Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Investor Presentation (April 2014)
29 slides from Cnh Industrial's investor presentation, Apr 25, 2014
Slide 1: Transition to U.S. GAAP and U.S. dollar as reporting currency
Exhibit 99.2 Transition to U.S. GAAP and U.S. dollar as reporting currency A summary document for investors and analysts April 25, 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this document that are not statements of historical fact constitute forward-looking statements, notwithstanding that such statements are not specifically identified. Words such as “may”, “will”, “could”, “should”, “design”, “target”, “objective”,
Slide 3: Agenda
Agenda 1 Accounting standards, reporting currency and segment realignment 2 From IFRS to U.S. GAAP 3 FY 2013 Results (IFRS $ & U.S. GAAP $) 4 Appendix 5 Q&A April 25, 2014 Transition to U.S. GAAP and U.S. dollar as reporting currency 3
Slide 4: Accounting standards and reporting currency
1 Accounting standards and reporting currency IFRS € U.S. GAAP $ IFRS $ Investorsaroundthe worldwill havebetter understanding of CNHIndustrial’sfinancialresults April 25, 2014 Transition to U.S. GAAP and U.S. dollar as reporting currency 4
Slide 5: Segment realignment
1 Segment realignment Agricultural & Construction Equipment Agricultural Equipment Construction Equipment Trucks & Commercial Vehicles Commercial Vehicles Powertrain Powertrain Financial Services Industrial Activities Financial Services Segment reporting expanded April 25, 2014 Transition to U.S. GA
Slide 6: From IFRS to U.S. GAAP: Main differences
2 From IFRS to U.S. GAAP Main differences IFRS U.S. G A A P Development costs Goodwill and other intangible assets Defined benefit plans Restructuring Income taxes April 25, 2014 Transition to U.S. GAAP and U.S. dollar as reporting currency 6
Slide 7: From IFRS to U.S. GAAP: Total Equity walk
2 From IFRS to U.S. GAAP Total Equity walk December 31, 2012 December 31, 2013 Total Equity in accordance with IFRS 7,093 7,662 (a) Development costs, net (2,361) (2,862) (b) Goodwill and other intangible assets 142 130 (c) Defined benefit plans (11) 29 (d) Restructuring 22 6 (e) Other adjustments 2
Slide 8: From IFRS to U.S. GAAP: Net Profit walk
2 From IFRS to U.S. GAAP Net Profit walk The following reconciles Net Profit in IFRS to Net Income under U.S. GAAP: FY 2012 EPS FY 2013 EPS Profit/(Loss) attributable to CNH Industrial N.V. 1,023 0.84 1,048 0.83 Plus: Profit/(Loss) attributable to noncontrolling interest 139 170 Profit/(loss) in acc
Slide 9: From IFRS to U.S. GAAP: Effective Tax rate walk
2 From IFRS to U.S. GAAP Effective Tax rate walk FY 2012 FY 2013 Effective Income tax rate under IFRS 38% 39% Different method for tax rate calculation 3 p.p. 4 p.p. Different valuation allowances on deferred tax assets, mainly for DTA on 1 p.p. 6 p.p. development costs Effective Income tax rate und
Slide 10: Trading Profit (IFRS) to Operating Profit (U.S. GAAP) walk
2 From IFRS to U.S. GAAP TradingProfit(IFRS$) to OperatingProfit (USGAAP$) - Walk FULL YEAR 2013 Industrial % Financial % Elim. & % Group Activities Margin Services Margin Others Margin IFRS –Trading Profit 2,119 6.5% 518 26.6% - 2,637 7.7% Development costs, net (443) - (443) Reclassification of In
Slide 11: From IFRS to U.S. GAAP: Net Industrial Debt Walk
2 From IFRS to U.S. GAAP Net Industrial Debt Walk ThefollowingreconcilesIFRS- Net Industrialdebt to U.S.GAAP- Net Industrialdebt: December 31, 2012 December 31, 2013 IFRS –Net Industrial Debt (NID) (2,166) (2,195) Amounts included in IFRS NID, which have been reclassified to the following line items
Slide 12: Cash Flow: Change in Net Industrial Debt
3 FY 2013 Results Cash Flow C – hange in Net Industrial Debt (from IFRS $ to U.S. GAAP $) IFRS U.S. GAAP Net Industrial (Debt)/Cash beginning of period (2,166) (1,961) 205 Net Income 1,218 828 (390) D&A (excl. Vehicle Buybacks) 994 686 (308) Change in Funds & Others (including items related to Buyba
Slide 13: FY 2013 Results Highlights
3 FY 2013 Results Highlights IFRS U.S. G A A P Consolidated Consolidated Net Revenues at $34.2bnup 3.3%or $1.1bn Net Revenues at $33.8bnup 3.2%or $1bn Net Profitat $1.2bnup $56mn vs. Last year Net Incomeat $828mndown $48mn vs. Last year EPSat $0.83down $0.01 from last year EPSat $0.54down $0.08 from
Slide 14: New walk from Operating Profit to Net Income
3 FY 2013 Results Thenew walk from OperatingProfit to NetIncome- ($/mn) IFRS U.S. G A A P FY 2013 FY 2013 Trading profit 2,637 Industrial Activities Operating Profit 2,095 Financial Services Operating Profit 514 Unusual items, net (156) Eliminations and other (332) Operating Profit 2,277 Operating i
Slide 15: Appendix
4 Appendix April 25, 2014 Transition to U.S. GAAP and U.S. dollar as reporting currency 15
Slide 16: Non-GAAP financial measures
4 Appendix Non-GAAP financial measures We monitor our operations through the use of several non-GAAP financial measures: i) Operating Profit of Industrial Activities and Financial Services, ii) Trading Profit, iii) Net Debt and Net Debt of Industrial Activities, and iv) revenues on a constant curren
Slide 17: Detailed Net Profit walk
4 Appendix Detailed Net Profit walk The following reconciles Net Profit in IFRS to Net Income under U.S. GAAP: FY 2012 EPS FY 2013 EPS Profit/(Loss) attributable to CNH Industrial N.V. 1,023 0.84 1,048 0.83 Profit/(Loss) attributable to non controlling interest 139 170 Profit/(loss) in accordance wi
Slide 18: Reconciliation of IFRS Trading Profit to U.S. GAAP Income before income taxes
Appendix 4 Reconciliation of IFRS Trading Profit to U.S. GAAP Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates FY 2012 FY 2013 IFRS –Trading Profit 2,650 2,637 Accounting for development costs, net (429) (443) Restructuring (231) (71) Interestexpensesof I
Slide 19: New Segments (IFRS $ - U.S. GAAP $)
4 Appendix NewSegments(IFRS$ - U.S.GAAP$) Revenues Revenues Trading Profit Operating Profit Margin Margin (IFRS) (U.S. GAAP) (IFRS) (U.S. GAAP) (IFRS) (U.S. GAAP) Agricultural Equipment 16,763 16,763 1,949 2,008 11.6% 12.0% Construction Equipment 3,258 3,258 (109) (97) (3.3)% (3.0)% Commercial Vehic
Slide 20: Prior Segments (IFRS $ - U.S. GAAP $)
4 Appendix PriorSegments(IFRS$ - U.S.GAAP$) Revenues Revenues Trading Profit Operating Profit Margin Margin (IFRS) (U.S. GAAP) (IFRS) (U.S. GAAP) (IFRS) (U.S. GAAP) Agricultural & Construction Equipment * 21,254 20,984 2,368 2,133 11.1% 10.2% Trucks & Commercial Vehicles * 11,622 11,453 134 35 1.2%
Slide 21: Net Industrial Debt (December 31, 2013) - IFRS vs. U.S. GAAP
4 Appendix NetIndustrialDebt(December31,2013)-IFRSvs.U.S.GAAP IFRS IFRS Total Adj. U.S. GAAP €/mn $/mn U.S. GAAP $/mn (8,765) Debt (12,088) 140 (11,948) 4,138 Intersegment financial receivables 5,706 (26) 5,680 (4,627) Debt, net of intersegment balances (6,382) 114 (6,268) 184 Other Financial assets
Slide 22: Q&A: Why is the company moving from EUR IFRS to USD U.S. GAAP?
5 Q&A 1 - Q: Why is the company moving from EUR IFRS to USD U.S. GAAP? There are several reasons for the move: (i) a significant percentage of our revenue stream is in U.S. dollar; (ii) our main competitors listed on the New York Stock Exchange (NYSE) also report in U.S. dollar under U.S. GAAP; (iii
Slide 23: Q&A: Material income statement adjustments between IFRS and U.S. GAAP
5 Q&A 4 - Q: What are the material income statement adjustments between IFRS and U.S. GAAP? Development costs Defined benefit plans Restructuring Income taxes For detailed explanation of each single adjustment please refer to slide 7 of this presentation. 5 - Q: Will revenues be impacted going forwa
Slide 24: Q&A: Differences to the balance sheet and cash flow statement
5 Q&A 7 - Q: What are some of the material differences to the balance sheet and cash flow statement from this switch in accounting standards? Balance sheet: There are some differences that result in a corresponding adjustment to total equity, as described in slide 7, the most significant of which ar
Slide 25: Q&A: Cash Flow Statement differences
5 Q&A 7 - Q: continued Cash Flow Statement in the F-pages on the Annual Report on Form 20-F: Financing receivables: under IFRS, the net change in financing receivables is presented as an investing cash flow. Under U.S. GAAP, the net change in financing receivables related to wholesale financing (a s
Slide 26: Q&A: Net Debt under U.S. GAAP vs. IFRS
5 Q&A 8 - Q: How should we think about Net Debt under U.S. GAAP vs. IFRS? The reconciling items for Net Debt include: Debt issuance costs are presented as other assets under U.S. GAAP and as a reduction in the debt balance under IFRS. This causes net debt to be higher under U.S. GAAP. Accrued intere
Slide 27: Q&A: Intangible assets, inventory and consolidation
5 Q&A 9 - Q: What is the difference in accounting for intangible assets? The primary difference relates to certain development costs which are capitalized and amortized under IFRS but expensed immediately under U.S. GAAP. 10 - Q: Is there any revaluation of inventory under the change to U.S. GAAP? C
Slide 28: Q&A: Securitized assets, depreciation and employee benefits
5 Q&A 12 - Q: Will any securitized assets not be de-recognized going forward under U.S. GAAP that were de-recognized under IFRS? U.S. GAAP and IFRS are very similar in their treatment of securitized assets. 13 - Q: How will Depreciation and Amortization accounting change under U.S. GAAP? The only ma
Slide 29: Group Investor Relations Team
Contacts Group Investor Relations Team Federico DonatiHead – of Investor Relations Europe +39(011)00- 62756 Noah Weiss Head – of Investor Relations North America +1(630)887- 3745 e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com April 25, 2014 Transition to U.S. GAAP and U.S. doll