CNH Industrial third quarter revenues of $5.9 billion, operating profit of Industrial Activities of $245 million at a margin of 4.4%, net loss of $128 million including the exceptional charge of $150 million from the re-measurement of Venezuelan operations
LONDON, Oct. 29, 2015 /PRNewswire/ --
Financial results under U.S. GAAP(*) (**)
- Third quarter revenues totaled $5.9 billion, down 13% compared to Q3 2014 on a constant currency basis (down 24% on a reported basis). Net sales of Industrial Activities were $5.5 billion, down 13% compared to Q3 2014 on a constant currency basis (down 25% on a reported basis).
- Operating profit of Industrial Activities for the quarter was $245 million ($522 million in Q3 2014), with operating margin at 4.4% (7.1% in Q3 2014).
- Costs for research and development and selling, general and administrative expenses were $772 million in Q3 2015, down $218 million reflecting primarily the results from the Efficiency Program.
- Net income before restructuring and other exceptional items for the period was $38 million or $0.03 per share. Reported net loss was $128 million, or -$0.09 per share, after a $150 million exceptional charge due to the re-measurement of the Venezuelan operations to prevailing SIMADI exchange rates to the U.S. dollar.
- Net industrial debt was $3.4 billion at September 30, 2015 ($3.0 billion at June 30, 2015) including the impact of the Venezuelan re-measurement of $133 million on cash and cash equivalents. Available liquidity totaled $7.4 billion ($7.8 billion at June 30, 2015).
- Full year guidance updated as follows: net sales of Industrial Activities in the range of $25-26 billion, with operating margin of Industrial Activities between 5.6% and 6.0% and net industrial debt at the end of 2015 between $2.1 billion and $2.3 billion.
(*) |
CNH Industrial reports quarterly and annual consolidated financial results under U.S. GAAP and IFRS. The following tables and discussion related to the financial results of the Company and its segments are prepared in accordance with U.S. GAAP. Financial results under IFRS are shown in specific tables at the end of this press release. |
(**) |
Refer to the Non-GAAP Financial Information section of this press release for information regarding non-GAAP financial measures. |
CNH INDUSTRIAL Summary Income Statement ($ million) |
|||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||
18,768 |
24,190 |
-22.4% |
Revenues |
5,850 |
7,739 |
-24.4% |
|||
17 |
621 |
-604 |
Net income (loss) |
(128) |
162 |
-290 |
|||
212 |
773 |
-561 |
Net income before restructuring and other exceptional items (1) |
38 |
214 |
-176 |
|||
22 |
627 |
-605 |
Net income (loss) attributable to CNH Industrial N.V. |
(124) |
173 |
-297 |
|||
0.02 |
0.46 |
-0.44 |
Basic EPS ($) |
(0.09) |
0.13 |
-0.22 |
|||
0.02 |
0.46 |
-0.44 |
Diluted EPS ($) |
(0.09) |
0.13 |
-0.22 |
|||
0.16 |
0.57 |
-0.41 |
Basic EPS before restructuring and other exceptional items (1) ($) |
0.03 |
0.16 |
-0.13 |
|||
(1) This item is a non-GAAP measure. Refer to the Non-GAAP Financial Information section of this press release for information regarding non GAAP financial measures. |
|||||||||
CNH INDUSTRIAL Income Statement Data of Industrial Activities(1) ($ million) |
|||||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
||||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||||
17,808 |
23,180 |
-23.2% |
Net sales of Industrial Activities |
5,549 |
7,403 |
-25.0% |
|||||
869 |
1,612 |
-743 |
Operating profit of Industrial Activities (2) |
245 |
522 |
-277 |
|||||
4.9 |
7.0 |
-2.1 p.p. |
Operating margin of Industrial Activities (%) |
4.4 |
7.1 |
-2.7 p.p. |
|||||
(1) Industrial Activities represent the activities carried out by the four industrial segments Agricultural Equipment, Construction Equipment, Commercial Vehicles, and Powertrain, as well as Corporate functions. (2) Operating profit of Industrial Activities is a non-GAAP measure and is defined as net sales less cost of goods sold, selling, general and administrative expenses, and research and development expenses. |
|||||||||||
CNH Industrial N.V. (NYSE:CNHI / MI:CNHI) today announced consolidated revenues of $5,850 million for the third quarter of 2015, down 12.9% compared to Q3 2014 on a constant currency basis (down 24.4% on a reported basis). Net sales of Industrial Activities were $5,549 million in Q3 2015, down 13.3% compared to Q3 2014 on a constant currency basis (down 25.0% on a reported basis). Excluding the negative impact of currency translation, net sales increased for Commercial Vehicles (up 4.6%) confirming a positive trend in EMEA for trucks and buses. This increase was more than offset by the forecasted decline in Agricultural Equipment, driven by lower industry volumes in the row crop sector, primarily in NAFTA and LATAM, slightly offset by favorable net pricing in all regions. Net sales also decreased in Construction Equipment, due to continued negative industry volumes primarily in LATAM, and in Powertrain, due to lower sales to captive customers.
CNH INDUSTRIAL Revenues by Segment ($ million) |
||||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
|||||||||
2015 |
2014 |
% change |
2015 |
2014 |
% change |
|||||
8,043 |
11,801 |
-31.8 |
Agricultural Equipment |
2,431 |
3,659 |
-33.6 |
||||
1,933 |
2,546 |
-24.1 |
Construction Equipment |
591 |
841 |
-29.7 |
||||
6,696 |
7,534 |
-11.1 |
Commercial Vehicles |
2,189 |
2,522 |
-13.2 |
||||
2,648 |
3,476 |
-23.8 |
Powertrain |
800 |
1,025 |
-22.0 |
||||
(1,512) |
(2,177) |
- |
Eliminations and other |
(462) |
(644) |
- |
||||
17,808 |
23,180 |
-23.2 |
Total Industrial Activities |
5,549 |
7,403 |
-25.0 |
||||
1,226 |
1,363 |
-10.1 |
Financial Services |
390 |
455 |
-14.3 |
||||
(266) |
(353) |
- |
Eliminations and other |
(89) |
(119) |
- |
||||
18,768 |
24,190 |
-22.4 |
Total |
5,850 |
7,739 |
-24.4 |
||||
Operating profit of Industrial Activities was $245 million in Q3 2015, a $255 million decrease compared to Q3 2014 on a constant currency basis (down $277 million on a reported basis) with an operating margin for the third quarter of 4.4%, down 2.7 p.p. from Q3 2014. Operating profit declined in Agricultural Equipment, driven by negative volume and product mix, primarily in the NAFTA row crop sector. These negative factors were partially offset by net price realization, lower material costs and structural cost reductions. Commercial Vehicles' operating result improved due to favorable volume in EMEA, industrial efficiencies and a reduction in selling, general and administrative ("SG&A") expenses as a result of the Company's Efficiency Program. Construction Equipment's operating profit was substantially flat, as a result of cost containment actions and net price realization in NAFTA offset by the negative effect of lower volume in LATAM. Powertrain's operating profit decreased mainly due to lower volumes, primarily due to the decline of agricultural equipment demand, partially offset by manufacturing efficiencies.
CNH INDUSTRIAL |
||||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
|||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|||||
604 |
1,529 |
-925 |
Agricultural Equipment |
137 |
433 |
-296 |
||||
72 |
70 |
2 |
Construction Equipment |
37 |
39 |
-2 |
||||
128 |
(71) |
199 |
Commercial Vehicles |
60 |
20 |
40 |
||||
124 |
157 |
-33 |
Powertrain |
35 |
59 |
-24 |
||||
(59) |
(73) |
14 |
Eliminations and other |
(24) |
(29) |
5 |
||||
869 |
1,612 |
-743 |
Total Industrial Activities |
245 |
522 |
-277 |
||||
397 |
407 |
-10 |
Financial Services |
128 |
121 |
7 |
||||
(227) |
(255) |
28 |
Eliminations and other |
(85) |
(81) |
-4 |
||||
1,039 |
1,764 |
-725 |
Total |
288 |
562 |
-274 |
||||
(1) Operating profit of Industrial Activities (a non-GAAP measure) 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 (a non-GAAP measure) is defined as revenues less selling, general and administrative expenses, interest expense and certain other operating expenses. |
||||||||||
CNH INDUSTRIAL Reconciliation of Operating Profit to Net Income ($ million) |
||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
|||||||
2015 |
2014 |
2015 |
2014 |
|||||
1,039 |
1,764 |
Total Operating Profit |
288 |
562 |
||||
52 |
98 |
Restructuring expenses |
18 |
56 |
||||
341 |
449 |
Interest expenses of Industrial Activities, net of interest income and eliminations |
118 |
150 |
||||
(403) |
(254) |
Other, net |
(235) |
(97) |
||||
243 |
963 |
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates |
(83) |
259 |
||||
259 |
408 |
Income taxes |
56 |
107 |
||||
33 |
66 |
Equity in income of unconsolidated subsidiaries and affiliates |
11 |
10 |
||||
17 |
621 |
Net income (loss) |
(128) |
162 |
||||
Restructuring expenses totaled $18 million for the quarter, $38 million lower than Q3 2014, and mainly related to actions in Commercial Vehicles and Agricultural Equipment as part of the Company's Efficiency Program launched in 2014.
Interest expense, net totaled $118 million for the quarter, a decrease of $32 million or 21% compared to Q3 2014, primarily due to a more favorable cost of funding and a lower average indebtedness in the quarter.
Other, net was a charge of $235 million for the quarter, an increase of $138 million compared to Q3 2014 mainly as a result of the exceptional pre-tax charge of $150 million primarily due to the re-measurement of the net monetary assets of the Venezuelan subsidiary denominated in bolivar fuerte ("Bs.F") adopting the Marginal Foreign Exchange System ("SIMADI") rate of Bs.F 199.42 to the U.S. dollar, as opposed to the exchange rate Supplementary Foreign Currency Administration System ("SICAD") rate of Bs.F 12.8 to the U.S. dollar which the Company used at June 30, 2015. The SIMADI rate is considered more reflective of the current economic environment in Venezuela and future transactions at the SICAD rate appear highly unlikely.
Income taxes totaled $56 million in the quarter ($107 million in Q3 2014). Excluding the impact of the exceptional pre-tax charge relating to the re-measurement of the Venezuelan operations, for which no corresponding tax benefit has been booked, and the impact deriving from the inability to record deferred tax assets on losses in certain jurisdictions, primarily Italy and Brazil, the effective tax rate for the third quarter 2015 was 30%. The Company's effective tax rate for the full year is expected now to be in the range of 60% to 63%. The long-term effective tax rate target of between 34% to 36% range remains unchanged.
Equity in income of unconsolidated subsidiaries and affiliates totaled $11 million for the quarter ($10 million for Q3 2014).
Net income of Financial Services was $94 million for the quarter compared to $75 million for Q3 2014, primarily due to lower provisions for credit losses and reduced income taxes, partially offset by the negative impact of currency translation.
Net income before restructuring and other exceptional items was $38 million for the quarter ($214 million in Q3 2014) or $0.03 per share ($0.16 for Q3 2014). Consolidated net loss was $128 million for the quarter (compared to net income of $162 million for Q3 2014), or -$0.09 per share ($0.13 for Q3 2014), after the $150 million exceptional charge due to the re-measurement of the Venezuelan operations.
Net industrial debt was $3.4 billion at September 30, 2015 ($3.0 billion at June 30, 2015 and $2.7 billion at December 31, 2014). Excluding the impact from the Venezuelan re-measurement, net industrial cash flow was a net outflow of $0.5 billion in the third quarter, primarily attributable to an increase in working capital related to lower payables due to the production shutdown in the quarter. The impact on net industrial debt was partially offset by favorable foreign exchange translation impact on non U.S. dollar-denominated debt for $0.2 billion.
Available liquidity at September 30, 2015 was $7.4 billion, inclusive of $2.9 billion in undrawn committed facilities ($2.8 billion at June 30, 2015), compared to $7.8 billion at June 30, 2015. The decrease is mainly attributable to a reduction in bank debt and unfavorable foreign exchange impact partially offset by lower financing needs of Financial Services due to lower portfolio receivables.
Agricultural Equipment
AGRICULTURAL EQUIPMENT Net sales & Operating profit/(loss) ($ million) |
||||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
|||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|||||
8,043 |
11,801 |
-31.8% |
Net sales |
2,431 |
3,659 |
-33.6% |
||||
604 |
1,529 |
-925 |
Operating profit |
137 |
433 |
-296 |
||||
7.5 |
13.0 |
-5.5 p.p. |
Operating margin (%) |
5.6 |
11.8 |
-6.2 p.p. |
||||
Agricultural Equipment's net sales were $2,431 million for the quarter, down 25.1% compared to Q3 2014 on a constant currency basis (down 33.6% on a reported basis). The decrease was driven by the anticipated decline in industry volumes in the row crop sector, primarily in NAFTA and LATAM, slightly offset by favorable net pricing in all regions. The geographic distribution of net sales for the period was 39% NAFTA, 33% EMEA, 11% LATAM and 17% APAC.
The NAFTA row crop sector (primarily tractors over 140 horsepower ("hp") and combines) was down 37% year-over-year. The under 40 hp tractor segment in NAFTA was up 8%, and the 40-140 hp tractor segment was down 2%. EMEA markets were down 8% for tractors and up 8% for combines. In LATAM, tractor and combine markets decreased 34% and 37%, respectively. APAC markets decreased 15% for tractors but were up 20% for combines.
Agricultural Equipment's worldwide market share performance was flat for tractors in the quarter. Combine market share decreased in NAFTA and LATAM, was flat in EMEA and increased in APAC.
The Company was able to under-produce retail in the NAFTA row crop sector by 29% in Q3 2015 in the continued effort to balance channel inventory to prevailing demand conditions. Total worldwide unit production was down 24% year-over-year. The Company expects to significantly under-produce retail demand in the last quarter of the year.
Agricultural Equipment's operating profit was $137 million for the quarter ($433 million in Q3 2014), with an operating margin of 5.6% (11.8% in Q3 2014). The decrease was mainly due to lower sales volumes, less favorable product mix primarily in the NAFTA row crop sector, and the negative effect of the significant reduction in industrial capacity utilization. These effects were partially offset by net price realization, lower material costs and structural cost reductions.
Construction Equipment
CONSTRUCTION EQUIPMENT Net sales & Operating profit/(loss) ($ million) |
|||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||
1,933 |
2,546 |
-24.1% |
Net sales |
591 |
841 |
-29.7% |
|||
72 |
70 |
2 |
Operating profit |
37 |
39 |
-2 |
|||
3.7 |
2.7 |
1.0 p.p. |
Operating margin (%) |
6.3 |
4.6 |
1.7 p.p. |
|||
Construction Equipment's net sales were $591 million for the quarter, down 23.1% compared to Q3 2014 on a constant currency basis (down 29.7% on a reported basis), due to continued negative industry volumes, primarily in LATAM. The geographic distribution of net sales for the period was 55% NAFTA, 22% EMEA, 14% LATAM and 9% APAC.
In Q3 2015, Construction Equipment's worldwide heavy and light industry sales were down 17% and 7%, respectively. Industry light equipment sales were roughly flat in NAFTA and EMEA, and down in LATAM and APAC. Industry heavy equipment sales decreased in all regions, but primarily in LATAM and APAC.
Construction Equipment's worldwide market share was flat compared to the prior year period for both heavy and light construction equipment. Light equipment was down in NAFTA while flat to up in all other regions. Heavy equipment was flat in all regions except for LATAM, where municipality-driven demand declined as infrastructure investments, in which the Company has a significant position, slowed.
Construction Equipment's worldwide production levels were 4% above retail sales in the quarter, in-line with production seasonality. In LATAM, underproduction vs. retail was at 9% and production level was down 48% from Q3 2014. A similar production curtailment is expected for Q4 2015 in the region, as a result of poor demand conditions in the construction sector and an uncertain environment with BNDES PSI programs.
Construction Equipment reported operating profit of $37 million for the third quarter compared to $39 million for Q3 2014, as a result of cost containment actions and net price realization in NAFTA, offset by the negative effect of lower volume in LATAM. Operating margin increased 1.7 p.p. to 6.3%.
Commercial Vehicles
COMMERCIAL VEHICLES Net sales & Operating profit/(loss) ($ million) |
||||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
|||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|||||
6,696 |
7,534 |
-11.1% |
Net sales |
2,189 |
2,522 |
-13.2% |
||||
128 |
(71) |
199 |
Operating profit/(loss) |
60 |
20 |
40 |
||||
1.9 |
(0.9) |
2.8 p.p. |
Operating margin (%) |
2.7 |
0.8 |
1.9 p.p. |
||||
Commercial Vehicles' net sales were $2,189 million for the quarter, up 4.6% compared to Q3 2014 on a constant currency basis (down 13.2% on a reported basis), primarily as a result of favorable volume and product mix in EMEA. Excluding the negative impact of currency translation, net sales increased in EMEA driven by higher volumes for trucks, primarily in the light and heavy segments, and buses. In LATAM, net sales decreased significantly, mainly due to the decline of the Brazilian market for trucks, partially offset by positive pricing. In APAC, net sales were slightly up. The geographic distribution of net sales for the period was 80% EMEA, 12% LATAM and 8% APAC.
The European truck market (GVW ≥3.5 tons) was up 16% compared to Q3 2014. The light vehicle market (GVW 3.5-6.0 tons) increased 15%, the medium vehicle market (GVW 6.1-15.9 tons) increased 7% and the heavy vehicle market (GVW ≥16 tons) increased 21%. In LATAM, new truck registrations (GVW ≥3.5 tons) declined 38% compared to Q3 2014, with a decrease of 47% in Brazil and 5% in Venezuela, while Argentina increased by 21%. In APAC, registrations declined 9%.
In Q3 2015, the Company's market share in the European truck market (GVW ≥3.5 tons) was 11.4%, up 1.2 p.p. compared with Q3 2014. The Company's market share in LATAM was 11.8%, up 2.0 p.p. compared to Q3 2014.
Commercial Vehicles delivered approximately 33,500 vehicles (including buses and specialty vehicles) in the quarter, representing a 16% increase compared to Q3 2014. Volumes were higher in the light segment and heavy segment, up 15% and 24%, respectively, while volumes were substantially flat in the medium segment. Commercial Vehicles' deliveries increased 23% in EMEA, but decreased in APAC and LATAM by 6% and 5%, respectively.
Commercial Vehicles' Q3 2015 ending book-to-bill ratio was 0.89, a decrease of 6% over Q3 2014. Third quarter 2015 truck order intake in Europe increased 18% compared to Q3 2014.
Commercial Vehicles closed the third quarter with an operating profit of $60 million, up $40 million compared to Q3 2014, with an operating margin of 2.7% (0.8% in Q3 2014). The increase was mainly due to higher volume in EMEA, industrial efficiencies and SG&A expense reductions as a result of the Company's Efficiency Program. The increase in operating profit occurred primarily in EMEA, where European market strength and structural cost reductions were partially offset by the negative impact of currency translation. In LATAM, operating profit also improved, primarily as a result of improved demand in Argentina and structural cost reductions enacted in the Company's Brazilian operations, while the profit contribution of operations in Venezuela was immaterial following the re-measurement.
Powertrain
POWERTRAIN Net sales & Operating profit/(loss) ($ million) |
|||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||
2,648 |
3,476 |
-23.8% |
Net sales |
800 |
1,025 |
-22.0% |
|||
124 |
157 |
-33 |
Operating profit |
35 |
59 |
-24 |
|||
4.7 |
4.5 |
0.2 p.p. |
Operating margin (%) |
4.4 |
5.8 |
-1.4 p.p. |
|||
Powertrain's net sales were $800 million for the quarter, a decrease of 7.4% compared to Q3 2014 on a constant currency basis (down 22.0% on a reported basis), on lower volumes mainly in the captive portion of the business as a result of decreased agricultural equipment demand and the 2014 build-up of Tier 4 final transition engine inventory for the off-road segment. Sales to external customers accounted for 44% of total net sales (39% in Q3 2014).
During the quarter, Powertrain sold approximately 112,500 engines, a decrease of 16% compared to Q3 2014. By major customer, 31% of engine units were supplied to Commercial Vehicles, 11% to Agricultural Equipment, 4% to Construction Equipment and the remaining 54% to external customers (units sold to third parties were up 1.4% compared to Q3 2014). Additionally, Powertrain delivered approximately 14,600 transmissions and 43,600 axles, an increase of 3% and 16%, respectively, compared to Q3 2014.
Powertrain's operating profit was $35 million for the quarter, down $24 million compared to Q3 2014, with an operating margin of 4.4% (down 1.4 p.p. compared to Q3 2014), mainly due to lower sales volume and negative foreign exchange impacts, partially offset by manufacturing efficiencies.
Financial Services
FINANCIAL SERVICES Revenues & Net income ($ million) |
|||||||||
YTD (01.01 to 09.30) |
3rd Quarter |
||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||
1,226 |
1,363 |
-10.1% |
Revenues |
390 |
455 |
-14.3% |
|||
277 |
266 |
11 |
Net income |
94 |
75 |
19 |
|||
Financial Services' revenues were $390 million for the quarter, a decrease of 4.1% compared to Q3 2014 on a constant currency basis (down 14.3% on a reported basis) due to a reduction in interest yields, primarily driven by lower funding costs.
Financial Services' net income was $94 million, up $19 million compared to Q3 2014, mainly due to lower provisions for credit losses and reduced income taxes, partially offset by the negative impact of currency translation.
Retail loan originations in the quarter were $2.2 billion, down $0.6 billion compared to Q3 2014, due to the decline in Agricultural Equipment sales and the negative impact of currency translation. The managed portfolio (including unconsolidated joint ventures) of $24.5 billion as of September 30, 2015 (of which retail was 66% and wholesale 34%) was down $0.9 billion compared to June 30, 2015. Excluding the impact of currency translation, the portfolio decreased $0.2 billion, primarily in NAFTA (wholesale).
In September, CNH Industrial was confirmed as Industry Leader in the Dow Jones Sustainability Indices (DJSI) World and Europe. The Company was also named as leader in the Capital Goods Industry Group. The 2015 assessment resulted in a score of 91/100 for CNH Industrial, compared to an average of 52/100 for the participating companies in the Machinery and Electrical Equipment industry. All companies chosen for consideration in the indices are evaluated on their economic, environmental and social performance by RobecoSAM, investment specialists focused exclusively on Sustainability Investing.
2015 U.S. GAAP Guidance
The Company expects that continued demand weakness primarily in LATAM and ongoing strength of the U.S. dollar will have a negative impact on the revenue levels previously forecasted for the fourth quarter of 2015. Full year guidance is therefore updated as follows:
- Net sales of Industrial Activities in the range of $25-26 billion, the operating margin of Industrial Activities is unchanged at 5.6% and 6.0%;
- Net industrial debt at the end of 2015 between $2.1 billion and $2.3 billion.
Sergio Marchionne |
Richard Tobin |
Chairman |
Chief Executive Officer |
About CNH Industrial
CNH Industrial N.V. (NYSE: CNHI /MI: CNHI) is a global leader in the capital goods sector with established industrial experience, a wide range of products and a worldwide presence. Each of the Company's individual brands is a major international force in its specific industrial sector: Case IH, New Holland Agriculture and Steyr for tractors and agricultural machinery; Case and New Holland Construction for earth moving equipment; Iveco for commercial vehicles; Iveco Bus and Heuliez Bus for buses and coaches; Iveco Astra for quarry and construction vehicles; Magirus for firefighting vehicles; Iveco Defence Vehicles for defence and civil protection; and FPT Industrial for engines, transmissions and axles. More information can be found on the corporate website: www.cnhindustrial.com
Additional Information
Today, at 6:00 p.m. CET / 5:00 p.m. GMT / 1:00 p.m. EDT, management will hold a conference call to present 2015 third quarter and first nine months results to financial analysts and institutional investors. The call can be followed live online at: http://bit.ly/1Ozq3aP 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.
Non-GAAP Financial Information
CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial believes that these non-GAAP financial measures provide useful and relevant information regarding its results and enhance the reader's ability to assess CNH Industrial's financial performance and financial position. They provide measures which facilitate management's ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions. These and similar measures are widely used in the industries in which the Company operates. These financial measures may not 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 prepared in accordance with U.S. GAAP and/or 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.
- Trading Profit under IFRS: Trading Profit is derived from financial information prepared in accordance with IFRS and is defined as income before restructuring, gains/(losses) on disposal of investments and other unusual items, interest expense of Industrial Activities, income taxes, equity in income (loss) of unconsolidated subsidiaries and affiliates, non-controlling interests.
- Operating Profit under IFRS: Operating Profit under IFRS is computed starting from Trading Profit under IFRS plus/minus restructuring costs, other income (expenses) that are unusual in the ordinary course of business (such as gains and losses on the disposal of investments and other unusual items arising from infrequent external events or market conditions).
- Net income (loss) before restructuring and other exceptional items: is defined as Net income (loss), less restructuring charges and exceptional items, after tax.
- Net Debt and Net Debt of Industrial Activities (or Net Industrial 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.
- Working capital: is defined as trade receivables and financing receivables related to sales, net, plus inventories, less trade payables, plus other assets (liabilities), net.
- Constant currency: CNH Industrial discusses the fluctuations in revenues and certain non-GAAP financial measures on a constant currency basis by applying the prior-year exchange rates to current year's values expressed in local currency in order to eliminate the impact of foreign exchange rate fluctuations.
Forward-looking statements
All statements other than statements of historical fact contained in this earning release 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 the Company's 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 including, 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 the Company's 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 the Company competes; development and use of new technologies and technological difficulties; compliance requirements (including engine emissions legislation and/or regulations); 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; the Company's 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, intellectual property rights disputes, product warranty and defective products claims, emissions and/or fuel economy regulatory and contractual issues; the evolution of the Company's contractual relations with Kobelco Construction Machinery Co., Ltd. and Sumitomo (S.H.I.) Construction Machinery Co., Ltd.; the Company's pension plans and other post-employment obligations; political and civil unrest; volatility and deterioration of capital and financial markets, including further deterioration of the Eurozone sovereign debt crisis and other similar risks and uncertainties; and the Company's 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, 2014, prepared in accordance with U.S. GAAP and in our EU Annual Report at December 31, 2014, prepared in accordance with IFRS. Investors should refer to and consider the incorporated information on risks, factors, and uncertainties in addition to the information presented here.
Forward-looking statements speak only as of the date on which such statements are made. Furthermore, in light of ongoing difficult macroeconomic conditions, both globally and in the industries in which CNH Industrial operates, it is particularly difficult to forecast results, and any estimates or forecasts of particular periods that are provided in this earnings release are uncertain. Accordingly, investors should not place undue reliance on such forward-looking statements. The Company can give no assurance that the expectations reflected in any forward-looking statements will prove to be correct. Actual results could differ materially from those anticipated in such forward-looking statements. The Company's outlook is based upon assumptions relating to the factors described in the earnings release, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. The Company undertakes no obligation to update or revise publicly its outlook or forward-looking statements, whether as a result of new developments or otherwise. Further information concerning the Company and its businesses, including factors that potentially could materially affect the Company's financial results, is included in the Company'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 the Company or persons acting on Company's behalf are expressly qualified in their entirety by the cautionary statements contained herein or referred to above.
Contacts |
|
Media Inquiries |
Investor Relations |
Richard Gadeselli |
Federico Donati |
Tel: +44 207 7660 346 |
Tel: +39 011 00 62756 |
Laura Overall |
Noah Weiss |
Tel: +44 207 7660 346 |
Tel: +1 630 887 3745 |
e-mail: [email protected] |
|
CNH INDUSTRIAL N.V. |
||||||||
Condensed Consolidated Statements of Operations |
||||||||
For The Three Months Ended September 30, 2015 and 2014 and For The Nine Months Ended September 30, 2015 and 2014 |
||||||||
(Unaudited) |
||||||||
(U.S. GAAP) |
||||||||
($ million) |
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||
2015 |
2014 |
2015 |
2014 |
|||||
Revenues |
||||||||
Net sales |
5,549 |
7,403 |
17,808 |
23,178 |
||||
Finance and interest income |
301 |
336 |
960 |
1,012 |
||||
TOTAL REVENUES |
5,850 |
7,739 |
18,768 |
24,190 |
||||
Costs and Expenses |
||||||||
Cost of goods sold |
4,599 |
5,998 |
14,771 |
18,797 |
||||
Selling, general and administrative expenses |
565 |
736 |
1,758 |
2,240 |
||||
Research and development expenses |
207 |
254 |
622 |
809 |
||||
Restructuring expenses |
18 |
56 |
52 |
98 |
||||
Interest expense |
258 |
327 |
824 |
976 |
||||
Other, net |
286 |
109 |
498 |
307 |
||||
TOTAL COSTS AND EXPENSES |
5,933 |
7,480 |
18,525 |
23,227 |
||||
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES |
(83) |
259 |
243 |
963 |
||||
Income taxes |
56 |
107 |
259 |
408 |
||||
Equity in income of unconsolidated subsidiaries and affiliates |
11 |
10 |
33 |
66 |
||||
NET INCOME (LOSS) |
(128) |
162 |
17 |
621 |
||||
Net income (loss) attributable to noncontrolling interests |
(4) |
(11) |
(5) |
(6) |
||||
NET INCOME (LOSS) ATTRIBUTABLE TO CNH INDUSTRIAL N.V. |
(124) |
173 |
22 |
627 |
||||
(in $) |
||||||||
Earnings (loss) per share attributable to common shareholders |
||||||||
Basic |
(0.09) |
0.13 |
0.02 |
0.46 |
||||
Diluted |
(0.09) |
0.13 |
0.02 |
0.46 |
||||
These Condensed Consolidated Statements of Operations should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2014 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Operations represent the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V. |
|||||||
Condensed Consolidated Balance Sheets |
|||||||
As of September 30, 2015 and December 31, 2014 |
|||||||
(Unaudited) |
|||||||
(U.S. GAAP) |
|||||||
($ million) |
September 30, 2015 |
December 31, 2014 |
|||||
ASSETS |
|||||||
Cash and cash equivalents |
3,717 |
5,163 |
|||||
Restricted cash |
782 |
978 |
|||||
Trade receivables, net |
818 |
1,054 |
|||||
Financing receivables, net |
18,867 |
21,472 |
|||||
Inventories, net |
6,866 |
7,008 |
|||||
Property, plant and equipment, net |
6,447 |
6,865 |
|||||
Investments in unconsolidated subsidiaries and affiliates |
543 |
605 |
|||||
Equipment under operating leases |
1,744 |
1,518 |
|||||
Goodwill |
2,452 |
2,484 |
|||||
Other intangible assets, net |
797 |
850 |
|||||
Deferred tax assets |
1,811 |
1,747 |
|||||
Derivative assets |
334 |
205 |
|||||
Other assets |
1,748 |
1,964 |
|||||
TOTAL ASSETS |
46,926 |
51,913 |
|||||
LIABILITY AND EQUITY |
|||||||
Debt |
26,123 |
29,594 |
|||||
Trade payables |
5,407 |
5,982 |
|||||
Deferred tax liabilities |
774 |
452 |
|||||
Pension, postretirement and other post-employment benefits |
2,470 |
2,614 |
|||||
Derivative liabilities |
87 |
235 |
|||||
Other liabilities |
7,595 |
8,059 |
|||||
Total liabilities |
42,456 |
46,936 |
|||||
Redeemable noncontrolling interest |
19 |
16 |
|||||
Equity |
4,451 |
4,961 |
|||||
TOTAL EQUITY AND LIABILITIES |
46,926 |
51,913 |
|||||
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, 2014 included in the Annual Report on Form 20-F. These Condensed Consolidated Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V. |
|||
Condensed Consolidated Statements of Cash Flows |
|||
For The Nine Months Ended September 30, 2015 and 2014 |
|||
(Unaudited) |
|||
(U.S. GAAP) |
|||
($ million) |
Nine Months Ended September 30, |
||
2015 |
2014 |
||
Operating activities: |
|||
Net income |
17 |
621 |
|
Adjustments to reconcile net income 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 |
516 |
556 |
|
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments |
325 |
303 |
|
Loss from disposal of assets |
6 |
4 |
|
Undistributed income (loss) of unconsolidated subsidiaries |
27 |
(5) |
|
Other non-cash items |
283 |
177 |
|
Changes in operating assets and liabilities: |
|||
Provisions |
(82) |
210 |
|
Deferred income taxes |
37 |
(116) |
|
Trade and financing receivables related to sales, net |
603 |
(1,041) |
|
Inventories, net |
(657) |
(1,571) |
|
Trade payables |
(154) |
(861) |
|
Other assets and liabilities |
110 |
255 |
|
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
1,031 |
(1,468) |
|
Investing activities: |
|||
Net (additions) collections of retail receivables |
390 |
(99) |
|
Proceeds from the sale of assets, net of assets under operating leases and assets sold under buy-back commitments |
3 |
16 |
|
Proceeds from the sale of assets previously under operating leases and assets sold under buy-back commitments |
511 |
391 |
|
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments |
(375) |
(601) |
|
Expenditures for assets under operating leases and assets sold under buy-back commitments |
(1,315) |
(1,240) |
|
Other |
328 |
451 |
|
NET CASH (USED IN) IN INVESTING ACTIVITIES |
(458) |
(1,082) |
|
Financing activities: |
|||
Net increase (decrease) in debt |
(1,114) |
2,267 |
|
Dividends paid |
(294) |
(381) |
|
Other |
17 |
15 |
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
(1,391) |
1,901 |
|
Effect of foreign exchange rate changes on cash and cash equivalents |
(628) |
(303) |
|
DECREASE IN CASH AND CASH EQUIVALENTS |
(1,446) |
(952) |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |
5,163 |
5,567 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
3,717 |
4,615 |
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, 2014 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.
CNH INDUSTRIAL N.V. |
|||||||||
Supplemental Statements of Operations |
|||||||||
For The Three Months Ended September 30, 2015 and 2014 and For The Nine Months Ended September 30, 2015 and 2014 |
|||||||||
(Unaudited) |
|||||||||
(U.S. GAAP) |
|||||||||
Industrial Activities |
Financial Services |
||||||||
($ million) |
Three Months Ended September 30, |
Nine Months Ended September 30, |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
||
Revenues |
|||||||||
Net sales |
5,549 |
7,403 |
17,808 |
23,180 |
- |
- |
- |
- |
|
Finance and interest income |
32 |
65 |
162 |
191 |
390 |
455 |
1,226 |
1,363 |
|
TOTAL REVENUES |
5,581 |
7,468 |
17,970 |
23,371 |
390 |
455 |
1,226 |
1,363 |
|
Costs and Expenses |
|||||||||
Cost of goods sold |
4,599 |
5,998 |
14,771 |
18,799 |
- |
- |
- |
- |
|
Selling, general and administrative expenses |
498 |
629 |
1,546 |
1,960 |
67 |
107 |
212 |
280 |
|
Research and development expenses |
207 |
254 |
622 |
809 |
- |
- |
- |
- |
|
Restructuring expenses |
18 |
56 |
51 |
98 |
- |
- |
1 |
- |
|
Interest expense |
152 |
211 |
501 |
630 |
141 |
180 |
448 |
530 |
|
Interest compensation to Financial Services |
83 |
85 |
229 |
265 |
- |
- |
- |
- |
|
Other, net |
234 |
92 |
398 |
239 |
55 |
52 |
174 |
161 |
|
TOTAL COSTS AND EXPENSES |
5,791 |
7,325 |
18,118 |
22,800 |
263 |
339 |
835 |
971 |
|
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES |
(210) |
143 |
(148) |
571 |
127 |
116 |
391 |
392 |
|
Income taxes |
18 |
61 |
130 |
267 |
38 |
46 |
129 |
141 |
|
Equity in income of unconsolidated subsidiaries and affiliates |
6 |
4 |
18 |
52 |
5 |
6 |
15 |
14 |
|
Result from intersegment investments |
94 |
76 |
277 |
265 |
- |
(1) |
- |
1 |
|
NET INCOME (LOSS) |
(128) |
162 |
17 |
621 |
94 |
75 |
277 |
266 |
These Supplemental Statements of Operations are presented for informational purposes. The supplemental Industrial Activities data in these statements (with Financial Services on the equity basis) include CNH Industrial N.V.'s Agricultural Equipment, Construction Equipment, Commercial Vehicles and Powertrain segments, as well as Corporate functions. The supplemental Financial Services data in these statements refer to CNH Industrial N.V.'s Financial Services segment. Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated financial statements.
CNH INDUSTRIAL N.V. |
||||
Supplemental Balance Sheets |
||||
As of September 30, 2015 and December 31, 2014 |
||||
(Unaudited) |
||||
(U.S. GAAP) |
||||
Industrial Activities |
Financial Services |
|||
($ million) |
September 30, 2015 |
December 31, 2014 |
September 30, 2015 |
December 31, 2014 |
ASSETS |
||||
Cash and cash equivalents |
2,793 |
4,122 |
924 |
1,041 |
Restricted cash |
16 |
1 |
766 |
977 |
Trade receivables, net |
793 |
1,025 |
53 |
92 |
Financing receivables, net |
2,216 |
4,767 |
19,495 |
22,717 |
Inventories, net |
6,669 |
6,845 |
197 |
163 |
Property, plant and equipment, net |
6,445 |
6,862 |
2 |
3 |
Investments in unconsolidated subsidiaries and affiliates |
2,893 |
3,063 |
134 |
136 |
Equipment under operating leases |
11 |
20 |
1,733 |
1,498 |
Goodwill |
2,300 |
2,324 |
152 |
160 |
Other intangible assets, net |
780 |
828 |
17 |
22 |
Deferred tax assets |
1,648 |
1,508 |
163 |
239 |
Derivative assets |
328 |
198 |
8 |
9 |
Other assets |
1,499 |
1,502 |
452 |
781 |
TOTAL ASSETS |
28,391 |
33,065 |
24,096 |
27,838 |
LIABILITY AND EQUITY |
||||
Debt |
8,414 |
11,520 |
20,553 |
24,086 |
Trade payables |
5,284 |
5,850 |
149 |
197 |
Deferred tax liabilities |
534 |
202 |
240 |
250 |
Pension, postretirement and other post-employment benefits |
2,440 |
2,594 |
30 |
20 |
Derivative liabilities |
81 |
221 |
8 |
16 |
Other liabilities |
7,168 |
7,701 |
631 |
675 |
Total liabilities |
23,921 |
28,088 |
21,611 |
25,244 |
Redeemable noncontrolling interest |
19 |
16 |
- |
- |
Equity |
4,451 |
4,961 |
2,485 |
2,594 |
TOTAL EQUITY AND LIABILITIES |
28,391 |
33,065 |
24,096 |
27,838 |
These Supplemental Balance Sheets are presented for informational purposes. The supplemental Industrial Activities data in these statements (with Financial Services on the equity basis) include CNH Industrial N.V.'s Agricultural Equipment, Construction Equipment, Commercial Vehicles and Powertrain segments, as well as Corporate functions. The supplemental Financial Services data in these statements refer to CNH Industrial N.V.'s Financial Services segment. Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated financial statements.
CNH INDUSTRIAL N.V. |
||||||
Supplemental Statements of Cash Flows |
||||||
For The Nine Months Ended September 30, 2015 and 2014 |
||||||
(Unaudited) |
||||||
(U.S. GAAP) |
||||||
Industrial Activities |
Financial Services |
|||||
($ million) |
Nine Months Ended September 30, |
Nine Months Ended September 30, |
||||
2015 |
2014 |
2015 |
2014 |
|||
Operating activities: |
||||||
Net income |
17 |
621 |
277 |
266 |
||
Adjustments to reconcile net income 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 |
512 |
552 |
4 |
4 |
||
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments |
173 |
196 |
152 |
107 |
||
Loss from disposal of assets |
6 |
- |
- |
4 |
||
Undistributed (loss) of unconsolidated subsidiaries |
(103) |
(153) |
(12) |
(15) |
||
Other non-cash items |
196 |
56 |
87 |
121 |
||
Changes in operating assets and liabilities: |
||||||
Provisions |
(93) |
203 |
11 |
7 |
||
Deferred income taxes |
13 |
(124) |
24 |
8 |
||
Trade and financing receivables related to sales, net |
101 |
110 |
529 |
(1,138) |
||
Inventories, net |
(618) |
(1,599) |
(39) |
28 |
||
Trade payables |
(139) |
(751) |
(45) |
(123) |
||
Other assets and liabilities |
(202) |
(76) |
315 |
331 |
||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
(137) |
(965) |
1,303 |
(400) |
||
Investing activities: |
||||||
Net (additions) collections of retail receivables |
- |
- |
390 |
(99) |
||
Proceeds from the sale of assets, net of assets under operating leases and assets sold under buy-back commitments |
3 |
16 |
- |
- |
||
Proceeds from the sale of assets under operating leases and assets sold under buy-back commitments |
218 |
213 |
293 |
178 |
||
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments |
(375) |
(588) |
- |
(13) |
||
Expenditures for assets under operating leases and assets sold under buy-back commitments |
(597) |
(589) |
(718) |
(651) |
||
Other |
1,774 |
325 |
(1,488) |
113 |
||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES |
1,023 |
(623) |
(1,523) |
(472) |
||
Financing activities: |
||||||
Net increase (decrease) in debt |
(1,467) |
1,942 |
353 |
325 |
||
Dividends paid |
(294) |
(381) |
(135) |
(103) |
||
Other |
17 |
15 |
42 |
13 |
||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
(1,744) |
1,576 |
260 |
235 |
||
Effect of foreign exchange rate changes on cash and cash equivalents |
(471) |
(248) |
(157) |
(55) |
||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
(1,329) |
(260) |
(117) |
(692) |
||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |
4,122 |
4,010 |
1,041 |
1,557 |
||
CASH AND CASH EQUIVALENTS, END OF PERIOD |
2,793 |
3,750 |
924 |
865 |
||
These Supplemental Statements of Cash Flows are presented for informational purposes. The supplemental Industrial Activities data in these statements (with Financial Services on the equity basis) include CNH Industrial N.V.'s Agricultural Equipment, Construction Equipment, Commercial Vehicles and Powertrain segments, as well as Corporate functions. The supplemental Financial Services data in these statements refer to CNH Industrial N.V.'s Financial Services segment. Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated financial statements.
CNH INDUSTRIAL N.V. |
||||||||
Other Supplemental Financial Information |
||||||||
(Unaudited) |
||||||||
(U.S. GAAP) |
||||||||
CNH INDUSTRIAL Net debt ($ million) |
||||||||
September 30, 2015 |
June 30, 2015 |
December 31, 2014 |
||||||
Total debt (1) |
(26,123) |
(27,340) |
(29,594) |
|||||
- Asset-backed financing |
(12,498) |
(12,710) |
(13,587) |
|||||
- Other debt |
(13,625) |
(14,630) |
(16,007) |
|||||
Derivative hedging debt |
37 |
35 |
35 |
|||||
Cash and cash equivalents |
3,717 |
4,235 |
5,163 |
|||||
Restricted cash |
782 |
749 |
978 |
|||||
Net debt (2) |
(21,587) |
(22,321) |
(23,418) |
|||||
Of which : Industrial Activities |
(3,439) |
(3,016) |
(2,691) |
|||||
Financial Services |
(18,148) |
(19,305) |
(20,727) |
|||||
Cash, cash equivalents and restricted cash |
4,499 |
4,984 |
6,141 |
|||||
Undrawn committed facilities |
2,910 |
2,845 |
2,716 |
|||||
Available liquidity |
7,409 |
7,829 |
8,857 |
|||||
(1) Inclusive of adjustments to fair value hedges. |
||||||||
(2) Net Debt is a non-GAAP measure. Refer to the Non-GAAP Financial Information section of this press release for information regarding non-GAAP financial measures. |
||||||||
(U.S. GAAP) |
|||||||
CNH INDUSTRIAL Change in Net Industrial Debt ($ million) |
|||||||
YTD (01.01- 09.30) |
3rd Quarter |
||||||
2015 |
2014 |
2015 |
2014 |
||||
(2,691) |
(2,214) |
Net industrial (debt)/cash at beginning of period |
(3,016) |
(3,692) |
|||
17 |
621 |
Net income (loss) |
(128) |
162 |
|||
512 |
552 |
Amortization and depreciation (*) |
166 |
194 |
|||
41 |
(36) |
Changes in provisions and similar, and items related to assets sold under buy-back commitments, and assets under operating leases |
157 |
(123) |
|||
(1,084) |
(2,481) |
Change in working capital |
(458) |
(737) |
|||
(374) |
(588) |
Investments in property, plant and equipment, and intangible assets (*) |
(150) |
(246) |
|||
(97) |
77 |
Other changes |
(99) |
53 |
|||
(985) |
(1,855) |
Net industrial cash flow (1) |
(512) |
(697) |
|||
(277) |
(366) |
Capital increases and dividends |
- |
7 |
|||
514 |
500 |
Currency translation differences |
89 |
447 |
|||
(748) |
(1,721) |
Change in Net industrial debt |
(423) |
(243) |
|||
(3,439) |
(3,935) |
Net industrial (debt)/cash at end of period |
(3,439) |
(3,935) |
|||
(*) Excluding assets sold under buy-back commitments and assets under operating leases. |
|||||||
(1) This item is a non-GAAP measure. Refer to the Non-GAAP Financial Information section of this press release for information regarding non GAAP financial measures. |
|||||||
CNH INDUSTRIAL N.V. |
||||||||
Other Supplemental Financial Information |
||||||||
(Unaudited) |
||||||||
(U.S. GAAP) |
||||||||
CNH INDUSTRIAL Net Income and basic EPS before Restructuring and Exceptional Items ($ million, except per share data) |
||||||||
Nine Months Ended September 30, |
Three Months Ended September 30, |
|||||||
2015 |
2014 |
2015 |
2014 |
|||||
17 |
621 |
Net income (loss) |
(128) |
162 |
||||
45 |
88 |
Restructuring expenses, net of tax |
16 |
52 |
||||
150(1) |
64 |
Other exceptional items, net of tax |
150(1) |
- |
||||
212 |
773 |
Net income before restructuring and other exceptional items |
38 |
214 |
||||
214 |
768 |
Net income (loss) before restructuring and other exceptional items attributable to CNH Industrial N.V. |
39 |
214 |
||||
1,360 |
1,354 |
Weighted average shares outstanding (million) |
1,362 |
1,354 |
||||
0.16 |
0.57 |
Basic EPS before restructuring and exceptional items ($) |
0.03 |
0.16 |
||||
(1) Represents the exceptional charge due to the re-measurement of Venezuelan operations. |
||||||||
(U.S. GAAP) |
||||||||
CNH INDUSTRIAL Industrial Activities Cash Provided (Used) by Working Capital ($ million) |
||||||||
Balance as of September 30, 2015 |
Balance as of June 30, 2015 |
Differences |
Of which: effect of Foreign Currency Translation and Non-Cash Transactions |
Cash Provided (Used) by Working Capital |
||||
Trade and financing receivables related to sales, net |
850 |
872 |
22 |
85 |
(63) |
|||
Inventories, net |
6,669 |
7,019 |
350 |
312 |
38 |
|||
Trade payables |
(5,284) |
(5,815) |
(531) |
(77) |
(454) |
|||
Other assets and liabilities, net |
(194) |
(190) |
4 |
(17) |
21 |
|||
Working capital (1) |
2,041 |
1,886 |
(155) |
303 |
(458) |
|||
(1) This item is a non-GAAP measure. Refer to the Non-GAAP Financial Information section of this press release for information regarding non GAAP financial measures. |
(U.S. GAAP) |
||||||||||
CNH INDUSTRIAL Industrial Activities Cash Provided (Used) by Working Capital ($ million) |
||||||||||
Balance as of September 30, 2015 |
Balance as of December 31, 2014 |
Differences |
Of which: effect of Foreign Currency Translation and Non-Cash Transactions |
Cash Provided (Used) by Working Capital |
||||||
Trade and financing receivables related to sales, net |
850 |
1,096 |
246 |
145 |
101 |
|||||
Inventories, net |
6,669 |
6,845 |
176 |
784 |
(608) |
|||||
Trade payables |
(5,284) |
(5,850) |
(566) |
(427) |
(139) |
|||||
Other assets and liabilities, net |
(194) |
(674) |
(480) |
(42) |
(438) |
|||||
Working capital |
2,041 |
1,417 |
(624) |
460 |
(1,084) |
|||||
CNH INDUSTRIAL N.V. |
|||||
Condensed Consolidated Income Statement |
|||||
For The Three Months Ended September 30, 2015 and 2014 and For The Nine Months Ended September 30, 2015 and 2014 |
|||||
(Unaudited) |
|||||
(IFRS) |
|||||
($ million) |
3rd Quarter 2015 |
3rd Quarter 2014 |
01/01-09/30 2015 |
01/01-09/30 2014 |
|
Net revenues |
5,968 |
7,817 |
19,095 |
24,469 |
|
Cost of sales |
4,923 |
6,322 |
15,740 |
19,760 |
|
Selling, general and administrative costs |
537 |
672 |
1,666 |
2,110 |
|
Research and development costs |
223 |
217 |
638 |
645 |
|
Other income/(expenses) |
(18) |
(36) |
(60) |
(73) |
|
TRADING PROFIT/(LOSS) |
267 |
570 |
991 |
1,881 |
|
Gains/(losses) on the disposal of investments |
- |
- |
- |
- |
|
Restructuring costs |
16 |
51 |
48 |
116 |
|
Other unusual income/(expenses) |
(30) |
(14) |
(41) |
(24) |
|
OPERATING PROFIT/(LOSS) |
221 |
505 |
902 |
1,741 |
|
Financial income/(expenses) |
(296) |
(191) |
(608) |
(585) |
|
Result from investments: |
12 |
12 |
38 |
68 |
|
Share of the profit/(loss) of investees accounted for using the equity method |
12 |
12 |
40 |
68 |
|
Other income/(expenses) from investments |
- |
- |
(2) |
- |
|
PROFIT/(LOSS) BEFORE TAXES |
(63) |
326 |
332 |
1,224 |
|
Income taxes |
49 |
92 |
237 |
441 |
|
PROFIT/(LOSS) FROM CONTINUING OPERATIONS |
(112) |
234 |
95 |
783 |
|
Profit/(loss) from discontinued operations |
- |
- |
- |
- |
|
PROFIT/(LOSS) FOR THE PERIOD |
(112) |
234 |
95 |
783 |
|
PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO: |
|||||
Owners of the parent |
(108) |
245 |
98 |
789 |
|
Non-controlling interests |
(4) |
(11) |
(3) |
(6) |
|
(in $) |
|||||
BASIC EARNINGS/(LOSS) PER COMMON SHARE |
(0.08) |
0.18 |
0.07 |
0.58 |
|
DILUTED EARNINGS/(LOSS) PER COMMON SHARE |
(0.08) |
0.18 |
0.07 |
0.58 |
These Condensed Consolidated Income Statements should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2014 included in the EU Annual Report. This Condensed Consolidated Income Statements represents the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V. |
|||
Condensed Consolidated Statement of Financial Position |
|||
As of September 30, 2015 and December 31, 2014 |
|||
(Unaudited) |
|||
(IFRS) |
|||
($ million) |
September 30, 2015 |
December 31, 2014 |
|
ASSETS |
|||
Intangible assets |
5,747 |
6,031 |
|
Property, plant and equipment |
6,339 |
6,733 |
|
Investments and other financial assets: |
621 |
690 |
|
Investments accounted for using the equity method |
575 |
633 |
|
Other investments and financial assets |
46 |
57 |
|
Leased assets |
1,744 |
1,518 |
|
Defined benefit plan assets |
14 |
20 |
|
Deferred tax assets |
1,419 |
1,655 |
|
Total Non-current assets |
15,884 |
16,647 |
|
Inventories |
6,975 |
7,140 |
|
Trade receivables |
818 |
1,054 |
|
Receivables from financing activities |
18,867 |
21,472 |
|
Current tax receivables |
414 |
324 |
|
Other current assets |
1,144 |
1,434 |
|
Current financial assets: |
334 |
205 |
|
Current securities |
- |
- |
|
Other financial assets |
334 |
205 |
|
Cash and cash equivalents |
4,499 |
6,141 |
|
Total Current assets |
33,051 |
37,770 |
|
Assets held for sale |
17 |
24 |
|
TOTAL ASSETS |
48,952 |
54,441 |
|
EQUITY AND LIABILITIES |
|||
Issued capital and reserves attributable to owners of the parent |
6,895 |
7,534 |
|
Non-controlling interests |
45 |
43 |
|
Total Equity |
6,940 |
7,577 |
|
Provisions: |
5,839 |
6,386 |
|
Employee benefits |
2,708 |
2,831 |
|
Other provisions |
3,131 |
3,555 |
|
Debt: |
26,202 |
29,701 |
|
Asset-backed financing |
12,498 |
13,587 |
|
Other debt |
13,704 |
16,114 |
|
Other financial liabilities |
87 |
235 |
|
Trade payables |
5,407 |
5,982 |
|
Current tax payables |
209 |
206 |
|
Deferred tax liabilities |
372 |
399 |
|
Other current liabilities |
3,896 |
3,955 |
|
Liabilities held for sale |
- |
- |
|
Total Liabilities |
42,012 |
46,864 |
|
TOTAL EQUITY AND LIABILITIES |
48,952 |
54,441 |
These Condensed Consolidated Statements of Financial Position should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2014 included in the EU Annual Report. This Condensed Consolidated Statements of Financial Position represents the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V. |
|||
Condensed Consolidated Statement of Cash Flows |
|||
For The Nine Months Ended September 30, 2015 and 2014 |
|||
(Unaudited) |
|||
(IFRS) |
|||
($ million) |
01/01-09/30/2015 |
01/01-09/30/2014 |
|
A) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
6,141 |
6,489 |
|
B) CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES DURING THE PERIOD: |
|||
Profit/(loss) for the period |
95 |
783 |
|
Amortization and depreciation (net of vehicles sold under buy-back commitments and operating leases) |
841 |
861 |
|
(Gains)/losses from disposal of non-current assets (net of vehicles sold under buy-back commitments) |
6 |
- |
|
Other non-cash items |
233 |
86 |
|
Dividends received |
61 |
61 |
|
Change in provisions |
(146) |
190 |
|
Change in deferred income taxes |
47 |
(127) |
|
Change in items due to buy-back commitments (a) |
75 |
85 |
|
Change in operating lease items (b) |
(316) |
(334) |
|
Change in working capital |
(718) |
(2,310) |
|
TOTAL |
178 |
(705) |
|
C) CASH FLOWS FROM/(USED IN) INVESTMENT ACTIVITIES: |
|||
Investments in: |
|||
Property, plant and equipment and intangible assets (net of vehicles sold under buy-back commitments and operating leases) |
(704) |
(1,086) |
|
Consolidated subsidiaries and other equity investments |
(5) |
(5) |
|
Proceeds from the sale of non-current assets (net of vehicles sold under buy-back commitments) |
(3) |
16 |
|
Net change in receivables from financing activities |
902 |
(1,148) |
|
Change in current securities |
- |
- |
|
Other changes |
199 |
264 |
|
TOTAL |
389 |
(1,959) |
|
D) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES: |
|||
Bonds issued |
600 |
2,801 |
|
Repayment of bonds |
(1,126) |
- |
|
Issuance of other medium-term borrowings (net of repayment) |
(476) |
453 |
|
Net change in other financial payables and other financial assets/liabilities |
(266) |
(982) |
|
Capital increase |
17 |
15 |
|
Dividends paid |
(294) |
(381) |
|
TOTAL |
(1,545) |
1,906 |
|
Translation exchange differences |
(664) |
(314) |
|
E) TOTAL CHANGE IN CASH AND CASH EQUIVALENTS |
(1,642) |
(1,072) |
|
F) CASH AND CASH EQUIVALENTS AT END OF PERIOD |
4,499 |
5,417 |
(a) |
The cash flows generated by the sale of vehicles under buy-back commitments, net of the amounts included in Profit/(loss) for the period, are included under operating activities in a single line item which includes changes in working capital, capital expenditures, depreciation and impairment losses. This item also includes gains and losses arising from the sales of vehicles transferred under buy-back commitments that occur before the end of the agreement term without repossession of the vehicle. |
(b) |
Cash flows generated during the period by operating lease arrangements are included in operating activities in a single line item which includes capital expenditures, depreciation, impairment losses and changes in inventories. |
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, 2014 included in the EU Annual Report. This Condensed Consolidated Statement of Cash Flows represents the consolidation of all CNH Industrial N.V. subsidiaries.
CNH INDUSTRIAL N.V. |
|||||||||
Other Supplemental Financial Information |
|||||||||
(Unaudited) |
|||||||||
CNH INDUSTRIAL Revenues by Segment under IFRS ($ million) |
|||||||||
Nine Months Ended September 30, |
3rd Quarter |
||||||||
2015 |
2014 |
% change |
2015 |
2014 |
% change |
||||
8,043 |
11,801 |
-31.8 |
Agricultural Equipment |
2,431 |
3,659 |
-33.6 |
|||
1,933 |
2,546 |
-24.1 |
Construction Equipment |
591 |
841 |
-29.7 |
|||
6,860 |
7,675 |
-10.6 |
Commercial Vehicles |
2,238 |
2,565 |
-12.7 |
|||
2,656 |
3,484 |
-23.8 |
Powertrain |
803 |
1,027 |
-21.8 |
|||
(1,512) |
(2,177) |
- |
Eliminations and other |
(462) |
(644) |
- |
|||
17,980 |
23,329 |
-22.9 |
Total Industrial Activities |
5,601 |
7,448 |
-24.8 |
|||
1,450 |
1,541 |
-5.9 |
Financial Services |
465 |
504 |
-7.7 |
|||
(335) |
(401) |
- |
Eliminations and other |
(98) |
(135) |
- |
|||
19,095 |
24,469 |
-22.0 |
Total |
5,968 |
7,817 |
-23.7 |
|||
CNH INDUSTRIAL Trading profit/(loss) by Segment under IFRS ($ million) |
|||||||||
Nine Months Ended September 30, |
3rd Quarter |
||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||
434 |
1,451 |
-1,017 |
Agricultural Equipment |
66 |
398 |
-332 |
|||
38 |
64 |
-26 |
Construction Equipment |
23 |
29 |
-6 |
|||
79 |
(111) |
190 |
Commercial Vehicles |
45 |
2 |
43 |
|||
105 |
147 |
-42 |
Powertrain |
27 |
52 |
-25 |
|||
(57) |
(63) |
6 |
Eliminations and other |
(21) |
(28) |
7 |
|||
599 |
1,488 |
-889 |
Total Industrial Activities |
140 |
453 |
-313 |
|||
392 |
393 |
-1 |
Financial Services |
127 |
117 |
10 |
|||
- |
- |
- |
Eliminations and other |
- |
- |
- |
|||
991 |
1,881 |
-890 |
Total |
267 |
570 |
-303 |
|||
CNH INDUSTRIAL Key Balance Sheet data under IFRS ($ million) |
||||||||
September 30, 2015 |
June 30, 2015 |
December 31, 2014 |
||||||
Total assets |
48,952 |
51,321 |
54,441 |
|||||
Total equity |
6,940 |
7,366 |
7,577 |
|||||
Equity attributable to CNH Industrial N.V. |
6,895 |
7,314 |
7,534 |
|||||
Net debt |
(21,456) |
(22,348) |
(23,590) |
|||||
Of which Net industrial debt |
(3,299) |
(3,053) |
(2,874) |
|||||
CNH INDUSTRIAL N.V. |
|||||||
Other Supplemental Financial Information |
|||||||
(Unaudited) |
|||||||
CNH INDUSTRIAL Net income reconciliation ($ million) |
|||||||
Nine Months Ended September 30, |
3rd Quarter |
||||||
2015 |
2014 |
2015 |
2014 |
||||
17 |
621 |
Net income (loss) under U.S. GAAP |
(128) |
162 |
|||
Adjustments to conform with IFRS: |
|||||||
2 |
181 |
Development costs, net of amortization |
(7) |
39 |
|||
6 |
6 |
Goodwill and other intangible assets |
2 |
2 |
|||
33 |
12 |
Defined benefit plans |
11 |
4 |
|||
4 |
(18) |
Restructuring provisions |
2 |
5 |
|||
11 |
14 |
Other adjustments |
1 |
7 |
|||
(12) |
(97) |
Tax impact on adjustments |
2 |
(51) |
|||
34 |
64 |
Deferred tax assets and tax contingencies recognition |
5 |
66 |
|||
78 |
162 |
Total adjustments |
16 |
72 |
|||
95 |
783 |
Profit under IFRS |
(112) |
234 |
|||
CNH INDUSTRIAL Total Equity reconciliation ($ million) |
|||||
September 30, 2015 |
December 31, 2014 |
||||
Total Equity under U.S. GAAP |
4,451 |
4,961 |
|||
Adjustments to conform with IFRS: |
|||||
Development costs, net of amortization |
2,614 |
2,819 |
|||
Goodwill and other intangible assets |
(116) |
(122) |
|||
Defined benefit plans |
(46) |
(6) |
|||
Restructuring provisions |
(6) |
(12) |
|||
Other adjustments |
3 |
(16) |
|||
Tax impact on adjustments |
(769) |
(815) |
|||
Deferred tax assets and tax contingencies recognition |
809 |
768 |
|||
Total adjustments |
2,489 |
2,616 |
|||
Total Equity under IFRS |
6,940 |
7,577 |
|||
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:
01/01-09/30/2015 |
At December 31, 2014 |
01/01-09/30/2014 |
|||||
Average |
At September 30 |
Average |
At September 30 |
||||
Euro |
0.898 |
0.893 |
0.824 |
0.738 |
0.795 |
||
Pound sterling |
0.653 |
0.659 |
0.642 |
0.599 |
0.618 |
||
Swiss franc |
0.953 |
0.974 |
0.990 |
0.899 |
0.959 |
||
Polish zloty |
3.731 |
3.789 |
3.520 |
3.081 |
3.320 |
||
Brazilian real |
3.164 |
4.000 |
2.653 |
2.290 |
2.449 |
||
Canadian dollar |
1.260 |
1.342 |
1.158 |
1.094 |
1.117 |
||
Argentine peso |
8.966 |
9.420 |
8.551 |
7.984 |
8.478 |
||
Turkish lira |
2.666 |
3.026 |
2.333 |
2.165 |
2.287 |
SOURCE CNH Industrial N.V.
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