As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

11/12/19  CNH Industrial Capital LLC        10-Q        9/30/19   64:18M                                    Toppan Merrill Bridge/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML   1.37M 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     31K 
 3: EX-31.2     Certification -- §302 - SOA'02                      HTML     31K 
 4: EX-32.1     Certification -- §906 - SOA'02                      HTML     24K 
33: R1          Document and Entity Information                     HTML     45K 
54: R2          Consolidated Statements of Income                   HTML     78K 
47: R3          Consolidated Statements of Comprehensive Income     HTML     44K 
12: R4          Consolidated Balance Sheets                         HTML     94K 
34: R5          Consolidated Balance Sheets (Parenthetical)         HTML     43K 
55: R6          Consolidated Statements of Cash Flows               HTML     98K 
48: R7          Consolidated Statements of Changes in               HTML     70K 
                Stockholder's Equity                                             
11: R8          Basis of Presentation                               HTML     27K 
35: R9          New Accounting Pronouncements                       HTML     34K 
50: R10         Accumulated Other Comprehensive Income              HTML    292K 
58: R11         Receivables                                         HTML    727K 
42: R12         Equipment on Operating Leases                       HTML     32K 
18: R13         Credit Facilities and Debt                          HTML     24K 
49: R14         Income Taxes                                        HTML     23K 
57: R15         Financial Instruments                               HTML    170K 
41: R16         Geographical Information                            HTML    168K 
17: R17         Related - Party Transactions                        HTML    102K 
51: R18         Commitments and Contingencies                       HTML     24K 
56: R19         Supplemental Condensed Consolidating Financial      HTML   1.09M 
                Information                                                      
28: R20         Subsequent Events                                   HTML     22K 
20: R21         Summary of Significant Accounting Policies          HTML     33K 
                (Policies)                                                       
44: R22         Accumulated Other Comprehensive Income (Tables)     HTML    292K 
62: R23         Receivables (Tables)                                HTML    725K 
27: R24         Equipment on Operating Leases (Tables)              HTML     31K 
19: R25         Financial Instruments (Tables)                      HTML    161K 
43: R26         Geographical Information (Tables)                   HTML    170K 
61: R27         Related-Party Transactions (Tables)                 HTML     99K 
26: R28         Supplemental Condensed Consolidating Financial      HTML   1.09M 
                Information (Tables)                                             
21: R29         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -        HTML     26K 
                Change in Accounting Principle (Details)                         
15: R30         ACCUMULATED OTHER COMPREHENSIVE INCOME - Change in  HTML     66K 
                Components of AOCI (Details)                                     
38: R31         ACCUMULATED OTHER COMPREHENSIVE INCOME -            HTML     43K 
                Reclassifications out of AOCI (Details)                          
59: R32         RECEIVABLES - Summary of Receivables (Details)      HTML     52K 
52: R33         RECEIVABLES - Allowance for Credit Losses Activity  HTML     80K 
                (Details)                                                        
16: R34         RECEIVABLES - Breakdown of Receivables by Credit    HTML     48K 
                Quality Indicators (Details)                                     
39: R35         RECEIVABLES - Aging of Receivables (Details)        HTML     78K 
60: R36         RECEIVABLES - Impaired Receivables (Details)        HTML     63K 
53: R37         RECEIVABLES - Troubled Debt Restructuring of        HTML     32K 
                Receivables (Details)                                            
14: R38         Equipment on Operating Leases (Details)             HTML     34K 
40: R39         Credit Facilities and Debt (Details)                HTML     59K 
24: R40         Income Taxes (Details)                              HTML     28K 
30: R41         FINANCIAL INSTRUMENTS - Generial Information        HTML     24K 
                (Details)                                                        
63: R42         FINANCIAL INSTRUMENTS - Fair Market Value of        HTML     57K 
                Derivatives (Details)                                            
45: R43         FINANCIAL INSTRUMENTS - Items Measured at Fair      HTML     42K 
                Value (Details)                                                  
25: R44         FINANCIAL INSTRUMENTS - Carrying Amount and         HTML     30K 
                Estimated Fair Value (Details)                                   
31: R45         Geographical Information (Details)                  HTML     65K 
64: R46         Related Party Transactions (Details)                HTML     72K 
46: R47         Commitments and Contingencies (Details)             HTML     26K 
23: R48         SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL      HTML    143K 
                INFORMATION - Statements of Comprehensive Income                 
                (Details)                                                        
32: R49         SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL      HTML    120K 
                INFORMATION - Balance Sheets (Details)                           
37: R50         SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL      HTML     78K 
                INFORMATION - Statements of Cash Flows (Details)                 
13: R51         Subsequent Events (Details)                         HTML     24K 
22: XML         IDEA XML File -- Filing Summary                      XML    113K 
29: EXCEL       IDEA Workbook of Financial Reports                  XLSX     86K 
 5: EX-101.INS  XBRL Instance -- cnhc-20190930                       XML   6.65M 
 7: EX-101.CAL  XBRL Calculations -- cnhc-20190930_cal               XML    180K 
 8: EX-101.DEF  XBRL Definitions -- cnhc-20190930_def                XML    521K 
 9: EX-101.LAB  XBRL Labels -- cnhc-20190930_lab                     XML   1.09M 
10: EX-101.PRE  XBRL Presentations -- cnhc-20190930_pre              XML    793K 
 6: EX-101.SCH  XBRL Schema -- cnhc-20190930                         XSD    147K 
36: ZIP         XBRL Zipped Folder -- 0001558370-19-010749-xbrl      Zip    240K 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Commission File Number: 000-55510

CNH INDUSTRIAL CAPITAL LLC

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes  ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes  ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes  ☒ No

As of September 30, 2019, all of the limited liability company interests of the registrant were held by CNH Industrial America  LLC, a wholly-owned subsidiary of CNH Industrial N.V.

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with certain reduced disclosures as permitted by those instructions.

 

 

 

TABLE OF CONTENTS

 

*This item has been omitted pursuant to the reduced disclosure format as set forth in General Instruction (H)(2) of Form 10‑Q

 

 

PART I. FINANCIAL INFORMATION

 

Item 1.  Financial Statements

 

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Dollars in thousands)

(Unaudited)

 

 

 

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Dollars in thousands)

(Unaudited)

 

 

 

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018

(Dollars in thousands)

(Unaudited)

 

 

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018

(Dollars in thousands)

(Unaudited)

 

The following table presents certain assets and liabilities of consolidated variable interest entities (“VIEs”), which are included in the consolidated balance sheets. The assets in the table include those assets that can only be used to settle obligations of consolidated VIEs. The liabilities in the table include third-party liabilities of the consolidated VIEs, for which creditors do not have recourse to the general credit of CNH Industrial Capital LLC.

 

 

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

NOTE 1: BASIS OF PRESENTATION

CNH Industrial Capital LLC and its primary operating subsidiaries, including New Holland Credit Company, LLC (“New Holland Credit”), CNH Industrial Capital America LLC (“CNH Industrial Capital America”), and CNH Industrial Capital Canada Ltd. (“CNH Industrial Capital Canada”) (collectively, “CNH Industrial Capital” or the “Company”), are each a subsidiary of CNH Industrial America LLC (“CNH Industrial America”), which is an indirect wholly-owned subsidiary of CNH Industrial N.V. (“CNHI” and, together with its consolidated subsidiaries, “CNH Industrial”). CNH Industrial America and CNH Industrial Canada Ltd. (collectively, “CNH Industrial North America”) design, manufacture, and sell agricultural and construction equipment. CNH Industrial Capital provides financial services for CNH Industrial North America dealers and end-use customers primarily located in the United States and Canada.

CNHI is incorporated in and under the laws of The Netherlands. CNHI has its corporate seat in Amsterdam, The Netherlands, and its principal office in London, England. The common shares of CNHI are listed on the New York Stock Exchange under the symbol “CNHI,” as well as on the Mercato Telematico Azionario managed by Borsa Italiana S.p.A.

The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information, which should be read in conjunction with the audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2018. Certain financial information that is normally included in annual financial statements prepared in conformity with U.S. GAAP, which is not required for interim reporting purposes, has been condensed or omitted. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of our interim unaudited financial statements have been reflected.

The consolidated financial statements include the Company and its consolidated subsidiaries. The consolidated financial statements are expressed in U.S. dollars. The consolidated financial statements include the accounts of the Company’s subsidiaries in which the Company has a controlling financial interest and reflect the noncontrolling interests of the minority owners of the subsidiaries that are not fully owned for the periods presented, as applicable. A controlling financial interest may exist based on ownership of a majority of the voting interest of a subsidiary, or based on the Company’s determination that it is the primary beneficiary of a variable interest entity (“VIE”). The primary beneficiary of a VIE is the party that has the power to direct the activities that most significantly impact the economic performance of the entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entity. The Company assesses whether it is the primary beneficiary on an ongoing basis, as prescribed by the accounting guidance on the consolidation of VIEs. The consolidated status of the VIEs with which the Company is involved may change as a result of such reassessments.

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and reported amounts of revenues and expenses. Significant estimates in these consolidated financial statements include the allowance for credit losses and residual values of equipment on operating leases. Actual results could differ from those estimates.

NOTE 2: NEW ACCOUNTING PRONOUNCEMENTS

New Accounting Pronouncements Adopted in 2019

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes ASC 840, Leases (“ASC 840”). Subsequently, the FASB has issued additional ASUs, which further clarified this guidance. The ASU’s most prominent change is the requirement for lessees to recognize leased assets and liabilities classified as operating leases under the previous standard. The ASU did not significantly change the lessee’s recognition, measurement and

presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. ASU 2016-02 also requires disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted ASU 2016-02 on January 1, 2019, using the modified retrospective approach, without recasting prior periods. The adoption of this standard did not have a material impact on its consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements and improve the disclosures of hedging arrangements. Among other provisions, the new standard (1) requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported, (2) eliminates the separate measurement and reporting of hedge ineffectiveness and (3) permits an entity to recognize in earnings the initial value of an excluded component under a systematic and rational method over the life of the derivative instrument. The Company adopted ASU 2017-12 on January 1, 2019. The adoption of this standard did not have a material impact on its consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which amends ASC 220, Income Statement – Reporting Comprehensive Income. In December 2017, the U.S. government enacted new tax legislation (“U.S. Tax Reform”). Included in the provisions of U.S. Tax Reform was a reduction of the corporate income tax rate from 35 percent to 21 percent. U.S. GAAP requires that the remeasurement of deferred taxes to the new corporate tax rate occur in the period in which the legislation is enacted, with the deferred tax adjustment being recorded in the provision for income taxes, including items for which the tax effects were originally recorded in other comprehensive income (“OCI”). This treatment results in the items in OCI reflecting a disproportionate tax rate, a result often referred to as stranded tax effects. This ASU allowed a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from U.S. Tax Reform. The Company adopted ASU 2018-02 on January 1, 2019, and reclassified $597 of tax effects from “Accumulated other comprehensive loss” to “Retained earnings” within its consolidated balance sheet.

In August 2018, the SEC adopted a final rule that amends certain disclosure requirements that have become duplicative, overlapping, or outdated in light of other SEC disclosure requirements, U.S. GAAP, or changes in the information environment. However, the guidance also added requirements for registrants to include in their interim financial statements a reconciliation of changes in stockholders’ equity for each period for which an income statement is required (both year-to-date and quarterly periods). The Company adopted the new interim disclosure requirement on January 1, 2019. The adoption of this standard did not have a material impact on its consolidated statements of changes in stockholder’s equity.

New Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which establishes ASC 326, Financial Instruments – Credit Losses. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”), which supersedes existing ASU 2016-13. The ASU introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Additional disclosures about significant estimates and credit quality are also required. ASU 2018-19 is effective for annual periods beginning after December 15, 2019. The Company has established a cross-functional implementation team. The team is in the process of validating and testing the models and procedures that will be used to calculate the allowance for credit losses and has started designing new processes and controls.

In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC 820, Fair Value Measurement. This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The effective date is the first quarter of fiscal year 2021, with early adoption permitted for the removed disclosures and delayed adoption until fiscal year 2021 permitted for the new disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement (“ASU 2018-15”), which expands upon the guidance set forth in ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. ASU 2018-15 aligns the requirements for capitalization of implementation costs in a cloud computing service contract with those requirements for capitalization of implementation costs incurred for an internal-use software license. ASU 2018-15 may be applied prospectively from the date the guidance is first applied or retrospectively.

ASU 2018-15 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. The Company expects to adopt the ASU on a prospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In October 2018, the FASB issued ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities (“ASU 2018-17”), which expands the application of a specific private company alternative related to VIEs and changes the guidance for determining whether a decision-making fee is a variable interest. Under the new guidance, to determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportionate basis, rather than in their entirety. ASU 2018-17 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted in any interim period. ASU 2018-17 is required to be applied retrospectively from the date the guidance is first applied. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

NOTE 3: ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income (“AOCI”) includes net income plus other comprehensive income, which includes foreign currency translation gains and losses, certain changes in pension plans and changes in fair value of certain derivatives designated as cash flow hedges.

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the three months ended September 30, 2019:

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the nine months ended September 30, 2019: