The operating segments through which the Company manages its operations are based on the internal reporting used by the Company’s Chief Operating Decision Maker (“CODM”) to assess performance and make decisions about resource allocation. The segments are organized based on products and services provided by the Company.

Agriculture designs, manufactures and distributes a full line of farm machinery and implements, including two-wheel and four-wheel drive tractors, crawler tractors (Quadtrac®), combines, cotton pickers, grape and sugar cane harvesters, hay and forage equipment, planting and seeding equipment, soil preparation and cultivation implements and material handling equipment. Agricultural equipment is sold under the New Holland Agriculture and Case IH brands, as well as the STEYR, Kongskilde, Överum, and JF brands in Europe and the Miller brand, primarily in North America and Australia.

Construction designs, manufactures and distributes a full line of construction equipment including excavators, crawler dozers, graders, wheel loaders, backhoe loaders, skid steer loaders, compact track loaders, and telehandlers. Construction equipment is sold under the CASE Construction Equipment and New Holland Construction brands.

Commercial and Specialty Vehicles designs, manufactures and distributes a full range of light, medium, and heavy vehicles for the transportation and distribution of goods under the IVECO brand, commuter buses and touring coaches under the IVECO BUS (previously Iveco Irisbus) and Heuliez Bus brands, quarry and mining equipment under the IVECO ASTRA brand, firefighting vehicles under the Magirus brand, and vehicles for civil defense and peace-keeping missions under the Iveco Defence Vehicles brand.

Financial Services offers a range of financial services to dealers and customers. Financial Services provides and administers retail financing to customers for the purchase or lease of new and used industrial equipment or vehicles and other equipment sold by CNH Industrial dealers. In addition, Financial Services provides wholesale financing to CNH Industrial dealers. Wholesale financing consists primarily of floor plan financing and allows the dealers to purchase and maintain a representative inventory of products. Financial Services also provides trade receivables factoring services to CNH Industrial companies.

Revenues for each reported segment are those directly generated by or attributable to the segment as a result of its business activities and include revenues from transactions with third parties as well as those deriving from transactions with other segments, recognized at normal market prices. Segment expenses represent expenses deriving from each segment’s business activities both with third parties and other operating segments or which may otherwise be directly attributable to it. Expenses deriving from business activities with other segments are recognized at normal market prices.

The CODM assesses segment performance and makes decisions about resource allocation based upon Adjusted EBIT and Adjusted EBITDA. The Company believes Adjusted EBIT and Adjusted EBITDA more fully reflect segment and consolidated profitability. Adjusted

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

Adjusted EBITDA is defined as Adjusted EBIT plus depreciation and amortization (including on assets under operating leases and assets sold under buy-back commitments). With reference to Financial Services, the CODM assesses the performance of the segment on the basis of net income prepared in accordance with U.S. GAAP.

The following tables summarize selected financial information by segment as well as the reconciliation from consolidated net income (loss) under U.S. GAAP to Adjusted EBIT and Adjusted EBITDA for the three and nine months ended September 30, 2019 and 2018.



	Three Months Ended September 30, 2019
	Agriculture		Construction		Commercial and Specialty Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities			Financial Services		Eliminations			Total
	(in millions)
Revenues	$	2,446	$	664	$	2,331	$	940	$	(489	)	$	5,892		$	487	$	(19	)	$	6,360
Net income⁽¹⁾												561			82		—			643
Add back:
Income tax expense												(520		)	34		—			(486		)
Interest expense of Industrial Activities, net of interest income and eliminations												62			—		—			62
Foreign exchange losses, net												19			—		—			19
Finance and non-service component of Pension and OPEB costs⁽²⁾												(16		)	—		—			(16		)
Adjustments:
Restructuring expenses	9		18		9		5		—			41			1		—			42
Other discrete items⁽³⁾	—		—		135		—		2			137			—		—			137
Adjusted EBIT	$	152	$	10	$	70	$	81	$	(29	)	$	284		$	117	$	—		$	401
Depreciation and amortization	69		13		49		29		2			162			—		—			162
Depreciation of assets on operating lease and assets sold with buy-back commitment	—		—		77		—		—			77			60		—			137
Adjusted EBITDA	$	221	$	23	$	196	$	110	$	(27	)	$	523		$	177	$	—		$	700



	Nine Months Ended September 30, 2019
	Agriculture		Construction		Commercial and Specialty Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities			Financial Services		Eliminations			Total
	(in millions)
Revenues	$	8,031	$	2,061	$	7,443	$	3,109	$	(1,678	)	$	18,966		$	1,480	$	(62	)	$	20,384
Net income⁽¹⁾												1,066			268		—			1,334
Add back:
Income tax expense												(362		)	101		—			(261		)
Interest expense of Industrial Activities, net of interest income and eliminations												181			—		—			181
Foreign exchange losses, net												39			—		—			39
Finance and non-service component of Pension and OPEB costs⁽²⁾												(47		)	—		—			(47		)
Adjustments:
Restructuring expenses	27		22		20		5		1			75			3		—			78
Other discrete items⁽³⁾	—		—		135		—		2			137			—		—			137
Adjusted EBIT	$	661	$	48	$	221	$	279	$	(120	)	$	1,089		$	372	$	—		$	1,461
Depreciation and amortization	213		42		143		92		2			492			2		—			494
Depreciation of assets on operating lease and assets sold with buy-back commitment	—		—		235		—		—			235			184		—			419
Adjusted EBITDA	$	874	$	90	$	599	$	371	$	(118	)	$	1,816		$	558	$	—		$	2,374



	Three Months Ended September 30, 2018
	Agriculture		Construction		Commercial and Specialty Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities			Financial Services		Eliminations			Total
	(in millions)
Revenues	$	2,636	$	726	$	2,404	$	972	$	(493	)	$	6,245		$	469	$	(28	)	$	6,686
Net income⁽¹⁾												139			92		—			231
Add back:
Income tax expense												100			31		—			131
Interest expense of Industrial Activities, net of interest income and eliminations												79			—		—			79
Foreign exchange losses, net												12			—		—			12
Finance and non-service component of Pension and OPEB costs⁽²⁾												(17		)	—		—			(17		)
Adjustments:
Restructuring expenses	3		—		5		—		—			8			—		—			8
Adjusted EBIT	$	196	$	26	$	68	$	82	$	(51	)	$	321		$	123	$	—		$	444
Depreciation and amortization	75		15		53		31		—			174			—		—			174
Depreciation of assets on operating lease and assets sold with buy-back commitment	1		—		95		—		—			96			59		—			155
Adjusted EBITDA	$	272	$	41	$	216	$	113	$	(51	)	$	591		$	182	$	—		$	773



	Nine Months Ended September 30, 2018
	Agriculture		Construction		Commercial and Specialty Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities			Financial Services		Eliminations			Total
	(in millions)
Revenues	$	8,527	$	2,207	$	7,788	$	3,376	$	(1,774	)	$	20,124		$	1,469	$	(89	)	$	21,504
Net income⁽¹⁾												544			297		—			841
Add back:
Income tax expense												202			110		—			312
Interest expense of Industrial Activities, net of interest income and eliminations												260			—		—			260
Foreign exchange losses, net												134			—		—			134
Finance and non-service component of Pension and OPEB costs⁽²⁾												(3		)	—		—			(3		)
Adjustments:
Restructuring expenses	4		—		11		1		—			16			—		—			16
Adjusted EBIT	$	778	$	59	$	209	$	285	$	(178	)	$	1,153		$	407	$	—		$	1,560
Depreciation and amortization	229		46		161		98		1			535			3		—			538
Depreciation of assets on operating lease and assets sold with buy-back commitment	2		—		291		—		—			293			185		—			478
Adjusted EBITDA	$	1,009	$	105	$	661	$	383	$	(177	)	$	1,981		$	595	$	—		$	2,576