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Employee Benefit Plans and Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2015

Defined Benefit Pension, Healthcare and Other Plans

The following summarizes data from CNH Industrial’s defined benefit pension, healthcare and other postemployment plans for the years ended December 31, 2015 and 2014:

	Pension						Healthcare ˡ						Other ˡ
	2015			2014			2015			2014			2015			2014
	(in millions)
Change in benefit obligations:
Beginning benefit obligation	$	3,619		$	3,441		$	1,243		$	1,117		$	526		$	565
Service cost		30			27			8			9			15			18
Interest cost		112			134			48			51			5			10
Plan participants’ contributions		3			3			9			8			—			—
Actuarial (gain) loss		(159	)		442			(64	)		150			(37	)		58
Gross benefits paid		(190	)		(233	)		(80	)		(78	)		(45	)		(40	)
Plan amendments		—			1			—			(12	)		—			(24	)
Currency translation adjustments and other		(134	)		(196	)		(7	)		(2	)		(41	)		(61	)
Ending benefit obligation		3,281			3,619			1,157			1,243			423			526
Change in the fair value of plan assets:
Beginning plan assets		2,686			2,665			107			98			—			—
Actual return on plan assets		(9	)		288			—			11			—			—
Employer contributions		27			28			—			—			—			—
Plan participants’ contributions		3			3			—			—			—			—
Gross benefits paid		(161	)		(199	)		(2	)		(2	)		—			—
Currency translation adjustments and other		(66	)		(99	)		—			—			—			—
Ending plan assets		2,480			2,686			105			107			—			—
Funded status:	$	(801	)	$	(933	)	$	(1,052	)	$	(1,136	)	$	(423	)	$	(526	)

ˡ The healthcare and other postemployment plans are not required to be prefunded.

Defined Benefit Pension Plans by Geographical Area

The following summarizes data from CNH Industrial’s defined benefit pension plans by significant geographical area for the years ended December 31, 2015 and 2014:

	U.S.						U.K						Germanyˡ						Other Countriesˡ
	2015			2014			2015			2014			2015			2014			2015			2014
	(in millions)
Change in benefit obligations:
Beginning benefit obligation	$	1,291		$	1,223		$	1,468		$	1,360		$	523		$	537		$	337		$	321
Service cost		6			5			7			5			4			4			13			13
Interest cost		48			55			50			56			8			14			6			9
Plan participants’ contributions		—			—			—			—			—			—			3			3
Actuarial (gain) loss		(54	)		128			(74	)		199			(16	)		71			(15	)		44
Gross benefits paid		(83	)		(120	)		(64	)		(62	)		(29	)		(34	)		(14	)		(17	)
Plan amendments		—			—			—			—			—			—			—			1
Currency translation adjustments and other		—			—			(55	)		(90	)		(52	)		(69	)		(27	)		(37	)
Ending benefit obligation		1,208			1,291			1,332			1,468			438			523			303			337
Change in the fair value of plan assets:
Beginning plan assets		1,295			1,269			1,105			1,099			5			6			281			291
Actual return on plan assets		(30	)		146			13			119			—			—			8			23
Employer contributions		—			—			17			17			—			—			10			11
Plan participants’ contributions		—			—			—			—			—			—			3			3
Gross benefits paid		(83	)		(120	)		(64	)		(62	)		—			—			(14	)		(17	)
Currency translation adjustments and other		—			—			(43	)		(68	)		—			(1	)		(23	)		(30	)
Ending plan assets		1,182			1,295			1,028			1,105			5			5			265			281
Funded status:	$	(26	)	$	4		$	(304	)	$	(363	)	$	(433	)	$	(518	)	$	(38	)	$	(56	)

Net Amounts Recognized in Consolidated Balance Sheets

Net amounts recognized in the consolidated balance sheets as of December 31, 2015 and 2014 consist of:

	Pension						Healthcare						Other
	2015			2014			2015			2014			2015			2014
	(in millions)
Other assets	$	6		$	19		$	—		$	—		$	—		$	—
Pension, postretirement and other postemployment benefits		(807	)		(952	)		(1,052	)		(1,136	)		(423	)		(526	)
Net liability recognized at end of year	$	(801	)	$	(933	)	$	(1,052	)	$	(1,136	)	$	(423	)	$	(526	)

Pre-tax Amounts Recognized in Accumulated Other Comprehensive Income (Loss)

Pre-tax amounts recognized in accumulated other comprehensive loss as of December 31, 2015 consist of:

	Pension			Healthcare			Other
	(in millions)
Unrecognized actuarial losses	$	970		$	195		$	66
Unrecognized prior service credit		(3	)		(10	)		(4	)
Accumulated other comprehensive loss	$	967		$	185		$	62

Accumulated Benefit Obligations in Excess of Plan Assets

The following table summarizes the aggregate pension accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets:

	Pension
	2015		2014
	(in millions)
Accumulated benefit obligation	$	3,182	$	2,103
Fair value of plan assets	$	2,404	$	1,191

Projected Benefit Obligations in Excess of Plan Assets

The following table summarizes CNH Industrial’s pension and other postemployment plans with projected benefit obligations in excess of plan assets:

	Pension				Healthcare				Other
	2015		2014		2015		2014		2015		2014
	(in millions)
Projected benefit obligation	$	3,211	$	2,149	$	1,157	$	1,243	$	423	$	526
Fair value of plan assets	$	2,404	$	1,191	$	105	$	107	$	—	$	—

Net Periodic Benefit Cost

The following summarizes the components of net periodic benefit cost of CNH Industrial’s defined benefit for the years ended December 31, 2015, 2014, and 2014:

	Pension									Healthcare									Other
	2015			2014			2013			2015			2014			2013			2015			2014		2013
	(in millions)
Service cost	$	30		$	27		$	27		$	8		$	9		$	9		$	15		$	18	$	16
Interest cost		112			134			126			48			51			45			5			10		12
Expected return on assets		(140	)		(151	)		(166	)		(7	)		(7	)		(7	)		—			—		—
Amortization of:
Prior service cost (credit)		—			1			2			(10	)		(12	)		(12	)		1			2		1
Actuarial loss (gain)		83			64			78			26			5			22			(7	)		13		(5	)
Settlement loss and other		—			—			1			—			—			—			—			1		1
Net periodic benefit cost	$	85		$	75		$	68		$	65		$	46		$	57		$	14		$	44	$	25

Net Periodic Benefit Cost Recognized in Net Income and Other Changes in Plan Assets and Benefit Obligation

Net periodic benefit cost recognized in net income and other changes in plan assets and benefit obligations that are recognized in other comprehensive loss during 2015 consist of:

	Pension			Healthcare			Other
	(in millions)
Net periodic benefit cost	$	85		$	65		$	14
Benefit adjustments included in other comprehensive (income) loss:
Net actuarial gains		(10	)		(57	)		(37	)
Amortization of actuarial gains (losses)		(83	)		(26	)		7
Amortization of prior service (cost) credit		—			10			(1	)
Currency translation adjustments and other		(38	)		(1	)		(9	)
Total recognized in other comprehensive loss		(131	)		(74	)		(40	)
Total recognized in comprehensive loss	$	(46	)	$	(9	)	$	(26	)

Pre-tax Amounts Expected to be Amortized from Accumulated Other Comprehensive Income (Loss)

Pre-tax amounts expected to be amortized in 2016 from accumulated other comprehensive loss consist of:

	Pension			Healthcare			Other
	(in millions)
Actuarial losses	$	(79	)	$	(15	)	$	—
Prior service (cost) credit		—			4			(1	)
Total	$	(79	)	$	(11	)	$	(1	)

Assumptions Utilized in Determining the Funded Status and Net Periodic Cost of Defined Benefit Pension Plans and Other Postretirement Benefit Plans

The following assumptions were utilized in determining the funded status as at December 31, 2015 and 2014, and the net periodic benefit cost of CNH Industrial’s defined benefit plans for the years ended December 31, 2015, 2014, and 2013:

	Pension plans						Healthcare plans						Other
(in %)	2015		2014		2013		2015		2014		2013		2015		2014		2013
Assumptions used to determine funded status at December 31
Weighted-average discount rates		3.49		3.22	n/a			4.27		3.96	n/a			2.06		1.81	n/a
Weighted-average rate of compensation increase		2.98		3.25	n/a			2.50		3.00	n/a			1.33		2.27	n/a
Weighted-average, initial healthcare cost trend rate	n/a		n/a		n/a			6.98		7.23	n/a		n/a		n/a		n/a
Weighted-average, ultimate healthcare cost trend rate(*)	n/a		n/a		n/a			5.00		5.00	n/a		n/a		n/a		n/a
Assumptions used to determine expense for the years ended December 31
Weighted-average discount rates		3.22		4.05		3.75		3.96		4.67		3.79		1.81		3.00		3.27
Weighted-average rate of compensation increase		3.25		3.35		2.99		3.00		3.42		3.42		2.27		2.63		2.75
Weighted-average long-term rates of return on plan assets		5.38		5.85		5.95		6.75		6.75		7.00	n/a		n/a		n/a
Weighted-average, initial healthcare cost trend rate	n/a		n/a		n/a			7.23		8.19		7.04	n/a		n/a		n/a
Weighted-average, ultimate healthcare cost trend rate(*)	n/a		n/a		n/a			5.00		5.00		5.00	n/a		n/a		n/a

*	CNH Industrial expects to achieve the ultimate healthcare cost trend rate in 2024 and 2018 for U.S. and Canada plans, respectively.

Effect of One Percentage Point Change in Assumed Healthcare Cost Trend Rates

A one percentage point change in the assumed healthcare cost trend rates would have the following effect:

	One Percentage- Point Increase		One Percentage- Point Decrease
	(in millions)
Total increase/(decrease) in service cost and interest cost components of 2015 Healthcare Plan benefit expense	$	8	$	(7	)
Total increase/(decrease) in accumulated Healthcare benefit obligations as of December 31, 2015	$	149	$	(121	)

Weighted Average Target Asset Allocation for All Plans

Weighted average target asset allocation for all plans for 2015 are as follows:

	All Plans
Asset category:
Equity securities		22	%
Debt securities		67	%
Cash/Other		11	%

Summary of Fair Value of Plan Assets by Asset Category and Level Within Fair Value Hierarchy

The following summarizes the fair value of plan assets by asset category and level within the fair value hierarchy as of December 31, 2015:

	Total		Level 1		Level 2		Level 3
	(in millions)
Equity securities:
U.S. equities—large cap	$	53	$	15	$	38	$	—
U.S. equities—mid cap		—		—		—		—
U.S. equities—small cap		—		—		—		—
Non-U.S. equities		289		—		289		—
Total Equity securities		342		15		327		—
Fixed income securities:
U.S. government bonds		305		302		3		—
U.S. corporate bonds		504		—		504		—
Non-U.S. government bonds		611		17		594		—
Non-U.S. corporate bonds		112		—		112		—
Mortgage backed securities		1		—		1		—
Other fixed income		12		—		12		—
Total Fixed income securities		1,545		319		1,226		—
Other types of investments:
Mutual funds (A)		537		—		537		—
Insurance contracts		133		—		—		133
Derivatives—credit contracts		—		—		—		—
Real estate		—		—		—		—
Other (B)		8		—		8		—
Total Other types of investments		678		—		545		133
Cash:		20		1		19		—
Total	$	2,585	$	335	$	2,117	$	133

(A)

This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds.

(B)

This category includes primarily commingled funds, which invest in both U.S. and non-U.S. equity securities.

The following summarizes the fair value of plan assets by asset category and level within the fair value hierarchy as of December 31, 2014:

	Total		Level 1		Level 2		Level 3
	(in millions)
Equity securities:
U.S. equities—large cap	$	—	$	—	$	—	$	—
U.S. equities—mid cap		—		—		—		—
U.S. equities—small cap		—		—		—		—
Non-U.S. equities—large cap		15		15		—		—
Total Equity securities		15		15		—		—
Fixed income securities:
U.S. government bonds		346		336		10		—
U.S. corporate bonds		534		—		534		—
Non-U.S. government bonds		682		17		665		—
Non-U.S. corporate bonds		116		—		116		—
Mortgage backed securities		1		—		1		—
Other fixed income		31		—		31		—
Total Fixed income securities		1,710		353		1,357		—
Other types of investments:
Mutual funds(A)		556		—		556		—
Insurance contracts		125		—		—		125
Derivatives—credit contracts		4		4		—		—
Real estate		—		—		—		—
Other (B)		350		—		350		—
Total Other types of investments		1,035		4		906		125
Cash:		33		—		33		—
Total	$	2,793	$	372	$	2,296	$	125

(A)	This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds.

(B)	This category includes primarily commingled funds, which invest in both U.S. and non-U.S. equity securities.

Changes in Level 3 Plan Assets

The following table presents the changes in the Level 3 plan assets for the year ended December 31, 2015:

	Insurance Contracts
Balance at December 31, 2014	$	125
Actual return on plan assets relating to assets still held at reporting date		2
Purchases		7
Settlements		(6	)
Transfers in and/or out of level 3		6
Currency impact		(1	)
Balance at December 31, 2015	$	133

The following table presents the changes in the Level 3 plan assets for the year ended December 31, 2014:

	Insurance Contracts
Balance at December 31, 2013	$	33
Actual return on plan assets relating to assets still held at reporting date		6
Purchases		105
Settlements		(3	)
Currency impact		(16	)
Balance at December 31, 2014	$	125

The benefit expected to be paid from the benefit plans, which reflect expected future years of service, and the Medicare subsidy expected to be received are as follows:

	Pension Plans		Healthcare		Medicare Part D Reimbursement			Other
	(in millions)
2016	$	189	$	74	$	(1	)	$	30
2017		189		72		—			30
2018		188		71		—			35
2019		189		71		—			33
2020		193		70		—			35
2021 - 2025		964		341		(2	)		146
Total	$	1,912	$	699	$	(3	)	$	309