Management's Discussion and Analysis
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to promote understanding of the Company's financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the Consolidated Financial Statements and the accompanying Notes to the Consolidated Financial Statements.
This discussion includes forward-looking statements, which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those expressed or implied by the forward-looking statements. This MD&A should be read in conjunction with our discussion of cautionary statements and significant risks to the Company's business under "Item 1A. Risk Factors" of this Annual Report on Form 10-K.
Global Business Conditions
I n 2025, we operated in a challenging environment characterized by lower industry demand in large agriculture, particularly in the Americas, elevated tariff and input‑cost pressures, and cautious farmer sentiment. We view 2025 as part of a cyclical downturn in agricultural equipment rather than a structural change in our end markets. Throughout the year, we prioritized price discipline, production and inventory management, cost‑reduction initiatives, and continued investment in Precision Technology and quality, with the aim of positioning CNH for improved performance as conditions normalize, particularly into 2026 and beyond.
For a discussion of the Company's risks and uncertainties, see Part 1, Item 1A: "Risk Factors".
Operating Results
The operations, key financial measures, and financial analysis, differ significantly for manufacturing and distribution businesses ("Industrial Activities") and financial businesses ("Financial Services"); therefore, management believes that certain supplemental disclosures are important in understanding our consolidated operations and financial results. For further information, see "Supplemental Information" within this section, where we present supplemental consolidating data split by Industrial Activities and Financial Services. Transactions between Industrial Activities and Financial Services have been eliminated to arrive at the consolidated data.
2025 Compared to 2024
Consolidated Results of Operations
Years Ended December 31,
(in millions of dollars)
Revenues
Net sales
Finance, interest and other income
Total Revenues
Costs and Expenses
Cost of goods sold
Selling, general and administrative expenses
Research and development expenses
Restructuring expenses
Interest expense
Other, net
Total Costs and Expenses
Consolidated income before income taxes
Income tax expense
Equity in income of unconsolidated affiliates
Net income
Net income (loss) attributable to noncontrolling interests
Net income attributable to CNH Industrial N.V.
Revenues
We recorded revenues of $18,095 million in 2025, a decline of 8.8% compared to 2024. This decline was mainly due to lower shipments on decreased industry demand. See "Business Segment Performance."
Cost of Goods Sold
Cost of goods sold were $12,389 million in 2025 compared to $13,350 million in 2024, a decrease of 7.2% year-over- year. As a percentage of net sales, cost of goods sold was 80.7% in 2025 (78.3% in 2024), the increase in the percentage from 2024 was due to lower production volumes and tariff costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") increased to $1,876 million in 2025 (10.4% of revenues) from $1,712 million in 2024 (8.6% of revenues). The year-over-year increase is primarily due to higher credit risk provisions in the Financial Services segment and higher labor costs.
Research and Development
In 2025, R&D expenses were $1,025 million compared to $924 million in 2024. R&D expenses were higher in 2025 primarily due to a $172 million non-cash impairment charge related to in-process research & development ("IPR&D") acquired as part of the Raven and Bennamann acquisitions.
Restructuring Expenses
The Company incurred restructuring costs of $22 million and $118 million in 2025 and 2024, respectively. These costs primarily relate to the restructuring program announced in November 2023 targeting labor and non-labor SG&A expenses. This program was substantially complete in 2024, with total costs of $131 million.
Interest Expense
Interest expense decreased to $1,482 million in 2025 from $1,611 million in 2024 primarily due to lower external borrowings. The interest expense attributable to Industrial Activities, net of interest income and eliminations, was $114 million in 2025 compared to $152 million in 2024.
Other, net
Other, net expenses were $681 million in 2025 and included a pre-tax gain of $21 million ($16 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 $62 million impairment of investments in unconsolidated affiliates.
Other, net expenses were $664 million in 2024 and included a pre-tax gain of $24 million ($18 million after-tax) as a result of the amortization over 4 years of the $101 million positive impact from the 2021 U.S. healthcare plan modification and a gain of $14 million for investment fair value adjustments, partially offset by a loss of $17 million on the sale of certain non-core product lines.
Income Taxes
Years Ended December 31,
(in millions of dollars, except percentages)
Consolidated income before income taxes
Income tax expense
Effective tax rate
In 2025, income taxes were an expense of $184 million, compared to a tax expense of $336 million in 2024. The effective tax rates for 2025 and 2024 were 29.7% and 23.1%, respectively. The tax expense in 2025 was reduced as compared to 2024 due to lower profit-before-tax. However, the 2025 effective tax rate increased due to the year-over year tax impact of Argentina's highly inflationary economy and the non-recognized tax benefits associated with the non-cash impairment charges related to Monarch Tractors and IPR&D acquired as part of the Raven acquisition. In 2025, we also recorded a valuation allowance against deferred tax assets generated by Bennamann.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into U.S. law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provision of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.The
impacts of the OBBBA legislation did not have a material impact on the Company's financial results during 2025; further, the Company estimates the OBBBA legislation will not have a material impact on the Company’s financial results during 2026.
Equity in Income of Unconsolidated Affiliates
Equity in income of unconsolidated affiliates was $69 million in 2025 compared to $138 million in 2024 primarily due to lower sales in our joint venture TürkTraktör ve Ziraat Makineleri A.S.
Business Segment Performance
The following table includes total revenues by segment (in millions of dollars, except percentages):
Years Ended December 31,
% Change
Revenues:
Agriculture
Construction
Total Net sales of Industrial Activities
Financial Services
Eliminations and other
Total Revenues
The following table includes Adjusted EBIT of Industrial Activities by segment (in millions of dollars, except percentages):
Years Ended December 31,
$ Change
2025 Adj EBIT Margin
2024 Adj EBIT Margin
Adjusted EBIT: (1)
Agriculture
Construction
Eliminations and other
Adjusted EBIT of Industrial Activities
(1) A reconciliation from the most closely related U.S. GAAP measure to this non-GAAP measure is included on page 56 .
Agriculture
Net Sales
Net sales for Agriculture were $12,390 million in 2025, an 11.5% decline compared to 2024. This decline is mainly due to lower shipment volumes on decreased industry demand.
In North America, industry volume was down 33% year over year in 2025 for tractors over 140 hp and was down 7% for tractors under 140 hp; combines were down 26%. In EMEA, tractor and combine demand was down 13% and 3%, respectively. South America tractor demand was down 1% and combine demand was down 16%. Asia Pacific tractor demand was up 12% and combine demand was down 26%.
The following table includes Agriculture net sales by geographic region in 2025 compared to 2024 (in millions of dollars, except percentages):
Years Ended December 31,
% Change
North America
Europe, Middle East and Africa
South America
Asia Pacific
Total
Adjusted EBIT
Adjusted EBIT was $772 million in 2025, compared to $1,470 million in 2024. The decline, driven by lower shipment volumes and the impact from tariffs, was partially offset by lower quality costs. R&D expenses accounted for 7.5% of sales (5.9% in 2024), including a $172 million non-cash impairment charge related to IPR&D acquired as part of the Raven and Bennamann acquisitions. Adjusted EBIT margin was 6.2% in 2025.
Construction
Net Sales
Net sales for Construction were $2,956 million in 2025, a decline of 3.2% compared to 2024, due to lower shipment volumes in North America and continued channel destocking.
Global industry volume for construction equipment increased 7% year over year in 2025 for Heavy construction equipment; Light construction equipment was up 1%. Aggregated demand increased 1% in North America and 4% in EMEA, respectively, and increased 5% in South America and 5% for Asia Pacific, particularly in China.
The following table includes Construction net sales by geographic region in 2025 compared to 2024 (in millions of dollars, except percentages):
Years Ended December 31,
% Change
North America
Europe, Middle East and Africa
South America
Asia Pacific
Total
Adjusted EBIT
Adjusted EBIT was $68 million in 2025, compared to $169 million in 2024. The decline was primarily due to lower volumes and higher manufacturing costs primarily as a result of higher tariff costs. Adjusted EBIT margin was 2.3% in 2025.
Financial Services
Finance, Interest and Other Income
Financial Services reported revenues of $2,720 million in 2025, down 1.9% compared to 2024 due to the negative impact from currency translation, unfavorable volumes in EMEA and lower yields in South America and EMEA, partially offset by favorable volumes in all regions except EMEA and higher yields in North America and APAC.
Net Income
Net income for Financial Services was $333 million in 2025, a $46 million decrease compared to 2024, primarily due to higher risk costs from increased specific reserves and delinquencies in South America, higher losses and collective rates in North America and increased labor costs; partially offset by margin improvement in all regions and favorable income taxes due to a non-recurring prior year valuation allowance adjustment in Argentina.
In 2025, retail originations (including unconsolidated joint ventures) were $10.6 billion, down $0.8 billion compared to 2024. The managed portfolio (including unconsolidated joint ventures) was $28.6 billion as of December 31, 2025 (of which retail was 70% and wholesale 30%), up $0.7 billion compared to December 31, 2024.
At December 31, 2025, the receivable balance past due greater than 30 days as a percentage of receivables was 3.1% (1.9% as of December 31, 2024) due to economic and environmental factors impacting farmers, specifically in South America.
2024 Compared to 2023
Please refer to the "Management's Discussion and Analysis" section of our 2024 Form 10-K .
Supplemental Information
The operations, key financial measures, and financial analysis differ significantly for manufacturing and distribution businesses and financial services businesses; therefore, management believes that certain supplemental disclosures are important in understanding the consolidated operations and financial results of CNH. This supplemental information does not purport to represent the operations of each group as if each group were to operate on a standalone basis. This supplemental data is as follows:
Statement of Operations
Year Ended December 31, 2025
Year Ended December 31, 2024
(in millions of dollars)
Industrial Activities (1)
Financial Services
Eliminations
Consolidated
Industrial Activities (1)
Financial Services
Eliminations
Consolidated
Revenues
Net sales
Finance, interest and other income
Total Revenues
Costs and Expenses
Cost of goods sold
Selling, general & administrative expenses
Research and development expenses
Restructuring expenses
Interest expense
Other, net
Total Costs and Expenses
Consolidated income before Income Taxes
Income tax expense
Equity in income of unconsolidated affiliates
Net income
(1) Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture, Construction, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2) Eliminations of Financial Services' interest income earned from Industrial Activities.
(3) Eliminations of Industrial Activities' interest expense to Financial Services.
Balance Sheets
As of December 31, 2025
As of December 31, 2024
(in millions of dollars)
Industrial Activities (1)
Financial Services
Eliminations
Consolidated
Industrial Activities (1)
Financial Services
Eliminations
Consolidated
Assets
Cash and cash equivalents
Restricted cash
Trade receivables, net
Financing receivables, net
Financial receivables from Iveco Group N.V.
Inventories, net
Property, plant and equipment, net
Investments in unconsolidated affiliates
Equipment under operating leases
Goodwill
Other intangible assets, net
Deferred tax assets
Derivative assets
Other assets
Total Assets
Liabilities and Equity
Debt
Financial payables from Iveco Group N.V.
Trade payables
Deferred tax liabilities
Pension, postretirement and other postemployment benefits
Derivative liability
Other liabilities
Total Liabilities
Redeemable noncontrolling interest
Equity
Total Liabilities and Equity
(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 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
Year Ended December 31, 2025
Year Ended December 31, 2024
(in millions of dollars)
Industrial Activities (1)
Financial Services
Eliminations
Consolidated
Industrial Activities (1)
Financial Services
Eliminations
Consolidated
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization expense excluding assets under operating leases
Depreciation and amortization expense of assets under operating leases
Undistributed income (loss) of unconsolidated affiliates
Other non-cash items
Changes in operating assets and liabilities:
Provisions
Deferred income taxes
Trade and financing receivables related to sales, net
Inventories, net
Trade payables
Other assets and liabilities
Net cash provided (used) by operating activities
Cash Flows from Investing Activities
Additions to retail receivables
Collections of retail receivables
Expenditures for property, plant and equipment and intangible assets, excluding assets under operating leases
Expenditures for assets under operating leases
Other
Net cash provided (used) by investing activities
Cash Flows from Financing Activities
Proceeds from long-term debt
Payments of long-term debt
Net increase (decrease) in other financial liabilities
Dividends paid
Purchase of treasury stock and other
Net cash provided (used) by financing activities
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of year
Cash, cash equivalents and restricted cash, end of year
(1) Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company's Agriculture, Construction, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2) This item includes the elimination of dividends from Financial Services to Industrial Activities, which are included in Industrial Activities' net cash provided (used) by operating activities.
(3) This item includes the elimination of certain minor activities between Industrial Activities and Financial Services.
(4) This item includes the elimination of capital investment between Industrial Activities and Financial Services.
Non-GAAP Financial Measures
CNH monitors its operations through the use of several non-GAAP financial measures. CNH's management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers' ability to assess CNH's financial performance and financial position. Management uses these non-GAAP measures to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions as they provide additional transparency with respect to our core operations. These non-GAAP financial measures have no standardized meaning under U.S. GAAP and are unlikely to be comparable to other similarly titled measures used by other companies and are not intended to be substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP.
As of December 31, 2025, CNH's 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 postemployment benefit costs, restructuring expenses, and certain non-recurring items. Such non-recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent in nature and not reflective of ongoing operational activities.
Net Cash (Debt) and Net Cash (Debt) of Industrial Activities
Net Cash (Debt) is defined as total debt less: intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets (primarily current securities, short-term deposits and investments towards high-credit-rating counterparties) and derivative hedging debt. CNH provides the reconciliation of Net Cash (Debt) to Total (Debt), which is the most directly comparable measure included in the Consolidated Balance Sheet. 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.
We believe that Net Debt is a useful analytical metric for measuring our effective borrowing requirements. We provide a separate analysis of Net Debt of Industrial Activities and Net Debt of Financial Services to reflect the different cash flow management practices in the two activities. Industrial Activities reflects the consolidation of all majority-owned subsidiaries, including those performing centralized treasury activities, except for Financial Services subsidiaries. Financial Services reflects the consolidation of the Financial Services' businesses.
Free Cash Flow of Industrial Activities
Free Cash Flow of Industrial Activities ("Industrial Free Cash Flow") refers to Industrial Activities, only, and is computed as consolidated cash flow from operating activities less: cash flow from operating activities of Financial Services; investments of Industrial Activities in property, plant and equipment, intangible assets, and assets sold under operating leases; change in derivatives hedging debt of Industrial Activities; as well as other changes and intersegment eliminations.
Reconciliation of Adjusted EBIT to Net Income (Loss)
The following table includes the reconciliation of Adjusted EBIT for Industrial Activities to net income, the most comparable U.S. GAAP financial measure (in millions of dollars):
Years Ended December 31,
Agriculture
Construction
Unallocated items, eliminations and other (1)
Total Adjusted EBIT of Industrial Activities
Interest expense of Industrial Activities, net of interest income and eliminations
Foreign exchange losses, net of Industrial Activities
Finance and non-service component of Pension and other postemployment benefit cost of Industrial Activities (2)
Restructuring expenses of Industrial Activities
Other discrete items of Industrial Activities (3)
Financial Services Net Income
Financial Services Income Taxes
Income before taxes
Income tax expense
Net income
(1) Unallocated items, eliminations and other primarily includes certain corporate costs and other operating expenses and incomes not allocated to segments' results. The December 31, 2025 decline in Unallocated items was driven by a decrease in indirect taxes.
(2) In the years ended December 31, 2025, 2024, and 2023, this item includes a pre-tax gain of $21 million, $24 million, and $24 million, respectively as a result of the amortization over 4 years of the $101 million positive impact from the 2021 modifications of a healthcare plan in the U.S.
(3) In the year ended December 31, 2025, this item includes a $172 million non-cash impairment charge related to IPR&D acquired as part of the Raven and Bennamann acquisitions, a $62 million for non-cash impairment of investment in Monarch Tractors and other minority holdings and a $10 million inventory write-down for the New Holland T6.180 Methane Power Tractor. In the year ended December 31, 2024, this item includes a loss of $17 million on the sale of certain non-core product lines and a gain of $14 million for investment fair value adjustments. In the year ended December 31, 2023, this item includes a loss of $23 million on the sale of the CNH Industrial Russia and CNH Capital Russia businesses, partially offset by a gain of $13 million for the fair value remeasurement of Augmenta and Bennamann.
Reconciliation of Net Debt to Total Debt
The calculation of Net Debt as of December 31, 2025 and 2024 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 (in millions of dollars):
Industrial Activities
Financial Services
Consolidated
As of December 31, 2025
As of December 31, 2024
As of December 31, 2025
As of December 31, 2024
As of December 31, 2025
As of December 31, 2024
Third party debt
Intersegment notes payable
Financial payables to Iveco Group N.V.
Total Debt
Less:
Cash and cash equivalents
Restricted cash
Intersegment notes receivable
Financial receivables from Iveco Group N.V.
Derivatives hedging debt
Net debt
Reconciliation of Free Cash Flow of Industrial Activities to Net Cash Provided by Operating Activities
The reconciliation of Free Cash Flow of Industrial Activities to Net cash provided by Operating Activities, the U.S. GAAP financial measure that we believe to be most directly comparable, for the years ended December 31, 2025, 2024 and 2023 , is shown below (in millions of dollars):
Years Ended December 31,
Net cash provided by Operating Activities
Less:
Cash flows from Operating Activities of Financial Services, net of eliminations
Change in derivatives hedging debt of Industrial Activities
Investments in operating lease assets of Industrial Activities
Investments in property plant and equipment, and intangible assets of Industrial Activities
Other changes (1)
Free Cash Flow of Industrial Activities
(1) This item primarily includes capital increases in intersegment investments and change in financial receivables.
Liquidity and Capital Resources
Our operations are capital intensive and subject to seasonal variations in financing requirements for dealer receivables and company inventories. Whenever necessary, funds from operating activities are supplemented with external sources. CNH, focusing on cash preservation and leveraging its good access to funding, continues to maintain solid financial strength and liquidity.
Capital Resources
The cash flows, funding requirements and liquidity of CNH are managed on a standard and centralized basis. This centralized system is designed to optimize the efficiency and effectiveness of our management of capital resources.
Our subsidiaries participate in a global cash management system, which we operate in a number of jurisdictions. Under this system, the cash balances of our subsidiaries are aggregated at the end of each business day to central pooling accounts. Centralized treasury management offers financial and systems expertise in managing these accounts, as well as providing related services and consulting to our business segments.
Our policy is to keep a high degree of flexibility with our funding and investment options to maintain our desired level of liquidity to achieve our rating targets while improving the Company's capital structure over time. In managing our liquidity requirements, we are pursuing a financing strategy that aims to extend our Industrial Activities debt profile over time by issuing long-term bonds and retiring short-term debt through opportunistic transactions, deleveraging our Industrial Activities balance sheet by reducing debt, and diversifying funding sources.
A summary of our strategy is set forth below:
• Our funding strategy's goal is to maintain sufficient liquidity and flexible access to a wide variety of financial instruments. While we expect securitizations and sale of receivables (factoring) to continue to represent a material portion of our capital structure and intersegment borrowings to remain a marginal source of funding, we will continue to diversify our funding sources and expand our investor base within Financial Services to support our investment grade credit ratings. These diversified funding sources include secured and unsecured facilities, a repurchase agreement, commercial paper and unsecured notes.
• Industrial Activities sells certain of its receivables to Financial Services and relies on internal cash flows including managing working capital to fund its near-term financing requirements. We will also supplement our short-term financing by drawing on existing or new facilities with banks.
• To the extent funding needs of Industrial Activities are determined to be of a longer-term nature, we will access public debt markets as well as private investors and banks, as appropriate, to refinance borrowings and replenish our liquidity.
On a global level, we continue to evaluate alternatives to ensure that Financial Services has access to capital on favorable terms to support its business, including agreements with global or regional partners, new funding arrangements or a combination of the foregoing. Our access to external sources of financing, as well as the cost of financing, is dependent on various factors, including our credit ratings.
Ratings as of December 31, 2025 for the Company are as follows:
CNH Industrial N.V. (1)
CNH Industrial Capital LLC
Long-Term
Short-Term
Outlook
Senior Long-Term
Short-Term
Outlook
S&P Global Ratings
BBB+
Negative
BBB+
Negative
Fitch Ratings
BBB
Stable
BBB
Stable
Moody's Investors Service
Baa2
Stable
Baa2
Stable
(1) Includes treasury subsidiary, CNH Industrial Finance Europe S.A.
The Company's ratings are investment grade, which the Company believes allow it to access funding at competitive rates.
A credit rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. A deterioration in our ratings could impair our ability to obtain debt financing and would increase the cost of such financing. Ratings are influenced by a number of factors, including, among others: financial leverage on an absolute basis or relative to peers, the composition of the balance sheet and/or capital structure, material changes in earnings trends and volatility, ability to dividend monies from subsidiaries and our competitive position. Material deterioration in any one, or a combination, of these factors could result in a downgrade of our ratings, thus increasing the cost of funding and potentially limiting our access to the capital markets and other sources of financing.
Consolidated Debt
Net Debt increased $480 million compared to December 31, 2024. The increase was primarily driven by negative foreign exchange effects of $1,317 million and $433 million in share buybacks and dividends. These increases were partially offset by a reduction in portfolio receivables of Financial Services of $1,049 million and free cash flow generation of $513 million.
Cash Flow Analysis
For the year ended December 31, 2025, Cash and cash equivalents and Restricted cash combined were $3,229 million, a decrease of $637 million from December 31, 2024, primarily due to decrease in external borrowings, investments in fixed assets, the share buyback program, and dividends paid; partially offset by operating activities cash generation and an increase in external borrowing.
At December 31, 2025, Cash and cash equivalents and Restricted cash were $2,578 million ($3,191 million at December 31, 2024) and $651 million ($675 million at December 31, 2024), respectively. Undrawn medium-term
unsecured committed facilities were $6,483 million ($5,493 million at December 31, 2024). At December 31, 2025, the aggregate of Cash and cash equivalents, Restricted cash, undrawn committed facilities and other current financial assets, which we consider to constitute our principal liquid assets (or "available liquidity"), totaled $9,816 million ($9,465 million at December 31, 2024). At December 31, 2025, this amount also included $104 million net financial receivables from Iveco Group ($106 million net financial receivables at December 31, 2024) consisting of net financial receivables mainly towards Financial Services of Iveco Group.
The following table summarizes the changes to cash flows from operating, investing, and financing activities for each of the years ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Years Ended December 31,
Cash flow provided (used) by:
Operating activities
Investing activities
Financing activities
Translation exchange differences
Net decrease in cash and cash equivalents
Net Cash from Operating Activities
Cash provided by operating activities in 2025 totaled $2,538 million compared to $1,968 in 2024. The year-over-year increase reflects more favorable working capital movements, including lower outflows associated with Trade Payables compared to the prior year.
Net Cash from Investing Activities
Cash outflows from investing activities in 2025 was $1,380 million compared to $2,772 in 2024. The year-over-year decrease was driven by higher financing receivable collections. Expenditure on property, plant and equipment, and intangible assets, excluding operating leases, totaled $543 million, and spending on assets under operating leases totaled $655 million, and were flat to 2024 expenditures.
The following table summarizes our investments in tangible assets by segment and investments in intangible assets for each of the years ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Years Ended December 31,
Agriculture
Construction
Total Industrial Activities investments in tangible assets
Industrial Activities investments in intangible assets
Total Industrial Activities capital expenditures
Financial Services investments in intangible assets
Total Capital expenditures
We incurred these capital expenditures principally related to initiatives to introduce new products, enhance manufacturing efficiency and increase capacity, and for maintenance and engineering.
Net Cash from Financing Activities
Cash outflows from financing activities were $2,020 million in 2025 and $67 million in 2024. The year-over-year change was driven by a $21 million net cash outflow on long-term debt in 2025, and a net inflow of $1,658 million in 2024, resulting from fewer retail securitizations, lower use of commercial paper and revolving credit facilities, and reduced bond offerings. Net cash outflow on other financial liabilities was $1,566 million in 2025 and $416 million in 2024, the change was driven by lower wholesale facilities and short-term revolving lines
Free Cash Flow
For the year ended December 31, 2025, the generation of Free Cash Flow of Industrial Activities was $513 million primarily due to adjusted EBIT results of the segments, working capital generation and undistributed income of unconsolidated affiliates, partially offset by capital expenditures and cash interest and taxes.
Future Liquidity
We have adopted formal policies and decision-making processes designed to optimize the allocation of funds, cash management processes and financial risk management. Our liquidity needs could increase in the event of an extended economic slowdown or recession that would reduce our cash flow from operations and impair the ability of our dealers and retail customers to meet their payment obligations. Any reduction of our credit ratings would increase our cost of funding and potentially limit our access to the capital markets and other sources of financing.
We believe that funds available under our current liquidity facilities, those realized under existing and planned asset-backed securitization programs and issuances of debt securities and those expected from ordinary course refinancing of existing credit facilities, together with cash provided by operating activities, will allow us to satisfy our debt service requirements for the coming year. At December 31, 2025, we had available committed, unsecured facilities expiring after twelve months of $6.5 billion ($5.5 billion at December 31, 2024).
Financial Services securitized debt is repaid with the cash generated by the underlying amortizing receivables. Accordingly, additional liquidity is not normally necessary for the repayment of such debt. Financial Services has traditionally relied upon the term ABS market and committed asset-backed facilities as a primary source of funding and liquidity. At December 31, 2025, Financial Services' committed asset-backed facilities expiring after twelve months amounted to $3.7 billion ($3.7 billion at December 31, 2024), of which $3.5 billion was utilized at December 31, 2025 ($3.1 billion at December 31, 2024).
If Financial Services were unable to obtain ABS funding at competitive rates and at the same time were unable to access other sources of funding at similar conditions, its ability to conduct its activities would be limited.
Pension and Other Post-employment Benefits
Pension Plans
Pension plan obligations primarily comprise the obligations of our pension plans in the United States, the U.K. and Germany.
Under these plans, contributions are made to a separate fund (trust) which independently administers the plan assets. Our funding policy is to contribute amounts to the plan equal to the amounts required to satisfy the minimum funding requirements pursuant to the laws of the applicable jurisdictions. The significant pension plans that we are required to fund are in the United States and the U.K. In addition, we make discretionary contributions in addition to the funding requirements. To the extent that a fund is overfunded, we are not required to make further contributions to the plan in respect of minimum performance requirements so long as the fund is in surplus.
The investment strategy for the plan assets depends on the features of the plan and on the maturity of the obligations. Typically, less mature plan benefit obligations are funded by using more equity securities as they are expected to achieve long-term growth exceeding inflation. More mature plan benefit obligations are funded using more fixed income securities as they are expected to produce current income with limited volatility. Risk management practices include the use of multiple asset classes and investment managers within each asset class for diversification purposes. Specific guidelines for each asset class and investment manager are implemented and monitored.
In July 2024, the U.K. Court of Appeal upheld a ruling in the matter of Virgin Media Limited v NTL Pension Trustees II Limited, a decision that the Company was not a party to or involved in, that certain historical amendments for contracted out defined benefit schemes were invalid if they were not accompanied by the correct actuarial confirmation. The Company and its U.K. pension scheme trustee are reviewing this development and considering whether this decision has any implications for the CNHI and JI Case Pension Plans. In June 2025, the U.K. government announced its intention to introduce legislation permitting retrospective actuarial confirmation of benefit changes, if required. This proposed legislation is expected to provide relief to plan sponsors in light of recent case law, although the timing and specific provisions have not yet been finalized. The Company is assessing the potential impact of this ruling on its financial statements, including any implications for pension obligations, funding requirements, or other financial exposures. Due to the complexity of the ruling, the Company will engage with the pension plan trustees and other parties required to retrieve and analyze data necessary to perform an assessment of plan amendments which may be affected by this ruling. As of December 31, 2025, the Company is not able to reasonably estimate the impact of this ruling, if any, on the Company's results of operations.
At December 31, 2025 and 2024, the difference between the present value of the pension plan obligations and the fair value of the related plan assets was a deficit of $119 million and $151 million, respectively. In 2025, we contributed $31 million to the plan assets and made direct benefit payments of $12 million for our pension plans. Our expected total contribution to pension plan assets and direct benefit payments is estimated to be $45 million for 2026.
Healthcare Plans
Healthcare postretirement benefit plan obligations comprise obligations for healthcare and insurance plans granted to our employees working in the United States and Canada. These plans generally cover employees retiring on or after reaching the age of 55 who have completed at least 10 years of employment. United States salaried and non-represented hourly employees and Canadian employees hired after January 1, 2001 and January 1, 2002, respectively, are not eligible for postretirement healthcare and life insurance benefits under our plans. These plans are not required to be funded. Beginning in 2007, we made contributions on a voluntary basis to a separate and independently managed fund established to finance the North America healthcare plans.
At December 31, 2025 and 2024, the difference between the present value of the healthcare plan obligations and the fair value of the related plan assets was a deficit of $127 million and $126 million, respectively. In 2025, we did not contribute to the plan assets and made direct benefit payments for healthcare plans of $19 million and we expect to make direct benefit payments of $15 million in 2026.
Other Postemployment Benefits
Other postemployment benefits consist of benefits for Italian Employee Leaving Entitlements up to December 31, 2006, loyalty bonus in Italy and various other similar plans in France, Germany and Belgium. Until December 31, 2006, Italian companies with more than 50 employees were required to accrue for benefits paid to employees upon them leaving the company. The scheme has since changed to a defined contribution plan. The obligation on our Consolidated Balance Sheets represents the residual reserve for years until December 31, 2006. Loyalty bonuses are accrued for employees who have reached certain service seniority and are generally settled when employees leave the company. These plans are not required to be funded and, therefore, have no plan assets.
At December 31, 2025 and 2024, the present value of the obligation for other postemployment benefits amounted to $81 million and $81 million, respectively.
In 2025, we made direct benefit payments of $7 million for other postemployment benefits and expect to make direct benefit payments of $7 million in 2026.
For further information on pension and other postemployment benefits, see "Note 13: Employee Benefit Plans and Postretirement Benefits" to our Consolidated Financial Statements for the year ended December 31, 2025.
Off-Balance Sheet Arrangements
We use certain off-balance sheet arrangements with unconsolidated third parties in the ordinary course of business, including financial guarantees. Our arrangements are described in more detail below. For additional information, see "Note 15: Commitments and Contingencies" to our Consolidated Financial Statements for the year ended December 31, 2025.
Financial Guarantees
Our financial guarantees require us to make contingent payments upon the occurrence of certain events or changes in an underlying instrument that is related to an asset, a liability or the equity of the guaranteed party. These guarantees include arrangements that are direct obligations, giving the party receiving the guarantee a direct claim against us, as well as indirect obligations, under which we have agreed to provide the funds necessary for another party to satisfy an obligation.
CNH provided guarantees on the debt or commitments of third parties and performance guarantees in the interest of non-consolidated affiliates totaling $119 million as of December 31, 2025.
Disclosure of Contractual Obligations
The following table sets forth our contractual obligations and commercial commitments with definitive payment terms that will require significant cash outlays in the future, as of December 31, 2025 (in millions of dollars):
Payments due in
Total
Less than
1 Year
1-3 Years
3-5 Years
After 5
Years
Contractual Obligations (1)
Debt obligations (2)
Bonds
Borrowings from banks
Asset-backed financing
Other debt
Operating lease obligations
Purchase obligations
Total
(1) Reserves for uncertain tax positions are not included within this table as the timing and ultimate uncertainty of settlement with the relevant taxing authorities is not known.
(2) Amounts presented exclude the related interest expense that will be paid when due. Potential outflows in the years after 2026 are subject to a number of uncertainties, including future asset performance and changes in assumptions, and therefore we are unable to make sufficiently reliable estimates of future contributions beyond 2026.
Debt Obligations
For information on our debt obligations, see "Capital Resources" above and "Note 10: Debt" to our Consolidated Financial Statements for the year ended December 31, 2025. The amount reported as debt obligations in the table above consists of our bonds, borrowings from banks, asset-backed financing and other debt which reconciles in total to the amount in the December 31, 2025 consolidated balance sheet.
Operating Lease Obligations
Our operating leases consist mainly of leases for commercial and industrial properties used in carrying out our businesses. The amounts reported above under "Operating lease obligations" include the minimal rental and payment commitments due under such leases.
Purchase Obligations
Our purchase obligations at December 31, 2025, include commitments to purchase tangible fixed assets, largely in connection with planned capital expenditures, in an aggregate amount of approximately $48 million.
Critical Accounting Estimates
The financial statements included in this Annual Report and related disclosures have been prepared in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and related assumptions are based on available information at the date of preparation of the financial statements, historical experience and other relevant factors. Actual results may differ from the estimates.
Particularly in light of the current economic uncertainty, developments may occur which may differ from our estimates and assumptions, and therefore might require significant adjustments to the carrying amounts of certain items, which as of the date of this Annual Report cannot be accurately estimated or predicted. The principal items affected by estimates are the allowances for credit losses, fair values for goodwill impairment tests, other indefinite-lived intangible assets, the residual values of equipment leased out under operating lease arrangements, sales allowances, product warranties, pension and other postemployment benefits, deferred tax assets and contingent liabilities.
Estimates and assumptions are reviewed periodically, and the effects of any changes are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The following critical accounting estimates reflect the significant judgments and assumptions we make in applying our accounting policies. These estimates have the most significant effect on the amounts reported in our Consolidated Financial Statements and could result in material adjustments to the carrying amounts of assets and liabilities within the next financial year. See "Note 2: Summary of Significant Accounting Policies" to the Consolidated Financial Statements for the year ended December 31, 2025 for additional information.
Allowance for Credit Losses
The allowance for credit losses represents our estimate of lifetime expected credit losses on trade and financing receivables. Retail receivables include retail notes, finance leases, and revolving charge accounts to end‑use customers, while wholesale receivables primarily include dealer floorplan financing and other dealer‑related financing. Receivables within a geographic area generally share similar risk characteristics and are evaluated collectively.
Expected credit losses for retail, trade, and wholesale portfolios are estimated using loss‑forecast models that incorporate historical loss experience, collateral values, portfolio performance, delinquency trends, and forward‑looking macroeconomic factors. Retail models consider indicators such as Gross Domestic Product and net farm income, while wholesale and trade models also reflect industry sales volumes. Models are updated quarterly, and qualitative adjustments are applied when risks are not fully captured in the quantitative inputs.
Receivables that do not share similar risk characteristics are evaluated individually based on factors such as outstanding amounts, delinquency status, and collection history. Expected credit losses reflect the probability‑weighted present value of cash shortfalls, including collateral values when relevant, over the expected life of the asset.
Charge‑offs are recorded when amounts are deemed uncollectible. Revolving charge accounts are generally charged off at 120 days past due.
At December 31, 2025 and 2024, the allowance for credit losses was $572 million and $424 million, respectively. The 2025 balance includes a $121 million increase in retail reserves for Brazil due to adverse market conditions including crop price declines, flooding and drought. Management's evaluation considers historical loss experience, portfolio risks, adverse situations that may affect the borrower's ability to repay, collateral values and current and forecasted economic conditions.
The assumptions used in evaluating the Company's exposure to credit losses involve estimates and significant judgment. While management believes the allowance is adequate, future changes in economic conditions or customer financial health could require adjustments to the allowance. Historically, changes in economic conditions have had limited impact on wholesale receivables. Retail receivable credit loss estimates are more sensitive, reflecting factors such as historical portfolio performance, current delinquency levels, and estimated recoveries on defaulted accounts. A hypothetical 10% increase in the quantitative loss rates would have resulted in an approximately $21 million increase to the allowance for credit losses at December 31, 2025.
Goodwill
We test goodwill for impairment annually at the reporting unit level and whenever events or circumstances indicate potential impairment. For CNH, indicators include adverse global economic conditions, declines in agricultural or construction equipment demand, commodity price volatility, supply chain disruptions, regulatory or trade policy changes, deterioration in reporting unit financial performance, loss of significant dealer or customer relationships, technological shifts affecting product competitiveness, or decisions to reorganize a reporting unit.
Our reporting units are Agriculture, Construction, and Financial Services. Impairment testing compares the estimated fair value of each reporting unit with its carrying value. Any excess of carrying value over fair value is recognized as an impairment charge, limited to the goodwill allocated to that unit. A qualitative assessment may be performed to determine whether a quantitative test is required.
Annual impairment reviews as of December 31, 2025, 2024, and 2023 indicated no impairment. We monitor events and changes in circumstances to determine if interim testing is required. For all reporting units, a 10% decrease in the estimated fair value would have had no effect on the carrying value of goodwill at the annual measurement date in 2025.
Other Indefinite-lived Intangible Assets
The Company holds indefinite-lived intangible assets that consist primarily of trade names and IPR&D acquired through business combinations. These assets are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. In 2024 and 2025, the Company recognized impairment charges of $11 million and $123 million, respectively, related to the IPR&D acquired as part of the Raven acquisition. In 2025, the Company recognized an impairment charge of $49 million related to the IPR&D acquired as part of the Bennamann acquisition. The Company recognized the related impairment charges within R&D expense for
the Agriculture reporting unit. The fair value of the IPR&D acquired as part of the Raven acquisition was determined using the relief-from-royalty method, which estimates value based on the present value of royalties avoided. This approach depends on several management assumptions, including estimates of future revenues, estimated cost of completion, and the weighted-average cost of capital. The fair value of the IPR&D acquired as part of the Bennamann acquisition was determined using the Multi-Period Excess Earnings Method ("MPEEM"), which isolates cash flows specifically attributable to the asset after deducting returns on contributory assets, such as working capital, that support the generation of income. This approach depends on several management assumptions, including estimates of future revenues, contributory asset charges, probability of success and discount rates.
Residual Values of Assets Leased Out Under Operating Lease Arrangements
Our Financial Services segment purchases equipment from our dealers and leases such equipment to retail customers under operating leases. Income from these operating leases is recognized over the term of the lease. Our decision on whether or not to offer lease financing to customers is based, in part, upon estimated residual values of the leased equipment, which are estimated at the lease inception date and periodically updated. Realization of the residual values, a component in the profitability of a lease transaction, is dependent on our ability to market the equipment at lease termination under the then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Although realization is not assured, management believes that the estimated residual values are realizable.
Sales Incentives and Allowances
The Company provides sales incentives and allowances to dealers as a reduction of revenue at the time of sale, based on estimated future incentive costs. These incentives may be based on dealer purchase volumes, or on retail sales incentive programs and financing programs that will be due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on historical data, announced and expected incentive programs, and field inventory levels. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to the retail customer. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales". Accruals recorded in "Other liabilities" on the Consolidated Balance Sheets were $1,930 million, $2,075 million and $2,433 million at December 31, 2025, 2024 and 2023, respectively. The decrease in 2024 reflected dealer destocking following elevated inventory levels, while the further decline in 2025 was driven by broader channel destocking across dealers and other distribution partners.
Product Warranties
For most equipment and service parts sales, the Company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period of time. At the time a sale is recognized, the Company records the estimated future warranty costs. The Company determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold to end-users and is still under warranty based on dealer inventories and retail sales. Variances in claims experience and the type of warranty programs affect these estimates, which are reviewed quarterly.
The product warranty accruals at December 31, 2025, 2024 and 2023 were $641 million, $633 million and $610 million, respectively. Estimates used to determine the product warranty accruals are based on historical claims rate leveraging the last rolling 12 months and consideration of current quality developments.
Pension and Other Postemployment Benefits
As described in "Note 13: Employee Benefit Plans and Postretirement Benefits" to our Consolidated Financial Statements for the year ended December 31, 2025, we sponsor pension, healthcare and other postemployment plans in various countries. The related costs and obligations are actuarially determined using several statistical and judgment-based assumptions, including discount rates, rates for expected returns on plan assets, rates for compensation increases, mortality rates, retirement rates, and healthcare cost trend rates. Differences between actual experience and these assumptions, or changes in the assumptions themselves, may result in gains or losses that are initially recorded in equity and subsequently amortized into expense when they exceed 10% of the greater of (1) the projected benefit obligation or (2) the fair market value of the plan assets at year end. Any such excess is amortized over the average remaining service period of active employees, and by the average life expectancy for inactive employees expected to receive benefits under the plan.
The measurement of our pension, healthcare, and other postemployment benefit obligations and related net periodic benefit cost is particularly sensitive to changes in key actuarial assumptions. The discount rate is the most significant
driver of volatility, especially for our pension plans. A one percentage‑point decrease in the discount rate would increase our pension obligation by approximately $121 million, while a one percentage‑point increase would reduce it by approximately $102 million. Pension expense is also affected by these assumptions: a one percentage‑point change in the discount rate or expected long‑term rate of return on plan assets would change annual pension cost by approximately $3 million and $11 million, respectively.
Our healthcare and other postemployment benefit obligations are also sensitive to changes in the discount rate, though to a lesser extent. A one percentage‑point decrease in the discount rate would increase these obligations by approximately $8 million, while a one percentage‑point increase would reduce them by approximately $7 million. For healthcare benefits, a one percentage‑point change in the assumed healthcare cost trend rate would change the obligation by approximately $6 million.
Realization of Deferred Tax Assets
At December 31, 2025, the Company had net deferred tax assets on temporary differences of $1,666 million, including $209 million of deferred tax assets that were not recognized in the financial statements. The corresponding totals at December 31, 2024, were net deferred tax assets of $1,560 million, including $183 million of deferred tax assets that were not recognized in the financial statements.
We have recognized deferred tax assets we believe are more likely than not to be realized. The determination to record a valuation allowance requires significant judgment and is based on an assessment of positive and negative evidence, whereby objectively verifiable evidence takes precedence over other forms of evidence. In our assessments, we consider actual and forecasted results, the potential to carryback net operating losses and credits, the future reversal of certain taxable temporary differences, and tax planning strategies. We also consider risk factors, including, but not limited to, the economic conditions in the countries and, in some cases, regions in which we have significant operations as those conditions would generally impact our ability to generate taxable income in specific jurisdictions.
During the fourth quarter of 2025, we recognized a valuation allowance on deferred tax assets from the non-cash impairment charges related to Monarch Tractors and the IPR&D acquired as part of the Raven acquisition. In 2025, we also recorded a valuation allowance against deferred tax assets generated by Bennamann.
During the fourth quarter of 2024, we recognized a significant portion of the deferred tax assets related to our operations in China, resulting in a non-cash tax benefit, as those operations had consistently returned to pre-tax profitability, with that trend anticipated to continue for the foreseeable future. During this same period, we also recorded a valuation allowance on deferred tax assets generated by our financial services business in Argentina, resulting in a non-cash increase to the Company's tax expense, as those operations generated statutory tax losses attributable to Argentina's hyperinflationary economy that we do not anticipate utilizing in the foreseeable future.
Contingent Liabilities
We are the subject of legal and indirect tax proceedings covering a range of matters that are pending in various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such matters. The cases and claims against us often raise difficult and complex factual and legal issues, which are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. In the normal course of business, we consult with legal counsel and other experts on matters related to litigation, taxes and other similar contingent liabilities. We accrue a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated. In the event an adverse outcome is probable, but an estimate is not determinable or is possible, the matter is disclosed. S ee "Note 15 : Commitments and Contingencies" to the Consolidated Financial Statements for the year ended December 31, 2025 for additional information.
Cautionary Note on Forward-Looking Statements
This Annual Report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact contained in this filing including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. Forward-looking statements also include statements regarding the future performance of CNH and its subsidiaries on a standalone basis. These statements may include terminology such as "may", "will", "expect", "could", "should", "intend", "estimate", "anticipate", "believe", "outlook", "continue", "remain", "on track", "design", "target", "objective", "goal", "forecast", "projection", "prospects", "plan", or similar terminology. Forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions
and involve known and unknown risks, uncertainties and other factors, many of which are outside our control and are difficult to predict. If any of these risks and uncertainties materialize (or they occur with a degree of severity that the Company is unable to predict) or other assumptions underlying any of the forward-looking statements prove to be incorrect, including any assumptions regarding strategic plans, the actual results or developments may differ materially from any future results or developments expressed or implied by the forward-looking statements.
Factors, risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others: economic conditions in each of our markets, including the significant uncertainty caused by geopolitical events; production and supply chain disruptions, including industry capacity constraints, material availability, and global logistics delays and constraints; the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods related products, particularly as it relates to the agricultural market business cycle; 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, commerce and infrastructure development; government policies on international trade and investment, including sanctions, import quotas, capital controls, tariffs and other protective measures issued to promote national interests or address foreign competition, which in turn result or may result in retaliatory tariffs or other measures enacted by affected trade partners; volatility in international trade caused by the imposition of tariffs and the related impact on cost and prices, which could consequently affect demand of our products, sanctions, embargoes, and trade wars; actions of competitors in the various industries in which we compete; development and use of new technologies (including artificial intelligence) and technological difficulties; the interpretation of, or adoption of new, compliance requirements with respect to engine emissions, safety, privacy and data security 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; weather conditions, particularly to the extent it impacts the agricultural industry; our ability to obtain financing or to refinance existing debt; price pressure on new and used equipment; the resolution of pending litigation and investigations on a wide range of topics, including dealer and supplier litigation, intellectual property rights disputes, product warranty and defective product claims, and emissions and/or fuel economy regulatory and contractual issues; security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of CNH and its suppliers and dealers; security breaches with respect to our products; our pension plans and other postemployment obligations; political and civil unrest; volatility and deterioration of capital and financial markets, including pandemics, terrorist attacks in Europe and elsewhere; the remediation of a material weakness; our ability to realize the anticipated benefits from our business initiatives as part of our strategic plan; including targeted restructuring actions to optimize our cost structure and improve the efficiency of our operations; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or divestitures and other similar risks and uncertainties, and our success in managing the risks involved in the foregoing.
Forward-looking statements are based upon assumptions relating to the factors described in this filing, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside CNH's control. CNH expressly disclaims any intention or obligation to provide, update or revise any forward-looking statements in this document to reflect any change in expectations or any change in events, conditions or circumstances on which these forward-looking statements are based.
Further information concerning CNH, including factors that potentially could materially affect its financial results, is included in the Company's reports and filings with the SEC.
All future written and oral forward-looking statements by CNH or persons acting on the behalf of CNH are expressly qualified in their entirety by the cautionary statements contained herein or referred to above.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of CNH Industrial N.V.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of CNH Industrial N.V. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, cash flows, and changes in equity, for each of the three years in the period ended December 31, 2025, and the related notes and the sche dules listed in the Index at Item 16 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue – Timing of Revenue Recognition — Industrial Activities — Refer to Notes 2 and 3 to the financial statements
Critical Audit Matter Description
The Company recognizes revenue when control of the equipment, services or parts has been transferred, and the Company’s performance obligations to the customers (e.g., dealers) have been satisfied. Transfer of control occurs when title and risk of ownership have transferred to the customer, which occurs based upon the terms specified in the agreement. In most of the jurisdictions where the Company operates, and subject to specific exceptions, transfer of control, and thus revenue recognition, occurs upon shipment.
We identified the timing of revenue recognition specific to Industrial Activities as a critical audit matter due to the extent of additional audit effort required to evaluate whether the timing of revenue recognition was appropriate. This required both extensive audit effort due to the volume of transactions at year-end and a high degree of auditor judgment, especially pertaining to the evaluation of management's identification of when transfer of control has occurred.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to evaluating the timing of revenue recognition for Industrial Activities included the following, among others:
• We tested the operating effectiveness of certain internal controls over the timing of revenue recognition and the identification of when transfer of control occurred.
• On a selection basis, we performed the following procedures:
◦ Tested the completeness and accuracy of revenue transactions recorded for a period of time prior to and subsequent to year-end.
◦ Obtained the terms in certain dealer agreements by region and evaluated the appropriateness of management’s application of their accounting policies in the determination of revenue recognition conclusions based on the dealer terms.
◦ Obtained evidence of shipment to evaluate the timing of revenue recognized.
◦ Confirmed transaction terms with dealers to evaluate the timing of revenue recognition.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 26, 2026
We have served as the Company's auditor since 2023.
CNH INDUSTRIAL N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2025, 2024 and 2023
Years Ended December 31,
(in millions of dollars and shares, except per share amounts)
Revenues
Net sales
Finance, interest and other income
Total Revenues
Costs and Expenses
Cost of goods sold
Selling, general and administrative expenses
Research and development expenses
Restructuring expenses
Interest expense
Other, net
Total Costs and Expenses
Consolidated income before income taxes
Income tax expense
Equity in income of unconsolidated affiliates
Net income
Net income (loss) attributable to noncontrolling interests
Net income attributable to CNH Industrial N.V.
Basic earnings per share attributable to common shareholders
Basic earnings per share attributable to CNH Industrial N.V.
Diluted earnings per share attributable to common shareholders
Diluted earnings per share attributable to CNH Industrial N.V.
Weighted-average shares outstanding
Basic
Diluted
Cash dividends declared per common share
The accompanying notes to consolidated financial statements are an integral part of these statements.
CNH INDUSTRIAL N.V.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended December 31, 2025, 2024 and 2023
Years Ended December 31,
(in millions of dollars)
Net income
Other comprehensive loss, net of tax
Unrealized gain (loss) on cash flow hedges
Changes in retirement plans' funded status
Foreign currency translation
Share of other comprehensive income (loss) of entities using the equity method
Other comprehensive loss, net of tax
Comprehensive income
Less: Comprehensive income attributable to noncontrolling interests
Comprehensive income attributable to CNH Industrial N.V.
The accompanying notes to consolidated financial statements are an integral part of these statements.
CNH INDUSTRIAL N.V.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2025 and 2024
(in millions of dollars)
December 31, 2025
December 31, 2024
Assets
Cash and cash equivalents
Restricted cash
Trade receivables, net
Financing receivables, net
Financial receivables from Iveco Group N.V.
Inventories, net
Property, plant and equipment, net
Investments in unconsolidated affiliates
Equipment under operating leases
Goodwill
Other intangible assets, net
Deferred tax assets
Derivative assets
Other assets
Total Assets
Liabilities and Equity
Debt
Financial payables to Iveco Group N.V.
Trade payables
Deferred tax liabilities
Pension, postretirement and other postemployment benefits
Derivative liabilities
Other liabilities
Total Liabilities
Redeemable noncontrolling interest
Common shares, € 0.01 , par value; outstanding 1,242,064,719 common shares and 370,457,350 loyalty program special voting shares in 2025; and outstanding 1,248,023,791 common shares and 370,994,305 loyalty program special voting shares in 2024
Treasury stock, at cost - 122,335,477 shares in 2025 and 116,376,405 shares in 2024
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Noncontrolling interests
Total Equity
Total Liabilities and Equity
The accompanying notes to consolidated financial statements are an integral part of these statements.
CNH INDUSTRIAL N.V.
CONSOLIDATED BALANCE SHEETS — (Continued)
As of December 31, 2025 and 2024
The following table presents certain assets and liabilities of consolidated variable interest entities ("VIEs"), which are included in the Consolidated Balance Sheets above. The assets in the table include those assets that can only be used to settle obligations of consolidated VIEs. The liabilities in the table include third party liabilities of the consolidated VIEs, for which creditors do not have recourse to the general credit of CNH. See "Note 4: Receivables" of the Consolidated Financial Statements for additional information on the Company's VIEs.
(in millions of dollars)
December 31, 2025
December 31, 2024
Restricted cash
Financing receivables, net
Total Assets
Debt
Total Liabilities
The accompanying notes to consolidated financial statements are an integral part of these statements.
CNH INDUSTRIAL N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2025, 2024 and 2023
Years Ended December 31,
(in millions of dollars)
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense excluding depreciation and amortization of assets under operating leases
Depreciation and amortization expense of assets under operating leases
Undistributed income of unconsolidated affiliates
Other non-cash items
Changes in operating assets and liabilities:
Provisions
Deferred income taxes
Trade and financing receivables related to sales, net
Inventories, net
Trade payables
Other assets and liabilities
Net cash provided by operating activities
Cash Flows from Investing Activities
Additions to retail receivables
Collections of retail receivables
Expenditures for property, plant and equipment and intangible assets excluding assets under operating leases
Expenditures for assets under operating leases
Other, net
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from long-term debt
Payments of long-term debt
Net increase (decrease) in other financial liabilities
Dividends paid
Purchase of treasury stock
Net cash provided (used) by financing activities
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
Net decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of year
Cash, cash equivalents and restricted cash, end of year
Components of cash, cash equivalents and restricted cash
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents and restricted cash
The accompanying notes to consolidated financial statements are an integral part of these statements.
CNH INDUSTRIAL N.V.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Years Ended December 31, 2025, 2024 and 2023
(in millions of dollars)
Common
Shares
Treasury
Stock
Additional
Paid-in
Capital
Retained
Earnings (1)
Accumulated Other Comprehensive Loss
Noncontrolling
Interests
Total
Redeemable
Noncontrolling
Interest
Balance at December 31, 2022
Net income (loss)
Other comprehensive income (loss), net of tax
Dividends paid (1)
Acquisition of treasury stock
Common shares issued from treasury stock for share-based compensation
Share-based compensation expense
Other changes
Balance at December 31, 2023
Net income (loss)
Other comprehensive loss, net of tax
Dividends paid (1)
Acquisition of treasury stock
Common shares issued from treasury stock for share-based compensation
Share-based compensation expense
Other changes
Balance at December 31, 2024
Net income (loss)
Other comprehensive income (loss), net of tax
Dividends paid (1)
Acquisition of treasury stock
Common shares issued from treasury stock for share-based compensation
Share-based compensation expense
Other changes
Balance at December 31, 2025
(1) Dividends per share of common stock of $ 0.250 , $ 0.470 , and $ 0.396 were declared in the years ended December 31, 2025, 2024 and 2023, respectively.
The accompanying notes to consolidated financial statements are an integral part of these statements.
CNH INDUSTRIAL N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Footnote
Page
Note 1
Presentation
Note 2
Summary of Significant Accounting Policies
Note 3
Revenue
Note 4
Receivables
Note 5
Inventories
Note 6
Property, Plant and Equipment
Note 7
Investments in Unconsolidated Affiliates
Note 8
Leases
Note 9
Goodwill and Other Intangibles
Note 10
Debt
Note 11
Supply Chain Finance Programs
Note 12
Income Taxes
Note 13
Employee Benefit Plans and Postretirement Benefits
Note 14
Other Liabilities
Note 15
Commitments and Contingencies
Note 16
Financial Instruments
Note 17
Shareholders' Equity
Note 18
Share-Based Compensation
Note 19
Earnings per Share
Note 20
Accumulated Other Comprehensive Income (Loss)
Note 21
Segment Reporting
Note 22
Related Party Information
Note 23
Subsequent Event
CNH INDUSTRIAL N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Presentation
CNH Industrial N.V. is incorporated in, and under the laws of, the Netherlands. CNH is a leading global company in the capital goods sector that develops, manufactures and sells agricultural equipment and construction equipment. In addition, CNH's Financial Services segment offers an array of financial products and services, including:
• Retail financing for end customers purchasing or leasing new and/or used CNH equipment and/or other manufacturers' products, as well as other retail financing programs.
• Wholesale financing to dealers.
The Company has three reportable segments: (i) Agriculture, which develops, manufactures and sells agricultural equipment; (ii) Construction, which develops, manufactures and sells construction equipment; and (iii) Financial Services, which provides financial services to customers of the Company's products. The Company's global agricultural equipment and construction equipment segments, as well as corporate functions, are collectively referred to as "Industrial Activities".
The Company was formed as a result of the merger of Fiat Industrial S.p.A. and its subsidiary CNH Global N.V. with and into CNH, effective September 29, 2013.
Note 2: Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
CNH has prepared the accompanying Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Consolidated Financial Statements include CNH Industrial N.V. and its consolidated affiliates. The Consolidated Financial Statements are expressed in U.S. dollars and unless otherwise indicated, all financial data set forth in these Consolidated Financial Statements are expressed in U.S. dollars. The Consolidated Financial Statements include the accounts of CNH's subsidiaries in which CNH has a controlling financial interest, and reflect the noncontrolling interests of the minority owners of the subsidiaries that are not fully owned for the periods presented, as applicable. A controlling financial interest exists when the Company holds a majority voting interest of an entity or determines that it is the primary beneficiary of a VIE. The primary beneficiary is the party with both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could be significant to the entity. The Company evaluates its status as primary beneficiary on an ongoing basis in accordance with VIE consolidation guidance, and the consolidation status of VIEs may change as a result of these reassessments.
Investments in unconsolidated affiliates are accounted for using the equity method when CNH does not have a controlling interest but exercises significant influence. Under this method, the investment is initially recorded at cost and is increased or decreased by CNH's proportionate share of the entity's respective net income or loss. Dividends received from these entities reduce the carrying value of the investments.
Business Combinations
Business combinations are accounted for by applying the acquisition method. Under this method, the consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred and liabilities assumed by the Company and the equity interests issued in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as incurred.
On October 12, 2023, CNH closed on its purchase of Hemisphere, a global satellite navigation technology leader, for a total consideration of $ 181 million.
On March 15, 2023, CNH acquired a controlling interest in Bennamann, increasing its ownership to just over 50.0 % through the purchase of an additional 34.4 % interest for approximately $ 51 million in cash.
On March 13, 2023, CNH acquired the remaining 89.5 % of Augmenta for cash consideration of approximately $ 80 million, and a deferred payment of $ 10 million.
Use of Estimates in the Preparation of Financial Statements
The preparation of Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses. Significant estimates in these Consolidated Financial Statements include allowance for credit losses; fair values for goodwill impairment tests; residual values of equipment on operating leases; sales allowances;
liabilities for warranties; obligations related to employee benefits; realizability of deferred tax assets; and contingent liabilities. Actual results could differ from these estimates.
Revenue Recognition
Revenue is recognized when control of the equipment, services or parts has been transferred and the Company's performance obligations to the customers have been satisfied. Revenue is measured as the amount of consideration the Company is entitled to receive in exchange for transferring goods or providing services.
The timing of when the Company transfers control of the goods or services to the customer may differ from the timing of the customer's payment.
Revenues are stated net of discounts, allowances, settlement discounts and rebates, as well as sales incentive program costs, which are determined on the basis of historical costs, country by country, and charged against profit for the period in which the corresponding sales are recognized.
The Company also enters into contracts with multiple performance obligations. For these contracts, the Company allocates revenue from the transaction price to the distinct goods and services in the contract on a relative standalone selling price basis. To the extent the Company sells the goods or services separately in the same market, the standalone selling price is the observable price at which the Company sells the goods or services separately. For all other goods or services, the Company estimates the standalone selling price considering all information reasonably available (including market conditions, entity-specific factors and information about the customer or class of customer).
Sales of goods
The Company's customers for equipment and parts consist of dealers, distributors, public entities and retail customers.
The Company recognizes revenue at a point in time when control has transferred to the customer at the amount of consideration that the Company expects to be entitled. In most of the jurisdictions where the Company operates, and subject to specific exceptions, transfer of control occurs upon shipment. For certain sales transactions, the equipment may be temporarily held at our location under a bill-and-hold arrangement, whereby the Company bills a customer for equipment that will be picked up by the customer or its designated carrier at a later date. Under these arrangements, control typically transfers when the product is ready for physical transfer to the customer and cannot be directed to another customer, risk and rewards of ownership are transferred to the customer and the Company has a present right to payment. We have elected to recognize shipping and handling activities that may occur after control has transferred as fulfillment costs, which are presented in "Cost of goods sold".
For all sales, no uncertainty exists surrounding the purchaser's obligation to pay for equipment and parts. Fixed payment schedules exist for all sales, but payment terms vary by geographic market and product line. See "Note 4: Receivables for information about financing payment terms. The Company records an appropriate allowance for credit losses.
The cost of incentives, if any, are estimated at the inception of a contract at the amount that is expected to be paid and is recognized as a reduction in revenue at the time of the sale. If an equipment contract transaction has multiple performance obligations, the cost of incentives is allocated entirely to the equipment. If the estimate of the incentive changes following the sale to the customer, the change in estimate is recognized as an adjustment to revenue in the period of the change. CNH grants certain sales incentives to support sales of its products to retail customers. At the later of the time of sale or the time an incentive is announced to dealers, CNH records the estimated impact of sales allowances in the form of dealer and customer incentives as a reduction of revenue. Subsequent adjustments to sales incentive programs related to products previously sold are recognized as an adjustment to revenues in the period the adjustment is determinable. The determination of sales allowances requires management to make estimates based upon historical data, estimated future market demand for products, field inventory levels, announced incentive programs, competitive pricing and interest rates, among other things.
Sales to dealers may be accompanied by floorplan agreements under which the Company offers wholesale financing, which may include "interest-free" financing for a specified period of time (which also vary by geographic market and product line; see "Note 4: Receivables" for further information). Concurrent with the sale of the equipment, Industrial Activities offers to the dealer wholesale financing through loans extended by Financial Services. Industrial Activities compensates Financial Services for the cost of the interest-free period. The interest-free financing represents a financing component, and therefore is recognized upfront as a reduction of net sales of Industrial Activities. The compensation received by Financial Services from Industrial Activities for the period of the interest-free financing and the interest charged to the dealer for the remaining period is recognized by Financial Services over the period of the outstanding exposure.
For parts sales, when the Company provides its customers with a right to return a transferred product, revenue and corresponding cost of sales are recognized for parts that are not expected to be returned. The expected returns are
estimated based on an analysis of historical experience. The portion of revenue (and corresponding cost of sales) related to the parts that are expected to be returned is recognized at the end of the return period. The amount received or receivable that is expected to be returned is recognized as a refund liability, representing the obligation to return the customer's consideration.
Furthermore, at the time of the initial sale, CNH recognizes a return asset for the right to recover the goods returned by the customer. This asset is initially measured at the former carrying amount of the inventory. At each reporting date, both the refund liability and the return asset are remeasured to record any revisions to the expected level of returns, as well as any decreases in the value of the returned products.
Rendering of services
Revenues from services are primarily from extended warranties and maintenance and repair services. These revenues are recognized over the contract period as the costs are incurred, which occurs when claims are submitted by the dealer. Amounts invoiced to customers for which CNH receives consideration prior to satisfying the related performance obligation are recorded as contract liabilities. These services are either separately priced or included in the equipment's selling price. When included in the selling price, revenue is allocated to the service component based on its estimated stand-alone selling price. In the event that the costs expected to be incurred to satisfy the remaining performance obligations exceed the transaction price, an estimated contract loss is recognized.
Finance and interest income
Finance and interest income on receivables is recorded using the effective yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the effective yield method. Recognition of income on loans is suspended when management determines that collection of future income is not probable or when an account becomes 90 days past due, whichever occurs earlier. Income accrual is resumed when and if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at that time. The Company applies cash received on nonaccrual financing receivables to first reduce any unrecognized interest and then the recorded investment and any other fees.
Rents and other income on operating leases
Income from operating leases is recognized over the term of the lease on a straight-line basis.
Sales Allowances
CNH grants certain sales allowances to promote the sale of its products to retail customers. The cost for such allowance programs are recorded as a deduction from gross sales at the time of the sale of the product to the dealer. The cost for new programs is accrued at the inception of the program. The amounts of incentives to be paid are estimated based upon historical data, estimated future market demand for products, field inventory levels, announced incentive programs, competitive pricing and interest rates, among other things.
Warranty Costs
At the time revenue is recognized for equipment or parts sales, CNH records an estimate of future base warranty costs. Total warranty liabilities are determined using historical claims rate and applicable contractual terms for products still under warranty. Quality campaigns are formal post-production modification programs approved by management. The liabilities for such programs are recognized when approved, based on an estimate of the total cost of the program. Warranty liabilities include estimated costs for parts owned by dealers that are utilized for warranty repairs, including parts sold by CNH to dealers prior to their utilization in warranty repairs.
Advertising
CNH expenses advertising costs as incurred. Advertising expenses totaled $ 125 million , $ 120 million and $ 148 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Research and Development
Research and development costs are expensed as incurred.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, and those that require a substantial period of time to be made ready for their intended use or sale, are capitalized and amortized over the useful life of the related asset class.
All other borrowing costs are expensed when incurred.
Government Grants
Government grants are recognized in the financial statements when the Company has reasonable assurance that it will meet the grant conditions and receive the funds. Government grants are recognized as income over the periods in which the related costs are incurred.
The benefit of a government loan at a below-market rate of interest is treated as a government grant. The benefit is measured as the difference between the loan's initial carrying amount (fair value plus transaction costs) and the proceeds received. The loan is accounted for in accordance with the Company's government grant policies.
Foreign Currency
Certain of CNH's non-U.S. affiliates maintain their books and accounting records using local currency as the functional currency. Assets and liabilities of these non-U.S. affiliates are translated into U.S. dollars at period-end exchange rates. Translation adjustments are included in "Accumulated other comprehensive income (loss)" within the Company's Consolidated Balance Sheets. Income and expense accounts of these non-U.S. subsidiaries are translated at the average exchange rates for the period. Gains and losses from foreign currency transactions are included in net income in the period during which they arise. Net foreign currency transaction gains and losses, including the cost of hedging instruments, are reflected in "Other, net" in the accompanying Consolidated Statements of Operations.
Cash and Cash Equivalents
Cash equivalents are highly liquid investments with an original maturity of three months or less. The carrying value of cash equivalents approximates fair value because of the short maturity of these investments.
Restricted Cash
Restricted cash consists of principal and interest payments from retail notes and wholesale receivables owned by the consolidated VIEs that are payable to the VIEs' investors, as well as cash pledged as a credit enhancement to those same investors. These amounts are held by depository banks in order to comply with contractual agreements. Restricted cash equivalents also include balances held under escrow exclusively for the repayment of the pension obligations relating to U.K. Pension plans.
Cash Flow Information
All cash flows from the changes in trade accounts and notes receivable are classified as operating activities in the consolidated statements of cash flows as these receivables arise from sales to CNH's customers. Cash flows from financing receivables that are related to sales to CNH's dealers are also included in operating activities. CNH's financing of receivables related to equipment sold by dealers is included in investing activities.
CNH paid interest of $ 1,462 million, $ 1,598 million and $ 1,091 million for the years ended December 31, 2025, 2024 and 2023, respectively.
In 2025, "Other non-cash items" of $ 647 million primarily included amortization of debt issuance costs and discounts of $ 45 million, writedowns of financial assets of $ 313 million, a $ 172 million non-cash impairment charge related to IPR&D acquired as part of the Raven and Bennamann acquisitions, and $ 62 million charge related to investments in unconsolidated affiliates. In 2024, "Other non-cash items" of $ 340 million primarily included amortization of debt issuance costs and discounts of $ 71 million and writedowns of financial assets of $ 204 million. In 2023, "Other non-cash items" of $ 183 million primarily included share-based payments of $ 99 million and writedowns of financial assets of $ 80 million.
In 2025, Investing Activities - "Other, net" consisted of change in related party receivable/payable with Iveco Group of $( 117 ) million. In 2024, Investing Activities - "Other, net" included change in related party receivable/payable with Iveco Group of $ 151 million. In 2023, Investing Activities - "Other, net" included cash paid for business acquisitions of $ 312 million.
Receivables
Receivables are recorded at amortized cost, net of allowances for credit losses and deferred fees and costs.
Periodically, the Company sells or transfers retail notes and wholesale receivables to funding facilities or in securitization transactions. In accordance with the accounting guidance regarding transfers of financial assets and the consolidation of VIEs, the majority of the retail notes and wholesale receivables sold in securitizations do not qualify as sales and are recorded as secured borrowings with no gains or losses recognized at the time of securitization. Receivables associated with these securitization transactions and receivables that the Company has the ability and intent to hold for the foreseeable future are classified as held for investment. The substantial majority of the Company’s receivables, which include unrestricted receivables and restricted receivables for securitization investors, are classified as held for investment.
Allowance for Credit Losses
The allowance for credit losses is the Company's estimate of the lifetime expected credit losses inherent in the trade receivables and financing receivables owned by the Company. Retail receivables primarily include retail notes and finance leases to end use customers and revolving charge accounts, which represent financing for customers to purchase parts, service, rentals, implements and attachments from CNH dealers. Wholesale receivables include dealer floorplan financing, and to a lesser extent, the financing of dealer operations. Typically, our receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk.
Retail customer receivables that share the same risk characteristics such as, collateralization levels, geography, product type and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for retail credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as Gross Domestic Product and Net Farm Income. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment.
Trade and wholesale receivables that share the same risk characteristics such as, collateralization levels, term, geography and other relevant factors are reviewed on a collective basis using measurement models and management judgment. The allowance for trade and wholesale credit losses is based on loss forecast models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The calculation is adjusted for forward-looking macroeconomic factors, such as industry sales volumes. The forward-looking macroeconomic factors are updated quarterly. In addition, qualitative factors that are not fully captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment.
Retail, trade and wholesale receivables that do not have similar risk characteristics are individually reviewed based on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are measured by considering: the probability-weighted estimates of cash flows and collateral value; the time value of money; current conditions and forecasts of future economic conditions. Expected credit losses are measured as the probability-weighted present value of all cash shortfalls (including the value of the collateral, if appropriate) over the expected life of each financial asset.
Charge-offs of principal amounts of receivables outstanding are deducted from the allowance at the point when it is estimated that amounts due are deemed uncollectible. Revolving charge accounts are generally deemed to be uncollectible and charged off to the allowance for credit losses when delinquency reaches 120 days.
Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. The cost of finished goods and work-in-progress includes the cost of raw materials, other direct costs and production overheads.
Property, Plant and Equipment
Property, plant and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred.
Assets held under finance leases, for which the Company assumes substantially all the risks and rewards of ownership, are recognized as assets of the Company at the lower of fair value or present value of the minimum lease payments. The corresponding liability to the lessor is included in the financial statements as debt.
Depreciation is recorded on a straight-line basis over the estimated useful lives of the respective assets as follows:
Category
Lives
Buildings and improvements
10 - 40 years
Plant, machinery and equipment
5 - 25 years
Other equipment
3 - 10 years
Impairment of Long-Lived Assets
CNH evaluates the recoverability of the carrying amount of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, CNH compares the carrying amount of an asset or asset group to future undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value.
Goodwill and Other Intangible Assets
Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired. Other indefinite-lived assets primarily consist of IPR&D, software in progress and acquired trademarks which have no legal, regulatory, contractual, competitive, economic, or other factor that limits their useful life. Goodwill and indefinite-lived intangible assets are not amortized and are reviewed for impairment at least annually. At December 31, 2025 and 2024, the Company performed its annual goodwill impairment review and determined there was no impairment to goodwill. At December 31, 2025 and 2024, the Company performed its annual impairment reviews of indefinite-lived intangible assets. The Company recorded a $ 123 million non-cash impairment charge in 2025 and an $ 11 million charge in 2024 related to IPR&D acquired as part of the Raven acquisition. In addition, as a result of an interim triggering event during the third quarter of 2025, the Company performed an interim impairment review of IPR&D acquired as part of the Bennamann acquisition and recorded a non-cash impairment charge of $ 49 million.
Definite-lived intangible assets consist primarily of acquired dealer networks, product drawings, patents, and capitalized software. Software costs capitalized by CNH primarily relate to costs incurred in the production of software to be embedded in our products. Capitalized software costs are included in "Other intangible assets, net" on our Consolidated Balance Sheets. Capitalization of software costs begins when technological feasibility has been established and ends upon reaching commercialization. Amortization of definite-lived intangible assets occurs on a straight-line basis over the useful life of the asset which is primarily 2 – 5 years for capitalized software and 5 - 25 years for other definite-lived intangible assets.
As stated above, the Company evaluates the recoverability of the carrying amount of long-lived assets, which include definite-lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. If circumstances require a long-lived asset to be tested for possible impairment, the carrying amount of an asset or asset group is compared to future undiscounted net cash flows expected to be generated by the asset or asset group. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value.
Reference is made to "Note 9: Goodwill and Other Intangibles" for further information regarding goodwill and other intangible assets.
Income Taxes
The provision for income taxes is determined using the asset and liability method. CNH recognizes a current tax liability or asset for the estimated taxes payable or refundable on tax returns for the current year and tax contingencies estimated to be settled with taxing authorities within one year. A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and tax attributes. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on available evidence.
Derivatives
The Company uses derivative transactions to manage exposures that arise in the normal course of business and not for trading or speculative purposes. All derivative financial instruments are recorded in the Consolidated Balance Sheets as either an asset or a liability measured at fair value. The fair value of CNH's foreign exchange derivatives is based on
quoted market exchange rates, adjusted for the respective interest rate differentials (premiums or discounts). The fair value of CNH's interest rate derivatives is based on discounting expected cash flows, using market interest rates, over the remaining term of the instrument. Changes in the fair value of derivative financial instruments are recognized in current income unless specific hedge accounting criteria are met. For derivative financial instruments designated to hedge exposure to changes in the fair value of a recognized asset or liability, the gain or loss is recognized in income in the period of change, together with the offsetting loss or gain on the related hedged item. For derivative financial instruments designated to hedge exposure to variable cash flows of a forecasted transaction, the derivative financial instrument's gain or loss is initially reported in "Accumulated other comprehensive income (loss)" and is subsequently reclassified into income when the forecasted transaction affects income. For derivative financial instruments that are not designated as hedges but held as economic hedges, the gain or loss is recognized immediately in income.
For derivative instruments designated as hedges, CNH formally documents the hedging relationship, the risk being hedged, and its risk management objective. Fair value hedges are linked to specific recognized assets or liabilities. Cash flow hedges are linked to specific forecasted transactions or variability in expected cash flows. CNH evaluates hedge effectiveness at inception and on an ongoing basis. If a derivative is determined to be ineffective or if the forecasted transaction is no longer probable, hedge accounting is discontinued and the derivative is subsequently remeasured at fair value with changes recognized in income.
Reference is made to "Note 16: Financial Instruments" for further information regarding CNH's use of derivative financial instruments.
Share-Based Compensation Plans
CNH measures all share-based compensation as an expense based on the fair value of each award on the grant date. CNH recognizes share-based compensation costs on a straight-line basis over the requisite service period for each separately vesting portion of an award.
New Accounting Pronouncements
Adopted in 2025
Improvements to income tax disclosures
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Improvements to Income Tax Disclosures , to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for annual periods beginning after December 15, 2024, and may be applied prospectively or retrospectively. The Company adopted ASU 2023-09 prospectively for the period ending December 31, 2025 with updates to the annual income tax disclosures within Footnote 12: Income Taxes. The adoption of the ASU does not impact our results of operations.
Not Yet Adopted
Government Grants: Accounting for Government Grants Received by Business Entities
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities , which provides updated guidance on the recognition, measurement, and presentation of government grants. The ASU will be effective for annual reporting periods beginning after December 15, 2028, including interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact on its consolidated financial statements and related disclosures.
Hedge Accounting Improvements
In November 2025, the FASB issued ASU 2025‑09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements , which expands hedge accounting eligibility, clarifies cash flow hedge effectiveness, and provides guidance on forecasted interest payments and reference rate reform. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those years, with early adoption permitted. Adoption requires a modified retrospective application, with a cumulative‑effect adjustment to opening retained earnings. The ASU is not expected to have a material impact on the Company's consolidated financial statements and related disclosures.
Accounting for Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software, which simplifies the capitalization guidance by removing all references to software development project stages. Under this standard, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. This update is effective for annual reporting periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.
Measurement of Credit Losses for Accounts Receivable and Contract Assets
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces an optional practical expedient for estimating expected credit losses on current accounts receivable and contract assets. The Company has reviewed the guidance and determined that it will not elect the practical expedient, as it does not provide a benefit to the Company's existing credit loss estimation process. The standard is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted, and the guidance is to be applied prospectively after the adoption date. Adoption of the ASU is not expected to have a material impact on the Company's consolidated financial statements and related disclosures.
Business Combinations and Consolidations
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topics 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. This standard clarifies the guidance in determining the accounting acquirer in a business combination effected primarily by exchanging equity interests when the acquiree is a VIE that meets the definition of a business. The amendments in this update are effective for interim reporting periods and fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Adoption of the ASU is not expected to have a material impact on the Company's consolidated financial statements and related disclosures.
Expense Disaggregation Disclosures
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) to improve the disclosures about a public business entity’s expenses and provide more detailed information about the types of expenses included in certain expense captions in the Consolidated Financial Statements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is evaluating the impact this guidance will have on the disclosures in the Consolidated Financial Statements and related disclosures.
Note 3: Revenue
The following table summarizes revenues for the years ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Years Ended December 31,
Agriculture
Construction
Total Industrial Activities
Financial Services
Eliminations and other
Total Revenues
The following table disaggregates revenues by major source for the years ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Years Ended December 31,
Revenues from:
Sales of goods
Rendering of services and other revenues
Revenues from sales of goods and services
Finance and interest income
Rents and other income on operating leases
Finance, interest and other income
Total Revenues
Contract liabilities recorded in "Other liabilities" were $ 122 million, $ 72 million and $ 50 million at December 31, 2025, 2024 and 2023, respectively. Contract liabilities primarily relate to extended warranties. During the year ended December 31, 2025, 2024 and 2023, revenues included $ 21 million, $ 18 million and $ 11 million, respectively, relating to contract liabilities outstanding at the beginning of each period.
As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 122 million (approximately $ 72 million at December 31, 2024 and approximately $ 48 million at December 31, 2023). CNH expects to recognize revenue on approximately 27 % and 81 % of the remaining performance obligations over the next 12 and 36 months, respectively (approximately 30 % and 90 % at of December 31, 2024 and approximately 32 % and 95 % at of December 31, 2023, respectively).
Note 4: Receivables
Trade Receivables, net
As of December 31, 2025 and 2024, the Company had trade receivables of $ 226 million and $ 125 million, respectively. Trade receivables are shown net of allowances for credit losses of $ 27 million and $ 21 million at December 31, 2025 and 2024 respectively. Trade accounts have significant concentrations of credit risk in the Agriculture and Construction segments. There is not a disproportionate concentration of credit risk in any geographic region.
The Industrial Activities businesses sell a significant portion of their trade receivables to Financial Services and provide compensation to Financial Services at approximate market interest rates.
Financing Receivables, net
A summary of financing receivables included in the Consolidated Balance Sheets as of December 31, 2025 and 2024 is as follows (in millions of dollars):
As of December 31,
Retail
Wholesale
Other
Total
Included in the financing receivables balance at December 31, 2025 and 2024, is unearned finance income and unamortized deferred fees and costs of $ 722 million and $ 533 million, respectively, and allowance for credit losses of $ 572 million and $ 424 million, respectively.
CNH 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 seven 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, from the financing of dealer operations. Under the standard terms of the wholesale receivable agreements, these receivables typically have "interest-free" periods of up to twelve months and stated original maturities of up to twenty-four months , with repayment accelerated upon the sale of the underlying equipment by the dealer. During the interest-free period, Financial Services is compensated by Industrial Activities based on market interest rates. After the expiration of any "interest-free" period, interest is charged to dealers on outstanding balances until CNH receives payment in full. The "interest-free" periods are determined based on the type of equipment sold and the time of year of the sale. The Company evaluates and assesses dealers on an ongoing basis as to their creditworthiness. CNH may be obligated to repurchase the dealer's equipment upon cancellation or termination of the dealer's contract for such causes as change in ownership, closeout of the business, or default. There were no significant losses in 2025, 2024 or 2023 relating to the termination of dealer contracts.
Maturities of financing receivables as of December 31, 2025 are as follows (in millions of dollars):
As of December 31, 2025
2031 and thereafter
Total
It has been the Company's experience that substantial portions of retail receivables, which include retail notes and finance leases, are repaid before their contractual maturity dates. As a result, the above table should not be regarded as a forecast of future cash collections. Financing receivables has significant concentrations of credit risk in the agriculture and construction business sectors. On a geographic basis, there is not a disproportionate concentration of credit risk in any area. The Company typically retains, as collateral, a security interest in the equipment associated with retail and wholesale receivables, while revolving charge accounts are generally unsecured.
Transfers of Financial Assets
As part of its overall funding strategy, CNH periodically transfers certain receivables into bankruptcy-remote special purpose entities ("SPEs") as part of its asset-backed securitization ("ABS") programs or through factoring transactions.
Assets transferred to SPEs are legally isolated and their related cash flows are restricted to satisfy the SPEs’ obligations. The SPEs, including certain VIE trusts, are consolidated as CNH has both the power to direct their significant activities and exposure to potentially significant benefits or losses. Accordingly, transfers to these entities do not qualify for sale accounting and are recorded as secured borrowings.
CNH may retain subordinated interests but does not guarantee securities issued by the trusts. CNH provides customary representations and warranties, which may require it to repurchase receivables if those representations or warranties are breached. The trusts generally terminate upon final investor distributions or exercise of a cleanup call.
Factoring transactions may be with or without recourse. Transfers that include deferred purchase price features, first‑loss positions, or other forms of continuing involvement do not meet the criteria for derecognition. In those cases, CNH continues to recognize the receivables and records a corresponding liability within asset‑backed financing.
The secured borrowings related to the transferred receivables are obligations that are payable as the receivables are collected. At December 31, 2025 and 2024, the carrying amount of such restricted assets included in financing receivables are the following (in millions of dollars):
As of December 31,
Retail
Wholesale
Total
Allowance for Credit Losses
CNH's allowance for credit losses is segregated into two portfolio products: retail and wholesale. A portfolio product is the level at which CNH develops a systematic methodology for determining its allowance for credit losses. Further, the class
of receivables by which CNH evaluates its portfolio products is by geographic region. Typically, CNH's receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. The classes align with management reporting.
Allowance for credit losses activity for the year ended December 31, 2025, is as follows (in millions of dollars):
Year Ended December 31, 2025
Retail
Wholesale
Balance at beginning of year
Provision
Charge-offs
Recoveries
Foreign currency translation and other
Balance at end of year
For the period ended on December 31, 2025, the allowance for credit losses incl uded an increase in retail reserves of $ 121 million for Brazil as compared to December 31, 2024. This increase reflects Brazilian market conditions, primarily related to current crop prices, flooding, and drought events. CNH plans to continue updating the macroeconomic factors in future periods, as warranted. The provision for credit losses is included in "Selling, general and administrative" expenses in the Consolidated Statements of Operations.
Allowance for credit losses activity for the year ended December 31, 2024, is as follows (in millions of dollars):
Year Ended December 31, 2024
Retail
Wholesale
Balance at beginning of year
Provision
Charge-offs
Recoveries
Foreign currency translation and other
Balance at end of year
Allowance for credit losses activity for the year ended December 31, 2023, is as follows (in millions of dollars):
Year Ended December 31, 2023
Retail
Wholesale
Balance at beginning of year
Provision
Charge-offs
Recoveries
Foreign currency translation and other
Balance at end of year
CNH assesses and monitors the credit quality of its financing receivables based on delinquency status. Receivables are considered past due if the required principal and interest payments have not yet been received as of the date such payments were due. Delinquency is reported on financing receivables greater than 30 days past due. Non-performing financing receivables represent receivables for which CNH has ceased accruing finance income. These receivables are generally over 90 days past due. Accrued interest is charged off to interest income. Interest income charged-off was not material for the year ended December 31, 2025.
Interest accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at that time. As the terms for retail financing receivables are greater than one year, the performing/non-performing information is presented by year of origination for North America, South America and Asia Pacific.
The aging of financing receivables and charge-offs by vintage, net of allowance for credit losses, as of December 31, 2025, is as follows (in millions of dollars):
31-60 Days
Past Due
61-90 Days
Past Due
Total Past
Due
Current
Total
Performing
Non-
Performing
Total
Gross Charge-offs
Retail
North America
Prior to 2021
Total
South America
Prior to 2021
Total
Asia Pacific
Prior to 2021
Total
EMEA
Total Retail
Wholesale
North America
South America
Asia Pacific
EMEA
Total Wholesale
The aging of financing receivables and charge-offs by vintage, net of allowance for credit losses, as of December 31, 2024, is as follows (in millions of dollars):
31-60 Days
Past Due
61-90 Days
Past Due
Total Past
Due
Current
Total
Performing
Non-
Performing
Total
Gross Charge-offs
Retail
North America
Prior to 2020
Total
South America
Prior to 2020
Total
Asia Pacific
Prior to 2020
Total
EMEA
Total Retail
Wholesale
North America
South America
Asia Pacific
EMEA
Total Wholesale
Modifications
CNH periodically modifies the terms of finance receivable agreements with customers experiencing financial difficulties. Typically, the types of modifications granted are payment deferrals, extended contract maturities, modification of a contractual interest rate or waiving of interest and principal. As a collateral-based lender, CNH has recourse to the financed assets on default. The Company continues to monitor the credit quality of these modified financing receivables. CNH's allowance for credit losses incorporates historical loss information, including the effects of the modified financing receivables. Therefore, additional adjustments to the allowance are generally not recorded upon modification of the financing receivable.
As of December 31, 2025, modifications of CNH's retail and wholesale receivables for customers experiencing financial difficulties and defaults and subsequent write-offs of receivables modified for the year ended December 31, 2025 were immaterial.
Due to conditions in the Brazilian market, including crop prices and extreme weather events like flooding and drought, CNH has offered payment refinancing to South American customers. These refinancings are not deemed to be modifications as they are insignificant adjustments to the contract. To qualify, customers must make partial payments on their outstanding installments. As of December 31, 2025, $ 126 million of installments were refinanced relating to $ 513 million of retail Agricultural receivables in South America. As of December 31, 2024, $ 95 million of installments were refinanced relating to $ 380 million of retail Agricultural receivables in South America. As of December 31, 2025, these refinancings demonstrated a higher delinquency rate, specifically those greater than 90 days past due, compared to non-refinanced receivables within the portfolio. CNH has taken this into account when provisioning for credit losses.
Note 5: Inventories
Inventories as of December 31, 2025 and 2024 consist of the following (in millions of dollars):
As of December 31,
Raw materials
Work-in-process
Finished goods
Total Inventories
Note 6: Property, Plant and Equipment
A summary of property, plant and equipment as of December 31, 2025 and 2024 is as follows (in millions of dollars):
As of December 31,
Land and industrial buildings
Plant, machinery and equipment
Construction in progress
Other
Gross property, plant and equipment
Accumulated depreciation
Net property, plant and equipment
Property, plant and equipment recorded under capital leases were immaterial as of December 31, 2025 and 2024.
Depreciation expenses on the above property, plant and equipment totaled $ 267 million, $ 235 million and $ 213 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The Company had contractual commitments of $ 48 million and $ 76 million for the acquisition of property, plant and equipment at December 31, 2025 and 2024, respectively.
Note 7: Investments in Unconsolidated Affiliates
A summary of investments in unconsolidated affiliates as of December 31, 2025 and 2024 is as follows (in millions of dollars):
As of December 31,
Equity method
Other investments, at carrying value
Total
At December 31, 2025, the Company recognized a $ 62 million non-cash impairment on our investment in Monarch Tractors and other minority holdings within Other investments, at carrying value.
A summary of the combined results of operations and financial position as reported by the investees that CNH accounts for using the equity method is as follows (in millions of dollars, unaudited):
Years Ended December 31,
Net revenue
Income before taxes
Net income
As of December 31,
Total assets
Total liabilities
Total equity
The investees included in these tables primarily consist of TürkTraktör ve Ziraat Makineleri A.S. ( 37.5 % ownership), New Holland HFT Japan Inc. ( 50.0 % ownership), CNH de Mexico S.A. de C.V. ( 50.0 % ownership), Al Ghazi Tractors Ltd. ( 43.2 % ownership) and CIFINS S.p.a ( 50.0 % ownership) .
Note 8: Leases
Lessee
The Company leases certain buildings, plant and machinery, vehicles, and information technology ("IT") equipment for its own use. A lease is a contract that conveys the right to control the use of an identified asset (the leased asset) for a period of time in exchange for consideration. The lease term determined by the Company comprises the non-cancellable period of the lease contract together with both periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. For real estate leases, this assessment is based on an analysis by management of all relevant facts and circumstances including the leased asset's purpose, the economic and practical potential for replacing and any plans that the Company has in place for the future use of the asset. For lease agreements, we combine lease and non-lease components.
For leases with terms not exceeding twelve months (short-term leases), the Company recognizes the lease payments associated with those leases on a straight-line basis over the lease term as operating expense in the Consolidated Statements of Operations. Leases with a term of 12 months or less are not recorded in the Consolidated Balance Sheets. For these leases the Company recognized, on a straight-line basis over the lease term, lease expenses of $ 4 million, $ 5 million and $ 10 million for the year ended December 31, 2025, 2024 and 2023, respectively.
For all other leases, the right-of-use asset includes the amount of lease liability recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Correspondingly, the Company recognizes a lease liability, measured at the present value of lease payments to be made over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. The incremental borrowing rate is determined considering macro-economic factors such as the specific interest rate curve based on the relevant currency and term, as well as specific factors contributing to CNH's credit spread. The Company primarily uses the incremental borrowing rate as the discount rate for its lease liabilities.
For finance leases, the right-of-use asset is classified within "Property, plant and equipment, net" and the lease liability, within "Debt". Assets held under finance leases, which the Company assumes substantially all the risks and rewards of ownership, are recognized as assets of the Company at the lower of fair value or present value of the minimum lease payments.
In the case of operating leases, the right-of-use asset is classified within "Other assets" and the lease liability, within "Other liabilities". After the commencement date, the Company recognizes in profit or loss a single lease cost, calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis. In particular, after lease commencement, the lease liability is measured at the present value of any remaining lease payments, discounted by using the rate determined at lease commencement, consistently with the model used to calculate the liability related to the finance lease. Correspondingly, the right-of-use asset is measured as the lease liability adjusted by
accrued or prepaid rents (i.e., the aggregate difference between the cash payment and straight-line lease cost), remaining unamortized initial direct costs and lease incentives, and any impairments of the right-of-use asset.
For long-term leases recorded in the Consolidated Balance Sheets, the Company incurred operating lease expenses of $ 108 million, $ 106 million and $ 93 million for the years ended December 31, 2025, 2024 and 2023, respectively.
At December 31, 2025 and 2024, the Company recorded approximately $ 264 million and $ 275 million of right-of-use asset, respectively, and $ 272 million and $ 282 million of lease liability included in " Other assets" and " Other liabilities" , respectively. At December 31, 2025 and 2024, 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 4.5 years and 4.6 %, and 5.1 and 4.5 %, respectively.
During the years ended December 31, 2025 and 2024, leased assets obtained in exchange for operating lease obligations were $ 77 million and $ 84 million, respectively. During the years ended December 31, 2025 and 2024, operating cash outflow for amounts included in the measurement of operating lease obligations was $ 108 million and $ 103 million, respectively.
Future minimum lease payments under non-cancellable leases as of December 31, 2025, were as follows (in millions of dollars):
Operating Leases
2031 and thereafter
Total future minimum lease payments
Less: Interest
Total
Lessor
The Company, primarily through its Financial Services segment, purchases leases and equipment from CNH dealers and other independent third parties that have leased equipment to retail customers under operating leases. Financial Services' investment in operating leases is based on the purchase price paid for the equipment. Income from these operating leases is recognized over the term of the lease. 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. The equipment is depreciated on a straight-line basis over the term of the lease to the estimated residual value at lease termination. Residual values are estimated at the inception of the lease and are reviewed quarterly. Realization of the residual values is dependent on Financial Services' future ability to re-market the equipment under then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Management believes that the estimated residual values are realizable. Expenditures for maintenance and repairs of the applicable equipment are the responsibility of the lessee.
Financial Services evaluates the carrying amount of equipment on operating leases for potential impairment when it determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability identifies a possible impairment, the asset's fair value is measured in accordance with the fair value measurement framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value.
Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded in inventory at the lower of net book value or estimated fair value of the equipment, less cost to sell, and is not depreciated. Matured operating lease inventory is reported in "Inventory."
A summary of equipment on operating leases as of December 31, 2025, and 2024 is as follows (in millions of dollars):
As of December 31,
Equipment on operating leases
Accumulated depreciation and other changes
Net equipment on operating leases
Depreciation expense on equipment under operating leases is recorded in "Other, net" and amounted to $ 197 million, $ 188 million and $ 187 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The following table sets out a maturity analysis of operating lease payments, showing the undiscounted lease payments to be received after the reporting date (in millions of dollars):
Amount
2031 and thereafter
Total undiscounted lease payments
Note 9: Goodwill and Other Intangibles
Changes in the carrying amount of goodwill, for the years ended December 31, 2025 and 2024 are as follows (in millions of dollars):
Agriculture
Construction
Financial
Services
Total
Balance at December 31, 2023
Foreign currency translation and other
Balance at December 31, 2024
Foreign currency translation and other
Balance at December 31, 2025
Impairment testing for goodwill is done at a reporting unit level. Under the goodwill impairment test, CNH's estimate of the fair value of the reporting unit is compared with its carrying value. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. CNH has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary.
Goodwill and other indefinite-lived intangible assets are tested for impairment annually or more frequently if a triggering event occurs that would indicate it is more likely than not that the fair value of a reporting unit is less than book value. At December 31, 2025 the Company completed its annual impairment assessment and concluded there were no impairments to goodwill for any of the reporting units. As of December 31, 2025 the estimated fair values of each reporting unit with goodwill exceeded the carrying value by more than 36 %.
As of December 31, 2025 and 2024, the Company's other intangible assets and related accumulated amortization consisted of the following (in millions of dollars):
As of December 31,
Weighted
Avg. Life
Gross
Accumulated
Amortization
Net
Gross
Accumulated
Amortization
Net
Other intangible assets subject to amortization:
Dealer networks
Patents, concessions, licenses and other
Capitalized software
Other intangible assets not subject to amortization:
In-process research and development
Software in-progress
Trademarks
Total other intangible assets
During 2025, the Company recorded a $ 172 million non-cash impairment charge related to the IPR&D assets within the Agriculture segment, including $ 123 million associated with the Raven acquisition and $ 49 million related to the Bennamann acquisition. The IPR&D assets acquired through the Raven transaction represent core underlying technology supporting autonomous farming solutions, including the integration of autonomous capabilities into CNH tractors and implements. The impairment charge related to the Raven assets was primarily driven by reduced projected cash flows resulting from revisions to the expected commercialization timeline. The IPR&D assets acquired as part of the Bennamann acquisition relate to technologies that capture methane emissions from livestock waste and convert them into better-than-zero carbon biofuel. The impairment charge related to the Bennamann assets was primarily due to reduced projected cash flows following a narrowing of strategic focus to the cleaning and upgrading of methane waste.These charges are included in "Research and development expenses" in the Consolidated Statements of Operations and in "Other non-cash items" within Operating Activities in the Consolidated Statements of Cash Flows. During 2024, the Company recorded an $ 11 million impairment charge related to an IPR&D asset in the Agriculture segment, which is also included in "Research and development expenses" in the Consolidated Statements of Operations.
CNH recorded amortization expenses of $ 165 million, $ 182 million and $ 164 million during 2025, 2024 and 2023, respectively.
Based on the current amount of other intangible assets subject to amortization, the estimated annual amortization expense for each of the succeeding 5 years is expected to be as follows: $ 160 million in 2026; $ 136 million in 2027; $ 87 million in 2028; $ 60 million in 2029 and $ 56 million in 2030.
Note 10: Debt
Credit Facilities
Lenders of committed credit facilities have the obligation to make advances up to the facility amount. Lenders of uncommitted facilities have the right to terminate the agreement with prior notice to CNH. At December 31, 2025, CNH's available committed unsecured facilities expiring after twelve months amounted to $ 6.5 billion, of which $ 1.3 billion for Financial Services ($ 5.5 billion at December 31, 2024, of which $ 1.2 billion for Financial Services).
Euro 3.25 billion Revolving Credit Facility: On April 19, 2024, the Company terminated its five-year committed revolving credit agreement dated March 18, 2019 (as amended and restated on December 10, 2021) and entered into a new five-year credit agreement, which provides for an unsecured, committed revolving credit facility in an aggregate principal amount equal to € 3.25 billion. The Company may elect to increase the total commitments under the credit facility up to an additional € 500 million on the terms set forth in the credit agreement. In March 2025, the Company extended the maturity date by one year on the terms set forth in the credit agreement. As such, the credit agreement will mature and all
outstanding loans will become due and payable on April 19, 2030, or such later date as may be extended pursuant to a remaining one-year extension option which is available to the Company on the terms set forth in the credit agreement.
The credit facility contains customary covenants (including a negative pledge, a status (or pari passu ) covenant and restrictions on the incurrence of indebtedness by certain subsidiaries) and customary events of default, some of which are subject to minimum thresholds and customary mitigants (including cross acceleration provisions, failure to pay amounts due or to comply with certain provisions under the credit agreement, the occurrence of certain bankruptcy-related events) and mandatory prepayment obligations upon a change in control of the Company. At December 31, 2025, the Company was in compliance with all covenants in the credit agreement.
At December 31, 2025, Financial Services' committed asset-backed facilities expiring after twelve months amounted to $ 3.7 billion ($ 3.7 billion at December 31, 2024), of which $ 3.5 billion at December 31, 2025 ($ 3.1 billion at December 31, 2024) were utilized.
Repurchase Agreement
We are a party to a Global Master Repurchase Agreement which expires in September 2026. As of December 31, 2025, the Company had sold, and not yet repurchased, CAD 450.0 million ($ 328.7 million) of Canadian receivables under the repurchase agreement, with an obligation to repurchase such receivables in 30 days. The repurchase agreement is treated as a financing arrangement for accounting purposes.
Commercial Paper Programs
CNH Industrial Capital LLC had no outstanding commercial paper as of December 31, 2025 ($ 100 million outstanding at December 31, 2024).
Banco CNH Industrial Capital S.A. outstanding commercial paper totaled $ 294 million as of December 31, 2025 ($ 202 million outstanding at December 31, 2024).
Support Agreement in the Interest of CNH Industrial Capital LLC
CNH Industrial Capital LLC benefits from a support agreement issued by CNH Industrial N.V., pursuant to which CNH Industrial N.V. agrees to, among other things, (a) make cash capital contributions to CNH Industrial Capital LLC, to the extent necessary to cause its ratio of net earnings available for fixed charges to fixed charges to be not less than 1.05 :1.0 for each fiscal quarter (with such ratio determined, on a consolidated basis and in accordance with U.S. GAAP, for such fiscal quarter and the immediately preceding three fiscal quarters taken as a whole), (b) generally maintain an ownership of at least 51 % of the voting equity interests in CNH Industrial Capital LLC and (c) cause CNH Industrial Capital LLC to have, as of the end of any fiscal quarter, a consolidated tangible net worth of at least $ 50 million. The support agreement is not intended to be, and is not, a guarantee by CNH Industrial N.V. of the indebtedness or other obligations of CNH Industrial Capital LLC. The obligations of CNH Industrial N.V. to this support agreement are to CNH Industrial Capital LLC only and do not run to, and are not enforceable directly by, any creditor of CNH Industrial Capital LLC, including holders of the CNH Industrial Capital LLC's notes or the trustee under the indenture governing the notes. The support agreement may be modified, amended or terminated, at CNH Industrial N.V.’s election, upon thirty days' prior written notice to CNH Industrial Capital LLC and the rating agencies of CNH Industrial Capital LLC, if (a) the modification, amendment or termination would not result in a downgrade of CNH Industrial Capital LLC rated indebtedness; (b) the modification, amendment or notice of termination provides that the support agreement will continue in effect with respect to the CNH Industrial Capital LLC rated indebtedness then outstanding; or (c) CNH Industrial Capital LLC has no long-term rated indebtedness outstanding.
Debt
A summary of issued bonds outstanding as of December 31, 2025, is as follows (in millions of dollars, except percentages):
Currency
Face value of outstanding bonds
Issue Date
Coupon
Maturity Date
Outstanding amount
Industrial Activities
Euro Medium Term Notes:
CNH Industrial Finance Europe S.A. (1)
EUR
March 25, 2019
March 25, 2027
CNH Industrial Finance Europe S.A. (1)
EUR
April 21, 2016
April 21, 2028
CNH Industrial Finance Europe S.A. (1)
EUR
July 3, 2019
July 3, 2029
CNH Industrial Finance Europe S.A. (1)
EUR
July 15, 2019
July 15, 2039
CNH Industrial N.V. (2)
EUR
June 11, 2024
June 11, 2031
CNH Industrial N.V. (2)
EUR
November 26, 2025
January 26, 2033
CNH Industrial N.V. (2)
EUR
September 3, 2025
September 3, 2035
Other Bonds:
CNH Industrial N.V. (3)
USD
November 14, 2017
November 15, 2027
Hedging effects, bond premium/discount, and unamortized issuance costs
Total Industrial Activities
Financial Services
CNH Industrial Capital LLC
USD
October 6, 2020
January 15, 2026
CNH Industrial Capital LLC
USD
May 24, 2021
July 15, 2026
CNH Industrial Capital LLC
USD
October 9, 2024
October 8, 2027
CNH Industrial Capital LLC
USD
March 21, 2025
March 21, 2028
CNH Industrial Capital LLC
USD
April 10, 2023
April 10, 2028
CNH Industrial Capital LLC
USD
September 13, 2023
January 12, 2029
CNH Industrial Capital LLC
USD
March 21, 2024
April 20, 2029
CNH Industrial Capital LLC
USD
September 25, 2025
October 16, 2030
CNH Industrial Capital Australia Pty. Limited (4)
AUD
CNH Industrial Capital Canada Ltd.
CAD
August 11, 2023
August 11, 2026
CNH Industrial Capital Canada Ltd.
CAD
March 25, 2024
March 25, 2027
CNH Industrial Capital Canada Ltd.
CAD
October 10, 2024
April 11, 2028
CNH Industrial Capital Canada Ltd.
CAD
June 5, 2025
June 5, 2029
CNH Industrial Capital Argentina
USD
Banco CNH Industrial Capital S.A. (6)
BRL
Hedging effects, bond premium/discount, and unamortized issuance costs
Total Financial Services
(1) Bond listed on the regulated market of Euronext Dublin
(2) Bond listed on the Global Exchange Market of Euronext Dublin
(3) Bond listed on the New York Stock Exchange
(4) Comprised of 4 bonds issued that range in coupon rates of 4.700 % and 5.800 % and mature between July 13, 2026 and June 20, 2028.
(5) Comprised of 5 bonds issued that range in coupon rates of 6.000 % and 8.250 % and mature between March 2, 2026 and November 12, 2028.
(6) Comprised of 22 bonds issued that range in coupon rates of 12.140 % and 18.630 % and mature between May 9, 2026 and December 22, 2032.
A summary of total debt as of December 31, 2025 and 2024, is as follows (in millions of dollars):
As of December 31,
Industrial Activities
Financial Services
Consolidated
Industrial Activities
Financial Services
Consolidated
Total bonds
Asset-backed debt
Other debt
Intersegment debt
Total Debt
Financial payables to Iveco Group N.V.
Total Debt (including Financial payables to Iveco Group N.V.)
The weighted-average interest rate on consolidated debt at December 31, 2025, and 2024 was 5.5 % and 5.7 %, respectively.
The bonds issued by CNH may contain commitments of the issuer, and in certain cases commitments of CNH Industrial N.V. in its capacity as guarantor, which are typical of international practice for bond issues of this type such as, in particular, negative pledge (in relation to quoted indebtedness), a status (or pari passu ) covenant and cross default clauses. A breach of these commitments can lead to the early repayment of the applicable notes. The bonds guaranteed by CNH Industrial N.V. under the Euro Medium Term Note Programme (and its predecessor the Global Medium Term Note Programme), as well as the notes issued by CNH Industrial N.V., contain clauses which could lead to early repayment if there is a change of control of CNH Industrial N.V. leading to a rating downgrading of CNH Industrial N.V.. At December 31, 2025, the Company was in compliance with such obligations and covenants.
Other debt consists primarily of borrowings from banks which are at various terms and rates. Included in Other debt of Financial Services is approximately $ 1.3 billion and $ 1.3 billion at December 31, 2025 and 2024, respectively, of funding provided by the Brazilian development agency, BNDES. The program provides subsidized funding to financial institutions to be loaned to customers to support the purchase of agricultural or construction machinery or commercial equipment in accordance with the program.
A summary of the minimum annual repayments of debt as of December 31, 2025, and thereafter is as follows (in millions of dollars):
Industrial
Activities
Financial
Services
Consolidated
2031 and thereafter
Financial payables to Iveco Group N.V.
Intersegment debt
Costs and premium discounts related to issuances
Total
Please refer to "Note 16: Financial Instruments" for fair value information on debt.
We sell certain of our financial receivables to third parties in order to improve liquidity, to take advantage of market opportunities and, in certain circumstances, to reduce credit and concentration risk in accordance with our risk management objectives.
The sale of financial receivables is executed primarily through ABS transactions and involves retail notes and wholesale receivables originated by our Financial Services subsidiaries from end-use customers and dealers, respectively.
At December 31, 2025, our receivables from financing activities included receivables sold and financed through both ABS and factoring transactions of $ 13.1 billion ($ 13.9 billion at December 31, 2024), which do not meet derecognition requirements and therefore are recorded on our Consolidated Balance Sheets. These receivables are recognized as such
in our financial statements even though they have been legally sold; a corresponding financial liability is recorded in the Consolidated Balance Sheets as debt (see "Note 4: Receivables" to our Consolidated Financial Statements).
Note 11: Supply Chain Finance Programs
Under the supply chain finance ("SCF") programs, administered by a third party, our suppliers are given the opportunity to sell receivables from us to participating financial institutions at their sole discretion. Our responsibility is limited to making payment on the terms originally negotiated with our supplier, regardless of whether the supplier sells its receivable to a financial institution. The range of payment terms we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the program. No guarantees are provided by the Company under the SCF program.
As of December 31, 2025 and 2024, $ 95 million and $ 79 million, respectively, of obligations remain outstanding that we have confirmed as valid to the administrators of the SCF programs. We have no economic interest in a supplier's decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program. These balances are included within " Trade payables " in our Consolidated Balance Sheets and are reflected as "Cash Flows from Operating Activities" in our Consolidated Statements of Cash Flows when settled.
Changes in the outstanding obligation for the years ended December 31, 2025 and 2024, are as follows (in millions of dollars):
Years Ended December 31,
Balance at beginning of year
Invoices confirmed during the year
Confirmed invoices paid during the year
Currency translation adjustment and other
Balance at end of year
Note 12: Income Taxes
CNH Industrial N.V. and its subsidiaries have substantial worldwide operations and incur tax obligations in the jurisdictions in which they operate. The Company's provision for income taxes as reported in its Consolidated Statements of Operations for the year ended December 31, 2025, of $ 184 million consists almost entirely of income taxes related to subsidiaries of CNH Industrial N.V..
The sources of income before taxes and equity in income of unconsolidated affiliates for the years ended December 31, 2025, 2024 and 2023 are as follows (in millions of dollars):
Years Ended December 31,
Parent country source
Foreign sources
Consolidated income before income taxes
The provision for income taxes for the years ended December 31, 2025, 2024 and 2023 consisted of the following (in millions of dollars):
Years Ended December 31,
Parent country source
Foreign sources
Total current income taxes
Parent country source
Foreign sources
Total deferred income taxes
Total income tax provision
CNH Industrial N.V. is incorporated in the Netherlands but is a tax resident of the U.K. The reconciliation of the differences
between the provision for income taxes and the statutory rate is presented based on the weighted-average of the U.K. statutory corporation tax rates in force over each of the Company's calendar year reporting periods; specifically, the tax rate are 25.0 %, 25.0 % and 23.5 % for the years ended December 31, 2025, 2024 and 2023, respectively.
Reconciliation of CNH's income tax expense for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09 is presented in the following table (in millions of dollars):
Years Ended December 31,
Consolidated income taxes
Amount
Percent
U.K. Federal Statutory Tax Rate
Foreign Tax Effects
Argentina
Hyper-inflationary tax impacts
Statutory tax rate difference
Valuation allowance
Other
Brazil
NID (1)
Other
Italy
Tax incentives
Functional Currency
Other
Total Other Jurisdictions
Effect of Cross-Border Tax Laws
NID (1)
Other
Valuation Allowance
Nontaxable or Nondeductible Items
Functional Currency
Other Adjustments
Changes in Unrecognized Tax Benefits
Other Adjustments
Total
(1) Notional interest deduction on qualifying equity under local tax law.
Reconciliations of CNH's income tax expense in accordance with the guidance prior to the adoption of ASU 2023-09 for the years ended December 31, 2024 and 2023 are as follows (in millions of dollars):
Years Ended December 31,
Tax provision at the parent statutory rate
Foreign income taxed at different rates
Change in valuation allowance
Tax contingencies
Tax credits and incentives
Hyper-inflationary tax impacts
Withholding taxes
Other
Total income tax provision
The reduction in tax expense in 2025 as compared to 2024 was largely attributable to lower profit-before-tax. However, the 2025 effective tax rate increased due to the year-over-year tax impact of Argentina's highly inflationary economy and the non-recognized tax benefits associated with the non-cash impairment charges related to Monarch Tractors and IPR&D acquired as part of the Raven acquisition. In 2025, we also recorded a valuation allowance against deferred tax assets generated by Bennamann.
The change in tax expense in 2024 as compared to 2023 was largely attributable to lower income before-tax and the tax impact from Argentina's highly inflationary economy, as identified in the table above. The 2024 tax expense was also reduced by the recognition of $ 29 million of previously unrecognized deferred tax benefit assets in China, offset by the de-recognition of $ 35 million of deferred tax assets in Argentina, increases in withholding tax on dividends, and lower benefits from U.S. exports.
At December 31, 2025, undistributed earnings in certain subsidiaries outside the U.K. totaled approximately $ 14 billion, of which $ 1 billion could give rise to tax costs upon distribution. The company has not recorded a deferred tax liability related to its undistributed earnings because the remittance of earnings to the U.K. would either incur no tax, or because such earnings are indefinitely reinvested. The Company has determined the amount of unrecognized deferred tax liability relating to the $ 1 billion of undistributed earnings that would be taxable if distributed was approximately $ 147 million and was attributable to withholding taxes and incremental local country income taxes in certain jurisdictions. The repatriation of undistributed earnings from subsidiaries to the U.K. is generally exempt from U.K. income taxes and as such there is no deferred tax liability associated with the receipt of undistributed earnings by the U.K. tax-resident parent entity from its subsidiaries in non-U.K. jurisdictions. Finally, the Company evaluated the undistributed earnings from joint ventures in which it owned 50% or less and recorded $ 9 million of deferred tax liabilities as of December 31, 2025.
Deferred Income Tax Assets and Liabilities
The components of net deferred tax assets as of December 31, 2025 and 2024 are as follows (in millions of dollars):
As of December 31,
Deferred tax assets:
Warranty and campaigns
Allowance for credit losses
Marketing and sales incentive programs
Other risk and future charges reserve
Pension, postretirement and postemployment benefits
Leasing liabilities
Research and development costs
Other reserves
Tax credits and loss carry forwards
Other
Less: Valuation allowances
Total deferred tax assets
Deferred tax liabilities:
Property, plant and equipment
Intangibles
Inventories
Other
Total deferred tax liabilities
Net deferred tax assets
Net deferred tax assets are reflected in the accompanying Consolidated Balance Sheets as of December 31, 2025 and 2024 as follows (in millions of dollars):
As of December 31,
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets
Valuation Allowances
As of December 31, 2025, the Company has valuation allowances of $ 209 million against certain deferred tax assets, including tax loss carry forwards, tax credits and other deferred tax assets. These valuation allowances are primarily attributable to certain operations in Argentina, Germany, and the U.K.
CNH has gross tax loss carry forwards in several tax jurisdictions. These tax losses expire as follows: $ 4 million in 2026; $ 4 million in 2027; $ 2 million in 2028; $ 22 million in 2029; $ 190 million in 2030 and beyond. CNH also has tax loss carry forwards of approximately $ 890 million with indefinite lives. CNH has tax credit carry forwards of $ 44 million of which $ 3 million will expire in 2026, $ 2 million will expire in 2027, $ 5 million will expire in 2028, $ 4 million will expire in 2029, and $ 30 million will expire in 2030 and beyond.
Income Taxes Paid
Income taxes paid, net of refunds, by jurisdiction for the years ended December 31, 2025, 2024 and 2023 were as follows:
Years Ended December 31,
United Kingdom
Foreign:
Austria
Brazil
Canada
India
Italy
United States
All other foreign
Total
Uncertain Tax Positions
The Company files income tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. The Company has open tax years from 2006 to 2025. Due to the global nature of the Company's business, transfer pricing disputes may arise, and the Company may seek correlative relief through the competent authority process. The Company has considered the possibility of correlative relief when booking contingencies related to transfer pricing. The lapsing of statutes, closure of currently on-going audits, or initiation of new audits in the next 12 months is not expected to have a material adverse effect on the Company's financial positions or results of operations.
A reconciliation of the gross amounts of tax contingencies at the beginning and end of the year is as follows (in millions of dollars):
Years Ended December 31,
Balance at beginning of year
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Reductions for tax positions as a result of lapse of statute
Settlements
Balance at end of year
As of December 31, 2025, there are $ 271 million of unrecognized tax benefits before consideration of interest and penalties and $ 332 million of unrecognized tax benefits after consideration of interest and penalties that, if recognized, would affect the effective tax rate.
The Company recognizes interest and penalties accrued related to tax contingencies as part of the income tax provision. During the years ended December 31, 2025, 2024 and 2023, the Company recognized expense of approximately $ 12 million, $ 22 million and $ 7 million for income tax-related interest and penalties, respectively. The Company had approximately $ 61 million, $ 47 million and $ 25 million of income tax-related interest and penalties accrued at December 31, 2025, 2024 and 2023, respectively.
Note 13: Employee Benefit Plans and Postretirement Benefits
During the years ended December 31, 2025, 2024 and 2023, CNH recorded expenses of $ 133 million, $ 138 million and $ 145 million, respectively, for its defined contribution plans.
Obligations and Funded Status
The following summarizes data from CNH's defined benefit pension, healthcare and other postemployment plans for the years ended December 31, 2025 and 2024 (in millions of dollars):
Pension
Healthcare (1)
Other (1)
Years Ended December 31,
Years Ended December 31,
Years Ended December 31,
Change in benefit obligations:
Beginning benefit obligation
Service cost
Interest cost
Plan participants' contributions
Actuarial loss (gain)
Gross benefits paid
Plan amendments
Currency translation adjustments and other
Ending benefit obligation
Change in the fair value of plan assets:
Beginning plan assets
Actual return on plan assets
Employer contributions
Plan participants' contributions
Gross benefits paid
Currency translation adjustments and other
Ending plan assets
Funded status:
(1) The healthcare and other postemployment plans are not required to be prefunded.
The following summarizes data from CNH's defined benefit pension plans by significant geographical area for the years ended December 31, 2025 and 2024 (in millions of dollars):
Germany (1)
Other Countries (1)
Years Ended December 31,
Years Ended December 31,
Years Ended December 31,
Years Ended December 31,
Change in benefit obligations:
Beginning benefit obligation
Service cost
Interest cost
Plan participants' contributions
Actuarial loss (gain)
Gross benefits paid
Plan amendments
Currency translation adjustments and other
Ending benefit obligation
Change in the fair value of plan assets:
Beginning plan assets
Actual return on plan assets
Employer contributions
Plan participants' contributions
Gross benefits paid
Currency translation adjustments and other
Ending plan assets
Funded status:
(1) Pension benefits in Germany and some other countries are not required to be prefunded.
Net amounts recognized in the Consolidated Balance Sheets as of December 31, 2025 and 2024 consist of (in millions of dollars):
Pension
Healthcare
Other
As of December 31,
As of December 31,
As of December 31,
Other assets
Pension, postretirement and other postemployment benefits
Net liability recognized at end of year
Pre-tax amounts recognized in accumulated other comprehensive loss as of December 31, 2025, consist of (in millions of dollars):
As of December 31, 2025
Pension
Healthcare
Other
Unrecognized actuarial losses (gains)
Unrecognized prior service credit
Accumulated other comprehensive (income) loss
The following table summarizes the aggregate pension accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets (in millions of dollars):
Pension
As of December 31,
Accumulated benefit obligation
Fair value of plan assets
The following table summarizes CNH's pension and other postemployment plans with projected benefit obligations in excess of plan assets (in millions of dollars):
Pension
Healthcare
Other
As of December 31,
As of December 31,
As of December 31,
Projected benefit obligation
Fair value of plan assets
The total accumulated benefit obligation for pension was $ 1,197 million and $ 1,152 million as of December 31, 2025 and 2024, respectively.
Net Periodic Benefit Cost
The following summarizes the components of net periodic benefit cost (income) of CNH's defined benefit for the years ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Pension
Healthcare
Other
Years Ended December 31,
Years Ended December 31,
Years Ended December 31,
Service cost
Interest cost
Expected return on assets
Amortization of:
Prior service cost (credit)
Actuarial loss (gain)
Settlement loss and other
Net periodic benefit cost (income)
Net periodic benefit cost (income) recognized in net income and other changes in plan assets and benefit obligations that are recognized in other comprehensive loss during the year ended December 31, 2025 consist of (in millions of dollars):
Year Ended December 31, 2025
Pension
Healthcare
Other
Net periodic benefit cost (income)
Benefit adjustments included in other comprehensive (income) loss:
Net actuarial loss (gain)
Amortization of actuarial (loss) gain
Amortization of prior service (cost) credit
Curtailment of prior service credit
Currency translation adjustments and other
Total recognized in other comprehensive (income) loss
Total recognized in comprehensive (income) loss
Assumptions
The following assumptions were utilized in determining the funded status at December 31, 2025 and 2024, and the net periodic benefit cost of CNH's defined benefit plans for the years ended December 31, 2025, 2024 and 2023 (in percentages):
Pension plans
Healthcare plans
Other
Years Ended December 31,
Years Ended December 31,
Years Ended December 31,
Weighted-average rate assumptions used to determine funded status
Discount rate
Rate of compensation increase
Initial healthcare cost trend rate
Ultimate healthcare cost trend rate (1)
Weighted-average rate assumptions used to determine expense
Discount rates—service cost
Discount rates—interest cost
Rate of compensation increase
Long-term rates of return on plan assets
Initial healthcare cost trend rate
Ultimate healthcare cost trend rate (1)
(1) CNH expects to achieve the ultimate healthcare cost trend rate in 2037 for U.S. plans. A flat trend rate assumption is utilized for the Canada plans.
Assumed discount rates are used in measurements of pension, healthcare and other postemployment benefit obligations and interest cost components of net periodic cost. CNH selects its assumed discount rates based on the consideration of equivalent yields on high-quality fixed income investments at the measurement date. The assumed discount rate is used to discount future benefit obligations back to today's dollars. The discount rates for the U.S., European, U.K. and Canadian obligations are based on a benefit cash flow-matching approach and represent the rates at which the benefit obligations could effectively be settled as of the measurement date, December 31. The benefit cash flow-matching approach involves analyzing CNH's projected cash flows against a high-quality bond yield curve, mainly calculated using a wide population of AA-grade corporate bonds subject to minimum amounts outstanding and meeting other defined selection criteria. The discount rates for the Company's remaining obligations are based on benchmark yield data of high-quality fixed income investments for which the timing and amounts of payments approximate the timing and amounts of projected benefit payments.
The expected long-term rate of return on plan assets reflects management's expectations on long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. The expected return is based on the outlook for inflation, fixed income returns and equity returns while also considering asset allocation and investment strategy, premiums for active management to the extent asset classes are actively managed, and plan expenses. Return patterns and correlations, consensus return forecasts, and other relevant financial factors are analyzed to check for reasonability and appropriateness.
The assumed healthcare trend rate represents the rate at which healthcare costs are assumed to increase. Rates are determined based on company-specific experience, consultation with actuaries and outside consultants, and various trend factors including general and healthcare sector-specific inflation projections from the United States Department of Health and Human Services Healthcare Financing Administration. The initial trend is a short-term assumption based on recent experience and prevailing market conditions. The ultimate trend is a long-term assumption of healthcare cost inflation based on general inflation, incremental medical inflation, technology, new medicine, government cost-shifting, utilization changes, an aging population, and a changing mix of medical services.
CNH annually reviews the mortality assumptions and demographic characteristics of its pension plan and healthcare plan participants. For its U.S. pension and healthcare plans, the Company continued to use the adopted MP 2021 mortality improvement scale as it continues to be the most current . At this time the Company is not adjusting to the MP 2021 for any short-term or long-term impacts COVID may have on mortality improvement scales issued in the future. For its U.K. pension plans, the Company elected to utilize the CMI 2024 mortality improvement table.
The Company uses the spot yield curve approach to estimate the service and interest cost components of the net periodic pension and other postretirement benefit costs by applying the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows.
Plan Assets
The investment strategy for the plan assets depends on the features of the plan and on the maturity of the obligations. Typically, less mature plan benefit obligations are funded by using more equity securities as they are expected to achieve long-term growth exceeding the rate of inflation. More mature plan benefit obligations are funded using more fixed income securities as they are expected to produce current income with limited volatility. Risk management practices include the use of multiple asset classes and investment managers within each asset class for diversification purposes. Specific guidelines for each asset class and investment manager are implemented and monitored.
Weighted-average target asset allocation for all plans for December 31, 2025 are as follows:
As of December 31, 2025
All Plans
Asset category:
Equity securities
Debt securities
Cash/Other
CNH determines the fair value of plan assets using observable market data obtained from independent sources when available. CNH classifies its plan assets according to the fair value hierarchy:
• Level 1—Quoted prices for identical instruments in active markets.
• Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
• Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The following summarizes the fair value of plan assets by asset category and levels within the fair value hierarchy as of December 31, 2025 (in millions of dollars):
As of December 31, 2025
Total
Level 1
Level 2
Level 3
Fixed income securities:
U.S. government bonds
U.S. corporate bonds
Non-U.S. government bonds
Non-U.S. corporate bonds
Mortgage-backed securities
Other fixed income
Total Fixed income securities
Other types of investments:
Mutual funds (1)
Insurance contracts
Derivatives—credit contracts
Real estate
Total Other types of investments
Cash:
Total of Level 1, Level 2 and Level 3 Assets
Investments at net asset value:
Mutual funds (2)
Total Net Assets
(1) This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds.
(2) This category includes open-ended mutual fund, the underlying assets of the mutual fund are illiquid in nature and are not classified in the fair value hierarchy using the net asset per share practical expedient.
The following table presents the changes in the Level 3 plan assets for the year ended December 31, 2025 (in millions of dollars):
Level 3 Assets
Balance at December 31, 2024
Actual return on plan assets relating to assets still held at reporting date
Purchases
Settlements
Transfers in and/or out of level 3
Currency impact
Balance at December 31, 2025
The following summarizes the fair value of plan assets by asset category and level within the fair value hierarchy as of December 31, 2024 (in millions of dollars):
As of December 31, 2024
Total
Level 1
Level 2
Level 3
Fixed income securities:
U.S. government bonds
U.S. corporate bonds
Non-U.S. government bonds
Non-U.S. corporate bonds
Mortgage-backed securities
Other fixed income
Total Fixed income securities
Other types of investments:
Mutual funds (1)
Insurance contracts
Derivatives—credit contracts
Real estate
Total Other types of investments
Cash:
Total of Level 1, Level 2 and Level 3 Assets
Investments at net asset value:
Mutual funds (2)
Total Net Assets
(1) This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds.
(2) This category includes open-ended mutual fund, the underlying assets of the mutual fund are illiquid in nature and are not classified in the fair value hierarchy using the net asset per share practical expedient.
The following table presents the changes in the Level 3 plan assets for the year ended December 31, 2024 (in millions of dollars):
Level 3 Assets
Balance at December 31, 2023
Actual return on plan assets relating to assets still held at reporting date
Purchases
Settlements
Transfers in and/or out of Level 3
Currency impact
Balance at December 31, 2024
Contributions
CNH expects to contribute (including through direct benefit payments) approximately $ 45 million to its pension plans, $ 15 million to its healthcare plans and $ 7 million to its other postemployment plans in 2026.
The benefit expected to be paid from the benefit plans, which reflect expected future years of service, and the Medicare subsidy expected to be received are as follows (in millions of dollars):
Pension Plans
Healthcare
Other
Total
Note 14: Other Liabilities
A summary of "Other liabilities" as of December 31, 2025 and 2024 is as follows (in millions of dollars):
As of December 31,
Warranty and campaign programs
Marketing and sales incentive programs
Tax payables
Accrued expenses and deferred income
Accrued employee benefits
Lease liabilities
Legal reserves and other provisions
Contract liabilities
Restructuring reserve
Other
Total
Warranty and Campaign Program
As described in "Note 2: Summary of Significant Accounting Policies", CNH pays for basic warranty and other service action costs. A summary of recorded activity for the basic warranty and campaign program accrual for the years ended December 31, 2025 and 2024 are as follows (in millions of dollars):
Years Ended December 31,
Balance at beginning of year
Current year additions
Claims paid
Currency translation adjustment and other
Balance at end of year
Restructuring Provision
The Company's restructuring program announced in November 2023 targeted both labor and non-labor SG&A expenses. This program was completed in 2024, and the Company has incurred a total of $ 131 million from launch to December 31, 2024, under this program.
The Company incurred restructuring costs of $ 22 million, $ 118 million and $ 67 million for the years ended December 31, 2025, 2024 and 2023, respectively. These costs were as follows:
• In 2025, Agriculture, Construction and Financial Services recorded $ 20 million, $ 3 million and $( 1 ) million respectively.
• In 2024, Agriculture, Construction and Financial Services recorded $ 104 million, $ 13 million and $ 1 million, respectively.
• In 2023, Agriculture, Construction and Finance recorded $ 51 million and $ 14 million and $ 2 million, respectively.
The following table sets forth restructuring activity for the years ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Severance and Other Employee Costs
Facility Related
Costs
Other
Restructuring
Total
Balance at December 31, 2022
Restructuring charges
Reserves utilized: cash
Reserves utilized: non-cash
Currency translation adjustments
Balance at December 31, 2023
Restructuring charges
Reserves utilized: cash
Reserves utilized: non-cash
Currency translation adjustments
Balance at December 31, 2024
Restructuring charges
Reserves utilized: cash
Reserves utilized: non-cash
Currency translation adjustments
Balance at December 31, 2025
Note 15: Commitments and Contingencies
As a global company with diverse business portfolio, CNH in the ordinary course of business is exposed to numerous legal risks, including, without limitation, dealer and supplier litigation, intellectual property right disputes, product liability, asbestos, personal injury, emissions and/or fuel economy regulatory, competition law and other regulatory investigations and environmental claims. We are party to various unresolved investigations, claims and actions that are incidental to our business. The most significant of these matters are described below.
The outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in one or more of these proceedings, claims or investigations could require CNH to pay substantial damages or fines or undertake service actions, recall campaigns or other costly actions. It is therefore possible that legal judgments could give rise to expenses that are not covered, or not fully covered, by insurance and could affect CNH's financial position and results. When it is probable that such a loss has been incurred and the amount can be reasonably estimated, such amounts are provided for in the Company's Consolidated Statements of Operations and the related accrual is recorded in "Other liabilities" on the Consolidated Balance Sheets.
Although the ultimate outcome of legal matters pending against CNH and its subsidiaries cannot be predicted, the Company believes the reasonable possible range of losses for these unresolved legal matters in addition to the amounts accrued would not have a material effect on its Consolidated Financial Statements.
Environmental
Pursuant to the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), which imposes strict and, under certain circumstances, joint and several liability for remediation and liability for natural resource damages, and other federal and state laws that impose similar liabilities, CNH has received inquiries for information or notices of its potential liability regarding 66 non-owned U.S. sites at which regulated materials allegedly generated by CNH were released or disposed ("Waste 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 could be required to pay amounts in excess of its pro rata share of remediation costs. However, when appropriate, the financial strength of other PRPs has been considered in the determination of the Company's potential liability. CNH believes that the costs associated with the Waste Sites will not have a material effect on the Company's business, financial position or results of operations.
The Company is conducting environmental investigatory or remedial activities at certain properties that are currently or were formerly owned and/or operated or that are being decommissioned. The Company believes that the outcome of these activities will not have a material adverse effect on its business, financial position, or results of operations.
The actual costs for environmental matters could differ materially from those costs currently anticipated due to the nature of historical handling and disposal of hazardous substances typical of manufacturing and related operations, the discovery of currently unknown conditions, and as a result of more aggressive enforcement by regulatory authorities and changes in existing laws and regulations. As in the past, CNH plans to continue funding its costs of environmental compliance from operating cash flows.
Investigation, analysis and remediation of environmental sites is a time-consuming activity. The Company expects such costs to be incurred and claims to be resolved over an extended period of time that could exceed 30 years for some sites. As of December 31, 2025 and 2024, environmental reserves of approximately $ 24 million and $ 21 million, respectively, were established to address these specific estimated potential liabilities. Such reserves are undiscounted and do not include anticipated recoveries, if any, from insurance companies. After considering these reserves, management is of the opinion that the outcome of these matters will not have a material adverse effect on the Company's financial position or results of operations.
Other Litigation and Investigation
Follow-up on Damages Claims: In 2011 Iveco S.p.A. ("Iveco"), a subsidiary of Iveco Group N.V., and its competitors in the European Union were subject to an investigation by the European Commission (the "Commission") into certain business practices in the European Union (in the period 1997-2011) in relation to Medium & Heavy trucks. On July 19, 2016, the Commission announced a settlement with Iveco ("the Decision"). Following the Decision, the Company, Iveco and Iveco Magirus AG ("IMAG") have been named as defendants in proceedings across Europe. Following the demerger of Iveco Group N.V. and CNH, ("Demerger"), CNH cannot be excluded from current and future follow-on proceedings originating from the Decision because under European Union competition law a company cannot use corporate reorganizations to avoid liability for private damage claims. At this time, CNH is unable to predict the outcome of these proceedings or reasonably estimate any potential losses. In the event one or more of these judicial proceedings would result in a decision against CNH ordering it to compensate such claimants as a result of the conduct that was the subject matter of the Decision, then CNH, as a result of various arrangements, will ultimately have recourse against Iveco and IMAG for the reimbursement of any damages paid by CNH to such claimants. However, if Iveco or IMAG do not comply with their obligations with respect to any such decisions or fail to fulfill their obligations to CNH, then CNH could experience financial losses. The Company believes that the risk of Iveco, IMAG or Iveco Group defaulting on potential payment obligations arising from such follow-up on damage claims is remote and, at this time, is unable to reasonably estimate any potential losses.
FPT Emissions Investigation: On July 22, 2020, a number of the Company's (pre-Demerger) offices in Europe were visited by investigators in the context of a request for assistance by the public prosecutors of Frankfurt am Main, Germany and Turin, Italy in relation to alleged noncompliance of two engine models produced by FPT Industrial S.p.A. ("FPT Industrial"), which is a wholly-controlled subsidiary of Iveco Group N.V.. The Italian criminal investigation was dismissed in 2023. As a result of FPT Industrial's full cooperation with the investigative authorities, all German criminal investigations were concluded in December 2023. FPT is defending individual civil claims alleging emissions' non-compliance in Germany and Austria. While the Company had no role in the design and sale of such engine models and vehicles, the Company cannot predict the likelihood of these outcomes or reasonably estimate any potential losses. The Company believes that the risk of either FPT Industrial or Iveco Group N.V. defaulting on potential payment obligations arising from such proceedings is remote.
Poland Antitrust Case : On December 9, 2025, the Polish Antitrust Authority issued a notification of decision imposing fines on CNH Polska and some of its dealers of approximately € 57 million. This decision follows an investigation beginning in 2023 of alleged commercial anticompetitive practices. The Company disagrees with the allegations presented by the Polish Antitrust Authority and intends to defend its case. This decision is not final and binding until judicial proceedings
and available appeals have been completed. CNH Polska filed an appeal of the decision on January 9, 2026, on several grounds, including lack of evidence of CNH Polska’s role as a coordinator of the alleged misconduct and time barred claims. A first instance decision from the Polish courts on this appeal is not expected for at least two years from the date of appeal. CNH Polska is confident in its defenses and ability to significantly reduce or nullify the decision and accordingly has determined a reserve is not required at this time.
Commitments
CNH has entered into operating lease contracts for the right to use industrial buildings and equipment and other assets.
Refer to "Note 8: Leases" for future minimum lease payments under non-cancellable lease contracts.
At December 31, 2025, Financial Services has various agreements, on an uncommitted basis, to extend credit for the following financing arrangements (in millions of dollars):
As of December 31, 2025
Total
Credit Limit
Utilized
Not
Utilized
Wholesale and dealer financing
Revolving charge accounts
Guarantees
CNH provided guarantees on the debt or commitments of third parties and performance guarantees in the interest of non-consolidated affiliates as of December 31, 2025 and 2024 totaling $ 119 million and $ 54 million, respectively.
Note 16: Financial Instruments
CNH may elect to measure financial instruments and certain other items at fair value. This fair value option would be applied on an instrument-by-instrument basis with changes in fair value reported in earnings. The election can be made at the acquisition of an eligible financial asset, financial liability or firm commitment or, when certain specified reconsideration events occur. The fair value election may not be revoked once made. CNH has not elected the fair value measurement option for eligible items.
Fair-Value Hierarchy
The hierarchy of valuation techniques for financial instruments is based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs have created the following fair-value hierarchy:
• Level 1—Quoted prices for identical instruments in active markets.
• Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
• Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
This hierarchy requires the use of observable market data when available.
Determination of Fair Value
When available, the Company uses quoted market prices to determine fair value and classifies such items as Level 1. In some cases where a market price is not available, the Company will use of observable market-based inputs to calculate fair value, in which case the items are classified as Level 2.
If quoted or observable market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters such as interest rates, currency rates, or yield curves. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified as Level 3 even though there may be some significant inputs that are readily observable.
The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is
generally classified. Where appropriate, the description includes details of the valuation models and the key inputs to those models as well as any significant assumptions.
Derivatives
CNH utilizes derivative instruments to mitigate its exposure to interest rate and foreign currency exposures. Derivatives used as hedges are effective at reducing the risk associated with the exposure being hedged and are designated as a hedge at the inception of the derivative contract. CNH does not hold or enter into derivatives or other financial instruments for speculative purposes. The credit and market risk related to derivatives is reduced through diversification among various counterparties, utilizing mandatory termination 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 "Cash Flows from Operating Activities" in the Consolidated Statements of Cash Flows.
Foreign Exchange Derivatives
CNH has entered into foreign exchange forward contracts and swaps in order to manage and preserve the economic value of cash flows in a currency different from the functional currency of the relevant legal entity. CNH conducts its business on a global basis in a wide variety of foreign currencies and hedges foreign currency exposures arising from various receivables, liabilities, and expected inventory purchases and sales. Derivative instruments utilized to hedge the foreign currency risk associated with anticipated inventory purchases and sales in foreign currencies are designated as cash flow hedges. Gains and losses on these instruments are deferred in accumulated other comprehensive income/(loss) and recognized in earnings when the related transaction occurs. If a derivative instrument is terminated because the hedge relationship is no longer effective or because the hedged item is a forecasted transaction that is no longer determined to be probable, the cumulative amount recorded in accumulated other comprehensive income (loss) is recognized immediately in earnings. Such amounts were insignificant for the years ending December 31, 2025, 2024 and 2023.
CNH also uses forwards and swaps to hedge certain assets and liabilities denominated in foreign currencies. Such derivatives are considered economic hedges and not designated as hedging instruments. The changes in the fair values of these instruments are recognized directly in income in "Other, net" and are expected to offset the foreign exchange gains or losses on the exposures being managed.
All of CNH's foreign exchange derivatives are considered Level 2 as the fair value is calculated using market data input and can be compared to actively traded derivatives. The total notional amount of CNH's foreign exchange derivatives was $ 3.6 billion and $ 4.2 billion at December 31, 2025 and 2024, respectively.
Interest Rate Derivatives
CNH has entered into interest rate derivatives (swaps and caps) in order to manage interest rate exposures arising in the normal course of business. Interest rate derivatives that have been designated as cash flow hedges are being used by the Company to mitigate the risk of rising interest rates related to existing debt and anticipated issuance of fixed-rate debt in future periods. Gains and losses on these instruments are deferred in "Accumulated other comprehensive income (loss)" and recognized in "Interest expense" over the period in which CNH recognizes "Interest expense" on the related debt.
Interest rate derivatives that have been designated as fair value hedge relationships have been used by CNH to mitigate the volatility in the fair value of existing fixed rate bonds and medium-term notes due to changes in floating interest rate benchmarks. Gains and losses on these instruments are recorded in "Interest expense" in the period in which they occur, and an offsetting gain or loss is also reflected in "Interest expense" based on changes in the fair value of the debt instrument being hedged due to changes in floating interest rate benchmarks.
CNH also enters into offsetting interest rate derivatives with substantially similar terms that are not designated as hedging instruments to mitigate interest rate risk related to CNH's committed asset-backed facilities. Unrealized and realized gains and losses resulting from fair value changes in these instruments are recognized directly in income. Net gains and losses on these instruments were insignificant for the years ending December 31, 2025, 2024 and 2023.
All of CNH's interest rate derivatives outstanding as of December 31, 2025 and 2024 are considered Level 2. The fair market value of these derivatives is calculated using market data input and can be compared to actively traded derivatives. The total notional amount of CNH's interest rate derivatives was approximately $ 11.1 billion and $ 9.1 billion at December 31, 2025 and 2024, respectively.
Financial Statement Impact of CNH Derivatives
The following table summarizes the gross impact of changes in the fair value of derivatives designated as cash flow hedges on "Accumulated other comprehensive loss" and "Net income" during the year ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Recognized in Net Income
For the Years Ended December 31,
(Gains) Loss Recognized in Accumulated Other Comprehensive Loss
Classification of Gain (Loss)
(Gains) Loss Reclassified from Accumulated Other Comprehensive Loss into Income
Foreign exchange contracts
Net sales
Cost of goods sold
Other, net
Interest expense, net
Interest rate contracts
Total
Foreign exchange contracts
Net sales
Cost of goods sold
Other, net
Interest expense, net
Interest rate contracts
Total
Foreign exchange contracts
Net sales
Cost of goods sold
Other, net
Interest expense, net
Interest rate contracts
Total
The following table summarizes the activity in "Accumulated other comprehensive income (loss)" related to the derivatives held by the Company during the years ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Before-Tax Amount
Income Tax
After-Tax Amount
Accumulated derivative net income as of December 31, 2022
Net changes in fair value of derivatives
Net income reclassified from accumulated other comprehensive income into income
Accumulated derivative net losses as of December 31, 2023
Net changes in fair value of derivatives
Net income reclassified from accumulated other comprehensive income into income
Accumulated derivative net income as of December 31, 2024
Net changes in fair value of derivatives
Net loss reclassified from accumulated other comprehensive income into income
Accumulated derivative net income as of December 31, 2025
The following tables summarize the impact of the changes in the fair value of fair value hedges and derivatives not designated as hedging instruments had on earnings for the year ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Years Ended December 31,
Classification of Gain
Fair Value Hedges
Interest rate derivatives
Interest expense
Not Designated as Hedges
Foreign exchange contracts
Other, Net
The fair values of CNH's derivatives as of December 31, 2025 and 2024 in the Consolidated Balance Sheets are recorded as follows (in millions of dollars):
As of December 31, 2025
As of December 31, 2024
Balance Sheet Location
Fair Value
Balance Sheet Location
Fair Value
Derivatives designated as hedging instruments
Foreign currency contracts
Derivative assets
Derivative assets
Interest rate contracts
Derivative assets
Derivative assets
Total derivative assets
Foreign currency contracts
Derivative liabilities
Derivative liabilities
Interest rate contracts
Derivative liabilities
Derivative liabilities
Total derivative liabilities
Derivatives not designated as hedging instruments
Foreign currency contracts
Derivative assets
Derivative assets
Interest rate contracts
Derivative assets
Derivative assets
Total derivative assets
Foreign currency contracts
Derivative liabilities
Derivative liabilities
Interest rate contracts
Derivative liabilities
Derivative liabilities
Total derivative liabilities
Items Measured at Fair Value on a Recurring Basis
The following tables present for each of the fair-value hierarchy levels the Company's assets and liabilities that are measured at fair value on a recurring basis at December 31, 2025 and 2024 (in millions of dollars):
Level 1
Level 2
Total
As of December 31, 2025
As of December 31, 2024
As of December 31, 2025
As of December 31, 2024
As of December 31, 2025
As of December 31, 2024
Assets
Foreign exchange derivatives
Interest rate derivatives
Total Assets
Liabilities
Foreign exchange derivatives
Interest rate derivatives
Total Liabilities
Items Measured at Fair Value on a Non-Recurring Basis
During 2025, the Company recorded an intangible assets impairment of $ 172 million related to IPR&D assets. During the period ended December 31, 2024, the Company recorded an intangible assets impairment of $ 11 million related to IPR&D.
The following tables present fair value for nonrecurring Level 3 measurements from impairments as of December 31, 2025 and 2024 (in millions of dollars):
Fair Value
Losses
As of December 31, 2025
As of December 31, 2024
As of December 31, 2025
As of December 31, 2024
Other intangible assets
The following is a description of the valuation methodologies the Company uses for non-monetary assets at fair value:
Other intangible assets, net impairments are measured at the lower of the carrying amount or fair value. The valuation of the IPR&D asset acquired as part of the Raven acquisition was based on the relief-from-royalty method. Inputs utilized for the valuation include projected revenues, projected costs to complete, and royalty rate. The valuation of the IPR&D asset acquired as part of the Bennamann acquisition was based on the MPEEM Method. Inputs utilized for the valuation include projected revenues, contributory asset charges, probability of success and discount rate.
Fair Value of Other Financial Instruments
The carrying value of cash and cash equivalents, restricted cash, trade accounts receivable and accounts payable included in the Consolidated Balance Sheets approximates its fair value.
Financial Instruments Not Carried at Fair Value
The estimated fair market values of financial instruments not carried at fair value in the Consolidated Balance Sheets as of December 31, 2025 and 2024 are as follows (in millions of dollars):
As of December 31, 2025
As of December 31, 2024
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Financing receivables
Debt
Financing Receivables
The fair value of financing receivables is based on the discounted values of their related cash flows at current market interest rates and they are classified as a Level 3 fair value measurement.
Debt
All debt is classified as a Level 2 fair value measurement with the exception of bonds issued by CNH Industrial Finance Europe S.A. and bonds issued by CNH Industrial N.V. that are classified as a Level 1 fair value measurement.
Note 17: Shareholders' Equity
The Articles of Association of CNH Industrial N.V. provide for authorized share capital of € 40 million, divided into 2 billion common shares and 2 billion special voting shares to be held with associated common shares, each with a per share par value of € 0.01 . As of December 31, 2025, the Company's share capital was € 18 million (equivalent to $ 25 million), fully paid-in, and consisted of 1,364,400,196 common shares ( 1,242,064,719 common shares outstanding and 122,335,477 common shares held in treasury by the Company as described in the following section) and 396,474,276 special voting shares ( 370,457,350 special voting shares outstanding, net of 26,016,926 special voting shares held in treasury by the Company as described in the section below).
Changes in the composition of the share capital of CNH Industrial N.V. during 2025, 2024 and 2023 are as follows (number of shares):
Common
Shares
Loyalty Program Special
Voting Shares
Total
Shares
Total shares at December 31, 2022
Common stock issued from Treasury stock
Common stock repurchases
Retirement of special voting shares
Total shares at December 31, 2023
Common stock issued from Treasury stock
Common stock repurchases
Retirement of special voting shares
Total shares at December 31, 2024
Common stock issued from Treasury stock
Common stock repurchases
Retirement of special voting shares
Total shares at December 31, 2025
During the year ended December 31, 2025 and 2024, 0.5 million and — million special voting shares, respectively, were acquired for no consideration by the Company following the deregistration of the corresponding number of qualifying common shares from the Loyalty Register, net of transfer and allocation of special voting shares in accordance with the Special Voting Shares – Terms and Conditions.
Furthermore, during the years ended December 31, 2025 and 2024, the Company delivered 3.4 million and 17.0 million common shares, respectively, under the Company's stock compensation plan, primarily due to the vesting or exercise of share-based awards. See "Note 18: Share-Based Compensation" for further discussion.
Loyalty Voting Program
In order to reward long-term ownership of the Company's common shares and promote stability of its shareholder base, the Articles of Association of CNH Industrial N.V. provide for a loyalty voting program that grants eligible long-term shareholders the equivalent of two votes for each CNH Industrial N.V. common share that they hold. This has been accomplished through the issuance of special voting shares.
A shareholder may at any time elect to participate in the loyalty voting program by requesting the registration of all or some of the common shares held by such shareholder in a separate register (the "Loyalty Register") of the Company. If such common shares have been registered in the Loyalty Register for an uninterrupted period of three years in the name of the same shareholder, such shares will become "Qualifying Common Shares" and the relevant shareholder will be entitled to receive one special voting share for each such Qualifying Common Share which can be retained only for so long as the shareholder retains the associated common share and registers it in the Loyalty Register.
Shareholders are not required to pay any amount to the Company in connection with the allocation of the special voting shares.
The common shares are freely transferable, while special voting shares are transferable exclusively in limited circumstances and they are not listed on the New York Stock Exchange ("NYSE"). In particular, at any time, a holder of common shares that are Qualifying Common Shares who wants to transfer such common shares other than in limited specified circumstances (e.g., transfers to affiliates or relatives through succession, donation or other transfers) must request a deregistration of such Qualifying Common Shares from the Loyalty Register. After deregistration from the Loyalty Register, such common shares no longer qualify as Qualifying Common Shares and, as a result, the holder of such common shares is required to transfer the special voting shares associated with the transferred common shares to the Company for no consideration.
The special voting shares have minimal economic entitlements as the purpose of the special voting shares is to grant long-term shareholders with an extra voting right by means of granting an additional special voting share, without granting such shareholders with any additional economic rights. However, as a matter of Dutch law, such special voting shares cannot be fully excluded from economic entitlements. Therefore, the Articles of Association provide that only a minimal dividend accrues to the special voting shares, which is not distributed, but allocated to a separate special dividend reserve. The impact of this special dividend reserve on the earnings per share of the common shares is not material.
Treasury Shares
In order to maintain the necessary operating flexibility over an adequate time period, including the implementation of the program in place, on April 13, 2022, the Annual General Meeting ("AGM") granted to the Board of Directors the authority to acquire common shares in the capital of the Company through stock exchange trading on the Euronext Milan and the NYSE or otherwise through November 6, 2023. On November 7, 2023, CNH's Board of Directors approved a new share buyback program for the repurchase of up to $ 1 billion of common shares between November 8, 2023, and March 1, 2024. In February 2024, the Company's Board of Directors authorized a $ 500 million share buyback program under which the Company may repurchase its common shares.
Under such authorization the Board's authority is limited to a maximum of up to 10 % of the issued common shares as of the date of the AGM and, in compliance with applicable rules and regulations, subject to a maximum price per common share equal to the average of the highest price on each of the five trading days prior to the date of acquisition, as shown in the Official Price List of the NYSE (as the case may be) plus 10 % (maximum price) and to a minimum price per common share equal to the average of the lowest price on each of the five trading days prior to the date of acquisition, as shown in the Official Price List of the NYSE (as the case may be) minus 10 % (minimum price).
Neither the renewal of the authorization, nor the launch of any program obliges the Company to buyback any common shares. The launch of any new program will be subject to a further resolution of the Board of Director. In any event, such programs may be suspended, discontinued or modified at any time for any reason and without previous notice, in accordance with applicable laws and regulations.
During the year ended December 31, 2025, the Company repurchased 9.4 million shares of its common stock on the NYSE and on multilateral trading facilities under the buyback program. As of December 31, 2025, the Company held 122.3 million common shares in treasury, net of transfers of common shares to fulfill its obligations under its stock compensation plans, at an aggregate cost of $ 1,422 million. Depending on market and business conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without notice.
During the year ended December 31, 2025, the Company acquired, for no consideration, approximately 0.5 million special voting shares following the deregistration of qualifying common shares from the Loyalty Register, net of the transfer and allocation of special voting shares to those shareholders whose qualifying common shares became eligible to receive special voting shares after the uninterrupted three-year registration period in the Loyalty Register. As of December 31, 2025, the Company held 26.0 million special voting shares in treasury.
Dividend
On May 12, 2025, the Company's shareholders approved a dividend of $ 0.25 per common share and totaling approximately $ 313 million.
The Company shall only have power to make distributions to shareholders and other persons entitled to distributable profits to the extent the Company's equity exceeds the sum of the paid-up portion of the share capital and the reserves that must be maintained in accordance with provisions of law. No distribution of profits may be made to the Company itself for shares that the Company holds in its own share capital.
Note 18: Share-Based Compensation
For the years ended December 31, 2025, 2024 and 2023 CNH recognized total share-based compensation expense of $ 25 million, $ 19 million and $ 99 million respectively. For the years ended December 31, 2025, 2024 and 2023, CNH recognized a total reduction to taxable income of $ 26 million, $ 29 million and $ 14 million, respectively, related to vesting of share-based compensation awards. Unrecognized share-based compensation costs will be recognized over a weighted-average period of 1.5 years.
CNH's equity awards are governed by the CNH Industrial N.V. Equity Incentive Plan ("CNH EIP") and CNH Industrial N.V. Directors' Compensation Plan ("CNH DCP").
At the AGM held on April 16, 2014, the Company's shareholders approved the adoption of the CNH EIP, an umbrella program defining the terms and conditions for any subsequent long-term incentive program. The CNH EIP allows grants of the following specific types of equity awards to any current or prospective executive director, officer, employee of, or service provider to, CNH: stock options, stock appreciation rights, restricted share units, restricted stock, performance shares or performance share units and other stock-based awards that are payable in cash, common shares or any combination thereof subject to the terms and conditions established by the Compensation Committee.
In February 2020, the Board of Directors approved the issuance of up to 50 million common shares under the CNH EIP. At the AGM on April 16, 2020, the Company's shareholders approved the issuance of up to 7 million common shares to executive directors under the 2021-2023 Long-Term Incentive Plan in accordance with and under the CNH EIP.
Performance Share Units ("PSU")
2023 - 2025 Long-Term Incentive Plans
The 2023, 2024, and 2025 Long-Term Incentive Plans feature a three-year vesting period, two internal financial metrics, and a financial multiplier. Additionally the two internal financial metrics and financial multiplier are calculated. However, differences between all plans exist in regards to the performance achievement threshold for both internal financial metrics.
In 2023, 2024 and 2025, CNH issued 2.8 million, 9.7 million, and 3.0 million PSUs, respectively. The total number of shares that will eventually be issued may vary from the original estimate due to forfeiture or the level of achievement of the performance goals. The weighted-average fair value of the awards that were issued in 2023, 2024 and 2025 was $ 12.29 , $ 8.27 and $ 11.30 per share, respectively. The fair value of the award is measured on the grant date using a Monte Carlo simulation model.
The following table reflects the activity of PSUs under the Long-Term Incentive Plans during the year ended December 31, 2025:
Year Ended December 31, 2025
Performance
Shares
Weighted
Average
Grant Date
Fair Value
Nonvested at beginning of year
Granted
Forfeited/Cancelled
Vested
Nonvested at end of year
Restricted Share Units ("RSU")
2023 - 2025 Long-Term Incentive Plans
In 2023, 2024, and 2025, CNH issued approximately 2.1 million, 3.5 million and 3.0 million RSUs, respectively, to key executive officers and selected employees. The total number of shares that will eventually be issued may vary from the original estimate due to forfeiture. The weighted-average fair value of the awards that were issued in 2023, 2024, and 2025 were $ 11.87 , $ 9.42 and $ 11.68 per share, respectively. The fair value of the award is measured using the CNH Industrial N.V. stock price on the grant date adjusted for the present value of future dividends that employees will not receive during the vesting period. The RSUs vest upon a time-based service requirement.
The following table reflects the activity of RSUs under the Long-Term Incentive Plans during the year ended December 31, 2025:
Year Ended December 31, 2025
Restricted
Shares
Weighted
Average
Grant Date
Fair Value
Nonvested at beginning of year
Granted
Forfeited
Vested
Nonvested at end of year
Additional Share-Based Compensation Information
The table below provides additional share-based compensation information for the years ended December 31, 2025, 2024 and 2023 (in millions of dollars):
Years Ended December 31,
Total intrinsic value of options exercised and shares vested
Fair value of shares vested
Note 19: Earnings per Share
The Company's basic EPS is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period.
Diluted EPS reflects the potential dilution that could occur if dilutive securities were exercised into common stock. The effect of dilutive securities is calculated using the treasury stock method.
The following table sets forth the computation of basic and diluted EPS for the years ended December 31, 2025, 2024 and 2023 (in millions of dollars, except per share data):
Years Ended December 31,
Basic EPS attributable to common shareholders
Net income attributable to CNH Industrial N.V.
Weighted-average common shares outstanding—basic
Basic earnings per share
Diluted EPS attributable to common shareholders
Weighted-average common shares outstanding—basic
Dilutive effect of stock compensation plans
Weighted-average common shares outstanding—diluted (1)
Diluted earnings per share
(1) For the years ended December 31, 2025, 2024 and 2023, no shares were excluded from the computation of diluted EPS due to an anti-dilutive impact.
Note 20: Accumulated Other Comprehensive Income (Loss)
The Company's share of comprehensive loss includes net income plus other comprehensive loss, which includes changes in fair value of certain derivatives designated as cash flow hedges, certain changes in pension and other retirement benefit plans, foreign currency translation gains and losses, changes in the fair value of available-for-sale securities, the Company's share of other comprehensive loss of entities accounted for using the equity method, and reclassifications for amounts included in net income less net income and other comprehensive loss attributable to the noncontrolling interest. For more information on the Company's derivative instruments, see "Note 16: Financial Instruments". For more information on the Company's pensions and retirement benefit obligations, see "Note 13: Employee Benefit Plans and Postretirement Benefits". The Company's other comprehensive loss amounts are aggregated within accumulated other comprehensive loss. The tax effect for each component of other comprehensive income consisted of the following (in millions of dollars):
Year Ended December 31, 2025
Gross
Amount
Income
Taxes
Net
Amount
Unrealized loss on cash flow hedges
Changes in retirement plans' funded status
Foreign currency translation
Share of other comprehensive income of entities using the equity method
Other comprehensive loss
Year Ended December 31, 2024
Gross
Amount
Income
Taxes
Net
Amount
Unrealized gain on cash flow hedges
Changes in retirement plans' funded status
Foreign currency translation
Share of other comprehensive loss of entities using the equity method
Other comprehensive loss
Year Ended December 31, 2023
Gross
Amount
Income
Taxes
Net
Amount
Unrealized loss on cash flow hedges
Changes in retirement plans' funded status
Foreign currency translation
Share of other comprehensive income of entities using the equity method
Other comprehensive loss
The changes, net of tax, in each component of "Accumulated other comprehensive income (loss)" consisted of the following (in millions of dollars):
Unrealized
Gain (Loss) on
Cash Flow
Hedges
Change in
Retirement Plans'
Funded
Status
Foreign
Currency
Translation
Share of Other
Comprehensive
Income (loss) of
Entities Using
the Equity
Method
Total
Balance at December 31, 2022
Other comprehensive income (loss), before reclassifications
Amounts reclassified from other comprehensive income
Other comprehensive income (loss) (1)
Balance at December 31, 2023
Other comprehensive income (loss), before reclassifications
Amounts reclassified from other comprehensive income
Other comprehensive income (loss) (1)
Balance at December 31, 2024
Other comprehensive income (loss), before reclassifications
Amounts reclassified from other comprehensive income
Other comprehensive income (loss) (1)
Balance at December 31, 2025
(1) Excluded from the table above is other comprehensive (income) loss allocated to noncontrolling interests of $ 5 million, $( 1 ) million and $ 3 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Significant amounts reclassified out of each component of "Accumulated other comprehensive income (loss)" at December 31, 2025 and 2024 consisted of the following (in millions of dollars):
Amount Reclassified from Other
Comprehensive Income (Loss)
Consolidated Statement
of Operations line
Year Ended December 31, 2025
Year Ended December 31, 2024
Cash flow hedges
Net sales
Cost of goods sold
Other, net
Interest expense
Income taxes
Change in retirement plans' funded status:
Amortization of actuarial losses
Amortization of prior service credit
Curtailment of prior service credit
Income taxes
Total reclassifications, net of tax
(1) These amounts are included in net periodic pension and other postretirement benefit cost. See "Note 13 : Employee Benefit Plans and Postretirement Benefits" for additional information.
Note 21: Segment Reporting
The operating segments through which the Company manages its operations are reflected in the internal reporting used by the Company's Chief Operating Decision Maker ("CODM") to assess performance and make decisions about resource allocation. The CODM has been identified as the Chief Executive Officer ("CEO"). The CEO is charged with the management of CNH, reviews operating performance of the segments and makes decisions on certain operational matters. The CEO, supported by the Global Leadership Team ("GLT"), presents to the Board of Directors the Company's operating results, updated strategic business plans, and long-term value creation strategies as well as top short-term and mid-term operational and strategic risks. The presentations to the Board of Directors allow management to articulate their strategies for the achievement of their business objectives and mitigation of risks and permits the Board of Directors to give feedback on management's plans.
The segments are organized based on products and services provided by the Company. CNH has three operating segments, that meet the criteria of reportable segments: Agriculture, Construction and Financial Services.
Revenues for each reported segment are those directly generated by or attributable to the segment as a result of the respective business activities and include revenues from transactions with third parties as well as those deriving from transactions with other segments, recognized at normal market prices. Segment expenses represent costs arising from each segment's business activities with both third parties and other operating segments. These expenses are either directly attributable to the segment or allocated to it using recognized allocation bases, reflecting the amount of expenses that would be required if the segment operated autonomously from the larger group. Allocations are necessary to report segment data due to the integrated nature of our operations as well as the use of shared administrative functions and common support services. Expenses deriving from business activities with other segments are recognized at normal market prices.
With reference to the Agriculture and Construction segments, the CODM assesses segment performance and makes decisions about resource allocation based upon Adjusted EBIT. The Company believes Adjusted EBIT more fully reflects Agriculture and Construction segments' profitability. Adjusted EBIT of the Agriculture and Construction segments is defined as net income (loss) before income taxes, Financial Services' results, Industrial Activities' segments interest expenses (net), foreign exchange gains/losses, finance and non-service component of pension and other postemployment benefit costs, restructuring expenses, and certain non-recurring and unallocated items. In particular, non-recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent in nature and not reflective of ongoing operational activities.
With reference to Financial Services, the Company revised the performance metric used to assess the segment's performance in 2024 from Net Income to Income before income taxes. This change was made to better reflect the manner in which the CODM evaluates segment performance and allocates resources. The prior-period segment results have been recast to reflect this change for comparability purposes.
The CODM uses both Adjusted EBIT of Agriculture and Construction and Income before income taxes of Financial Services predominantly in the annual budget and forecasting process. The CODM considers actual-to-budget and actual-to-forecast variances on a monthly basis for both measures when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses Adjusted EBIT for Agriculture and Construction and Income before income taxes of Financial Services to evaluate any pricing strategy, to assess and compare the performance of each segment and to determine compensation of certain employees.
The following table includes reported segment revenue and income, significant segment expenses and other segment items considered in the calculation of both Adjusted EBIT for Industrial Activities and Income before income taxes for Financial Services (in millions of dollars):
Year Ended December 31, 2025
Agriculture
Construction
Financial Services (1)
Total
Net sales
Finance, interest and other income (Financial Services)
Total Revenues
Cost of goods sold
Selling, general and administrative expenses (2)
Research and development expenses
Interest expense (Financial Services)
Restructuring expenses (Financial Services)
Other, net (Financial Services)
Equity in income of joint ventures
Adjusted EBIT [A]
Income before income taxes [B]
Segment Profit/(loss) [C=A+B]
Interest expenses, net (excluding Financial Services)
Restructuring expenses (Industrial Activities)
Foreign exchange gains, net (Industrial Activities)
Finance and non-service component of Pension and other postemployment benefit costs (Agriculture & Construction) (3)
Unallocated amounts (4)
Discrete items excluded from Segments (5)
Income tax expense
Net income
Year Ended December 31, 2024
Agriculture
Construction
Financial Services (1)
Total
Net sales
Finance, interest and other income
Total Revenues
Cost of goods sold
Selling, general and administrative expenses (2)
Research and development expenses
Interest expense (Financial Services)
Restructuring expenses (Financial Services)
Other, net (Financial Services)
Equity in income of joint ventures
Adjusted EBIT [A]
Income before income taxes [B]
Segment Profit/(loss) [C=A+B]
Interest expenses, net (excluding Financial Services)
Restructuring expenses (Agriculture & Construction)
Foreign exchange gains, net (Industrial Activities)
Finance and non-service component of Pension and other postemployment benefit costs (Agriculture & Construction) (3)
Unallocated amounts (4)
Discrete items excluded from Segments (5)
Income tax expense
Net income
Year Ended December 31, 2023
Agriculture
Construction
Financial Services (1)
Total
Net sales
Finance, interest and other income
Total Revenues
Cost of goods sold
Selling, general and administrative expenses (2)
Research and development expenses
Interest expense (Financial Services)
Restructuring expenses (Financial Services)
Other, net (Financial Services)
Equity in income of joint ventures
Adjusted EBIT [A]
Income before income taxes [B]
Segment Profit/(loss) [C=A+B]
Interest expenses, net (excluding Financial Services)
Restructuring expenses (Agriculture & Construction)
Foreign exchange gains, net (Agriculture & Construction)
Finance and non-service component of Pension and other postemployment benefit costs (Agriculture & Construction) (3)
Unallocated amounts (4)
Discrete items excluded from Segments (5)
Income tax expense
Net income
(1) For Financial Services, the CODM uses Income before income taxes as the measure to allocate resources and assess segment performance.
(2) In the years ended December 31, 2025, 2024, and 2023, this item included risk costs for the Financial Services segment of $ 313 million, $ 204 million and $ 80 million, respectively.
(3) In the year ended December 31, 2025, this item included an annual pre-tax gain of $ 21 million and $ 24 million for the years ended December 31, 2024 and 2023, as a result of the amortization over 4 years of the $ 101 million positive impact from the 2021 modifications of a healthcare plan in the U.S.
(4) Unallocated amounts include certain corporate costs and other operating expenses and incomes not allocated to segments' results.
(5) In the year ended December 31, 2025, this item includes a $ 172 million non-cash impairment charge related to IPR&D acquired as part of the Raven and Bennamann acquisitions, $ 62 million for non-cash impairment of investment in Monarch Tractors and other minority holdings and a $ 10 million inventory write-down for the New Holland T6.180 Methane Power Tractor. In the year ended December 31, 2024, this item includes a loss of $ 17 million on the sale of certain non-core product lines and a gain of $ 14 million for investment fair value adjustments. In the year ended December 31, 2023, this item includes a loss of $ 23 million on the sale of the CNH Industrial Russia and CNH Capital Russia businesses, partially offset by a gain of $ 13 million for the fair value remeasurement of Augmenta and Bennamann.
There are no segment assets reported to the CODM for assessing performance and allocating resources. However, the CODM reviews expenditures for long-lived assets by operating segment, therefore, this information is presented below as well.
A summary of additional operating segment information for the years ended December 31, 2025, 2024 and 2023 is as follows (in millions of dollars):
Years Ended December 31,
Revenues
Agriculture
Construction
Net sales
Financial Services
Eliminations and other
Total Revenues
Depreciation and Amortization (1)
Agriculture
Construction
Other activities and adjustments
Depreciation and amortization of Industrial Activities
Financial Services
Total Depreciation and amortization
Expenditures for long-lived assets (2)
Agriculture
Construction
Other activities
Expenditures for long-lived assets of Industrial Activities
Financial Services
Total Expenditures for long-lived assets
(1) Excluding equipment on operating leases.
(2) Excluding equipment on operating leases and right-of-use assets.
A summary of additional operating segment information as of December 31, 2025 and 2024 is as follows (in millions of dollars):
As of December 31,
Inventory
Agriculture
Construction
Financial Services
Total Inventory
Equity Method Investments
Agriculture
Financial Services
Total Equity Method Investments
Geographic Information
CNH has its principal office in Basildon, England, U.K. Revenues earned in the U.K. from external customers were $ 393 million, $ 359 million and $ 548 million for the years ended December 31, 2025, 2024 and 2023, respectively. Revenues earned in the rest of the world from external customers were $ 17,702 million, $ 19,477 million and $ 24,139 million for the years ended December 31, 2025, 2024 and 2023, respectively. The following highlights revenues earned from external customers in the rest of the world by destination (in millions of dollars):
Years Ended December 31,
United States
Brazil
Canada
France
Australia
Argentina
India
Italy
Germany
China
Poland
Spain
Other
Total Revenues from external customers in the rest of world
For the years ended December 31, 2025, 2024 and 2023, no single external customer of CNH accounted for 10 percent or more of consolidated revenues.
Total long-lived tangible and intangible assets located in the U.K. were $ 288 million and $ 324 million at December 31, 2025, and 2024, respectively, and the total of such assets located in the rest of the world totaled $ 8,187 million and $ 7,883 million at December 31, 2025 and 2024, respectively. The following highlights long-lived tangible and intangible assets by geography in the rest of the world (in millions of dollars):
As of December 31,
United States
Canada
Italy
Brazil
France
China
Germany
Spain
Other
Total Long-lived assets in the rest of the world
Note 22: Related Party Information
As of December 31, 2025 and 2024 CNH's related parties were primarily EXOR N.V. ("Exor") and the companies that EXOR N.V. controlled or had a significant influence over, including Stellantis N.V., ("Stellantis"), Ferrari N.V., ("Ferrari") and Iveco Group N.V., ("Iveco"), which effective January 1, 2022 separated from CNH Industrial N.V. by way of a demerger under Dutch law and became a public listed company independent from CNH.
As of December 31, 2025, EXOR N.V. held 45.5 % of CNH's voting power and had the ability to significantly influence the decisions submitted to a vote of CNH's shareholders, including approval of annual dividends, the election and removal of directors, mergers or other business combinations, the acquisition or disposition of assets, and issuances of equity and the incurrence of indebtedness. The percentage above has been calculated as the ratio of (i) the aggregate number of
common shares and special voting shares owned by EXOR to (ii) the aggregate number of outstanding common shares and special voting shares of CNH as of December 31, 2025. In addition, CNH engages in transactions with its unconsolidated affiliates over which CNH has a significant influence or joint control.
The Company's Audit Committee reviews and, if appropriate, evaluates all significant related party transactions.
Transactions with EXOR N.V. and its Subsidiaries and Affiliates
EXOR is an investment holding company in Europe. As of December 31, 2025, 2024, and 2023, among other things, EXOR managed a portfolio that includes investments in CNH, Stellantis, Iveco Group and Ferrari. CNH did not enter into any significant transactions with EXOR N.V. during the years ended December 31, 2025, 2024, and 2023.
Transactions with Iveco Group post-Demerger
CNH and Iveco Group post-Demerger entered into transactions consisting of the sale of engines from Iveco Group to CNH. Additionally, concurrent with the Demerger, the Companies entered into arms-length services contracts in relation to general administrative and specific technical matters, provided by either CNH to Iveco Group and vice versa as follows:
Master Service Agreement : CNH and Iveco Group entered into a two-year Master Services Agreement ("MSA"), with a two-year extension implemented, whereby each Party (and its subsidiaries) may provide services to the other (and its subsidiaries). Services provided under the MSA relate mainly to lease of premises and depots and IT services. Revenues from services provided under the MSA are presented as "Finance, interest and other income" on the Consolidated Statements of Operations.
Engine Supply Agreement : In relation to the design and supply of off-road engines from Iveco Group to CNH post-Demerger, Iveco Group and CNH entered into a ten-year Engine Supply Agreement ("ESA") whereby Iveco Group will sell to CNH post-Demerger diesel, compressed natural gas ("CNG") and liquid natural gas ("LNG") engines and provide post-sale services. Costs related to engines purchased through this agreement are presented as "Cost of goods sold" on the Consolidated Statements of Operations.
Financial Service Agreement : In relation to certain financial services activities carried out by either CNH to Iveco Group post-Demerger or vice versa, in connection with the execution of the Demerger Deed, CNH and Iveco Group entered into a three-year Master Services Agreement ("FS MSA"), whereby each Party (and its subsidiaries) may provide services and/or financial services activities to the other (and its subsidiaries). Services provided under the FS MSA relate mainly to wholesale and retail financing activities to suppliers, distribution network and customers. Revenues from services provided under the FS MSA are presented as "Finance, interest and other income" on the Consolidated Statements of Operations.
The following table sets forth the related party transactions entered into with Iveco Group post-Demerger for the time period presented (in millions of dollars):
Years Ended December 31,
Net revenues
Purchases
As of December 31,
Trade receivables
Financial receivables from Iveco Group N.V.
Trade payables
Financial payables to Iveco Group N.V.
Transactions with Unconsolidated Affiliates
CNH sells agricultural and construction equipment and provides technical services to unconsolidated affiliates such as CNH de Mexico S.A. de C.V., TürkTraktör and New Holland HFT Japan Inc. CNH also purchases equipment from unconsolidated affiliates, such as TürkTraktör.
The following table sets forth the related party transactions entered into for the time period presented (in millions of dollars):
Years Ended December 31,
Net sales
Purchases
As of December 31,
Trade receivables
Trade payables
At December 31, 2025 and 2024, CNH had pledged guarantees and commitments on the debt or commitments of third parties and performance guarantees in the interest of its associated company for the amounts of $ 118 million and $ 53 million, respectively, related to CNH Industrial Capital Europe S.a.S.
Note 23: Subsequent Events
On January 8, 2026 CNH Industrial Capital LLC completed its notes offering of $ 500 million in aggregate principal amount of 4.375 % notes due March 7, 2031, with an issue price of 99.086 %.
On January 15, 2026 CNH Industrial Capital LLC repaid its $ 500 million note on maturity.
On January 28, 2026, CNH Industrial Capital LLC, through a bankruptcy-remote trust, issued $ 1.2 billion of amortizing asset-backed notes secured by U.S. retail receivables.
