cnhi-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36085

CNH INDUSTRIAL N.V.

(Exact name of registrant as specified in its charter)

Netherlands

98-1125413

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Cranes Farm Road, Basildon, Essex, SS14 3AD, United Kingdom

(Address of principal executive offices)

Registrant’s telephone number including area code: +44 207 925 1964

Former name, former address and former fiscal year, if changed since last report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, par value €0.01

CNHI

New York Stock Exchange 1

4.50% Notes due 2023

CNHI23

New York Stock Exchange

3.850% Notes due 2027

CNHI27

New York Stock Exchange

1 In addition to the New York Stock Exchange, CNHI common shares are listed on Euronext Milan, the regulated market of Borsa Italiana, in Italy.

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

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

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


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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

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

At June 30, 2023, 1,334,353,497 common shares, par value €0.01 per share, of the registrant were outstanding.

TABLE OF CONTENTS


		Page
PART I – FINANCIAL INFORMATION
Item 1	Financial statements	1
Item 2	Management's discussion and analysis of financial condition and results of operations	33
Item 3	Quantitative and qualitative disclosures about market risk	53
Item 4	Controls and procedures	54

PART II – OTHER INFORMATION
Item 1	Legal proceedings	55
Item 1A	Risk factors	55
Item 2	Unregistered sales of equity securities and use of proceeds	55
Item 3	Default upon senior securities	55
Item 4	Mine safety disclosures	55
Item 5	Other information	55
Item 6	Exhibits	56

Note:

CNH Industrial N.V. qualifies as a Foreign Private Issuer, as determined by Rule 3b-4 under the Securities Exchange Act of 1934 (the "Exchange Act") and is exempt from filing quarterly reports on Form 10-Q by virtue of Rules 13a-13 and 15d-13 under the Exchange Act. CNH Industrial N.V. has voluntarily elected to file this quarterly financial report using Form 10-Q.

As a Foreign Private Issuer, CNH Industrial N.V. is also exempt from the proxy solicitation rules under Section 14 of the Exchange Act and Regulation FD, and its officers, directors, and principal shareholders are not subject to the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

PART I - FINANCIAL INFORMATION

CNH INDUSTRIAL N.V.

CONSOLIDATED BALANCE SHEETS

As of June 30, 2023 and December 31, 2022

(Unaudited)


	June 30, 2023		December 31, 2022
	(in millions)
ASSETS
Cash and cash equivalents	$	3,194	$	4,376
Restricted cash	731		753
Trade receivables, net	191		172
Financing receivables, net	21,541		19,260
Receivables from Iveco Group N.V.	260		298
Inventories, net	6,411		4,811
Property, plant and equipment, net	1,643		1,532
Investments in unconsolidated subsidiaries and affiliates	405		385
Equipment under operating leases	1,458		1,502
Goodwill, net	3,490		3,322
Other intangible assets, net	1,229		1,129
Deferred tax assets	587		433
Derivative assets	195		189
Other assets	1,352		1,219
Total Assets	42,687		39,381
LIABILITIES AND EQUITY
Debt	$	24,870	$	22,962
Payables to Iveco Group N.V.	111		156
Trade payables	3,937		3,702
Deferred tax liabilities	37		85
Pension, postretirement and other postemployment benefits	442		449
Derivative liabilities	243		204
Other liabilities	5,417		4,847
Total Liabilities	35,057		32,405
Redeemable noncontrolling interest	55		49
Common shares, €0.01, par value; outstanding 1,334,353,497 common shares and 370,995,910 loyalty program special voting shares at 6/30/2023; and outstanding 1,344,240,971 common shares and 371,072,953 loyalty program special voting shares at 12/31/2022	25		25
Treasury stock, at cost; 30,046,699 common shares at 6/30/2023 and 20,159,225 common shares at 12/31/2022	(382)		(230)
Additional paid in capital	1,536		1,504
Retained earnings	8,567		7,906
Accumulated other comprehensive loss	(2,246)		(2,278)
Noncontrolling interests	75		—
Total Equity	7,575		6,927
Total Liabilities and Equity	$	42,687	$	39,381

See accompanying notes to the consolidated financial statements

CNH INDUSTRIAL N.V.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2023 and 2022

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Revenues
Net sales	$	5,954	$	5,613	$	10,730	$	9,793
Finance, interest and other income	613		469		1,179		934
Total Revenues	6,567		6,082		11,909		10,727
Costs and Expenses
Cost of goods sold	4,463		4,377		8,074		7,663
Selling, general and administrative expenses	485		424		923		802
Research and development expenses	269		212		500		396
Restructuring expenses	2		6		3		8
Interest expense	323		162		595		300
Other, net	187		148		350		331
Total Costs and Expenses	5,729		5,329		10,445		9,500
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates	838		753		1,464		1,227
Income tax (expense) benefit	(192)		(228)		(365)		(387)
Equity in income of unconsolidated subsidiaries and affiliates	64		27		97		48
Net income (loss)	710		552		1,196		888
Net income attributable to noncontrolling interests	4		4		8		7
Net income (loss) attributable to CNH Industrial N.V.	$	706	$	548	$	1,188	$	881

Earnings (loss) per share attributable to common shareholders
Basic	$	0.53	$	0.40	$	0.89	$	0.65
Diluted	$	0.52	$	0.40	$	0.88	$	0.65
Weighted average shares outstanding (in millions)
Basic	1,338		1,355		1,340		1,355
Diluted	1,355		1,360		1,357		1,360

Cash dividends declared per common share	$	0.396	$	0.302	$	0.396	$	0.302

See accompanying notes to the consolidated financial statements

CNH INDUSTRIAL N.V.

CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

For the Three and Six Months Ended June 30, 2023 and 2022

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Net income	$	710	$	552	$	1,196	$	888
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on cash flow hedges	(36)		16		(26)		(79)
Changes in retirement plans’ funded status	(3)		(25)		(8)		(50)
Foreign currency translation	117		72		84		331
Share of other comprehensive income (loss) of entities using the equity method	(6)		(20)		(15)		(29)
Other comprehensive income, net of tax	72		43		35		173
Comprehensive income	782		595		1,231		1,061
Less: Comprehensive income attributable to noncontrolling interests	6		3		11		6
Comprehensive income (loss) attributable to CNH Industrial N.V.	$	776	$	592	$	1,220	$	1,055

See accompanying notes to the consolidated financial statements

CNH INDUSTRIAL N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2023 and 2022

(Unaudited)


	Six Months Ended June 30,
	2023		2022
	(in millions)
Cash Flows from Operating activities
Net Income	$	1,196	$	888
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization expense excluding depreciation and amortization of assets under operating leases	178		167
Depreciation and amortization expense of assets under operating leases	92		105
(Gain) loss on disposal of assets, net	20		16
Undistributed (income) loss of unconsolidated subsidiaries	(46)		(13)
Other non-cash items, net	78		89
Changes in operating assets and liabilities:
Provisions	445		(51)
Deferred income taxes	(188)		27
Trade and financing receivables related to sales, net	(1,380)		(963)
Inventories, net	(1,379)		(1,164)
Trade payables	202		56
Other assets and liabilities	(58)		(315)
Net cash provided (used) by operating activities	(840)		(1,158)
Cash Flows from Investing activities
Additions to retail receivables	(3,576)		(2,703)
Collections of retail receivables	2,995		2,392
Proceeds from the sale of assets excluding assets under operating leases	1		2
Expenditures for property, plant and equipment and intangible assets excluding assets under operating leases	(224)		(139)
Expenditures for assets under operating leases	(237)		(252)
Other	(206)		(300)
Net cash provided (used) by investing activities	(1,247)		(1,000)
Cash Flows from Financing activities
Proceeds from long-term debt	4,408		5,212
Payments of long-term debt	(3,485)		(4,888)
Net increase in other financial liabilities	612		203
Dividends paid	(529)		(415)
Purchase of treasury stock and other	(169)		(40)
Net cash provided (used) by financing activities	837		72
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	46		(175)
Net increase (decrease) in cash, cash equivalents and restricted cash	(1,204)		(2,261)
Cash, cash equivalents and restricted cash, beginning of year	5,129		5,845
Cash, cash equivalents and restricted cash, end of period	$	3,925	$	3,584

CNH INDUSTRIAL N.V.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Three and Six Months Ended June 30, 2023

(Unaudited)


	Common Shares		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total		Redeemable Noncontrolling Interest
	(in millions)
Balance December 31, 2022	$	25	$	(230)	$	1,504	$	7,906	$	(2,278)	$	—	$	6,927	$	49
Net Income	—		—		—		482		—		—		482		4
Other comprehensive income (loss), net of tax	—		—		—		—		(38)		1		(37)		—
Dividends paid	—		—		—		—		—		—		—		(1)
Acquisition of treasury stock	—		(71)		—		—		—		—		(71)		—
Common shares issued from treasury stock and capital increase for share-based compensation	—		—		—		—		—		—		—		—
Share-based compensation expense	—		—		24		—		—		—		24		—
Other changes	—		—		—		—		—		74		74		—
Balance March 31, 2023	25		(301)		1,528		8,388		(2,316)		75		7,399		52
Net Income	—		—		—		706		—		—		706		4
Other comprehensive income (loss), net of tax	—		—		—		—		70		2		72		—
Dividends paid	—		—		—		(527)		—		—		(527)		(1)
Acquisition of treasury stock	—		(98)		—		—		—		—		(98)		—
Common shares issued from treasury stock and capital increase for share-based compensation	—		17		(17)		—		—		—		—		—
Share-based compensation expense	—		—		25		—		—		—		25		—
Other changes	—		—		—		—		—		(2)		(2)		—
Balance June 30, 2023	$	25	$	(382)	$	1,536	$	8,567	$	(2,246)	$	75	$	7,575	$	55

CNH INDUSTRIAL N.V.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Three and Six Months Ended June 30, 2022

(Unaudited)


	Common Shares		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total		Redeemable Noncontrolling Interest
	(in millions)
Balance December 31, 2021, as previously reported	$	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	—		—		—		333		—		—		333		3
Other comprehensive income (loss), net of tax	—		—		—		—		130		—		130		—
Dividends paid	—		—		—		—		—		—		—		(1)
Acquisition of treasury stock	—		(21)		—		—		—		—		(21)		—
Common shares issued from treasury stock and capital increase for share-based compensation	—		—		—		—		—		—		—		—
Share-based compensation expense	—		—		18		—		—		—		18		—
Other changes	—		—		(4)		—		—		(1)		(5)		—
Balance March 31, 2022	25		(105)		1,434		6,615		(2,367)		7		5,609		47
Net income	—		—		—		548		—		—		548		4
Other comprehensive income (loss), net of tax	—		—		—		—		44		(1)		43		—
Dividends paid	—		—		—		(412)		—		—		(412)		(2)
Acquisition of treasury stock	—		(19)		—		—		—		—		(19)		—
Common shares issued from treasury stock and capital increase for share-based compensation	—		3		(3)		—		—		—		—		—
Share-based compensation expense	—		—		21		—		—		—		21		—
Other changes	—		—		4		—		—		—		4		—
Balance June 30, 2022	$	25	$	(121)	$	1,456	$	6,751	$	(2,323)	$	6	$	5,794	$	49

See accompanying notes to the consolidated financial statements.

CNH INDUSTRIAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

CNH Industrial N.V. (“CNH Industrial” or the “Company”) is incorporated in, and under the laws of the Netherlands. CNH Industrial has its corporate seat in Amsterdam, the Netherlands, and its principal office in Basildon, England, United Kingdom. The Company was formed on September 29, 2013 as a result of the business combination transaction between Fiat Industrial S.p.A. (“Fiat Industrial”) and its majority owned subsidiary CNH Global N.V. Unless otherwise indicated or the context otherwise requires, the terms “CNH Industrial”, "CNH" and the “Company” refer to CNH Industrial and its subsidiaries.

The consolidated financial statements of CNH Industrial N.V. and its consolidated subsidiaries have been voluntarily prepared by the Company without audit. Although prepared on a voluntary basis, the consolidated financial statements included in the report comply in all material respects with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) governing interim financial statements. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting only of normal recurring adjustments, have been reflected in these consolidated financial statements. Management believes that the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. These interim financial statements should be read in conjunction with the financial statements and the notes thereto appearing in the Company’s annual report on Form 10-K for the year ended December 31, 2022. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and related accompanying notes and disclosures. Significant uncertainties, including rising inflation, geopolitical instability and the war in the Ukraine may impact the Company's business, which may cause actual results to differ materially from the estimates and assumptions used in preparation of the financial statements including, but not limited to, future cash flows associated with goodwill, indefinite life intangibles, definite life intangibles, long-lived impairment tests, determination of discount rates and other assumptions for pension and other post-retirement benefit expense and income taxes. Changes in estimates are recorded in results of operations in the period during which the events or circumstances giving rise to such changes occur.

Certain financial information in this report has been presented by geographic region. Our geographic regions are: (1) North America; (2) Europe, Middle East and Africa ("EMEA"); (3) South America and (4) Asia Pacific. The geographic designations have the following meanings:

•North America: United States, Canada, and Mexico;

•Europe, Middle East, and Africa: member countries of the European Union, European Free Trade Association, the United Kingdom, Ukraine and Balkans, Russia, Turkey, Uzbekistan, Pakistan, the African continent, and the Middle East;

•South America: Central and South America, and the Caribbean Islands; and

•Asia Pacific: Continental Asia (including the India subcontinent), Indonesia, and Oceania.

Business Combinations

On March 13, 2023, CNH Industrial purchased Augmenta Holding SAS ("Augmenta"). The Company acquired the remaining 89.5% of Augmenta it did not own for cash consideration of approximately $79 million and deferred payment of $10 million. At March 31, 2023, CNH Industrial 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. Measurement period adjustments were made in the second quarter of 2023 reducing goodwill by $15 million and increasing other intangibles $15 million. The goodwill is not deductible for tax purposes. The valuation of assets acquired and liabilities assumed were not finalized as of June 30, 2023. 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.

On March 15, 2023, CNH Industrial acquired a controlling interest in Bennamann LTD ("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 Industrial 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. Measurement period adjustments were made in the second quarter of 2023 reducing goodwill by $11 million

and increasing other intangibles $11 million. The goodwill is not deductible for tax purposes. The valuation of assets acquired and liabilities assumed was not finalized as of June 30, 2023. 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.

2. NEW ACCOUNTING PRONOUNCEMENTS

Adopted in 2023

Revenue Contract Assets and Liabilities Acquired in a Business Combination

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606) as applied by the acquiree to determine what to record for the acquired revenue contract assets and liabilities instead of at fair value on the acquisition date. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and early adoption is permitted. The Company adopted ASU 2021-08 and applied the guidance within ASU 2021-08 on business combinations beginning January 1, 2023. The adoption did not have a material impact on our consolidated financial statements.

Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings (TDRs) for creditors in ASC 310-40 and amends the guidance on vintage disclosures to require disclosure of current period gross write-offs by year of origination. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. Entities can elect to adopt the guidance on TDRs using either a prospective or modified retrospective transition. The amendments related to disclosures should be adopted prospectively. The Company adopted ASU 2022-02 and applied the guidance within ASU 2022-02 to its consolidated financial statements and disclosures prospectively beginning January 1, 2023. The adoption did not have a material impact on the Company's consolidated financial statements and note disclosures.

Supplier Finance Programs Disclosures

In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations ("ASU 2022-04"). ASU 2022-04 requires the buyer in a supplier finance program to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a roll forward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of roll forward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted ASU 2022-04 and applied the guidance within ASU 2022-04 to its disclosures beginning January 1, 2023. As these amendments relate to disclosures only, there are no impacts to the Company’s consolidated financial statements.

Under the supply chain finance 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.

As of June 30, 2023 and December 31, 2022, $209 million and $189 million of obligations remain outstanding that we have confirmed as valid to the administrators of the supply chain finance programs. These balances are included within “Accounts payable” in our consolidated balance sheets and are reflected as cash flow from operating activities in our consolidated statements of cash flows when settled.

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides temporary optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedging relationships, and other transactions affected by Reference Rate Reform if certain criteria are met. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (ASU 2022-06"). ASU 2022-06 extended the sunset date of ASC Topic 848 from December 31, 2022 to December 31, 2024. The Company elected to adopt ASU 2020-04 and ASU

2022-06 in the second quarter of 2023. The Company renegotiated its contract terms on its interest rate derivatives by changing the floating interest rate swap from LIBOR to overnight SOFR. The Company elected to make the change using the optional expedients under ASC 848, which allows the change in critical terms without de-designation and results in no change to the cumulative basis adjustment reflected in earnings. The elections did not have a material impact on our consolidated financial statements for the three months ended June 30, 2023, and the impact of applying the elections to future eligible contract modifications that occur through December 31, 2023 is also not expected to be material.

Not Yet Adopted

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 amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact, if any, of adoption to our consolidated financial statements.

3. REVENUE

The following table summarizes revenues for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,
	2023		2022
	(in millions)
Agriculture	$	4,890	$	4,722
Construction	1,064		891
Total Industrial Activities	5,954		5,613
Financial Services	603		471
Eliminations and Other	10		(2)
Total Revenues	$	6,567	$	6,082


	Six Months Ended June 30,
	2023		2022
	(in millions)
Agriculture	$	8,817	$	8,099
Construction	1,913		1,694
Total Industrial Activities	10,730		9,793
Financial Services	1,152		937
Eliminations and Other	27		(3)
Total Revenues	$	11,909	$	10,727

The following table disaggregates revenues by major source for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,
	2023		2022
	(in millions)
Revenues from:
Sales of goods	$	5,942	$	5,604
Rendering of services and other revenues	12		9

Revenues from sales of goods and services	5,954		5,613
Finance and interest income	449		271
Rents and other income on operating lease	164		198
Finance, interest and other income	613		469
Total Revenues	$	6,567	$	6,082


	Six Months Ended June 30,
	2023		2022
	(in millions)
Revenues from:
Sales of goods	$	10,709	$	9,778
Rendering of services and other revenues	21		15

Revenues from sales of goods and services	10,730		9,793
Finance and interest income	851		512
Rents and other income on operating lease	328		422
Finance, interest and other income	1,179		934
Total Revenues	$	11,909	$	10,727

4. VARIABLE INTEREST ENTITIES

The Company consolidates various securitization trusts and facilities that have been determined to be variable interest entities (“VIEs”) and of which the Company is a primary beneficiary. The Company has both the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. For further information regarding VIEs, please see “Note 9: Receivables.”

The following table presents certain assets and liabilities of consolidated VIEs, which are included in the consolidated balance sheets included in this report. The assets in the table below include only those assets that can be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third party liabilities of the consolidated VIEs for which creditors do not have recourse to the general credit of the Company.


	June 30, 2023		December 31, 2022
	(in millions)
Restricted cash	$	565	$	595
Financing receivables	9,093		8,808
Total Assets	$	9,658	$	9,403
Debt	$	8,739	$	8,485
Total Liabilities	$	8,739	$	8,485

5. EARNINGS PER SHARE

The Company’s basic earnings per share (“EPS”) is computed by dividing net income 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. Stock options, restricted stock units and performance stock units are considered dilutive securities.

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Basic earnings per share attributable to CNH Industrial N.V.
Net income (loss) attributable to CNH Industrial	$	706	$	548	$	1,188	$	881
Weighted average common shares outstanding—basic (in millions)	1,338		1,355		1,340		1,355
Basic earnings per share attributable to CNH Industrial N.V.	$	0.53	$	0.40	$	0.89	$	0.65
Diluted earnings per share attributable to common shareholders
Weighted average common shares outstanding—basic (in millions)	1,338		1,355		1,340		1,355
Stock compensation plans (1) (in millions)	17		5		17		5
Weighted average common shares outstanding—diluted (in millions)	1,355		1,360		1,357		1,360
Diluted earnings per share attributable to CNH Industrial N.V.	$	0.52	$	0.40	$	0.88	$	0.65

(1) For the three and six months ended June 30, 2023, no shares were excluded from the computation of diluted earnings per share due to an anti-dilutive impact. For the three and six months ended June 30, 2022, 886,000 and 861,000 shares were excluded from the computation of diluted earnings per share due to an anti-dilutive impact.

6. EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS

The following table summarizes the components of net periodic benefit cost of CNH Industrial’s defined benefit pension plans and postretirement health and life insurance plans for the three and six months ended June 30, 2023 and 2022:


	Pension				Healthcare				Other
	Three Months Ended June 30,				Three Months Ended June 30,				Three Months Ended June 30,
	2023		2022		2023		2022		2023		2022
	(in millions)
Service cost	$	2	$	3	$	—	$	1	$	1	$	1
Interest cost	13		7		2		2		1		—
Expected return on assets	(11)		(12)		—		(2)		—		—
Amortization of:
Prior service credit	—		—		(9)		(32)		—		—
Actuarial loss	5		5		—		1		—		—
Net periodic benefit cost	$	9	$	3	$	(7)	$	(30)	$	2	$	1


	Pension				Healthcare				Other
	Six Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022		2023		2022
	(in millions)
Service cost	$	4	$	6	$	1	$	2	$	2	$	3
Interest cost	27		14		4		3		2		—
Expected return on assets	(22)		(24)		(1)		(3)		—		—
Amortization of:
Prior service credit	—		—		(18)		(63)		—		—
Actuarial loss	9		10		—		1		—		—
Net periodic benefit cost	$	18	$	6	$	(14)	$	(60)	$	4	$	3

On February 20, 2018, CNH Industrial 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 Industrial to terminate or modify various

retiree healthcare benefits previously provided to certain UAW Union represented Company retirees. On April 16, 2018, CNH Industrial announced its determination to modify the benefits provided to the applicable retirees (“Benefit Modification”) to make them consistent with the benefits provided to current eligible CNH Industrial retirees who had been represented by the UAW. The Benefit Modification resulted in a reduction of the plan liability by $527 million. This amount was amortized from Other Comprehensive Income ("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 three and six months ended June 30, 2022, $30 million and $60 million of amortization (“Benefit Modification Amortization”) was recorded as a pre-tax gain in Other, net, respectively.

In 2021, CNH Industrial communicated plan changes for the US retiree medical plan. The plan changes resulted in a reduction of the plan liability by $100 million. This amount will be 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 three and six months ended June 30, 2023 and 2022, $6 million and $12 million of amortization was recorded as a pre-tax gain in Other, net, respectively.

7. INCOME TAXES

The effective tax rates for the three months ended June 30, 2023 and 2022 were 22.9% and 30.3%, respectively. The 2023 effective tax rate for the three months ended June 30, 2023 was reduced by tax benefits related to the sale of CNH Industrial Russia. The 2022 effective tax rate was increased by the discrete tax charge from the sale of Raven’s Engineered Films division.

The effective tax rates for the six months ended June 30, 2023 and 2022 were 24.9% and 31.5%, respectively. The 2023 effective tax rate was reduced by the tax benefits related to the sale of CNH Industrial Russia, although these benefits were partially offset by discrete tax expenses associated with prior periods. The 2022 effective tax rate was increased by pre-tax losses for which deferred tax assets were not recognized, the de-recognition of certain deferred tax assets, increased charges for unrecognized tax benefits, and a discrete tax charge resulting from the sale of Raven’s Engineered Films division.

As in all financial reporting periods, the Company assessed the realizability of its deferred tax assets, which relate to multiple tax jurisdictions in all regions of the world. During the six-month period ended June 30, 2023, there were no changes in our assessment of deferred tax asset positions that impacted the Company’s tax rate for the period. During the six-month period ended June 30, 2022, the Company changed its assessment regarding the recognition of its Russian deferred tax assets and applied a full valuation allowance as of the beginning of the period.

The Company operates in many jurisdictions around the world and is routinely subject to income tax audits. As various ongoing audits are concluded, or as the applicable statutes of limitations expire, it is possible the Company’s amount of unrecognized tax benefits could change during the next twelve months. Those changes, however, are not expected to have a material impact on the Company’s results of operations, balance sheet, or cash flows.

8. SEGMENT INFORMATION

The operating segments through which the Company manages its operations are based on the internal reporting used by the Company’s Chief Operating Decision Maker (“CODM”) to assess performance and make decisions about resource allocation. The segments are organized based on products and services provided by the Company. CNH Industrial has the following three operating 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; and Kongskilde providing tillage, seeding and hay & forage implements. The Raven brand supports digital agriculture, precision technology and the development of autonomous systems.

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. Construction equipment is sold under the CASE Construction Equipment, New Holland Construction and Eurocomach brands.

Financial Services offers retail note and lease financing to end-use customers for the purchase of new and used agricultural and construction equipment and components sold through CNH Industrial brands' dealer network, as well as revolving charge account financing and other financial services. Financial Services also provides wholesale financing to CNH Industrial brand dealers and distributors. Further, Financial Services provides trade receivables factoring services to CNH Industrial companies. The European operations of CNH Industrial Financial Services are supported by the Iveco

Group's Financial Services segment. CNH Industrial Financial Services provides financial services to Iveco Group companies in the North America, South America and Asia Pacific regions.

The activities carried out by Agriculture and Construction, as well as corporate functions, are collectively referred to as "Industrial Activities".

Revenues for each reported segment are those directly generated by or attributable to the segment as a result of its 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 expenses deriving from each segment’s business activities both with third parties and other operating segments or which may otherwise be directly attributable to it. Expenses deriving from business activities with other segments are recognized at normal market prices.

With reference to Industrial Activities' segments, the CODM assesses segment performance and makes decisions about resource allocation based upon Adjusted EBIT. The Company believes Adjusted EBIT more fully reflects Industrial Activities segments' inherent profitability. 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-employment benefit costs, restructuring expenses, and certain non-recurring items. In particular, non-recurring items are specifically disclosed items that management considers to be rare or discrete events that are infrequent in nature and not reflective of ongoing operational activities.

With reference to Financial Services, the CODM assesses the performance of the segment and makes decisions about resource allocation on the basis of net income prepared in accordance with U.S. GAAP.

The following table includes the reconciliation of Adjusted EBIT for Industrial Activities to net income, the most comparable U.S. GAAP financial measure, for the three and six months ended June 30, 2023 and 2022.


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Agriculture	$	821	$	663	$	1,391	$	1,089
Construction	72		34		116		66
Unallocated items, eliminations and other	(71)		(43)		(130)		(72)
Total Adjusted EBIT of Industrial Activities	822		654		1,377		1,083
Financial Services Net Income	94		95		172		177
Financial Services Income Taxes	26		38		55		74
Interest expense of Industrial Activities, net of interest income and eliminations	(22)		(35)		(26)		(70)
Foreign exchange gains (losses), net of Industrial Activities	—		13		(6)		—
Finance and non-service component of Pension and other post-employment benefit cost of Industrial Activities(1)	1		40		2		77
Restructuring expense of Industrial Activities	(2)		(6)		(3)		(8)
Other discrete items of Industrial Activities(2)	(17)		(19)		(10)		(58)
Income (loss) before taxes	902		780		1,561		1,275
Income tax (expense) benefit	(192)		(228)		(365)		(387)
Net income (loss)	$	710	$	552	$	1,196	$	888

(1) In the three and six months ended June 30, 2023 and 2022, this item includes the pre-tax gain of $6 million and $12 million as a result of the amortization over the 4 years of the $101 million positive impact from the 2021 modifications of a healthcare plan in the U.S. In the three and six months ended June 30, 2022, this item includes the pre-tax gain of $30 million and $60 million as a result of the 2018 modification of a healthcare plan in the U.S.

(2) In the three months ended June 30, 2023 this item included a loss of $17 million related to the sale of CNH Industrial Russia. In the six months ended June 30, 2023 this item included a gain of $13 million in relation to the fair value remeasurement of Augmenta and Bennamann, offset by a $23 million loss on the sale of CNH Industrial Russia and CNH Capital Russia. In the three and six months ended June 30, 2022, this item includes $3 million and $6 million of separation costs incurred in connection with our spin-off of the Iveco Group Business and $16 million and $8 million of loss from the activity of the two Raven businesses held for sale, including the loss on the sale of the Engineered Films division. In the six months ended June 30, 2022, this item also included $44 million of asset write-downs related to our Russian operations.

9. RECEIVABLES

Financing Receivables, net

A summary of financing receivables as of June 30, 2023 and December 31, 2022 is as follows:


	June 30, 2023		December 31, 2022
	(in millions)
Retail	$	12,212	$	11,446
Wholesale	9,290		7,785
Other	39		29
Total	$	21,541	$	19,260

CNH Industrial provides and administers retail note and lease financing to end-use customers for the purchase of new and used equipment and components sold through its dealer network, as well as revolving charge account financing. The terms of retail notes and finance leases generally range from two to six years, and interest rates vary depending on the 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, 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 of the underlying equipment by the dealer. Financial Services is compensated by Industrial Activities for providing the "interest free" period based on market interest rates. After the expiration of any "interest-free" period, interest is charged to dealers on outstanding balances until CNH Industrial 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 Industrial 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 the three months ended June 30, 2023 and 2022 relating to the termination of dealer contracts.

Transfers of Financial Assets

As part of its overall funding strategy, CNH Industrial periodically transfers certain receivables into special purpose entities (“SPE”) 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. For bankruptcy analysis purposes, the Company has sold the receivables to the SPEs in a true sale and the SPEs are separate legal entities. Upon transfer of the receivables to the SPEs, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the SPEs' creditors. The SPEs have ownership of cash balances that also have restrictions for the benefit of the SPEs' investors. The Company's interests in the SPEs' receivables are subordinate to the interests of third-party investors. None of the receivables that are directly or indirectly sold or transferred in any of these transactions are available to pay the Company's creditors until all obligations of the SPE have been fulfilled or the receivables are removed from the SPE.

Certain securitization trusts 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 receivables for which there is a breach of the representations and warranties. Moreover, the Company does not guarantee any securities issued by the trusts. The trusts have a limited life and generally terminate upon final distribution of amounts owed to investors or upon exercise of a cleanup-call option by the Company, in its role as servicer.

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, CNH Industrial continued to recognize the receivable transferred by this means in its consolidated statement of financial position and recognizes 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 June 30, 2023 and December 31, 2022, the carrying amount of such restricted assets included in financing receivables above are the following (in millions):


	Restricted Receivables
	June 30, 2023		December 31, 2022
Retail note and finance lease receivables	$	6,581	$	6,766
Wholesale receivables	6,102		4,582
Total	$	12,683	$	11,348

Allowance for Credit Losses

Allowance for credit losses (activity) for the three and six months ended June 30, 2023 is as follows (in millions):


	Three Months Ended June 30, 2023
	Retail		Wholesale
Opening Balance	$	264	$	63
Provision	19		(3)
Charge-offs	(10)		—
Recoveries	1		—
Foreign currency translation and other	6		—
Ending Balance	$	280	$	60


	Six Months Ended June 30, 2023
	Retail		Wholesale
Opening Balance	$	270	$	64
Provision	36		(3)
Charge-offs	(21)		—
Recoveries	1		—
Foreign currency translation and other	(6)		(1)
Ending Balance	$	280	$	60

At June 30, 2023, the allowance for credit losses included an increase in reserves due to specific reserve needs primarily in South America, partially offset by a decrease in reserves of $15 million due to the sale of CNH Capital Russia. CNH Industrial will update the macroeconomic factors in future periods, as warranted. The provision for credit losses is included in selling, general and administrative expenses.

Allowance for credit losses activity for the three and six months ended June 30, 2022 is as follows (in millions):


	Three Months Ended June 30, 2022
	Retail		Wholesale
Opening Balance	$	244	$	74
Provision	14		(4)
Charge-offs, net of recoveries	(8)		(5)
Foreign currency translation and other	(4)		(4)
Ending Balance	$	246	$	61


	Six Months Ended June 30, 2022
	Retail		Wholesale
Opening Balance	$	220	$	65
Provision	26		3
Charge-offs, net of recoveries	(9)		(5)
Foreign currency translation and other	9		(2)
Ending Balance	$	246	$	61

At June 30, 2022, the allowance for credit losses included an increase in reserves primarily due to $15 million for domestic Russian receivables.

Allowance for credit losses activity for the year ended December 31, 2022 is as follows (in millions):


	Twelve Months Ended December 31, 2022
	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 customers.

CNH Industrial assesses and monitors the credit quality of its financing receivables based on whether a receivable is classified as Performing or Non-Performing. 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 loans for which the Company has ceased accruing finance income. These receivables are generally more than 90 days past due. Accrued interest is charged-off to interest income. Interest income charged-off was not material for the three months ended June 30, 2023 and 2022. Interest accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at such 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.

The aging of financing receivables and charge-offs as of June 30, 2023 is as follows (in millions):


	June 30, 2023
	31-60 Days Past Due		61-90 Days Past Due		Total Past Due		Current		Total Performing		Non- Performing		Total		Charge-offs
Retail
North America
2023									$	1,784	$	1	$	1,785	$	—
2022									2,710		1		2,711		6
2021									1,695		1		1,696		2
2020									774		1		775		2
2019									338		—		338		3
Prior to 2019									169		1		170		3
Total	$	32	$	9	$	41	$	7,429	$	7,470	$	5	$	7,475	$	16
South America
2023									$	1,101	$	1	$	1,102	$	—
2022									1,074		19		1,093		—
2021									646		12		658		—
2020									339		5		344		3
2019									155		3		158		1
Prior to 2019									126		1		127		1
Total	$	105	$	1	$	106	$	3,335	$	3,441	$	41	$	3,482	$	5
Asia Pacific
2023									$	583	$	—	$	583	$	—
2022									352		1		353		—
2021									189		1		190		—
2020									86		1		87		—
2019									22		1		23		—
Prior to 2019									—		—		—		—
Total	$	7	$	8	$	15	$	1,217	$	1,232	$	4	$	1,236	$	—
Europe, Middle East, Africa	$	—	$	—	$	—	$	8	$	8	$	11	$	19	$	—
Total Retail	$	144	$	18	$	162	$	11,989	$	12,151	$	61	$	12,212	$	21
Wholesale
North America	$	—	$	—	$	—	$	4,424	$	4,424	$	—	$	4,424	$	—
South America	1		—		1		1,339		1,340		—		1,340		—
Asia Pacific	—		—		—		622		622		—		622		—
Europe, Middle East, Africa	11		—		11		2,893		2,904		—		2,904		—
Total Wholesale	$	12	$	—	$	12	$	9,278	$	9,290	$	—	$	9,290	$	—

The aging of financing receivables as of December 31, 2022 is as follows (in millions):


	December 31, 2022
	31-60 Days Past Due		61-90 Days Past Due		Total Past Due		Current		Total Performing		Non- Performing		Total
Retail
North America
2022									$	3,558	$	—	$	3,558
2021									2,035		1		2,036
2020									994		—		994
2019									472		—		472
2018									225		—		225
Prior to 2018									65		—		65
Total	$	42	$	16	$	58	$	7,291	$	7,349	$	1	$	7,350
South America
2022									$	1,179	$	2	$	1,181
2021									725		3		728
2020									408		2		410
2019									207		1		208
2018									116		—		116
Prior to 2018									95		—		95
Total	$	12	$	—	$	12	$	2,718	$	2,730	$	8	$	2,738
Asia Pacific
2022									$	601	$	—	$	601
2021									400		1		401
2020									220		1		221
2019									84		—		84
2018									35		—		35
Prior to 2018									3		—		3
Total	$	8	$	8	$	16	$	1,327	$	1,343	$	2	$	1,345
Europe, Middle East, Africa	$	—	$	—	$	—	$	2	$	2	$	11	$	13
Total Retail	$	62	$	24	$	86	$	11,338	$	11,424	$	22	$	11,446
Wholesale
North America	$	—	$	—	$	—	$	3,378	$	3,378	$	—	$	3,378
South America	—		—		—		1,416		1,416		—		1,416
Asia Pacific	—		—		—		494		494		—		494
Europe, Middle East, Africa	7		2		9		2,488		2,497		—		2,497
Total Wholesale	$	7	$	2	$	9	$	7,776	$	7,785	$	—	$	7,785

Troubled Debt Restructurings

A restructuring of a receivable constitutes a troubled debt restructuring (“TDR”) when the lender grants a concession it would not otherwise consider to a borrower that is experiencing financial difficulties. As a collateral-based lender, the Company typically will repossess collateral in lieu of restructuring receivables. As such, for retail receivables, concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions granted may include extended contract maturities, inclusion of interest-only periods, modification of a contractual interest rate to a below market interest rate and waiving of interest and principal.

TDRs are reviewed along with other receivables as part of management’s ongoing evaluation of the adequacy of the allowance for credit losses. As of June 30, 2023 and 2022, CNH Industrial's TDRs were immaterial.

10. INVENTORIES

Inventories as of June 30, 2023 and December 31, 2022 consist of the following:


	June 30, 2023		December 31, 2022
	(in millions)
Raw materials	$	2,086	$	1,955
Work-in-process	822		471
Finished goods	3,503		2,385
Total inventories	$	6,411	$	4,811

11. LEASES

Lessee

The Company has mainly operating lease contracts for buildings, plant and machinery, vehicles, information technology ("IT") equipment and machinery.

Leases with a term of 12 months or less are not recorded in the balance sheet. For these leases the Company recognized on a straight-line basis over the lease term, lease expense of $2 million and $2 million in the three months ended June 30, 2023 and 2022, respectively, and $3 million and $3 million in the six months ended June 30, 2023 and 2022.

For the three months ended June 30, 2023 and 2022, the Company incurred operating lease expenses of $20 million and $19 million, respectively, and $39 million and $35 million in the six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023, the Company has recorded approximately $227 million of right-of-use assets and $231 million of related lease liability included in Other Assets and Other Liabilities, respectively. At June 30, 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 5.6 years and 4.0%, respectively.

During the six months ended June 30, 2023 and 2022 leased assets obtained in exchange for operating lease obligations were $39 million and $73 million, respectively. The operating cash outflow for amounts included in the measurement of operating lease obligations was $37 million and $35 million as of June 30, 2023 and 2022, respectively.

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 is accounted for separately.

12. INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES

A summary of investments in unconsolidated subsidiaries and affiliates as of June 30, 2023 and December 31, 2022 is as follows:


	June 30, 2023		December 31, 2022
	(in millions)
Equity method	$	352	$	331
Cost method	53		54
Total	$	405	$	385

13. GOODWILL AND OTHER INTANGIBLES

Changes in the carrying amount of goodwill for the six months ended June 30, 2023 were as follows:


	Agriculture		Construction		Financial Services		Total
	(in millions)
Balance at January 1, 2023	$	3,136	$	46	$	140	$	3,322
Acquisition	169		—		—		169
Foreign currency translation and other	(1)		—		—		(1)
Balance at June 30, 2023	$	3,304	$	46	$	140	$	3,490

Goodwill and other indefinite-lived intangible assets are tested for impairment annually or more frequently if a triggering event occurred that would indicate it is more likely than not that the fair value of a reporting unit is less than book value. CNH Industrial performed its most recent annual impairment review as of December 31, 2022 and concluded that there was no impairment to goodwill for any of the reporting entities.

The acquisitions of Augmenta Holding SAS and Bennamann LTD during the first quarter of 2023 led to an increase in goodwill for Agriculture of $76 million and $118 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. During the second quarter of 2023, measurement period adjustments were recorded reducing goodwill by $15 million and $11 million for Augmenta and Bennamann, respectively, with an offsetting increase to intangible assets. The valuations of assets acquired and liabilities assumed have not yet been finalized as of June 30, 2023. Thus, goodwill associated with the acquisitions is subject to adjustment during the measurement period.

As of June 30, 2023 and December 31, 2022, the Company’s other intangible assets and related accumulated amortization consisted of the following:


		June 30, 2023						December 31, 2022
	Weighted Avg. Life	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
		(in millions)
Other intangible assets subject to amortization:
Dealer networks	15	$	293	$	247	$	46	$	291	$	242	$	49
Patents, concessions, licenses and other	5-25	1,918		1,228		690		1,796		1,153		643
		2,211		1,475		736		2,087		1,395		692
Other intangible assets not subject to amortization:
In-process research and development		221				221		165				165
Trademarks		272		—		272		272		—		272
Total other intangible assets		$	2,704	$	1,475	$	1,229	$	2,524	$	1,395	$	1,129

During the first quarter of 2023, the Company recorded $81 million in intangible assets based on the preliminary valuation for the Augmenta and Bennamann acquisitions. Measurement period adjustments were recorded in the second quarter increasing intangible assets by $26 million. The valuation of assets acquired and liabilities assumed has not been finalized as of June 30, 2023. The intangible assets associated with the acquisitions are subject to adjustment during the measurement period.

CNH Industrial recorded amortization expense of $38 million and $34 million for the three months ended June 30, 2023 and 2022, respectively, and $76 million and $66 million for the six months ended June 30, 2023 and 2022, respectively.

14. OTHER LIABILITIES

A summary of other liabilities as of June 30, 2023 and December 31, 2022 is as follows:


	June 30, 2023		December 31, 2022
	(in millions)
Warranty and campaign programs	$	588	$	544
Marketing and sales incentive programs	1,985		1,556
Tax payables	554		506
Accrued expenses and deferred income	822		700
Accrued employee benefits	481		535
Lease liabilities	231		228
Legal reserves and other provisions	298		263
Contract reserve	16		16
Contract liabilities	40		33
Restructuring reserve	20		30
Other	382		436
Total	$	5,417	$	4,847

Warranty and Campaign Programs

CNH Industrial pays for basic warranty and other service action costs. A summary of recorded activity for the three and six months ended June 30, 2023 and 2022 for the basic warranty and accruals for campaign programs are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Balance at beginning of period	$	551	$	501	$	544	$	526
Current year additions	156		117		265		185
Claims paid	(120)		(115)		(227)		(210)
Currency translation adjustment and other	1		(19)		6		(17)
Balance at end of period	$	588	$	484	$	588	$	484

Restructuring Expense

The Company incurred restructuring expenses of $2 million and $6 million during the three months ended June 30, 2023 and 2022, respectively. The Company incurred restructuring expenses of $3 million and $8 million during the six months ended June 30, 2023 and 2022, respectively.

15. COMMITMENTS AND CONTINGENCIES

As a global company with a diverse business portfolio, CNH Industrial in the ordinary course of business is exposed to numerous legal risks, including, without limitation, dealer and supplier litigation, intellectual property right disputes, product warranty and defective product claims, product performance, asbestos, personal injury, emissions and/or fuel economy regulatory and contractual issues, competition law and other investigations and environmental claims. 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 CNH Industrial 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 insurers’ compensation payments and could affect CNH Industrial’s financial position and results.

Although the ultimate outcome of legal matters pending against CNH Industrial and its subsidiaries cannot be predicted, CNH Industrial 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 Industrial 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 Industrial were released or disposed (“Waste 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 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 Industrial could be required to pay amounts in excess of its pro rata share of remediation costs. However, when appropriate, the financial strength of other PRPs has been considered in the determination of the Company’s potential liability. CNH Industrial believes that the costs associated with the Waste Sites will not have a material effect on the Company’s business, financial position, or results of operations.

The Company is conducting environmental investigatory or remedial activities at certain properties that are currently or were formerly owned and/or operated or that are being decommissioned. The Company believes that the outcome of these activities will not have a material adverse effect on its business, financial position, or results of operations.

The actual costs for environmental matters could differ materially from those costs currently anticipated due to the nature of historical handling and disposal of hazardous substances typical of manufacturing and related operations, the discovery of currently unknown conditions and as a result of more aggressive enforcement by regulatory authorities and changes in existing laws and regulations. As in the past, CNH Industrial plans to continue funding its costs of environmental compliance from operating cash flows.

Investigation, analysis and remediation of environmental sites is a time-consuming activity. The Company expects such costs to be incurred and claims to be resolved over an extended period of time that could exceed 30 years for some sites. As of June 30, 2023 and December 31, 2022, environmental reserves of approximately $26 million and $25 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 Investigations

Iveco Follow-on Damages Claims: in 2011 Iveco S.p.A. (“Iveco”), which, following the Demerger, is now part 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 and 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. The consummation of the Demerger will not allow CNH Industrial to 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. In the event one or more of these judicial proceedings would result in a decision against CNH Industrial ordering it to compensate such claimants as a result of the conduct that was the subject matter of the Decision, and Iveco and IMAG do not comply with such decisions, as a result of various intercompany arrangements, then CNH Industrial will ultimately have recourse against Iveco and IMAG for the reimbursement of the damages effectively paid to such claimants. The extent and outcome of these claims cannot be predicted at this time. 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.

FPT Emissions Investigation: on July 22, 2020, a number of FPT Industrial S.p.A.'s 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., which is a wholly-controlled subsidiary Iveco Group N.V., installed in certain Ducato (a vehicle distributed by Stellantis N.V.) and Iveco Daily vehicles. In certain instances CNH Industrial and other third parties have also received various requests for compensation by German and Austrian customers on various contractual and tort grounds, including requests for damages resulting from the termination of the purchase contracts, or in the form of requests for an alleged lower residual value of their vehicles as a consequence of the alleged non-compliance with other approval regulations regarding emissions. In certain instances, other customers have brought judicial claims on the same legal and factual bases. While

the Company had no role in the design and sale of such engine models and vehicles, the Company cannot predict at this time the extent and outcome of these requests and directly or indirectly related legal proceedings, including customer claims or potential class actions alleging emissions non-compliance. 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.

Guarantees

CNH Industrial provided guarantees on the debt or commitments of third parties and performance guarantees on non-consolidated affiliates as of June 30, 2023 and December 31, 2022 totaling of $25 million and $19 million, respectively.

16. FINANCIAL INSTRUMENTS

CNH Industrial 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 Industrial 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 in Level 1. In some cases where a market price is not available, the Company will use observable market-based inputs to calculate fair value, in which case the items are classified in Level 2.

If quoted or observable market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters such as interest rates, currency rates, or yield curves. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified. Where appropriate, the description includes details of the valuation models, and the key inputs to those models as well as any significant assumptions.

Derivatives

CNH Industrial utilizes derivative instruments to mitigate its exposure to interest rate and foreign currency exposures. CNH Industrial designates derivatives that are effective at reducing the risk associated with the exposure being hedged as accounting hedges at the inception of the contract and does not hold or enter into derivative 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 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 Industrial 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 Industrial conducts its business on a global basis in a wide variety of foreign currencies and hedges foreign currency exposures arising from various receivables, liabilities, and expected inventory purchases and sales. Derivative instruments 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 Industrial also uses forwards and swaps to hedge certain assets and liabilities denominated in foreign currencies. Such derivatives are considered economic hedges and not designated as hedging instruments. The changes in the fair values of these instruments are recognized directly in income in “Other, net” and are expected to offset the foreign exchange gains or losses on the exposures being managed.

All of CNH Industrial’s foreign exchange derivatives are considered Level 2 as the fair value is calculated using market data input and can be compared to actively traded derivatives. The total notional amount of CNH Industrial’s foreign exchange derivatives was $7.4 billion and $5.9 billion at June 30, 2023 and December 31, 2022, respectively.

Interest Rate Derivatives

CNH Industrial has entered into interest rate derivatives (swaps and caps) in order to manage interest rate exposures arising in the normal course of business. Interest rate derivatives that have been designated 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 Industrial recognizes interest expense on the related debt.

Interest rate derivatives that have been designated as fair value hedge relationships have been used by CNH Industrial 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 Industrial also enters into offsetting interest rate derivatives with substantially similar terms that are not designated as hedging instruments to mitigate interest rate risk related to CNH Industrial’s committed asset-backed facilities. Unrealized and realized gains and losses resulting from fair value changes in these instruments are recognized directly in income. Net gains and losses on these instruments were insignificant for the three and six months ended June 30, 2023 and 2022.

All of CNH Industrial’s interest rate derivatives outstanding as of June 30, 2023 and December 31, 2022 are considered Level 2. The fair market value of these derivatives is calculated using market data input and can be compared to actively traded derivatives. The total notional amount of CNH Industrial’s interest rate derivatives was approximately $7.4 billion and $6.4 billion at June 30, 2023 and December 31, 2022, 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.

Financial Statement Impact of CNH Industrial Derivatives

The following table summarizes the gross impact of changes in the fair value of derivatives designated as cash flow hedges recognized in accumulated other comprehensive income (loss) and net income (loss) during the three and six months ended June 30, 2023 and 2022 (in millions):


			Recognized in Net Income
For the Three Months Ended June 30,	Gain (Loss) Recognized in Accumulated Other Comprehensive Income		Classification of Gain (Loss)	Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
2023
Foreign exchange contracts	$	(26)
			Net sales	(3)
			Cost of goods sold	(5)
			Other, net	18
Interest rate contracts	(13)		Interest expense	3
Total	$	(39)		$	13
2022
Foreign exchange contracts	$	(21)
			Net sales	1
			Cost of goods sold	(41)
			Other, net	6
Interest rate contracts	13		Interest expense	9
Total	$	(8)		$	(25)


			Recognized in Net Income
For the Six Months Ended June 30,	Gain (Loss) Recognized in Accumulated Other Comprehensive Income		Classification of Gain (Loss)	Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
2023
Foreign exchange contracts	$	(11)
			Net sales	(4)
			Cost of goods sold	(32)
			Other, net	25
Interest rate contracts	(34)		Interest expense	8
Total	$	(45)		$	(3)
2022
Foreign exchange contracts	$	(172)
			Net sales	2
			Cost of goods sold	(58)
			Other, net	(4)
Interest rate contracts	50		Interest expense	17
Total	$	(122)		$	(43)

The following table summarizes the activity in accumulated other comprehensive income related to the derivatives held by the Company during the six months ended June 30, 2023 and 2022:


(In Millions)	Before-Tax Amount		Income Tax		After-Tax Amount
Accumulated derivative net gain as of December 31, 2022	$	71	$	(27)	$	44
Net changes in fair value of derivatives	(45)		19		(26)
Net losses reclassified from accumulated other comprehensive income into income	3		(3)		—
Accumulated derivative net gain as of June 30, 2023	$	29	$	(11)	$	18


(In Millions)	Before-Tax Amount		Income Tax		After-Tax Amount
Accumulated derivative net losses as of December 31, 2021	$	(3)	$	(14)	$	(17)
Impact of demerger	—		—		—
Net changes in fair value of derivatives	(122)		8		(114)
Net losses reclassified from accumulated other comprehensive income into income	43		(8)		35
Accumulated derivative net losses as of June 30, 2022	$	(82)	$	(14)	$	(96)

The following tables summarize the impact that changes in the fair value of fair value hedges and derivatives not designated as hedging instruments had on earnings (in millions):


		For the Three Months Ended June 30,
	Classification of Gain (Loss)	2023		2022
Fair Value Hedges
Interest rate derivatives	Interest expense	$	(15)	$	(21)

Not Designated as Hedges
Foreign exchange contracts	Other, Net	$	(10)	$	—


		For the Six Months Ended June 30,
	Classification of Gain (Loss)	2023		2022
Fair Value Hedges
Interest rate derivatives	Interest expense	$	1	$	(76)

Not Designated as Hedges
Foreign exchange contracts	Other, Net	$	(34)	$	(47)

The fair values of CNH Industrial’s derivatives as of June 30, 2023 and December 31, 2022 in the consolidated balance sheets are recorded as follows:

June 30, 2023

December 31, 2022

(In millions)

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments under Subtopic 815-20

Interest rate contracts

Derivative assets

Foreign currency contracts

Derivative assets

Total derivative assets designated as hedging instruments

133

147

Interest rate contracts

Derivative liabilities

136

Derivative liabilities

106

Foreign currency contracts

Derivative liabilities

Total derivative liabilities designated as hedging instruments

196

162

Derivatives not designated as hedging instruments under Subtopic 815-20

Interest rate contracts

Derivative assets

Foreign currency contracts

Derivative assets

Total derivative assets not designated as hedging instruments

Interest rate contracts

Derivative liabilities

Foreign currency contracts

Derivative liabilities

Total derivative liabilities not designated as hedging instruments

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 June 30, 2023 and December 31, 2022:


	Level 1				Level 2				Total
	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
	(in millions)
Assets
Foreign exchange derivatives	$	—	$	—	$	93	$	84	$	93	$	84
Interest rate derivatives	—		—		102		105		102		105
Total Assets	$	—	$	—	$	195	$	189	$	195	$	189
Liabilities
Foreign exchange derivatives	$	—	$	—	$	170	$	70	$	170	$	70
Interest rate derivatives	—		—		73		134		73		134
Total Liabilities	$	—	$	—	$	243	$	204	$	243	$	204

Items Measured at Fair Value on a Non-Recurring Basis

The Company recorded fixed asset write-downs of $17 million related to the suspension of operations in Russia during the six months ended June 30, 2022.

The following tables present the fair value for nonrecurring Level 3 measurements from impairments recorded in the quarter ended June 30, 2023 and 2022. No impairments were recorded during the six months ended June 30, 2023.


	Fair Value				Losses
	2023		2022		2023		2022
	(in millions)
Property, plant and equipment	$	—	$	7	$	—	$	17

The following is a description of the valuation methodologies the Company uses to non-monetary assets at fair value:

Property, plant and equipment, net: The impairments are measured at the lower of the carrying amount or fair value. The valuations were based on a cost approach. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence.

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 June 30, 2023 and December 31, 2022 were as follows:


	June 30, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in millions)
Financing receivables	$	21,541	$	21,406	$	19,260	$	18,827
Debt	$	24,870	$	24,744	$	22,962	$	22,651

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.

17. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The Company’s share of other comprehensive income (loss) includes net income plus other comprehensive income, which includes changes in fair value of certain derivatives designated as cash flow hedges, certain changes in pension and other retirement benefit plans, foreign currency translations gains and losses, changes in the fair value of available-for-sale securities, the Company’s share of other comprehensive income (loss) of entities accounted for using the equity method, and reclassifications for amounts included in net income (loss) less net income (loss) and other comprehensive income (loss) attributable to the non-controlling interest. For more information on derivative instruments, see “Note 16: Financial Instruments”. For more information on pensions and retirement benefit obligations, see “Note 6: Employee Benefit Plans and Postretirement Benefits”. The Company’s other comprehensive income (loss) amounts are aggregated within accumulated other comprehensive income (loss). The tax effect for each component of other comprehensive income (loss) consisted of the following (in millions):


	Three Months Ended June 30, 2023
	Gross Amount		Income Taxes		Net Amount
Unrealized gain (loss) on cash flow hedges	$	(51)	$	15	$	(36)
Changes in retirement plans’ funded status	(5)		2		(3)
Foreign currency translation	117		—		117
Share of other comprehensive income (loss) of entities using the equity method	(6)		—		(6)
Other comprehensive income (loss)	$	55	$	17	$	72


	Six Months Ended June 30, 2023
	Gross Amount		Income Taxes		Net Amount
Unrealized gain (loss) on cash flow hedges	$	(42)	$	16	$	(26)
Changes in retirement plans’ funded status	(11)		3		(8)
Foreign currency translation	84		—		84
Share of other comprehensive income (loss) of entities using the equity method	(15)		—		(15)
Other comprehensive income (loss)	$	16	$	19	$	35


	Three Months Ended June 30, 2022
	Gross Amount		Income Taxes		Net Amount
Unrealized gain (loss) on cash flow hedges	$	15	$	1	$	16
Changes in retirement plans’ funded status	(34)		9		(25)
Foreign currency translation	72		—		72
Share of other comprehensive income (loss) of entities using the equity method	(20)		—		(20)
Other comprehensive income (loss)	$	33	$	10	$	43


	Six Months Ended June 30, 2022
	Gross Amount		Income Taxes		Net Amount
Unrealized gain (loss) on cash flow hedges	$	(80)	$	1	$	(79)
Changes in retirement plans’ funded status	(68)		18		(50)
Foreign currency translation	331		—		331
Share of other comprehensive income (loss) of entities using the equity method	(29)		—		(29)
Other comprehensive income (loss)	$	154	$	19	$	173

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


	Unrealized Gain (Loss) on Cash Flow Hedges		Change in Retirement Plans’ Funded Status		Foreign Currency Translation		Share of Other Comprehensive Income (Loss) of Entities Using the Equity Method		Total
Balance, January 1, 2022	$	2	$	(324)	$	(1,951)	$	(224)	$	(2,497)
Other comprehensive income (loss), before reclassifications	(114)		16		332		(29)		205
Amounts reclassified from other comprehensive income	35		(66)		—		—		(31)
Other comprehensive income (loss)*	(79)		(50)		332		(29)		174
Balance, June 30, 2022	$	(77)	$	(374)	$	(1,619)	$	(253)	$	(2,323)

Balance, January 1, 2023	$	46	$	(285)	$	(1,800)	$	(239)	$	(2,278)
Other comprehensive income (loss), before reclassifications	(26)		(1)		81		(15)		39
Amounts reclassified from other comprehensive income	—		(7)		—		—		(7)
Other comprehensive income (loss)*	(26)		(8)		81		(15)		32
Balance, June 30, 2023	$	20	$	(293)	$	(1,719)	$	(254)	$	(2,246)

(*)Excluded from the table above is other comprehensive income (loss) allocated to non-controlling interests of $3 million and $(1) million for the six months ended June 30, 2023 and 2022, respectively.

Significant amounts reclassified out of each component of accumulated other comprehensive income (loss) in the three and six months ended June 30, 2023 and 2022 consisted of the following:


	Amounts Reclassified from Other Comprehensive Income (Loss)				Amount Reclassified from Other Comprehensive Income (Loss)				Consolidated Statement of Operations Line
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Cash flow hedges	$	3	$	(1)	$	4	$	(2)	Net sales
	5		41		32		58		Cost of goods sold
	(18)		(6)		(25)		4		Other, net
	(3)		(9)		(8)		(17)		Interest expense
	(1)		(5)		(3)		(8)		Income taxes
	$	(14)	$	20	$	—	$	35
Change in retirement plans’ funded status:
Amortization of actuarial losses	$	5	$	6	$	9	$	11	*
Amortization of prior service cost	(9)		(32)		(18)		(63)		*
	1		(7)		2		(14)		Income taxes
	$	(3)	$	(33)	$	(7)	$	(66)
Total reclassifications, net of tax	$	(17)	$	(13)	$	(7)	$	(31)

(*) These amounts are included in net periodic pension and other postretirement benefit cost. See “Note 6: Employee Benefit Plans and Postretirement Benefits” for additional information.

18. RELATED PARTY INFORMATION

As of June 30, 2023, CNH Industrial’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. 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 Industrial.

As of June 30, 2023, EXOR N.V. held 42.9% of CNH Industrial’s voting power and had the ability to significantly influence the decisions submitted to a vote of CNH Industrial’s shareholders, including approval of annual dividends, the election and removal of directors, mergers or other business combinations, the acquisition or disposition of assets and issuances of equity and the incurrence of indebtedness. The percentage above has been calculated as the ratio of (i) the aggregate number of common shares and special voting shares owned by EXOR N.V. to (ii) the aggregate number of outstanding common shares and special voting shares of CNH Industrial as of June 30, 2023. In addition, CNH Industrial engages in transactions with its unconsolidated subsidiaries and affiliates over which CNH Industrial has a significant influence or joint control.

The Company’s Audit Committee reviews and approves all significant related party transactions.

Transactions with EXOR N.V. and its Subsidiaries and Affiliates

EXOR N.V. is an investment holding company. As of June 30, 2023 and December 31, 2022, among other things, EXOR N.V. managed a portfolio that includes investments in Stellantis, Iveco Group and Ferrari. CNH Industrial did not enter into any significant transactions with EXOR N.V. during the three and six months ended June 30, 2023 and 2022.

In connection with the establishment of Fiat Industrial (now CNH Industrial) through the demerger from Fiat (which was subsequently merged into Fiat Chrysler Automobiles N.V. which is now Stellantis), the two companies entered into a Master Services Agreement (“Stellantis MSA”) which sets forth the primary terms and conditions pursuant to which the service provider subsidiaries of CNH Industrial and Stellantis provide services to the service receiving subsidiaries. As structured, the applicable service provider and service receiver subsidiaries become parties to the Stellantis MSA through the execution of an Opt-in letter that may contain additional terms and conditions. Pursuant to the Stellantis MSA, service receivers are required to pay to service providers the actual cost of the services plus a negotiated margin. During the three and six months ended June 30, 2023 and 2022, Stellantis subsidiaries provided CNH Industrial with administrative services such as accounting, maintenance of plant and equipment, security, information systems and training under the terms and conditions of the Stellantis MSA and the applicable Opt-in letters. At June 30, 2023, the Stellantis MSA was terminated. Costs incurred by CNH Industrial in the six months ended June 30, 2023 related to the termination of the contract were not material.

Furthermore, CNH Industrial and Stellantis engage in other minor transactions in the ordinary course of business.

These transactions with Stellantis are reflected in the Company’s consolidated financial statements as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Net sales	$	—	$	—	$	—	$	—
Cost of goods sold	2		6		6		11
Selling, general and administrative expenses	10		12		22		25


	June 30, 2023		December 31, 2022
	(in millions)
Trade receivables	$	—	$	—
Trade payables	17		14

Transactions with Iveco Group post-Demerger

CNH Industrial and Iveco Group post-Demerger entered into transactions consisting of the sale of engines from Iveco Group to CNH Industrial. Additionally, concurrent with the Demerger, the Companies entered into services contracts in relation to general administrative and specific technical matters, provided by either CNH Industrial to Iveco Group and vice versa as follows:

Master Service Agreements: CNH Industrial 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.

Engine Supply Agreement: in relation to the design and supply of off-road engines from Iveco Group to CNH Industrial post-Demerger, Iveco Group and CNH Industrial entered into a ten-year Engine Supply Agreement (“ESA”) whereby Iveco Group will sell to CNH Industrial post-Demerger diesel, CNG and LNG engines and provide post-sale services.

Financial Service Agreement: in relation to certain financial services activities carried out by either CNH Industrial to Iveco Group or vice versa, in connection with the execution of the Demerger Deed, CNH Industrial 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.

The transactions with Iveco Group post-Demerger are reflected in the consolidated financial statements as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Net sales	$	37	$	21	$	57	$	21
Cost of goods sold	279		243		534		503


	June 30, 2023		December 31, 2022
	(in millions)
Trade receivables	$	24	$	21
Receivables from Iveco Group N.V.	260		298
Trade payables	230		184
Payables to Iveco Group N.V.	111		156

Transactions with Unconsolidated Subsidiaries and Affiliates

CNH Industrial sells agricultural and construction equipment and provides technical services to unconsolidated subsidiaries and affiliates such as CNH de Mexico SA de CV, Turk Traktor ve Ziraat Makineleri A.S. and New Holland HFT Japan Inc. CNH Industrial also purchases equipment from unconsolidated subsidiaries and affiliates, such as Turk Traktor ve Ziraat Makineleri A.S. These transactions primarily affected revenues, finance and interest income, cost of goods sold, trade receivables and payables, and are presented as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Net sales	$	160	$	96	$	293	$	222
Cost of goods sold	176		123		326		244


	June 30, 2023		December 31, 2022
	(in millions)
Trade receivables	$	4	$	—
Trade payables	86		100

At June 30, 2023 and December 31, 2022, CNH Industrial had provided guarantees totaling $25 million and $19 million, respectively, on certain commitments of its affiliate CNH Industrial Capital Europe S.a.S.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

CNH Industrial N.V. (“CNH Industrial” or the “Company”) is incorporated in, and under the laws of the Netherlands. CNH Industrial has its corporate seat in Amsterdam, the Netherlands, and its principal office in Basildon, England, United Kingdom. Unless otherwise indicated or the context otherwise requires, the terms “CNH Industrial” and the “Company” refer to CNH Industrial and its subsidiaries.

The Company has three reportable segments reflecting the three businesses directly managed by CNH Industrial N.V., 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 customers acquiring our products. The Company’s worldwide Agriculture and Construction operations as well as corporate functions are collectively referred to as “Industrial Activities.”

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the notes to our unaudited consolidated financial statements in this report, as well as our annual report on Form 10-K for the year ended December 31, 2022 ("2022 Annual Report") filed with the U.S. Securities and Exchange Commission (“SEC”). Results for the interim periods presented are not necessarily indicative of the results to be expected for the full fiscal year due to seasonal and other factors.

•North America: United States, Canada, and Mexico;

•South America: Central and South America, and the Caribbean Islands; and

•Asia Pacific: Continental Asia (including the India subcontinent), Indonesia, and Oceania.

Non-GAAP Financial Measures

CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial’s management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers’ ability to assess CNH Industrial’s financial performance and financial position. Management uses these non-GAAP measures to identify operational trends, as well as to 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.

Our primary 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-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 on-going 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 Industrial provides the reconciliation of Net Cash (Debt) to Total (Debt), which is the most directly comparable measure included in the consolidated balance sheets. Due to different sources of cash flows used for the repayment of the debt between Industrial Activities and Financial Services (by cash from operations for Industrial Activities and by collection of financing receivables for Financial Services), management separately evaluates the cash flow performance of Industrial Activities using Net Cash (Debt) of Industrial Activities.

Revenues on a Constant Currency Basis

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

A. OPERATING RESULTS

The operations and key financial measures and financial analysis differ significantly for manufacturing and distribution businesses and financial services businesses; therefore, management believes that certain supplemental disclosures are important in understanding of 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.

Global Business Conditions

In combination with the economic recovery from the pandemic and repercussions from geopolitical events, including the war in Ukraine, the global economy continues to experience volatile disruptions including to the commodity, labor and transportation markets. These disruptions have contributed to an inflationary environment which has affected, and may continue to affect, the price and availability of certain products and services necessary for the Company's operations. For example, the Company experienced supply chain disruptions and inflationary pressures in 2022 and, while these trends improved in the second quarter 2023, the Company continues to experience some disruptions. The reduction in supply chain disruptions contributed to improved efficiencies in our manufacturing operations, but purchasing costs remain elevated.

In addition, the Company continues to monitor global economic conditions and the impact of macroeconomic pressures, including repercussions from rising interest rates, fluctuating currency exchange rates, inflation and recession fears, on the Company’s business, customers and suppliers.

For a discussion of the Company’s risks and uncertainties, see Part 1, Item 1A: Risk Factors in the Company’s Form 10-K for the year ended December 31, 2022.

During the first quarter of 2022, CNH Industrial announced it had suspended non-domestic operations in Russia. As a result of the suspension, the Company evaluated the carrying value of assets held within the Company's Russia operations and recorded charges of $71 million related to asset write downs, financial receivable allowances and a valuation allowance against deferred tax assets. During the first quarter of 2023, CNH Industrial sold CNH Capital Russia at a loss of $6 million and during the second quarter of 2023, CNH Industrial sold CNH Industrial Russia at a loss of $17 million.

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Consolidated Results of Operations


	Three Months Ended June 30,
	2023		2022
	(in millions)
Revenues:
Net sales	$	5,954	$	5,613
Finance, interest and other income	613		469
Total Revenues	6,567		6,082
Costs and Expenses:
Cost of goods sold	4,463		4,377
Selling, general and administrative expenses	485		424
Research and development expenses	269		212
Restructuring expenses	2		6
Interest expense	323		162
Other, net	187		148
Total Costs and Expenses	5,729		5,329
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates	838		753
Income tax (expense) benefit	(192)		(228)
Equity in income of unconsolidated subsidiaries and affiliates	64		27
Net income	710		552
Net income attributable to noncontrolling interests	4		4
Net income attributable to CNH Industrial N.V.	$	706	$	548

Revenues

We recorded revenues of $6,567 million for the three months ended June 30, 2023, an increase of 8.0% (up 8.8% on a constant currency basis) compared to the three months ended June 30, 2022. Net sales were $5,954 million in the three months ended June 30, 2023, an increase of 6.1% (up 6.9% on a constant currency basis) compared to the three months ended June 30, 2022. These increases were due to favorable price realization and higher sales volume offsetting adverse currency conversion impacts.

Cost of Goods Sold

Cost of goods sold was $4,463 million for the three months ended June 30, 2023 compared with $4,377 million for the three months ended June 30, 2022. As a percentage of net sales of Industrial Activities, cost of goods sold was 75.0% in the three months ended June 30, 2023 (78.0% for the three months ended June 30, 2022), as a result of favorable price realization and improved operating performance of our production system.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $485 million during the three months ended June 30, 2023 (7.4% of total revenues), up $61 million compared to the three months ended June 30, 2022 (7.0% of total revenues). The year over year increase is primarily attributable to increased labor costs.

Research and Development Expenses

For the three months ended June 30, 2023, research and development expenses were $269 million compared to $212 million for the three months ended June 30, 2022. The expense for the three months ended June 30, 2023 and 2022 was primarily attributable to continued investment in new products and technologies.

Restructuring Expenses

Restructuring expenses for the three months ended June 30, 2023 were $2 million, compared to $6 million for the three months ended June 30, 2022.

Interest Expense

Interest expense was $323 million for the three months ended June 30, 2023 compared to $162 million for the three months ended June 30, 2022. The interest expense attributable to Industrial Activities for the three months ended June 30, 2023, net of interest income and eliminations, was $22 million, compared to $35 million in the three months ended June 30, 2022.

Other, net

Other, net expenses were $187 million for the three months ended June 30, 2023 and include a loss of $17 million on the sale of CNH Industrial Russia offset by a pre-tax gain of $6 million ($5 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.

Other, net expenses were $148 million for the three months ended June 30, 2022 and include a pre-tax gain of $30 million ($23 million after-tax) as a result of the Benefit Modification Amortization over approximately 4.5 years of the $527 million positive impact from the 2018 U.S. healthcare plan modification, a pre-tax gain of $6 million ($5 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, $16 million ($49 million after-tax) of loss on the sale of Raven Engineered Films net of income from the Raven businesses held for sale during the quarter, and foreign exchange losses of $13 million.

Income Taxes


	Three Months Ended June 30,
	2023			2022
	(in millions, except percentages)
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates	$	838		$	753
Income tax (expense) benefit	$	(192)		$	(228)
Effective tax rate	22.9		%	30.3		%

Income tax expense for the three months ended June 30, 2023 was $192 million compared to $228 million for the three months ended June 30, 2022. The effective tax rates for the three months ended June 30, 2023 and 2022 were 22.9% and 30.3%, respectively. The 2023 effective tax rate for the three months ended June 30, 2023 was reduced by the tax benefits related to the sale of CNH Industrial Russia. The 2022 effective tax rate was increased by the discrete tax charge from the sale of Raven’s Engineered Films Division.

Equity in Income of Unconsolidated Subsidiaries and Affiliates

Equity in income of unconsolidated subsidiaries and affiliates was $64 million and $27 million for the three months ended June 30, 2023 and 2022, respectively.

Net Income

Net income was $710 million for the three months ended June 30, 2023, compared to net income of $552 million for the three months ended June 30, 2022. Net income for the three months ended June 30, 2023 included a loss of $17 million related to the sale of CNH Industrial Russia and restructuring expenses of $2 million, partially offset by a pre-tax gain of $6 million ($5 million after-tax) as a result of the amortization over four years of the $101 million positive impact from the 2021 U.S. healthcare plan modification.

Net income for the three months ended June 30, 2022 included a pre-tax gain of $30 million ($23 million after-tax) as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the 2018 U.S. healthcare plan modification, a pre-tax gain of $6 million ($5 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 offset by $16 million ($49 million after-tax) of loss on the sale of Raven Engineered Films net of income from the Raven businesses held for sale during the quarter, separation costs in connection with the spin-off of Iveco Group of $3 million ($2 million after-tax) and restructuring expenses of $6 million ($3 million after-tax).

Industrial Activities and Business Segments

The following tables show revenues and Adjusted EBIT by segment. We have also included a discussion of our results by Industrial Activities and each of our business segments.


	Three Months Ended June 30,
	2023		2022		% Change		% Change Excl. FX
	(in millions, except percentages)
Revenues:
Agriculture	$	4,890	$	4,722	3.6	%	4.5	%
Construction	1,064		891		19.4	%	19.9	%
Eliminations and other	—		—
Total Net sales of Industrial Activities	5,954		5,613		6.1	%	6.9	%
Financial Services	603		471		28.0	%	29.3	%
Eliminations and other	10		(2)
Total Revenues	$	6,567	$	6,082	8.0	%	8.8	%


	Three Months Ended June 30,
	2023		2022		$ Change		2023 Adj EBIT Margin		2022 Adj EBIT Margin
	(in millions, except percentages)
Adjusted EBIT by segment:
Agriculture	$	821	$	663	$	158	16.8	%	14.0	%
Construction	72		34		38		6.8	%	3.8	%
Unallocated items, eliminations and other	(71)		(43)		(28)
Total Adjusted EBIT of Industrial Activities	$	822	$	654	$	168	13.8	%	11.7	%

Net sales of Industrial Activities were $5,954 million during the three months ended June 30, 2023, an increase of 6.1% compared to the three months ended June 30, 2022 (up 6.9% on a constant currency basis), due to favorable price realization offsetting adverse currency conversion impacts.

Adjusted EBIT of Industrial Activities was $822 million during the three months ended June 30, 2023, compared to an adjusted EBIT of $654 million during the three months ended June 30, 2022. The increase in adjusted EBIT was primarily attributable to gross margin improvement in our Agriculture and Construction segments partially offset by increased SG&A (selling, general, and administrative) expenditures and R&D investments.

Segment Performance

Agriculture

Net Sales

The following table shows Agriculture net sales by geographic region for the three months ended June 30, 2023 compared to the three months ended June 30, 2022:

Agriculture Sales—by geographic region


	Three Months Ended June 30,
(in millions, except percentages)	2023		2022		% Change
North America	$	1,872	$	1,757	6.5	%
Europe, Middle East and Africa	1,676		1,560		7.4	%
South America	850		939		(9.5)	%
Asia Pacific	492		466		5.6	%
Total	$	4,890	$	4,722	3.6	%

Agriculture's net sales totaled $4,890 million in the three months ended June 30, 2023, an increase of 3.6% compared to the three months ended June 30, 2022 (up 4.5% on a constant currency basis). Net sales increased as a result of favorable price realization partially offset by lower volume.

In North America, industry volume was up 21% year over year in the second quarter for tractors over 140 HP and was down 8% for tractors under 140 HP; combines were up 27% from prior year. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 6% and up 32%, respectively, which included Europe tractor and combine demand down 1% and up 11%, respectively. South America tractor demand was down 4% and combine demand was down 27%. Asia Pacific tractor demand was down 4% and combine demand was down 29%.

Adjusted EBIT

Adjusted EBIT was $821 million in the three months ended June 30, 2023, compared to $663 million in the three months ended June 30, 2022. The $158 million (or 2.8 p.p.) increase from Q2 2022 was a result of favorable pricing and improved mix partially offset by increased production costs, SG&A expenditures, and R&D investments. Adjusted EBIT margin was 16.8%.

Construction

Net Sales

The following table shows Construction net sales by geographic region for the three months ended June 30, 2023 compared to the three months ended June 30, 2022:

Construction Sales—by geographic region


	Three Months Ended June 30,
(in millions, except percentages)	2023		2022		% Change
North America	$	587	$	412	42.5	%
Europe, Middle East and Africa	237		234		1.3	%
South America	169		174		(2.9)	%
Asia Pacific	71		71		—	%
Total	$	1,064	$	891	19.4	%

Construction's net sales totaled $1,064 million in the three months ended June 30, 2023, an increase of 19.4% compared to the three months ended June 30, 2022 (up 19.9% on a constant currency basis), driven by favorable price realization and positive volume/mix mainly in North America; partially offset by lower net revenue from South America.

Global industry volume for construction equipment was down 9% year over year in the second quarter for Heavy construction equipment; Light construction equipment was flat year over year. Aggregated demand increased 8% in North America, was flat in EMEA, decreased 16% in South America and decreased 13% for Asia Pacific (excluding China, Asia Pacific markets decreased 3%).

Adjusted EBIT

Adjusted EBIT was $72 million in the three months ended June 30, 2023, compared to $34 million in the three months ended June 30, 2022. The improvement was due to favorable price realization and favorable volume/mix partially offset by higher production, SG&A spend, and R&D investments. Adjusted EBIT margin was 6.8%.

Financial Services

Finance, Interest and Other Income

Financial Services' revenues totaled $603 million in the three months ended June 30, 2023, up 28.0% compared to the three months ended June 30, 2022 (up 29.3% on a constant currency basis), due to favorable volumes and higher base rates across all regions, partially offset by lower used equipment sales due to diminished inventory levels.

Net Income

Net income of Financial Services was $94 million in the three months ended June 30, 2023, a decrease compared to the three months ended June 30, 2022, primarily due to margin compression in North America and higher risk costs, partially offset by favorable volumes in all regions and a lower tax rate.

In the second quarter of 2023, retail loan originations, including unconsolidated joint ventures, were $2.8 billion, up $0.4 billion compared to the second quarter of 2022. The managed portfolio (including unconsolidated joint ventures) was $26 billion as of June 30, 2023 (of which retail was 64% and wholesale was 36%), up $4.9 billion compared to June 30, 2022 (up $4.5 billion on a constant currency basis).

At June 30, 2023, the receivables balance greater than 30 days past due as a percentage of receivables was 1.8% (1.5% as of June 30, 2022) with increases mainly in South America.

Reconciliation of Net Income (Loss) to Adjusted EBIT

The following table includes the reconciliation of Adjusted EBIT, a non-GAAP financial measure, to net income, the most comparable U.S. GAAP financial measure.


	Three Months Ended June 30,
	2023		2022
	(in millions)
Agriculture	$	821	$	663
Construction	72		34
Unallocated items, eliminations and other	(71)		(43)
Total Adjusted EBIT of Industrial Activities	822		654
Financial Services Net Income	94		95
Financial Services Income Taxes	26		38
Interest expense of Industrial Activities, net of interest income and eliminations	(22)		(35)
Foreign exchange gains (losses), net of Industrial Activities	—		13
Finance and non-service component of Pension and other post-employment benefit cost of Industrial Activities(1)	1		40
Restructuring expense of Industrial Activities	(2)		(6)
Other discrete items of Industrial Activities(2)	(17)		(19)
Income (loss) before taxes	902		780
Income tax (expense) benefit	(192)		(228)
Net income (loss)	$	710	$	552

(1) In the three months ended June 30, 2023 and 2022, this item includes the pre-tax gain of $6 million as a result of the amortization over the 4 years of the $101 million positive impact from the 2021 modifications of a healthcare plan in the U.S. In the three months ended June 30, 2022, this item includes the pre-tax gain of $30 million as a result of the 2018 modification of a healthcare plan in the U.S.

(2) In the three months ended June 30, 2023 this item included a $17 million loss on the sale of CNH Industrial Russia. In the three months ended June 30, 2022, this item includes $3 million of separation costs incurred in connection with our spin-off of the Iveco Group Business and a $16 million loss from the activity of the two Raven businesses held for sale, including the loss on the sale of the Engineered Films Division.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Consolidated Results of Operations


	Six Months Ended June 30,
	2023		2022
	(in millions)
Revenues:
Net sales	$	10,730	$	9,793
Finance, interest and other income	1,179		934
Total Revenues	11,909		10,727
Costs and Expenses:
Cost of goods sold	8,074		7,663
Selling, general and administrative expenses	923		802
Research and development expenses	500		396
Restructuring expenses	3		8
Interest expense	595		300
Other, net	350		331
Total Costs and Expenses	10,445		9,500
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates	1,464		1,227
Income tax (expense) benefit	(365)		(387)
Equity in income of unconsolidated subsidiaries and affiliates	97		48
Net income	1,196		888
Net income attributable to noncontrolling interests	8		7
Net income attributable to CNH Industrial N.V.	$	1,188	$	881

Revenues

We recorded revenues of $11,909 million for the six months ended June 30, 2023, an increase of 11.0% (up 12.5% on a constant currency basis) compared to the six months ended June 30, 2022. Net sales were $10,730 million in the six months ended June 30, 2023, an increase of 9.6% (up 11.1% on a constant currency basis) compared to the six months ended June 30, 2022. These increases were due to favorable price realization and higher sales volume.

Cost of Goods Sold

Cost of goods sold was $8,074 million for the six months ended June 30, 2023 compared with $7,663 million for the six months ended June 30, 2022. As a percentage of net sales of Industrial Activities, cost of goods sold was 75.2% in the six months ended June 30, 2023 (78.2% for the six months ended June 30, 2022), as a result of favorable price realization partially offset by higher manufacturing and purchasing costs. In the six months ended June 30, 2022, this item included $34 million of asset write-downs as a result of the suspension of non-domestic operations in Russia.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $923 million during the six months ended June 30, 2023 (7.8% of total revenues), up $121 million compared to the six months ended June 30, 2022 (7.5% of total revenues). The year over year increase is primarily due to increased labor costs. For the six months ended June 30, 2022, SG&A included $25 million in write-downs due to the suspension of non-domestic operations in Russia.

Research and Development Expenses

For the six months ended June 30, 2023, research and development expenses were $500 million compared to $396 million for the six months ended June 30, 2022. The expense for the six months ended June 30, 2023 and 2022 was primarily attributable to continued investment in new products and technologies.

Restructuring Expenses

Restructuring expenses for the six months ended June 30, 2023 were $3 million, compared to $8 million for the six months ended June 30, 2022.

Interest Expense

Interest expense was $595 million for the six months ended June 30, 2023 compared to $300 million for the six months ended June 30, 2022. The interest expense attributable to Industrial Activities for the six months ended June 30, 2023, net of interest income and eliminations was $26 million, compared to $70 million in the six months ended June 30, 2022.

Other, net

Other, net expenses were $350 million for the six months ended June 30, 2023 and includes a loss of $23 million on the sale of CNH Industrial Russia and CNH Capital Russia, offset by a pre-tax gain of $12 million ($9 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.

Other, net expenses were $331 million for the six months ended June 30, 2022 and include a pre-tax gain of $60 million ($46 million after-tax) as a result of the Benefit Modification Amortization over approximately 4.5 years of the $527 million positive impact from the 2018 U.S. healthcare plan modification, a pre-tax gain of $12 million ($9 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, $8 million ($43 million after-tax) of loss on the sale of Raven Engineered Films net of income from the Raven businesses held for sale.

Income Taxes


	Six Months Ended June 30,
	2023			2022
	(in millions, except percentages)
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates	$	1,464		$	1,227
Income tax (expense) benefit	$	(365)		$	(387)
Effective tax rate	24.9		%	31.5		%

Income tax expense for the six months ended June 30, 2023 was $365 million compared to $387 million for the six months ended June 30, 2022. The effective tax rates for the six months ended June 30, 2023 and 2022 were 24.9% and 31.5%, respectively. The 2023 effective tax rate was reduced by the tax benefits related to the sale of CNH Industrial Russia although these benefits were partially offset by discrete tax expense associated with prior periods. The 2022 effective tax rate was increased by pre-tax losses for which deferred tax assets were not recognized, the de-recognition of certain deferred tax assets, increased charges for unrecognized tax benefits, and a discrete tax charge resulting from the sale of Raven’s Engineered Films Division.

Equity in Income of Unconsolidated Subsidiaries and Affiliates

Equity in income of unconsolidated subsidiaries and affiliates was $97 million and $48 million for the six months ended June 30, 2023 and 2022, respectively.

Net Income

Net income was $1,196 million for the six months ended June 30, 2023, compared to net income of $888 million for the six months ended June 30, 2022. Net income for the six months ended June 30, 2023 included a loss of $17 million related to the sale of CNH Industrial Russia, a loss of $6 million related to CNH Capital Russia, and restructuring expenses of $3 million, partially offset by a pre-tax gain of $12 million ($9 million after-tax) as a result of the amortization over four 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.

Net income for the six months ended June 30, 2022, included a pre-tax gain of $60 million ($46 million after-tax) as a result of the amortization over approximately 4.5 years of the $527 million positive impact from the 2018 U.S. healthcare plan modification, a pre-tax gain of $12 million ($9 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 offset by $8 million ($43 million after-tax) of loss on the sale of Raven Engineered Films net of income from the Raven businesses held for sale during the quarter, a charge of $71 million related to asset write-downs, financial receivable allowances and valuation allowances on deferred tax assets as a result of the suspension of operations in Russia, separation costs in connection with the spin-off of the Iveco Group of $6 million ($5 million after-tax), and restructuring expenses of $8 million ($5 million after-tax).

Industrial Activities and Business Segments

The following tables show revenues and Adjusted EBIT by segment. We have also included a discussion of our results by Industrial Activities and each of our business segments.


	Six Months Ended June 30,
	2023		2022		% Change		% Change Excl. FX
	(in millions, except percentages)
Revenues:
Agriculture	$	8,817	$	8,099	8.9	%	10.5	%
Construction	1,913		1,694		12.9	%	14.0	%
Eliminations and other	—		—
Total Net sales of Industrial Activities	10,730		9,793		9.6	%	11.1	%
Financial Services	1,152		937		22.9	%	24.3	%
Eliminations and other	27		(3)
Total Revenues	$	11,909	$	10,727	11.0	%	12.5	%


	Six Months Ended June 30,
	2023		2022		$ Change		2023 Adj EBIT Margin		2022 Adj EBIT Margin
	(in millions, except percentages)
Adjusted EBIT by segment:
Agriculture	$	1,391	$	1,089	$	302	15.8	%	13.4	%
Construction	116		66		50		6.1	%	3.9	%
Unallocated items, eliminations and other	(130)		(72)		(58)
Total Adjusted EBIT of Industrial Activities	$	1,377	$	1,083	$	294	12.8	%	11.1	%

Net sales of Industrial Activities were $10,730 million during the six months ended June 30, 2023, an increase of 9.6% compared to the six months ended June 30, 2022 (up 11.1% on a constant currency basis), due to favorable price realization and higher sales volume.

Adjusted EBIT of Industrial Activities was $1,377 million during the six months ended June 30, 2023, compared to an adjusted EBIT of $1,083 million during the six months ended June 30, 2022. The increase in adjusted EBIT was primarily attributable to gross margin improvement in our Agriculture and Construction segments offset by increased SG&A expenditures and R&D investments.

Segment Performance

Agriculture

Net Sales

The following table shows Agriculture net sales by geographic region for the six months ended June 30, 2023 compared to the six months ended June 30, 2022:

Agriculture Sales—by geographic region


	Six Months Ended June 30,
(in millions, except percentages)	2023		2022		% Change
North America	$	3,360	$	2,933	14.6	%
Europe, Middle East and Africa	3,023		2,755		9.7	%
South America	1,580		1,631		(3.1)	%
Asia Pacific	854		780		9.5	%
Total	$	8,817	$	8,099	8.9	%

Agriculture's net sales totaled $8,817 million in the six months ended June 30, 2023, an increase of 8.9% compared to the six months ended June 30, 2022 (up 10.5% on a constant currency basis). Net sales increased due to favorable price realization and favorable mix.

For the six months ended June 30, 2023 in North America, industry volume was up 20% year over year for tractors over 140 HP and was down 11% for tractors under 140 HP; combines were up 57% from a severely disrupted industry in the prior year. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 2% and up 22%, respectively, which included Europe tractor and combine demand flat and up 31%, respectively. South America tractor demand was down 4% and combine demand was down 3%. Asia Pacific tractor demand was up 1% and combine demand was down 22%.

Adjusted EBIT

Adjusted EBIT was $1,391 million in the six months ended June 30, 2023, compared to $1,089 million in the six months ended June 30, 2022. The $302 million increase was mostly driven by gross margin improvement, partially offset by increased production costs, SG&A expenditures, and R&D investments. Adjusted EBIT margin was 15.8%.

Construction

Net Sales

The following table shows Construction net sales by geographic region for the six months ended June 30, 2023 compared to the six months ended June 30, 2022:

Construction Sales—by geographic region


	Six Months Ended June 30,
(in millions, except percentages)	2023		2022		% Change
North America	$	1,050	$	806	30.3	%
Europe, Middle East and Africa	450		436		3.2	%
South America	278		307		(9.4)	%
Asia Pacific	135		145		(6.9)	%
Total	$	1,913	$	1,694	12.9	%

Construction's net sales totaled $1,913 million in the six months ended June 30, 2023, an increase of 12.9% compared to the six months ended June 30, 2022 (up 14.0% on a constant currency basis), driven by positive volume and mix mainly in North America and Europe and favorable price realization; partially offset by lower net revenue from South America, and ceased activities in China and Russia.

In the six months ended June 30, 2023 global industry volume for construction equipment was down 14% year over year for Heavy construction equipment; light construction equipment was down 2% year over year. Aggregated demand increased 7% in North America, increased 4% in EMEA, decreased 18% in South America and decreased 21% for Asia Pacific (excluding China, Asia Pacific markets decreased 1%).

Adjusted EBIT

Adjusted EBIT was $116 million in the six months ended June 30, 2023, compared to $66 million in the six months ended June 30, 2022. The improvement was due to favorable volume and mix and favorable price realization, partially offset by higher raw materials and manufacturing costs and increased R&D investments. Adjusted EBIT margin was 6.1%.

Financial Services

Finance, Interest and Other Income

Financial Services' revenues totaled $1,152 million in the six months ended June 30, 2023, up 22.9% compared to the six months ended June 30, 2022 (up 24.3% on a constant currency basis), due to favorable volumes and higher base rates across all regions, partially offset by lower used equipment sales due to diminished inventory levels.

Net Income

Net income of Financial Services was $172 million in the six months ended June 30, 2023, a decrease of $5 million compared to the six months ended June 30, 2022, primarily due to margin compression in North America, higher risk costs, and increased labor costs, partially offset by favorable volumes in all regions.

In the six months ended June 30, 2023, retail loan originations, including unconsolidated joint ventures, were $5.0 billion, up $0.4 billion compared to the six months ended June 30, 2022 (up $0.5 billion on a constant currency basis). The managed portfolio, including unconsolidated joint ventures, was $26.0 billion as of June 30, 2023 (of which retail was 64% and wholesale 36%), up $4.9 billion compared to June 30, 2022 (up $4.5 billion on a constant currency basis).

At June 30, 2023, the receivables balance greater than 30 days past due as a percentage of receivables was 1.8% (1.5% as of June 30, 2022) with increases mainly in South America.

Reconciliation of Net Income (Loss) to Adjusted EBIT

The following table includes the reconciliation of Adjusted EBIT, a non-GAAP financial measure, to net income, the most comparable U.S. GAAP financial measure.


	Six Months Ended June 30,
	2023		2022
	(in millions)
Agriculture	$	1,391	$	1,089
Construction	116		66
Unallocated items, eliminations and other	(130)		(72)
Total Adjusted EBIT of Industrial Activities	1,377		1,083
Financial Services Net Income	172		177
Financial Services Income Taxes	55		74
Interest expense of Industrial Activities, net of interest income and eliminations	(26)		(70)
Foreign exchange gains (losses), net of Industrial Activities	(6)		—
Finance and non-service component of Pension and other post-employment benefit cost of Industrial Activities(1)	2		77
Restructuring expense of Industrial Activities	(3)		(8)
Other discrete items of Industrial Activities(2)	(10)		(58)
Income (loss) before taxes	1,561		1,275
Income tax (expense) benefit	(365)		(387)
Net income (loss)	$	1,196	$	888

(1) In the six months ended June 30, 2023 and 2022, this item includes the pre-tax gain of $12 million as a result of the amortization over the 4 years of the $101 million positive impact from the 2021 modifications of a healthcare plan in the U.S. In the six months ended June 30, 2022, this item includes the pre-tax gain of $60 million as a result of the 2018 modification of a healthcare plan in the U.S.

(2) In the six months ended June 30, 2023, this item included a gain of $13 million in relation to the fair value remeasurement of Augmenta and Bennamann, offset by a $23 million loss on the sale of CNH Industrial Russia and CNH Capital Russia. In the six months ended June 30, 2022, this item includes $6 million of separation costs incurred in connection with our spin-off of the Iveco Group Business, $8 million of loss from the activity of the two Raven businesses held for sale, and $44 million of asset write-downs.

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 Industrial. This supplemental information does not purport to represent the operations of each group as if each group were to operate on a standalone basis. This supplemental data includes:

Industrial Activities—The financial information captioned “Industrial Activities” reflects the consolidation of all majority-owned subsidiaries except for the Financial Services business.

Financial Services—The financial information captioned “Financial Services” reflects the consolidation or combination of the Financial Services business.


	Statement of Operations
	Three Months Ended June 30, 2023									Three Months Ended June 30, 2022
	Industrial Activities(1)		Financial Services		Eliminations			Consolidated		Industrial Activities(1)		Financial Services		Eliminations			Consolidated
	(in millions)
Revenues
Net sales	$	5,954	$	—	$	—		$	5,954	$	5,613	$	—	$	—		$	5,613
Finance, interest and other income	47		603		(37)		(2)	613		15		471		(17)		(2)	469
Total Revenues	6,001		603		(37)			6,567		5,628		471		(17)			6,082
Costs and Expenses
Cost of goods sold	4,463		—		—			4,463		4,377		—		—			4,377
Selling, general & administrative expenses	434		51		—			485		381		43		—			424
Research and development expenses	269		—		—			269		212		—		—			212
Restructuring expenses	2		—		—			2		6		—		—			6
Interest expense	69		291		(37)		(3)	323		50		129		(17)		(3)	162
Other, net	42		145		—			187		(21)		169		—			148
Total Costs and Expenses	5,279		487		(37)			5,729		5,005		341		(17)			5,329
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates	722		116		—			838		623		130		—			753
Income tax (expense) benefit	(166)		(26)		—			(192)		(190)		(38)		—			(228)
Equity in income of unconsolidated subsidiaries and affiliates	60		4		—			64		24		3		—			27
Net income (loss)	$	616	$	94	$	—		$	710	$	457	$	95	$	—		$	552

(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) Eliminations of Financial Services' interest income earned from Industrial Activities.

(3) Eliminations of Industrial Activities' interest expense to Financial Services.


	Statement of Operations
	Six Months Ended June 30, 2023									Six Months Ended June 30, 2022
	Industrial Activities(1)		Financial Services		Eliminations			Consolidated		Industrial Activities(1)		Financial Services		Eliminations			Consolidated
	(in millions)
Revenues
Net sales	$	10,730	$	—	$	—		$	10,730	$	9,793	$	—	$	—		$	9,793
Finance, interest and other income	104		1,152		(77)		(2)	1,179		25		937		(28)		(2)	934
Total Revenues	10,834		1,152		(77)			11,909		9,818		937		(28)			10,727
Costs and Expenses
Cost of goods sold	8,074		—		—			8,074		7,663		—		—			7,663
Selling, general & administrative expenses	821		102		—			923		710		92		—			802
Research and development expenses	500		—		—			500		396		—		—			396
Restructuring expenses	3		—		—			3		8		—		—			8
Interest expense	130		542		(77)		(3)	595		95		233		(28)		(3)	300
Other, net	62		288		—			350		(38)		369		—			331
Total Costs and Expenses	9,590		932		(77)			10,445		8,834		694		(28)			9,500
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates	1,244		220		—			1,464		984		243		—			1,227
Income tax (expense) benefit	(310)		(55)		—			(365)		(313)		(74)		—			(387)
Equity in income of unconsolidated subsidiaries and affiliates	90		7		—			97		40		8		—			48
Net income (loss)	$	1,024	$	172	$	—		$	1,196	$	711	$	177	$	—		$	888

(2) Eliminations of Financial Services' interest income earned from Industrial Activities.

(3) Eliminations of Industrial Activities' interest expense to Financial Services.


	Balance Sheets
	June 30, 2023									December 31, 2022
	Industrial Activities(1)		Financial Services		Eliminations			Consolidated		Industrial Activities(1)		Financial Services		Eliminations			Consolidated
	(in millions)
ASSETS
Cash and cash equivalents	$	2,730	$	464	$	—		$	3,194	$	3,802	$	574	$	—		$	4,376
Restricted cash	166		565		—			731		158		595		—			753
Trade receivables, net	192		10		(11)		(2)	191		175		3		(6)		(2)	172
Financing receivables, net	765		21,770		(994)		(3)	21,541		898		19,313		(951)		(3)	19,260
Receivables from Iveco Group N.V.	179		81		—			260		234		64		—			298
Inventories, net	6,396		15		—			6,411		4,798		13		—			4,811
Property, plant and equipment, net	1,643		—		—			1,643		1,532		—		—			1,532
Investments in unconsolidated subsidiaries and affiliates	283		122		—			405		272		113		—			385
Equipment under operating leases	28		1,430		—			1,458		29		1,473		—			1,502
Goodwill, net	3,350		140		—			3,490		3,182		140		—			3,322
Other intangible assets, net	1,206		23		—			1,229		1,105		24		—			1,129
Deferred tax assets	640		131		(184)		(4)	587		440		107		(114)		(4)	433
Derivative assets	108		102		(15)		(5)	195		82		128		(21)		(5)	189
Other assets	1,237		162		(47)		(2)	1,352		1,172		126		(79)		(2)	1,219
TOTAL ASSETS	$	18,923	$	25,015	$	(1,251)		$	42,687	$	17,879	$	22,673	$	(1,171)		$	39,381
LIABILITIES AND EQUITY
Debt	$	4,861	$	21,003	$	(994)		$	24,870	$	4,972	$	18,941	$	(951)	(3)	$	22,962
Payables from Iveco Group N.V.	4		107		—			111		5		151		—			156
Trade payables	3,796		152		(11)		(2)	3,937		3,492		216		(6)		(2)	3,702
Deferred tax liabilities	37		184		(184)		(4)	37		4		195		(114)		(4)	85
Pension, postretirement and other postemployment benefits	437		5		—			442		444		5		—			449
Derivative liabilities	123		135		(15)		(5)	243		132		93		(21)		(5)	204
Other liabilities	4,569		895		(47)		(2)	5,417		4,139		787		(79)		(2)	4,847
TOTAL LIABILITIES	13,827		22,481		(1,251)			35,057		13,188		20,388		(1,171)			32,405
Redeemable noncontrolling interest	55		—		—			55		49		—		—			49
Equity	5,041		2,534		—			7,575		4,642		2,285		—			6,927
TOTAL LIABILITIES AND EQUITY	$	18,923	$	25,015	$	(1,251)		$	42,687	$	17,879	$	22,673	$	(1,171)		$	39,381

(2) Eliminations of primarily receivables/payables between Industrial Activities and Financial Services.

(3) Eliminations of financing receivables/payables between Industrial Activities and Financial Services.

(4) Reclassification of deferred tax assets/liabilities in the same jurisdiction and reclassification needed for appropriate consolidated presentation.

(5) Elimination of derivative assets/liabilities between Industrial Activities and Financial Services.


	Cash Flow Statements
	Six Months Ended June 30, 2023									Six Months Ended June 30, 2022
	Industrial Activities(1)		Financial Services		Eliminations			Consolidated		Industrial Activities(1)		Financial Services		Eliminations			Consolidated
	(in millions)
Operating activities:
Net income (loss)	$	1,024	$	172	$	—		$	1,196	$	711	$	177	$	—		$	888
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization expense excluding assets under operating lease	176		2		—			178		166		1		—			167
Depreciation and amortization expense of assets under operating lease	3		89		—			92		1		104		—			105
(Gain) loss from disposal of assets, net	20		—		—			20		16		—		—			16
Undistributed (income) loss of unconsolidated subsidiaries	(35)		(7)		(4)			(46)		85		(8)		(90)		(3)	(13)
Other non-cash items, net	43		35		—			78		59		30		—			89
Changes in operating assets and liabilities:
Provisions	445		—		—			445		(51)		—		—			(51)
Deferred income taxes	(179)		(9)		—			(188)		53		(26)		—			27
Trade and financing receivables related to sales, net	(19)		(1,367)		6		(3)	(1,380)		105		(1,068)		—		(3)	(963)
Inventories, net	(1,567)		188		—			(1,379)		(1,433)		269		—			(1,164)
Trade payables	273		(66)		(5)			202		81		(32)		7		(3)	56
Other assets and liabilities	(134)		77		(1)		(3)	(58)		(274)		(34)		(7)		(3)	(315)
Net cash provided (used) by operating activities	50		(886)		(4)			(840)		(481)		(587)		(90)			(1,158)
Investing activities:
Additions to retail receivables	—		(3,576)		—			(3,576)		—		(2,703)		—			(2,703)
Collections of retail receivables	—		2,995		—			2,995		—		2,392		—			2,392
Proceeds from sale of assets excluding assets sold under operating leases	1		—		—			1		2		—		—			2
Expenditures for property, plant and equipment and intangible assets excluding assets under operating lease	(221)		(3)		—			(224)		(137)		(2)		—			(139)
Expenditures for assets under operating lease	(9)		(228)		—			(237)		(6)		(246)		—			(252)
Other	137		(422)		79			(206)		(623)		323		—			(300)
Net cash provided (used) by investing activities	(92)		(1,234)		79			(1,247)		(764)		(236)		—			(1,000)
Financing activities:
Proceeds from long-term debt	—		4,408		—			4,408		—		5,212		—			5,212
Payments of long-term debt	(403)		(3,082)		—			(3,485)		(83)		(4,805)		—			(4,888)
Net increase (decrease) in other financial liabilities	42		570		—			612		25		178		—			203
Dividends paid	(529)		(4)		4		(2)	(529)		(415)		(90)		90		(2)	(415)
Other	(169)		79		(79)			(169)		(40)		—		—			(40)
Net cash provided (used) by financing activities	(1,059)		1,971		(75)			837		(513)		495		90			72
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash	37		9		—			46		(182)		7		—			(175)
Increase (decrease) in cash and cash equivalents	(1,064)		(140)		—			(1,204)		(1,940)		(321)		—			(2,261)
Cash and cash equivalents, beginning of year	3,960		1,169		—			5,129		4,514		1,331		—			5,845
Cash and cash equivalents, end of period	$	2,896	$	1,029	$	—		$	3,925	$	2,574	$	1,010	$	—		$	3,584

(2) This item includes the elimination of dividends from Financial Services to Industrial Activities, which are included in Industrial Activities net cash used in operating activities.

(3) This item includes the elimination of certain minor activities between Industrial Activities and Financial Services.

B. CRITICAL ACCOUNTING ESTIMATES

See our critical accounting estimates discussed in Part 1, Item 5. Operating and Financial Review and Prospects - Application of Critical Accounting Estimates of our 2022 Annual report. There have been no material changes to these estimates.

C. LIQUIDITY AND CAPITAL RESOURCES

The following discussion of liquidity and capital resources principally focuses on our consolidated statement of cash flows and our consolidated statement of financial position. Our operations are capital intensive and subject to seasonal variations in financing requirements for dealer receivables and dealer and company inventories. Whenever necessary, funds from operating activities are supplemented from external sources. CNH Industrial focuses on cash preservation and leveraging its good access to funding in order to maintain solid financial strength and liquidity.

Cash Flow Analysis

At June 30, 2023, Cash and cash equivalents and Restricted cash were $3,925 million, a decrease of $1,204 million from $5,129 million at December 31, 2022, primarily due to operating activities cash absorption, receivables portfolio absorption, dividends paid, investments in fixed assets, and acquisition of businesses and other equity investments, partially offset by an increase in external borrowings to support working capital requirements.

At June 30, 2023, Cash and cash equivalents were $3,194 million ($4,376 million at December 31, 2022) and Restricted cash was $731 million ($753 million at December 31, 2022), respectively. Undrawn medium-term unsecured committed facilities were $5,020 million ($5,061 million at December 31, 2022) and other current financial assets were $300 million ($300 million at December 31, 2022). At June 30, 2023, the aggregate of Cash and cash equivalents, Restricted cash, undrawn medium-term unsecured committed facilities, other current financial assets, and net financial receivables from Iveco Group which we consider to constitute our principal liquid assets (or "available liquidity"), totaled $9,394 million ($10,632 million at December 31, 2022). At June 30, 2023, this amount also included $149 million net financial receivables from Iveco Group ($142 million net financial payables at December 31, 2022) consisting of net financial receivables mainly towards Financial Services of Iveco Group.

Net Cash from Operating Activities

Cash used by operating activities in the six months ended June 30, 2023 totaled $840 million and primarily comprised the following elements:

▪$1,196 million net income;

▪plus $270 million in non-cash charges for depreciation and amortization ($178 million excluding equipment on operating leases);

▪plus $78 million in Other non-cash items primarily due to share-based payments and write downs of assets under operating leases;

▪plus change in provisions of $445 million;

▪less change in working capital of $2,615 million;

▪less change in deferred income taxes of $188 million.

In the six months ended June 30, 2022, net cash used in operating activities was $1,158 million primarily as a result of $2,386 million change in working capital, partially offset by 888 million in net income and by $272 million in non-cash charges for depreciation and amortization, along with $89 million in Other non-cash items driven by share-based payments and the write down of assets under operating leases.

Net Cash from Investing Activities

Net cash used in investing activities was $1,247 million in the six months ended June 30, 2023 and was primarily due to additions to retail receivables ($581 million), expenditures for assets under operating leases ($237 million), expenditures for property, plant and equipment and intangible assets, excluding assets under operating lease ($224 million), and cash paid for acquisitions/investments of third-party businesses ($137 million).

In the six months ended June 30, 2022, net cash used in investing activities was $1,000 million and was primarily due to payment of the $502 million debt outstanding with Iveco Group at December 31, 2021, additions to retail receivables ($311 million), and expenditures for assets under operating leases ($252 million).

Net Cash from Financing Activities

Net cash provided by financing activities was $837 million in the six months ended June 30, 2023 compared to $72 million in the six months ended June 30, 2022 and was primarily due to an increase in external borrowings to support working capital requirements, partially offset by dividends paid.

Our consolidated debt as of June 30, 2023 and December 31, 2022 was as follows:


	Consolidated				Industrial Activities				Financial Services
	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
	(in millions)
Total Debt (including Payables to Iveco Group)	$	24,981	$	23,118	$	4,865	$	4,977	$	21,110	$	19,092

A summary of total debt as of June 30, 2023 and December 31, 2022 is as follows:


	June 30, 2023						December 31, 2022
	Industrial Activities		Financial Services		Total		Industrial Activities		Financial Services		Total
	(in millions)
Total bonds	$	4,514	$	4,756	$	9,270	$	4,836	$	4,046	$	8,882
Asset-backed debt	—		10,487		10,487		—		9,751		9,751
Other debt	105		5,008		5,113		73		4,256		4,329
Intersegment debt	242		752		—		63		888		—
Total Debt	4,861		21,003		24,870		4,972		18,941		22,962
Payables to Iveco Group	4		107		111		5		151		156
Total Debt (including Payables to Iveco Group)	$	4,865	$	21,110	$	24,981	$	4,977	$	19,092	$	23,118

A summary of issued bonds outstanding as of June 30, 2023 is as follows:


	Currency	Face value of outstanding bonds (in millions)	Coupon		Maturity	Outstanding amount ($ millions)
Industrial Activities
Euro Medium Term Notes:
CNH Industrial Finance Europe S.A. (1)	EUR	750	—	%	April 1, 2024	815
CNH Industrial Finance Europe S.A. (1)	EUR	650	1.750	%	September 12, 2025	707
CNH Industrial Finance Europe S.A. (1)	EUR	100	3.500	%	November 12, 2025	109
CNH Industrial Finance Europe S.A. (1)	EUR	500	1.875	%	January 19, 2026	543
CNH Industrial Finance Europe S.A. (1)	EUR	600	1.750	%	March 25, 2027	652
CNH Industrial Finance Europe S.A. (1)	EUR	50	3.875	%	April 21, 2028	54
CNH Industrial Finance Europe S.A. (1)	EUR	500	1.625	%	July 3, 2029	543
CNH Industrial Finance Europe S.A. (1)	EUR	50	2.200	%	July 15, 2039	54
Other Bonds:
CNH Industrial N.V. (2)	USD	600	4.500	%	August 15, 2023	600
CNH Industrial N.V. (2)	USD	500	3.850	%	November 15, 2027	500
Hedging effects, bond premium/discount, and unamortized issuance costs						(63)
Total Industrial Activities						$	4,514
Financial Services
CNH Industrial Capital LLC	USD	600	1.950	%	July 2, 2023	600
CNH Industrial Capital LLC	USD	500	4.200	%	January 15, 2024	500
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	600	4.550	%	April 10, 2028	600
CNH Industrial Capital Australia Pty Ltd.	AUD	250	1.750	%	July 8, 2024	166
CNH Industrial Capital Canada Ltd	CAD	300	1.500	%	October 1, 2024	226
CNH Industrial Capital Argentina SA	USD	67	—	%	2023/2025	67
Banco CNH Industrial Capital S.A.	BRL	3,212	14.220% 15.470%		2023/2028	663
Hedging effects, bond premium/discount, and unamortized issuance costs						(66)
Total Financial Services						$	4,756

(1) Bond listed on the Irish Stock Exchange.

(2) Bond listed on the New York Stock Exchange.

The calculation of Net Debt as of June 30, 2023 and December 31, 2022 and the reconciliation of Total Debt, the U.S. GAAP financial measure that we believe to be most directly comparable to Net Debt are shown below:


	Consolidated				Industrial Activities				Financial Services
	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
	(in millions)
Third party debt	$	(24,870)	$	(22,962)	$	(4,619)	$	(4,909)	$	(20,251)	$	(18,053)
Intersegment notes payable	—		—		(242)		(63)		(752)		(888)
Payable to Iveco Group N.V.	(111)		(156)		(4)		(5)		(107)		(151)
Total Debt(1)	(24,981)		(23,118)		(4,865)		(4,977)		(21,110)		(19,092)
Cash and cash equivalents	3,194		4,376		2,730		3,802		464		574
Restricted cash	731		753		166		158		565		595
Intersegment notes receivable	—		—		752		888		242		63
Receivables from Iveco Group N.V.	260		298		179		234		81		64
Other current financial assets(2)	300		300		300		300		—		—
Derivatives hedging debt	(39)		(43)		(39)		(43)		—		—
Net Cash (Debt)(3)	$	(20,535)	$	(17,434)	$	(777)	$	362	$	(19,758)	$	(17,796)

(1) Total (Debt) of Industrial Activities includes Intersegment notes payable to Financial Services of $242 million and $63 million as of June 30, 2023 and December 31, 2022, respectively. Total (Debt) of Financial Services includes Intersegment notes payable to Industrial Activities of $752 million and $888 million as of June 30, 2023 and December 31, 2022, respectively.

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

(3) The net intersegment receivable/(payable) balance recorded by Financial Services relating to Industrial Activities was $(510) million and $(825) million as of June 30, 2023 and December 31, 2022, respectively.

Excluding exchange rate differences of $354 million, Net Debt at June 30, 2023 increased by $2,747 million compared to December 31, 2022, mainly reflecting a Free Cash Flow absorption from Industrial Activities of $287 million, the increase in portfolio receivables of Financial Services of $1,908 million, and the cash out of $698 million related to yearly dividend and share buyback program.

In March 2019, CNH Industrial signed a five-year committed revolving credit facility for €4 billion ($4.5 billion at March 31, 2019 exchange rate) due to mature in 2024 with two extension options of one-year each, exercisable on the first and second anniversary of the signing date. CNH Industrial exercised the first of the two extension options as of February 28, 2020 and the second extension option as of February 26, 2021. The facility will expire in March 2026 for €3,950.5 million; the remaining €49.5 million will mature in March 2025.

Available committed unsecured facilities expiring after twelve months amounted to approximately $5.0 billion at June 30, 2023 ($5.1 billion at December 31, 2022). Total committed secured facilities expiring after twelve months amounted to approximately $3.6 billion at June 30, 2023 ($2.9 billion at December 31, 2022), of which $0.7 billion was available at June 30, 2023 ($0.8 billion at December 31, 2022).

With the strong liquidity position at the end of June 2023 and the demonstrated access to the financial markets, CNH Industrial believes that its cash and cash equivalents, access to credit facilities and cash flows from future operations will be adequate to fund its known cash needs.

Please refer to “Note 10: Debt” in our 2022 Annual Report for more information related to our debt and credit facilities.

Contingencies

As a global company with a diverse business portfolio, CNH Industrial is exposed to numerous legal risks, including legal proceedings, claims and governmental investigations, particularly in the areas of product liability (including asbestos-related liability), product performance, emissions and fuel economy, retail and wholesale credit, competition and antitrust law, intellectual property matters (including patent infringement), disputes with dealers and suppliers and service providers, environmental risks, and tax and employment matters. For more information, please refer to the information presented in “Note 15: Commitments and Contingencies” to our consolidated financial statements.

SAFE HARBOR STATEMENT

This Quarterly Report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical

fact contained in this filing, including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. Forward-looking statements also include statements regarding the future performance of CNH Industrial and its subsidiaries on a standalone basis. These statements may include terminology such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “outlook”, “continue”, “remain”, “on track”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “prospects”, “plan”, or similar terminology. Forward-looking statements, 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 the war in the Ukraine; 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, trade and commerce and infrastructure development; government policies on international trade and investment, including sanctions, import quotas, capital controls and tariffs; volatility in international trade caused by the imposition of tariffs, sanctions, embargoes, and trade wars; actions of competitors in the various industries in which we compete; development and use of new technologies and technological difficulties; the interpretation of, or adoption of new, compliance requirements with respect to engine emissions, safety or other aspects of our products; 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 Industrial and its suppliers and dealers; security breaches with respect to our products; our pension plans and other post-employment obligations; political and civil unrest; volatility and deterioration of capital and financial markets, including pandemics (such as the COVID-19 pandemic), terrorist attacks in Europe and elsewhere; our ability to realize the anticipated benefits from our business initiatives as part of our strategic plan; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or divestitures and other similar risks and uncertainties, and our success in managing the risks involved in the foregoing.

Forward-looking statements are based upon assumptions relating to the factors described in this 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 Industrial’s control. CNH Industrial expressly disclaims any intention or obligation to provide, update or revise any forward-looking statements in this announcement to reflect any change in expectations or any change in events, conditions or circumstances on which these forward-looking statements are based.

Further information concerning CNH Industrial, including factors that potentially could materially affect CNH Industrial’s financial results, is included in CNH Industrial’s reports and filings with the SEC, the Autoriteit Financiële Markten and Commissione Nazionale per le Società e la Borsa.

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

Additional factors could cause actual results to differ from those express or implied by the forward-looking statements included in the Company’s filings with the SEC (including, but not limited to, the factors discussed in our 2022 Annual Report and subsequent quarterly reports).

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See our Part I, Item 11 of our 2022 Annual Report. There has been no material change in this information.

ITEM 4. CONTROLS AND PROCEDURES

Our management, under the supervision of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2023. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended (the Exchange Act)), are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Based on their evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2023.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three-month period ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See “Note 15: Commitments and Contingencies” to our consolidated financial statements.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors previously disclosed in our 2022 Annual Report (Part I, Item 3D). The risks described in our 2022 Annual Report, and in the "Safe Harbor Statement" within this report are not the only risks faced by us. Additional risks and uncertainties not currently known, or that are currently judged to be immaterial, may also materially affect our business, financial condition or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

CNH Industrial N.V. has a share repurchase program that was announced in July 2022 to purchase up to $300 million shares of the Company’s common shares. The Company’s purchases of its common shares under the Share Buyback Program during the three months ended June 30, 2023, were as follows:


Period	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share (€)	Average Price Paid per Share ($)(3)	Approximate USD Value of Shares that May Yet Be Purchased under the Plans or Programs ($)
4/1/2023 - 4/30/2023	1,955,272	13.34	14.59	2,626,601
5/1/2023 - 5/31/2023(1)	1,339,017	12.63	13.65	34,351,702
6/1/2023 - 6/30/2023(2)	3,673,429	12.72	13.77	33,771,161
Total	6,967,718			33,771,161

1) On May 24, 2023, CNH Industrial N.V. launched a fourth tranche of $50 million share buyback in the framework of its $300 million share buyback program and the amount in this column represents the approximate value of shares that may be purchased under this third tranche.

2) On June 29, 2023, CNH Industrial N.V. launched a fifth tranche of $50 million share buyback in the framework of its $300 million share buyback program and the amount in this column represents the approximate value of shares that may be purchased under this third tranche.

3) Share repurchases are made on Euronext Milan and have been translated from Euros at the exchange rate reported by the European Central Bank on the respective transaction dates.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.


ITEM 6. EXHIBITS
Exhibit Number						Description
3.1						Articles of Association of CNH Industrial N.V., dates 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).

31.1						Certification of Chief Executive Officer of CNH Industrial NV, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Chief Financial Officer of CNH Industrial NV, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Certification of Chief Executive Officer of CNH Industrial NV and Chief Financial Officer of CNH Industrial NV, as required pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

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The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosures other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular any warranties or representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of instruments defining the rights of holders of certain long-term debt have not been filed. The registrant will furnish copies thereof to the SEC upon request.

SIGNATURES

Pursuant to the requirements 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.

									/s/ SCOTT W. WINE
									Scott W. Wine
									Chief Executive Officer


									/s/ ODDONE INCISA
									Oddone Incisa
									Chief Financial Officer
August 2, 2023