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

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

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

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

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

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

The CODM assesses segment performance and makes decisions about resource allocation based upon Adjusted EBIT and Adjusted EBITDA. The Company believes Adjusted EBIT and Adjusted EBITDA more fully reflect segment and consolidated profitability. Adjusted EBIT is defined as net income/(loss) before income taxes, interest expenses of Industrial Activities, net, restructuring expenses, the finance and non-service component of pension and other post-employment benefits costs, foreign exchange gains/(losses) and certain non-recurring

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

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



	Three Months Ended June 30, 2019
	Agriculture		Construction		Commercial and Specialty Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities			Financial Services		Eliminations			Total
	(in millions)
Revenues	$	3,095	$	757	$	2,698	$	1,133	$	(615	)	$	7,068		$	519	$	(20	)	$	7,567
Net income⁽¹⁾												336			91		—			427
Add back:
Income tax expense												104			31		—			135
Interest expense of Industrial Activities, net of interest income and eliminations												66			—		—			66
Foreign exchange losses, net												11			—		—			11
Finance and non-service component of Pension and OPEB costs⁽²⁾												(16		)	—		—			(16		)
Adjustments:
Restructuring expenses	15		4		6		—		1			26			2		—			28
Adjusted EBIT	$	341	$	25	$	100	$	102	$	(41	)	$	527		$	124	$	—		$	651
Depreciation and amortization	69		15		47		31		—			162			1		—			163
Depreciation of assets on operating lease and assets sold with buy-back commitment	—		—		79		—		—			79			59		—			138
Adjusted EBITDA	$	410	$	40	$	226	$	133	$	(41	)	$	768		$	184	$	—		$	952



	Six Months Ended June 30, 2019
	Agriculture		Construction		Commercial and Specialty Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities			Financial Services		Eliminations			Total
	(in millions)
Revenues	$	5,585	$	1,397	$	5,112	$	2,169	$	(1,189	)	$	13,074		$	993	$	(43	)	$	14,024
Net income⁽¹⁾												505			186		—			691
Add back:
Income tax expense												158			67		—			225
Interest expense of Industrial Activities, net of interest income and eliminations												119			—		—			119
Foreign exchange losses, net												20			—		—			20
Finance and non-service component of Pension and OPEB costs⁽²⁾												(31		)	—		—			(31		)
Adjustments:
Restructuring expenses	18		4		11		—		1			34			2		—			36
Adjusted EBIT	$	509	$	38	$	151	$	198	$	(91	)	$	805		$	255	$	—		$	1,060
Depreciation and amortization	144		29		94		63		—			330			2		—			332
Depreciation of assets on operating lease and assets sold with buy-back commitment	—		—		158		—		—			158			124		—			282
Adjusted EBITDA	$	653	$	67	$	403	$	261	$	(91	)	$	1,293		$	381	$	—		$	1,674



	Three Months Ended June 30, 2018
	Agriculture		Construction		Commercial and Specialty Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities			Financial Services		Eliminations			Total
	(in millions)
Revenues	$	3,312	$	799	$	2,889	$	1,218	$	(639	)	$	7,579		$	498	$	(32	)	$	8,045
Net income (loss)⁽¹⁾												306			102		—			408
Add back:
Income tax expense												79			39		—			118
Interest expense of Industrial Activities, net of interest income and eliminations												88			—		—			88
Foreign exchange losses, net												97			—		—			97
Finance and non-service component of Pension and OPEB costs⁽²⁾												(4		)	—		—			(4		)
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 on operating lease and assets sold with buy-back commitment	1		—		94		—		—			95			60		—			155
Adjusted EBITDA	$	472	$	48	$	239	$	141	$	(57	)	$	843		$	203	$	—		$	1,046



	Six Months Ended June 30, 2018
	Agriculture		Construction		Commercial and Specialty Vehicles		Powertrain		Unallocated items, eliminations and other			Total Industrial Activities		Financial Services		Eliminations			Total
	(in millions)
Revenues	$	5,891	$	1,481	$	5,384	$	2,404	$	(1,281	)	$	13,879	$	1,000	$	(61	)	$	14,818
Net income⁽¹⁾												405		205		—			610
Add back:
Income tax expense												102		79		—			181
Interest expense of Industrial Activities, net of interest income and eliminations												181		—		—			181
Foreign exchange losses, net												122		—		—			122
Finance and non-service component of Pension and OPEB costs⁽²⁾												14		—		—			14
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 on operating lease and assets sold with buy-back commitment	1		—		196		—		—			197		126		—			323
Adjusted EBITDA	$	737	$	64	$	445	$	270	$	(126	)	$	1,390	$	413	$	—		$	1,803