|CNH INDUSTRIAL N.V. filed this Form 6-K on 11/06/2017|
The following table includes the reconciliation of our net income (loss), the most comparable U.S. GAAP financial measure, to our operating profit, a non-GAAP financial measure.
CRITICAL ACCOUNTING POLICIES
See our critical accounting policies discussed in the Management’s Discussion and Analysis of the most recent annual report filed on Form 20-F. There have been no material changes to these policies.
LIQUIDITY AND CAPITAL RESOURCES
The following discussion of liquidity and capital resources principally focuses on our condensed consolidated statements of cash flows and our condensed consolidated balance sheets. Our operations are capital intensive and subject to seasonal variations in financing requirements for dealer receivables and dealer and company inventories. Whenever necessary, funds from operating activities are supplemented from external sources. We expect to have available cash reserves and cash generated from operations and from sources of debt and financing activities that are sufficient to fund our working capital requirements, capital expenditures and debt service at least through the next twelve months.
During the nine months ended September 30, 2017, consolidated cash and cash equivalents decreased by $917 million. Cash and cash equivalents of Industrial Activities decreased $1,080 million, while cash and cash equivalents of Financial Services increased by $163 million.
Cash Flows of Industrial Activities
Net cash provided by operating activities was $356 million in the nine months ended September 30, 2017 compared to $331 million generated in the nine months ended September 30, 2016.
Net cash used in investing activities was $903 million in the nine months ended September 30, 2017 compared to $217 million used in the nine months ended September 30, 2016. The increase in cash usage was primarily due to a decrease in net cash receipts related to intersegment receivables and payables.
Net cash used in financing activities was $798 million in the nine months ended September 30, 2017 compared to $148 million used in the nine months ended September 30, 2016. The increased cash usage was primarily due to the early redemption of all the outstanding $636 million aggregate principal amount of Case New Holland Inc 7.875% Senior Notes due 2017 (repurchase of $450 million in the nine months ended September 30, 2016), as well as the repurchase of €347 million of CNH Industrial Finance Europe S.A. outstanding €1.2 billion 6.250% Notes due 2018, and the repurchase of €453 million of CNH Industrial Finance Europe S.A. outstanding €1 billion 2.750% Notes due 2019, as well as the reduction in bank debt.