Joint Statment World Day Against Trafficking in Persons: The international community must strengthen prevention and accountability for trafficking in persons in conflict situations

GENEVA Ahead of the World Day Against Trafficking in persons, a group of United Nations and regional human rights experts* raised serious concerns about the risks of trafficking for those displaced by conflict, including children.

“Conflict situations greatly increase the risks of trafficking in persons. Women and girls, particularly those who are displaced, are disproportionately affected by trafficking for the purpose of sexual exploitation, often combined with other forms of exploitation, such as forced and child marriage, forced labour and domestic servitude. Trafficking in persons of all ages is often a tactic used by armed groups, contributing to continued instability, conflict and displacement, hindering processes of peace building, durable solutions to displacement, and transition to peace and security.”

Refugees, internally displaced and stateless persons are particularly at risk of exploitation, and are frequently the targets of attacks and abductions that lead to trafficking. Continuing restrictions on access to protection, limited resettlement and family reunification, and restrictive migration policies, increase these risks.

The risks of exploitation, occurring in times of conflict, are not new. They are linked to and stem from existing, structural inequalities, gender-based and racial discrimination, poverty, and weaknesses in child protection systems. Such structural inequalities are exacerbated in the periods during and after conflicts, and disproportionately affect children.

Trafficking in persons in situations of conflict, including by private actors, continues with impunity, with limited monitoring, reporting or investigations and corporate accountability or access to remedies.

We have seen increasing recognition from the Security Council of the link between activities of armed groups and trafficking particularly targeting children, and trafficking in persons related to sexual violence in conflict. Yet, despite this recognition, accountability for conflict related trafficking for all purposes of exploitation remains limited, and prevention measures are ineffective.

Child trafficking is closely linked to the grave violations against children in armed conflict, including the recruitment and use of children abductions, attacks against schools and hospitals, and sexual violence. However, child victims of trafficking in conflict situations rarely receive the assistance, protection, and rehabilitative care that is their right. Denial of humanitarian assistance increases gaps in protection.

Without early identification of victims of trafficking and referral for assistance and protection, victims remain without support and are exposed to the additional risks of being subjected to enforced disappearance and continuing exploitation.

The experts welcome the attention given to trafficking in conflict situations, but urge the international community to do more to prevent trafficking in all conflicts and to protect victims. “We have seen what can be achieved through coordinated action and political will to prevent trafficking in conflict situations.

All responses to risks of trafficking in persons must be victim centered, age and gender sensitive and disability inclusive.” Non-governmental organisations, human rights defenders and lawyers assisting trafficked persons, and persons at risk of trafficking, must be supported and protected in carrying out their legitimate and critical work.

Measures to prevent trafficking in persons must be integrated into the work of all humanitarian and protection actors, in women, peace and security agendas, and in peacebuilding and peacekeeping transition measures. Urgent action is needed to address climate related displacement and conflict, to ensure effective prevention of trafficking in persons.

We must ensure that accountability for trafficking in persons in conflict situations is strengthened, including through effective application of international humanitarian law, international criminal law and international human rights law.”

Source: UN Human Rights Council

Anti-Junta Forces in Myanmar Rely on Homemade Weapons

YANGON, MYANMAR — Opposition People’s Defense Forces in Myanmar are battling the ruling junta’s military with locally produced weapons, members of the PDF told VOA in recent weeks.

The PDF members, mostly students and farmers with no previous weapons manufacturing experience, said they figured out how to make the weapons from YouTube and from each other.

Most opposition troops are said to rely on these improvised weapons.

Some opposition armed groups in central Myanmar and in Kayah state, along the country’s eastern border with Thailand, have been producing and using handmade weapons, including rocket launchers, inflicting heavy casualties on junta forces.

The Tiger People’s Defense Force in Sagaing region’s Pale township has produced 15 rockets with a range of around three miles. Initially the group produced rudimentary rifles, bombs and mines, then moved to producing rocket launchers and ammunition within six months.

“We made 100 single-shot rifles and shared them with other groups in Sagaing region and produced 300 rounds for rocket launchers. All of those weapons are being used in battle,” said Bo Than Chaung, head of the Tiger People’s Defense Force information and weapons production team.

Another resistance unit, the Karenni Generation Z, active in Kayah and southern Shan state, has been producing 130 mm, 70 mm and 55 mm mortars since March. Kalay Bo, the unit’s spokesperson said it costs between $50 and $80 to make a mortar.

Karenni Generation Z can produce 20 rounds for 130 mm mortars per day. However, it must change locations whenever the junta finds out where it is operating, and it faces raw material and, most importantly, financial issues.

“At first, we were able to produce homemade hunting rifles to fight the military. However, we could not resist with these guns when the junta forces used automatic weapons, long-range artillery, jets and helicopters. That’s why we developed more advanced weapons to fight the military,” Kalay Bo said.

Armed resistance movements erupted across Myanmar shortly after the military cracked down on peaceful protests of last year’s military coup. Since then, the armed People’s Defense Forces have emerged. However, not all the groups are working together under a single command. The opposition National Unity Government has said 257 battalions have been established under the command of the NUG defense ministry and more than 500 PDFs are affiliated with the ministry.

Some PDFs are based in areas in Kachin, Kayah and Karen states in the east and Chin state in the west that are under the control of armed ethnic organizations that have been fighting for autonomy for years. Those units are receiving arms support from the Karen National Union, Kachin Independence Organization, and the Arakan Army – themselves ethnic organizations – as well as the NUG.

However, obtaining weapons for fighters in central Myanmar is difficult because of transportation difficulties and lack of funding. According to the resistance chapters, it costs at least $3,000 for an automatic machine gun on the black market. Because of the lack of weapons and insufficient funds, opposition groups have turned to producing weapons themselves.

One group, the Anti-Dictatorship People’s Revolutionary Army, or DPRA, with nearly 1,000 fighters, which operates mainly in Sagaing but also has launched guerilla attacks in the cities of Yangon and Mandalay, learned the technique for producing rockets from its ally, the Kani Guerrilla Force in Sagaing. Depending on the availability of raw materials, the DPRA said it manufactures 20 rocket launchers, 30 60 mm mortars, 20 roadside bombs and 30 8 mm rifles a month.

“We receive 10 million kyats [$5,000] a month from public donations and most of it is used for weapons production,” Linn Nway, a senior member of the organization, told VOA.

The DPRA estimates production costs at $175 for a roadside bomb, $35 for each 60 mm mortar and 8 mm rifle round, $75 for a rocket with a range of between three and five miles. “It takes three months to produce a rocket,” Linn Nway said.

Some small opposition groups made up of around 50 members are incapable of combat with the junta forces because of a shortage of weapons and manpower. The groups depend heavily on their production of mines for guerrilla warfare against military convoys, bases, banks and buildings.

“Although we cannot fight with the junta forces, they are afraid of entering into the villages. They were ambushed by our group, which inflicted heavy causalities because of landmines we planted,” said Bi Lone, a leader of the Black Wolf Defense Force in Sagaing’s Monywa township.

Most of the PDF-produced weapons are rudimentary and insufficient to defeat the well-armed junta forces.

Many groups can only produce single-shot guns that can only be loaded with one bullet.

“Each time we shoot, we have to insert another bullet to shoot again,” Bo Than Chaung said.

Opposition groups say the lack of military-grade raw materials and of arms-making experience has cost lives and caused injuries and loss of materials when manufacturing weapons. In October, some members of Black Wolf Defense Force were seriously injured and a large quantity of raw materials, plus fighters’ property, including uniforms were destroyed in an explosion while making explosive devices, Bi Lone said.

Another issue facing the opposition groups is obtaining raw materials, such as iron pipes, lead, and gunpowder, as the military regime has restricted the transportation of metal, including iron and steel, into Sagaing. Goods coming into Sagaing are subject to strict inspections.

“We can manage to get iron, mostly we face shortage of gunpowder imported from India and the Thai border. We cannot make homemade bombs without it,” said Lin Nway. Under these circumstances, the price of raw materials has tripled, and it costs more than $150 for 35 grams of gunpowder.

Opposition groups say only 10% of their troops can be armed with commercially produced weapons, and the rest rely heavily on locally produced weapons. The groups are heavily dependent on public donations and selling their belongings to raise funds for weapons production, however, production can fulfill less than 50% of requirements. Under these circumstances, the opposition forces all say a lack of financial support is the biggest problem.

“We need at least 10 million kyats [$5,000] per month, however, the donation we normally receive is around 5 million kyats [$2,500],” said Bo Than Chaung. The group is working under the NUG but has not received any support so far.

“I hope, one day we will get weapons from NUG,” he added.

On July 9, the NUG’s defense ministry publicly shared its spending for military affairs. As of May, of the $44 million in military spending, about 63% went for weapons, ammunition and military operations and 22% went for weapons production. The NUG has said it needs at least $10 million a month to support the fighting forces.

Source: Voice of America

‘Hungry river’ phenomenon to blame for severe erosion of Mekong River banks in Laos

Upstream dams and sand mining have caused significant erosion along the Mekong River in western Laos, according to experts, devastating riparian communities in the impoverished Southeast Asian nation with high waters and powerful currents.

But residents of those communities say they believe that other issues are to blame.

Brian Eyler, director of the Southeast Asia Program and the Energy, Water, and Sustainability Program at the Stimson Center in Washington, D.C., said upstream activities had created a “hungry river” phenomenon responsible for the severe erosion.

“There is a natural phenomenon called a ‘hungry river’ where a river which has been robbed of its sediments looks for new sediment to fill its course,” he said. “Sediment is taken out of a river system by upstream dams and sand mining, so when the river goes ‘hungry’ it pulls new sediment into it from river banks through erosion processes.”

“Upstream dams in China have removed more than half of the sediment from the Mekong mainstream and now that Laos has built about 100 dams, the effects are being felt even more severely,” he said.

If dams must be built, their designs should include sediment flushing mechanisms to allow sediment to pass through the structure, Eyler said.

If they don’t include the flushing systems, the situation will “get worse and worse because the river will get hungrier and hungrier as time passes,” he added.

Direct impact

The dams are part of Laos’ ambitious plan to become the “battery of Southeast Asia” and boost the landlocked nation’s economy by selling the generated electricity to neighboring countries like Thailand. But the projects are controversial because of their environmental impact, displacement of villagers, and financial and power demand arrangements.

Ian Baird, director of the Center for Southeast Asia Studies at the University of Wisconsin-Madison, said there are many factors responsible for the Mekong River erosion, including sand dredging and deforestation, though he agreed that the main cause is the “hungry water” phenomenon.

“This phenomenon takes place because all the dams on the Mekong River collect all the sediment, [and] the water released from the dams has less sediment,” he said. “When the water gets hungrier, it causes erosion along the Mekong River bank in the region below the dams.”

The erosion has a direct impact on riparian communities, causing the collapse of roads, and the washing away of land, forcing Laotians who live near the riverbank to relocate, Baird said.

“The villagers who used to grow vegetables like tomatoes and chili peppers in the dry season on the riverbank can’t do that anymore,” he said. “If they still want to grow vegetables, they’ll have to grow them on higher ground, to which they’ll have to pump the water up. They’ll have to pay for electricity [to do that].”

Growing vegetables on higher ground also means that the crops will not benefit from river sediment that acts as a natural fertilizer, so farmers will have to buy fertilizer as well, Baird said.

Many erosion ‘hotspots’

Lao officials point to other possible explanations for the erosion that wipes out houses and land in riparian communities.

In Bokeo province in the northern part of the country, an entire village of 300 households was lost to the river over the past 24 years due to powerful waves caused by ship movement, an official from the province’s Natural Resources and Environment Department told RFA.

“The culprit is the large and heavy ships weighing up to 100 tons running through the river,” he said. “The ships are the worst enemies of the riverbank. Their strong waves destroy the riverbank. Some waves are more than one meter (3.3 feet) high.”

At least 73 kilometers (45 miles) of the 179 kilometers (111 miles) of Mekong River bank in central Laos’ Borikhamxay province is severely eroded, said Vixay Phoumy, director of the province’s Public Works and Transport Department at the agency’s annual meeting on July 7. Only 21 kilometers (13 miles) of the stretch is protected by retaining walls.

“We have many hotspots in Thaphabath and Borikhan districts where the erosion is worse,” an official from the province’s Natural Resources and Environment Department told RFA.

“From our inspection, we know that the riverbank slides down the most in the rainy season,” he said. “Of course, some homes and farmland have been washed away too.”

Farther downstream, strong currents in the Mekong have eroded about 90 kilometers, or nearly 50%, of riverbank, in Saravan province, an official of the province’s Natural Resources and Environment Department told RFA.

‘Our common problem’

The severe erosion is not confined to the Laos side of the Mekong River and affects banks on the Thai side as well, said Omboon Thipsuna, secretary-general of the Mekong Community Organizations Network Association, 7 Provinces, Northeastern Region (NCPO) in Thailand.

“The main cause is the upstream dams releasing and holding water,” she told RFA. “It’s obvious that the sediment has disappeared.”

“The water goes up and down,” she said. “They [riparian residents] see it tumbling down every day.”

Thipsuna called for bilateral talks between Laos and Thailand to find a solution to the erosion issue.

“It’s our common problem,” she said.

The Sanakham Dam, a proposed hydropower project on the Mekong mainstream between Xayaburi and Vientiane provinces in Laos will make the erosion worse, she said, adding that water levels currently can go up to four meters (13 meters) high daily.

The cash-strapped Lao government can only afford to build erosion-prevention barriers in a few locations, leaving the residents of many other areas to deal with the issue on their own.

“The Mekong River bank erosion has been occurring for years, causing a lot of concerns to our riparian residents,” said a villager in the town of Paksan, capital of Borikhamxay province. “The erosion has caused a lot of damage every year. The authorities haven’t said anything [because] they don’t care about this.”

A resident of the Sangthong district of Vientiane noted severe erosion there as well, but said limited government funding may prevent the erection of an erosion wall.

“The authorities conducted a survey recently and planned to build a revetment,” he said. “The problem is that the government budget for building revetment is limited. The plan might be delayed further.”

Further studies needed

An official with the Lao Ministry of Natural Resources and Environment told RFA that the government is well aware of the erosion problem and its impact on land and natural resources.

“The cause of the erosion is sand dredging,” said the official. “As for the fluctuation of water, it needs more study to prove whether the fluctuation is caused by dams and/or climate change.”

Meanwhile, the Thai government appears to be making more headway in addressing the issue. It set aside 4 billion baht (U.S. $110 million) to build barriers in 181 hotspots in eight riparian provinces along the Mekong River between 2021 and 2024.

Radio Free Asia Copyright © 1998-2016, RFA. Used with the permission of Radio Free Asia, 2025 M St. NW, Suite 300, Washington DC 20036

Thai taekwondo team performs well at 2022 World Taekwondo Junior Championship

Thai taekwondo team, in the 12-14 age group has, so far, won two golds, one silver and two bronzes at the Sofia 2022 World Taekwondo Junior Championships in Bulgaria.

Nitipoom Chaiyotha won the second gold medal in the 37kg category, beating his South Korean opponent 2:0.

The silver was won by Yada Saengthong in the 44kg category, after she lost to her Iranian opponent 0:2 in the final match.

The two bronzes were won by Phurit Mudsamoen in the 41kg category and Thanaphum Fuangnoi in the 53kg category.

Three young Thais are scheduled to meet their rivals in the finals tonight (Sunday).

Source: Thai Public Broadcasting Service

LGBTQ community confronts ‘excruciating’ monkeypox – and its stigma

The spread of the monkeypox virus and its prevalence among gay men has raised widespread fear, growing anger and a number of uncomfortable questions for a community still scarred by the early years of the HIV/AIDS epidemic.

While there is still widespread public confusion about the precise nature and spread of the disease, it is a fact that the overwhelming majority of monkeypox patients in the United States identify as LGBTQ and are male.

For some, the situation evokes dark parallels with the 1980s, when HIV/AIDS was stigmatized as a “gay plague,” hospitals and funeral homes turned away patients and victims, and White House officials either cracked homophobic jokes or simply ignored the new virus.

At a meeting this week in West Hollywood, a hub for Los Angeles’ LGBTQ community, actor Matt Ford received a standing ovation as he spoke openly about the “excruciating” symptoms he had endured when he contracted the disease — an experience he has also shared online.

Afterward, he told AFP that he “definitely had doubts before coming out publicly about my experience.”

“I was pretty on the fence prior to tweeting due to the potential for social stigma and people being cruel — especially on the internet — but thankfully the response was mostly positive,” he said.

What pushed Ford to speak out was the urgent need to warn others about the disease in the days leading up to West Hollywood’s major LGBTQ Pride celebrations.

While monkeypox has not so far been labelled a sexually transmitted infection (STI) and can infect anyone, the group currently most affected is men who have sex with men.

Spreading through skin-to-skin contact, the disease is most often transmitted through sexual activity, and the World Health Organization this week urged gay and bisexual men to limit their sexual partners.

“At the end of the day, it’s not homophobic to say that certain groups are disproportionately impacted by the monkeypox outbreak,” said Grant Roth, who is part of a network that collects information about the disease in New York.

“And right now it’s about the queer community.”

– ‘Blame’ –

While the notion of monkeypox affecting mainly the LGBTQ community raises fear of homophobia and stigmatization, it has also prompted anger that the US government is not taking the disease seriously enough.

A lack of available vaccines to meet demand has caused outrage across a country where some 4,900 cases have been detected — more than any other nation.

On Thursday, San Francisco and New York state declared public health emergencies in order to bolster efforts to control the spread of monkeypox.

The US health department announced plans to allocate an additional 786,000 vaccine doses, which will take supply above one million — but for many, the response has come too late.

“Why is the government not acting as fast as it should?” asked Jorge Reyes Salinas of Equality California, a coalition of LGTBQ activists and organizations.

“We need more resources, and we need more attention to this issue. It’s not just an LGBTQ concern. It should not be painted that way.”

The way the health emergency is being handled revives painful memories, he said.

“I think that’s always gonna be a risk in the back of our minds because, again, of the HIV and AIDS pandemic.”

Roth said a lot of “blame” has been placed on men who have sex with men, when in reality the government should have “secured the vaccines sooner, and made testing more widely available.”

– ‘Afraid’ –

At the West Hollywood meeting Andrea Kim, director of Los Angeles County’s vaccine program, said a mobile monkeypox immunization unit is due to arrive “soon.”

Other speakers outlined measures that the community can take to protect itself until then.

Dan Wohlfeiler, who has worked with HIV and STI prevention for more than three decades, urged people to use the “lessons of Covid” to address the spread by temporarily narrowing social circles and creating bubbles, including for sexual activity.

“This event is yet another traumatic time for a lot of us. Hopefully vaccine access will significantly increase in the next six to eight weeks,” he said.

“The more steps that we take as individuals starting now to protect ourselves and our partners, the sooner we can end this outbreak.”

“I’m proud to belong to this city and to have this opportunity” to learn more about the disease, said a Latina trans woman after the meeting, who asked not to be identified.

“But how can we not be afraid, if historically we have been discriminated against?” she said.

Source: Thai Public Broadcasting Service

North Korea reports no new cases for first time since Covid outbreak

North Korea reported zero fever cases on Saturday for the first time in more than two months since it confirmed its first Covid-19 infections in May.

“There were no new fever patients reported” over a 24-hour period from Thursday evening, the state-run Korean Central News Agency said, marking the first time the isolated country had reported no new cases since it began tallying numbers in May.

While it has maintained a rigid coronavirus blockade since the start of the pandemic, experts have said that massive Omicron outbreaks in neighbouring countries meant it was only a matter of time before Covid snuck in.

North Korea has recorded nearly 4.8 million infections since late April, KCNA said, adding “99.994 percent” of them had fully recovered with just 204 patients under treatment.

Apparently due to a lack of testing capacity, North Korea refers to “fever patients” rather than “Covid patients” in case reports.

The country has one of the world’s worst healthcare systems, with poorly-equipped hospitals, few intensive care units, and no Covid-19 treatment drugs or mass testing ability, experts say.

Pyongyang announced its first coronavirus cases on May 12 and activated a “maximum emergency epidemic prevention system”, with leader Kim Jong Un putting himself front and centre of the government’s response.

North Korea has not vaccinated any of its roughly 25 million people, having rejected jabs offered by the World Health Organization.

The North said in late May it started seeing “progress” in controlling the outbreak but experts have cast doubts on the claim, citing the country’s crumbling health infrastructure and unvaccinated population.

WHO emergencies director Michael Ryan said last month he assumed the situation in North Korea was “getting worse not better”, though he acknowledged Pyongyang had provided very limited information.

South Korea previously offered to send vaccines and other medical aid to the North to help it deal with its coronavirus outbreak.

Source: Thai Public Broadcasting Service

13 “high risk” people in isolation to monitor for monkeypox symptoms

Thirteen people have been isolated under observation for 21 days, after being identified as being at high risk, having had close physical contact with a 47-year-old Thai man, who has been confirmed as Thailand’s second monkeypox case, according to Dr. Opart Karnkawinpong, director-general of Thailand’s Disease Control Department.

He said that the patient is now being treated in an airborne infection isolation room (AIIR) at Vajira Hospital in Bangkok, adding that specimens collected from those at high risk have been sent for lab tests and the results are awaited.

The patient admitted to health officials that he had engaged in unsafe sex with a European man on July 12th and, three days later, developed a fever, followed by blisters emerging on his genitals.

He took medicine purchased from a pharmacy, but his condition worsened and he decided to see a doctor at Vajira Hospital on July 27th. Specimens were sent to the Department of Medical Sciences and the Thai Red Cross Emerging Infectious Disease Health Science Centre for lab tests, which eventually confirmed the monkeypox infection, said Dr. Opart.

He advised people at “high risk’ to refrain from contact with other people and from having unsafe and unprotected sex with strangers.

The first monkeypox case in Thailand was a 27-year-old Nigerian, who is now being treated in Phnom Penh after he refused to receive treatment in Thailand last week.

The third suspected case, also a Thai man, was confirmed as being infected with common chicken pox.

Source: Thai Public Broadcasting Service

Thailand’s Opposition Parties to Ask Court Whether PM’s Time Is Up

BANGKOK — Thailand’s opposition parties say Prime Minister Prayut Chan-ocha is bound by law to step down next month. With all signs suggesting he plans to stay put, however, the parties say they will ask the country’s Constitutional Court to settle a debate dividing politicians and lawyers alike.

The constitution says a prime minister can serve no more than eight years, whether consecutively or split up.

The opposition claims the clock started ticking for Prayut on August 24, 2014, the day then-King Bhumibol Adulyadej endorsed him as prime minister, and three months after he seized power in a military coup that toppled an elected government. By that count, Prayut would have to resign by August 23.

Local media reports, citing unnamed sources, say legal advisers to the House of Representatives have concluded that Prayut’s first four-year term actually started in June 2019, when the new king, Maha Vajiralongkorn, endorsed him as prime minister a month after he won a controversial election tilted in his favor. Prayut himself has said he intends to serve out his current term through March, the deadline for new elections.

Prayut’s coup knocked the popular Pheu Thai party from power; it’s now the largest party in the opposition. Spokeswoman Theerarat Samrejvanich said Pheu Thai plans to join forces with five other opposition parties in calling on the Constitutional Court to settle the controversy over Prayut’s tenure in the coming weeks.

“We have plans to do that,” she told VOA. “We [are] looking to ask to the Constitutional Court about this problem.”

Prayut’s official time as prime minister, she said, “begins from the date that Mr. Prayut Chan-ocha became the prime minister on the first day, and we count day by day and month by month and year by year, and the 23rd of August must be the last day of the eight years.”

Rangsiman Rome, a lawmaker and spokesman for Move Forward, another opposition party, said it would join in the court filing.

“We agreed that we have to report this case to the Constitution Court because we believe that, by the constitution, Mr. Prime Minister cannot be [more] than eight years, and the way that we count, we count from since he started to be the prime minister in fact,” he said.

Government spokesperson Thanakorn Wangboonkongchana said he would not comment on the controversy, without explanation. Prayut and his cabinet, though, have given no sign of making plans to step down next month.

In May, Deputy Prime Minister Wissanu Krea-ngam, who handles legal affairs for the government, told reporters the administration would abide by any court ruling on the debate but would not seek a ruling itself.

“The government will not ask for a Constitutional Court ruling on that matter since we have had no doubt about it in the first place,” he said, without elaborating.

The controversy is not dividing just political opinion.

“The legal community is the same,” said Jade Donavanik, a legal scholar who served as an adviser to the ad hoc committee that drafted the current constitution.

Besides those who argue for 2014 or 2019, he said some lawyers believe Prayut’s time as prime minister actually began in April 2017, when the constitution took effect, while Thailand was still in the grip of Prayut’s military junta.

Jade himself agrees with the opposition, for two main reasons. The first is Article 158, which lays out the eight-year rule. The second is Article 264, which says the council of ministers seated the day before the constitution takes effect will remain the council of ministers after the charter comes into force.

“So, when it’s said that way, that the Cabinet prior to constitutional effectiveness will be the cabinet subsequent to the Constitution coming into effect, that means the term of Gen. Prayut, who was the prime minister prior to the constitution’s effective date, will still be the prime minister and will be the prime minister on and on. So, I read from Article 158 as well as Article 264 to mean that Gen. Prayut’s term started 2014,” said Jade, referring to the prime minister by his former military rank.

Udom Rathamarit, a former law professor who co-wrote the 2017 charter, has publicly endorsed the interpretation that Prayut’s official time as prime minister started in 2019. Should that position hold, Prayut could potentially remain in office until 2027.

Prayut has not explicitly stated his intention to run in the coming elections. But political analyst Thitinan Pongsudhirak says the prime minister has sent “clear signals” he would, and that his party, Palang Pracharath, has shown no one else as an obvious alternative.

He also doubts the Constitutional Court would stand in his way. Most of the court’s current justices were appointed since the 2014 coup, and they have already made a number of controversial decisions in his administration’s favor.

Thitinan, a political science professor at Thailand’s Chulalongkorn University, said Prayut’s last real test before the coming polls was the confidence vote in parliament on July 23 — which he won — that capped a three-day censure debate arranged by the opposition.

“After the censure debate, he’s now got a clear path toward the next election and he seems to be running,” he said. “So … I would be extremely surprised if the Constitutional Court is going to be the agency to derail his bid, because the judges were picked mostly from the junta era.”

Actually winning the coming elections is another matter.

In a recent survey on possible candidates for prime minister, Prayut finished third behind senior figures in the Pheu Thai and Move Forward parties. Though the prime minister is not popularly elected, Thitinan said any decision by the Constitutional Court that lets Prayut serve past August would only hurt his party in the coming polls.

“The sentiment is going to go against him and the Palang Pracharath party, and the Constitutional Court ruling, in the event that it goes in his favor, which I expect, will be part of that, meaning that it will be part of the adverse sentiment against him,” he said.

If Prayut is forced to resign next month, the popularly elected House of Representatives and the junta-appointed Senate would hold a joint vote to choose a new prime minister.

Source: Voice of America

CNH Industrial reports strong second quarter performance

Record consolidated revenues of $6,082 million (up 17.5% compared to Q2 2021 for continuing operations, up 20% at constant currency)

Net income of $552 million, Adjusted Net Income of $583 million, with adjusted diluted EPS of $0.43

Adjusted EBIT of Industrial Activities of $654 million (up $82 million compared to Q2 2021)

Free cash flow generation of $404 million (Industrial Activities)

Board approved additional $300 million share buy-back program

Financial results presented under U.S. GAAP

Our robust second quarter results highlighted the CNH Industrial team’s focus on execution, as they excelled in both tactically ensuring we continued to meet customer commitments and making notable progress on our strategic initiatives. These considerations and strong price realization contributed to our impressive sales and adjusted diluted EPS growth, up 17.5% and 16.2% respectively. Pricing, volumes, and favorable mix offset significant cost escalation and gross profit increased $174 million year over year. Component shortages again impacted production, resulting in Free Cash Flow of $404 million which, though a tremendous sequential improvement, was still down almost 50% versus Q2 2021. Despite this, we continue to expect to deliver more than $1 billion of free cash flow for 2022.

Looking forward, we have exciting new products to unveil at the upcoming trade shows and our Tech Day late in the year. Raven and our Precision team are making great strides and helping to drive Agriculture’s growth, and Construction Equipment, bolstered by Sampierana, is significantly increasing its profitability. With this ever-stronger foundation, we expect to meet our Full Year guidance, but anticipate a decidedly less advantageous climate for the next several quarters. The strengthening US dollar is impacting soft commodity prices, risking further deterioration in farmer sentiment and income, while we see the likelihood of declining European industrial demand due to the war in Ukraine, energy risk and inflation. In the Americas, steady demand from cash crop customers indicates that the market may be more stable, but overall we are positioning for a recession. Our team has proven that, regardless of the environment, they will continue to execute our strategic priorities and deliver for our customers and shareholders.”

    Scott W. Wine, Chief Executive Officer

2022 Second Quarter Results

(all amounts $ million, comparison vs Q2 2021 continuing operations – unless otherwise stated)

US-GAAP Q2 2022 PY(1) Change Change at c.c.(3) Consolidated revenue 6,082 5,174 +17.5% +20% of which Net sales of Industrial Activities 5,613 4,778 +17.5% +20% Net income 552 514 +38 Diluted EPS $ 0.40 0.38 +0.02 Cash flow from operating activities (271) 560 (831) Cash and cash equivalents(6) 2,855 3,219 (364) Gross profit margin of Industrial Activities 22.0% 22.2% -20bps NON-GAAP(2) Q2 2022 PY(1) Change Adjusted EBIT of Industrial Activities 654 572 +82 Adjusted EBIT Margin of Industrial Activities 11.7% 12.0% -30bps Adjusted net income 583 507 +76 Adjusted diluted EPS $ 0.43 0.37 +0.06 Free Cash flow of Industrial Activities 404 785 (381) Available liquidity(6) 8,795 9,399 (604) Adjusted gross margin of Industrial Activities 22.0% 22.2% -20bps

Net sales of Industrial Activities of $5,613 million, up 17.5% mainly due to favorable price realization, offsetting almost 3% adverse currency conversion.

Adjusted EBIT of Industrial Activities of $654 million ($572 million in Q2 2021), with both segments up year over year. Agriculture adjusted EBIT margin at 14% and Construction at 3.8%.

Adjusted net income of $583 million, with adjusted diluted earnings per share of $0.43 (adjusted net income of $507 million in Q2 2021, with adjusted diluted earnings per share of $0.37).

Gross profit margin of Industrial Activities of 22.0%, (22.2% in Q2 2021) with improvement in Construction despite continued cost pressures.

Reported income tax expense of $228 million and adjusted income tax expense(1) of $185 million, with adjusted effective tax rate (adjusted ETR(1)) of 25.0%,

Free cash flow of Industrial Activities was $404 million. Manufacturing inventories remain high, amid supply chain constraints, while finished goods inventories are lean relative to sales. Total Debt of $20.8 billion at June 30, 2022 ($20.9 billion at December 31, 2021).

Industrial Activities Net Debt(1) position at $1.6 billion, an increase of $438 million from December 31, 2021.

Available liquidity at $8,795 million as of June 30, 2022. In April, CNH Industrial Capital LLC’s 4.375% $500 million notes matured. In May, CNH Industrial Capital LLC issued a 3.950% $500 million notes due in 2025. In May, CNH Industrial paid €379 million (~$412 million) in dividends to shareholders. During the quarter, CNH Industrial received proceeds of $350 million for the sale of the Raven Engineered Films Division.

The Board of Directors approved a $300 million share buyback program to be launched at the completion of the existing $100 million program.

Agriculture
Q2 2022 Q2 2021(1) Change Change at c.c.(3)
Net sales ($ million) 4,722 3,970 +19% +22%
Adjusted EBIT ($ million) 663 582 +81
Adjusted EBIT margin 14.0% 14.7% -70 bps

In North America, industry volume was flat for tractors over 140 HP and was down 16% for tractors under 140 HP; combines were up 3%. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 1% and 24%, respectively, with combine demand up when excluding Turkey and Russia. South America tractor demand was up 4% and combine demand was down 14%. Asia Pacific tractor demand was up 11% and combine demand was up 21%.

Net sales were up 19%, due to favorable price realization and better mix, mostly driven by North America and South America.

Gross profit margin was 23.4%, with Gross Profit $150 million higher than in Q2 2021, mainly due to better mix and favorable price realization primarily in North America and South America, partially offset by higher production and raw material costs across all regions.

Adjusted EBIT was $663 million ($582 million for Q2 2021), with Adjusted EBIT margin at 14.0%. The $81 million increase was driven by higher gross profit, partially offset by higher SG&A costs, and increased R&D spend.

Order book in Agriculture was up almost 5% year over year for tractors. Order book for combines was down almost 6%, with declines in North America and South America offset partially by growth in EMEA. At more than 3 times the pre-pandemic levels, order books remain strong in all regions and key products, with the company accepting orders only through Q1 2023 in most regions as cost uncertainties remain.

Construction
Q2 2022 Q2 2021(1) Change Change at c.c.(3)
Net sales ($ million) 891 808 +10% +12%
Adjusted EBIT ($ million) 34 24 +10
Adjusted EBIT margin 3.8% 3.0% +80 bps

Global industry volume for construction equipment decreased in both Heavy and Light sub-segments, with Heavy down 18% and Light down 12%, mostly driven by a 29% decrease in Light and Heavy equipment demand for Asia Pacific, particularly in China. Demand decreased 3% in North America, 3% in EMEA and increased 22% in South America.

Net sales were up 10%, driven by price realization and contribution from the Sampierana business, partially offset by lower volume in all regions except South America.

Gross profit margin was 13.8%, up 1.4% compared to Q2 2021, mainly due to higher volumes and favorable price realization, partially offset by unfavorable fixed costs absorption and higher freight and raw material costs.

Adjusted EBIT increased $10 million due to favorable volume and mix and positive price realization, partially offset by higher freight and raw material costs and increased SG&A spend. Adjusted EBIT margin at 3.8%.

Construction order book up more than 20% year over year in both Heavy and Light sub-segments, with increases in the North America, EMEA and South America regions.

Financial Services
Q2 2022 Q2 2021(1) Change Change at c.c.(3)
Revenue ($ million) 471 392 +20% +20%
Net income ($ million) 95 85 +10
Equity at quarter-end ($ million) 2,211 2,185 +26
Retail loan originations ($ million) 2,440 2,407 +1.4%

Revenues were up 20% due to higher used equipment sales, higher base rates in South America and higher average portfolios in all regions, partially offset by lower average retail yields in North America.

Net income increased $10 million to $95 million, primarily as a result of higher recoveries on used equipment sales, higher base rates in South America, and higher average portfolios in all regions, offset by increased income taxes and unfavorable risk costs.

The managed portfolio (including unconsolidated joint ventures) was $21.1 billion as of June 30, 2022 (of which retail was 70% and wholesale 30%), up $0.6 billion compared to June 30, 2021 (up $1.7 billion on a constant currency basis).

The receivable balance greater than 30 days past due as a percentage of receivables was 1.5% (1.5% as of June 30, 2021).

2022 Outlook

The Company is substantially confirming the following 2022 outlook for its Industrial Activities:

  • Net sales(5) up between 12% and 14% year on year including currency translation effects
  • SG&A expenses lower or equal to 7.5% of net sales
  • Free cash flow in excess of $1.0 billion
  • R&D expenses and capital expenditures at around $1.4 billion

Significant uncertainties remain in all regions, linked to rising inflation, geopolitical instability, the war in Ukraine and continuing COVID-19 infection waves, all these factors may affect our forecast for the year.

RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2022

Consolidated revenues of $10,727 million (up 15.7% year on year, up 18% at constant currency), net income of $888 million, with adjusted diluted EPS of $0.70, adjusted EBIT of Industrial Activities of $1,083 million, and free cash flow absorption of $655 million (Industrial Activities).

Results for the Six Months Ended June 30, 2022

(all amounts $ million, comparison vs Q2 2021 continuing operations – unless otherwise stated)

US-GAAP
Q2 2022 PY(1) Change Change at c.c.(3)
Consolidated revenue 10,727 9,270 +15.7% +18%
of which Net sales of Industrial Activities 9,793 8,472 +15.6% +18%
Net income 888 877 +11
Diluted EPS $ 0.65 0.64 +0.01
Cash flow from operating activities (1,158) 801 (1,959)
Cash and cash equivalents(7) 2,855 5,044 (2,189)
Gross profit margin of Industrial Activities 21.8% 22.0% -20bps
NON-GAAP(2)
Q2 2022 PY(1) Change
Adjusted EBIT of Industrial Activities 1,083 965 +118
Adjusted EBIT Margin of Industrial Activities 11.1% 11.4% -30bps
Adjusted net income 961 859 +102
Adjusted diluted EPS $ 0.70 0.63 +0.07
Free Cash flow of Industrial Activities (655) 772 (1,427)
Available liquidity(7) 8,795 10,521 (1,726)
Adjusted gross margin of Industrial Activities 22.1% 22.0% +10bps
Agriculture
YTD Q2 2022 YTD Q2 2021(1) Change Change at c.c.(3)
Net sales ($ million) 8,099 7,008 +16% +18%
Adjusted EBIT ($ million) 1,089 981 +108
Adjusted EBIT margin 13.4% 14.0% -60bps
Construction
YTD Q2 2022 YTD Q2 2021(1) Change Change at c.c.(3)
Net sales ($ million) 1,694 1,464 +16% +17%
Adjusted EBIT ($ million) 66 49 +17
Adjusted EBIT margin 3.9% 3.3% +60bps
Financial Services
YTD Q2 2022 YTD Q2 2021(1) Change Change at c.c.(3)
Revenues ($ million) 937 789 +19% +19%
Net income ($ million) 177 163 +14

Notes

CNH Industrial reports quarterly and annual consolidated financial results under U.S. GAAP and EU-IFRS. The tables and discussion related to the financial results of the Company and its segments shown in this press release are prepared in accordance with U.S. GAAP. Financial results under EU-IFRS are shown in specific tables at the end of this press release.

  1. Effective January 1, 2022, the Iveco Group business was separated from CNH Industrial N.V. by way of a demerger under Dutch law to Iveco Group N.V. and Iveco Group became a public listed company independent from CNH Industrial. Accordingly, that business is presented as discontinued operations beginning in the first quarter of 2022. The Company has reclassified the financial results of Iveco Group to Net income (loss) from discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. The Company has reclassified the related assets and liabilities as Assets held for distribution and Liabilities held for distribution on the Condensed Consolidated Balance Sheets as of December 31, 2021. Cash flows from the Company’s discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows for all periods. All comparative figures shown exclude the results of the discontinued operations.
  2. This item is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Information” section of this press release for information regarding non-GAAP financial measures. Refer to the specific table in the “Other Supplemental Financial Information” section of this press release for the reconciliation between the non-GAAP financial measure and the most comparable GAAP financial measure.
  3. c.c. means at constant currency.
  4. Certain financial information in this report has been presented by geographic area. Our geographical regions are: (1) North America; (2) Europe, Middle East and Africa; (3) South America and (4) Asia Pacific. The geographic designations have the following meanings:
    1. North America: United States, Canada, and Mexico;
    2. Europe, Middle East, and Africa: member countries of the European Union, European Free Trade Association, the United Kingdom, Ukraine, Balkans, Russia, Turkey, the African continent, and the Middle East;
    3. South America: Central and South America, and the Caribbean Islands; and
    4. Asia Pacific: Continental Asia (including the Indian subcontinent) and Oceania.
  5. Net sales reflecting the exchange rate of 1.05 EUR/USD
  6. Comparison vs. March 31, 2022
  7. Comparison vs. December 31, 2021

Non-GAAP Financial Information

CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial’s management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers’ ability to assess CNH Industrial’s financial performance and financial position. Management uses these non-GAAP measures to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions as they provide additional transparency with respect to our core operations. These non-GAAP financial measures have no standardized meaning under U.S. GAAP or EU-IFRS and are unlikely to be comparable to other similarly titled measures used by 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 and/or EU-IFRS.

CNH Industrial’s non-GAAP financial measures are defined as follows:

  • Adjusted EBIT of Industrial Activities under U.S. GAAP is defined as net income (loss) before income taxes, Financial Services’ results, Industrial Activities’ interest expenses, net, foreign exchange gains/losses, finance and non-service component of pension and other post-employment benefit costs, restructuring expenses, and certain non-recurring items. In particular, non-recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent in nature and not reflective of on-going operational activities.
  • Adjusted EBIT of Industrial Activities under EU-IFRS: is defined as profit/(loss) before taxes, Financial Services’ results, Industrial Activities’ financial expenses, restructuring costs, and certain non-recurring items.
  • Adjusted Net Income (Loss): is defined as net income (loss), less restructuring charges and non-recurring items, after tax.
  • Adjusted Diluted EPS: is computed by dividing Adjusted Net Income (loss) attributable to CNH Industrial N.V. by a weighted-average number of common shares outstanding during the period that takes into consideration potential common shares outstanding deriving from the CNH Industrial share-based payment awards, when inclusion is not anti-dilutive. When we provide guidance for adjusted diluted EPS, we do not provide guidance on a earnings per share basis because the GAAP measure will include potentially significant items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end.
  • Adjusted Income Taxes: is defined as income taxes less the tax effect of restructuring expenses and non-recurring items, and non-recurring tax charges or benefits.
  • Adjusted Effective Tax Rate (Adjusted ETR): is computed by dividing a) adjusted income taxes by b) income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates, less restructuring expenses and non-recurring items.
  • Adjusted Gross Profit Margin of Industrial Activities: is computed by dividing Net sales less Cost of goods sold, as adjusted by non-recurring items, by Net sales.
  • Net Cash (Debt) and Net Cash (Debt) of Industrial Activities: Net Cash (Debt) is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets (primarily current securities, short-term deposits and investments towards high-credit rating counterparties) and derivative hedging debt. CNH Industrial provides the reconciliation of Net Cash (Debt) to Total (Debt), which is the most directly comparable measure included in the 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 Cash (Debt) of Industrial Activities.
  • Free Cash Flow of Industrial Activities (or Industrial Free Cash Flow): refers to Industrial Activities only, and is computed as consolidated cash flow from operating activities less: cash flow from operating activities of Financial Services; investments of Industrial Activities in assets sold under operating leases, property, plant and equipment and intangible assets; change in derivatives hedging debt of Industrial Activities; as well as other changes and intersegment eliminations.
  • Available Liquidity: is defined as cash and cash equivalents plus restricted cash, undrawn medium-term unsecured committed facilities, net receivables/payables with Iveco Group N.V. and other current financial assets (primarily current securities, short-term deposits and investments in instruments of high-credit rating counterparties).
  • Change excl. FX or Constant Currency: CNH Industrial discusses the fluctuations in revenues on a constant currency basis by applying the prior year average exchange rates to current year’s revenues expressed in local currency in order to eliminate the impact of foreign exchange rate fluctuations

The tables attached to this press release provide reconciliations of the non-GAAP measures used in this press release to the most directly comparable GAAP measures.

Forward-looking statements

All statements other than statements of historical fact contained in this earning release, including 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, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. Forward looking statements also include statements regarding the future performance of CNH Industrial and its subsidiaries on a standalone basis. 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, including those related to the COVID-19 pandemic, 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 they occur with a degree of severity that the Company is unable to predict) or other assumptions underlying any of the forward-looking statements prove to be incorrect, including any assumptions regarding strategic plans, 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 continued uncertainties related to the unknown duration and economic, operational and financial impacts of the global COVID-19 pandemic and the actions taken or contemplated by governmental authorities or others in connection with the pandemic on our business, our employees, customers and suppliers; supply chain disruptions, including delays caused by mandated shutdowns, industry capacity constraints, material availability, and global logistics delays and constraints; disruption caused by business responses to COVID-19, including remote working arrangements, which may create increased vulnerability to cybersecurity or data privacy incidents; our ability to execute business continuity plans as a result of COVID-19; the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products, including demand uncertainty caused by COVID-19; general economic conditions in each of our markets, including the significant economic uncertainty and volatility caused by the war in the Ukraine and COVID-19; changes in government policies regarding banking, monetary and fiscal policy; legislation, particularly pertaining 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; volatility in international trade caused by the imposition of tariffs, sanctions, embargoes, and trade wars; 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; price pressure on new and used equipment; 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; security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of CNH Industrial and its suppliers and dealers; security breaches with respect to our products; our pension plans and other post-employment obligations; political and civil unrest; volatility and deterioration of capital and financial markets, including other pandemics, terrorist attacks in Europe and elsewhere; our ability to realize the anticipated benefits from our business initiatives as part of our strategic plan; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or divestitures and other similar risks and uncertainties, and our success in managing the risks involved in the foregoing.

Forward-looking statements are based upon assumptions relating to the factors described in this earnings release, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside CNH Industrial’s control. CNH Industrial expressly disclaims any intention or obligation to provide, update or revise any forward-looking statements in this announcement to reflect any change in expectations or any change in events, conditions or circumstances on which these forward-looking statements are based. Further information concerning CNH Industrial, including factors that potentially could materially affect CNH Industrial’s financial results, is included in CNH Industrial’s reports and filings with the U.S. Securities and Exchange Commission (“SEC”), the Autoriteit Financiële Markten (“AFM”) and Commissione Nazionale per le Società e la Borsa (“CONSOB”).

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

Conference Call and Webcast

Today, at 3:30 p.m. CEST / 2:30 p.m. BST/ 9:30 a.m. EDT, management will hold a conference call to present second quarter 2022 results to financial analysts and institutional investors. The call can be followed live online at https://bit.ly/CNH_Industrial_Q2_2022 and a recording will be available later on the Company’s website www.cnhindustrial.com. A presentation will be made available on the CNH Industrial website prior to the call.

London, July 29, 2022

CONTACTS

Media Inquiries – Laura Overall Tel +44 207 925 1964 or Rebecca Fabian Tel +1 312 515 2249 (Email mediarelations@cnhind.com)

Investor Relations – Noah Weiss Tel +1 773 896 5242 or Federico Pavesi Tel +39 345 605 6218

CNH INDUSTRIAL N.V.
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021
(Unaudited, U.S.-GAAP)

Three Months Ended June 30, Six Months Ended June 30,
($ million) 2022 2021 2022 2021
Revenues
Net sales 5,613 4,778 9,793 8,472
Finance, interest and other income 469 396 934 798
TOTAL REVENUES 6,082 5,174 10,727 9,270
Costs and Expenses
Cost of goods sold 4,377 3,716 7,663 6,612
Selling, general and administrative expenses 424 355 802 674
Research and development expenses 212 164 396 296
Restructuring expenses 6 5 8 6
Interest expense 162 137 300 290
Other, net 148 156 331 298
TOTAL COSTS AND EXPENSES 5,329 4,533 9,500 8,176
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES 753 641 1,227 1,094
Income tax (expense) benefit (228) (152) (387) (268)
Equity in income (loss) of unconsolidated subsidiaries and affiliates 27 25 48 51
Net income (loss) from continuing operations 552 514 888 877
Net income (loss) from discontinued operations 185 247
NET INCOME (LOSS) 552 699 888 1,124
Net income attributable to noncontrolling interests 4 9 7 26
NET INCOME (LOSS) ATTRIBUTABLE TO CNH INDUSTRIAL N.V. 548 690 881 1,098
Basic earnings (loss) per share attributable to common shareholders (in $)
Continuing operations 0.40 0.38 0.65 0.64
Discontinued operations 0.13 0.17
Basic earnings per share attributable to CNH Industrial N.V. 0.40 0.51 0.65 0.81
Diluted earnings (loss) per share attributable to common shareholders (in $)
Continuing operations 0.40 0.38 0.65 0.64
Discontinued operations 0.13 0.17
Diluted earnings per share attributable to CNH Industrial N.V. 0.40 0.51 0.65 0.81
Average shares outstanding (in millions)
Basic 1,355 1,354 1,355 1,354
Diluted 1,360 1,361 1,360 1,360
Cash dividends declared per common share 0.302 0.132 0.302 0.132

These Condensed Consolidated Statements of Operations should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the year ended December 31, 2021 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Operations represent the consolidation of all CNH Industrial N.V. subsidiaries.

CNH INDUSTRIAL N.V.
Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021
(Unaudited, U.S.-GAAP)

($ million) June 30, 2022 December 31, 2021
ASSETS
Cash and cash equivalents 2,855 5,044
Restricted cash 729 801
Financing receivables, net 16,537 15,376
Receivables from Iveco Group N.V. 281
Inventories, net 5,473 4,216
Property, plant and equipment, net and equipment under operating lease 3,043 3,213
Intangible assets, net 4,435 4,417
Other receivables and assets 2,295 2,803
Assets held for distribution 13,546
TOTAL ASSETS 35,648 49,416
LIABILITIES AND EQUITY
Debt 20,817 20,897
Payables to Iveco Group N.V. 73 502
Other payables and liabilities 8,915 9,272
Liabilities held for distribution 11,892
Total Liabilities 29,805 42,563
Redeemable noncontrolling interest 49 45
Equity 5,794 6,808
TOTAL LIABILITIES AND EQUITY 35,648 49,416

These Condensed Consolidated Balance Sheets should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the year ended December 31, 2021, included in the Annual Report on Form 20-F. These Condensed Consolidated Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.

CNH INDUSTRIAL N.V.
Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2022 and 2021
(Unaudited, U.S.-GAAP)

Six Months Ended June 30,
($ million) 2022 2021
Net income (loss) 888 1,124
Less: Net income (loss) of Discontinued Operations 247
Net income (loss) of Continuing Operations 888 877
Adjustments to reconcile net income (loss) from Continuing Operations to net cash provided by (used in) operating activities from Continuing Operations: (2,046) (76)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS (1,158) 801
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS 570
TOTAL NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1,158) 1,371
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM CONTINUING OPERATIONS (1,000) (612)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS (153)
TOTAL NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (1,000) (765)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM CONTINUING OPERATIONS 72 (1,111)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM DISCONTINUED OPERATIONS (370)
TOTAL NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 72 (1,481)
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash (175) (170)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH (2,261) (1,045)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR 5,845 9,629
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD 3,584 8,584
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (Discontinued Operations) 680
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (Continuing Operations) 3,584 7,904

These Condensed Consolidated Statements of Cash Flows should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the year ended December 31, 2021 included in the Annual Report on Form 20-F. These Condensed Consolidated Statements of Cash Flows represent the consolidation of all CNH Industrial N.V. subsidiaries.

CNH INDUSTRIAL N.V.
Supplemental Statements of Operations for the three months ended June 30, 2022 and 2021
(Unaudited, U.S.-GAAP)

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021
($ million) Industrial Activities(1) Financial Services Eliminations Consolidated Industrial Activities(1) Financial Services Eliminations Consolidated
Revenues
Net sales 5,613 5,613 4,778 4,778
Finance, interest and other income 15 471 (17)(2) 469 14 392 (10)(2) 396
TOTAL REVENUES 5,628 471 (17) 6,082 4,792 392 (10) 5,174
Costs and Expenses
Cost of goods sold 4,377 4,377 3,716 3,716
Selling, general and administrative expenses 381 43 424 333 22 355
Research and development expenses 212 212 164 164
Restructuring expenses 6 6 5 5
Interest expense 50 129 (17) (3) 162 45 102 (10) (3) 137
Other, net (21) 169 148 (4) 160 156
TOTAL COSTS AND EXPENSES 5,005 341 (17) 5,329 4,259 284 (10) 4,533
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES 623 130 753 533 108 641
Income tax (expense) benefit (190) (38) (228) (126) (26) (152)
Equity in income (loss) of unconsolidated subsidiaries and affiliates 24 3 27 22 3 25
NET INCOME (LOSS) Continuing Operations 457 95 552 429 85 514
NET INCOME (LOSS) Discontinued Operations 171 14 185
NET INCOME (LOSS) 457 95 552 600 99 699

(1)   Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)   Elimination of Financial Services’ interest income earned from Industrial Activities.
(3)  Elimination of Industrial Activities’ interest expense to Financial Services.

CNH INDUSTRIAL N.V.
Supplemental Statements of Operations for the six months ended June 30, 2022 and 2021
(Unaudited, U.S.-GAAP)

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021
($ million) Industrial Activities(1) Financial Services Eliminations Consolidated Industrial Activities(1) Financial Services Eliminations Consolidated
Revenues
Net sales 9,793 9,793 8,472 8,472
Finance, interest and other income 25 937 (28)(2) 934 27 789 (18)(2) 798
TOTAL REVENUES 9,818 937 (28) 10,727 8,499 789 (18) 9,270
Costs and Expenses
Cost of goods sold 7,663 7,663 6,612 6,612
Selling, general and administrative expenses 710 92 802 619 55 674
Research and development expenses 396 396 296 296
Restructuring expenses 8 8 6 6
Interest expense 95 233 (28) (3) 300 98 210 (18) (3) 290
Other, net (38) 369 331 (17) 315 298
TOTAL COSTS AND EXPENSES 8,834 694 (28) 9,500 7,614 580 (18) 8,176
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES 984 243 1,227 885 209 1,094
Income tax (expense) benefit (313) (74) (387) (216) (52) (268)
Equity in income (loss) of unconsolidated subsidiaries and affiliates 40 8 48 45 6 51
NET INCOME (LOSS) Continuing Operations 711 177 888 714 163 877
NET INCOME (LOSS) Discontinued Operations 220 27 247
NET INCOME (LOSS) 711 177 888 934 190 1,124

(1)  Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)   Elimination of Financial Services’ interest income earned from Industrial Activities.
(3)  Elimination of Industrial Activities’ interest expense to Financial Services.

CNH INDUSTRIAL N.V.
Supplemental Balance Sheets as of June 30, 2022 and December 31, 2021
(Unaudited, U.S.-GAAP)

June 30, 2022 December 31, 2021
($ million) Industrial Activities(1) Financial Services Eliminations Consolidated Industrial Activities(1) Financial Services Eliminations Consolidated
ASSETS
Cash and cash equivalents 2,430 425 2,855 4,386 658 5,044
Restricted cash 144 585 729 128 673 801
Financing receivables, net 694 16,691 (848)(2) 16,537 199 15,508 (331)(2) 15,376
Receivables from Iveco Group N.V. 220 61 281
Inventories, net 5,455 18 5,473 4,187 29 4,216
Property, plant and equipment, net and equipment on operating lease 1,458 1,585 3,043 1,504 1,709 3,213
Intangible assets, net 4,273 162 4,435 4,255 162 4,417
Other receivables and assets 2,305 478 (488)(3) 2,295 2,656 345 (198)(3) 2,803
Assets held for distribution 9,814 4,543 (811) 13,546
TOTAL ASSETS 16,979 20,005 (1,336) 35,648 27,129 23,627 (1,340) 49,416
LIABILITIES AND EQUITY
Debt 4,997 16,668 (848) (2) 20,817 5,485 15,743 (331) (2) 20,897
Payables to Iveco Group N.V. 8 65 73 334 168 502
Other payables and liabilities 8,342 1,061 (488) (3) 8,915 8,426 1,044 (198) (3) 9,272
Liabilities held for distribution 8,985 3,718 (811) 11,892
Total Liabilities 13,347 17,794 (1,336) 29,805 23,230 20,673 (1,340) 42,563
Redeemable noncontrolling interest 49 49 45 45
Equity 3,583 2,211 5,794 3,854 2,954 6,808
TOTAL LIABILITIES AND EQUITY 16,979 20,005 (1,336) 35,648 27,129 23,627 (1,340) 49,416

(1)  Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)  This item includes the elimination of receivables/payables between Industrial Activities and Financial Services.
(3)  This item primarily represents the reclassification of deferred tax assets/liabilities in the same taxing jurisdiction and elimination of intercompany activity between Industrial Activities and Financial Services.

CNH INDUSTRIAL N.V.
Supplemental Statements of Cash Flows for the six months ended June 30, 2022 and 2021
(Unaudited, U.S.-GAAP)

Six months ended June 30, 2022 Six months ended June 30, 2021
($ million) Industrial Activities(1) Financial Services Eliminations(3) Consolidated Industrial Activities(1) Financial Services Eliminations(3) Consolidated
Net income (loss) 711 177 888 934 190 1,124
Less: Net income (loss) of Discontinued Operations 220 27 247
Net income (loss) of Continuing Operations 711 177 888 714 163 877
Adjustments to reconcile net income (loss) from Continuing Operations to net cash provided by (used in) operating activities from Continuing Operations: (1,192) (764) (90)(2) (2,046) 167 (163) (80) (76)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS (481) (587) (90) (1,158) 881 (80) 801
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS 342 230 (2) 570
TOTAL NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (481) (587) (90) (1,158) 1,223 230 (82) 1,371
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM CONTINUING OPERATIONS (764) (236) (1,000) (363) (255) 6 (612)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS (280) 125 2 (153)
TOTAL NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (764) (236) (1,000) (643) (130) 8 (765)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM CONTINUING OPERATIONS (513) 495 90 72 (1,077) (108) 74 (1,111)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM DISCONTINUED OPERATIONS (20) (350) (370)
TOTAL NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (513) 495 90(4) 72 (1,097) (458) 74 (1,481)
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash (182) 7 (175) (168) (2) (170)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH (1,940) (321) (2,261) (685) (360) (1,045)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR 4,514 1,331 5,845 8,116 1,513 9,629
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD 2,574 1,010 3,584 7,431 1,153 8,584
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (DISCONTINUED OPERATIONS) 561 119 680
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (CONTINUING OPERATIONS) 2,574 1,010 3,584 6,870 1,034 7,904

(1)          Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)         This item includes the elimination of dividends from Financial Services to Industrial Activities, which are included in Industrial Activities net cash used in operating activities.
(3)         This item includes the elimination of certain minor activities between Industrial Activities and Financial Services.
(4)         This item includes the elimination of paid in capital from Industrial Activities to Financial Services.

Other Supplemental Financial Information

(Unaudited)

Reconciliation of Consolidated Net Income to Adjusted EBIT of Industrial Activities by segment under U.S.-GAAP
($ million) Three Months ended June 30, 2022
Agriculture Construction Unallocated items, eliminations and other Total
Consolidated Net income 552
Less: Consolidated Income tax (expense) benefit (228)
Consolidated Income before taxes 780
Less: Financial Services
Financial Services Net income 95
Financial Services Income taxes 38
Add back of the following Industrial Activities items:
Interest expenses, net of interest income and eliminations 35
Foreign exchange (gains) losses, net (13)
Finance and non-service component of Pension and other post-employment benefit costs(1) (40)
Adjustments for the following Industrial Activities items:
Restructuring expenses 3 3 6
Other discrete items(2) 19 19
Adjusted EBIT of Industrial Activities 663 34 (43) 654
Three Months ended June 30, 2021
Agriculture Construction Unallocated items, eliminations and other Total
Consolidated Net income 699
Less: Consolidated Net Income (loss) of Discontinued Operations 185
Consolidated Net income (loss) of Continuing Operations 514
Less: Consolidated Income tax (expense) benefit (152)
Consolidated Income (loss) before taxes (continuing operations) 666
Less: Financial Services
Financial Services Net income 85
Financial Services Income taxes 26
Add back of the following Industrial Activities items:
Interest expenses, net of interest income and eliminations 31
Foreign exchange (gains) losses, net 4
Finance and non-service component of Pension and other post-employment benefit costs(1) (35)
Adjustments for the following Industrial Activities items:
Restructuring expenses 2 3 5
Other discrete items(2) 12 12
Adjusted EBIT of Industrial Activities 582 24 (34) 572

(1)  In the three months ended June 30, 2022, this item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the 2018 modification of a healthcare plan in the U.S. and a pre-tax gain of $6 million as a result of the amortization over the 4 years of the $101 million positive impact from the 2021 modifications of a healthcare plan in the U.S. In the three months ended June 30, 2021, this item includes the pre-tax gain of $30 million as a result of the 2018 modification.

(2)  In the three months ended June 30, 2022, this item included $16 million related to the activity of the Raven segments held for sale, including the loss on the sale of the Engineered Films division. In the three months ended June 30, 2021, this item included $8 million separation costs in connection with the spin-off of the Iveco Group business.

Other Supplemental Financial Information
(Unaudited)

Reconciliation of Consolidated Net Income to Adjusted EBIT of Industrial Activities by segment under US-GAAP
($ million) Six Months ended June 30, 2022
Agriculture Construction Unallocated items, eliminations and other Total
Consolidated Net income 888
Less: Consolidated Income tax (expense) benefit (387)
Consolidated Income before taxes 1,275
Less: Financial Services
Financial Services Net income 177
Financial Services Income taxes 74
Add back of the following Industrial Activities items:
Interest expenses, net of interest income and eliminations 70
Foreign exchange (gains) losses, net
Finance and non-service component of Pension and other post-employment benefit costs(1) (77)
Adjustments for the following Industrial Activities items:
Restructuring expenses 5 3 8
Other discrete items(2) 58 58
Adjusted EBIT of Industrial Activities 1,089 66 (72) 1,083
Six Months ended June 30, 2021
Agriculture Construction Unallocated items, eliminations and other Total
Consolidated Net income 1,124
Less: Consolidated Net Income (loss) of Discontinued Operations 247
Consolidated Net income (loss) of Continuing Operations 877
Less: Consolidated Income tax (expense) benefit (268)
Consolidated Income (loss) before taxes (continuing operations) 1,145
Less: Financial Services
Financial Services Net income 163
Financial Services Income taxes 52
Add back of the following Industrial Activities items:
Interest expenses, net of interest income and eliminations 71
Foreign exchange (gains) losses, net 15
Finance and non-service component of Pension and other post-employment benefit costs(1) (70)
Adjustments for the following Industrial Activities items:
Restructuring expenses 4 2 6
Other discrete items(2) 13 13
Adjusted EBIT of Industrial Activities 981 49 (65) 965

(1)  In the six months ended June 30, 2022, this item includes the pre-tax gain of $60 million as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the 2018 modification of a healthcare plan in the U.S. and a pre-tax gain of $12 million as a result of the amortization over the 4 years of the $101 million positive impact from the 2021 modifications of a healthcare plan in the U.S. In the six months ended June 30, 2021, this item includes the pre-tax gain of $60 million as a result of the 2018 modification.

(2)   In the six months ended June 30, 2022, this item included $44 million of asset write-downs, $6 million of separation costs incurred in a connection with our spin-off of the Iveco Group Business and $8 million related to the activity of the Raven segments held for sale, including the loss on the sale of the Engineered Films division. In the six months ended June 30, 2021, this item included $9 million separation costs in connection with the spin-off of the Iveco Group business.

Other Supplemental Financial Information

(Unaudited)

Reconciliation of Total (Debt) to Net Cash (Debt) under US-GAAP
($ million) Consolidated Industrial Services Financial Services
June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021
Third party (debt) (20,817) (20,897) (4,828) (5,335) (15,989) (15,562)
Intersegment notes payable (169) (150) (679) (181)
Payable to Iveco Group N.V.(4) (73) (3,986) (8) (3,764) (65) (222)
Total (Debt)(1) (20,890) (24,883) (5,005) (9,249) (16,733) (15,965)
Cash and cash equivalents 2,855 5,044 2,430 4,386 425 658
Restricted cash 729 801 144 128 585 673
Intersegment notes receivable 679 181 169 150
Receivables from Iveco Group N.V.(4) 281 3,484 220 3,430 61 54
Other current financial assets(2) 1 1 1 1
Derivatives hedging debt (33) (3) (33) (3)
Net Cash (Debt)(3) (17,057) (15,556) (1,564) (1,126) (15,493) (14,430)

(1)  Total (Debt) of Industrial Activities includes Intersegment notes payable to Financial Services of $169 million and $150 million as of June 30, 2022 and December 31, 2021, respectively. Total (Debt) of Financial Services includes Intersegment notes payable to Industrial Activities of $679 million and $181 million as of June 30, 2022 and December 31, 2021, respectively.
(2)   This item includes short-term deposits and investments towards high-credit rating counterparties.
(3)   The net intersegment receivable/(payable) balance recorded by Financial Services relating to Industrial Activities was ($510) million and ($31) million as of June 30, 2022 and December 31, 2021, respectively.
(4)   For December 31, 2021, this item is shown net on the CNH Industrial balance sheet.

Reconciliation of Cash and cash equivalents to Available liquidity under US-GAAP
($ million) June 30, 2022 March 31, 2022 December 31, 2021
Cash and cash equivalents 2,855 3,219 5,044
Restricted cash 729 842 801
Undrawn committed facilities 5,002 5,087 5,177
Receivables from Iveco Group N.V. 281 297 3,484
Payables to Iveco Group N.V. (73) (47) (3,986)
Other current financial assets(1) 1 1 1
Available liquidity 8,795 9,399 10,521

(1)   This item includes short-term deposits and investments towards high-credit rating counterparties.

Other Supplemental Financial Information

(Unaudited)

Change in Net Cash (Debt) of Industrial Activities under US-GAAP
Six Months ended June 30, Three Months ended June 30,
2022 2021 ($ million) 2022 2021
(1,126) (893) Net Cash (Debt) of Industrial Activities at beginning of period (2,086) (688)
1,083 965 Adjusted EBIT of Industrial Activities 654 572
166 146 Depreciation and Amortization 84 74
1 1 Depreciation of assets under operating leases 1
(316) (179) Cash interest and taxes (196) (125)
100 144 Changes in provisions and similar(1) 199 173
(1,550) (211) Change in working capital (254) 121
(516) 866 Operating cash flow of Industrial Activities – Continuing operations 487 816
(137) (105) Investments in property, plant and equipment, and intangible assets (84) (69)
(2) 11 Other changes 1 38
(655) 772 Free cash flow of Industrial Activities – Continuing operations 404 785
(455) (183) Capital increases and dividends(3) (434) (182)
672 156 Currency translation differences and other(2) 552 (63)
(438) 745 Change in Net Cash (Debt) of Industrial Activities – Continuing operations 522 540
(1,564) (148) Net Cash (Debt) of Industrial Activities at end of period (1,564) (148)

(1)         Including other cash flow items related to operating lease.

(2)         In the three and six months ended June 30, 2022 this item also includes the proceed of Raven Engineered Films Division for $350 million. In the six months ended June 30, 2021, this item also includes the charge of $8 million related to the repurchase of notes.
(3)         In the three and six months ended June 30, 2022, this item also includes share buy-back transactions.

Reconciliation of Net cash provided by (used in) Operating Activities to Free cash flow of Industrial Activities under US-GAAP
Six Months ended June 30, Three Months ended June 30,
2022 2021 ($ million) 2022 2021
(1,158) 801 Net cash provided by (used in) Operating Activities (Continuing Operations) (271) 560
677 80 Less: Cash flows from Operating Activities of Financial Services net of eliminations 773 256
(29) (7) Change in derivatives hedging debt of Industrial Activities and other (11) 5
(6) (8) Investments in assets sold under operating lease assets of Industrial Activities (4) (5)
(516) 866 Operating cash flow of Industrial Activities 487 816
(137) (105) Investments in property, plant and equipment, and intangible assets of Industrial Activities (84) (69)
(2) 11 Other changes(1) 1 38
(655) 772 Free cash flow of Industrial Activities 404 785

(1)         This item primarily includes change in intersegment financial receivables and capital increases in intersegment investments.

Other Supplemental Financial Information

(Unaudited)

Reconciliation of Adjusted net income and Adjusted income tax (expense) benefit to Net income (loss) and Income tax (expense) benefit and calculation of Adjusted diluted EPS and Adjusted ETR under US-GAAP
Six Months ended June 30, Three Months ended June 30,
2022 2021 ($ million) 2022 2021
888 877 Net income (loss) – Continuing Operations 552 514
9 (34) Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) (12) (13)
64 16 Adjustments impacting Income tax (expense) benefit (b) 43 6
961 859 Adjusted net income (loss) 583 507
954 855 Adjusted net income (loss) attributable to CNH Industrial N.V. 579 506
1,360 1,360 Weighted average shares outstanding – diluted (million) 1,360 1,361
0.70 0.63 Adjusted diluted EPS ($) 0.43 0.37
1,227 1,094 Income (loss) from continuing operations before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates 753 641
9 (34) Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) (12) (13)
1,236 1,060 Adjusted income (loss) from continuing operations before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (A) 741 628
(387) (268) Income tax (expense) benefit (228) (152)
64 16 Adjustments impacting Income tax (expense) benefit (b) 43 6
(323) (252) Adjusted income tax (expense) benefit (B) (185) (146)
26.1% 23.7% Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A) 25.0% 23.2%
a) Adjustments impacting Income (loss) from continuing operations before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates
8 5 Restructuring expenses 5 5
8 Loss on repurchase of notes
(60) (60) Pre-tax gain related to the 2018 modification of a healthcare plan in the U.S. (30) (30)
(12) Pre-tax gain related to the 2021 modification of a healthcare plan in the U.S. (6)
44 Asset write-down: Industrial Activities, Russia Operations
15 Asset write-down: Financial Services, Russia Operations
6 9 Spin related costs 3 8
4 Other discrete items 4
8 Activity of the Raven Segments held for sale, including loss on sale of the Engineered Films Division 16
9 (34) Total (12) (13)
b) Adjustments impacting Income tax (expense) benefit
61 14 Tax effect of adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates(1) 39 7
3 2 Other 4 (1)
64 16 Total 43 6

(1)         Includes $12 million of increase to the valuation allowances on historical deferred tax assets as a result of the suspension of operations in Russia.


Other Supplemental Financial Information

(Unaudited)

Reconciliation of Adjusted gross profit to gross profit under US-GAAP
Six Months ended June 30, Three Months ended June 30,
2022 2021 ($ million) 2022 2021
9,793 8,472 Net Sales (A) 5,613 4,778
7,663 6,612 Cost of goods sold 4,377 3,716
2,130 1,860 Gross profit (B) 1,236 1,062
34 Asset write down (Russia operations)
2,164 1,860 Adjusted gross profit (C) 1,236 1,062
21.8% 22.0% Gross profit margin (B ÷ A) 22.0% 22.2%
22.1% 22.0% Adjusted gross profit margin (C ÷ A) 22.0% 22.2%
Revenues by Segment under EU-IFRS
Six Months ended June 30, Three Months ended June 30,
2022 2021 % Change ($ million) 2022 2021 % Change
8,099 7,018 15.4% Agriculture 4,722 3,979 18.7%
1,694 1,464 15.7% Construction 891 808 10.3%
(1) Eliminations and other (1)
9,793 8,481 15.5% Total Industrial Activities of Continuing Operations 5,613 4,786 17.3%
933 786 18.7% Financial Services 468 390 20.0%
(19) (12) 58.3% Eliminations and other (11) (7)
10,707 9,255 15.7% Total of Continuing Operations 6,070 5,169 17.4%
Adjusted EBIT of Industrial Activities(1) by Segment under EU-IFRS
Three Months ended June 30,
2022 2021 $ Change 2022 adjusted EBIT margin 2021 adjusted EBIT margin
Agriculture 662 573 89 14.0% 14.4%
Construction 31 23 8 3.5% 2.8%
Unallocated items, eliminations and other (43) (37) (6)
Adjusted EBIT of Industrial Activities of Continuing Operations 650 559 91 11.6% 11.7%

(1)         This item is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Information” section of this press release for information regarding non-GAAP financial measures.

Adjusted EBIT of Industrial Activities(1) by Segment under EU-IFRS
Six Months ended June 30,
2022 2021 $ Change 2022 adjusted EBIT margin 2021 adjusted EBIT margin
Agriculture 1,083 963 120 13.4% 13.7%
Construction 61 47 14 3.6% 3.2%
Unallocated items, eliminations and other (73) (71) (2)
Adjusted EBIT of Industrial Activities of Continuing Operations 1,071 939 132 10.9% 11.1%

(1)         This item is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Information” section of this press release for information regarding non-GAAP financial measures.

Other Supplemental Financial Information

(Unaudited)

Other key data under EU-IFRS
June 30, 2022 March 31, 2022 December 31, 2021
Total Assets 36,403 37,272 51,122
Total Equity 6,428 6,258 8,426
Equity attributable to CNH Industrial N.V. 6,421 6,251 8,393
Net Cash (Debt) of Continuing Operations (17,422) (17,454) (15,840)
Net Cash (Debt) of Discontinued Operations (1,480)
Net Cash (Debt) of CNH Industrial (17,422) (17,454) (17,320)
of which Net Cash (Debt) of Industrial Activities(1) of Continuing Operations (1,892) (2,452) (1,374)
of which Net Cash (Debt) of Industrial Activities(1) of Discontinued Operations 1,204
of which Net Cash (Debt) of Industrial Activities(1) (1,892) (2,452) (170)
Net Income of Financial Services of Continuing Operations 159 73 357
Net Income of Financial Services of Discontinued Operations 71
Net Income of Financial Services of CNH Industrial Pre-Demerger 159 73 428

(1)         This item is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Information” section of this press release for information regarding non-GAAP financial measures.

Net income (loss) reconciliation US-GAAP to EU-IFRS
Six Months ended June 30, Three Months ended June 30,
2022 2021 ($ million) 2022 2021
888 877 Net income (loss) in accordance with U.S. GAAP 552 514
Adjustments to conform with EU-IFRS:
(11) (20) Development costs (4) (9)
(108) (66) Other adjustments(1) (56) (35)
22 16 Tax impact on adjustments and other income tax differences 11 6
(97) (70) Total adjustments (49) (38)
791 807 Profit (loss) in accordance with EU-IFRS 503 476

(1)         This item also includes the different accounting impacts from the modifications of a healthcare plan in the U.S.

Total Equity reconciliation US-GAAP to EU-IFRS
June 30, 2022 March 31, 2022 December 31, 2021
Total Equity under U.S. GAAP 5,794 5,609 6,808
Adjustments to conform with EU-IFRS:
Development costs 751 783 2,058
Other adjustments 45 41 28
Tax impact on adjustments and other income tax differences (162) (175) (468)
Total adjustments 634 649 1,618
Total Equity under EU-IFRS 6,428 6,258 8,426

Other Supplemental Financial Information
(Unaudited)

Translation of financial statements denominated in a currency other than the U.S. dollar
The principal exchange rates used to translate into U.S. dollars the financial statements prepared in currencies other than the U.S. dollar were as follows:
Six months Ended June 30, 2022 Six months Ended June 30, 2021
Average At June 30 At December 31, 2021 Average At June 30,
Euro 0.915 0.963 0.883 0.830 0.841
Pound sterling 0.770 0.826 0.742 0.720 0.722
Swiss franc 0.944 0.959 0.912 0.908 0.924
Polish zloty 4.239 4.506 4.059 3.764 3.804
Brazilian real 5.082 5.279 5.571 5.384 4.969
Canadian dollar 1.271 1.292 1.271 1.247 1.239
Turkish lira 14.870 16.738 13.450 7.900 8.685
Condensed Consolidated Income Statement for the three and six months ended June 30, 2022 and 2021
(Unaudited, EU-IFRS) Three Months Ended June 30, Six Months Ended June 30,
($ million) 2022 2021 2022 2021
Net revenues 6,070 5,169 10,707 9,255
Cost of sales 4,685 3,975 8,294 7,134
Selling, general and administrative costs 414 355 772 664
Research and development costs 219 175 412 319
Result from investments:
Share of the profit/(loss) of investees accounted for using the equity method 28 27 50 53
Restructuring costs 6 7 8 8
Other income/(expenses) (30) (32) (39) (45)
Financial income/(expenses) (24) (30) (76) (79)
PROFIT/(LOSS) BEFORE TAXES 720 622 1,156 1,059
Income tax (expense) benefit (217) (146) (365) (252)
PROFIT/(LOSS) FROM CONTINUING OPERATIONS 503 476 791 807
PROFIT/(LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX 90 172
PROFIT/(LOSS) FOR THE PERIOD 503 566 791 979
PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS ATTRIBUTABLE TO:
Owners of the parent 499 475 784 803
Non-controlling interests 4 1 7 4
(in $)
BASIC EARNINGS/(LOSS) PER COMMON SHARE 0.37 0.41 0.58 0.70
Basic earnings/(loss) per common share from continuing operations 0.35 0.59
DILUTED EARNINGS/(LOSS) PER COMMON SHARE 0.37 0.41 0.58 0.70
Diluted earnings/(loss) per common share from continuing operations 0.35 0.59

Other Supplemental Financial Information
(Unaudited)

Condensed Consolidated Statement of Financial Position as of June 30, 2022 and December 31, 2021
(Unaudited, EU-IFRS)
($ million) June 30, 2022 December 31, 2021
ASSETS
Intangible assets 5,141 5,159
Property, plant and equipment and Leased assets 3,294 3,435
Inventories 5,533 4,228
Receivables from financing activities 16,871 15,443
Cash and cash equivalents 3,584 5,845
Other receivables and assets 1,980 2,535
Assets held for distribution(*) 14,477
TOTAL ASSETS 36,403 51,122
EQUITY AND LIABILITIES
Issued capital and reserves attributable to owners of the parent 6,421 8,393
Non-controlling interests 7 33
Total Equity 6,428 8,426
Debt 21,199 21,689
Other payables and liabilities 8,776 9,148
Liabilities held for distribution(*) 11,859
Total Liabilities 29,975 42,696
TOTAL EQUITY AND LIABILITIES 36,403 51,122
Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2022 and 2021
(Unaudited, EU-IFRS)
($ million) June 30, 2022 June 30, 2021
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 5,845 9,629
Profit/(loss) from Continuing Operations 791 807
Adjustment to reconcile profit/(loss) from Continuing Operation to cash flows from/(used in) operating activities from Continuing Operations (1,055) 395
CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS (264) 1,202
CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS 219
TOTAL (264) 1,421
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES FROM CONTINUING OPERATIONS (1,936) (988)
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS 244
TOTAL (1,936) (744)
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES FROM CONTINUING OPERATIONS 116 (1,135)
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES FROM DISCONTINUED OPERATIONS (414)
TOTAL 116 (1,549)
Translation exchange differences (177) (173)
TOTAL CHANGE IN CASH AND CASH EQUIVALENTS (2,261) (1,045)
Less:
CASH AND EQUIVALENTS AT END OF THE PERIOD – INCLUDED WITHIN ASSETS HELD FOR DISTRIBUTION AT THE END OF THE PERIOD 680
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 3,584 7,904

Notes:

(*) The 2021 data have been re-presented following the classification of the Iveco Group Business as Discontinued Operations for the quarter ended June 30, 2021, as requested by the IFRS 5 – Non-current assets held for sale and discontinued operations.

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