Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2020 | |
Cover [Abstract] | |
Document Type | 6-K |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q1 |
Entity Registrant Name | CNH Industrial N.V. |
Entity Central Index Key | 0001567094 |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 3,850 | $ 4,875 |
Restricted cash | 854 | 898 |
Trade receivables, net | 346 | 416 |
Financing receivables, net | 17,584 | 19,428 |
Inventories, net | 7,435 | 7,082 |
Property, plant and equipment, net | 4,886 | 5,269 |
Investments in unconsolidated subsidiaries and affiliates | 593 | 631 |
Equipment under operating leases | 1,797 | 1,857 |
Goodwill | 2,514 | 2,538 |
Other intangible assets, net | 790 | 806 |
Deferred tax assets | 1,097 | 1,134 |
Derivative assets | 221 | 73 |
Other assets | 1,946 | 2,345 |
Total Assets | 43,913 | 47,352 |
LIABILITIES AND EQUITY | ||
Debt | 23,518 | 24,854 |
Trade payables | 4,907 | 5,632 |
Deferred tax liabilities | 145 | 172 |
Pension, postretirement and other postemployment benefits | 1,469 | 1,578 |
Derivative liabilities | 162 | 121 |
Other liabilities | 8,054 | 8,839 |
Total Liabilities | 38,255 | 41,196 |
Redeemable noncontrolling interest | 36 | 35 |
Common shares, €0.01, par value; outstanding 1,350,168,250 common shares and 387,951,166 loyalty program special voting shares at 3/31/2020; and outstanding 1,350,132,117 common shares and 387,951,166 loyalty program special voting shares at 12/31/2019 | 25 | 25 |
Treasury stock, at cost - 14,231,946 common shares at 3/31/2020 and 14,268,079 common shares at 12/31/2019 | (154) | (154) |
Additional paid in capital | 4,401 | 4,404 |
Retained earnings | 3,707 | 3,808 |
Accumulated other comprehensive loss | (2,401) | (2,002) |
Noncontrolling interests | 44 | 40 |
Total Equity | 5,622 | 6,121 |
Total Liabilities and Equity | $ 43,913 | $ 47,352 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - € / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common shares, par value (in eur per share) | € 0.01 | € 0.01 |
Common shares, shares outstanding (in shares) | 1,350,168,250 | 1,350,132,117 |
Special voting shares, shares outstanding (in shares) | 387,951,166 | 387,951,166 |
Treasury stock, shares (in shares) | 14,231,946 | 14,268,079 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
Net sales | $ 4,993 | $ 6,006 |
Finance, interest and other income | 468 | 451 |
Total Revenues | 5,461 | 6,457 |
Costs and Expenses | ||
Cost of goods sold | 4,414 | 4,966 |
Selling, general and administrative expenses | 526 | 539 |
Research and development expenses | 214 | 244 |
Restructuring expenses | 5 | 8 |
Interest expense | 181 | 183 |
Other, net | 197 | 168 |
Total Costs and Expenses | 5,537 | 6,108 |
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates | (76) | 349 |
Income tax (expense) | 23 | (90) |
Equity in income of unconsolidated subsidiaries and affiliates | (1) | 5 |
Net income (loss) | (54) | 264 |
Net income attributable to noncontrolling interests | 11 | 7 |
Net income (loss) attributable to CNH Industrial N.V. | $ (65) | $ 257 |
Earnings (loss) per share attributable to common shareholders | ||
Basic (in usd per share) | $ (0.05) | $ 0.19 |
Diluted (in usd per share) | (0.05) | 0.19 |
Cash dividends declared per common share (in usd per share) | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (54) | $ 264 |
Other comprehensive income (loss), net of tax | ||
Unrealized income (loss) on cash flow hedges | 65 | (27) |
Changes in retirement plans’ funded status | (20) | (7) |
Foreign currency translation | (427) | 86 |
Share of other comprehensive loss of entities using the equity method | (19) | (3) |
Other comprehensive income (loss), net of tax | (401) | 49 |
Comprehensive income (loss) | (455) | 313 |
Less: Comprehensive income attributable to noncontrolling interests | 9 | 9 |
Comprehensive income (loss) attributable to CNH Industrial N.V. | $ (464) | $ 304 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net income (loss) | $ (54) | $ 264 |
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 | 155 | 169 |
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments | 128 | 144 |
Undistributed income (loss) of unconsolidated subsidiaries | 7 | (4) |
Other non-cash items | 39 | 33 |
Changes in operating assets and liabilities: | ||
Provisions | (152) | (106) |
Deferred income taxes | (32) | 32 |
Trade and financing receivables related to sales, net | 644 | (293) |
Inventories, net | (551) | (879) |
Trade payables | (504) | 129 |
Other assets and liabilities | (212) | (240) |
Net cash used in operating activities | (532) | (751) |
Investing activities: | ||
Additions to retail receivables | (926) | (947) |
Collections of retail receivables | 1,035 | 1,225 |
Proceeds from the sale of assets, net of assets under operating leases and assets sold under buy-back commitments | 5 | 0 |
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments | (63) | (79) |
Expenditures for assets under operating leases and assets sold under buy-back commitments | (256) | (285) |
Other | 127 | 48 |
Net cash provided by (used in) investing activities | (78) | (38) |
Financing activities: | ||
Proceeds from long-term debt | 2,220 | 3,810 |
Payments of long-term debt | (2,657) | (4,001) |
Net increase (decrease) in other financial liabilities | 243 | (321) |
Dividends paid | (1) | (1) |
Net cash used in financing activities | (195) | (513) |
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash | (264) | (42) |
Increase (decrease) in cash and cash equivalents | (1,069) | (1,344) |
Cash and cash equivalents and restricted cash, beginning of year | 5,773 | 5,803 |
Cash and cash equivalents and restricted cash, end of period | $ 4,704 | $ 4,459 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Millions | Total | Adoption of ASC 326, net of tax | Adjusted Balance | Common Shares | Common SharesAdjusted Balance | Treasury Stock | Treasury StockAdjusted Balance | Additional Paid-in Capital | Additional Paid-in CapitalAdjusted Balance | Retained Earnings | Retained EarningsAdoption of ASC 326, net of tax | Retained EarningsAdjusted Balance | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Adjusted Balance | Noncontrolling Interests | Noncontrolling InterestsAdjusted Balance | Redeemable Noncontrolling Interest |
Beginning balance at Dec. 31, 2018 | $ 5,068 | $ 25 | $ (128) | $ 4,409 | $ 2,596 | $ (1,859) | $ 25 | ||||||||||
Beginning balance, redeemable noncontrolling interests at Dec. 31, 2018 | $ 30 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net income (loss) | 263 | 257 | 6 | ||||||||||||||
Net income (loss), redeemable non controlling interests | 1 | ||||||||||||||||
Other Comprehensive income (loss), net of tax | 49 | 47 | 2 | ||||||||||||||
Reclassification of certain tax effects | 0 | 65 | (65) | ||||||||||||||
Dividends paid | 0 | (1) | |||||||||||||||
Common shares issued from treasury stock and capital increase for share-based compensation | 0 | 6 | (6) | ||||||||||||||
Share-based compensation expense | 9 | 9 | |||||||||||||||
Other changes | 2 | 3 | (1) | ||||||||||||||
Ending balance at Mar. 31, 2019 | 5,391 | 25 | (122) | 4,415 | 2,918 | (1,877) | 32 | ||||||||||
Ending balance, redeemable noncontrolling interests at Mar. 31, 2019 | 30 | ||||||||||||||||
Beginning balance at Dec. 31, 2019 | 6,121 | $ (36) | $ 6,085 | 25 | $ 25 | (154) | $ (154) | 4,404 | $ 4,404 | 3,808 | $ (36) | $ 3,772 | (2,002) | $ (2,002) | 40 | $ 40 | |
Beginning balance, redeemable noncontrolling interests at Dec. 31, 2019 | 35 | 35 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net income (loss) | (56) | (65) | 9 | ||||||||||||||
Net income (loss), redeemable non controlling interests | 2 | ||||||||||||||||
Other Comprehensive income (loss), net of tax | (401) | (399) | (2) | ||||||||||||||
Dividends paid | 0 | (1) | |||||||||||||||
Decrease in non controlling interest due to the change of ownership | 9 | 5 | 4 | ||||||||||||||
Share-based compensation expense | 5 | 5 | |||||||||||||||
Other changes | (2) | (3) | 1 | ||||||||||||||
Ending balance at Mar. 31, 2020 | 5,622 | $ 25 | $ (154) | $ 4,401 | $ 3,707 | $ (2,401) | $ 44 | ||||||||||
Ending balance, redeemable noncontrolling interests at Mar. 31, 2020 | $ 36 | $ 36 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2020 | |
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, 2019. 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. Due to the speed with which the COVID-19 situation is developing, actual results could 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. Our geographical regions are: (1) North America; (2) Europe; (3) South America and (4) Rest of World. The geographic designations have the following meanings: • North America : United States, Canada and Mexico; • Europe : member countries of the European Union, European Free Trade Association, Ukraine, and Balkans; • South America : Central and South America, and the Caribbean Islands; and • Rest of World |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS Adopted in 2020 Financial Instruments In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, M easurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which established ASC 326, Financial Instruments – Credit Losses (ASC 326”). In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”), which superseded existing ASU 2016-13. The ASU introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Additional disclosures about significant estimates and credit quality were also required. The Company adopted ASU 2018-19 on January 1, 2020, using the modified retrospective approach. The impact to the consolidated balance sheet on January 1, 2020 was an increase to the allowance for credit losses of $26 million, a decrease to the investments in non-consolidated affiliates of $17 million and an increase to deferred tax assets of $7 million, with the offset to retained earnings of $36 million. The following paragraphs present the Company’s policy for Allowance for Credit Losses: Allowance for Credit Losses The allowance for credit losses is the Company’s estimate of the lifetime expected credit losses inherent in the trade receivables and financing receivables portfolios owned by the Company. Retail financing receivables that share the same risk characteristics (such as, collateralization levels, geography, product type and other relevant factors) are reviewed on a collective basis using measurement models and management judgment. The allowance for retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward looking macroeconomic factors, such as GDP and Net Farm Income. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Wholesale financing receivables and trade receivables that share the same risk characteristics (such as collateralization levels, term, geography and other relevant factors) are reviewed on a collective basis using measurement models and management judgment. The allowances for trade and wholesale credit losses are based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward looking macroeconomic factors, such as industry sales volumes. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowances for credit losses. These qualitative factors are subjective and require a degree of management judgment. Wholesale and retail financing receivables and trade receivables that do not have similar risk characteristics are individually reviewed based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured by considering: the probability-weighted estimates of cash flows and collateral value; the time value of money; current conditions and forecasts of future economic conditions. Expected credit losses are measured as the probability-weighted present value of all cash shortfalls (including the value of the collateral, if appropriate) over the expected life of each financial asset. Intangibles - Cloud Computing Arrangements In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement ("ASU 2018-15"), which expands upon the guidance set forth in ASU 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement . ASU 2018-15 aligns the requirements for capitalization of implementation costs in a cloud computing service contract with those requirements for capitalization of implementation costs incurred for an internal-use software license. The Company adopted ASU 2018-15 on a prospective basis on January 1, 2020. The adoption did not have a material impact on our results of operations, financial position and cash flows. Related Party Guidance for Variable Interest Entities In October 2018, the FASB issued ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities ("ASU 2018-17"), which expands the application of a specific private company alternative related to VIEs and changes the guidance for determining whether a decision-making fee is a variable interest. Under the new guidance, to determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportionate basis, rather than in their entirety. The Company adopted ASU 2018-17 on January 1, 2020. The adoption did not have a material impact on our consolidated financial statements. Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging , and Topic 825, Financial Instruments , which makes targeted changes to standards on credit losses, hedging, and recognizing and measuring financial instruments to clarify them and address implementation issues. The amendments clarify the scope of the credit losses standard and address issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other things. On recognizing and measuring financial instruments, the amendments address the scope of the guidance, the requirement for remeasurement under ASC 820 when using the measurement alternative, certain disclosure requirements and which equity securities have to be remeasured at historical exchange rates. The Company adopted the amendments related to ASU 2016-13, ASU 2017-12 and ASU 2016-01 at January 1, 2020. The adoption of this standard did not have a material impact on our consolidated financial statements. Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which amends ASC 820, Fair Value Measurement . This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements. Not Yet Adopted Defined Benefit Plans Disclosure In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General: Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14"), which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. ASU 2018-14 is effective for annual periods beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its related disclosures. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”). This ASU eliminates certain exceptions to the general principles in ASC 740, Income Taxes. Specifically, it eliminates the exception to (1) the incremental approach for intraperiod tax allocation when there is a loss from continuing operations, and income or a gain from other items; (2) the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (3) the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. ASU 2019-12 will be effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the impact of the adoption of this standard on its consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides temporary optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedging relationships, and other transactions affected by Reference Rate Reform if certain criteria are met. ASU 2020-04 can be adopted beginning as of March 12, 2020 through December 31, 2022 and may be applied as of the beginning of the interim period that includes March 12, 2020 or any date thereafter. The Company has not adopted ASU 2020-04 as of March 31, 2020. ASU 2020-04 is not expected to have a significant impact on the Company's consolidated financial statements. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The following table summarizes revenues for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (in millions) Agriculture $ 2,244 $ 2,490 Construction 422 640 Commercial and Specialty Vehicles 2,021 2,414 Powertrain 753 1,036 Eliminations and Other (447) (574) Total Industrial Activities $ 4,993 $ 6,006 Financial Services 489 474 Eliminations and Other (21) (23) Total Revenues $ 5,461 $ 6,457 The following table disaggregates revenues by major source for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (in millions) Revenues from: Sales of goods $ 4,755 $ 5,757 Rendering of services and other revenues 156 145 Rents on assets sold with a buy-back commitment 82 104 Revenues from sales of goods and services 4,993 6,006 Finance and interest income 273 288 Rents and other income on operating lease 195 163 Finance, interest and other income 468 451 Total Revenues $ 5,461 $ 6,457 Contract liabilities recorded in Other liabilities were $1,154 million and $1,236 million at March 31, 2020 and December 31, 2019, respectively. Contract liabilities primarily relate to extended warranties/maintenance and repair contracts, and transactions for the sale of vehicles with a buy-back commitment. During the three months ended March 31, 2020 and 2019, revenues included $145 million and $163 million, respectively, relating to contract liabilities outstanding at the beginning of each period. At March 31, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $1.8 billion. The Company expects to recognize revenue on approximately 39% and 84% of the remaining performance obligations over the next 12 and 36 months, respectively, with the remaining recognized thereafter. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The Company consolidates various securitization trusts and facilities that have been determined to be variable interest entities (“VIEs”) and of which the Company is a primary beneficiary. The Company has both the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. For further information regarding VIEs, please see “Note 9: Receivables.” The following table presents certain assets and liabilities of consolidated VIEs, which are included in the condensed consolidated balance sheets included in this report. The assets in the table below include only those assets that can be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third party liabilities of the consolidated VIEs for which creditors do not have recourse to the general credit of the Company. March 31, 2020 December 31, 2019 (in millions) Restricted cash $ 692 $ 739 Financing receivables 8,183 9,026 Total Assets $ 8,875 $ 9,765 Debt $ 8,115 $ 9,011 Total Liabilities $ 8,115 $ 9,011 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The Company’s basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if dilutive securities were exercised into common stock. Stock options, restricted stock units and performance stock units are considered dilutive securities. A reconciliation of basic and diluted earnings per share is as follows (in millions, except per share amounts): Three Months Ended March 31, 2020 2019 Basic: Net income (loss) attributable to CNH Industrial $ (65) $ 257 Weighted average common shares outstanding—basic 1,350 1,354 Basic earnings per share $ (0.05) $ 0.19 Diluted: Net income (loss) attributable to CNH Industrial $ (65) $ 257 Weighted average common shares outstanding—basic 1,350 1,354 Effect of dilutive securities (when dilutive): Stock compensation plans (1) — 2 Weighted average common shares outstanding—diluted 1,350 1,356 Diluted earnings per share $ (0.05) $ 0.19 (1) For the three months ended March 31, 2019, no shares were excluded from the computation of diluted earnings per share due to an anti-dilutive impact. |
EMPLOYEE BENEFIT PLANS AND POST
EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS | 3 Months Ended |
Mar. 31, 2020 | |
Postemployment Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS | EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS The following table summarizes the components of net periodic benefit cost of CNH Industrial’s defined benefit pension plans and postretirement health and life insurance plans for the three months ended March 31, 2020 and 2019: Pension Healthcare Other Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 2020 2019 (in millions) Service cost $ 5 $ 6 $ 1 $ 1 $ 4 $ 3 Interest cost 11 19 3 4 — 1 Expected return on assets (20) (25) (2) (2) — — Amortization of: Prior service credit — — (33) (30) — — Actuarial loss 10 17 1 — — — Net periodic benefit cost $ 6 $ 17 $ (30) $ (27) $ 4 $ 4 On February 20, 2018, CNH Industrial announced that the United States Supreme Court ruled in its favor in Reese vs. CNH Industrial N.V. and CNH Industrial America LLC. The decision allowed CNH Industrial to terminate or modify various retiree healthcare benefits previously provided to certain UAW Union represented Company retirees. On April 16, 2018, CNH Industrial announced its determination to modify the benefits provided to the applicable retirees (“Benefit Modification”) to make them consistent with the benefits provided to current eligible CNH Industrial retirees who had been represented by the UAW. The Benefit Modification resulted in a reduction of the plan liability by $527 million. This amount will be amortized from Other Comprehensive Income ("OCI") to the income statement over approximately 4.5 years, which represents the average service period to attain eligibility conditions for active participants. For the three months ended March 31, 2020 and 2019, $30 million and $30 million of amortization was recorded as a pre-tax gain in Other, net, respectively. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rates for the three months ended March 31, 2020 and 2019 were 30.3% and 25.8%, respectively. The higher 2020 effective tax rate was primarily due to changes in the jurisdictional mix of pre-tax results and the percentage impact of discrete tax items on the overall level of pre-tax results. As in all financial reporting periods, the Company evaluated the realizability of its various deferred tax assets, which relate to multiple tax jurisdictions in all regions of the world. While no changes occurred during the three months ended March 31, 2020, given the economic impact of the COVID-19 pandemic, it is possible that such changes could occur within the next twelve months, with those changes potentially having a material impact on the Company’s results of operations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION 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. CNH Industrial has the following five operating segments: 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 and Överum 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 and compact track loaders. 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. Powertrain designs, manufactures and distributes, under the FPT Industrial brand, a range of engines, transmission systems and axles for on- and off-road applications, as well as for marine and power generation. 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 brands dealers. In addition, Financial Services provides wholesale financing to CNH Industrial brands 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 items. In particular, non-recurring items are specifically disclosed items that management considers to be rare or discrete events that are infrequent in nature and not reflective of on-going operational activities. 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 months ended March 31, 2020 and 2019. Three Months Ended March 31, 2020 Agriculture Construction Commercial and Specialty Vehicles Powertrain Unallocated items, eliminations and other Total Industrial Activities Financial Services Eliminations Total (in millions) Revenues $ 2,244 $ 422 $ 2,021 $ 753 $ (447) $ 4,993 $ 489 $ (21) $ 5,461 Net income (loss) (1) (134) 80 — (54) Add back: Income tax expense (53) 30 — (23) Interest expense of Industrial Activities, net of interest income and eliminations 59 — — 59 Foreign exchange losses, net (2) — — (2) Finance and non-service component of Pension and OPEB costs (2) (30) — — (30) Adjustments: Restructuring expenses 2 1 2 — — 5 — — 5 Other discrete items — — — — 7 7 — — 7 Adjusted EBIT $ 24 $ (83) $ (56) $ 31 $ (64) $ (148) $ 110 $ — $ (38) Depreciation and amortization 64 13 49 29 — 155 — — 155 Depreciation of assets on operating lease and assets sold with buy-back commitment — — 65 — — 65 63 — 128 Adjusted EBITDA $ 88 $ (70) $ 58 $ 60 $ (64) $ 72 $ 173 $ — $ 245 (1) For Industrial Activities, net loss is net of “Results from intersegment investments”. (2) This item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of certain healthcare benefits in the U.S. Three Months Ended March 31, 2019 Agriculture Construction Commercial and Specialty Vehicles Powertrain Unallocated items, eliminations and other Total Industrial Activities Financial Services Eliminations Total (in millions) Revenues $ 2,490 $ 640 $ 2,414 $ 1,036 $ (574) $ 6,006 $ 474 $ (23) $ 6,457 Net income (1) 169 95 — 264 Add back: Income tax expense 54 36 — 90 Interest expense of Industrial Activities, net of interest income and eliminations 53 — — 53 Foreign exchange losses, net 9 — — 9 Finance and non-service component of Pension and OPEB costs (2) (15) — — (15) Adjustments: Restructuring expenses 3 — 5 — — 8 — — 8 Adjusted EBIT $ 168 $ 13 $ 51 $ 96 $ (50) $ 278 $ 131 $ — $ 409 Depreciation and amortization 75 14 47 32 — 168 1 — 169 Depreciation of assets on operating lease and assets sold with buy-back commitment — — 79 — — 79 65 — 144 Adjusted EBITDA $ 243 $ 27 $ 177 $ 128 $ (50) $ 525 $ 197 $ — $ 722 (1) For Industrial Activities, net income is net of “Results from intersegment investments”. (2) This item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of certain healthcare benefits in the U.S. |
RECEIVABLES
RECEIVABLES | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
RECEIVABLES | RECEIVABLES Financing Receivables, net A summary of financing receivables as of March 31, 2020 and December 31, 2019 is as follows: March 31, 2020 December 31, 2019 (in millions) Retail $ 8,453 $ 9,218 Wholesale 9,031 10,081 Other 100 129 Total $ 17,584 $ 19,428 The Company assesses and monitors the credit quality of its portfolio based on whether a receivable is classified as Performing or Non-Performing. Financing receivables are considered past due if the required principal and interest payments have not yet been received as of the contractual payment due date. Delinquency is reported in financing receivables greater than 30 days past due. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. These receivables are generally 90 days delinquent. Finance income for non-performing receivables is recognized on a cash basis. Accrued interest is charged-off to Interest income. Interest income charged-off was not material for the three months ended March 31, 2020. Accrual of finance income is resumed when the receivable becomes contractually current and collections are reasonably assured. As the terms for retail financing receivables are greater than one year, the performing/non-performing information is presented by year of origination for North America, South America and Rest of World. The aging of financing receivables as of March 31, 2020 and December 31, 2019 is as follows (in millions): 31-60 Days 61-90 Days Total Past Current Total Non- Total Retail North America 2020 $ 509 $ — $ 509 2019 2,213 2 2,215 2018 1,507 3 1,510 2017 853 4 857 2016 488 3 491 Prior to 2016 285 2 287 Total $ 19 $ — $ 19 $ 5,836 $ 5,855 $ 14 $ 5,869 South America 2020 $ 195 $ — $ 195 2019 602 5 607 2018 397 6 403 2017 239 4 243 2016 133 3 136 Prior to 2016 144 6 150 Total $ 9 $ 1 $ 10 $ 1,700 $ 1,710 $ 24 $ 1,734 Rest of World 2020 $ 86 $ — $ 86 2019 260 — 260 2018 189 1 190 2017 133 — 133 2016 55 — 55 Prior to 2016 9 — 9 Total $ 7 $ 2 $ 9 $ 723 $ 732 $ 1 $ 733 Europe $ — $ — $ — $ 117 $ 117 $ — $ 117 Total Retail $ 35 $ 3 $ 38 $ 8,376 $ 8,414 $ 39 $ 8,453 Wholesale North America $ — $ — $ — $ 3,506 $ 3,506 $ 24 $ 3,530 South America 1 — 1 654 655 41 696 Rest of World 8 1 9 532 541 6 547 Europe 36 6 42 4,208 4,250 8 4,258 Total Wholesale $ 45 $ 7 $ 52 $ 8,900 $ 8,952 $ 79 $ 9,031 December 31, 2019 31-60 Days 61-90 Days Greater Than Total Past Current Total Non- Total Retail North America $ 24 $ 4 $ — $ 28 $ 6,123 $ 6,151 $ 16 $ 6,167 Europe — — — — 136 136 — 136 South America 9 2 6 17 1,974 1,991 18 2,009 Rest of World 3 1 2 6 900 906 — 906 Total Retail $ 36 $ 7 $ 8 $ 51 $ 9,133 $ 9,184 $ 34 $ 9,218 Wholesale North America $ — $ — $ — $ — $ 3,641 $ 3,641 $ 26 $ 3,667 Europe 24 9 7 40 4,857 4,897 — 4,897 South America 2 — 1 3 829 832 55 887 Rest of World 5 3 6 14 616 630 — 630 Total Wholesale $ 31 $ 12 $ 14 $ 57 $ 9,943 $ 10,000 $ 81 $ 10,081 Allowance for credit losses activity for the three months ended March 31, 2020 and 2019 is as follows (in millions): Three Months Ended March 31, 2020 Retail Wholesale Opening Balance, as previously reported $ 299 $ 159 Adoption of ASC 326 35 (9) Opening Balance, as recast 334 150 Provision (benefit) 20 2 Charge-offs, net of recoveries (20) — Foreign Currency Translation and Other (20) (8) Ending Balance $ 314 $ 144 At March 31, 2020, the allowance for credit losses was impacted by a change in the Company’s forward-looking macroeconomic factors and qualitative factors for the Company’s estimates of the impact from the COVID-19 pandemic. As this situation has rapidly evolved and is fluid, there is significant subjectivity in the assessment. The Company continues to monitor the situation and will update the macroeconomic factors and qualitative factors in future periods, as warranted. The provision for credit losses is included in selling, general, and administrative expenses. Three Months Ended March 31, 2019 Retail Wholesale Opening Balance $ 326 $ 164 Provision (benefit) 8 (3) Charge-offs, net of recoveries (11) (2) Foreign Currency Translation and Other (6) (2) Ending Balance $ 317 $ 157 Allowance for credit losses activity for the year ended December 31, 2019 is as follows (in millions): December 31, 2019 Retail Wholesale Opening Balance $ 326 $ 164 Provision (benefit) 44 12 Charge-offs, net of recoveries (51) (18) Foreign Currency Translation and Other (20) 1 Ending Balance $ 299 $ 159 Troubled Debt Restructurings A restructuring of a receivable constitutes a troubled debt restructuring (“TDR”) when a lender grants a concession it would not otherwise consider to a borrower that is experiencing financial difficulties. As a collateral-based lender, the Company typically will repossess collateral in lieu of restructuring receivables. As such, for retail receivables, concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions granted may include extended contract maturities, inclusion of interest-only periods, modification of a contractual interest rate to a below market interest rate and waiving of interest and principal. TDRs are reviewed along with other receivables as part of management’s ongoing evaluation of the adequacy of the allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source of repayment, which is normally the liquidation of the collateral. In determining collateral value, the Company estimates the current fair market value of the equipment collateral and considers credit enhancements such as additional collateral and third-party guarantees. Before removing a receivable from TDR classification, a review of the borrower is conducted. If, based on this review, concerns persist about the future ability of the borrower to meet its obligations, the TDR classification is not removed from the receivable. As of March 31, 2020, the Company had 289 retail and finance lease contracts classified as TDRs where a court in North America has determined the concession. The pre-modification value was $9 million and the post-modification value was $8 million. Additionally, the Company had 334 accounts with a balance of $17 million in North America undergoing bankruptcy proceedings where a concession has not yet been determined. As of March 31, 2019, the Company had 264 retail and finance lease contracts classified as TDRs where a court in North America has determined the concession. The pre-modification value was $9 million and the post-modification value was $8 million. Additionally, the Company had 365 accounts with a balance of $17 million in North America undergoing bankruptcy proceedings where a concession has not yet been determined. As the outcome of the bankruptcy cases is determined by a court based on available assets, subsequent re-defaults are unusual and were not material for retail and finance lease contracts that were modified in a TDR during the previous twelve months ended March 31, 2020 and 2019. As of March 31, 2020, the Company had retail and finance lease receivable contracts classified as TDRs in Europe. The pre-modification value was $79 million and the post-modification value was $72 million. Subsequent re-defaults were not material for retail and finance lease receivable contracts that were modified in a TDR during the previous twelve months ended March 31, 2020. As of March 31, 2020 and 2019, the Company’s wholesale TDR were immaterial. Transfers of Financial Assets The Company transfers a number of its financial receivables to securitization programs or factoring transactions. A securitization transaction entails the sale of a portfolio of receivables to a securitization vehicle. This special purpose entity (“SPE”) finances the purchase of the receivables by issuing asset-backed securities (i.e. securities whose repayment and interest flow depend upon the cash flow generated by the portfolio). SPEs utilized in securitizations differ from other entities included in the Company’s condensed consolidated financial statements because the assets they hold are legally isolated. For bankruptcy analysis purposes, the Company has sold the receivables to the SPEs in a true sale and the SPEs are separate legal entities. Upon transfer of the receivables to the SPEs, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the SPEs creditors. The SPEs have ownership of cash balances that also have restrictions for the benefit of the SPEs’ investors. The Company’s interests in the SPEs’ receivables are subordinate to the interests of third party investors. None of the receivables that are directly or indirectly sold or transferred in any of these transactions are available to pay the Company’s creditors until all obligations of the SPE have been fulfilled. These securitization trusts were determined to be VIEs, and consequently, the Company has consolidated these trusts. In its role as servicer, the Company has the power to direct the trusts’ activities. Through its retained interests, the Company has an obligation to absorb certain losses or the right to receive certain benefits that could potentially be significant to the trusts. No recourse provisions exist that allow holders of the asset-backed securities issued by the trusts to put those securities back to the Company although the Company provides customary representations and warranties that could give rise to an obligation to repurchase from the trusts any receivables for which there is a breach of the representations and warranties. Moreover, the Company does not guarantee any securities issued by the trusts. The trusts have a limited life and generally terminate upon final distribution of amounts owed to investors or upon exercise of a cleanup-call option by the Company in its role as servicer. Furthermore, factoring transactions may be either with recourse or without recourse; certain without recourse transfers include deferred payment clauses (for example, when the payment by the factor of a minor part of the purchase price is dependent on the total amount collected from the receivables), requiring first loss cover, meaning that the transferor takes priority participation in the losses, or requires a significant exposure to the cash flows arising from the transferred receivables to be retained. These types of transactions do not qualify for the derecognition of the assets since the risks and rewards connected with collection are not substantially transferred, and, accordingly, the Company continues to recognize the receivables transferred by this means in its balance sheet and a financial liability of the same amount under asset-backed financing. At March 31, 2020 and December 31, 2019, the carrying amount of such restricted assets included in financing receivables above are the following (in millions): Restricted Receivables March 31, 2020 December 31, 2019 Retail note and finance lease receivables $ 5,797 $ 6,340 Wholesale receivables 7,151 7,266 Total $ 12,948 $ 13,606 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories as of March 31, 2020 and December 31, 2019 consist of the following: March 31, 2020 December 31, 2019 (in millions) Raw materials $ 1,510 $ 1,332 Work-in-process 744 612 Finished goods 5,181 5,138 Total inventories $ 7,435 $ 7,082 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
LEASES | LEASES Lessee The Company has mainly operating lease contracts for buildings, plant and machinery, vehicles, IT equipment and machinery. Leases with a term of 12 months or less are not recorded in the balance sheet. For these leases the Company recognized, on a straight-line basis over the lease term, lease expense of $3 million and $4 million in the three months ended March 31, 2020 and 2019, respectively. For the three months ended March 31, 2020 and 2019, the Company incurred operating lease expenses of $35 million and $39 million, respectively. At March 31, 2020, the Company has recorded approximately $419 million of right-of-use assets and $416 million of related lease liability included in Other Assets and Other Liabilities, respectively. At March 31, 2020, the weighted average remaining lease term (calculated on the basis of the remaining lease term and the lease liability balance for each lease) and the weighted average discount rate for operating leases were 7.0 years and 3.4%, respectively. During the three months ended March 31, 2020 and 2019, leased assets obtained in exchange for operating lease obligations were $16 million and $18 million, respectively. The operating cash outflow for amounts included in the measurement of operating lease obligations was $36 million and $40 million as of March 31, 2020 and 2019, respectively. Future minimum lease payments under non-cancellable leases as of March 31, 2020 were as follows: Operating Leases ($ million) 2020 (excluding the three months ended March 31, 2020) $ 90 2021 95 2022 70 2023 53 2024 38 2025 and thereafter 124 Total future minimum lease payments $ 470 Less: Interest (54) Total $ 416 Lessor The Company, primarily through its Financial Services segment, leases equipment and vehicles to retail customers under operating leases. Our leases typically have terms of 3 to 5 years with options available for the lessee to purchase the equipment at the lease term date. Revenue for non-lease components are accounted for separately. The following table sets out a maturity analysis of operating lease payments, showing the undiscounted lease payments to be received after the reporting date: Amount (in millions) 2020 $ 200 2021 149 2022 82 2023 30 2024 8 2025 and thereafter 3 Total undiscounted lease payments $ 472 |
LEASES | LEASES Lessee The Company has mainly operating lease contracts for buildings, plant and machinery, vehicles, IT equipment and machinery. Leases with a term of 12 months or less are not recorded in the balance sheet. For these leases the Company recognized, on a straight-line basis over the lease term, lease expense of $3 million and $4 million in the three months ended March 31, 2020 and 2019, respectively. For the three months ended March 31, 2020 and 2019, the Company incurred operating lease expenses of $35 million and $39 million, respectively. At March 31, 2020, the Company has recorded approximately $419 million of right-of-use assets and $416 million of related lease liability included in Other Assets and Other Liabilities, respectively. At March 31, 2020, the weighted average remaining lease term (calculated on the basis of the remaining lease term and the lease liability balance for each lease) and the weighted average discount rate for operating leases were 7.0 years and 3.4%, respectively. During the three months ended March 31, 2020 and 2019, leased assets obtained in exchange for operating lease obligations were $16 million and $18 million, respectively. The operating cash outflow for amounts included in the measurement of operating lease obligations was $36 million and $40 million as of March 31, 2020 and 2019, respectively. Future minimum lease payments under non-cancellable leases as of March 31, 2020 were as follows: Operating Leases ($ million) 2020 (excluding the three months ended March 31, 2020) $ 90 2021 95 2022 70 2023 53 2024 38 2025 and thereafter 124 Total future minimum lease payments $ 470 Less: Interest (54) Total $ 416 Lessor The Company, primarily through its Financial Services segment, leases equipment and vehicles to retail customers under operating leases. Our leases typically have terms of 3 to 5 years with options available for the lessee to purchase the equipment at the lease term date. Revenue for non-lease components are accounted for separately. The following table sets out a maturity analysis of operating lease payments, showing the undiscounted lease payments to be received after the reporting date: Amount (in millions) 2020 $ 200 2021 149 2022 82 2023 30 2024 8 2025 and thereafter 3 Total undiscounted lease payments $ 472 |
INVESTMENTS IN UNCONSOLIDATED S
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES | INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES A summary of investments in unconsolidated subsidiaries and affiliates as of March 31, 2020 and December 31, 2019 is as follows: March 31, 2020 December 31, 2019 (in millions) Equity method $ 474 $ 513 Cost method 119 118 Total $ 593 $ 631 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES Changes in the carrying amount of goodwill for the three months ended March 31, 2020 are as follows: Agriculture Construction Commercial and Specialty Powertrain Financial Total (in millions) Balance at Balance at January 1, 2020 $ 1,732 $ 587 $ 59 $ 5 $ 155 $ 2,538 Foreign currency translation and other (14) (4) (2) — (4) (24) Balance at Balance at March 31, 2020 $ 1,718 $ 583 $ 57 $ 5 $ 151 $ 2,514 Goodwill and other indefinite-lived intangible assets are tested for impairment annually or more frequently if a triggering event occurs that would indicate it is more likely than not that the fair value of a reporting unit is less than book value. CNH Industrial performed its most recent annual impairment review as of December 31, 2019. At that date, the estimated fair values of the Agriculture, Construction and Financial Services reporting units exceeded the carrying value by approximately 143%, 28%, and 43% respectively. For the Construction reporting unit, CNH Industrial had determined that the goodwill was at risk for impairment going forward should there be a deterioration of projected cash flows of the reporting unit as a result of the Company’s inability to successfully execute its plans to achieve future growth projections. Refer to Footnote 9 of the Company’s December 31, 2019 annual report filed on Form 20-F for further details. In addition to the annual impairment test, CNH Industrial is required to regularly assess whether it is more likely than not that the fair value of each reporting unit is still greater than book value. In particular, during the first quarter of 2020, the Company considered whether a quantitative interim assessment of goodwill for impairment was required as a result of the significant economic disruption caused by the COVID-19 pandemic. Based on the internal and external sources of information considered, including the current and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact on each of the reporting units, industry and market considerations, overall financial performance (both current and projected), as well as the amount by which the fair value of the Company’s reporting units exceeded their respective carrying values at the date of the last quantitative assessment, the Company, as part of the qualitative assessment performed, determined these conditions did not indicate that it is more likely than not that the carrying value of its reporting units exceeded their fair value as of March 31, 2020 based on information available at this time. However, the Company is unable to predict how long the pandemic conditions will persist and continues to review its forecasts and various action plans to improve performance of all its segments. Delayed recovery or further deterioration in market conditions related to the general economy and the specific industries in which the Company operates, a sustained trend of weaker than anticipated financial performance within a reporting unit, and in particular with reference to our Construction reporting unit, or an increase in the market-based weighted average cost of capital, among other factors, could significantly impact the impairment analysis and may result in future goodwill impairment charges that, if incurred, could have a material adverse effect on the Company's financial condition and results of operations. The Company will continue to monitor its performance throughout 2020 to determine if an interim goodwill evaluation should be conducted. As of March 31, 2020 and December 31, 2019, the Company’s other intangible assets and related accumulated amortization consisted of the following: March 31, 2020 December 31, 2019 Weighted Gross Accumulated Net Gross Accumulated Net (in millions) Other intangible assets subject to Dealer networks 15 $ 337 $ 233 $ 104 $ 320 $ 224 $ 96 Patents, concessions and licenses and other 5-25 1,929 1,516 413 1,965 1,528 437 2,266 1,749 517 2,285 1,752 533 Other intangible assets not subject to Trademarks 273 — 273 273 — 273 Total Other intangible assets $ 2,539 $ 1,749 $ 790 $ 2,558 $ 1,752 $ 806 CNH Industrial recorded amortization expense of $24 million and $26 million for the three months ended March 31, 2020 and 2019, respectively. |
OTHER LIABILITIES
OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LIABILITIES | OTHER LIABILITIES A summary of Other liabilities as of March 31, 2020 and December 31, 2019 is as follows: March 31, 2020 December 31, 2019 (in millions) Repurchase price on buy-back agreements $ 1,307 $ 1,472 Warranty and campaign programs 887 919 Marketing and sales incentive programs 1,156 1,279 Tax payables 422 696 Accrued expenses and deferred income 670 639 Accrued employee benefits 486 562 Lease liabilities 416 449 Legal reserves and other provisions 319 299 Contract reserve 301 319 Contract liabilities (1) 1,154 1,236 Restructuring reserve 80 103 Other 856 866 Total $ 8,054 $ 8,839 (1) Contract liabilities include $602 million and $657 million at March 31, 2020 and December 31, 2019, respectively, for future rents related to buy-back agreements. Warranty and Campaign Programs CNH Industrial pays for basic warranty and other service action costs. A summary of recorded activity for the three months ended March 31, 2020 and 2019 for the basic warranty and accruals for campaign programs are as follows: Three Months Ended March 31, 2020 2019 (in millions) Balance at beginning of period $ 919 $ 925 Current year additions 184 184 Claims paid (169) (180) Currency translation adjustment and other (47) (14) Balance at March 31, 2020 $ 887 $ 915 Restructuring Provision |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES As a global company with a diverse business portfolio, CNH Industrial is exposed to numerous legal risks, including dealer and supplier litigation, intellectual property right disputes, product warranty and defective product claims, product performance, asbestos, personal injury, emissions and/or fuel economy regulatory and contractual issues and environmental claims that arise in the ordinary course of business. The most significant of these matters are described below. The outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in one or more of these proceedings, claims or investigations could require the Company to pay substantial damages or undertake service actions, recall campaigns or other costly actions. It is therefore possible that legal judgments could give rise to expenses that are not covered, or not fully covered, by insurers’ compensation payments and could affect CNH Industrial’s financial position and results. When it is probable that such a loss has been incurred and the amount can be reasonably estimated, an accrual has been made against the Company’s earnings and included in “Other liabilities” on the condensed consolidated balance sheets. Although the ultimate outcome of legal matters pending against CNH Industrial and its subsidiaries cannot be predicted, the Company believes the reasonable possible range of losses for these unresolved legal matters in addition to the amounts accrued would not have a material effect on its condensed consolidated financial statements. Environmental Pursuant to the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), which imposes strict and, under certain circumstances, joint and several liability for remediation and liability for natural resource damages, and other federal and state laws that impose similar liabilities, CNH Industrial has received inquiries for information or notices of its potential liability regarding 66 non-owned U.S. sites at which regulated materials allegedly generated by CNH Industrial were released or disposed (“Waste Sites”). Of the Waste Sites, 16 are on the National Priority List (“NPL”) promulgated pursuant to CERCLA. For 60 of the Waste Sites, the monetary amount or extent of the Company’s liability has either been resolved, it has not been named as a potentially responsible party (“PRP”), or its liability is likely de minimis . Because estimates of remediation costs are subject to revision as more information becomes available about the extent and cost of remediation and settlement agreements can be reopened under certain circumstances, the Company’s potential liability for remediation costs associated with the 66 Waste Sites could change. Moreover, because liability under CERCLA and similar laws can be joint and several, CNH Industrial could be required to pay amounts in excess of its pro rata share of remediation costs. However, when appropriate, the financial strength of other PRPs has been considered in the determination of the Company’s potential liability. CNH Industrial believes that the costs associated with the Waste Sites will not have a material effect on the Company’s business, financial position, or results of operations. The Company is conducting environmental investigatory or remedial activities at certain properties that are currently or were formerly owned and/or operated or that are being decommissioned. The Company believes that the outcome of these activities will not have a material adverse effect on its business, financial position, or results of operations. The actual costs for environmental matters could differ materially from those costs currently anticipated due to the nature of historical handling and disposal of hazardous substances typical of manufacturing and related operations, the discovery of currently unknown conditions and as a result of more aggressive enforcement by regulatory authorities and changes in existing laws and regulations. As in the past, CNH Industrial plans to continue funding its costs of environmental compliance from operating cash flows. Investigation, analysis and remediation of environmental sites is a time consuming activity. The Company expects such costs to be incurred and claims to be resolved over an extended period of time that could exceed 30 years for some sites. As of March 31, 2020 and December 31, 2019, environmental reserves of approximately $31 million and $32 million, respectively, were established to address these specific estimated potential liabilities. Such reserves are undiscounted and do not include anticipated recoveries, if any, from insurance companies. After considering these reserves, management is of the opinion that the outcome of these matters will not have a material adverse effect on the Company’s financial position or results of operations. Other Litigation and Investigation Follow-up on Damages Claims : Iveco S.p.A., the Company’s wholly owned subsidiary, and its competitors were subject to an investigation by the European Commission (the “Commission”) into certain business practices in the European Union in relation to M&H trucks. On July 19, 2016, the Commission announced a settlement with Iveco. Following the settlement, CNH Industrial has been named as defendant in private litigation commenced in various European jurisdictions and Israel by customers and other third parties, either acting individually or as part of a wider group or class of claimants. These claims remain at an early stage. Further, on the basis of the letters issued by a significant number of customers indicating that they may commence proceedings in the future, CNH Industrial expects to face further claims based on the same legal grounds in the same and other jurisdictions. The extent and outcome of these claims cannot be predicted at this time. Guarantees CNH Industrial provided guarantees on the debt or commitments of third parties and performance guarantees on non-consolidated affiliates as of March 31, 2020 and December 31, 2019 totaling of $448 million and $453 million, respectively. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS The Company may elect to measure financial instruments and certain other items at fair value. This fair value option would be applied on an instrument-by-instrument basis with changes in fair value reported in earnings. The election can be made at the acquisition of an eligible financial asset, financial liability or firm commitment or, when certain specified reconsideration events occur. The fair value election may not be revoked once made. The Company has not elected the fair value measurement option for eligible items. Fair-Value Hierarchy The hierarchy of valuation techniques for financial instruments is based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy: Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the use of observable market data when available. Determination of Fair Value When available, the Company uses quoted market prices to determine fair value and classifies such items in Level 1. In some cases where a market price is not available, the Company will use observable market-based inputs to calculate fair value, in which case the items are classified in Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters such as interest rates, currency rates, or yield curves. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable. The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified. Where appropriate, the description includes details of the valuation models, and the key inputs to those models as well as any significant assumptions. Derivatives CNH Industrial utilizes derivative instruments to mitigate its exposure to interest rate and foreign currency exposures. Derivatives used as hedges are effective at reducing the risk associated with the exposure being hedged and are designated as a hedge at the inception of the derivative contract. CNH Industrial does not hold or enter into derivative or other financial instruments for speculative purposes. The credit and market risk related to derivatives is reduced through diversification among various counterparties, utilizing mandatory termination clauses and/or collateral support agreements. Derivative instruments are generally classified as Level 2 in the fair value hierarchy. The cash flows underlying all derivative contracts were recorded in operating activities in the condensed consolidated statements of cash flows. Foreign Exchange Derivatives CNH Industrial has entered into foreign exchange forward contracts and swaps in order to manage and preserve the economic value of cash flows in a currency different from the functional currency of the relevant legal entity. CNH Industrial conducts its business on a global basis in a wide variety of foreign currencies and hedges foreign currency exposures arising from various receivables, liabilities, and expected inventory purchases and sales. Derivative instruments utilized to hedge the foreign currency risk associated with anticipated inventory purchases and sales in foreign currencies are designated as cash flow hedges. Gains and losses on these instruments are deferred in accumulated other comprehensive income (loss) and recognized in earnings when the related transaction occurs. If a derivative instrument is terminated because the hedge relationship is no longer effective or because the hedged item is a forecasted transaction that is no longer determined to be probable, the cumulative amount recorded in accumulated other comprehensive income (loss) is recognized immediately in earnings. Such amounts were insignificant in all periods presented. CNH Industrial also uses forwards and swaps to hedge certain assets and liabilities denominated in foreign currencies. Such derivatives are considered economic hedges and not designated as hedging instruments. The changes in the fair values of these instruments are recognized directly in income in “Other, net” and are expected to offset the foreign exchange gains or losses on the exposures being managed. All of CNH Industrial’s foreign exchange derivatives are considered Level 2 as the fair value is calculated using market data input and can be compared to actively traded derivatives. The total notional amount of CNH Industrial’s foreign exchange derivatives was $6.9 billion and $6.9 billion at March 31, 2020 and December 31, 2019, respectively. Interest Rate Derivatives CNH Industrial has entered into interest rate derivatives (swaps and caps) in order to manage interest rate exposures arising in the normal course of business. Interest rate derivatives that have been designated as cash flow hedges are being used by the Company to mitigate the risk of rising interest rates related to existing debt and anticipated issuance of fixed-rate debt in future periods. Gains and losses on these instruments are deferred in accumulated other comprehensive income (loss) and recognized in interest expense over the period in which CNH Industrial recognizes interest expense on the related debt. Interest rate derivatives that have been designated as fair value hedge relationships have been used by CNH Industrial to mitigate the volatility in the fair value of existing fixed rate bonds and medium-term notes due to changes in floating interest rate benchmarks. Gains and losses on these instruments are recorded in “Interest expense” in the period in which they occur and an offsetting gain or loss is also reflected in “Interest expense” based on changes in the fair value of the debt instrument being hedged due to changes in floating interest rate benchmarks. CNH Industrial also enters into offsetting interest rate derivatives with substantially similar terms that are not designated as hedging instruments to mitigate interest rate risk related to CNH Industrial’s committed asset-backed facilities. Unrealized and realized gains and losses resulting from fair value changes in these instruments are recognized directly in income. Net gains and losses on these instruments were insignificant for the three months ended March 31, 2020 and 2019. All of CNH Industrial’s interest rate derivatives outstanding as of March 31, 2020 and December 31, 2019 are considered Level 2. The fair market value of these derivatives is calculated using market data input and can be compared to actively traded derivatives. The total notional amount of CNH Industrial’s interest rate derivatives was approximately $5.1 billion and $5.4 billion at March 31, 2020 and December 31, 2019, respectively. As a result of the reform and replacement of specific benchmark interest rates, uncertainty remains regarding the timing and exact nature of those changes. At March 31, 2020, the notional amount of hedging instruments directly affected by the reform of benchmark interest rates is $971 million. In the first quarter of 2020, the COVID-19 pandemic significantly impacted the economic environment. With regard to hedge accounting, the Company continues to monitor significant developments in order to assess the potential future impacts of the COVID-19 pandemic on the hedging relationships in place and to update its estimates concerning whether forecasted transactions can still be considered probable of occurring. Financial Statement Impact of CNH Industrial Derivatives The following table summarizes the gross impact of changes in the fair value of derivatives designated as cash flow hedges on accumulated other comprehensive income (loss) and net income (loss) during the three months ended March 31, 2020 and 2019 (in millions): Recognized in Net Income For the Three Months Ended March 31, Gain (Loss) Recognized in Accumulated Other Comprehensive Income Classification of Gain (Loss) Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income 2020 Foreign exchange contracts $ 81 Net sales (1) Cost of goods sold (16) Other, Net 15 Interest rate contracts (15) Interest expense (1) Total $ 66 $ (3) 2019 Foreign currency contracts $ (62) Net sales (5) Cost of goods sold (11) Other, Net (11) Interest rate contracts (9) Interest expense (1) Total $ (71) $ (28) The following table summarizes the activity in accumulated other comprehensive income related to the derivatives held by the Company during the three months ended March 31, 2020 and 2019: In Millions Before-Tax Amount Income Tax After-Tax Amount Accumulated derivative net losses as of December 31, 2019 $ (62) $ 8 $ (54) Net changes in fair value of derivatives 66 (2) 64 Net losses reclassified from accumulated other comprehensive income into income 3 (2) 1 Accumulated derivative net losses as of March 31, 2020 $ 7 $ 4 $ 11 In Millions Before-Tax Amount Income Tax After-Tax Amount Accumulated derivative net losses as of December 31, 2018 $ (23) $ 1 $ (22) Net changes in fair value of derivatives (71) 20 (51) Net losses reclassified from accumulated other comprehensive income into income 28 (4) 24 Accumulated derivative net losses as of March 31, 2019 $ (66) $ 17 $ (49) The following tables summarize the impact that changes in the fair value of fair value hedges and derivatives not designated as hedging instruments had on earnings (in millions). For the Three Months Ended March 31, Classification of Gain 2020 2019 Fair Value Hedges Interest rate derivatives Interest expense $ 40 $ 11 Not Designated as Hedges Foreign exchange contracts Other, Net $ 141 $ (24) The fair values of CNH Industrial’s derivatives as of March 31, 2020 and December 31, 2019 in the condensed consolidated balance sheets are recorded as follows: March 31, 2020 December 31, 2019 in millions of dollars Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments under Subtopic 815-20 Interest rate contracts Derivative assets 82 Derivative assets 44 Foreign currency contracts Derivative assets 111 Derivative assets 17 Total derivative assets designated as hedging instruments 193 61 Interest rate contracts Derivative liabilities 42 Derivative liabilities 29 Foreign currency contracts Derivative liabilities 69 Derivative liabilities 69 Total derivative liabilities designated as hedging instruments 111 98 Derivatives not designated as hedging instruments under Subtopic 815-20 Interest rate contracts Derivative assets — Derivative assets — Foreign currency contracts Derivative assets 28 Derivative assets 12 Total derivative assets not designated as hedging instruments 28 12 Interest rate contracts Derivative liabilities — Derivative liabilities — Foreign currency contracts Derivative liabilities 51 Derivative liabilities 23 Total derivative liabilities not designated as hedging instruments 51 23 Items Measured at Fair Value on a Recurring Basis The following tables present for each of the fair-value hierarchy levels the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019: Level 1 Level 2 Total March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 (in millions) Assets Foreign exchange derivatives $ — $ — $ 139 $ 29 $ 139 $ 29 Interest rate derivatives — — 82 44 82 44 Investments 1 1 — — 1 1 Total Assets $ 1 $ 1 $ 221 $ 73 $ 222 $ 74 Liabilities Foreign exchange derivatives $ — $ — $ (119) $ (92) $ (119) $ (92) Interest rate derivatives — — (42) (29) (42) (29) Commodities — — (1) — (1) — Total Liabilities $ — $ — $ (162) $ (121) $ (162) $ (121) Fair Value of Other Financial Instruments The carrying value of cash and cash equivalents, restricted cash, trade accounts receivable and accounts payable included in the condensed consolidated balance sheets approximates its fair value. Financial Instruments Not Carried at Fair Value The estimated fair market values of financial instruments not carried at fair value in the condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019 are as follows: March 31, 2020 December 31, 2019 Carrying Fair Carrying Fair (in millions) Financing receivables $ 17,584 $ 17,590 $ 19,428 $ 19,375 Debt $ 23,518 $ 23,293 $ 24,854 $ 25,249 Financing Receivables The fair value of financing receivables is based on the discounted values of their related cash flows at current market interest rates and they are classified as a Level 3 fair value measurement. Debt All debt is classified as a Level 2 fair value measurement with the exception of bonds issued by CNH Industrial Finance Europe S.A. and bonds issued by CNH Industrial N.V. that are classified as a Level 1 fair value measurement. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The Company’s share of other comprehensive income (loss) includes net income plus other comprehensive income, which includes changes in fair value of certain derivatives designated as cash flow hedges, certain changes in pension and other retirement benefit plans, foreign currency translations gains and losses, changes in the fair value of available-for-sale securities, the Company’s share of other comprehensive income (loss) of entities accounted for using the equity method, and reclassifications for amounts included in net income (loss) less net income (loss) and other comprehensive income (loss) attributable to the noncontrolling interest. For more information on derivative instruments, see “Note 16: Financial Instruments”. For more information on pensions and retirement benefit obligations, see “Note 6: Employee Benefit Plans and Postretirement Benefits”. The Company’s other comprehensive income (loss) amounts are aggregated within accumulated other comprehensive income (loss). The tax effect for each component of other comprehensive income (loss) consisted of the following (in millions): Three Months Ended March 31, 2020 Gross Income Net Unrealized gain (loss) on cash flow hedges $ 69 $ (4) $ 65 Changes in retirement plans’ funded status (29) 9 (20) Foreign currency translation (427) — (427) Share of other comprehensive (loss) of entities using the (19) — (19) Other comprehensive income (loss) $ (406) $ 5 $ (401) Three Months Ended March 31, 2019 Gross Income Net Unrealized gain (loss) on cash flow hedges $ (43) $ 16 $ (27) Changes in retirement plans’ funded status (10) 3 (7) Foreign currency translation 86 — 86 Share of other comprehensive income of entities using the (3) — (3) Other comprehensive income (loss) $ 30 $ 19 $ 49 The changes, net of tax, in each component of accumulated other comprehensive income (loss) consisted of the following (in millions): Unrealized Change in Foreign Currency Share of Other Total Balance, January 1, 2019 $ (22) $ (473) $ (1,216) $ (148) $ (1,859) Other comprehensive income (loss), before reclassifications (51) (76) 86 (5) (46) Amounts reclassified from other comprehensive 24 69 — — 93 Other comprehensive income (loss) * (27) (7) 86 (5) 47 Reclassification of certain tax effects — (65) — — (65) Balance, Balance, March 31, 2019 $ (49) $ (545) $ (1,130) $ (153) $ (1,877) Balance, January 1, 2020 $ (54) $ (650) $ (1,145) $ (153) $ (2,002) Other comprehensive income (loss), before reclassifications 63 9 (427) (17) (372) Amounts reclassified from other comprehensive 2 (29) — — (27) Other comprehensive income (loss) * 65 (20) (427) (17) (399) Balance, March 31, 2020 $ 11 $ (670) $ (1,572) $ (170) $ (2,401) (*) Excluded from the table above is other comprehensive income (loss) allocated to noncontrolling interests of $(2) million and $2 million for the three months ended March 31, 2020 and 2019, respectively. Significant amounts reclassified out of each component of accumulated other comprehensive income (loss) in the three months ended March 31, 2020 and 2019 consisted of the following: Amounts Reclassified from Other Consolidated Statement Three Months Ended March 31, 2020 2019 (in millions) Cash flow hedges $ 1 $ 5 Net sales 16 11 Cost of goods sold (15) 11 Other, net 1 1 Interest expense (1) (4) Income taxes $ 2 $ 24 Change in retirement plans’ funded status: Amortization of actuarial losses $ 11 $ 17 * Amortization of prior service cost (33) (30) * (7) 82 Income taxes $ (29) $ 69 Total reclassifications, net of tax $ (27) $ 93 (*) These amounts are included in net periodic pension and other postretirement benefit cost. See “Note 6: Employee Benefit Plans and Postretirement Benefits” for additional information. |
RELATED PARTY INFORMATION
RELATED PARTY INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY INFORMATION | RELATED PARTY INFORMATION CNH Industrial’s related parties are primarily EXOR N.V. and the companies that EXOR N.V. controls or has significant influence over, including Fiat Chrysler Automobiles N.V. and its subsidiaries and affiliates (“FCA”) and Ferrari N.V. and its subsidiaries and affiliates (“Ferrari”). As of March 31, 2020, EXOR N.V. held 42.2% of CNH Industrial’s voting power and had the ability to significantly influence the decisions submitted to a vote of CNH Industrial’s shareholders, including approval of annual dividends, the election and removal of directors, mergers or other business combinations, the acquisition or disposition of assets and issuances of equity and the incurrence of indebtedness. The percentage above has been calculated as the ratio of (i) the aggregate number of common shares and special voting shares owned by EXOR N.V. to (ii) the aggregate number of outstanding common shares and special voting shares of CNH Industrial as of March 31, 2020. In addition, CNH Industrial engages in transactions with its unconsolidated subsidiaries and affiliates over which CNH Industrial has a significant influence or jointly controls. The Company’s Audit Committee reviews and evaluates all significant related party transactions. Transactions with EXOR N.V. and its Subsidiaries and Affiliates EXOR N.V. is an investment holding company in Europe. Among other things, EXOR N.V. manages a portfolio that includes investments in FCA and Ferrari. CNH Industrial did not enter into any significant transactions with EXOR N.V. during the three months ended March 31, 2020 and 2019. In connection with the establishment of Fiat Industrial (now CNH Industrial) through the demerger from Fiat (now FCA), the two companies entered into a Master Services Agreement (“MSA”) which sets forth the primary terms and conditions pursuant to which the service provider subsidiaries of CNH Industrial and FCA provide services to the service receiving subsidiaries. As structured, the applicable service provider and service receiver subsidiaries become parties to the MSA through the execution of an Opt-in letter that may contain additional terms and conditions. Pursuant to the MSA, service receivers are required to pay to service providers the actual cost of the services plus a negotiated margin. FCA subsidiaries provide CNH Industrial with administrative services such as accounting, cash management, maintenance of plant and equipment, security, information systems and training under the terms and conditions of the MSA and the applicable Opt-in letters. Additionally, CNH Industrial sells engines and light commercial vehicles to and purchases engine blocks and other components from FCA subsidiaries. Furthermore, CNH Industrial and FCA may engage in other minor transactions in the ordinary course of business. These transactions with FCA are reflected in the Company’s condensed consolidated financial statements as follows: Three Months Ended March 31, 2020 2019 (in millions) Net sales $ 130 $ 160 Cost of goods sold $ 57 $ 113 Selling, general and administrative expenses $ 24 $ 33 March 31, 2020 December 31, 2019 (in millions) Trade receivables $ 4 $ 4 Trade payables $ 55 $ 83 Transactions with Unconsolidated Subsidiaries and Affiliates CNH Industrial sells commercial vehicles, agricultural and construction equipment, and provides technical services to unconsolidated subsidiaries and affiliates such as IVECO-OTO MELARA Società Consortile a responsabilità limitata, CNH de Mexico SA de CV, Turk Traktor ve Ziraat Makineleri A.S. and New Holland HFT Japan Inc. CNH Industrial also purchases equipment from unconsolidated subsidiaries and affiliates, such as Turk Traktor ve Ziraat Makineleri A.S. These transactions primarily affected revenues, finance and interest income, cost of goods sold, trade receivables and payables and are presented as follows: Three Months Ended March 31, 2020 2019 (in millions) Net sales $ 164 $ 251 Cost of goods sold $ 92 $ 106 March 31, 2020 December 31, 2019 (in millions) Trade receivables $ 95 $ 121 Trade payables $ 90 $ 70 At March 31, 2020 and December 31, 2019, CNH Industrial had provided guarantees on commitments of its joint ventures for an amount of $141 million and $145 million, respectively, mainly related to IVECO-OTO MELARA Società Consortile a responsabilità limitata. At March 31, 2020 and December 31, 2019, CNH Industrial had provided guarantees on commitments of its associated company for an amount of $276 million and $276 million, respectively, related to CNH Industrial Capital Europe S.a.S. |
SUPPLEMENTAL INFORMATION
SUPPLEMENTAL INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Information [Abstract] | |
SUPPLEMENTAL INFORMATION | SUPPLEMENTAL INFORMATION The operations and key financial measures and financial analysis differ significantly for manufacturing and distribution businesses and financial services businesses; therefore, management believes that certain supplemental disclosures are important in understanding the consolidated operations and financial results of CNH Industrial. This supplemental data is as follows: Industrial Activities - The financial information captioned “Industrial Activities” reflects the consolidation of all majority-owned subsidiaries except for Financial Services. Financial Services has been included using the equity method of accounting whereby the net income and net assets of Financial Services are reflected, respectively, in “Equity in income of unconsolidated subsidiaries and affiliates” in the accompanying condensed consolidated statements of operations, and in “Investment in Financial Services” in the accompanying condensed consolidated balance sheets. Financial Services - The financial information captioned “Financial Services” reflects the consolidation or combination of Financial Services business. Transactions between the “Industrial Activities” and “Financial Services” have been eliminated to arrive at the condensed consolidated financial statements. Statement of Operations Industrial Activities Financial Services Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 (in millions) Revenues Net sales $ 4,993 $ 6,006 $ — $ — Finance, interest and other income 15 30 489 474 Total Revenues $ 5,008 $ 6,036 $ 489 $ 474 Costs and Expenses Cost of goods sold $ 4,414 $ 4,966 $ — $ — Selling, general and administrative expenses 464 493 62 46 Research and development expenses 214 244 — — Restructuring expenses 5 8 — — Interest expense 74 83 143 153 Other, net 15 16 182 152 Total Costs and Expenses $ 5,186 $ 5,810 $ 387 $ 351 Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates (178) 226 102 123 Income tax (expense) benefit 53 (54) (30) (36) Equity in income of unconsolidated subsidiaries (9) (3) 8 8 Results from intersegment investments 80 95 — — Net income (loss) $ (54) $ 264 $ 80 $ 95 Balance Sheets Industrial Activities Financial Services March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 (in millions) ASSETS Cash and cash equivalents $ 3,429 $ 4,407 $ 421 $ 468 Restricted cash 122 120 732 778 Trade receivables, net 344 416 26 28 Financing receivables, net 979 1,223 18,998 20,657 Inventories, net 7,291 6,907 144 175 Property, plant and equipment, net 4,885 5,268 1 1 Investments in unconsolidated subsidiaries and affiliates 3,011 3,213 223 237 Equipment under operating leases 47 51 1,750 1,806 Goodwill 2,363 2,383 151 155 Other intangible assets, net 775 790 15 16 Deferred tax assets 1,072 1,090 170 178 Derivative assets 154 34 84 47 Other assets 1,929 2,148 164 319 Total Assets $ 26,401 $ 28,050 $ 22,879 $ 24,865 LIABILITIES AND EQUITY Debt $ 6,817 $ 6,558 $ 19,093 $ 20,748 Trade payables 4,796 5,490 155 191 Deferred tax liabilities 12 19 277 286 Pension, postretirement and other postemployment benefits 1,450 1,558 19 20 Derivative liabilities 130 97 49 32 Other liabilities 7,538 8,172 647 771 Total Liabilities $ 20,743 $ 21,894 $ 20,240 $ 22,048 Equity 5,622 6,121 2,639 2,817 Redeemable noncontrolling interest 36 35 — — Total Liabilities and Equity $ 26,401 $ 28,050 $ 22,879 $ 24,865 Statements of Cash Flows Industrial Activities Financial Services Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 (in millions) Operating activities: Net income (loss) $ (54) $ 264 $ 80 $ 95 Adjustments to reconcile net income (loss) to net cash Depreciation and amortization expense, net of 155 168 — 1 Depreciation and amortization expense of 65 79 63 65 Undistributed loss of unconsolidated subsidiaries (25) (84) (8) (8) Other non-cash items 15 28 24 5 Changes in operating assets and liabilities: Provisions (150) (96) (2) (10) Deferred income taxes (27) 10 (5) 22 Trade and financing receivables related to 46 (65) 600 (229) Inventories, net (697) (950) 146 71 Trade payables (478) 171 (28) (41) Other assets and liabilities (223) (339) 11 99 Net cash provided by (used in) operating activities $ (1,373) $ (814) $ 881 $ 70 Investing activities: Additions to retail receivables — — (926) (947) Collections of retail receivables — — 1,035 1,225 Proceeds from sale of assets, net of assets sold 5 — — — Expenditures for property, plant and equipment (63) (77) — (2) Expenditures for assets under operating leases and (98) (100) (158) (185) Other 517 (370) (390) 398 Net cash provided by (used in) investing activities $ 361 $ (547) $ (439) $ 489 Financing activities: Proceeds from long-term debt 100 683 2,120 3,127 Payments of long-term debt (5) (630) (2,652) (3,371) Net increase (decrease) in other financial liabilities 150 73 93 (394) Dividends paid (1) (1) (40) (7) Other — — — 20 Net cash provided by (used in) financing activities $ 244 $ 125 $ (479) $ (625) Effect of foreign exchange rate changes on cash and (208) (42) (56) — Decrease in cash and cash equivalents and restricted cash (976) (1,278) (93) (66) Cash and cash equivalents and restricted cash, beginning of year 4,527 4,553 1,246 1,250 Cash and cash equivalents and restricted cash, end of period $ 3,551 $ 3,275 $ 1,153 $ 1,184 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS As previously announced, in light of the challenges and uncertainties associated with the COVID-19 situation, as a precautionary measure, the Board of Directors decided to withdraw the dividend distribution previously proposed for payment on May 5, 2020. At the Annual General Meeting of shareholders held on April 16, 2020, the Company’s shareholders replaced the authorization for the Board of Directors to repurchase up to a maximum of 10% of the Company’s common shares issued as of the date of the AGM and approved the plan to award (rights to subscribe for) common shares in the capital of the Company to executive directors in accordance with Article 13.6 of the Company’s Articles of Association. On April 29, 2020, the Company issued £600 million ($748 million) of commercial paper through the Joint HM Treasury and Bank of England’s COVID Corporate Financing Facility (CCFF). Furthermore, in Canada, the Company issued a new retail ABS transaction on April 23, 2020 for a total amount of C$465 million ($338 million). |
NEW ACCOUNTING PRONOUNCEMENTS (
NEW ACCOUNTING PRONOUNCEMENTS (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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, 2019. 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. Due to the speed with which the COVID-19 situation is developing, actual results could 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. Our geographical regions are: (1) North America; (2) Europe; (3) South America and (4) Rest of World. The geographic designations have the following meanings: • North America : United States, Canada and Mexico; • Europe : member countries of the European Union, European Free Trade Association, Ukraine, and Balkans; • South America : Central and South America, and the Caribbean Islands; and • Rest of World |
New Accounting Policies Adopted and Not Yet Adopted | Financial Instruments In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, M easurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which established ASC 326, Financial Instruments – Credit Losses (ASC 326”). In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”), which superseded existing ASU 2016-13. The ASU introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Additional disclosures about significant estimates and credit quality were also required. The Company adopted ASU 2018-19 on January 1, 2020, using the modified retrospective approach. The impact to the consolidated balance sheet on January 1, 2020 was an increase to the allowance for credit losses of $26 million, a decrease to the investments in non-consolidated affiliates of $17 million and an increase to deferred tax assets of $7 million, with the offset to retained earnings of $36 million. The following paragraphs present the Company’s policy for Allowance for Credit Losses: Allowance for Credit Losses The allowance for credit losses is the Company’s estimate of the lifetime expected credit losses inherent in the trade receivables and financing receivables portfolios owned by the Company. Retail financing receivables that share the same risk characteristics (such as, collateralization levels, geography, product type and other relevant factors) are reviewed on a collective basis using measurement models and management judgment. The allowance for retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward looking macroeconomic factors, such as GDP and Net Farm Income. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Wholesale financing receivables and trade receivables that share the same risk characteristics (such as collateralization levels, term, geography and other relevant factors) are reviewed on a collective basis using measurement models and management judgment. The allowances for trade and wholesale credit losses are based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward looking macroeconomic factors, such as industry sales volumes. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowances for credit losses. These qualitative factors are subjective and require a degree of management judgment. Wholesale and retail financing receivables and trade receivables that do not have similar risk characteristics are individually reviewed based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured by considering: the probability-weighted estimates of cash flows and collateral value; the time value of money; current conditions and forecasts of future economic conditions. Expected credit losses are measured as the probability-weighted present value of all cash shortfalls (including the value of the collateral, if appropriate) over the expected life of each financial asset. Intangibles - Cloud Computing Arrangements In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement ("ASU 2018-15"), which expands upon the guidance set forth in ASU 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement . ASU 2018-15 aligns the requirements for capitalization of implementation costs in a cloud computing service contract with those requirements for capitalization of implementation costs incurred for an internal-use software license. The Company adopted ASU 2018-15 on a prospective basis on January 1, 2020. The adoption did not have a material impact on our results of operations, financial position and cash flows. Related Party Guidance for Variable Interest Entities In October 2018, the FASB issued ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities ("ASU 2018-17"), which expands the application of a specific private company alternative related to VIEs and changes the guidance for determining whether a decision-making fee is a variable interest. Under the new guidance, to determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportionate basis, rather than in their entirety. The Company adopted ASU 2018-17 on January 1, 2020. The adoption did not have a material impact on our consolidated financial statements. Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging , and Topic 825, Financial Instruments , which makes targeted changes to standards on credit losses, hedging, and recognizing and measuring financial instruments to clarify them and address implementation issues. The amendments clarify the scope of the credit losses standard and address issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other things. On recognizing and measuring financial instruments, the amendments address the scope of the guidance, the requirement for remeasurement under ASC 820 when using the measurement alternative, certain disclosure requirements and which equity securities have to be remeasured at historical exchange rates. The Company adopted the amendments related to ASU 2016-13, ASU 2017-12 and ASU 2016-01 at January 1, 2020. The adoption of this standard did not have a material impact on our consolidated financial statements. Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which amends ASC 820, Fair Value Measurement . This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements. Not Yet Adopted Defined Benefit Plans Disclosure In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General: Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14"), which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. ASU 2018-14 is effective for annual periods beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its related disclosures. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”). This ASU eliminates certain exceptions to the general principles in ASC 740, Income Taxes. Specifically, it eliminates the exception to (1) the incremental approach for intraperiod tax allocation when there is a loss from continuing operations, and income or a gain from other items; (2) the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (3) the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. ASU 2019-12 will be effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the impact of the adoption of this standard on its consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides temporary optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedging relationships, and other transactions affected by Reference Rate Reform if certain criteria are met. ASU 2020-04 can be adopted beginning as of March 12, 2020 through December 31, 2022 and may be applied as of the beginning of the interim period that includes March 12, 2020 or any date thereafter. The Company has not adopted ASU 2020-04 as of March 31, 2020. ASU 2020-04 is not expected to have a significant impact on the Company's consolidated financial statements. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue by Segment and Source | The following table summarizes revenues for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (in millions) Agriculture $ 2,244 $ 2,490 Construction 422 640 Commercial and Specialty Vehicles 2,021 2,414 Powertrain 753 1,036 Eliminations and Other (447) (574) Total Industrial Activities $ 4,993 $ 6,006 Financial Services 489 474 Eliminations and Other (21) (23) Total Revenues $ 5,461 $ 6,457 The following table disaggregates revenues by major source for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (in millions) Revenues from: Sales of goods $ 4,755 $ 5,757 Rendering of services and other revenues 156 145 Rents on assets sold with a buy-back commitment 82 104 Revenues from sales of goods and services 4,993 6,006 Finance and interest income 273 288 Rents and other income on operating lease 195 163 Finance, interest and other income 468 451 Total Revenues $ 5,461 $ 6,457 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Assets and Liabilities of Consolidated VIEs | The following table presents certain assets and liabilities of consolidated VIEs, which are included in the condensed consolidated balance sheets included in this report. The assets in the table below include only those assets that can be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third party liabilities of the consolidated VIEs for which creditors do not have recourse to the general credit of the Company. March 31, 2020 December 31, 2019 (in millions) Restricted cash $ 692 $ 739 Financing receivables 8,183 9,026 Total Assets $ 8,875 $ 9,765 Debt $ 8,115 $ 9,011 Total Liabilities $ 8,115 $ 9,011 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Earnings Per Share | A reconciliation of basic and diluted earnings per share is as follows (in millions, except per share amounts): Three Months Ended March 31, 2020 2019 Basic: Net income (loss) attributable to CNH Industrial $ (65) $ 257 Weighted average common shares outstanding—basic 1,350 1,354 Basic earnings per share $ (0.05) $ 0.19 Diluted: Net income (loss) attributable to CNH Industrial $ (65) $ 257 Weighted average common shares outstanding—basic 1,350 1,354 Effect of dilutive securities (when dilutive): Stock compensation plans (1) — 2 Weighted average common shares outstanding—diluted 1,350 1,356 Diluted earnings per share $ (0.05) $ 0.19 (1) For the three months ended March 31, 2019, no shares were excluded from the computation of diluted earnings per share due to an anti-dilutive impact. |
EMPLOYEE BENEFIT PLANS AND PO_2
EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Postemployment Benefits [Abstract] | |
Summary of Net Periodic Benefit Cost | The following table summarizes the components of net periodic benefit cost of CNH Industrial’s defined benefit pension plans and postretirement health and life insurance plans for the three months ended March 31, 2020 and 2019: Pension Healthcare Other Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 2020 2019 (in millions) Service cost $ 5 $ 6 $ 1 $ 1 $ 4 $ 3 Interest cost 11 19 3 4 — 1 Expected return on assets (20) (25) (2) (2) — — Amortization of: Prior service credit — — (33) (30) — — Actuarial loss 10 17 1 — — — Net periodic benefit cost $ 6 $ 17 $ (30) $ (27) $ 4 $ 4 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Financial Information by Segment | 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 months ended March 31, 2020 and 2019. Three Months Ended March 31, 2020 Agriculture Construction Commercial and Specialty Vehicles Powertrain Unallocated items, eliminations and other Total Industrial Activities Financial Services Eliminations Total (in millions) Revenues $ 2,244 $ 422 $ 2,021 $ 753 $ (447) $ 4,993 $ 489 $ (21) $ 5,461 Net income (loss) (1) (134) 80 — (54) Add back: Income tax expense (53) 30 — (23) Interest expense of Industrial Activities, net of interest income and eliminations 59 — — 59 Foreign exchange losses, net (2) — — (2) Finance and non-service component of Pension and OPEB costs (2) (30) — — (30) Adjustments: Restructuring expenses 2 1 2 — — 5 — — 5 Other discrete items — — — — 7 7 — — 7 Adjusted EBIT $ 24 $ (83) $ (56) $ 31 $ (64) $ (148) $ 110 $ — $ (38) Depreciation and amortization 64 13 49 29 — 155 — — 155 Depreciation of assets on operating lease and assets sold with buy-back commitment — — 65 — — 65 63 — 128 Adjusted EBITDA $ 88 $ (70) $ 58 $ 60 $ (64) $ 72 $ 173 $ — $ 245 (1) For Industrial Activities, net loss is net of “Results from intersegment investments”. (2) This item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of certain healthcare benefits in the U.S. Three Months Ended March 31, 2019 Agriculture Construction Commercial and Specialty Vehicles Powertrain Unallocated items, eliminations and other Total Industrial Activities Financial Services Eliminations Total (in millions) Revenues $ 2,490 $ 640 $ 2,414 $ 1,036 $ (574) $ 6,006 $ 474 $ (23) $ 6,457 Net income (1) 169 95 — 264 Add back: Income tax expense 54 36 — 90 Interest expense of Industrial Activities, net of interest income and eliminations 53 — — 53 Foreign exchange losses, net 9 — — 9 Finance and non-service component of Pension and OPEB costs (2) (15) — — (15) Adjustments: Restructuring expenses 3 — 5 — — 8 — — 8 Adjusted EBIT $ 168 $ 13 $ 51 $ 96 $ (50) $ 278 $ 131 $ — $ 409 Depreciation and amortization 75 14 47 32 — 168 1 — 169 Depreciation of assets on operating lease and assets sold with buy-back commitment — — 79 — — 79 65 — 144 Adjusted EBITDA $ 243 $ 27 $ 177 $ 128 $ (50) $ 525 $ 197 $ — $ 722 (1) For Industrial Activities, net income is net of “Results from intersegment investments”. (2) This item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the modification of certain healthcare benefits in the U.S. |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Summary of Financing Receivables | A summary of financing receivables as of March 31, 2020 and December 31, 2019 is as follows: March 31, 2020 December 31, 2019 (in millions) Retail $ 8,453 $ 9,218 Wholesale 9,031 10,081 Other 100 129 Total $ 17,584 $ 19,428 |
Summary of Aging of Financing Receivables | The aging of financing receivables as of March 31, 2020 and December 31, 2019 is as follows (in millions): 31-60 Days 61-90 Days Total Past Current Total Non- Total Retail North America 2020 $ 509 $ — $ 509 2019 2,213 2 2,215 2018 1,507 3 1,510 2017 853 4 857 2016 488 3 491 Prior to 2016 285 2 287 Total $ 19 $ — $ 19 $ 5,836 $ 5,855 $ 14 $ 5,869 South America 2020 $ 195 $ — $ 195 2019 602 5 607 2018 397 6 403 2017 239 4 243 2016 133 3 136 Prior to 2016 144 6 150 Total $ 9 $ 1 $ 10 $ 1,700 $ 1,710 $ 24 $ 1,734 Rest of World 2020 $ 86 $ — $ 86 2019 260 — 260 2018 189 1 190 2017 133 — 133 2016 55 — 55 Prior to 2016 9 — 9 Total $ 7 $ 2 $ 9 $ 723 $ 732 $ 1 $ 733 Europe $ — $ — $ — $ 117 $ 117 $ — $ 117 Total Retail $ 35 $ 3 $ 38 $ 8,376 $ 8,414 $ 39 $ 8,453 Wholesale North America $ — $ — $ — $ 3,506 $ 3,506 $ 24 $ 3,530 South America 1 — 1 654 655 41 696 Rest of World 8 1 9 532 541 6 547 Europe 36 6 42 4,208 4,250 8 4,258 Total Wholesale $ 45 $ 7 $ 52 $ 8,900 $ 8,952 $ 79 $ 9,031 December 31, 2019 31-60 Days 61-90 Days Greater Than Total Past Current Total Non- Total Retail North America $ 24 $ 4 $ — $ 28 $ 6,123 $ 6,151 $ 16 $ 6,167 Europe — — — — 136 136 — 136 South America 9 2 6 17 1,974 1,991 18 2,009 Rest of World 3 1 2 6 900 906 — 906 Total Retail $ 36 $ 7 $ 8 $ 51 $ 9,133 $ 9,184 $ 34 $ 9,218 Wholesale North America $ — $ — $ — $ — $ 3,641 $ 3,641 $ 26 $ 3,667 Europe 24 9 7 40 4,857 4,897 — 4,897 South America 2 — 1 3 829 832 55 887 Rest of World 5 3 6 14 616 630 — 630 Total Wholesale $ 31 $ 12 $ 14 $ 57 $ 9,943 $ 10,000 $ 81 $ 10,081 |
Summary of Allowance for Credit Loss Activity | Allowance for credit losses activity for the three months ended March 31, 2020 and 2019 is as follows (in millions): Three Months Ended March 31, 2020 Retail Wholesale Opening Balance, as previously reported $ 299 $ 159 Adoption of ASC 326 35 (9) Opening Balance, as recast 334 150 Provision (benefit) 20 2 Charge-offs, net of recoveries (20) — Foreign Currency Translation and Other (20) (8) Ending Balance $ 314 $ 144 At March 31, 2020, the allowance for credit losses was impacted by a change in the Company’s forward-looking macroeconomic factors and qualitative factors for the Company’s estimates of the impact from the COVID-19 pandemic. As this situation has rapidly evolved and is fluid, there is significant subjectivity in the assessment. The Company continues to monitor the situation and will update the macroeconomic factors and qualitative factors in future periods, as warranted. The provision for credit losses is included in selling, general, and administrative expenses. Three Months Ended March 31, 2019 Retail Wholesale Opening Balance $ 326 $ 164 Provision (benefit) 8 (3) Charge-offs, net of recoveries (11) (2) Foreign Currency Translation and Other (6) (2) Ending Balance $ 317 $ 157 Allowance for credit losses activity for the year ended December 31, 2019 is as follows (in millions): December 31, 2019 Retail Wholesale Opening Balance $ 326 $ 164 Provision (benefit) 44 12 Charge-offs, net of recoveries (51) (18) Foreign Currency Translation and Other (20) 1 Ending Balance $ 299 $ 159 |
Summary of Financing Receivable Impairment | |
Summary of Carrying Amount of Restricted Assets | At March 31, 2020 and December 31, 2019, the carrying amount of such restricted assets included in financing receivables above are the following (in millions): Restricted Receivables March 31, 2020 December 31, 2019 Retail note and finance lease receivables $ 5,797 $ 6,340 Wholesale receivables 7,151 7,266 Total $ 12,948 $ 13,606 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories as of March 31, 2020 and December 31, 2019 consist of the following: March 31, 2020 December 31, 2019 (in millions) Raw materials $ 1,510 $ 1,332 Work-in-process 744 612 Finished goods 5,181 5,138 Total inventories $ 7,435 $ 7,082 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments Under Operating Leases and Payments to be Received | Future minimum lease payments under non-cancellable leases as of March 31, 2020 were as follows: Operating Leases ($ million) 2020 (excluding the three months ended March 31, 2020) $ 90 2021 95 2022 70 2023 53 2024 38 2025 and thereafter 124 Total future minimum lease payments $ 470 Less: Interest (54) Total $ 416 |
Schedule of Undiscounted Lease Payments to be Received | The following table sets out a maturity analysis of operating lease payments, showing the undiscounted lease payments to be received after the reporting date: Amount (in millions) 2020 $ 200 2021 149 2022 82 2023 30 2024 8 2025 and thereafter 3 Total undiscounted lease payments $ 472 |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Investments in Unconsolidated Subsidiaries and Affiliates | A summary of investments in unconsolidated subsidiaries and affiliates as of March 31, 2020 and December 31, 2019 is as follows: March 31, 2020 December 31, 2019 (in millions) Equity method $ 474 $ 513 Cost method 119 118 Total $ 593 $ 631 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill for the three months ended March 31, 2020 are as follows: Agriculture Construction Commercial and Specialty Powertrain Financial Total (in millions) Balance at Balance at January 1, 2020 $ 1,732 $ 587 $ 59 $ 5 $ 155 $ 2,538 Foreign currency translation and other (14) (4) (2) — (4) (24) Balance at Balance at March 31, 2020 $ 1,718 $ 583 $ 57 $ 5 $ 151 $ 2,514 |
Summary of Other Intangible Assets | As of March 31, 2020 and December 31, 2019, the Company’s other intangible assets and related accumulated amortization consisted of the following: March 31, 2020 December 31, 2019 Weighted Gross Accumulated Net Gross Accumulated Net (in millions) Other intangible assets subject to Dealer networks 15 $ 337 $ 233 $ 104 $ 320 $ 224 $ 96 Patents, concessions and licenses and other 5-25 1,929 1,516 413 1,965 1,528 437 2,266 1,749 517 2,285 1,752 533 Other intangible assets not subject to Trademarks 273 — 273 273 — 273 Total Other intangible assets $ 2,539 $ 1,749 $ 790 $ 2,558 $ 1,752 $ 806 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Liabilities | A summary of Other liabilities as of March 31, 2020 and December 31, 2019 is as follows: March 31, 2020 December 31, 2019 (in millions) Repurchase price on buy-back agreements $ 1,307 $ 1,472 Warranty and campaign programs 887 919 Marketing and sales incentive programs 1,156 1,279 Tax payables 422 696 Accrued expenses and deferred income 670 639 Accrued employee benefits 486 562 Lease liabilities 416 449 Legal reserves and other provisions 319 299 Contract reserve 301 319 Contract liabilities (1) 1,154 1,236 Restructuring reserve 80 103 Other 856 866 Total $ 8,054 $ 8,839 (1) Contract liabilities include $602 million and $657 million at March 31, 2020 and December 31, 2019, respectively, for future rents related to buy-back agreements. |
Summary of Basic Warranty and Accruals for Campaign Programs | A summary of recorded activity for the three months ended March 31, 2020 and 2019 for the basic warranty and accruals for campaign programs are as follows: Three Months Ended March 31, 2020 2019 (in millions) Balance at beginning of period $ 919 $ 925 Current year additions 184 184 Claims paid (169) (180) Currency translation adjustment and other (47) (14) Balance at March 31, 2020 $ 887 $ 915 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Gross Impact of Changes in Fair Value of Derivatives Designated as Cash Flow Hedges on AOCI and Net Income | The following table summarizes the gross impact of changes in the fair value of derivatives designated as cash flow hedges on accumulated other comprehensive income (loss) and net income (loss) during the three months ended March 31, 2020 and 2019 (in millions): Recognized in Net Income For the Three Months Ended March 31, Gain (Loss) Recognized in Accumulated Other Comprehensive Income Classification of Gain (Loss) Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income 2020 Foreign exchange contracts $ 81 Net sales (1) Cost of goods sold (16) Other, Net 15 Interest rate contracts (15) Interest expense (1) Total $ 66 $ (3) 2019 Foreign currency contracts $ (62) Net sales (5) Cost of goods sold (11) Other, Net (11) Interest rate contracts (9) Interest expense (1) Total $ (71) $ (28) Significant amounts reclassified out of each component of accumulated other comprehensive income (loss) in the three months ended March 31, 2020 and 2019 consisted of the following: Amounts Reclassified from Other Consolidated Statement Three Months Ended March 31, 2020 2019 (in millions) Cash flow hedges $ 1 $ 5 Net sales 16 11 Cost of goods sold (15) 11 Other, net 1 1 Interest expense (1) (4) Income taxes $ 2 $ 24 Change in retirement plans’ funded status: Amortization of actuarial losses $ 11 $ 17 * Amortization of prior service cost (33) (30) * (7) 82 Income taxes $ (29) $ 69 Total reclassifications, net of tax $ (27) $ 93 (*) These amounts are included in net periodic pension and other postretirement benefit cost. See “Note 6: Employee Benefit Plans and Postretirement Benefits” for additional information. |
Summary of Impact of Changes in Fair Value of Fair Value Hedges and Derivatives Not Designated as Hedging Instruments on Earnings | The following table summarizes the activity in accumulated other comprehensive income related to the derivatives held by the Company during the three months ended March 31, 2020 and 2019: In Millions Before-Tax Amount Income Tax After-Tax Amount Accumulated derivative net losses as of December 31, 2019 $ (62) $ 8 $ (54) Net changes in fair value of derivatives 66 (2) 64 Net losses reclassified from accumulated other comprehensive income into income 3 (2) 1 Accumulated derivative net losses as of March 31, 2020 $ 7 $ 4 $ 11 In Millions Before-Tax Amount Income Tax After-Tax Amount Accumulated derivative net losses as of December 31, 2018 $ (23) $ 1 $ (22) Net changes in fair value of derivatives (71) 20 (51) Net losses reclassified from accumulated other comprehensive income into income 28 (4) 24 Accumulated derivative net losses as of March 31, 2019 $ (66) $ 17 $ (49) The following tables summarize the impact that changes in the fair value of fair value hedges and derivatives not designated as hedging instruments had on earnings (in millions). For the Three Months Ended March 31, Classification of Gain 2020 2019 Fair Value Hedges Interest rate derivatives Interest expense $ 40 $ 11 Not Designated as Hedges Foreign exchange contracts Other, Net $ 141 $ (24) |
Summary of Fair Value of Derivatives | The fair values of CNH Industrial’s derivatives as of March 31, 2020 and December 31, 2019 in the condensed consolidated balance sheets are recorded as follows: March 31, 2020 December 31, 2019 in millions of dollars Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments under Subtopic 815-20 Interest rate contracts Derivative assets 82 Derivative assets 44 Foreign currency contracts Derivative assets 111 Derivative assets 17 Total derivative assets designated as hedging instruments 193 61 Interest rate contracts Derivative liabilities 42 Derivative liabilities 29 Foreign currency contracts Derivative liabilities 69 Derivative liabilities 69 Total derivative liabilities designated as hedging instruments 111 98 Derivatives not designated as hedging instruments under Subtopic 815-20 Interest rate contracts Derivative assets — Derivative assets — Foreign currency contracts Derivative assets 28 Derivative assets 12 Total derivative assets not designated as hedging instruments 28 12 Interest rate contracts Derivative liabilities — Derivative liabilities — Foreign currency contracts Derivative liabilities 51 Derivative liabilities 23 Total derivative liabilities not designated as hedging instruments 51 23 |
Summary of Fair Value Hierarchy Levels | The following tables present for each of the fair-value hierarchy levels the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019: Level 1 Level 2 Total March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 (in millions) Assets Foreign exchange derivatives $ — $ — $ 139 $ 29 $ 139 $ 29 Interest rate derivatives — — 82 44 82 44 Investments 1 1 — — 1 1 Total Assets $ 1 $ 1 $ 221 $ 73 $ 222 $ 74 Liabilities Foreign exchange derivatives $ — $ — $ (119) $ (92) $ (119) $ (92) Interest rate derivatives — — (42) (29) (42) (29) Commodities — — (1) — (1) — Total Liabilities $ — $ — $ (162) $ (121) $ (162) $ (121) |
Summary of Estimated Fair Market Values | The estimated fair market values of financial instruments not carried at fair value in the condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019 are as follows: March 31, 2020 December 31, 2019 Carrying Fair Carrying Fair (in millions) Financing receivables $ 17,584 $ 17,590 $ 19,428 $ 19,375 Debt $ 23,518 $ 23,293 $ 24,854 $ 25,249 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Tax Effects on Components of Other Comprehensive Income (Loss) | The tax effect for each component of other comprehensive income (loss) consisted of the following (in millions): Three Months Ended March 31, 2020 Gross Income Net Unrealized gain (loss) on cash flow hedges $ 69 $ (4) $ 65 Changes in retirement plans’ funded status (29) 9 (20) Foreign currency translation (427) — (427) Share of other comprehensive (loss) of entities using the (19) — (19) Other comprehensive income (loss) $ (406) $ 5 $ (401) Three Months Ended March 31, 2019 Gross Income Net Unrealized gain (loss) on cash flow hedges $ (43) $ 16 $ (27) Changes in retirement plans’ funded status (10) 3 (7) Foreign currency translation 86 — 86 Share of other comprehensive income of entities using the (3) — (3) Other comprehensive income (loss) $ 30 $ 19 $ 49 |
Summary of Changes in Other Comprehensive Income (Loss) | The changes, net of tax, in each component of accumulated other comprehensive income (loss) consisted of the following (in millions): Unrealized Change in Foreign Currency Share of Other Total Balance, January 1, 2019 $ (22) $ (473) $ (1,216) $ (148) $ (1,859) Other comprehensive income (loss), before reclassifications (51) (76) 86 (5) (46) Amounts reclassified from other comprehensive 24 69 — — 93 Other comprehensive income (loss) * (27) (7) 86 (5) 47 Reclassification of certain tax effects — (65) — — (65) Balance, Balance, March 31, 2019 $ (49) $ (545) $ (1,130) $ (153) $ (1,877) Balance, January 1, 2020 $ (54) $ (650) $ (1,145) $ (153) $ (2,002) Other comprehensive income (loss), before reclassifications 63 9 (427) (17) (372) Amounts reclassified from other comprehensive 2 (29) — — (27) Other comprehensive income (loss) * 65 (20) (427) (17) (399) Balance, March 31, 2020 $ 11 $ (670) $ (1,572) $ (170) $ (2,401) (*) Excluded from the table above is other comprehensive income (loss) allocated to noncontrolling interests of $(2) million and $2 million for the three months ended March 31, 2020 and 2019, respectively. |
Summary of Reclassification of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the gross impact of changes in the fair value of derivatives designated as cash flow hedges on accumulated other comprehensive income (loss) and net income (loss) during the three months ended March 31, 2020 and 2019 (in millions): Recognized in Net Income For the Three Months Ended March 31, Gain (Loss) Recognized in Accumulated Other Comprehensive Income Classification of Gain (Loss) Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income 2020 Foreign exchange contracts $ 81 Net sales (1) Cost of goods sold (16) Other, Net 15 Interest rate contracts (15) Interest expense (1) Total $ 66 $ (3) 2019 Foreign currency contracts $ (62) Net sales (5) Cost of goods sold (11) Other, Net (11) Interest rate contracts (9) Interest expense (1) Total $ (71) $ (28) Significant amounts reclassified out of each component of accumulated other comprehensive income (loss) in the three months ended March 31, 2020 and 2019 consisted of the following: Amounts Reclassified from Other Consolidated Statement Three Months Ended March 31, 2020 2019 (in millions) Cash flow hedges $ 1 $ 5 Net sales 16 11 Cost of goods sold (15) 11 Other, net 1 1 Interest expense (1) (4) Income taxes $ 2 $ 24 Change in retirement plans’ funded status: Amortization of actuarial losses $ 11 $ 17 * Amortization of prior service cost (33) (30) * (7) 82 Income taxes $ (29) $ 69 Total reclassifications, net of tax $ (27) $ 93 (*) These amounts are included in net periodic pension and other postretirement benefit cost. See “Note 6: Employee Benefit Plans and Postretirement Benefits” for additional information. |
RELATED PARTY INFORMATION (Tabl
RELATED PARTY INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | These transactions with FCA are reflected in the Company’s condensed consolidated financial statements as follows: Three Months Ended March 31, 2020 2019 (in millions) Net sales $ 130 $ 160 Cost of goods sold $ 57 $ 113 Selling, general and administrative expenses $ 24 $ 33 March 31, 2020 December 31, 2019 (in millions) Trade receivables $ 4 $ 4 Trade payables $ 55 $ 83 Three Months Ended March 31, 2020 2019 (in millions) Net sales $ 164 $ 251 Cost of goods sold $ 92 $ 106 March 31, 2020 December 31, 2019 (in millions) Trade receivables $ 95 $ 121 Trade payables $ 90 $ 70 |
SUPPLEMENTAL INFORMATION (Table
SUPPLEMENTAL INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Information [Abstract] | |
Summary of Supplemental Information, Income Statement | Statement of Operations Industrial Activities Financial Services Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 (in millions) Revenues Net sales $ 4,993 $ 6,006 $ — $ — Finance, interest and other income 15 30 489 474 Total Revenues $ 5,008 $ 6,036 $ 489 $ 474 Costs and Expenses Cost of goods sold $ 4,414 $ 4,966 $ — $ — Selling, general and administrative expenses 464 493 62 46 Research and development expenses 214 244 — — Restructuring expenses 5 8 — — Interest expense 74 83 143 153 Other, net 15 16 182 152 Total Costs and Expenses $ 5,186 $ 5,810 $ 387 $ 351 Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates (178) 226 102 123 Income tax (expense) benefit 53 (54) (30) (36) Equity in income of unconsolidated subsidiaries (9) (3) 8 8 Results from intersegment investments 80 95 — — Net income (loss) $ (54) $ 264 $ 80 $ 95 |
Summary of Supplemental Information, Balance Sheet | Balance Sheets Industrial Activities Financial Services March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 (in millions) ASSETS Cash and cash equivalents $ 3,429 $ 4,407 $ 421 $ 468 Restricted cash 122 120 732 778 Trade receivables, net 344 416 26 28 Financing receivables, net 979 1,223 18,998 20,657 Inventories, net 7,291 6,907 144 175 Property, plant and equipment, net 4,885 5,268 1 1 Investments in unconsolidated subsidiaries and affiliates 3,011 3,213 223 237 Equipment under operating leases 47 51 1,750 1,806 Goodwill 2,363 2,383 151 155 Other intangible assets, net 775 790 15 16 Deferred tax assets 1,072 1,090 170 178 Derivative assets 154 34 84 47 Other assets 1,929 2,148 164 319 Total Assets $ 26,401 $ 28,050 $ 22,879 $ 24,865 LIABILITIES AND EQUITY Debt $ 6,817 $ 6,558 $ 19,093 $ 20,748 Trade payables 4,796 5,490 155 191 Deferred tax liabilities 12 19 277 286 Pension, postretirement and other postemployment benefits 1,450 1,558 19 20 Derivative liabilities 130 97 49 32 Other liabilities 7,538 8,172 647 771 Total Liabilities $ 20,743 $ 21,894 $ 20,240 $ 22,048 Equity 5,622 6,121 2,639 2,817 Redeemable noncontrolling interest 36 35 — — Total Liabilities and Equity $ 26,401 $ 28,050 $ 22,879 $ 24,865 |
Summary of Supplemental Information, Cash Flows | Statements of Cash Flows Industrial Activities Financial Services Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 (in millions) Operating activities: Net income (loss) $ (54) $ 264 $ 80 $ 95 Adjustments to reconcile net income (loss) to net cash Depreciation and amortization expense, net of 155 168 — 1 Depreciation and amortization expense of 65 79 63 65 Undistributed loss of unconsolidated subsidiaries (25) (84) (8) (8) Other non-cash items 15 28 24 5 Changes in operating assets and liabilities: Provisions (150) (96) (2) (10) Deferred income taxes (27) 10 (5) 22 Trade and financing receivables related to 46 (65) 600 (229) Inventories, net (697) (950) 146 71 Trade payables (478) 171 (28) (41) Other assets and liabilities (223) (339) 11 99 Net cash provided by (used in) operating activities $ (1,373) $ (814) $ 881 $ 70 Investing activities: Additions to retail receivables — — (926) (947) Collections of retail receivables — — 1,035 1,225 Proceeds from sale of assets, net of assets sold 5 — — — Expenditures for property, plant and equipment (63) (77) — (2) Expenditures for assets under operating leases and (98) (100) (158) (185) Other 517 (370) (390) 398 Net cash provided by (used in) investing activities $ 361 $ (547) $ (439) $ 489 Financing activities: Proceeds from long-term debt 100 683 2,120 3,127 Payments of long-term debt (5) (630) (2,652) (3,371) Net increase (decrease) in other financial liabilities 150 73 93 (394) Dividends paid (1) (1) (40) (7) Other — — — 20 Net cash provided by (used in) financing activities $ 244 $ 125 $ (479) $ (625) Effect of foreign exchange rate changes on cash and (208) (42) (56) — Decrease in cash and cash equivalents and restricted cash (976) (1,278) (93) (66) Cash and cash equivalents and restricted cash, beginning of year 4,527 4,553 1,246 1,250 Cash and cash equivalents and restricted cash, end of period $ 3,551 $ 3,275 $ 1,153 $ 1,184 |
NEW ACCOUNTING PRONOUNCEMENTS_2
NEW ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Investments in unconsolidated subsidiaries and affiliates | $ 593 | $ 631 | |
Deferred tax assets | 1,097 | 1,134 | |
Decrease in retained earnings | $ (3,707) | $ (3,808) | |
Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Financing Receivable, Allowance for Credit Loss | $ 26 | ||
Investments in unconsolidated subsidiaries and affiliates | 17 | ||
Deferred tax assets | 7 | ||
Decrease in retained earnings | $ 36 |
REVENUE - Summary of Net Revenu
REVENUE - Summary of Net Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 4,993 | $ 6,006 |
Total Revenues | 5,461 | 6,457 |
Eliminations and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | (21) | (23) |
Industrial Activities | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,993 | 6,006 |
Total Revenues | 5,008 | 6,036 |
Industrial Activities | Operating segments | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,993 | 6,006 |
Industrial Activities | Operating segments | Agriculture | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,244 | 2,490 |
Industrial Activities | Operating segments | Construction | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 422 | 640 |
Industrial Activities | Operating segments | Commercial and Specialty Vehicles | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,021 | 2,414 |
Industrial Activities | Operating segments | Powertrain | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 753 | 1,036 |
Industrial Activities | Eliminations and Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | (447) | (574) |
Financial Services | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
Total Revenues | 489 | 474 |
Financial Services | Operating segments | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 489 | 474 |
Financial Services | Eliminations and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ (21) | $ (23) |
REVENUE - Disaggregation of Net
REVENUE - Disaggregation of Net Revenues by Major Source (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 4,993 | $ 6,006 |
Finance and interest income | 273 | 288 |
Rents and other income on operating lease | 195 | 163 |
Finance, interest and other income | 468 | 451 |
Total Revenues | 5,461 | 6,457 |
Sales of goods | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,755 | 5,757 |
Rendering of services and other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 156 | 145 |
Rents on assets sold with a buy-back commitment | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 82 | $ 104 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Contract liabilities | $ 1,154 | $ 1,236 | |
Revenues relating to contract liabilities outstanding | 145 | $ 163 | |
Transaction price allocated to remaining performance obligations | $ 1,800 |
REVENUE - Performance Obligatio
REVENUE - Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | Mar. 31, 2020 |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of revenue recognized on remaining performance obligation | 39.00% |
Revenue over the remaining lives of the contracts | 12 months |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of revenue recognized on remaining performance obligation | 84.00% |
Revenue over the remaining lives of the contracts | 36 months |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | ||
Restricted cash | $ 854 | $ 898 |
Financing receivables, net | 17,584 | 19,428 |
Total Assets | 43,913 | 47,352 |
Debt | 23,518 | 24,854 |
Total Liabilities | 38,255 | 41,196 |
Variable interest entities | ||
Variable Interest Entity [Line Items] | ||
Restricted cash | 692 | 739 |
Financing receivables, net | 8,183 | 9,026 |
Total Assets | 8,875 | 9,765 |
Debt | 8,115 | 9,011 |
Total Liabilities | $ 8,115 | $ 9,011 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Basic: | ||
Net income (loss) attributable to CNH Industrial | $ (65) | $ 257 |
Weighted average common shares outstanding—basic (in shares) | 1,350,000,000 | 1,354,000,000 |
Basic earnings per share (in usd per share) | $ (0.05) | $ 0.19 |
Diluted: | ||
Net income (loss) attributable to CNH Industrial | $ (65) | $ 257 |
Weighted average common shares outstanding—basic (in shares) | 1,350,000,000 | 1,354,000,000 |
Effect of dilutive securities (when dilutive): | ||
Stock compensation plans (in shares) | 0 | 2,000,000 |
Weighted average common shares outstanding—diluted (in shares) | 1,350,000,000 | 1,356,000,000 |
Diluted earnings per share (in usd per share) | $ (0.05) | $ 0.19 |
Antidilutive securities excluded from EPS computation (in shares) | 0 |
EMPLOYEE BENEFIT PLANS AND PO_3
EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS - Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Pension | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ 5 | $ 6 |
Interest cost | 11 | 19 |
Expected return on assets | (20) | (25) |
Amortization of: | ||
Prior service credit | 0 | 0 |
Actuarial loss | 10 | 17 |
Net periodic benefit cost | 6 | 17 |
Healthcare | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 1 | 1 |
Interest cost | 3 | 4 |
Expected return on assets | (2) | (2) |
Amortization of: | ||
Prior service credit | (33) | (30) |
Actuarial loss | 1 | 0 |
Net periodic benefit cost | (30) | (27) |
Other | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 4 | 3 |
Interest cost | 0 | 1 |
Expected return on assets | 0 | 0 |
Amortization of: | ||
Prior service credit | 0 | 0 |
Actuarial loss | 0 | 0 |
Net periodic benefit cost | $ 4 | $ 4 |
EMPLOYEE BENEFIT PLANS AND PO_4
EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Postemployment Benefits [Abstract] | ||
Reduction of plan liability | $ 527 | $ 527 |
Amortization period of retirement benefits payable | 4 years 6 months | 4 years 6 months |
Benefits modification amortization | $ 30 | $ 30 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 30.30% | 25.80% |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of segments (in segments) | 5 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation from Net Income Under US GAAP To Adjusted EBIT and Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 5,461 | $ 6,457 |
Net income (loss) | (54) | 264 |
Add back: | ||
Income tax expense | (23) | 90 |
Interest expense of Industrial Activities, net of interest income and eliminations | 59 | 53 |
Foreign exchange losses, net | (2) | 9 |
Finance and non-service component of Pension and OPEB costs(2) | (30) | (15) |
Adjustments: | ||
Restructuring expenses | 5 | 8 |
Other discrete items | 7 | |
Adjusted EBIT | (38) | 409 |
Depreciation and amortization | 155 | 169 |
Depreciation of assets on operating lease and assets sold with buy-back commitment | 128 | 144 |
Adjusted EBITDA | 245 | 722 |
Benefits modification amortization | $ 30 | $ 30 |
Amortization period of retirement benefits payable | 4 years 6 months | 4 years 6 months |
Reduction of plan liability | $ 527 | $ 527 |
Eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenues | (21) | (23) |
Net income (loss) | 0 | 0 |
Add back: | ||
Income tax expense | 0 | 0 |
Interest expense of Industrial Activities, net of interest income and eliminations | 0 | 0 |
Foreign exchange losses, net | 0 | 0 |
Finance and non-service component of Pension and OPEB costs(2) | 0 | 0 |
Adjustments: | ||
Restructuring expenses | 0 | 0 |
Other discrete items | 0 | |
Adjusted EBIT | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Depreciation of assets on operating lease and assets sold with buy-back commitment | 0 | 0 |
Adjusted EBITDA | 0 | 0 |
Industrial Activities | ||
Segment Reporting Information [Line Items] | ||
Revenues | 5,008 | 6,036 |
Net income (loss) | (54) | 264 |
Add back: | ||
Income tax expense | (53) | 54 |
Adjustments: | ||
Restructuring expenses | 5 | 8 |
Industrial Activities | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4,993 | 6,006 |
Net income (loss) | (134) | 169 |
Add back: | ||
Income tax expense | (53) | 54 |
Interest expense of Industrial Activities, net of interest income and eliminations | 59 | 53 |
Foreign exchange losses, net | (2) | 9 |
Finance and non-service component of Pension and OPEB costs(2) | (30) | (15) |
Adjustments: | ||
Restructuring expenses | 5 | 8 |
Other discrete items | 7 | |
Adjusted EBIT | (148) | 278 |
Depreciation and amortization | 155 | 168 |
Depreciation of assets on operating lease and assets sold with buy-back commitment | 65 | 79 |
Adjusted EBITDA | 72 | 525 |
Industrial Activities | Unallocated items, eliminations and other | ||
Segment Reporting Information [Line Items] | ||
Revenues | (447) | (574) |
Adjustments: | ||
Restructuring expenses | 0 | 0 |
Other discrete items | 7 | |
Adjusted EBIT | (64) | (50) |
Depreciation and amortization | 0 | 0 |
Depreciation of assets on operating lease and assets sold with buy-back commitment | 0 | 0 |
Adjusted EBITDA | (64) | (50) |
Agriculture | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2,244 | 2,490 |
Adjustments: | ||
Restructuring expenses | 2 | 3 |
Other discrete items | 0 | |
Adjusted EBIT | 24 | 168 |
Depreciation and amortization | 64 | 75 |
Depreciation of assets on operating lease and assets sold with buy-back commitment | 0 | 0 |
Adjusted EBITDA | 88 | 243 |
Construction | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 422 | 640 |
Adjustments: | ||
Restructuring expenses | 1 | 0 |
Other discrete items | 0 | |
Adjusted EBIT | (83) | 13 |
Depreciation and amortization | 13 | 14 |
Depreciation of assets on operating lease and assets sold with buy-back commitment | 0 | 0 |
Adjusted EBITDA | (70) | 27 |
Commercial and Specialty Vehicles | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2,021 | 2,414 |
Adjustments: | ||
Restructuring expenses | 2 | 5 |
Other discrete items | 0 | |
Adjusted EBIT | (56) | 51 |
Depreciation and amortization | 49 | 47 |
Depreciation of assets on operating lease and assets sold with buy-back commitment | 65 | 79 |
Adjusted EBITDA | 58 | 177 |
Powertrain | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 753 | 1,036 |
Adjustments: | ||
Restructuring expenses | 0 | 0 |
Other discrete items | 0 | |
Adjusted EBIT | 31 | 96 |
Depreciation and amortization | 29 | 32 |
Depreciation of assets on operating lease and assets sold with buy-back commitment | 0 | 0 |
Adjusted EBITDA | 60 | 128 |
Financial Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 489 | 474 |
Net income (loss) | 80 | 95 |
Add back: | ||
Income tax expense | 30 | 36 |
Adjustments: | ||
Restructuring expenses | 0 | 0 |
Financial Services | Operating segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 489 | 474 |
Net income (loss) | 80 | 95 |
Add back: | ||
Income tax expense | 30 | 36 |
Interest expense of Industrial Activities, net of interest income and eliminations | 0 | 0 |
Foreign exchange losses, net | 0 | 0 |
Finance and non-service component of Pension and OPEB costs(2) | 0 | 0 |
Adjustments: | ||
Restructuring expenses | 0 | 0 |
Other discrete items | 0 | |
Adjusted EBIT | 110 | 131 |
Depreciation and amortization | 0 | 1 |
Depreciation of assets on operating lease and assets sold with buy-back commitment | 63 | 65 |
Adjusted EBITDA | 173 | 197 |
Financial Services | Eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ (21) | $ (23) |
RECEIVABLES - Summary of Financ
RECEIVABLES - Summary of Financing Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables, net | $ 17,584 | $ 19,428 |
Retail | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables, net | 8,453 | 9,218 |
Wholesale | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables, net | 9,031 | 10,081 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables, net | $ 100 | $ 129 |
RECEIVABLES - Summary of Aging
RECEIVABLES - Summary of Aging of Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Retail | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 38 | $ 51 |
Current | 8,376 | 9,133 |
Total | 8,453 | 9,218 |
Retail | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 8,414 | 9,184 |
Retail | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 39 | 34 |
Retail | North America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
2020 | 509 | |
2019 | 2,215 | |
2018 | 1,510 | |
2017 | 857 | |
2016 | 491 | |
Prior to 2016 | 287 | |
Total Past Due | 19 | 28 |
Current | 5,836 | 6,123 |
Total | 5,869 | 6,167 |
Retail | North America | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
2020 | 509 | |
2019 | 2,213 | |
2018 | 1,507 | |
2017 | 853 | |
2016 | 488 | |
Prior to 2016 | 285 | |
Total | 5,855 | 6,151 |
Retail | North America | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
2020 | 0 | |
2019 | 2 | |
2018 | 3 | |
2017 | 4 | |
2016 | 3 | |
Prior to 2016 | 2 | |
Total | 14 | 16 |
Retail | South America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
2020 | 195 | |
2019 | 607 | |
2018 | 403 | |
2017 | 243 | |
2016 | 136 | |
Prior to 2016 | 150 | |
Total Past Due | 10 | 17 |
Current | 1,700 | 1,974 |
Total | 1,734 | 2,009 |
Retail | South America | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
2020 | 195 | |
2019 | 602 | |
2018 | 397 | |
2017 | 239 | |
2016 | 133 | |
Prior to 2016 | 144 | |
Total | 1,710 | 1,991 |
Retail | South America | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
2020 | 0 | |
2019 | 5 | |
2018 | 6 | |
2017 | 4 | |
2016 | 3 | |
Prior to 2016 | 6 | |
Total | 24 | 18 |
Retail | Europe | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Current | 117 | 136 |
Total | 117 | 136 |
Retail | Europe | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 117 | 136 |
Retail | Europe | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 0 | 0 |
Retail | Rest of World | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
2020 | 86 | |
2019 | 260 | |
2018 | 190 | |
2017 | 133 | |
2016 | 55 | |
Prior to 2016 | 9 | |
Total Past Due | 9 | 6 |
Current | 723 | 900 |
Total | 733 | 906 |
Retail | Rest of World | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
2020 | 86 | |
2019 | 260 | |
2018 | 189 | |
2017 | 133 | |
2016 | 55 | |
Prior to 2016 | 9 | |
Total | 732 | 906 |
Retail | Rest of World | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 1 | |
2017 | 0 | |
2016 | 0 | |
Prior to 2016 | 0 | |
Total | 1 | 0 |
Retail | Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 36 | |
Retail | Financial Asset, 30 to 59 Days Past Due [Member] | North America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 24 | |
Retail | Financial Asset, 30 to 59 Days Past Due [Member] | South America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 9 | |
Retail | Financial Asset, 30 to 59 Days Past Due [Member] | Europe | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | |
Retail | Financial Asset, 30 to 59 Days Past Due [Member] | Rest of World | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3 | |
Retail | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 35 | 7 |
Retail | 31-60 Days Past Due | North America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 19 | 4 |
Retail | 31-60 Days Past Due | South America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 9 | 2 |
Retail | 31-60 Days Past Due | Europe | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Retail | 31-60 Days Past Due | Rest of World | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 7 | 1 |
Retail | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3 | 8 |
Retail | 61-90 Days Past Due | North America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Retail | 61-90 Days Past Due | South America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1 | 6 |
Retail | 61-90 Days Past Due | Europe | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Retail | 61-90 Days Past Due | Rest of World | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 2 | 2 |
Wholesale | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 52 | 57 |
Current | 8,900 | 9,943 |
Total | 9,031 | 10,081 |
Wholesale | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 8,952 | 10,000 |
Wholesale | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 79 | 81 |
Wholesale | North America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | |
Current | 3,506 | 3,641 |
Total | 3,506 | 3,667 |
Wholesale | North America | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 24 | 3,641 |
Wholesale | North America | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 3,530 | 26 |
Wholesale | South America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3 | |
Current | 654 | 829 |
Total | 655 | 887 |
Wholesale | South America | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 41 | 832 |
Wholesale | South America | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 696 | 55 |
Wholesale | Europe | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 40 | |
Current | 4,208 | 4,857 |
Total | 4,250 | 4,897 |
Wholesale | Europe | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 8 | 4,897 |
Wholesale | Europe | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 4,258 | 0 |
Wholesale | Rest of World | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 14 | |
Current | 532 | 616 |
Total | 541 | 630 |
Wholesale | Rest of World | Total Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 6 | 630 |
Wholesale | Rest of World | Non- Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total | 547 | 0 |
Wholesale | Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 31 | |
Wholesale | Financial Asset, 30 to 59 Days Past Due [Member] | North America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Wholesale | Financial Asset, 30 to 59 Days Past Due [Member] | South America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1 | 2 |
Wholesale | Financial Asset, 30 to 59 Days Past Due [Member] | Europe | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 36 | 24 |
Wholesale | Financial Asset, 30 to 59 Days Past Due [Member] | Rest of World | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 8 | 5 |
Wholesale | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 45 | 12 |
Wholesale | 31-60 Days Past Due | North America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Wholesale | 31-60 Days Past Due | South America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Wholesale | 31-60 Days Past Due | Europe | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 6 | 9 |
Wholesale | 31-60 Days Past Due | Rest of World | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1 | 3 |
Wholesale | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 7 | 14 |
Wholesale | 61-90 Days Past Due | North America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Wholesale | 61-90 Days Past Due | South America | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1 | 1 |
Wholesale | 61-90 Days Past Due | Europe | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 42 | 7 |
Wholesale | 61-90 Days Past Due | Rest of World | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 9 | $ 6 |
RECEIVABLES - Allowance for Cre
RECEIVABLES - Allowance for Credit Losses Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Ending balance, net | $ 17,584 | $ 19,428 | |
Retail | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Opening balance | 299 | $ 326 | 326 |
Provision (benefit) | 20 | 8 | 44 |
Charge-offs, net of recoveries | (20) | (11) | (51) |
Foreign currency translation and other | (20) | (6) | (20) |
Ending balance | 314 | 317 | 299 |
Ending balance, net | 8,453 | 9,218 | |
Retail | Adoption of ASC 326, net of tax | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Opening balance | 35 | ||
Ending balance | 35 | ||
Retail | Adjusted Balance | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Opening balance | 334 | ||
Ending balance | 334 | ||
Wholesale | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Opening balance | 159 | 164 | 164 |
Provision (benefit) | 2 | (3) | 12 |
Charge-offs, net of recoveries | 0 | (2) | (18) |
Foreign currency translation and other | (8) | (2) | 1 |
Ending balance | 144 | $ 157 | 159 |
Ending balance, net | 9,031 | 10,081 | |
Wholesale | Adoption of ASC 326, net of tax | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Opening balance | (9) | ||
Ending balance | (9) | ||
Wholesale | Adjusted Balance | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Opening balance | $ 150 | ||
Ending balance | $ 150 |
RECEIVABLES - Additional Inform
RECEIVABLES - Additional Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)contract | Mar. 31, 2019USD ($)contract | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Contractual payments period | 30 days | |
Receivables delinquency period | 90 days | |
Number of accounts receivable undergoing bankruptcy proceedings (in contracts) | contract | 334 | 365 |
Amount of accounts receivable undergoing bankruptcy proceedings | $ 17 | $ 17 |
North America | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Finance lease, contracts (in contracts) | contract | 289 | 264 |
Pre-modification value of retail and finance lease receivable contracts | $ 9 | $ 9 |
Post-modification value of retail and finance lease receivable contracts | 8 | $ 8 |
Europe | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Pre-modification value of retail and finance lease receivable contracts | 79 | |
Post-modification value of retail and finance lease receivable contracts | $ 72 |
RECEIVABLES - Carrying Amount o
RECEIVABLES - Carrying Amount of Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Restricted Receivables | $ 12,948 | $ 13,606 |
Retail note and finance lease receivables | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Restricted Receivables | 5,797 | 6,340 |
Wholesale | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Restricted Receivables | $ 7,151 | $ 7,266 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,510 | $ 1,332 |
Work-in-process | 744 | 612 |
Finished goods | 5,181 | 5,138 |
Total inventories | $ 7,435 | $ 7,082 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Short-term lease expenses | $ 3 | $ 4 | |
Operating lease expenses | 35 | 39 | |
Operating lease right-of-use assets | 419 | ||
Operating lease liabilities | $ 416 | $ 449 | |
Weighted average remaining lease term | 7 years | ||
Weighted average discount rate | 3.40% | ||
Leased assets obtained in exchange for operating lease obligations | $ 16 | 18 | |
Operating cash outflow for amounts included in the measurement of operating lease obligations | $ 36 | $ 40 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease term | 3 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease term | 5 years |
LEASES - Schedule of Future Min
LEASES - Schedule of Future Minimum Lease Payments Under Operating Leases (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Lease Liabilities, Payments Due [Abstract] | ||
2020 (excluding the three months ended March 31, 2020) | $ 90 | |
2021 | 95 | |
2022 | 70 | |
2023 | 53 | |
2024 | 38 | |
2025 and thereafter | 124 | |
Total future minimum lease payments | 470 | |
Less: Interest | (54) | |
Operating lease liabilities | $ 416 | $ 449 |
LEASES - Schedule of Future M_2
LEASES - Schedule of Future Minimum Lease Payments to be Received (Details) $ in Millions | Mar. 31, 2020USD ($) |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | |
2020 | $ 200 |
2021 | 149 |
2022 | 82 |
2023 | 30 |
2024 | 8 |
2025 and thereafter | 3 |
Total undiscounted lease payments | $ 472 |
INVESTMENTS IN UNCONSOLIDATED_3
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES - Summary of Investments in Unconsolidated Subsidiaries and Affiliates (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Equity method | $ 474 | $ 513 |
Cost method | 119 | 118 |
Total | $ 593 | $ 631 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES - Changes in the Carrying Amount of Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning | $ 2,538 |
Foreign currency translation and other | (24) |
Balance at ending | 2,514 |
Agriculture | |
Goodwill [Roll Forward] | |
Balance at beginning | 1,732 |
Foreign currency translation and other | (14) |
Balance at ending | 1,718 |
Construction | |
Goodwill [Roll Forward] | |
Balance at beginning | 587 |
Foreign currency translation and other | (4) |
Balance at ending | 583 |
Commercial and Specialty Vehicles | |
Goodwill [Roll Forward] | |
Balance at beginning | 59 |
Foreign currency translation and other | (2) |
Balance at ending | 57 |
Powertrain | |
Goodwill [Roll Forward] | |
Balance at beginning | 5 |
Foreign currency translation and other | 0 |
Balance at ending | 5 |
Financial Services | |
Goodwill [Roll Forward] | |
Balance at beginning | 155 |
Foreign currency translation and other | (4) |
Balance at ending | $ 151 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES - Other Intangible Assets and Related Accumulated Amortization (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Schedule Of Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets subject to amortization, gross | $ 2,266 | $ 2,285 |
Other intangible assets subject to amortization, accumulated amortization | 1,749 | 1,752 |
Other intangible assets subject to amortization, net | 517 | 533 |
Other intangible assets not subject to amortization | 273 | 273 |
Total other intangible assets, gross | 2,539 | 2,558 |
Total other intangible assets, net | $ 790 | 806 |
Dealer networks | ||
Schedule Of Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets subject to amortization, weighted average life | 15 years | |
Other intangible assets subject to amortization, gross | $ 337 | 320 |
Other intangible assets subject to amortization, accumulated amortization | 233 | 224 |
Other intangible assets subject to amortization, net | 104 | 96 |
Patents, concessions and licenses and other | ||
Schedule Of Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets subject to amortization, gross | 1,929 | 1,965 |
Other intangible assets subject to amortization, accumulated amortization | 1,516 | 1,528 |
Other intangible assets subject to amortization, net | $ 413 | $ 437 |
Patents, concessions and licenses and other | Minimum | ||
Schedule Of Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets subject to amortization, weighted average life | 5 years | |
Patents, concessions and licenses and other | Maximum | ||
Schedule Of Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets subject to amortization, weighted average life | 25 years |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Goodwill [Line Items] | |||
Amortization expense | $ 24 | $ 26 | |
Agriculture | |||
Goodwill [Line Items] | |||
Percentage of fair value in excess of carrying value | 143.00% | ||
Construction | |||
Goodwill [Line Items] | |||
Percentage of fair value in excess of carrying value | 28.00% | ||
Commercial and Specialty Vehicles | |||
Goodwill [Line Items] | |||
Percentage of fair value in excess of carrying value | 43.00% |
OTHER LIABILITIES - Summary of
OTHER LIABILITIES - Summary of Other Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||||
Repurchase price on buy-back agreements | $ 1,307 | $ 1,472 | ||
Warranty and campaign programs | 887 | 919 | $ 915 | $ 925 |
Marketing and sales incentive programs | 1,156 | 1,279 | ||
Tax payables | 422 | 696 | ||
Accrued expenses and deferred income | 670 | 639 | ||
Accrued employee benefits | 486 | 562 | ||
Lease liabilities | 416 | 449 | ||
Legal reserves and other provisions | 319 | 299 | ||
Contract reserve | 301 | 319 | ||
Contract liabilities | 1,154 | 1,236 | ||
Restructuring reserve | 80 | 103 | ||
Other | 856 | 866 | ||
Total | 8,054 | 8,839 | ||
Future rents related to buy-back agreements | $ 602 | $ 657 |
OTHER LIABILITIES - Summary o_2
OTHER LIABILITIES - Summary of Recorded Activity for Basic Warranty and Accruals for Campaign Programs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance at beginning of period | $ 919 | $ 925 |
Current year additions | 184 | 184 |
Claims paid | (169) | (180) |
Currency translation adjustment and other | (47) | (14) |
Balance at March 31, 2020 | $ 887 | $ 915 |
OTHER LIABILITIES - Additional
OTHER LIABILITIES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Liabilities [Abstract] | ||
Restructuring expenses | $ 5 | $ 8 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)site | Dec. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of non-owned sites (in sites) | 66 | |
Number of national priority list (in sites) | 16 | |
Number of sites not named as PRP, with resolved liability, or deemed de minimis (in sites) | 60 | |
Incurred and claims to be resolved over extended period of time | 30 years | |
Environmental reserves | $ | $ 31 | $ 32 |
Guarantees at carrying value | $ | $ 448 | $ 453 |
FINANCIAL INSTRUMENTS - Additio
FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Foreign exchange derivatives | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Notional amount of foreign exchange derivatives | $ 6,900 | $ 6,900 |
Interest rate derivatives | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Notional amount of foreign exchange derivatives | 5,100 | $ 5,400 |
Nominal amount of hedging instruments affected by reform of benchmark | $ 971 |
FINANCIAL INSTRUMENTS - Gross I
FINANCIAL INSTRUMENTS - Gross Impact of Changes in Fair Value of Derivatives Designated as Cash Flow Hedges on AOCI and Net Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (Loss) Recognized in Accumulated Other Comprehensive Income | $ 66 | $ (71) |
Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (3) | (28) |
Net sales | Foreign exchange and foreign currency contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (Loss) Recognized in Accumulated Other Comprehensive Income | 81 | (62) |
Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (1) | (5) |
Cost of goods sold | Foreign exchange and foreign currency contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (16) | (11) |
Other, Net | Foreign exchange and foreign currency contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 15 | (11) |
Interest expense | Interest rate contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (Loss) Recognized in Accumulated Other Comprehensive Income | (15) | (9) |
Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ (1) | $ (1) |
FINANCIAL INSTRUMENTS - Summary
FINANCIAL INSTRUMENTS - Summary of Activity in Accumulated Other Comprehensive Income Related to Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Before-Tax Amount | ||
Accumulated derivative net losses, beginning of period | $ (62) | $ (23) |
Net changes in fair value of derivatives | 66 | (71) |
Net losses reclassified from accumulated other comprehensive income into income | 3 | 28 |
Accumulated derivative net losses, end of period | 7 | (66) |
Income Tax | ||
Accumulated derivative net losses, beginning of period | 8 | 1 |
Net changes in fair value of derivatives | (2) | 20 |
Reclassification from AOCI, Current Period, Tax | (2) | (4) |
Accumulated derivative net losses, end of period | 4 | 17 |
After-Tax Amount | ||
Accumulated derivative net losses, beginning of period | (54) | (22) |
Net changes in fair value of derivatives | 64 | (51) |
Net losses reclassified from accumulated other comprehensive income into income | 1 | 24 |
Accumulated derivative net losses, end of period | $ 11 | $ (49) |
FINANCIAL INSTRUMENTS - Impact
FINANCIAL INSTRUMENTS - Impact of Changes in Fair Value of Fair Value Hedges and Derivatives Not Designated as Hedging Instruments on Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest expense | Fair Value Hedges | Interest rate derivatives | ||
Fair Value Hedges | ||
Interest rate derivatives, fair value hedges | $ 40 | $ 11 |
Other, Net | Foreign exchange derivatives | Derivatives not designated as hedging instruments | ||
Not Designated as Hedges | ||
Foreign exchange contracts, not designated as hedges | $ 141 | $ (24) |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Values of Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 221 | $ 73 |
Derivative liabilities | 162 | 121 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 193 | 61 |
Derivative liabilities | 111 | 98 |
Derivatives designated as hedging instruments | Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 82 | 44 |
Derivative liabilities | 42 | 29 |
Derivatives designated as hedging instruments | Foreign currency contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 111 | 17 |
Derivative liabilities | 69 | 69 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 28 | 12 |
Derivative liabilities | 51 | 23 |
Derivatives not designated as hedging instruments | Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Derivatives not designated as hedging instruments | Foreign currency contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 28 | 12 |
Derivative liabilities | $ 51 | $ 23 |
FINANCIAL INSTRUMENTS - Fair _2
FINANCIAL INSTRUMENTS - Fair Value Hierarchy Levels of Assets and Liabilities Value on Recurring Basis (Details) - Fair Value, measurements, recurring - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | $ 222 | $ 74 |
Total Liabilities | (162) | (121) |
Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 1 | 1 |
Foreign exchange derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 139 | 29 |
Total Liabilities | (119) | (92) |
Interest rate derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 82 | 44 |
Total Liabilities | (42) | (29) |
Commodities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | (1) | 0 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 1 | 1 |
Total Liabilities | 0 | 0 |
Level 1 | Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 1 | 1 |
Level 1 | Foreign exchange derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 1 | Interest rate derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 1 | Commodities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 221 | 73 |
Total Liabilities | (162) | (121) |
Level 2 | Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 0 | 0 |
Level 2 | Foreign exchange derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 139 | 29 |
Total Liabilities | (119) | (92) |
Level 2 | Interest rate derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 82 | 44 |
Total Liabilities | (42) | (29) |
Level 2 | Commodities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | $ (1) | $ 0 |
FINANCIAL INSTRUMENTS - Estimat
FINANCIAL INSTRUMENTS - Estimated Fair Values of Instruments Not Carried at Fair Value in Balance Sheets (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financing receivables | $ 17,584 | $ 19,428 |
Debt | 23,518 | 24,854 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financing receivables | 17,590 | 19,375 |
Debt | $ 23,293 | $ 25,249 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Components of OCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Unrealized gain (loss) on cash flow hedges | ||
Gross Amount | $ 69 | $ (43) |
Income Taxes | (4) | 16 |
Net Amount | 65 | (27) |
Changes in retirement plans’ funded status | ||
Gross Amount | (29) | (10) |
Income Taxes | 9 | 3 |
Net Amount | (20) | (7) |
Foreign currency translation | ||
Gross Amount | (427) | 86 |
Income Taxes | 0 | 0 |
Net Amount | (427) | 86 |
Share of other comprehensive (loss) of entities using the equity method | ||
Gross Amount | (19) | (3) |
Income Taxes | 0 | 0 |
Net Amount | (19) | (3) |
Other comprehensive income (loss) | ||
Gross Amount | (406) | 30 |
Income Taxes | 5 | 19 |
Other comprehensive income (loss), net of tax | $ (401) | $ 49 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Components of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning balance | $ 6,121 | $ 5,068 |
Reclassification of certain tax effects | 0 | |
Ending balance | 5,622 | 5,391 |
Other comprehensive income (loss) allocated to noncontrolling interests | (2) | 2 |
Unrealized Gain (Loss) on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning balance | (54) | (22) |
Other comprehensive income (loss), before reclassifications | 63 | (51) |
Amounts reclassified from other comprehensive income | 2 | 24 |
Other comprehensive income (loss) | 65 | (27) |
Reclassification of certain tax effects | 0 | |
Ending balance | 11 | (49) |
Change in Retirement Plans’ Funded Status | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning balance | (650) | (473) |
Other comprehensive income (loss), before reclassifications | 9 | (76) |
Amounts reclassified from other comprehensive income | (29) | 69 |
Other comprehensive income (loss) | (20) | (7) |
Reclassification of certain tax effects | (65) | |
Ending balance | (670) | (545) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning balance | (1,145) | (1,216) |
Other comprehensive income (loss), before reclassifications | (427) | 86 |
Amounts reclassified from other comprehensive income | 0 | 0 |
Other comprehensive income (loss) | (427) | 86 |
Reclassification of certain tax effects | 0 | |
Ending balance | (1,572) | (1,130) |
Share of Other Comprehensive Income (Loss) of Entities Using the Equity Method | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning balance | (153) | (148) |
Other comprehensive income (loss), before reclassifications | (17) | (5) |
Amounts reclassified from other comprehensive income | 0 | 0 |
Other comprehensive income (loss) | (17) | (5) |
Reclassification of certain tax effects | 0 | |
Ending balance | (170) | (153) |
Total | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning balance | (2,002) | (1,859) |
Other comprehensive income (loss), before reclassifications | (372) | (46) |
Amounts reclassified from other comprehensive income | (27) | 93 |
Other comprehensive income (loss) | (399) | 47 |
Reclassification of certain tax effects | (65) | |
Ending balance | $ (2,401) | $ (1,877) |
ACCUMULATED OTHER COMPREHENSI_5
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Schedule of Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Revenues | $ 5,461 | $ 6,457 |
Cost of goods sold | (4,414) | (4,966) |
Other, net | (197) | (168) |
Interest expense | (181) | (183) |
Income taxes | 23 | (90) |
Net income (loss) | (54) | 264 |
Reclassification out of accumulated other comprehensive income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net income (loss) | (27) | 93 |
Reclassification out of accumulated other comprehensive income | Unrealized Gain (Loss) on Cash Flow Hedges | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Revenues | 1 | 5 |
Cost of goods sold | 16 | 11 |
Other, net | (15) | 11 |
Interest expense | 1 | 1 |
Income taxes | (1) | (4) |
Net income (loss) | 2 | 24 |
Reclassification out of accumulated other comprehensive income | Change in Retirement Plans’ Funded Status | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amortization of actuarial losses | 11 | 17 |
Amortization of prior service cost | (33) | (30) |
Reclassification out of accumulated other comprehensive income | Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income taxes | (7) | 82 |
Net income (loss) | $ (29) | $ 69 |
RELATED PARTY INFORMATION - Add
RELATED PARTY INFORMATION - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
EXOR N.V. | ||
Related Party Transaction [Line Items] | ||
Percentage of common shares outstanding held by related parties | 42.20% | |
IVECO-OTO MELARA Societa Consortile | ||
Related Party Transaction [Line Items] | ||
Pledged guarantees on commitments | $ 141 | $ 145 |
CNH Industrial Capital Europe S.A.S. | ||
Related Party Transaction [Line Items] | ||
Pledged guarantees on commitments | $ 276 | $ 276 |
RELATED PARTY INFORMATION - Sch
RELATED PARTY INFORMATION - Schedule of Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
FCA Group | |||
Related Party Transaction [Line Items] | |||
Net sales | $ 130 | $ 160 | |
Cost of goods sold | 57 | 113 | |
Selling, general and administrative expenses | 24 | 33 | |
Trade receivables | 4 | $ 4 | |
Trade payables | 55 | 83 | |
Unconsolidated subsidiaries and affiliates | |||
Related Party Transaction [Line Items] | |||
Net sales | 164 | 251 | |
Cost of goods sold | 92 | $ 106 | |
Trade receivables | 95 | 121 | |
Trade payables | $ 90 | $ 70 |
SUPPLEMENTAL INFORMATION - Inco
SUPPLEMENTAL INFORMATION - Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
Net sales | $ 4,993 | $ 6,006 |
Finance, interest and other income | 468 | 451 |
Total Revenues | 5,461 | 6,457 |
Costs and Expenses | ||
Cost of goods sold | 4,414 | 4,966 |
Selling, general and administrative expenses | 526 | 539 |
Research and development expenses | 214 | 244 |
Restructuring expenses | 5 | 8 |
Interest expense | 181 | 183 |
Other, net | 197 | 168 |
Total Costs and Expenses | 5,537 | 6,108 |
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates | (76) | 349 |
Income tax (expense) | 23 | (90) |
Equity in income of unconsolidated subsidiaries and affiliates | (1) | 5 |
Net income (loss) | (54) | 264 |
Industrial Activities | ||
Revenues | ||
Net sales | 4,993 | 6,006 |
Finance, interest and other income | 15 | 30 |
Total Revenues | 5,008 | 6,036 |
Costs and Expenses | ||
Cost of goods sold | 4,414 | 4,966 |
Selling, general and administrative expenses | 464 | 493 |
Research and development expenses | 214 | 244 |
Restructuring expenses | 5 | 8 |
Interest expense | 74 | 83 |
Other, net | 15 | 16 |
Total Costs and Expenses | 5,186 | 5,810 |
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates | (178) | 226 |
Income tax (expense) | 53 | (54) |
Equity in income of unconsolidated subsidiaries and affiliates | (9) | (3) |
Results from intersegment investments | 80 | 95 |
Net income (loss) | (54) | 264 |
Financial Services | ||
Revenues | ||
Net sales | 0 | 0 |
Finance, interest and other income | 489 | 474 |
Total Revenues | 489 | 474 |
Costs and Expenses | ||
Cost of goods sold | 0 | 0 |
Selling, general and administrative expenses | 62 | 46 |
Research and development expenses | 0 | 0 |
Restructuring expenses | 0 | 0 |
Interest expense | 143 | 153 |
Other, net | 182 | 152 |
Total Costs and Expenses | 387 | 351 |
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates | 102 | 123 |
Income tax (expense) | (30) | (36) |
Equity in income of unconsolidated subsidiaries and affiliates | 8 | 8 |
Results from intersegment investments | 0 | 0 |
Net income (loss) | $ 80 | $ 95 |
SUPPLEMENTAL INFORMATION - Bala
SUPPLEMENTAL INFORMATION - Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||||
Cash and cash equivalents | $ 3,850 | $ 4,875 | ||
Restricted cash | 854 | 898 | ||
Trade receivables, net | 346 | 416 | ||
Financing receivables, net | 17,584 | 19,428 | ||
Inventories, net | 7,435 | 7,082 | ||
Property, plant and equipment, net | 4,886 | 5,269 | ||
Investments in unconsolidated subsidiaries and affiliates | 593 | 631 | ||
Equipment under operating leases | 1,797 | 1,857 | ||
Goodwill | 2,514 | 2,538 | ||
Other intangible assets, net | 790 | 806 | ||
Derivative assets | 221 | 73 | ||
Other assets | 1,946 | 2,345 | ||
Total Assets | 43,913 | 47,352 | ||
LIABILITIES AND EQUITY | ||||
Debt | 23,518 | 24,854 | ||
Trade payables | 4,907 | 5,632 | ||
Pension, postretirement and other postemployment benefits | 1,469 | 1,578 | ||
Derivative liabilities | 162 | 121 | ||
Other liabilities | 8,054 | 8,839 | ||
Total Liabilities | 38,255 | 41,196 | ||
Total Equity | 5,622 | 6,121 | $ 5,391 | $ 5,068 |
Redeemable noncontrolling interest | 36 | 35 | ||
Total Liabilities and Equity | 43,913 | 47,352 | ||
Industrial Activities | ||||
ASSETS | ||||
Cash and cash equivalents | 3,429 | 4,407 | ||
Restricted cash | 122 | 120 | ||
Trade receivables, net | 344 | 416 | ||
Financing receivables, net | 979 | 1,223 | ||
Inventories, net | 7,291 | 6,907 | ||
Property, plant and equipment, net | 4,885 | 5,268 | ||
Investments in unconsolidated subsidiaries and affiliates | 3,011 | 3,213 | ||
Equipment under operating leases | 47 | 51 | ||
Goodwill | 2,363 | 2,383 | ||
Other intangible assets, net | 775 | 790 | ||
Deferred Tax Assets, Net of Valuation Allowance | 1,072 | 1,090 | ||
Derivative assets | 154 | 34 | ||
Other assets | 1,929 | 2,148 | ||
Total Assets | 26,401 | 28,050 | ||
LIABILITIES AND EQUITY | ||||
Debt | 6,817 | 6,558 | ||
Trade payables | 4,796 | 5,490 | ||
Deferred Tax Liabilities, Net | 12 | 19 | ||
Pension, postretirement and other postemployment benefits | 1,450 | 1,558 | ||
Derivative liabilities | 130 | 97 | ||
Other liabilities | 7,538 | 8,172 | ||
Total Liabilities | 20,743 | 21,894 | ||
Total Equity | 5,622 | 6,121 | ||
Redeemable noncontrolling interest | 36 | 35 | ||
Total Liabilities and Equity | 26,401 | 28,050 | ||
Financial Services | ||||
ASSETS | ||||
Cash and cash equivalents | 421 | 468 | ||
Restricted cash | 732 | 778 | ||
Trade receivables, net | 26 | 28 | ||
Financing receivables, net | 18,998 | 20,657 | ||
Inventories, net | 144 | 175 | ||
Property, plant and equipment, net | 1 | 1 | ||
Investments in unconsolidated subsidiaries and affiliates | 223 | 237 | ||
Equipment under operating leases | 1,750 | 1,806 | ||
Goodwill | 151 | 155 | ||
Other intangible assets, net | 15 | 16 | ||
Deferred Tax Assets, Net of Valuation Allowance | 170 | 178 | ||
Derivative assets | 84 | 47 | ||
Other assets | 164 | 319 | ||
Total Assets | 22,879 | 24,865 | ||
LIABILITIES AND EQUITY | ||||
Debt | 19,093 | 20,748 | ||
Trade payables | 155 | 191 | ||
Deferred Tax Liabilities, Net | 277 | 286 | ||
Pension, postretirement and other postemployment benefits | 19 | 20 | ||
Derivative liabilities | 49 | 32 | ||
Other liabilities | 647 | 771 | ||
Total Liabilities | 20,240 | 22,048 | ||
Total Equity | 2,639 | 2,817 | ||
Redeemable noncontrolling interest | 0 | 0 | ||
Total Liabilities and Equity | $ 22,879 | $ 24,865 |
SUPPLEMENTAL INFORMATION - Cash
SUPPLEMENTAL INFORMATION - Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net income (loss) | $ (54) | $ 264 |
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 | 155 | 169 |
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments | 128 | 144 |
Undistributed income (loss) of unconsolidated subsidiaries | 7 | (4) |
Other non-cash items | 39 | 33 |
Changes in operating assets and liabilities: | ||
Provisions | (152) | (106) |
Deferred income taxes | (32) | 32 |
Trade and financing receivables related to sales, net | 644 | (293) |
Inventories, net | (551) | (879) |
Trade payables | (504) | 129 |
Other assets and liabilities | (212) | (240) |
Net cash used in operating activities | (532) | (751) |
Investing activities: | ||
Additions to retail receivables | (926) | (947) |
Collections of retail receivables | 1,035 | 1,225 |
Proceeds from the sale of assets, net of assets under operating leases and assets sold under buy-back commitments | 5 | 0 |
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments | (63) | (79) |
Expenditures for assets under operating leases and assets sold under buy-back commitments | (256) | (285) |
Other | 127 | 48 |
Net cash provided by (used in) investing activities | (78) | (38) |
Financing activities: | ||
Proceeds from long-term debt | 2,220 | 3,810 |
Payments of long-term debt | (2,657) | (4,001) |
Net increase (decrease) in other financial liabilities | 243 | (321) |
Dividends paid | (1) | (1) |
Net cash used in financing activities | (195) | (513) |
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash | (264) | (42) |
Increase (decrease) in cash and cash equivalents | (1,069) | (1,344) |
Cash and cash equivalents and restricted cash, beginning of year | 5,773 | 5,803 |
Cash and cash equivalents and restricted cash, end of period | 4,704 | 4,459 |
Industrial Activities | ||
Operating activities: | ||
Net income (loss) | (54) | 264 |
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 | 155 | 168 |
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments | 65 | 79 |
Undistributed income (loss) of unconsolidated subsidiaries | (25) | (84) |
Other non-cash items | 15 | 28 |
Changes in operating assets and liabilities: | ||
Provisions | (150) | (96) |
Deferred income taxes | (27) | 10 |
Trade and financing receivables related to sales, net | 46 | (65) |
Inventories, net | (697) | (950) |
Trade payables | (478) | 171 |
Other assets and liabilities | (223) | (339) |
Net cash used in operating activities | (1,373) | (814) |
Investing activities: | ||
Additions to retail receivables | 0 | 0 |
Collections of retail receivables | 0 | 0 |
Proceeds from the sale of assets, net of assets under operating leases and assets sold under buy-back commitments | 5 | 0 |
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments | (63) | (77) |
Expenditures for assets under operating leases and assets sold under buy-back commitments | (98) | (100) |
Other | 517 | (370) |
Net cash provided by (used in) investing activities | 361 | (547) |
Financing activities: | ||
Proceeds from long-term debt | 100 | 683 |
Payments of long-term debt | (5) | (630) |
Net increase (decrease) in other financial liabilities | 150 | 73 |
Dividends paid | (1) | (1) |
Proceeds from (Payments for) Other Financing Activities | 0 | 0 |
Net cash used in financing activities | 244 | 125 |
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash | (208) | (42) |
Increase (decrease) in cash and cash equivalents | (976) | (1,278) |
Cash and cash equivalents and restricted cash, beginning of year | 4,527 | 4,553 |
Cash and cash equivalents and restricted cash, end of period | 3,551 | 3,275 |
Financial Services | ||
Operating activities: | ||
Net income (loss) | 80 | 95 |
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 | 0 | 1 |
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments | 63 | 65 |
Undistributed income (loss) of unconsolidated subsidiaries | (8) | (8) |
Other non-cash items | 24 | 5 |
Changes in operating assets and liabilities: | ||
Provisions | (2) | (10) |
Deferred income taxes | (5) | 22 |
Trade and financing receivables related to sales, net | 600 | (229) |
Inventories, net | 146 | 71 |
Trade payables | (28) | (41) |
Other assets and liabilities | 11 | 99 |
Net cash used in operating activities | 881 | 70 |
Investing activities: | ||
Additions to retail receivables | (926) | (947) |
Collections of retail receivables | 1,035 | 1,225 |
Proceeds from the sale of assets, net of assets under operating leases and assets sold under buy-back commitments | 0 | 0 |
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments | 0 | (2) |
Expenditures for assets under operating leases and assets sold under buy-back commitments | (158) | (185) |
Other | (390) | 398 |
Net cash provided by (used in) investing activities | (439) | 489 |
Financing activities: | ||
Proceeds from long-term debt | 2,120 | 3,127 |
Payments of long-term debt | (2,652) | (3,371) |
Net increase (decrease) in other financial liabilities | 93 | (394) |
Dividends paid | (40) | (7) |
Proceeds from (Payments for) Other Financing Activities | 0 | 20 |
Net cash used in financing activities | (479) | (625) |
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash | (56) | 0 |
Increase (decrease) in cash and cash equivalents | (93) | (66) |
Cash and cash equivalents and restricted cash, beginning of year | 1,246 | 1,250 |
Cash and cash equivalents and restricted cash, end of period | $ 1,153 | $ 1,184 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Apr. 29, 2020USD ($) | Apr. 29, 2020GBP (£) | Apr. 23, 2020USD ($) | Apr. 23, 2020CAD ($) |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Commercial paper issued | $ 748,000,000 | £ 600,000,000 | $ 338,000,000 | $ 465,000,000 |