EX-99.2

EX-99.2 3 d580273dex992.htm EX-99.2 EX-99.2


				*Exhibit 99.2*
		2018 SECOND QUARTER RESULTS

CNH Industrial reported 2018 second quarter consolidated revenues up 15% to
$8.0 billion, with net income up 73% to $408 million, or $0.29 per share.
Net industrial debt⁽³⁾⁽⁴⁾ decreased by 33% to $1.3 billion

Financial results presented under U.S. GAAP⁽¹⁾⁽²⁾

• Industrial Activities net sales increased 16% (up 13% on a constant currency basis) primarily driven by double-digit improvements in the Agricultural and Construction Equipment segments

• Adjusted EBIT⁽³⁾⁽⁴⁾ of Industrial Activities increased 44% to $571 million, with a 7.5% margin (up 1.4 percentage points). Adjusted EBITDA⁽³⁾⁽⁴⁾ of Industrial Activities at $843 million, with an 11.1% margin

• Adjusted net income⁽³⁾⁽⁴⁾ was $397 million (a $142 million increase, or up 56%, compared to the second quarter of 2017), with adjusted diluted EPS⁽³⁾⁽⁴⁾ of $0.28 (up $0.10 per share)

• Net industrial debt was $1.3 billion at June 30, 2018, $0.6 billion lower than at March 31, 2018, as a result of a strong operating cash generation in the quarter (up 58% compared to the second quarter of 2017)

• Full year guidance updated as follows: net sales of Industrial Activities unchanged at approximately $28 billion, adjusted diluted EPS increased to between $0.67 and $0.71 per share. Net industrial debt guidance improved to between $0.7 billion and $0.9 billion

CNH INDUSTRIAL

Summary of Results ($ million except EPS)


Six Months ended June 30,								Three Months ended June 30,
2018		2017		Change				2018		2017		Change
	14,818		12,788		15.9	%	Consolidated revenues		8,045		7,003		14.9	%
	610		282		328		Net income		408		236		172
	601		310		291		Adjusted net income		397		255		142
	0.43		0.20		0.23		Basic EPS ($)		0.29		0.17		0.12
	0.43		0.20		0.23		Diluted EPS ($)		0.29		0.17		0.12
	0.43		0.22		0.21		Adjusted diluted EPS ($)		0.28		0.18		0.10


		London (UK) – (July 26, 2018) CNH Industrial N.V. (NYSE:CNHI / MI:CNHI) today announced consolidated revenues of $8,045 million for the second quarter of 2018, up 15% compared to the second quarter of 2017. Net sales of Industrial Activities were $7,579 million in the second quarter of 2018, up 16% compared to the second quarter of 2017. Net income of $408 million for the second quarter of 2018 included a pre-tax gain of $20 million ($15 million net of tax impact) as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of a healthcare plan following the favorable judgment issued by the United States Supreme Court, as previously announced by the Company on April 16, 2018. (1) CNH Industrial reports quarterly and annual consolidated financial results under U.S. GAAP and EU-IFRS. The tables and discussion related to the financial results of the Company and its segments shown in this press release are prepared in accordance with U.S. GAAP. Financial results under EU-IFRS are shown in specific tables at the end of this press release. (2) On January 1, 2018, the Company adopted, on a retrospective basis, updated FASB accounting standards for revenue recognition (ASC 606), retirement benefits accounting (ASU 2017-07) and cash flow presentation (ASU 2016-18) and began using Adjusted EBIT and Adjusted EBITDA. Please refer to “About this Press Release” section of this press release for additional information. (3) This item is a non-GAAP financial measure. Refer to the “About this Press Release” and “Non-GAAP Financial Information” sections of this press release for information regarding non-GAAP financial measures. (4) Refer to the specific table in the “Other Supplemental Financial Information” section of this press release for the reconciliation between the non-GAAP financial measure and the most comparable GAAP financial measure.

		CNH Industrial N.V. Corporate Office: 25 St. James’s Street London, SW1A 1HA United Kingdom



		2018 SECOND QUARTER RESULTS

Adjusted net income was $397 million for the second quarter of 2018 compared to $255 million in the second quarter of 2017, with an adjusted diluted EPS of $0.28 ($0.18 in the second quarter of 2017).

Adjusted EBIT of Industrial Activities was $571 million in the second quarter of 2018, an increase of $175 million (or up 44%) compared to the second quarter of 2017. Adjusted EBIT margin increased 1.4 percentage points (“p.p.”) to 7.5%.

Adjusted EBITDA of Industrial Activities was up 30% to $843 million for the second quarter of 2018 compared to $650 million in the second quarter of 2017, with an adjusted EBITDA margin of 11.1%, up 1.1 p.p. compared to the second quarter of 2017.

Income taxes were $118 million in the second quarter of 2018 ($110 million in the second quarter of 2017). Adjusted income taxes⁽¹⁾⁽²⁾ for the second quarter of 2018 were $114 million ($120 million in the second quarter of 2017). The adjusted effective tax rate (adjusted ETR)⁽¹⁾⁽²⁾of 23% (34% in the second quarter of 2017) improved as a result of a favorable geographic mix of earnings, and the lower U.S. tax rate. Full year 2018 adjusted ETR now expected to be approximately 28%.

Net industrial debt of $1.3 billion at June 30, 2018 decreased by $0.6 billion from March 31, 2018 as a result of a strong cash generation from operations in the quarter. Total debt of $24.4 billion at June 30, 2018 was down $0.3 billion compared to March 31, 2018. At June 30, 2018, available liquidity⁽¹⁾⁽²⁾ was $8.4 billion, up $0.7 billion compared to March 31, 2018.

On April 27, 2018, Moody’s Investors Service (“Moody’s”) affirmed the Ba1 corporate family rating of CNH Industrial N.V. and the Ba1 senior unsecured rating of CNH Industrial Capital LLC, raising the outlook to positive from stable for both companies. At the same time, Moody’s upgraded the ratings of the senior unsecured debt of CNH Industrial N.V. and CNH Industrial Finance Europe S.A. to Ba1 from Ba2.

Segment Results

CNH INDUSTRIAL

Revenues by Segment ($ million)


Six Months ended June 30,										Three Months ended June 30,
2018		2017			% change		% change excl. FX⁽¹⁾			2018			2017			% change		% change excl. FX⁽¹⁾
	5,891		5,006			17.7		15.0	Agricultural Equipment		3,312			2,766			19.7		18.3
	1,481		1,152			28.6		26.3	Construction Equipment		799			650			22.9		22.3
	5,384		4,723			14.0		5.4	Commercial Vehicles		2,889			2,598			11.2		5.9
	2,404		2,137			12.5		3.2	Powertrain		1,218			1,136			7.2		1.4
	(1,281)		(1,203	)		—		—	Eliminations and other		(639	)		(625	)		—		—
	13,879		11,815			17.5		11.8	Total Industrial Activities		7,579			6,525			16.2		12.8
	1,000		1,014			-1.4		-2.1	Financial Services		498			502			-0.8		—
	(61)		(41	)		—		—	Eliminations and other		(32	)		(24	)		—		—
	14,818		12,788			15.9		10.7	Total		8,045			7,003			14.9		11.9

(1)

“Change excl. FX” or “constant currency” is a non-GAAP financial measure. Refer to the “About this Press Release” and “Non-GAAP Financial Information” sections of this press release for information regarding non-GAAP financial measures.

(1)

This item is a non-GAAP financial measure. Refer to the “About this Press Release” and “Non-GAAP Financial Information” sections of this press release for information regarding non-GAAP financial measures.

(2)

Refer to the specific table in the “Other Supplemental Financial Information” section of this press release for the reconciliation between the non-GAAP financial measure and the most comparable GAAP financial measure.



		2018 SECOND QUARTER RESULTS

CNH INDUSTRIAL

Adjusted EBIT by Segment ($ million)



Six Months ended June 30,														Three Months ended June 30,
2018		2017			$change		2018 adjusted EBIT margin			2017 adjusted EBIT margin				2018			2017			$ change		2018 adjusted EBIT margin			2017 adjusted EBIT margin
	582		376			206		9.9	%		7.5	%	Agricultural Equipment		396			261			135		12.0	%		9.4	%
	33		(24	)		57		2.2	%		(2.1	)%	Construction Equipment		33			7			26		4.1	%		1.1	%
	141		89			52		2.6	%		1.9	%	Commercial Vehicles		92			72			20		3.2	%		2.8	%
	203		171			32		8.4	%		8.0	%	Powertrain		108			97			11		8.9	%		8.5	%
	(127)		(75	)		-52		—			—		Unallocated items, eliminations and other		(58	)		(41	)		-17		—			—

	832		537			295		6.0	%		4.5	%	Total Industrial Activities		571			396			175		7.5	%		6.1	%

	284		255			29		28.4	%		25.1	%	Financial Services		141			129			12		28.3	%		25.7	%
	—		—			—		—			—		Eliminations and other		—			—			—		—			—

	1,116		792			324		7.5	%		6.2	%	Total		712			525			187		8.9	%		7.5	%


CNH INDUSTRIAL Adjusted EBITDA by Segment *($ million)*

Six Months ended June 30,														Three Months ended June 30,
2018		2017			$ change		2018 adjusted EBITDA margin			2017 adjusted EBITDA margin				2018			2017			$ change		2018 adjusted EBITDA margin			2017 adjusted EBITDA margin
	737		531			206		12.5	%		10.6	%	Agricultural Equipment		472			337			135		14.3	%		12.2	%
	64		8			56		4.3	%		0.7	%	Construction Equipment		48			23			25		6.0	%		3.5	%
	445		345			100		8.3	%		7.3	%	Commercial Vehicles		239			203			36		8.3	%		7.8	%
	270		232			38		11.2	%		10.9	%	Powertrain		141			128			13		11.6	%		11.3	%
	(126)		(75	)		-51		—			—		Unallocated items, eliminations and other		(57	)		(41	)		-16		—			—

	1,390		1,041			349		10.0	%		8.8	%	Total Industrial Activities		843			650			193		11.1	%		10.0	%

	413		385			28		41.3	%		38.0	%	Financial Services		203			193			10		40.8	%		38.4	%
	—		—			—		—			—		Eliminations and other		—			—			—		—			—

	1,803		1,426			377		12.2	%		11.2	%	Total		1,046			843			203		13.0	%		12.0	%

Agricultural Equipment’s net sales increased 20% in the second quarter of 2018 compared to the second quarter of 2017 (up 18% on a constant currency basis). A favorable end-user demand environment, with NAFTA row crop industry demand up 9% in high horsepower tractors and 26% in combine harvesters, combined with increased sales from Company inventory, led to the segment’s strong retail performance (up 16% year-over-year). Price realization was favorable across all regions.

Adjusted EBIT was $396 million in the second quarter of 2018, a $135 million increase compared to the second quarter of 2017. Adjusted EBIT margin increased 2.6 p.p. to 12.0% compared to the second quarter of 2017. Half of the increase was due to favorable volume and mix, primarily in NAFTA and EMEA, while the remaining increase was due to sustained net price realization across all regions, including the expected reduction in interest compensation to Financial Services as a result of the achievement of an investment grade rating. The anticipated increase in raw material costs was offset by manufacturing efficiencies. Product development spending, related primarily to precision farming and compliance with Stage V emissions requirements, increased 10%.



		2018 SECOND QUARTER RESULTS

Construction Equipment’s net sales increased 23% in the second quarter of 2018 compared to the second quarter of 2017 (up 22% on a constant currency basis), as a result of a favorable end-user industry demand environment, up 20% in light equipment and 34% in heavy equipment year-over-year.

Adjusted EBIT was $33 million in the second quarter of 2018, a $26 million increase compared to the second quarter of 2017, with an adjusted EBIT margin increase of 3.0 p.p. to 4.1%, as a result of higher volume, favorable product mix, and positive net price realization, more than offsetting raw material cost increase. In the quarter, production levels were 12% above retail demand, in line with the order book, which is up approximately 15% compared to the prior year period.

Commercial Vehicles’ net sales increased 11% in the second quarter of 2018 compared to the second quarter of 2017 (up 6% on a constant currency basis), as a result of a favorable product mix and positive pricing primarily in EMEA and LATAM. Total deliveries were flat year-over-year, as increased volumes in light commercial vehicles (as a result of favorable end-user demand in EMEA and Brazil) and in buses in EMEA and LATAM were offset by the impact of re-focusing the heavy vehicle sales to a more profitable product portfolio, including alternative propulsion vehicles.

Adjusted EBIT was $92 million for the second quarter of 2018, an increase of $20 million compared to the second quarter of 2017, with an adjusted EBIT margin of 3.2% (up 0.4 p.p. compared to the second quarter of 2017). The increase was the result of a favorable volume and mix performance primarily in buses, and positive net price realization in EMEA and LATAM in trucks, partially offset by a 24% increase in research and development spending primarily related to initiatives aimed at enhancing product competitiveness and fuel efficiency.

Powertrain’s net sales increased 7% in the second quarter of 2018 compared to the second quarter of 2017 (up 1% on a constant currency basis). Sales to external customers accounted for 49% of total net sales (47% in the second quarter of 2017).

Adjusted EBIT was $108 million for the second quarter of 2018, an $11 million increase compared to the second quarter of 2017, with an adjusted EBIT margin of 8.9% (up 0.4 p.p. compared to the second quarter of 2017). The increase was due to a favorable product mix and manufacturing efficiencies, partially offset by increased selling, general and administrative expenses and product development spending.

Financial Services’ revenues totaled $498 million in the second quarter of 2018, a decrease of 1% compared to the second quarter of 2017 (flat on a constant currency basis), primarily due to a lower average portfolio balance in NAFTA.

In the second quarter of 2018, retail loan originations (including unconsolidated joint ventures) were $2.6 billion, relatively flat compared to the second quarter of 2017. The managed portfolio (including unconsolidated joint ventures) was $25.9 billion as of June 30, 2018 (of which retail was 61% and wholesale 39%), up $0.3 billion compared to June 30, 2017. Excluding the impact of currency translation, the managed portfolio increased $0.8 billion compared to the same period in 2017.

Net income was $102 million in the second quarter of 2018, an increase of $15 million compared to the second quarter of 2017, primarily due to stronger performances in NAFTA, EMEA and LATAM.



		2018 SECOND QUARTER RESULTS

2018 Outlook⁽¹⁾

As a result of the sustained profitability improvement in the second quarter of 2018, CNH Industrial is updating its guidance for the full year 2018 as follows:

•

Net sales of Industrial Activities unchanged at approximately $28 billion;

•

Adjusted diluted EPS⁽²⁾ increased to between $0.67 and $0.71 per share;

•

Net industrial debt at the end of 2018 improved to between $0.7 billion and $0.9 billion.

(1)

2018 guidance does not include any impacts deriving from the gain resulting from the modification of the healthcare plan in the U.S. previously mentioned and anticipated on April 16, 2018, as this gain has been considered non-recurring and therefore treated as an adjusting item for the purpose of the adjusted diluted EPS calculation. In addition, 2018 guidance does not include any impacts deriving from possible further repurchases of Company’s shares under the plan authorized by the AGM on April 13, 2018.

(2)

Outlook is not provided on diluted EPS, the most comparable GAAP financial measure of this non-GAAP financial measure, as the income or expense excluded from the calculation of adjusted diluted EPS and instead included in the calculation of diluted EPS are, by definition, not predictable and uncertain.



		2018 SECOND QUARTER RESULTS

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 individual brands belonging to the Company 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 and transmissions. More information can be found on the corporate website: www.cnhindustrial.com

About this Press Release

On January 1, 2018, the Company adopted, on a retrospective basis, updated FASB accounting standards for revenue recognition (ASC 606), retirement benefits accounting (ASU 2017-07) and cash flow presentation (ASU 2016-18). 2017 figures presented in this press release have been recast to reflect the adoption of such updated accounting standards.

Furthermore, concurrently with the change in accounting standards, the Company reviewed the metrics on which the operating segments will be assessed. Effective January 1, 2018, the Chief Operating Decision Maker began to assess segment performance and make decisions about resource allocation based upon Adjusted EBIT and Adjusted EBITDA.

As such, we have introduced Adjusted EBIT and Adjusted EBITDA as new non-GAAP measures in our earnings releases this year. These measures replaced our previous Operating Profit non-GAAP measure. The Company believes Adjusted EBIT and Adjusted EBITDA more fully reflect segment and consolidated profitability. See “Non-GAAP Financial Information” for information about these measures, including how CNH Industrial calculates them.

On April 16, 2018, the Company published a presentation and a webcast to summarize the key impacts on its prior periods’ consolidated financial statements deriving from the adoption of the new accounting standards, as well as the introduction of the new metrics Adjusted EBIT and Adjusted EBITDA.

Additional Information

Today, at 3:30 p.m. CEST / 2:30 p.m. BST / 9:30 a.m. EDT, management will hold a conference call to present 2018 second quarter and first half results to financial analysts and institutional investors. The call can be followed live online at: http://bit.ly/CNH_Industrial_Q2_2018 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’s management believes that these non-GAAP financial measures provide useful and relevant information regarding its results and allow management and investors to assess CNH Industrial’s and our segments’ operating trends, financial performance and financial position. Management uses these non-GAAP measures to 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 and our business segments’ core operations. These non-GAAP financial measures have no standardized meaning presented in U.S. GAAP or EU-IFRS and are unlikely to be comparable to other similarly titled measures used by other companies due to potential differences between the companies in calculations. As a result, the use of these non-GAAP measures has limitations and they should not be considered as substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP and/or EU-IFRS.

CNH Industrial non-GAAP financial measures are defined as follows:

•

Adjusted EBIT under U.S. GAAP: is defined as net income (loss) before income taxes, interest expenses of Industrial Activities, net, restructuring expenses, the finance and non-service component of pension and other post-employment benefit costs, foreign exchange gains/(losses), and certain non-recurring items. In particular, non-recurring 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.



		2018 SECOND QUARTER RESULTS

•

Adjusted EBITDA under U.S. GAAP: is defined as Adjusted EBIT plus depreciation and amortization (including on assets sold under operating leases and assets sold under buy-back commitments).

•

Adjusted EBIT under EU-IFRS: is defined as profit/(loss) before taxes, financial income/(expense) of Industrial Activities, restructuring costs, and certain non-recurring items.

•

Adjusted EBITDA under EU-IFRS: is defined as Adjusted EBIT plus depreciation and amortization (including on assets sold under operating leases and assets sold under buy-back commitments).

•

Adjusted Net Income (Loss): is defined as net income (loss), less restructuring charges and non-recurring items, after tax.

•

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 anti-dilutive. 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 non-recurring items and non-recurring 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 non-recurring 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.

The tables attached to this press release provide reconciliations of the non-GAAP measures used in this press release to the most directly comparable GAAP measures.

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 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,



		2018 SECOND QUARTER RESULTS

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.

Forward-looking statements are based upon assumptions relating to the factors described in this earnings release, 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.


Contacts

Media Inquiries		Investor Relations

United Kingdom		United Kingdom

Richard Gadeselli		Federico Donati
Tel: +44 207 7660 346		Tel: +44 207 7660 386

Laura Overall		United States
Tel: +44 207 7660 338
		Noah Weiss
		Tel: +1 630 887 3745
E-mail: mediarelations@cnhind.com www.cnhindustrial.com

CNH INDUSTRIAL N.V.

Condensed Consolidated Statements of Operations

For The Three and Six Months Ended June 30, 2018 and 2017

(Unaudited)

(U.S. GAAP)


	Three Months Ended June 30,						Six Months Ended June 30,
($ million)	2018			*2017()**			2018			*2017()**
Revenues
Net sales		7,579			6,525			13,879			11,815
Finance, interest and other income		466			478			939			973

TOTAL REVENUES		8,045			7,003			14,818			12,788

Costs and Expenses
Cost of goods sold		6,188			5,393			11,444			9,875
Selling, general and administrative expenses		593			571			1,183			1,110
Research and development expenses		262			228			489			419
Restructuring expenses		5			12			8			24
Interest expense⁽¹⁾		192			233			392			452
Other, net⁽²⁾		302			247			553			510

TOTAL COSTS AND EXPENSES		7,542			6,684			14,069			12,390

INCOME BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES		503			319			749			398

Income tax (expense)		(118	)		(110	)		(181	)		(161	)
Equity in income of unconsolidated subsidiaries and affiliates		23			27			42			45

NET INCOME		408			236			610			282
Net income attributable to noncontrolling interests		12			5			18			8

NET INCOME ATTRIBUTABLE TO CNH INDUSTRIAL N.V.		396			231			592			274


(in $)
Earnings per share attributable to common shareholders
Basic		0.29			0.17			0.43			0.20
Diluted		0.29			0.17			0.43			0.20
Cash dividends declared per common share		0.173			0.118			0.173			0.118

Notes:

(*)

2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated accounting standards for revenue recognition (ASC 606) and retirement benefits accounting (ASU 2017-07).

(1)

In the three and six months ended June 30, 2017, Interest expense included the charge of $17 million related to the early redemption of all outstanding Case New Holland Industrial Inc. 7⁷⁄₈% Senior Notes due 2017.

(2)

In the three and six months ended June 30, 2018, Other, net includes the pre-tax gain of $20 million related to the modification of a healthcare plan in the U.S.

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, 2017 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 June 30, 2018 and December 31, 2017

(Unaudited)

(U.S. GAAP)


($ million)	June 30, 2018		*December 31, 2017()**
ASSETS
Cash and cash equivalents		4,560		5,430
Restricted cash		657		770
Trade receivables, net		548		496
Financing receivables, net		18,957		19,795
Inventories, net		7,131		6,452
Property, plant and equipment, net		6,254		6,831
Investments in unconsolidated subsidiaries and affiliates		537		561
Equipment under operating leases		1,744		1,845
Goodwill		2,460		2,472
Other intangible assets, net		762		792
Deferred tax assets⁽¹⁾		748		852
Derivative assets		113		77
Other assets		1,892		1,925

TOTAL ASSETS		46,363		48,298

LIABILITIES AND EQUITY
Debt		24,353		25,895
Trade payables		6,300		6,060
Deferred tax liabilities		97		94
Pension, postretirement and other postemployment benefits⁽¹⁾		1,627		2,300
Derivative liabilities		126		98
Other liabilities		9,254		9,594

Total Liabilities		41,757		44,041

Redeemable noncontrolling interest		27		25

Equity⁽¹⁾		4,579		4,232

TOTAL LIABILITIES AND EQUITY		46,363		48,298

Notes:

(*)

2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated accounting standard for revenue recognition (ASC 606).

(1)

In the three months ended June 30, 2018, the liability for Pension, postretirement and other postemployment benefits decreased by $527 million as a result of the modification of a healthcare plan in the U.S., with a corresponding reduction of $128 million in Deferred tax assets. As a consequence Equity increased by $399 million.

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, 2017 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 Six Months Ended June 30, 2018 and 2017

(Unaudited)

(U.S. GAAP)


($ million)	Six Months Ended June 30,
($ million)	2018			*2017()**
Operating activities:
Net income		610			282
Adjustments to reconcile net income (loss) 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		364			354
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments		323			280
Loss from disposal of assets		—			1
Loss on repurchase/early redemption of notes		—			17
Undistributed income (loss) of unconsolidated subsidiaries		4			(10	)
Other non-cash items		110			78
Changes in operating assets and liabilities:
Provisions		(56	)		32
Deferred income taxes		(78	)		(86	)
Trade and financing receivables related to sales, net		(229	)		(291	)
Inventories, net		(765	)		(660	)
Trade payables		586			617
Other assets and liabilities		(142	)		30

NET CASH PROVIDED BY OPERATING ACTIVITIES		727			644

Investing activities:
Additions to retail receivables		(1,999	)		(1,806	)
Collections of retail receivables		2,151			2,190
Proceeds from the sale of assets, net of assets under operating leases and assets sold under buy-back commitments		1			2
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments		(161	)		(165	)
Expenditures for assets under operating leases and assets sold under buy-back commitments		(591	)		(850	)
Other		209			(16	)

NET CASH USED IN INVESTING ACTIVITIES		(390	)		(645	)

Financing activities:
Net increase (decrease) in debt		(724	)		(619	)
Dividends paid		(238	)		(165	)
Other		(134	)		(5	)

NET CASH USED IN FINANCING ACTIVITIES		(1,096	)		(789	)
Effect of foreign exchange rate changes on cash and cash equivalents		(224	)		227

DECREASE IN CASH AND CASH EQUIVALENTS		(983	)		(563	)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		6,200			5,854

CASH AND CASH EQUIVALENTS, END OF PERIOD		5,217			5,291

Notes:

(*)

2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated accounting standards for revenue recognition (ASC 606) and cash flow presentation (ASU 2016-18).

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, 2017 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 and Six Months Ended June 30, 2018 and 2017

(Unaudited)

(U.S. GAAP)


	Industrial Activities												Financial Services
	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
($ million)	2018			*2017()**			2018			*2017()**			2018			*2017()**			2018			*2017()**
Revenues
Net sales		7,579			6,525			13,879			11,815			—			—			—			—
Finance, interest and other income		23			29			50			65			498			502			1,000			1,014

TOTAL REVENUES		7,602			6,554			13,929			11,880			498			502			1,000			1,014

Costs and Expenses
Cost of goods sold		6,188			5,393			11,444			9,875			—			—			—			—
Selling, general and administrative expenses		545			515			1,072			989			48			56			111			121
Research and development expenses		262			228			489			419			—			—			—			—
Restructuring expenses		5			11			8			22			—			1			—			2
Interest expense		111			150			231			289			136			137			272			268
Other, net		124			59			204			128			178			187			349			383

TOTAL COSTS AND EXPENSES		7,235			6,356			13,448			11,722			362			381			732			774

INCOME BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES		367			198			481			158			136			121			268			240

Income tax (expense)		(79	)		(69	)		(102	)		(82	)		(39	)		(41	)		(79	)		(79	)
Equity in income of unconsolidated subsidiaries and affiliates		18			20			26			32			5			7			16			13
Results from intersegment investments		102			87			205			174			—			—			—			—

NET INCOME		408			236			610			282			102			87			205			174

Notes:

(*)

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 June 30, 2018 and December 31, 2017

(Unaudited)

(U.S. GAAP)


	Industrial Activities				Financial Services
($ million)	June 30, 2018		*December 31, 2017()**		June 30, 2018		*December 31, 2017()**
ASSETS
Cash and cash equivalents		4,026		4,901		534		529
Restricted cash		—		—		657		770
Trade receivables		543		490		38		53
Financing receivables		1,739		1,718		20,441		20,699
Inventories, net		6,924		6,236		207		216
Property, plant and equipment, net		6,253		6,829		1		2
Investments in unconsolidated subsidiaries and affiliates		3,171		3,173		208		205
Equipment under operating leases		38		35		1,706		1,810
Goodwill		2,306		2,316		154		156
Other intangible assets, net		749		779		13		13
Deferred tax assets		755		869		186		198
Derivative assets		111		73		13		14
Other assets		1,742		1,742		320		358

TOTAL ASSETS		28,357		29,161		24,478		25,023

LIABILITIES AND EQUITY
Debt		6,983		7,443		20,593		21,075
Trade payables		6,191		5,936		150		193
Deferred tax liabilities		97		94		192		215
Pension, postretirement and other postemployment benefits		1,599		2,280		28		20
Derivative liabilities		107		88		30		20
Other liabilities		8,774		9,063		645		686

Total Liabilities		23,751		24,904		21,638		22,209

Redeemable noncontrolling interest		27		25		—		—

Equity		4,579		4,232		2,840		2,814

TOTAL LIABILITIES AND EQUITY		28,357		29,161		24,478		25,023

Notes:

(*)

2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated accounting standard for revenue recognition (ASC 606).

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 Six Months Ended June 30, 2018 and 2017

(Unaudited)

(U.S. GAAP)


	Industrial Activities						Financial Services
($ million)	Six Months Ended June 30,						Six Months Ended June 30,
	2018			*2017()**			2018			*2017()**
Operating activities:
Net income		610			282			205			174
Adjustments to reconcile net income (loss) 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		361			352			3			2
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments		197			152			126			128
Loss from disposal of assets		—			1			—			—
Loss on repurchase/early redemption of notes		—			17			—			—
Undistributed income (loss) of unconsolidated subsidiaries		(94	)		(2	)		(16	)		(13	)
Other non-cash items		83			39			27			39
Changes in operating assets and liabilities:
Provisions		(52	)		36			(4	)		(4	)
Deferred income taxes		(51	)		(74	)		(27	)		(12	)
Trade and financing receivables related to sales, net		(99	)		(2	)		(122	)		(284	)
Inventories, net		(988	)		(909	)		223			249
Trade payables		608			658			(31	)		(45	)
Other assets and liabilities		(182	)		(28	)		41			57

NET CASH PROVIDED BY OPERATING ACTIVITIES		393			522			425			291

Investing activities:
Additions to retail receivables		—			—			(1,999	)		(1,806	)
Collections of retail receivables		—			—			2,151			2,190
Proceeds from the sale of assets, net of assets sold under operating leases and assets sold under buy-back commitments		1			2			—			—
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments		(158	)		(165	)		(3	)		—
Expenditures for assets under operating leases and assets sold under buy-back commitments		(334	)		(496	)		(257	)		(354	)
Other		643			(133	)		(473	)		88

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		152			(792	)		(581	)		118

Financing activities:
Net increase (decrease) in debt		(876	)		(327	)		152			(292	)
Dividends paid		(238	)		(165	)		(91	)		(169	)
Other		(134	)		(5	)		39			29

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(1,248	)		(497	)		100			(432	)

Effect of foreign exchange rate changes on cash and cash equivalents		(172	)		209			(52	)		18

DECREASE IN CASH AND CASH EQUIVALENTS		(875	)		(558	)		(108	)		(5	)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		4,901			4,649			1,299			1,205

CASH AND CASH EQUIVALENTS, END OF PERIOD		4,026			4,091			1,191			1,200

Notes:

(*)

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)

CNH INDUSTRIAL

Reconciliation of Net Income to Adjusted EBIT and Adjusted EBITDA by segment under U.S. GAAP

($ million)


	Three Months ended June 30, 2018
	Agricultural Equipment		Construction Equipment		Commercial Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities			Financial Services		Total
Net income⁽¹⁾													306			102		408
Add back:
Interest expenses of Industrial Activities, net of interest income and eliminations													88			—		88
Foreign exchange (gains) losses, net													97			—		97
Finance and non-service component of Pension and other post-employment benefit costs⁽²⁾													(4	)		—		(4	)
Income tax expense													79			39		118
Adjustments:
Restructuring expenses		1		—		3		1		—			5			—		5

Adjusted EBIT		396		33		92		108		(58	)		571			141		712

Depreciation and Amortization		75		15		53		33		1			177			2		179
Depreciation of assets under operating leases and assets sold with buy-back commitments		1		—		94		—		—			95			60		155

Adjusted EBITDA		472		48		239		141		(57	)		843			203		1,046


	Three Months ended June 30, 2017
	Agricultural Equipment		Construction Equipment		Commercial Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities			Financial Services		Total
Net income⁽¹⁾													149			87		236
Add back:
Interest expenses of Industrial Activities, net of interest income and eliminations													121			—		121
Foreign exchange (gains) losses, net													24			—		24
Finance and non-service component of Pension and other post-employment benefit costs													22			—		22
Income tax expense													69			41		110
Adjustments:
Restructuring expenses		5		1		4		1		—			11			1		12

Adjusted EBIT		261		7		72		97		(41	)		396			129		525

Depreciation and Amortization		76		16		53		31		—			176			1		177
Depreciation of assets under operating leases and assets sold with buy-back commitments		—		—		78		—		—			78			63		141

Adjusted EBITDA		337		23		203		128		(41	)		650			193		843

(1)

For Industrial Activities, net income net of “Results from intersegment investments”.

(2)

This item includes the pre-tax gain of $20 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of a healthcare plan in the U.S.

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Reconciliation of Net Income to Adjusted EBIT and Adjusted EBITDA by segment under U.S. GAAP

($ million)


	Six Months ended June 30, 2018
	Agricultural Equipment		Construction Equipment			Commercial Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities		Financial Services		Total
Net income⁽¹⁾														405		205		610
Add back:
Interest expenses of Industrial Activities, net of interest income and eliminations														181		—		181
Foreign exchange (gains) losses, net														122		—		122
Finance and non-service component of Pension and other post-employment benefit costs⁽²⁾														14		—		14
Income tax expense														102		79		181
Adjustments:
Restructuring expenses		1		—			6		1		—			8		—		8

Adjusted EBIT		582		33			141		203		(127	)		832		284		1,116

Depreciation and Amortization		154		31			108		67		1			361		3		364
Depreciation of assets under operating leases and assets sold with buy-back commitments		1		—			196		—		—			197		126		323

Adjusted EBITDA		737		64			445		270		(126	)		1,390		413		1,803


	Six Months ended June 30, 2017
	Agricultural Equipment		Construction Equipment			Commercial Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities		Financial Services		Total
Net income⁽¹⁾														108		174		282
Add back:
Interest expenses of Industrial Activities, net of interest income and eliminations														224		—		224
Foreign exchange (gains) losses, net														56		—		56
Finance and non-service component of Pension and other post-employment benefit costs														45		—		45
Income tax expense														82		79		161
Adjustments:
Restructuring expenses		10		4			7		1		—			22		2		24

Adjusted EBIT		376		(24	)		89		171		(75	)		537		255		792

Depreciation and Amortization		155		32			104		61		—			352		2		354
Depreciation of assets under operating leases and assets sold with buy-back commitments		—		—			152		—		—			152		128		280

Adjusted EBITDA		531		8			345		232		(75	)		1,041		385		1,426

(1)

For Industrial Activities, net income net of “Results from intersegment investments”.

(2)

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Reconciliation of Total Debt to Net debt under U.S. GAAP ($ million)


	Consolidated						Industrial Activities						Financial Activities
	June 30, 2018			December 31, 2017			June 30, 2018			December 31, 2017			June 30, 2018		December 31, 2017
Third party debt		24,353			25,895			5,436			6,461			18,917		19,434
Intersegment notes payable		—			—			1,547			982			1,676		1,641

Total Debt⁽¹⁾		24,353			25,895			6,983			7,443			20,593		21,075

Less: Cash and cash equivalents		4,560			5,430			4,026			4,901			534		529
Restricted cash		657			770			—			—			657		770
Intersegment notes receivable		—			—			1,676			1,641			1,547		982
Derivatives hedging debt		(10	)		(7	)		(10	)		(7	)		—		—

Net debt (cash)⁽²⁾		19,146			19,702			1,291			908			17,855		18,794

(1)

Total Debt of Industrial Activities includes Intersegment notes payable to Financial Services of $1,547 million and $982 million as of June 30, 2018 and December 31, 2017, respectively. Total Debt of Financial Services includes Intersegment notes payable to Industrial Activities of $1,676 million and $1,641 million as of June 30, 2018 and December 31, 2017, respectively.

(2)

The net intersegment receivable/payable balance owed by Financial Services to Industrial Activities was $129 million and $659 million as of June 30, 2018 and December 31, 2017, respectively.

CNH INDUSTRIAL

Reconciliation of Cash and cash equivalents to Available liquidity under U.S. GAAP

($ million)

June 30, 2018

March 31, 2018

December 31, 2017

Cash and cash equivalents

4,560

3,615

5,430

Restricted cash

657

773

770

Undrawn committed facilities

3,141

3,254

3,180

Available liquidity

8,358

7,642

9,380

CNH INDUSTRIAL

Change in Net industrial debt under U.S. GAAP ($ million)


Six Months ended June 30,							Three Months ended June 30,
2018			2017				2018			2017
	(908	)		(1,609	)	Net industrial (debt)/cash at beginning of period		(1,923	)		(2,170	)
	1,390			1,041		Adjusted EBITDA of Industrial Activities		843			650
	(290	)		(273	)	Cash interest and taxes		(128	)		(93	)
	(279	)		(176	)	Changes in provisions and similar⁽¹⁾		(145	)		(94	)
	(765	)		(573	)	Change in working capital		240			49

	56			19		Operating cash flow		810			512

	(158	)		(165	)	Investments in property, plant and equipment, and intangible assets⁽²⁾		(97	)		(91	)
	(42	)		36		Other changes		(32	)		1

	(144	)		(110	)	Net industrial cash flow		681			422

	(372	)		(170	)	Capital increases and dividends⁽³⁾		(281	)		(169	)
	133			(223	)	Currency translation differences and other⁽⁴⁾		232			(195	)

	(383	)		(503	)	Change in Net industrial debt		632			58

	(1,291	)		(2,112	)	Net industrial (debt)/cash at end of period		(1,291	)		(2,112	)

(1)

Including other cash flow items related to operating lease and buy-back activities.

(2)

Excluding assets sold under buy-back commitments and assets under operating leases.

(3)

Including share buy-back transactions.

(4)

In the three and six months ended June 30, 2017, this item also included the charge of $17 million related to the early redemption of all outstanding Case New Holland Industrial Inc. 7⁷⁄₈% Senior Notes due 2017.

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Reconciliation of Adjusted net income and Adjusted income tax (expense) to Net income and Income tax (expense) and calculation of Adjusted diluted EPS and Adjusted ETR under U.S.GAAP

($ million, except per share data)


Six Months ended June 30,							Three Months ended June 30,
2018			2017				2018			2017
	610			282		Net income		408			236
	(12	)		41		Adjustments impacting Income before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (a)		(15	)		29
	3			(13	)	Adjustments impacting Income tax (expense) (b)		4			(10	)

	601			310		Adjusted net income		397			255

	583			302		Adjusted net income attributable to CNH Industrial N.V.		385			250
	1,364			1,366		Weighted average shares outstanding – diluted (million)		1,361			1,367
	0.43			0.22		Adjusted diluted EPS ($)		0.28			0.18
	749			398		Income before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates		503			319
	(12	)		41		Adjustments impacting Income before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (a)		(15	)		29

	737			439		Adjusted income before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates (A)		488			348
	(181	)		(161	)	Income tax (expense)		(118	)		(110	)
	3			(13	)	Adjustments impacting Income tax (expense) (b)		4			(10	)

	(178	)		(174	)	Adjusted income tax (expense) (B)		(114	)		(120	)

	24	%		40	%	Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A)		23	%		34	%
	a)Adjustments impacting Income before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates
	8			24		Restructuring expenses		5			12
	—			17		Cost of repurchase/early redemption of notes		—			17
	(20	)		—		Pre-tax gain related to the modification of a healthcare plan in the U.S.		(20	)		—

	(12	)		41		Total		(15	)		29

	b)Adjustments impacting Income tax (expense)
	3			(13	)	Tax effect of adjustments impacting Income before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates		4			(10	)

	3			(13	)	Total		4			(10	)

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Revenues by Segment under EU-IFRS ($ million)


Six Months ended June 30,									Three Months ended June 30,
2018			2017			% change			2018			2017			% change
	5,891			5,006			17.7	Agricultural Equipment		3,312			2,766			19.7
	1,481			1,152			28.6	Construction Equipment		799			650			22.9
	5,384			4,723			14.0	Commercial Vehicles		2,889			2,598			11.2
	2,405			2,138			12.5	Powertrain		1,219			1,137			7.2
	(1,281	)		(1,203	)		—	Eliminations and other		(639	)		(625	)		—

	13,880			11,816			17.5	Total Industrial Activities		7,580			6,526			16.2

	1,000			1,014			-1.4	Financial Services		498			502			-0.8
	(97	)		(81	)		—	Eliminations and other		(47	)		(43	)		—

	14,783			12,749			16.0	Total		8,031			6,985			15.0

CNH INDUSTRIAL

Adjusted EBIT⁽¹⁾⁽²⁾ by Segment under EU-IFRS ($ million)


Six Months ended June 30,															Three Months ended June 30,
2018			2017			$ change		2018 adjusted EBIT margin			2017 adjusted EBIT margin				2018			2017			$ change		2018 adjusted EBIT margin			2017 adjusted EBIT margin
	555			346			209		9.4	%		6.9	%	Agricultural Equipment		388			254			134		11.7	%		9.2	%
	20			(43	)		63		1.4	%		(3.7	)%	Construction Equipment		28			(3	)		31		3.5	%		(0.5	)%
	143			73			70		2.7	%		1.5	%	Commercial Vehicles		99			67			32		3.4	%		2.6	%
	198			163			35		8.2	%		7.6	%	Powertrain		108			94			14		8.9	%		8.3	%
	(131	)		(75	)		-56		—			—		Unallocated items, eliminations and other		(60	)		(41	)		-19		—			—

	785			464			321		5.7	%		3.9	%	Total Industrial Activities		563			371			192		7.4	%		5.7	%

	287			255			32		28.7	%		25.1	%	Financial Services		144			129			15		28.9	%		25.7	%
	—			—			—		—			—		Eliminations and other		—			—			—		—			—

	1,072			719			353		7.3	%		5.6	%	Total		707			500			207		8.8	%		7.2	%

(1)

Concurrently with the changes following the adoption of the new accounting standards, the Company reviewed the metrics on which the operating segments will be assessed. Starting in 2018, the Chief Operating Decision Maker began to assess segment performance and make decisions about resource allocation based upon Adjusted EBIT and Adjusted EBITDA.

(2)

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Adjusted EBITDA⁽¹⁾⁽²⁾ by Segment under EU-IFRS ($ million)


Six Months ended June 30,															Three Months ended June 30,
2018			2017			$ change		2018 adjusted EBITDA margin			2017 adjusted EBITDA margin				2018			2017			$ change		2018 adjusted EBITDA margin			2017 adjusted EBITDA margin
	832			613			219		14.1	%		12.2	%	Agricultural Equipment		526			387			139		15.9	%		14.0	%
	75			17			58		5.1	%		1.5	%	Construction Equipment		55			27			28		6.9	%		4.2	%
	520			399			121		9.7	%		8.4	%	Commercial Vehicles		282			234			48		9.8	%		9.0	%
	288			244			44		12.0	%		11.4	%	Powertrain		153			135			18		12.6	%		11.9	%
	(130	)		(75	)		-55		—			—		Unallocated items, eliminations and other		(60	)		(41	)		-19		—			—

	1,585			1,198			387		11.4	%		10.1	%	Total Industrial Activities		956			742			214		12.6	%		11.4	%

	416			386			30		41.6	%		38.1	%	Financial Services		205			194			11		41.2	%		38.6	%
	—			—			—		—			—		Eliminations and other		—			—			—		—			—

	2,001			1,584			417		13.5	%		12.4	%	Total		1,161			936			225		14.5	%		13.4	%

(1)

(2)

CNH INDUSTRIAL

Key Balance Sheet data under EU-IFRS ($ million)


	June 30, 2018			March 31, 2018			December 31, 2017
Total Assets		48,912			49,809			50,798
Total Equity		6,971			6,664			6,684
Equity attributable to CNH Industrial N.V.		6,948			6,646			6,671
Net debt		(19,223	)		(20,384	)		(19,835	)
Of which Net industrial debt⁽¹⁾		*(1,356*	)		(1,975	)		(1,023	)

(1)

CNH INDUSTRIAL N.V.

Other Supplemental Financial Information

(Unaudited)

CNH INDUSTRIAL

Net income reconciliation U.S. GAAP to EU-IFRS ($ million)


Six Months ended June 30,							Three Months ended June 30,
2018			2017				2018			2017
	610			282		Net income in accordance with U.S. GAAP		408			236
						Adjustments to conform with EU-IFRS:
	(21	)		(64	)	Development costs		5			(22	)
	513			26		Other adjustments⁽¹⁾		510			16
	(120	)		8		Tax impact on adjustments⁽¹⁾		(129	)		(2	)
	(13	)		(9	)	Deferred tax assets and tax contingencies recognition		(9	)		(5	)

	359			(39	)	Total adjustments		377			(13	)

	969			243		Profit in accordance with EU-IFRS		785			223

(1)

In the three and six months ended June 30, 2018, this item includes the different accounting impact from the modification of a healthcare plan in the U.S.

CNH INDUSTRIAL

Total Equity reconciliation U.S. GAAP to EU-IFRS ($ million)


	June 30, 2018			December 31, 2017
Total Equity under U.S. GAAP		4,579			4,232
Adjustments to conform with EU-IFRS:
Development costs		2,388			2,477
Other adjustments		(84	)		(112	)
Tax impact on adjustments		(600	)		(645	)
Deferred tax assets and tax contingencies recognition		688			732

Total adjustments		2,392			2,452

Total Equity under EU-IFRS		6,971			6,684

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:


	Six Months Ended June 30, 2018				At December 31, 2017		Six Months Ended June 30, 2017
	Average		At June 30		At December 31, 2017		Average		At June 30
Euro		0.826		0.858		0.834		0.923		0.876
Pound sterling		0.727		0.760		0.740		0.795		0.771
Swiss franc		0.966		0.992		0.976		0.994		0.958
Polish zloty		3.487		3.751		3.483		3.942		3.703
Brazilian real		3.422		3.849		3.313		3.179		3.295
Canadian dollar		1.277		1.325		1.254		1.335		1.296
Argentine peso		21.559		28.200		18.840		15.694		16.476
Turkish lira		4.095		4.579		3.791		3.637		3.517

CNH INDUSTRIAL N.V.

Condensed Consolidated Income Statement^(*)

For The Three and Six Months Ended June 30, 2018 and 2017

(Unaudited)

(EU-IFRS)


	Three Months Ended June 30,						Six Months Ended June 30,
($ million)	2018			2017()**			2018			2017()**
Net revenues		8,031			6,985			14,783			12,749
Cost of sales		6,461			5,684			11,998			10,477
Selling, general and administrative costs		588			558			1,158			1,074
Research and development costs		264			255			526			495
Result from investments:		23			29			44			48
Share of the profit/(loss) of investees accounted for using the equity method		23			29			44			48
Other income/(expenses) from investments		—			—			—			—
Gains/(losses) on the disposal of investments		—			—			—			—
Restructuring costs		7			10			10			23
Other income/(expenses)⁽¹⁾		493			(17	)		454			(32	)
Financial income/(expenses)⁽²⁾		(186	)		(151	)		(306	)		(292	)

PROFIT/(LOSS) BEFORE TAXES		1,041			339			1,283			404
Income tax (expense)		(256	)		(116	)		(314	)		(161	)

PROFIT/(LOSS) FROM CONTINUING OPERATIONS		785			223			969			243

PROFIT/(LOSS) FOR THE PERIOD		785			223			969			243
PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO:
Owners of the parent		773			218			951			235
Non-controlling interests		12			5			18			8

(in $)
BASIC EARNINGS/(LOSS) PER COMMON SHARE⁽³⁾		0.57			0.16			0.70			0.17
DILUTED EARNINGS/(LOSS) PER COMMON SHARE⁽³⁾		0.57			0.16			0.70			0.17

Notes:

(*)

Concurrently with the changes following the adoption of the new accounting standards, CNH Industrial reviewed the metrics on which the operating segments will be assessed. Starting in 2018, the Chief Operating Decision Maker began to assess segment performance and make decision about resource allocation based upon Adjusted EBIT and Adjusted EBITDA. As a consequence, CNH Industrial no longer reports Trading Profit and Operating Profit on the face of the Income Statement.

(**)

2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated accounting standard for revenue recognition (IFRS 15).

(1)

In the three and six months ended June 30, 2018, Other income/(expenses) includes the pre-tax gain of $527 million related to the modification of a healthcare plan in the U.S.

(2)

In the three and six months ended June 30, 2017, Financial income/(expenses) included the charge of $17 million related to the early redemption of all outstanding Case New Holland Industrial Inc. 7⁷⁄₈% Senior Notes due 2017.

(3)

In the three and six months ended June 30, 2018, basic and diluted earnings per common share include the positive impact of $399 million, net of taxes, of the pre-tax gain of $527 million related to the modification of a healthcare plan in the U.S. Excluding this impact, basic and diluted earnings per common share would have been $0.28 and $0.41, respectively.

This Condensed Consolidated Income Statement should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2017 included in the EU Annual Report. This Condensed Consolidated Income Statement represents the consolidation of all CNH Industrial N.V. subsidiaries.

CNH INDUSTRIAL N.V.

Condensed Consolidated Statement of Financial Position

As of June 30, 2018, December 31, 2017 and January 1, 2017

(Unaudited)

(EU-IFRS)


($ million)	June 30, 2018		*December 31, 2017()**		*January 1, 2017()**
ASSETS
Intangible assets		5,516		5,644		5,504
Property, plant and equipment		6,311		6,830		6,278
Investments and other financial assets:		591		631		554
Investments accounted for using the equity method		559		590		505
Other investments and financial assets		32		41		49
Leased assets		1,744		1,845		1,907
Defined benefit plan assets		25		28		5
Deferred tax assets⁽¹⁾		966		982		997

Total Non-current assets		15,153		15,960		15,245

Inventories		7,142		6,453		5,729
Trade receivables		543		496		623
Receivables from financing activities		18,959		19,795		18,614
Current tax receivables		250		303		430
Other current assets		1,525		1,501		1,234
Current financial assets:		113		77		95
Current securities		—		—		—
Other financial assets		113		77		95
Cash and cash equivalents		5,217		6,200		5,854

Total Current assets		33,749		34,825		32,579

Assets held for sale		10		13		22

TOTAL ASSETS		48,912		50,798		47,846

EQUITY AND LIABILITIES
Issued capital and reserves attributable to owners of the parent		6,948		6,671		6,497
Non-controlling interests		23		13		10

Total Equity⁽¹⁾		6,971		6,684		6,507

Provisions:		5,097		5,977		5,351
Employee benefits⁽¹⁾		1,809		2,587		2,532
Other provisions		3,288		3,390		2,819
Debt:		24,427		26,014		25,434
Asset-backed financing		11,634		12,028		11,784
Other debt		12,793		13,986		13,650
Other financial liabilities		126		98		249
Trade payables		6,300		6,060		5,185
Current tax payables		168		86		229
Deferred tax liabilities		211		138		186
Other current liabilities		5,612		5,741		4,705
Liabilities held for sale		—		—		—

Total Liabilities		41,941		44,114		41,339

TOTAL EQUITY AND LIABILITIES		48,912		50,798		47,846

Notes:

(*)

2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated accounting standard for revenue recognition (IFRS 15).

(1)

In the three months ended June 30, 2018, the provision for Employee benefits decreased by $527 million as a result of the modification of a healthcare plan in the U.S., with a corresponding reduction of $128 million in Deferred tax assets. As a consequence Total Equity increased by $399 million.

This Condensed Consolidated Statement of Financial Position should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the Year Ended December 31, 2017 included in the EU Annual Report. This Condensed Consolidated Statement 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 Six Months Ended June 30, 2018 and 2017

(Unaudited)

(EU-IFRS)


	Six Months Ended June 30,
($ million)	2018			*2017()**
A) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		6,200			5,854
B) CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES:
Profit/(loss) for the period		969			243
Amortization and depreciation (net of vehicles sold under buy-back commitments and operating leases)		606			585
(Gains)/losses on disposal of non-current assets (net of vehicles sold under buy-back commitments)		—			—
Other non-cash items		(2	)		(4	)
Loss on repurchase/early redemption of notes		—			17
Dividends received		46			35
Change in provisions		(663	)		(22	)
Change in deferred income taxes		31			(78	)
Change in items due to buy-back commitments⁽¹⁾		55			21
Change in operating lease items⁽²⁾		84			10
Change in working capital		(569	)		(391	)

TOTAL		557			416

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)		(383	)		(335	)
Consolidated subsidiaries and other equity investments		—			(4	)
Proceeds from the sale of non-current assets (net of vehicles sold under buy-back commitments)		6			2
Net change in receivables from financing activities		23			176
Change in current securities		—			—
Other changes		198			(105	)

TOTAL		(156	)		(266	)

D) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES:
Net change in debt and other financial assets/liabilities		(788	)		(770	)
Capital increase		—			11
Dividends paid		(238	)		(165	)
(Purchase)/sale of treasury shares		(134	)		(16	)
(Purchase)/sale of ownership interests in subsidiaries		—			—

TOTAL		(1,160	)		(940	)

Translation exchange differences		(224	)		227

E) TOTAL CHANGE IN CASH AND CASH EQUIVALENTS		(983	)		(563	)

F) CASH AND CASH EQUIVALENTS AT END OF PERIOD		5,217			5,291

Notes:

(*)	2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated accounting standard for revenue recognition (IFRS 15).

(1)

Cash generated by the sale of vehicles under buy-back commitments, net of the amounts included in Profit/(loss), is recognized under operating activities in a single line item, which includes changes in working capital, capital expenditure, depreciation and impairment losses. The item also includes gains and losses arising from the sale of vehicles subject to buy-back commitments before the end of the agreement and without repossession of the vehicle.

(2)

Cash from operating lease is recognized under operating activities in a single line item which includes capital expenditure, depreciation, write-down and changes in inventory.

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, 2017 included in the EU Annual Report. This Condensed Consolidated Statement of Cash Flows represents the consolidation of all CNH Industrial N.V. subsidiaries.