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BASIS OF PRESENTATION | 3 Months Ended
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Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
BASIS OF PRESENTATION | BASIS OF PRESENTATION CNH Industrial N.V. (“CNH Industrial” or the “Company”) is incorporated in, and under the laws of, the Netherlands. CNH Industrial has its corporate seat in Amsterdam, the Netherlands, and its principal office in London, England, United Kingdom. The Company was formed on September 29, 2013 as a result of the business combination transaction between Fiat Industrial S.p.A. (“Fiat Industrial”) and its majority owned subsidiary CNH Global N.V. (“CNH Global”). Unless otherwise indicated or the context otherwise requires, the terms “CNH Industrial” and the “Company” refer to CNH Industrial and its subsidiaries. The condensed consolidated financial statements of CNH Industrial N.V. and its consolidated subsidiaries have been voluntarily prepared by the Company without audit. Although prepared on a voluntary basis, the condensed consolidated financial statements included in the report comply in all material respects with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) governing interim financial statements. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting only of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. These interim financial statements should be read in conjunction with the financial statements and the notes thereto appearing in the Company’s annual report on Form 20-F for the year ended December 31, 2021. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and related accompanying notes and disclosures. The COVID-19 pandemic has resulted in uncertainties in the Company's business, which may cause actual results to differ materially from the estimates and assumptions used in preparation of the financial statements including, but not limited to, future cash flows associated with goodwill, indefinite life intangibles, definite life intangibles, long-lived impairment tests, determination of discount rates and other assumptions for pension and other post-retirement benefit expense and income taxes. Changes in estimates are recorded in results of operations in the period during which the events or circumstances giving rise to such changes occur. Certain financial information in this report has been presented by geographic area. Beginning January 1, 2022, our geographical regions are: (1) North America; (2) Europe, Middle East and Africa; (3) South America and (4) Asia Pacific. Prior amounts have been conformed to these regions. The geographic designations have the following meanings: •North America: United States, Canada, and Mexico; •Europe, Middle East, and Africa: member countries of the European Union, European Free Trade Association, the United Kingdom, Ukraine, Balkans, Russia, Turkey, the African continent, and the Middle East; •South America: Central and South America, and the Caribbean Islands; and •Asia Pacific: Continental Asia (including the Indian subcontinent) and Oceania Discontinued Operations Until December 31, 2021, CNH Industrial N.V. owned and controlled the Commercial and Specialty Vehicles business, the Powertrain business, and the related Financial Services business (together the “Iveco Group Business” or the “On-Highway Business”), as well as the Agriculture business, the Construction business, and the related Financial Services business (collectively, the “Off-Highway Business”). Effective January 1, 2022, the Iveco Group Business was separated from CNH Industrial N.V. by way of a demerger under Dutch law to Iveco Group N.V. (the Demerger) and Iveco Group became a public listed company independent from CNH Industrial with its common shares trading on Euronext Milan, a regulated market organized and managed by Borsa Italiana S.p.A. The On-Highway Business' financial results for the periods prior to the demerger have been reflected in our Condensed Consolidated Statement of Operations, retrospectively, as discontinued operations. Additionally, the related assets and liabilities associated with the On-Highway Business are classified as discontinued operations within Assets Held for Distribution and Liabilities Held for Distribution in the prior year of the Condensed Consolidated Balance Sheet. Pursuant to the terms of the deeds of demerger entered into between CNH Industrial N.V. and Iveco Group N.V. on January 1, 2022, assets related to the On-Highway Business were transferred to, and liabilities related to the On-Highway Business were retained or assumed by, Iveco Group N.V. In order to present the financial effects of a Discontinued Operation, revenues and expenses arising from intercompany transactions were eliminated. Eliminations from transactions between Continuing and Discontinued Operations are allocated in full to Discontinued Operations. However, no profit or loss is recognized for intercompany transactions within the Condensed Consolidated Statement of Operations. The amounts of income statement items included in Discontinued Operations is detailed in the following sections. Intercompany transactions between Continuing and Discontinued Operations have been eliminated in the consolidated statement of financial position. The net balance between Assets held for distribution and Liabilities held for distribution represents the net equity of the Discontinued Operations. This amount corresponds to the reduction in the total equity of CNH Industrial due to the Demerger that occurred on January 1, 2022. All cash flows from Discontinued Operations are reported in the appropriate items for operating activities, investing activities and financing activities in the Statement of Cash Flows. The cash flows represent those arising from transactions with third parties. The following table presents the assets and liabilities of the Iveco Group Business classified as Assets Held for Distribution and Liabilities Held for Distribution:
|  | December 31, 2021
ASSETS HELD FOR DISTRIBUTION |  |
Cash and cash equivalents |  | $ | 961 |
Restricted cash |  | 55 |
Trade receivables, net |  | 165 |
Financing receivables, net |  | 3,284 |
Inventories, net |  | 3,005 |
Property, plant and equipment, net |  | 3,221 |
Investments in unconsolidated subsidiaries and affiliates |  | 613 |
Equipment under operating leases |  | 66 |
Goodwill, net |  | 80 |
Other intangible assets, net |  | 141 |
Deferred tax assets |  | 1,059 |
Other assets |  | 896 |
Total Assets Held for Distribution |  | $ | 13,546 |
LIABILITIES HELD FOR DISTRIBUTION |  |
Debt |  | 2,343 |
Trade payables |  | 3,366 |
Deferred tax liabilities |  | 14 |
Pension, postretirement and other postemployment benefits |  | 560 |
Other liabilities |  | 5,609 |
Total Liabilities Held for Distribution |  | $ | 11,892 |
Details of Statement of Operations line items included in Discontinued Operations, after the eliminations, for the quarter ended March 31, 2021 are as follows:
|  | Three Months Ended March 31,
|  | 2021
Revenues |  |
Net sales |  | $ | 3,570 |
Finance, interest and other income |  | 49 |
Total Revenues |  | $ | 3,619 |
Costs and Expenses |  |
Cost of goods sold |  | 3,058 |
Selling, general and administrative expenses |  | 221 |
Research and development expenses |  | 131 |
Restructuring expenses |  | 1 |
Interest expense |  | 29 |
Other, net |  | 75 |
Total Costs and Expenses |  | $ | 3,515 |
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates |  | 104 |
Income tax (expense) benefit |  | (41) |
Equity in income of unconsolidated subsidiaries and affiliates |  | (1) |
Net Income (loss) from discontinued operations |  | $ | 62 |
Cash flows from Discontinued Operations from the quarter ended March 31, 2021 are as follows:
|  | Three Months Ended March 31,
|  | 2021
Operating activities: |  |
Net income (loss) of discontinued operations |  | $ | 62 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |
Depreciation and amortization expense, net of depreciation and amortization of assets under operating leases and assets sold under buy-back commitments |  | 78 |
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments |  | 75 |
Loss on repurchase of notes |  | — |
Undistributed income of unconsolidated subsidiaries |  | 1 |
Other non-cash items |  | 48 |
Changes in operating assets and liabilities: |  |
Provisions |  | 57 |
Deferred income taxes |  | 22 |
Trade and financing receivables related to sales, net |  | 215 |
Inventories, net |  | (380) |
Trade payables |  | (22) |
Other assets and liabilities |  | (25) |
Cash flow from operating activities of discontinued operation |  | $ | 131 |
Investing activities: |  |
Additions to retail receivables |  | (4) |
Collections of retail receivables |  | 9 |
Proceeds from the sale of assets, net of assets under operating leases and assets sold under buy-back commitments |  | — |
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments |  | (34) |
Expenditures for assets under operating leases and assets sold under buy-back commitments |  | (169) |
Other |  | 325 |
Cash flow from investing activities of discontinued operation |  | $ | 127 |
Financing activities: |  |
Proceeds from long-term debt |  | 731 |
Payments of long-term debt |  | (986) |
Net decrease in other financial liabilities |  | (104) |
Dividends paid |  | — |
Cash flow from financing activities of discontinued operation |  | $ | (359) |
Business Combinations On November 30, 2021, CNH Industrial acquired Raven Industries, Inc. ("Raven"). Raven included three business divisions: Applied Technology, Engineered Films and Aerostar. The acquisition of Raven has been accounted for as a business combination using the acquisition method of accounting. At December 31, 2021, CNH Industrial recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date including $1.3 billion and $0.5 billion in preliminary goodwill and intangible assets, respectively. The valuation of assets acquired and liabilities assumed has not yet been finalized as of March 31, 2022 and no measurement period adjustments have been recorded in the three months ended March 31, 2022. Applied Technology results for the three months ended March 31, 2022 are included in the Company's Agriculture segment. The Engineered Films and Aerostar business divisions continue to be identified as held for sale as of March 31, 2022. On December 30, 2021, CNH Industrial completed its previously announced purchase of 90% capital stock of Sampierana S.p.A. ("Sampierana"). At December 31, 2021, CNH Industrial had recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date including approximately $51 million in preliminary goodwill. The valuation of assets acquired and liabilities assumed has not yet been finalized as of March 31, 2022 and no measurement period adjustments have been recorded in the three months ended March 31, 2022. The results of Sampierana are included in the Company’s Construction segment using a one month lag period.

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- Definition The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -URI http://asc.fasb.org/topic&trid=2122149 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI http://asc.fasb.org/topic&trid=2134479 + Details
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