CNH Industrial N.V. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a15(e) and 15d15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our principal executive officer and principal financial officer concluded that, due to the material weakness in our internal control over financial reporting as described below, our disclosure controls and procedures were not effective as of December 31, 2024. Management’s Annual Report on Internal Control over Financial Reporting We are responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system is designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) in Internal Control—Integrated Framework . Based on our assessment, and the material weakness noted below, we believe that, as of December 31, 2024 our internal control over financial reporting was not effective. Deloitte & Touche LLP, the independent registered public accounting firm that audited our 2024 consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on our internal control over financial reporting. The report appears on page 38 . 37 Material Weakness in Internal Control over Financial Reporting – Inventory Management In connection with the preparation of our Annual report on Form 10-K for the year ended December 31, 2024, we identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. The material weakness relates to deficiencies in the operating effectiveness of internal controls related to the existence and completeness of raw material and work-in-process inventory. These control deficiencies have not resulted in an error or misstatements to our financial statements or the need to revise any previously published financial results. However, the control deficiencies could have resulted in a misstatement of one or more account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected, and accordingly, we determined that these control deficiencies constitute a material weakness. We, with the oversight of the Audit Committee of the Board of Directors, are taking actions to remediate the material weakness in internal control over financial reporting. Such remediation actions include: • Develop a remediation plan, which will include hiring consulting professionals with knowledge and experience specific to cycle count internal controls to assist us in evaluating and making recommendations to improve our current raw material and work-in-process cycle count program and controls, including more effective use of the IT systems used to facilitate these cycle counts, to ensure compliance with our policy; • Performing full-physical inventory counts of raw material and work-in-process inventory in the fourth quarter of 2025 at certain locations; • Developing standard operating procedures to ensure consistent communication of the raw material and work-in-process inventory count process and adherence to our cycle count policy at facilities managed by us and third-party warehouse service providers; • Providing training on standard operating procedures, cycle count policy and related internal controls to plant personnel responsible for the cycle count program and inventory processes to ensure the controls are operating effectively going forward. Changes in Internal Control over Financial Reporting As described above, the Company has identified a material weakness related to inventory management. We are undertaking the remediation actions described above to remediate the material weakness that exists as of December 31, 2024. There have been no other changes in our internal control over financial reporting during the fiscal year ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Limitations on Effectiveness of Disclosure Controls and Procedures and Internal Control over Financial Reporting Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to the costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.  38 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of CNH Industrial N.V. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of CNH Industrial N.V. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, because of the effect of the material weakness identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 28, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Material Weakness A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management's assessment: material weakness related to the operating effectiveness of internal controls related to the existence and completeness of raw material and work-in-process inventory. This material weakness was considered in determining the nature, timing, and extent of audit tests applied 39 in our audit of the consolidated financial statements as of and for the year ended December 31, 2024, of the Company, and this report does not affect our report on such financial statements. /s/ Deloitte & Touche LLP Chicago, Illinois February 28, 2025 40 Item 9B. Other Information Director and Executive Officer Trading Arrangements None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 41 PART III Item 10. Directors, Executive Officers, and Corporate Governance The information required by this item regarding our executive officers appears as Item 1 of this Report under the caption "Information about our Executive Officers". The remaining information required by this item will be contained in the Company's Notice of Meeting and Proxy Statement for its 2025 Annual General Meeting, prepared in accordance with applicable requirements and/or in the Company's Form 10-K, which, if required, will be filed no later than 120 days after December 31, 2024. Code of Ethics We have adopted a Code of Conduct that applies to our executive officers, including our principal executive officer, principal financial officer and principal accounting officer. This Code of Conduct and our corporate governance policies are posted on our website at https://www.cnh.com/en-US/Our-Company/Governance. We intend to satisfy disclosure requirements regarding amendments to or waivers from our Code of Conduct by posting such information on this website. The charters of the Audit Committee, the Environmental, Social and Governance Committee and Human Capital and Compensation Committee are available on our website as well. This information is also available in print free of charge to any person who requests it. Insider Trading Policies and Procedures We have adopted an insider trading policy and related procedures governing the purchase, sale and/or other distribution of our securities by directors, officers and employees, that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards. Our insider trading policies and procedures are filed as Exhibit 19.1 to this Form 10-K. Item 11. Executive Compensation The information required by this item will be contained in the Company’s Notice of Meeting and Proxy Statement for its 2025 Annual General Meeting, prepared in accordance with applicable requirements, will be filed no later than 120 days after December 31, 2024. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item will be contained in the Company’s Notice of Meeting and Proxy Statement for its 2025 Annual General Meeting, prepared in accordance with applicable requirements, which will be filed no later than 120 days after December 31, 2024. Item 13. Certain Relationships and Related Transactions and Director Independence The information required by this item will be contained in the Company’s Notice of Meeting and Proxy Statement for its 2025 Annual General Meeting, prepared in accordance with applicable requirements, which will be filed no later than 120 days after December 31, 2024. Item 14. Principal Accountant Fees and Services The information required by this item will be contained in the Company’s Notice of Meeting and Proxy Statement for its 2025 Annual General Meeting, prepared in accordance with applicable requirements, which will be filed no later than 120 days after December 31, 2024. 42 PART IV Item 15. Exhibits and Financial Statement Schedules (a) 1. Financial Statements - CNH Industrial N.V. and Subsidiaries The following are contained in this Annual Report on Form 10-K: Report of Independent Registered Public Accounting Firm - (PCAOB ID 34 ) 71 Report of Independent Registered Public Accounting Firm - (PCAOB ID 42 ) 73 Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022 74 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022 75 Consolidated Balance Sheets as of December 31, 2024 and 2023 76 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 , 2023 and 2022 78 Consolidated Statements of Changes in Equity for the Years Ended December 31, 2024, 2023 and 2022 79 Notes to the Consolidated Financial Statements 80 The Report of Independent Registered Public Accounting Firm, the Consolidated Financial Statements, and the Notes to the Financial Statements listed above are filed as part of this Report and are set forth beginning on page 71 immediately following the signature pages of this Report. (a) 2. Financial Statement Schedules Schedules are omitted because they are not applicable, the information required to be contained in them is disclosed elsewhere on our Consolidated Financial Statements, or the amounts involved are not sufficient to require submission. (a) 3. Exhibits 43 Exhibit Description 3.1 Articles of Association of CNH Industrial N.V., dated September 29, 2013 (Previously filed as Exhibit 1.1 to the Annual Report on Form 20-F of the registrant for the year ended December 31, 2014 (File No. 001-36085) and incorporated herein by reference). 3.2 Regulations of the Board of Directors of CNH Industrial N.V. dated September 9, 2013 (Previously filed as Exhibit 1.2 to the Annual Report on Form 20-F of the registrant for the year ended December 31, 2014 (File No. 001-36085) and incorporated herein by reference). 4.1 Indenture, dated as of August 18, 2016, by and between CNH Industrial N.V., as issuer, and U.S. Bank National Association, as trustee, relating to the CNH Industrial N.V. debt securities. (Previously filed as Exhibit 4.1 to the report on Form 6-K of the registrant (File No. 001-36085) and incorporated herein by reference). 4.2 Officers’ Certificate, dated as of November 14, 2017 (including Form of 3.850% Note due 2027 included therein). (Previously filed as Exhibit 4.1 to Form 6‑K of the registrant on November 14, 2017 (File No. 001-36085) and incorporated herein by reference). 4.3 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Exchange Act 10.1* CNH Industrial N.V. Directors’ Compensation Plan (Previously filed as Exhibit 10.2 to the report on Form 8-K of the registrant on May 9 , 20 24 (File No. 001 - 36085 ) incorporated herein by reference). 10.2* Case New Holland Industrial Inc. 2005 Deferred Compensation Plan, restated effective January 1, 2012 (Previously filed as Exhibit 4.9 to the Annual Report on Form 20-F of the registrant for the year ended December 31, 2014 (File No. 001-36085) and incorporated herein by reference). 10.3* CNH Industrial N.V. Equity Incentive Plan (Previously filed as Exhibit 10.1 to the report on Form 8-K of the registrant on May 9 , 202 4 (File No. 001 - 36085 ) incorporated herein by reference). 10.6* Form of Performance Share Agreement (2022-2024) (Previously filed as Exhibit 10.6 to the Annual Report on Form 10-K for the registrant for the year ended December 31, 2022 and incorporated herein by reference). 10.7* Form of Restricted Stock Units Agreement (2022-2024) (Previously filed as Exhibit 10.7 to the Annual Report on Form 10-K for the registrant for the year ended December 31, 2022 and incorporated herein by reference). 10.8 Agreement and Plan of Merger among Raven Industries, Inc., CNH Industrial N.V. and CNH Industrial South Dakota, Inc. (Previously filed as Exhibit 99.2 to Form 6-K of the registrant on June 21, 2021 and incorporated herein by reference). 10.9 Credit Agreement, dated April 19, 2024, by and among CNH Industrial N.V., Citibank Europe PLC, UK Branch, as Facility Agent, and the banks listed therein 10.11* Form of Restricted Stock Units Agreement (2023-2025) (Previously file d as Exhibit 10.13 to the Annual Report on Form 10-K of the registrant for the year ended December 31, 2023 and incorporated herein by reference) 10.12* Form of Performance Share Agreement (2023-2025) (Previously filed as Exhibit 10.14 to the Annual Report on Form 10-K of the registrant for the year ended December 31, 2023 and incorporated herein by reference) 10.13* Form of Restricted Stock Units Agreement (2024-2026) 10.14* Form of Performance Share Agreement (2024-2026) 10.15* Executive Employment Agreement with Gerrit Marx (Previously filed as Exhibit 10.1 to the the report on Form 8-K of the registrant on June 28, 2024 (File No. 001-36085) and incorporated herein by reference). 10.16* Letter Agreement dated April 20, 2024 with Scott W. Wine (Previously filed as Exhibit 10.1 to the report on Form 8-K of the registrant on April 22, 2024 (File No. 001-36085) and incorporated herein by reference). 10.17* Amendments to Employment Agreement with Kevin Barr (Previously filed as Exhibit 10.1 to the report on Form 8-K of the registrant on January 12, 2024 (File No. 001-36085) and incorporated herein by reference). 10.18* Letter Agreement dated May 30, 2024 with Derek Neilson (Previously filed as Exhibit 10.1 to the report on Form 8-K of the registrant on May 31, 2024 (File No. 001-36085) and incorporated herein by reference). 10.19* Executive Employment Agreement with Stefano Pampalone (Previously filed as Exhibit 10.1 to the report on Form 8-K of the registrant on January 14, 2025 (File 001-36085) and incorporated herein by reference). 19.1 Insider Trading Policy 21.0 Subsidiaries and affiliates of the registrant 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Deloitte & Touche LLP. 31.1 Certification of Chief Executive Officer of CNH Industrial N.V., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer of CNH Industrial N.V., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Chief Executive Officer of CNH Industrial N.V. and Chief Financial Officer of CNH Industrial N.V., as required pursuant Section 906 of the Sarbanes-Oxley Act of 2002. 44 Exhibit Description 97.1 Compensation Recovery Policy of CNH Industrial N.V. 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CLA Inline XBRL Taxonomy Extension Calculation Linkbase Document 101DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover page Interactive Data File is formatted in Inline XBRL and is contained in Exhibits 101 There have not been filed as exhibits to this Form 10-K certain long-term debt instruments, none of which relates to indebtedness that exceeds 10% of the consolidated assets of CNH Industrial N.V. CNH Industrial N.V. agrees to furnish the Securities and Exchange Commission, upon its request, a copy of any instrument defining the rights of holders of long-term debt of CNH Industrial N.V. and its consolidated subsidiaries. * Management contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item 15(b) of this Report. Item 16. Form 10-K Summary None. 45 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CNH INDUSTRIAL N.V. (Registrant) By: /s/ GERRIT MARX Gerrit Marx Chief Executive Officer Date: February 28, 2025 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Each person signing below also appoints Gerrit Marx, Oddone Incisa, and Roberto Russo, and each of them singly, his or her lawful attorney-in-fact with full power to execute and file any and all amendments to this report together with exhibits thereto and generally to do all such things as such attorney-in-fact may deem appropriate to enable CNH Industrial N.V. to comply with the provisions of the Securities Exchange Act of 1934 and all requirements of the Securities and Exchange Commission. Date Signature Title February 28, 2025 /s/ GERRIT MARX Chief Executive Officer Gerrit Marx February 28, 2025 /s/ ODDONE INCISA Chief Financial Officer Oddone Incisa (Principal Financial Officer and Principal Accounting Officer) February 28, 2025 /s/ SUZANNE HEYWOOD Executive Director and Chair of the Board Suzanne Heywood February 28, 2025 /s/ ELIZABETH BASTONI Director Elizabeth Bastoni February 28, 2025 /s/ HOWARD W. BUFFETT Director Howard W. Buffett February 28, 2025 /s/ RICHARD J. KRAMER Director Richard J. Kramer February 28, 2025 /s/ KAREN LINEHAN Director Karen Linehan February 28, 2025 /s/ ALESSANDRO NASI Director Alessandro Nasi February 28, 2025 /s/ VAGN SORENSEN Director Vagn Sørensen February 28, 2025 /s/ ÅSA TAMSONS Director Åsa Tamsons 46 Management's Discussion and Analysis The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to promote understanding of the Company's financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to the Consolidated Financial Statements. This discussion includes forward-looking statements, which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those expressed or implied by the forward-looking statements. This MD&A should be read in conjunction with our discussion of cautionary statements and significant risks to the Company’s business under “Item 1A. Risk Factors” of this Annual Report on Form 10-K. Overview CNH is an equipment and services company engaged in the design, production, marketing, sale, and financing of agricultural and construction equipment. CNH operates across three business segments: Agriculture, Construction and Financial Services. CNH refers to its Agriculture and Construction operations as "Industrial Activities". We generate revenues and cash flows principally from the sale of equipment to dealers and distributors. Financial Services provides a range of financial products focused on financing the sale and lease of equipment to our dealers and their customers. Revenues of Industrial Activities are presented net of discounts, allowances, settlement discounts and rebates, as well as costs for sales incentive programs, determined on the basis of historical costs, country by country, and charged against profit for the period in which the corresponding sales are recognized. Our sales incentive programs may include the granting by Financial Services of retail financing at discounts to market interest rates. The corresponding cost to Industrial Activities is recognized at the time of the initial sale and the revenues of Financial Services are recognized on a pro rata basis in order to match the cost of funding. Principal Factors Affecting Results Our operating performance is highly correlated to sales volumes, which are influenced by several different factors that vary across our segments. For our Agriculture segment, the key factors influencing sales are the level of net farm income, which is influenced by commodity prices, and, to a lesser extent, general economic conditions, interest rates and the availability of financing and related subsidy programs. Variations by region and product are also attributable to differences in typical climate and farming calendars, as well as extraordinary weather conditions. For our Construction segment, sales levels for heavy construction equipment are particularly dependent on the expected level of major infrastructure construction and repair projects, which is a function of expected economic growth and government spending. For light construction equipment, the principal factor influencing demand is the level of residential and commercial construction, remodeling and renovation, which is influenced in turn by interest rates and availability of financing, as well as, in the residential sector, levels of disposable income and, in the commercial sector, the broader economic cycle. Demand for services and service-related products, including parts, is a function of the nature and extent of the use of the related agricultural and construction equipment. The after-sales market is historically less volatile than the wholegoods market and, therefore, helps reduce the impact on operating results of fluctuations in new sales. Our cost base principally comprises the cost of raw materials and personnel costs. Raw material costs are closely linked to commodity markets and largely outside of our control, although we are making a targeted effort to increase procurement and production efficiencies. Historically, we have been able to pass on to our customers most of the increase in the cost of raw materials through increases in product pricing. Nevertheless, even when we are able to do so, there is usually a time lag between an increase in materials cost and a realized increase in product prices and, accordingly, our results are typically adversely affected at least in the short-term until price increases are accepted in the market. Personnel costs change over time and are impacted by the terms of collective bargaining agreements, inflation and average number of employees. A significant proportion of our employees are based in countries where labor laws impose significant protection of employees’ rights and, accordingly, we have limited ability to downsize our personnel in response to a decrease in production during periods of market downturn. Our results are also affected by changes in foreign exchange rates from period to period, mainly due to the difference in geographic distribution between our manufacturing activities and our commercial activities, resulting in cash flows from exports denominated in currencies that differ from those associated with production costs. In addition, our Consolidated Financial Statements are expressed in 47 U.S. dollars and are therefore subject to movements in exchange rates upon translation of the financial statements of subsidiaries whose functional currency is not the U.S. dollar. Finally, our results may be materially affected, directly or indirectly, by governmental policies, including monetary and fiscal policies and policies on international trade and investment. Global Business Conditions The global economy is experiencing volatile disruptions due to a combination of factors, including geopolitical events, shifts in trade and economic policies from the new U.S. presidential administration, change in commodity prices, as well as change in climate conditions. These disruptions have affected the price and availability of certain products and services used in the Company's operations in 2024, and are expected to persist in 2025. These factors also affect our customers' profitability, impacting their ability to achieve higher returns on their output, and reducing their purchasing power and demand for our products. The Company is closely monitoring global economic conditions and the impact that macroeconomic pressures, such as new and retaliatory tariffs, fluctuating currency exchange rates, interest rates and inflation, have on its business, customers, and suppliers. For a discussion of the Company’s risks and uncertainties, see Part 1, Item 1A: Risk Factors. Non-GAAP Financial Measures CNH monitors its operations through the use of several non-GAAP financial measures. CNH’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’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 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. As of December 31, 2024, CNH’s non-GAAP financial measures are defined as follows: Adjusted EBIT of Industrial Activities Adjusted EBIT of Industrial Activities 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-confirm this term is employment benefit costs, restructuring expenses, and certain non-recurring items. Such non-recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent in nature and not reflective of ongoing operational activities. 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 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. Revenues on a Constant Currency Basis CNH 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 from year to year. Free Cash Flow 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 property, plant and equipment, intangible assets, and assets sold under operating leases; change in derivatives hedging debt of Industrial Activities; as well as other changes and intersegment eliminations. 48 Operating Results The operations, key financial measures, and financial analysis differ significantly for manufacturing and distribution businesses (Industrial Activities) and financial services businesses; therefore, management believes that certain supplemental disclosures are important in understanding our consolidated operations and financial results. For further information, see “Supplemental Information” within this section, where we present supplemental consolidating data split by Industrial Activities and Financial Services. Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated data. 2024 Compared to 2023 Consolidated Results of Operations (in millions of dollars) 2024 2023 (1) Revenues Net sales $ 17,060 $ 22,080 Finance, interest and other income 2,776 2,607 Total Revenues 19,836 24,687 Costs and Expenses Cost of goods sold 13,350 16,838 Selling, general and administrative expenses 1,712 1,863 Research and development expenses 924 1,041 Restructuring expenses 118 67 Interest expense 1,611 1,345 Other, net 664 830 Total Costs and Expenses 18,379 21,984 Income (loss) of Consolidated Group before Income Taxes 1,457 2,703 Income tax expense (336) (594) Equity in income of unconsolidated subsidiaries and affiliates 138 178 Net income (loss) 1,259 2,287 Net income attributable to noncontrolling interests 13 12 Net income (loss) attributable to CNH Industrial N.V. $ 1,246 $ 2,275 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. Revenues We recorded revenues of $19,836 million in 2024, a decline of 19.6% (down 18.7% on a constant currency basis) compared to 2023. This decline was mainly due to lower shipment volumes on decreased industry demand and dealer destocking. Cost of Goods Sold Cost of goods sold were $13,350 million in 2024 compared to $16,838 million in 2023, a decrease of 20.7% year over year. As a percentage of net sales, cost of goods sold was 78.3% in 2024 (76.3% in 2023), the increase in the percentage from 2023 reflects lower production volumes and unfavorable mix, partially offset by improved purchasing and manufacturing costs. Selling, General and Administrative Expenses Selling, general and administrative expenses ("SG&A") decreased to $1,712 million in 2024 (8.6% of revenues) from $1,863 million in 2023 (7.5% of revenues). The year over year decrease is primarily due to lower labor costs, driven by the Company's restructuring program and lower variable compensation, partially offset by higher credit risk provisions in the Financial Services segment. Research and Development In 2024, R&D expenses were $924 million compared to $1,041 million in 2023. The expense in both years was primarily attributable to continued investment in new products, technologies and digital solutions. 49 Restructuring Expenses The Company incurred restructuring costs of $118 million and $67 million in 2024 and 2023, respectively. The Company’s restructuring program announced in November 2023 targeted both labor and non-labor SG&A expenses. This program was completed in 2024, and the Company has incurred a total of $128 million from launch to December 31, 2024, under it. Interest Expense Interest expense increased to $1,611 million in 2024 from $1,345 million in 2023 primarily due to higher average interest rates and higher external borrowings. The interest expense attributable to Industrial Activities, net of interest income and eliminations, was $152 million in 2024 compared to $76 million in 2023 primarily due to higher external borrowings to support working capital requirements and higher average interest rates. Other, net Other, net expenses were $664 million in 2024 and included a pre-tax gain of $24 million ($18 million after-tax) as a result of the amortization over 4 years of the $101 million positive impact from the 2021 U.S. healthcare plan modification and a gain of $14 million for investment fair value adjustments, partially offset by a loss of $17 million on the sale of certain non-core product lines. Other, net expenses were $830 million in 2023 and included a pre-tax gain of $24 million ($18 million after-tax) as a result of the amortization over 4 years of the $101 million positive impact from the 2021 U.S. healthcare plan modification and a gain of $13 million in relation to the fair value remeasurement of previously held investments in Augmenta and Bennamann, offset by a loss of $23 million on the sale of CNH Industrial Russia. Income Taxes (in millions of dollars, except percentages) 2024 2023 (1) Income (loss) of Consolidated Group before Income Taxes $ 1,457 $ 2,703 Income tax expense $ 336 $ 594 Effective tax rate 23.1 % 22.0 % (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. In 2024, income taxes were an expense of $336 million, compared to a tax expense of $594 million in 2023. The effective tax rates for 2024 and 2023 were 23.1% and 22.0%, respectively. The decreased tax expense in 2024, as compared to 2023, was largely attributable to lower profit-before tax and the tax impact from Argentina’s highly inflationary economy. The 2024 tax expense was also reduced by the recognition of $29 million of previously unrecognized deferred tax assets in China, offset by the derecognition of $35 million deferred tax assets in Argentina, increases in withholding tax on dividends, and lower benefit from U.S. exports. The 2023 effective tax rate was reduced by the recognition of $99 million of previously unrecognized deferred tax assets in the United Kingdom, lower profitability in high-tax jurisdictions as a percent of total profit, higher credits and incentives, and the tax benefits related to the sale of CNH Industrial Russia; offset the tax impact from the Argentina highly inflationary economy and discrete tax expense associated with prior periods. The Organization for Economic Cooperation and Development (the "OECD") has proposed a global minimum tax of 15% of reported profits ("Pillar Two") that has been agreed upon in principle by over 140 countries. Pillar Two legislation has been enacted in one or more jurisdictions in which the Company operates and the Company has determined that it falls within the scope of the legislation. The Company has assessed the impact of the Pillar Two legislation and related transitional safe harbor provisions and does not expect the tax impacts of the legislation to have a material impact on the Company’s financial results during 2024. Equity in Income of Unconsolidated Subsidiaries and Affiliates Equity in income of unconsolidated subsidiaries and affiliates was $138 million in 2024 compared to $178 million in 2023 primarily due to lower sales in our joint venture TürkTraktör ve Ziraat Makineleri A.S. 50 Industrial Activities and Business Segments The following tables include Revenues and Adjusted EBIT of Industrial Activities by segment. We have also included a discussion of our results of Industrial Activities and of each of our segments. (in millions of dollars, except percentages) 2024 2023 % Change % Change excl. FX Revenues: Agriculture $ 14,007 $ 18,148 (22.8) % (22.1) % Construction 3,053 3,932 (22.4) % (21.4) % Total Net sales of Industrial Activities 17,060 22,080 (22.7) % (21.9) % Financial Services 2,774 2,573 7.8 % 10.1 % Eliminations and other 2 34 Total Revenues $ 19,836 $ 24,687 (19.7) % (18.7) % (in millions of dollars, except percentages) 2024 2023 (1) $ Change 2024 Adj EBIT Margin (1) 2023 Adj EBIT Margin Adjusted EBIT by Segment: (2) Agriculture $ 1,470 $ 2,636 $ (1,166) 10.5 % 14.5 % Construction 169 238 (69) 5.5 % 6.1 % Eliminations and other (235) (240) 5 Adjusted EBIT of Industrial Activities $ 1,404 $ 2,634 $ (1,230) 8.2 % 11.9 % (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. (2) A reconciliation from the most closely related U.S. GAAP measure to this non-GAAP measure is included on page 53 . Net sales of Industrial Activities were $17,060 million in 2024, down 22.7% compared to the prior year (down 21.9% on a constant currency basis) primarily due to lower shipment volumes on decreased industry demand and dealer destocking. Adjusted EBIT of Industrial Activities was $1,404 million in 2024 ($2,634 million in 2023), with an Adjusted EBIT margin of 8.2%. The decline was primarily due to lower shipment volumes on decreased industry demand and unfavorable mix in the Agriculture segment; partially offset by improved purchasing and manufacturing costs, along with a reduction in SG&A expenses. Business Segment Performance Agriculture Net Sales The following table includes Agriculture net sales by geographic region in 2024 compared to 2023: Agriculture Sales – by geographic region: (in millions of dollars) 2024 2023 % Change North America $ 5,839 $ 7,157 (18.4) % Europe, Middle East and Africa 4,267 5,878 (27.4) % South America 2,280 3,178 (28.3) % Asia Pacific 1,621 1,935 (16.2) % Total $ 14,007 $ 18,148 (22.8) % Net sales for Agriculture were $14,007 million in 2024, a 22.8% decline (down 22.1% on a constant currency basis) compared to 2023. This decline is mainly due to lower shipment volumes on decreased industry demand across all regions and dealer inventory unit requirements across all regions. In North America, industry volume was down 16% year over year in 2024 for tractors over 140 hp and was down 13% for tractors under 140 hp; combines were down 22%. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 13% and 43%, respectively, of which Europe tractor and combine demand was down 12% and 35%, respectively. South America tractor demand was down 9% and combine demand was down 31%. Asia Pacific tractor demand was down 1% and combine demand was up 11%. 51 Adjusted EBIT Adjusted EBIT was $1,470 million in 2024, compared to $2,636 million in 2023. The decline was mostly driven by lower shipment volumes and unfavorable mix, partially offset by improved purchasing and manufacturing costs, along with a reduction in SG&A expenses. R&D investments accounted for 5.9% of sales (5.2% in 2023). Adjusted EBIT margin was 10.5%. Construction Net Sales The following table includes Construction net sales by geographic region in 2024 compared to 2023: Construction Sales – by geographic region: (in millions of dollars) 2024 2023 % Change North America $ 1,633 $ 2,253 (27.5) % Europe, Middle East and Africa 660 851 (22.4) % South America 540 559 (3.4) % Asia Pacific 220 269 (18.2) % Total $ 3,053 $ 3,932 (22.4) % Net sales for Construction were $3,053 million in 2024, a decline of 22.4% (down 21.4% on a constant currency basis) compared to 2023, due to lower shipment volumes across all regions driven mainly by lower market demand and dealer destocking. Global industry volume for construction equipment increased 1% year over year in 2024 for Heavy construction equipment; Light construction equipment was down 7%. Aggregated demand decreased 5% in North America and 12% in EMEA, respectively, and increased 13% in South America and 3% for Asia Pacific, particularly in China. Adjusted EBIT Adjusted EBIT was $169 million in 2024, compared to $238 million in 2023. The decline was primarily due to lower volumes, partially offset by improved purchasing and manufacturing costs, along with lower SG&A expenses. Adjusted EBIT margin was 5.5%. Financial Services Performance Finance, Interest and Other Income Financial Services reported revenues of $2,774 million in 2024, up 7.8% compared to 2023 (up 10.1% on a constant currency basis) due to favorable volumes in all regions except EMEA and higher yields in all regions, except South America; partially offset by lower used equipment sales due to decreased operating lease maturities. Net Income Net income for Financial Services was $379 million in 2024, an $8 million increase compared to 2023, primarily due to favorable volumes in all regions except EMEA, margin improvement in all regions except Asia Pacific, and a favorable effective tax rate due to Argentina inflation adjustment in the current year; partially offset by increased risk costs due to higher delinquencies in South America, increased specific reserve needs in North America, the derecognition of previously recognized deferred tax assets in Argentina, and lower used equipment sales from less operating lease maturities. In 2024, retail originations (including unconsolidated joint ventures) were $11.4 billion, down $0.1 billion compared to 2023 (flat on a constant currency basis). The managed portfolio (including unconsolidated joint ventures) was $27.8 billion as of December 31, 2024 (of which retail was 68% and wholesale 32%), down $1.1 billion compared to December 31, 2023 (up $1.0 billion on a constant currency basis). At December 31, 2024, the receivable balance greater than 30 days past due as a percentage of receivables was 1.9% (1.4% as of December 31, 2023) due to economic and environmental factors impacting farmers, specifically in South America. 52 2023 Compared to 2022 Please refer to the “Management’s Discussion and Analysis” section of our 202 3 Form 10-K . Reconciliation of Adjusted EBIT to Net Income (Loss) The following table includes the reconciliation of Adjusted EBIT for Industrial Activities to net income, the most comparable U.S. GAAP financial measure. Years Ended December 31, (in millions of dollars) 2024 2023 (1) 2022 Agriculture $ 1,470 $ 2,636 $ 2,456 Construction 169 238 124 Unallocated items, eliminations and other (2) (235) (240) (147) Total Adjusted EBIT of Industrial Activities 1,404 2,634 2,433 Financial Services Net Income 379 371 338 Financial Services Income Taxes 110 136 125 Interest expense of Industrial Activities, net of interest income and eliminations (152) (76) (119) Foreign exchange gains (losses), net of Industrial Activities (15) (105) (59) Finance and non-service component of Pension and other post-employment benefit cost of Industrial Activities (3) (10) (4) 124 Restructuring expense of Industrial Activities (117) (65) (31) Other discrete items of Industrial Activities (4) (4) (10) (25) Income (loss) before taxes 1,595 2,881 2,786 Income tax benefit (expense) (336) (594) (747) Net income (loss) $ 1,259 $ 2,287 $ 2,039 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. (2) Unallocated items, eliminations and other primarily includes certain corporate costs and other operating expenses and incomes not allocated to segments' results. (3) In the years ended December 31, 2024, 2023, and 2022, this item includes a pre-tax gain of $24 million, $24 million, and $24 million, respectively as a result of the amortization over 4 years of the $101 million positive impact from the 2021 modifications of a healthcare plan in the U.S. In the years ended December 31, 2022 this item includes the pre-tax gain of $90 million respectively as a result of the amortization over approximately 4.5 years of the $527 million positive impact from 2018 modification of a healthcare plan in the U.S. (4) In the year ended December 31, 2024, this item includes a loss of $17 million on the sale of certain non-core product lines and a gain of $14 million for investment fair value adjustments. In the year ended December 31, 2023, this item includes a loss of $23 million on the sale of the CNH Industrial Russia and CNH Capital Russia businesses, partially offset by a gain of $13 million for the fair value remeasurement of Augmenta and Bennamann. In the year ended December 31, 2022, this item included $43 million of asset write-downs, $25 million of separation costs incurred in a connection with our spin-off of the Iveco Group Business and $22 million of costs related to the activity of the Raven segments held for sale, including the loss on the sale of the Engineered Films and Aerostar divisions, partially offset by a $65 million dollar gain on the sale of our Canada parts depot. 53 Supplemental Information The operations, key financial measures, and financial analysis differ significantly for manufacturing and distribution businesses and financial services businesses; therefore, management believes that certain supplemental disclosures are important in understanding the consolidated operations and financial results of CNH. This supplemental information does not purport to represent the operations of each group as if each group were to operate on a standalone basis. This supplemental data is as follows: Industrial Activities—The financial information captioned “Industrial Activities” reflects the consolidation of all majority-owned subsidiaries except for Financial Services business. Financial Services—The financial information captioned “Financial Services” reflects the consolidation or combination of Financial Services business. Statement of Operations Year Ended December 31, 2024 Year Ended December 31, 2023 (in millions of dollars) Industrial Activities (1) Financial Services Eliminations Consolidated Industrial Activities (1)(2) Financial Services Eliminations Consolidated Revenues Net sales $ 17,060 $ — $ — $ 17,060 $ 22,080 $ — $ — $ 22,080 Finance, interest and other income 130 2,774 (128) (3) 2,776 206 2,573 (172) (3) 2,607 Total Revenues 17,190 2,774 (128) 19,836 22,286 2,573 (172) 24,687 Costs and Expenses Cost of goods sold 13,350 — — 13,350 16,838 — — 16,838 Selling, general & administrative expenses 1,380 332 — 1,712 1,645 218 — 1,863 Research and development expenses 924 — — 924 1,041 — — 1,041 Restructuring expenses 117 1 — 118 65 2 — 67 Interest expense 282 1,457 (128) (4) 1,611 282 1,235 (172) (4) 1,345 Other, net 150 514 — 664 201 629 — 830 Total Costs and Expenses 16,203 2,304 (128) 18,379 20,072 2,084 (172) 21,984 Income (loss) of Consolidated Group before Income Taxes 987 470 — 1,457 2,214 489 — 2,703 Income tax expense (226) (110) — (336) (458) (136) — (594) Equity income (loss) of unconsolidated subsidiaries and affiliates 119 19 — 138 160 18 — 178 Net income (loss) $ 880 $ 379 $ — $ 1,259 $ 1,916 $ 371 $ — $ 2,287 (1) Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture, Construction, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services. (2) See Note 23 Immaterial Revision of Prior Period Financial Statements. (3) Eliminations of Financial Services' interest income earned from Industrial Activities. (4) Eliminations of Industrial Activities' interest expense to Financial Services. 54 Balance Sheets Year Ended December 31, 2024 Year Ended December 31, 2023 (in millions of dollars) Industrial Activities (1) Financial Services Eliminations Consolidated Industrial Activities (1)(2) Financial Services Eliminations Consolidated Assets Cash and cash equivalents $ 2,332 $ 859 $ — $ 3,191 $ 3,532 $ 790 $ — $ 4,322 Restricted cash 89 586 — 675 96 627 — 723 Trade receivables, net 121 11 (7) (3) 125 136 9 (12) (3) 133 Financing receivables, net 218 23,528 (661) (4) 23,085 393 24,539 (683) (4) 24,249 Financial receivables from Iveco Group N.V. 50 118 — 168 302 78 — 380 Inventories, net 4,713 63 — 4,776 5,522 23 — 5,545 Property, plant and equipment, net 1,935 1 — 1,936 1,912 1 — 1,913 Investments in unconsolidated subsidiaries and affiliates 371 119 — 490 356 123 — 479 Equipment under operating leases 44 1,422 — 1,466 39 1,378 — 1,417 Goodwill 3,446 138 — 3,584 3,473 141 — 3,614 Other intangible assets, net 1,197 24 — 1,221 1,266 26 — 1,292 Deferred tax assets 899 134 (106) (5) 927 933 181 (135) (5) 979 Derivative assets 82 132 (18) (6) 196 48 104 (16) (6) 136 Other assets 1,180 119 (206) (3) 1,093 1,149 119 (183) (3) 1,085 Total Assets $ 16,677 $ 27,254 $ (998) $ 42,933 $ 19,157 $ 28,139 $ (1,029) $ 46,267 Liabilities and Equity Debt $ 4,499 $ 23,173 $ (790) (3) (4) $ 26,882 $ 4,433 $ 23,721 $ (828) (3) (4) $ 27,326 Financial payables from Iveco Group N.V. 4 58 — 62 6 140 — 146 Trade payables 2,123 176 (7) (3) 2,292 3,424 198 (11) (3) 3,611 Deferred tax liabilities 28 106 (106) (5) 28 35 135 (135) (5) 35 Pension, postretirement and other postemployment benefits 385 7 — 392 471 5 — 476 Derivative liability 101 63 (18) (6) 146 116 116 (16) (6) 216 Other liabilities 4,514 926 (77) (3) 5,363 5,311 1,035 (39) (3) 6,307 Total Liabilities 11,654 24,509 (998) 35,165 13,796 25,350 (1,029) 38,117 Redeemable noncontrolling interest 55 — — 55 54 — — 54 Equity 4,968 2,745 — 7,713 5,307 2,789 — 8,096 Total Liabilities and Equity $ 16,677 $ 27,254 $ (998) $ 42,933 $ 19,157 $ 28,139 $ (1,029) $ 46,267 (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) See Note 23 Immaterial Revision of Prior Period Financial Statements. (3) Eliminations of primarily receivables/payables between Industrial Activities and Financial Services. (4) Eliminations of financing receivables/payables between Industrial Activities and Financial Services. (5) Reclassification of deferred tax assets/liabilities in the same jurisdiction and reclassification needed for appropriate consolidated presentation. (6) Elimination of derivative assets/liabilities between Industrial Activities and Financial Services. 55 Cash Flow Statements Year Ended December 31, 2024 Year Ended December 31, 2023 (in millions of dollars) Industrial Activities (1) Financial Services Eliminations Consolidated Industrial Activities (1)(2) Financial Services Eliminations Consolidated Cash Flows from Operating Activities Net income (loss) $ 880 $ 379 $ — $ 1,259 $ 1,916 $ 371 $ — $ 2,287 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization expense excluding assets under operating leases 413 4 — 417 373 4 — 377 Depreciation and amortization expense of assets under operating leases 8 180 — 188 8 179 — 187 (Gain) loss from disposal of assets 11 — — 11 10 — — 10 Undistributed income (loss) of unconsolidated subsidiaries 291 (19) (283) (3) (11) (49) (18) (48) (3) (115) Other non-cash items 63 266 — 329 92 81 — 173 Changes in operating assets and liabilities: Provisions (204) — — (204) 908 3 — 911 Deferred income taxes (38) (69) — (107) (439) (96) — (535) Trade and financing receivables related to sales, net 3 1,016 (4) (4) 1,015 51 (2,325) 6 (4) (2,268) Inventories, net 472 315 — 787 (695) 436 — (259) Trade payables (1,173) (17) 4 (4) (1,186) (132) (19) (6) (4) (157) Other assets and liabilities (564) 34 — (530) 94 202 — (4) 296 Net cash provided (used) by operating activities 162 2,089 (283) 1,968 2,137 (1,182) (48) 907 Cash Flows from Investing Activities Additions to retail receivables — (8,227) — (8,227) — (8,069) — (8,069) Collections of retail receivables — 6,459 — 6,459 — 5,824 — 5,824 Proceeds from sale of assets, excluding assets under operating leases 1 — — 1 16 — — 16 Expenditures for property, plant and equipment and intangible assets, excluding assets under operating leases (533) (3) — (536) (637) (7) — (644) Expenditures for assets under operating leases (31) (619) — (650) (30) (521) — (551) Other 586 (431) 26 (5) 181 191 (677) 211 (5) (275) Net cash provided (used) by investing activities 23 (2,821) 26 (2,772) (460) (3,450) 211 (3,699) Cash Flows from Financing Activities Proceeds from long-term debt 1,874 13,237 — 15,111 — 9,941 — 9,941 Payments of long-term debt (1,843) (11,610) — (13,453) (1,002) (7,222) — (8,224) Net increase (decrease) in other financial liabilities 106 (522) — (416) 92 1,979 — 2,071 Dividends paid (607) (283) 283 (3) (607) (538) (48) 48 (3) (538) Purchase of treasury stock and other (702) 26 (26) (5) (702) (652) 211 (211) (5) (652) Net cash provided (used) by financing activities (1,172) 848 257 (67) (2,100) 4,861 (163) 2,598 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash (220) (88) — (308) 91 19 — 110 Net increase (decrease) in cash, cash equivalents and restricted cash (1,207) 28 — (1,179) (332) 248 — (84) Cash, cash equivalents and restricted cash, beginning of year 3,628 1,417 — 5,045 3,960 1,169 — 5,129 Cash, cash equivalents and restricted cash, end of year $ 2,421 $ 1,445 $ — $ 3,866 $ 3,628 $ 1,417 $ — $ 5,045 (1) Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture, Construction, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services. (2) See Note 23 Immaterial Revision of Prior Period Financial Statements. (3) This item includes the elimination of dividends from Financial Services to Industrial Activities, which are included in Industrial Activities net cash provided by operating activities. (4) This item includes the elimination of certain minor activities between Industrial Activities and Financial Services. (5) This item includes the elimination of capital investment between Industrial Activities and Financial Services. Liquidity and Capital Resources Our operations are capital intensive and subject to seasonal variations in financing requirements for dealer receivables and company inventories. Whenever necessary, funds from operating activities are supplemented with external sources. CNH, focusing on cash preservation and leveraging its good access to funding, continues to maintain solid financial strength and liquidity. 56 Capital Resources The cash flows, funding requirements and liquidity of CNH are managed on a standard and centralized basis. This centralized system is designed to optimize the efficiency and effectiveness of our management of capital resources. Our subsidiaries participate in a company-wide cash management system, which we operate in a number of jurisdictions. Under this system, the cash balances of our subsidiaries are aggregated at the end of each business day to central pooling accounts. The centralized treasury management offers financial and systems expertise in managing these accounts, as well as providing related services and consulting to our business segments. Our policy is to keep a high degree of flexibility with our funding and investment options in order to maintain our desired level of liquidity to achieve our rating targets while improving the Company's capital structure over time. In managing our liquidity requirements, we are pursuing a financing strategy that aims at extending over time our Industrial Activities debt profile by issuing long-term bonds and retiring short-term debt through opportunistic transactions, deleveraging our Industrial Activities balance sheet by reducing debt, and diversifying funding sources. A summary of our strategy is set forth below: • Industrial Activities sells certain of its receivables to Financial Services and relies on internal cash flows including managing working capital to fund its near-term financing requirements. We will also supplement our short-term financing by drawing on existing or new facilities with banks. • To the extent funding needs of Industrial Activities are determined to be of a longer-term nature, we will access public debt markets as well as private investors and banks, as appropriate, to refinance borrowings and replenish our liquidity. • Financial Services’ funding strategy is to maintain sufficient liquidity and flexible access to a wide variety of financial instruments. While we expect securitizations and sale of receivables (factoring) to continue to represent a material portion of our capital structure and intersegment borrowings to remain a marginal source of funding, we will continue to diversify our funding sources and expand our investor base within Financial Services to support our investment grade credit ratings. These diversified funding sources include secured and unsecured facilities, a repurchase agreement, commercial paper and unsecured notes. On a global level, we continue to evaluate alternatives to ensure that Financial Services has access to capital on favorable terms to support its business, including agreements with global or regional partners, new funding arrangements or a combination of the foregoing. Our access to external sources of financing, as well as the cost of financing, is dependent on various factors, including our credit ratings. On January 4, 2022, Fitch Ratings raised its Long-Term Issuer Default Rating ("IDR") on CNH Industrial N.V. to 'BBB+' from 'BBB-'. Fitch also upgraded CNH Industrial Finance Europe S.A.'s senior unsecured rating to 'BBB+' from 'BBB-', with a stable outlook. On January 7, 2022, Fitch upgraded the Long-Term IDR and senior long-term debt ratings of CNH Industrial Capital LLC and CNH Industrial Capital Canada Ltd. to 'BBB+' from 'BBB-', with a stable outlook. Fitch also upgraded CNH Industrial Capital LLC's short-term IDR and commercial paper ratings to 'F2' from 'F3'. On November 25, 2024, Fitch rating affirmed the IDR for CNH Industrial N.V, CNH Industrial Capital LLC and CNH Industrial Capital Canada Ltd. The Outlook was changed from stable to negative. Fitch Ratings also affirmed CNH Capital LLC short-term IDR at 'F2'. On February 25, 2022, Moody's upgraded the senior unsecured ratings of CNH Industrial N.V. and its supported subsidiaries including CNH Industrial Capital LLC, CNH Industrial Finance Europe S.A., CNH Industrial Capital Australia Pty. Ltd. and CNH Industrial Capital Canada Ltd. to Baa2 from Baa3. The rating outlook is stable. On November 30, 2023, Standard & Poor's ("S&P") Global Ratings raised its long-term issuer credit ratings on CNH Industrial N.V. and its subsidiary, CNH Industrial Capital LLC, to 'BBB+' from 'BBB'. S&P Global Ratings also affirmed the 'A-2' short-term issuer credit rating. Additionally, S&P Global Ratings raised the issue-level ratings on CNH Industrial N.V. and its industrial subsidiaries' debt, as well as the issue-level ratings on CNH Industrial Capital LLC's senior unsecured debt, to 'BBB+' from 'BBB'. On February 21, 2025, S&P Global Ratings changed the outlook of CNH Industrial N.V. and CNH Industrial Capital LLC from stable to negative. Current ratings for the Company are as follows: CNH Industrial N.V. (1) CNH Industrial Capital LLC Long-Term Short-Term Outlook Senior Long-Term Short-Term Outlook S&P Global Ratings BBB+ A-2 Negative BBB+ A-2 Negative Fitch Ratings BBB+ - Negative BBB+ F2 Negative Moody’s Investors Service Baa2 - Stable Baa2 - Stable (1) Includes treasury subsidiary, CNH Industrial Finance Europe S.A. The Company's ratings are investment grade, which the Company believes allow it to access funding at competitive rates. 57 A credit rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. A deterioration in our ratings could impair our ability to obtain debt financing and would increase the cost of such financing. Ratings are influenced by a number of factors, including, among others: financial leverage on an absolute basis or relative to peers, the composition of the balance sheet and/or capital structure, material changes in earnings trends and volatility, ability to dividend monies from subsidiaries and our competitive position. Material deterioration in any one, or a combination, of these factors could result in a downgrade of our ratings, thus increasing the cost, and limiting the availability, of financing. Consolidated Debt As of December 31, 2024 and 2023, our consolidated Debt was as shown below: Consolidated Industrial Activities Financial Services (in millions of dollars) 2024 2023 2024 2023 2024 2023 Total Debt $ 26,944 $ 27,472 $ 4,503 $ 4,439 $ 23,231 $ 23,861 We believe that Net Cash (Debt), a non-GAAP financial measure as defined in the section “Non-GAAP Financial Measures”, of section "General" above, is a useful analytical metric for measuring our effective borrowing requirements. We provide a separate analysis of Net Cash (Debt) of Industrial Activities and Net Cash (Debt) of Financial Services to reflect the different cash flow management practices in the two activities. Industrial Activities reflects the consolidation of all majority-owned subsidiaries, including those performing centralized treasury activities, except for Financial Services subsidiaries. Financial Services reflects the consolidation of the Financial Services’ businesses. The calculation of Net Cash (Debt) as of December 31, 2024 and 2023 and the reconciliation of Total Debt, the U.S. GAAP financial measure that we believe to be most directly comparable, to Net Cash (Debt), are shown below: Consolidated Industrial Activities Financial Services (in millions of dollars) 2024 2023 2024 2023 2024 2023 Third party (debt) $ (26,882) $ (27,326) $ (4,043) $ (4,132) $ (22,839) $ (23,194) Intersegment notes payable — — (456) (301) (334) (527) Financial payables to Iveco Group N.V. (62) (146) (4) (6) (58) (140) Total Debt (1) (26,944) (27,472) (4,503) (4,439) (23,231) (23,861) Less: Cash and cash equivalents 3,191 4,322 2,332 3,532 859 790 Restricted cash 675 723 89 96 586 627 Intersegment notes receivables — — 334 527 456 301 Financial receivables from Iveco Group N.V. 168 380 50 302 118 78 Derivatives hedging debt (37) (41) (29) (34) (8) (7) Net Cash (Debt) (2) $ (22,947) $ (22,088) $ (1,727) $ (16) $ (21,220) $ (22,072) (1) Total (Debt) of Industrial Activities includes Intersegment notes payable to Financial Services of $456 million and $301 million at December 31, 2024 and 2023, respectively. Total (Debt) of Financial Services includes Intersegment notes payable to Industrial Activities of $334 million and $527 million at December 31, 2024 and 2023, respectively. (2) The net intersegment receivable/(payable) balance owed by Financial Services relating to Industrial Activities was $122 million and $(226) million as of December 31, 2024 and 2023, respectively. Excluding the positive effect of exchange rate differences of $1,473 million, Net Debt at December 31, 2024 increased by $2,332 million compared to December 31, 2023. This was mainly due to an increase in portfolio receivables of Financial Services of $544 million, free cash flow absorption from Industrial Activities of $401 million, and the cash out of $1,309 million related to the share buyback program and dividends paid. Cash Flow Analysis For the year ended December 31, 2024, Cash and cash equivalents and Restricted cash combined were $3,866 million, a decrease of $1,179 million from December 31, 2023, primarily due to receivable portfolio growth, investments in fixed assets, the share buyback program, and dividends paid; partially offset by operating activities cash generation and an increase in external borrowing. At December 31, 2024, Cash and cash equivalents and Restricted cash were $3,191 million ($4,322 million at December 31, 2023) and $675 million ($723 million at December 31, 2023), respectively. Undrawn medium-term unsecured committed facilities were 58 $5,493 million ($5,945 million at December 31, 2023). At December 31, 2024, the aggregate of Cash and cash equivalents, Restricted cash, undrawn committed facilities and other current financial assets, which we consider to constitute our principal liquid assets (or "available liquidity"), totaled $9,465 million ($11,224 million at December 31, 2023). At December 31, 2024, this amount also included $106 million net financial receivables from Iveco Group ($234 million net financial receivables at December 31, 2023) consisting of net financial receivables mainly towards Financial Services of Iveco Group. The following table summarizes the changes to cash flows from operating, investing, and financing activities for each of the years ended December 31, 2024, 2023 and 2022. (in millions of dollars) 2024 2023 2022 Cash flow provided (used) by: Operating activities $ 1,968 $ 907 $ 557 Investing activities (2,772) (3,699) (3,009) Financing activities (67) 2,598 1,964 Translation exchange differences (308) 110 (228) Net increase (decrease) in cash and cash equivalents $ (1,179) $ (84) $ (716) Net Cash from Operating Activities Cash provided by operating activities in 2024 totaled $1,968 million and comprised the following elements: • $1,259 million net income; • plus $605 million in non-cash charges for depreciation and amortization ($417 million excluding equipment on operating leases); • plus $329 million in Other non-cash items; • plus $86 million change in working capital; • less change in provisions of $204 million; • less deferred tax income of $107 million. In 2023, cash provided by operating activities of continuing operations during the year was $907 million primarily as a result of $2,287 million in net income, change in provisions of $911 million, $564 million in non-cash charges for depreciation, and $173 million in Other non-cash items, partially offset by change in working capital of $2,388 million and change in deferred income taxes of $535 million. In 2022, cash provided by operating activities of continuing operations during the year was $557 million primarily as a result of $2,039 million in net income, $535 million in non-cash charges for depreciation, and $196 million in Other non-cash items partially offset by an increase of working capital of $2,241 million. Net Cash from Investing Activities In 2024, cash used in investing activities was $2,772 million. Expenditures included net additions to retail receivables ($1,768 million), expenditures for assets under operating leases ($650 million), and expenditures for property, plant and equipment and intangible assets, excluding assets under operating lease ($536 million). In 2023, cash used in investing activities was $3,699 million. Expenditures included net additions to retail receivables ($2,245 million), expenditures for assets under operating leases ($551 million), and expenditures for property, plant and equipment and intangible assets, excluding assets under operating lease ($644 million). In 2022, cash used in investing activities was $3,009 million. Expenditures included net additions to retail receivables ($1,611 million), expenditures for assets under operating leases ($538 million), expenditures for property, plant, and equipment and intangible assets, excluding assets under operating lease ($461 million). 59 The following table summarizes our investments in tangible assets by segment and investments in intangible assets for each of the years ended December 31, 2024, 2023 and 2022: (in millions of dollars) 2024 2023 2022 Agriculture $ 321 $ 396 $ 282 Construction 62 79 48 Total Industrial Activities in tangible assets 383 475 330 Industrial Activities investments in intangible assets 150 162 126 Total Industrial Activities capital expenditures 533 637 456 Financial Services investments in intangible assets 3 7 5 Total Capital expenditures $ 536 $ 644 $ 461 We incurred these capital expenditures principally related to initiatives to introduce new products, enhance manufacturing efficiency and increase capacity, and for maintenance and engineering. Net Cash from Financing Activities In 2024, cash used in financing activities totaled $67 million, primarily due to the shares buyback program and dividends paid, partially offset by an increase in external borrowings. In 2023, cash provided by financing activities totaled $2,598 million, primarily due to an increase in external borrowings to support working capital requirements and an increase to the Financial Services portfolio, partially offset by dividends paid and the shares buyback program. In 2022, cash provided by financing activities totaled $1,964 million, primarily due to increase in debt, mainly due to increase in receivables portfolio of Financial Services, dividends paid and shares buyback program. Reconciliation of Free Cash Flow The non-GAAP financial measures (Net Cash (Debt) and Free Cash Flow of Industrial Activities), as defined in the section “Non-GAAP Financial Measures" above, used in this section, should neither be considered as a substitute for, nor superior to, measures of financial performance prepared in accordance with U.S. GAAP. In addition, these non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. The reconciliation of Free Cash Flow of Industrial Activities to Net cash provided (used) by Operating Activities, the U.S. GAAP financial measure that we believe to be most directly comparable, for the years ended December 31, 2024 and 2023, is shown below: (in millions of dollars) 2024 2023 Net cash provided (used) by Operating Activities $ 1,968 $ 907 Cash flows from Operating Activities of Financial Services, net of eliminations (1,806) 1,230 Change in derivatives hedging debt of Industrial Activities 5 9 Investments in operating lease assets of Industrial Activities (31) (30) Investments in property plant and equipment, and intangible assets of Industrial Activities (533) (637) Other changes (1) (4) (263) Free Cash Flow of Industrial Activities $ (401) $ 1,216 (1) This item primarily includes capital increases in intersegment investments and change in financial receivables. For the year ended December 31, 2024, the use of Free Cash Flow of Industrial Activities was $401 million primarily due to the lower adjusted EBIT results of the segments which were more than offset by working capital absorption, capital expenditures and cash interest and taxes. Industrial Activities Capital Markets At December 31, 2024, we had an aggregate amount of $9.8 billion in bonds outstanding, of which $3.8 billion was issued by Industrial Activities. 60 The capital markets debt of Industrial Activities is mainly related to notes issued under the Euro Medium Term Note Programme (and the notes issued under its predecessor, the Global Medium Term Notes Programme), and senior unsecured debt securities issued by CNH Industrial N.V. described below. Euro Medium Term Note ("EMTN") Programme . We have a medium-term note program allowing for the placement of debt securities up to a total authorized amount of €10 billion ($10 billion). In June 2024, CNH Industrial N.V. issued Euro 750 million of 3.750% notes due in 2031 with an issue price of 99.168% of their principal amount. At December 31, 2024, €3,200 million ($3,324 million) was outstanding under the program, all such debt having been issued by CNH Industrial Finance Europe S.A. (guaranteed by CNH Industrial N.V) or directly by CNH Industrial NV. CNH Industrial N.V. Senior Notes . In the United States, CNH Industrial N.V has issued notes from time to time. In 2017, CNH Industrial N.V. issued $500 million of notes at an interest rate of 3.850% due November 2027 (the “2027 Notes”) at an issue price of 99.384% of their principal amount. The 2027 Notes are referred to as the “CNH Industrial N.V. Senior Notes” The notes issued under the EMTN (and its predecessor the Global Medium Term Notes Programme) as well as the CNH Industrial N.V. Senior Notes impose covenants and other obligations on CNH Industrial N.V. as issuer and, in certain cases, as guarantor and CNH Industrial Finance Europe S.A. as issuer, including: (i) a negative pledge provision which requires that, if any security interest over assets of the issuer or the guarantor is granted in connection with debt that is, or is capable of being, listed or any guarantee is granted in connection with such debt, such security or guarantee must be equally and ratably extended to the outstanding notes; (ii) a status (or pari passu ) covenant, under which the notes rank and will rank pari passu with all other present and future outstanding unsubordinated and unsecured obligations of the issuer and/or the guarantor (subject to mandatorily preferred obligations under applicable laws); (iii) an events of default provision setting out certain customary events (such as cross defaults, insolvency related events, etc.) the occurrence of which entitles the holders of the outstanding notes to accelerate the repayment of the notes; (iv) change of control provisions which, when combined with a rating downgrade of CNH Industrial N.V., grant the note holders the right to require immediate repayment of the notes; and (v) other clauses that are generally applicable to securities of a similar type. A breach of these obligations may require the early repayment of the notes. At December 31, 2024, the Company was in compliance with such obligations and covenants. CNH intends to repay the issued bonds in cash at the due date by utilizing available liquid resources. In addition, CNH may from time to time repurchase or enforce the available call options of issued bonds. Such repurchases, if made, depend upon market conditions, the financial situation of CNH and other factors which could affect such decisions. Credit Facilities At December 31, 2024, Industrial Activities available committed unsecured facilities expiring after twelve months amounted to $4.3 billion ($5.4 billion at December 31, 2023). Euro 3.25 billion Revolving Credit Facility. On April 19, 2024, the Company terminated its five-year committed revolving credit agreement dated March 18, 2019 (as amended and restated on December 10, 2021) and entered into a new five-year credit agreement. The credit facility provides for an unsecured, committed revolving credit facility in an aggregate principal amount equal to €3.25 billion. The Company may elect to increase the total commitments under the Credit Facility up to an additional €500 million on the terms set forth in the credit agreement. The credit agreement will mature, and all outstanding loans will become due and payable, on April 19, 2029, or such later date as may be extended pursuant to the two extension options of one-year each which are available to the Company on the terms set forth in the credit agreement. The credit facility contains customary covenants (including a negative pledge, a status (or pari passu) covenant and restrictions on the incurrence of indebtedness by certain subsidiaries) and customary events of default, some of which are subject to minimum thresholds and customary mitigants (including cross acceleration provisions failure to pay amounts due or to comply with certain provisions under the credit loan agreement, the occurrence of certain bankruptcy-related events) and mandatory prepayment obligations upon a change in control of the Company. At December 31, 2024, the Company was in compliance with all covenants in the credit agreement. Financial Services Total debt of Financial Services was $23.2 billion at December 31, 2024, compared to $23.9 billion at December 31, 2023. Asset-Backed Financing At December 31, 2024, Financial Services’ committed asset-backed facilities expiring after twelve months amounted to $3.7 billion ($3.7 billion at December 31, 2023), of which $3.1 billion was utilized at December 31, 2024 ($3.7 billion at December 31, 2023). We sell certain of our financial receivables to third parties in order to improve liquidity, to take advantage of market opportunities and, in certain circumstances, to reduce credit and concentration risk in accordance with our risk management objectives. 61 The sale of financial receivables is executed primarily through ABS transactions and involves retail notes and wholesale receivables originated by our Financial Services subsidiaries from end-use customers and dealers, respectively. At December 31, 2024, our receivables from financing activities included receivables sold and financed through both ABS and factoring transactions of $13.9 billion ($14.1 billion at December 31, 2023), which do not meet derecognition requirements and therefore are recorded on our consolidated statement of financial position. These receivables are recognized as such in our financial statements even though they have been legally sold; a corresponding financial liability is recorded in the consolidated statement of financial position as debt (see "Note 4: Receivables"). Repurchase Agreement We are a party to a Global Master Repurchase Agreement which expires in September 2025. As of December 31, 2024, the Company had sold, and not yet repurchase, CAD 450.0 million ($312.8 million) of Canadian receivables under the repurchase agreement, with an obligation to repurchase such receivables in 30 days. The repurchase agreement is treated as a financing arrangement for accounting purposes. Capital Markets In February 2024, CNH Industrial Capital Argentina issued USD 53 million of 7.500% notes due in 2026, with an issue price of 100.000% of their principal amount. In March 2024, CNH Industrial Capital Canada Ltd. issued CAD 400 million of 4.800% notes due in 2027, with an issue price of 99.876% of their principal amount. In March 2024, CNH Industrial Capital LLC issued USD 600 million of 5.100% due in 2029 with an issue price of 99.157% of their principal amount. In April 2024, Banco CNH Industrial Capital S.A. issued BRL 700 million of notes in three tranches: BRL 335 million at CDI + 0.550% due 2026, BRL 245 million at CDI + 0.750% due in 2027 and BRL 120 million at CDI + 0.900% due in 2028. In May 2024, CNH Industrial Australia issued AUD 250 million of 5.400% notes due in 2027 at an issue price of 99.877% of their principal amount. In September 2024, the obligation nominal amount was increased of AUD 75 million, at an issue price of 101.561%, for a total of AUD 325 million. In May 2024, Banco CNH Industrial Capital S.A. issued BRL 50 million of notes at CDI + 0.900% due in 2028, through a private placement. In May 2024, Banco CNH Industrial Capital S.A. issued BRL 200 million of 12.290% notes due in 2028, through a private placement. In June 2024, Banco CNH Industrial Capital S.A. issued BRL 200 million of notes in two tranches: BRL 100 million at 12.350% due in 2026 and BRL 100 million at 12.850% due in 2027, through a private placement. In October 2024, CNH Industrial Capital LLC issued USD 500 million of 4.500% notes due in 2027 with an issue price of 99.809% of their principal amount. In October 2024, CNH Industrial Capital Canada Ltd. issued CAD 300 million of 4.000% notes due 2028 with an issue price of 99.964% of their principal amount. In October 2024, Banco CNH Industrial Capital S.A. issued BRL 500 million of notes in three tranches: BRL 150 million at CDI + 0.350% due in 2026, BRL 200 million at CDI + 0.500% due in 2027 and BRL 150 million at CDI + 0.700% due in 2028. In November 2024, CNH Industrial Capital Argentina issued USD 17 million of 6.000% notes due in 2026 at an issue price of 100% of their principal amount. In November 2024, CNH Industrial Capital Argentina issued USD 11 million of 7.500% notes due in 2028 at an issue price of 100% of their principal amount. Credit Facilities At December 31, 2024, Financial Services' available committed, unsecured facilities expiring after twelve months amounted to $1.2 billion ($0.5 billion at December 31, 2023). Commercial Paper Programs CNH Industrial Capital LLC outstanding commercial paper totaled $100 million as of December 31, 2024 ($351 million outstanding at December 31, 2023). Banco CNH Industrial S.A. outstanding commercial paper totaled $202 million as of December 31, 2024 ($488 million outstanding at December 31, 2023). 62 Support Agreement in the Interest of CNH Industrial Capital LLC CNH Industrial Capital LLC benefits from a support agreement issued by CNH Industrial N.V., pursuant to which CNH Industrial N.V. agrees to, among other things, (a) make cash capital contributions to CNH Industrial Capital LLC, to the extent necessary to cause its ratio of net earnings available for fixed charges to fixed charges to be not less than 1.05:1.0 for each fiscal quarter (with such ratio determined, on a consolidated basis and in accordance with U.S. GAAP, for such fiscal quarter and the immediately preceding three fiscal quarters taken as a whole), (b) generally maintain an ownership of at least 51% of the voting equity interests in CNH Industrial Capital LLC and (c) cause CNH Industrial Capital LLC to have, as of the end of any fiscal quarter, a consolidated tangible net worth of at least $50 million. The support agreement is not intended to be, and is not, a guarantee by CNH Industrial N.V. of the indebtedness or other obligations of CNH Industrial Capital LLC. The obligations of CNH Industrial N.V. to CNH Industrial Capital LLC pursuant to this support agreement are to the company only and do not run to, and are not enforceable directly by, any creditor of CNH Industrial Capital LLC, including holders of the CNH Industrial Capital LLC’s notes or the trustee under the indenture governing the notes. The support agreement may be modified, amended or terminated, at CNH Industrial N.V.’s election, upon thirty days’ prior written notice to CNH Industrial Capital LLC and the rating agencies of CNH Industrial Capital LLC, if (a) the modification, amendment or termination would not result in a downgrade of CNH Industrial Capital LLC rated indebtedness; (b) the modification, amendment or notice of termination provides that the support agreement will continue in effect with respect to the company’s rated indebtedness then outstanding; or (c) CNH Industrial Capital LLC has no long-term rated indebtedness outstanding. For more information on our outstanding indebtedness, see “Note 10: Debt” to our consolidated financial statements for the year ended December 31, 2024. Future Liquidity We have adopted formal policies and decision-making processes designed to optimize the allocation of funds, cash management processes and financial risk management. Our liquidity needs could increase in the event of an extended economic slowdown or recession that would reduce our cash flow from operations and impair the ability of our dealers and retail customers to meet their payment obligations. Any reduction of our credit ratings would increase our cost of funding and potentially limit our access to the capital markets and other sources of financing. We believe that funds available under our current liquidity facilities, those realized under existing and planned asset-backed securitization programs and issuances of debt securities and those expected from ordinary course refinancing of existing credit facilities, together with cash provided by operating activities, will allow us to satisfy our debt service requirements for the coming year. At December 31, 2024, we had available committed, unsecured facilities expiring after twelve months of $5.5 billion ($5.9 billion at December 31, 2023). Financial Services securitized debt is repaid with the cash generated by the underlying amortizing receivables. Accordingly, additional liquidity is not normally necessary for the repayment of such debt. Financial Services has traditionally relied upon the term ABS market and committed asset-backed facilities as a primary source of funding and liquidity. At December 31, 2024, Financial Services’ committed asset-backed facilities expiring after twelve months amounted to $3.7 billion ($3.7 billion at December 31, 2023), of which $3.1 billion was utilized at December 31, 2024 ($3.7 billion at December 31, 2023). If Financial Services were unable to obtain ABS funding at competitive rates and at the same time were unable to access other sources of finding at similar conditions, its ability to conduct its financial services activities would be limited. Pension and Other Post-employment Benefits Pension Plans Pension plan obligations primarily comprise the obligations of our pension plans in the United States, the U.K. and Germany. Under these plans, contributions are made to a separate fund (trust) which independently administers the plan assets. Our funding policy is to contribute amounts to the plan equal to the amounts required to satisfy the minimum funding requirements pursuant to the laws of the applicable jurisdictions. The significant pension plans that we are required to fund are in the United States and the U.K. In addition, we make discretionary contributions in addition to the funding requirements. To the extent that a fund is overfunded, we are not required to make further contributions to the plan in respect of minimum performance requirements so long as the fund is in surplus. The investment strategy for the plan assets depends on the features of the plan and on the maturity of the obligations. Typically, less mature plan benefit obligations are funded by using more equity securities as they are expected to achieve long-term growth exceeding inflation. More mature plan benefit obligations are funded using more fixed income securities as they are expected to produce current income with limited volatility. Risk management practices include the use of multiple asset classes and investment managers within each asset class for diversification purposes. Specific guidelines for each asset class and investment manager are implemented and monitored. 63 At December 31, 2024 and 2023, the difference between the present value of the pension plan obligations and the fair value of the related plan assets was a deficit of $151 million and $225 million, respectively. In 2024, we contributed $32 million to the plan assets and made direct benefit payments of $12 million for our pension plans. Our expected total contribution to pension plan assets and direct benefit payments is estimated to be $43 million for 2025. Healthcare Plans Healthcare postretirement benefit plan obligations comprise obligations for healthcare and insurance plans granted to our employees working in the United States and Canada. These plans generally cover employees retiring on or after reaching the age of 55 who have completed at least 10 years of employment. United States salaried and non-represented hourly employees and Canadian employees hired after January 1, 2001 and January 1, 2002, respectively, are not eligible for postretirement healthcare and life insurance benefits under our plans. These plans are not required to be funded. Beginning in 2007, we made contributions on a voluntary basis to a separate and independently managed fund established to finance the North America healthcare plans. At December 31, 2024 and 2023, the difference between the present value of the healthcare plan obligations and the fair value of the related plan assets was a deficit of $126 million and $121 million, respectively. In 2024, we did not contribute to the plan assets and made direct benefit payments for healthcare plans of $19 million and we expect to make direct benefit payments of $19 million in 2025. Other Postemployment Benefits Other postemployment benefits consist of benefits for Italian Employee Leaving Entitlements up to December 31, 2006, loyalty bonus in Italy and various other similar plans in France, Germany and Belgium. Until December 31, 2006, Italian companies with more than 50 employees were required to accrue for benefits paid to employees upon them leaving the company. The scheme has since changed to a defined contribution plan. The obligation on our consolidated balance sheet represents the residual reserve for years until December 31, 2006. Loyalty bonuses are accrued for employees who have reached certain service seniority and are generally settled when employees leave the company. These plans are not required to be funded and, therefore, have no plan assets. At December 31, 2024 and 2023, the present value of the obligation for other postemployment benefits amounted to $81 million and $100 million, respectively. In 2024, we made direct benefit payments of $13 million for other postemployment benefits and expect to make direct benefit payments of $6 million in 2025. For further information on pension and other postemployment benefits, see “Note 13: Employee Benefit Plans and Postretirement Benefits” to our consolidated financial statements for the year ended December 31, 2024. Off-Balance Sheet Arrangements We use certain off-balance sheet arrangements with unconsolidated third parties in the ordinary course of business, including financial guarantees. Our arrangements are described in more detail below. For additional information, see “Note 15: Commitments and Contingencies” to our consolidated financial statements for the year ended December 31, 2024. Financial Guarantees Our financial guarantees require us to make contingent payments upon the occurrence of certain events or changes in an underlying instrument that is related to an asset, a liability or the equity of the guaranteed party. These guarantees include arrangements that are direct obligations, giving the party receiving the guarantee a direct claim against us, as well as indirect obligations, under which we have agreed to provide the funds necessary for another party to satisfy an obligation. CNH provided guarantees on the debt or commitments of third parties and performance guarantees in the interest of non-consolidated affiliates totaling $54 million as of December 31, 2024. 64 Tabular Disclosure of Contractual Obligations The following table sets forth our contractual obligations and commercial commitments with definitive payment terms that will require significant cash outlays in the future, as of December 31, 2024: (in millions of dollars) Total Less than 1 Year 1-3 Years 3-5 Years After 5 Years Contractual Obligations (1) Debt obligations (2) Bonds $ 9,796 $ 1,952 $ 4,415 $ 2,598 $ 831 Borrowings from banks 3,606 2,012 597 421 576 Asset-backed financing 11,965 5,969 4,301 1,588 107 Other debt 1,515 905 468 142 — Operating lease obligations 324 86 117 63 58 Purchase obligations 76 76 — — — Total $ 27,282 $ 11,000 $ 9,898 $ 4,812 $ 1,572 (1) Reserves for uncertain tax positions are not included within this table as the timing and ultimate uncertainty of settlement with the relevant taxing authorities is not known. (2) Amounts presented exclude the related interest expense that will be paid when due. The table above does not include obligations for pensions, post-retirement benefits and health care plans. Our best estimate of expected contributions including direct benefit payment to be made by us in 2025 to pension plans, healthcare plans and other post-employment plans is $43 million, $19 million and $6 million, respectively. Potential outflows in the years after 2025 are subject to a number of uncertainties, including future asset performance and changes in assumptions, and therefore we are unable to make sufficiently reliable estimates of future contributions beyond 2025. Debt Obligations For information on our debt obligations, see “Capital Resources” above and “Note 10: Debt” to our consolidated financial statements for the year ended December 31, 2024. The amount reported as debt obligations in the table above consists of our bonds, borrowings from banks, asset-backed financing and other debt which reconciles in total to the amount in the December 31, 2024 consolidated balance sheet. Operating Lease Obligations Our operating leases consist mainly of leases for commercial and industrial properties used in carrying out our businesses. The amounts reported above under “Operating lease obligations” include the minimal rental and payment commitments due under such leases. Purchase Obligations Our purchase obligations at December 31, 2024, include commitments to purchase tangible fixed assets, largely in connection with planned capital expenditures, in an aggregate amount of approximately $76 million. Critical Accounting Estimates The financial statements included in this Annual Report and related disclosures have been prepared in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and related assumptions are based on available information at the date of preparation of the financial statements, historical experience and other relevant factors. Actual results may differ from the estimates. Particularly in light of the current economic uncertainty, developments may occur which may differ from our estimates and assumptions, and therefore might require significant adjustments to the carrying amounts of certain items, which as of the date of this Annual Report cannot be accurately estimated or predicted. The principal items affected by estimates are the allowances for credit losses receivable and inventories, long-lived assets (tangible and intangible assets), the residual values of equipment leased out under operating lease arrangements, sales allowances, product warranties, pension and other postemployment benefits, deferred tax assets and contingent liabilities. Estimates and assumptions are reviewed periodically, and the effects of any changes are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. 65 The following are the critical judgments and the key assumptions concerning the future that we have made in the process of applying our accounting policies and that may have the most significant effect on the amounts recognized in our consolidated financial statements included in this Annual Report or that represent a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Allowance for Credit Losses The allowance for credit losses is our estimate of the lifetime expected credit losses inherent in the trade receivables and financing receivables owned by us. Retail customer receivables primarily include retail notes and finance leases to end use customers and revolving charge accounts, which represent financing for customers to purchase parts, service, rentals, implements and attachments from CNH dealers. Wholesale receivables include dealer floorplan financing, and to a lesser extent, the financing of dealer operations. Typically, our receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. Retail receivables that share the same risk characteristics such as, collateralization levels, geography, product type and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as GDP and Net Farm Income. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Trade and wholesale receivables that share the same risk characteristics such as, collateralization levels, term, geography and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for trade and wholesale credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as industry sales volumes. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Retail, trade and wholesale receivables that do not have similar risk characteristics are individually reviewed based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured by considering: the probability-weighted estimates of cash flows and collateral value; the time value of money; current conditions and forecasts of future economic conditions. Expected credit losses are measured as the probability-weighted present value of all cash shortfalls (including the value of the collateral, if appropriate) over the expected life of each financial asset. Charge-offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due are deemed uncollectible. When delinquency reaches 120 days, revolving change accounts are generally deemed to be uncollectible and charged off to the allowance for credit losses. The total allowance for credit losses at December 31, 2024 and 2023 was $424 million and $363 million, respectively. Management’s ongoing evaluation of the adequacy of the allowance for credit losses takes into consideration historical loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of underlying collateral and current and future economic conditions. While management believes it has exercised prudent judgment and applied reasonable assumptions, there can be no assurance that, in the future, changes in economic conditions or other factors will not cause changes in the financial condition of our customers. If the financial condition of some of our customers deteriorates, the timing and level of payments received could be impacted and, therefore, could result in an increase in losses on the current portfolio. The assumptions used in evaluating the Company’s exposure to credit losses involve estimates and significant judgment. While the company believes its allowance is sufficient to provide for losses over the life of its existing receivable portfolio, different assumptions or changes in economic conditions would result in changes to the allowance for credit losses. Historically, changes in economic conditions have had limited impact on credit losses within the company’s wholesale receivable portfolio. Within the retail customer receivables portfolio, credit loss estimates are dependent on a number of factors, including historical portfolio performance, current delinquency levels, and estimated recoveries on defaulted accounts. A hypothetical 10% increase in the quantitative loss rates would have resulted in an approximately $24 million increase to the allowance for credit losses at December 31, 2024. 66 Allowance for Obsolete and Slow-moving Inventory Inventories are valued at the lower of cost or net realizable value, using the first-in, first-out method. Net realizable value is the estimated selling price, less reasonably predictable costs of completion or disposal and transportation. We estimate the selling price of equipment based on past experience and expected future trends in dealer inventory unit requirements, pricing and promotions, and local market and general economic conditions. Recoverability of Long-lived Assets (including Goodwill) Long-lived assets include property, plant and equipment, goodwill and other intangible assets such as patents and trademarks. We evaluate the recoverability of property, plant and equipment and finite-lived other intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. We assess the recoverability of property, plant and equipment and finite-lived other intangible assets by comparing the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the long-lived asset is not recoverable in full on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. We have identified three reporting units for the purpose of goodwill impairment testing: Agriculture, Construction, and Financial Services. Impairment testing for goodwill is done at a reporting unit level. Under the goodwill impairment test, CNH’s estimate of the fair value of the reporting unit is compared with its carrying value. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. CNH has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Goodwill and indefinite-lived other intangible assets are tested for impairment at least annually. For goodwill, in 2022, 2023, and 2024, we performed our annual impairment review as of December 31 of each year and concluded that there was no impairment. We evaluate events and changes in circumstances to determine if additional testing may be required. For all reporting units, a 10% decrease in the estimated fair value would have had no effect on the carrying value of goodwill at the annual measurement date in 2024. For indefinite-lived other intangible assets, in 2022 and 2023 our annual impairment review performed as of December 31 of each year concluded that there was no impairment in either year. In 2024, the fair value of our indefinite-lived other intangible asset was below the carrying value by $11 million and the Company recognized an impairment charge, within Research and Development expense, of $11 million for the Agriculture reporting unit. The fair value of the in-process research and development ("IPR&D") was determined using the relief from royalty method. Under the relief from royalty approach, the fair value of the indefinite-lived intangible asset is calculated based on the present value of royalties avoided. This approach is dependent on several management assumptions, including estimates of future revenues, estimated cost of completion, and the weighted average cost of capital. Residual Values of Assets Leased Out Under Operating Lease Arrangements Our Financial Services segment purchase equipment from our dealers and leases such equipment to retail customers under operating leases. Income from these operating leases is recognized over the term of the lease. Our decision on whether or not to offer lease financing to customers is based, in part, upon estimated residual values of the leased equipment, which are estimated at the lease inception date and periodically updated. Realization of the residual values, a component in the profitability of a lease transaction, is dependent on our ability to market the equipment at lease termination under the then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Although realization is not assured, management believes that the estimated residual values are realizable. Sales Allowances The company provides sales incentives and allowances to dealers. At the time a sale to a dealer is recognized, the company records an estimate of the future sales incentive costs as a reduction of revenue. These incentives may be based on a dealer’s purchase volume, or on retail sales incentive programs and financing programs that will be due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on historical data, announced and expected incentive programs, field inventory levels. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to the retail customer. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in “Net sales”. The total accruals recorded were $2,075 million, $2,433 million and $1,556 million in “Other liabilities” on the Consolidated Balance Sheets at December 31, 2024, 2023 and 2022, respectively. The decrease in 2024 was due to dealer destocking, while the increase in 2023 was due to targeted initiatives to drive higher retail demand. 67 Product Warranties For most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period of time. At the time a sale is recognized, the company records the estimated future warranty costs. The company determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold to end-users and is still under warranty based on dealer inventories and retail sales. Variances in claims experience and the type of warranty programs affect these estimates, which are reviewed quarterly. The product warranty accruals at December 31, 2024, 2023 and 2022 were $633 million, $610 million and $544 million, respectively. Estimates used to determine the product warranty accruals are based on historical claims rate leveraging the last rolling 12 months and consideration of current quality developments. Pension and Other Postemployment Benefits As more fully described in “Note 13: Employee Benefit Plans and Postretirement Benefits” to our consolidated financial statements for the year ended December 31, 2024, we sponsor pension, healthcare and other postemployment plans in various countries. We actuarially determine the costs and obligations relating to such plans using several statistical and judgmental factors. These assumptions include discount rates, rates for expected returns on plan assets, rates for compensation increases, mortality rates, retirement rates, and healthcare cost trend rates, as determined by us within certain guidelines. To the extent actual experiences differ from our assumptions or our assumptions change, we may experience gains and losses that we have not yet recognized in our consolidated statements of operations but would be recognized in equity. For our pension and postemployment benefit plans, we recognize net gain or loss as a component of defined benefit plan cost for the year if, as of the beginning of the year, such unrecognized net gain or loss exceeds 10% of the greater of (1) the projected benefit obligation or (2) the fair market value of the plan assets at year end. In such case, the amount of amortization we recognize is the resulting excess divided by the average remaining service period of active employees, and by the average life expectancy for inactive employees expected to receive benefits under the plan. The following table includes the effects of a one percentage-point change in our primary actuarial assumptions on pension, healthcare and other postemployment benefit obligations and expense: Year End Benefit Cost Year End Benefit Obligation (in millions of dollars) One Percentage-Point Increase One Percentage-Point Decrease One Percentage-Point Increase One Percentage-Point Decrease Pension benefits: Assumed discount rate $ (3) $ 4 $ (103) $ 123 Expected long-term rate of return on plan assets $ (10) $ 10 $ — $ — Healthcare benefits: Assumed discount rate $ — $ — $ (8) $ 9 Assumed health care cost trend rate (initial and ultimate) $ — $ — $ 7 $ (6) Other benefits: Assumed discount rate $ — $ — $ (6) $ 7 Realization of Deferred Tax Assets At December 31, 2024, we had a net deferred tax asset on temporary differences, including tax attributes, of $1.6 billion, including $0.2 billion of deferred tax assets that are not recognized in the financial statements. The corresponding totals at December 31, 2023, were $1.6 billion and $0.2 billion, respectively. We have recognized deferred tax assets we believe are more likely than not to be realized. The determination to record a valuation allowance requires significant judgement and is based on an assessment of positive and negative evidence, whereby objectively verifiable evidence takes precedence over other forms of evidence. In our assessments, we consider actual and forecasted results, the potential to carryback net operating losses and credits, the future reversal of certain taxable temporary differences, and tax planning strategies. We also consider risk factors, including, but not limited to, the economic conditions in the countries and, in some cases, regions in which we have significant operations as those conditions would generally impact our ability to generate taxable income in specific jurisdictions. During the fourth quarter of 2024, we recognized a significant portion of the deferred tax assets related to our operations in China, resulting in a $29 million non-cash tax benefit, as those operations had consistently returned to pre-tax profitability, with the trend anticipated to continue for the foreseeable future. During this same period, we also recorded a valuation allowance on deferred tax assets generated by our financial services business in Argentina, resulting in a $35 million non-cash increase to the Company’s tax 68 expense, as those operations generated statutory tax losses attributable to Argentina’s hyperinflationary economy that we do not anticipate utilizing in the foreseeable future. During the fourth quarter of 2023, we recognized a significant portion of the deferred tax assets related to our operations in the U.K., resulting in a $99 million non-cash tax benefit, as those operations had consistently returned to pre-tax profitability, with that trend anticipated to continue for the foreseeable future. During the fourth quarter of 2022, we recognized substantially all the deferred tax assets related to our agricultural and construction equipment operations in Italy, resulting in a $55 million non-cash tax benefit, as those operations had consistently returned to pre-tax profitability, with that trend anticipated to continue for the foreseeable future. Contingent Liabilities We are the subject of legal and indirect tax proceedings covering a range of matters, which are pending in various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such matters. The cases and claims against us often raise difficult and complex factual and legal issues, which are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. In the normal course of business, we consult with legal counsel and other experts on matters related to litigation, taxes and other similar contingent liabilities. We accrue a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated. In the event an adverse outcome is probable, but an estimate is not determinable or is possible, the matter is disclosed. S ee “Note 15: Commitments and Contingencies” to the consolidated financial statements for the year ended December 31, 2024 for additional information. Cautionary Note on Forward-Looking Statements This Annual Report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact contained in this filing including 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 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, 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: economic conditions in each of our markets, including the significant uncertainty caused by geopolitical events; production and supply chain disruptions, including industry capacity constraints, material availability, and global logistics delays and constraints; the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products, 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, commerce and infrastructure development; government policies on international trade and investment, including sanctions and actions after recent U.S. elections in respect to global trade, tariffs, trade agreements, and the uncertainty of our ability to sell products internationally based on these actions and policies; 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; labor relations; interest rates and currency exchange rates; inflation and deflation; energy prices; prices for agricultural commodities and material price increases; 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 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 pandemics (such as the COVID-19 pandemic), terrorist attacks in Europe and elsewhere; the remediation of a material weakness; our ability to realize the anticipated benefits from our business initiatives as part of our strategic plan, including targeted restructuring actions to optimize our cost structure and improve the efficiency of our operations; our failure to realize, or a delay in realizing, all of the anticipated benefits 69 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 filing, 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’s control. CNH expressly disclaims any intention or obligation to provide, update or revise any forward-looking statements in this document 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, including factors that potentially could materially affect its financial results, is included in the Company’s reports and filings with the U.S. Securities and Exchange Commission (“SEC”). All future written and oral forward-looking statements by CNH or persons acting on the behalf of CNH are expressly qualified in their entirety by the cautionary statements contained herein or referred to above. 70 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of CNH Industrial N.V. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of CNH Industrial N.V. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, cash flows, and changes in equity, for each of the two years in the period ended December 31, 2024, and the related notes and the schedules listed in the Index at Item 16 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2025, expressed an adverse opinion on the Company's internal control over financial reporting because of a material weakness. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 71 Revenue – Timing of Revenue Recognition — Industrial Activities — Refer to Notes 2 and 3 to the financial statements Critical Audit Matter Description The Company recognizes revenue when control of the equipment, services or parts has been transferred, and the Company’s performance obligations to the customers (e.g. dealers) have been satisfied. Transfer of control occurs when title and risk of ownership have transferred to the customer, which occurs based upon the terms specified in the agreement. In most of the jurisdictions where the Company operates, and subject to specific exceptions, transfer of control, and thus revenue recognition, occurs upon shipment. We identified the timing of revenue recognition specific to Industrial Activities as a critical audit matter due to the extent of additional audit effort required to evaluate whether the timing of revenue recognition was appropriate. This required both extensive audit effort due to the volume of transactions at year-end and a high degree of auditor judgment, especially pertaining to the evaluation of management's identification of when transfer of control has occurred. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to evaluating the timing of revenue recognition for Industrial Activities included the following, among others: • We tested the operating effectiveness of certain internal controls over the timing of revenue recognition and the identification of when transfer of control occurred. • On a selection basis, we performed the following procedures: ◦ Tested the completeness and accuracy of revenue transactions recorded for a period of time prior to and subsequent to year-end. ◦ Obtained the terms in certain dealer agreements by region and evaluated the appropriateness of management’s application of their accounting policies in the determination of revenue recognition conclusions based on the dealer terms. ◦ Agreed the evidence of shipment to support the timing of revenue recognized. ◦ Confirmed certain dealer inventory balances as of year-end. /s/ Deloitte & Touche LLP Chicago, Illinois February 28, 2025 We have served as the Company's auditor since 2023. 72 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of CNH Industrial N.V. Opinion on the Financial Statements We have audited the accompanying consolidated statements of operations, comprehensive income, cash flows and changes in equity for the year ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We served as the Company’s auditor from 2014 to 2023. Chicago, Illinois February 28, 2023 73 CNH INDUSTRIAL N.V. CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2024, 2023 and 2022 (in millions of dollars and shares, except per share amounts) 2024 2023 (1) 2022 Revenues Net sales $ 17,060 $ 22,080 $ 21,541 Finance, interest and other income 2,776 2,607 2,010 Total Revenues 19,836 24,687 23,551 Costs and Expenses Cost of goods sold 13,350 16,838 16,797 Selling, general and administrative expenses 1,712 1,863 1,752 Research and development expenses 924 1,041 866 Restructuring expenses 118 67 31 Interest expense 1,611 1,345 734 Other, net 664 830 689 Total Costs and Expenses 18,379 21,984 20,869 Income (loss) of Consolidated Group before Income Taxes 1,457 2,703 2,682 Income tax expense ( 336 ) ( 594 ) ( 747 ) Equity in income of unconsolidated subsidiaries and affiliates 138 178 104 Net income (loss) 1,259 2,287 2,039 Net income attributable to noncontrolling interests 13 12 10 Net income (loss) attributable to CNH Industrial N.V. $ 1,246 $ 2,275 $ 2,029 Basic earnings (loss) per share attributable to common shareholders Basic earnings per share attributable to CNH Industrial N.V. $ 0.99 $ 1.71 $ 1.50 Diluted earnings (loss) per share attributable to common shareholders Diluted earnings per share attributable to CNH Industrial N.V. $ 0.99 $ 1.69 $ 1.49 Average shares outstanding Basic 1,254 1,332 1,351 Diluted 1,260 1,350 1,362 Cash dividends declared per common share $ 0.470 $ 0.396 $ 0.302 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements . The accompanying notes to consolidated financial statements are an integral part of these statements. 74 CNH INDUSTRIAL N.V. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended December 31, 2024, 2023 and 2022 (in millions of dollars) 2024 2023 (1) 2022 Net income (loss) $ 1,259 $ 2,287 $ 2,039 Other comprehensive income (loss), net of tax Unrealized gain (loss) on cash flow hedges 82 ( 56 ) 44 Changes in retirement plans’ funded status 3 ( 66 ) 41 Foreign currency translation ( 408 ) 40 158 Share of other comprehensive income (loss) of entities using the equity method ( 28 ) 1 ( 25 ) Other comprehensive income (loss), net of tax ( 351 ) ( 81 ) 218 Comprehensive income (loss) 908 2,206 2,257 Less: Comprehensive income attributable to noncontrolling interests 12 15 9 Comprehensive income (loss) attributable to CNH Industrial N.V. $ 896 $ 2,191 $ 2,248 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. The accompanying notes to consolidated financial statements are an integral part of these statements. 75 CNH INDUSTRIAL N.V. CONSOLIDATED BALANCE SHEETS As of December 31, 2024 and 2023 (in millions of dollars) December 31, 2024 December 31, 2023 (1) Assets Cash and cash equivalents $ 3,191 $ 4,322 Restricted cash 675 723 Trade receivables, net 125 133 Financing receivables, net 23,085 24,249 Financial receivables from Iveco Group N.V. 168 380 Inventories, net 4,776 5,545 Property, plant and equipment, net 1,936 1,913 Investments in unconsolidated subsidiaries and affiliates 490 479 Equipment under operating leases 1,466 1,417 Goodwill 3,584 3,614 Other intangible assets, net 1,221 1,292 Deferred tax assets 927 979 Derivative assets 196 136 Other assets 1,093 1,085 Total Assets $ 42,933 $ 46,267 Liabilities and Equity Debt $ 26,882 $ 27,326 Financial payables to Iveco Group N.V. 62 146 Trade payables 2,292 3,611 Deferred tax liabilities 28 35 Pension, postretirement and other postemployment benefits 392 476 Derivative liabilities 146 216 Other liabilities 5,363 6,307 Total Liabilities $ 35,165 $ 38,117 Redeemable noncontrolling interest 55 54 Common shares, € 0.01 , par value; outstanding 1,248,023,791 common shares and 370,994,305 loyalty program special voting shares in 2024; and outstanding 1,290,937,585 common shares and 371,000,610 loyalty program special voting shares in 2023 25 25 Treasury stock, at cost - 116,376,405 shares in 2024 and 73,462,611 shares in 2023 ( 1,386 ) ( 865 ) Additional paid-in capital 1,415 1,578 Retained earnings 10,309 9,654 Accumulated other comprehensive loss ( 2,712 ) ( 2,362 ) Noncontrolling interests 62 66 Total Equity $ 7,713 $ 8,096 Total Liabilities and Equity $ 42,933 $ 46,267 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. The accompanying notes to consolidated financial statements are an integral part of these statements. 76 CNH INDUSTRIAL N.V. CONSOLIDATED BALANCE SHEETS — (Continued) As of December 31, 2024 and 2023 The following table presents certain assets and liabilities of consolidated variable interest entities (“VIEs”), which are included in the consolidated balance sheets above. 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. See note 4: Receivables for additional information on the Company's VIEs. (in millions of dollars) December 31, 2024 December 31, 2023 Restricted cash $ 585 $ 626 Financing receivables, net 10,831 10,365 Total Assets $ 11,416 $ 10,991 Debt $ 10,577 $ 10,033 Total Liabilities $ 10,577 $ 10,033 The accompanying notes to consolidated financial statements are an integral part of these statements. 77 CNH INDUSTRIAL N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2024, 2023 and 2022 (in millions of dollars) 2024 2023 (1) 2022 Cash Flows from Operating Activities Net income (loss) $ 1,259 $ 2,287 $ 2,039 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense excluding depreciation and amortization of assets under operating lease 417 377 327 Depreciation and amortization expense of assets under operating lease 188 187 208 (Gain) loss from disposal of assets 11 10 ( 42 ) Undistributed income (loss) of unconsolidated subsidiaries ( 11 ) ( 115 ) ( 69 ) Other non-cash items 329 173 196 Changes in operating assets and liabilities: Provisions ( 204 ) 911 189 Deferred income taxes ( 107 ) ( 535 ) ( 50 ) Trade and financing receivables related to sales, net 1,015 ( 2,268 ) ( 2,447 ) Inventories, net 787 ( 259 ) ( 151 ) Trade payables ( 1,186 ) ( 157 ) 125 Other assets and liabilities ( 530 ) 296 232 Net cash provided (used) by operating activities 1,968 907 557 Cash Flows from Investing Activities Additions to retail receivables ( 8,227 ) ( 8,069 ) ( 5,971 ) Collections of retail receivables 6,459 5,824 4,360 Proceeds from the sale of assets, net of assets under operating leases 1 16 97 Expenditures for property, plant and equipment and intangible assets excluding assets under operating lease ( 536 ) ( 644 ) ( 461 ) Expenditures for assets under operating leases ( 650 ) ( 551 ) ( 538 ) Other, net 181 ( 275 ) ( 496 ) Net cash used in investing activities ( 2,772 ) ( 3,699 ) ( 3,009 ) Cash Flows from Financing Activities Proceeds from long-term debt 15,111 9,941 11,183 Payments of long-term debt ( 13,453 ) ( 8,224 ) ( 9,223 ) Net increase (decrease) in other financial liabilities ( 416 ) 2,071 580 Dividends paid ( 607 ) ( 538 ) ( 423 ) Purchase of treasury stock ( 702 ) ( 652 ) ( 153 ) Net cash provided (used) by financing activities ( 67 ) 2,598 1,964 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash ( 308 ) 110 ( 228 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 1,179 ) ( 84 ) ( 716 ) Cash, cash equivalents and restricted cash, beginning of year 5,045 5,129 5,845 Cash, cash equivalents and restricted cash, end of year $ 3,866 $ 5,045 $ 5,129 Components of cash, cash equivalents and restricted cash Cash and cash equivalents $ 3,191 $ 4,322 $ 4,376 Restricted cash 675 723 753 Total cash, cash equivalents and restricted cash $ 3,866 $ 5,045 $ 5,129 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. The accompanying notes to consolidated financial statements are an integral part of these statements. 78 CNH INDUSTRIAL N.V. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the Years Ended December 31, 2024, 2023 and 2022 (in millions of dollars) Common Shares Treasury Stock Additional Paid-in Capital Retained Earnings (2) Accumulated Other Comprehensive Income (Loss) (1) Noncontrolling Interests Total Redeemable Noncontrolling Interest Balance December 31, 2021 25 ( 84 ) 4,464 4,818 ( 2,445 ) 30 6,808 45 Demerger of Iveco Group — — ( 3,044 ) 1,464 ( 52 ) ( 22 ) ( 1,654 ) — Balance January 1, 2022 25 ( 84 ) 1,420 6,282 ( 2,497 ) 8 5,154 45 Net income (loss) — — — 2,029 — ( 6 ) 2,023 16 Other comprehensive income (loss), net of tax — — — — 219 ( 1 ) 218 — Dividends paid (2) — — — ( 412 ) — — ( 412 ) ( 11 ) Acquisition of treasury stock — ( 153 ) — — — — ( 153 ) — Common shares issued from treasury stock and capital increase for share-based compensation — 7 ( 7 ) — — — — — Share-based compensation expense — — 87 — — — 87 — Other changes — — 4 7 — ( 1 ) 10 ( 1 ) Balance December 31, 2022 25 ( 230 ) 1,504 7,906 ( 2,278 ) — 6,927 49 Net income (loss) — — — 2,275 — ( 4 ) 2,271 16 Other comprehensive income (loss), net of tax — — — — ( 84 ) 3 ( 81 ) — Dividends paid (2) — — — ( 527 ) — — ( 527 ) ( 11 ) Acquisition of treasury stock — ( 652 ) — — — — ( 652 ) — Common shares issued from treasury stock and capital increase for share-based compensation — 20 ( 20 ) — — — — — Share-based compensation expense — — 99 — — — 99 — Other changes — ( 3 ) ( 5 ) — — 67 59 — Balance December 31, 2023 $ 25 $ ( 865 ) $ 1,578 $ 9,654 $ ( 2,362 ) $ 66 $ 8,096 $ 54 Net income (loss) — — — 1,246 — ( 4 ) 1,242 17 Other comprehensive income (loss), net of tax — — — — ( 350 ) ( 1 ) ( 351 ) — Dividends paid (2) — — — ( 591 ) — — ( 591 ) ( 16 ) Acquisition of treasury stock — ( 702 ) — — — — ( 702 ) — Common shares issued from treasury stock and capital increase for share-based compensation — 190 ( 190 ) — — — — — Share-based compensation expense — — 19 — — — 19 — Other changes — ( 9 ) 8 — — 1 — — Balance December 31, 2024 25 ( 1,386 ) 1,415 10,309 ( 2,712 ) 62 7,713 55 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. (2) Dividends per share of common stock of $ 0.470 , $ 0.396 , and $ 0.302 were declared in the years ended December 31, 2024, 2023 and 2022, respectively. The accompanying notes to consolidated financial statements are an integral part of these statements. 79 CNH INDUSTRIAL N.V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Footnote Page Note 1 Presentation 81 Note 2 Summary of Significant Accounting Policies 81 Note 3 Revenue 90 Note 4 Receivables 90 Note 5 Inventories 96 Note 6 Property, Plant and Equipment 96 Note 7 Investments in Unconsolidated Subsidiaries and Affiliates 96 Note 8 Leases 97 Note 9 Goodwill and Other Intangibles 98 Note 10 Debt 99 Note 11 Supply Chain Finance Programs 102 Note 12 Income Taxes 103 Note 13 Employee Benefit Plans and Postretirement Benefits 105 Note 14 Other Liabilities 113 Note 15 Commitments and Contingencies 114 Note 16 Financial Instruments 116 Note 17 Shareholders' Equity 121 Note 18 Share-Based Compensation 123 Note 19 Earnings per Share 125 Note 20 Accumulated Other Comprehensive Income (Loss) 126 Note 21 Segment Reporting 128 Note 22 Related Party Information 133 Note 23 Immaterial Revision of Prior Period Financial Statements 135 80 CNH INDUSTRIAL N.V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1: Presentation CNH Industrial N.V. (“CNH” or the “Company”) is incorporated in, and under the laws of, the Netherlands. CNH is a leading company in the capital goods sector that, through its various businesses, designs, produces and sells agricultural equipment and construction equipment. In addition, CNH’s Financial Services segment offers an array of financial products and services, including retail financing for the purchase or lease of new and used CNH and other manufacturers’ products and other retail financing programs and wholesale financing to dealers. The Company has three reportable segments consisting of: (i) Agriculture, which designs, produces and sells agricultural equipment (ii) Construction, which designs, produces and sells construction equipment and (iii) Financial Services, which provides financial services to the customers of the Company’s products. The Company’s worldwide agricultural equipment and construction equipment segments as well as corporate functions are collectively referred to as “Industrial Activities”. The Company was formed as a result of the merger of Fiat Industrial S.p.A. and its subsidiary CNH Global N.V. with and into CNH, effective September 29, 2013. Immaterial Revision of Prior Period Financial Statements In connection with the preparation of our consolidated financial statements for the three months ended September 30, 2024, the Company identified an immaterial error related to the highly inflationary accounting for its unconsolidated subsidiary in Türkiye, TürkTraktör ve Ziraat Makineleri A.S. ("TürkTraktör") in the quarterly and annual periods in fiscal 2023 and first and second quarters in fiscal 2024. The functional currency of Türkiye-based TürkTraktör is the Turkish lira, and the Türkiye economy was deemed highly inflationary in 2022. CNH has determined that its translation criteria from Turkish lira into CNH's functional currency of US Dollars resulted in an overstatement of CNH's Equity in income of Unconsolidated Subsidiaries and Affiliates by $ 96 million in 2023 and by $ 67 million in the first half of 2024. In accordance with SAB No. 99, "Materiality," and SAB No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements," CNH evaluated the error and determined that the related impact was not material to its financial statements for any prior annual or interim period, but that correcting the cumulative impact of the error would be significant to its results of operations for the three months ended September 30, 2024. For comparative purposes, the Company has made these immaterial corrections to the recognition of highly inflationary impacts, as well as the related impacts to assets and retained earnings in the 2023 period presented in this Form 10-K. The impacts of the error and subsequent corrections are contained entirely within the Agriculture segment. A summary of revisions to our previously reported financial statements is presented in Note 23: Immaterial Revision of Prior Period Financial Statements. We will also correct previously reported financial information for this immaterial error in the Company's filings through the second quarter of 2025. Note 2: Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation CNH has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include CNH Industrial N.V. and its consolidated subsidiaries. The consolidated financial statements are expressed in U.S. dollars and, unless otherwise indicated, all financial data set forth in these consolidated financial statements are expressed in U.S. dollars. The consolidated financial statements include the accounts of CNH’s subsidiaries in which CNH 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 an entity or based on CNH’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. Investments in unconsolidated subsidiaries and affiliates are accounted for using the equity method when CNH does not have a controlling interest but exercises significant influence. Under this method, the investment is initially recorded at cost and is increased or decreased by CNH’s proportionate share of the entity’s respective net income or loss. Dividends received from these entities reduce the carrying value of the investments. 81 Business Combinations Business combinations are accounted for by applying the acquisition method. Under this method, the consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred and liabilities assumed by the Company and the equity interests issued in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as incurred. Effective October 12, 2023, CNH closed on its purchase of Hemisphere, a global satellite navigation technology leader, for a total consideration of $ 181 million. The acquisition of Hemisphere consolidates our guidance and connectivity capabilities to advance CNH's in-house precision, automation and autonomy technology for the agriculture and construction industries. At December 31, 2023, CNH recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date, including $ 111 million and $ 51 million in preliminary goodwill and intangible assets, respectively. The valuation of assets acquired and liabilities assumed was finalized as of December 31, 2024. Measurement period adjustments were made in 2024 to reduce goodwill by $ 3 million and increase other intangible assets by $ 6 million, offset by an increase in deferred tax liabilities and a decrease in other assets. Pro forma results of operations have not been presented because the effects of the Hemisphere acquisition were not material to the Company’s consolidated results of operations. Additionally, Hemisphere's post-acquisition results were not material. On March 15, 2023, CNH acquired a controlling interest in Bennamann (ownership interest of 50.0085 %) by purchasing an additional 34.4 % interest through cash consideration of approximately $ 51 million. At March 31, 2023, CNH recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date, including $ 118 million and $ 46 million in preliminary goodwill and intangible assets, respectively. The valuation of assets acquired and liabilities assumed was finalized as of March 31, 2024. Measurement period adjustments were made in 2023 reducing goodwill by $ 3 million, primarily offset by increases in intangible assets as a result of updates to certain of the valuations. Pro forma results of operations have not been presented because the effects of the Bennamann acquisition were not material to the Company’s consolidated results of operations. Additionally, Bennamann's post-acquisition results were not material. On March 13, 2023, CNH purchased Augmenta. The Company acquired the remaining 89.5 % of Augmenta it did not own for cash consideration of approximately $ 80 million and a deferred payment of $ 10 million. At March 31, 2023, CNH recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date, including $ 76 million and $ 35 million in preliminary goodwill and intangible assets, respectively. The valuation of assets acquired and liabilities assumed was finalized as of March 31, 2024. Measurement period adjustments were recorded during 2023 reducing goodwill by $ 14 million primarily offset by increases in intangible assets as a result of updates of certain of the valuations. Pro forma results of operations have not been presented because the effects of the Augmenta acquisition were not material to the Company’s consolidated results of operations. Additionally, Augmenta's post-acquisition results were not material. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses. Significant estimates in these consolidated financial statements include the recoverability of long-lived assets, including property, plant and equipment, goodwill and other intangible assets; residual values of equipment on operating leases; allowance for credit losses; realizability of deferred tax assets; liabilities for warranties; sales allowances; allowance for obsolete and slow-moving inventory; and assets and obligations related to employee benefits. Actual results could differ from these estimates. Revenue Recognition Revenue is recognized when control of the equipment, services or parts has been transferred and the Company’s performance obligations to the customers have been satisfied. Revenue is measured as the amount of consideration the Company is entitled to receive in exchange for transferring goods or providing services. The timing of when the Company transfers control of the goods or services to the customer may differ from the timing of the customer’s payment. Revenues are stated net of discounts, allowances, settlement discounts and rebates, as well as sales incentive program costs, which are determined on the basis of historical costs, country by country, and charged against profit for the period in which the corresponding sales are recognized. The Company also enters into contracts with multiple performance obligations. For these contracts, the Company allocates revenue from the transaction price to the distinct goods and services in the contract on a relative standalone selling price basis. To the extent the Company sells the goods or services separately in the same market, the standalone selling price is the observable price at which the Company sells the goods or services separately. For all other goods or services, the Company estimates the standalone selling price considering all information reasonably available (including market conditions, entity-specific factors and information about the customer or class of customer). 82 Sales of goods The Company has determined that the customers from the sale of equipment and parts are dealers, distributors, public entities and retail customers. The Company recognizes revenue at a point in time when control has transferred to the customer at the amount of consideration that the Company expects to be entitled. In most of the jurisdictions where the Company operates, and subject to specific exceptions, transfer of control occurs upon shipment. For certain sales transactions, the equipment may be temporarily held at our location under a bill-and-hold arrangement, whereby the Company bills a customer for equipment that will be picked up by the customer or its designated carrier at a later date. Under these arrangements, control typically transfers when the product is ready for physical transfer to the customer and cannot be directed to another customer, risk and rewards of ownership are transferred to the customer and the Company has a present right to payment. We have elected to recognize shipping and handling activities that may occur after control has transferred as fulfillment costs, which are presented in Cost of goods sold. For all sales, no uncertainty exists surrounding the purchaser’s obligation to pay for equipment and parts. Fixed payment schedules exist for all sales, but payment terms vary by geographic market and product line. See Note 4: Receivables for information about financing payment terms. The Company records an appropriate allowance for credit losses. The cost of incentives, if any, are estimated at the inception of a contract at the amount that is expected to be paid and is recognized as a reduction in revenue at the time of the sale. If an equipment contract transaction has multiple performance obligations, the cost of incentives is allocated entirely to the equipment. If the estimate of the incentive changes following the sale to the customer, the change in estimate is recognized as an adjustment to revenue in the period of the change. CNH grants certain sales incentives to support sales of its products to retail customers. At the later of the time of sale or the time an incentive is announced to dealers, CNH records the estimated impact of sales allowances in the form of dealer and customer incentives as a reduction of revenue. Subsequent adjustments to sales incentive programs related to products previously sold are recognized as an adjustment to revenues in the period the adjustment is determinable. The determination of sales allowances requires management to make estimates based upon historical data, estimated future market demand for products, field inventory levels, announced incentive programs, competitive pricing and interest rates, among other things. Sales to dealers may be accompanied by floorplan agreements under which the Company offers wholesale financing, which may include “interest-free” financing for specified period of time (which also vary by geographic market and product line; see Note 4: Receivables for further information). Concurrent with the sale of the equipment, Industrial Activities offers to the dealer wholesale financing through loans extended by Financial Services. Industrial Activities compensates Financial Services for the cost of the interest-free period. The interest-free financing represents a financing component, and therefore is recognized upfront as a reduction of net sales of Industrial Activities. The compensation received by Financial Services from Industrial Activities for the period of the interest-free financing and the interest charged to the dealer for the remaining period is recognized by Financial Services over the period of the outstanding exposure. For parts sales, when the Company provides its customers with a right to return a transferred product, revenue and corresponding cost of sales are recognized for parts that are not expected to be returned. The expected returns are estimated based on an analysis of historical experience. The portion of revenue (and corresponding cost of sales) related to the parts that are expected to be returned is recognized at the end of the return period. The amount received or receivable that is expected to be returned is recognized as a refund liability, representing the obligation to return the customer’s consideration. Furthermore, at the time of the initial sale, CNH recognizes a return asset for the right to recover the goods returned by the customer. This asset is initially measured at the former carrying amount of the inventory. At each reporting date, both the refund liability and the return asset are remeasured to record for any revisions to the expected level of returns, as well as any decreases in the value of the returned products. Rendering of services Revenues from services provided are primarily comprised of extended warranties and maintenance and repair services and are recognized over the contract period when the costs are incurred, that is when the claims are charged by the dealer. Amounts invoiced to customers for which CNH receives consideration before the performance is satisfied are recognized as contract liability. These services are either separately-priced or included in the selling price of the equipment. In the second case, revenue for the services is allocated based on the estimated stand-alone selling price. In the event that the costs expected to be incurred to satisfy the remaining performance obligations exceed the transaction price, an estimated contract loss is recognized. 83 Finance and interest income Finance and interest income on receivables is recorded using the effective yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the effective yield method. Recognition of income on loans is suspended when management determines that collection of future income is not probable or when an account becomes 90 days past due, whichever occurs earlier. Income accrual is resumed when and if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at that time. The Company applies cash received on nonaccrual financing receivables to first reduce any unrecognized interest and then the recorded investment and any other fees. Rents and other income on operating leases Income from operating leases is recognized over the term of the lease on a straight-line basis. Sales Allowances CNH grants certain sales incentives to support sales of its products to retail customers. The cost for such incentive programs is recorded as a deduction in arriving at the net sales amount at the time of the sale of the product to the dealer. The cost for new programs is accrued at the inception of the program. The amounts of incentives to be paid are estimated based upon historical data, estimated future market demand for products, field inventory levels, announced incentive programs, competitive pricing and interest rates, among other things. Warranty Costs At the time a sale of equipment or parts is recognized, CNH records the estimated future base warranty costs for the product. CNH determines its total warranty liability by applying historical claims rate experience, while considering specific contractual terms, to equipment that has been sold and is still under warranty. Quality campaigns are formal post-production modification programs approved by management. The liabilities for such programs are recognized when approved, based on an estimate of the total cost of the program. Warranty liabilities include estimated costs for parts owned by dealers that are utilized for warranty repairs, including parts sold by CNH to dealers prior to their utilization in warranty repairs. Advertising CNH expenses advertising costs as incurred. Advertising expenses totaled $ 120 million , $ 148 million and $ 152 million for the years ended December 31, 2024, 2023 and 2022, respectively. Research and Development Research and development costs are expensed as incurred. Borrowing Costs Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalized and amortized over the useful life of the class of assets to which they refer. All other borrowing costs are expensed when incurred. Government Grants Government grants are recognized in the financial statements when there is reasonable assurance that the Company will comply with the conditions for receiving such grants and that the grants themselves will be received. Government grants are recognized as income over the periods necessary to match the related costs which they are intended to offset. The benefit of a government loan at a below-market rate of interest is treated as a government grant. The benefit of the below-market rate of interest is measured as the difference between the initial carrying amount of the loan (fair value plus transaction costs) and the proceeds received and is accounted for in accordance with the policies already used for the recognition of government grants. Foreign Currency Certain of CNH’s non-U.S. subsidiaries and affiliates maintain their books and accounting records using local currency as the functional currency. Assets and liabilities of these non-U.S. subsidiaries are translated into U.S. dollars at period-end exchange rates, and net exchange gains or losses resulting from such translation are included in “Accumulated other comprehensive income (loss)” in the accompanying consolidated balance sheets. Income and expense accounts of these non-U.S. subsidiaries are translated at the average exchange rates for the period. Gains and losses from foreign currency transactions are included in net income in the period 84 during which they arise. Net foreign currency transaction gains and losses are reflected in “Other, net” in the accompanying consolidated statement of operations and also include the cost of hedging instruments. For the years ended December 31, 2024, and 2023 the Company recorded a net gain on foreign currency transactions of $ 17 million and $ 10 million, respectively. For the year ended December 31, 2022, the Company recorded a net loss on foreign currency transactions of $ 185 million. As described in Note 16: Financial Instruments, the Company uses hedging instruments to mitigate foreign currency risk. Net of gains realized on foreign currency hedging instruments, the Company recorded losses of $ 28 million, $ 119 million and $ 80 million for the years ended December 31, 2024, 2023 and 2022, respectively. Cash and Cash Equivalents Cash equivalents are highly liquid investments with an original maturity of three months or less. The carrying value of cash equivalents approximates fair value because of the short maturity of these investments. Restricted Cash Restricted cash includes principal and interest payments from retail notes and wholesale receivables owned by the consolidated VIEs that are payable to the VIEs’ investors, and cash pledged as a credit enhancement to the same investors. These amounts are held by depository banks in order to comply with contractual agreements. Restricted cash equivalents also include balances held under escrow exclusively for the repayment of the pension obligations relating to U.K. Pension plans. Cash Flow Information All cash flows from the changes in trade accounts and notes receivable are classified as operating activities in the consolidated statements of cash flows as these receivables arise from sales to CNH’s customers. Cash flows from financing receivables that are related to sales to CNH’s dealers are also included in operating activities. CNH’s financing of receivables related to equipment sold by dealers is included in investing activities. CNH paid interest of $ 1,598 million, $ 1,091 million and $ 718 million for the years ended December 31, 2024, 2023 and 2022, respectively. CNH paid taxes of $ 769 million, $ 802 million and $ 717 million in 2024, 2023 and 2022, respectively. In 2024, Other non-cash items of $ 329 million primarily included amortization of debt issuance costs and discounts of $ 71 million and writedowns of financial assets of $ 204 million. In 2023, Other non-cash items of $ 173 million primarily included share-based payments of $ 99 million and writedowns of financial assets of $ 80 million. In 2022, Other non-cash items of $ 196 million primarily included share-based payments of $ 87 million and writedowns of financial assets of $ 77 million. In 2024, Investing Activities - Other primarily consisted of change in related party receivable/payable with Iveco Group of $ 151 million. In 2023, Investing Activities - Other included cash paid for business acquisitions of $ 312 million. In 2022, Investing Activities - Other primarily consisted of change in related party receivable/payable with Iveco Group less proceeds from the sale of the Raven EFD and Aerostar divisions and sale of certain real estate. Receivables Receivables are recorded at amortized cost, net of allowances for credit losses and deferred fees and costs. Periodically, the Company sells or transfers retail notes and wholesale receivables to funding facilities or in securitization transactions. In accordance with the accounting guidance regarding transfers of financial assets and the consolidation of VIEs, the majority of the retail notes and wholesale receivables sold in securitizations do not qualify as sales and are recorded as secured borrowings with no gains or losses recognized at the time of securitization. Receivables associated with these securitization transactions and receivables that the Company has the ability and intent to hold for the foreseeable future are classified as held for investment. The substantial majority of the Company’s receivables, which include unrestricted receivables and restricted receivables for securitization investors, are classified as held for investment. Allowance for Credit Losses The allowance for credit losses is the Company’s estimate of the lifetime expected credit losses inherent in the trade receivables and financing receivables owned by the Company. Retail receivables primarily include retail notes and finance leases to end use customers and revolving charge accounts, which represent financing for customers to purchase parts, service, rentals, implements and attachments from CNH dealers. Wholesale receivables include dealer floorplan financing, and to a lesser extent, the financing of 85 dealer operations. Typically, our receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. Retail customer receivables that share the same risk characteristics such as, collateralization levels, geography, product type and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as GDP and Net Farm Income. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Trade and wholesale receivables that share the same risk characteristics such as, collateralization levels, term, geography and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for trade and wholesale credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as industry sales volumes. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Retail, trade and wholesale receivables that do not have similar risk characteristics are individually reviewed based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured by considering: the probability-weighted estimates of cash flows and collateral value; the time value of money; current conditions and forecasts of future economic conditions. Expected credit losses are measured as the probability-weighted present value of all cash shortfalls (including the value of the collateral, if appropriate) over the expected life of each financial asset. Charge-offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due are deemed uncollectible. Revolving charge accounts are generally deemed to be uncollectible and charged off to the allowance for credit losses when delinquency reaches 120 days. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. The cost of finished goods and work-in-progress includes the cost of raw materials, other direct costs and production overheads. Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred. Assets held under finance leases, for which the Company assumes substantially all the risks and rewards of ownership, are recognized as assets of the Company at the lower of fair value or present value of the minimum lease payments. The corresponding liability to the lessor is included in the financial statements as debt. Depreciation is recorded on a straight-line basis over the estimated useful lives of the respective assets as follows: Category Lives Buildings and improvements 10 - 40 years Plant, machinery and equipment 5 - 25 years Other equipment 3 - 10 years Impairment of Long-Lived Assets CNH evaluates the recoverability of the carrying amount of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, CNH compares the carrying amount of an asset or asset group to future undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. 86 Lessee Arrangements The Company leases certain buildings, plant and machinery, vehicles, and IT equipment for its own use. A lease is a contract that conveys the right to control the use of an identified asset (the leased asset) for a period of time in exchange for consideration. The lease term determined by the Company comprises the non-cancellable period of lease contract together with both periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. For real estate leases, this assessment is based on an analysis by management of all relevant facts and circumstances including the leased asset’s purpose, the economic and practical potential for replacing and any plans that the Company has in place for the future use of the asset. For lease agreements, we combine lease and non-lease components. For leases with terms not exceeding twelve months (short-term leases), the Company recognizes the lease payments associated with those leases on a straight-line basis over the lease term as operating expense in the income statement. For all other leases, the right-of-use asset includes the amount of lease liability recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Correspondingly, the Company recognizes a lease liability, measured at the present value of lease payments to be made over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. The incremental borrowing rate is determined considering macro-economic factors such as the specific interest rate curve based on the relevant currency and term, as well as specific factors contributing to CNH’s credit spread. The Company primarily uses the incremental borrowing rate as the discount rate for its lease liabilities. For finance leases, the right-of-use asset is classified within Property, plant and equipment, net and the lease liability, within Debt. Assets held under finance leases, which the Company assumes substantially all the risks and rewards of ownership, are recognized as assets of the Company at the lower of fair value or present value of the minimum lease payments. In case of operating leases, the right-of-use asset is classified within Other assets and the lease liability, within Other liabilities. After the commencement date, the Company recognizes in profit or loss a single lease cost, calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis. In particular, after lease commencement, the lease liability is measured at the present value of any remaining lease payments, discounted by using the rate determined at lease commencement, consistently with the model used to calculate the liability related to the finance lease. Correspondingly, the right-of-use asset is measured as the lease liability adjusted by accrued or prepaid rents (i.e., the aggregate difference between the cash payment and straight-line lease cost), remaining unamortized initial direct costs and lease incentives, and any impairments of the right-of-use asset. Lessor Arrangements Financial Services purchases leases and equipment from CNH dealers and other independent third parties that have leased equipment to retail customers under operating leases. Financial Services’ investment in operating leases is based on the purchase price paid for the equipment. Income from these operating leases is recognized over the term of the lease. The equipment is depreciated on a straight-line basis over the term of the lease to the estimated residual value at lease termination. Residual values are estimated at the inception of the lease and are reviewed quarterly. Realization of the residual values is dependent on Financial Services’ future ability to re-market the equipment under then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Management believes that the estimated residual values are realizable. Expenditures for maintenance and repairs of the applicable equipment are the responsibility of the lessee. Financial Services evaluates the carrying amount of equipment on operating leases for potential impairment when it determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability identifies a possible impairment, the asset’s fair value is measured in accordance with the fair value measurement framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value. Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded in inventory at the lower of net book value or estimated fair value of the equipment, less cost to sell, and is not depreciated. Matured operating lease inventory is reported in "Inventory." Goodwill and Other Intangible Assets Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired. Other indefinite-lived assets primarily consist of in-process research and development (“IPR&D”), software in progress and acquired trademarks which have no legal, regulatory, contractual, competitive, economic, or other factor that limits their useful life. Goodwill and indefinite-lived intangible assets are not amortized and are reviewed for impairment at least annually. At December 31, 2024 and 2023, the Company performed its annual goodwill impairment review and determined there was no impairment to goodwill. At December 31, 2024 and 87 2023, the Company performed its annual indefinite-lived intangible assets impairment review and recorded an impairment charge on its autonomy IPR&D of $ 11 million in 2024 and no impairment in 2023. Definite-lived intangible assets consist primarily of acquired dealer networks, product drawings, patents, and capitalized software. Software costs capitalized by CNH primarily relate to costs incurred in the production of software to be embedded in our products. Capitalized software costs are included in Other intangible assets, net on our Consolidate Balance Sheets. Capitalization of software costs begins when technological feasibility has been established and ends upon reaching commercialization. Amortization of definite-lived intangible assets occurs on a straight-line basis over the useful life of the asset which is primarily 2 – 5 years for capitalized software and 5 - 25 years for other definite lived intangible assets. As stated above, the Company evaluates the recoverability of the carrying amount of long-lived assets, which include definite-lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. If circumstances require a long-lived asset to be tested for possible impairment, the carrying amount of an asset or asset group is compared to future undiscounted net cash flows expected to be generated by the asset or asset group. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Reference is made to “Note 9: Goodwill and Other Intangibles” for further information regarding goodwill and other intangible assets. Income Taxes The provision for income taxes is determined using the asset and liability method. CNH recognizes a current tax liability or asset for the estimated taxes payable or refundable on tax returns for the current year and tax contingencies estimated to be settled with taxing authorities within one year. A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and tax attributes. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on available evidence. Retirement and Post-employment Benefits CNH sponsors numerous defined benefit and defined contribution pension plans, the assets of which are held in separate trustee-administered funds. The pension plans are funded by payments from CNH. The cost of providing defined benefit pension and other postretirement benefits is calculated based upon actuarial valuations. The liability for termination indemnities is accrued in accordance with labor legislation in each country where such benefits are required. CNH contributions to defined contribution plans are charged to the income statement during the period of the employee’s service. Derivatives CNH’s policy is to enter into derivative transactions to manage exposures that arise in the normal course of business and not for trading or speculative purposes. CNH records derivative financial instruments in the consolidated balance sheets as either an asset or a liability measured at fair value. The fair value of CNH’s foreign exchange derivatives is based on quoted market exchange rates, adjusted for the respective interest rate differentials (premiums or discounts). The fair value of CNH’s interest rate derivatives is based on discounting expected cash flows, using market interest rates, over the remaining term of the instrument. Changes in the fair value of derivative financial instruments are recognized in current income unless specific hedge accounting criteria are met. For derivative financial instruments designated to hedge exposure to changes in the fair value of a recognized asset or liability, the gain or loss is recognized in income in the period of change together with the offsetting loss or gain on the related hedged item. For derivative financial instruments designated to hedge exposure to variable cash flows of a forecasted transaction, the derivative financial instrument’s gain or loss is initially reported in other comprehensive income (loss) and is subsequently reclassified into income when the forecasted transaction affects income. For derivative financial instruments that are not designated as hedges but held as economic hedges, the gain or loss is recognized immediately in income. For derivative financial instruments designated as hedges, CNH formally documents the hedging relationship to the hedged item and its risk management strategy. This includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities contained in the consolidated balance sheets and linking cash flow hedges to specific forecasted transactions or variability of cash flow. CNH assesses the effectiveness of its hedging instruments both at inception and on an ongoing basis. If a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable of occurring, the hedge accounting described above is discontinued and the derivative is marked to fair value and recorded in income through the remainder of its term. Reference is made to “Note 16: Financial Instruments,” for further information regarding CNH’s use of derivative financial instruments. 88 Share-Based Compensation Plans CNH measures all share-based compensation as an expense based on the fair value of each award on the grant date. CNH recognizes share-based compensation costs on a straight-line basis over the requisite service period for each separately vesting portion of an award. Earnings per Share Basic earnings per share is based on the weighted average number of shares outstanding during each period. Diluted earnings per share is based on the weighted average number of shares and dilutive share equivalents outstanding during each period. Unvested performance-based awards are considered outstanding and included in the computation of diluted earnings per share based on the number of shares that would vest if the end of the reporting period were the end of the contingency period. New Accounting Pronouncements Adopted in 2024 Improvements to reportable segment disclosures In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures ("ASU 2023-07"), to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 in the fourth quarter of 2024 with updates to related segment disclosures. Leases between entities under common control In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements ("ASU 2023-01"). ASU 2023-01 requires that leasehold improvements associated with common control leases be amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset. Additionally, the leasehold improvements are subject to the impairment guidance in Topic 360: Property, Plant and Equipment . The adoption did not have a material impact on our consolidated financial statements. Not Yet Adopted Expense Disaggregation Disclosures In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) to improve the disclosures about a public business entity’s expense and provide more detailed information about the types of expenses included in certain expense captions in the consolidated financial statements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted and the amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the impact this guidance will have on the disclosures in the consolidated financial statements . Disclosure improvements In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , to amend certain disclosure and presentation requirements for a variety of topics within the Accounting Standards Codification (“ASC”). These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. The Company does not anticipate that the ASU will have a significant effect on its financial statements and related disclosures. Improvements to income tax disclosures In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact this guidance will have on its income tax disclosures. 89 Note 3: Revenue The following table summarize revenues for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (in millions of dollars) 2024 2023 2022 Agriculture $ 14,007 $ 18,148 $ 17,969 Construction 3,053 3,932 3,572 Total Industrial Activities 17,060 22,080 21,541 Financial Services 2,774 2,573 1,996 Eliminations and other 2 34 14 Total Revenues $ 19,836 $ 24,687 $ 23,551 The following table disaggregates revenues by major source for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (in millions of dollars) 2024 2023 2022 Revenues from: Sales of goods $ 17,009 $ 22,036 $ 21,506 Rendering of services and other revenues 51 44 35 Revenues from sales of goods and services 17,060 22,080 21,541 Finance and interest income 2,170 1,882 1,169 Rents and other income on operating lease 606 725 841 Finance, interest and other income 2,776 2,607 2,010 Total Revenues $ 19,836 $ 24,687 $ 23,551 Contract liabilities recorded in "Other liabilities" were $ 72 million, $ 50 million and $ 33 million at December 31, 2024, 2023 and 2022, respectively. Contract liabilities primarily relate to extended warranties. During the year ended December 31, 2024, 2023 and 2022, revenues included $ 18 million, $ 11 million and $ 6 million, respectively, relating to contract liabilities outstanding at the beginning of each period. As of December 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 72 million (approximately $ 48 million at December 31, 2023). CNH expects to recognize revenue on approximately 30 % and 90 % of the remaining performance obligations over the next 12 and 36 months, respectively (approximately 32 % and 95 % as of December 31, 2023, respectively). Note 4: Receivables Trade Receivables, net As of December 31, 2024 and 2023, the Company had trade receivables of $ 125 million and $ 133 million, respectively. Trade receivables are shown net of allowances for credit losses of $ 21 million and $ 24 million at December 31, 2024 and 2023 respectively. Trade accounts have significant concentrations of credit risk in the Agriculture and Construction segments. There is not a disproportionate concentration of credit risk in any geographic region. The Industrial Activities businesses sell a significant portion of their trade receivables to Financial Services and provide compensation to Financial Services at approximate market interest rates. 90 Financing Receivables, net A summary of financing receivables included in the consolidated balance sheets as of December 31, 2024 and 2023 is as follows: (in millions of dollars) 2024 2023 Retail $ 14,297 $ 13,868 Wholesale 8,749 10,334 Other 39 47 Total $ 23,085 $ 24,249 CNH provides and administers retail note and lease financing, as well as revolving charge account financing, to end use customers for the purchase of new and used equipment and components sold by its dealer network. The terms of retail notes and finance leases generally range from two to seven years , and interest rates vary depending on prevailing market interest rates and certain incentive programs offered on behalf of and sustained by Industrial Activities. Revolving charge accounts are generally accompanied by higher interest rates than the Company’s other retail financing products, require minimum monthly payments, and do not have pre-determined maturity dates. Wholesale receivables arise primarily from dealer floorplan financing, and to a lesser extent, from the financing of dealer operations. Under the standard terms of the wholesale receivable agreements, these receivables typically have “interest-free” periods of up to twelve months and stated original maturities of up to twenty-four months , with repayment accelerated upon the sale by the dealer of the underlying equipment. For the “interest-free” period, Financial Services is compensated by Industrial Activities based on market interest rates. After the expiration of any “interest-free” period, interest is charged to dealers on outstanding balances until CNH receives payment in full. The “interest-free” periods are determined based on the type of equipment sold and the time of year of the sale. The Company evaluates and assesses dealers on an ongoing basis as to their creditworthiness. CNH may be obligated to repurchase the dealer’s equipment upon cancellation or termination of the dealer’s contract for such causes as change in ownership, closeout of the business, or default. There were no significant losses in 2024, 2023 or 2022 relating to the termination of dealer contracts. Maturities of financing receivables as of December 31, 2024 are as follows: (in millions of dollars) Amount 2025 $ 13,438 2026 3,535 2027 2,731 2028 1,880 2029 1,093 2030 and thereafter 408 Total $ 23,085 It has been the Company’s experience that substantial portions of retail receivables, which include retail notes and finance leases, are repaid before their contractual maturity dates. As a result, the above table should not be regarded as a forecast of future cash collections. Financing receivables has significant concentrations of credit risk in the agriculture and construction business sectors. On a geographic basis, there is not a disproportionate concentration of credit risk in any area. The Company typically retains, as collateral, a security interest in the equipment associated with retail and wholesale receivables, while revolving charge accounts are generally not related to or secured by an identified piece of equipment. Transfers of Financial Assets As part of its overall funding strategy, the Company periodically transfers certain receivables into bankruptcy-remote special purpose entities ("SPEs") as part of its asset backed securitization ("ABS") programs or into factoring transactions. SPEs utilized in the securitization programs differ from other entities included in the Company's consolidated financial statements because the assets they hold are legally isolated from the Company's assets. Upon transfer of the receivables to the SPEs, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the SPEs' creditors. The SPEs are consolidated since the Company has both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. Therefore, the SPEs do not meet the accounting criteria for deconsolidation. As a result, they are accounted for as a secured borrowing. 91 Certain securitizations are also VIEs and consequently, the VIEs are consolidated since the Company has both the power to direct the activities that most significantly impact the VIEs' economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. The Company may retain all or a portion of the subordinated interests in the SPEs. No recourse provisions exist that allow holders of the asset-backed securities issued by the trusts to put those securities back to the Company, although the Company provides customary representations and warranties that could give rise to an obligation to repurchase from the trusts any receivable for which there is a breach of the representations and warranties. Moreover, the Company does not guarantee any security issued by the trusts. The trusts have a limited life and generally terminate upon final distribution of amounts owed to investors or upon exercise of a cleanup-call option by the Company, in its role as servicer. Factoring transactions may be either with recourse or without recourse; certain without recourse transfers include deferred payment clauses (for example, when the payment by the factor of a minor part of the purchase price is dependent on the total amount collected from the receivables), requiring first loss cover, meaning that the transferor takes priority participation in the losses, or requires a significant exposure to the cash flows arising from the transferred receivables to be retained. These types of transactions do not qualify for the derecognition of the assets since the risks and rewards connected with collection are not substantially transferred, and accordingly the Company continues to recognize the receivables transferred by this means in its balance sheet and a financial liability of the same amount under asset-backed financing. The secured borrowings related to the transferred receivables are obligations that are payable as the receivables are collected. At December 31, 2024 and 2023, the carrying amount of such restricted receivables included in financing receivables are the following: (in millions of dollars) 2024 2023 Retail $ 8,692 $ 7,707 Wholesale 5,246 6,381 Total $ 13,938 $ 14,088 Allowance for Credit Losses CNH's allowance for credit losses is segregated into two portfolio products: retail and wholesale. A portfolio product is the level at which CNH develops a systematic methodology for determining its allowance for credit losses. Further, the class of receivables by which CNH evaluates its portfolio products is by geographic region. Typically, CNH's receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. The classes align with management reporting. Allowance for credit losses activity for the year ended December 31, 2024, is as follows: (in millions of dollars) Retail Wholesale Opening balance $ 310 $ 53 Provision 201 3 Charge-offs ( 89 ) ( 7 ) Recoveries 6 3 Foreign currency translation and other ( 52 ) ( 4 ) Ending balance $ 376 $ 48 For the period ended on December 31, 2024, the allowance for credit losses incl uded an increase in retail reserves, primarily driven by specific reserve needs in South America. This increase was largely due to Brazilian market conditions, including current crop prices, flooding, and drought events. The provision for credit losses is included in selling, general and administrative expenses. Allowance for credit losses activity for the year ended December 31, 2023, is as follows: (in millions of dollars) Retail Wholesale Opening Balance, as recast $ 270 $ 64 Provision 86 ( 6 ) Charge-offs ( 42 ) ( 5 ) Recoveries 4 — Foreign currency translation and other ( 8 ) — Ending balance $ 310 $ 53 92 At December 31, 2023, the allowance for credit losses included an increase in reserves due to reserve needs primarily in South America, partially offset by a decrease in reserves of $ 15 million due to the sale of CNH Capital Russia. The provision for credit losses is included in selling, general and administrative expenses. Allowance for credit losses activity for the year ended December 31, 2022, is as follows: (in millions of dollars) Retail Wholesale Opening balance $ 220 $ 65 Provision 59 7 Charge-offs, net of recoveries ( 17 ) ( 7 ) Foreign currency translation and other 8 ( 1 ) Ending balance $ 270 $ 64 At December 31, 2022, the allowance for credit losses included increases in reserves due to growth in the retail portfolio and additionally included $ 15 million for domestic Russian receivables, $ 9 million for the addition of revolving charge accounts in North America and $ 7 million in China related to Construction. The provision for credit losses is included in selling, general and administrative expenses. CNH assesses and monitors the credit quality of its financing receivables based on delinquency status. Receivables are considered past due if the required principal and interest payments have not yet been received as of the date such payments were due. Delinquency is reported on financing receivables greater than 30 days past due. Non-performing financing receivables represent receivables for which CNH has ceased accruing finance income. These receivables are generally over 90 days past due. Accrued interest is charged-off to interest income. Interest income charged-off was not material for the year ended December 31, 2024. Interest accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at that time. As the terms for retail financing receivables are greater than one year, the performing/non-performing information is presented by year of origination for North America, South America and Asia Pacific. 93 The aging of financing receivables by vintage as of December 31, 2024, is as follows: (in millions of dollars) 31-60 Days Past Due 61-90 Days Past Due Total Past Due Current Total Performing Non- Performing Total Gross Charge-offs Retail North America 2024 $ 4,485 $ 5 $ 4,490 $ 5 2023 2,145 6 2,151 12 2022 1,421 4 1,425 9 2021 766 2 768 5 2020 249 1 250 3 Prior to 2020 58 1 59 3 Total 64 4 68 9,056 9,124 19 9,143 37 South America 2024 1,400 5 1,405 — 2023 1,255 26 1,281 2 2022 518 26 544 24 2021 287 8 295 12 2020 127 2 129 4 Prior to 2020 65 1 66 3 Total 29 1 30 3,622 3,652 68 3,720 45 Asia Pacific 2024 563 — 563 — 2023 402 1 403 1 2022 276 1 277 1 2021 129 — 129 1 2020 41 — 41 2 Prior to 2020 3 — 3 2 Total 4 3 7 1,407 1,414 2 1,416 7 Europe, Middle East, Africa — — — 11 11 7 18 — Total Retail $ 97 $ 8 $ 105 $ 14,096 $ 14,201 $ 96 $ 14,297 $ 89 Wholesale North America $ — $ — $ — $ 4,817 $ 4,817 $ 23 $ 4,840 $ — South America — — — 1,048 1,048 — 1,048 — Asia Pacific 2 1 3 883 886 1 887 2 Europe, Middle East, Africa 7 — 7 1,967 1,974 — 1,974 5 Total Wholesale $ 9 $ 1 $ 10 $ 8,715 $ 8,725 $ 24 $ 8,749 $ 7 94 The aging of financing receivables by vintage as of December 31, 2023, is as follows: (in millions of dollars) 31-60 Days Past Due 61-90 Days Past Due Total Past Due Current Total Performing Non- Performing Total Gross Charge-offs Retail North America 2023 $ 3,976 $ 4 $ 3,980 $ 1 2022 2,133 4 2,137 10 2021 1,323 3 1,326 4 2020 561 2 563 3 2019 208 1 209 3 Prior to 2019 66 1 67 3 Total 44 3 47 8,220 8,267 15 8,282 24 South America 2023 1,986 9 1,995 — 2022 955 32 987 — 2021 573 13 586 2 2020 294 4 298 7 2019 123 2 125 1 Prior to 2019 107 1 108 1 Total 22 — 22 4,016 4,038 61 4,099 11 Asia Pacific 2023 609 — 609 — 2022 453 1 454 1 2021 255 1 256 1 2020 115 1 116 2 2019 31 1 32 2 Prior to 2019 3 — 3 1 Total 5 6 11 1,455 1,466 4 1,470 7 Europe, Middle East, Africa — — — 6 6 11 17 — Total Retail $ 71 $ 9 $ 80 $ 13,697 $ 13,777 $ 91 $ 13,868 $ 42 Wholesale North America $ — $ — $ — $ 5,154 $ 5,154 $ — $ 5,154 $ — South America — — — 1,404 1,404 2 1,406 4 Asia Pacific 4 2 6 870 876 — 876 1 Europe, Middle East, Africa 5 — 5 2,893 2,898 — 2,898 — Total Wholesale $ 9 $ 2 $ 11 $ 10,321 $ 10,332 $ 2 $ 10,334 $ 5 Modifications CNH periodically modifies the terms of their finance receivable agreements with customers experiencing financial difficulties. Typically, the types of modifications granted are payment deferrals, extended contract maturities, modification of a contractual interest rate or waiving of interest and principal. As a collateral based lender, CNH has recourse to the financed assets on default. The Company continues to monitor the credit quality of these modified financing receivables. CNH's allowance for credit losses incorporates historical loss information, including the effects of the modified financing receivables. Therefore, additional adjustments to the allowance are generally not recorded upon modification of the financing receivable. As of December 31, 2024, modifications of CNH's retail and wholesale receivables for customers experiencing financial difficulties were immaterial. Defaults and subsequent write-offs of receivables modified in the prior twelve months were not significant during the full year 2024. 95 Due to conditions in the Brazilian market, including crop prices and extreme weather events like flooding and drought, CNH has offered payment refinancing to South American customers. These refinancings are not deemed to be modifications as they are insignificant adjustments to the contract and generally, the customer are not considered to be in financial difficulty. To qualify, customers must make partial payments on their outstanding installments. CNH takes these refinancings into account when provisioning for credit losses. As of December 31, 2024, $ 95 million of installments were refinanced relating to $ 380 million of retail Agricultural receivables in South America. Note 5: Inventories Inventories (stated at the lower of cost or net realizable value, cost being determined on a FIFO basis) as of December 31, 2024 and 2023 consist of the following: (in millions of dollars) 2024 2023 Raw materials $ 1,372 $ 1,891 Work-in-process 384 443 Finished goods 3,020 3,211 Total Inventories $ 4,776 $ 5,545 Note 6: Property, Plant and Equipment A summary of property, plant and equipment as of December 31, 2024 and 2023 is as follows: (in millions of dollars) 2024 2023 Land and industrial buildings $ 1,657 $ 1,896 Plant, machinery and equipment 3,814 3,641 Construction in progress 227 276 Other 433 423 Gross property, plant and equipment 6,131 6,236 Accumulated depreciation ( 4,195 ) ( 4,323 ) Net property, plant and equipment $ 1,936 $ 1,913 Property, plant and equipment recorded under capital leases were immaterial as of December 31, 2024 and 2023. Depreciation expenses on the above property, plant and equipment totaled $ 235 million, $ 213 million and $ 198 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company had contractual commitments of $ 76 million and $ 207 million for the acquisition of property, plant and equipment at December 31, 2024 and 2023, respectively. Note 7: Investments in Unconsolidated Subsidiaries and Affiliates A summary of investments in unconsolidated subsidiaries and affiliates as of December 31, 2024 and 2023 is as follows: (in millions of dollars) 2024 2023 (1) Equity method $ 403 $ 425 Other investments, at carrying value 87 54 Total $ 490 $ 479 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. 96 A summary of the combined results of operations and financial position as reported by the investees that CNH accounts for using the equity method is as follows (unaudited): Years Ended December 31, (in millions of dollars) 2024 2023 (1) 2022 Net revenue $ 2,621 $ 2,748 $ 2,096 Income before taxes $ 481 $ 632 $ 348 Net income $ 380 $ 477 $ 280 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. As of December 31, (in millions of dollars) 2024 2023 (1) Total assets $ 7,558 $ 7,568 Total liabilities $ 6,430 $ 6,347 Total equity $ 1,128 $ 1,221 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. The investees included in these tables primarily consists of Al Ghazi Tractors Ltd. ( 43.2 % ownership), TürkTraktör ve Ziraat Makineleri A.S. ( 37.5 % ownership), New Holland HFT Japan Inc. ( 50.0 % ownership), CNH de Mexico S.A. de C.V. ( 50.0 % ownership), CIFINS S.p.a ( 50.0 % ownership) and CNH Industrial Capital Europe S.a.S ( 24.9 % ownership owned directly by CIFINS S.p.a). Note 8: Leases Lessee The Company has operating lease contracts mainly for buildings, plant and machinery, vehicles, IT equipment and machinery. Leases with a term of 12 months or less are not recorded in the balance sheet. For the leases the Company recognized, on a straight-line basis over the lease term, the Company incurred lease expense of $ 5 million, $ 10 million and $ 13 million for the year ended December 31, 2024, 2023 and 2022, respectively. For long-term leases recorded in the balance sheet, the Company incurred operating lease expenses of $ 106 million, $ 93 million and $ 74 million for the year ended December 31, 2024, 2023 and 2022, respectively. At December 31, 2024 and 2023, the Company recorded approximately $ 275 million and $ 297 million of a right-of-use asset, respectively, and $ 282 million and $ 300 million of lease liability included in Other assets and Other liabilities , respectively. At December 31, 2024 and 2023 the weighted-average remaining lease term (calculated on the basis of the remaining lease term and the lease liability balance for each lease) and the weighted-average discount rate for operating leases were 5.1 years and 4.5 %, and 5.6 and 4.4 %, respectively. During the years ended December 31, 2024 and 2023, leased assets obtained in exchange for operating lease obligations were $ 84 million and $ 153 million, respectively. During the years ended December 31, 2024 and 2023, operating cash outflow for amounts included in the measurement of operating lease obligations was $ 103 million and $ 90 million, respectively. Future minimum lease payments under non-cancellable leases as of December 31, 2024, were as follows: (in millions of dollars) Operating Leases 2025 $ 86 2026 66 2027 51 2028 37 2029 26 2030 and thereafter 58 Total future minimum lease payments 324 Less: Interest 42 Total $ 282 97 Lessor The Company, primarily through its Financial Services segment, leases equipment to retail customers under operating leases. Our leases typically have terms of 3 to 5 years with options available for the lessee to purchase the equipment at the lease term date. Revenue for non-lease components are accounted for separately. A summary of equipment on operating leases as of December 31, 2024, and 2023 is as follows: (in millions of dollars) 2024 2023 Equipment on operating leases $ 1,831 $ 1,784 Accumulated depreciation and other changes ( 365 ) ( 367 ) Net equipment on operating leases $ 1,466 $ 1,417 Depreciation expense on equipment on operating leases is recorded in "Other, net" and amounted to $ 188 million, $ 187 million and $ 207 million for the years ended December 31, 2024, 2023 and 2022, respectively. The following table sets out a maturity analysis of operating lease payments, showing the undiscounted lease payments to be received after the reporting date: (in millions of dollars) Amount 2025 $ 195 2026 136 2027 68 2028 27 2029 7 2030 and thereafter — Total undiscounted lease payments $ 433 Note 9: Goodwill and Other Intangibles Changes in the carrying amount of goodwill, for the years ended December 31, 2024 and 2023 are as follows: (in millions of dollars) Agriculture Construction Financial Services Total Balance at January 1, 2023 $ 3,136 $ 46 $ 140 $ 3,322 Foreign currency translation and other 2 1 1 4 Acquisitions 288 — — 288 Balance at December 31, 2023 3,426 47 141 3,614 Foreign currency translation and other ( 24 ) ( 3 ) ( 3 ) ( 30 ) Balance at December 31, 2024 $ 3,402 $ 44 $ 138 $ 3,584 During 2023, the acquisitions of Augmenta, Bennamann and Hemisphere led to an increase in goodwill for Agriculture of $ 76 million, $ 118 million and $ 111 million, respectively. Goodwill related to the acquisitions was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. Measurement period adjustments were recorded in 2024 reducing goodwill by $ 3 million for Hemisphere. During the fiscal year 2023, measurement period adjustments were recorded reducing goodwill by $ 14 million and $ 3 million for Augmenta and Bennamann, respectively. The valuations of assets acquired and liabilities assumed were finalized for Hemisphere as of December 31, 2024 and for Augmenta and Bennamann as of March 31, 2024. Impairment testing for goodwill is done at a reporting unit level. Under the goodwill impairment test, CNH’s estimate of the fair value of the reporting unit is compared with its carrying value. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. CNH has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Goodwill and other indefinite-lived intangible assets are tested for impairment annually or more frequently if a triggering event occurs. At December 31, 2024 the Company completed its annual impairment assessment and concluded there were no impairments to 98 goodwill for any of the reporting units. As of December 31, 2024 the estimated fair values of each reporting units with goodwill exceeded the carrying value by more than 58 %. As of December 31, 2024 and 2023, the Company’s other intangible assets and related accumulated amortization consisted of the following: 2024 2023 (in millions of dollars) Weighted Avg. Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Other intangible assets subject to amortization: Dealer networks 20 - 25 $ 218 $ 203 $ 15 $ 246 $ 223 $ 23 Patents, concessions, licenses and other 5 - 25 938 573 365 928 523 405 Capitalized software 2 - 5 1,159 910 249 1,070 810 260 2,315 1,686 629 2,244 1,556 688 Other intangible assets not subject to amortization: In-process research and development 198 — 198 213 — 213 Software in-progress 121 — 121 119 — 119 Trademarks 273 — 273 272 — 272 Total other intangible assets $ 2,907 $ 1,686 $ 1,221 $ 2,848 $ 1,556 $ 1,292 During the fourth quarter 2024, the Company recorded an impairment charge of $ 11 million related to the in-process research and development asset in the Agriculture segment. The impairment charge is included in Research and Development expenses in the Consolidated Statement of Operations. During 2023, the Company’s acquisitions lead to an increase in intangible assets of $ 35 million, $ 46 million and $ 51 million for Augmenta, Bennamann and Hemisphere, respectively. The recorded intangibles comprise developed technology, in-process R&D, and customer relationships. Measurement period adjustments were recorded in 2024 increasing intangible assets by $ 6 million for Hemisphere. During 2023, measurement period adjustments were recorded in the second and third quarters increasing intangible assets by $ 12 million and $ 5 million for Augmenta and Bennamann, respectively. The valuations of assets acquired and liabilities assumed were finalized for Hemisphere as of December 31, 2024, and finalized for Augmenta and Bennamann as of March 31, 2024. CNH recorded amortization expenses of $ 182 million, $ 164 million and $ 130 million during 2024, 2023 and 2022, respectively. Based on the current amount of other intangible assets subject to amortization, the estimated annual amortization expense for each of the succeeding 5 years is expected to be as follows: $ 144 million in 2025; $ 108 million in 2026; $ 91 million in 2027; $ 69 million in 2028 and $ 44 million in 2029. Note 10: Debt Credit Facilities Lenders of committed credit facilities have the obligation to make advances up to the facility amount. Lenders of uncommitted facilities have the right to terminate the agreement with prior notice to CNH. At December 31, 2024, CNH’s available committed unsecured facilities expiring after twelve months amounted to $ 5.5 billion ($ 5.9 billion at December 31, 2023). Euro 3.25 billion Revolving Credit Facility: On April 19, 2024, the Company terminated its five-year committed revolving credit agreement dated March 18, 2019 (as amended and restated on December 10, 2021) and entered into a new five-year credit agreement, which provides for an unsecured, committed revolving credit facility in an aggregate principal amount equal to € 3.25 billion. The Company may elect to increase the total commitments under the credit facility up to an additional € 500 million on the terms set forth in the credit agreement. The credit facility will mature, and all outstanding loans will become due and payable, on April 19, 2029, or such later date as may be extended pursuant to the two extension options of one-year each which are available to the Company on the terms set forth in the credit agreement. The credit facility contains customary covenants (including a negative pledge, a status (or pari passu) covenant and restrictions on the incurrence of indebtedness by certain subsidiaries) and customary events of default, some of which are subject to minimum thresholds and customary mitigants (including cross acceleration provisions, failure to pay amounts due or to comply with certain provisions under the credit agreement, the occurrence of certain bankruptcy-related events) and mandatory prepayment obligations upon a change in control of the Company. At December 31, 2024, Financial Services’ committed asset-backed facilities expiring after twelve months amounted to $ 3.7 billion ($ 3.7 billion at December 31, 2023), of which $ 3.1 billion at December 31, 2024 ($ 3.7 billion at December 31, 2023) were utilized. 99 Debt A summary of issued bonds outstanding as of December 31, 2024, is as follows: (in millions of dollars, except percentages) Currency Face value of outstanding bonds Coupon Maturity Outstanding amount Industrial Activities Euro Medium Term Notes: CNH Industrial Finance Europe S.A. (1) EUR 650 1.750 % September 12, 2025 $ 675 CNH Industrial Finance Europe S.A. (1) EUR 100 3.500 % November 12, 2025 104 CNH Industrial Finance Europe S.A. (1) EUR 500 1.875 % January 19, 2026 519 CNH Industrial Finance Europe S.A. (1) EUR 600 1.750 % March 25, 2027 623 CNH Industrial Finance Europe S.A. (1) EUR 50 3.875 % April 21, 2028 52 CNH Industrial Finance Europe S.A. (1) EUR 500 1.625 % July 3, 2029 520 CNH Industrial Finance Europe S.A. (1) EUR 50 2.200 % July 15, 2039 52 CNH Industrial N.V. (2) EUR 750 3.750 % June 11, 2031 779 Other Bonds: CNH Industrial N.V. (3) USD 500 3.850 % November 15, 2027 500 Hedging effects, bond premium/discount, and unamortized issuance costs ( 50 ) Total Industrial Activities $ 3,774 Financial Services CNH Industrial Capital LLC USD 500 3.950 % May 23, 2025 $ 500 CNH Industrial Capital LLC USD 400 5.450 % October 14, 2025 400 CNH Industrial Capital LLC USD 500 1.875 % January 15, 2026 500 CNH Industrial Capital LLC USD 600 1.450 % July 15, 2026 600 CNH Industrial Capital LLC USD 500 4.500 % October 8, 2027 500 CNH Industrial Capital LLC USD 600 4.550 % April 10, 2028 600 CNH Industrial Capital LLC USD 500 5.500 % January 12, 2029 500 CNH Industrial Capital LLC USD 600 5.100 % April 20, 2029 600 CNH Industrial Capital Australia Pty Ltd. AUD 500 5.400 % 5.800 % 2026/2027 310 CNH Industrial Capital Canada Ltd. CAD 400 5.500 % August 11, 2026 278 CNH Industrial Capital Canada Ltd CAD 400 4.800 % March 25, 2027 278 CNH Industrial Capital Canada Ltd CAD 300 4.000 % April 11, 2028 208 CNH Industrial Capital Argentina S.A. USD 131 0.000 % 7.500 % 2025/2028 131 Banco CNH Industrial Capital S.A. BRL 4,107 12.290 % 13.940 % 2025/2028 663 Hedging effects, bond premium/discount, and unamortized issuance costs ( 46 ) Total Financial Services $ 6,022 (1) Bond listed on the regulated market of Euronext Dublin (2) Bond listed on the Global Exchange Market of Euronext Dublin (3) Bond listed on the New York Stock Exchange 100 A summary of total debt as of December 31, 2024 and 2023, is as follows: 2024 2023 (in millions of dollars) Industrial Activities Financial Services Consolidated Industrial Activities Financial Services Consolidated Total bonds $ 3,774 $ 6,022 $ 9,796 $ 3,986 $ 5,170 $ 9,156 Asset-backed debt — 11,965 11,965 — 11,716 11,716 Other debt 269 4,852 5,121 146 6,308 6,454 Intersegment debt 456 334 — 301 527 — Total Debt 4,499 23,173 26,882 4,433 23,721 27,326 Financial payables to Iveco Group N.V. 4 58 62 6 140 146 Total Debt (including Financial payables to Iveco Group N.V.) $ 4,503 $ 23,231 $ 26,944 $ 4,439 $ 23,861 $ 27,472 The weighted-average interest rate on consolidated debt at December 31, 2024, and 2023 was 5.7 % and 5.3 %, respectively. In February 2024, CNH Industrial Capital Argentina. issued USD 53 million of 7.500 % notes due in 2026, with an issue price of 100.000 % of their principal amount. In March 2024, CNH Industrial Capital Canada Ltd. issued CAD 400 million of 4.800 % notes due in 2027, with an issue price of 99.876 % of their principal amount. In March 2024, CNH Industrial Capital LLC issued USD 600 million of 5.100 % due in 2029 with an issue price of 99.157 % of their principal amount. In April 2024, Banco CNH Industrial Capital S.A. issued BRL 700 million of notes in three tranches: BRL 335 million at Certificado de Depósito Interbancário ("CDI") + 0.550 % due 2026, BRL 245 million at CDI + 0.750 % due in 2027 and BRL 120 million at CDI + 0.900 % due in 2028. In May 2024, CNH Industrial Australia issued AUD 250 million of 5.400 % notes due in 2027 at an issue price of 99.877 % of their principal amount. In September 2024, the obligation nominal amount was increased by AUD 75 million, at an issuance price of 101.561 %, for a total of AUD 325 million. In May 2024, Banco CNH Industrial Capital S.A. issued BRL 50 million of notes at CDI + 0.900 % notes due in 2028, through a private placement. In May 2024, Banco CNH Industrial Capital S.A. issued BRL 200 million of 12.290 % notes due in 2028, through a private placement. In June 2024, Banco CNH Industrial Capital S.A. issued BRL 200 million of notes in two tranches: BRL 100 million at 12.350 % due in 2026 and BRL 100 million at 12.850 % due in 2027, through a private placement. In June 2024, CNH Industrial N.V. issued Euro 750 million of 3.750 % notes due in 2031 with an issue price of 99.168 % of their principal amount. In October 2024, CNH Industrial Capital LLC issued USD 500 million of 4.500 % notes due in 2027 with an issue price of 99.809 % of their principal amount. In October 2024, CNH Industrial Capital Canada Ltd. issued CAD 300 million of 4.000 % notes due 2028 with an issue price of 99.964 % of their principal amount. In October 2024, Banco CNH Industrial Capital S.A. issued BRL 500 million of notes in three tranches: BRL 150 million at CDI + 0.350 % due in 2026, BRL 200 million at BRL at CDI + 0.500 % due in 2027 and BRL 150 million at CDI + 0.700 % due in 2028. In November 2024, CNH Industrial Capital Argentina issued USD 17 million of 6.000 % notes due in 2026 at an issue price of 100.000 % of their principal amount. In November 2024, CNH Industrial Capital Argentina issued USD 11 million of 7.500 % notes due in 2028 at an issue price of 100.000 % of their principal amount. In April 2023, CNH Industrial Capital LLC issued USD 600 million of 4.550 % notes due 2028, with an issue price of 98.857 % of their principal amount. In May 2023, CNH Industrial Capital Argentina issued USD 36 million of 0.000 % notes due in 2025 at an issue price of 124.000 % of their principal amount. In May 2023, Banco CNH Industrial Capital S.A. issued BRL 500 million of notes in two tranches: BRL 400 million at CDI + 1.400 %, due in 2025 and BRL 100 million at CDI + 1.600 %, due in 2026. In July 2023, CNH Industrial Capital Australia Pty. Limited issued AUD 175 million of 5.800 % notes due in 2026 at an issue price of 99.715 % of their principal amount. In August 2023, CNH Industrial Capital Canada Ltd. issued CAD 400 million of 5.500 % notes due in 2026, with an issue price of 99.883 % of their principal amount. 101 In September 2023, CNH Industrial Capital LLC issued USD 500 million of 5.500 % notes due in 2029 at an issue price of 99.399 % of their principal amount. In October 2023, Banco CNH Industrial Capital S.A. issued BRL 600 million of notes in three tranches: BRL 312.1 million at CDI + 0.900 %, due in 2025, BRL 172.4 million at CDI + 1.000 %, due in 2026 and BRL 115.5 million at CDI + 1.300 %, due in 2027. The bonds issued by CNH may contain commitments of the issuer, and in certain cases commitments of CNH Industrial N.V. in its capacity as guarantor, which are typical of international practice for bond issues of this type such as, in particular, negative pledge (in relation to quoted indebtedness), a status (or pari passu ) covenant and cross default clauses. A breach of these commitments can lead to the early repayment of the applicable notes. The bonds guaranteed by CNH Industrial N.V. under the Euro Medium Term Note Programme (and its predecessor the Global Medium Term Note Programme), as well as the notes issued by CNH Industrial N.V., contain clauses which could lead to early repayment if there is a change of control of CNH Industrial N.V. leading to a rating downgrading of CNH Industrial N.V. Other debt consists primarily of borrowings from banks which are at various terms and rates. Included in Other debt of Financial Services is approximately $ 1.3 billion and $ 1.5 billion at December 31, 2024 and 2023, respectively, of funding provided by the Brazilian development agency, Banco Nacional de Desenvolvimento Econômico e Social ("BNDES"). The program provides subsidized funding to financial institutions to be loaned to customers to support the purchase of agricultural or construction machinery or commercial equipment in accordance with the program. A summary of the minimum annual repayments of debt as of December 31, 2024, and thereafter is as follows: (in millions of dollars) Industrial Activities Financial Services Consolidated 2025 $ 1,023 $ 9,816 $ 10,839 2026 521 5,154 5,675 2027 1,097 3,009 4,106 2028 52 2,232 2,284 2029 519 1,945 2,464 2030 and thereafter 831 683 1,514 Financial payables to Iveco Group N.V. 4 58 62 Intersegment 456 334 — Total $ 4,503 $ 23,231 $ 26,944 Please refer to "Note 16: Financial Instruments" for fair value information on debt. Note 11. Supply Chain Finance Programs Under the supply chain finance ("SCF") programs, administered by a third party, our suppliers are given the opportunity to sell receivables from us to participating financial institutions at their sole discretion. Our responsibility is limited to making payment on the terms originally negotiated with our supplier, regardless of whether the supplier sells its receivable to a financial institution. The range of payment terms we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the program. No guarantees are provided by the Company under the SCF program. As of December 31, 2024 and 2023, $ 79 million and $ 148 million, respectively, of obligations remain outstanding that we have confirmed as valid to the administrators of the SCF programs. We have no economic interest in a supplier's decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program. These balances are included within " Trade payables " in our consolidated balance sheets and are reflected as cash flow from operating activities in our consolidated statements of cash flows when settled. Changes in the outstanding obligation for the year ended December 31, 2024, are as follows: (in millions of dollars) 2024 Balance at beginning of year $ 148 Invoices confirmed during the year 1,459 Confirmed invoices paid during the year ( 1,501 ) Currency translation adjustment and other ( 27 ) Balance at end of year $ 79 102 Note 12: Income Taxes CNH Industrial N.V. and its subsidiaries have substantial worldwide operations and incur tax obligations in the jurisdictions in which they operate. The Company's provision for income taxes as reported in its consolidated statements of operations for the year ended December 31, 2024, of $ 336 million consists almost entirely of income taxes related to subsidiaries of CNH Industrial N.V. The sources of income before taxes and equity in income of unconsolidated subsidiaries and affiliates for the years ended December 31, 2024, 2023 and 2022 are as follows: (in millions of dollars) 2024 2023 2022 Parent country source $ ( 36 ) $ ( 48 ) $ 143 Foreign sources 1,493 2,751 2,539 Income (loss) of Consolidated Group before Income Taxes $ 1,457 $ 2,703 $ 2,682 The provision for income taxes for the years ended December 31, 2024, 2023 and 2022 consisted of the following: (in millions of dollars) 2024 2023 2022 Current income taxes $ 442 $ 1,118 $ 819 Deferred income taxes ( 106 ) ( 524 ) ( 72 ) Total income tax provision (benefit) $ 336 $ 594 $ 747 CNH Industrial N.V. is incorporated in the Netherlands but is a tax resident of the United Kingdom ("U.K."). The reconciliation of the differences between the provision for income taxes and the statutory rate is presented based on the weighted average of the U.K. statutory corporation tax rates in force over each of the Company’s calendar year reporting periods; specifically, the tax rate are 25.0 %, 23.5 % and 19.0 % for the years ended December 31, 2024, 2023 and 2022, respectively. Reconciliations of CNH’s income tax expense for the years ended December 31, 2024, 2023 and 2022 are as follows: (in millions of dollars) 2024 2023 2022 Tax provision at the parent statutory rate $ 364 $ 635 $ 510 Foreign income taxed at different rates 37 73 243 Change in valuation allowance ( 7 ) ( 117 ) ( 70 ) Tax contingencies 69 66 58 Tax credits and incentives ( 88 ) ( 136 ) ( 54 ) Hyper-inflationary tax impacts (1) ( 64 ) 27 ( 6 ) Withholding taxes (1) 26 28 3 Other ( 1 ) 18 63 Total income tax provision (benefit) $ 336 $ 594 $ 747 (1) These balances were shown within "Other" in previous periods. In the current period, they have been presented separately. Prior period amounts have been reclassified for comparability. The change in tax expense in 2024 as compared to 2023 was largely attributable to lower profit-before tax and the tax impact from Argentina's highly inflationary economy as identified in the table above. The 2024 tax expense was also reduced by the recognition of $ 29 million of previously unrecognized deferred tax benefit assets in China, offset by the de-recognition of $ 35 million of deferred tax assets in Argentina, increases in withholding tax on dividends, and lower benefits from U.S. exports. The decreased tax expense in 2023, as compared to 2022, was largely attributable to the recognition of $ 99 million of previously unrecognized deferred tax assets in the United Kingdom, lower profitability in high-tax jurisdictions as a percent of total profit, higher credits and incentives, and the tax benefit related to the sale of CNH Industrial Russia, offset by increases in the tax rate due to the tax impact from the Argentina highly inflationary economy and discrete tax expense associated with prior periods. At December 31, 2024, undistributed earnings in certain subsidiaries outside the U.K. totaled approximately $ 13 billion, of which $ 2 billion could give rise to tax costs upon distribution. The company has not recorded a deferred tax liability related to its undistributed earnings because the remittance of earnings to the U.K. would either incur no tax, or because such earnings are indefinitely reinvested. The Company has determined the amount of unrecognized deferred tax liability relating to the $ 2 billion of undistributed earnings that would be taxable if distributed was approximately $ 136 million and was attributable to withholding taxes and incremental local country income taxes in certain jurisdictions. The repatriation of undistributed earnings from subsidiaries to the U.K. is generally exempt from U.K. income taxes and as such there is no deferred tax liability associated with the receipt of undistributed earnings by the U.K. tax-resident parent entity from its subsidiaries in non-U.K. jurisdictions. Finally, the Company 103 evaluated the undistributed earnings from joint ventures in which it owned 50% or less and recorded $ 10 million of deferred tax liabilities as of December 31, 2024. Deferred Income Tax Assets and Liabilities The components of net deferred tax assets as of December 31, 2024 and 2023 are as follows: (in millions of dollars) 2024 2023 Deferred tax assets: Warranty and campaigns $ 99 $ 94 Allowance for credit losses 158 137 Marketing and sales incentive programs 504 551 Other risk and future charges reserve 46 57 Pension, postretirement and postemployment benefits 82 104 Leasing liabilities 68 69 Research and development costs 293 234 Other reserves 200 267 Tax credits and loss carry forwards 293 262 Less: Valuation allowances ( 183 ) ( 207 ) Total deferred tax assets 1,560 1,568 Deferred tax liabilities: Property, plant and equipment 365 380 Intangibles 183 192 Inventories 33 25 Other 80 27 Total deferred tax liabilities 661 624 Net deferred tax assets $ 899 $ 944 Net deferred tax assets are reflected in the accompanying consolidated balance sheets as of December 31, 2024 and 2023 as follows: (in millions of dollars) 2024 2023 Deferred tax assets $ 927 $ 979 Deferred tax liabilities ( 28 ) ( 35 ) Net deferred tax assets $ 899 $ 944 Valuation Allowances As of December 31, 2024, the Company has valuation allowances of $ 183 million against certain deferred tax assets, including tax loss carry forwards, tax credits and other deferred tax assets. These valuation allowances are primarily attributable to certain operations in Argentina, Germany, and the U.K. CNH has gross tax loss carry forwards in several tax jurisdictions. These tax losses expire as follows: $ 23 million in 2025; $ 4 million in 2026; $ 4 million in 2027; $ 6 million in 2028; $ 288 million in 2029 and beyond. CNH also has tax loss carry forwards of approximately $ 730 million with indefinite lives. CNH has tax credit carry forwards of $ 51 million of which $ 9 million will expire in 2026, $ 2 million will expire in 2027, $ 5 million will expire in 2028, and $ 35 million will expire in 2029 and beyond. Uncertain Tax Positions The Company files income tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. The Company has open tax years from 2006 to 2024. Due to the global nature of the Company’s business, transfer pricing disputes may arise, and the Company may seek correlative relief through the competent authority processes. The Company has considered the possibility of correlative relief when booking contingencies related to transfer pricing. The lapsing of statutes, closure of currently on-going audits, or initiation of new audits in the next 12 months is not expected to have a material adverse effect on the Company's financial positions or results of operations. 104 A reconciliation of the gross amounts of tax contingencies at the beginning and end of the year is as follows: (in millions of dollars) 2024 2023 Balance, beginning of year $ 234 $ 162 Additions based on tax positions related to the current year 36 52 Additions for tax positions of prior years 16 63 Reductions for tax positions of prior years ( 6 ) ( 35 ) Reductions for tax positions as a result of lapse of statute ( 12 ) — Settlements — ( 8 ) Balance, end of year $ 268 $ 234 As of December 31, 2024, there are $ 268 million of unrecognized tax benefits before consideration of interest and penalties and $ 304 million of unrecognized tax benefits after consideration of interest and penalties that if recognized would affect the effective tax rate. The Company recognizes interest and penalties accrued related to tax contingencies as part of the income tax provision. During the years ended December 31, 2024, 2023 and 2022, the Company recognized expense of approximately $ 22 million, $ 7 million and $ 6 million for income tax related interest and penalties, respectively. The Company had approximately $ 47 million, $ 25 million and $ 19 million of income tax related interest and penalties accrued at December 31, 2024, 2023 and 2022, respectively. The Organization for Economic Cooperation and Development (the "OECD") has proposed a global minimum tax of 15% of reported profits ("Pillar Two") that has been agreed upon in principle by over 140 countries. Pillar Two legislation has been enacted in one or more jurisdictions in which the Company operates and the Company has determined it is within the scope of the legislation. The Company has assessed the impact of the Pillar Two legislation and related transitional safe harbor provisions and does not expect the tax impacts of the legislation to have a material impact on the Company's financial results during 2024. Note 13: Employee Benefit Plans and Postretirement Benefits CNH provides pension, healthcare and insurance plans and other postemployment benefits to its employees and retirees under defined contribution and defined benefit plans. In the case of defined contribution plans, CNH makes contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Once the contributions have been made, the Company has no further payment obligations. CNH recognizes the contribution cost when the employees have rendered their service and includes this cost by function in cost of goods sold, SG&A expense, and R&D expense. During the years ended December 31, 2024, 2023 and 2022, CNH recorded expenses of $ 138 million, $ 145 million and $ 115 million, respectively, for its defined contribution plans. Defined benefit plans are classified by CNH on the basis of the type of benefit provided as follows: pension plans, healthcare plans, and other postemployment benefit plans. Pension Plans Pension obligations primarily comprise the obligations of the Company’s pension plans in the U.S., the U.K., and Germany. Under these plans, contributions are made to a separate fund (trust) that independently administers the plan assets. The Company’s funding policy is to meet the minimum funding requirements pursuant to the laws of the applicable jurisdictions. The Company may also choose to make discretionary contributions. In July 2024, the U.K. Court of Appeal upheld a ruling in the matter of Virgin Media Limited v NTL Pension Trustees II Limited, a decision that the Company was not a party to or involved in, that certain historical amendments for contracted out defined benefit schemes were invalid if they were not accompanied by the correct actuarial confirmation. The Company and its U.K. pension scheme trustee are reviewing this development and considering whether this decision has any implications for the CNHI and JI Case Pension Plans. The Company is currently assessing the potential impact of this ruling on its financial statements, including any implications for pension obligations, funding requirements, or other financial exposures. Due to the complexity of the ruling, the Company will engage with the pension plan trustees and other parties required to retrieve and analyze data necessary to perform an assessment of plan amendments which may be affected by this ruling. As of December 31, 2024, the Company is not able to reasonably estimate the impact of this ruling, if any, on the Company’s results of operations. Healthcare Postretirement Benefit Plans Healthcare postretirement benefit plan obligations comprise obligations for healthcare and insurance plans granted to employees working in the U.S. and Canada. These plans generally cover employees retiring on or after reaching the age of 55 who have completed at least 10 years of employment. CNH U.S. salaried and non-represented hourly employees and Canadian employees hired 105 after January 1, 2001, and January 1, 2002, respectively, are not eligible for postretirement healthcare and life insurance benefits under the CNH plans. These benefits may be subject to deductibles, co-payment provisions and other limitations, and CNH has reserved the right to change or terminate these benefits, subject to the provisions of any collective bargaining agreement. These plans are not required to be funded. However, beginning in 2007, the Company began making contributions on a voluntary basis to a separate and independently managed fund established to finance the North American healthcare plans. On February 20, 2018, CNH announced that the United States Supreme Court ruled in its favor in Reese vs. CNH Industrial N.V. and CNH Industrial America LLC. The decision allowed CNH to terminate or modify various retiree healthcare benefits previously provided to certain UAW Union represented CNH retirees. On April 16, 2018, CNH announced its determination to modify the Benefits provided to the applicable retirees (“Benefits Modification”) to make them consistent with the Benefits provided to current eligible CNH retirees who had been represented by the UAW. The Benefits Modification resulted in a reduction of the plan liability by $ 527 million. This amount was amortized from OCI to the income statement over approximately 4.5 years, which represents the average service period to attain eligibility conditions for active participants. The amount was completely amortized as of December 31, 2022 . For the year ended December 31, 2022, $ 90 million of amortization was recorded as a pre-tax gain in Other, net. In 2021, CNH communicated plan changes for the U.S. retiree medical plan. The plan changes resulted in a reduction of the plan liability by approximately $ 101 million. This amount is being amortized from OCI to the income statement over approximately 4 years, which represents the average service period to attain eligibility conditions for active participants. For the year ended December 31, 2024, 2023 and 2022, $ 24 million, $ 24 million and $ 24 million of amortization was recorded as a pre-tax gain in Other, net, respectively. Effective January 1, 2022, post-retirement medical coverage for certain U.S. employees who retired prior to December 2004 was transitioned to an individual marketplace. In August 2022, the Company settled the benefits obligation related to RHRA benefits for this group. In connection with this transaction, $ 27 million of plan obligations and plan assets were transferred. The Company recognized a $ 3 million pre-tax non-cash settlement charge, primarily related to the accelerated recognition of actuarial losses. Other Postemployment Benefits Other postemployment benefits consist of obligations for Italian Employee Leaving Entitlements up to December 31, 2006, loyalty bonus in Italy and various other similar plans in France, Germany and Belgium. Until December 31, 2006, Italian companies with more than 50 employees were required to accrue for benefits paid to employees upon them leaving the Company. The scheme has since changed to a defined contribution plan. The obligation on the Company’s consolidated balance sheet represents the residual reserve for years until December 31, 2006. Loyalty bonus is accrued for employees who have reached certain service seniority and are generally settled when employees leave the Company. These plans are not required to be funded and, therefore, have no plan assets. 106 Obligations and Funded Status The following summarizes data from CNH’s defined benefit pension, healthcare and other postemployment plans for the years ended December 31, 2024 and 2023: Pension Healthcare (1) Other (1) (in millions of dollars) 2024 2023 2024 2023 2024 2023 Change in benefit obligations: Beginning benefit obligation $ 1,274 $ 1,175 $ 179 $ 181 $ 100 $ 89 Service cost 10 9 2 3 5 5 Interest cost 52 54 8 9 3 4 Plan participants’ contributions 1 1 3 4 — — Actuarial loss (gain) ( 95 ) 53 8 10 ( 7 ) 5 Gross benefits paid ( 85 ) ( 80 ) ( 21 ) ( 29 ) ( 13 ) ( 7 ) Plan amendments 16 4 1 1 ( 2 ) — Currency translation adjustments and other (2) ( 4 ) 58 6 — ( 5 ) 4 Ending benefit obligation 1,169 1,274 186 179 81 100 Change in the fair value of plan assets: Beginning plan assets 1,049 979 58 58 — — Actual return on plan assets 8 51 4 6 — — Employer contributions 32 41 — — — — Plan participants’ contributions 1 1 — — — — Gross benefits paid ( 74 ) ( 68 ) ( 2 ) ( 6 ) — — Currency translation adjustments and other (2) 2 45 — — — — Ending plan assets 1,018 1,049 60 58 — — Funded status: $ ( 151 ) $ ( 225 ) $ ( 126 ) $ ( 121 ) $ ( 81 ) $ ( 100 ) (1) The healthcare and other postemployment plans are not required to be prefunded. (2) Includes the impact of the transfer of the outstanding pension benefit obligations related to certain retirees and beneficiaries within the U.S. plans through group annuity contract purchases in 2022. 107 The following summarizes data from CNH’s defined benefit pension plans by significant geographical area for the years ended December 31, 2024 and 2023: U.S. U.K. Germany (1) Other Countries (1) (in millions of dollars) 2024 2023 2024 2023 2024 2023 2024 2023 Change in benefit obligations: Beginning benefit obligation $ 139 $ 128 $ 825 $ 770 $ 117 $ 108 $ 193 $ 169 Service cost 1 2 — — — — 9 7 Interest cost 7 7 36 38 3 4 6 5 Plan participants’ contributions — — — — — — 1 1 Actuarial loss (gain) — 7 ( 87 ) 17 ( 5 ) 12 ( 3 ) 17 Gross benefits paid ( 6 ) ( 5 ) ( 51 ) ( 48 ) ( 11 ) ( 11 ) ( 17 ) ( 16 ) Plan amendments — — 16 4 — — — — Currency translation adjustments and other (2) — — 17 44 ( 6 ) 4 ( 15 ) 10 Ending benefit obligation 141 139 756 825 98 117 174 193 Change in the fair value of plan assets: Beginning plan assets 161 159 707 650 4 4 177 166 Actual return on plan assets 6 6 ( 13 ) 36 — — 14 9 Employer contributions — — 25 31 — — 7 10 Plan participants’ contributions — — — — — — 1 1 Gross benefits paid ( 5 ) ( 4 ) ( 52 ) ( 48 ) — — ( 17 ) ( 16 ) Currency translation adjustments and other (2) — — 16 38 — — ( 13 ) 7 Ending plan assets 162 161 683 707 4 4 169 177 Funded status: $ 21 $ 22 $ ( 73 ) $ ( 118 ) $ ( 94 ) $ ( 113 ) $ ( 5 ) $ ( 16 ) (1) Pension benefits in Germany and some other countries are not required to be prefunded. (2) Includes the impact of the transfer of the outstanding pension benefit obligations related to certain retirees and beneficiaries within the U.S. plans through group annuity contract purchases in the fourth quarter of 2023. Net amounts recognized in the consolidated balance sheets as of December 31, 2024 and 2023 consist of: Pension Healthcare Other (in millions of dollars) 2024 2023 2024 2023 2024 2023 Other assets $ 34 $ 30 $ — $ — $ — $ — Pension, postretirement and other postemployment benefits ( 185 ) ( 255 ) ( 126 ) ( 121 ) ( 81 ) ( 100 ) Net liability recognized at end of year $ ( 151 ) $ ( 225 ) $ ( 126 ) $ ( 121 ) $ ( 81 ) $ ( 100 ) Pre-tax amounts recognized in accumulated other comprehensive loss as of December 31, 2024, consist of: (in millions of dollars) Pension Healthcare Other Unrecognized actuarial losses (gains) $ 329 $ 15 $ ( 14 ) Unrecognized prior service credit 18 ( 22 ) ( 8 ) Accumulated other comprehensive loss $ 347 $ ( 7 ) $ ( 22 ) 108 The following table summarizes the aggregate pension accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets: Pension (in millions of dollars) 2024 2023 Accumulated benefit obligation $ 904 $ 998 Fair value of plan assets $ 724 $ 753 The following table summarizes CNH’s pension and other post-employment plans with projected benefit obligations in excess of plan assets: Pension Healthcare Other (in millions of dollars) 2024 2023 2024 2023 2024 2023 Projected benefit obligation $ 908 $ 1,091 $ 187 $ 179 $ 81 $ 100 Fair value of plan assets $ 724 $ 836 $ 60 $ 58 $ — $ — The total accumulated benefit obligation for pension was $ 1,152 million and $ 1,256 million as of December 31, 2024 and 2023, respectively. Net Periodic Benefit Cost The following summarizes the components of net periodic benefit cost of CNH’s defined benefit for the years ended December 31, 2024, 2023 and 2022: Pension Healthcare Other (in millions of dollars) 2024 2023 2022 2024 2023 2022 2024 2023 2022 Service cost $ 10 $ 9 $ 11 $ 2 $ 3 $ 4 $ 5 $ 5 $ 5 Interest cost 52 54 27 8 9 6 3 4 1 Expected return on assets ( 54 ) ( 45 ) ( 47 ) ( 3 ) ( 4 ) ( 5 ) — — — Amortization of: Prior service cost (credit) — — — ( 24 ) ( 36 ) ( 126 ) — — — Actuarial loss (gain) 22 18 19 — — 1 ( 3 ) 2 ( 2 ) Settlement loss and other — 2 ( 3 ) 7 — 3 1 ( 1 ) 1 Net periodic benefit cost (credit) $ 30 $ 38 $ 7 $ ( 10 ) $ ( 28 ) $ ( 117 ) $ 6 $ 10 $ 5 Net periodic benefit cost recognized in net income and other changes in plan assets and benefit obligations that are recognized in other comprehensive loss during 2024 consist of: (in millions of dollars) Pension Healthcare Other Net periodic benefit cost $ 30 $ ( 10 ) $ 6 Benefit adjustments included in other comprehensive (income) loss: Net actuarial losses (gains) ( 22 ) — 3 Amortization of actuarial losses ( 49 ) 7 ( 9 ) Amortization of prior service (cost) credit 16 25 ( 1 ) Currency translation adjustments and other ( 6 ) 1 1 Total recognized in other comprehensive (income) loss ( 61 ) 33 ( 6 ) Total recognized in comprehensive loss $ ( 31 ) $ 23 $ — 109 Assumptions The following assumptions were utilized in determining the funded status at December 31, 2024 and 2023, and the net periodic benefit cost of CNH’s defined benefit plans for the years ended December 31, 2024, 2023 and 2022: Pension plans Healthcare plans Other (in percentages) 2024 2023 2022 2024 2023 2022 2024 2023 2022 Weighted-average rate assumptions used to determine funded status Discount rate 4.89 4.22 4.64 5.36 4.97 5.28 3.67 3.50 4.11 Rate of compensation increase 2.80 2.91 3.03 4.00 4.00 4.00 3.00 2.94 3.19 Initial healthcare cost trend rate n/a n/a n/a 5.35 4.70 5.12 n/a n/a n/a Ultimate healthcare cost trend rate (1) n/a n/a n/a 4.08 3.74 4.00 n/a n/a n/a Weighted-average rate assumptions used to determine expense Discount rates—service cost 2.80 3.51 1.32 5.11 5.37 3.15 3.73 4.32 1.36 Discount rates—interest cost 4.22 4.65 1.59 4.91 5.17 2.87 3.51 4.08 0.99 Rate of compensation increase 2.91 3.03 2.41 4.00 4.00 4.00 2.94 3.19 2.33 Long-term rates of return on plan assets 5.22 4.54 3.42 6.25 5.75 4.76 n/a n/a n/a Initial healthcare cost trend rate n/a n/a n/a 4.70 5.12 4.18 n/a n/a n/a Ultimate healthcare cost trend rate (1) n/a n/a n/a 3.74 4.00 3.58 n/a n/a n/a (1) CNH expects to achieve the ultimate healthcare cost trend rate in 2033 for U.S. plans. A flat trend rate assumption is utilized for the Canada plans. Assumed discount rates are used in measurements of pension, healthcare and other postemployment benefit obligations and interest cost components of net periodic cost. CNH selects its assumed discount rates based on the consideration of equivalent yields on high-quality fixed income investments at the measurement date. The assumed discount rate is used to discount future benefit obligations back to today’s dollars. The discount rates for the U.S., European, U.K. and Canadian obligations are based on a benefit cash flow-matching approach and represent the rates at which the benefit obligations could effectively be settled as of the measurement date, December 31. The benefit cash flow-matching approach involves analyzing CNH’s projected cash flows against a high-quality bond yield curve, mainly calculated using a wide population of AA-grade corporate bonds subject to minimum amounts outstanding and meeting other defined selection criteria. The discount rates for the Company’s remaining obligations are based on benchmark yield data of high-quality fixed income investments for which the timing and amounts of payments approximate the timing and amounts of projected benefit payments. The expected long-term rate of return on plan assets reflects management’s expectations on long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. The expected return is based on the outlook for inflation, fixed income returns and equity returns while also considering asset allocation and investment strategy, premiums for active management to the extent asset classes are actively managed, and plan expenses. Return patterns and correlations, consensus return forecasts, and other relevant financial factors are analyzed to check for reasonability and appropriateness. The assumed healthcare trend rate represents the rate at which healthcare costs are assumed to increase. Rates are determined based on company-specific experience, consultation with actuaries and outside consultants, and various trend factors including general and healthcare sector-specific inflation projections from the United States Department of Health and Human Services Healthcare Financing Administration. The initial trend is a short-term assumption based on recent experience and prevailing market conditions. The ultimate trend is a long-term assumption of healthcare cost inflation based on general inflation, incremental medical inflation, technology, new medicine, government cost-shifting, utilization changes, an aging population, and a changing mix of medical services. CNH annually reviews the mortality assumptions and demographic characteristics of its U.S. pension plan and healthcare plan participants. In 2024 and 2023, the Company continued to use the adopted MP 2021 mortality improvement scale as it continues to be the most current . At this time the Company is not adjusting to the MP 2021 for any short-term or long-term impacts COVID may have on mortality improvement scales issued in the future. The Company uses the spot yield curve approach to estimate the service and interest cost components of the net periodic pension and other postretirement benefit costs by applying the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows. 110 Plan Assets The investment strategy for the plan assets depends on the features of the plan and on the maturity of the obligations. Typically, less mature plan benefit obligations are funded by using more equity securities as they are expected to achieve long-term growth exceeding the rate of inflation. More mature plan benefit obligations are funded using more fixed income securities as they are expected to produce current income with limited volatility. Risk management practices include the use of multiple asset classes and investment managers within each asset class for diversification purposes. Specific guidelines for each asset class and investment manager are implemented and monitored. Weighted-average target asset allocation for all plans for 2024 are as follows: All Plans Asset category: Equity securities 9 % Debt securities 58 % Cash/Other 33 % CNH determines the fair value of plan assets using observable market data obtained from independent sources when available. CNH classifies its plan assets according to the fair value hierarchy: Level 1—Quoted prices for identical instruments in active markets. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The following summarizes the fair value of plan assets by asset category and level within the fair value hierarchy as of December 31, 2024: (in millions of dollars) Total Level 1 Level 2 Level 3 Equity securities: U.S. equities $ — $ — $ — $ — Non-U.S. equities — — — — Total Equity securities — — — — Fixed income securities: U.S. government bonds 18 18 — — U.S. corporate bonds 8 8 — — Non-U.S. government bonds 24 — 24 — Non-U.S. corporate bonds 11 — 11 — Mortgage backed securities 2 — 2 — Other fixed income 3 — 3 — Total Fixed income securities 66 26 40 — Other types of investments: Mutual funds (1) 860 — 860 — Insurance contracts 66 — — 66 Derivatives—credit contracts — — — — Real estate — — — — Total Other types of investments 926 — 860 66 Cash: 36 14 22 — Total of Level 1, Level 2 and Level 3 Assets $ 1,028 $ 40 $ 922 $ 66 Investments at net asset value: Mutual funds (2) 49 Total Net Assets $ 1,077 $ 40 $ 922 $ 66 (1) This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds. (2) This category includes open ended mutual fund, the underlying assets of the mutual fund are illiquid in nature and are not classified in the fair value hierarchy using the net asset per share practical expedient. 111 The following table presents the changes in the Level 3 plan assets for the year ended December 31, 2024: (in millions of dollars) Level 3 Assets Balance at December 31, 2023 $ 45 Actual return on plan assets relating to assets still held at reporting date 1 Purchases 28 Settlements ( 5 ) Transfers in and/or out of level 3 ( 1 ) Currency impact ( 2 ) Balance at December 31, 2024 $ 66 The following summarizes the fair value of plan assets by asset category and level within the fair value hierarchy as of December 31, 2023: (in millions of dollars) Total Level 1 Level 2 Level 3 Equity securities: U.S. equities $ — $ — $ — $ — Non-U.S. equities — — — — Total Equity securities — — — — Fixed income securities: U.S. government bonds 13 12 1 — U.S. corporate bonds 17 14 3 — Non-U.S. government bonds 26 — 26 — Non-U.S. corporate bonds 13 — 13 — Mortgage backed securities 2 — 2 — Other fixed income 2 — 2 — Total Fixed income securities 73 26 47 — Other types of investments: Mutual funds (1) 919 — 919 — Insurance contracts 45 — — 45 Derivatives—credit contracts — — — — Real estate — — — — Total Other types of investments 964 — 919 45 Cash: 22 11 11 — Total of Level 1, Level 2 and Level 3 Assets $ 1,059 $ 37 $ 977 $ 45 Investments at net asset value: Mutual funds (2) 48 Total Net Assets $ 1,107 $ 37 $ 977 $ 45 (1) This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds. The following table presents the changes in the Level 3 plan assets for the year ended December 31, 2023: (in millions of dollars) Level 3 Assets Balance at December 31, 2022 $ 40 Actual return on plan assets relating to assets still held at reporting date 1 Purchases 4 Settlements ( 2 ) Transfers in and/or out of Level 3 — Currency impact 2 Balance at December 31, 2023 $ 45 112 Contributions CNH expects to contribute (including through direct benefit payments) approximately $ 43 million to its pension plans, $ 19 million to its healthcare plans and $ 6 million to its other post-employment plans in 2025. The benefit expected to be paid from the benefit plans, which reflect expected future years of service, and the Medicare subsidy expected to be received are as follows: (in millions of dollars) Pension Plans Healthcare Other 2025 $ 91 $ 23 $ 6 2026 79 22 7 2027 88 20 6 2028 86 19 6 2029 86 18 7 2030 - 2034 405 77 36 Total $ 835 $ 179 $ 68 Note 14: Other Liabilities A summary of “Other liabilities” as of December 31, 2024 and 2023 is as follows: (in millions of dollars) 2024 2023 Warranty and campaign programs $ 633 $ 610 Marketing and sales incentive programs 2,075 2,433 Tax payables 243 704 Accrued expenses and deferred income 917 946 Accrued employee benefits 376 524 Lease liabilities 282 300 Legal reserves and other provisions 390 342 Contract liabilities 72 50 Restructuring reserve 30 43 Other 345 355 Total $ 5,363 $ 6,307 Warranty and Campaign Program As described in "Note 2: Summary of Significant Accounting Policies," CNH pays for basic warranty and other service action costs. A summary of recorded activity for the basic warranty and campaign program accrual for the years ended December 31, 2024 and 2023 are as follows: (in millions of dollars) 2024 2023 Balance at beginning of year $ 610 $ 544 Current year additions 628 566 Claims paid ( 570 ) ( 510 ) Currency translation adjustment and other ( 35 ) 10 Balance at end of year $ 633 $ 610 113 Restructuring Provision The Company’s restructuring program announced in November 2023 targeted both labor and non-labor SG&A expenses. This program was completed in 2024, and the Company has incurred a total of $ 128 million from launch to December 31, 2024, under this program. The Company incurred restructuring costs of $ 118 million, $ 67 million and $ 31 million for the years ended December 31, 2024, 2023 and 2022, respectively. These costs were as follows: • In 2024, Agriculture, Construction and Financial Services recorded $ 104 million, $ 13 million and $ 1 million respectively. • In 2023, Agriculture, Construction and Financial Services recorded $ 51 million, $ 14 million and $ 2 million, respectively. • In 2022, Agriculture and Construction recorded $ 21 million and $ 10 million, respectively. The following table sets forth restructuring activity for the years ended December 31, 2024, 2023 and 2022: (in millions of dollars) Severance and Other Employee Costs Facility Related Costs Other Restructuring Total Balance at January 1, 2022 $ 17 $ 11 $ 1 $ 29 Restructuring charges 23 4 4 31 Reserves utilized: cash ( 12 ) ( 3 ) ( 3 ) ( 18 ) Reserves utilized: non-cash ( 2 ) ( 9 ) — ( 11 ) Currency translation adjustments ( 1 ) — — ( 1 ) Balance at December 31, 2022 25 3 2 30 Restructuring charges 36 23 8 67 Reserves utilized: cash ( 19 ) ( 23 ) ( 12 ) ( 54 ) Reserves utilized: non-cash ( 3 ) 1 2 — Currency translation adjustments — — — — Balance at December 31, 2023 39 4 — 43 Restructuring charges 81 17 20 118 Reserves utilized: cash ( 99 ) ( 5 ) ( 14 ) ( 118 ) Reserves utilized: non-cash ( 2 ) ( 5 ) ( 7 ) ( 14 ) Currency translation adjustments ( 4 ) ( 3 ) 8 1 Balance at December 31, 2024 $ 15 $ 8 $ 7 $ 30 Note 15: Commitments and Contingencies CNH in the ordinary course of business is exposed to numerous legal risks, including, without limitation, dealer and supplier litigation, intellectual property right disputes, product liability, asbestos, personal injury, emissions and/or fuel economy regulatory, competition law and other regulatory investigations and environmental claims. We are party to various unresolved investigations, claims and actions that our incidental to our business. The most significant of these matters are described below. The outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in one or more of these proceedings, claims or investigations could require the Company to pay substantial damages or fines or undertake service actions, recall campaigns or other costly actions. It is therefore possible that legal judgments could give rise to expenses that are not covered, or not fully covered, by insurance and could affect CNH’s financial position and results. When it is probable that such a loss has been incurred and the amount can be reasonably estimated, such amounts are provided for in the Company's income statement and the related accrual is recorded in “Other liabilities” on the consolidated balance sheets. Although the ultimate outcome of legal matters pending against CNH and its subsidiaries cannot be predicted, the Company believes the reasonable possible range of losses for these unresolved legal matters in addition to the amounts accrued would not have a material effect on its consolidated financial statements. Environmental Pursuant to the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), which imposes strict and, under certain circumstances, joint and several liability for remediation and liability for natural resource damages, and other federal and state laws that impose similar liabilities, CNH has received inquiries for information or notices of its potential liability regarding 66 non-owned U.S. sites at which regulated materials allegedly generated by CNH were released or disposed (“Waste 114 Sites”). Of the Waste Sites, 16 are on the National Priority List (“NPL”) promulgated pursuant to CERCLA. For 60 of the Waste Sites, the monetary amount or extent of the Company’s liability has either been resolved; it has not been named as a potentially responsible party (“PRP”), or its liability is likely de minimis . Because estimates of remediation costs are subject to revision as more information becomes available about the extent and cost of remediation and because settlement agreements can be reopened under certain circumstances, the Company’s potential liability for remediation costs associated with the 66 Waste Sites could change. Moreover, because liability under CERCLA and similar laws can be joint and several, CNH could be required to pay amounts in excess of its pro rata share of remediation costs. However, when appropriate, the financial strength of other PRPs has been considered in the determination of the Company’s potential liability. CNH believes that the costs associated with the Waste Sites will not have a material effect on the Company’s business, financial position or results of operations. The Company is conducting environmental investigatory or remedial activities at certain properties that are currently or were formerly owned and/or operated or that are being decommissioned. The Company believes that the outcome of these activities will not have a material adverse effect on its business, financial position, or results of operations. The actual costs for environmental matters could differ materially from those costs currently anticipated due to the nature of historical handling and disposal of hazardous substances typical of manufacturing and related operations, the discovery of currently unknown conditions, and as a result of more aggressive enforcement by regulatory authorities and changes in existing laws and regulations. As in the past, CNH plans to continue funding its costs of environmental compliance from operating cash flows. Investigation, analysis and remediation of environmental sites is a time-consuming activity. The Company expects such costs to be incurred and claims to be resolved over an extended period of time that could exceed 30 years for some sites. As of December 31, 2024 and 2023, environmental reserves of approximately $ 21 million and $ 20 million, respectively, were established to address these specific estimated potential liabilities. Such reserves are undiscounted and do not include anticipated recoveries, if any, from insurance companies. After considering these reserves, management is of the opinion that the outcome of these matters will not have a material adverse effect on the Company’s financial position or results of operations. Other Litigation and Investigation Follow-up on Damages Claims: In 2011 Iveco S.p.A. ("Iveco"), a subsidiary of Iveco Group N.V., and its competitors in the European Union were subject to an investigation by the European Commission (the “Commission”) into certain business practices in the European Union (in the period 1997-2011) in relation to Medium & Heavy trucks. On July 19, 2016, the Commission announced a settlement with Iveco ("the Decision"). Following the Decision, the Company, Iveco and Iveco Magirus AG ("IMAG") have been named as defendants in proceedings across Europe. Following the Demerger, CNH cannot be excluded from current and future follow on proceedings originating from the Decision because under EU competition law a company cannot use corporate reorganizations to avoid liability for private damage claims. At this time, CNH is unable to predict the outcome of these proceedings or reasonably estimate any potential losses. In the event one or more of these judicial proceedings would result in a decision against CNH ordering it to compensate such claimants as a result of the conduct that was the subject matter of the Decision, then CNH, as a result of various intercompany arrangements, will ultimately have recourse against Iveco and IMAG for the reimbursement of the damages effectively paid to such claimants. However, if Iveco or IMAG do not comply with their obligations with respect to any such decisions or fail to fulfill their obligations to CNH, then CNH could experience financial losses. The Company believes that the risk of either Iveco or IMAG or Iveco Group defaulting on potential payment obligations arising from such follow-up on damage claims is remote and, at this time, is unable to reasonably estimate any potential losses. FPT Emissions Investigation: On July 22, 2020, a number of the Company's (pre-Demerger) offices in Europe were visited by investigators in the context of a request for assistance by the public prosecutors of Frankfurt am Main, Germany and Turin, Italy in relation to alleged noncompliance of two engine models produced by FPT Industrial S.p.A. ("FPT Industrial"), which is a wholly-controlled subsidiary of Iveco Group N.V.. The Italian criminal investigation was dismissed in 2023. As a result of FPT Industrial's full cooperation and ongoing discussions with the investigative authorities, the German criminal investigation was concluded in December 2023. FPT is defending individual civil claims alleging emissions' non-compliance in Germany and Austria. While the Company had no role in the design and sale of such engine models and vehicles, the Company is unable to predict the likelihood of these outcomes or reasonably estimate any potential losses. The Company believes that the risk of either FPT Industrial or Iveco Group N.V. defaulting on potential payment obligations arising from such proceedings is remote. SEC Subpoenas : The Company has been responding to subpoenas issued by the Securities and Exchange Commission requesting information and documents relating to our revenue recognition and sales practices. The Company is cooperating with the SEC’s inquiry and continues to provide responsive documents and information. The Company is unable to predict with certainty what action, if any, might be taken in the future by the SEC or any other governmental authority as a result of these requests. 115 Commitments CNH has entered into operating lease contracts for the right to use industrial buildings and equipment and other assets. Refer to Note 8: Leases for future minimum lease payments under non-cancellable lease contracts. At December 31, 2024, Financial Services has various agreements to extend credit for the following financing arrangements: (in millions of dollars) Total Credit Limit Utilized Not Utilized Wholesale and dealer financing $ 8,985 $ 5,411 $ 3,574 Revolving charge accounts $ 2,706 $ 240 $ 2,466 Guarantees CNH provided guarantees on the debt or commitments of third parties and performance guarantees in the interest of non-consolidated affiliates as of December 31, 2024 and 2023 totaling $ 54 million and $ 37 million, respectively. Note 16: Financial Instruments CNH may elect to measure financial instruments and certain other items at fair value. This fair value option would be applied on an instrument-by-instrument basis with changes in fair value reported in earnings. The election can be made at the acquisition of an eligible financial asset, financial liability or firm commitment or, when certain specified reconsideration events occur. The fair value election may not be revoked once made. CNH has not elected the fair value measurement option for eligible items. Fair-Value Hierarchy The hierarchy of valuation techniques for financial instruments is based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy: Level 1—Quoted prices for identical instruments in active markets. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the use of observable market data when available. Determination of Fair Value When available, the Company uses quoted market prices to determine fair value and classifies such items as Level 1. In some cases where a market price is not available, the Company will make use of observable market-based inputs to calculate fair value, in which case the items are classified as Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters such as interest rates, currency rates, or yield curves. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified as Level 3 even though there may be some significant inputs that are readily observable. The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified. Where appropriate, the description includes details of the valuation models and the key inputs to those models as well as any significant assumptions. Derivatives CNH utilizes derivative instruments to mitigate its exposure to interest rate and foreign currency exposures. Derivatives used as hedges are effective at reducing the risk associated with the exposure being hedged and are designated as a hedge at the inception of the derivative contract. CNH does not hold or enter into derivatives or other financial instruments for speculative purposes. The credit and market risk related to derivatives is reduced through diversification among various counterparties, utilizing mandatory termination 116 clauses and/or collateral support agreements. Derivative instruments are generally classified as Level 2 in the fair value hierarchy. The cash flows underlying all derivative contracts were recorded in operating activities in the consolidated statements of cash flows. Foreign Exchange Derivatives CNH has entered into foreign exchange forward contracts and swaps in order to manage and preserve the economic value of cash flows in a currency different from the functional currency of the relevant legal entity. CNH conducts its business on a global basis in a wide variety of foreign currencies and hedges foreign currency exposures arising from various receivables, liabilities, and expected inventory purchases and sales. Derivative instruments utilized to hedge the foreign currency risk associated with anticipated inventory purchases and sales in foreign currencies are designated as cash flow hedges. Gains and losses on these instruments are deferred in accumulated other comprehensive income/(loss) and recognized in earnings when the related transaction occurs. If a derivative instrument is terminated because the hedge relationship is no longer effective or because the hedged item is a forecasted transaction that is no longer determined to be probable, the cumulative amount recorded in accumulated other comprehensive income (loss) is recognized immediately in earnings. Such amounts were insignificant in all periods presented. CNH also uses forwards and swaps to hedge certain assets and liabilities denominated in foreign currencies. Such derivatives are considered economic hedges and not designated as hedging instruments. The changes in the fair values of these instruments are recognized directly in income in “Other, net” and are expected to offset the foreign exchange gains or losses on the exposures being managed. All of CNH’s foreign exchange derivatives are considered Level 2 as the fair value is calculated using market data input and can be compared to actively traded derivatives. The total notional amount of CNH’s foreign exchange derivatives was $ 4.2 billion and $ 6.1 billion at December 31, 2024 and 2023, respectively. Interest Rate Derivatives CNH has entered into interest rate derivatives (swaps and caps) in order to manage interest rate exposures arising in the normal course of business. Interest rate derivatives that have been designated as cash flow hedges are being used by the Company to mitigate the risk of rising interest rates related to existing debt and anticipated issuance of fixed-rate debt in future periods. Gains and losses on these instruments are deferred in accumulated other comprehensive income (loss) and recognized in interest expense over the period in which CNH recognizes interest expense on the related debt. Interest rate derivatives that have been designated as fair value hedge relationships have been used by CNH to mitigate the volatility in the fair value of existing fixed rate bonds and medium-term notes due to changes in floating interest rate benchmarks. Gains and losses on these instruments are recorded in “Interest expense” in the period in which they occur, and an offsetting gain or loss is also reflected in “Interest expense” based on changes in the fair value of the debt instrument being hedged due to changes in floating interest rate benchmarks. CNH also enters into offsetting interest rate derivatives with substantially similar terms that are not designated as hedging instruments to mitigate interest rate risk related to CNH’s committed asset-backed facilities. Unrealized and realized gains and losses resulting from fair value changes in these instruments are recognized directly in income. Net gains and losses on these instruments were insignificant for the years ending December 31, 2024, 2023 and 2022. All of CNH’s interest rate derivatives outstanding as of December 31, 2024 and 2023 are considered Level 2. The fair market value of these derivatives is calculated using market data input and can be compared to actively traded derivatives. The total notional amount of CNH’s interest rate derivatives was approximately $ 9.1 billion and $ 9.0 billion at December 31, 2024 and 2023, respectively. As a result of the reform and replacement of specific benchmark interest rates, the Company elected to make the replacement using the optional expedient under ASC 848, which allows the change in critical terms without de-designation and the Company also elected the optional expedient to apply a spread adjustment to hedged items cash flows that resulted in no change to the cumulative basis adjustment reflected in earnings. 117 Financial Statement Impact of CNH Derivatives The following table summarizes the gross impact of changes in the fair value of derivatives designated as cash flow hedges on accumulated other comprehensive income (loss) and net income during the year ended December 31, 2024, 2023 and 2022 (in millions of dollars): Recognized in Net Income For the Year Ended December 31, Gain (Loss) Recognized in Accumulated Other Comprehensive Income Classification of Gain (Loss) Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income 2024 Foreign exchange contracts $ ( 17 ) Net sales $ ( 9 ) Cost of goods sold ( 18 ) Other, net 4 Interest expense, net ( 25 ) Interest rate contracts 103 Total $ 86 $ ( 48 ) 2023 Foreign exchange contracts $ ( 35 ) Net sales $ ( 7 ) Cost of goods sold ( 33 ) Other, net 7 Interest expense, net 6 Interest rate contracts ( 82 ) Total $ ( 117 ) $ ( 27 ) 2022 Foreign exchange contracts $ ( 191 ) Net sales $ ( 1 ) Cost of goods sold ( 219 ) Other, net 3 Interest expense, net 30 Interest rate contracts 59 Total $ ( 132 ) $ ( 187 ) 118 The following table summarizes the activity in accumulated other comprehensive income related to the derivatives held by the Company during the years ended December 31, 2024, 2023 and 2022: (in millions of dollars) Before-Tax Amount Income Tax After-Tax Amount Accumulated derivative net losses as of December 31, 2023 $ ( 19 ) $ 9 $ ( 10 ) Net changes in fair value of derivatives 86 ( 49 ) 37 Net income reclassified from accumulated other comprehensive income into income 48 ( 3 ) 45 Accumulated derivative net income as of December 31, 2024 $ 115 $ ( 43 ) $ 72 (in millions of dollars) Before-Tax Amount Income Tax After-Tax Amount Accumulated derivative net income as of December 31, 2022 $ 71 $ ( 27 ) $ 44 Net changes in fair value of derivatives ( 117 ) 39 ( 78 ) Net income reclassified from accumulated other comprehensive income into income 27 ( 3 ) 24 Accumulated derivative net losses as of December 31, 2023 $ ( 19 ) $ 9 $ ( 10 ) (in millions of dollars) Before-Tax Amount Income Tax After-Tax Amount Accumulated derivative net losses as of December 31, 2021 $ ( 3 ) $ ( 14 ) $ ( 17 ) Impact of demerger 19 — 19 Net changes in fair value of derivatives ( 132 ) 4 ( 128 ) Net income reclassified from accumulated other comprehensive income into income 187 ( 17 ) 170 Accumulated derivative net income as of December 31, 2022 $ 71 $ ( 27 ) $ 44 The following tables summarize the impact of the changes in the fair value of fair value hedges and derivatives not designated as hedging instruments had on earnings for the year ended December 31, 2024, 2023 and 2022: For the Year Ended December 31, (in millions of dollars) Classification of Gain 2024 2023 2022 Fair Value Hedges Interest rate derivatives Interest expense $ 19 $ ( 42 ) $ ( 104 ) Not Designated as Hedges Foreign exchange contracts Other, Net $ ( 49 ) $ ( 67 ) $ ( 16 ) 119 The fair values of CNH’s derivatives as of December 31, 2024 and 2023 in the consolidated balance sheets are recorded as follows: December 31, 2024 December 31, 2023 (in millions of dollars) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments Interest rate contracts Derivative assets $ 103 Derivative assets $ 60 Foreign currency contracts Derivative assets 44 Derivative assets 31 Total derivative assets $ 147 $ 91 Interest rate contracts Derivative liabilities $ 58 Derivative liabilities $ 117 Foreign currency contracts Derivative liabilities 51 Derivative liabilities 49 Total derivative liabilities $ 109 $ 166 Derivatives not designated as hedging instruments Interest rate contracts Derivative assets $ 22 Derivative assets $ 31 Foreign currency contracts Derivative assets 27 Derivative assets 14 Total derivative assets $ 49 $ 45 Interest rate contracts Derivative liabilities $ 22 Derivative liabilities $ 30 Foreign currency contracts Derivative liabilities 15 Derivative liabilities 20 Total derivative liabilities $ 37 $ 50 Items Measured at Fair Value on a Recurring Basis The following tables present for each of the fair-value hierarchy levels the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2024 and 2023: Level 1 Level 2 Total (in millions of dollars) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Assets Foreign exchange derivatives $ — $ — $ 71 $ 46 $ 71 $ 46 Interest rate derivatives — — 125 90 125 90 Total Assets $ — $ — $ 196 $ 136 $ 196 $ 136 Liabilities Foreign exchange derivatives $ — $ — $ 66 $ 69 $ 66 $ 69 Interest rate derivatives — — 80 147 80 147 Total Liabilities $ — $ — $ 146 $ 216 $ 146 $ 216 Items Measured at Fair Value on a Non-Recurring Basis During the fourth quarter of 2024 the Company recorded an intangible assets impairment of $ 11 million related to the in-process research and development. The impairment is the result of the declining Agriculture market. The following tables present fair value for nonrecurring Level 3 measurements from impairments as of December 31, 2024 and 2023: Fair Value Losses (in millions of dollars) 2024 2023 2024 2023 Other intangible assets $ 173 $ — $ 11 $ — The following is a description of the valuation methodologies the Company uses for non-monetary assets at fair value: Other intangible assets, net: The impairments are measured at the lower of the carrying amount or fair value. The valuations were based on the relief from royalty approach. Inputs utilized for the valuation include projected revenues, projected costs to complete, and weighted average cost of capital. 120 Fair Value of Other Financial Instruments The carrying value of cash and cash equivalents, restricted cash, trade accounts receivable and accounts payable included in the consolidated balance sheets approximates its fair value. Financial Instruments Not Carried at Fair Value The estimated fair market values of financial instruments not carried at fair value in the consolidated balance sheets as of December 31, 2024 and 2023 are as follows: December 31, 2024 December 31, 2023 (in millions of dollars) Carrying Amount Fair Value Carrying Amount Fair Value Financing receivables $ 23,085 $ 22,920 $ 24,249 $ 24,129 Debt $ 26,882 $ 27,222 $ 27,326 $ 27,624 Financing Receivables The fair value of financing receivables is based on the discounted values of their related cash flows at current market interest rates and they are classified as a Level 3 fair value measurement. Debt All debt is classified as a Level 2 fair value measurement with the exception of bonds issued by CNH Industrial Finance Europe S.A. and bonds issued by CNH Industrial N.V. that are classified as a Level 1 fair value measurement. Note 17: Shareholders’ Equity The Articles of Association of CNH Industrial N.V. provide for authorized share capital of € 40 million, divided into 2 billion common shares and 2 billion special voting shares to be held with associated common shares, each with a per share par value of € 0.01 . As of December 31, 2024, the Company’s share capital was € 18 million (equivalent to $ 25 million), fully paid-in, and consisted of 1,364,400,196 common shares ( 1,248,023,791 common shares outstanding and 116,376,405 common shares held in treasury by the Company as described in the following section) and 396,474,276 special voting shares ( 370,994,305 special voting shares outstanding, net of 25,479,971 special voting shares held in treasury by the Company as described in the section below). Changes in the composition of the share capital of CNH Industrial N.V. during 2024, 2023 and 2022 are as follows: (number of shares) Common Shares Loyalty Program Special Voting Shares Total Shares Total shares at December 31, 2021 1,356,077,000 371,218,250 1,727,295,250 Capital increase 554,023 — 554,023 Common stock repurchases ( 12,390,052 ) — ( 12,390,052 ) Retirement of special voting shares — ( 145,297 ) ( 145,297 ) Total shares at December 31, 2022 1,344,240,971 371,072,953 1,715,313,924 Capital increase 1,894,985 — 1,894,985 Common stock repurchases ( 55,198,371 ) — ( 55,198,371 ) Retirement of special voting shares — ( 72,343 ) ( 72,343 ) Total shares at December 31, 2023 1,290,937,585 371,000,610 1,661,938,195 Capital increase 16,965,686 — 16,965,686 Common stock repurchases ( 59,879,480 ) — ( 59,879,480 ) Retirement of special voting shares — ( 6,305 ) ( 6,305 ) Total shares at December 31, 2024 1,248,023,791 370,994,305 1,619,018,096 During the year ended December 31, 2024 and 2023, — million and 0.1 million special voting shares, respectively, were acquired for no consideration by the Company following the deregistration of the corresponding number of qualifying common shares from the Loyalty Register, net of transfer and allocation of special voting shares in accordance with the Special Voting Shares – Terms and Conditions. 121 Furthermore, during the years ended December 31, 2024 and 2023, the Company delivered 17.0 million and 1.9 million common shares, respectively, under the Company’s stock compensation plan, primarily due to the vesting or exercise of share-based awards. See “Note 18: Share-Based Compensation” for further discussion. Loyalty Voting Program In order to reward long-term ownership of the Company’s common shares and promote stability of its shareholder base, the Articles of Association of CNH Industrial N.V. provide for a loyalty voting program that grants eligible long-term shareholders the equivalent of two votes for each CNH Industrial N.V. common share that they hold. This has been accomplished through the issuance of special voting shares. A shareholder may at any time elect to participate in the loyalty voting program by requesting the registration of all or some of the common shares held by such shareholder in a separate register (the “Loyalty Register”) of the Company. If such common shares have been registered in the Loyalty Register for an uninterrupted period of three years in the name of the same shareholder, such shares will become “Qualifying Common Shares” and the relevant shareholder will be entitled to receive one special voting share for each such Qualifying Common Share which can be retained only for so long as the shareholder retains the associated common share and registers it in the Loyalty Register. Shareholders are not required to pay any amount to the Company in connection with the allocation of the special voting shares. The common shares are freely transferable, while special voting shares are transferable exclusively in limited circumstances and they are not listed on the NYSE. In particular, at any time, a holder of common shares that are Qualifying Common Shares who wants to transfer such common shares other than in limited specified circumstances (e.g., transfers to affiliates or relatives through succession, donation or other transfers) must request a deregistration of such Qualifying Common Shares from the Loyalty Register. After deregistration from the Loyalty Register, such common shares no longer qualify as Qualifying Common Shares and, as a result, the holder of such common shares is required to transfer the special voting shares associated with the transferred common shares to the Company for no consideration. The special voting shares have minimal economic entitlements as the purpose of the special voting shares is to grant long-term shareholders with an extra voting right by means of granting an additional special voting share, without granting such shareholders with any additional economic rights. However, as a matter of Dutch law, such special voting shares cannot be fully excluded from economic entitlements. Therefore, the Articles of Association provide that only a minimal dividend accrues to the special voting shares, which is not distributed, but allocated to a separate special dividend reserve. The impact of this special dividend reserve on the earnings per share of the common shares is not material. Treasury Shares In order to maintain the necessary operating flexibility over an adequate time period, including the implementation of the program in place, on April 13, 2022, the Annual General Meeting ("AGM") granted to the Board of Directors the authority to acquire common shares in the capital of the Company through stock exchange trading on the Euronext Milan and the NYSE or otherwise for a period of 18 months. The program reached its conclusion on November 6, 2023. Upon the completion of the program, on November 7, 2023, CNH's board of directors approved a new share buyback program. Under the new program, CNH will repurchase up to $ 1 billion worth of its common shares between November 8, 2023, and March 1, 2024. In February 2024, the Company’s Board of Directors authorized a $ 500 million share buyback program under which the Company may repurchase its common shares commencing after the maturity or exhaustion of the limit of the $ 1 billion share buyback program. Under such authorization the Board's authority is limited to a maximum of up to 10 % of the issued common shares as of the date of the AGM and, in compliance with applicable rules and regulations, subject to a maximum price per common share equal to the average of the highest price on each of the five trading days prior to the date of acquisition, as shown in the Official Price List of the NYSE (as the case may be) plus 10 % (maximum price) and to a minimum price per common share equal to the average of the lowest price on each of the five trading days prior to the date of acquisition, as shown in the Official Price List of the NYSE (as the case may be) minus 10 % (minimum price). Neither the renewal of the authorization, nor the launch of any program obliges the Company to buyback any common shares. The launch of any new program will be subject to a further resolution of the Board of Director. In any event, such programs may be suspended, discontinued or modified at any time for any reason and without previous notice, in accordance with applicable laws and regulations. During the year ended December 31, 2024, the Company repurchased 59.9 million shares of its common stock on the NYSE and on multilateral trading facilities under the buyback program. As of December 31, 2024, the Company held 116.4 million common shares in treasury, net of transfers of common shares to fulfill its obligations under its stock compensation plans, at an aggregate cost of $ 1,386 million. Depending on market and business conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without notice. 122 During the year ended December 31, 2024, the Company acquired, for no consideration, approximately — million special voting shares following the deregistration of qualifying common shares from the Loyalty Register, net of the transfer and allocation of special voting shares to those shareholders whose qualifying common shares became eligible to receive special voting shares after the uninterrupted three-year registration period in the Loyalty Register. As of December 31, 2024, the Company held 25.5 million special voting shares in treasury. Dividend On May 3, 2024, the Company's shareholders approved a dividend of $ 0.47 per common share and totaling approximately $ 591 million. The Company shall only have power to make distributions to shareholders and other persons entitled to distributable profits to the extent the Company’s equity exceeds the sum of the paid-up portion of the share capital and the reserves that must be maintained in accordance with provision of law. No distribution of profits may be made to the Company itself for shares that the Company holds in its own share capital. Note 18: Share-Based Compensation For the years ended December 31, 2024, 2023 and 2022 CNH recognized total share-based compensation expense of $ 19 million, $ 99 million and $ 87 million respectively. For the years ended December 31, 2024, 2023 and 2022, CNH recognized a total reduction to taxable income of $ 29 million, $ 14 million and $ 11 million, respectively, related to vesting of share-based compensation awards. Unrecognized share-based compensation costs will be recognized over a weighted-average period of 1.3 years. CNH’s equity awards are governed by the CNH Industrial N.V. Equity Incentive Plan (“CNH EIP”) and CNH Industrial N.V. Directors’ Compensation Plan (“CNH DCP”). At the AGM held on April 16, 2014, the Company’s shareholders approved the adoption of the CNH EIP, an umbrella program defining the terms and conditions for any subsequent long-term incentive program. The EIP allows grants of the following specific types of equity awards to any current or prospective executive director, officer, employee of, or service provider to, CNH: stock options, stock appreciation rights, restricted share units, restricted stock, performance shares or performance share units and other stock-based awards that are payable in cash, common shares or any combination thereof subject to the terms and conditions established by the Compensation Committee. In February 2020, the Board of Directors approved the issuance of up to 50 million common shares under the EIP. At the AGM on April 16, 2020, the Company's shareholders approved the issuance of up to 7 million common shares to executive directors under the 2021-2023 Long-Term Incentive Plan (described below) in accordance with and under the EIP. As part of the Demerger, any awards outstanding under the CNH EIP, and held by directors, officers and other employees vesting in 2022 were accelerated in December 2021 and the related equity incentives were issued by CNH in CNH stock. As a result of the Demerger, remaining outstanding awards vesting in 2023 and 2024 were converted to the entity the participant is employed with post spin. As such, for Iveco Group employees, the underlying stock awards under the CNH EIP vesting in 2023 and 2024 were converted at the effective date of the Demerger, subject to its terms, to Common Shares of Iveco Group N.V. The conversion of the CNH EIP includes appropriate adjustment mechanisms to ensure that the value of the unvested awards granted to all the beneficiaries under such plan remain unchanged pre and post demerger for employees in both the Iveco Group N.V. and CNH Industrial N.V. Performance Share Units ("PSU") 2021-2023 Long-Term Incentive Plan In February 2020, the Board of Directors approved the 2021-2023 Long-Term Incentive Plan under the EIP. In December 2020, CNH issued a new grant of PSUs to its key executive officers and select employees with the financial performance goals covering a three-year period culminating with a cliff vest date of February 28, 2024. Two internal financial metrics, Industrial ROIC (the ratio of Adjusted EBIT (after-tax) over Average Industrial Invested Capital) and Adjusted EPS (the net income (loss) excluding any nonrecurring items (after-tax), divided by the weighted average outstanding number of common shares on a fully diluted basis), weighted 50 % each, and a multiplier-based on CNH’s percentile ranking of Total Shareholder Return among a comparator group, will determine the total PSUs earned. The internal financial metrics have a payout factor of up to 200 % and the market based TSR determinant has a payout factor of 125 %. These metrics are considered performance vesting conditions. As such, compensation cost will be accrued based on whether it is considered probable that the performance conditions will be satisfied. The fair value of the PSU awards issued under this plan will be calculated by using the CNH Industrial N.V. stock price on the grant date adjusted for the present value of future dividends that would not be received during the vesting period. As of December 31, 2020, CNH issued 5 million PSUs. The total number of shares that will eventually vest may vary from the original estimate due to forfeiture or the level of achievement of the performance goals. The weighted average fair value of the awards 123 that were issued in 2020 was $ 10.83 per share. The 2020 PSU awards distributed under this plan were issued on December 4, 2020 to key executive officers and select employees and on December 14, 2020 to the Chair of CNH. During 2021, CNH issued an additional 3 million PSUs to the CEO, key executive officers and select employees. The weighted average fair value of the awards that were issued in 2021 was $ 13.13 per share. Effective January 1, 2022, the Iveco Group Business was separated from CNH Industrial N.V. by way of a legal statutory demerger to Iveco Group N.V. (the Demerger) and Iveco Group became a public listed company independent from CNH. As part of the Demerger, any awards outstanding under the CNH Equity Incentive Plan (or “CNH EIP”), and held by directors, officers and other employees vesting in April 2022 were accelerated in December 2021 and the related equity incentives were issued by CNH in CNH stock. Further, as a result of the Demerger, remaining outstanding awards vesting in 2023 and 2024 were converted to the entity the participant is employed with post Demerger. The conversion of the CNH EIP includes appropriate adjustment mechanisms to ensure that the value of the unvested awards granted to all the beneficiaries under such plan remain unchanged pre and post demerger for employees in both the Iveco Group N.V. and CNH Industrial N.V. 2022, 2023, and 2024 Long-Term Incentive Plan In 2022, 2023, and 2024, the Board of Directors approved the 2022-2024 Long-Term Incentive Plan, the 2023-2025 Long-Term Incentive Plan, and the 2024-2026 Long-Term Incentive Plan respectively, under the EIP. The 2022, 2023, and 2024 Long-Term Incentive Plans feature the same three year vesting period, two internal financial metrics, and financial multiplier as the 2021 Long-Term Incentive plan. Additionally the two internal financial metrics and financial multiplier are calculated as specified in the 2021 Long Term Incentive plan. However, differences between all plans exist in regards to the performance achievement threshold for both ROIC and EPS. Furthermore, the 2022, 2023, and 2024 plans feature a smaller list of comparator group for its TSR percentile ranking when compared to the 2021 plan. In 2023 and 2024 CNH issued 2.8 million and 9.7 million PSUs, respectively. The total number of shares that will eventually be issued may vary from the original estimate due to forfeiture or the level of achievement of the performance goals. The weighted average fair value of the awards that were issued in 2023 and 2024 was $ 12.29 and $ 8.27 per share, respectively. The following table reflects the activity of PSUs under the Long-Term Incentive Plans during the year ended December 31, 2024: 2024 Performance Shares Weighted Average Grant Date Fair Value Nonvested at beginning of year 13,379,487 $ 9.52 Granted 9,714,110 $ 8.27 Forfeited/Cancelled ( 1,163,447 ) $ 13.00 Vested ( 15,128,611 ) $ 7.66 Nonvested at end of year 6,801,539 $ 11.28 Restricted Share Units ("RSU") In 2022, 2023, and 2024, CNH issued approximately 2 million, 2 million and 4 million Restricted Share Units (“RSUs”) to key executive officers and select employees with a weighted average fair value of $ 13.90 , $ 11.87 and $ 9.42 per share, respectively. The fair value of the award is measured using the CNH Industrial N.V. stock price on the grant date adjusted for the present value of future dividends that employees will not receive during the vesting period. The RSUs vest upon a time-based service requirement. 2021-2023 Long-Term Incentive Plan On December 4, 2020, CNH issued two separate RSU grants to key executive officers and select employees. Under the first RSU grant, 1.1 million RSUs were awarded to select employees with a weighted average fair value of $ 11.43 . These awards vested on December 31, 2020. Under the second RSU grant, 3.3 million RSUs were awarded to select employees and were set to vest in three equal installments over a three-year period. The first tranche, which consisted of 1.1 million RSUs, was set to vest on April 30, 2022. The second and third tranches were set to vest on April 30, 2023, and April 30, 2024, respectively. The weighted average fair value for the December 2020 three tranche award group are $ 11.23 , $ 11.02 , and $ 10.82 , respectively. On December 14, 2020, CNH issued 120 thousand RSUs to the Chair of CNH, of which 17 thousand vested on December 31, 2020. The weighted average fair value for these awards is $ 10.96 . The remaining 103 thousand RSUs vested in three equal installments on April 30, 2022, 2023, and 2024 respectively. The fair value for these awards was $ 10.76 , $ 10.55 and $ 10.35 , respectively. During 2021, CNH issued an additional 1.5 million RSUs to the CEO, key executive officers and select employees. Of the awards that were issued, 1.2 million are set to vest in three equal installments over a three-year period. The first tranche, which consists of 124 0.4 million RSUs, were set to vest on April 31, 2022. The second and third tranches were set to vest on April 30, 2023, and April 30, 2024, respectively. The weighted average fair value of these awards are $ 14.04 per share for the first tranche, $ 13.84 per share for the second tranche, and $ 13.66 per share for the third tranche. The remaining awards issued in 2021 had a cumulative weighted average fair value of $ 16.73 . In 2021, CNH, in anticipation of the Demerger, accelerated the vesting of awards with a vest date of April 30, 2022 to December 1, 2021, excluding shares awarded to the CEO and Chairperson. As a result, CNH recorded $ 5 million of expense due to the acceleration of these awards. The weighted average fair value of the shares vested during 2021 was $ 11.75 per share. 2022-2024 Long-Term Incentive Plan In 2023 and 2024 CNH issued 2.1 million and 3.5 million RSUs. The total number of shares that will eventually be issued may vary from the original estimate due to forfeiture or the level of achievement of the performance goals. The weighted average fair value of the awards that were issued in 2023 and 2024 were $ 11.87 and $ 9.42 per share. The following table reflects the activity of RSUs under the Long-Term Incentive Plans during the year ended December 31, 2024: 2024 Restricted Shares Weighted Average Grant Date Fair Value Nonvested at beginning of year 5,423,057 $ 11.21 Granted 3,510,065 $ 9.42 Forfeited ( 893,278 ) $ 12.15 Vested ( 1,835,471 ) $ 8.46 Nonvested at end of year 6,204,373 $ 10.88 Additional Share-Based Compensation Information The table below provides additional share-based compensation information for the years ended December 31, 2024, 2023 and 2022: (in millions of dollars) 2024 2023 2022 Total intrinsic value of options exercised and shares vested $ 203 $ 52 $ 22 Fair value of shares vested $ 126 $ 14 $ 3 Note 19: Earnings per Share The Company’s basic earnings per share (“EPS”) is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if dilutive securities were exercised into common stock. The effect of dilutive securities is calculated using the treasury stock method. 125 The following table sets forth the computation of basic EPS and diluted EPS for the years ended December 31, 2024, 2023 and 2022: (in millions of dollars, except per share data) 2024 2023 (1) 2022 Basic: Net income (loss) attributable to CNH Industrial N.V. $ 1,246 $ 2,275 $ 2,029 Basic earnings (loss) per share attributable to common shareholders: Weighted average common shares outstanding—basic 1,254 1,332 1,351 Basic earnings (loss) per share $ 0.99 $ 1.71 $ 1.50 Diluted: Net income (loss) attributable to CNH Industrial N.V. $ 1,246 $ 2,275 $ 2,029 Weighted average common shares outstanding—basic 1,254 1,332 1,351 Dilutive effect of stock compensation plans 6 18 11 Weighted average common shares outstanding—diluted (2) 1,260 1,350 1,362 Diluted earnings (loss) per share $ 0.99 $ 1.69 $ 1.49 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. (2) For the years ended December 31, 2024 and 2023, no shares were excluded from the computation of diluted earnings per share due to an anti-dilutive impact. For the year ended December 31, 2022, 0.50 million shares were excluded from the computation of diluted earnings per share due to an anti-dilutive impact. Note 20: Accumulated Other Comprehensive Income (Loss) The Company’s share of comprehensive income (loss) includes net income plus other comprehensive income, which includes changes in fair value of certain derivatives designated as cash flow hedges, certain changes in pension and other retirement benefit plans, foreign currency translation gains and losses, changes in the fair value of available-for-sale securities, the Company’s share of other comprehensive income of entities accounted for using the equity method, and reclassifications for amounts included in net income less net income and other comprehensive income attributable to the noncontrolling interest. For more information on the Company’s derivative instruments, see “Note 16: Financial Instruments”. For more information on the Company’s pensions and retirement benefit obligations, see “Note 13: Employee Benefit Plans and Postretirement Benefits”. The Company’s other comprehensive income (loss) amounts are aggregated within accumulated other comprehensive income (loss). The tax effect for each component of other comprehensive income (loss) consisted of the following: Year Ended December 31, 2024 (in millions of dollars) Gross Amount Income Taxes Net Amount Unrealized gain (loss) on cash flow hedges $ 134 $ ( 52 ) $ 82 Changes in retirement plans’ funded status 15 ( 12 ) 3 Foreign currency translation ( 408 ) — ( 408 ) Share of other comprehensive loss of entities using the equity method ( 28 ) — ( 28 ) Other comprehensive income (loss) $ ( 287 ) $ ( 64 ) $ ( 351 ) Year Ended December 31, 2023 (1) (in millions of dollars) Gross Amount Income Taxes Net Amount Unrealized gain (loss) on cash flow hedges $ ( 90 ) $ 34 $ ( 56 ) Changes in retirement plans’ funded status ( 87 ) 21 ( 66 ) Foreign currency translation 40 — 40 Share of other comprehensive loss of entities using the equity method 1 — 1 Other comprehensive income (loss) $ ( 136 ) $ 55 $ ( 81 ) (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. 126 Year Ended December 31, 2022 (in millions of dollars) Gross Amount Income Taxes Net Amount Unrealized gain (loss) on cash flow hedges $ 56 $ ( 12 ) $ 44 Changes in retirement plans’ funded status 29 12 41 Foreign currency translation 158 — 158 Share of other comprehensive loss of entities using the equity method ( 25 ) — ( 25 ) Other comprehensive income (loss) $ 218 $ — $ 218 The changes, net of tax, in each component of accumulated other comprehensive income (loss) consisted of the following: (in millions of dollars) Unrealized Gain (Loss) on Cash Flow Hedges Change in Retirement Plans’ Funded Status Foreign Currency Translation Share of Other Comprehensive Income of Entities Using the Equity Method Total Balance, December 31, 2021 $ ( 17 ) $ ( 559 ) $ ( 1,643 ) $ ( 226 ) $ ( 2,445 ) Demerger of Iveco Group 19 233 ( 316 ) 12 ( 52 ) Balance, January 1, 2022 2 ( 326 ) ( 1,959 ) ( 214 ) ( 2,497 ) Other comprehensive income (loss), before reclassifications ( 126 ) 102 159 ( 25 ) 110 Amounts reclassified from other comprehensive income 170 ( 61 ) — — 109 Other comprehensive income (loss) (1) 44 41 159 ( 25 ) 219 Balance, December 31, 2022 46 ( 285 ) ( 1,800 ) ( 239 ) ( 2,278 ) Other comprehensive income (loss), before reclassifications (2) ( 80 ) ( 54 ) 37 1 ( 96 ) Amounts reclassified from other comprehensive income 24 ( 12 ) — — 12 Other comprehensive income (loss) (1) ( 56 ) ( 66 ) 37 1 ( 84 ) Balance, December 31, 2023 ( 10 ) ( 351 ) ( 1,763 ) ( 238 ) ( 2,362 ) Other comprehensive income (loss), before reclassifications 37 7 ( 407 ) ( 28 ) ( 391 ) Amounts reclassified from other comprehensive income 45 ( 4 ) — — 41 Other comprehensive income (loss) (1) 82 3 ( 407 ) ( 28 ) ( 350 ) Balance, December 31, 2024 $ 72 $ ( 348 ) $ ( 2,170 ) $ ( 266 ) $ ( 2,712 ) (1) Excluded from the table above is other comprehensive (income) loss allocated to noncontrolling interests of $( 1 ) million, $ 3 million and $( 1 ) million for the years ended December 31, 2024, 2023 and 2022, respectively. (2) See Note 23 Immaterial Revision of Prior Period Financial Statements. 127 Significant amounts reclassified out of each component of accumulated other comprehensive income (loss) at December 31, 2024 and 2023 consisted of the following: Amount Reclassified from Other Comprehensive Income (Loss) Consolidated Statement of Operations line (in millions of dollars) 2024 2023 Cash flow hedges $ 9 $ 7 Net sales 18 33 Cost of goods sold ( 4 ) ( 7 ) Other, net 25 ( 6 ) Interest expense ( 3 ) ( 3 ) Income taxes 45 24 Change in retirement plans’ funded status: Amortization of actuarial losses 19 20 (1) Amortization of prior service cost ( 24 ) ( 36 ) (1) 1 4 Income taxes ( 4 ) ( 12 ) Total reclassifications, net of tax $ 41 $ 12 (1) These amounts are included in net periodic pension and other postretirement benefit cost. See “Note 13: Employee Benefit Plans and Postretirement Benefits” for additional information. Note 21: Segment Reporting The operating segments through which the Company manages its operations are reflected in the internal reporting used by the Company’s Chief Operating Decision Maker (“CODM”) to assess performance and make decisions about resource allocation. The Company’s Chief Operating Decision Makers (“CODM”) has been identified as the Chief Executive Officer (“CEO”). The CEO is charged with the management of CNH, reviews operating performance of the segments and makes decisions on certain operational matters. The CEO, supported by the Global Leadership Team ("GLT"), presents to the Board of Directors the Company's operating results, updated strategic business plans, and long-term value creation strategies as well as top short-term and mid-term operational and strategic risks. The presentations to the Board of Directors allows management to articulate their strategies for the achievement of their business objectives and mitigation of risks and permits the Board of Directors to give feedback on management’s plans. The segments are organized based on products and services provided by the Company. CNH has three operating segments, that meet the criteria of reportable segments: Agriculture designs, manufactures and distributes a full line of farm machinery and implements, including two-wheel and four-wheel drive tractors, crawler tractors, combines, grape and sugar cane harvesters, hay and forage equipment, planting and seeding equipment, soil preparation and cultivation implements, and material handling equipment. Agricultural equipment is sold under the New Holland Agriculture and Case IH brands. Regionally focused brands include: STEYR, for agricultural tractors; Flexi-Coil specializing in tillage and seeding systems; Miller manufacturing application equipment. The Raven brand supports Precision Agriculture, digital technology and the development of autonomous systems. Hemisphere, acquired in 2023, provides high-performance satellite positioning technology for the agriculture and construction industries. Construction designs, manufactures and distributes a full line of construction equipment including excavators, crawler dozers, graders, wheel loaders, backhoe loaders, skid steer loaders, and compact track loaders along with a wide variety of attachments. Construction equipment is sold under the CASE Construction Equipment, New Holland Construction and Eurocomach brands. Financial Services provides and administers financing to end-use customers for the purchase of new and used agricultural and construction equipment and components sold through CNH's dealer network, as well as revolving charge account financing and other financial services. Financial Services also provides wholesale financing to CNH dealers and distributors primarily to finance inventories of equipment. Furthermore, Financial Services provides trade receivables factoring services to CNH subsidiaries. The European Financial Services operations are supported by the Iveco Group's Financial Services segment. Financial Services also provides financial products and services to dealers and end customers of Iveco Group companies in the North America, South America and Asia Pacific regions. The segment is referred to commercially as CNH Capital - the captive financial provider for the CNH family of brands, specializing in agricultural and construction equipment. In Brazil, it operates under the brand of Banco CNH. Revenues for each reported segment are those directly generated by or attributable to the segment as a result of the respective business activities and include revenues from transactions with third parties as well as those deriving from transactions with other segments, recognized at normal market prices. Segment expenses represent costs arising from each segment’s business activities with both third 128 parties and other operating segments. These expenses are either directly attributable to the segment or allocated to it using recognized allocation bases, reflecting the amount of expenses that would be required if the segment operated autonomously from the larger group. Allocations are necessary to report segment data due to the integrated nature of our operations as well as the use of shared administrative functions and common support services. Expenses deriving from business activities with other segments are recognized at normal market prices. With reference to the Agriculture and Construction segments, the CODM assesses segment performance and makes decisions about resource allocation based upon Adjusted EBIT. The Company believes Adjusted EBIT more fully reflects Agriculture and Construction segments profitability. Adjusted EBIT of the Agriculture and Construction segments 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 and unallocated 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. With reference to Financial Services, the Company revised the performance metric used to assess the segment’s performance in 2024 from Net Income to Income before income taxes. This change was made to better reflect the manner in which the CODM evaluates segment performance and allocates resources. The prior-period segment results have been recast to reflect this change for comparability purposes. The CODM uses both Adjusted EBIT of Agriculture and Construction and Income before income taxes of Financial Services predominantly in the annual budget and forecasting process. The CODM considers actual-to-budget and actual-to-forecast variances on a monthly basis for both measures when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses Adjusted EBIT for Agriculture and Construction and Income before income taxes of Financial Services to evaluate any pricing strategy, to assess and compare the performance of each segment and to determine compensation of certain employees. The following table includes reported segment revenue and income, significant segment expenses and other segment items considered in the calculation of both Adjusted EBIT for Industrial Activities' and Income before income taxes for Financial Services. Years Ended December 31, 2024 (in millions of dollars) Agriculture (1) Construction Financial Services (2) Total Net Sales $ 14,007 $ 3,053 $ — Finance, interest income (Financial Services) — — 2,774 Total Revenues 14,007 3,053 2,774 Cost of goods sold ( 10,796 ) ( 2,554 ) — Selling, general and administrative expenses (6) ( 1,031 ) ( 235 ) ( 332 ) Research and Development Expenses ( 829 ) ( 95 ) — Interest Expense (Financial Services) — — ( 1,457 ) Restructuring Expenses (Financial Services) — — ( 1 ) Other, Net (Financial Services) — — ( 514 ) Equity in income of joint ventures 119 — 19 Adjusted EBIT [A] 1,470 169 n/a Income before income taxes [B] n/a n/a 489 Segment Profit/(loss) [C=A+B] $ 2,128 Interest Income/(expenses), net (excluding Financial Services) $ ( 152 ) Restructuring expenses (Industrial Activities) ( 117 ) Foreign exchange (gains) losses, net (Agriculture & Construction) ( 15 ) Finance and non-service component of Pension and other post employment benefit costs (Agriculture & Construction) (4) ( 10 ) Unallocated amounts (3) ( 235 ) Discrete items excluded from Segments (5) ( 4 ) Income tax expense ( 336 ) Net income $ 1,259 129 Years Ended December 31, 2023 (in millions of dollars) Agriculture Construction Financial Services (2) Total Net Sales $ 18,148 $ 3,932 $ — Finance, interest income — — 2,573 Total Revenues 18,148 3,932 2,573 Cost of goods sold ( 13,521 ) ( 3,317 ) — Selling, general and administrative expenses (6) ( 1,214 ) ( 273 ) ( 218 ) Research and Development Expenses ( 937 ) ( 104 ) — Interest Expense (Financial Services) — — ( 1,235 ) Restructuring Expenses (Financial Services) — — ( 2 ) Other, Net (Financial Services) — — ( 629 ) Equity in income of joint ventures 160 — 18 Adjusted EBIT [A] 2,636 238 n/a Income before income taxes [B] n/a n/a 507 Segment Profit/(loss) [C=A+B] $ 3,381 Interest Income/(expenses), net (excluding Financial Services) $ ( 76 ) Restructuring expenses (Agriculture & Construction) ( 65 ) Foreign exchange (gains) losses, net (Agriculture & Construction) ( 105 ) Finance and non-service component of Pension and other post employment benefit costs (Agriculture & Construction) (4) ( 4 ) Unallocated amounts (3) ( 240 ) Discrete items excluded from Segments (5) ( 10 ) Income tax expense ( 594 ) Net income $ 2,287 130 Years Ended December 31, 2022 (in millions of dollars) Agriculture Construction Financial Services (2) Total Net Sales $ 17,969 $ 3,572 $ — Finance, interest income — — 1,996 Total Revenues 17,969 3,572 1,996 Cost of goods sold ( 13,685 ) ( 3,098 ) — Selling, general and administrative expenses (6) ( 1,139 ) ( 262 ) ( 203 ) Research and Development Expenses ( 778 ) ( 88 ) — Interest Expense (Financial Services) — — ( 601 ) Other, Net (Financial Services) — — ( 744 ) Equity in income of joint ventures 89 — 15 Adjusted EBIT [A] 2,456 124 n/a Income before income taxes [B] n/a n/a 463 Segment Profit/(loss) [C=A+B] $ 3,043 Interest Income/(expenses), net (excluding Financial Services) $ ( 119 ) Restructuring expenses (Agriculture & Construction) ( 31 ) Foreign exchange (gains) losses, net (Agriculture & Construction) ( 59 ) Finance and non-service component of Pension and other post employment benefit costs (Agriculture & Construction) (4) 124 Unallocated amounts (3) ( 147 ) Discrete items excluded from Segments (5) ( 25 ) Income tax expense ( 747 ) Net income $ 2,039 (1) See Note 23 Immaterial Revision of Prior Period Financial Statements. (2) For Financial Services, the CODM uses Income before income taxes as the measure to allocate resources and assess segment performance. Interest income and interest expenses are presented as significant segment items considered in the calculation of net income. (3) Unallocated amounts includes certain corporate costs and other operating expenses and incomes not allocated to segments' results. (4) In the years ended December 31, 2024, 2023 and 2022, this item includes an annual pre-tax gain of $ 24 million, respectively as a result of the amortization over 4 years of the $ 101 million positive impact from the 2021 modifications of a healthcare plan in the U.S. In the years ended December 31, 2022, this item includes the pre-tax gain of $ 90 million as a result of the amortization over approximately 4.5 years of the $ 527 million positive impact from 2018 modification of a healthcare plan in the U.S. (5) In the year ended December 31, 2024, this item includes a loss of $ 17 million on the sale of certain non-core product lines and a gain of $ 14 million for investment fair value adjustments. In the year ended December 31, 2023, this item includes a loss of $ 23 million on the sale of the CNH Industrial Russia and CNH Capital Russia businesses, partially offset by a gain of $ 13 million for the fair value remeasurement of Augmenta and Bennamann. In the year ended December 31, 2022, this item included $ 43 million of asset write-downs, $ 25 million of separation costs incurred in a connection with our spin-off of the Iveco Group Business and $ 22 million of costs related to the activity of the Raven segments held for sale, including the loss on the sale of the Engineered Films and Aerostar divisions, partially offset by a $ 65 million dollar gain on the sale of our Canada parts depot. (6) In the years ended December 31, 2024, 2023 and 2022, this item included risk costs for the Financial Services segment of $ 204 million, $ 80 million and $ 72 million, respectively. There are no segment assets reported to the CODM for assessing performance and allocating resources. However, the CODM reviews expenditures for long-lived assets by operating segment, therefore, this information is presented below as well. 131 A summary of additional operating segment information for the years ended December 31, 2024, 2023 and 2022 is as follows: Years Ended December 31, (in millions of dollars) 2024 2023 2022 Revenues Agriculture $ 14,007 $ 18,148 $ 17,969 Construction 3,053 3,932 3,572 Net sales 17,060 22,080 21,541 Financial Services 2,774 2,573 1,996 Eliminations and other 2 34 14 Total Revenues $ 19,836 $ 24,687 $ 23,551 Depreciation and Amortization (1) Agriculture $ 366 $ 331 $ 287 Construction 45 42 38 Other activities and adjustments 2 — — Depreciation and amortization of Industrial Activities 413 373 325 Financial Services 4 4 2 Total Depreciation and amortization $ 417 $ 377 $ 327 Expenditures for long-lived assets (2) Agriculture $ 455 $ 534 $ 393 Construction 75 96 63 Other activities 3 7 — Expenditures for long-lived assets of Industrial Activities 533 637 456 Financial Services 3 7 5 Total Expenditures for long-lived assets $ 536 $ 644 $ 461 Inventory Agriculture $ 3,730 $ 4,299 $ 3,783 Construction 983 1,223 1,015 Financial Services 63 23 13 Total Inventory $ 4,776 $ 5,545 $ 4,811 Equity Method Investments Agriculture $ 284 $ 302 $ 218 Financial Services 119 123 113 Total Equity Method Investments $ 403 $ 425 $ 331 (1) Excluding equipment on operating leases. (2) Excluding equipment on operating leases and right-of-use assets. 132 Geographic Information CNH has its principal office in London, England, U.K. Revenues earned in the U.K. from external customers were $ 359 million, $ 548 million and $ 557 million for the years ended December 31, 2024, 2023 and 2022, respectively. Revenues earned in the rest of the world from external customers were $ 19,477 million, $ 24,139 million and $ 22,994 million for the years ended December 31, 2024, 2023 and 2022, respectively. The following highlights revenues earned from external customers in the rest of the world by destination: (in millions of dollars) 2024 2023 2022 United States $ 7,193 $ 9,090 $ 8,189 Brazil 2,748 3,540 3,904 Canada 1,745 1,712 1,530 France 1,060 1,300 1,123 Australia 888 1,222 982 Argentina 566 574 565 India 532 499 470 Italy 422 562 592 Germany 399 633 674 China 326 300 267 Poland 287 373 449 Spain 259 263 263 Other 3,052 4,071 3,986 Total Revenues from external customers in the rest of world $ 19,477 $ 24,139 $ 22,994 Total long-lived tangible and intangible assets located in the U.K. were $ 324 million and $ 328 million at December 31, 2024, and 2023, respectively, and the total of such assets located in the rest of the world totaled $ 7,883 million and $ 7,908 million at December 31, 2024 and 2023, respectively. The following highlights long-lived tangible and intangible assets by geography in the rest of the world: At December 31, (in millions of dollars) 2024 2023 United States $ 5,795 $ 5,701 Canada 680 732 Italy 466 499 Brazil 202 226 France 62 60 China 51 53 Germany 19 24 Spain 3 3 Other 605 610 Total Long-lived assets in the rest of the world $ 7,883 $ 7,908 In 2024, 2023 and 2022, no single external customer of CNH accounted for 10 percent or more of consolidated revenues. Note 22: Related Party Information As of December 31, 2024 and 2023 CNH’s related parties were primarily EXOR N.V. and the companies that EXOR N.V. controlled or had a significant influence over, including Stellantis N.V. (formerly Fiat Chrysler Automobiles N.V. which, effective January 16, 2021, merged with Peugeot S.A. by means of a cross-border legal merger) and its subsidiaries and affiliates ("Stellantis") and Iveco Group N.V. which effective January 1, 2022 separated from CNH Industrial N.V. by way of a demerger under Dutch law and became a public listed company independent from CNH. As of December 31, 2024, EXOR N.V. held 45.3 % of CNH’s voting power and had the ability to significantly influence the decisions submitted to a vote of CNH’s shareholders, including approval of annual dividends, the election and removal of directors, mergers or other business combinations, the acquisition or disposition of assets, and issuances of equity and the incurrence of indebtedness. The percentage above has been calculated as the ratio of (i) the aggregate number of common shares and special voting shares owned by EXOR N.V. to (ii) the aggregate number of outstanding common shares and special voting shares of CNH as of December 31, 2024. 133 In addition, CNH engages in transactions with its unconsolidated subsidiaries and affiliates over which CNH has a significant influence or joint control. The Company’s Audit Committee reviews and, if appropriate, evaluates all significant related party transactions. Transactions with EXOR N.V. and its Subsidiaries and Affiliates EXOR N.V. is an investment holding company in Europe. As of December 31, 2024, 2023, and 2022, among other things, EXOR N.V. managed a portfolio that includes investments in CNH, Stellantis, Iveco Group and Ferrari. CNH did not enter into any significant transactions with EXOR N.V. during the years ended December 31, 2024, 2023, and 2022. Transactions with Iveco Group post-Demerger CNH and Iveco Group post-Demerger entered into transactions consisting of the sale of engines from Iveco Group to CNH. Additionally, concurrent with the Demerger, the Companies entered into arms-length services contracts in relation to general administrative and specific technical matters, provided by either CNH to Iveco Group and vice versa as follows: Master Service Agreements : CNH and Iveco Group entered into a two-year Master Services Agreement (“MSA”) whereby each Party (and its subsidiaries) may provide services to the other (and its subsidiaries). Services provided under the MSA relate mainly to lease of premises and depots and IT services. Revenues from services provided under the MSA are presented as Finance, interest and other income on the Statement of Operations. Engine Supply Agreement : in relation to the design and supply of off-road engines from Iveco Group to CNH post-Demerger, Iveco Group and CNH entered into a ten-year Engine Supply Agreement (“ESA”) whereby Iveco Group will sell to CNH post-Demerger diesel, CNG and LNG engines and provide post-sale services. Costs related to engines purchased through this agreement are presented as Cost of goods sold on the Statement of Operations. Financial Service Agreement : in relation to certain financial services activities carried out by either CNH to Iveco Group post-Demerger or vice versa, in connection with the execution of the Demerger Deed, CNH and Iveco Group entered into a three-year Master Services Agreement (“FS MSA”), whereby each Party (and its subsidiaries) may provide services and/or financial services activities to the other (and its subsidiaries). Services provided under the FS MSA relate mainly to wholesale and retail financing activities to suppliers, distribution network and customers. Revenues from services provided under the FS MSA are presented as Finance, interest and other income on the Statement of Operations. The following table sets forth the related party transactions entered into with Iveco Group post-Demerger for the time period presented: (in millions of dollars) 2024 2023 2022 Net revenues $ 129 $ 139 $ 48 Purchases $ 747 $ 1,042 $ 930 Selling, general and administrative expenses $ — $ — $ — (in millions of dollars) December 31, 2024 December 31, 2023 Trade receivables $ 24 $ 25 Financial receivables from Iveco Group N.V. $ 168 $ 380 Trade payables $ 205 $ 335 Financial payables to Iveco Group N.V. $ 62 $ 146 134 Transactions with Unconsolidated Subsidiaries and Affiliates CNH sells agricultural and construction equipment and provides technical services to unconsolidated subsidiaries and affiliates such as CNH de Mexico S.A. de C.V., TürkTraktör and New Holland HFT Japan Inc. CNH also purchases equipment from unconsolidated subsidiaries and affiliates, such as TürkTraktör. The following table sets forth the related party transaction entered into for the time period presented: (in millions of dollars) 2024 2023 2022 Net sales $ 489 $ 589 $ 400 Purchases $ 420 $ 508 $ 554 (in millions of dollars) December 31, 2024 December 31, 2023 Trade receivables $ 3 $ 2 Trade payables $ 53 $ 54 At December 31, 2024 and 2023, CNH had pledged guarantees and commitments on the debt or commitments of third parties and performance guarantees in the interest of its associated company for an amount of $ 53 million and $ 37 million, respectively, related to CNH Industrial Capital Europe S.a.S. Note 23. Immaterial Revision of Prior Period Financial Statements In the third quarter of the year ended December 31, 2024, the Company corrected the accounting treatment for highly inflationary accounting related to its unconsolidated subsidiary in Türkiye, TürkTraktör. Refer to Note 1 for additional information. While the prior period amounts have been revised, as set forth below for comparability, the impact of the correction in these prior periods is not material to the consolidated financial statements of the Company in any of the impacted periods. The prior period impacts on the Company’s Consolidated Statements of Operations were as shown below. Year Ended December 31, 2023 (in millions of dollars and shares, except per share amounts) Previously Reported Revision Impacts As Revised Income (loss) of Consolidated Group before Income Taxes $ 2,703 $ — $ 2,703 Income tax expense ( 594 ) — ( 594 ) Equity in income of unconsolidated subsidiaries and affiliates 274 ( 96 ) 178 Net income (loss) 2,383 ( 96 ) 2,287 Net income (loss) attributable to noncontrolling interests 12 — 12 Net income (loss) attributable to CNH Industrial N.V. $ 2,371 $ ( 96 ) $ 2,275 Earnings per share attributable to common shareholders Basic $ 1.78 $ ( 0.07 ) $ 1.71 Diluted $ 1.76 $ ( 0.07 ) $ 1.69 Weighted average shares outstanding Basic 1,332 — 1,332 Diluted 1,350 — 1,350 135 The prior period impacts to the Company's Consolidated Statements of Comprehensive income were as shown below. Year Ended December 31, 2023 (in millions of dollars) Previously Reported Revision Impacts As Revised Net income (loss) $ 2,383 $ ( 96 ) $ 2,287 Other comprehensive income (loss), net of tax Share of other comprehensive income (loss) of entities using the equity method ( 11 ) 12 1 Other comprehensive loss, net of tax ( 93 ) 12 ( 81 ) Comprehensive income (loss) 2,290 ( 84 ) 2,206 Less: Comprehensive income (loss) attributable to noncontrolling interests 15 — 15 Comprehensive income (loss) attributable to CNH Industrial N.V. $ 2,275 $ ( 84 ) $ 2,191 The prior period impacts to the Company's Consolidated Balance Sheet were as shown below. December 31, 2023 (in millions of dollars) Previously Reported Revision Impacts As Revised Assets Investments in unconsolidated subsidiaries and affiliates 563 ( 84 ) 479 Total Assets $ 46,351 $ ( 84 ) $ 46,267 Liabilities and Equity Total Liabilities 38,117 — 38,117 Redeemable equity 54 — 54 Retained earnings 9,750 ( 96 ) 9,654 Accumulated other comprehensive income (loss) ( 2,374 ) 12 ( 2,362 ) Total Equity 8,180 ( 84 ) 8,096 Total Liabilities and Equity $ 46,351 $ ( 84 ) $ 46,267 The prior period impacts to the Company's Consolidated Statement of Cash Flows were as follows: Year Ended December 31, 2023 (in millions of dollars) Previously Reported Revision Impacts As Revised Cash Flows from Operating Activities Net Income (loss) $ 2,383 $ ( 96 ) $ 2,287 Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Undistributed income of unconsolidated subsidiaries ( 211 ) 96 ( 115 ) Net cash provided (used) by operating activities 907 — 907 136