Adoption of New Revenue Recognition Standard (ASC 606), New Retirement Benefits Accounting (ASU 2017-07), and Other
Financial Presentation Changes
April 2018
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
2Safe Harbor Statement and Disclosures
All statements other than statements of historical fact contained in this presentation including statements regarding our 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, 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 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 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 many interrelated
factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products; general economic conditions in each of our markets; changes in
government policies regarding banking, monetary and fiscal policies; legislation, particularly relating 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;
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; a decline in the price of 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; political and civil unrest;
volatility and deterioration of capital and financial markets, including possible effects of “Brexit”, terror attacks in Europe and elsewhere, 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, 2017, prepared in accordance with U.S. GAAP and in the Company’s EU Annual Report at December 31, 2017, prepared in
accordance with EU-IFRS. Investors should refer to and consider the incorporated information on risks, factors, and uncertainties in addition to the information presented here. Investors should
consider non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with U.S. GAAP. Reconciliations of non-GAAP measures to the
most directly comparable GAAP measure are presented in our earning releases, which are available in EDGAR on the SEC’s website at www.sec.gov and on our website at
www.cnhindustrial.com/en-us/investor_relations/financial_information.
Forward-looking statements are based upon assumptions relating to the factors described in this presentation, which are sometimes based upon estimates and data received from third parties.
Such estimates and data are often revised. Our actual results could differ materially from those anticipated in such forward-looking statements. Forward-looking statements speak only as of the
date on which such statements are made, and we undertake no obligation to update or revise publicly our forward-looking statements. 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.
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
3Agenda
1 Changes in Accounting Standards
2 2017 Recast Financials
3 Transition from Operating Profit to Adjusted EBIT and
Adjusted EBITDA
4 Appendix
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
Overview
▪ In Fiscal Year 2018, CNH Industrial will adopt for U.S. GAAP reporting updated FASB accounting standards for
revenue recognition (ASC 606) and retirement benefits accounting (ASU 2017-07)
▪ The new standards are not estimated to have a material impact on our financial results – specifically our consolidated
revenues, net income, earnings per share, and net industrial debt. However, they will have an impact on how we
present certain transactions like the interest compensation paid from Industrial Activities to Financial Services for the
“interest-free” period of dealer floor plan financing, as well as certain other services to customers
▪ We will adopt these new standards on a retrospective basis. Thus, starting with the first quarter of 2018 all current
periods, and historical financial information will be presented on a recast basis, when we report earnings
▪ Included with this presentation are preliminary and unaudited recast financial statements for Fiscal Year 2016 and
2017, including 2017 by quarter, to provide full comparability for the historical periods
▪ All amounts in this presentation are in millions of U.S. dollars, except percentages and per share figures, and are
prepared in accordance with U.S. GAAP, unless otherwise stated
4
Changes in Accounting
Standards
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
Changes in accounting standards | Summary1 6
Type of Change Category Summary of Impact
Revenue
Recognition (ASC 606)
Classification of Interest
compensation paid to
Financial Services
from Industrial Activities
• Reclassification of interest compensation paid to Financial Services from Industrial Activities for the
“interest-free” period of dealer floor plan financing
• Prior treatment was as Industrial Activities interest expense; new treatment will be as a reduction
of Industrial Activities net sales and operating profit
• In the consolidated Statement of Operations, no change will result to total revenues and total
operating profit, as the transactions between Industrial Activities and Financial Services are
eliminated
Revenue recognition of
certain services and certain
other incentives
• The adoption of the new Revenue Recognition standard requires that certain services and certain
other incentives provided by the Company to its customers be accounted for with a different
recognition timing for revenues and margin
• As a consequence, we estimated a reduction of net equity at January 1, 2016 (date of the first time
retrospective adoption of the new standard) of $122 million
• The impact on the Statement of Operations in subsequent years is not significant
Other
• The new Revenue Recognition standard will also result in changes in classification between net
revenues and expenses, and changes in classification for certain assets and liabilities. The
overall impact on total net revenues and expenses and on total assets and liabilities is not
significant
Retirement Benefit
Accounting (ASU 2017-07)
Reclassification of non-
service cost component
• Amendment requires the disaggregation of the service cost component from the other
components of net benefit cost
• The classification of these other components will be recognized outside of operating results
Additional disclosures on these changes can be found in our 2017 Annual Report on Form 20-F
2017 Recast Financials
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
82 2017 Consolidated Statement of Operations Recast
(1) Finance and Interest Income also includes Financial Services Rental fees on operating lease contracts, as well as Proceeds from the sale of used equipment at the end of operating lease
As Reported
Total impact of
New Revenue
Recognition Standard
Impact of
New Retirement
Benefits Accounting
As Recast
Revenues
Net Sales 26,168 (399) - 25,769
Finance and Interest Income (1) 1,193 739 - 1,932
Total Revenues 27,361 340 - 27,701
Costs and Expenses
Cost of goods sold 21,621 (40) (9) 21,572
Selling, general and administrative expenses 2,330 - (15) 2,315
Research and Development expenses 957 - - 957
Restructuring expenses 93 - - 93
Interest expense 942 (2) - 940
Other, net 738 403 24 1,165
Total Costs and Expenses 26,681 361 - 27,042
Income (Loss) before income taxes and Equity in
income of unconsolidated subsidiaries and affiliates680 (21) - 659
Income tax (expense) (455) (2) - (457)
Equity in income of unconsolidated subsidiaries and
affiliates88 - - 88
Net Income (Loss) 313 (23) - 290
Net Income (Loss) attributable to Non Controlling interest 18 - - 18
Net Income (Loss) attributable to Controlling interest 295 (23) - 272
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
92 Summary of impacts on 2017 Segment Revenues and Results
As Reported
Total impact of
New Revenue
Recognition Standard
Impact of
New Retirement Benefits
Accounting
As Recast
Revenues by Segment
Agricultural Equipment 11,130 (447) - 10,683
Construction Equipment 2,626 (96) - 2,530
Commercial Vehicles 10,415 147 - 10,562
Powertrain 4,372 (3) - 4,369
Eliminations and Other (2,375) - - (2,375)
Net Sales of Industrial Activities 26,168 (399) - 25,769
Financial Services 1,625 403 2,028
Eliminations and Other (432) 336 (96)
Total Revenues 27,361 340 - 27,701
Operating Profit by Segment
Agricultural Equipment 949 (237) 16 728
Construction Equipment 21 (42) 5 (16)
Commercial Vehicles 272 (78) 3 197
Powertrain 362 (2) - 360
Eliminations and Other (85) - - (85)
Operating Profit of Industrial Activities 1,519 (359) 24 1,184
Financial Services 479 - - 479
Eliminations and Other (336) 336 - -
Total Operating Profit 1,662 (23) 24 1,663
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
102 Interest Compensation Walk
($mn)
In 2018 Company expects to improve Interest Compensation by ~$90mn-$130mn
(210) to (250)
~90 to ~130
70 to 90
20 to 40
(5) to (10)
(338)
2017 Floorplan Days Interest Spread FX & Base Rate Risk 2018E
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
112 Recast of Statement of Financial Position at December 31, 2017
As ReportedAdjustments and
reclassificationsAs Recast
ASSETS
Cash and cash equivalents 5,430 - 5,430
Restricted cash 770 - 770
Trade receivables, net 496 - 496
Financing receivables, net 19,842 (47) 19,795
Inventories, net 6,280 172 6,452
Property, plant and equipment, net 7,003 (172) 6,831
Investments in unconsolidated subsidiaries and affiliates 561 - 561
Equipment under operating leases 1,845 - 1,845
Goodwill 2,472 - 2,472
Other intangible assets, net 792 - 792
Deferred tax assets 818 34 852
Derivative assets 77 - 77
Contract assets (Current / non Current) - 54 54
Other assets 1,889 (18) 1,871
Total Assets 48,275 23 48,298
LIABILITIES & EQUITY
Debt 25,895 - 25,895
Trade payables 6,060 - 6,060
Deferred tax liabilities 97 (3) 94
Pension, postretirement and other postemployment benefits 2,300 - 2,300
Derivative liabilities 98 - 98
Contract liabilities (Current / non Current) - 609 609
Other liabilities 9,400 (415) 8,985
Total Liabilities 43,850 191 44,041
Total Equity (with Redeemable non controlling interest) 4,425 (168) 4,257
Total Liabilities and Equity 48,275 23 48,298
Transition from Operating Profit
to Adjusted EBIT and Adjusted
EBITDA
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
133 Adjusted EBIT and Adjusted EBITDA as Measures of Segment Results
▪ In connection with the change in accounting standards, the Company reviewed the metrics on which the operating
segments will be assessed
▪ Starting in 2018, the Chief Operating Decision Maker (CODM) will assess performance and make decisions about
resource allocation based upon Adjusted EBIT and Adjusted EBITDA
▪ There will be no change to how the segments are defined within CNH Industrial
▪ Using Adjusted EBITDA as one of the key metrics for segment profit has an added benefit for investors as it helps to
demonstrate the cash flow potential of the individual segments and their value within the overall portfolio
All figures presented in the following slides are recast following the adoption of the new accounting standards.
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
143 Reconciliation of Net Income to Adjusted EBIT and Adjusted EBITDA (under US GAAP)
2017 2016
Industrial
Activities
Financial
ServicesTotal
Industrial
Activities
Financial
ServicesTotal
Net Income (Loss) (1) (162) 452 290 (595) 334 (261)
Add back:
Interest expenses of Industrial Activities, net of interest income and eliminations 482 - 482 541 - 541
Foreign exchange (gains) losses, net 124 - 124 142 - 142
Finance and Non-service component of Pension and OPEB 102 - 102 107 - 107
Income tax expenses 415 42 457 136 161 297
Adjustments:
Restructuring expenses 90 3 93 43 1 44
Venezuelan re-measurement and impairment of assets, and 2017 year-end
deconsolidation of Venezuelan operations92 - 92 34 - 34
Chinese JVs restructuring - - - 9 - 9
European Commission settlement - - - 551 - 551
Adjusted EBIT 1,143 497 1,640 968 496 1,464
Depreciation and Amortization 720 5 725 710 6 716
D&A Operating Leasing and Buyback 328 297 625 284 261 545
Adjusted EBITDA 2,191 799 2,990 1,962 763 2,725
(1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments”
($mn)
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
153 Reconciliation of Net Income to Adjusted EBIT and Adjusted EBITDA by Segment (under US GAAP)
(1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments”
2017
AG CE CV PTUnallocated Items,
Elim. & Other
Industrial
Activities
Financial
ServicesTotal
Net Income (Loss) (1) (162) 452 290
Add back:
Interest expenses of Industrial Activities, net of
interest income and eliminations 482 - 482
Foreign exchange (gains) losses, net 124 - 124
Finance and non-service component of Pension
and OPEB102 - 102
Income tax expenses 415 42 457
Adjustments:
Restructuring expenses 14 4 69 3 - 90 3 93
Venezuelan re-measurement and impairment of
assets, and 2017 year-end deconsolidation of
Venezuelan operations
- - - - 92 92 - 92
Adjusted EBIT 791 (16) 195 360 (187) 1,143 497 1,640
Depreciation and Amortization 315 65 212 128 - 720 5 725
D&A Operating Leasing and Buyback - - 328 - - 328 297 625
Adjusted EBITDA 1,106 49 735 488 (187) 2,191 799 2,990
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
163 Reconciliation of Net Income to Adjusted EBIT and Adjusted EBITDA by Segment (under US GAAP)
(1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments”
2016
AG CE CV PTUnallocated Items,
Elim. & Other
Industrial
Activities
Financial
ServicesTotal
Net Income (Loss) (1) (595) 334 (261)
Add back:
Interest expenses of Industrial Activities, net of
interest income and eliminations 541 - 541
Foreign exchange (gains) losses, net 142 142
Finance and non-service component of Pension and
OPEB107 107
Income tax expenses 136 161 297
Adjustments:
Restructuring expenses 9 - 34 - - 43 1 44
Venezuelan re-measurement and impairment of
assets, and 2017 year-end deconsolidation of
Venezuelan operations
- - - - 34 34 - 34
Chinese JVs restructuring - - - - 9 9 - 9
European Commission settlement - - - - 551 551 - 551
Adjusted EBIT 642 (44) 279 233 (142) 968 496 1,464
Depreciation and Amortization 309 69 208 124 - 710 6 716
D&A Operating Leasing and Buyback - - 284 - - 284 261 545
Adjusted EBITDA 951 25 771 357 (142) 1,962 763 2,725
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
FY 2018E | US GAAP Financial Targets
(*) Outlook is not provided on diluted EPS, most comparable GAAP financial measure of this non-GAAP financial measure, as the income or expense excluded from the calculation of adjusted diluted EPS are, by definition, not predictable and uncertain
FY 2018E Guidance:
Net sales of Industrial Activities $27bn - $28bn
Adjusted diluted EPS (*) $0.63 - $0.67
Net industrial debt $0.8bn - $1.0bn
Guidance unchanged since January 30, 2018
173
Appendix
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
2017 Consolidated Statement of Operations Recast by quarter 194
Q1 2017
As Reported
Q1 2017
As Recast
Q2 2017
As Reported
Q2 2017
As Recast
Q3 2017
As Reported
Q3 2017
As Recast
Q4 2017
As Reported
Q4 2017
As Recast
Revenues
Net Sales 5,384 5,290 6,655 6,525 6,331 6,238 7,798 7,716
Finance and Interest Income (1) 297 495 293 478 299 451 304 508
Total Revenues 5,681 5,785 6,948 7,003 6,630 6,689 8,102 8,224
Costs and Expenses
Cost of goods sold 4,497 4,482 5,427 5,393 5,242 5,229 6,455 6,468
Selling, general and administrative
expenses542 539 575 571 559 555 654 650
Research and Development
expenses191 191 228 228 243 243 295 295
Restructuring expenses 12 12 12 12 53 53 16 16
Interest expense 219 219 234 233 259 258 230 230
Other, net 141 263 139 247 174 250 284 405
Total Costs and Expenses 5,602 5,706 6,615 6,684 6,530 6,588 7,934 8,064
Income (Loss) before income
taxes and Equity in income of
unconsolidated subsidiaries and
affiliates
79 79 333 319 100 101 168 160
Income tax (expense) (48) (51) (113) (110) (64) (62) (230) (234)
Equity in income of unconsolidated
subsidiaries and affiliates18 18 27 27 21 21 22 22
Net Income (Loss) 49 46 247 236 57 60 (40) (52)
Net Income (Loss) attributable to
Non Controlling interest3 3 5 5 4 4 6 6
Net Income (Loss) attributable to
Controlling interest46 43 242 231 53 56 (46) (58)
(1) Finance and Interest Income also includes Financial Services Rental fees on operating lease contracts, as well as Proceeds from the sale of used equipment at the end of operating lease
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
204 Summary of impacts on 2017 Segment Revenues and Results by Quarter
Q1 2017
As Reported
Q1 2017
As Recast
Q2 2017
As Reported
Q2 2017
As Recast
Q3 2017
As Reported
Q3 2017
As Recast
Q4 2017
As Reported
Q4 2017
As Recast
Revenues by Segment
Agricultural Equipment 2,346 2,240 2,893 2,766 2,651 2,547 3,240 3,130
Construction Equipment 523 502 676 650 642 618 785 760
Commercial Vehicles 2,091 2,125 2,575 2,598 2,537 2,573 3,212 3,266
Powertrain 1,002 1,001 1,136 1,136 1,075 1,074 1,159 1,158
Eliminations and Other (578) (578) (625) (625) (574) (574) (598) (598)
Net Sales of Industrial
Activities5,384 5,290 6,655 6,525 6,331 6,238 7,798 7,716
Financial Services 396 512 400 502 409 478 420 536
Eliminations and Other (99) (17) (107) (24) (110) (27) (116) (28)
Total Revenues 5,681 5,785 6,948 7,003 6,630 6,689 8,102 8,224
Operating Profit by Segment
Agricultural Equipment 159 104 303 242 208 158 279 224
Construction Equipment (22) (31) 17 7 13 2 13 6
Commercial Vehicles 28 16 91 71 59 44 94 66
Powertrain 74 74 98 97 88 88 102 101
Eliminations and Other (20) (20) (28) (28) (17) (17) (20) (20)
Operating Profit of
Industrial Activities219 143 481 389 351 275 468 377
Financial Services 120 120 125 125 120 120 114 114
Eliminations and Other (82) - (83) - (83) - (88) -
Total Operating Profit 257 263 523 514 388 395 494 491
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
2016 Consolidated Statement of Operations Recast 214
As Reported
Total impact of
New Revenue
Recognition Standard
Impact of
New Retirement
Benefits Accounting
As Recast
Revenues
Net Sales 23,669 (453) - 23,216
Finance and Interest Income (1) 1,203 676 - 1,879
Total Revenues 24,872 223 - 25,095
Costs and Expenses
Cost of goods sold 19,539 (108) (11) 19,420
Selling, general and administrative expenses 2,262 - (16) 2,246
Research and Development expenses 860 - - 860
Restructuring expenses 44 - - 44
Interest expense 1,028 (2) - 1,026
Other, net 1,148 346 27 1,521
Total Costs and Expenses 24,881 236 - 25,117
Income (Loss) before income taxes and Equity in
income of unconsolidated subsidiaries and affiliates(9) (13) - (22)
Income tax (expense) (298) 1 - (297)
Equity in income of unconsolidated subsidiaries and
affiliates58 - - 58
Net Income (Loss) (249) (12) - (261)
Net Income (Loss) attributable to Non Controlling interest 3 - - 3
Net Income (Loss) attributable to Controlling interest (252) (12) - (264)
(1) Finance and Interest Income also includes Financial Services Rental fees on operating lease contracts, as well as Proceeds from the sale of used equipment at the end of operating lease
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
Summary of impacts on 2016 Segment Revenues and Results 224
As Reported
Total impact of
New Revenue
Recognition Standard
Impact of
New Retirement Benefits
Accounting
As Recast
Revenues by Segment
Agricultural Equipment 10,120 (430) - 9,690
Construction Equipment 2,304 (98) - 2,206
Commercial Vehicles 9,553 75 - 9,628
Powertrain 3,707 - - 3,707
Eliminations and Other (2,015) - - (2,015)
Net Sales of Industrial Activities 23,669 (453) - 23,216
Financial Services 1,570 346 - 1,916
Eliminations and Other (367) 330 - (37)
Total Revenues 24,872 223 - 25,095
Operating Profit by Segment
Agricultural Equipment 818 (235) 12 595
Construction Equipment 2 (50) 4 (44)
Commercial Vehicles 333 (60) 10 283
Powertrain 232 - 1 233
Eliminations and Other (94) - - (94)
Operating Profit of Industrial Activities 1,291 (345) 27 973
Financial Services 478 - - 478
Eliminations and Other (330) 330 - -
Total Operating Profit 1,439 (15) 27 1,451
Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation ChangesApril 2018
234 Recast of Statement of Financial Position at December 31, 2016
As ReportedAdjustments and
reclassificationsAs Recast
ASSETS
Cash and cash equivalents 5,017 - 5,017
Restricted cash 837 - 837
Trade receivables, net 623 - 623
Financing receivables, net 18,662 (48) 18,614
Inventories, net 5,609 120 5,729
Property, plant and equipment, net 6,397 (123) 6,274
Investments in unconsolidated subsidiaries and affiliates 487 - 487
Equipment under operating leases 1,907 - 1,907
Goodwill 2,449 - 2,449
Other intangible assets, net 787 - 787
Deferred tax assets 937 34 971
Derivative assets 95 - 95
Contract assets (Current / non Current) - 39 39
Other assets 1,740 (14) 1,726
Total Assets 45,547 8 45,555
LIABILITIES & EQUITY
Debt 25,276 - 25,276
Trade payables 5,185 - 5,185
Deferred tax liabilities 84 (2) 82
Pension, postretirement and other postemployment benefits 2,276 - 2,276
Derivative liabilities 249 - 249
Contract liabilities (Current / non Current) - 485 485
Other liabilities 8,005 (344) 7,661
Total Liabilities 41,075 139 41,214
Total Equity (with Redeemable non controlling interest) 4,472 (131) 4,341
Total Liabilities and Equity 45,547 8 45,555
April 2018Adoption of New Revenue Recognition Standard, New Retirement Benefits Accounting, and Other Financial
Presentation Changes
Non-GAAP Financial Measures
CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial’s management believes that these non-GAAP financial measures provide useful and relevant information regarding itsresults and allow management and investors to assess CNH Industrial’s operating trends, financial performance and financial position without effects caused by differing capital structures. Management uses these non-GAAP measuresto 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-GAAPfinancial measures have no standardized meaning presented in U.S. GAAP or EUIFRS and are unlikely to be comparable to other similarly titled measures used by other companies due to potential differences between the companies incalculations. As a result, the use of these non-GAAP measures has limitations and should not be considered as substitutes for measures of financial performance and financial position prepared in accordance with U.S. GAAP and/or EU-IFRS.
CNH Industrial non-GAAP financial measures are defined as follows:
Operating Profit under U.S. GAAP: Operating Profit of Industrial Activities is defined as net sales less cost of goods sold, selling, general and administrative expenses, and research and development expenses. Operating Profit of Financial Services is defined as revenues less selling, general and administrative expenses, interest expenses and certain other operating expenses.
Adjusted EBIT: is defined as net income/(loss) before income taxes, interest expenses of Industrial Activities, net, restructuring charges, the finance and non-service component of pension and other post-employment benefits costs, foreign exchange gains/(losses), and certain exceptional items.
Adjusted EBITDA: is defined as Adjusted EBIT plus depreciation and amortization (including on assets under operating leases and assets sold under buy-back commitments)
Adjusted Net Income (Loss): is defined as net income (loss), less restructuring charges and exceptional items, after tax. In particular, exceptional 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 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 antidilutive. When we provide guidance for adjusted diluted EPS, we do not provide guidance on an earnings per share basis because the GAAP measure will include potentially significant items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end.
Adjusted Income Taxes: is defined as income taxes less the tax effect of restructuring expenses and exceptional items and exceptional tax charges.
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 exceptional items.
Net Debt and Net Debt of Industrial Activities (or Net Industrial Debt): Net Debt is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash 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.
Available Liquidity: is defined as cash and cash equivalents plus restricted cash and undrawn committed facilities.
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.
24
Corporate Presentation 2017
Investor Relations Team
e-mail: [email protected]
website: www.cnhindustrial.com
▪ Federico Donati – Head of Global Investor Relations +44 (207) 76 - 60386
+39 (011) 00 - 71929
▪ Noah Weiss – Investor Relations North America +1 (630) 887 - 3745