Note 21: Supplemental Information

The operations and key financial measures and financial analysis differ significantly for manufacturing and distribution businesses and financial services businesses; therefore, management believes that certain supplemental disclosures are important in understanding the consolidated operations and financial results of CNH Industrial. This supplemental information does not purport to represent the operations of each group as if each group were to operate on a standalone basis. For example, Industrial Activities presents the cost of “interest free” periods for wholesale receivables as Interest Compensation to Financial Services, and not as a reduction of sales in their Statements of Operations. This supplemental data is as follows:

Industrial Activities—The financial information captioned “Industrial Activities” reflects the consolidation of all majority-owned subsidiaries except for Financial Services business. Financial Services business has been included using the equity method of accounting whereby the net income and net assets of Financial Services business are reflected, respectively, in “Equity in income of unconsolidated subsidiaries and affiliates” in the accompanying consolidated statements of operations, and in “Investment in Financial Services” in the accompanying consolidated balance sheets.

Financial Services—The financial information captioned “Financial Services” reflects the consolidation or combination of Financial Services business.

Transactions between the “Industrial Activities” and “Financial Services” have been eliminated to arrive at the consolidated financial statements.

	Statement of Operations
	Industrial Activities						Financial Services
	2015		2014		2013		2015		2014		2013
	(in millions, except share data)
Revenues
Net sales	$	24,677	$	31,198	$	32,661	$	—	$	—	$	—
Finance and interest income		201		258		271		1,603		1,828		1,679
Total Revenues	$	24,878	$	31,456	$	32,932	$	1,603	$	1,828	$	1,679
Costs and Expenses
Cost of goods sold	$	20,357	$	25,536	$	26,580	$	—	$	—	$	—
Selling, general & administrative expenses		2,032		2,568		2,764		285		357		330
Research and development expenses		856		1,106		1,222		—		—		—
Restructuring expenses		82		184		71		2		—		—
Interest expense		678		857		799		576		705		658
Interest compensation to Financial Services		314		357		352		—		—		—
Other, net		497		290		251		235		235		210
Total Costs and Expenses		24,816		30,898		32,039		1,098		1,297		1,198
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates		62		558		893		505		531		481
Income taxes		202		280		518		158		187		153
Equity income of unconsolidated subsidiaries and affiliates		20		68		110		21		18		15
Results from intersegment investments		368		362		343		—		2		(1	)
Net income	$	248	$	708	$	828	$	368	$	364	$	342

	Balance Sheets
	Industrial Activities				Financial Services
	2015		2014		2015		2014
	(in millions, except share data)
ASSETS
Cash and cash equivalents	$	4,551	$	4,122	$	833	$	1,041
Restricted cash		15		1		912		977
Trade receivables		555		1,025		52		92
Financing receivables		2,162		4,767		19,974		22,717
Inventories, net		5,513		6,845		177		163
Property, plant and equipment, net		6,479		6,862		2		3
Investments in unconsolidated subsidiaries and affiliates		2,846		3,063		136		136
Equipment under operating leases		10		20		1,825		1,498
Goodwill		2,295		2,324		152		160
Other intangible assets, net		793		828		17		22
Deferred tax assets		1,087		1,508		163		239
Derivative assets		205		198		6		9
Other assets		1,303		1,502		527		781
TOTAL ASSETS	$	27,814	$	33,065	$	24,776	$	27,838
LIABILITIES AND EQUITY
Debt	$	8,304	$	11,520	$	21,219	$	24,086
Trade payables		5,176		5,850		197		197
Deferred tax liabilities		60		202		274		250
Pension, postretirement and other postemployment benefits		2,263		2,594		19		20
Derivative liability		62		221		7		16
Other liabilities		7,088		7,701		605		675
TOTAL LIABILITIES	$	22,953	$	28,088	$	22,321	$	25,244
Equity		4,843		4,961		2,455		2,594
Redeemable noncontrolling interest		18		16		—		—
TOTAL EQUITY AND LIABILITIES	$	27,814	$	33,065	$	24,776	$	27,838

	Cash Flow Statements
	Industrial Activities									Financial Services
	2015			2014			2013			2015			2014			2013
	(in millions)
Operating activities:
Net income	$	248		$	708		$	828		$	368		$	364		$	342
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization expense, net of assets under operating lease and assets sold under buy-back commitments		694			725			686			5			6			4
Depreciation and amortization expense of assets under operating lease and assets sold under buy-back commitments		238			257			286			209			152			127
Loss (gain) from disposal of assets		(2	)		(1	)		25			—			9			—
Undistributed income of unconsolidated subsidiaries		(104	)		(181	)		(108	)		(17	)		(20	)		(8	)
Other non-cash items		213			101			72			118			153			124
Changes in operating assets and liabilities:
Provisions		(61	)		110			104			13			11			3
Deferred income taxes		59			(110	)		(62	)		60			71			3
Trade and financing receivables related to sales, net		354			285			306			(50	)		(1,101	)		(943	)
Inventories, net		507			(187	)		(1,225	)		(34	)		15			20
Trade payables		(162	)		(790	)		903			4			(66	)		39
Other assets and liabilities		114			(104	)		395			214			434			(129	)
Net cash provided (used) by operating activities		2,098			813			2,210			890			28			(418	)
Investing activities:
Additions to retail receivables		—			—			—			(4,498	)		(6,467	)		(7,511	)
Collections of retail receivables		—			—			—			5,146			6,506			6,043
Proceeds from sale of assets, net of assets sold under operating leases and assets sold under buy-back commitments		11			25			7			—			—			—
Proceeds from sale of assets under operating leases and assets sold under buy-back commitments		320			319			194			406			258			272
Expenditures for property, plant and equipment and intangible assets, net of assets under operating lease and sold under buy-back commitments		(653	)		(1,005	)		(1,220	)		(3	)		(17	)		(7	)
Expenditures for assets under operating lease and assets sold under buy-back commitments		(875	)		(797	)		(805	)		(976	)		(1,017	)		(634	)
Other		2,164			498			525			(2,016	)		(275	)		(663	)
Net cash provided (used) by investing activities		967			(960	)		(1,299	)		(1,941	)		(1,012	)		(2,500	)
Financing activities:
Proceeds from long-term debt		650			3,356			1,339			9,277			14,021			11,125
Payments of long-term debt		(2,483	)		(2,145	)		(2,049	)		(8,185	)		(13,178	)		(7,939	)
Net increase (decrease) in other financial liabilities		36			(198	)		265			48			(127	)		249
Dividends paid		(297	)		(382	)		(368	)		(207	)		(160	)		(270	)
Other		23			18			(6	)		43			13			11
Net cash provided (used) by financing activities		(2,071	)		649			(819	)		976			569			3,176
Effect of foreign exchange rate changes on cash and cash equivalents		(565	)		(390	)		28			(133	)		(101	)		(10	)
Increase (decrease) in cash and cash equivalents		429			112			120			(208	)		(516	)		248
Cash and cash equivalents, beginning of year		4,122			4,010			3,890			1,041			1,557			1,309
Cash and cash equivalents, end of year	$	4,551		$	4,122		$	4,010		$	833		$	1,041		$	1,557