cnhi-10q_20160331.htm

	March 31, 2016			December 31, 2015
	(Unaudited)
(in millions)
Cash and cash equivalents	$	4,311		$	5,384
Restricted cash		831			927
Trade receivables, net		642			580
Financing receivables, net		18,820			19,001
Inventories, net		6,630			5,690
Property, plant and equipment, net		6,591			6,481
Investments in unconsolidated subsidiaries and affiliates		502			527
Equipment under operating leases		1,874			1,835
Goodwill		2,461			2,447
Other intangible assets, net		807			810
Deferred tax assets		937			1,250
Derivative assets		182			211
Other assets		1,847			1,534
TOTAL ASSETS	$	46,435		$	46,677
Debt	$	25,767		$	26,301
Trade payables		5,608			5,342
Deferred tax liabilities		80			334
Pension, postretirement and other postemployment benefits		2,298			2,282
Derivative liabilities		162			69
Other liabilities		8,139			7,488
Total Liabilities	$	42,054		$	41,816
Redeemable noncontrolling interest		19			18
Common shares, €0.01, par value; outstanding 1,362,070,103 common shares and 413,218,148 special voting shares at 03/31/2016; and outstanding 1,362,048,989 common shares and 413,249,206 special voting shares at 12/31/2015		25			25
Additional paid in capital		4,405			4,399
Retained earnings		1,730			2,241
Accumulated other comprehensive loss		(1,811	)		(1,863	)
Noncontrolling interests		13			41
Equity:	$	4,362		$	4,843
TOTAL EQUITY AND LIABILITIES	$	46,435		$	46,677

	Three Months Ended March 31,
	2016			2015
	(in millions)
Revenues
Net sales	$	5,076		$	5,625
Finance and interest income		296			335
Total Revenues	$	5,372		$	5,960
Costs and Expenses
Cost of goods sold	$	4,238		$	4,716
Selling, general and administrative expenses		546			567
Research and development expenses		183			190
Restructuring expenses		15			12
Interest expense		230			284
Other, net		630			100
Total Costs and Expenses	$	5,842		$	5,869
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates		(470	)		91
Income taxes		40			77
Equity in income of unconsolidated subsidiaries and affiliates		(3	)		9
Net income (loss)		(513	)		23
Net income (loss) attributable to noncontrolling interests		(1	)		1
Net income (loss) attributable to CNH Industrial N.V.	$	(512	)	$	22
Earnings (loss) per share attributable to common shareholders
Basic	$	(0.38	)	$	0.02
Diluted	$	(0.38	)	$	0.02

	Three Months Ended March 31,
	2016			2015
	(in millions)
Operating activities:
Net income (loss)	$	(513	)	$	23
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		177			173
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments		133			103
Loss from disposal of assets		1			3
Undistributed income of unconsolidated subsidiaries		42			19
Other non-cash items		55			47
Changes in operating assets and liabilities:
Provisions		357			(75	)
Deferred income taxes		98			81
Trade and financing receivables related to sales, net		301			276
Inventories, net		(704	)		(746	)
Trade payables		126			7
Other assets and liabilities		(82	)		(533	)
Net cash used in operating activities		(9	)		(622	)
Investing activities:
Additions to retail receivables		(858	)		(1,360	)
Collections of retail receivables		1,172			1,814
Proceeds from the sale of assets, net of assets under operating leases and assets sold under buy-back commitments		2			—
Proceeds from the sale of assets previously under operating leases and assets sold under buy-back commitments		154			162
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and assets sold under buy-back commitments		(81	)		(88	)
Expenditures for assets under operating leases and assets sold under buy- back commitments		(300	)		(363	)
Other		21			423
Net cash provided by investing activities		110			588
Financing activities:
Proceeds from long-term debt		1,835			2,387
Payments of long-term debt		(2,990	)		(3,889	)
Net increase (decrease) in other financial liabilities		(109	)		476
Dividends paid		(2	)		—
Other		(49	)		2
Net cash used in financing activities		(1,315	)		(1,024	)
Effect of foreign exchange rate changes on cash and cash equivalents		141			(407	)
Decrease in cash and cash equivalents		(1,073	)		(1,465	)
Cash and cash equivalents, beginning of year		5,384			5,163
Cash and cash equivalents, end of period	$	4,311		$	3,698

	Common Shares		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests			Total			Redeemable Noncontrolling Interest
	(in millions)
Balance, January 1, 2015	$	25	$	4,342		$	2,291		$	(1,736	)	$	39		$	4,961		$	16
Net income		—		—			22			—			1			23			—
Other comprehensive loss, net of tax		—		—			—			(34	)		—			(34	)		—
Capital increase		—		1			—			—			1			2			—
Share-based compensation expense		—		12			—			—			—			12			—
Other changes		—		—			(8	)		—			(1	)		(9	)		—
Balance, March 31, 2015	$	25	$	4,355		$	2,305		$	(1,770	)	$	40		$	4,955		$	16

Balance, January 1, 2016	$	25	$	4,399		$	2,241		$	(1,863	)	$	41		$	4,843		$	18
Net income (loss)		—		—			(512	)		—			(3	)		(515	)		2
Other comprehensive gain, net of tax		—		—			—			52			3			55			—
Dividend paid		—		—			—			—			(1	)		(1	)		(1	)
Share-based compensation expense		—		11			—			—			—			11			—
Other changes		—		(5	)		1			—			(27	)		(31	)		—
Balance, March 31, 2016	$	25	$	4,405		$	1,730		$	(1,811	)	$	13		$	4,362		$	19

CNH Industrial N.V. (“CNH Industrial” or the “Company”) is incorporated in, and under the laws of, the Netherlands, and has its principal office in London, United Kingdom. The Company was formed as a result of the business combination transaction (the “Merger”) between Fiat Industrial S.p.A. (“Fiat Industrial” and, together with its subsidiaries the “Fiat Industrial Group”) and CNH Global N.V. (“CNH Global”).

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 U.S. (“U.S. GAAP”) have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting 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 filed for the year ended December 31, 2015 with the SEC. 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. Actual results could differ materially from those estimates.

Certain prior period balances have been reclassified to conform to the current period presentation resulting from the adoption of new accounting pronouncements.

Certain financial information in this report has been presented by geographic area. Our geographic regions are: (1) NAFTA; (2) EMEA; (3) LATAM; and (4) APAC. The geographic designations have the following meanings:

In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-02, Consolidation (“ASU 2015-02”). ASU 2015-02 is intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitized structures. The new standard eliminates the previous deferral in Accounting Standards Codification (“ASC”) 810, which allowed reporting entities with interests in certain investment funds to follow previously issued consolidations guidance, and makes changes to both the variable interest model and the voting model. The Company adopted the guidance prospectively as of January 1, 2016, which did not have a material impact on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”), which amends ASC 835-30, Interest—Imputation of Interest and clarifies ASU 2015-03. These costs may be presented as an asset and amortized ratably over the term of the line of credit arrangement, regardless of whether there are outstanding borrowings on the arrangement. The Company adopted the guidance retrospectively as of January 1, 2016, which did not have a material impact on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification 605—Revenue Recognition and most industry-specific guidance throughout the Codification. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 to fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, which clarifies the principal versus agent guidance in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies guidance related to identifying performance obligations and the licensing implementation guidance in ASU 2014-09. These related ASU’s have the same effective date and the same implementation requirements as ASU 2014-09. The Company is in the process of assessing the method of adoption it will elect and the impact of the adoption of these revenue recognition updates on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The purpose of this update is to enhance the reporting model for financial instruments to provide users with more decision-useful information. Accordingly, ASU 2016-01 updates and revises various requirements, including measurement of equity investments at fair value with changes recognized in net income (except equity method or consolidated investees), which supersedes the current guidance to classify equity securities with readily determinable fair values into different categories (e.g. trading or available for sale). It also requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (e.g. securities or loans and receivables) in the balance sheet and accompanying notes. The update is effective for annual reporting periods beginning after December 15, 2017 including interim periods within those fiscal years, and early adoption is not permitted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. It is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years, but early adoption is permitted. The ASU requires a modified retrospective transition approach and provides certain optional transition relief. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-04, Liabilities—Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products (“ASU 2016-04”). The purpose of this standard is to deem the liabilities related to the sale of prepaid stored-value products to be financial liabilities, and to provide a narrow scope exception to the guidance in Subtopic 405-20 that require that breakage for those liabilities be accounted for consistent with the breakage guidance in Topic 606. ASU 2016-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The Company does not believe the adoption of this standard will have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-07, Investments—Equity Method and Joint Ventures (“ASU 2016-07”). As part of the FASB’s simplification initiative, this update eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust its financial statements retrospectively as if the equity method had been in effect during all previous periods. It requires that an entity, which has an available for sale equity security that becomes qualified for the equity method of accounting, recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date it becomes qualified to use the equity method. ASU 2016-07 is effective for annual reporting periods beginning after December 15, 2016 with prospective application, and may be early-adopted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows, and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

The functional currency of CNH Industrial’s Venezuelan subsidiary is the U.S. dollar. At the end of each period, CNH Industrial re-measures the net monetary assets of its Venezuelan subsidiary from the bolivar fuerte (“Bs.F.” or “bolivars”) to the U.S. dollar at the rate it believes is legally available to the Company.

In January 2014, the Venezuelan government enacted changes affecting the country’s currency exchange and other controls, and established a new foreign currency administration, the National Center for Foreign Commerce (“CENCOEX”). CENCOEX assumed control of the sale and purchase of foreign currency in Venezuela, and established the official exchange rate of 6.3 bolivars to 1.0 U.S. dollar. Additionally, the government expanded the types of transactions that may be subject to the weekly auction mechanism under SICAD I. For a period of time, the Venezuelan government announced plans for SICAD II, which was intended to more closely resemble a market-driven exchange.

In February 2015, the Venezuelan government announced that the two previously used currency conversion mechanisms (SICAD I and SICAD II) had been merged into a single mechanism called SICAD and introduced a new open market exchange rate system, SIMADI. The changes created a three-tiered system. In the third quarter of 2015, due to progressively deteriorating economic conditions in Venezuela, management determined that the SIMADI rate was the most appropriate legally available rate, and remeasured the net monetary assets of CNH Industrial’s Venezuelan subsidiary, resulting in a pre- and after-tax charge of $150 million recorded in the line item “Other, net” in the Company’s condensed consolidated statement of operations during the three months and nine months ended September 30, 2015.

In March 2016, the Venezuelan government devalued its currency and reduced its existing three-tiered system to a two-tiered system by eliminating the SICAD rate. The CENCOEX rate, which is the official rate and is available for purchases and sales of essential items, was changed to 10 bolivars per U.S. dollar from 6.3 and is now known as DIPRO. The Venezuelan government also announced that the SIMADI rate would be replaced by the DICOM rate, which will be allowed to float freely and is expected to fluctuate based on supply and demand. As a result, management determined that the DICOM rate was the most appropriate legally available rate to remeasure the net monetary assets of the Company’s Venezuelan subsidiary. CNH Industrial’s results of operations in Venezuela for the three months ended March 31, 2016 were negligible as a percentage of both the Company’s net revenues and operating profit.

As of March 31, 2016, the Company continues to control, and therefore consolidate, its Venezuelan operations. Despite the significant macroeconomic challenges in the country, CNH Industrial intends to continue its presence in the Venezuelan market for the foreseeable future. CNH Industrial continues to monitor the Venezuelan economic situation and is actively engaged in discussions with the Venezuelan government agencies concerning its ongoing business activities. If, in the future, it concludes that it no longer maintains control over its operations in Venezuela, CNH Industrial may need to de-consolidate its operations in Venezuela, which would result in a pre- and after-tax charge of approximately $130 million.

Additionally, at the end of each period, CNH Industrial re-measures the net monetary assets of its Argentinian subsidiaries from the Argentine Peso into the U.S. dollar. During the first quarter of 2016, CNH Industrial recorded a $10 million charge following the re-measurement of such net monetary assets. At March 31, 2016, the Company held $50 million bonds, subscribed in December 2015, offered to importers by the Argentinian government in order to help importers settle their backlog of payments that had ballooned under the previous government's capital controls. These bonds yield a 6% interest rate and will be repaid in eight monthly installments between May 2016 and December 2016. These financial instruments should facilitate the settlement by CNH Industrial’s Argentinian subsidiaries of payables due to other non-Argentinian subsidiaries, having fixed the exchange rate at the bond issuance.

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 include only those assets that can be used to settle obligations of the consolidated VIEs. The liabilities in the table include third party liabilities of the consolidated VIEs, for which creditors do not have recourse to the general credit of the Company.

A reconciliation of basic and diluted earnings (loss) per share is as follows (in millions, except per share amounts):

Beginning in 2016, the Company changed the method used to estimate the service and interest cost components of the net periodic pension and other postretirement benefit costs in order to provide a more precise measure of interest and service costs by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The new method uses the spot yield curve approach to estimate the service and interest costs by applying the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows. Historically, the service and interest costs were determined using a single weighted-average discount rate based on hypothetical AA yield curves used to measure the benefit obligation at the beginning of the period. The change has been accounted for as a change in estimate prospectively, and the impact on interest and service costs recognized in the first quarter of 2016 was not material. Additionally, this change does not affect the measurement of the total benefit obligations.

The following 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, 2016 and 2015 (in millions):

	Pension						Healthcare						Other
	Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2016			2015			2016		2015

Service cost	$	7		$	8		$	2		$	2		$	3	$	4
Interest cost		22			28			10			12			1		1
Expected return on assets		(29	)		(35	)		(2	)		(2	)		—		—
Amortization of:
Prior service credit		—			—			(1	)		(3	)		—		—
Actuarial loss		20			21			4			7			—		—
Net periodic benefit cost	$	20		$	22		$	13		$	16		$	4	$	5

The effective tax rate for the three months ended March 31, 2016 was (8.5)% compared to 84.6% for the three months ended March 31, 2015. The effective tax rate was impacted by the exceptional non-tax deductible charge of $502 million incurred in the first quarter of 2016 related to the investigation of the Company’s wholly-owned subsidiary, Iveco S.p.A. (“Iveco”), and certain of its competitors by the European Commission regarding certain alleged anticompetitive practices and related matters. For more information on this charge, see “Note 14: Commitments and Contingencies.” Additionally, the effective tax rate for both years has been negatively impacted by the inability to record deferred tax assets on losses in certain jurisdictions.

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.

Agricultural Equipment 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 Agriculture brands, as well as the Steyr brand in Europe and the Miller brand, primarily in North America.

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

Commercial Vehicles designs, produces and sells 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 offers a range of propulsion and transmission systems and axles for on- and off-road applications, as well as engines for marine application and power generation under the FPT Industrial brand.

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

Revenues for each reported segment are those directly generated by or attributable to the segment as a result of its usual business activities and include revenues from transactions with third parties as well as those deriving from transactions with other segments, which are 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 reviews the performance of operating segments using only Operating Profit of Industrial Activities calculated using U.S. GAAP measures. Operating Profit of Industrial Activities is defined as net sales less cost of goods sold, SG&A expenses, and R&D expenses. Operating Profit of Financial Services is defined as revenues, less SG&A expenses, interest expenses and certain other operating expenses. In addition, 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. Furthermore, the CODM reviews expenditures for long-lived assets; however, other operating segment asset information is not readily available.

A reconciliation from consolidated operating profit to income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates under U.S. GAAP for the three months ended March 31, 2016 and 2015 is provided below.

A summary of financing receivables as of March 31, 2016 and December 31, 2015 is as follows:

Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. These receivables are generally 120 days delinquent. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is resumed when the receivable becomes contractually current and collections are reasonably assured.

The aging of financing receivables as of March 31, 2016 and December 31, 2015 is as follows (in millions):

	March 31, 2016
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Performing		Non- Performing		Total
Retail
NAFTA	$	26	$	—	$	—	$	26	$	7,639	$	7,665	$	34	$	7,699
EMEA		—		—		—		—		523		523		—		523
LATAM		14		—		—		14		1,459		1,473		66		1,539
APAC		2		2		3		7		486		493		—		493
Total Retail	$	42	$	2	$	3	$	47	$	10,107	$	10,154	$	100	$	10,254
Wholesale
NAFTA	$	—	$	—	$	—	$	—	$	3,703	$	3,703	$	63	$	3,766
EMEA		57		1		—		58		3,880		3,938		83		4,021
LATAM		—		—		—		—		435		435		—		435
APAC		—		—		23		23		284		307		—		307
Total Wholesale	$	57	$	1	$	23	$	81	$	8,302	$	8,383	$	146	$	8,529


	December 31, 2015
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Performing		Non- Performing		Total
Retail
NAFTA	$	17	$	—	$	—	$	17	$	7,869	$	7,886	$	36	$	7,922
EMEA		—		—		—		—		572		572		1		573
LATAM		6		—		—		6		1,286		1,292		44		1,336
APAC		1		3		—		4		509		513		—		513
Total Retail	$	24	$	3	$	—	$	27	$	10,236	$	10,263	$	81	$	10,344
Wholesale
NAFTA	$	—	$	—	$	—	$	—	$	3,656	$	3,656	$	79	$	3,735
EMEA		33		2		—		35		3,613		3,648		26		3,674
LATAM		3		—		—		3		595		598		4		602
APAC		6		4		26		36		518		554		46		600
Total Wholesale	$	42	$	6	$	26	$	74	$	8,382	$	8,456	$	155	$	8,611

Allowance for credit losses activity for the three months ended March 31, 2016 and 2015 is as follows:

	Three Months Ended March 31, 2016
	Retail			Wholesale			Other		Total
Opening balance	$	394		$	158		$	—	$	552
Provision		12			11			—		23
Charge-offs, net of recoveries		(18	)		(2	)		—		(20	)
Foreign currency translation and other		17			9			—		26
Ending balance		405			176			—		581
Ending balance: Individually evaluated for impairment		192			130			—		322
Ending balance: Collectively evaluated for impairment		213			46			—		259
Receivables:
Ending balance		10,254			8,529			37		18,820
Ending balance: Individually evaluated for impairment		399			710			—		1,109
Ending balance: Collectively evaluated for impairment	$	9,855		$	7,819		$	37	$	17,711


	Three Months Ended March 31, 2015
	Retail			Wholesale			Other		Total
Opening balance	$	468		$	182		$	—	$	650
Provision		13			11			—		24
Charge-offs, net of recoveries		(12	)		(2	)		—		(14	)
Foreign currency translation and other		(49	)		(19	)		—		(68	)
Ending balance		420			172			—		592
Ending balance: Individually evaluated for impairment		207			113			—		320
Ending balance: Collectively evaluated for impairment		213			59			—		272
Receivables:
Ending balance		10,910			8,611			50		19,571
Ending balance: Individually evaluated for impairment		447			714			—		1,161
Ending balance: Collectively evaluated for impairment	$	10,463		$	7,897		$	50	$	18,410

Allowance for credit losses activity for the year ended December 31, 2015 is as follows:

	December 31, 2015
	Retail			Wholesale			Other		Total
Opening balance	$	468		$	182		$	—	$	650
Provision		81			27			—		108
Charge-offs, net of recoveries		(92	)		(13	)		—		(105	)
Foreign currency translation and other		(63	)		(38	)		—		(101	)
Ending balance		394			158			—		552
Ending balance: Individually evaluated for impairment		187			125			—		312
Ending balance: Collectively evaluated for impairment		207			33			—		240
Receivables:
Ending balance		10,344			8,611			46		19,001
Ending balance: Individually evaluated for impairment		416			767			—		1,183
Ending balance: Collectively evaluated for impairment	$	9,928		$	7,844		$	46	$	17,818

Financing receivables are considered impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, have provided bankruptcy notification, or require significant collection efforts. Receivables, which are impaired, are generally classified as non-performing.

	March 31, 2016								December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Investment		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Investment
	(in millions)
With no related allowance
Retail
NAFTA	$	37	$	37	$	—	$	33	$	41	$	40	$	—	$	37
EMEA	$	76	$	76	$	—	$	77	$	74	$	74	$	—	$	79
LATAM	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
APAC	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Wholesale
NAFTA	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
EMEA	$	29	$	29	$	—	$	34	$	33	$	33	$	—	$	35
LATAM	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
APAC	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
With an allowance recorded
Retail
NAFTA	$	44	$	42	$	19	$	42	$	54	$	53	$	18	$	52
EMEA	$	232	$	232	$	171	$	230	$	238	$	238	$	167	$	263
LATAM	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
APAC	$	10	$	10	$	2	$	11	$	9	$	9	$	2	$	12
Wholesale
NAFTA	$	66	$	66	$	3	$	70	$	82	$	82	$	3	$	92
EMEA	$	570	$	570	$	115	$	625	$	607	$	607	$	95	$	657
LATAM	$	25	$	21	$	5	$	25	$	25	$	21	$	7	$	22
APAC	$	20	$	20	$	7	$	18	$	20	$	20	$	20	$	18
Total
Retail	$	399	$	397	$	192	$	393	$	416	$	414	$	187	$	443
Wholesale	$	710	$	706	$	130	$	772	$	767	$	763	$	125	$	824

A troubled debt restructuring (“TDR”) is generally the modification of debt in which a lender grants a concession it would not otherwise consider to a borrower that is experiencing financial difficulties. These modifications may include extended contract maturities, inclusion of interest-only periods, modification of a contractual interest rate to a below market interest rate, extended skip payment period and waving interest and principal. 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 or other court proceedings.

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 concerns exist about the future ability of the borrower to meet its obligations under the loans based on a credit review, the TDR classification is not removed from the receivable.

As of March 31, 2016, the Company had approximately 680 retail and finance lease receivable contracts classified as TDRs in NAFTA, of which the pre-modification value was $31 million and the post-modification value was $30 million. The court has determined the concession in 276 of these cases. The pre-modification value of these contracts was $5 million and the post-modification value was $4 million. As of March 31, 2015, the Company had approximately 630 retail and finance lease receivable contracts classified as TDRs in NAFTA, of which the pre-modification value was $17 million and the post-modification value was $15 million. The court has determined the concession in 385 of these cases. The pre-modification value of these contracts was $7 million and the post-modification value was $6 million. 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 receivable contracts that were modified in a TDR during the previous twelve months ended March 31, 2016 and 2015.

As of March 31, 2016 and 2015, the Company had approximately $75 million and $85 million, respectively, in retail and finance lease receivable contracts classified as TDRs in EMEA. The primary concessions were skipped payments and extended contract maturities and, as such, the post-modification value approximated the pre-modification value. Subsequent re-defaults were not material for retail and finance lease receivable contracts that were modified in a TDR during the previous three months ended March 31, 2016 and 2015.

As of March 31, 2016 and 2015, the Company had approximately $27 million and $43 million, respectively, in retail and finance lease contracts classified as TDRs in LATAM. The concessions granted on these receivables were primarily skipped payments and extended contract maturities. Subsequent re-defaults were not material for retail and finance lease receivable contracts that were modified in a TDR during the previous three months ended March 31, 2016 and 2015.

As of March 31, 2016 and 2015, the Company’s wholesale TDR agreements were immaterial.

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 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, 2016 and December 31, 2015, the carrying amount of such restricted assets included in financing receivables above are the following (in millions):

Inventories as of March 31, 2016 and December 31, 2015 consist of the following:

A summary of investments in unconsolidated subsidiaries and affiliates as of March 31, 2016 and December 31, 2015 is as follows:

Changes in the carrying amount of goodwill for the three months ended March 31, 2016 are as follows:

As of March 31, 2016 and December 31, 2015, the Company’s other intangible assets and related accumulated amortization consisted of the following:

	March 31, 2016							December 31, 2015
	Weighted Avg. Life	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
	(in millions)
Other intangible assets subject to amortization:
Dealer networks	15	$	303	$	145	$	158	$	289	$	143	$	146
Patents, concessions and licenses and other	5-25		1,620		1,245		375		1,569		1,187		382
			1,923		1,390		533		1,858		1,330		528
Other intangible assets not subject to amortization:
Trademarks			274		—		274		282		—		282
Total Other intangible assets		$	2,197	$	1,390	$	807	$	2,140	$	1,330	$	810

CNH Industrial recorded amortization expense of $25 million and $24 million for the three months ended March 31, 2016 and 2015, respectively.

A summary of “Other liabilities” as of March 31, 2016 and December 31, 2015 is as follows:

At March 31, 2016, “Legal reserves and other provisions” include the provision of $502 million, recorded in the first quarter of 2016, in relation to the investigation by the European Commission for certain alleged anticompetitive practices and related matters. For more information on this matter, see “Note 14: Commitments and Contingencies.”

CNH Industrial pays for basic warranty and other service action costs. A summary of recorded activity for the three months ended March 31, 2016 and 2015 for the basic warranty and accruals for campaign programs are as follows:

The Company incurred restructuring expenses of $15 million and $12 million during the three months ended March 31, 2016 and 2015, respectively. The expenses in both periods were primarily attributable to actions within Commercial Vehicles and Agricultural Equipment as part of the Company’s efficiency program launched in 2014.

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, contractual issues, and environmental claims that arise in the ordinary course of our 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 our 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.

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 65 non-owned U.S. sites at which regulated materials allegedly generated by CNH Industrial were released or disposed (“Waste Sites”). Of the Waste Sites, 15 are on the National Priority List (“NPL”) promulgated pursuant to CERCLA. For 59 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 because settlement agreements can be reopened under certain circumstances, the Company’s potential liability for remediation costs associated with the 65 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 which could exceed 30 years for some sites. As of March 31, 2016 and December 31, 2015, environmental reserves of approximately $38 million and $37 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.

European Commission anticompetition investigation: Since January 2011, Iveco, our wholly owned subsidiary, and certain of its competitors have been subject to an investigation by the European Commission (the “Commission”) into certain business practices in the European Union in relation to medium and heavy trucks. On November 20, 2014, we received a Statement of Objections from the Commission alleging that Iveco and other companies in the heavy and medium truck industry had breached EU antitrust rules. The Commission indicated that it would seek to impose significant fines on the manufacturers. The Statement of Objections is a formal step in the Commission’s investigative process and details the Commission’s preliminary view of the conduct of the companies involved.

The Statement of Objections is not a final decision and, as such, it does not prejudice the final outcome of the proceedings.

Based on recent developments, on March 24, 2016, CNH Industrial recorded an exceptional non-tax deductible charge of $502 million (€450 million) in relation to the investigation and related matters. CNH Industrial will continue to evaluate the amount of the charge pending final resolution of the investigation and related matters.

CNH Industrial provided loan guarantees on the debt or commitments of third parties and performance guarantees to non-consolidated affiliates as of March 31, 2016 and December 31, 2015 totaling of $371 million and $316 million, respectively.

CNH Industrial is successor to Fiat Industrial, a company formed as a result of the demerger of Fiat S.p.A. (which, effective October 12, 2014, was merged into Fiat Chrysler Automobiles N.V., “FCA”) in favor of Fiat Industrial. As such, CNH Industrial continues to be liable jointly with FCA for the liabilities of FCA that arose prior to the effective date of the Demerger (January 1, 2011) and were still outstanding at that date (the “Liabilities”). This statutory provision is limited to the value of the net assets transferred to Fiat Industrial in the Demerger and survives until the Liabilities are satisfied in full. Furthermore, CNH Industrial may be responsible jointly with FCA in relation to tax liabilities, even if such tax liabilities exceed the value of the net assets transferred to Fiat Industrial in the Demerger. At March 31, 2016, the outstanding Liabilities amounted to approximately €1.2 billion ($1.4 billion) of which €1.1 billion ($1.2 billion) consisted of bonds guaranteed by FCA. CNH Industrial evaluated as extremely remote the risk of FCA’s insolvency, and therefore no specific provision has been accrued in respect of the above mentioned potential joint liability.

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 did not elect the fair value measurement option for eligible items.

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 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.

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 make use of 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.

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 issue derivative or other financial instruments for speculative purposes. The credit and market risk for interest rate hedges is reduced through diversification among various counterparties, utilizing mandatory termination clauses and/or collateral support agreements. Derivative instruments are generally classified as Level 2 or 3 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.

CNH Industrial has entered into foreign exchange forward contracts, swaps, and options in order to manage and preserve the economic value of cash flows in non-functional currencies. 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 that are 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. Ineffectiveness related to these hedge relationships is recognized currently in the condensed consolidated statements of operations in the line “Other, net” and was not significant for all periods presented. The maturity of these instruments does not exceed 17 months and the after-tax gains (losses) deferred in accumulated other comprehensive income (loss) that will be recognized in net sales and cost of goods sold over the next twelve months assuming foreign exchange rates remain unchanged is approximately $22 million. 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 $7.0 billion and $7.3 billion at March 31, 2016 and December 31, 2015, respectively.

Additionally, CNH Industrial employs cross currency swaps to convert fixed-rate foreign currency denominated debt to floating-rate debt denominated in the functional currency of the borrowing entity. Cross currency swaps combine the elements of a foreign exchange contract and an interest rate swap into a single financial instrument. These instruments are designated as cash flow hedges and thus accounted for similarly to the foreign exchange contracts and interest rate swaps disclosed in this footnote. The maturity of these instruments does not exceed 12 months and the after-tax losses deferred in accumulated other comprehensive income (loss) are insignificant. The total notional amount of CNH Industrial’s cross currency swaps was $165 million at December 31, 2015. There were no cross currency swaps outstanding as of March 31, 2016.

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 in cash flow hedging relationships 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, to the extent that the hedge relationship has been effective, 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. Any ineffectiveness is recorded in “Other, net” in the condensed consolidated statements of operations and was insignificant for all periods presented. The maximum length of time over which CNH Industrial is hedging its interest rate exposure through the use of derivative instruments designated in cash flow hedge relationships is 45 months. The after-tax gains (losses) deferred in accumulated other comprehensive income (loss) that will be recognized in interest expense over the next twelve months is approximately $(2) million.

Interest rate derivatives that have been designated as fair value hedge relationships have been used by CNH Industrial to mitigate the risk of reductions in the fair value of existing fixed rate bonds and medium-term notes due to increases in LIBOR based interest rates. 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 LIBOR based interest rates. Ineffectiveness was insignificant for the three months ended March 31, 2016 and 2015, respectively.

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. These facilities require CNH Industrial to enter into interest rate derivatives. To ensure that these transactions do not result in the Company being exposed to this risk, CNH Industrial enters into a compensating position. Net gains and losses on these instruments were insignificant for the three months ended March 31, 2016 and 2015, respectively.

All of CNH Industrial’s interest rate derivatives outstanding as of March 31, 2016 and December 31, 2015 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 $4.6 billion at March 31, 2016 and December 31, 2015, respectively.

The fair values of CNH Industrial’s derivatives as of March 31, 2016 and December 31, 2015 in the condensed consolidated balance sheets are recorded as follows:

	March 31, 2016			December 31, 2015
	(in millions)
Derivatives Designated as Hedging Instruments:
Assets:
Foreign exchange contracts:	$	77		$	61
Interest rate derivatives:		47			30
Cross currency swaps:		—			16
Total Assets	$	124		$	107
Liabilities:
Foreign exchange contracts:	$	(39	)	$	(29	)
Interest rate derivatives:		(9	)		(6	)
Cross currency swaps:		—			—
Total Liabilities	$	(48	)	$	(35	)
Derivatives Not Designated as Hedging Instruments:
Assets:
Foreign exchange contracts:	$	57		$	100
Interest rate derivatives:		1			4
Cross currency swaps:		—			—
Total Assets	$	58		$	104
Liabilities:
Foreign exchange contracts:	$	(111	)	$	(30	)
Interest rate derivatives:		(3	)		(4	)
Cross currency swaps:		—			—
Total Liabilities	$	(114	)	$	(34	)

Pre-tax gains (losses) on the condensed consolidated statements of operations related to CNH Industrial’s derivatives for the three months ended March 31, 2016 and 2015 are recorded in the following accounts:

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, 2016 and December 31, 2015:

	Level 1				Level 2						Total
	March 31, 2016		December 31, 2015		March 31, 2016			December 31, 2015			March 31, 2016			December 31, 2015
	(in millions)
Assets
Foreign exchange derivatives	$	—	$	—	$	134		$	161		$	134		$	161
Interest rate derivatives		—		—		48			34			48			34
Cross currency swaps		—		—		—			16			—			16
Available for sale securities		1		1		—			—			1			1
Total Assets	$	1	$	1	$	182		$	211		$	183		$	212
Liabilities
Foreign exchange derivatives	$	—	$	—	$	(150	)	$	(59	)	$	(150	)	$	(59	)
Interest rate derivatives		—		—		(12	)		(10	)		(12	)		(10	)
Total Liabilities	$	—	$	—	$	(162	)	$	(69	)	$	(162	)	$	(69	)

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.

The estimated fair market values of financial instruments not carried at fair value in the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015 are as follows:

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.

All debt is classified as a Level 2 fair value measurement, with the exception of bonds issued by CNH Industrial Finance Europe S.A. which are classified as a Level 1 fair value measurement.

The Company’s share of 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 15: 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, 2016	Gross Amount			Income Taxes			Net Amount
Unrealized gain on cash flow hedges	$	11		$	1		$	12
Changes in retirement plans’ funded status		20			(7	)		13
Foreign currency translation		17			—			17
Share of other comprehensive loss of entities using the equity method		13			—			13
Other comprehensive income (loss)	$	61		$	(6	)	$	55


Three Months Ended March 31, 2015	Gross Amount			Income Taxes			Net Amount
Unrealized loss on cash flow hedges	$	(39	)	$	—		$	(39	)
Changes in retirement plans’ funded status		44			(6	)		38
Foreign currency translation		(5	)		—			(5	)
Share of other comprehensive loss of entities using the equity method		(28	)		—			(28	)
Other comprehensive income (loss)	$	(28	)	$	(6	)	$	(34	)

The changes, net of tax, in each component of accumulated other comprehensive income (loss) consisted of the following (in millions):

	Unrealized Gain (Loss) on Cash Flow Hedges			Change in Retirement Plans’ Funded Status			Foreign Currency Translation			Share of Other Comprehensive Income (Loss) of Entities Using the Equity Method			Total
Balance, January 1, 2015	$	(117	)	$	(1,105	)	$	(448	)	$	(66	)	$	(1,736	)
Other comprehensive income (loss), before reclassifications		(100	)		16			(5	)		(28	)		(117	)
Amounts reclassified from other comprehensive income		61			22			—			—			83
Other comprehensive income (loss) *		(39	)		38			(5	)		(28	)		(34	)
Balance, March 31, 2015	$	(156	)	$	(1,067	)	$	(453	)	$	(94	)	$	(1,770	)

Balance, January 1, 2016	$	3		$	(947	)	$	(806	)	$	(113	)	$	(1,863	)
Other comprehensive income (loss), before reclassifications		23			(7	)		14			13			43
Amounts reclassified from other comprehensive income (loss)		(11	)		20			—			—			9
Other comprehensive income (loss) *		12			13			14			13			52
Balance, March 31, 2016	$	15		$	(934	)	$	(792	)	$	(100	)		(1,811	)

Significant amounts reclassified out of each component of accumulated other comprehensive income (loss) in the three months ended March 31, 2016 and 2015 consisted of the following:

CNH Industrial’s related parties are primarily EXOR S.p.A. and the companies that EXOR S.p.A controls or has significant influence over, including FCA and its subsidiaries and affiliates (the “FCA Group”) and Ferrari N.V. and its subsidiaries and affiliates. As of March 31, 2016, EXOR S.p.A. held 41.34% 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 beneficially owned by EXOR S.p.A. and (ii) the aggregate number of outstanding common shares and special voting shares of CNH Industrial as of March 31, 2016. 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 the FCA Group and EXOR S.p.A. and its Subsidiaries and Affiliates

In connection with the Demerger, Fiat (now known as FCA) and Fiat Industrial entered into a Master Services Agreement (“MSA”) which sets forth the primary terms and conditions pursuant to which the various service provider subsidiaries of such entities provide services (such as purchasing, tax, accounting and other back office services, security and training) to the various 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 which 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. Companies of the FCA Group 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, the FCA Group companies.

These transactions with the FCA Group are reflected in the Company’s condensed consolidated statements of operations as follows:

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 ARL, 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:

At March 31, 2016 and December 31, 2015, CNH Industrial had pledged guarantees on commitments of its joint venture for an amount of $252 million and $203 million, respectively, mainly related to Iveco—Oto Melara Società consortile ARL.

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 information does not purport to represent the operations of each group as if each group were to operate on a standalone basis. For example, Industrial Activities presents the cost of “interest free” periods for wholesale receivables as Interest Compensation to Financial Services, and not as a reduction of sales in their statements of operations. This supplemental data is as follows:

Industrial Activities—The financial information captioned “Industrial Activities” reflects the consolidation of all majority-owned subsidiaries except for the Financial Services business. Financial Services business has been included using the equity method of accounting whereby the net income and net assets of Financial Services business 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 consolidated financial statements.

Certain prior period balances have been reclassified to conform to the current period presentation resulting from the adoption of new accounting pronouncements.

	Statement of Operations
	Industrial Activities						Financial Services
	Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2016		2015
	(in millions)
Revenues
Net sales	$	5,076		$	5,625		$	—	$	—
Finance and interest income		31			71			388		413
Total Revenues	$	5,107		$	5,696		$	388	$	413
Costs and Expenses
Cost of goods sold	$	4,238		$	4,716		$	—	$	—
Selling, general and administrative expenses		477			496			69		71
Research and development expenses		183			190			—		—
Restructuring expenses		15			12			—		—
Interest expense		150			174			126		156
Interest compensation to Financial Services		76			71			—		—
Other, net		565			73			66		59
Total Costs and Expenses		5,704			5,732			261		286
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates		(597	)		(36	)		127		127
Income taxes		(6	)		30			46		47
Equity income of unconsolidated subsidiaries and affiliates		(9	)		4			6		5
Results from intersegment investments		87			85			—		—
Net income (loss)	$	(513	)	$	23		$	87	$	85

	Balance Sheets
	Industrial Activities				Financial Services
	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015
	(in millions)
ASSETS
Cash and cash equivalents	$	3,606	$	4,551	$	705	$	833
Restricted cash		15		15		816		912
Trade receivables		612		555		50		52
Financing receivables		1,829		2,162		19,489		19,974
Inventories, net		6,432		5,513		198		177
Property, plant and equipment, net		6,589		6,479		2		2
Investments in unconsolidated subsidiaries and affiliates		2,924		2,846		148		136
Equipment under operating leases		10		10		1,864		1,825
Goodwill		2,306		2,295		155		152
Other intangible assets, net		791		793		16		17
Deferred tax assets		1,092		1,087		173		163
Derivative assets		176		205		10		6
Other assets		1,573		1,271		470		490
TOTAL ASSETS	$	27,955	$	27,782	$	24,096	$	24,739
LIABILITIES AND EQUITY
Debt	$	7,884	$	8,260	$	20,381	$	21,176
Trade payables		5,485		5,176		147		197
Deferred tax liabilities		77		60		332		274
Pension, postretirement and other postemployment benefits		2,272		2,263		26		19
Derivative liabilities		157		62		9		7
Other liabilities		7,699		7,100		632		611
Total Liabilities	$	23,574	$	22,921	$	21,527	$	22,284
Equity		4,362		4,843		2,569		2,455
Redeemable noncontrolling interest		19		18		—		—
TOTAL EQUITY AND LIABILITIES	$	27,955	$	27,782	$	24,096	$	24,739

	Cash Flow Statements
	Industrial Activities						Financial Services
	Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2016			2015
	(in millions)
Operating activities:
Net income (loss)	$	(513	)	$	23		$	87		$	85
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		176			172			1			1
Depreciation and amortization expense of assets under operating leases and assets sold under buy-back commitments		72			56			61			47
Loss from disposal of assets		1			1			—			2
Undistributed income of unconsolidated subsidiaries		37			(25	)		(7	)		(6	)
Other non-cash items		26			22			29			25
Changes in operating assets and liabilities:
Provisions		359			(77	)		(2	)		2
Deferred income taxes		39			38			59			43
Trade and financing receivables related to sales, net		(33	)		178			341			115
Inventories, net		(684	)		(738	)		(20	)		(8	)
Trade payables		174			6			(55	)		(16	)
Other assets and liabilities		(134	)		(491	)		52			(42	)
Net cash provided by (used in) operating activities		(480	)		(835	)		546			248
Investing activities:
Additions to retail receivables		—			—			(858	)		(1,360	)
Collections of retail receivables		—			—			1,172			1,814
Proceeds from sale of assets, net of assets sold under operating leases and assets sold under buy-back commitments		2			—			—			—
Proceeds from sale of assets under operating leases and assets sold under buy-back commitments		76			60			78			102
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases and sold under buy-back commitments		(80	)		(88	)		(1	)		—
Expenditures for assets under operating leases and assets sold under buy-back commitments		(143	)		(117	)		(157	)		(246	)
Other		(39	)		901			60			(418	)
Net cash provided by (used in) investing activities		(184	)		756			294			(108	)
Financing activities:
Proceeds from long-term debt		146			155			1,689			2,232
Payments of long-term debt		(416	)		(1,456	)		(2,574	)		(2,433	)
Net increase (decrease) in other financial liabilities		(71	)		284			(38	)		192
Dividends paid		(2	)		—			(75	)		(35	)
Other		(49	)		2			—			(60	)
Net cash used in financing activities		(392	)		(1,015	)		(998	)		(104	)
Effect of foreign exchange rate changes on cash and cash equivalents		111			(298	)		30			(109	)
Decrease in cash and cash equivalents		(945	)		(1,392	)		(128	)		(73	)
Cash and cash equivalents, beginning of year		4,551			4,122			833			1,041
Cash and cash equivalents, end of period	$	3,606		$	2,730		$	705		$	968

CNH Industrial and certain 100% owned subsidiaries of CNH Industrial (the “Guarantor Subsidiaries”) guarantee the 7.875% Senior Notes issued by Case New Holland Industrial Inc. (formerly known as Case New Holland Inc.) in 2010. As the guarantees are fully unconditional, irrevocable, and joint and several with all other guarantees and as the Guarantor Subsidiaries are all 100% owned by CNH Industrial, the Company has included the following condensed consolidating financial information as of March 31, 2016 and December 31, 2015 and for the three months ended March 31, 2016 and 2015. The condensed consolidating financial information reflects investments in consolidated subsidiaries on the equity method of accounting. The goodwill and other intangible assets are allocated to reporting units and are primarily reported by the Guarantor Subsidiaries, except for the portion related to Financial Services, which is reported by All Other Subsidiaries. It is not practicable to allocate goodwill and other intangibles to the individual Guarantor Subsidiaries and All Other Subsidiaries.

Certain prior period balances have been reclassified to conform to the current period presentation resulting from the adoption of new accounting pronouncements.

	Condensed Statements of Operations for the Three Months Ended March 31, 2016
	CNH Industrial N.V.			Case New Holland Industrial Inc.			Guarantor Subsidiaries			All Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Total Revenues	$	324		$	2		$	2,097		$	4,330		$	(1,381	)	$	5,372
Cost and Expenses:
Cost of goods sold		279			—			1,784			3,397			(1,222	)		4,238
Selling, general and administrative expenses		28			—			125			393			—			546
Research and development expenses		(2	)		—			65			120			—			183
Restructuring expenses		5			—			(8	)		18			—			15
Interest expense		29			63			28			220			(110	)		230
Interest compensation to Financial Services		3			—			46			—			(49	)		—
Other, net		35			2			16			577			—			630
Total Costs and Expenses		377			65			2,056			4,725			(1,381	)		5,842
Income (loss) before income taxes and equity in income of unconsolidated affiliates and consolidated subsidiaries accounted for under the equity method		(53	)		(63	)		41			(395	)		—			(470	)
Income taxes		(1	)		(23	)		(2	)		66			—			40
Equity in income of unconsolidated affiliates and consolidated subsidiaries accounted for under the equity method		(461	)		28			75			65			290			(3	)
Net income (loss)		(513	)		(12	)		118			(396	)		290			(513	)
Net loss attributable to noncontrolling interests		—			—			—			(1	)		—			(1	)
Net income (loss) attributable to owners of the parent	$	(513	)	$	(12	)	$	118		$	(395	)	$	290		$	(512	)

	Condensed Balance Sheets as of March 31, 2016
	CNH Industrial N.V.		Case New Holland Industrial Inc.			Guarantor Subsidiaries		All Other Subsidiaries		Eliminations			Consolidated
	(in millions)
Assets:
Cash and cash equivalents	$	1	$	—		$	133	$	4,177	$	—		$	4,311
Deposits in subsidiaries’ cash management pools		148		—			3,446		—		(3,594	)		—
Receivables		158		1,011			5,004		26,580		(13,291	)		19,462
Inventories, net		166		—			1,629		4,835		—			6,630
Property, plant and equipment, net		83		—			1,093		5,415		—			6,591
Equipment on operating leases		—		—			—		1,874		—			1,874
Investments in unconsolidated subsidiaries and affiliates		258		—			—		244		—			502
Investments in consolidated subsidiaries		8,952		7,283			1,664		888		(18,787	)		—
Goodwill and intangibles		12		—			2,789		467		—			3,268
Other		230		66			1,386		2,397		(282	)		3,797
Total Assets	$	10,008	$	8,360		$	17,144	$	46,877	$	(35,954	)	$	46,435
Liabilities and Equity:
Debt	$	4,910	$	5,200		$	2,200	$	28,390	$	(14,933	)	$	25,767
Trade payables		238		116			2,059		5,156		(1,961	)		5,608
Other liabilities		511		(69	)		3,361		7,168		(273	)		10,698
Total Equity		4,349		3,113			9,524		6,163		(18,787	)		4,362
Total Equity and Liabilities	$	10,008	$	8,360		$	17,144	$	46,877	$	(35,954	)	$	46,435

	Condensed Statements of Cash Flow for the Three Months Ended March 31, 2016
	CNH Industrial N.V.			Case New Holland Industrial Inc.			Guarantor Subsidiaries			All Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Operating Activities:
Net income (loss)	$	(513	)	$	(12	)	$	118		$	(396	)	$	290		$	(513	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		3			—			53			254			—			310
Other, net		509			15			(374	)		417			(373	)		194
Net cash provided by (used in) operating activities		(1	)		3			(203	)		275			(83	)		(9	)
Investing Activities:
Expenditures for property, plant and equipment, equipment on operating leases, equipment sold under a buy-back commitment and intangible assets		(3	)		—			(18	)		(360	)		—			(381	)
Net collections from retail receivables and related securitizations		—			—			—			314			—			314
Withdrawals from subsidiaries’ cash management pools		(26	)		—			1,331			—			(1,305	)		—
Other, net		(22	)		(44	)		(866	)		(207	)		1,316			177
Net cash provided by (used in) investing activities		(51	)		(44	)		447			(253	)		11			110
Financing Activities:
Net increase (decrease) in indebtedness		55			40			(263	)		(1,096	)		—			(1,264	)
Dividends paid		—			—			—			(85	)		83			(2	)
Other, net		3			1			3			(45	)		(11	)		(49	)
Net cash provided by (used in) financing activities		58			41			(260	)		(1,226	)		72			(1,315	)
Effect of foreign exchange rate changes on cash and cash equivalents		(8	)		—			5			144			—			141
Decrease in cash and cash equivalents		(2	)		—			(11	)		(1,060	)		—			(1,073	)
Cash and cash equivalents, beginning of year		3			—			144			5,237			—			5,384
Cash and cash equivalents, end of period	$	1		$	—		$	133		$	4,177		$	—		$	4,311

	Condensed Statements of Operations for the Three Months Ended March 31, 2015
	CNH Industrial N.V.			Case New Holland Industrial Inc.			Guarantor Subsidiaries		All Other Subsidiaries		Eliminations			Consolidated
	(in millions)
Total Revenues	$	373		$	3		$	2,290	$	4,540	$	(1,246	)	$	5,960
Cost and Expenses:
Cost of goods sold		315			—			1,885		3,495		(979	)		4,716
Selling, general and administrative expenses		29			—			117		421		—			567
Research and development expenses		3			—			70		117		—			190
Restructuring expenses		—			—			3		9		—			12
Interest expense		45			61			36		363		(221	)		284
Interest compensation to Financial Services		2			—			44		—		(46	)		—
Other, net		14			(4	)		39		51		—			100
Total Costs and Expenses		408			57			2,194		4,456		(1,246	)		5,869
Income (loss) before income taxes and equity in income of unconsolidated affiliates and consolidated subsidiaries accounted for under the equity method		(35	)		(54	)		96		84		—			91
Income taxes		2			(21	)		29		67		—			77
Equity in income of unconsolidated affiliates and consolidated subsidiaries accounted for under the equity method		59			57			79		41		(227	)		9
Net income		22			24			146		58		(227	)		23
Net loss attributable to noncontrolling interests		—			—			—		1		—			1
Net income attributable to owners of the parent	$	22		$	24		$	146	$	57	$	(227	)	$	22

	Condensed Balance Sheets as of December 31, 2015
	CNH Industrial N.V.		Case New Holland Industrial Inc.			Guarantor Subsidiaries		All Other Subsidiaries		Eliminations			Consolidated
	(in millions)
Assets:
Cash and cash equivalents	$	3	$	—		$	144	$	5,237	$	—		$	5,384
Deposits in subsidiaries’ cash management pools		116		—			4,753		—		(4,869	)		—
Receivables		584		986			4,970		27,401		(14,360	)		19,581
Inventories, net		138		—			1,364		4,188		—			5,690
Property, plant and equipment, net		80		—			1,108		5,293		—			6,481
Equipment on operating leases		—		—			—		1,835		—			1,835
Investments in unconsolidated subsidiaries and affiliates		251		—			—		276		—			527
Investments in consolidated subsidiaries		9,166		7,191			1,607		794		(18,758	)		—
Goodwill and intangibles		12		—			2,786		459		—			3,257
Other		176		104			1,292		2,555		(205	)		3,922
Total Assets	$	10,526	$	8,281		$	18,024	$	48,038	$	(38,192	)	$	46,677
Liabilities and Equity:
Debt	$	5,045	$	5,187		$	3,302	$	29,987	$	(17,220	)	$	26,301
Trade payables		221		112			2,083		4,954		(2,028	)		5,342
Other liabilities		458		(79	)		3,365		6,633		(186	)		10,191
Total Equity		4,802		3,061			9,274		6,464		(18,758	)		4,843
Total Equity and Liabilities	$	10,526	$	8,281		$	18,024	$	48,038	$	(38,192	)	$	46,677

	Condensed Statements of Cash Flow for the Three Months Ended March 31, 2015
	CNH Industrial N.V.			Case New Holland Industrial Inc.			Guarantor Subsidiaries			All Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Operating Activities:
Net income	$	22		$	24		$	146		$	58		$	(227	)	$	23
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		6			—			53			217			—			276
Other, net		56			(39	)		(449	)		(357	)		(132	)		(921	)
Net cash provided by (used in) operating activities		84			(15	)		(250	)		(82	)		(359	)		(622	)
Investing Activities:
Expenditures for property, plant and equipment, equipment on operating leases, equipment sold under a buy-back commitment and intangible assets		(5	)		—			(26	)		(420	)		—			(451	)
Net collections from retail receivables and related securitizations		—			—			—			454			—			454
Withdrawals from subsidiaries’ cash management pools		—			—			2			—			(2	)		—
Other, net		(54	)		(1	)		—			386			254			585
Net cash provided by (used in) investing activities		(59	)		(1	)		(24	)		420			252			588
Financing Activities:
Net increase (decrease) in indebtedness		—			17			406			(1,131	)		(318	)		(1,026	)
Dividends paid		—			(3	)		(112	)		(292	)		407			—
Other, net		16			2			2			(36	)		18			2
Net cash provided by (used in) financing activities		16			16			296			(1,459	)		107			(1,024	)
Effect of foreign exchange rate changes on cash and cash equivalents		(29	)		—			(2	)		(376	)		—			(407	)
Increase (decrease) in cash and cash equivalents		12			—			20			(1,497	)		—			(1,465	)
Cash and cash equivalents, beginning of year		7			—			39			5,117			—			5,163
Cash and cash equivalents, end of period	$	19		$	—		$	59		$	3,620		$	—		$	3,698

At the Annual General Meeting of shareholders held on April 15, 2016, the Company’s shareholders approved a dividend of €0.13 per common share. Shareholders who held common shares traded on the New York Stock Exchange on April 26, 2016, the record date, received the dividend in U.S. dollar in the amount of $0.1476 per common share, translated at the exchange rate reported by the European Central Bank on April 21, 2016. The dividend was paid on May 3, 2016 with a total amount of $201 million (the equivalent of €177 million).

Based on a proposal of the Board of Directors aimed at continuing the ongoing buy-back program and at maintaining the necessary operation flexibility over an adequate period of time, CNH Industrial’s shareholders also granted the Board of Directors the authority to repurchase up to a maximum of 10% of CNH Industrial’s issued common shares as of the date of the Annual General Meeting. The authorization, which is valid for a period of 18 months from April 15, 2016 up to and including October 14, 2017, provides for the repurchase of CNH Industrial’s common shares in accordance with applicable laws and regulations. Shareholders also granted the Board of Directors the authority to reduce the issued share capital of CNH Industrial by cancelling up to 80 million special voting shares held in treasury.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CNH Industrial N.V. (“CNH Industrial” or the “Company”) is incorporated in, and under the laws of, the Netherlands. The Company was formed as a result of the business combination transaction (“Merger”) between Fiat Industrial S.p.A. (“Fiat Industrial” and, together with its subsidiaries the “Fiat Industrial Group”) and CNH Global N.V. (“CNH Global”).

The Company has five reportable segments reflecting the five businesses directly managed by CNH Industrial N.V., consisting of: (i) Agricultural Equipment, which designs, produces and sells agricultural equipment (ii) Construction Equipment, which designs, produces and sells construction equipment (iii) Commercial Vehicles, which designs, produces and sell trucks, commercial vehicles, buses, and specialty vehicles (iv) Powertrain, which produces and sells engines, transmissions and axles for those vehicles and engines for marine and power generation applications; and (v) Financial Services, which provides financial services to the customers of our products. The Company’s worldwide agricultural equipment, construction equipment, commercial vehicles, powertrain operations as well as corporate functions are collectively referred to as “Industrial Activities”.

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to our unaudited condensed consolidated financial statements in this report, as well as our annual report on Form 20-F for the year ended December 31, 2015 filed with the U.S. Securities and Exchange Commission (“SEC”). Results for the interim periods presented are not necessarily indicative of the results to be expected for the full fiscal year due to seasonal and other factors.

We monitor our operations through the use of several non-GAAP financial measures. We believe that these non-GAAP financial measures provide useful and relevant information regarding our operating results and enhance the reader’s ability to assess our financial performance and financial position. These measures facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions. These and similar measures are widely used in the industries in which we operate. These financial measures may not be comparable to other similarly titled measures of other companies and are not intended to be substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP.

Operating Profit of Industrial Activities is defined as net sales less cost of goods sold, selling, general and administrative (“SG&A”) expenses and research and development (“R&D”) expenses.

Operating Profit of Financial Services is defined as revenues, less SG&A expenses, interest expenses and certain other operating expenses.

We provide a reconciliation of Operating Profit to Net Income, which is the most directly comparable measure included in our condensed consolidated statements of operations.

Net Debt is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash and derivative hedging debt. We provide a reconciliation of Net Debt to Total Debt, which is the most directly comparable measure included in our consolidated balance sheets. Due to different sources of cash flows used for the repayment of the debt between Industrial Activities and Financial Services (by cash from operations for Industrial Activities and by collection of financing receivables for Financial Services), management separately evaluates the cash flow performance of Industrial Activities using Net Debt of Industrial Activities.

We discuss the fluctuations in revenues on a constant currency basis by applying the prior-year exchange rates to current year’s revenue expressed in local currency in order to eliminate the impact of foreign exchange rate fluctuations.

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 our consolidated operations and financial results. For further information, see “Note 18: Supplemental Information” to our condensed consolidated financial statements for the three months ended March 31, 2016, where we present supplemental consolidating data split by Industrial Activities and Financial Services. Industrial Activities include the Financial Services business on the equity basis of accounting. Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated data.

	Three Months Ended March 31,
	2016			2015
	(in millions)
Revenues:
Net sales	$	5,076		$	5,625
Finance and interest income		296			335
Total Revenues		5,372			5,960
Costs and Expenses:
Cost of goods sold		4,238			4,716
Selling, general and administrative expenses		546			567
Research and development expenses		183			190
Restructuring expenses		15			12
Interest expense		230			284
Other, net		630			100
Total Costs and Expenses		5,842			5,869
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates		(470	)		91
Income taxes		40			77
Equity in income of unconsolidated subsidiaries and affiliates		(3	)		9
Net income (loss)		(513	)		23
Net income (loss) attributable to noncontrolling interests		(1	)		1
Net income (loss) attributable to CNH Industrial N.V.	$	(512	)	$	22

We recorded revenues of $5,372 million during the first quarter of 2016, down 9.9% (down 5.7% on a constant currency basis) compared to the same period in 2015. Net sales of Industrial Activities were $5,076 million in the first quarter of 2016, a 9.8% decrease (down 5.7% on a constant currency basis) compared to the prior year. Excluding the negative impact of currency translation, net sales increased in Commercial Vehicles and Powertrain, offsetting a portion of the decline in volumes in the remaining segments.

Cost of goods sold were $4,238 million during the first quarter of 2016 compared with $4,716 million during the first quarter of 2015. The decrease of 10.1% was driven by the decline in revenues. As a percentage of net sales of Industrial Activities, cost of goods sold was 83.5% and 83.8% in the first quarter of 2016 and 2015, respectively.

SG&A expenses amounted to $546 million during the first quarter of 2016, down 3.7% compared to $567 million recorded in the comparable period of 2015. We continue to focus on cost containment actions across all segments.

During the three months ended March 31, 2016, R&D expenses were $183 million compared to $190 million for the same period in 2015. The expense in both periods was primarily attributable to continued investment in new products.

Restructuring expenses for the first quarter of 2016 were $15 million compared to $12 million for the same period in 2015. The expense in both periods was primarily attributable to actions in Commercial Vehicles and Agricultural Equipment as part of the efficiency program launched in 2014.

Interest expense was $230 million during the first quarter of 2016 compared to $284 million in 2015. The interest expense attributable to Industrial Activities, net of interest income and eliminations, was $119 million, an increase of $13 million over the same period in 2015, which was primarily due to higher cost of carry and higher debt in Brazil. The interest expense attributable to Financial Services was $126 million, a decrease of $30 million over the same period in 2015, primarily due to a more favorable cost of funding and a lower average indebtedness in the quarter.

Other, net expenses were $630 million for the quarter, an increase of $530 million from $100 million during the first quarter of 2015. The increase was primarily attributable to an exceptional non-tax deductible charge of $502 million incurred related to the investigation by the European Commission regarding certain alleged anticompetitive practices and related matters. For more information on this charge, see “Note 14: Commitments and Contingencies.”

Income taxes totaled $40 million in the quarter ($77 million in the first quarter of 2015). Excluding the impact of the exceptional non-tax deductible charge recognized in “Other, net”, and the impact of the inability to record deferred tax assets on losses in certain jurisdictions, primarily Brazil, the effective tax rate for the quarter was 50%, in line with the comparable rate in the first quarter of 2015.

Equity in income of unconsolidated subsidiaries and affiliates totaled $(3) million and $9 million for the first quarters of 2016 and 2015, respectively.

The following tables show revenues and operating profit broken down by segment. We have also included a discussion of our results by Industrial Activities and each of our business segments.

	Three Months Ended March 31,
	2016			2015			$ Change			% Change
	(in millions, except percentages)
Revenues:
Agricultural Equipment	$	2,124		$	2,577		$	(453	)		(17.6	)%
Construction Equipment		536			602			(66	)		(11.0	)%
Commercial Vehicles		2,045			2,037			8			0.4	%
Powertrain		882			901			(19	)		(2.1	)%
Eliminations and other		(511	)		(492	)		(19	)	n.m.
Total Net sales of Industrial Activities		5,076			5,625			(549	)		(9.8	)%
Financial Services		388			413			(25	)		(6.1	)%
Eliminations and other		(92	)		(78	)		(14	)	n.m.
Total Revenues	$	5,372		$	5,960		$	(588	)		(9.9	)%

Net sales of Industrial Activities were $5,076 million during the first quarter of 2016, down 9.8% (down 5.7% on a constant currency basis) compared to the same period in 2015. Excluding the negative impact of currency translation, net sales increased for Commercial Vehicles (up 5.3%) and for Powertrain (up 0.8%), but decreased for Agricultural Equipment and Construction Equipment.

Operating profit of Industrial Activities was $178 million in the first quarter of 2016, a $45 million decrease compared to the first quarter of 2015, with an operating margin of 3.5%, down 0.5 percentage points (“p.p.”) compared to the prior year period. Operating profit was primarily impacted by a $114 million decrease for Agricultural Equipment, partially offset by a $37 million increase for Commercial Vehicles.

The following table shows Agricultural Equipment net sales broken down by geographic region for the three months ended March 31, 2016 compared to 2015:

Net sales of the Agricultural Equipment business were $2,124 million for the first quarter, down 17.6% (down 13.6% on a constant currency basis) compared to the same period in 2015. The decrease was primarily the result of unfavorable industry volume and product mix in the row crop sector in NAFTA and the Brazilian market in LATAM. Net sales increased in EMEA and in APAC, mainly driven by favorable volume in Australia.

In our key product segments within NAFTA, the over 140 horsepower (“hp”) tractor segment was down 37%, while demand for combines was down 16%. Smaller hp tractors in NAFTA had positive demand, with the under 140 hp segment up 9%. In LATAM, tractor and combines markets decreased 41% and 18%, respectively. EMEA markets were down 3% for tractors and 6% for combines. APAC markets increased 5% for tractors and 31% for combines.

Agricultural Equipment’s worldwide market share performance was down 1% for tractors and combines. In the first quarter of 2016, the Agricultural Equipment’s worldwide unit production was 5% above retail sales in support of the expected seasonal increase in demand from dairy and livestock customers. Production of NAFTA row crop related products, including the over 140 hp tractors, combines and other major crop production equipment decreased 53% compared to the same period last year.

Agricultural Equipment’s operating profit was $90 million for the first quarter of 2016 compared to $204 million for the same period in 2015, with an operating margin of 4.2% (7.9% in the first quarter of 2015). The decrease was mainly due to unfavorable volume, industrial absorption and product mix in NAFTA and LATAM, partially offset by disciplined pricing and lower material costs.

The following table shows Construction Equipment net sales broken down by geographic region for the three months ended March 31, 2016 compared to the prior-year period:

Net sales of the Construction Equipment business were $536 million during the three months ended March 31, 2016, down 11.0% (down 8.1% on a constant currency basis) compared to the same period in 2015 due to negative volume and mix primarily in NAFTA and LATAM.

In the first quarter of 2016, Construction Equipment’s worldwide heavy and light industry sales were down 13% and 3%, respectively. Industry light equipment sales were flat in NAFTA and EMEA, and down in LATAM and APAC. Industry heavy equipment sales decreased in all regions, primarily in LATAM.

Construction Equipment’s worldwide market share was flat compared to the prior year period for both heavy and light construction equipment in all regions except for heavy equipment in LATAM, where market share increased 2.8 p.p.

Construction Equipment’s worldwide production levels were 18% above retail sales in the quarter to support the seasonal increase expected in NAFTA and EMEA.

Construction Equipment reported operating profit of $14 million for the first quarter of 2016 compared to $0 million for the same period in 2015 as a result of improved margins in NAFTA and APAC more than offsetting the negative effects of challenging trading conditions in LATAM. Operating margin increased 2.6 p.p. to 2.6% (0.0% in the first quarter of 2015).

The following table shows Commercial Vehicles’ net sales broken down by geographic region for the three months ended March 31, 2016 compared to the prior-year period:

Commercial Vehicles’ net sales were $2,045 million during the three months ended March 31, 2016, up 0.4% (up 5.3% on a constant currency basis) compared to the same period in 2015 primarily as a result of favorable truck volume in EMEA. In LATAM, net sales decreased due to lower industry volumes in Brazil and Argentina. In APAC, net sales decreased, mainly for buses.

During the first quarter of 2016, the European truck market (GVW ≥3.5 tons) was up 18% compared to 2015. The light vehicle market (GVW 3.5-6.0 tons) increased 18%, the medium vehicle market (GVW 6.1-15.9 tons) increased 19%, and the heavy vehicle market (GVW ≥16 tons) increased 19%. In LATAM, new truck registrations (GVW ≥3.5 tons) declined 34% compared to the first quarter of 2015, primarily impacted by a decrease of 35% in Brazil and 28% in Argentina. In APAC, registrations declined 2%.

In the first quarter of 2016, our market share in the European truck market (GVW ≥3.5 tons) was 10.8%, consistent with the first quarter of 2015. Our market share in LATAM was 13.2%, up 2.3 p.p. compared to 2015.

Commercial Vehicles delivered approximately 31,200 vehicles (including buses and specialty vehicles) in the quarter, representing a 13% increase compared to the first quarter of 2015. Volumes were higher in the light and heavy segments, up 19% and 16%, respectively, while volumes in the medium segment were down 11%. Commercial Vehicles’ deliveries increased 21% in EMEA, but decreased in APAC and LATAM by 1% and 38%, respectively.

Commercial Vehicles’ first quarter ratio of units shipped and billed, or book-to-bill ratio, was 1.29, a decrease of 7% over 2015. In 2016, truck order intake in Europe increased 25% compared to the first quarter of 2015, with a 33% increase in light trucks, a 2% decrease in medium trucks and a 15% increase in heavy trucks.

Commercial Vehicles reported operating profit of $38 million for the first quarter of 2016 (operating margin of 1.9%). This represents a $37 million increase compared to the first quarter of 2015, or a $49 million increase excluding the $12 million operating profit reported in the first quarter of 2015 from our Venezuelan subsidiary before the currency re-measurement in the second half of 2015.

The increase was a result of improved volume and mix, positive pricing across all regions, and lower product costs. In EMEA, the increase was mainly due to favorable volume in trucks and buses. In LATAM, operating profit was flat as cost containment actions offset the effect of lower volumes due to market declines. In APAC, operating profit was positive due to truck pricing offsetting lower bus volumes.

Powertrain net sales were $882 million for the first quarter of 2016, a decrease of 2.1% (up 0.8% on a constant currency basis) compared to the same period in 2015. The slight increase, on a constant currency basis, was primarily attributable to higher volumes in the captive portion of the business. Sales to external customers accounted for 44% of total net sales compared to 47% in 2015.

During the first quarter of 2016, Powertrain sold approximately 129,100 engines, a decrease of 0.4% compared to 2015. In terms of major customers, 32% of engine units were supplied to Commercial Vehicles, 10% to Agricultural Equipment, 4% to Construction Equipment and the remaining 54% to external customers. Additionally, Powertrain delivered approximately 19,600 transmissions and 50,600 axles, an increase of 23.6% and 22.3%, respectively, compared to the first quarter of 2015.

During the first quarter of 2016, Powertrain’s operating profit was $53 million, up $17 million compared to the same period in 2015, with an operating margin of 6.0% (up 2.0 p.p. compared to 2015). The improvement was mainly due to positive product mix and industrial efficiencies.

Financial Services reported revenues of $388 million for the three months ended March 31, 2016, a decrease of 6.1% (down 0.1% on a constant currency basis) compared to the same period in 2015 due to a lower average portfolio, partially offset by an increase in interest yields.

Net income of Financial Services was $87 million for the first quarter of 2016, an increase of $2 million over the same period in 2015, with improved net interest margin more than offsetting a slightly higher provision for credit losses and the negative impact of currency translation.

Retail loan originations in the quarter were $1.9 billion, down $0.2 billion (down $0.1 billion on a constant currency basis) compared to the first quarter of 2015, primarily due to the decline in Agricultural Equipment sales. The managed portfolio (including unconsolidated joint ventures) of $24.9 billion as of March 31, 2016 (of which retail was 65% and wholesale 35%) was up $0.3 billion compared to December 31, 2015. Excluding the impact of currency translation, the portfolio decreased $0.6 billion, primarily in NAFTA and EMEA.

The following table includes the reconciliation of our net income (loss), the most comparable U.S. GAAP financial measure, to our operating profit, a non-GAAP financial measure.

See our critical accounting policies discussed in the Management’s Discussion and Analysis of the most recent annual report filed on Form 20-F. There have been no material changes to these policies.

The following discussion of liquidity and capital resources principally focuses on our condensed consolidated statements of cash flows and our condensed consolidated balance sheets. Our operations are capital intensive and subject to seasonal variations in financing requirements for dealer receivables and dealer and company inventories. Whenever necessary, funds from operating activities are supplemented from external sources. We expect to have available cash reserves and cash generated from operations and from sources of debt and financing activities that are sufficient to fund our working capital requirements, capital expenditures and debt service at least through the next twelve months.

During the three months ended March 31, 2016, consolidated cash and cash equivalents decreased by $1,073 million. Cash and cash equivalents at Industrial Activities decreased $945 million, while cash and cash equivalents at Financial Services decreased by $128 million.

Industrial Activities used $480 million of cash flows from operations in 2016, compared to $835 million of cash used in 2015, primarily due to improved working capital.

Industrial Activities used $184 million of cash flows from investing activities in 2016, primarily due to a decrease in net cash receipts related to intercompany receivables and payables.

Industrial Activities used $392 million of cash flows from financing activities in 2016, primarily due to repayments of long-term debt.

The generation of cash in operating activities at Financial Services of $546 million in 2016, compared to the generation of cash of $248 million in 2015, was primarily due to improved collection of wholesale receivables.

The generation of cash in investing activities at Financial Services of $294 million in the three months ended March 31, 2016, was primarily due to a reduction in net cash payments related to intercompany payables and receivables.

Financing activities of Financial Services used $998 million of cash in 2016, primarily from a reduction in debt.

As of March 31, 2016 and December 31, 2015, our consolidated debt was as detailed in the table below:

Of the total consolidated debt, $8,688 million at March 31, 2016, and $8,289 million at December 31, 2015, were related to bonds. The following table shows the summary of our bonds:

	March 31, 2016						December 31, 2015 *
	Industrial Activities		Financial Services		Consolidated		Industrial Activities		Financial Services		Consolidated
	(in millions)
Bonds:
Payable in 2018, interest rate of 6.250%	$	1,357	$	—	$	1,357	$	1,296	$	—	$	1,296
Payable in 2019, interest rate of 2.750%		1,130		—		1,130		1,080		—		1,080
Payable in 2021, interest rate of 2.875%		788		—		788		753		—		753
Payable in 2025, interest rate of 3.500%		113		—		113		107		—		107
Payable in 2016, interest rate of 7.250%		—		—		—		254		—		254
Payable in 2017, interest rate of 7.875%		1,521		—		1,521		1,519		—		1,519
Payable in 2016, interest rate of 6.250%		—		499		499		—		500		500
Payable in 2018, interest rate of 3.625%		—		601		601		—		597		597
Payable in 2018, interest rate of 3.875%		—		594		594		—		594		594
Payable in 2017, interest rate of 3.250%		—		499		499		—		499		499
Payable in 2019, interest rate of 3.375%		—		498		498		—		498		498
Payable in 2020, interest rate of 4.375%		—		592		592		—		592		592
Payable in 2021, interest rate of 4.875%		—		496		496		—		—		—
Total Bonds	$	4,909	$	3,779	$	8,688	$	5,009	$	3,280	$	8,289

The calculation of Net Debt as of March 31, 2016 and December 31, 2015, and the reconciliation of Net Debt to Total Debt, the U.S. GAAP financial measure that we believe to be most directly comparable, are shown below:

	Consolidated				Industrial Activities				Financial Services
	March 31, 2016		December 31, 2015 *		March 31, 2016		December 31, 2015 *		March 31, 2016		December 31, 2015 *
	(in millions)
Total Debt **	$	25,767	$	26,301	$	7,884	$	8,260	$	20,381	$	21,176
Less:
Cash and cash equivalents		4,311		5,384		3,606		4,551		705		833
Restricted cash		831		927		15		15		816		912
Intersegment notes receivables		—		—		1,765		2,089		733		1,046
Derivatives hedging debt		28		27		28		27		—		—
Net Debt (Cash)	$	20,597	$	19,963	$	2,470	$	1,578	$	18,127	$	18,385

The increase in Net Debt at March 31, 2016, compared to December 31, 2015, mainly reflects the expected seasonal increase in working capital and the impact of foreign exchange changes on euro-denominated debt.

The following table shows the change in Net Debt of Industrial Activities for the three months ended March 31, 2016:

(*) Excluding assets sold under buy-back commitments and equipment under operating leases.

As of March 31, 2016, we had approximately $3.0 billion available under our committed lines of credit.

Please refer to “Note 9: Debt” in our most recent annual report on Form 20-F for more information related to our debt and credit facilities.

As a global company with a diverse business portfolio, CNH Industrial is exposed to numerous legal risks, including legal proceedings, claims and governmental investigations, particularly in the areas of product liability (including asbestos-related liability), product performance, emissions and fuel economy, retail and wholesale credit, competition and antitrust law, intellectual property matters (including patent infringement), disputes with dealers and suppliers and service providers, environmental risks, and tax and employment matters. For more information, please refer to the information presented in “Note 14: Commitments and Contingencies” to our interim condensed consolidated financial statements.

This quarterly report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact contained in this filing including statements regarding our: competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. These statements may include terminology such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “outlook”, “continue”, “remain”, “on track”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “prospects”, “plan”, or similar terminology. Forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside our control and are difficult to predict. If any of these risks and uncertainties materialize or other assumptions underlying any of the forward-looking statements prove to be incorrect, the actual results or developments may differ materially from any future results or developments expressed or implied by the forward-looking statements.

Factors, risks, and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others: the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products; general economic conditions in each of our markets; changes in government policies regarding banking, monetary and fiscal policies; legislation, particularly relating to capital goods-related issues such as agriculture, the environment, debt relief and subsidy program policies, trade and commerce and infrastructure development; government policies on international trade and investment, including sanctions, import quotas, capital controls and tariffs; actions of competitors in the various industries in which we compete; development and use of new technologies and technological difficulties; the interpretation of, or adoption of new, compliance requirements with respect to engine emissions, safety or other aspects of our products; production difficulties, including capacity and supply constraints and excess inventory levels; labor relations; interest rates and currency exchange rates; inflation and deflation; energy prices; prices for agricultural commodities; housing starts and other construction activity; our ability to obtain financing or to refinance existing debt; a decline in the price of used vehicles; the resolution of pending litigation and investigations on a wide range of topics, including dealer and supplier litigation, intellectual property rights disputes, product warranty and defective product claims, and emissions and/or fuel economy regulatory and contractual issues; the evolution of our contractual relations with Kobelco Construction Machinery Co., Ltd. and Sumitomo (S.H.I.) Construction Machinery Co., Ltd.; the Company’s pension plans and other postemployment obligations; political and civil unrest; volatility and deterioration of capital and financial markets, including further deterioration of the Eurozone sovereign debt crisis, other similar risks and uncertainties and our success in managing the risks involved in the foregoing.

Forward-looking statements speak only as of the date on which such statements are made. Furthermore, in light of ongoing difficult macroeconomic conditions, both globally and in the industries in which we operate, it is particularly difficult to forecast our results, and any estimates or forecasts of particular periods that are provided in this report are uncertain. Accordingly, investors should not place undue reliance on such forward-looking statements. We can give no assurance that the expectations reflected in any forward-looking statements will prove to be correct. Actual results could differ materially from those anticipated in such forward-looking statements. Our outlook is based upon assumptions, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new developments or otherwise.

All future written and oral forward-looking statements by the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements contained herein or referred to above.

The Company’s principal executive officer and its principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (1934 Act)) were effective as of March 31, 2016, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the 1934 Act. During the three months ended March 31, 2016, there were no changes that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

See our most recent annual report filed on Form 20-F (Part I, Item 11). There has been no material change in this information.

See “Note 14: Commitments and Contingencies” to our condensed consolidated financial statements.

See our most recent annual report filed on Form 20-F (Part I, Item 3D). There was no material change in our risk factors during the three months ended March 31, 2016. The risks described in the annual report on Form 20-F, and the “Safe Harbor Statement” in this report, are not the only risks faced by us. Additional risks and uncertainties not currently known or that are currently judged to be immaterial may also materially affect our business, financial condition or operating results.

The Company’s purchases of its common shares during the first quarter of 2016 were as follows:

On January 29, 2016, the Company announced a buy-back program to repurchase up to $300 million in common shares from time to time, subject to business and market condition, as authorized at the Annual General Meeting of Shareholders (“AGM”) held on April 15, 2016. The authorization granted at the AGM is for a period of 18 months from the date of the AGM and, therefore, expires on October 14, 2017. The purchases under the stock buy-back program have been carried out on the Italian Stock Exchange, in compliance with applicable rules and regulations, subject to a maximum price per common share equal to the average of the highest price on each of the five trading days prior to the date of acquisition, as shown in the official price list of the Mercato Telematico Azionario (“MTA”) plus 10% (maximum price) and to a minimum price per common share equal to the average of the lowest price on each of the five trading days prior to the date of acquisition, as shown in the official price list of the MTA minus 10% (minimum price).

On February 12, 2016, the Company purchased 800,000 common shares for a purchase price of $4,889,404 (translated from euros at the exchange rate reported by the European Central Bank on February 12, 2016) and $295,100,596 remains available for repurchase under buy-back program.

	Page
PART I – FINANCIAL INFORMATION Condensed consolidated balance sheets as of March 31, 2016 (unaudited) and December 31, 2015	1
Condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015 (unaudited)	2
Condensed consolidated statements of comprehensive income for the three months ended March 31, 2016 and 2015 (unaudited)	3
Condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 (unaudited)	4
Condensed consolidated statements of changes in equity for the three months ended March 31, 2016 and 2015 (unaudited)	5
Notes to condensed consolidated financial statements (unaudited)	6
Management’s discussion and analysis of financial condition and results of operations	37
Controls and Procedures	47
Quantitative and qualitative disclosures about market risk	47

PART II – OTHER INFORMATION
Legal proceedings	48
Risk factors	48
Unregistered sales of equity securities and use of proceeds	48
Default upon senior securities	48
Mine safety disclosures	48
Other information	48

	March 31, 2016		December 31, 2015
	(in millions)
Restricted cash	$	761	$	849
Financing receivables		10,671		11,361
Equipment on operating leases, net		—		—
Total Assets	$	11,432	$	12,210
Debt	$	10,764	$	11,592
Total Liabilities	$	10,764	$	11,592

	Restricted Receivables
	March 31, 2016		December 31, 2015
Retail note and finance lease receivables	$	7,643	$	7,695
Wholesale receivables		6,123		6,189
Total	$	13,766	$	13,884

	March 31, 2016		December 31, 2015
	(in millions)
Raw materials	$	1,386	$	1,254
Work-in-process		935		747
Finished goods		4,309		3,689
Total inventories	$	6,630	$	5,690

	March 31, 2016		December 31, 2015
	(in millions)
Advances on buy-back agreements	$	2,242	$	2,147
Warranty and campaign programs		951		908
Marketing and sales incentive programs		1,127		1,166
Tax payables		697		528
Accrued expenses and deferred income		575		595
Accrued employee benefits		573		572
Legal reserves and other provisions		904		389
Contract reserve		397		396
Restructuring reserve		54		51
Other		619		736
Total	$	8,139	$	7,488

	Agricultural Equipment		Construction Equipment		Commercial Vehicles		Powertrain		Financial Services		Total
	(in millions)
Balance at January 1, 2016	$	1,645	$	588	$	57	$	5	$	152	$	2,447
Impact of foreign exchange		7		2		2		—		3	$	14
Balance at March 31, 2016	$	1,652	$	590	$	59	$	5	$	155	$	2,461

	March 31, 2016				December 31, 2015
	Carrying Amount		Fair Value		Carrying Amount *		Fair Value
	(in millions)
Financing receivables	$	18,820	$	18,661	$	19,001	$	18,868
Debt	$	25,767	$	25,889	$	26,301	$	26,371

	Amounts Reclassified from Other Comprehensive Income (Loss)						Consolidated Statement of Operations Line
	Three Months Ended March 31,
	2016			2015
	(in millions)
Cash flow hedges	$	(7	)	$	4		Net sales
		(6	)		51		Cost of goods sold
		(2	)		26		Other, net
		1			3		Interest expense
		3			(23	)	Income taxes
	$	(11	)	$	61
Change in retirement plans’ funded status:
Amortization of actuarial losses	$	24		$	28		*
Amortization of prior service cost		(1	)		(3	)	*
		(3	)		(3	)	Income taxes
	$	20		$	22
Total reclassifications, net of tax	$	9		$	83

	Condensed Statements of Comprehensive Income for the Three Months Ended March 31, 2016
	CNH Industrial N.V.			Case New Holland Industrial Inc.		Guarantor Subsidiaries		All Other Subsidiaries			Eliminations			Consolidated
	(in millions)
Comprehensive income (loss)	$	(460	)	$	52	$	254	$	(201	)	$	(103	)	$	(458	)
Comprehensive income attributable to noncontrolling interests		—			—		—		2			—			2
Comprehensive income (loss) attributable to parent	$	(460	)	$	52	$	254	$	(203	)	$	(103	)	$	(460	)

(in millions)	2016
Net Debt of Industrial Activities at beginning of year	$	(1,578	)
Net loss		(513	)
Amortization and depreciation *		177
Changes in provisions and similar, and items related to assets sold under buy-back commitments, and assets under operating leases		464
Change in working capital		(673	)
Investments in property, plant and equipment, and intangible assets *		(80	)
Other changes		3
Net industrial cash flow		(622	)
Capital increases and dividends		(7	)
Currency translation differences and other		(263	)
Change in Net Debt of Industrial Activities		(892	)
Net Debt of Industrial Activities at end of period	$	(2,470	)

Period	Total Number of Shares Purchased (actual)		Average Price Paid per Share (actual €)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (actual)		Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (actual $)
Jan 1 to Jan 31, 2016		—	€	—		—
Feb 1 to Feb 29, 2016		800,000	€	5.4206		800,000
Mar 1 to Mar 31, 2016		—	€	—		—
Total		800,000				800,000	$	295,110,596