10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2018
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to

Commission File Number: 000-55510

CNH INDUSTRIAL CAPITAL LLC

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		39-1937630 (I.R.S. Employer Identification Number)
5729 Washington Avenue Racine, Wisconsin (Address of principal executive offices)	(262) 636-6011 (Registrant’s telephone number, including area code)	53406 (Zip code)

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

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

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

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

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

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

As of September 30, 2018, all of the limited liability company interests of the registrant were held by CNH Industrial America  LLC, a wholly-owned subsidiary of CNH Industrial N.V.

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

TABLE OF CONTENTS

		PAGE
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2018 and 2017 (Unaudited)	1
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2018 and 2017 (Unaudited)	2
	Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017 (Unaudited)	3
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 (Unaudited)	5
	Consolidated Statements of Changes in Stockholder’s Equity for the Nine Months Ended September 30, 2018 and 2017 (Unaudited)	6
	Condensed Notes to Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	*
Item 4.	Controls and Procedures	45
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	*
Item 3.	Defaults Upon Senior Securities	*
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	46

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

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

(Dollars in thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
REVENUES
Interest income on retail notes and finance leases	$	52,649	$	50,592	$	151,480	$	149,783
Interest income on wholesale notes		17,211		16,772		49,036		48,827
Interest and other income from affiliates		76,142		97,581		263,549		291,844
Rental income on operating leases		60,027		63,291		181,100		189,016
Other income		5,252		6,653		18,628		18,116
Total revenues		211,281		234,889		663,793		697,586
EXPENSES
Interest expense:
Interest expense to third parties		79,991		78,614		232,847		225,003
Interest expense to affiliates		1,566		1,158		5,942		8,294
Total interest expense		81,557		79,772		238,789		233,297
Administrative and operating expenses:
Fees charged by affiliates		11,777		11,307		35,036		33,948
Provision for credit losses		8,286		8,851		24,396		31,949
Depreciation of equipment on operating leases		54,920		75,030		173,174		210,332
Other expenses		8,349		11,403		32,033		28,032
Total administrative and operating expenses		83,332		106,591		264,639		304,261
Total expenses		164,889		186,363		503,428		537,558
INCOME BEFORE TAXES		46,392		48,526		160,365		160,028
Income tax provision		5,111		14,387		31,653		49,309
NET INCOME	$	41,281	$	34,139	$	128,712	$	110,719

See the accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).

1

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

(Dollars in thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
NET INCOME	$	41,281	$	34,139	$	128,712	$	110,719
Other comprehensive income (loss):
Foreign currency translation adjustment		11,493		24,179		(23,475)		45,585
Pension liability adjustment		81		97		276		307
Change in derivative financial instruments		725		1,460		719		2,108
Total other comprehensive income (loss)		12,299		25,736		(22,480)		48,000
COMPREHENSIVE INCOME	$	53,580	$	59,875	$	106,232	$	158,719

See the accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).

2

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2018 AND DECEMBER 31, 2017

(Dollars in thousands)

(Unaudited)

	September 30,		December 31,
	2018		2017
ASSETS
Cash and cash equivalents	$	90,283	$	226,946
Restricted cash		527,808		648,612
Receivables, less allowance for credit losses of $77,419 and $79,196, respectively		9,913,571		10,421,545
Affiliated accounts and notes receivable		97,422		73,133
Equipment on operating leases, net		1,709,839		1,781,489
Equipment held for sale		204,179		208,516
Goodwill		109,592		110,588
Other intangible assets, net		9,409		6,868
Other assets		52,275		34,381
TOTAL	$	12,714,378	$	13,512,078
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt (including current maturities of long-term debt)	$	4,454,292	$	4,617,464
Accounts payable and other accrued liabilities		705,211		740,410
Affiliated debt		78,717		445,802
Long-term debt		6,053,864		6,332,763
Total liabilities		11,292,084		12,136,439
Commitments and contingent liabilities (Note 10)
Stockholder’s equity:
Member’s capital		—		—
Paid-in capital		843,982		843,559
Accumulated other comprehensive loss		(122,643)		(100,163)
Retained earnings		700,955		632,243
Total stockholder’s equity		1,422,294		1,375,639
TOTAL	$	12,714,378	$	13,512,078

See the accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).

3

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2018 AND DECEMBER 31, 2017

(Dollars in thousands)

(Unaudited)

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

	September 30,		December 31,
	2018		2017
Restricted cash	$	527,808	$	648,612
Receivables, less allowance for credit losses of $57,584 and $59,268, respectively		6,846,048		7,159,290
TOTAL	$	7,373,856	$	7,807,902
Short-term debt (including current maturities of long-term debt)	$	3,389,903	$	3,556,007
Long-term debt		3,354,474		3,692,963
TOTAL	$	6,744,377	$	7,248,970

See the accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).

4

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

(Dollars in thousands)

(Unaudited)

	2018		2017 (*)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	128,712	$	110,719
Adjustments to reconcile net income to net cash from (used in) operating activities:
Depreciation on property and equipment and equipment on operating leases		173,180		210,353
Amortization of intangibles		1,602		1,575
Provision for credit losses		24,396		31,949
Deferred income tax (benefit) expense		(10,368)		12,590
Changes in components of working capital:
Change in affiliated accounts and notes receivables		(24,322)		77,381
Change in other assets and equipment held for sale		(23,698)		(25,778)
Change in accounts payable and other accrued liabilities		(20,334)		61,885
Net cash from (used in) operating activities		249,168		480,674
CASH FLOWS FROM INVESTING ACTIVITIES
Cost of receivables acquired		(8,185,725)		(7,443,703)
Collections of receivables		8,594,883		7,794,990
Purchase of equipment on operating leases		(431,457)		(459,274)
Proceeds from disposal of equipment on operating leases		324,304		313,816
Change in property, equipment and software, net		(4,143)		(170)
Net cash from (used in) investing activities		297,862		205,659
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of affiliated debt		674,596		633,254
Payment of affiliated debt		(1,040,598)		(745,415)
Proceeds from issuance of long-term debt		2,574,196		2,648,923
Payment of long-term debt		(3,091,688)		(3,158,234)
Change in short-term borrowings, net		138,997		(3,165)
Dividends paid to CNH Industrial America LLC		(60,000)		(210,000)
Net cash from (used in) financing activities		(804,497)		(834,637)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(257,467)		(148,304)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period		875,558		877,092
End of period	$	618,091	$	728,788
CASH PAID DURING THE PERIOD FOR INTEREST	$	221,751	$	216,310
CASH PAID DURING THE PERIOD FOR TAXES	$	50,761	$	49,007

Notes:

(*)2017 figures have been recast following the retrospective adoption on January 1, 2018 of the updated accounting standard for cash flow presentation (ASU 2016-18).

See the accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).

5

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

(Dollars in thousands)

(Unaudited)

					Accumulated
					Other
	Member’s		Paid-in		Comprehensive		Retained
	Capital		Capital		Income (Loss)		Earnings		Total
BALANCE - January 1, 2017	$	—	$	844,100	$	(144,136)	$	666,754	$	1,366,718
Net income		—		—		—		110,719		110,719
Dividends paid to CNH Industrial America LLC		—		—		—		(210,000)		(210,000)
Foreign currency translation adjustment		—		—		45,585		—		45,585
Stock compensation		—		(39)		—		—		(39)
Pension liability adjustment, net of tax		—		—		307		—		307
Change in derivative financial instruments, net of tax		—		—		2,108		—		2,108
BALANCE - September 30, 2017	$	—	$	844,061	$	(96,136)	$	567,473	$	1,315,398
BALANCE - January 1, 2018	$	—	$	843,559	$	(100,163)	$	632,243	$	1,375,639
Net income		—		—		—		128,712		128,712
Dividends paid to CNH Industrial America LLC		—		—		—		(60,000)		(60,000)
Foreign currency translation adjustment		—		—		(23,475)		—		(23,475)
Stock compensation		—		423		—		—		423
Pension liability adjustment, net of tax		—		—		276		—		276
Change in derivative financial instruments, net of tax		—		—		719		—		719
BALANCE - September 30, 2018	$	—	$	843,982	$	(122,643)	$	700,955	$	1,422,294

See the accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).

6

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

(Unaudited)

NOTE 1: BASIS OF PRESENTATION

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

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

The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information, which should be read in conjunction with the audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2017. Certain financial information that is normally included in annual financial statements prepared in conformity with U.S. GAAP, which is not required for interim reporting purposes, has been condensed or omitted. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of our interim unaudited financial statements have been reflected. Certain items in prior periods have been reclassified to conform the current presentation.

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

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

NOTE 2: NEW ACCOUNTING PRONOUNCEMENTS

New Accounting Pronouncements Adopted in 2018

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (ASC606) (“ASU 2014-09”), which supersedes existing revenue recognition guidance under current U.S. GAAP. The new standard requires an entity to recognize revenue upon transfer of control of goods or services to a customer at an amount that reflects the consideration that

7

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

the entity expects to receive. This new revenue recognition model defines a five-step process to achieve this objective. The new standard also requires additional disclosures to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts with customers. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented, or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the consolidated statement of changes in equity.

The Company has adopted the new standard effective January 1, 2018. The adoption did not impact the timing or measurement of the Company’s revenue recognition as it is consistent with its current accounting treatment for contracts within the scope of the new ASU.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”) that changes the presentation of restricted cash and cash equivalents on the statement of cash flows. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted ASU 2016-18 on a retrospective basis as of January 1, 2018. The impact to the consolidated statement of cash flows for the nine months ended September 30, 2017 was to increase cash flows from changes in accounts payable and other accrued liabilities by $8,566, eliminate cash flows from changes in restricted cash of $180,661, and to increase cash, cash equivalents and restricted cash by $172,095.

In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). The amendments in this update require that an employer disaggregate the service cost component from other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. ASU 2017-07 is effective for annual reporting periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018, which did not have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which amends ASC 825-10, Financial Instruments – Overall. This ASU changes the treatment for available-for-sale equity investments by recognizing unrealized fair value changes directly in net income, and no longer in other comprehensive income. ASU 2016-01 is effective January 1, 2018, with the cumulative-effect adjustment from initially applying the new standard recognized in the consolidated statement of financial position as of January 1, 2018. The Company adopted this standard on January 1, 2018, which did not have a material impact on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). This standard provides guidance clarification to reduce diversity in classification of certain cash flow payments and receipts in the statement of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 on a retrospective transition basis to each period presented, and may be early adopted. The Company adopted this standard on January 1, 2018, which did not have a material impact on its consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

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

8

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

measurement and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. ASU 2016-02 also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. It is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years and early adoption is permitted. The ASU requires a modified retrospective transition approach and provides certain optional transition reliefs. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which establishes ASC 326, Financial Instruments – Credit Losses. The ASU introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Additional disclosures about significant estimates and credit quality are also required. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, with early adoption permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements and improve the disclosures of hedging arrangements. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, including interim periods within these years. Early adoption is permitted in any interim period or fiscal year before the effective date. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which amends ASC 202, Income Statement – Reporting Comprehensive Income. In December 2017, the U.S. government enacted new tax legislation (the “U.S. Tax Reform”). Included in the provisions of U.S. Tax Reform is a reduction of the corporate income tax rate from 35 percent to 21 percent. U.S. GAAP requires that remeasurement of deferred taxes to the new corporate tax rate occur in the period in which the legislation is enacted. The deferred tax adjustment is recorded in the provision for income taxes, including items for which the tax effects were originally recorded in other comprehensive income (“OCI”). This treatment results in the items in OCI reflecting a disproportionate tax rate, a result often referred to as stranded tax effects. This ASU allows a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from tax reform. ASU 2018-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years and early adoption is permitted. The ASU can be adopted at the beginning of an interim or annual period or retrospectively to each period affected by tax reform. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

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

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement (“ASU 2018-15”), which expands upon the guidance set forth in ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. ASU 2018-15 aligns the requirements for capitalization of implementation costs in a cloud computing service contract with those requirements for

9

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

capitalization of implementation costs incurred for an internal-use software license. ASU 2018-15 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted in any interim period for which financial statements have not been issued. ASU 2018-15 may be applied prospectively from the date the guidance is first applied or retrospectively. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In August 2018, the SEC adopted a final rule that amends certain disclosure requirements that have become duplicative, overlapping, or outdated in light of other SEC disclosure requirements, U.S. GAAP, or changes in the information environment. However, the guidance also added requirements for registrants to include in their interim financial statements a reconciliation of changes in stockholders’ equity for each period for which an income statement is required (both year-to-date and quarterly periods). The final rule is effective for all filings made on or after November 5, 2018. However, the SEC staff said it would not object to a registrant waiting to comply with the new interim disclosure requirement until the filing for the quarter that begins after the effective date. As a result, the Company plans to adopt the new interim disclosure requirement in its Form 10-Q for the three months ended March 31, 2019. The Company is currently evaluating the impact compliance with this rule will have on its consolidated financial statements.

NOTE 3: ACCUMULATED OTHER COMPREHENSIVE INCOME

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

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the three months ended September 30, 2018:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		on Derivatives		Total
Beginning balance, gross	$	(133,685)	$	(4,693)	$	2,325	$	(136,053)
Tax asset		—		1,726		(615)		1,111
Beginning balance, net of tax		(133,685)		(2,967)		1,710		(134,942)
Other comprehensive income (loss) before reclassifications		11,493		(58)		1,114		12,549
Amounts reclassified from accumulated other comprehensive income (loss)		—		165		(128)		37
Tax effects		—		(26)		(261)		(287)
Net current-period other comprehensive income (loss)		11,493		81		725		12,299
Total	$	(122,192)	$	(2,886)	$	2,435	$	(122,643)

10

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the nine months ended September 30, 2018:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		on Derivatives		Total
Beginning balance, gross	$	(98,717)	$	(4,952)	$	2,333	$	(101,336)
Tax asset		—		1,790		(617)		1,173
Beginning balance, net of tax		(98,717)		(3,162)		1,716		(100,163)
Other comprehensive income (loss) before reclassifications		(23,475)		(130)		1,031		(22,574)
Amounts reclassified from accumulated other comprehensive income (loss)		—		496		(53)		443
Tax effects		—		(90)		(259)		(349)
Net current-period other comprehensive income (loss)		(23,475)		276		719		(22,480)
Total	$	(122,192)	$	(2,886)	$	2,435	$	(122,643)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the three months ended September 30, 2017:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		Derivatives		Total
Beginning balance, gross	$	(118,179)	$	(5,433)	$	(330)	$	(123,942)
Tax asset		—		1,982		88		2,070
Beginning balance, net of tax		(118,179)		(3,451)		(242)		(121,872)
Other comprehensive income (loss) before reclassifications		24,179		(79)		1,802		25,902
Amounts reclassified from accumulated other comprehensive income (loss)		—		237		184		421
Tax effects		—		(61)		(526)		(587)
Net current-period other comprehensive income (loss)		24,179		97		1,460		25,736
Total	$	(94,000)	$	(3,354)	$	1,218	$	(96,136)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the nine months ended September 30, 2017:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		Derivatives		Total
Beginning balance, gross	$	(139,585)	$	(5,768)	$	(1,213)	$	(146,566)
Tax asset		—		2,107		323		2,430
Beginning balance, net of tax		(139,585)		(3,661)		(890)		(144,136)
Other comprehensive income (loss) before reclassifications		45,585		(207)		2,344		47,722
Amounts reclassified from accumulated other comprehensive income (loss)		—		700		524		1,224
Tax effects		—		(186)		(760)		(946)
Net current-period other comprehensive income (loss)		45,585		307		2,108		48,000
Total	$	(94,000)	$	(3,354)	$	1,218	$	(96,136)

11

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

The reclassifications out of AOCI and the location on the consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 are as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017		Affected Line Item
Amortization of defined benefit pension items:
	$	(165)	$	(237)	$	(496)	$	(700)	Various line items individually insignificant
		(165)		(237)		(496)		(700)	Income before taxes
		40		91		122		264	Income tax benefit
	$	(125)	$	(146)	$	(374)	$	(436)	Net of tax
Unrealized losses on derivatives:
	$	128	$	(184)	$	53	$	(524)	Interest expense to third parties
		128		(184)		53		(524)	Income before taxes
		(34)		49		(14)		139	Income tax benefit
	$	94	$	(135)	$	39	$	(385)	Net of tax

NOTE 4: RECEIVABLES

A summary of receivables included in the consolidated balance sheets as of September 30, 2018 and December 31, 2017 is as follows:

	September 30,		December 31,
	2018		2017
Retail	$	715,312	$	768,502
Wholesale		703,069		671,740
Wholesale factoring		8,411		235,834
Finance lease		61,509		58,198
Restricted receivables		8,502,689		8,766,467
Gross receivables		9,990,990		10,500,741
Less: Allowance for credit losses		(77,419)		(79,196)
Total receivables, net	$	9,913,571	$	10,421,545

Restricted Receivables and Securitization

As part of its overall funding strategy, the Company periodically transfers certain receivables into VIEs that are special purpose entities (“SPEs”) as part of its asset-backed securitization (“ABS”) programs.

SPEs utilized in the securitization programs differ from other entities included in the Company’s consolidated financial statements because the assets they hold are legally isolated from the Company’s assets. For bankruptcy analysis purposes, the Company has sold the receivables to the SPEs in a true sale and the SPEs are separate legal entities. Upon transfer of the receivables to the SPEs, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the SPEs’ creditors. The SPEs have ownership of cash balances that also have restrictions for the benefit of the SPEs’ investors. The Company’s interests in the SPEs’ receivables are subordinate to the interests of third-party investors. None of the receivables that are directly or indirectly sold or

12

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

transferred in any of these transactions are available to pay the Company’s creditors until all obligations of the SPE have been fulfilled or the receivables are repurchased from the SPE.

The secured borrowings related to the restricted receivables are obligations that are payable as the receivables are collected. The following table summarizes the restricted receivables as of September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Retail	$	5,744,328	$	6,042,186
Wholesale		2,758,361		2,724,281
Total restricted receivables	$	8,502,689	$	8,766,467

Within the U.S. retail receivables securitization programs, qualifying retail receivables are sold to limited purpose, bankruptcy remote SPEs. In turn, these SPEs either establish separate trusts to which the receivables are transferred in exchange for proceeds from asset-backed securities issued by the trusts or pledge the receivables as collateral in exchange for proceeds from a committed asset-backed facility. In Canada, the receivables are transferred directly to the trusts. These trusts were determined to be VIEs. In its role as servicer, the Company has the power to direct the trusts’ activities. Through its retained interests, the Company has an obligation to absorb certain losses, or the right to receive certain benefits, that could potentially be significant to the trusts. Consequently, the Company has consolidated these retail trusts.

With regard to the wholesale receivable securitization programs, the Company sells eligible receivables on a revolving basis to structured master trust facilities, which are limited-purpose, bankruptcy-remote SPEs. These trusts were determined to be VIEs. In its role as servicer, CNH Industrial Capital has the power to direct the trusts’ activities. Through its retained interests, the Company provides security to investors in the event that cash collections from the receivables are not sufficient to make principal and interest payments on the securities. Consequently, CNH Industrial Capital has consolidated these wholesale trusts.

Allowance for Credit Losses

The allowance for credit losses is the Company’s estimate of losses for receivables owned by the Company and consists of two components, depending on whether the receivable has been individually identified as being impaired. The first component of the allowance for credit losses covers the receivables specifically reviewed by management for which the Company has determined it is probable that it will not collect all the principal and interest payments as per the terms of the contract. Receivables are individually reviewed for impairment based on, among other items, amounts outstanding, days past due and prior collection history. These receivables are subject to impairment measurement at the loan level based either on the fair value of the collateral for collateral-dependent receivables or on the present value of expected future cash flows discounted at the receivables’ effective interest rate.

The second component of the allowance for credit losses covers all receivables that have not been individually reviewed for impairment. The allowance for these receivables is based on aggregated portfolio evaluations, generally by financial product. The allowance for retail 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. In addition, qualitative factors that are not fully captured in the loss forecast models, including industry trends, and macroeconomic factors 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.

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.

13

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

The Company’s allowance for credit losses is segregated into three portfolio segments: retail, wholesale and wholesale factoring. A portfolio segment is the level at which the Company develops a systematic methodology for determining its allowance for credit losses. The retail segment includes retail notes and finance lease receivables. The wholesale segment includes wholesale financing to CNH Industrial North America dealers and the wholesale factoring segment represents the short-term receivables purchased from Iveco Argentina S.A. (“Iveco Argentina”).

Further, the Company evaluates its retail and wholesale portfolio segments by class of receivable: United States and Canada. Typically, the Company’s receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. These classes align with management reporting.

Allowance for credit losses activity for the three months ended September 30, 2018 is as follows:

	Retail		Wholesale		Wholesale Factoring		Total
Allowance for credit losses:
Beginning balance	$	70,316	$	6,486	$	50	$	76,852
Charge-offs		(8,563)		—		—		(8,563)
Recoveries		765		3		—		768
Provision (benefit)		7,824		509		(47)		8,286
Foreign currency translation and other		66		8		2		76
Ending balance	$	70,408	$	7,006	$	5	$	77,419

Allowance for credit losses activity for the nine months ended September 30, 2018 is as follows:

	Retail		Wholesale		Wholesale Factoring		Total
Allowance for credit losses:
Beginning balance	$	73,610	$	5,444	$	142	$	79,196
Charge-offs		(28,830)		(187)		—		(29,017)
Recoveries		2,912		67		—		2,979
Provision (benefit)		22,831		1,696		(131)		24,396
Foreign currency translation and other		(115)		(14)		(6)		(135)
Ending balance	$	70,408	$	7,006	$	5	$	77,419
Ending balance: individually evaluated for impairment	$	16,102	$	4,435	$	—	$	20,537
Ending balance: collectively evaluated for impairment	$	54,306	$	2,571	$	5	$	56,882
Receivables:
Ending balance	$	6,521,149	$	3,461,430	$	8,411	$	9,990,990
Ending balance: individually evaluated for impairment	$	32,464	$	26,504	$	—	$	58,968
Ending balance: collectively evaluated for impairment	$	6,488,685	$	3,434,926	$	8,411	$	9,932,022

14

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

Allowance for credit losses activity for the three months ended September 30, 2017 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	80,440	$	4,734	$	85,174
Charge-offs		(10,021)		—		(10,021)
Recoveries		446		9		455
Provision		8,822		29		8,851
Foreign currency translation and other		(466)		21		(445)
Ending balance	$	79,221	$	4,793	$	84,014

Allowance for credit losses activity for the nine months ended September 30, 2017 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	78,047	$	6,848	$	84,895
Charge-offs		(32,296)		(2,016)		(34,312)
Recoveries		2,442		17		2,459
Provision (benefit)		32,043		(94)		31,949
Foreign currency translation and other		(1,015)		38		(977)
Ending balance	$	79,221	$	4,793	$	84,014
Ending balance: individually evaluated for impairment	$	22,044	$	2,170	$	24,214
Ending balance: collectively evaluated for impairment	$	57,177	$	2,623	$	59,800
Receivables:
Ending balance	$	7,108,878	$	3,556,478	$	10,665,356
Ending balance: individually evaluated for impairment	$	44,094	$	33,871	$	77,965
Ending balance: collectively evaluated for impairment	$	7,064,784	$	3,522,607	$	10,587,391

Allowance for credit losses activity for the year ended December 31, 2017 is as follows:

	Retail		Wholesale		Wholesale Factoring		Total
Allowance for credit losses:
Beginning balance	$	78,047	$	6,848	$	—	$	84,895
Charge-offs		(46,460)		(2,374)		—		(48,834)
Recoveries		4,045		20		—		4,065
Provision		39,842		919		137		40,898
Foreign currency translation and other		(1,864)		31		5		(1,828)
Ending balance	$	73,610	$	5,444	$	142	$	79,196
Ending balance: individually evaluated for impairment	$	18,018	$	2,920	$	—	$	20,938
Ending balance: collectively evaluated for impairment	$	55,592	$	2,524	$	142	$	58,258
Receivables:
Ending balance	$	6,868,886	$	3,396,021	$	235,834	$	10,500,741
Ending balance: individually evaluated for impairment	$	38,807	$	43,912	$	—	$	82,719
Ending balance: collectively evaluated for impairment	$	6,830,079	$	3,352,109	$	235,834	$	10,418,022

15

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

Utilizing an internal credit scoring model, which considers customers’ attributes, prior credit history and each retail transaction’s attributes, the Company assigns a credit quality rating to each retail customer, by specific transaction, as part of the retail underwriting process. This rating is used in setting the terms on the transaction, including the interest rate. A description of the general characteristics of the customers’ risk grades is as follows:

Titanium — Customers from whom the Company expects no loss or collection effort.

Platinum — Customers from whom the Company expects minimal, if any, loss or collection effort.

Gold, Silver, Bronze — Customers defined as those with the potential for loss and collection effort.

A breakdown of the retail portfolio by the customer’s risk grade at the time of origination as of September 30, 2018 and December 31, 2017 is as follows:

	September 30,		December 31,
	2018		2017
Titanium	$	3,446,228	$	3,734,313
Platinum		1,958,664		2,002,791
Gold		933,294		952,404
Silver		149,666		146,051
Bronze		33,297		33,327
Total	$	6,521,149	$	6,868,886

As part of the ongoing monitoring of the credit quality of the wholesale portfolio, the Company utilizes an internal credit scoring model that assigns a risk grade for each dealer. The scoring model considers the strength of the dealer’s financial condition and payment history. The Company considers the dealers’ ratings in the quarterly credit allowance analysis. A description of the general characteristics of the dealer risk grades is as follows:

Grades A and B —Includes receivables due from dealers that have significant capital strength, moderate leverage, stable earnings and growth, and excellent payment performance.

Grade C —Includes receivables due from dealers with moderate credit risk. Dealers of this grade are differentiated from higher grades on a basis of leverage or payment performance.

Grade D —Includes receivables due from dealers with additional credit risk. These dealers require additional monitoring due to their weaker financial condition or payment performance.

A breakdown of the wholesale portfolio by its credit quality indicators as of September 30, 2018 and December 31, 2017 is as follows:

	September 30,		December 31,
	2018		2017
A	$	1,490,875	$	1,222,813
B		1,298,798		1,425,591
C		502,039		439,353
D		169,718		308,264
Total	$	3,461,430	$	3,396,021

16

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

The following tables present information at the level at which management assesses and monitors its credit risk. Receivables are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Delinquency is reported on receivables greater than 30 days past due.

The aging of receivables as of September 30, 2018 is as follows:

													Recorded
													Investment
					Greater								> 90 Days
	31 – 60 Days		61 – 90 Days		Than		Total				Total		and
	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Retail
United States	$	20,725	$	5,525	$	24,956	$	51,206	$	5,281,963	$	5,333,169	$	6,581
Canada	$	1,946	$	487	$	2,860	$	5,293	$	1,182,687	$	1,187,980	$	1,170
Wholesale
United States	$	651	$	34	$	1,363	$	2,048	$	2,680,102	$	2,682,150	$	450
Canada	$	17	$	—	$	46	$	63	$	779,217	$	779,280	$	17
Wholesale Factoring	$	111	$	1,753	$	2,145	$	4,009	$	4,402	$	8,411	$	—
Total
Retail	$	22,671	$	6,012	$	27,816	$	56,499	$	6,464,650	$	6,521,149	$	7,751
Wholesale	$	668	$	34	$	1,409	$	2,111	$	3,459,319	$	3,461,430	$	467
Wholesale factoring	$	111	$	1,753	$	2,145	$	4,009	$	4,402	$	8,411	$	—

The aging of receivables as of December 31, 2017 is as follows:

													Recorded
													Investment
					Greater								> 90 Days
	31 – 60 Days		61 – 90 Days		Than		Total				Total		and
	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Retail
United States	$	27,590	$	8,412	$	37,004	$	73,006	$	5,532,329	$	5,605,335	$	6,232
Canada	$	2,010	$	585	$	2,837	$	5,432	$	1,258,119	$	1,263,551	$	665
Wholesale
United States	$	802	$	1	$	236	$	1,039	$	2,658,716	$	2,659,755	$	179
Canada	$	22	$	—	$	6	$	28	$	736,238	$	736,266	$	6
Wholesale Factoring	$	5,652	$	1,390	$	—	$	7,042	$	228,792	$	235,834	$	—
Total
Retail	$	29,600	$	8,997	$	39,841	$	78,438	$	6,790,448	$	6,868,886	$	6,897
Wholesale	$	824	$	1	$	242	$	1,067	$	3,394,954	$	3,396,021	$	185
Wholesale factoring	$	5,652	$	1,390	$	—	$	7,042	$	228,792	$	235,834	$	—

17

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

Impaired receivables are receivables for which the Company has determined it will not collect all the principal and interest payments as per the terms of the contract. As of September 30, 2018 and December 31, 2017, the Company’s recorded investment in impaired receivables individually evaluated for impairment and the related unpaid principal balances, allowances and average recorded investment (based on a ten-month average and thirteen-month average, respectively) are as follows:

	September 30, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Retail
United States	$	31,424	$	30,153	$	15,194	$	32,962
Canada	$	1,040	$	988	$	908	$	1,154
Wholesale
United States	$	26,504	$	25,357	$	4,435	$	36,405
Total
Retail	$	32,464	$	31,141	$	16,102	$	34,116
Wholesale	$	26,504	$	25,357	$	4,435	$	36,405

	December 31, 2017
			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Retail
United States	$	38,035	$	36,187	$	17,518	$	39,917
Canada	$	772	$	716	$	500	$	1,084
Wholesale
United States	$	43,912	$	43,531	$	2,920	$	49,469
Total
Retail	$	38,807	$	36,903	$	18,018	$	41,001
Wholesale	$	43,912	$	43,531	$	2,920	$	49,469

As of September 30, 2018 and December 31, 2017, the Company’s impaired receivables individually evaluated for impairment without an allowance were immaterial. Interest income recognized for the three and nine months ended September 30, 2018 and 2017 was immaterial.

18

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

Recognition of income is generally suspended when management determines that collection of future finance income is not probable or when an account becomes 120 days delinquent, whichever occurs first. Interest accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at that time. The receivables on nonaccrual status as of September 30, 2018 and December 31, 2017 are as follows:

	September 30, 2018						December 31, 2017
	Retail		Wholesale		Total		Retail		Wholesale		Total
United States	$	28,039	$	25,357	$	53,396	$	40,968	$	43,531	$	84,499
Canada	$	2,523	$	—	$	2,523	$	2,538	$	—	$	2,538

Troubled Debt Restructurings

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

TDRs are reviewed along with other receivables as part of management’s ongoing evaluation of the adequacy of the allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source of repayment, which is normally the liquidation of collateral. In determining collateral value, the Company estimates the current fair market value of the equipment collateral and considers credit enhancements such as additional collateral and third-party guarantees.

Before removing a receivable from TDR classification, a review of the borrower is conducted. If concerns exist about the future ability of the borrower to meet its obligations based on a credit review, the TDR classification is not removed from the receivable.

As of September 30, 2018, the Company had 278 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre-modification value of these contracts was $9,408 and the post-modification value was $8,509. Additionally, the Company had 365 accounts with a balance of $17,028 undergoing bankruptcy proceedings where a concession has not yet been determined. As of September 30, 2017, the Company had 235 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre-modification value of these contracts was $5,780 and the post-modification value was $5,092. Additionally, the Company had 453 accounts with a balance of $29,722 undergoing bankruptcy proceedings where a concession has not yet been determined. As the outcome of the bankruptcy cases is determined by a court based on available assets, subsequent re-defaults are unusual and were not material for retail and finance lease contracts that were modified in a TDR during the previous 12 months ended September 30, 2018 and 2017.

As of September 30, 2018 and 2017, the Company’s wholesale TDRs were immaterial.

NOTE 5: CREDIT FACILITIES AND DEBT

On August 14, 2018, the Company completed an offering of $500,000 in aggregate principal amount of its 4.200% unsecured notes due 2024, issued at a price to the public of 99.701%.

On September 26, 2018, the Company, through a bankruptcy-remote trust, issued $809,930 of amortizing asset-backed notes secured by U.S. retail receivables.

19

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

On September 27, 2018, the Company extended the maturity date of the $1,200,000 U.S. retail committed asset-backed facility to September 27, 2020.

Unsecured facilities with banks as of September 30, 2018 totaled $830,536. These committed credit facilities, which are eligible for renewal at various future dates, are used primarily for working capital and other general corporate purposes. As of September 30, 2018, we had $230,536 outstanding against these credit facilities. Included in the remaining available credit commitments is $348,900 maintained primarily to provide backup liquidity for commercial paper borrowings.

NOTE 6: INCOME TAXES

The effective tax rates for the three months ended September 30, 2018 and 2017 were 11.0% and 29.6%, respectively. The effective tax rate was 19.7% for the nine-month period ended September 30, 2018, compared to 30.8% for the same period in 2017. The decreases in the effective tax rates were primarily due to the passage of the U.S. Tax Reform on December 22, 2017, which reduced the U.S. corporate tax rate from 35% t to 21% and certain net discrete tax benefits, including a revision to the Company's provisional estimate of accounting for U.S Tax Reform. Excluding the discrete tax benefits, the Company’s effective tax rates would have been 23.1% and 23.2%, for the three and nine-month periods ended September 30, 2018, respectively.

The U.S. Tax Reform changed many aspects of U.S. corporate income taxation, including reducing the corporate tax rate, implementing a quasi-territorial tax system and imposing a tax on deemed repatriated earnings of certain foreign subsidiaries. The Company reasonably estimated the effects of the U.S. Tax Reform in the three months ended December 31, 2017. During the three and nine months ended September 30, 2018, the Company recognized a tax benefit in refining, in accordance with Staff Accounting Bulletin No. (“SAB”) 118, its provisional estimates of the U.S. Tax Reform as reflected in our 2017 results. During the final three months of 2018, the Company will finalize its provisional estimates of accounting for the impacts of U.S. Tax Reform, in accordance with SAB 118.

NOTE 7: FINANCIAL INSTRUMENTS

The Company may elect to measure many financial instruments and certain other items at fair value. This fair value option must 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. The Company did not elect the fair value measurement option for eligible items.

Fair-Value Hierarchy

U.S. GAAP specifies a hierarchy of valuation techniques 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 internally-developed 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.

20

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

This hierarchy requires the use of observable market data when available.

Determination of Fair Value

When available, the Company uses quoted market prices to determine fair value and classifies such items in Level 1. In some cases where a market price is not available, the Company will make use of observable market-based inputs to calculate fair value, in which case the items are classified in Level 2.

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

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

Derivatives

The Company 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. The Company does not hold or issue derivative or other financial instruments for speculative purposes. The credit risk for the interest rate hedges is reduced through diversification among counterparties, utilizing mandatory termination clauses and/or collateral support agreements. Derivative instruments are generally classified in Level 2 or 3 of the fair value hierarchy. The cash flows underlying all derivative contracts were recorded in operating activities in the consolidated statements of cash flows.

Interest Rate Derivatives

The Company has entered into interest rate derivatives in order to manage interest rate exposures arising in the normal course of business. Interest rate derivatives that have been designated in cash flow hedging relationships are being used by the Company to mitigate the risk of rising interest rates related to debt and anticipated issuance of fixed-rate debt in future periods. Gains and losses on these instruments, to the extent that the hedge relationship has been effective, are deferred in accumulated other comprehensive income (loss) and recognized in interest expense over the period in which the Company recognizes interest expense on the related debt. Any ineffectiveness was recorded in “Other expenses” in the consolidated statements of income and was insignificant for all periods presented. As of September 30, 2018, the maximum length of time over which the Company is hedging its interest rate exposure through the use of derivative instruments designated in cash flow hedge relationships is 46 months. As of September 30, 2018, the after-tax losses deferred in accumulated other comprehensive income (loss) that will be recognized in interest expense over the next 12 months are approximately $419.

The Company also enters into interest rate derivatives with substantially similar economic terms that are not designated as hedging instruments to mitigate interest rate risk related to the Company’s committed asset-backed facilities. These facilities require the Company to enter into interest rate derivatives. To ensure that these transactions do not result in the Company being exposed to this risk, the Company enters into an offsetting position. Unrealized and realized gains and losses resulting from fair value changes in these instruments are recognized directly in income and were insignificant for the three and nine months ended September 30, 2018 and 2017.

21

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

All of the Company’s interest rate derivatives as of September 30, 2018 and December 31, 2017 are considered Level 2. The fair market value of these derivatives is calculated using market data input for forecasted benchmark interest rates and can be compared to actively traded derivatives. The total notional amount of the Company’s interest rate derivatives was $3,147,985 and $3,143,737 at September 30, 2018 and December 31, 2017, respectively. The ten-month average notional amounts for the nine months ended September 30, 2018 and 2017 were $2,915,781 and $3,260,026, respectively.

Foreign Exchange Contracts

The Company uses forward contracts to hedge certain assets and liabilities denominated in foreign currencies. Such derivatives are considered economic hedges and are not designated as hedging instruments. The changes in the fair value of these instruments are recognized directly as income in “Other expenses” and are expected to offset the foreign exchange gains or losses on the exposures being managed.

All of the Company’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.

Financial Statement Impact of the Company’s Derivatives

The fair values of the Company’s derivatives as of September 30, 2018 and December 31, 2017 in the consolidated balance sheets are recorded as follows:

	September 30,		December 31,
	2018		2017
Derivatives Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	733	$	4,113
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	10,428	$	6,698
Derivatives Not Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	4,767	$	4,638
Foreign exchange contracts		6		1,393
Total	$	4,773	$	6,031
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	4,767	$	4,638
Foreign exchange contracts		318		325
Total	$	5,085	$	4,963

22

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

Pre-tax gains (losses) on the consolidated statements of income and comprehensive income related to the Company’s derivatives for the three and nine months ended September 30, 2018 and 2017 are recorded in the following accounts:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Cash Flow Hedges
Recognized in accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives	$	1,114	$	1,802	$	1,031	$	2,344
Reclassified from accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives—Interest expense to third parties		128		(184)		53		(524)
Not Designated as Hedges
Foreign exchange contracts—Other expenses	$	(168)	$	(139)	$	(11,691)	$	874

Items Measured at Fair Value on a Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Assets
Interest rate derivatives	$	5,500	$	8,751
Foreign exchange contracts		6		1,393
Total assets	$	5,506	$	10,144
Liabilities
Interest rate derivatives	$	15,195	$	11,336
Foreign exchange contracts		318		325
Total liabilities	$	15,513	$	11,661

There were no transfers between Level 1, Level 2 and Level 3 hierarchy levels during the periods presented.

Fair Value of Other Financial Instruments

The carrying amount of cash and cash equivalents, restricted cash, floating-rate affiliated accounts and notes receivable, floating-rate short-term debt, interest payable and short-term affiliated debt was assumed to approximate its fair value. Under the fair value hierarchy, cash and cash equivalents and restricted cash are classified as Level 1 and the remainder of the financial instruments listed is classified as Level 2.

23

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

Financial Instruments Not Carried at Fair Value

The carrying amount and estimated fair value of assets and liabilities considered financial instruments as of September 30, 2018 and December 31, 2017 are as follows:

	September 30, 2018				December 31, 2017
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value *		Amount		Fair Value *
Receivables	$	9,913,571	$	9,813,399	$	10,421,545	$	10,379,020
Long-term debt	$	6,053,864	$	5,982,078	$	6,332,763	$	6,314,182

______________

*Under the fair value hierarchy, receivables measurements are classified as Level 3 and long‑term debt measurements are classified as Level 2.

Receivables

The fair value of receivables was determined by discounting the estimated future payments using a discount rate that includes an estimate for credit risk.

Long-term debt

The fair values of long-term debt were based on current market quotes for identical or similar borrowings and credit risk.

NOTE 8: SEGMENT AND GEOGRAPHICAL INFORMATION

The Company’s segment data is based on disclosure requirements of accounting guidance on segment reporting, which requires financial information be reported on the basis that is used internally for measuring segment performance. The Company’s reportable segments are strategic business units that are organized around differences in geographic areas. Each segment is managed separately as they require different knowledge of regulatory environments and marketing strategies. The operating segments offer primarily the same services within each of the respective segments.

24

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

A summary of the Company’s reportable segment information is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenues
United States	$	170,988	$	188,733	$	523,185	$	567,401
Canada		42,107		47,357		146,687		133,385
Eliminations		(1,814)		(1,201)		(6,079)		(3,200)
Total	$	211,281	$	234,889	$	663,793	$	697,586
Interest expense
United States	$	69,761	$	69,649	$	203,717	$	202,785
Canada		13,610		11,324		41,151		33,712
Eliminations		(1,814)		(1,201)		(6,079)		(3,200)
Total	$	81,557	$	79,772	$	238,789	$	233,297
Segment net income
United States	$	30,810	$	16,925	$	84,449	$	65,257
Canada		10,471		17,214		44,263		45,462
Total	$	41,281	$	34,139	$	128,712	$	110,719
Depreciation and amortization
United States	$	44,514	$	63,908	$	141,215	$	178,404
Canada		10,937		11,672		33,567		33,524
Total	$	55,451	$	75,580	$	174,782	$	211,928
Expenditures for equipment on operating leases
United States	$	160,179	$	95,662	$	343,485	$	382,661
Canada		29,490		20,741		87,972		76,613
Total	$	189,669	$	116,403	$	431,457	$	459,274
Provision for credit losses
United States	$	7,661	$	8,924	$	22,475	$	31,841
Canada		625		(73)		1,921		108
Total	$	8,286	$	8,851	$	24,396	$	31,949

25

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

	As of		As of
	September 30,		December 31,
	2018		2017
Segment assets
United States	$	10,310,001	$	10,738,403
Canada		2,518,382		2,838,754
Eliminations		(114,005)		(65,079)
Total	$	12,714,378	$	13,512,078
Managed receivables
United States	$	8,015,319	$	8,265,090
Canada		1,975,671		2,235,651
Total	$	9,990,990	$	10,500,741

NOTE 9: RELATED-PARTY TRANSACTIONS

The Company receives compensation from CNH Industrial North America for retail, wholesale and operating lease sales programs offered by CNH Industrial North America on which finance charges are waived or below market rate financing programs are offered. The Company receives compensation from CNH Industrial North America based on the Company’s estimated costs and a targeted return on equity. The Company is also compensated for lending funds to CNH Industrial North America.

In addition, the Company receives income from Iveco Argentina for wholesale factoring receivables purchased at a discount.

The summary of sources included in “Interest and other income from affiliates” in the accompanying consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Subsidy from CNH Industrial North America
Retail	$	35,618	$	39,401	$	112,115	$	116,561
Wholesale		24,658		41,331		93,508		124,261
Operating lease		14,996		16,802		46,002		50,909
Income from Iveco Argentina
Wholesale factoring		589		—		10,881		—
Income from affiliated receivables
CNH Industrial North America		281		47		1,043		113
Total interest and other income from affiliates	$	76,142	$	97,581	$	263,549	$	291,844

Interest expense to affiliates was $1,566 and $1,158, respectively, for the three months ended September 30, 2018 and 2017 and $5,942 and $8,294, respectively, for the nine months ended September 30, 2018 and 2017. Fees charged by affiliates were $11,777 and $11,307, respectively, for the three months ended September 30, 2018 and 2017, and $35,036 and $33,948, respectively, for the nine months ended September 30, 2018 and 2017, and represents payroll and other human resource services CNH Industrial America performs on behalf of the Company.

26

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

As of September 30, 2018 and December 31, 2017, the Company had various accounts and notes receivable and debt with the following affiliates:

	September 30,		December 31,
	2018		2017
Affiliated receivables
CNH Industrial America	$	84,257	$	49,311
CNH Industrial Canada Ltd.		718		11,282
Other affiliates		12,447		12,540
Total affiliated receivables	$	97,422	$	73,133
Affiliated debt
CNH Industrial America	$	50,000	$	327,160
CNH Industrial Canada Ltd.		28,717		118,642
Total affiliated debt	$	78,717	$	445,802

Included in “Other Assets” in the accompanying balance sheet were tax receivables due from related parties of $16,810 and $3,513, respectively, as of September 30, 2018 and December 31, 2017. Accounts payable and other accrued liabilities, including tax payables, of $81,624 and $60,070, respectively, as of September 30, 2018 and December 31, 2017, were payable to related parties.

NOTE 10: COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is party to various litigation matters and claims arising from its operations. Management believes that the outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position or results of operations.

Guarantees

The Company provides payment guarantees on the financial debt of various foreign financial services subsidiaries of CNHI for approximately $30,000. The guarantees are in effect for the term of the underlying funding facilities.

Commitments

The Company has various agreements to extend credit for the wholesale managed portfolio. At September 30, 2018, the total credit limit available was $6,092,405, of which $3,424,103 was utilized.

27

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

NOTE 11: SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

CNH Industrial Capital America and New Holland Credit (the “Guarantor Entities”), which are 100%-owned subsidiaries of CNH Industrial Capital LLC, guarantee certain indebtedness of CNH Industrial Capital LLC. As the guarantees are full, unconditional, and joint and several, and because the Guarantor Entities are 100%-owned by CNH Industrial Capital LLC, the Company has included the following condensed consolidating financial information as of September 30, 2018 and December 31, 2017 and for the three and nine months ended September 30, 2018 and 2017. The condensed consolidating financial information reflects investments in consolidated subsidiaries under the equity method of accounting.

28

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

	Condensed Statements of Comprehensive Income for the
	Three Months Ended September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	4,384	$	48,265	$	—	$	52,649
Interest income on wholesale notes		—		(253)		17,464		—		17,211
Interest and other income from affiliates		17,719		46,041		65,642		(53,260)		76,142
Rental income on operating leases		—		46,659		13,368		—		60,027
Other income		—		21,711		431		(16,890)		5,252
Total revenues		17,719		118,542		145,170		(70,150)		211,281
EXPENSES
Interest expense:
Interest expense to third parties		37,971		(1,845)		43,865		—		79,991
Interest expense to affiliates		—		44,554		10,272		(53,260)		1,566
Total interest expense		37,971		42,709		54,137		(53,260)		81,557
Administrative and operating expenses:
Fees charged by affiliates		—		11,248		17,419		(16,890)		11,777
Provision for credit losses		—		2,667		5,619		—		8,286
Depreciation of equipment on operating leases		—		43,982		10,938		—		54,920
Other expenses		6		7,389		954		—		8,349
Total administrative and operating expenses		6		65,286		34,930		(16,890)		83,332
Total expenses		37,977		107,995		89,067		(70,150)		164,889
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(20,258)		10,547		56,103		—		46,392
Income tax provision (benefit)		(4,907)		4,493		5,525		—		5,111
Equity in income of consolidated subsidiaries accounted for under the equity method		56,632		50,578		—		(107,210)		—
NET INCOME	$	41,281	$	56,632	$	50,578	$	(107,210)	$	41,281
COMPREHENSIVE INCOME	$	53,580	$	68,931	$	61,309	$	(130,240)	$	53,580

29

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

	Condensed Statements of Comprehensive Income for the
	Nine Months Ended September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	10,144	$	141,336	$	—	$	151,480
Interest income on wholesale notes		—		(765)		49,801		—		49,036
Interest and other income from affiliates		52,789		152,299		223,010		(164,549)		263,549
Rental income on operating leases		—		140,075		41,025		—		181,100
Other income		—		67,583		1,970		(50,925)		18,628
Total revenues		52,789		369,336		457,142		(215,474)		663,793
EXPENSES
Interest expense:
Interest expense to third parties		101,982		8,815		122,050		—		232,847
Interest expense to affiliates		—		149,902		20,589		(164,549)		5,942
Total interest expense		101,982		158,717		142,639		(164,549)		238,789
Administrative and operating expenses:
Fees charged by affiliates		—		33,646		52,315		(50,925)		35,036
Provision for credit losses		—		5,578		18,818		—		24,396
Depreciation of equipment on operating leases		—		139,607		33,567		—		173,174
Other expenses		16		11,879		20,138		—		32,033
Total administrative and operating expenses		16		190,710		124,838		(50,925)		264,639
Total expenses		101,998		349,427		267,477		(215,474)		503,428
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(49,209)		19,909		189,665		—		160,365
Income tax provision (benefit)		(11,919)		6,814		36,758		—		31,653
Equity in income of consolidated subsidiaries accounted for under the equity method		166,002		152,907		—		(318,909)		—
NET INCOME	$	128,712	$	166,002	$	152,907	$	(318,909)	$	128,712
COMPREHENSIVE INCOME	$	106,232	$	143,522	$	133,371	$	(276,893)	$	106,232

30

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

	Condensed Balance Sheets as of September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	$	—	$	71,621	$	18,662	$	—	$	90,283
Restricted cash		—		—		527,808		—		527,808
Receivables, less allowance for credit losses		—		1,384,146		8,529,425		—		9,913,571
Retained interests in securitized receivables		—		—		—		—		—
Affiliated accounts and notes receivable		2,468,215		2,119,069		2,217,493		(6,707,355)		97,422
Equipment on operating leases, net		—		1,346,957		362,882		—		1,709,839
Equipment held for sale		—		183,597		20,582		—		204,179
Investments in consolidated subsidiaries accounted for under the equity method		2,764,916		2,658,976		—		(5,423,892)		—
Goodwill and intangible assets, net		—		90,981		28,020		—		119,001
Other assets		4,836		11,607		39,621		(3,789)		52,275
TOTAL	$	5,237,967	$	7,866,954	$	11,744,493	$	(12,135,036)	$	12,714,378
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt, including current maturities of long-term debt	$	1,047,478	$	16,911	$	3,389,903	$	—	$	4,454,292
Accounts payable and other accrued liabilities		300,274		2,931,437		1,175,124		(3,701,624)		705,211
Affiliated debt		—		2,152,713		935,524		(3,009,520)		78,717
Long-term debt		2,467,921		977		3,584,966		—		6,053,864
Total liabilities		3,815,673		5,102,038		9,085,517		(6,711,144)		11,292,084
Stockholder’s equity		1,422,294		2,764,916		2,658,976		(5,423,892)		1,422,294
TOTAL	$	5,237,967	$	7,866,954	$	11,744,493	$	(12,135,036)	$	12,714,378

31

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

	Condensed Statements of Cash Flows for the
	Nine Months Ended September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	32,158	$	146,608	$	58,353	$	12,049	$	249,168
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(6,283,817)		(7,080,363)		5,178,455		(8,185,725)
Collections of receivables		—		6,262,320		7,511,294		(5,178,731)		8,594,883
Change in restricted cash		—		—		—		—		—
Purchase of equipment on operating leases, net		—		(72,766)		(34,387)		—		(107,153)
Change in property and equipment and software, net		—		(4,143)		—		—		(4,143)
Net cash from (used in) investing activities		—		(98,406)		396,544		(276)		297,862
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(100,535)		(253,694)		(11,773)		(366,002)
Net change in indebtedness		27,842		(36,385)		(369,952)		—		(378,495)
Dividends paid to CNH Industrial America LLC		(60,000)		—		—		—		(60,000)
Net cash from (used in) financing activities		(32,158)		(136,920)		(623,646)		(11,773)		(804,497)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(88,718)		(168,749)		—		(257,467)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		—		160,339		715,219		—		875,558
End of period	$	—	$	71,621	$	546,470	$	—	$	618,091

32

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

	Condensed Statements of Comprehensive Income for the
	Three Months Ended September 30, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	3,363	$	47,229	$	—	$	50,592
Interest income on wholesale notes		—		(261)		17,033		—		16,772
Interest and other income from affiliates		26,792		60,233		79,555		(68,999)		97,581
Rental income on operating leases		—		49,290		14,001		—		63,291
Other income		—		24,197		798		(18,342)		6,653
Total revenues		26,792		136,822		158,616		(87,341)		234,889
EXPENSES
Interest expense:
Interest expense to third parties		46,887		(5,255)		36,982		—		78,614
Interest expense to affiliates		—		59,721		10,436		(68,999)		1,158
Total interest expense		46,887		54,466		47,418		(68,999)		79,772
Administrative and operating expenses:
Fees charged by affiliates		—		10,875		18,774		(18,342)		11,307
Provision for credit losses		—		3,743		5,108		—		8,851
Depreciation of equipment on operating leases		—		63,361		11,669		—		75,030
Other expenses		—		9,203		2,200		—		11,403
Total administrative and operating expenses		—		87,182		37,751		(18,342)		106,591
Total expenses		46,887		141,648		85,169		(87,341)		186,363
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(20,095)		(4,826)		73,447		—		48,526
Income tax provision (benefit)		(7,499)		(1,907)		23,793		—		14,387
Equity in income of consolidated subsidiaries accounted for under the equity method		46,735		49,654		—		(96,389)		—
NET INCOME	$	34,139	$	46,735	$	49,654	$	(96,389)	$	34,139
COMPREHENSIVE INCOME	$	59,875	$	72,471	$	71,767	$	(144,238)	$	59,875

33

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

	Condensed Statements of Comprehensive Income for the
	Nine Months Ended September 30, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	11,025	$	138,758	$	—	$	149,783
Interest income on wholesale notes		—		(835)		49,662		—		48,827
Interest and other income from affiliates		75,242		181,293		238,112		(202,803)		291,844
Rental income on operating leases		—		149,020		39,996		—		189,016
Other income		—		73,081		1,503		(56,468)		18,116
Total revenues		75,242		413,584		468,031		(259,271)		697,586
EXPENSES
Interest expense:
Interest expense to third parties		125,560		(5,926)		105,369		—		225,003
Interest expense to affiliates		—		177,887		33,210		(202,803)		8,294
Total interest expense		125,560		171,961		138,579		(202,803)		233,297
Administrative and operating expenses:
Fees charged by affiliates		—		32,624		57,792		(56,468)		33,948
Provision for credit losses		—		9,739		22,210		—		31,949
Depreciation of equipment on operating leases		—		176,817		33,515		—		210,332
Other expenses		—		21,731		6,301		—		28,032
Total administrative and operating expenses		—		240,911		119,818		(56,468)		304,261
Total expenses		125,560		412,872		258,397		(259,271)		537,558
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(50,318)		712		209,634		—		160,028
Income tax provision (benefit)		(18,778)		259		67,828		—		49,309
Equity in income of consolidated subsidiaries accounted for under the equity method		142,259		141,806		—		(284,065)		—
NET INCOME	$	110,719	$	142,259	$	141,806	$	(284,065)	$	110,719
COMPREHENSIVE INCOME	$	158,719	$	190,259	$	182,791	$	(373,050)	$	158,719

34

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

	Condensed Balance Sheets as of December 31, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	$	—	$	160,339	$	66,607	$	—	$	226,946
Restricted cash		—		—		648,612		—		648,612
Receivables, less allowance for credit losses		—		1,367,951		9,053,594		—		10,421,545
Affiliated accounts and notes receivable		2,518,121		1,991,481		2,068,016		(6,504,485)		73,133
Equipment on operating leases, net		—		1,405,731		375,758		—		1,781,489
Equipment held for sale		—		191,710		16,806		—		208,516
Investments in consolidated subsidiaries accounted for under the equity method		2,620,971		2,525,605		—		(5,146,576)		—
Goodwill and intangible assets, net		—		88,440		29,016		—		117,456
Other assets		7,548		4,432		26,466		(4,065)		34,381
TOTAL	$	5,146,640	$	7,735,689	$	12,284,875	$	(11,655,126)	$	13,512,078
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt, including current maturities of long-term debt	$	1,015,520	$	45,937	$	3,556,007	$	—	$	4,617,464
Accounts payable and other accrued liabilities		283,445		2,807,195		1,160,573		(3,510,803)		740,410
Affiliated debt		—		2,253,248		1,190,301		(2,997,747)		445,802
Long-term debt		2,472,036		8,338		3,852,389		—		6,332,763
Total liabilities		3,771,001		5,114,718		9,759,270		(6,508,550)		12,136,439
Stockholder’s equity		1,375,639		2,620,971		2,525,605		(5,146,576)		1,375,639
TOTAL	$	5,146,640	$	7,735,689	$	12,284,875	$	(11,655,126)	$	13,512,078

35

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

(Unaudited)

	Condensed Statements of Cash Flows for the
	Nine Months Ended September 30, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	200,310	$	367,764	$	171,263	$	(258,663)	$	480,674
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(5,764,415)		(6,497,555)		4,818,267		(7,443,703)
Collections of receivables		—		5,819,270		6,794,335		(4,818,615)		7,794,990
Change in restricted cash		—		—		—		—		—
Purchase of equipment on operating leases, net		—		(105,329)		(40,129)		—		(145,458)
Change in property and equipment and software, net		—		(170)		—		—		(170)
Net cash from (used in) investing activities		—		(50,644)		256,651		(348)		205,659
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(346,109)		(25,063)		259,011		(112,161)
Net change in indebtedness		9,690		(38,049)		(484,117)		—		(512,476)
Dividends paid to CNH Industrial America LLC		(210,000)		—		—		—		(210,000)
Net cash from (used in) financing activities		(200,310)		(384,158)		(509,180)		259,011		(834,637)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(67,038)		(81,266)		—		(148,304)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		—		151,654		725,438		—		877,092
End of period	$	—	$	84,616	$	644,172	$	—	$	728,788

36

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Organization

We offer a range of financial products and services to the dealers and customers of CNH Industrial North America. The principal products offered are retail financing for the purchase or lease of new and used CNH Industrial North America equipment and wholesale financing to CNH Industrial North America dealers. Wholesale financing consists primarily of floor plan financing as well as financing equipment used in dealer‑owned rental yards, parts inventory and working capital needs. In addition, we purchase equipment from dealers that is leased to retail customers under operating lease agreements.

Trends and Economic Conditions

Our business is closely related to the agricultural and construction equipment industries because we offer financing products for such equipment. For the three months ended September 30, 2018, CNH Industrial’s net sales of agricultural equipment and net sales of construction equipment generated in NAFTA were $945 million and $388 million, respectively, representing increases of 14.7% and 21.6%, respectively, from the same period in 2017. For the nine months ended September 30, 2018, CNH Industrial’s net sales of agricultural equipment and net sales of construction equipment generated in NAFTA were $2,793 million and $1,113 million, respectively, representing increases of 14.7% and 19.4%, respectively, from the same period in 2017.

In general, our receivable mix between agricultural and construction equipment financing directionally reflects the mix of equipment sales by CNH Industrial North America. As such, changes in the agricultural industry or with respect to our agricultural equipment borrowers (“farmers”) may affect the majority of our portfolio.

Net income was $41.3 million and $128.7 million for the three and nine months ended September 30, 2018, compared to $34.1 million and $110.7 million for the three and nine months ended September 30, 2017. The increase in net income for both periods was primarily due to lower depreciation of equipment on operating leases, a lower provision for credit losses and a decrease in U.S. federal income taxes following the enactment of the U.S. Tax Cuts and Jobs Act (the “U.S. Tax Reform”), partially offset by a reduced net interest income. The receivables balance greater than 30 days past due as a percentage of managed receivables was 0.6% at September 30, 2018, 0.8% at December 31, 2017 and 0.9% at September 30, 2017.

Macroeconomic issues for us include the uncertainty of governmental actions with respect to monetary, fiscal, international trade and legislative policies, changes in demand and pricing for used equipment, capital market disruptions, trade agreements and financial regulatory reform. Significant volatility in the price of certain commodities could also impact CNH Industrial North America’s and our results.

37

Results of Operations

Three and Nine Months Ended September 30, 2018 Compared to Three and Nine Months Ended September 30, 2017

Revenues

Revenues for the three and nine months ended September 30, 2018 and 2017 were as follows (dollars in thousands):

	Three Months Ended
	September 30,
	2018		2017		$ Change		% Change
Interest income on retail notes and finance leases	$	52,649	$	50,592	$	2,057	4.1	%
Interest income on wholesale notes		17,211		16,772		439	2.6
Interest and other income from affiliates		76,142		97,581		(21,439)	(22.0)
Rental income on operating leases		60,027		63,291		(3,264)	(5.2)
Other income		5,252		6,653		(1,401)	(21.1)
Total revenues	$	211,281	$	234,889	$	(23,608)	(10.1)	%

	Nine Months Ended
	September 30,
	2018		2017		$ Change		% Change
Interest income on retail notes and finance leases	$	151,480	$	149,783	$	1,697	1.1	%
Interest income on wholesale notes		49,036		48,827		209	0.4
Interest and other income from affiliates		263,549		291,844		(28,295)	(9.7)
Rental income on operating leases		181,100		189,016		(7,916)	(4.2)
Other income		18,628		18,116		512	2.8
Total revenues	$	663,793	$	697,586	$	(33,793)	(4.8)	%

Revenues totaled $211.3 million and $663.8 million for the three and nine months ended September 30, 2018, respectively, compared to $234.9 million and $697.6 million for the same periods in 2017. The quarter-over-quarter decrease was driven by a lower average portfolio and a lower average yield. The year-over-year decrease was driven by a lower average portfolio. The average yield for the managed portfolio was 7.0% and 7.4% for the three months ended September 30, 2018 and 2017, respectively, and 7.3% for the nine months ended September 30, 2018 and 2017.

Interest income on retail notes and finance leases for the three and nine months ended September 30, 2018 was $52.6 million and $151.5 million, respectively, representing an increase of $2.1 million and $1.7 million, respectively, from the same periods in 2017. For the third quarter, the increase was primarily due to a $6.3 million favorable impact from higher interest rates, partially offset by a $4.2 million unfavorable impact from lower average earning assets. For the nine months ended September 30, 2018, compared to the same period in 2017, the increase was primarily due to a $13.4 million favorable impact from higher interest rates, partially offset by a $11.7 million unfavorable impact from lower average earning assets.

Interest income on wholesale notes for the three and nine months ended September 30, 2018 was $17.2 million and $49.0 million, respectively, representing an increase of $0.4 million and $0.2 million, respectively, from the same periods in 2017.

Interest and other income from affiliates for the three and nine months ended September 30, 2018 was $76.1 million and $263.5 million, respectively, compared to $97.6 million and $291.8 million, respectively, for the three and nine months ended September 30, 2017. For the three and nine months ended September 30, 2018, compensation from CNH Industrial North America for retail low‑rate financing programs and interest waiver programs offered to customers was $35.6 million and $112.1 million, respectively, a decrease of $3.8 million and $4.4 million, respectively, from the same periods in 2017. The decreases were primarily due to lower average retail receivables. For the three and nine months ended September 30, 2018, compensation from CNH Industrial North America for wholesale marketing programs was $24.7 million and $93.5 million, respectively, a decrease of $16.7 million and $30.8 million, respectively, from the same periods in 2017. The decreases were primarily due to

38

changes in pricing strategy. For select operating leases, compensation from CNH Industrial North America for the difference between market rental rates and the amounts paid by customers was $15.0 million and $46.0 million for the three and nine months ended September 30, 2018, a decrease of $1.8 million and $4.9 million, respectively, from the same periods in 2017. The decreases were primarily due to lower average earning assets. Also included in interest and other income from affiliates for the three and nine months ended September 30, 2018 was $0.6 million and $10.9 million, respectively, of wholesale factoring income.

Rental income on operating leases for the three and nine months ended September 30, 2018 was $60.0 million and $181.1 million, representing a decrease of $3.3 million and $7.9 million, respectively, from the same periods in 2017. The third quarter decrease was primarily due to a $4.3 million unfavorable impact from lower average earning assets, partially offset by a $1.0 million favorable impact from higher rates. For the nine months ended September 30, 2018, compared to the same period in 2017, the decrease was primarily due to a $12.9 million unfavorable impact from lower average earning assets, partially offset by a $5.0 million favorable impact from higher rates.

Other income for the three and nine months ended September 30, 2018 was $5.3 million and $18.6 million, representing a decrease of $1.4 million and an increase of $0.5 million from the same periods in 2017.

Expenses

Expenses for the three and nine months ended September 30, 2018 and 2017 were as follows (dollars in thousands):

	Three Months Ended
	September 30,
	2018		2017		$ Change		% Change
Total interest expense	$	81,557	$	79,772	$	1,785	2.2	%
Fees charged by affiliates		11,777		11,307		470	4.2
Provision for credit losses		8,286		8,851		(565)	(6.4)
Depreciation of equipment on operating leases		54,920		75,030		(20,110)	(26.8)
Other expenses		8,349		11,403		(3,054)	(26.8)
Total expenses	$	164,889	$	186,363	$	(21,474)	(11.5)	%

	Nine Months Ended
	September 30,
	2018		2017		$ Change		% Change
Total interest expense	$	238,789	$	233,297	$	5,492	2.4	%
Fees charged by affiliates		35,036		33,948		1,088	3.2
Provision for credit losses		24,396		31,949		(7,553)	(23.6)
Depreciation of equipment on operating leases		173,174		210,332		(37,158)	(17.7)
Other expenses		32,033		28,032		4,001	14.3
Total expenses	$	503,428	$	537,558	$	(34,130)	(6.3)	%

Interest expense totaled $81.6 million and $238.8 million for the three and nine months ended September 30, 2018, respectively, compared to $79.8 million and $233.3 million for the same periods in 2017. For the three months ended September 30, 2018, the increase was primarily due to a $8.0 million unfavorable impact from higher average interest rates, partially offset by a $6.2 million favorable impact from lower average total debt. For the nine months ended September 30, 2018, the increase was primarily due to a $20.6 million unfavorable impact from higher average interest rates, partially offset by a $15.1 million favorable impact from lower average total debt. The average debt cost was 3.0% for the nine months ended September 30, 2018 compared to 2.7% for the nine months ended September 30, 2017.

The provision for credit losses was $8.3 million and $24.4 million for the three and nine months ended September 30, 2018, respectively, compared to $8.9 million and $31.9 million for the same periods in 2017. The decreases in 2018 were primarily due to lower retail losses.

Depreciation of equipment on operating leases was $54.9 million and $173.2 million for the three and nine months ended September 30, 2018, respectively, compared to $75.0 million and $210.3 million, respectively, for the

39

same periods in 2017. The decreases were primarily due to updated depreciation estimates and a smaller operating lease portfolio.

Other expenses were $8.3 million and $32.0 million for the three and nine months ended September 30, 2018, respectively, compared to $11.4 million and $28.0 million for the same periods in 2017. For the three months ended September 30, 2018, the decrease was primarily due to lower losses on equipment held for sale. The increase for the nine months ended September 30, 2018 was primarily due to foreign exchange.

The effective tax rates for the three months ended September 30, 2018 and 2017 were 11.0% and 29.6%, respectively. The effective tax rate was 19.7% for the nine-month period ended September 30, 2018, compared to 30.8% for the same period in 2017. The decreases in the effective tax rates were primarily due to the passage of the U.S. Tax Reform on December 22, 2017, which reduced the U.S. corporate tax rate from 35% to 21%, and certain net discrete tax benefits, including a revision to the Company’s provisional estimate of accounting for U.S. Tax Reform. Excluding the discrete tax benefits, the Company’s effective tax rates would have been 23.1% and 23.2%, for the three and nine-month periods ended September 30, 2018, respectively.

Receivables and Equipment on Operating Leases Originated and Held

Receivables and equipment on operating lease originations for the three and nine months ended September 30, 2018 and 2017 were as follows (dollars in thousands):

	Three Months Ended
	September 30,
	2018		2017		$ Change		% Change
Retail	$	733,609	$	695,605	$	38,004	5.5	%
Wholesale		2,040,590		1,898,726		141,864	7.5
Wholesale factoring		—		—		—	—
Equipment on operating leases		189,669		116,403		73,266	62.9
Total originations	$	2,963,868	$	2,710,734	$	253,134	9.3	%

	Nine Months Ended
	September 30,
	2018		2017		$ Change		% Change
Retail	$	2,040,534	$	1,951,627	$	88,907	4.6	%
Wholesale		5,967,433		5,450,837		516,596	9.5
Wholesale factoring		177,758		—		177,758	—
Equipment on operating leases		431,457		459,274		(27,817)	(6.1)
Total originations	$	8,617,182	$	7,861,738	$	755,444	9.6	%

Retail and wholesale originations increased in the three and nine months ended September 30, 2018 compared to the same periods in 2017, primarily due to an increase in unit sales of CNH Industrial North America equipment. For the three months ended September 30, 2018, the increase in operating lease originations was primarily due to seasonal programming and timing of larger accounts. The decrease in operating lease originations for the nine months ended September 30, 2018 was primarily due to lower demand for leasing of used equipment.

Total receivables and equipment on operating leases held as of September 30, 2018, December 31, 2017 and September 30, 2017 were as follows (dollars in thousands):

	September 30,		December 31,		September 30,
	2018		2017		2017
Retail	$	6,521,149	$	6,868,886	$	7,108,878
Wholesale		3,461,430		3,396,021		3,556,478
Wholesale factoring		8,411		235,834		—
Equipment on operating leases		1,709,839		1,781,489		1,809,048
Total receivables and equipment on operating leases	$	11,700,829	$	12,282,230	$	12,474,404

40

The total retail receivables balance 30 days or more past due as a percentage of the retail receivables was 0.9% at September 30, 2018, 1.1% at December 31, 2017 and 1.3% at September 30, 2017. The total wholesale receivables balance 30 days or more past due as a percentage of the wholesale receivables was not significant at September 30, 2018, December 31, 2017 or September 30, 2017. Total retail receivables on nonaccrual status, which represent receivables for which we have ceased accruing finance income, were $30.6 million, $43.5 million and $50.9 million at September 30, 2018, December 31, 2017 and September 30, 2017, respectively. Total wholesale receivables on nonaccrual status were $25.4 million, $43.5 million and $33.6 million at September 30, 2018, December 31, 2017 and September 30, 2017, respectively.

Total receivable write‑off amounts and recoveries, by product, for the three and nine months ended September 30, 2018 and 2017 were as follows (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Write-offs:
Retail	$	8,563	$	10,021	$	28,830	$	32,296
Wholesale		—		—		187		2,016
Total write-offs		8,563		10,021		29,017		34,312
Recoveries:
Retail		(765)		(446)		(2,912)		(2,442)
Wholesale		(3)		(9)		(67)		(17)
Total recoveries		(768)		(455)		(2,979)		(2,459)
Write-offs, net of recoveries:
Retail		7,798		9,575		25,918		29,854
Wholesale		(3)		(9)		120		1,999
Total write-offs, net of recoveries	$	7,795	$	9,566	$	26,038	$	31,853

Our allowance for credit losses on all receivables financed totaled $77.4 million at September 30, 2018, $79.2 million at December 31, 2017 and $84.0 million at September 30, 2017.

The allowance is subject to a quarterly evaluation based on many quantitative and qualitative factors, including historical loss experience by product category, portfolio duration, delinquency trends, economic conditions (in particular, those conditions directly affecting the profitability and financial strength of our customers), collateral value and credit risk quality. No single factor determines the adequacy of the allowance. Different assumptions or changes in economic conditions would result in changes to the allowance for credit losses and the provision for credit losses. These qualitative factors are subjective and require a degree of management judgment.

We believe our allowance is sufficient to provide for losses in our receivable portfolio as of September 30, 2018.

Liquidity and Capital Resources

The following discussion of liquidity and capital resources principally focuses on our statements of cash flows, balance sheets and capitalization. CNH Industrial Capital’s current funding strategy is to maintain sufficient liquidity and flexible access to a wide variety of financial instruments and funding options.

In the past, securitization has been one of our most economical sources of funding and, therefore, the majority of our originated receivables are securitized, with the cash generated from such receivables utilized to repay the related debt or purchase new receivables.

In addition, we have secured and unsecured facilities, commercial paper, unsecured bonds, affiliate borrowings and cash to fund our liquidity needs. To add more diversity to our funding structure, we established a commercial paper program during 2017 and continued to access the unsecured bond market. As of September 30, 2018, our outstanding unsecured senior notes totaled $3.0 billion and our outstanding commercial paper totaled $349 million. We expect continued changes to our funding profile, with less reliance on the securitization market.

41

Cash Flows

For the nine months ended September 30, 2018 and 2017, our cash flows were as follows (dollars in thousands):

	2018		2017
Cash flows from (used in):
Operating activities	$	249,168	$	480,674
Investing activities		297,862		205,659
Financing activities		(804,497)		(834,637)
Net cash increase (decrease)	$	(257,467)	$	(148,304)

Operating activities in the nine months ended September 30, 2018 generated cash of $249 million, resulting primarily from net income of $129 million, adjusted by depreciation and amortization of $175 million and provision for credit losses of $24 million, partially offset by deferred tax benefits of $10 million and changes in working capital of $69 million. The decrease in cash provided by operating activities for the nine months ended September 30, 2018 compared to the same period in 2017 was primarily due to $182 million related to changes in working capital, a $23 million change in deferred income tax, a $37 million decrease in depreciation and amortization expense and a $8 million decrease in provision for credit losses, partially offset by a $18 million increase in net income.

Investing activities in the nine months ended September 30, 2018 generated cash of $298 million, resulting primarily from a net reduction in receivables of $409 million, partially offset by $107 million in net expenditures for equipment on operating leases and $4 million in net expenditures for property, equipment and software. The increase in cash provided by investing activities for the nine months ended September 30, 2018 compared to the same period in 2017 was primarily due to a $58 million net decrease receivables acquired and a $38 million reduction in net expenditures for equipment on operating leases, partially offset by a $4 million increase in expenditures for property, equipment and software.

Financing activities in the nine months ended September 30, 2018 used cash of $804 million, resulting primarily from net cash paid on long-term debt and affiliated debt of $517 million and $366 million, respectively, and $60 million in dividends paid to CNH Industrial America, partially offset by net cash received on short-term borrowings of $139 million. The decrease in cash used in financing activities in the nine months ended September 30, 2018 compared to the same period in 2017 was primarily due to an increase in net cash from short-term borrowings of $142 million and lower dividends of $150 million paid to CNH Industrial America, partially offset by increases in net cash paid on affiliated debt and long-term debt of $254 million and $8 million, respectively.

Securitization

CNH Industrial Capital and its predecessor entities have been securitizing receivables since 1992. This market is a cost‑effective financing source and allows access to a wide investor base. CNH Industrial Capital has completed public and private issuances of asset‑backed securities in both the U.S. and Canada and, as of September 30, 2018, the amounts outstanding were approximately $5.1 billion. Our securitizations are treated as financing arrangements for accounting purposes.

Committed Asset‑Backed Facilities

CNH Industrial Capital has committed asset‑backed facilities with several banks or through their commercial paper conduit programs. Committed asset‑backed facilities for the U.S. and Canada totaled $2.8 billion at September 30, 2018, with original borrowing maturities of up to two years. The unused availability under the facilities varies during the year, depending on origination volume and the refinancing of receivables with term securitization transactions and/or other financing. At September 30, 2018, approximately $1.2 billion of funding was available for use under these facilities.

Unsecured Facilities and Debt

Unsecured facilities with banks as of September 30, 2018 totaled $831 million. These committed credit facilities, which are eligible for renewal at various future dates, are used primarily for working capital and other general corporate purposes. As of September 30, 2018, we had $231 million outstanding against these credit facilities.

42

Included in the remaining available credit commitments is $349 million maintained primarily to provide backup liquidity for commercial paper borrowings.

As of September 30, 2018, our outstanding unsecured senior notes were as follows (dollars in thousands):

3.375% notes, due 2019	$	500,000
4.375% notes, due 2020		600,000
4.875% notes, due 2021		500,000
3.875% notes, due 2021		400,000
4.375% notes, due 2022		500,000
4.200% notes, due 2024		500,000
Discounts and unamortized issuance costs		(20,829)
Total	$	2,979,171

These notes, which are senior unsecured obligations of CNH Industrial Capital LLC, are guaranteed by CNH Industrial Capital America and New Holland Credit.

On August 14, 2018, we completed an offering of $500,000 in aggregate principal amount of our 4.200% unsecured notes due 2024, issued at a price to the public of 99.701%.

Credit Ratings

Our ability to obtain funding is affected by credit ratings of our debt, which are closely related to the outlook for and the financial condition of CNHI, and the nature and availability of our support agreement with CNHI.

To access public debt capital markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our securities as an indicator of credit quality for fixed income investors. A credit rating agency may change or withdraw our ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Each agency’s rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets.

The senior long-term and short-term debt ratings and outlook currently assigned to our unsecured debt securities by the rating agencies engaged by us are the same as the corporate ratings for CNHI. The ratings as of September 30, 2018 were as follows:

	Senior Long-Term	Short-Term	Outlook
Fitch Ratings	BBB-	F-3	Stable
Standard & Poor's	BBB	A-2	Stable
Moody's Investor Service, Inc.	Ba1	Unrated	Positive

Affiliate Sources

CNH Industrial Capital borrows, as needed, from CNH Industrial. This source of funding is primarily used to finance various assets and provides additional flexibility when evaluating market conditions and potential third‑party financing options. We had affiliated debt of $79 million and $446 million as of September 30, 2018 and December 31, 2017, respectively.

Equity Position

Our equity position also supports our ability to access various funding sources. Our stockholder’s equity at September 30, 2018 and December 31, 2017 was $1.4 billion. For the nine months ended September 30, 2018, CNH Industrial Capital LLC paid cash dividends of $60 million to CNH Industrial America.

43

Liquidity

The majority of CNH Industrial Capital’s debt is self-liquidating from the cash generated by the underlying receivables. Normally, additional liquidity should not be necessary for the repayment of such debt. New originations of retail receivables are usually warehoused in committed asset-backed facilities until being refinanced in the term ABS market or with other third party debt. The majority of new wholesale receivables are financed through a master trust and funded by variable funding notes.

The liquidity available for use varies due to: (a) changes in origination volumes, reflecting the financing needs of our customers, and is influenced by the timing of any refinancing of underlying receivables; and (b) the execution of our funding strategy of maintaining a sufficient level of liquidity and flexible access to a wide variety of financial instruments including both committed and uncommitted, unsecured facilities.

Other Data

	As of or for the Nine Months
	Ended September 30,
	2018			2017
	(Dollars in thousands)
Total managed receivables	$	9,990,990		$	10,665,356
Operating lease equipment		1,709,839			1,809,048
Total managed portfolio	$	11,700,829		$	12,474,404
Delinquency (1)		0.63	%		0.87	%
Average managed receivables	$	10,174,099		$	10,741,227
Net credit loss (2)		0.38	%		0.39	%
Profitability: (3)
Return on average managed portfolio (4)		1.46	%		1.18	%
Asset Quality:
Allowance for credit losses/total receivables		0.77	%		0.79	%

(1) Delinquency means managed receivables that are past due over 30 days, expressed as a percentage of the managed receivables as of the end of the respective period.

(2) Net credit losses on the managed receivables means write-offs, net of recoveries, for the preceding 12 months expressed as a percentage of the respective average managed receivables.

(3) Nine months ended September 30, 2018 and 2017 annualized.

(4) Net income for the period expressed as a percentage of the average managed portfolio.

Cautionary Note Regarding Forward‑Looking Statements

This quarterly report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact contained in this filing, including statements regarding our competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, capital expenditures, dividends, capital structure or other financial items; costs; and plans and objectives of management regarding operations, products and services, are forward-looking statements. 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 other assumptions underlying any of the forward-looking statements prove to be incorrect, the actual results or developments may differ materially from any future results or developments expressed or implied by the forward-looking statements.

44

Factors, risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others: the many interrelated factors that affect customer confidence and demand for our financing products and services; general economic conditions; changes in government policies regarding banking, monetary and fiscal policies; legislation, particularly relating to capital goods-related issues such as agriculture, the environment, debt relief and subsidy program policies, trade and commerce and infrastructure development; government policies on international trade and investment, including protectionist trade policies such as higher tariffs, sanctions, import quotas, capital controls and new barriers to entry or consequent reactions by other governments against such policies; actions of competitors in the various industries in which CNH Industrial North America competes; interest rates and currency exchange rates; inflation and deflation; energy prices; prices for agricultural commodities; housing starts and other construction activity; our ability to obtain financing or to refinance existing debt; restrictive covenants in our debt agreements; actions by rating agencies concerning the ratings on our debt and asset-backed securities and the credit rating of CNHI; a decline in the price of used equipment; political and civil unrest; volatility and deterioration of capital and financial markets, other similar risks and uncertainties and our success, and CNH Industrial North America’s success, in managing the risks involved in the foregoing.

Forward‑looking statements speak only as of the date on which such statements are made. Our outlook is based upon assumptions, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. Our actual results could differ materially from those anticipated in such forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements.

Additional factors which could cause actual results and developments to differ from those expressed or implied by the forward‑looking statements are included in the section “Item 1A. Risk Factors” in our most recent annual report on Form 10‑K.

Critical Accounting Policies and Estimates

See our critical accounting policies and estimates discussed in our annual report for the year ended December 31, 2017 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2 to our audited consolidated financial statements included in such annual report. There were no material changes to these policies or estimates during the three months ended September 30, 2018.

New Accounting Pronouncements Not Yet Adopted

See Note 2: New Accounting Pronouncements to this Form 10-Q.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

Under the supervision, and with the participation, of our management, including our President and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a‑15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2018. Based on that evaluation, our President and Chief Financial Officer concluded that the disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in our Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the three months ended September 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

45

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

CNH Industrial Capital is party to various litigation matters and claims arising from its operations. Management believes that the outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on CNH Industrial Capital’s financial position or results of operations.

Item 1A.  Risk Factors

See our most recent annual report on Form 10‑K (Part I, Item 1A). There was no material change in our risk factors during the nine months ended September 30, 2018.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

Item 6.  Exhibits

Exhibit	Description
31.1	Certifications of President Pursuant to Exchange Act Rule 13a‑14(a), as Adopted Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
31.2	Certifications of Chief Financial Officer Pursuant to Exchange Act Rule 13a‑14(a), as Adopted Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
32.1†	Certification required by Exchange Act Rule 13a‑14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).
101	Interactive data files pursuant to Rule 405 of Regulation S‑T: (i) Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017, (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2018 and 2017, (iii) Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017, (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017, (v) Consolidated Statements of Changes in Stockholder’s Equity for the nine months ended September 30, 2018 and 2017 and (vi) Condensed Notes to Consolidated Financial Statements.

†These certifications are deemed not filed for purposes of section 18 of the Exchange Act, or otherwise subject to the liability of that section; nor shall they be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act.

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

46

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CNH INDUSTRIAL CAPITAL LLC
Date: November 13, 2018	By:	/s/ BRETT D. DAVIS
		Name:	Brett D. Davis
		Title:	Chairman and President

47

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Brett D. Davis, certify that:

1. I have reviewed this quarterly report on Form 10‑Q of CNH Industrial Capital LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2018	By:	/s/ Brett D. Davis
	Name:	Brett D. Davis
	Title:	President

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Douglas MacLeod, certify that:

1. I have reviewed this quarterly report on Form 10‑Q of CNH Industrial Capital LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2018	By:	/s/ Douglas MacLeod
	Name:	Douglas MacLeod
	Title:	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of CNH Industrial Capital LLC (the “Company”) does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10‑Q for the quarter ended September 30, 2018 of the Company (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 13, 2018	/s/ Brett D. Davis
	Brett D. Davis
	President
November 13, 2018	/s/ Douglas MacLeod
	Douglas MacLeod
	Chief Financial Officer

A signed original of this written statement has been provided to CNH Industrial Capital LLC and will be retained by CNH Industrial Capital LLC and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to 18 U.S.C §1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2018 shares
Document and Entity Information
Entity Registrant Name	CNH INDUSTRIAL CAPITAL LLC
Entity Central Index Key	0001552493
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	0
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
REVENUES
Interest income on retail notes and finance leases	$ 52,649	$ 50,592	$ 151,480	$ 149,783
Interest income on wholesale notes	17,211	16,772	49,036	48,827
Interest and other income from affiliates	76,142	97,581	263,549	291,844
Rental income on operating leases	60,027	63,291	181,100	189,016
Other income	5,252	6,653	18,628	18,116
Total revenues	211,281	234,889	663,793	697,586
Interest expense:
Interest expense to third parties	79,991	78,614	232,847	225,003
Interest expense to affiliates	1,566	1,158	5,942	8,294
Total interest expense	81,557	79,772	238,789	233,297
Administrative and operating expenses:
Fees charged by affiliates	11,777	11,307	35,036	33,948
Provision for credit losses	8,286	8,851	24,396	31,949	$ 40,898
Depreciation of equipment on operating leases	54,920	75,030	173,174	210,332
Other expenses	8,349	11,403	32,033	28,032
Total administrative and operating expenses	83,332	106,591	264,639	304,261
Total expenses	164,889	186,363	503,428	537,558
INCOME BEFORE TAXES	46,392	48,526	160,365	160,028
Income tax provision	5,111	14,387	31,653	49,309
NET INCOME	$ 41,281	$ 34,139	$ 128,712	$ 110,719

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NET INCOME	$ 41,281	$ 34,139	$ 128,712	$ 110,719
Other comprehensive income (loss):
Foreign currency translation adjustment	11,493	24,179	(23,475)	45,585
Pension liability adjustment	81	97	276	307
Change in derivative financial instruments	725	1,460	719	2,108
Total other comprehensive income (loss)	12,299	25,736	(22,480)	48,000
COMPREHENSIVE INCOME	$ 53,580	$ 59,875	$ 106,232	$ 158,719

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 90,283	$ 226,946
Restricted cash	527,808	648,612
Receivables, less allowance for credit losses of $77,419 and $79,196, respectively	9,913,571	10,421,545
Affiliated accounts and notes receivable	97,422	73,133
Equipment on operating leases, net	1,709,839	1,781,489
Equipment held for sale	204,179	208,516
Goodwill	109,592	110,588
Other intangible assets, net	9,409	6,868
Other assets	52,275	34,381
TOTAL	12,714,378	13,512,078
Liabilities:
Short-term debt (including current maturities of long-term debt)	4,454,292	4,617,464
Accounts payable and other accrued liabilities	705,211	740,410
Affiliated debt	78,717	445,802
Long-term debt	6,053,864	6,332,763
Total liabilities	11,292,084	12,136,439
Commitments and contingent liabilities (Note 10)
Stockholder's equity:
Member's capital
Paid-in capital	843,982	843,559
Accumulated other comprehensive loss	(122,643)	(100,163)
Retained earnings	700,955	632,243
Total stockholder's equity	1,422,294	1,375,639
TOTAL	$ 12,714,378	$ 13,512,078

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Allowance for credit losses	$ 77,419	$ 79,196
Restricted cash	527,808	648,612
Receivables, less allowance for credit losses of $57,584 and $59,268, respectively	9,913,571	10,421,545
TOTAL	12,714,378	13,512,078
Short-term debt (including current maturities of long-term debt)	4,454,292	4,617,464
Long-term debt	6,053,864	6,332,763
Total liabilities	11,292,084	12,136,439
Consolidated variable interest entities ("VIEs")
Allowance for credit losses	57,584	59,268
Restricted cash	527,808	648,612
Receivables, less allowance for credit losses of $57,584 and $59,268, respectively	6,846,048	7,159,290
TOTAL	7,373,856	7,807,902
Short-term debt (including current maturities of long-term debt)	3,389,903	3,556,007
Long-term debt	3,354,474	3,692,963
Total liabilities	$ 6,744,377	$ 7,248,970

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 128,712	$ 110,719
Adjustments to reconcile net income to net cash from (used in) operating activities:
Depreciation on property and equipment and equipment on operating leases	173,180	210,353
Amortization of intangibles	1,602	1,575
Provision for credit losses	24,396	31,949
Deferred income tax (benefit) expense	(10,368)	12,590
Changes in components of working capital:
Change in affiliated accounts and notes receivables	(24,322)	77,381
Change in other assets and equipment held for sale	(23,698)	(25,778)
Change in accounts payable and other accrued liabilities	(20,334)	61,885
Net cash from (used in) operating activities	249,168	480,674
CASH FLOWS FROM INVESTING ACTIVITIES
Cost of receivables acquired	(8,185,725)	(7,443,703)
Collections of receivables	8,594,883	7,794,990
Purchase of equipment on operating leases	(431,457)	(459,274)
Proceeds from disposal of equipment on operating leases	324,304	313,816
Change in property and equipment and software, net	(4,143)	(170)
Net cash from (used in) investing activities	297,862	205,659
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of affiliated debt	674,596	633,254
Payment of affiliated debt	(1,040,598)	(745,415)
Proceeds from issuance of long-term debt	2,574,196	2,648,923
Payment of long-term debt	(3,091,688)	(3,158,234)
Change in short-term borrowings, net	138,997	(3,165)
Dividend paid to CNH Industrial America LLC	(60,000)	(210,000)
Net cash from (used in) financing activities	(804,497)	(834,637)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(257,467)	(148,304)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period	875,558	877,092
End of period	618,091	728,788
CASH PAID DURING THE PERIOD FOR INTEREST	221,751	216,310
CASH PAID DURING THE PERIOD FOR TAXES	$ 50,761	$ 49,007

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY - USD ($) $ in Thousands	Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total
BALANCE at Dec. 31, 2016	$ 844,100	$ (144,136)	$ 666,754	$ 1,366,718
Increase (Decrease) in Stockholder's Equity
Net income			110,719	110,719
Dividend paid to CNH Industrial America LLC			(210,000)	(210,000)
Foreign currency translation adjustment		45,585		45,585
Stock compensation	(39)			(39)
Pension liability adjustment, net of tax		307		307
Change in derivative financial instruments, net of tax		2,108		2,108
BALANCE at Sep. 30, 2017	844,061	(96,136)	567,473	1,315,398
BALANCE at Dec. 31, 2017	843,559	(100,163)	632,243	1,375,639
Increase (Decrease) in Stockholder's Equity
Net income			128,712	128,712
Dividend paid to CNH Industrial America LLC			(60,000)	(60,000)
Foreign currency translation adjustment		(23,475)		(23,475)
Stock compensation	423			423
Pension liability adjustment, net of tax		276		276
Change in derivative financial instruments, net of tax		719		719
BALANCE at Sep. 30, 2018	$ 843,982	$ (122,643)	$ 700,955	$ 1,422,294

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2018

BASIS OF PRESENTATION

BASIS OF PRESENTATION

NOTE 1: BASIS OF PRESENTATION

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

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

The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information, which should be read in conjunction with the audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2017. Certain financial information that is normally included in annual financial statements prepared in conformity with U.S. GAAP, which is not required for interim reporting purposes, has been condensed or omitted. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of our interim unaudited financial statements have been reflected. Certain items in prior periods have been reclassified to conform the current presentation.

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

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

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NEW ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2018

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS

NOTE 2: NEW ACCOUNTING PRONOUNCEMENTS

New Accounting Pronouncements Adopted in 2018

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (ASC606) (“ASU 2014-09”), which supersedes existing revenue recognition guidance under current U.S. GAAP. The new standard requires an entity to recognize revenue upon transfer of control of goods or services to a customer at an amount that reflects the consideration that the entity expects to receive. This new revenue recognition model defines a five-step process to achieve this objective. The new standard also requires additional disclosures to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts with customers. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented, or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the consolidated statement of changes in equity.

The Company has adopted the new standard effective January 1, 2018. The adoption did not impact the timing or measurement of the Company’s revenue recognition as it is consistent with its current accounting treatment for contracts within the scope of the new ASU.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”) that changes the presentation of restricted cash and cash equivalents on the statement of cash flows. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted ASU 2016-18 on a retrospective basis as of January 1, 2018. The impact to the consolidated statement of cash flows for the nine months ended September 30, 2017 was to increase cash flows from changes in accounts payable and other accrued liabilities by $8,566, eliminate cash flows from changes in restricted cash of $180,661, and to increase cash, cash equivalents and restricted cash by $172,095.

In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). The amendments in this update require that an employer disaggregate the service cost component from other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. ASU 2017-07 is effective for annual reporting periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018, which did not have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which amends ASC 825-10, Financial Instruments – Overall. This ASU changes the treatment for available-for-sale equity investments by recognizing unrealized fair value changes directly in net income, and no longer in other comprehensive income. ASU 2016-01 is effective January 1, 2018, with the cumulative-effect adjustment from initially applying the new standard recognized in the consolidated statement of financial position as of January 1, 2018. The Company adopted this standard on January 1, 2018, which did not have a material impact on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). This standard provides guidance clarification to reduce diversity in classification of certain cash flow payments and receipts in the statement of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 on a retrospective transition basis to each period presented, and may be early adopted. The Company adopted this standard on January 1, 2018, which did not have a material impact on its consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes ASC 840, Leases. Subsequently, the FASB has issued additional ASUs, which further clarify this guidance. The ASU’s most prominent change is the requirement for lessees to recognize leased assets and liabilities classified as operating leases under the previous standard. The ASU does not significantly change the lessee’s recognition, measurement and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. ASU 2016-02 also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. It is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years and early adoption is permitted. The ASU requires a modified retrospective transition approach and provides certain optional transition reliefs. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which establishes ASC 326, Financial Instruments – Credit Losses. The ASU introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Additional disclosures about significant estimates and credit quality are also required. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, with early adoption permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements and improve the disclosures of hedging arrangements. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, including interim periods within these years. Early adoption is permitted in any interim period or fiscal year before the effective date. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which amends ASC 202, Income Statement – Reporting Comprehensive Income.  In December 2017, the U.S. government enacted new tax legislation (the “U.S. Tax Reform”). Included in the provisions of U.S. Tax Reform is a reduction of the corporate income tax rate from 35 percent to 21 percent. U.S. GAAP requires that remeasurement of deferred taxes to the new corporate tax rate occur in the period in which the legislation is enacted. The deferred tax adjustment is recorded in the provision for income taxes, including items for which the tax effects were originally recorded in other comprehensive income (“OCI”). This treatment results in the items in OCI reflecting a disproportionate tax rate, a result often referred to as stranded tax effects. This ASU allows a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from tax reform. ASU 2018-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years and early adoption is permitted. The ASU can be adopted at the beginning of an interim or annual period or retrospectively to each period affected by tax reform. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

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

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement (“ASU 2018-15”), which expands upon the guidance set forth in ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. ASU 2018-15 aligns the requirements for capitalization of implementation costs in a cloud computing service contract with those requirements for capitalization of implementation costs incurred for an internal-use software license. ASU 2018-15 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted in any interim period for which financial statements have not been issued. ASU 2018-15 may be applied prospectively from the date the guidance is first applied or retrospectively. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In August 2018, the SEC adopted a final rule that amends certain disclosure requirements that have become duplicative, overlapping, or outdated in light of other SEC disclosure requirements, U.S. GAAP, or changes in the information environment. However, the guidance also added requirements for registrants to include in their interim financial statements a reconciliation of changes in stockholders’ equity for each period for which an income statement is required (both year-to-date and quarterly periods). The final rule is effective for all filings made on or after November 5, 2018. However, the SEC staff said it would not object to a registrant waiting to comply with the new interim disclosure requirement until the filing for the quarter that begins after the effective date. As a result, the Company plans to adopt the new interim disclosure requirement in its Form 10-Q for the three months ended March 31, 2019. The Company is currently evaluating the impact compliance with this rule will have on its consolidated financial statements.

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ACCUMULATED OTHER COMPREHENSIVE INCOME

9 Months Ended

Sep. 30, 2018

ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME

NOTE 3: ACCUMULATED OTHER COMPREHENSIVE INCOME

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

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the three months ended September 30, 2018:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		on Derivatives		Total
Beginning balance, gross	$	(133,685)	$	(4,693)	$	2,325	$	(136,053)
Tax asset		—		1,726		(615)		1,111
Beginning balance, net of tax		(133,685)		(2,967)		1,710		(134,942)
Other comprehensive income (loss) before reclassifications		11,493		(58)		1,114		12,549
Amounts reclassified from accumulated other comprehensive income (loss)		—		165		(128)		37
Tax effects		—		(26)		(261)		(287)
Net current-period other comprehensive income (loss)		11,493		81		725		12,299
Total	$	(122,192)	$	(2,886)	$	2,435	$	(122,643)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the nine months ended September 30, 2018:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		on Derivatives		Total
Beginning balance, gross	$	(98,717)	$	(4,952)	$	2,333	$	(101,336)
Tax asset		—		1,790		(617)		1,173
Beginning balance, net of tax		(98,717)		(3,162)		1,716		(100,163)
Other comprehensive income (loss) before reclassifications		(23,475)		(130)		1,031		(22,574)
Amounts reclassified from accumulated other comprehensive income (loss)		—		496		(53)		443
Tax effects		—		(90)		(259)		(349)
Net current-period other comprehensive income (loss)		(23,475)		276		719		(22,480)
Total	$	(122,192)	$	(2,886)	$	2,435	$	(122,643)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the three months ended September 30, 2017:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		Derivatives		Total
Beginning balance, gross	$	(118,179)	$	(5,433)	$	(330)	$	(123,942)
Tax asset		—		1,982		88		2,070
Beginning balance, net of tax		(118,179)		(3,451)		(242)		(121,872)
Other comprehensive income (loss) before reclassifications		24,179		(79)		1,802		25,902
Amounts reclassified from accumulated other comprehensive income (loss)		—		237		184		421
Tax effects		—		(61)		(526)		(587)
Net current-period other comprehensive income (loss)		24,179		97		1,460		25,736
Total	$	(94,000)	$	(3,354)	$	1,218	$	(96,136)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the nine months ended September 30, 2017:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		Derivatives		Total
Beginning balance, gross	$	(139,585)	$	(5,768)	$	(1,213)	$	(146,566)
Tax asset		—		2,107		323		2,430
Beginning balance, net of tax		(139,585)		(3,661)		(890)		(144,136)
Other comprehensive income (loss) before reclassifications		45,585		(207)		2,344		47,722
Amounts reclassified from accumulated other comprehensive income (loss)		—		700		524		1,224
Tax effects		—		(186)		(760)		(946)
Net current-period other comprehensive income (loss)		45,585		307		2,108		48,000
Total	$	(94,000)	$	(3,354)	$	1,218	$	(96,136)

The reclassifications out of AOCI and the location on the consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 are as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017		Affected Line Item
Amortization of defined benefit pension items:
	$	(165)	$	(237)	$	(496)	$	(700)	Various line items individually insignificant
		(165)		(237)		(496)		(700)	Income before taxes
		40		91		122		264	Income tax benefit
	$	(125)	$	(146)	$	(374)	$	(436)	Net of tax
Unrealized losses on derivatives:
	$	128	$	(184)	$	53	$	(524)	Interest expense to third parties
		128		(184)		53		(524)	Income before taxes
		(34)		49		(14)		139	Income tax benefit
	$	94	$	(135)	$	39	$	(385)	Net of tax

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RECEIVABLES

9 Months Ended

Sep. 30, 2018

RECEIVABLES

RECEIVABLES

NOTE 4: RECEIVABLES

A summary of receivables included in the consolidated balance sheets as of September 30, 2018 and December 31, 2017 is as follows:

	September 30,		December 31,
	2018		2017
Retail	$	715,312	$	768,502
Wholesale		703,069		671,740
Wholesale factoring		8,411		235,834
Finance lease		61,509		58,198
Restricted receivables		8,502,689		8,766,467
Gross receivables		9,990,990		10,500,741
Less: Allowance for credit losses		(77,419)		(79,196)
Total receivables, net	$	9,913,571	$	10,421,545

Restricted Receivables and Securitization

As part of its overall funding strategy, the Company periodically transfers certain receivables into VIEs that are special purpose entities (“SPEs”) as part of its asset-backed securitization (“ABS”) programs.

SPEs utilized in the securitization programs differ from other entities included in the Company’s consolidated financial statements because the assets they hold are legally isolated from the Company’s assets. For bankruptcy analysis purposes, the Company has sold the receivables to the SPEs in a true sale and the SPEs are separate legal entities. Upon transfer of the receivables to the SPEs, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the SPEs’ creditors. The SPEs have ownership of cash balances that also have restrictions for the benefit of the SPEs’ investors. The Company’s interests in the SPEs’ receivables are subordinate to the interests of third-party investors. None of the receivables that are directly or indirectly sold or transferred in any of these transactions are available to pay the Company’s creditors until all obligations of the SPE have been fulfilled or the receivables are repurchased from the SPE.

The secured borrowings related to the restricted receivables are obligations that are payable as the receivables are collected. The following table summarizes the restricted receivables as of September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Retail	$	5,744,328	$	6,042,186
Wholesale		2,758,361		2,724,281
Total restricted receivables	$	8,502,689	$	8,766,467

Within the U.S. retail receivables securitization programs, qualifying retail receivables are sold to limited purpose, bankruptcy remote SPEs. In turn, these SPEs either establish separate trusts to which the receivables are transferred in exchange for proceeds from asset-backed securities issued by the trusts or pledge the receivables as collateral in exchange for proceeds from a committed asset-backed facility. In Canada, the receivables are transferred directly to the trusts. These trusts were determined to be VIEs. In its role as servicer, the Company has the power to direct the trusts’ activities. Through its retained interests, the Company has an obligation to absorb certain losses, or the right to receive certain benefits, that could potentially be significant to the trusts. Consequently, the Company has consolidated these retail trusts.

With regard to the wholesale receivable securitization programs, the Company sells eligible receivables on a revolving basis to structured master trust facilities, which are limited-purpose, bankruptcy-remote SPEs. These trusts were determined to be VIEs. In its role as servicer, CNH Industrial Capital has the power to direct the trusts’ activities. Through its retained interests, the Company provides security to investors in the event that cash collections from the receivables are not sufficient to make principal and interest payments on the securities. Consequently, CNH Industrial Capital has consolidated these wholesale trusts.

Allowance for Credit Losses

The allowance for credit losses is the Company’s estimate of losses for receivables owned by the Company and consists of two components, depending on whether the receivable has been individually identified as being impaired. The first component of the allowance for credit losses covers the receivables specifically reviewed by management for which the Company has determined it is probable that it will not collect all the principal and interest payments as per the terms of the contract. Receivables are individually reviewed for impairment based on, among other items, amounts outstanding, days past due and prior collection history. These receivables are subject to impairment measurement at the loan level based either on the fair value of the collateral for collateral-dependent receivables or on the present value of expected future cash flows discounted at the receivables’ effective interest rate.

The second component of the allowance for credit losses covers all receivables that have not been individually reviewed for impairment. The allowance for these receivables is based on aggregated portfolio evaluations, generally by financial product. The allowance for retail 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. In addition, qualitative factors that are not fully captured in the loss forecast models, including industry trends, and macroeconomic factors 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.

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.

The Company’s allowance for credit losses is segregated into three portfolio segments: retail, wholesale and wholesale factoring. A portfolio segment is the level at which the Company develops a systematic methodology for determining its allowance for credit losses. The retail segment includes retail notes and finance lease receivables. The wholesale segment includes wholesale financing to CNH Industrial North America dealers and the wholesale factoring segment represents the short-term receivables purchased from Iveco Argentina S.A. (“Iveco Argentina”).

Further, the Company evaluates its retail and wholesale portfolio segments by class of receivable: United States and Canada. Typically, the Company’s receivables within a geographic area have similar risk profiles and methods for assessing and monitoring risk. These classes align with management reporting.

Allowance for credit losses activity for the three months ended September 30, 2018 is as follows:

	Retail		Wholesale		Wholesale Factoring		Total
Allowance for credit losses:
Beginning balance	$	70,316	$	6,486	$	50	$	76,852
Charge-offs		(8,563)		—		—		(8,563)
Recoveries		765		3		—		768
Provision (benefit)		7,824		509		(47)		8,286
Foreign currency translation and other		66		8		2		76
Ending balance	$	70,408	$	7,006	$	5	$	77,419

Allowance for credit losses activity for the nine months ended September 30, 2018 is as follows:

	Retail		Wholesale		Wholesale Factoring		Total
Allowance for credit losses:
Beginning balance	$	73,610	$	5,444	$	142	$	79,196
Charge-offs		(28,830)		(187)		—		(29,017)
Recoveries		2,912		67		—		2,979
Provision (benefit)		22,831		1,696		(131)		24,396
Foreign currency translation and other		(115)		(14)		(6)		(135)
Ending balance	$	70,408	$	7,006	$	5	$	77,419
Ending balance: individually evaluated for impairment	$	16,102	$	4,435	$	—	$	20,537
Ending balance: collectively evaluated for impairment	$	54,306	$	2,571	$	5	$	56,882
Receivables:
Ending balance	$	6,521,149	$	3,461,430	$	8,411	$	9,990,990
Ending balance: individually evaluated for impairment	$	32,464	$	26,504	$	—	$	58,968
Ending balance: collectively evaluated for impairment	$	6,488,685	$	3,434,926	$	8,411	$	9,932,022

Allowance for credit losses activity for the three months ended September 30, 2017 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	80,440	$	4,734	$	85,174
Charge-offs		(10,021)		—		(10,021)
Recoveries		446		9		455
Provision		8,822		29		8,851
Foreign currency translation and other		(466)		21		(445)
Ending balance	$	79,221	$	4,793	$	84,014

Allowance for credit losses activity for the nine months ended September 30, 2017 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	78,047	$	6,848	$	84,895
Charge-offs		(32,296)		(2,016)		(34,312)
Recoveries		2,442		17		2,459
Provision (benefit)		32,043		(94)		31,949
Foreign currency translation and other		(1,015)		38		(977)
Ending balance	$	79,221	$	4,793	$	84,014
Ending balance: individually evaluated for impairment	$	22,044	$	2,170	$	24,214
Ending balance: collectively evaluated for impairment	$	57,177	$	2,623	$	59,800
Receivables:
Ending balance	$	7,108,878	$	3,556,478	$	10,665,356
Ending balance: individually evaluated for impairment	$	44,094	$	33,871	$	77,965
Ending balance: collectively evaluated for impairment	$	7,064,784	$	3,522,607	$	10,587,391

Allowance for credit losses activity for the year ended December 31, 2017 is as follows:

	Retail		Wholesale		Wholesale Factoring		Total
Allowance for credit losses:
Beginning balance	$	78,047	$	6,848	$	—	$	84,895
Charge-offs		(46,460)		(2,374)		—		(48,834)
Recoveries		4,045		20		—		4,065
Provision		39,842		919		137		40,898
Foreign currency translation and other		(1,864)		31		5		(1,828)
Ending balance	$	73,610	$	5,444	$	142	$	79,196
Ending balance: individually evaluated for impairment	$	18,018	$	2,920	$	—	$	20,938
Ending balance: collectively evaluated for impairment	$	55,592	$	2,524	$	142	$	58,258
Receivables:
Ending balance	$	6,868,886	$	3,396,021	$	235,834	$	10,500,741
Ending balance: individually evaluated for impairment	$	38,807	$	43,912	$	—	$	82,719
Ending balance: collectively evaluated for impairment	$	6,830,079	$	3,352,109	$	235,834	$	10,418,022

Utilizing an internal credit scoring model, which considers customers’ attributes, prior credit history and each retail transaction’s attributes, the Company assigns a credit quality rating to each retail customer, by specific transaction, as part of the retail underwriting process. This rating is used in setting the terms on the transaction, including the interest rate. A description of the general characteristics of the customers’ risk grades is as follows:

Titanium — Customers from whom the Company expects no loss or collection effort.

Platinum — Customers from whom the Company expects minimal, if any, loss or collection effort.

Gold, Silver, Bronze — Customers defined as those with the potential for loss and collection effort.

A breakdown of the retail portfolio by the customer’s risk grade at the time of origination as of September 30, 2018 and December 31, 2017 is as follows:

	September 30,		December 31,
	2018		2017
Titanium	$	3,446,228	$	3,734,313
Platinum		1,958,664		2,002,791
Gold		933,294		952,404
Silver		149,666		146,051
Bronze		33,297		33,327
Total	$	6,521,149	$	6,868,886

As part of the ongoing monitoring of the credit quality of the wholesale portfolio, the Company utilizes an internal credit scoring model that assigns a risk grade for each dealer. The scoring model considers the strength of the dealer’s financial condition and payment history. The Company considers the dealers’ ratings in the quarterly credit allowance analysis. A description of the general characteristics of the dealer risk grades is as follows:

Grades A and B —Includes receivables due from dealers that have significant capital strength, moderate leverage, stable earnings and growth, and excellent payment performance.

Grade C —Includes receivables due from dealers with moderate credit risk. Dealers of this grade are differentiated from higher grades on a basis of leverage or payment performance.

Grade D —Includes receivables due from dealers with additional credit risk. These dealers require additional monitoring due to their weaker financial condition or payment performance.

A breakdown of the wholesale portfolio by its credit quality indicators as of September 30, 2018 and December 31, 2017 is as follows:

	September 30,		December 31,
	2018		2017
A	$	1,490,875	$	1,222,813
B		1,298,798		1,425,591
C		502,039		439,353
D		169,718		308,264
Total	$	3,461,430	$	3,396,021

The following tables present information at the level at which management assesses and monitors its credit risk. Receivables are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Delinquency is reported on receivables greater than 30 days past due.

The aging of receivables as of September 30, 2018 is as follows:

													Recorded
													Investment
					Greater								> 90 Days
	31 – 60 Days		61 – 90 Days		Than		Total				Total		and
	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Retail
United States	$	20,725	$	5,525	$	24,956	$	51,206	$	5,281,963	$	5,333,169	$	6,581
Canada	$	1,946	$	487	$	2,860	$	5,293	$	1,182,687	$	1,187,980	$	1,170
Wholesale
United States	$	651	$	34	$	1,363	$	2,048	$	2,680,102	$	2,682,150	$	450
Canada	$	17	$	—	$	46	$	63	$	779,217	$	779,280	$	17
Wholesale Factoring	$	111	$	1,753	$	2,145	$	4,009	$	4,402	$	8,411	$	—
Total
Retail	$	22,671	$	6,012	$	27,816	$	56,499	$	6,464,650	$	6,521,149	$	7,751
Wholesale	$	668	$	34	$	1,409	$	2,111	$	3,459,319	$	3,461,430	$	467
Wholesale factoring	$	111	$	1,753	$	2,145	$	4,009	$	4,402	$	8,411	$	—

The aging of receivables as of December 31, 2017 is as follows:

													Recorded
													Investment
					Greater								> 90 Days
	31 – 60 Days		61 – 90 Days		Than		Total				Total		and
	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Retail
United States	$	27,590	$	8,412	$	37,004	$	73,006	$	5,532,329	$	5,605,335	$	6,232
Canada	$	2,010	$	585	$	2,837	$	5,432	$	1,258,119	$	1,263,551	$	665
Wholesale
United States	$	802	$	1	$	236	$	1,039	$	2,658,716	$	2,659,755	$	179
Canada	$	22	$	—	$	6	$	28	$	736,238	$	736,266	$	6
Wholesale Factoring	$	5,652	$	1,390	$	—	$	7,042	$	228,792	$	235,834	$	—
Total
Retail	$	29,600	$	8,997	$	39,841	$	78,438	$	6,790,448	$	6,868,886	$	6,897
Wholesale	$	824	$	1	$	242	$	1,067	$	3,394,954	$	3,396,021	$	185
Wholesale factoring	$	5,652	$	1,390	$	—	$	7,042	$	228,792	$	235,834	$	—

Impaired receivables are receivables for which the Company has determined it will not collect all the principal and interest payments as per the terms of the contract. As of September 30, 2018 and December 31, 2017, the Company’s recorded investment in impaired receivables individually evaluated for impairment and the related unpaid principal balances, allowances and average recorded investment (based on a ten-month average and thirteen-month average, respectively) are as follows:

	September 30, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Retail
United States	$	31,424	$	30,153	$	15,194	$	32,962
Canada	$	1,040	$	988	$	908	$	1,154
Wholesale
United States	$	26,504	$	25,357	$	4,435	$	36,405
Total
Retail	$	32,464	$	31,141	$	16,102	$	34,116
Wholesale	$	26,504	$	25,357	$	4,435	$	36,405

	December 31, 2017
			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Retail
United States	$	38,035	$	36,187	$	17,518	$	39,917
Canada	$	772	$	716	$	500	$	1,084
Wholesale
United States	$	43,912	$	43,531	$	2,920	$	49,469
Total
Retail	$	38,807	$	36,903	$	18,018	$	41,001
Wholesale	$	43,912	$	43,531	$	2,920	$	49,469

As of September 30, 2018 and December 31, 2017, the Company’s impaired receivables individually evaluated for impairment without an allowance were immaterial. Interest income recognized for the three and nine months ended September 30, 2018 and 2017 was immaterial.

Recognition of income is generally suspended when management determines that collection of future finance income is not probable or when an account becomes 120 days delinquent, whichever occurs first. Interest accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at that time. The receivables on nonaccrual status as of September 30, 2018 and December 31, 2017 are as follows:

	September 30, 2018						December 31, 2017
	Retail		Wholesale		Total		Retail		Wholesale		Total
United States	$	28,039	$	25,357	$	53,396	$	40,968	$	43,531	$	84,499
Canada	$	2,523	$	—	$	2,523	$	2,538	$	—	$	2,538

Troubled Debt Restructurings

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

TDRs are reviewed along with other receivables as part of management’s ongoing evaluation of the adequacy of the allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source of repayment, which is normally the liquidation of collateral. In determining collateral value, the Company estimates the current fair market value of the equipment collateral and considers credit enhancements such as additional collateral and third-party guarantees.

Before removing a receivable from TDR classification, a review of the borrower is conducted. If concerns exist about the future ability of the borrower to meet its obligations based on a credit review, the TDR classification is not removed from the receivable.

As of September 30, 2018, the Company had 278 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre-modification value of these contracts was $9,408 and the post-modification value was $8,509. Additionally, the Company had 365 accounts with a balance of $17,028 undergoing bankruptcy proceedings where a concession has not yet been determined. As of September 30, 2017, the Company had 235 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre-modification value of these contracts was $5,780 and the post-modification value was $5,092. Additionally, the Company had 453 accounts with a balance of $29,722 undergoing bankruptcy proceedings where a concession has not yet been determined. As the outcome of the bankruptcy cases is determined by a court based on available assets, subsequent re-defaults are unusual and were not material for retail and finance lease contracts that were modified in a TDR during the previous 12 months ended September 30, 2018 and 2017.

As of September 30, 2018 and 2017, the Company’s wholesale TDRs were immaterial.

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CREDIT FACILITIES AND DEBT

9 Months Ended

Sep. 30, 2018

CREDIT FACILITIES AND DEBT

CREDIT FACILITIES AND DEBT

NOTE 5: CREDIT FACILITIES AND DEBT

On August 14, 2018, the Company completed an offering of $500,000 in aggregate principal amount of its 4.200% unsecured notes due 2024, issued at a price to the public of 99.701%.

On September 26, 2018, the Company, through a bankruptcy-remote trust, issued $809,930 of amortizing asset-backed notes secured by U.S. retail receivables.

On September 27, 2018, the Company extended the maturity date of the $1,200,000 U.S. retail committed asset-backed facility to September 27, 2020.

Unsecured facilities with banks as of September 30, 2018 totaled $830,536. These committed credit facilities, which are eligible for renewal at various future dates, are used primarily for working capital and other general corporate purposes. As of September 30, 2018, we had $230,536 outstanding against these credit facilities. Included in the remaining available credit commitments is $348,900 maintained primarily to provide backup liquidity for commercial paper borrowings.

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INCOME TAXES

9 Months Ended

Sep. 30, 2018

INCOME TAXES

INCOME TAXES

NOTE 6: INCOME TAXES

The effective tax rates for the three months ended September 30, 2018 and 2017 were 11.0% and 29.6%, respectively. The effective tax rate was 19.7% for the nine-month period ended September 30, 2018, compared to 30.8% for the same period in 2017. The decreases in the effective tax rates were primarily due to the passage of the U.S. Tax Reform on December 22, 2017, which reduced the U.S. corporate tax rate from 35% t to 21% and certain net discrete tax benefits, including a revision to the Company's provisional estimate of accounting for U.S Tax Reform. Excluding the discrete tax benefits, the Company’s effective tax rates would have been 23.1% and 23.2%, for the three and nine-month periods ended September 30, 2018, respectively.

The U.S. Tax Reform changed many aspects of U.S. corporate income taxation, including reducing the corporate tax rate, implementing a quasi-territorial tax system and imposing a tax on deemed repatriated earnings of certain foreign subsidiaries. The Company reasonably estimated the effects of the U.S. Tax Reform in the three months ended December 31, 2017. During the three and nine months ended September 30, 2018, the Company recognized a tax benefit in refining, in accordance with Staff Accounting Bulletin No. (“SAB”) 118, its provisional estimates of the U.S. Tax Reform as reflected in our 2017 results. During the final three months of 2018, the Company will finalize its provisional estimates of accounting for the impacts of U.S. Tax Reform, in accordance with SAB 118.

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FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2018

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS

NOTE 7: FINANCIAL INSTRUMENTS

The Company may elect to measure many financial instruments and certain other items at fair value. This fair value option must 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. The Company did not elect the fair value measurement option for eligible items.

Fair-Value Hierarchy

U.S. GAAP specifies a hierarchy of valuation techniques 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 internally-developed market assumptions. These two types of inputs have created the following fair-value hierarchy:

Level 1 —Quoted prices for identical instruments in active markets.

Level 2 —Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 —Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

This hierarchy requires the use of observable market data when available.

Determination of Fair Value

When available, the Company uses quoted market prices to determine fair value and classifies such items in Level 1. In some cases where a market price is not available, the Company will make use of observable market-based inputs to calculate fair value, in which case the items are classified in Level 2.

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

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

Derivatives

The Company 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. The Company does not hold or issue derivative or other financial instruments for speculative purposes. The credit risk for the interest rate hedges is reduced through diversification among counterparties, utilizing mandatory termination clauses and/or collateral support agreements. Derivative instruments are generally classified in Level 2 or 3 of the fair value hierarchy. The cash flows underlying all derivative contracts were recorded in operating activities in the consolidated statements of cash flows.

Interest Rate Derivatives

The Company has entered into interest rate derivatives in order to manage interest rate exposures arising in the normal course of business. Interest rate derivatives that have been designated in cash flow hedging relationships are being used by the Company to mitigate the risk of rising interest rates related to debt and anticipated issuance of fixed-rate debt in future periods. Gains and losses on these instruments, to the extent that the hedge relationship has been effective, are deferred in accumulated other comprehensive income (loss) and recognized in interest expense over the period in which the Company recognizes interest expense on the related debt. Any ineffectiveness was recorded in “Other expenses” in the consolidated statements of income and was insignificant for all periods presented. As of September 30, 2018, the maximum length of time over which the Company is hedging its interest rate exposure through the use of derivative instruments designated in cash flow hedge relationships is 46 months. As of September 30, 2018, the after-tax losses deferred in accumulated other comprehensive income (loss) that will be recognized in interest expense over the next 12 months are approximately $419.

The Company also enters into interest rate derivatives with substantially similar economic terms that are not designated as hedging instruments to mitigate interest rate risk related to the Company’s committed asset-backed facilities. These facilities require the Company to enter into interest rate derivatives. To ensure that these transactions do not result in the Company being exposed to this risk, the Company enters into an offsetting position. Unrealized and realized gains and losses resulting from fair value changes in these instruments are recognized directly in income and were insignificant for the three and nine months ended September 30, 2018 and 2017.

All of the Company’s interest rate derivatives as of September 30, 2018 and December 31, 2017 are considered Level 2. The fair market value of these derivatives is calculated using market data input for forecasted benchmark interest rates and can be compared to actively traded derivatives. The total notional amount of the Company’s interest rate derivatives was $3,147,985 and $3,143,737 at September 30, 2018 and December 31, 2017, respectively. The ten-month average notional amounts for the nine months ended September 30, 2018 and 2017 were $2,915,781 and $3,260,026, respectively.

Foreign Exchange Contracts

The Company uses forward contracts to hedge certain assets and liabilities denominated in foreign currencies. Such derivatives are considered economic hedges and are not designated as hedging instruments. The changes in the fair value of these instruments are recognized directly as income in “Other expenses” and are expected to offset the foreign exchange gains or losses on the exposures being managed.

All of the Company’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.

Financial Statement Impact of the Company’s Derivatives

The fair values of the Company’s derivatives as of September 30, 2018 and December 31, 2017 in the consolidated balance sheets are recorded as follows:

	September 30,		December 31,
	2018		2017
Derivatives Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	733	$	4,113
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	10,428	$	6,698
Derivatives Not Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	4,767	$	4,638
Foreign exchange contracts		6		1,393
Total	$	4,773	$	6,031
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	4,767	$	4,638
Foreign exchange contracts		318		325
Total	$	5,085	$	4,963

Pre-tax gains (losses) on the consolidated statements of income and comprehensive income related to the Company’s derivatives for the three and nine months ended September 30, 2018 and 2017 are recorded in the following accounts:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Cash Flow Hedges
Recognized in accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives	$	1,114	$	1,802	$	1,031	$	2,344
Reclassified from accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives—Interest expense to third parties		128		(184)		53		(524)
Not Designated as Hedges
Foreign exchange contracts—Other expenses	$	(168)	$	(139)	$	(11,691)	$	874

Items Measured at Fair Value on a Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017:

	September 30,		December 31,
	2018		2017
Assets
Interest rate derivatives	$	5,500	$	8,751
Foreign exchange contracts		6		1,393
Total assets	$	5,506	$	10,144
Liabilities
Interest rate derivatives	$	15,195	$	11,336
Foreign exchange contracts		318		325
Total liabilities	$	15,513	$	11,661

There were no transfers between Level 1, Level 2 and Level 3 hierarchy levels during the periods presented.

Fair Value of Other Financial Instruments

The carrying amount of cash and cash equivalents, restricted cash, floating-rate affiliated accounts and notes receivable, floating-rate short-term debt, interest payable and short-term affiliated debt was assumed to approximate its fair value. Under the fair value hierarchy, cash and cash equivalents and restricted cash are classified as Level 1 and the remainder of the financial instruments listed is classified as Level 2.

Financial Instruments Not Carried at Fair Value

The carrying amount and estimated fair value of assets and liabilities considered financial instruments as of September 30, 2018 and December 31, 2017 are as follows:

	September 30, 2018				December 31, 2017
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value *		Amount		Fair Value *
Receivables	$	9,913,571	$	9,813,399	$	10,421,545	$	10,379,020
Long-term debt	$	6,053,864	$	5,982,078	$	6,332,763	$	6,314,182

______________

*Under the fair value hierarchy, receivables measurements are classified as Level 3 and long‑term debt measurements are classified as Level 2.

Receivables

The fair value of receivables was determined by discounting the estimated future payments using a discount rate that includes an estimate for credit risk.

Long-term debt

The fair values of long-term debt were based on current market quotes for identical or similar borrowings and credit risk.

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SEGMENT AND GEOGRAPHICAL INFORMATION

9 Months Ended

Sep. 30, 2018

SEGMENT AND GEOGRAPHICAL INFORMATION

SEGMENT AND GEOGRAPHICAL INFORMATION

NOTE 8: SEGMENT AND GEOGRAPHICAL INFORMATION

The Company’s segment data is based on disclosure requirements of accounting guidance on segment reporting, which requires financial information be reported on the basis that is used internally for measuring segment performance. The Company’s reportable segments are strategic business units that are organized around differences in geographic areas. Each segment is managed separately as they require different knowledge of regulatory environments and marketing strategies. The operating segments offer primarily the same services within each of the respective segments.

A summary of the Company’s reportable segment information is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenues
United States	$	170,988	$	188,733	$	523,185	$	567,401
Canada		42,107		47,357		146,687		133,385
Eliminations		(1,814)		(1,201)		(6,079)		(3,200)
Total	$	211,281	$	234,889	$	663,793	$	697,586
Interest expense
United States	$	69,761	$	69,649	$	203,717	$	202,785
Canada		13,610		11,324		41,151		33,712
Eliminations		(1,814)		(1,201)		(6,079)		(3,200)
Total	$	81,557	$	79,772	$	238,789	$	233,297
Segment net income
United States	$	30,810	$	16,925	$	84,449	$	65,257
Canada		10,471		17,214		44,263		45,462
Total	$	41,281	$	34,139	$	128,712	$	110,719
Depreciation and amortization
United States	$	44,514	$	63,908	$	141,215	$	178,404
Canada		10,937		11,672		33,567		33,524
Total	$	55,451	$	75,580	$	174,782	$	211,928
Expenditures for equipment on operating leases
United States	$	160,179	$	95,662	$	343,485	$	382,661
Canada		29,490		20,741		87,972		76,613
Total	$	189,669	$	116,403	$	431,457	$	459,274
Provision for credit losses
United States	$	7,661	$	8,924	$	22,475	$	31,841
Canada		625		(73)		1,921		108
Total	$	8,286	$	8,851	$	24,396	$	31,949

	As of		As of
	September 30,		December 31,
	2018		2017
Segment assets
United States	$	10,310,001	$	10,738,403
Canada		2,518,382		2,838,754
Eliminations		(114,005)		(65,079)
Total	$	12,714,378	$	13,512,078
Managed receivables
United States	$	8,015,319	$	8,265,090
Canada		1,975,671		2,235,651
Total	$	9,990,990	$	10,500,741

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RELATED - PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2018

RELATED-PARTY TRANSACTIONS

RELATED-PARTY TRANSACTIONS

NOTE 9: RELATED-PARTY TRANSACTIONS

The Company receives compensation from CNH Industrial North America for retail, wholesale and operating lease sales programs offered by CNH Industrial North America on which finance charges are waived or below market rate financing programs are offered. The Company receives compensation from CNH Industrial North America based on the Company’s estimated costs and a targeted return on equity. The Company is also compensated for lending funds to CNH Industrial North America.

In addition, the Company receives income from Iveco Argentina for wholesale factoring receivables purchased at a discount.

The summary of sources included in “Interest and other income from affiliates” in the accompanying consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Subsidy from CNH Industrial North America
Retail	$	35,618	$	39,401	$	112,115	$	116,561
Wholesale		24,658		41,331		93,508		124,261
Operating lease		14,996		16,802		46,002		50,909
Income from Iveco Argentina
Wholesale factoring		589		—		10,881		—
Income from affiliated receivables
CNH Industrial North America		281		47		1,043		113
Total interest and other income from affiliates	$	76,142	$	97,581	$	263,549	$	291,844

Interest expense to affiliates was $1,566 and $1,158, respectively, for the three months ended September 30, 2018 and 2017 and $5,942 and $8,294, respectively, for the nine months ended September 30, 2018 and 2017. Fees charged by affiliates were $11,777 and $11,307, respectively, for the three months ended September 30, 2018 and 2017, and $35,036 and $33,948, respectively, for the nine months ended September 30, 2018 and 2017, and represents payroll and other human resource services CNH Industrial America performs on behalf of the Company.

As of September 30, 2018 and December 31, 2017, the Company had various accounts and notes receivable and debt with the following affiliates:

	September 30,		December 31,
	2018		2017
Affiliated receivables
CNH Industrial America	$	84,257	$	49,311
CNH Industrial Canada Ltd.		718		11,282
Other affiliates		12,447		12,540
Total affiliated receivables	$	97,422	$	73,133
Affiliated debt
CNH Industrial America	$	50,000	$	327,160
CNH Industrial Canada Ltd.		28,717		118,642
Total affiliated debt	$	78,717	$	445,802

Included in “Other Assets” in the accompanying balance sheet were tax receivables due from related parties of $16,810 and $3,513, respectively, as of September 30, 2018 and December 31, 2017. Accounts payable and other accrued liabilities, including tax payables, of $81,624 and $60,070, respectively, as of September 30, 2018 and December 31, 2017, were payable to related parties.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2018

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 10: COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is party to various litigation matters and claims arising from its operations. Management believes that the outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position or results of operations.

Guarantees

The Company provides payment guarantees on the financial debt of various foreign financial services subsidiaries of CNHI for approximately $30,000. The guarantees are in effect for the term of the underlying funding facilities.

Commitments

The Company has various agreements to extend credit for the wholesale managed portfolio. At September 30, 2018, the total credit limit available was $6,092,405, of which $3,424,103 was utilized.

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2018

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

NOTE 11: SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

CNH Industrial Capital America and New Holland Credit (the “Guarantor Entities”), which are 100%-owned subsidiaries of CNH Industrial Capital LLC, guarantee certain indebtedness of CNH Industrial Capital LLC. As the guarantees are full, unconditional, and joint and several, and because the Guarantor Entities are 100%-owned by CNH Industrial Capital LLC, the Company has included the following condensed consolidating financial information as of September 30, 2018 and December 31, 2017 and for the three and nine months ended September 30, 2018 and 2017. The condensed consolidating financial information reflects investments in consolidated subsidiaries under the equity method of accounting.

	Condensed Statements of Comprehensive Income for the
	Three Months Ended September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	4,384	$	48,265	$	—	$	52,649
Interest income on wholesale notes		—		(253)		17,464		—		17,211
Interest and other income from affiliates		17,719		46,041		65,642		(53,260)		76,142
Rental income on operating leases		—		46,659		13,368		—		60,027
Other income		—		21,711		431		(16,890)		5,252
Total revenues		17,719		118,542		145,170		(70,150)		211,281
EXPENSES
Interest expense:
Interest expense to third parties		37,971		(1,845)		43,865		—		79,991
Interest expense to affiliates		—		44,554		10,272		(53,260)		1,566
Total interest expense		37,971		42,709		54,137		(53,260)		81,557
Administrative and operating expenses:
Fees charged by affiliates		—		11,248		17,419		(16,890)		11,777
Provision for credit losses		—		2,667		5,619		—		8,286
Depreciation of equipment on operating leases		—		43,982		10,938		—		54,920
Other expenses		6		7,389		954		—		8,349
Total administrative and operating expenses		6		65,286		34,930		(16,890)		83,332
Total expenses		37,977		107,995		89,067		(70,150)		164,889
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(20,258)		10,547		56,103		—		46,392
Income tax provision (benefit)		(4,907)		4,493		5,525		—		5,111
Equity in income of consolidated subsidiaries accounted for under the equity method		56,632		50,578		—		(107,210)		—
NET INCOME	$	41,281	$	56,632	$	50,578	$	(107,210)	$	41,281
COMPREHENSIVE INCOME	$	53,580	$	68,931	$	61,309	$	(130,240)	$	53,580

	Condensed Statements of Comprehensive Income for the
	Nine Months Ended September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	10,144	$	141,336	$	—	$	151,480
Interest income on wholesale notes		—		(765)		49,801		—		49,036
Interest and other income from affiliates		52,789		152,299		223,010		(164,549)		263,549
Rental income on operating leases		—		140,075		41,025		—		181,100
Other income		—		67,583		1,970		(50,925)		18,628
Total revenues		52,789		369,336		457,142		(215,474)		663,793
EXPENSES
Interest expense:
Interest expense to third parties		101,982		8,815		122,050		—		232,847
Interest expense to affiliates		—		149,902		20,589		(164,549)		5,942
Total interest expense		101,982		158,717		142,639		(164,549)		238,789
Administrative and operating expenses:
Fees charged by affiliates		—		33,646		52,315		(50,925)		35,036
Provision for credit losses		—		5,578		18,818		—		24,396
Depreciation of equipment on operating leases		—		139,607		33,567		—		173,174
Other expenses		16		11,879		20,138		—		32,033
Total administrative and operating expenses		16		190,710		124,838		(50,925)		264,639
Total expenses		101,998		349,427		267,477		(215,474)		503,428
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(49,209)		19,909		189,665		—		160,365
Income tax provision (benefit)		(11,919)		6,814		36,758		—		31,653
Equity in income of consolidated subsidiaries accounted for under the equity method		166,002		152,907		—		(318,909)		—
NET INCOME	$	128,712	$	166,002	$	152,907	$	(318,909)	$	128,712
COMPREHENSIVE INCOME	$	106,232	$	143,522	$	133,371	$	(276,893)	$	106,232

	Condensed Balance Sheets as of September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	$	—	$	71,621	$	18,662	$	—	$	90,283
Restricted cash		—		—		527,808		—		527,808
Receivables, less allowance for credit losses		—		1,384,146		8,529,425		—		9,913,571
Retained interests in securitized receivables		—		—		—		—		—
Affiliated accounts and notes receivable		2,468,215		2,119,069		2,217,493		(6,707,355)		97,422
Equipment on operating leases, net		—		1,346,957		362,882		—		1,709,839
Equipment held for sale		—		183,597		20,582		—		204,179
Investments in consolidated subsidiaries accounted for under the equity method		2,764,916		2,658,976		—		(5,423,892)		—
Goodwill and intangible assets, net		—		90,981		28,020		—		119,001
Other assets		4,836		11,607		39,621		(3,789)		52,275
TOTAL	$	5,237,967	$	7,866,954	$	11,744,493	$	(12,135,036)	$	12,714,378
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt, including current maturities of long-term debt	$	1,047,478	$	16,911	$	3,389,903	$	—	$	4,454,292
Accounts payable and other accrued liabilities		300,274		2,931,437		1,175,124		(3,701,624)		705,211
Affiliated debt		—		2,152,713		935,524		(3,009,520)		78,717
Long-term debt		2,467,921		977		3,584,966		—		6,053,864
Total liabilities		3,815,673		5,102,038		9,085,517		(6,711,144)		11,292,084
Stockholder’s equity		1,422,294		2,764,916		2,658,976		(5,423,892)		1,422,294
TOTAL	$	5,237,967	$	7,866,954	$	11,744,493	$	(12,135,036)	$	12,714,378

	Condensed Statements of Cash Flows for the
	Nine Months Ended September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	32,158	$	146,608	$	58,353	$	12,049	$	249,168
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(6,283,817)		(7,080,363)		5,178,455		(8,185,725)
Collections of receivables		—		6,262,320		7,511,294		(5,178,731)		8,594,883
Change in restricted cash		—		—		—		—		—
Purchase of equipment on operating leases, net		—		(72,766)		(34,387)		—		(107,153)
Change in property and equipment and software, net		—		(4,143)		—		—		(4,143)
Net cash from (used in) investing activities		—		(98,406)		396,544		(276)		297,862
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(100,535)		(253,694)		(11,773)		(366,002)
Net change in indebtedness		27,842		(36,385)		(369,952)		—		(378,495)
Dividends paid to CNH Industrial America LLC		(60,000)		—		—		—		(60,000)
Net cash from (used in) financing activities		(32,158)		(136,920)		(623,646)		(11,773)		(804,497)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(88,718)		(168,749)		—		(257,467)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		—		160,339		715,219		—		875,558
End of period	$	—	$	71,621	$	546,470	$	—	$	618,091

	Condensed Statements of Comprehensive Income for the
	Three Months Ended September 30, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	3,363	$	47,229	$	—	$	50,592
Interest income on wholesale notes		—		(261)		17,033		—		16,772
Interest and other income from affiliates		26,792		60,233		79,555		(68,999)		97,581
Rental income on operating leases		—		49,290		14,001		—		63,291
Other income		—		24,197		798		(18,342)		6,653
Total revenues		26,792		136,822		158,616		(87,341)		234,889
EXPENSES
Interest expense:
Interest expense to third parties		46,887		(5,255)		36,982		—		78,614
Interest expense to affiliates		—		59,721		10,436		(68,999)		1,158
Total interest expense		46,887		54,466		47,418		(68,999)		79,772
Administrative and operating expenses:
Fees charged by affiliates		—		10,875		18,774		(18,342)		11,307
Provision for credit losses		—		3,743		5,108		—		8,851
Depreciation of equipment on operating leases		—		63,361		11,669		—		75,030
Other expenses		—		9,203		2,200		—		11,403
Total administrative and operating expenses		—		87,182		37,751		(18,342)		106,591
Total expenses		46,887		141,648		85,169		(87,341)		186,363
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(20,095)		(4,826)		73,447		—		48,526
Income tax provision (benefit)		(7,499)		(1,907)		23,793		—		14,387
Equity in income of consolidated subsidiaries accounted for under the equity method		46,735		49,654		—		(96,389)		—
NET INCOME	$	34,139	$	46,735	$	49,654	$	(96,389)	$	34,139
COMPREHENSIVE INCOME	$	59,875	$	72,471	$	71,767	$	(144,238)	$	59,875

	Condensed Statements of Comprehensive Income for the
	Nine Months Ended September 30, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	11,025	$	138,758	$	—	$	149,783
Interest income on wholesale notes		—		(835)		49,662		—		48,827
Interest and other income from affiliates		75,242		181,293		238,112		(202,803)		291,844
Rental income on operating leases		—		149,020		39,996		—		189,016
Other income		—		73,081		1,503		(56,468)		18,116
Total revenues		75,242		413,584		468,031		(259,271)		697,586
EXPENSES
Interest expense:
Interest expense to third parties		125,560		(5,926)		105,369		—		225,003
Interest expense to affiliates		—		177,887		33,210		(202,803)		8,294
Total interest expense		125,560		171,961		138,579		(202,803)		233,297
Administrative and operating expenses:
Fees charged by affiliates		—		32,624		57,792		(56,468)		33,948
Provision for credit losses		—		9,739		22,210		—		31,949
Depreciation of equipment on operating leases		—		176,817		33,515		—		210,332
Other expenses		—		21,731		6,301		—		28,032
Total administrative and operating expenses		—		240,911		119,818		(56,468)		304,261
Total expenses		125,560		412,872		258,397		(259,271)		537,558
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(50,318)		712		209,634		—		160,028
Income tax provision (benefit)		(18,778)		259		67,828		—		49,309
Equity in income of consolidated subsidiaries accounted for under the equity method		142,259		141,806		—		(284,065)		—
NET INCOME	$	110,719	$	142,259	$	141,806	$	(284,065)	$	110,719
COMPREHENSIVE INCOME	$	158,719	$	190,259	$	182,791	$	(373,050)	$	158,719

	Condensed Balance Sheets as of December 31, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	$	—	$	160,339	$	66,607	$	—	$	226,946
Restricted cash		—		—		648,612		—		648,612
Receivables, less allowance for credit losses		—		1,367,951		9,053,594		—		10,421,545
Affiliated accounts and notes receivable		2,518,121		1,991,481		2,068,016		(6,504,485)		73,133
Equipment on operating leases, net		—		1,405,731		375,758		—		1,781,489
Equipment held for sale		—		191,710		16,806		—		208,516
Investments in consolidated subsidiaries accounted for under the equity method		2,620,971		2,525,605		—		(5,146,576)		—
Goodwill and intangible assets, net		—		88,440		29,016		—		117,456
Other assets		7,548		4,432		26,466		(4,065)		34,381
TOTAL	$	5,146,640	$	7,735,689	$	12,284,875	$	(11,655,126)	$	13,512,078
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt, including current maturities of long-term debt	$	1,015,520	$	45,937	$	3,556,007	$	—	$	4,617,464
Accounts payable and other accrued liabilities		283,445		2,807,195		1,160,573		(3,510,803)		740,410
Affiliated debt		—		2,253,248		1,190,301		(2,997,747)		445,802
Long-term debt		2,472,036		8,338		3,852,389		—		6,332,763
Total liabilities		3,771,001		5,114,718		9,759,270		(6,508,550)		12,136,439
Stockholder’s equity		1,375,639		2,620,971		2,525,605		(5,146,576)		1,375,639
TOTAL	$	5,146,640	$	7,735,689	$	12,284,875	$	(11,655,126)	$	13,512,078

	Condensed Statements of Cash Flows for the
	Nine Months Ended September 30, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	200,310	$	367,764	$	171,263	$	(258,663)	$	480,674
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(5,764,415)		(6,497,555)		4,818,267		(7,443,703)
Collections of receivables		—		5,819,270		6,794,335		(4,818,615)		7,794,990
Change in restricted cash		—		—		—		—		—
Purchase of equipment on operating leases, net		—		(105,329)		(40,129)		—		(145,458)
Change in property and equipment and software, net		—		(170)		—		—		(170)
Net cash from (used in) investing activities		—		(50,644)		256,651		(348)		205,659
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(346,109)		(25,063)		259,011		(112,161)
Net change in indebtedness		9,690		(38,049)		(484,117)		—		(512,476)
Dividends paid to CNH Industrial America LLC		(210,000)		—		—		—		(210,000)
Net cash from (used in) financing activities		(200,310)		(384,158)		(509,180)		259,011		(834,637)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(67,038)		(81,266)		—		(148,304)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		—		151,654		725,438		—		877,092
End of period	$	—	$	84,616	$	644,172	$	—	$	728,788

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

New Accounting Pronouncements

New Accounting Pronouncements Adopted in 2018

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (ASC606) (“ASU 2014-09”), which supersedes existing revenue recognition guidance under current U.S. GAAP. The new standard requires an entity to recognize revenue upon transfer of control of goods or services to a customer at an amount that reflects the consideration that the entity expects to receive. This new revenue recognition model defines a five-step process to achieve this objective. The new standard also requires additional disclosures to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts with customers. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented, or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the consolidated statement of changes in equity.

The Company has adopted the new standard effective January 1, 2018. The adoption did not impact the timing or measurement of the Company’s revenue recognition as it is consistent with its current accounting treatment for contracts within the scope of the new ASU.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”) that changes the presentation of restricted cash and cash equivalents on the statement of cash flows. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted ASU 2016-18 on a retrospective basis as of January 1, 2018. The impact to the consolidated statement of cash flows for the nine months ended September 30, 2017 was to increase cash flows from changes in accounts payable and other accrued liabilities by $8,566, eliminate cash flows from changes in restricted cash of $180,661, and to increase cash, cash equivalents and restricted cash by $172,095.

In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). The amendments in this update require that an employer disaggregate the service cost component from other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. ASU 2017-07 is effective for annual reporting periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018, which did not have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which amends ASC 825-10, Financial Instruments – Overall. This ASU changes the treatment for available-for-sale equity investments by recognizing unrealized fair value changes directly in net income, and no longer in other comprehensive income. ASU 2016-01 is effective January 1, 2018, with the cumulative-effect adjustment from initially applying the new standard recognized in the consolidated statement of financial position as of January 1, 2018. The Company adopted this standard on January 1, 2018, which did not have a material impact on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). This standard provides guidance clarification to reduce diversity in classification of certain cash flow payments and receipts in the statement of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 on a retrospective transition basis to each period presented, and may be early adopted. The Company adopted this standard on January 1, 2018, which did not have a material impact on its consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes ASC 840, Leases. Subsequently, the FASB has issued additional ASUs, which further clarify this guidance. The ASU’s most prominent change is the requirement for lessees to recognize leased assets and liabilities classified as operating leases under the previous standard. The ASU does not significantly change the lessee’s recognition, measurement and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. ASU 2016-02 also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. It is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years and early adoption is permitted. The ASU requires a modified retrospective transition approach and provides certain optional transition reliefs. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which establishes ASC 326, Financial Instruments – Credit Losses. The ASU introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Additional disclosures about significant estimates and credit quality are also required. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, with early adoption permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements and improve the disclosures of hedging arrangements. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, including interim periods within these years. Early adoption is permitted in any interim period or fiscal year before the effective date. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which amends ASC 202, Income Statement – Reporting Comprehensive Income.  In December 2017, the U.S. government enacted new tax legislation (the “U.S. Tax Reform”). Included in the provisions of U.S. Tax Reform is a reduction of the corporate income tax rate from 35 percent to 21 percent. U.S. GAAP requires that remeasurement of deferred taxes to the new corporate tax rate occur in the period in which the legislation is enacted. The deferred tax adjustment is recorded in the provision for income taxes, including items for which the tax effects were originally recorded in other comprehensive income (“OCI”). This treatment results in the items in OCI reflecting a disproportionate tax rate, a result often referred to as stranded tax effects. This ASU allows a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from tax reform. ASU 2018-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years and early adoption is permitted. The ASU can be adopted at the beginning of an interim or annual period or retrospectively to each period affected by tax reform. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

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

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement (“ASU 2018-15”), which expands upon the guidance set forth in ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. ASU 2018-15 aligns the requirements for capitalization of implementation costs in a cloud computing service contract with those requirements for capitalization of implementation costs incurred for an internal-use software license. ASU 2018-15 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted in any interim period for which financial statements have not been issued. ASU 2018-15 may be applied prospectively from the date the guidance is first applied or retrospectively. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

9 Months Ended

Sep. 30, 2018

ACCUMULATED OTHER COMPREHENSIVE INCOME

Schedule of changes in the components of AOCI and related tax effects

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the three months ended September 30, 2018:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		on Derivatives		Total
Beginning balance, gross	$	(133,685)	$	(4,693)	$	2,325	$	(136,053)
Tax asset		—		1,726		(615)		1,111
Beginning balance, net of tax		(133,685)		(2,967)		1,710		(134,942)
Other comprehensive income (loss) before reclassifications		11,493		(58)		1,114		12,549
Amounts reclassified from accumulated other comprehensive income (loss)		—		165		(128)		37
Tax effects		—		(26)		(261)		(287)
Net current-period other comprehensive income (loss)		11,493		81		725		12,299
Total	$	(122,192)	$	(2,886)	$	2,435	$	(122,643)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the nine months ended September 30, 2018:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		on Derivatives		Total
Beginning balance, gross	$	(98,717)	$	(4,952)	$	2,333	$	(101,336)
Tax asset		—		1,790		(617)		1,173
Beginning balance, net of tax		(98,717)		(3,162)		1,716		(100,163)
Other comprehensive income (loss) before reclassifications		(23,475)		(130)		1,031		(22,574)
Amounts reclassified from accumulated other comprehensive income (loss)		—		496		(53)		443
Tax effects		—		(90)		(259)		(349)
Net current-period other comprehensive income (loss)		(23,475)		276		719		(22,480)
Total	$	(122,192)	$	(2,886)	$	2,435	$	(122,643)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the three months ended September 30, 2017:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		Derivatives		Total
Beginning balance, gross	$	(118,179)	$	(5,433)	$	(330)	$	(123,942)
Tax asset		—		1,982		88		2,070
Beginning balance, net of tax		(118,179)		(3,451)		(242)		(121,872)
Other comprehensive income (loss) before reclassifications		24,179		(79)		1,802		25,902
Amounts reclassified from accumulated other comprehensive income (loss)		—		237		184		421
Tax effects		—		(61)		(526)		(587)
Net current-period other comprehensive income (loss)		24,179		97		1,460		25,736
Total	$	(94,000)	$	(3,354)	$	1,218	$	(96,136)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the nine months ended September 30, 2017:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		Derivatives		Total
Beginning balance, gross	$	(139,585)	$	(5,768)	$	(1,213)	$	(146,566)
Tax asset		—		2,107		323		2,430
Beginning balance, net of tax		(139,585)		(3,661)		(890)		(144,136)
Other comprehensive income (loss) before reclassifications		45,585		(207)		2,344		47,722
Amounts reclassified from accumulated other comprehensive income (loss)		—		700		524		1,224
Tax effects		—		(186)		(760)		(946)
Net current-period other comprehensive income (loss)		45,585		307		2,108		48,000
Total	$	(94,000)	$	(3,354)	$	1,218	$	(96,136)

Schedule of reclassifications out of AOCI and the location on the consolidated statements of income

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017		Affected Line Item
Amortization of defined benefit pension items:
	$	(165)	$	(237)	$	(496)	$	(700)	Various line items individually insignificant
		(165)		(237)		(496)		(700)	Income before taxes
		40		91		122		264	Income tax benefit
	$	(125)	$	(146)	$	(374)	$	(436)	Net of tax
Unrealized losses on derivatives:
	$	128	$	(184)	$	53	$	(524)	Interest expense to third parties
		128		(184)		53		(524)	Income before taxes
		(34)		49		(14)		139	Income tax benefit
	$	94	$	(135)	$	39	$	(385)	Net of tax

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RECEIVABLES (Tables)

9 Months Ended

Sep. 30, 2018

Receivables

Summary of receivables

	September 30,		December 31,
	2018		2017
Retail	$	715,312	$	768,502
Wholesale		703,069		671,740
Wholesale factoring		8,411		235,834
Finance lease		61,509		58,198
Restricted receivables		8,502,689		8,766,467
Gross receivables		9,990,990		10,500,741
Less: Allowance for credit losses		(77,419)		(79,196)
Total receivables, net	$	9,913,571	$	10,421,545

Summary of restricted receivables

	September 30,		December 31,
	2018		2017
Retail	$	5,744,328	$	6,042,186
Wholesale		2,758,361		2,724,281
Total restricted receivables	$	8,502,689	$	8,766,467

Schedule of allowance for credit losses activity

Allowance for credit losses activity for the three months ended September 30, 2018 is as follows:

	Retail		Wholesale		Wholesale Factoring		Total
Allowance for credit losses:
Beginning balance	$	70,316	$	6,486	$	50	$	76,852
Charge-offs		(8,563)		—		—		(8,563)
Recoveries		765		3		—		768
Provision (benefit)		7,824		509		(47)		8,286
Foreign currency translation and other		66		8		2		76
Ending balance	$	70,408	$	7,006	$	5	$	77,419

Allowance for credit losses activity for the nine months ended September 30, 2018 is as follows:

	Retail		Wholesale		Wholesale Factoring		Total
Allowance for credit losses:
Beginning balance	$	73,610	$	5,444	$	142	$	79,196
Charge-offs		(28,830)		(187)		—		(29,017)
Recoveries		2,912		67		—		2,979
Provision (benefit)		22,831		1,696		(131)		24,396
Foreign currency translation and other		(115)		(14)		(6)		(135)
Ending balance	$	70,408	$	7,006	$	5	$	77,419
Ending balance: individually evaluated for impairment	$	16,102	$	4,435	$	—	$	20,537
Ending balance: collectively evaluated for impairment	$	54,306	$	2,571	$	5	$	56,882
Receivables:
Ending balance	$	6,521,149	$	3,461,430	$	8,411	$	9,990,990
Ending balance: individually evaluated for impairment	$	32,464	$	26,504	$	—	$	58,968
Ending balance: collectively evaluated for impairment	$	6,488,685	$	3,434,926	$	8,411	$	9,932,022

Allowance for credit losses activity for the three months ended September 30, 2017 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	80,440	$	4,734	$	85,174
Charge-offs		(10,021)		—		(10,021)
Recoveries		446		9		455
Provision		8,822		29		8,851
Foreign currency translation and other		(466)		21		(445)
Ending balance	$	79,221	$	4,793	$	84,014

Allowance for credit losses activity for the nine months ended September 30, 2017 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	78,047	$	6,848	$	84,895
Charge-offs		(32,296)		(2,016)		(34,312)
Recoveries		2,442		17		2,459
Provision (benefit)		32,043		(94)		31,949
Foreign currency translation and other		(1,015)		38		(977)
Ending balance	$	79,221	$	4,793	$	84,014
Ending balance: individually evaluated for impairment	$	22,044	$	2,170	$	24,214
Ending balance: collectively evaluated for impairment	$	57,177	$	2,623	$	59,800
Receivables:
Ending balance	$	7,108,878	$	3,556,478	$	10,665,356
Ending balance: individually evaluated for impairment	$	44,094	$	33,871	$	77,965
Ending balance: collectively evaluated for impairment	$	7,064,784	$	3,522,607	$	10,587,391

Allowance for credit losses activity for the year ended December 31, 2017 is as follows:

	Retail		Wholesale		Wholesale Factoring		Total
Allowance for credit losses:
Beginning balance	$	78,047	$	6,848	$	—	$	84,895
Charge-offs		(46,460)		(2,374)		—		(48,834)
Recoveries		4,045		20		—		4,065
Provision		39,842		919		137		40,898
Foreign currency translation and other		(1,864)		31		5		(1,828)
Ending balance	$	73,610	$	5,444	$	142	$	79,196
Ending balance: individually evaluated for impairment	$	18,018	$	2,920	$	—	$	20,938
Ending balance: collectively evaluated for impairment	$	55,592	$	2,524	$	142	$	58,258
Receivables:
Ending balance	$	6,868,886	$	3,396,021	$	235,834	$	10,500,741
Ending balance: individually evaluated for impairment	$	38,807	$	43,912	$	—	$	82,719
Ending balance: collectively evaluated for impairment	$	6,830,079	$	3,352,109	$	235,834	$	10,418,022

Schedule of aging of financing receivables

The aging of receivables as of September 30, 2018 is as follows:

													Recorded
													Investment
					Greater								> 90 Days
	31 – 60 Days		61 – 90 Days		Than		Total				Total		and
	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Retail
United States	$	20,725	$	5,525	$	24,956	$	51,206	$	5,281,963	$	5,333,169	$	6,581
Canada	$	1,946	$	487	$	2,860	$	5,293	$	1,182,687	$	1,187,980	$	1,170
Wholesale
United States	$	651	$	34	$	1,363	$	2,048	$	2,680,102	$	2,682,150	$	450
Canada	$	17	$	—	$	46	$	63	$	779,217	$	779,280	$	17
Wholesale Factoring	$	111	$	1,753	$	2,145	$	4,009	$	4,402	$	8,411	$	—
Total
Retail	$	22,671	$	6,012	$	27,816	$	56,499	$	6,464,650	$	6,521,149	$	7,751
Wholesale	$	668	$	34	$	1,409	$	2,111	$	3,459,319	$	3,461,430	$	467
Wholesale factoring	$	111	$	1,753	$	2,145	$	4,009	$	4,402	$	8,411	$	—

The aging of receivables as of December 31, 2017 is as follows:

													Recorded
													Investment
					Greater								> 90 Days
	31 – 60 Days		61 – 90 Days		Than		Total				Total		and
	Past Due		Past Due		90 Days		Past Due		Current		Receivables		Accruing
Retail
United States	$	27,590	$	8,412	$	37,004	$	73,006	$	5,532,329	$	5,605,335	$	6,232
Canada	$	2,010	$	585	$	2,837	$	5,432	$	1,258,119	$	1,263,551	$	665
Wholesale
United States	$	802	$	1	$	236	$	1,039	$	2,658,716	$	2,659,755	$	179
Canada	$	22	$	—	$	6	$	28	$	736,238	$	736,266	$	6
Wholesale Factoring	$	5,652	$	1,390	$	—	$	7,042	$	228,792	$	235,834	$	—
Total
Retail	$	29,600	$	8,997	$	39,841	$	78,438	$	6,790,448	$	6,868,886	$	6,897
Wholesale	$	824	$	1	$	242	$	1,067	$	3,394,954	$	3,396,021	$	185
Wholesale factoring	$	5,652	$	1,390	$	—	$	7,042	$	228,792	$	235,834	$	—

Schedule of recorded investment in impaired receivables and the related unpaid principal balances, allowances and average recorded investment

	September 30, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Retail
United States	$	31,424	$	30,153	$	15,194	$	32,962
Canada	$	1,040	$	988	$	908	$	1,154
Wholesale
United States	$	26,504	$	25,357	$	4,435	$	36,405
Total
Retail	$	32,464	$	31,141	$	16,102	$	34,116
Wholesale	$	26,504	$	25,357	$	4,435	$	36,405

	December 31, 2017
			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Retail
United States	$	38,035	$	36,187	$	17,518	$	39,917
Canada	$	772	$	716	$	500	$	1,084
Wholesale
United States	$	43,912	$	43,531	$	2,920	$	49,469
Total
Retail	$	38,807	$	36,903	$	18,018	$	41,001
Wholesale	$	43,912	$	43,531	$	2,920	$	49,469

Schedule of receivables on nonaccrual status

	September 30, 2018						December 31, 2017
	Retail		Wholesale		Total		Retail		Wholesale		Total
United States	$	28,039	$	25,357	$	53,396	$	40,968	$	43,531	$	84,499
Canada	$	2,523	$	—	$	2,523	$	2,538	$	—	$	2,538

Retail

Receivables

Schedule of breakdown of the portfolio by its credit quality indicators

	September 30,		December 31,
	2018		2017
Titanium	$	3,446,228	$	3,734,313
Platinum		1,958,664		2,002,791
Gold		933,294		952,404
Silver		149,666		146,051
Bronze		33,297		33,327
Total	$	6,521,149	$	6,868,886

Wholesale

Receivables

Schedule of breakdown of the portfolio by its credit quality indicators

	September 30,		December 31,
	2018		2017
A	$	1,490,875	$	1,222,813
B		1,298,798		1,425,591
C		502,039		439,353
D		169,718		308,264
Total	$	3,461,430	$	3,396,021

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FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2018

FINANCIAL INSTRUMENTS

Schedule of fair values of derivatives in the consolidated balance sheets

	September 30,		December 31,
	2018		2017
Derivatives Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	733	$	4,113
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	10,428	$	6,698
Derivatives Not Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	4,767	$	4,638
Foreign exchange contracts		6		1,393
Total	$	4,773	$	6,031
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	4,767	$	4,638
Foreign exchange contracts		318		325
Total	$	5,085	$	4,963

Schedule of pre-tax gains (losses) on the consolidated statements of income related to the Company's derivatives

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Cash Flow Hedges
Recognized in accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives	$	1,114	$	1,802	$	1,031	$	2,344
Reclassified from accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives—Interest expense to third parties		128		(184)		53		(524)
Not Designated as Hedges
Foreign exchange contracts—Other expenses	$	(168)	$	(139)	$	(11,691)	$	874

Schedule of assets and liabilities measured at fair value on a recurring basis

	September 30,		December 31,
	2018		2017
Assets
Interest rate derivatives	$	5,500	$	8,751
Foreign exchange contracts		6		1,393
Total assets	$	5,506	$	10,144
Liabilities
Interest rate derivatives	$	15,195	$	11,336
Foreign exchange contracts		318		325
Total liabilities	$	15,513	$	11,661

Schedule of carrying amount and estimated fair value of assets and liabilities considered financial instruments

	September 30, 2018				December 31, 2017
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value *		Amount		Fair Value *
Receivables	$	9,913,571	$	9,813,399	$	10,421,545	$	10,379,020
Long-term debt	$	6,053,864	$	5,982,078	$	6,332,763	$	6,314,182

______________

*Under the fair value hierarchy, receivables measurements are classified as Level 3 and long‑term debt measurements are classified as Level 2.

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SEGMENT AND GEOGRAPHICAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2018

SEGMENT AND GEOGRAPHICAL INFORMATION

Summary of reportable segment information

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenues
United States	$	170,988	$	188,733	$	523,185	$	567,401
Canada		42,107		47,357		146,687		133,385
Eliminations		(1,814)		(1,201)		(6,079)		(3,200)
Total	$	211,281	$	234,889	$	663,793	$	697,586
Interest expense
United States	$	69,761	$	69,649	$	203,717	$	202,785
Canada		13,610		11,324		41,151		33,712
Eliminations		(1,814)		(1,201)		(6,079)		(3,200)
Total	$	81,557	$	79,772	$	238,789	$	233,297
Segment net income
United States	$	30,810	$	16,925	$	84,449	$	65,257
Canada		10,471		17,214		44,263		45,462
Total	$	41,281	$	34,139	$	128,712	$	110,719
Depreciation and amortization
United States	$	44,514	$	63,908	$	141,215	$	178,404
Canada		10,937		11,672		33,567		33,524
Total	$	55,451	$	75,580	$	174,782	$	211,928
Expenditures for equipment on operating leases
United States	$	160,179	$	95,662	$	343,485	$	382,661
Canada		29,490		20,741		87,972		76,613
Total	$	189,669	$	116,403	$	431,457	$	459,274
Provision for credit losses
United States	$	7,661	$	8,924	$	22,475	$	31,841
Canada		625		(73)		1,921		108
Total	$	8,286	$	8,851	$	24,396	$	31,949

	As of		As of
	September 30,		December 31,
	2018		2017
Segment assets
United States	$	10,310,001	$	10,738,403
Canada		2,518,382		2,838,754
Eliminations		(114,005)		(65,079)
Total	$	12,714,378	$	13,512,078
Managed receivables
United States	$	8,015,319	$	8,265,090
Canada		1,975,671		2,235,651
Total	$	9,990,990	$	10,500,741

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RELATED-PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2018

RELATED-PARTY TRANSACTIONS

Summary of the sources included in "Interest and other income from affiliates" in the accompanying consolidated statements of income

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Subsidy from CNH Industrial North America
Retail	$	35,618	$	39,401	$	112,115	$	116,561
Wholesale		24,658		41,331		93,508		124,261
Operating lease		14,996		16,802		46,002		50,909
Income from Iveco Argentina
Wholesale factoring		589		—		10,881		—
Income from affiliated receivables
CNH Industrial North America		281		47		1,043		113
Total interest and other income from affiliates	$	76,142	$	97,581	$	263,549	$	291,844

Schedule of various accounts and notes receivable and debt with the affiliates

	September 30,		December 31,
	2018		2017
Affiliated receivables
CNH Industrial America	$	84,257	$	49,311
CNH Industrial Canada Ltd.		718		11,282
Other affiliates		12,447		12,540
Total affiliated receivables	$	97,422	$	73,133
Affiliated debt
CNH Industrial America	$	50,000	$	327,160
CNH Industrial Canada Ltd.		28,717		118,642
Total affiliated debt	$	78,717	$	445,802

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2018

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Schedule of condensed statements of comprehensive income

	Condensed Statements of Comprehensive Income for the
	Three Months Ended September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	4,384	$	48,265	$	—	$	52,649
Interest income on wholesale notes		—		(253)		17,464		—		17,211
Interest and other income from affiliates		17,719		46,041		65,642		(53,260)		76,142
Rental income on operating leases		—		46,659		13,368		—		60,027
Other income		—		21,711		431		(16,890)		5,252
Total revenues		17,719		118,542		145,170		(70,150)		211,281
EXPENSES
Interest expense:
Interest expense to third parties		37,971		(1,845)		43,865		—		79,991
Interest expense to affiliates		—		44,554		10,272		(53,260)		1,566
Total interest expense		37,971		42,709		54,137		(53,260)		81,557
Administrative and operating expenses:
Fees charged by affiliates		—		11,248		17,419		(16,890)		11,777
Provision for credit losses		—		2,667		5,619		—		8,286
Depreciation of equipment on operating leases		—		43,982		10,938		—		54,920
Other expenses		6		7,389		954		—		8,349
Total administrative and operating expenses		6		65,286		34,930		(16,890)		83,332
Total expenses		37,977		107,995		89,067		(70,150)		164,889
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(20,258)		10,547		56,103		—		46,392
Income tax provision (benefit)		(4,907)		4,493		5,525		—		5,111
Equity in income of consolidated subsidiaries accounted for under the equity method		56,632		50,578		—		(107,210)		—
NET INCOME	$	41,281	$	56,632	$	50,578	$	(107,210)	$	41,281
COMPREHENSIVE INCOME	$	53,580	$	68,931	$	61,309	$	(130,240)	$	53,580

	Condensed Statements of Comprehensive Income for the
	Nine Months Ended September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	10,144	$	141,336	$	—	$	151,480
Interest income on wholesale notes		—		(765)		49,801		—		49,036
Interest and other income from affiliates		52,789		152,299		223,010		(164,549)		263,549
Rental income on operating leases		—		140,075		41,025		—		181,100
Other income		—		67,583		1,970		(50,925)		18,628
Total revenues		52,789		369,336		457,142		(215,474)		663,793
EXPENSES
Interest expense:
Interest expense to third parties		101,982		8,815		122,050		—		232,847
Interest expense to affiliates		—		149,902		20,589		(164,549)		5,942
Total interest expense		101,982		158,717		142,639		(164,549)		238,789
Administrative and operating expenses:
Fees charged by affiliates		—		33,646		52,315		(50,925)		35,036
Provision for credit losses		—		5,578		18,818		—		24,396
Depreciation of equipment on operating leases		—		139,607		33,567		—		173,174
Other expenses		16		11,879		20,138		—		32,033
Total administrative and operating expenses		16		190,710		124,838		(50,925)		264,639
Total expenses		101,998		349,427		267,477		(215,474)		503,428
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(49,209)		19,909		189,665		—		160,365
Income tax provision (benefit)		(11,919)		6,814		36,758		—		31,653
Equity in income of consolidated subsidiaries accounted for under the equity method		166,002		152,907		—		(318,909)		—
NET INCOME	$	128,712	$	166,002	$	152,907	$	(318,909)	$	128,712
COMPREHENSIVE INCOME	$	106,232	$	143,522	$	133,371	$	(276,893)	$	106,232

	Condensed Statements of Comprehensive Income for the
	Three Months Ended September 30, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	3,363	$	47,229	$	—	$	50,592
Interest income on wholesale notes		—		(261)		17,033		—		16,772
Interest and other income from affiliates		26,792		60,233		79,555		(68,999)		97,581
Rental income on operating leases		—		49,290		14,001		—		63,291
Other income		—		24,197		798		(18,342)		6,653
Total revenues		26,792		136,822		158,616		(87,341)		234,889
EXPENSES
Interest expense:
Interest expense to third parties		46,887		(5,255)		36,982		—		78,614
Interest expense to affiliates		—		59,721		10,436		(68,999)		1,158
Total interest expense		46,887		54,466		47,418		(68,999)		79,772
Administrative and operating expenses:
Fees charged by affiliates		—		10,875		18,774		(18,342)		11,307
Provision for credit losses		—		3,743		5,108		—		8,851
Depreciation of equipment on operating leases		—		63,361		11,669		—		75,030
Other expenses		—		9,203		2,200		—		11,403
Total administrative and operating expenses		—		87,182		37,751		(18,342)		106,591
Total expenses		46,887		141,648		85,169		(87,341)		186,363
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(20,095)		(4,826)		73,447		—		48,526
Income tax provision (benefit)		(7,499)		(1,907)		23,793		—		14,387
Equity in income of consolidated subsidiaries accounted for under the equity method		46,735		49,654		—		(96,389)		—
NET INCOME	$	34,139	$	46,735	$	49,654	$	(96,389)	$	34,139
COMPREHENSIVE INCOME	$	59,875	$	72,471	$	71,767	$	(144,238)	$	59,875

	Condensed Statements of Comprehensive Income for the
	Nine Months Ended September 30, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	11,025	$	138,758	$	—	$	149,783
Interest income on wholesale notes		—		(835)		49,662		—		48,827
Interest and other income from affiliates		75,242		181,293		238,112		(202,803)		291,844
Rental income on operating leases		—		149,020		39,996		—		189,016
Other income		—		73,081		1,503		(56,468)		18,116
Total revenues		75,242		413,584		468,031		(259,271)		697,586
EXPENSES
Interest expense:
Interest expense to third parties		125,560		(5,926)		105,369		—		225,003
Interest expense to affiliates		—		177,887		33,210		(202,803)		8,294
Total interest expense		125,560		171,961		138,579		(202,803)		233,297
Administrative and operating expenses:
Fees charged by affiliates		—		32,624		57,792		(56,468)		33,948
Provision for credit losses		—		9,739		22,210		—		31,949
Depreciation of equipment on operating leases		—		176,817		33,515		—		210,332
Other expenses		—		21,731		6,301		—		28,032
Total administrative and operating expenses		—		240,911		119,818		(56,468)		304,261
Total expenses		125,560		412,872		258,397		(259,271)		537,558
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(50,318)		712		209,634		—		160,028
Income tax provision (benefit)		(18,778)		259		67,828		—		49,309
Equity in income of consolidated subsidiaries accounted for under the equity method		142,259		141,806		—		(284,065)		—
NET INCOME	$	110,719	$	142,259	$	141,806	$	(284,065)	$	110,719
COMPREHENSIVE INCOME	$	158,719	$	190,259	$	182,791	$	(373,050)	$	158,719

Schedule of condensed balance sheets

	Condensed Balance Sheets as of September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	$	—	$	71,621	$	18,662	$	—	$	90,283
Restricted cash		—		—		527,808		—		527,808
Receivables, less allowance for credit losses		—		1,384,146		8,529,425		—		9,913,571
Retained interests in securitized receivables		—		—		—		—		—
Affiliated accounts and notes receivable		2,468,215		2,119,069		2,217,493		(6,707,355)		97,422
Equipment on operating leases, net		—		1,346,957		362,882		—		1,709,839
Equipment held for sale		—		183,597		20,582		—		204,179
Investments in consolidated subsidiaries accounted for under the equity method		2,764,916		2,658,976		—		(5,423,892)		—
Goodwill and intangible assets, net		—		90,981		28,020		—		119,001
Other assets		4,836		11,607		39,621		(3,789)		52,275
TOTAL	$	5,237,967	$	7,866,954	$	11,744,493	$	(12,135,036)	$	12,714,378
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt, including current maturities of long-term debt	$	1,047,478	$	16,911	$	3,389,903	$	—	$	4,454,292
Accounts payable and other accrued liabilities		300,274		2,931,437		1,175,124		(3,701,624)		705,211
Affiliated debt		—		2,152,713		935,524		(3,009,520)		78,717
Long-term debt		2,467,921		977		3,584,966		—		6,053,864
Total liabilities		3,815,673		5,102,038		9,085,517		(6,711,144)		11,292,084
Stockholder’s equity		1,422,294		2,764,916		2,658,976		(5,423,892)		1,422,294
TOTAL	$	5,237,967	$	7,866,954	$	11,744,493	$	(12,135,036)	$	12,714,378

	Condensed Balance Sheets as of December 31, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	$	—	$	160,339	$	66,607	$	—	$	226,946
Restricted cash		—		—		648,612		—		648,612
Receivables, less allowance for credit losses		—		1,367,951		9,053,594		—		10,421,545
Affiliated accounts and notes receivable		2,518,121		1,991,481		2,068,016		(6,504,485)		73,133
Equipment on operating leases, net		—		1,405,731		375,758		—		1,781,489
Equipment held for sale		—		191,710		16,806		—		208,516
Investments in consolidated subsidiaries accounted for under the equity method		2,620,971		2,525,605		—		(5,146,576)		—
Goodwill and intangible assets, net		—		88,440		29,016		—		117,456
Other assets		7,548		4,432		26,466		(4,065)		34,381
TOTAL	$	5,146,640	$	7,735,689	$	12,284,875	$	(11,655,126)	$	13,512,078
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt, including current maturities of long-term debt	$	1,015,520	$	45,937	$	3,556,007	$	—	$	4,617,464
Accounts payable and other accrued liabilities		283,445		2,807,195		1,160,573		(3,510,803)		740,410
Affiliated debt		—		2,253,248		1,190,301		(2,997,747)		445,802
Long-term debt		2,472,036		8,338		3,852,389		—		6,332,763
Total liabilities		3,771,001		5,114,718		9,759,270		(6,508,550)		12,136,439
Stockholder’s equity		1,375,639		2,620,971		2,525,605		(5,146,576)		1,375,639
TOTAL	$	5,146,640	$	7,735,689	$	12,284,875	$	(11,655,126)	$	13,512,078

Schedule of condensed statements of cash flows

	Condensed Statements of Cash Flows for the
	Nine Months Ended September 30, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	32,158	$	146,608	$	58,353	$	12,049	$	249,168
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(6,283,817)		(7,080,363)		5,178,455		(8,185,725)
Collections of receivables		—		6,262,320		7,511,294		(5,178,731)		8,594,883
Change in restricted cash		—		—		—		—		—
Purchase of equipment on operating leases, net		—		(72,766)		(34,387)		—		(107,153)
Change in property and equipment and software, net		—		(4,143)		—		—		(4,143)
Net cash from (used in) investing activities		—		(98,406)		396,544		(276)		297,862
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(100,535)		(253,694)		(11,773)		(366,002)
Net change in indebtedness		27,842		(36,385)		(369,952)		—		(378,495)
Dividends paid to CNH Industrial America LLC		(60,000)		—		—		—		(60,000)
Net cash from (used in) financing activities		(32,158)		(136,920)		(623,646)		(11,773)		(804,497)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(88,718)		(168,749)		—		(257,467)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		—		160,339		715,219		—		875,558
End of period	$	—	$	71,621	$	546,470	$	—	$	618,091

	Condensed Statements of Cash Flows for the
	Nine Months Ended September 30, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	200,310	$	367,764	$	171,263	$	(258,663)	$	480,674
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(5,764,415)		(6,497,555)		4,818,267		(7,443,703)
Collections of receivables		—		5,819,270		6,794,335		(4,818,615)		7,794,990
Change in restricted cash		—		—		—		—		—
Purchase of equipment on operating leases, net		—		(105,329)		(40,129)		—		(145,458)
Change in property and equipment and software, net		—		(170)		—		—		(170)
Net cash from (used in) investing activities		—		(50,644)		256,651		(348)		205,659
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(346,109)		(25,063)		259,011		(112,161)
Net change in indebtedness		9,690		(38,049)		(484,117)		—		(512,476)
Dividends paid to CNH Industrial America LLC		(210,000)		—		—		—		(210,000)
Net cash from (used in) financing activities		(200,310)		(384,158)		(509,180)		259,011		(834,637)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(67,038)		(81,266)		—		(148,304)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		—		151,654		725,438		—		877,092
End of period	$	—	$	84,616	$	644,172	$	—	$	728,788

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NEW ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Change in accounts payable and other accrued liabilities	$ (20,334)	$ 61,885
Increase in cash and cash equivalents and restricted cash	$ (257,467)	(148,304)
Effective Income Tax Rate Reconciliation, Percent [Abstract]
Tax provision at statutory rate (as a percent)	21.00%		35.00%
Accounting Standards Update 2016-18
Change in accounts payable and other accrued liabilities		8,566
Change in restricted cash		(180,661)
Increase in cash and cash equivalents and restricted cash		$ 172,095

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ACCUMULATED OTHER COMPREHENSIVE INCOME - Change in Components of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Changes in accumulated other comprehensive income by component
Beginning balance, gross					$ (136,053)	$ (101,336)	$ (123,942)	$ (146,566)
Tax asset (liability)					1,111	1,173	2,070	2,430
Beginning balance, net of tax	$ (134,942)	$ (121,872)	$ (100,163)	$ (144,136)
Other comprehensive income (loss) before reclassifications	12,549	25,902	(22,574)	47,722
Amounts reclassified from accumulated other comprehensive income (loss)	37	421	443	1,224
Tax effects	(287)	(587)	(349)	(946)
Total other comprehensive income (loss)	12,299	25,736	(22,480)	48,000
Ending balance	(122,643)	(96,136)	(122,643)	(96,136)
Currency Translation Adjustment
Changes in accumulated other comprehensive income by component
Beginning balance, gross					(133,685)	(98,717)	(118,179)	(139,585)
Beginning balance, net of tax	(133,685)	(118,179)	(98,717)	(139,585)
Other comprehensive income (loss) before reclassifications	11,493	24,179	(23,475)	45,585
Total other comprehensive income (loss)	11,493	24,179	(23,475)	45,585
Ending balance	(122,192)	(94,000)	(122,192)	(94,000)
Pension Liability
Changes in accumulated other comprehensive income by component
Beginning balance, gross					(4,693)	(4,952)	(5,433)	(5,768)
Tax asset (liability)					1,726	1,790	1,982	2,107
Beginning balance, net of tax	(2,967)	(3,451)	(3,162)	(3,661)
Other comprehensive income (loss) before reclassifications	(58)	(79)	(130)	(207)
Amounts reclassified from accumulated other comprehensive income (loss)	165	237	496	700
Tax effects	(26)	(61)	(90)	(186)
Total other comprehensive income (loss)	81	97	276	307
Ending balance	(2,886)	(3,354)	(2,886)	(3,354)
Unrealized (Losses) Gains on Derivatives
Changes in accumulated other comprehensive income by component
Beginning balance, gross					2,325	2,333	(330)	(1,213)
Tax asset (liability)					$ (615)	$ (617)	$ 88	$ 323
Beginning balance, net of tax	1,710	(242)	1,716	(890)
Other comprehensive income (loss) before reclassifications	1,114	1,802	1,031	2,344
Amounts reclassified from accumulated other comprehensive income (loss)	(128)	184	(53)	524
Tax effects	(261)	(526)	(259)	(760)
Total other comprehensive income (loss)	725	1,460	719	2,108
Ending balance	$ 2,435	$ 1,218	$ 2,435	$ 1,218

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ACCUMULATED OTHER COMPREHENSIVE INCOME - Reclassifications out of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reclassifications out of accumulated other comprehensive income and the location on the consolidated statements of income
Interest expense to third parties	$ (79,991)	$ (78,614)	$ (232,847)	$ (225,003)
Income before taxes	46,392	48,526	160,365	160,028
Income tax benefit	(5,111)	(14,387)	(31,653)	(49,309)
Net income	41,281	34,139	128,712	110,719
Pension Liability | Amounts Reclassified from AOCI
Reclassifications out of accumulated other comprehensive income and the location on the consolidated statements of income
Various line items individually insignificant	(165)	(237)	(496)	(700)
Income before taxes	(165)	(237)	(496)	(700)
Income tax benefit	40	91	122	264
Net income	(125)	(146)	(374)	(436)
Unrealized (Losses) Gains on Derivatives | Amounts Reclassified from AOCI
Reclassifications out of accumulated other comprehensive income and the location on the consolidated statements of income
Interest expense to third parties	128	(184)	53	(524)
Income before taxes	128	(184)	53	(524)
Income tax benefit	(34)	49	(14)	139
Net income	$ 94	$ (135)	$ 39	$ (385)

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RECEIVABLES - Summary of Receivables (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($) item	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Receivables
Gross receivables	$ 9,990,990		$ 10,500,741	$ 10,665,356
Less: Allowance for credit losses	(77,419)	$ (76,852)	(79,196)	$ (84,014)	$ (85,174)	$ (84,895)
Total receivables, net	9,913,571		10,421,545
Restricted Receivables	8,502,689		8,766,467
Receivables directly or indirectly sold or transferred and available to pay the entity's creditors prior to all obligations of the SPE having been fulfilled	$ 0
Number of components of allowance for credit losses | item	2
Number of portfolio segments in which allowance for credit losses is segregated | item	3
Retail
Receivables
Gross receivables	$ 715,312		768,502
Restricted Receivables	5,744,328		6,042,186
Wholesale
Receivables
Gross receivables	703,069		671,740
Restricted Receivables	2,758,361		2,724,281
Wholesale factoring
Receivables
Gross receivables	8,411		235,834
Finance lease receivables
Receivables
Gross receivables	$ 61,509		$ 58,198

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RECEIVABLES - Allowance for Credit Losses Activity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Allowance for credit losses:
Beginning balance	$ 76,852	$ 85,174	$ 79,196	$ 84,895	$ 84,895
Charge-offs	(8,563)	(10,021)	(29,017)	(34,312)	(48,834)
Recoveries	768	455	2,979	2,459	4,065
Provision (benefit)	8,286	8,851	24,396	31,949	40,898
Foreign currency translation and other	76	(445)	(135)	(977)	(1,828)
Ending balance	77,419	84,014	77,419	84,014	79,196
Ending balance: individually evaluated for impairment	20,537	24,214	20,537	24,214	20,938
Ending balance: collectively evaluated for impairment	56,882	59,800	56,882	59,800	58,258
Receivables:
Ending balance	9,990,990	10,665,356	9,990,990	10,665,356	10,500,741
Ending balance: individually evaluated for impairment	58,968	77,965	58,968	77,965	82,719
Ending balance: collectively evaluated for impairment	9,932,022	10,587,391	9,932,022	10,587,391	10,418,022
Retail
Allowance for credit losses:
Beginning balance	70,316	80,440	73,610	78,047	78,047
Charge-offs	(8,563)	(10,021)	(28,830)	(32,296)	(46,460)
Recoveries	765	446	2,912	2,442	4,045
Provision (benefit)	7,824	8,822	22,831	32,043	39,842
Foreign currency translation and other	66	(466)	(115)	(1,015)	(1,864)
Ending balance	70,408	79,221	70,408	79,221	73,610
Ending balance: individually evaluated for impairment	16,102	22,044	16,102	22,044	18,018
Ending balance: collectively evaluated for impairment	54,306	57,177	54,306	57,177	55,592
Receivables:
Ending balance	6,521,149	7,108,878	6,521,149	7,108,878	6,868,886
Ending balance: individually evaluated for impairment	32,464	44,094	32,464	44,094	38,807
Ending balance: collectively evaluated for impairment	6,488,685	7,064,784	6,488,685	7,064,784	6,830,079
Wholesale
Allowance for credit losses:
Beginning balance	6,486	4,734	5,444	6,848	6,848
Charge-offs			(187)	(2,016)	(2,374)
Recoveries	3	9	67	17	20
Provision (benefit)	509	29	1,696	(94)	919
Foreign currency translation and other	8	21	(14)	38	31
Ending balance	7,006	4,793	7,006	4,793	5,444
Ending balance: individually evaluated for impairment	4,435	2,170	4,435	2,170	2,920
Ending balance: collectively evaluated for impairment	2,571	2,623	2,571	2,623	2,524
Receivables:
Ending balance	3,461,430	3,556,478	3,461,430	3,556,478	3,396,021
Ending balance: individually evaluated for impairment	26,504	33,871	26,504	33,871	43,912
Ending balance: collectively evaluated for impairment	3,434,926	$ 3,522,607	3,434,926	$ 3,522,607	3,352,109
Wholesale factoring
Allowance for credit losses:
Beginning balance	50		142
Provision (benefit)	(47)		(131)		137
Foreign currency translation and other	2		(6)		5
Ending balance	5		5		142
Ending balance: collectively evaluated for impairment	5		5		142
Receivables:
Ending balance	8,411		8,411		235,834
Ending balance: collectively evaluated for impairment	$ 8,411		$ 8,411		$ 235,834

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RECEIVABLES - Breakdown of Receivables by Credit Quality Indicators (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Financing receivable, recorded investment
Gross receivables	$ 9,990,990	$ 10,500,741	$ 10,665,356
Retail
Financing receivable, recorded investment
Gross receivables	6,521,149	6,868,886	7,108,878
Retail | Titanium
Financing receivable, recorded investment
Gross receivables	3,446,228	3,734,313
Retail | Platinum
Financing receivable, recorded investment
Gross receivables	1,958,664	2,002,791
Retail | Gold
Financing receivable, recorded investment
Gross receivables	933,294	952,404
Retail | Silver
Financing receivable, recorded investment
Gross receivables	149,666	146,051
Retail | Bronze
Financing receivable, recorded investment
Gross receivables	33,297	33,327
Wholesale
Financing receivable, recorded investment
Gross receivables	3,461,430	3,396,021	$ 3,556,478
Wholesale | Grade A
Financing receivable, recorded investment
Gross receivables	1,490,875	1,222,813
Wholesale | Grade B
Financing receivable, recorded investment
Gross receivables	1,298,798	1,425,591
Wholesale | Grade C
Financing receivable, recorded investment
Gross receivables	502,039	439,353
Wholesale | Grade D
Financing receivable, recorded investment
Gross receivables	$ 169,718	$ 308,264

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RECEIVABLES - Aging of Receivables (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Financing receivable, recorded investment
Total Receivables	$ 9,990,990	$ 10,500,741	$ 10,665,356
Minimum account delinquency period for an account to be classified as past due	30 days	30 days
Retail
Financing receivable, recorded investment
Total Past Due	$ 56,499	$ 78,438
Current	6,464,650	6,790,448
Total Receivables	6,521,149	6,868,886	7,108,878
Recorded Investment > 90 Days and Accruing	7,751	6,897
Retail | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	22,671	29,600
Retail | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	6,012	8,997
Retail | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	27,816	39,841
Retail | United States
Financing receivable, recorded investment
Total Past Due	51,206	73,006
Current	5,281,963	5,532,329
Total Receivables	5,333,169	5,605,335
Recorded Investment > 90 Days and Accruing	6,581	6,232
Retail | United States | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	20,725	27,590
Retail | United States | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	5,525	8,412
Retail | United States | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	24,956	37,004
Retail | Canada
Financing receivable, recorded investment
Total Past Due	5,293	5,432
Current	1,182,687	1,258,119
Total Receivables	1,187,980	1,263,551
Recorded Investment > 90 Days and Accruing	1,170	665
Retail | Canada | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	1,946	2,010
Retail | Canada | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	487	585
Retail | Canada | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	2,860	2,837
Wholesale
Financing receivable, recorded investment
Total Past Due	2,111	1,067
Current	3,459,319	3,394,954
Total Receivables	3,461,430	3,396,021	$ 3,556,478
Recorded Investment > 90 Days and Accruing	467	185
Wholesale | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	668	824
Wholesale | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	34	1
Wholesale | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	1,409	242
Wholesale | United States
Financing receivable, recorded investment
Total Past Due	2,048	1,039
Current	2,680,102	2,658,716
Total Receivables	2,682,150	2,659,755
Recorded Investment > 90 Days and Accruing	450	179
Wholesale | United States | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	651	802
Wholesale | United States | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	34	1
Wholesale | United States | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	1,363	236
Wholesale | Canada
Financing receivable, recorded investment
Total Past Due	63	28
Current	779,217	736,238
Total Receivables	779,280	736,266
Recorded Investment > 90 Days and Accruing	17	6
Wholesale | Canada | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	17	22
Wholesale | Canada | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	46	6
Wholesale factoring
Financing receivable, recorded investment
Total Past Due	4,009	7,042
Current	4,402	228,792
Total Receivables	8,411	235,834
Wholesale factoring | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	111	5,652
Wholesale factoring | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	1,753	$ 1,390
Wholesale factoring | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	$ 2,145

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RECEIVABLES - Impaired Receivables (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Average Recorded Investment
Delinquency period of accounts considered for recognition of income	120 days	120 days
United States
Average Recorded Investment
Receivables on nonaccrual status	$ 53,396	$ 84,499
Canada
Average Recorded Investment
Receivables on nonaccrual status	2,523	2,538
Retail | United States
Average Recorded Investment
Receivables on nonaccrual status	28,039	40,968
Retail | Canada
Average Recorded Investment
Receivables on nonaccrual status	2,523	2,538
Wholesale | United States
Average Recorded Investment
Receivables on nonaccrual status	$ 25,357	$ 43,531
Individually evaluated for impairment
Unpaid Principal Balance
Period considered for average recorded investment	10 months	13 months
Individually evaluated for impairment | Retail
Recorded Investment
With an allowance recorded	$ 32,464	$ 38,807
Unpaid Principal Balance
With an allowance recorded		36,903
Unpaid Principle Balance	31,141
Related Allowance	16,102	18,018
Average Recorded Investment
With an allowance recorded	34,116	41,001
Individually evaluated for impairment | Retail | United States
Recorded Investment
With an allowance recorded	31,424	38,035
Unpaid Principal Balance
With an allowance recorded	30,153	36,187
Related Allowance	15,194	17,518
Average Recorded Investment
With an allowance recorded	32,962	39,917
Individually evaluated for impairment | Retail | Canada
Recorded Investment
With an allowance recorded	1,040	772
Unpaid Principal Balance
With an allowance recorded	988	716
Related Allowance	908	500
Average Recorded Investment
With an allowance recorded	1,154	1,084
Individually evaluated for impairment | Wholesale
Recorded Investment
With an allowance recorded	26,504	43,912
Unpaid Principal Balance
With an allowance recorded		43,531
Unpaid Principle Balance	25,357
Related Allowance	4,435	2,920
Average Recorded Investment
With an allowance recorded	36,405	49,469
Individually evaluated for impairment | Wholesale | United States
Recorded Investment
With an allowance recorded	26,504	43,912
Unpaid Principal Balance
With an allowance recorded	25,357	43,531
Related Allowance	4,435	2,920
Average Recorded Investment
With an allowance recorded	$ 36,405	$ 49,469

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RECEIVABLES - Troubled Debt Restructuring of Receivables (Details) - Retail $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($) item	Sep. 30, 2017 USD ($) item
Troubled Debt Restructurings
Number of contracts classified as TDRs | item	278	235
Pre-modification value	$ 9,408	$ 5,780
Post-modification value	$ 8,509	$ 5,092
Number of cases in which the court has not yet determined the concession | item	365	453
Pre-modification value for cases in which the court has not yet determined the concession	$ 17,028	$ 29,722

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CREDIT FACILITIES AND DEBT (Details) - USD ($) $ in Thousands	Aug. 14, 2018	Sep. 30, 2018	Sep. 27, 2018	Sep. 26, 2018
Revolving credit facilities
Debt
Maximum borrowing capacity		$ 830,536
Line of credit, outstanding amount		230,536
U.S. retail committed asset-backed facility
Debt
Debt amount			$ 1,200,000
Amortizing Retail Term ABS
Debt
Debt amount				$ 809,930
Commercial paper
Debt
Short-Term Outstanding		$ 348,900
4.200% unsecured notes due 2024
Debt
Debt issued	$ 500,000
Interest rate (as a percent)	4.20%
Issue price of debt (as a percent)	99.701%

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INCOME TAXES (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Reconciliation of statutory and effective income tax rate
Effective tax rate (as a percent)	11.00%	29.60%	19.70%	30.80%
Effective tax rate, excluding certain net discrete tax benefits (as a percent)	23.10%		23.20%
Tax provision at statutory rate (as a percent)			21.00%		35.00%

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FINANCIAL INSTRUMENTS - Generial Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Interest Rate Derivatives
Maximum length of time of interest rate derivative instruments designated in cash flow hedge relationships	46 months
After-tax losses deferred in accumulated other comprehensive income that will be recognized in interest expense over the next 12 months	$ 419

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FINANCIAL INSTRUMENTS - Fair Market Value of Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Fair market value of derivatives
Derivative assets designated as hedging instruments, classified in other assets	$ 733		$ 733		$ 4,113
Derivative liabilities designated as hedging instruments, classified in accounts payable and other accrued liabilities	10,428		10,428		6,698
Interest rate derivatives, derivative assets not designated as hedging instruments, classified in other assets	4,767		4,767		4,638
Foreign exchange contracts, derivatives not designated as hedging instruments, classified in other assets	6		6		1,393
Derivative assets not designated as hedging instruments, classified in other assets	4,773		4,773		6,031
Interest rate derivatives, derivative not designated as hedging instruments, classified in accounts payable and other accrued liabilities	4,767		4,767		4,638
Foreign exchange contracts, derivatives not designated as hedging instruments, classified in accounts payable and other accrued liabilities	318		318		325
Derivative liabilities not designated as hedging instruments, classified in accounts payable and other accrued liabilities	5,085		5,085		4,963
Cash Flow Hedges, Recognized in accumulated other comprehensive income (loss) (effective portion), Interest rate derivatives	1,114	$ 1,802	1,031	$ 2,344
Cash Flow Hedges, Reclassified from accumulated other comprehensive Income (loss) (effective portion), Interest rate derivatives - Interest expense to third parties	128	(184)	53	(524)
Foreign exchange contracts, other expenses, not designated as hedges	(168)	$ (139)	(11,691)	874
Interest Rate Derivatives
Fair market value of derivatives
Total notional amount of interest rate derivatives	$ 3,147,985		3,147,985		$ 3,143,737
Ten-month average notional amounts of interest rate derivatives			$ 2,915,781	$ 3,260,026

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FINANCIAL INSTRUMENTS - Items Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Assets
Foreign exchange contracts	$ 6	$ 1,393
Liabilities
Foreign exchange contracts	318	325
Assets transferred between Level 1, Level 2 and Level 3	0	0
Liabilities transferred between Level 1, Level 2 and Level 3	0	0
Recurring | Level 2
Assets
Interest rate derivatives	5,500	8,751
Foreign exchange contracts	6	1,393
Total assets	5,506	10,144
Liabilities
Interest rate derivatives	15,195	11,336
Foreign exchange contracts	318	325
Total liabilities	$ 15,513	$ 11,661

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FINANCIAL INSTRUMENTS - Carrying Amount and Estimated Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Financial Instruments Not Carried at Fair Value
Receivables	$ 9,913,571	$ 10,421,545
Long-term debt	6,053,864	6,332,763
Carrying Amount
Financial Instruments Not Carried at Fair Value
Receivables	9,913,571	10,421,545
Long-term debt	6,053,864	6,332,763
Estimated Fair Value
Financial Instruments Not Carried at Fair Value
Receivables	9,813,399	10,379,020
Long-term debt	$ 5,982,078	$ 6,314,182

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SEGMENT AND GEOGRAPHICAL INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Segment And Geographical Information
Revenues	$ 211,281	$ 234,889	$ 663,793	$ 697,586
Interest expense	81,557	79,772	238,789	233,297
Segment net income			128,712	110,719
Net income	41,281	34,139	128,712	110,719
Depreciation and amortization	55,451	75,580	174,782	211,928
Expenditures for equipment on operating leases	189,669	116,403	431,457	459,274
Provision (benefit) for credit losses	8,286	8,851	24,396	31,949	$ 40,898
Additional disclosures
Segment assets	12,714,378		12,714,378		13,512,078
Managed receivables	9,990,990		9,990,990		10,500,741
Eliminations.
Segment And Geographical Information
Revenues	(1,814)	(1,201)	(6,079)	(3,200)
Interest expense	(1,814)	(1,201)	(6,079)	(3,200)
Additional disclosures
Segment assets	(114,005)		(114,005)		(65,079)
United States
Segment And Geographical Information
Net income	30,810	16,925	84,449	65,257
Depreciation and amortization	44,514	63,908	141,215	178,404
Expenditures for equipment on operating leases	160,179	95,662	343,485	382,661
Provision (benefit) for credit losses	7,661	8,924	22,475	31,841
Additional disclosures
Managed receivables	8,015,319		8,015,319		8,265,090
United States | Operating segment
Segment And Geographical Information
Revenues	170,988	188,733	523,185	567,401
Interest expense	69,761	69,649	203,717	202,785
Additional disclosures
Segment assets	10,310,001		10,310,001		10,738,403
Canada
Segment And Geographical Information
Net income	10,471	17,214	44,263	45,462
Depreciation and amortization	10,937	11,672	33,567	33,524
Expenditures for equipment on operating leases	29,490	20,741	87,972	76,613
Provision (benefit) for credit losses	625	(73)	1,921	108
Additional disclosures
Managed receivables	1,975,671		1,975,671		2,235,651
Canada | Operating segment
Segment And Geographical Information
Revenues	42,107	47,357	146,687	133,385
Interest expense	13,610	$ 11,324	41,151	$ 33,712
Additional disclosures
Segment assets	$ 2,518,382		$ 2,518,382		$ 2,838,754

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RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
RELATED-PARTY TRANSACTIONS
Total interest and other income from affiliates	$ 76,142	$ 97,581	$ 263,549	$ 291,844
Affiliated receivables	97,422		97,422		$ 73,133
Affiliated debt	78,717		78,717		445,802
Other information
Tax receivable due from related party			16,810		3,513
Accounts payable and other accrued liabilities payable to related parties	81,624		81,624		60,070
Interest expense to related affiliates	1,566	1,158	5,942	8,294
Fees charged by affiliates	11,777	11,307	35,036	33,948
Gross receivables	9,990,990	10,665,356	9,990,990	10,665,356	10,500,741
Wholesale
Other information
Gross receivables	703,069		703,069		671,740
CNH Industrial North America
RELATED-PARTY TRANSACTIONS
Retail	35,618	39,401	112,115	116,561
Wholesale	24,658	41,331	93,508	124,261
Operating lease	14,996	16,802	46,002	50,909
Lending funds	281	$ 47	1,043	$ 113
CNH Industrial America
RELATED-PARTY TRANSACTIONS
Affiliated receivables	84,257		84,257		49,311
Affiliated debt	50,000		50,000		327,160
CNH Industrial Canada Ltd.
RELATED-PARTY TRANSACTIONS
Affiliated receivables	718		718		11,282
Affiliated debt	28,717		28,717		118,642
Iveco Argentina
RELATED-PARTY TRANSACTIONS
Wholesale factoring	589		10,881
Other affiliates
RELATED-PARTY TRANSACTIONS
Affiliated receivables	$ 12,447		$ 12,447		$ 12,540

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COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Sep. 30, 2018 USD ($)
COMMITMENTS AND CONTINGENCIES
Payment guarantees on the financial debt of various foreign financial services subsidiaries	$ 30,000
Total credit limit	6,092,405
Utilized	$ 3,424,103

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Statements of Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
REVENUES
Interest income on retail notes and finance leases	$ 52,649	$ 50,592	$ 151,480	$ 149,783
Interest income on wholesale notes	17,211	16,772	49,036	48,827
Interest and other income from affiliates	76,142	97,581	263,549	291,844
Rental income on operating leases	60,027	63,291	181,100	189,016
Other income	5,252	6,653	18,628	18,116
Total revenues	211,281	234,889	663,793	697,586
Interest expense:
Interest expense to third parties	79,991	78,614	232,847	225,003
Interest expense to affiliates	1,566	1,158	5,942	8,294
Total interest expense	81,557	79,772	238,789	233,297
Administrative and operating expenses:
Fees charged by affiliates	11,777	11,307	35,036	33,948
Provision (benefit) for credit losses	8,286	8,851	24,396	31,949	$ 40,898
Depreciation of equipment on operating leases	54,920	75,030	173,174	210,332
Other expenses	8,349	11,403	32,033	28,032
Total administrative and operating expenses	83,332	106,591	264,639	304,261
Total expenses	164,889	186,363	503,428	537,558
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method	46,392	48,526	160,365	160,028
Income tax provision (benefit)	5,111	14,387	31,653	49,309
NET INCOME	41,281	34,139	128,712	110,719
COMPREHENSIVE INCOME	53,580	59,875	106,232	158,719
Reportable Legal Entities | CNH Industrial Capital LLC
REVENUES
Interest and other income from affiliates	17,719	26,792	52,789	75,242
Total revenues	17,719	26,792	52,789	75,242
Interest expense:
Interest expense to third parties	37,971	46,887	101,982	125,560
Total interest expense	37,971	46,887	101,982	125,560
Administrative and operating expenses:
Other expenses	6		16
Total administrative and operating expenses	6		16
Total expenses	37,977	46,887	101,998	125,560
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method	(20,258)	(20,095)	(49,209)	(50,318)
Income tax provision (benefit)	(4,907)	(7,499)	(11,919)	(18,778)
Equity in income of consolidated subsidiaries accounted for under the equity method	56,632	46,735	166,002	142,259
NET INCOME	41,281	34,139	128,712	110,719
COMPREHENSIVE INCOME	53,580	59,875	106,232	158,719
Reportable Legal Entities | Guarantor Entities
REVENUES
Interest income on retail notes and finance leases	4,384	3,363	10,144	11,025
Interest income on wholesale notes	(253)	(261)	(765)	(835)
Interest and other income from affiliates	46,041	60,233	152,299	181,293
Rental income on operating leases	46,659	49,290	140,075	149,020
Other income	21,711	24,197	67,583	73,081
Total revenues	118,542	136,822	369,336	413,584
Interest expense:
Interest expense to third parties	(1,845)	(5,255)	8,815	(5,926)
Interest expense to affiliates	44,554	59,721	149,902	177,887
Total interest expense	42,709	54,466	158,717	171,961
Administrative and operating expenses:
Fees charged by affiliates	11,248	10,875	33,646	32,624
Provision (benefit) for credit losses	2,667	3,743	5,578	9,739
Depreciation of equipment on operating leases	43,982	63,361	139,607	176,817
Other expenses	7,389	9,203	11,879	21,731
Total administrative and operating expenses	65,286	87,182	190,710	240,911
Total expenses	107,995	141,648	349,427	412,872
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method	10,547	(4,826)	19,909	712
Income tax provision (benefit)	4,493	(1,907)	6,814	259
Equity in income of consolidated subsidiaries accounted for under the equity method	50,578	49,654	152,907	141,806
NET INCOME	56,632	46,735	166,002	142,259
COMPREHENSIVE INCOME	$ 68,931	72,471	$ 143,522	190,259
Reportable Legal Entities | CNH Industrial Capital America LLC
Condensed Statements of Comprehensive Income
Ownership percentage	100.00%		100.00%
Reportable Legal Entities | New Holland Credit Company LLC
Condensed Statements of Comprehensive Income
Ownership percentage	100.00%		100.00%
Reportable Legal Entities | All Other Subsidiaries
REVENUES
Interest income on retail notes and finance leases	$ 48,265	47,229	$ 141,336	138,758
Interest income on wholesale notes	17,464	17,033	49,801	49,662
Interest and other income from affiliates	65,642	79,555	223,010	238,112
Rental income on operating leases	13,368	14,001	41,025	39,996
Other income	431	798	1,970	1,503
Total revenues	145,170	158,616	457,142	468,031
Interest expense:
Interest expense to third parties	43,865	36,982	122,050	105,369
Interest expense to affiliates	10,272	10,436	20,589	33,210
Total interest expense	54,137	47,418	142,639	138,579
Administrative and operating expenses:
Fees charged by affiliates	17,419	18,774	52,315	57,792
Provision (benefit) for credit losses	5,619	5,108	18,818	22,210
Depreciation of equipment on operating leases	10,938	11,669	33,567	33,515
Other expenses	954	2,200	20,138	6,301
Total administrative and operating expenses	34,930	37,751	124,838	119,818
Total expenses	89,067	85,169	267,477	258,397
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method	56,103	73,447	189,665	209,634
Income tax provision (benefit)	5,525	23,793	36,758	67,828
NET INCOME	50,578	49,654	152,907	141,806
COMPREHENSIVE INCOME	61,309	71,767	133,371	182,791
Eliminations
REVENUES
Interest and other income from affiliates	(53,260)	(68,999)	(164,549)	(202,803)
Other income	(16,890)	(18,342)	(50,925)	(56,468)
Total revenues	(70,150)	(87,341)	(215,474)	(259,271)
Interest expense:
Interest expense to affiliates	(53,260)	(68,999)	(164,549)	(202,803)
Total interest expense	(53,260)	(68,999)	(164,549)	(202,803)
Administrative and operating expenses:
Fees charged by affiliates	(16,890)	(18,342)	(50,925)	(56,468)
Total administrative and operating expenses	(16,890)	(18,342)	(50,925)	(56,468)
Total expenses	(70,150)	(87,341)	(215,474)	(259,271)
Equity in income of consolidated subsidiaries accounted for under the equity method	(107,210)	(96,389)	(318,909)	(284,065)
NET INCOME	(107,210)	(96,389)	(318,909)	(284,065)
COMPREHENSIVE INCOME	$ (130,240)	$ (144,238)	$ (276,893)	$ (373,050)

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
ASSETS
Cash and cash equivalents	$ 90,283	$ 226,946
Restricted cash	527,808	648,612
Receivables, less allowance for credit losses	9,913,571	10,421,545
Affiliated accounts and notes receivable	97,422	73,133
Equipment on operating leases, net	1,709,839	1,781,489
Equipment held for sale	204,179	208,516
Goodwill and intangible assets, net	119,001	117,456
Other assets	52,275	34,381
TOTAL	12,714,378	13,512,078
Liabilities:
Short-term debt, including current maturities of long-term debt	4,454,292	4,617,464
Accounts payable and other accrued liabilities	705,211	740,410
Affiliated debt	78,717	445,802
Long-term debt	6,053,864	6,332,763
Total liabilities	11,292,084	12,136,439
Stockholder's equity	1,422,294	1,375,639	$ 1,315,398	$ 1,366,718
TOTAL	12,714,378	13,512,078
Eliminations
ASSETS
Affiliated accounts and notes receivable	(6,707,355)	(6,504,485)
Investments in consolidated subsidiaries accounted for under the equity method	(5,423,892)	(5,146,576)
Other assets	(3,789)	(4,065)
TOTAL	(12,135,036)	(11,655,126)
Liabilities:
Accounts payable and other accrued liabilities	(3,701,624)	(3,510,803)
Affiliated debt	(3,009,520)	(2,997,747)
Total liabilities	(6,711,144)	(6,508,550)
Stockholder's equity	(5,423,892)	(5,146,576)
TOTAL	(12,135,036)	(11,655,126)
CNH Industrial Capital LLC | Reportable Legal Entities
ASSETS
Affiliated accounts and notes receivable	2,468,215	2,518,121
Investments in consolidated subsidiaries accounted for under the equity method	2,764,916	2,620,971
Other assets	4,836	7,548
TOTAL	5,237,967	5,146,640
Liabilities:
Short-term debt, including current maturities of long-term debt	1,047,478	1,015,520
Accounts payable and other accrued liabilities	300,274	283,445
Long-term debt	2,467,921	2,472,036
Total liabilities	3,815,673	3,771,001
Stockholder's equity	1,422,294	1,375,639
TOTAL	5,237,967	5,146,640
Guarantor Entities | Reportable Legal Entities
ASSETS
Cash and cash equivalents	71,621	160,339
Receivables, less allowance for credit losses	1,384,146	1,367,951
Affiliated accounts and notes receivable	2,119,069	1,991,481
Equipment on operating leases, net	1,346,957	1,405,731
Equipment held for sale	183,597	191,710
Investments in consolidated subsidiaries accounted for under the equity method	2,658,976	2,525,605
Goodwill and intangible assets, net	90,981	88,440
Other assets	11,607	4,432
TOTAL	7,866,954	7,735,689
Liabilities:
Short-term debt, including current maturities of long-term debt	16,911	45,937
Accounts payable and other accrued liabilities	2,931,437	2,807,195
Affiliated debt	2,152,713	2,253,248
Long-term debt	977	8,338
Total liabilities	5,102,038	5,114,718
Stockholder's equity	2,764,916	2,620,971
TOTAL	7,866,954	7,735,689
All Other Subsidiaries | Reportable Legal Entities
ASSETS
Cash and cash equivalents	18,662	66,607
Restricted cash	527,808	648,612
Receivables, less allowance for credit losses	8,529,425	9,053,594
Affiliated accounts and notes receivable	2,217,493	2,068,016
Equipment on operating leases, net	362,882	375,758
Equipment held for sale	20,582	16,806
Goodwill and intangible assets, net	28,020	29,016
Other assets	39,621	26,466
TOTAL	11,744,493	12,284,875
Liabilities:
Short-term debt, including current maturities of long-term debt	3,389,903	3,556,007
Accounts payable and other accrued liabilities	1,175,124	1,160,573
Affiliated debt	935,524	1,190,301
Long-term debt	3,584,966	3,852,389
Total liabilities	9,085,517	9,759,270
Stockholder's equity	2,658,976	2,525,605
TOTAL	$ 11,744,493	$ 12,284,875

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Statements of Cash Flows (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$ 249,168	$ 480,674
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired	(8,185,725)	(7,443,703)
Collections of receivables	8,594,883	7,794,990
Purchase of equipment on operating leases, net	(107,153)	(145,458)
Change in property and equipment and software, net	(4,143)	(170)
Net cash from (used in) investing activities	297,862	205,659
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity	(366,002)	(112,161)
Net change in indebtedness	(378,495)	(512,476)
Dividend paid to CNH Industrial America LLC	(60,000)	(210,000)
Net cash from (used in) financing activities	(804,497)	(834,637)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(257,467)	(148,304)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period	875,558	877,092
End of period	618,091	728,788
Eliminations
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	12,049	(258,663)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired	5,178,455	4,818,267
Collections of receivables	(5,178,731)	(4,818,615)
Net cash from (used in) investing activities	(276)	(348)
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity	(11,773)	259,011
Net cash from (used in) financing activities	(11,773)	259,011
CNH Industrial Capital LLC | Reportable Legal Entities
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	32,158	200,310
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in indebtedness	27,842	9,690
Dividend paid to CNH Industrial America LLC	(60,000)	(210,000)
Net cash from (used in) financing activities	(32,158)	(200,310)
Guarantor Entities | Reportable Legal Entities
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	146,608	367,764
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired	(6,283,817)	(5,764,415)
Collections of receivables	6,262,320	5,819,270
Purchase of equipment on operating leases, net	(72,766)	(105,329)
Change in property and equipment and software, net	(4,143)	(170)
Net cash from (used in) investing activities	(98,406)	(50,644)
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity	(100,535)	(346,109)
Net change in indebtedness	(36,385)	(38,049)
Net cash from (used in) financing activities	(136,920)	(384,158)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(88,718)	(67,038)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period	160,339	151,654
End of period	71,621	84,616
All Other Subsidiaries | Reportable Legal Entities
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	58,353	171,263
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired	(7,080,363)	(6,497,555)
Collections of receivables	7,511,294	6,794,335
Purchase of equipment on operating leases, net	(34,387)	(40,129)
Net cash from (used in) investing activities	396,544	256,651
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity	(253,694)	(25,063)
Net change in indebtedness	(369,952)	(484,117)
Net cash from (used in) financing activities	(623,646)	(509,180)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(168,749)	(81,266)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period	715,219	725,438
End of period	$ 546,470	$ 644,172