (expense) and equity in income of unconsolidated subsidiaries and affiliates (a)    1,184        149       
    (160)    (560)    Adjustments impacting Income tax benefit (expense) (b)    (96)        (571)       
    5    899    Adjusted net income (loss)    156        221       
    (30)    871    Adjusted net income (loss) attributable to CNH Industrial N.V.    146        213       
    1,351    1,355    Weighted average shares outstanding – diluted (million)    1,352        1,352       
    (0.02)    0.64    Adjusted diluted EPS ($)    0.11        0.16       
                                   
    (735)    1,063    Income (loss) before income tax benefit (expense) and equity in income of unconsolidated subsidiaries and affiliates    (969)        160       
    790    125    Adjustments impacting Income (loss) before income tax benefit (expense) and equity in income of unconsolidated subsidiaries and affiliates (a)    1,184        149       
    55    1,188    Adjusted income (loss) before income tax benefit (expense) and equity in income of unconsolidated subsidiaries and affiliates (A)    215        309       
                                  
    78    261    Income tax benefit (expense)    15        486       
    (160)    (560)    Adjustments impacting Income tax benefit (expense) (b)    (96)        (571)       
    (82)    (299)    Adjusted income tax benefit (expense) (B)    (81)        (85)       
                                  
    149%    25%    Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A)    38%        28%       
                                  
   

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

    

     
    (268)    -    Nikola investment fair value adjustment    1,207      -       
    19    78    Restructuring expenses    7      42       
    (90)    (90)    Pre-tax gain related to the modification of a healthcare plan in the U.S.(1)    (30)      (30)       
    585    -    Goodwill impairment charge    -      -       
    255    -    Other assets impairment charges    -      -       
    282    135    Optimization charges on asset portfolio relating to vehicles sold under buy-back commitments    -      135       
    7    2    Other discrete items    -      2       
    790    125    Total    1,184      149       
                                  
   

b)   Adjustments impacting Income tax benefit (expense)

    

     
    (74)    (25)    Tax effect of adjustments impacting Income (loss) before income tax benefit (expense) and equity in income of unconsolidated subsidiaries and affiliates    (9)      (33)       
    (82)    (539)    Adjustment to valuation allowances on deferred tax assets    (82)      (539)       
    (4)    4    Other    (5)      1       
    (160)    (560)    Total    (96)      (571)       
                                      

 

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Other Supplemental Financial Information

(Unaudited)

 

Revenues by Segment under EU-IFRS
($ million)

 

                             
    

        Nine Months ended September 30,

          

Three Months ended September 30,

        
     2020      2019     % change            2020     2019     % change        
      7,491        8,013       -6.5      Agriculture      2,711       2,418       12.1      
      1,418        2,060       -31.2      Construction      576       663       -13.1      
      6,131        7,431       -17.5      Commercial and Specialty Vehicles      2,372       2,313       2.6      
      2,427        3,098       -21.7      Powertrain      911       925       -1.5      
      (1,217)        (1,656 )      -      Eliminations and other      (460 )      (468 )      -           
      16,250        18,946       -14.2      Total Industrial Activities      6,110       5,851       4.4      
      1,329        1,467       -9.4      Financial Services      404       477       -15.3      
      (85)        (106 )      -      Eliminations and other      (32 )      (32 )      -      
      17,494        20,307       -13.9      Total      6,482       6,296       3.0      
                                                                

 

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

 

                               
      Nine Months ended September 30,          Three Months ended September 30,        
        2020     2019     $ change      2020 adjusted
EBIT margin		     2019 adjusted
EBIT margin		           2020     2019     $ change      2020 adjusted
EBIT margin		     2019 adjusted
EBIT margin		        
       498       670       -172        6.6 %      8.4 %    Agriculture      269       180       89        9.9 %      7.4 %     
       (211 )      39       -250        (14.9 )%      1.9 %    Construction      (42 )      8       -50        (7.3 )%      1.2 %     
       (267 )      209       -476        (4.4 )%      2.8 %    Commercial and Specialty Vehicles      (25 )      25       -50        (1.1 )%      1.1 %     
       100       252       -152        4.1 %      8.1 %    Powertrain      59       68       -9        6.5 %      7.4 %     
       (209 )      (126 )      -83        -       -     Unallocated items, eliminations and other      (67 )      (28 )      -39        -       -      
       (89 )      1,044       -1,133        (0.5 )%      5.5 %    Adjusted EBIT of Industrial Activities      194       253       -59        3.2 %      4.3 %     
    

 

 

 

(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.

 

 

 
 

 

        

 

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

 

                             
           September 30, 2020     June 30, 2020     December 31, 2019        
      Total Assets      46,826       46,790       49,182      
      Total Equity      6,401       7,554       7,863      
         Equity attributable to CNH Industrial N.V.      6,339       7,500       7,819      
      Net debt      (17,792 )      (18,918 )      (19,630 )     
   

  of which Net debt of Industrial Activities(1)

      (1,881 )      (2,713 )      (1,403 )     
   
   

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

   

    
   
               

 

     Net income (loss) reconciliation U.S.-GAAP to EU-IFRS               
     ($ million)                  
             Nine Months ended September 30,            Three Months ended September 30,        
     2020    2019          2020      2019        
   

(625)

    1,334    Net income (loss) in accordance with U.S. GAAP    (932)      643       
             

Adjustments to conform with EU-IFRS:

                 
   

(173)

    (54)   

Development costs

    (42)      (29)       
   

(268)

    -   

Nikola investment fair value adjustment(1)

    1,207      -       
   

(61)

    (7)   

Other adjustments(2)

    (13)      14       
   

5

    (530)   

Tax impact on adjustments and other income tax differences(3)

    (48)      (539)       
   

(497)

    (591)   

Total adjustments

    1,104      (554)       
   

(1,122)

    743    Profit (loss) in accordance with EU-IFRS    172      89       
   

 

(1)  Starting from the second quarter of 2020, the investment in Nikola Corporation is measured at fair value through profit or loss under U.S. GAAP. This investment is measured at fair value through other comprehensive income under EU-IFRS.

(2)  This item also includes the different accounting impacts from the modification of a healthcare plan in the U.S.

(3)  In the three and nine months ended September 30, 2019, this item also included the impact of the tax benefit due to the release of valuation allowances on certain net deferred tax assets under U.S. GAAP.

     
          

 

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Other Supplemental Financial Information

(Unaudited)

 

Total Equity reconciliation U.S. GAAP to EU-IFRS
($ million)		                   
                        
           September 30, 2020             December 31, 2019         
    Total Equity under U.S. GAAP      4,799       6,121          
   

Adjustments to conform with EU-IFRS:

                         
   

Development costs

      2,129       2,260          
   

Other adjustments

      (34 )      (87 )         
   

Tax impact on adjustments and other income tax differences

      (493 )      (431 )         
   

Total adjustments

      1,602       1,742          
    Total Equity under EU-IFRS      6,401       7,863          
                              

Translation of financial statements denominated in a currency other than the U.S. dollar

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

 

     

Nine Months Ended September 30, 2020

                             

Nine Months Ended September 30, 2019

  
      Average      At September 30,             At December 31, 2019             Average      At September 30,  

Euro

      0.889        0.854           0.890           0.890        0.918  

Pound sterling

      0.787        0.779           0.757           0.786        0.813  

Swiss franc

      0.949        0.923           0.966           0.995        0.996  

Polish zloty

      3.931        3.883           3.789           3.828        4.021  

Brazilian real

      5.075        5.663           4.020           3.884        4.159  

Canadian dollar

      1.353        1.339           1.299           1.329        1.325  

Turkish lira

      6.755        7.772           5.950           5.642        5.647  

CNH INDUSTRIAL N.V.

Condensed Consolidated Income Statement for the three and nine months ended September 30, 2020 and 2019

(Unaudited, EU-IFRS)

 

     

Three Months Ended September 30,

           Nine Months Ended September 30,  
  ($ million)    2020     2019     2020     2019  

Net revenues

      6,482       6,296       17,494       20,307  

Cost of sales

      5,424       5,267       15,546       16,578  

Selling, general and administrative costs

      462       519       1,395       1,590  

Research and development costs

      271       269       826       824  

Result from investments:

      25       (2 )      37       15  

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

      25       (2 )      37       15  

Restructuring costs

      5       46       17       82  

Goodwill impairment loss

      -       -       576       -  

Other income/(expenses)

      (51 )      46       (158 )      (4 ) 

Financial income/(expenses)

      (89 )      (97 )      (218 )      (232 ) 

PROFIT/(LOSS) BEFORE TAXES

      205       142       (1,205 )      1,012  

Income tax benefit (expense)

      (33 )      (53 )      83       (269 ) 

PROFIT/(LOSS) FROM CONTINUING OPERATIONS

      172       89       (1,122 )      743  

PROFIT/(LOSS) FOR THE PERIOD

      172       89       (1,122 )      743  
                                  

PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO:

                                 

Owners of the parent

      162       83       (1,154 )      718  

Non-controlling interests

      10       6       32       25  

(in $)

                                 

BASIC EARNINGS/(LOSS) PER COMMON SHARE

      0.12       0.06       (0.85 )      0.53  

DILUTED EARNINGS/(LOSS) PER COMMON SHARE

      0.12       0.06       (0.85 )      0.53  

This Condensed Consolidated Income Statement should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2019 included in the EU Annual Report. This Condensed Consolidated Income Statement represents the consolidation of all CNH Industrial N.V. subsidiaries.

 

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CNH INDUSTRIAL N.V.

Condensed Consolidated Statement of Financial Position as of September 30, 2020 and December 31, 2019

(Unaudited, EU-IFRS)

 

  ($ million)    September 30, 2020      December 31, 2019  

ASSETS

                  

Intangible assets

      4,725        5,522  

Property, plant and equipment

      4,969        5,769  

Investments and other financial assets:

      1,133        707  

Investments accounted for using the equity method

      556        550  

Equity investments measured at fair value through other comprehensive income

      526        108  

Other investments and financial assets

      51        49  

Leased assets

      1,828        1,857  

Defined benefit plan assets

      22        28  

Deferred tax assets

      1,068        806  

Total Non-current assets

      13,745        14,689  

Inventories

      6,722        7,065  

Trade receivables

      418        408  

Receivables from financing activities

      17,157        19,429  

Current tax receivables

      174        260  

Other current receivables and financial assets(*)

      1,094        1,302  

Prepaid expenses and other assets(*)

      179        173  

Derivative assets

      188        73  

Cash and cash equivalents

      7,133        5,773  

Total Current assets

      33,065        34,483  

Assets held for sale

      16        10  

TOTAL ASSETS

      46,826        49,182  

EQUITY AND LIABILITIES

                  

Issued capital and reserves attributable to owners of the parent

      6,339        7,819  

Non-controlling interests

      62        44  

Total Equity

      6,401        7,863  

Provisions:

      4,808        4,787  

Employee benefits

      1,676        1,701  

Other provisions

      3,132        3,086  

Debt:

      25,166        25,413  

Asset-backed financing

      10,578        11,757  

Other debt

      14,588        13,656  

Derivative liabilities

      88        121  

Trade payables

      5,112        5,635  

Tax liabilities

      273        181  

Deferred tax liabilities

      244        274  

Other current liabilities

      4,734        4,908  

Total Liabilities

      40,425        41,319  

TOTAL EQUITY AND LIABILITIES

      46,826        49,182  

Notes:

(*)

For the sake of clarity and to enhance the comparability of information presented, certain balances previously reported under “Other current assets” have been reclassified to “Other receivables and other financial assets” and “Prepaid expenses and other assets”.

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

 

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CNH INDUSTRIAL N.V.

Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2020 and 2019

(Unaudited, EU-IFRS)

 

                      Nine Months Ended  September 30,  
  ($ million)    2020      2019  

A) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

      5,773        5,803  

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

                  

Profit/(loss) for the period

      (1,122)        743  

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

      878        926  

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

      4        2  

Goodwill impairment loss

      576        -  

Other non-cash items

      386        85  

Dividends received

      32        15  

Change in provisions(*)

      (27)        (215)  

Change in deferred income taxes

      (283)        53  

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

      99        (51)  

Change in operating lease items(2)

      92        (30)  

Change in working capital(*)

      (6)        (2,236)  

TOTAL

      629        (708)  

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)

      (462)        (616)  

Consolidated subsidiaries and other equity investments

      (147)        (109)  

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

      3        10  

Net change in receivables from financing activities

      1,412        138  

Change in current securities

      (80)        -  

Other changes

      1        204  

TOTAL

      727        (373)  

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

                  

Net change in debt and derivative assets/liabilities

      22        (51)  

Dividends paid

      (4)        (280)  

Purchase of treasury shares

      -        (45)  

Purchase of ownership interests in subsidiaries

      (9)        -  

TOTAL

      9        (376)  

Translation exchange differences

      (5)        (181)  

E) TOTAL CHANGE IN CASH AND CASH EQUIVALENTS

      1,360        (1,638)  

F) CASH AND CASH EQUIVALENTS AT END OF PERIOD

      7,133        4,165  

Notes:

(*)

Following the adoption, on January 1, 2019, of IFRIC Interpretation 23, figures for the nine months ended September 30, 2019 have been reclassified due to the change in classification for identified income tax-related risks that were previously recognized as a provision.

 

(1)

Cash generated from the sale of vehicles under buy-back commitments, net of amounts included in Profit/(loss) for the period, is recognized under operating activities in a single line item, which includes changes in working capital, capital expenditure, depreciation and impairment losses.

(2)

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

These Condensed Consolidated Statement of Cash Flows should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2019 included in the EU Annual Report. This Condensed Consolidated Statement of Cash Flows represents the consolidation of all CNH Industrial N.V. subsidiaries.

 

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