10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10‑K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 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)	53406 (Zip code)

(262) 636‑6011

(Registrant’s telephone number, including area code)

Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined by Rule 405 of the Securities Act. ☒ Yes  ☐No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐Yes  ☒No

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 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S‑K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K.  ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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 March 2, 2019, 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 I(1)(a) and (b) of Form 10-K and is therefore filing this Form with certain reduced disclosures as permitted by those instructions.

TABLE OF CONTENTS

		PAGE
PART I
Item 1.	Business	2
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	14
Item 2.	Properties	14
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6.	Selected Financial Data	15
Item 7.	Managements’ Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 8.	Financial Statements and Supplementary Data	29
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	30
Item 9A.	Controls and Procedures	30
Item 9B	Other Information	30
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	31
Item 11.	Executive Compensation	31
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
Item 13.	Certain Relationships and Related Transactions, and Director Independence	31
Item 14.	Principal Accounting Fees and Services	31
PART IV
Item 15.	Exhibits and Financial Statement Schedules	32

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PART I

Item 1.  Business

Overview

CNH Industrial Capital LLC (together with its consolidated subsidiaries, “CNH Industrial Capital,” the “Company” or “we”) is an indirect wholly‑owned subsidiary of CNH Industrial N.V. (“CNHI” and together with its consolidated subsidiaries, “CNH Industrial”) and is headquartered in Racine, Wisconsin. As a captive finance company, our primary business is to underwrite and manage financing products for end‑use customers and dealers of CNH Industrial America LLC (“CNH Industrial America”) and CNH Industrial Canada Ltd. (collectively, “CNH Industrial North America”) and provide other related financial products and services to support the sale of agricultural and construction equipment sold by CNH Industrial North America. We also provide wholesale and retail financing related to new and used equipment manufactured by entities other than CNH Industrial North America. We are often able to offer financing to customers at advantageous interest rates or other terms (such as longer contract terms, longer warranty terms or parts and service incentives), due to our participation in subsidized financing programs sponsored by CNH Industrial North America, which reimburses us for some or all of the cost of such terms. The primary operating subsidiaries of CNH Industrial Capital LLC include CNH Industrial Capital America LLC (“CNH Industrial Capital America”), New Holland Credit Company, LLC (“New Holland Credit”) and CNH Industrial Capital Canada Ltd. (“CNH Industrial Capital Canada”). CNH Industrial Capital America is the primary financing and business entity of CNH Industrial Capital for the United States that enters into retail and wholesale financing arrangements with end‑use customers and equipment dealers, and CNH Industrial Capital Canada performs the same functions in Canada, while New Holland Credit acts as the servicer for retail and wholesale receivables originated by CNH Industrial Capital America.

CNH Industrial is the company formed by the merger, completed September 29, 2013, between Fiat Industrial S.p.A. (“Fiat Industrial”) and CNH Global N.V. (“CNH Global”), the former indirect parents of CNH Industrial Capital. As a result of the merger, CNH Industrial Capital LLC and its primary operating subsidiaries, including CNH Industrial Capital America, New Holland Credit and CNH Industrial Capital Canada, are indirect wholly‑owned subsidiaries of CNHI (with all of the equity interests in CNH Industrial Capital LLC owned by CNHI through intermediate companies, through which CNHI exercises indirect control over CNH Industrial Capital LLC). 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.

CNH Industrial Capital offers retail loan and lease financing to end‑use customers for the purchase of new and used equipment and components, as well as other financial services. CNH Industrial Capital also provides wholesale financing to CNH Industrial North America equipment dealers and distributors (all of which are independently owned and operated). Wholesale financing consists primarily of dealer floorplan financing and gives dealers the ability to maintain a representative inventory of new products. In addition, CNH Industrial Capital provides financing to dealers for used equipment taken in trade, equipment utilized in dealer‑owned rental yards, parts inventory, working capital and other financing needs. CNH Industrial Capital Canada purchases short-term wholesale receivables at a discount (“wholesale factoring”) from Iveco Argentina S.A. (“Iveco Argentina”), an indirect wholly-owned subsidiary of CNHI, from time to time. The purchase is consistent with factoring arrangements between CNHI’s industrial and financial services companies. As a holding company, CNH Industrial Capital LLC generally does not conduct operations of its own, but relies on its subsidiaries for the generation and distribution of profits.

CNH Industrial Capital’s revenue is primarily generated through the income of its portfolio and the income generated through marketing programs with CNH Industrial North America. The size of the portfolio is in part related to the level of equipment sales by CNH Industrial North America. The portfolio profitability is linked to the difference between lending and borrowing rates, the credit quality of the borrowers and the value of collateral. For each of the years ended December 31, 2018 and 2017, the percentage of revenue derived by us from CNH Industrial North America and other CNH Industrial subsidiaries was 39% and 42%, respectively.

Our retail borrowers are generally commercial entities and, in many cases, have had a previous borrowing relationship with CNH Industrial Capital. Retail receivables are secured by the purchased equipment, which generally

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has a longer useful life than the term of the receivable. Wholesale financings are likewise secured by the equipment purchased by the dealer.

CNH Industrial Capital funds its operations and lending activity through a combination of term receivables securitizations, secured and unsecured facilities, commercial paper, unsecured bonds, affiliate borrowings and retained earnings. 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.

To help fund its retail and wholesale financing business, CNH Industrial Capital participates in the asset backed securitization (“ABS”) markets. CNH Industrial Capital periodically transfers retail and wholesale receivables originated from end‑use customers and dealers to special purpose entities, in exchange for cash proceeds from asset backed securities issued by these special purpose entities. Investors in these asset backed securities in turn receive payments on their securities based on the cash flows from the transferred receivables. CNH Industrial Capital continues to service the transferred receivables and maintains a cash reserve account, which provides security to investors in the event that cash collections from the receivables are not sufficient to permit principal and interest payments to the holders of the securities. These special purpose entities and the investors in the asset backed securities have no recourse, beyond the applicable cash reserve account, for failure of any end‑use customers or dealers to make payments on the transferred receivables when due.

In addition to portfolio quality and funding costs, CNH Industrial Capital’s long-term profitability is also dependent on service levels and operational effectiveness. CNH Industrial Capital performs billing and collection services, customer support, repossession and remarketing functions, reporting and data management operations and marketing activities.

As of December 31, 2018, CNH Industrial Capital had total assets of $12.9 billion and total stockholder’s equity of $1.4 billion. For the year ended December 31, 2018, CNH Industrial Capital had total revenues of $878.4 million and net income of $156.8 million. As of December 31, 2018, CNH Industrial Capital had outstanding debt (excluding debt owed to affiliates) of $10.6 billion, approximately 63% of which represented secured debt as of such date.

Relationship with CNH Industrial

CNH Industrial organizes its operations into five operating segments: Agricultural Equipment, Construction Equipment, Commercial Vehicles, Powertrain and Financial Services. CNH Industrial’s five segments design, produce, market, sell and finance agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for those vehicles and engines for marine and power generation applications. CNH Industrial has industrial and financial services companies located in 44 countries and a commercial presence in approximately 180 countries around the world.

CNH Industrial’s Agricultural Equipment segment designs, manufactures and distributes a full line of farm machinery and implements, including two‑wheel and four‑wheel drive tractors, crawler tractors (Quadtrac®), combines, cotton pickers, grape and sugar cane harvesters, hay and forage equipment, planting and seeding equipment, soil preparation and cultivation implements and material handling equipment. Agricultural equipment is sold in North America under the New Holland Agriculture and Case IH Agriculture brands, as well as the Steyr brand in Europe and the Miller brand, primarily in North America and Australia. Following the acquisition of the grass and soil implement business of Kongskilde Industries in February 2017, certain agricultural equipment products have been sold under the Kongskilde, Överum, and JF brands.

CNH Industrial’s Construction Equipment segment designs, manufactures and distributes a full line of construction equipment including excavators, crawler dozers, graders, wheel loaders, backhoe loaders, skid steer loaders, compact track loaders and telehandlers. Construction equipment is sold in North America under the New Holland Construction and Case Construction Equipment brands.

As of December 31, 2018 and 2017, CNH Industrial had total assets of $46.1 billion and $48.3 billion and total equity of $5.1 billion and $4.2 billion, respectively.

For the years ended December 31, 2018 and 2017, CNH Industrial had total revenues of $29.7 billion and $27.7 billion, respectively, and net income attributable to CNH Industrial N.V. of $1.1 billion and $272 million,

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respectively. For the year ended December 31, 2018, CNH Industrial’s net sales of agricultural equipment and net sales of construction equipment generated in NAFTA (United States, Canada and Mexico) were $4.0 billion and $1.5 billion, respectively, representing increases of 13% and 17% from the same period in 2017, respectively.

CNH Industrial Capital is a key financing source for CNH Industrial North America’s end‑use customers and dealers. CNH Industrial North America offers subsidized financing programs such as low‑rate, interest‑free or interest‑only periods and other sales incentive programs. We participate in and receive reimbursement for these programs, which allow us to offer financing to customers at advantageous terms.

Although our primary focus is to finance CNH Industrial North America equipment, we also provide retail and wholesale financing related to new and used agricultural and construction equipment manufactured by entities other than CNH Industrial North America. We are dependent on CNH Industrial North America for substantially all of our business, with revenues related to financing provided to CNH Industrial North America dealers and retail customers purchasing and/or leasing from CNH Industrial North America and its dealers accounting for over 90% of our total revenues for the year ended December 31, 2018, and with loan portfolios attributable to such financing accounting for over 90% of our total managed receivables as of December 31, 2018.

The size of our lending portfolio is related in part to the level of equipment sales by CNH Industrial North America, which is driven by the strength of the agricultural and construction markets. The credit quality of our portfolio reflects the underwriting standards of CNH Industrial Capital, which are developed internally and independent of the sales volume goals of CNH Industrial North America.

We borrow from our affiliates as one of the funding sources for our operations and lending activity. As of December 31, 2018 and 2017, we had outstanding affiliate borrowings of $276.3 million and $445.8 million, respectively, representing 2.5% and 3.9% of our total indebtedness.

CNH Industrial North America also provides us with other types of operational and administrative support, such as payroll and other human resource services. For the years ended December 31, 2018 and 2017, we incurred fees charged by our affiliates of $47.5 million and $46.4 million, respectively, representing 13% and 11% of our total administrative and operating expenses.

Effective as of September 29, 2013, in connection with the merger of CNH Global with and into CNHI, CNHI assumed all of CNH Global’s obligations under a support agreement, pursuant to which CNHI has agreed to, among other things, (a) make cash capital contributions to us, to the extent necessary to cause our ratio of net earnings available for fixed charges to fixed charges to be not less than 1.05 for each fiscal quarter (with such ratio determined, on a consolidated basis and in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), for such fiscal quarter and the immediately preceding three fiscal quarters taken as a whole), (b) generally maintain an ownership of at least 51% of the voting equity interests in us and (c) cause us to have, as of the end of any fiscal quarter, a consolidated tangible net worth of at least $50 million. The support agreement is not intended to be and is not a guarantee by CNHI of our indebtedness or other obligations. The obligations of CNHI to us pursuant to this support agreement are to us only and do not run to, and are not enforceable directly by, any creditor of ours, including holders of our notes or the trustee under the indenture governing our notes. The support agreement may be modified, amended or terminated, at CNHI’s election, upon thirty days’ prior written notice to us and the rating agencies, if (a) the modification, amendment or termination would not result in a downgrade of our rated indebtedness; (b) the modification, amendment or notice of termination provides that the support agreement will continue in effect with respect to our rated indebtedness then outstanding; or (c) we have no long‑term rated indebtedness outstanding.

Products and Services

CNH Industrial Capital’s financing products and services fall into the following main categories:

Retail (69.5% of managed portfolio as of December 31, 2018):  CNH Industrial Capital provides and administers retail financing to end‑use customers for the purchase or lease of new and used CNH Industrial North America equipment or other agricultural and construction equipment sold primarily through CNH Industrial North America dealers and distributors. Retail financing products primarily include retail installment sales contracts, finance leases and operating leases to end‑use customers. The terms of retail contracts, finance leases and operating leases generally

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range from two to six years, and interest rates vary depending on prevailing market interest rates and certain incentive programs offered by CNH Industrial North America.

CNH Industrial Capital utilizes a proprietary credit scoring model as part of the retail credit approval and review process. CNH Industrial Capital also provides servicing and collection operations generally performed through its subsidiary, New Holland Credit, for the retail financing products.

Wholesale (30.5% of managed portfolio as of December 31, 2018):  CNH Industrial Capital provides wholesale financing to dealers to finance purchases of new and used agricultural and construction equipment and parts. In addition, CNH Industrial Capital extends credit to dealers for working capital and other financing needs. Currently, credit is extended to approximately 900 CNH Industrial North America dealers (with each being a separate legal entity) with approximately 1,700 locations in North America.

The dealer financing agreements provide CNH Industrial Capital with a first priority security interest in the equipment and parts financed and possibly other collateral. A majority of dealers also provide a personal or corporate guarantee (from an affiliate of the dealer). The amount of credit extended is primarily based upon the dealer’s expected annual sales, effective net worth, utilization of existing credit lines and inventory turnover. CNH Industrial Capital evaluates and assesses dealers on an ongoing basis as to their credit worthiness and conducts audits of dealer equipment inventories on a regular basis. The amounts of credit made available to dealers are reviewed on a regular basis, which is usually annually, and such amounts are adjusted when deemed appropriate by CNH Industrial Capital.

Wholesale Factoring (0.0% of managed portfolio as of December 31, 2018): CNH Industrial Capital Canada purchases short-term receivables from Iveco Argentina from time to time.

CNH Industrial Capital finances other products, including insurance and equipment protection products underwritten through a third‑party insurer.

Competition

CNH Industrial Capital’s financing products and services are intended to be competitive with those available from third parties. CNH Industrial North America sponsors certain marketing programs that allow us to offer financing to customers at competitive or advantageous interest rates or other terms (such as longer contract terms, longer warranty terms or parts and service incentives). Under these programs, including our low‑rate financing programs or interest waiver programs, we are compensated by CNH Industrial North America for some or all of the cost of such terms. This support from CNH Industrial North America provides a material competitive advantage in offering financing to customers of CNH Industrial North America’s products.

We compete primarily with banks, equipment finance and leasing companies, and other financial institutions. Typically, this competition is based upon financial products and services offered, customer service, financial terms and interest rates charged. In addition, some of our competitors may be eligible to participate in government programs providing access to capital at more favorable rates, which may create a competitive disadvantage for CNH Industrial Capital. CNH Industrial Capital believes that its strong, long‑term relationship with the dealers and end‑use customers and the ease‑of‑use of our products provides a competitive edge over other third‑party financing options. In addition, the marketing programs offered by CNH Industrial North America have a positive influence on the proportion of CNH Industrial North America’s equipment sales financed by CNH Industrial Capital.

Employees

As of December 31, 2018, CNH Industrial Capital had approximately 390 employees, none of which were represented by unions.

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Item 1A.  Risk Factors

CNH Industrial Capital LLC is an indirect wholly-owned subsidiary of CNHI. The results of operations of the Company are primarily affected by its relationships with CNH Industrial North America.

The following risks are considered the most significant to the Company’s business based upon current knowledge, information and assumptions. This discussion of risk factors should be considered in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 15 and the other risks described in the Cautionary Note Regarding Forward‑Looking Statements beginning on page 26. These risks may affect our operating results and, individually or in the aggregate, could cause our actual results to differ materially from past and projected future results. Except as may be required by law, we undertake no obligation to publicly update these risks or any forward‑looking statements, whether as a result of new information, future events, or otherwise.

Risks Related to Our Indebtedness and Liquidity

Credit rating changes could affect our access to funding and our cost of funds, which could in turn adversely affect our financial position and results of operations.

Our ability to access the capital markets or other forms of financing and our funding costs are highly dependent on, among other things, our credit ratings and those of CNHI and our ABS transactions. Rating agencies may review and revise their ratings from time to time, and any downgrade or other negative action with respect to our credit ratings by one or more rating agencies may increase our funding costs, limit our access to sources of financing and/or adversely affect our financial position and results of operations. A lack of funding could result in our inability to meet customer demand for equipment financing, while increased funding costs could lead to deteriorating margins, decreased profits and could result in our inability to meet customer demand at attractive interest rates, which in turn may adversely affect our financial position and results of operations.

We have significant outstanding indebtedness, which may limit our ability to obtain additional funding and may limit our financial and operating flexibility.

As of December 31, 2018, we had an aggregate of $10.9 billion of consolidated indebtedness and our equity was $1.4 billion.

The extent of our indebtedness could have important consequences on our operations and financial results, including:

· we may not be able to secure additional funds for working capital, capital expenditures, debt service requirements or general corporate purposes;

· we may need to use a portion of our projected future cash flow from operations to pay principal and interest on our indebtedness, which may reduce the amount of funds available to us for other purposes;

· we may be more financially leveraged than some of our competitors, which could put us at a competitive disadvantage;

· we may not be able to invest in the development or introduction of new products or new business opportunities;

· we may not be able to adjust rapidly to changing market conditions, which may make us more vulnerable to a downturn in general economic conditions; and

· we may not be able to access the capital markets on favorable terms, which may adversely affect our ability to provide competitive retail and wholesale financing programs.

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Restrictive covenants in our debt agreements could limit our financial and operating flexibility.

The agreements governing our outstanding debt securities and other credit agreements to which we are a party from time to time contain, or may contain, covenants that restrict our ability and/or that of our subsidiaries to, among other things:

· incur additional indebtedness;

· make certain investments;

· enter into certain types of transactions with affiliates;

· sell or acquire certain assets or merge with or into other companies;

· use assets as security in other transactions; and/or

· enter into sale and leaseback transactions.

These restrictive covenants could limit our financial and operating flexibility. For example:

· limits on incurring additional debt and using assets as security in other transactions could materially limit our future business prospects by restricting us from financing as many customers as we otherwise would, particularly if our traditional funding sources (including principally the ABS markets) were not available;

· limits on investments could result in a return on assets lower than that of our competitors; and

· limits on the sale of assets or merger with or into other companies could deny us a future business opportunity despite the benefits that could be realized from such a transaction.

In addition, we are required to maintain a certain coverage level for leverage; our leverage ratio, defined as the ratio of total net debt to equity, is required not to exceed 9.00:1.

Although we do not believe any of these covenants materially restrict our operations currently, a breach of one or more of the covenants could result in adverse consequences that could negatively impact our businesses, results of operations and financial position. These consequences may include the acceleration of amounts outstanding under certain of our credit facilities, triggering an obligation to redeem certain debt securities, termination of existing unused commitments by our lenders, refusal by our lenders to extend further credit under one or more of the facilities or to enter into new facilities or the lowering or modification of CNHI’s or our credit ratings. We cannot assure you that we will continue to comply with each restrictive covenant at all times, particularly if we were to encounter challenging and volatile market conditions.

Risks Related to Our Business, Strategy and Operations

Reduced demand for agricultural and construction equipment would reduce the opportunities for us to finance equipment.

Our business is largely dependent upon the demand for CNH Industrial North America’s products and its customers’ willingness to enter into financing or leasing arrangements with respect thereto. A significant and prolonged decrease in demand for CNH Industrial North America’s products could have a material adverse effect on our business, financial position, results of operations and cash flows. Our primary business is to provide retail and wholesale financing alternatives for CNH Industrial North America’s products to CNH Industrial North America’s customers and dealers. The demand for CNH Industrial North America’s products and our financing products and services is influenced, in particular, by factors such as:

· the price of agricultural commodities and the relative level of inventories;

· the profitability of agricultural enterprises, farmers’ income and their capitalization;

· the demand for food products;

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· CNH Industrial North America’s ability to produce products that meet the quality, performance and price expectations of customers;

· agricultural policies, including aid and subsidies to agricultural enterprises provided by governments and/or supranational organizations as well as alternative fuel mandates;

· withdrawal from or change in trade agreements or trade terms, negotiation of new trade agreements and the imposition of new (and retaliatory) tariffs against certain countries or covering certain products or raw materials;

· change in or uncertainty surrounding global trade policies;

· unfavorable climatic conditions, especially during the spring, a particularly important period for generating CNH Industrial North America’s sales orders;

· public infrastructure spending;

· new residential and non-residential construction;

· capital spending in oil and gas and, to a lesser extent, in mining; and

· changes in currency exchange rates and interest rates.

In the equipment industry, changes in demand can occur suddenly, resulting in imbalances in inventories, product capacity, and prices for new and used equipment. If fewer pieces of equipment are sold, CNH Industrial Capital will be presented with fewer opportunities to finance equipment.

A decrease in government incentives may adversely affect our results.

Government initiatives that are intended to stimulate demand for products sold by CNH Industrial North America, such as changes in tax treatment or purchase incentives for new equipment, can substantially influence the timing and level of our revenues. The terms, size and duration of such government actions are unpredictable and outside of our control. Any adverse change in government policy relating to those initiatives could have a material adverse effect on our business, results of operations and financial condition.

Change in support from CNH Industrial North America could limit our ability to offer competitively priced financing, which may have a material adverse effect on our business, financial position, results of operations and cash flows.

CNH Industrial North America sponsors certain marketing programs that allow us to offer financing to customers at advantageous interest rates or other terms (such as longer contract terms, longer warranty terms or parts and service incentives). This support from CNH Industrial North America provides a material competitive advantage in offering financing to customers of CNH Industrial North America’s products. Any elimination or reduction of these marketing programs, which affects our ability to offer competitively priced financing to customers, could in turn reduce the percentage of CNH Industrial North America’s products financed by us and could have a material adverse effect on our business, financial condition, results of operations and cash flows. For the years ended December 31, 2018, 2017 and 2016, the revenues recognized by us from CNH Industrial North America for marketing programs were $333.8 million, $392.9 million and $398.4 million, respectively, representing 38%, 42% and 42% , respectively, of our total revenues.

CNH Industrial North America also provides us with other types of operational and administrative support, such as payroll and other human resource services. For the years ended December 31, 2018, 2017 and 2016, we incurred fees charged by our affiliates of $47.5 million, $46.4 million and $45.2 million, respectively, representing 13%, 11% and 13%, respectively, of our total administrative and operating expenses.

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An increase in customer credit risk may result in higher delinquencies and defaults, and deterioration in collateral valuation may reduce our collateral recoveries, which could increase losses on our receivables and operating leases and adversely affect our financial position and results of operations.

Fundamental to any organization that extends credit is the credit risk associated with its customers/borrowers. The creditworthiness of each customer, rates of delinquency and default, repossessions and net losses on customer receivables are impacted by many factors, including:

· relevant industry and general economic conditions (in particular, those conditions most directly affecting the agricultural and construction industries);

· the availability of capital;

· the terms and conditions applicable to extensions of credit;

· interest rates (and changes in the applicable interest rates);

· the experience and skills of the customer’s management team;

· commodity prices;

· political events;

· the weather; and

· the value of the collateral securing the extension of credit.

Deterioration in the quality of our financial assets, an increase in delinquencies or defaults, or a reduction in collateral recovery rates could have an adverse impact on our financial performance. These risks become more acute in an economic slowdown or recession due to decreased demand for (or availability of) credit, declining asset values, changes in government subsidies, reductions in collateral to receivable balance ratios, and an increase in delinquencies, defaults, insolvencies, foreclosures and losses. In such circumstances, our receivable servicing and litigation costs may also increase. In addition, governments may pass laws, or implement regulations, that modify rights and obligations under existing agreements, or which prohibit or limit the exercise of contractual rights.

When a borrower defaults on a receivable and we repossess collateral securing the repayment of the receivable, our ability to recover or mitigate losses by selling the collateral is subject to the current market value of such collateral. Those values are affected by levels of new and used inventory of agricultural and construction equipment on the market. They are also dependent upon the strength or weakness of market demand for new and used agricultural and construction equipment, which is affected by the strength of the general economy. In addition, repossessed collateral may be in poor condition, which would reduce its value. Finally, relative pricing of used equipment, compared with new equipment, can affect levels of market demand and the resale of repossessed equipment. An industry‑wide decrease in demand for agricultural or construction equipment could result in lower resale values for repossessed equipment, which could increase losses on receivables and operating leases, adversely affecting our financial position and results of operations.

Changes in interest rates, exchange rates and market liquidity could have a material adverse effect on our earnings and cash flows.

Because a significant number of our receivables are generated at fixed interest rates, our business is subject to fluctuations in interest rates. Although we seek to match fund our assets, with approximately 64% of our receivables and approximately 77% of our funding at a fixed rate, respectively, as of December 31, 2018, changes in market interest rates may influence our financing costs, returns on financial investments and the valuation of derivative contracts and could reduce our earnings and/or cash flow.

We are subject to currency exchange risk to the extent that our costs are denominated in currencies other than those in which we earn revenues. In addition, the reporting currency for the consolidated financial statements is the U.S. dollar. Certain of our assets, liabilities, expenses and revenues are denominated in other currencies. Those assets, liabilities, expenses and revenues are translated into the U.S. dollar at the applicable exchange rates to prepare our consolidated financial statements. Therefore, increases or decreases in exchange rates between the U.S. dollar and

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those other currencies affect the value of those items reflected in the consolidated financial statements, even if their value remains unchanged in the original currency. Changes in currency exchange rates between the U.S. dollar and other currencies could adversely affect our financial position and results of operations.

We also rely on the capital markets and a variety of funding programs to provide liquidity for our operations, including committed asset backed and unsecured facilities and the issuance of secured and unsecured debt. Significant changes in market liquidity conditions could affect our access to funding and the associated funding costs and reduce our earnings and cash flow.

Although we manage interest rate, exchange rate and market liquidity risks with a variety of techniques, including a match funding program, the selective use of derivatives and a diversified funding program, there can be no assurance that fluctuations in interest rates, exchange rates and market liquidity conditions will not have a material adverse effect on our earnings and cash flow. If any of the variety of instruments and strategies we use to hedge our exposure to these various types of risk is ineffective, we may incur losses.

The transition from LIBOR as an interest rate benchmark could subject the Company to financial risks.

The London Interbank Offered Rate (“LIBOR”) is a widely accepted interest rate benchmark and is the reference rate in a number of financial instruments and contracts, including in a number of our wholesale receivables agreements. In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR announced that it intends to stop compelling banks to submit LIBOR rates after 2021. In April 2018, the Federal Reserve Bank of New York commenced publication of three reference rates based on overnight United States Treasury repurchase agreement transactions, including the Secured Overnight Financing Rate (“SOFR”), which has been recommended as an alternative to United States dollar LIBOR by the Alternative Reference Rates Committee. Uncertainty exists as to the transition process and acceptance of SOFR as the primary alternative to LIBOR. The transition from LIBOR to SOFR or another benchmark rate could have adverse effects on our financial position, results of operations and cash flows.

Changes in government monetary or fiscal policies may negatively impact our results.

Governments may implement measures designed to slow the economic growth rate (e.g., higher interest rates, reduced bank lending and other anti-inflation measures). Rising interest rates could have a dampening effect on the overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect demand for our products and our customers’ ability to repay obligations to us. Central banks and other policy arms of many countries may take actions to vary the amount of liquidity and credit available in an economy. The impact from a change in liquidity and credit policies could negatively affect the customers and markets we serve, which could adversely impact our business, results of operations and financial condition.

If we are unable to obtain funding, in particular through the ABS market and committed asset‑backed facilities, at competitive rates, our ability to conduct our financing business may be severely impaired and our financial position, results of operations and cash flows may be materially and adversely affected.

We have traditionally relied upon the ABS market and committed asset‑backed facilities as a primary source of funding and liquidity. Access to funding at competitive rates is essential to our business. An inability to access the ABS market or a significant reduction in liquidity in the secondary market for ABS transactions could adversely affect our ability to sell receivables on a favorable or timely basis. Such conditions could have an adverse impact on our access to funding, financial position and results of operations.

If we breach our representations and warranties in connection with our ABS transactions, we may be required to repurchase non‑conforming receivables from the securitization vehicles, which could have an adverse effect on our financial position, results of operations and cash flows.

In connection with our ABS transactions, we make customary representations and warranties regarding the assets being securitized, as disclosed in the relevant offering documents. While no recourse provisions exist that allow holders of asset‑backed securities issued by our ABS trusts to require us to repurchase those securities, a breach of these representations and warranties could give rise to an obligation to repurchase non‑conforming receivables from

10

the trusts. Any obligation to make future repurchases could have an adverse effect on our financial position, results of operations and cash flows.

Certain of our operations are subject to supervision and regulation by governmental authorities and changes in applicable laws or regulations may adversely impact our ability to engage in related business activities or increase the cost of our operations, thus adversely affecting our business, financial position and results of operations.

Our operations are subject to extensive, complex and frequently changing rules, regulations and legal interpretations from various governmental authorities, which among other things:

· regulate credit granting activities, including establishing licensing requirements;

· establish maximum interest rates, finance and other charges;

· regulate customers’ insurance coverage;

· require disclosures to customers;

· govern secured and unsecured transactions;

· set collection, foreclosure, repossession and claims handling procedures and other trade practices;

· prohibit discrimination in the extension of credit and administration of loans; and

· regulate the use, handling and reporting of information related to applicants and borrowers.

As applicable laws are amended or construed differently, new laws are adopted to expand the scope of regulation imposed upon us, or existing laws prohibit interest rates we charge from rising to a level commensurate with risk and market conditions, such events could adversely affect our business and our financial position and results of operations.

New regulations or changes in financial services regulations could adversely affect us.

Our operations are highly regulated by governmental authorities which can impose significant additional costs and/or restrictions on our business. For example, the requirements of the Dodd‑Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd‑Frank Act”), including its implementing regulations, may substantially affect our origination, servicing and securitization programs. The Dodd‑Frank Act also strengthens the regulatory oversight of these securities and related capital market activities by the SEC and increases the regulation of the ABS markets through, among other things, a mandated risk retention requirement for securitizers and a direction to regulate credit rating agencies. Other future regulations may affect our ability to engage in funding these capital market activities or increase the effective cost of such transactions, which could adversely affect our financial position, results of operations and cash flows.

Our business may be affected by unfavorable weather conditions, climate change or other calamities.

Poor, severe or unusual weather conditions caused by climate change or other factors, particularly during the planting and early growing season, can significantly affect the purchasing decisions of CNH Industrial North America’s agricultural equipment customers. The timing and quantity of rainfall are two of the most important factors in agricultural production. Insufficient levels of rain prevent farmers from planting crops or may cause growing crops to die, resulting in lower yields. Excessive rain or flooding can also prevent planting or harvesting from occurring at optimal times and may cause crop loss through increased disease or mold growth. Temperature affects the rate of growth, crop maturity, crop quality and yield. Temperatures outside normal ranges can cause crop failure or decreased yields, and may also affect disease incidence. Natural disasters such as floods, hurricanes, storms and droughts can have a negative impact on agricultural production. The resulting negative impact on farm income can strongly affect demand for CNH Industrial North America’s agricultural equipment in any given period.

In addition, natural disasters, pandemic illness, terrorist attacks or violence, equipment failures, power outages, disruptions to our information technology systems and networks or other unexpected events could result in physical damage to and complete or partial closure of one or more of CNH Industrial’s manufacturing facilities or distribution centers, temporary or long‑term disruption in the supply of parts or component products, disruption in the transport

11

of CNH Industrial North America’s products to dealers and customers and delay in delivery of products to distribution centers. In the event such events occur, our financial results might be negatively impacted. Our existing insurance arrangements may not protect against all costs that may arise from such events.

Furthermore, the potential physical impacts of climate change on CNH Industrial North America’s facilities, suppliers and customers and therefore on its operations are highly uncertain and will be particular to the circumstances developing in various geographical regions. These may include long-term changes in temperature levels and water availability. These potential physical effects may adversely impact the demand for CNH Industrial North America’s products and the cost, production, sales and financial performance of its operations and as a result could adversely affect our financial position, results of operations and cash flows.

Changes in demand for food and alternate energy sources could impact our revenues.

Changing worldwide demand for farm outputs to meet the world’s growing food and alternative energy demands, driven in part by government policies and a growing world population, are likely to result in fluctuating agricultural commodity prices, which affect sales of agricultural equipment. While higher commodity prices will benefit our crop producing agricultural equipment customers, higher commodity prices also result in greater feed costs for livestock and poultry producers, which in turn may result in lower levels of equipment purchased by these customers. Lower commodity prices directly affect farm income, which could negatively affect sales of agricultural equipment. Moreover, changing alternative energy demands may cause farmers to change the types or quantities of the crops they grow, with corresponding changes in equipment demands. Finally, changes in governmental policies regulating bio‑fuel utilization could affect demand for CNH Industrial North America’s equipment and result in higher research and development costs related to equipment fuel standards.

Competitive activity or failure by us to respond to actions by our competitors could adversely affect our results of operations, in particular due to a cost of funds disparity between us and some of our competitors.

We operate in a highly competitive environment, with financing for owners or operators of CNH Industrial North America equipment available through a variety of sources, such as banks, finance companies and other financial institutions, including government sponsored entities. Some of our competitors enjoy certain regulatory, government support or credit rating advantages over CNH Industrial Capital today, which often enable them to access capital on favorable terms, among other things. Such cost of funds disparities between us and our competitors, or any additional regulatory, government support or credit rating changes that enhance the competitive position of our competitors, could result in our inability to effectively compete.

The success of our business also depends on our ability to identify emerging industry changes and develop and market new products and services that meet the evolving needs of existing and potential customers. Increasing competition may adversely affect our business if we are unable to match the products and services of our competitors. If we are unable to effectively compete, our business, financial position and results of operations will suffer.

A decrease in the value of the equipment that we lease or higher than expected return volumes of our leased equipment could adversely affect our results.

We estimate the expected residual values of leased equipment at the inception of the lease, which is the estimated future value of leased equipment at the time of the expiration of the lease term. The residual values are reviewed quarterly. Changes in residual value assumptions would affect the amount of depreciation expense and the net amount of equipment on operating leases. If estimated future values significantly decline due to economic factors, obsolescence, the overall industry volume of lease returns, or other adverse circumstances, we may not realize such residual values, which could reduce our earnings.

Actual proceeds realized by us upon the sale of returned leased equipment at lease termination may be lower than the amount projected. Among the factors that can affect the value of returned lease equipment are the volume of equipment returned (primarily affected by contractual lease‑end values relative to prevailing market values and marketing programs for new equipment), any significant trends in the used equipment market and any new product trends. Each of these factors, alone or in combination, has the potential to adversely affect our profitability if actual results were to differ significantly from our estimates.

As of December 31, 2018, our total operating lease residual values were $1.4 billion.

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Our results of operations may be adversely impacted by various types of claims, lawsuits, and other contingent obligations.

We are involved in various lawsuits and other legal proceedings that arise in the ordinary course of our business. The ultimate outcome of the legal matters pending against us or our subsidiaries is uncertain. Furthermore, we could in the future become subject to judgments or enter into settlements of lawsuits and claims that could have a material adverse effect on our results of operations in any particular period. In addition, while we maintain insurance coverage with respect to certain risks, we may not be able to obtain such insurance on acceptable terms in the future, if at all, and any such insurance may not provide adequate coverage against claims under such policies.

Our affiliates may cease to provide us with financing support.

During the capital markets crisis, which had a material adverse effect on the ABS markets, we relied more heavily upon financing provided by CNH Industrial and its predecessors. In the event of a repeat of the severe downturn in the ABS markets, we would need to look to alternative funding sources, including CNH Industrial, though CNH Industrial would have no obligation to provide such financing (other than the obligations assumed by CNHI under the support agreement, dated November 4, 2011). To the extent CNH Industrial does not provide such financing to us when needed, we could suffer from a lack of funding and/or incur increased funding costs if funding is obtained through other third‑party sources.

Our participation in cash management pools exposes us to CNH Industrial credit risk, which, in the event of a bankruptcy or insolvency of certain CNH Industrial entities, could render us unable to recover our deposits and in turn materially and adversely affect our financial position and results of operations.

We participate in a group‑wide cash management system with other companies within CNH Industrial, including CNH Industrial America and CNH Industrial Canada Ltd. Our positive cash deposits with CNH Industrial, if any, are either invested by CNH Industrial treasury subsidiaries in highly rated, highly liquid money market instruments or bank deposits, or may be applied by CNH Industrial treasury subsidiaries to meet the financial needs of other CNH Industrial entities and vice versa. While we believe participation in such CNH Industrial treasury subsidiaries’ cash management pools provides us with financial benefits, it exposes us to CNH Industrial credit risk.

In the event of a bankruptcy or insolvency of CNHI (or any other CNH Industrial entity, including CNH Industrial America and CNH Industrial Canada Ltd., in the jurisdictions with set off agreements) or in the event of a bankruptcy or insolvency of the CNH Industrial entity in whose name the deposit is pooled, we may be unable to secure the return of such funds to the extent they belong to us, and we may be viewed as a creditor of such CNH Industrial entity with respect to such deposits. It is possible that our claims as a creditor could be subordinated to the rights of third‑party creditors in certain situations. If we are not able to recover our deposits, our financial position and results of operations may be materially and adversely impacted.

Our financial statements may be adversely impacted by changes in accounting standards.

Our financial statements are prepared in accordance with U.S. GAAP, which are periodically revised. At times, we are required to adopt new or revised accounting standards issued by recognized bodies. It is possible such changes could have a material adverse effect on our reported results of operations or financial position. See “Note 2: Summary of Significant Accounting Policies” to our audited consolidated financial statements for the year ended December 31, 2018 for additional information on the adoption of new accounting guidance.

A cybersecurity breach could interfere with our operations, compromise confidential information, negatively impact our corporate reputation and expose us to liability.

We rely upon information technology systems and networks, some of which are managed by third parties, in connection with a variety of our business activities. We use information technology systems to record, process and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements. Additionally, we collect and store sensitive data, including intellectual property, proprietary business information and the proprietary information of CNH Industrial North America’s dealers, as well as personally identifiable information of our dealers, customers and our employees, in data centers and on information technology networks. Operating these information technology systems and networks,

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and processing and maintaining this data, in a secure manner, are critical to our business operations and strategy. Increased information technology security threats and more sophisticated computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data.

While we actively manage information technology security risks within our control through security measures, business continuity plans and employee training around phishing and other cyber risks, there can be no assurance that such actions will be sufficient to mitigate all potential risks to our systems, networks, data and products. Furthermore, third parties on which we rely, including internet, mobile communications technology and cloud service providers, could be sources of information security risk to us.

A failure or breach in security, whether of our systems and networks or those of third parties on which we rely, could expose us and our customers and dealers to risks of misuse of information or systems, the compromising of confidential information, loss of financial resources, manipulation and destruction of data and operations disruptions, which in turn could adversely affect our reputation, competitive position, businesses and results of operations. Security breaches could also result in litigation, regulatory action, unauthorized release of confidential or otherwise protected information and corruption of data, as well as remediation costs and higher operational and other costs of implementing further data protection measures. In addition, as security threats continue to evolve we may need to invest additional resources to protect the security of our systems and data. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilities relating to a cybersecurity attack.

Changes in privacy laws could disrupt our business. We are also subject to various laws regarding privacy and the protection of personal information.

The regulatory framework for privacy and data security issues is rapidly evolving and is likely to remain uncertain for the foreseeable future. We may be required to incur significant costs to comply with privacy and data security laws, rules and regulations. Any inability to adequately address privacy and security concerns or comply with applicable privacy and data security laws, rules and regulations could have an adverse effect on our business prospects, results of operations and/or financial position.

Item 1B.  Unresolved Staff Comments

None.

Item 2.  Properties

Our principal executive offices are located at 5729 Washington Avenue, Racine, WI 53406. We maintain the following offices:

	Primary
Location	Function	Tenant	Ownership Status
Burlington, ON	Office	CNH Industrial Capital Canada Ltd.	Leased
New Holland, PA	Office	New Holland Credit Company, LLC	Leased from New Holland North America, Inc.
Racine, WI	Office	CNH Industrial Capital LLC	Leased from CNH Industrial America

Item 3.  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 4.  Mine Safety Disclosures

Not applicable.

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PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

All of CNH Industrial Capital LLC’s limited liability company interests are owned by CNH Industrial America, which is indirectly wholly‑owned by CNHI. There is currently no established trading market for CNH Industrial Capital LLC’s limited liability company interests. CNH Industrial Capital LLC paid cash dividends of $130 million, $285 million and $290 million to CNH Industrial America in 2018, 2017 and 2016, respectively.

Item 6.  Selected Financial Data

Omitted pursuant to General Instruction I of Form 10‑K.

Item 7.  Managements’ 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 year ended December 31, 2018, CNH Industrial’s net sales of agricultural equipment and net sales of construction equipment generated in NAFTA were $4.0 billion and $1.5 billion, respectively, representing increases of 13% and 17% from the same period in 2017, respectively.

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 may affect the majority of our portfolio.

Net income was $156.8 million for the year ended December 31, 2018, compared to $250.5 million for the year ended December 31, 2017. The decrease in net income was primarily due to a one-time, positive income tax adjustment in the fourth quarter of 2017 with the enactment of the Tax Cuts and Jobs Act (“U.S. Tax Act”) and a reduced net interest margin, partially offset by lower depreciation of equipment on operating lease, and decreased provisions for credit losses. The receivables balance greater than 30 days past due as a percentage of managed receivables was 0.6%, 0.8% and 0.7% at December 31, 2018, 2017 and 2016, respectively.

Macroeconomic issues for us include the uncertainty of governmental actions in respect to monetary, fiscal and legislative policies, the global economic recovery, 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.

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Results of Operations

Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Revenues

Revenues for the years ended December 31, 2018 and 2017 were as follows (dollars in thousands):

	2018		2017		$ Change		% Change
Interest income on retail notes and finance leases	$	201,269	$	201,533	$	(264)	(0.1)	%
Interest income on wholesale notes		66,899		65,721		1,178	1.8
Interest and other income from affiliates		345,933		398,258		(52,325)	(13.1)
Rental income on operating leases		241,582		251,609		(10,027)	(4.0)
Other income		22,671		21,811		860	3.9
Total revenues	$	878,354	$	938,932	$	(60,578)	(6.5)	%

Revenues totaled $878.4 million for the year ended December 31, 2018 compared to $938.9 million for the year ended December 31, 2017. A lower average managed portfolio drove the year-over-year decrease in total revenues. The average yield for the managed portfolio was 7.3% for the year ended December 31, 2018, compared to 7.4% for the year ended December 31, 2017.

Interest income on retail notes and finance leases for the year ended December 31, 2018 was $201.3 million, flat compared to the year ended December 31, 2017, as the unfavorable impact from lower average earning assets was offset by a favorable impact from higher interest rates.

Interest income on wholesale notes for the year ended December 31, 2018 was $66.9 million, representing an increase of $1.2 million from the year ended December 31, 2017. The increase was primarily due to a $2.0 million favorable impact from higher average earning assets, partially offset by a $0.8 million unfavorable impact from lower interest rates.

Interest and other income from affiliates for the year ended December 31, 2018 was $345.9 million, compared to $398.3 million for the year ended December 31, 2017. Compensation from CNH Industrial North America for retail low‑rate financing programs and interest waiver programs offered to customers was $149.4 million and $157.5 million for the years ended December 31, 2018 and 2017, respectively. The decrease was primarily due to lower average retail receivables. For the year ended December 31, 2018, compensation from CNH Industrial North America for wholesale marketing programs was $123.6 million compared to $166.4 million for the prior year. The decrease was primarily due to pricing initiatives. For select operating leases, compensation from CNH Industrial North America for the difference between market rental rates and the amounts paid by customers was $60.8 million and $69.0 million for the years ended December 31, 2018 and 2017, respectively. The decrease was primarily due to lower average earning assets. Also included in interest and other income from affiliates was $10.9 million of wholesale factoring income for the year ended December 31, 2018 compared to $5.2 million for the year ended December 31, 2017.

Rental income on operating leases for the year ended December 31, 2018 was $241.6 million, representing a decrease of $10.0 million from the year ended December 31, 2017. The decrease was primarily due to a $15.5 million unfavorable impact from lower average earning assets, partially offset by a $5.5 million favorable impact from higher interest rates.

Other income for the year ended December 31, 2018 was $22.7 million, representing an increase of $0.9 million from the year ended December 31, 2017.

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Expenses

Expenses for the years ended December 31, 2018 and 2017 were as follows (dollars in thousands):

	2018		2017		$ Change		% Change
Total interest expense	$	325,280	$	322,570	$	2,710	0.8	%
Fees charged by affiliates		47,475		46,431		1,044	2.2
Provision for credit losses		31,699		40,898		(9,199)	(22.5)
Depreciation of equipment on operating leases		231,805		280,765		(48,960)	(17.4)
Other expenses		43,778		44,827		(1,049)	(2.3)
Total expenses	$	680,037	$	735,491	$	(55,454)	(7.5)	%

Interest expense totaled $325.3 million for the year ended December 31, 2018 compared to $322.6 million for the year ended December 31, 2017. The increase was primarily due to a $23.9 million unfavorable impact from higher average interest rates, partially offset by a $21.2 million favorable impact from lower average total debt. The average debt cost was 3.0% for the year ended December 31, 2018 compared to 2.8% for the year ended December 31, 2017.

The provision for credit losses was $31.7 million for the year ended December 31, 2018 compared to a provision of $40.9 million for the year ended December 31, 2017. The decrease in 2018 was primarily due to lower retail losses.

Depreciation of equipment on operating leases decreased by $49.0 million for the year ended December 31, 2018 compared to the year ended December 31, 2017, primarily due to updated depreciation estimates and a smaller operating lease portfolio.

Other expenses decreased by $1.0 million for the year ended December 31, 2018 compared to the prior year, primarily due to lower losses on equipment held for sale and foreign exchange.

The effective tax rate for the year ended December 31, 2018 was a provision of 20.9%, compared to a benefit of 23.1% for the year ended December 31, 2017, reflecting the impact from the enactment of the U.S. Tax Act.

Receivables and Equipment on Operating Leases Originated and Held

Receivables and equipment on operating lease originations for the years ended December 31, 2018 and 2017 were as follows (dollars in thousands):

	2018		2017		$ Change		% Change
Retail	$	2,894,344	$	2,754,309	$	140,035	5.1	%
Wholesale		8,730,459		7,783,324		947,135	12.2
Wholesale factoring		177,758		376,946		(199,188)	(52.8)
Equipment on operating leases		680,266		635,819		44,447	7.0
Total originations	$	12,482,827	$	11,550,398	$	932,429	8.1	%

The year-over-year increase in retail, wholesale and equipment on operating lease originations was primarily due to an increase in unit sales of CNH Industrial North America agricultural equipment.

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

	2018		2017		$ Change		% Change
Retail	$	6,441,054	$	6,868,886	$	(427,832)	(6.2)	%
Wholesale		3,584,284		3,396,021		188,263	5.5
Wholesale factoring		—		235,834		(235,834)	(100.0)
Equipment on operating leases		1,724,217		1,781,489		(57,272)	(3.2)
Total receivables and equipment on operating leases	$	11,749,555	$	12,282,230	$	(532,675)	(4.3)	%

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The total retail receivables balance greater than 30 days past due as a percentage of the retail receivables was 0.8% and 1.1% at December 31, 2018 and 2017, respectively. The total wholesale receivables balance greater than 30 days past due as a percentage of the wholesale receivables was not significant at December 31, 2018 or 2017. Total retail receivables on nonaccrual status, which represent receivables for which we have ceased accruing finance income, were $28.5 million and $43.5 million at December 31, 2018 and 2017, respectively. Total wholesale receivables on nonaccrual status were $23.0 million and $43.5 million at December 31, 2018 and 2017, respectively.

Total receivable write‑off amounts and recoveries, by product, for the years ended December 31, 2018 and 2017 were as follows (dollars in thousands):

	2018		2017
Write-offs:
Retail	$	39,375	$	46,460
Wholesale		1,567		2,374
Total write-offs		40,942		48,834
Recoveries:
Retail		(4,702)		(4,045)
Wholesale		(71)		(20)
Total recoveries		(4,773)		(4,065)
Write-offs, net of recoveries:
Retail		34,673		42,415
Wholesale		1,496		2,354
Total write-offs, net of recoveries	$	36,169	$	44,769

Our allowance for credit losses on all receivables financed totaled $74.4 million at December 31, 2018 and $79.2 million at December 31, 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 December 31, 2018.

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016

Revenues

Revenues for the years ended December 31, 2017 and 2016 were as follows (dollars in thousands):

	2017		2016		$ Change		% Change
Interest income on retail notes and finance leases	$	201,533	$	211,506	$	(9,973)	(4.7)	%
Interest income on wholesale notes		65,721		68,910		(3,189)	(4.6)
Interest and other income from affiliates		398,258		398,372		(114)	(0.0)
Rental income on operating leases		251,609		243,531		8,078	3.3
Other income		21,811		24,402		(2,591)	(10.6)
Total revenues	$	938,932	$	946,721	$	(7,789)	(0.8)	%

Revenues totaled $938.9 million for the year ended December 31, 2017 compared to $946.7 million for the year ended December 31, 2016. A lower average managed portfolio drove the year-over-year decrease in total revenues. The average yield for the managed portfolio was 7.4% for the year ended December 31, 2017, compared to 7.0% for the year ended December 31, 2016.

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Interest income on retail notes and finance leases for the year ended December 31, 2017 was $201.5 million, representing a decrease of $10.0 million from the year ended December 31, 2016. The decrease was primarily due to a $17.1 million unfavorable impact from lower average earning assets, partially offset by a $7.1 million favorable impact from higher interest rates.

Interest income on wholesale notes for the year ended December 31, 2017 was $65.7 million, representing a decrease of $3.2 million from the year ended December 31, 2016. The decrease was primarily due to a $7.9 million unfavorable impact from lower average earning assets, partially offset by a $4.7 million favorable impact from higher interest rates.

Interest and other income from affiliates for the year ended December 31, 2017 was $398.3 million, flat compared to the prior year. Compensation from CNH Industrial North America for retail low‑rate financing programs and interest waiver programs offered to customers was $157.5 million and $170.4 million for the years ended December 31, 2017 and 2016, respectively. The decrease was primarily due to lower average retail receivables. For the year ended December 31, 2017, compensation from CNH Industrial North America for wholesale marketing programs was $166.4 million compared to $156.7 million for the prior year. The increase was primarily due to the mix of programs and products. For select operating leases, compensation from CNH Industrial North America for the difference between market rental rates and the amounts paid by customers was $69.0 million and $70.1 million for the years ended December 31, 2017 and 2016, respectively.

Rental income on operating leases for the year ended December 31, 2017 was $251.6 million, representing an increase of $8.1 million from the year ended December 31, 2016. The increase was primarily due to higher interest rates.

Other income for the year ended December 31, 2017 was $21.8 million, representing a decrease of $2.6 million from the year ended December 31, 2016.

Expenses

Expenses for the years ended December 31, 2017 and 2016 were as follows (dollars in thousands):

	2017		2016		$ Change		% Change
Total interest expense	$	322,570	$	305,099	$	17,471	5.7	%
Fees charged by affiliates		46,431		45,225		1,206	2.7
Provision for credit losses		40,898		30,846		10,052	32.6
Depreciation of equipment on operating leases		280,765		247,438		33,327	13.5
Other expenses		44,827		36,297		8,530	23.5
Total expenses	$	735,491	$	664,905	$	70,586	10.6	%

Interest expense totaled $322.6 million for the year ended December 31, 2017 compared to $305.1 million for the year ended December 31, 2016. The increase was primarily due to a $37.1 million unfavorable impact from higher average interest rates, partially offset by a $19.6 million favorable impact from lower average total debt. The average debt cost was 2.8% for the year ended December 31, 2017 compared to 2.5% for the year ended December 31, 2016.

The provision for credit losses was $40.9 million for the year ended December 31, 2017 compared to a provision of $30.8 million for the year ended December 31, 2016. The increase in 2017 was primarily due to higher losses.

Depreciation of equipment on operating leases increased by $33.3 million for the year ended December 31, 2017 compared to the year ended December 31, 2016, primarily due to updated depreciation estimates.

Other expenses increased by $8.5 million for the year ended December 31, 2017 compared to the prior year, primarily due to higher losses on equipment held for sale and foreign exchange.

The effective tax rate for the year ended December 31, 2017 was a benefit of 23.1%, compared to a provision of 33.5% for the year ended December 31, 2016, reflecting the impact from the enactment of the U.S. Tax Act.

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Receivables and Equipment on Operating Leases Originated and Held

Receivables and equipment on operating lease originations for the years ended December 31, 2017 and 2016 were as follows (dollars in thousands):

	2017		2016		$ Change		% Change
Retail	$	2,754,309	$	2,934,531	$	(180,222)	(6.1)	%
Wholesale		7,783,324		7,869,440		(86,116)	(1.1)
Wholesale factoring		376,946		—		376,946	—
Equipment on operating leases		635,819		723,383		(87,564)	(12.1)
Total originations	$	11,550,398	$	11,527,354	$	23,044	0.2	%

The year-over-year decrease in retail, wholesale and equipment on operating lease originations was primarily due to a decrease in unit sales of CNH Industrial North America agricultural equipment.

Total receivables and equipment on operating leases held as of December 31, 2017 and 2016 were as follows (dollars in thousands):

	2017		2016		$ Change		% Change
Retail	$	6,868,886	$	7,398,017	$	(529,131)	(7.2)	%
Wholesale		3,396,021		3,527,709		(131,688)	(3.7)
Wholesale factoring		235,834		—		235,834	—
Equipment on operating leases		1,781,489		1,858,443		(76,954)	(4.1)
Total receivables and equipment on operating leases	$	12,282,230	$	12,784,169	$	(501,939)	(3.9)	%

The total retail receivables balance greater than 30 days past due as a percentage of the retail receivables was 1.1% and 1.0% at December 31, 2017 and 2016, respectively. The total wholesale receivables balance greater than 30 days past due as a percentage of the wholesale receivables was not significant at December 31, 2017 or 2016. Total retail receivables on nonaccrual status, which represent receivables for which we have ceased accruing finance income, were $43.5 million and $50.3 million at December 31, 2017 and 2016, respectively. Total wholesale receivables on nonaccrual status were $43.5 million and $43.4 million at December 31, 2017 and 2016, respectively.

Total receivable write‑offs and recoveries, by product, for the years ended December 31, 2017 and 2016 were as follows (dollars in thousands):

	2017		2016
Write-offs:
Retail	$	46,460	$	42,949
Wholesale		2,374		1
Total write-offs		48,834		42,950
Recoveries:
Retail		(4,045)		(3,228)
Wholesale		(20)		(522)
Total recoveries		(4,065)		(3,750)
Write-offs, net of recoveries:
Retail		42,415		39,721
Wholesale		2,354		(521)
Total write-offs, net of recoveries	$	44,769	$	39,200

Our allowance for credit losses on all receivables financed totaled $79.2 million at December 31, 2017 and $84.9 million at December 31, 2016.

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

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value and credit 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 December 31, 2017.

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 December 31, 2018, our outstanding commercial paper totaled $389 million and our outstanding unsecured senior notes totaled $3.0 billion. We expect continued changes to our funding profile, with less reliance on the securitization market.

Cash Flows

For the years ended December 31, 2018, 2017 and 2016, our cash flows were as follows (dollars in thousands):

	2018		2017		2016
Cash flows from (used in):
Operating activities	$	362,881	$	610,453	$	685,070
Investing activities		52,943		289,723		380,850
Financing activities		(491,511)		(901,710)		(1,286,697)
Net cash increase (decrease)	$	(75,687)	$	(1,534)	$	(220,777)

Operating activities in the year ended December 31, 2018 generated cash of $363 million, resulting primarily from net income of $157 million, adjusted by depreciation and amortization of $234 million, provision for credit losses of $32 million, and $28 million in deferred income tax expense, partially offset by changes in working capital of $88 million. The decrease in cash provided by operating activities in 2018 compared to 2017 was primarily due to $205 million related to changes in working capital, a $94 million decrease in net income, a $49 million decrease in depreciation and amortization expense, and a $9 million decrease in provision for credit losses, partially offset by a $109 million change in deferred income tax. Operating activities in 2017 generated cash of $610 million, resulting primarily from net income of $250 million, adjusted by depreciation and amortization of $283 million, cash from changes in working capital of $117 million, and provision for credit losses of $41 million, partially offset by $81 million in deferred income tax benefit. The decrease in cash provided by operating activities in 2017 compared to 2016 was primarily due to a $119 million increase in net deferred income tax benefit and a $62 million reduction in cash from changes in working capital, partially offset by a $63 million increase in net income, a $33 million increase in depreciation and amortization expense, and $10 million increase in provision for credit losses. Operating activities in 2016 generated cash of $685 million, resulting primarily from net income of $188 million, adjusted by depreciation and amortization of $249 million, cash from changes in working capital of $179 million, deferred income tax expense of $38 million and provision for credit losses of $31 million.

Investing activities in the year ended December 31, 2018 generated cash of $53 million, resulting primarily from a net reduction in receivables of $270 million, partially offset by $212 million in net expenditures for equipment on operating leases and $5 million in net expenditures for property, equipment and software. The decrease in cash provided by investing activities in 2018 compared to 2017 was primarily due to a $221 million lower net reduction in receivables, a $12 million increase in net expenditures for equipment on operating leases and a $4 million increase in net expenditures on property, equipment and software. Investing activities in 2017 generated cash of $290 million,

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resulting primarily from a net reduction in receivables of $491 million, partially offset by $200 million in net expenditures for equipment on operating leases. The decrease in cash provided in investing activities in 2017 compared to 2016 was primarily due to a $252 million lower net reduction in receivables, partially offset by a $162 million reduction in net expenditures for equipment on operating leases. Investing activities in 2016 generated cash of $381 million, resulting primarily from a net collection of receivables of $743 million, partially offset by $361 million in net expenditures for equipment on operating leases and $1 million in net expenditures for property, equipment and software.

Financing activities in the year ended December 31, 2018 used cash of $492 million, resulting primarily from net cash paid on long-term debt and affiliated debt of $390 million and $154 million, respectively, and $130 million in dividends paid to CNH Industrial America, partially offset by net cash received on short-term borrowings of $182 million. The decrease in cash used in financing activities in 2018 compared to 2017 was primarily due to a decrease in net cash paid on long-term debt of $825 million and lower dividends of $155 million paid to CNH Industrial America, partially offset by increases in net cash paid on affiliated debt and short-term borrowings of $443 million and $127 million, respectively. Financing activities in 2017 used cash of $902 million, resulting primarily from net cash paid on long‑term debt of $1,215 million and $285 million in dividends paid to CNH Industrial America, partially offset by net cash received on short-term borrowings and affiliated debt of $309 million and $289 million, respectively. The decrease in cash used in financing activities in 2017 compared to 2016 was primarily due to decreases in net cash paid on short-term borrowings and affiliated debt of $645 million and $179 million, respectively, and lower dividends of $5 million paid to CNH Industrial America, partially offset by a $444 million increase in net cash paid on long-term debt. Financing activities in 2016 used cash of $1,287 million, resulting primarily from net cash paid on long-term debt and short-term borrowings of $771 million and $336 million, respectively, and $290 million dividends paid to CNH Industrial America, partially offset by $110 million in net cash received on affiliated debt.

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 approximately $4.8 billion of public and private asset‑backed securities outstanding in both the U.S. and Canada as of December 31, 2018. 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 December 31, 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 December 31, 2018, approximately $0.9 billion of funding was available for use under these facilities.

Unsecured Facilities and Debt

As of December 31, 2018, we had fully-drawn uncommitted credit lines totaling $195 million with final maturities in June 2019 and July 2020. 

In addition, committed unsecured facilities with banks as of December 31, 2018 totaled $826 million. These credit facilities, which are eligible for renewal at various future dates, are used primarily for working capital and other general corporate purposes. As of December 31, 2018, we had $330 million outstanding under these credit facilities. Included in the remaining available credit commitments is $389 million maintained primarily to provide backup liquidity for commercial paper borrowings.

In 2017, we established a commercial paper program to issue short-term, unsecured, unsubordinated commercial paper notes on a private placement basis. As of December 31, 2018, the aggregate principal amount of notes outstanding was $389 million.

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As of December 31, 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
Hedging effects, discounts and unamortized issuance costs		(10,985)
Total	$	2,989,015

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

On April 16, 2018, we repaid $600 million of our 3.625% unsecured notes due 2018.

On August 14, 2018, we completed an offering of $500 million 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 those for CNHI. Those ratings as of December 31, 2018 were as follows:

	Senior Long-Term	Short-Term	Outlook
S&P Global Ratings	BBB	A-2	Stable
Fitch Ratings	BBB-	F3	Stable
Moody's Investors Service	Baa3	—	Stable

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 $276 million and $446 million as of December 31, 2018 and 2017, respectively.

Equity Position

Our equity position also supports our ability to access various funding sources. Our stockholder’s equity at December 31, 2018 and 2017 was $1.4 billion. During 2018, CNH Industrial Capital LLC paid cash dividends of $130 million to CNH Industrial America.

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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.

Debt

Our consolidated debt as of December 31, 2018 and 2017 is set forth in the table below (dollars in thousands):

	2018		2017
Short-term debt (including current maturities of long-term debt)	$	4,324,292	$	4,617,464
Long-term debt		6,259,839		6,332,763
Total third-party debt		10,584,131		10,950,227
Affiliated debt		276,271		445,802
Total debt	$	10,860,402	$	11,396,029

Cash, Cash Equivalents and Restricted Cash

The following table shows cash and cash equivalents and restricted cash as of December 31, 2018 and 2017 (dollars in thousands):

	2018		2017
Cash and cash equivalents	$	160,328	$	226,946
Restricted cash		639,543		648,612
Total cash	$	799,871		875,558

Cash and cash equivalents and restricted cash are comprised of highly liquid investments with short‑term original maturities. See “Liquidity and Capital Resources - Cash Flows” for a further discussion of the change in our cash position.

Restricted cash is principally held by depository banks in order to comply with securitization contractual agreements, such as providing cash reserve accounts for the benefit of securitization investors.

Off‑Balance Sheet Arrangements

For additional information, see “Note 13: Commitments and Contingencies” to our consolidated financial statements for the year ended December 31, 2018.

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Contractual Obligations

The following table sets forth the aggregate amounts of our contractual obligations and commitments as of December 31, 2018 with definitive payment terms that will require significant cash outlays in the future (dollars in thousands).

	Payments Due by Period
			Less than						After
	Total		1 year		1 - 3 years		4 - 5 years		5 years
Short-term and long-term debt (1)	$	10,584,131	$	4,324,292	$	4,392,217	$	1,328,572	$	539,050
Affiliated debt		276,271		276,271		—		—		—
Interest on fixed rate debt		939,258		250,836		445,661		221,761		21,000
Interest on floating rate debt (2)		357,148		82,679		149,776		122,983		1,710
Operating leases (3)		10,000		2,000		6,000		2,000		—
Total contractual obligations	$	12,166,808	$	4,936,078	$	4,993,654	$	1,675,316	$	561,760

(1) Short‑term debt shown as less than one year includes current maturities of long‑term debt of $2,511,226.

(2) The interest funding requirements are based on the year‑end 2018 interest rates.

(3) Minimum rental commitments.

See “Liquidity and Capital Resources - Debt” for information relating to our consolidated debt as of December 31, 2018.

Other Data

	As of or for the
	Year Ended December 31,
	2018			2017			2016
	(Dollars in thousands)
Total managed receivables	$	10,025,338		$	10,500,741		$	10,925,726
Operating lease equipment		1,724,217			1,781,489			1,858,443
Total managed portfolio	$	11,749,555		$	12,282,230		$	12,784,169
Delinquency (1)		0.57	%		0.82	%		0.72	%
Average managed receivables	$	10,051,880		$	10,591,308		$	11,365,535
Net credit loss (2)		0.36	%		0.42	%		0.34	%
Profitability:
Average receivable yields (3) (5)		5.49	%		5.63	%		5.35	%
Average debt cost		3.03	%		2.80	%		2.48	%
Return on average managed portfolio (4) (5)		1.33	%		2.02	%		1.42	%
Asset Quality:
Allowance for credit losses/total receivables (5)		0.74	%		0.75	%		0.78	%

(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) Yield on retail and wholesale receivables.

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

(5) 2017 and/or 2016 figures have been recast following the retrospective adoption on January 1, 2018 of ASU 2014-09.

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Cautionary Note Regarding Forward‑Looking Statements

All statements other than statements of historical fact contained in this annual report, 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.

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 are based upon assumptions relating to the factors described in this annual report, 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. Forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update or revise publicly our 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” of this annual report.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses during the reported periods. Actual results may differ from these estimates under different assumptions and conditions. Our critical accounting policies and estimates, which require management assumptions and complex judgments, are summarized below.

Allowance for Credit Losses

The allowance for credit losses is our estimate of losses for receivables owned by us 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 we have determined it is probable that we will not collect all the principal and interest 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.

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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.

The total allowance for credit losses at December 31, 2018 and 2017 was $74.4 million and $79.2 million, respectively. Management’s ongoing evaluation of the adequacy of the allowance for credit losses takes into consideration historical loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of underlying collateral and current economic conditions.

While management believes it has exercised prudent judgment and applied reasonable assumptions, there can be no assurance that, in the future, changes in economic conditions or other factors will not cause changes in the financial condition of our customers. If the financial condition of some of our customers deteriorates, the timing and level of payments received could be impacted and, therefore, could result in an increase in losses on the current portfolio.

Equipment on Operating Lease Residual Values

We purchase equipment from our dealers and other independent third parties and lease such equipment to retail customers under operating leases. Income from these operating leases is recognized over the term of the lease. Our decision on whether or not to offer lease financing to customers is based, in part, upon estimated residual values of the leased equipment, which are estimated at the lease inception date and periodically updated. Realization of the residual values, a component in the profitability of a lease transaction, is dependent on our ability to market the equipment at lease termination under the then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Although realization is not assured, management believes that the estimated residual values are realizable.

Total operating lease residual values at December 31, 2018 and 2017 were $1.4 billion.

Estimates used in determining end‑of‑lease market values for equipment on operating leases significantly impact the amount and timing of depreciation expense. If future values for this equipment were to decrease 10% from our present estimates, the total impact would be to increase our depreciation expense on equipment on operating leases by approximately $135.5 million. This amount would be charged to depreciation expense during the remaining lease terms such that the net amount of equipment on operating leases at the end of the lease terms would be equal to the revised residual values. Initial lease terms generally range from two to five years.

New Accounting Pronouncements Not Yet Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes ASC 840, Leases (“ASC 840”) 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 original transition guidance in ASU 2016-02 required a modified retrospective approach. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), an amendment to ASU 2016-02, which provides entities with an additional transition method to adopt the new leases standard. Under

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this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. If the transition option in ASU 2018-11 is elected, reporting for the comparative periods presented in the financial statements in which the entity adopts the new leases standard will continue to be in accordance with ASC 840.

We will adopt the new standard effective January 1, 2019, using the modified retrospective approach which requires us to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, without recasting prior periods. We will elect certain practical expedients upon transition, including: not to reassess under the new guidance its prior conclusions about lease identification, lease classification and initial direct costs; and, those provided for short-term leases. We do not believe the adoption of the standard will have a material impact on our 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. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”), which amended ASC 326. 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. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) and in October 2018, the FASB issued ASU No. 2018-16, Inclusion of the Secured Overnight Financial Rate (SOFR) Overnight Index Swap Rate (OIS) as a Benchmark Interest Rate for Hedge Accounting Purposes (“ASU 2018-16”), which together amend 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. We do not believe the adoption of this standard will have a material impact on our 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 Act”). Included in the provisions of U.S. Tax Act 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. We do not believe the adoption of this standard will have a material impact on our 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. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

28

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. We are currently evaluating the impact the adoption of this standard will have on our 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, we plan to adopt the new interim disclosure requirement in our Form 10-Q for the three months ended March 31, 2019. We are currently evaluating the impact compliance with this rule will have on our consolidated financial statements.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a variety of market risks, primarily changes in interest rates. We monitor our exposure to these risks, and manage the underlying economic exposures on transactions using financial instruments such as forward contracts, interest rate swaps, interest rate caps and forward starting swaps. We do not hold or issue derivatives or other financial instruments for speculative purposes or to hedge translation risks. See “Note 10: Financial Instruments” in the notes to our consolidated financial statements for the year ended December 31, 2018, for a description of our risk management strategy and the methods and assumptions used to determine the fair values of financial instruments.

Interest Rate Risk

We are exposed to market risk from changes in interest rates. We monitor our exposure to this risk and manage the underlying exposure both through the matching of financial assets and liabilities and through the use of financial instruments, including swaps, caps, and forward starting swaps for the net exposure. The instruments aim to stabilize funding costs by managing the exposure created by the differing maturities and interest rate structures of our financial assets and liabilities. We do not hold or issue derivative or other financial instruments for speculative purposes.

We monitor interest rate risk to achieve a predetermined level of matching between the interest rate structure of our financial assets and liabilities. Fixed‑rate financial instruments, including receivables, debt and other investments, are segregated from floating‑rate instruments in evaluating the potential impact of changes in applicable interest rates. A sensitivity analysis was performed to compute the impact on fair value which would be caused by a hypothetical 10% change in the interest rates used to discount each category of financial assets and liabilities. The net impact on the fair value of the financial instruments and derivative instruments held as of December 31, 2018 and 2017, resulting from a hypothetical 10% change in interest rates, would be approximately $12.6 million and $30.2 million, respectively. For the sensitivity analysis the financial instruments are grouped according to the currency in which financial assets and liabilities are denominated and the applicable interest rate index. As a result, our interest rate risk sensitivity model may overstate the impact of interest rate fluctuations for such financial instruments, as consistently unfavorable movements of all interest rates are unlikely.

Item 8.  Financial Statements and Supplementary Data

Our consolidated financial statements are included in this annual report beginning on page F‑1.

29

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.  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 December 31, 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 December 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013). Based on this assessment, management believes that, as of December 31, 2018, our internal control over financial reporting was effective.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this annual report.

Item 9B.  Other Information

None.

30

PART III

Item 10.  Directors, Executive Officers and Corporate Governance

Omitted pursuant to General Instruction I of Form 10‑K.

Item 11.  Executive Compensation

Omitted pursuant to General Instruction I of Form 10‑K.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

Omitted pursuant to General Instruction I of Form 10‑K.

Item 13.  Certain Relationships and Related Transactions, and Director Independence

Omitted pursuant to General Instruction I of Form 10‑K.

Item 14.  Principal Accounting Fees and Services

For the years ended December 31, 2018 and 2017, Ernst & Young LLP, the member firms of Ernst & Young and their respective affiliates (collectively, the “Ernst & Young Entities”) were appointed to serve as our independent registered public accounting firm.

We incurred the following fees for professional services performed by the Ernst & Young Entities for the years ended December 31, 2018 and 2017, respectively:

	2018		2017
Audit fees	$	784,400	$	770,300
Audit-related fees		569,120		584,000
Total	$	1,353,520	$	1,354,300

“Audit Fees” are the aggregate fees billed for the audit of our consolidated annual financial statements, reviews of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements. “Audit‑related fees” are fees charged for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” This category is comprised of fees for agreed‑upon procedure engagements and other attestation services subject to regulatory and funding requirements. There were no fees billed for professional services in connection with tax compliance, tax advice, tax planning or other fees not included above for the years ended December 31, 2018 and 2017.

Audit Committee’s Pre‑Approval Policies and Procedures

As a wholly‑owned subsidiary of CNHI, audit and non‑audit services provided by our independent registered public accounting firm are subject to CNHI’s Audit Committee pre‑approval policies and procedures. During the year ended December 31, 2018, all audit and non‑audit services provided by our independent registered public accounting firm were pre‑approved in accordance with such policies and procedures.

31

PART IV

Item 15.  Exhibits and Financial Statement Schedules

The following documents are filed as part of this report:

1.Financial Statements

2.Financial Statement Schedules

See table of contents to financial statement and schedules immediately preceding the financial statements and schedules to the consolidated financial statements.

3.Exhibits.

Exhibit	Description
3.1	Certificate of Formation of CNH Industrial Capital LLC dated December 31, 2004, as amended by the Certificate of Amendment to the Certificate of Formation of CNH Industrial Capital LLC dated February 10, 2014. (Previously filed as Exhibit 3.1 to the annual report on Form 10‑K of the registrant for the year ended December 31, 2015 (File No. 333‑182411) and incorporated herein by reference).
3.2	Amended and Restated Limited Liability Company Agreement of CNH Industrial Capital LLC, amended on July 7, 2011. (Previously filed as Exhibit 3.2 to the registration statement on Form S‑4 of the registrant (File No. 333‑182411) and incorporated herein by reference).
4.1	Indenture, dated as of June 30, 2014, by and among CNH Industrial Capital LLC, as issuer, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee, regarding 3.375% Notes due 2019. (Previously filed as Exhibit 4.1 to the current report on Form 8-K of the registrant on June 30, 2014 (File No. 333‑182411) and incorporated herein by reference).
4.2	Indenture, dated as of September 11, 2015, by and among CNH Industrial Capital LLC, as issuer, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee. (Previously filed as Exhibit 4.9 to the registration statement on Form F-3 of the registrant (File No. 333‑206891-03) and incorporated herein by reference).
4.3	Officers’ Certificate, dated as of November 6, 2015, (including Form of 4.375% Note due 2020 included therein). (Previously filed as Exhibit 4.1 to the current report on Form 8‑K of the registrant on November 6, 2015 (File No. 000‑55510) and incorporated herein by reference).
4.4	Officers’ Certificate, dated as of March 17, 2016, (including Form of 4.875% Note due 2021 included therein). (Previously filed as Exhibit 4.1 to the current report on Form 8‑K of the registrant on March 17, 2016 (File No. 000‑55510) and incorporated herein by reference).
4.5	Officers’ Certificate, dated as of October 21, 2016 (including Form of 3.875% Note due 2021 included therein). (Previously filed as Exhibit 4.1 to the current report on Form 8‑K of the registrant on October 21, 2016 (File No. 000‑55510) and incorporated herein by reference).
4.6	Officers’ Certificate, dated as of April 10, 2017 (including Form of 4.375% Note due 2022 included therein). (Previously filed as Exhibit 4.1 to the current report on Form 8-K of the registrant on April 10, 2017 (File No. 000-55510) and incorporated herein by reference).
4.7	Officers’ Certificate, dated as of August 14, 2018 (including Form of 4.200% Note due 2024 included therein). (Previously filed as Exhibit 4.1 to the current report on Form 8-K of the registrant on August 14, 2018 (File No. 000-55510) and incorporated herein by reference).
10.1	Support Agreement, dated as of November 4, 2011, by and between CNH Industrial Capital LLC and CNH Global N.V. (Previously filed as Exhibit 10.1 to the registration statement on Form S‑4 of the registrant (File No. 333‑182411) and incorporated herein by reference).

32

Exhibit	Description
10.2	Fourth Amended and Restated Wholesale and Parts CNHi Capital Financing Agreement, dated December 31, 2017, by and between CNH Industrial America LLC and CNH Industrial Capital America LLC.
10.3	Second Amended and Restated Wholesale and Parts CNHi Capital Financing Agreement, dated December 31, 2017, by and between CNH Industrial Canada Ltd. and CNH Industrial Capital Canada Ltd.
10.4	Supplemental Support Agreement, dated as of September 27, 2013, by and among CNH Industrial Capital LLC, CNH Global N.V. and CNH Industrial N.V. (formerly known as FI CBM Holdings N.V.). (Previously filed as Exhibit 10.1 to the quarterly report on Form 10-Q of the registrant for the quarter ended September 30, 2013 (File No. 333-182411) and incorporated herein by reference).
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 years ended December 31, 2018, 2017 and 2016, (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016, (iii) Consolidated Balance Sheets as of December 31, 2018 and 2017, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016, (v) Consolidated Statements of Changes in Stockholder’s Equity for the years ended December 31, 2018, 2017 and 2016 and (vi) 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.

33

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CNH INDUSTRIAL CAPITAL LLC
Date: March 1, 2019	By:	/s/ Brett D. Davis
		Name:	Brett D. Davis
		Title:	Chairman and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Brett D. Davis	Chairman, President and Director	March 1, 2019
Brett D. Davis	(Principal Executive Officer)
/s/ Douglas MacLeod	Chief Financial Officer and Assistant Treasurer	March 1, 2019
Douglas MacLeod	(Principal Financial Officer and Principal Accounting Officer)
/s/ Leandro Lecheta	Director	March 1, 2019
Leandro Lecheta

34

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

	PAGE
Report of Independent Registered Public Accounting Firm	F‑2
Consolidated Statements of Income for the Years Ended December 31, 2018, 2017 and 2016	F‑3
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2018, 2017 and 2016	F‑4
Consolidated Balance Sheets as of December 31, 2018 and 2017	F‑5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017 and 2016	F‑7
Consolidated Statements of Changes in Stockholder’s Equity for the Years Ended December 31, 2018, 2017 and 2016	F‑8
Notes to Consolidated Financial Statements	F‑9
Schedules Omitted
The following schedules are omitted because of the absence of conditions under which they are required or because the required information is included in the Notes to the Consolidated Financial Statements:
I, II, III, IV and V

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholder and Board of Directors of CNH Industrial Capital LLC

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of CNH Industrial Capital LLC and subsidiaries (the Company) as of December 31, 2018 and 2017, the related consolidated statements of income, comprehensive income, changes in stockholder’s equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ ERNST & YOUNG LLP

We have served as the Company’s auditor since 2011.

Milwaukee, WI

March 1, 2019

F-2

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016

(Dollars in thousands)

	2018		2017		2016
REVENUES
Interest income on retail notes and finance leases	$	201,269	$	201,533	$	211,506
Interest income on wholesale notes		66,899		65,721		68,910
Interest and other income from affiliates		345,933		398,258		398,372
Rental income on operating leases		241,582		251,609		243,531
Other income		22,671		21,811		24,402
Total revenues		878,354		938,932		946,721
EXPENSES
Interest expense:
Interest expense to third parties		317,747		311,128		297,881
Interest expense to affiliates		7,533		11,442		7,218
Total interest expense		325,280		322,570		305,099
Administrative and operating expenses:
Fees charged by affiliates		47,475		46,431		45,225
Provision for credit losses		31,699		40,898		30,846
Depreciation of equipment on operating leases		231,805		280,765		247,438
Other expenses		43,778		44,827		36,297
Total administrative and operating expenses		354,757		412,921		359,806
Total expenses		680,037		735,491		664,905
INCOME BEFORE TAXES		198,317		203,441		281,816
Income tax provision (benefit)		41,472		(47,048)		94,304
NET INCOME	$	156,845	$	250,489	$	187,512

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-3

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016

(Dollars in thousands)

	2018		2017		2016
NET INCOME	$	156,845	$	250,489	$	187,512
Other comprehensive income (loss):
Foreign currency translation adjustment		(48,009)		40,868		15,756
Pension liability adjustment		665		499		197
Change in derivative financial instruments		508		2,606		1,449
Total other comprehensive income (loss)		(46,836)		43,973		17,402
COMPREHENSIVE INCOME	$	110,009	$	294,462	$	204,914

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-4

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2018 AND 2017

(Dollars in thousands)

	2018		2017
ASSETS
Cash and cash equivalents	$	160,328	$	226,946
Restricted cash		639,543		648,612
Receivables, less allowance for credit losses of $74,412 and $79,196, respectively		9,950,926		10,421,545
Affiliated accounts and notes receivable		43,389		73,133
Equipment on operating leases, net		1,724,217		1,781,489
Equipment held for sale		209,991		208,516
Goodwill		108,399		110,588
Other intangible assets, net		10,182		6,868
Other assets		84,937		34,381
TOTAL	$	12,931,912	$	13,512,078
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt (including current maturities of long-term debt)	$	4,324,292	$	4,617,464
Accounts payable and other accrued liabilities		715,778		740,410
Affiliated debt		276,271		445,802
Long-term debt		6,259,839		6,332,763
Total liabilities		11,576,180		12,136,439
Commitments and contingent liabilities (Note 13)
Stockholder’s equity:
Member’s capital		—		—
Paid-in capital		843,643		843,559
Accumulated other comprehensive loss		(146,999)		(100,163)
Retained earnings		659,088		632,243
Total stockholder’s equity		1,355,732		1,375,639
TOTAL	$	12,931,912	$	13,512,078

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-5

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)

AS OF DECEMBER 31, 2018 AND 2017

(Dollars in thousands)

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

	2018		2017
Restricted cash	$	639,543	$	648,612
Receivables, less allowance for credit losses of $54,124 and $59,268, respectively		6,687,828		7,159,290
TOTAL	$	7,327,371	$	7,807,902
Short-term debt (including current maturities of long-term debt)	$	3,241,347	$	3,556,007
Long-term debt		3,442,286		3,692,963
TOTAL	$	6,683,633	$	7,248,970

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-6

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016

(Dollars in thousands)

	2018		2017		2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	156,845	$	250,489	$	187,512
Adjustments to reconcile net income to net cash from (used in) operating activities:
Depreciation on property and equipment and equipment on operating leases		231,812		280,789		247,472
Amortization of intangibles		2,114		2,112		1,998
Provision for credit losses		31,699		40,898		30,846
Deferred income tax expense (benefit)		28,254		(80,910)		37,767
Changes in components of working capital:
Change in affiliated accounts and notes receivables		29,203		92,400		126,928
Change in other assets and equipment held for sale		(50,798)		9,074		46,403
Change in accounts payable and other accrued liabilities		(66,248)		15,601		6,144
Net cash from (used in) operating activities		362,881		610,453		685,070
CASH FLOWS FROM INVESTING ACTIVITIES
Cost of receivables acquired		(11,802,561)		(10,914,579)		(10,803,971)
Collections of receivables		12,072,940		11,405,857		11,547,142
Purchase of equipment on operating leases		(680,266)		(635,819)		(723,383)
Proceeds from disposal of equipment on operating leases		468,257		435,878		361,952
Change in property, equipment and software, net		(5,427)		(1,614)		(890)
Net cash from (used in) investing activities		52,943		289,723		380,850
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of affiliated debt		1,138,573		1,186,763		1,238,950
Payment of affiliated debt		(1,292,749)		(898,230)		(1,128,741)
Proceeds from issuance of long-term debt		3,240,771		3,740,616		3,911,733
Payment of long-term debt		(3,630,702)		(4,955,232)		(4,682,446)
Change in short-term borrowings, net		182,596		309,373		(336,193)
Dividends paid to CNH Industrial America LLC		(130,000)		(285,000)		(290,000)
Net cash from (used in) financing activities		(491,511)		(901,710)		(1,286,697)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(75,687)		(1,534)		(220,777)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of year		875,558		877,092		1,097,869
End of year	$	799,871	$	875,558	$	877,092
CASH PAID DURING THE PERIOD FOR INTEREST	$	316,675	$	322,469	$	301,563
CASH PAID DURING THE PERIOD FOR TAXES	$	47,577	$	47,726	$	31,003

Notes:

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

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-7

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016

(Dollars in thousands)

					Accumulated
					Other
	Member’s		Paid-in		Comprehensive		Retained
	Capital		Capital		Income (Loss)		Earnings		Total
BALANCE - January 1, 2016	$	—	$	843,728	$	(161,538)	$	769,242	$	1,451,432
Net income		—		—		—		187,512		187,512
Dividend paid to CNH Industrial America LLC		—		—		—		(290,000)		(290,000)
Foreign currency translation adjustment		—		—		15,756		—		15,756
Stock compensation		—		372		—		—		372
Pension liability adjustment, net of tax		—		—		197		—		197
Change in derivative financial instruments, net of tax		—		—		1,449		—		1,449
BALANCE - December 31, 2016	$	—	$	844,100	$	(144,136)	$	666,754	$	1,366,718
Net income		—		—		—		250,489		250,489
Dividends paid to CNH Industrial America LLC		—		—		—		(285,000)		(285,000)
Foreign currency translation adjustment		—		—		40,868		—		40,868
Stock compensation		—		(541)		—		—		(541)
Pension liability adjustment, net of tax		—		—		499		—		499
Change in derivative financial instruments, net of tax		—		—		2,606		—		2,606
BALANCE - December 31, 2017	$	—	$	843,559	$	(100,163)	$	632,243	$	1,375,639
Net income		—		—		—		156,845		156,845
Dividends paid to CNH Industrial America LLC		—		—		—		(130,000)		(130,000)
Foreign currency translation adjustment		—		—		(48,009)		—		(48,009)
Stock compensation		—		84		—		—		84
Pension liability adjustment, net of tax		—		—		665		—		665
Change in derivative financial instruments, net of tax		—		—		508		—		508
BALANCE - December 31, 2018	$	—	$	843,643	$	(146,999)	$	659,088	$	1,355,732

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-8

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

NOTE 1: NATURE OF OPERATIONS

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.

To support CNH Industrial North America’s sales of agricultural and construction equipment products, the Company offers retail financing to end-use customers and wholesale financing to CNH Industrial North America equipment dealers, all of which are independently owned. The Company provides and administers retail financing, primarily retail installment sales contracts, finance leases and operating leases to end-use customers for the purchase or lease of new and used CNH Industrial North America equipment and other agricultural and construction equipment sold primarily through CNH Industrial North America dealers and distributors. In addition, the Company purchases equipment from dealers that is leased to retail customers under operating lease agreements. Wholesale financing consists primarily of dealer floorplan financing, which allows dealers the ability to maintain a representative inventory of products. In addition, the Company provides financing to dealers for equipment used in dealer-owned rental yards, parts inventory, working capital, and other financing needs. CNH Industrial Capital Canada purchases short-term wholesale receivables at a discount (“wholesale factoring”) from Iveco Argentina S.A. (“Iveco Argentina”), an indirect wholly-owned subsidiary of CNHI, from time to time. The purchase is consistent with factoring arrangements between CNHI’s industrial and financial services companies. The Company also finances other products, including insurance and equipment protection products underwritten through a third-party insurer. As a captive finance company, the Company is reliant on the operations of CNH Industrial North America, its dealers and end-use customers.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include 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

F-9

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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.

Certain prior period balances have been reclassified to conform to the current year presentation.

Use of Estimates in the Preparation of Financial Statements

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.

Revenue Recognition

Finance and interest income on retail notes and finance leases and on wholesale notes is recorded using the effective yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the effective yield method. Recognition of income on receivables is suspended when management determines that collection of future income is not probable or when an account becomes 120 days delinquent, whichever occurs earlier. Income accrual is resumed if the receivable becomes contractually current and collection doubts are removed. Previously suspended income is recognized at that time. The Company applies cash received on nonaccrual financing receivables to first reduce any unrecognized interest and then the recorded investment and any other fees. 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. 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.

A substantial portion of the Company’s interest income arises from retail sales programs offered by CNH Industrial North America on which finance charges are waived or below-market rate financing programs are offered. When the Company acquires retail installment sales contracts and finance leases subject to below-market interest rates, including waived interest rate financing, the Company receives compensation from CNH Industrial North America based on the Company’s estimated costs and a targeted return on equity. This amount is initially recognized as an unearned finance charge and is recognized as interest income over the term of the retail notes and finance leases, and is included in “Interest and other income from affiliates” in the accompanying consolidated statements of income.

For selected wholesale receivables, CNH Industrial North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. These amounts are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income.

The Company is also compensated for lending funds to CNH Industrial North America. The amounts earned are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income.

Income from operating leases is recognized over the term of the lease on a straight-line basis. For selected operating leases, CNH Industrial North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. The amounts from CNH Industrial North America recognized as rental income on operating leases are included in “Interest and other income from affiliates.”

Foreign Currency Translation

The Company’s non‑U.S. subsidiaries maintain their books and accounting records using local currency as the functional currency. Assets and liabilities of these non‑U.S. subsidiaries are translated into U.S. dollars at period‑end exchange rates, and net exchange gains or losses resulting from such translation are included in “Accumulated other

F-10

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

comprehensive income” in the accompanying consolidated balance sheets. Income and expense accounts of these non‑U.S. subsidiaries are translated at the average exchange rates for the period, and gains and losses from foreign currency transactions are included in net income in the period that they arise.

Cash and Cash Equivalents

Cash equivalents are highly liquid investments with an original maturity of three months or less. The carrying value of cash equivalents approximates fair value because of the short maturity of these investments.

Restricted Cash

Restricted cash includes principal and interest payments from retail notes and wholesale receivables owned by the consolidated VIEs that are payable to the VIEs’ investors, and cash pledged as a credit enhancement to the same investors. These amounts are held by depository banks in order to comply with contractual agreements.

Receivables

Receivables are recorded at amortized cost, net of allowances for credit losses and deferred fees and costs. Periodically, the Company sells or transfers retail and wholesale receivables to funding facilities or in securitization transactions. In accordance with the accounting guidance regarding transfers of financial assets and the consolidation of VIEs, the majority of the retail and wholesale receivables sold in securitizations do not qualify as sales and are recorded as secured borrowings with no gains or losses recognized at the time of securitization. Receivables associated with these securitization transactions and receivables that the Company has the ability and intent to hold for the foreseeable future are classified as held for investment. The substantial majority of the Company’s receivables, which include unrestricted receivables and restricted receivables for securitization investors, are classified as held for investment.

Allowance for Credit Losses

The allowance for credit losses is the Company’s estimate of losses on 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.

F-11

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

Equipment on Operating Leases

The Company purchases leases and equipment from CNH Industrial North America dealers and other independent third parties that have leased equipment to retail customers under operating leases. The Company’s investment in operating leases is based on the purchase price paid for the equipment. Income from these operating leases is recognized over the term of the lease. The equipment is depreciated on a straight-line basis over the term of the lease to the estimated residual value at lease termination. Residual values are estimated at the inception of the lease and are reviewed quarterly. Realization of the residual values is dependent on the Company’s future ability to re-market the equipment under then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Management believes that the estimated residual values are realizable. Expenditures for maintenance and repairs are the responsibility of the lessee.

The Company evaluates the carrying amount of equipment on operating leases for potential impairment when it determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability identifies a possible impairment, the asset’s fair value is measured in accordance with the fair value measurement framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value.

Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded at the lower of net book value or estimated fair value of the equipment, less cost to sell, and is not depreciated.

Goodwill and Intangible Assets

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired. Goodwill is deemed to have an indefinite useful life and is reviewed for impairment at least annually. During 2018 and 2017, the Company performed its annual impairment review as of December 31, and concluded that there was no impairment in either year. Other intangible assets consist of software and are being amortized on a straight‑line basis over five years.

Income Taxes

The provision for income taxes is determined using the asset and liability method. The Company recognizes a current tax liability or asset for the estimated taxes payable or refundable on tax returns for the current year and tax contingencies estimated to be settled with taxing authorities within one year. A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and tax loss carryforwards. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on available evidence.

Derivatives

The Company’s policy is to enter into derivative transactions to manage exposures that arise in the normal course of business and not for trading or speculative purposes. The Company records derivative financial instruments in the consolidated balance sheets as either an asset or liability measured at fair value. The fair value of the Company’s interest rate derivatives is based on discounting expected cash flows, using market interest rates, over the remaining term of the instrument. The fair value of the Company’s foreign exchange derivatives is based on market exchange rates, adjusted for the respective interest rate differentials (premiums or discounts). Changes in the fair value of derivative financial instruments are recognized in current income unless specific hedge accounting criteria are met.

F-12

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

For derivative financial instruments designated to hedge exposure to changes in the fair value of a recognized asset or liability, the gain or loss is recognized in income in the period of change together with the offsetting loss or gain on the related hedged item. For derivative financial instruments designated to hedge exposure to variable cash flows of a forecasted transaction, the effective portion of the derivative financial instrument’s gain or loss is initially reported in accumulated other comprehensive income and is subsequently reclassified into income when the forecasted transaction affects income. The ineffective portion of the gain or loss is recorded in income immediately. For derivative financial instruments that are not designated as hedges but held as economic hedges, the gain or loss is recognized immediately in income.

For derivative financial instruments designated as hedges, the Company formally documents the hedging relationship to the hedged item and its risk management strategy. This includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities contained in the consolidated balance sheets and linking cash flow hedges to specific forecasted transactions or variability of cash flow. The Company assesses the effectiveness of its hedging instruments both at inception and on an ongoing basis. If a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer probable of occurring, or the derivative is terminated, the hedge accounting described above is discontinued and the derivative is marked to fair value and recorded in income through the remainder of its term.

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 (ASC 606) (“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, and the cumulative effect of applying the standard would be recognized at the earliest period shown 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 this 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 will 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 years ended December 31, 2017 and 2016 was to increase cash flows from changes in accounts payable and other accrued liabilities by $7,643 and $3,300, respectively, eliminate cash flows from changes in restricted cash of $71,876 and $86,176, respectively, and to decrease cash, cash equivalents and restricted cash by $64,233 and $82,876, respectively.

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 the other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost

F-13

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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, and early adoption is permitted. 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 (“ASC 840”) 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 original transition guidance in ASU 2016-02 required a modified retrospective approach. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), an amendment to ASU 2016-02, which provides entities with an additional transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. If the transition option in ASU 2018-11 is elected, reporting for the comparative periods presented in the financial statements in which the entity adopts the new leases standard will continue to be in accordance with ASC 840.

The Company will adopt the new standard effective January 1, 2019, using the modified retrospective approach which requires it to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, without recasting prior periods. The Company will elect certain practical expedients upon transition, including: not to reassess under the new guidance its prior conclusions about lease identification, lease classification and initial direct costs; and, those provided for short-term leases. The Company does not believe the adoption of the standard will have a material impact 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. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”), which amended ASC 326. 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

F-14

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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”) and in October 2018, the FASB issued ASU No. 2018-16, Inclusion of the Secured Overnight Financial Rate (SOFR) Overnight Index Swap Rate (OIS) as a Benchmark Interest Rate for Hedge Accounting Purposes (“ASU 2018-16”), which together amend 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 does not believe the adoption of this standard will have a material impact 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 Act”). Included in the provisions of U.S. Tax Act 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 does not believe the adoption of this standard will have a material impact 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

F-15

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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 year ended December 31, 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		(48,009)		419		726		(46,864)
Amounts reclassified from accumulated other comprehensive income (loss)		—		463		(34)		429
Tax effects		—		(217)		(184)		(401)
Net current-period other comprehensive income (loss)		(48,009)		665		508		(46,836)
Total	$	(146,726)	$	(2,497)	$	2,224	$	(146,999)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the year ended December 31, 2017:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		on 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		40,868		114		2,797		43,779
Amounts reclassified from accumulated other comprehensive income (loss)		—		702		749		1,451
Tax effects		—		(317)		(940)		(1,257)
Net current-period other comprehensive income (loss)		40,868		499		2,606		43,973
Total	$	(98,717)	$	(3,162)	$	1,716	$	(100,163)

F-16

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

The reclassifications out of AOCI and the location on the consolidated statements of income for the years ended December 31, 2018 and 2017 are as follows:

		2018		2017	Affected Line Item
Amortization of defined benefit pension items:
	$	(463)	$	(702)	Various line items individually insignificant
		(463)		(702)	Income before taxes
		114		273	Income tax benefit
	$	(349)	$	(429)	Net of tax
Unrealized losses on derivatives:
	$	34	$	(749)	Interest expense to third parties
		34		(749)	Income before taxes
		(9)		199	Income tax benefit
	$	25	$	(550)	Net of tax

NOTE 4: RECEIVABLES

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

	2018		2017
Retail	$	753,388	$	768,502
Wholesale		747,191		671,740
Wholesale factoring		—		235,834
Finance lease		63,936		58,198
Restricted receivables		8,460,823		8,766,467
Gross receivables		10,025,338		10,500,741
Less: Allowance for credit losses		(74,412)		(79,196)
Total receivables, net	$	9,950,926	$	10,421,545

The Company provides and administers financing for retail purchases of new and used equipment sold through CNH Industrial North America’s dealer network. The terms of retail and other notes and finance leases generally range from two to six years, and interest rates vary depending on prevailing market interest rates and certain incentive programs offered by CNH Industrial North America.

Wholesale receivables arise primarily from the financing of the sale of goods to dealers and distributors by CNH Industrial North America, and to a lesser extent, the financing of dealer operations. Under the standard terms of the wholesale receivable agreements, these receivables typically have interest-free periods of up to twelve months and stated original maturities of up to twenty‑four months, with repayment accelerated upon the sale of the underlying equipment by the dealer. During the interest‑free period, the Company is compensated by CNH Industrial North America based on market interest rates. After the expiration of any interest‑free period, interest is charged to dealers on outstanding balances until the Company receives payment in full. The interest‑free periods are determined based on the type of equipment sold and the time of year of the sale. Interest rates are set based on market factors and the prime rate or LIBOR. The Company evaluates and assesses dealers on an ongoing basis as to their creditworthiness. CNH Industrial North America may be obligated to repurchase the dealer’s equipment upon cancellation or termination of the dealer’s contract for such causes as change in ownership, closeout of the business, or default. There were no significant losses in 2018, 2017 and 2016 relating to the termination of dealer contracts.

Wholesale factoring receivables represent short-term receivables purchased from Iveco Argentina.

F-17

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

Maturities of receivables as of December 31, 2018, are as follows:

2019	$	5,619,826
2020		1,548,323
2021		1,223,685
2022		900,707
2023 and thereafter		732,797
Total receivables	$	10,025,338

It has been the Company’s experience that substantial portions of retail receivables are repaid before their contractual maturity dates. As a result, the above table should not be regarded as a forecast of future cash collections. Retail, finance lease and wholesale receivables have significant concentrations of credit risk in the agricultural and construction business sectors. Short-term receivables purchased from Iveco Argentina have significant concentrations of credit risk in the agricultural and commercial vehicles business sectors in Argentina. On a geographic basis, there is not a disproportionate concentration of credit risk in any area of the United States, Canada or Argentina. The Company typically retains, as collateral, a security interest in the equipment associated with retail notes and wholesale receivables.

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 removed 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 December 31, 2018 and 2017:

	2018		2017
Retail	$	5,623,730	$	6,042,186
Wholesale		2,837,093		2,724,281
Total restricted receivables	$	8,460,823	$	8,766,467

Retail Receivables Securitizations

Within the U.S. retail receivables securitization programs, qualifying retail receivables are sold to limited purpose, bankruptcy‑remote SPEs. In turn, these SPEs establish separate trusts to which the receivables are transferred in exchange for proceeds from asset‑backed securities issued by the trusts. 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.

F-18

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

During the years ended December 31, 2018 and 2017, the Company executed $2,250,399 and $2,989,014, respectively, in term retail asset‑backed transactions in the U.S. and Canada. The securities in these transactions are backed by agricultural and construction equipment retail receivable contracts originated through CNH Industrial North America’s dealer network. As of December 31, 2018 and 2017, $4,808,679 and $5,567,786, respectively, of asset‑backed securities issued to investors were outstanding with weighted average remaining maturities of 30 months and 31 months, respectively. The Company believes that it is probable that it will continue to regularly utilize the term ABS markets.

The Company may retain all or a portion of the subordinated interests in the SPEs. No recourse provisions exist that allow holders of the asset‑backed securities issued by the trusts to put those securities back to the Company although the Company provides customary representations and warranties that could give rise to an obligation to repurchase from the trusts any receivables for which there is a breach of the representations and warranties. Moreover, the Company does not guarantee any securities issued by the trusts. The trusts have a limited life and generally terminate upon final distribution of amounts owed to investors or upon exercise of a cleanup‑call option by the Company, in its role as servicer.

The Company also has $1,566,870 in committed asset‑backed facilities through which it may sell on a monthly basis retail receivables generated in the United States and Canada. The Company has utilized these facilities in the past to fund the origination of receivables and has later repurchased and resold the receivables in the term ABS markets or found alternative financing for the receivables. The U.S. and Canadian facilities had an original funding term of two years and are renewable in September 2020 and December 2020, respectively. To the extent these facilities are not renewed, they will be repaid according to the amortization of the underlying receivables.

Wholesale Receivables Securitizations

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. As of December 31, 2018, debt issued through the U.S. master trust facility consists of two short-term facilities renewable at the discretion of the investors: $500,000 and $300,000.

The Canadian master trust facility consists of a C$585,750 ($429,788) facility renewable December 2020 at the discretion of the investor.

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.

Each of the facilities contains minimum payment rate thresholds that, if breached, could preclude the Company from selling additional receivables originated on a prospective basis and could force an early amortization of the debt.

Allowance for Credit Losses

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.

F-19

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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 year ended December 31, 2018 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	73,610	$	5,586	$	79,196
Charge-offs		(39,375)		(1,567)		(40,942)
Recoveries		4,702		71		4,773
Provision (benefit)		28,277		3,422		31,699
Foreign currency translation and other		(270)		(44)		(314)
Ending balance	$	66,944	$	7,468	$	74,412
Ending balance: individually evaluated for impairment	$	15,801	$	4,825	$	20,626
Ending balance: collectively evaluated for impairment	$	51,143	$	2,643	$	53,786
Receivables:
Ending balance	$	6,441,054	$	3,584,284	$	10,025,338
Ending balance: individually evaluated for impairment	$	31,148	$	24,513	$	55,661
Ending balance: collectively evaluated for impairment	$	6,409,906	$	3,559,771	$	9,969,677

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 (benefit)		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

F-20

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

Allowance for credit losses activity for the year ended December 31, 2016 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	88,405	$	6,319	$	94,724
Charge-offs		(42,949)		(1)		(42,950)
Recoveries		3,228		522		3,750
Provision (benefit)		30,915		(69)		30,846
Foreign currency translation and other		(1,552)		77		(1,475)
Ending balance	$	78,047	$	6,848	$	84,895
Ending balance: individually evaluated for impairment	$	18,113	$	4,250	$	22,363
Ending balance: collectively evaluated for impairment	$	59,934	$	2,598	$	62,532
Receivables:
Ending balance	$	7,398,017	$	3,527,709	$	10,925,726
Ending balance: individually evaluated for impairment	$	31,383	$	43,659	$	75,042
Ending balance: collectively evaluated for impairment	$	7,366,634	$	3,484,050	$	10,850,684

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 December 31, 2018 and 2017 is as follows:

	2018		2017
Titanium	$	3,367,239	$	3,734,313
Platinum		1,942,784		2,002,791
Gold		943,816		952,404
Silver		152,338		146,051
Bronze		34,877		33,327
Total	$	6,441,054	$	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.

F-21

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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 December 31, 2018 and 2017 is as follows:

	2018		2017
A	$	1,582,179	$	1,222,813
B		1,292,331		1,425,591
C		527,735		439,353
D		182,039		308,264
Total	$	3,584,284	$	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 December 31, 2018 and 2017 is as follows:

	2018
													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	$	19,318	$	6,372	$	24,772	$	50,462	$	5,239,777	$	5,290,239	$	4,573
Canada	$	1,398	$	510	$	2,326	$	4,234	$	1,146,581	$	1,150,815	$	911
Wholesale
United States	$	484	$	10	$	1,368	$	1,862	$	2,788,655	$	2,790,517	$	387
Canada	$	3	$	—	$	436	$	439	$	793,328	$	793,767	$	1
Total
Retail	$	20,716	$	6,882	$	27,098	$	54,696	$	6,386,358	$	6,441,054	$	5,484
Wholesale	$	487	$	10	$	1,804	$	2,301	$	3,581,983	$	3,584,284	$	388

F-22

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	2017
													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 December 31, 2018 and 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 thirteen-month average) are as follows:

	December 31, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Retail
United States	$	30,959	$	29,783	$	15,347	$	32,787
Canada	$	189	$	180	$	454	$	248
Wholesale
United States	$	24,513	$	22,985	$	4,825	$	27,269
Total
Retail	$	31,148	$	29,963	$	15,801	$	33,035
Wholesale	$	24,513	$	22,985	$	4,825	$	27,269

	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

F-23

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

As of December 31, 2018 and 2017, the Company’s impaired receivables individually evaluated for impairment without an allowance were immaterial. Interest income recognized on impaired receivables for the years ended December 31, 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 December 31, 2018 and 2017 are as follows:

	2018						2017
	Retail		Wholesale		Total		Retail		Wholesale		Total
United States	$	27,069	$	22,985	$	50,054	$	40,968	$	43,531	$	84,499
Canada	$	1,428	$	—	$	1,428	$	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 that is experiencing financial difficulties. As a collateral‑based lender, the Company typically will repossess collateral in lieu of restructuring receivables. As such, for retail receivables, concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions granted may include extended contract maturities, inclusion of interest‑only periods, modification of a contractual interest rate to a below market interest rate and waiving of interest and principal.

TDRs are reviewed along with other receivables as part of management’s ongoing evaluation of the adequacy of the allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source of repayment, which is normally the liquidation of the 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 December 31, 2018, the Company had 254 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre‑modification value of these contracts was $8,118 and the post‑modification value was $7,272. Additionally, the Company had 371 accounts with a balance of $17,129 undergoing bankruptcy proceedings where a concession has not yet been determined. As of December 31, 2017, the Company had 272 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre‑modification value of these contracts was $8,583 and the post‑modification value was $7,710. Additionally, the Company had 423 accounts with a balance of $23,750 undergoing bankruptcy proceedings where a concession has not yet been determined. As the outcome of the bankruptcy cases is determined by the 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 December 31, 2018 and 2017.

As of December 31, 2018 and 2017, the Company’s wholesale TDRs were immaterial.

F-24

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

NOTE 5: EQUIPMENT ON OPERATING LEASES

A summary of equipment on operating leases as of December 31, 2018 and 2017 is as follows:

	2018		2017
Equipment on operating leases	$	2,052,822	$	2,139,099
Accumulated depreciation		(328,605)		(357,610)
Total equipment on operating leases, net	$	1,724,217	$	1,781,489

Depreciation expense totaled $231,805, $280,765 and $247,438 for the years ended December 31, 2018, 2017 and 2016, respectively.

Lease payments owed to the Company for equipment under non‑cancelable operating leases (excluding deferred operating lease subsidy of $106,817) as of December 31, 2018 are as follows:

2019	$	169,387
2020		128,197
2021		69,883
2022		23,120
2023 and thereafter		5,173
Total lease payments	$	395,760

NOTE 6: GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows:

	2018		2017
Balance, beginning of year	$	110,588	$	108,715
Foreign currency translation adjustment		(2,189)		1,873
Balance, end of year	$	108,399	$	110,588

Goodwill is tested for impairment at least annually. During 2018, 2017 and 2016, the Company performed its annual impairment review as of December 31 and concluded that there were no impairments in any year.

As of December 31, 2018 and 2017, the Company’s intangible asset and related accumulated amortization for its software is as follows:

	2018		2017
Software	$	30,625	$	25,197
Accumulated amortization		(20,443)		(18,329)
Total software, net	$	10,182	$	6,868

The Company recorded amortization expense of $2,114, $2,112 and $1,998 during 2018, 2017 and 2016, respectively.

Based on the current amount of software subject to amortization, the estimated annual amortization expense for each of the succeeding five years is as follows: $1,722 in 2019; $1,082 in 2020; $516 in 2021; $241 in 2022; and $55 in 2023.

F-25

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

NOTE 7: OTHER ASSETS

The components of other assets as of December 31, 2018 and 2017 are as follows:

	2018		2017
Tax receivables	$	39,174	$	6,566
Deferred tax assets		14,955		10,275
Derivative assets		16,665		10,144
Other current assets		14,143		7,396
Total other assets	$	84,937	$	34,381

NOTE 8: CREDIT FACILITIES AND DEBT

The following table summarizes the Company’s debt and credit facilities, borrowings thereunder and availability at December 31, 2018:

	2018
						Current
						Maturities of
		Total		Short-Term		Long-Term		Long-Term
	Maturity (1)	Facility/Debt		Outstanding		Outstanding		Outstanding		Available
Committed Asset-Backed Facilities
Retail - U.S.	Sep 2020	$	1,200,000	$	—	$	139,556	$	474,294	$	586,150
Retail - Canada	Dec 2020		366,870		—		18,095		27,861		320,914
Wholesale VFN - U.S.	Various		800,000		800,000		—		—		—
Wholesale VFN - Canada	Dec 2020		429,788		429,788		—		—		—
			2,796,658		1,229,788		157,651		502,155		907,064
Secured Debt
Amortizing retail term ABS - N.A.	Various		4,808,679		—		1,853,908		2,954,771		—
Unamortized issuance costs			(14,779)		—		—		(14,779)		—
			4,793,900		—		1,853,908		2,939,992		—
Unsecured Credit Lines and Facilities
Credit lines	Various		195,386		195,386		—		—		—
Revolving credit facilities	Various		825,569		—		—		330,183		495,386
			1,020,955		195,386		—		330,183		495,386
Unsecured Debt
Commercial paper	Various		389,000		389,000		—		—		—
Notes	Various		3,000,000		—		500,000		2,500,000		—
Hedging effects, discounts and unamortized issuance costs			(13,932)		(1,108)		(333)		(12,491)		—
			3,375,068		387,892		499,667		2,487,509		—
Total credit facilities and debt		$	11,986,581	$	1,813,066	$	2,511,226	$	6,259,839	$	1,402,450

(1) Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility.

F-26

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

A summary of the minimum annual repayments of long‑term debt as of December 31, 2018, for 2020 and thereafter is as follows:

2020	$	2,367,515
2021		2,023,312
2022		1,219,488
2023		109,084
2024 and thereafter		540,440
Total	$	6,259,839

The following table summarizes the Company’s credit facilities, borrowings thereunder and availability at December 31, 2017:

	2017
						Current
						Maturities of
		Total		Short-Term		Long-Term		Long-Term
	Maturity (1)	Facility/Debt		Outstanding		Outstanding		Outstanding		Available
Committed Asset-Backed Facilities
Retail - U.S.	Sep 2019	$	1,200,000	$	—	$	60,099	$	160,301	$	979,600
Retail - Canada	Dec 2019		398,730		—		57,814		158,401		182,515
Wholesale VFN - U.S.	Various		800,000		800,000		—		—		—
Wholesale VFN - Canada	Dec 2019		467,112		461,167		—		—		5,945
			2,865,842		1,261,167		117,913		318,702		1,168,060
Secured Debt
Amortizing retail term ABS - N.A.	Various		5,567,786		—		2,176,929		3,390,857		—
Other ABS financing - N.A.	Various		54,275		—		45,937		8,338		—
Unamortized issuance costs			(17,507)		—		—		(17,507)		—
			5,604,554		—		2,222,866		3,381,688		—
Unsecured Credit Lines and Facilities
Credit lines	Various		300,000		300,000		—		—		—
Revolving credit facilities	Various		659,492		—		—		159,492		500,000
			959,492		300,000		—		159,492		500,000
Unsecured Debt
Commercial paper	Various		115,000		115,000		—		—		—
Notes	Various		3,100,000		—		600,000		2,500,000		—
Hedging effects, discounts and unamortized issuance costs			(26,601)		(89)		607		(27,119)		—
			3,188,399		114,911		600,607		2,472,881		—
Total credit facilities and debt		$	12,618,287	$	1,676,078	$	2,941,386	$	6,332,763	$	1,668,060

(1) Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility.

F-27

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

Committed Asset‑Backed Facilities

The Company has access to committed asset‑backed facilities with several banks through which it may sell its receivables. The Company utilizes retail facilities to fund the origination of retail receivables and has exercised the option to periodically repurchase receivables and resell them in the term ABS markets (shown as “Amortizing retail term ABS - N.A.”) or found alternative financing for the receivables. Under these facilities, the maximum amount of proceeds that can be accessed at one time is $1,566,870. In addition, if the receivables sold are not repurchased by the Company, the related debt is paid only as the underlying receivables are collected. Such receivables have maturities not exceeding seven years. The Company believes it is probable that a majority of these receivables will be repurchased and resold in the ABS markets. Borrowings against these facilities accrue interest based on prevailing money market rates, plus an applicable margin.

The Company finances a portion of its wholesale receivable portfolio with the issue of Variable Funding Notes (“VFNs”) which are privately subscribed by certain banks and asset‑backed commercial paper conduits. These notes accrue interest based on prevailing money market rates, plus an applicable margin.

Secured Debt

Secured borrowings bear interest at either floating rates of LIBOR plus an applicable margin or fixed rates.

Unsecured Facilities and Debt

As of December 31, 2018, the Company had fully-drawn uncommitted credit lines totaling $195,386 with final maturities in June 2019 and July 2020. 

Committed unsecured facilities with banks as of December 31, 2018 totaled $825,569. These credit facilities, which are eligible for renewal at various future dates, are used primarily for working capital and other general corporate purposes. As of December 31, 2018, the Company had $330,183 outstanding under these credit facilities. Included in the remaining available credit commitments is $389,000 maintained primarily to provide backup liquidity for commercial paper borrowings.

In 2017, the Company established a commercial paper program to issue short-term, unsecured, unsubordinated commercial paper notes on a private placement basis. As of December 31, 2018, the aggregate principal amount of notes outstanding was $389,000.

As of December 31, 2018, the Company’s outstanding unsecured senior notes were as follows:

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
Hedging effects, discounts and unamortized issuance costs		(10,985)
Total	$	2,989,015

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

On April 16, 2018, the Company repaid $600,000 of its 3.625% unsecured notes due 2018.

F-28

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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%.

Covenants

The indentures and credit agreements governing the Company’s unsecured funding transactions contain covenants that restrict the Company’s ability and/or that of its subsidiaries to, among other things, incur additional debt, make certain investments, enter into certain types of transactions with affiliates, use assets as security in other transactions, enter into sale or leaseback transactions and/or sell certain assets or merge with or into other companies. In addition, the Company is required to maintain a certain coverage level for leverage.

Interest Rates

The weighted‑average interest rate on total short‑term debt outstanding at December 31, 2018 and 2017 was 3.0% and 2.2%, respectively. The weighted‑average interest rate on total long‑term debt (including current maturities of long‑term debt) at December 31, 2018 and 2017 was 3.1% and 2.6%, respectively. The average rate is calculated using the actual rates at December 31, 2018 and 2017, weighted by the amount of outstanding borrowings of each debt instrument.

Support Agreement

Effective as of September 29, 2013, in connection with the merger of CNH Global N.V., the former indirect parent of CNH Industrial Capital (“CNH Global”), with and into CNHI, CNHI assumed all of CNH Global’s obligations under the support agreement, pursuant to which CNHI has agreed to, among other things, (a) make cash capital contributions to the Company, to the extent necessary to cause the ratio of net earnings available for fixed charges to fixed charges to be not less than 1.05 for each fiscal quarter (with such ratio determined, on a consolidated basis and in accordance with U.S. GAAP, for such fiscal quarter and the immediately preceding three fiscal quarters taken as a whole), (b) generally maintain an ownership of at least 51% of the voting equity interests in the Company and (c) cause the Company to have, as of the end of any fiscal quarter, a consolidated tangible net worth of at least $50,000. The support agreement is not intended to be and is not a guarantee by CNHI of any indebtedness or other obligation of the Company. The obligations of CNHI to the Company pursuant to this support agreement are to the Company only and do not run to, and are not enforceable directly by, any creditor of the Company. The support agreement may be modified, amended or terminated, at CNHI’s election, upon thirty days’ prior written notice to the Company and the rating agencies, if (a) the modification, amendment or termination would not result in a downgrade of the Company’s rated indebtedness; (b) the modification, amendment or notice of termination provides that the support agreement will continue in effect with respect to the Company’s rated indebtedness then outstanding; or (c) the Company has no long‑term rated indebtedness outstanding.

NOTE 9: INCOME TAXES

The income and expenses of the Company and certain of its domestic subsidiaries are included in the consolidated income tax return of CNH Industrial U.S. Holdings, Inc., a wholly-owned subsidiary of CNHI. CNH Industrial U.S. Holdings, Inc. is the new parent of Case New Holland Inc., who remains the parent of CNH Industrial America. The Company’s Canadian subsidiaries file separate income tax returns, as do certain domestic subsidiaries. The Company and certain of its domestic subsidiaries are LLCs and, as a result, incur no income tax liability on a stand‑alone basis for tax purposes. However, for financial reporting, all tax accounts have been disclosed and the income tax expense is reflective for all of the companies included in the consolidated financial statements.

F-29

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

The sources of income before taxes for the years ended December 31, 2018, 2017, and 2016 are as follows, with foreign defined as any income earned outside the United States:

	2018		2017		2016
Domestic	$	120,375	$	121,729	$	193,765
Foreign		77,942		81,712		88,051
Income before taxes	$	198,317	$	203,441	$	281,816

The provision for income taxes for the years ended December 31, 2018, 2017 and 2016 is as follows:

	2018		2017		2016
Current income tax expense (benefit):
Domestic	$	(11,719)	$	16,151	$	38,845
Foreign		24,937		17,711		17,692
Total current income tax expense		13,218		33,862		56,537
Deferred income tax expense (benefit):
Domestic		34,304		(83,647)		33,798
Foreign		(6,050)		2,737		3,969
Total deferred income tax expense		28,254		(80,910)		37,767
Total tax provision	$	41,472	$	(47,048)	$	94,304

A reconciliation of CNH’s statutory and effective income tax rate for the years ended December 31, 2018, 2017, and 2016 is as follows:

	2018		2017		2016
Tax provision at statutory rate	21.0	%	35.0	%	35.0	%
State taxes	1.8		5.9		4.7
Foreign taxes	(3.4)		(8.5)		(5.2)
Tax contingencies	2.5		—		—
Withholding taxes and credits	1.5		—		—
Tax credits and incentives	(0.9)		(0.6)		(0.6)
Tax rate and legislative changes	(1.4)		(54.5)		—
Other	(0.2)		(0.4)		(0.4)
Total tax provision effective rate	20.9	%	(23.1)	%	33.5	%

F-30

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

The components of the Company’s net deferred tax liability as of December 31, 2018 and 2017 are as follows:

	2018		2017
Deferred tax assets:
Pension, postretirement and post-employment benefits	$	1,918	$	1,986
Marketing and sales incentive programs		53,259		39,836
Allowance for credit losses		17,534		18,539
Other accrued liabilities		7,825		471
Tax loss and tax credit carry forwards		4,314		1,892
Total deferred tax assets	$	84,850	$	62,724
Deferred tax liability:
Equipment on operating lease	$	320,070	$	268,129
Deferred tax liability, net (1)	$	(235,220)	$	(205,405)

(1) In the accompanying consolidated balance sheets, the US net deferred tax position in 2018 and 2017 is included in “Accounts payable and other accrued liabilities” while the Canadian net deferred tax position in 2018 and 2017 is included in “Other assets”.

Deferred taxes are provided to reflect timing differences between the financial and tax basis of assets and liabilities and tax carryforwards using currently enacted tax rates and laws. Management believes it is more likely than not the benefit of the deferred tax assets will be realized.

A reconciliation of the gross amounts of tax contingencies at the beginning and end of the year is as follows:

	2018		2017		2016
Balance, beginning of year	$	—	$	—	$	—
Additions based on tax positions related to prior years		4,274		—		—
Reductions for tax positions of prior years		—		—		—
Settlements		—		—		—
Balance, end of year	$	4,274	$	—	$	—

The total amount of unrecognized tax benefits that, if recognized, would affect the annual effective income tax rate is $4,274.

The Company recognizes interest and penalties accrued related to tax contingencies in income tax expense. During the years ended December 31, 2018, 2017 and 2016, the Company recognized approximately $686, $0 and $0, respectively, in interest and penalties. The Company had approximately $686, $0 and $0 for the expected future payment of interest and penalties accrued at December 31, 2018, 2017 and 2016, respectively.

The Company has open tax years from 2012 to 2018.  The Company does not believe the resolution of any outstanding tax examinations will have a material adverse effect on the Company’s financial position or its results of operations. On December 22, 2017, the U.S. enacted the U.S. Tax Act which included, among other things, a reduction in the corporate tax rate from 35% to 21% and a tax on deemed repatriation of the undistributed earnings of foreign subsidiaries. As a result, in the fourth quarter of 2017, the Company recorded an estimated net tax benefit of $111,000, which included the revaluation of its net deferred tax liability and the tax charge on the deemed repatriation. In the fourth quarter of 2018, the Company filed its 2017 U.S. corporate income tax return and subsequently booked an additional benefit of $2,739 to reflect the final increment of corporate tax reform, thus resulting in an overall benefit of $113,739. In addition, amongst other items, the U.S. Tax Act enacted a tax upon global intangible low tax income (the “GILTI tax”). The Company has made a policy election to account for the GILTI tax as a current period cost, rather than under the deferred tax method.

At December 31, 2018, there are no material deferred tax liabilities on undistributed earnings of subsidiaries

F-31

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

outside of the U.S.

NOTE 10: 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

F-32

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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. Ineffectiveness recognized related to these hedging relationships was not significant for the years ended December 31, 2018, 2017 and 2016. These amounts are recorded in “Other expenses” in the consolidated statements of income. As of December 31, 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 53 months. As of December 31, 2018, the after‑tax gains deferred in accumulated other comprehensive income (loss) that will be recognized in interest expense over the next 12 months are approximately $712.

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 years ended December 31, 2018, 2017 and 2016.

Most of the Company’s interest rate derivatives 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. If the future notional amount of the Company’s interest rate derivatives is not known in advance, the derivatives are considered Level 3 derivatives. The fair market value of these derivatives is calculated using market data input and a forecasted future notional balance. The total notional amount of the Company’s interest rate derivatives was approximately $2,960,191 and $3,143,737 at December 31, 2018 and 2017, respectively. The thirteen‑month average notional amounts as of December 31, 2018 and 2017 were $2,947,318 and $3,246,576, 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.

F-33

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

Financial Statement Impact of the Company’s Derivatives

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

	2018		2017
Derivatives Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	15,422	$	4,113
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	8,107	$	6,698
Derivatives Not Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	1,157	$	4,638
Foreign exchange contracts		86		1,393
Total	$	1,243	$	6,031
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	1,157	$	4,638
Foreign exchange contracts		—		325
Total	$	1,157	$	4,963

Pre‑tax gains (losses) on the consolidated statements of income and comprehensive income related to the Company’s derivatives for the years ended December 31, 2018, 2017 and 2016 are recorded in the following accounts:

	2018		2017		2016
Cash Flow Hedges
Recognized in accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives	$	726	$	2,797	$	1,277
Reclassified from accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives—Interest expense to third parties		34		(749)		(694)
Not Designated as Hedges
Foreign exchange contracts—Other expenses	$	(12,355)	$	1,155	$	4,128

F-34

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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 December 31, 2018 and 2017, all of which are classified as Level 2:

	Level 2
	2018		2017
Assets
Interest rate derivatives	$	16,579	$	8,751
Foreign exchange contracts		86		1,393
Total assets	$	16,665	$	10,144
Liabilities
Interest rate derivatives	$	9,264	$	11,336
Foreign exchange contracts		—		325
Total liabilities	$	9,264	$	11,661

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

Items Measured at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from application of lower of cost or market accounting or impairment charges of individual assets.

Certain equipment held for sale measured at fair value on a nonrecurring basis at June 30, 2018 and December 31, 2017 was $144,913 and $123,503, respectively. The fair market value of these assets was based on an internal valuation methodology, which used industry guide book values adjusted for recent remarketing history and was classified as Level 3 under the fair value hierarchy. For the years ended December 31, 2018, 2017 and 2016, the Company recorded impairment losses on equipment held for sale of $2,894, $5,646 and $11,400, respectively. In addition, the Company recorded (gains) losses on the sale of the equipment held of $11,018,  $9,784 and $(1,690) for the years ended December 31, 2018, 2017 and 2016, respectively. Both the impairment losses and the gains on the sale of equipment held were included in “Other expenses” in the accompanying consolidated statements of income.

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.

F-35

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

Financial Instruments Not Carried at Fair Value

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

	2018				2017
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value *		Amount		Fair Value *
Receivables	$	9,950,926	$	9,859,920	$	10,421,545	$	10,379,020
Long-term debt	$	6,259,839	$	6,149,778	$	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.

Financial Assets

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

Financial Liabilities

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

NOTE 11: GEOGRAPHICAL INFORMATION

Based on how its operations are managed and evaluated by management, the Company is viewed as one operating segment.

F-36

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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

	2018		2017		2016
Revenues
United States	$	693,191	$	756,210	$	780,071
Canada		192,645		187,107		170,825
Eliminations		(7,482)		(4,385)		(4,175)
Total	$	878,354	$	938,932	$	946,721
Interest expense
United States	$	276,956	$	279,542	$	269,560
Canada		55,806		47,413		39,714
Eliminations		(7,482)		(4,385)		(4,175)
Total	$	325,280	$	322,570	$	305,099
Net income
United States	$	97,790	$	189,225	$	121,122
Canada		59,055		61,264		66,390
Total	$	156,845	$	250,489	$	187,512
Depreciation and amortization
United States	$	191,347	$	238,037	$	208,942
Canada		42,579		44,864		40,528
Total	$	233,926	$	282,901	$	249,470
Expenditures for equipment on operating leases
United States	$	533,706	$	507,349	$	555,219
Canada		146,560		128,470		168,164
Total	$	680,266	$	635,819	$	723,383
Provision for credit losses
United States	$	28,932	$	40,516	$	35,867
Canada		2,767		382		(5,021)
Total	$	31,699	$	40,898	$	30,846

	2018		2017		2016
Total assets
United States	$	10,482,805	$	10,738,403	$	12,016,606
Canada		2,511,839		2,838,754		2,400,814
Eliminations		(62,732)		(65,079)		(374,161)
Total	$	12,931,912	$	13,512,078	$	14,043,259
Managed receivables
United States	$	8,080,756	$	8,265,090	$	9,048,303
Canada		1,944,582		2,235,651		1,877,423
Total	$	10,025,338	$	10,500,741	$	10,925,726

NOTE 12: 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

F-37

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

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 at December 31, 2018, 2017, and 2016 is as follows:

	2018		2017		2016
Subsidy from CNH Industrial North America
Retail	$	149,363	$	157,496	$	170,425
Wholesale		123,615		166,426		156,654
Operating lease		60,841		68,987		70,138
Income from Iveco Argentina
Wholesale factoring		10,881		5,199		—
Income from affiliated receivables
CNH Industrial North America		1,096		—		1,155
Other affiliates		137		150		—
Total interest and other income from affiliates	$	345,933	$	398,258	$	398,372

Interest expense to affiliates was $7,533, $11,442 and $7,218, respectively, for the years ended December 31, 2018, 2017 and 2016. Fees charged by affiliates were $47,475 and $46,431 and $45,225 for the years ended December 31, 2018, 2017 and 2016, respectively, and represents payroll and other human resource services CNH Industrial America performs on behalf of the Company.

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

	2018				2017
	Rate	Maturity	Amount		Rate	Maturity	Amount
Affiliated receivables
CNH Industrial America	0%	—	$	24,724	0%	—	$	49,311
CNH Industrial Canada Ltd.	0%	—		6,233	0%	—		11,282
Other affiliates	0%	—		12,432	0%	—		12,540
Total affiliated receivables			$	43,389			$	73,133
Affiliated debt
CNH Industrial America	2.50%	2019	$	99,455	4.31%	2018	$	327,160
CNH Industrial Canada Ltd.	3.80%	2019		176,816	4.19%	2018		118,642
Total affiliated debt			$	276,271			$	445,802

Included in “Other Assets” in the accompanying balance sheet were tax receivables due from related parties of $39,174 and $3,513 as of December 31, 2018 and 2017, respectively. Accounts payable and other accrued liabilities, including tax payables, of $4,740 and $60,070, respectively, as of December 31, 2018 and 2017, were payable to related parties.

F-38

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

NOTE 13: 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 and dealer financing managed portfolio. At December 31, 2018, the total credit limit available was $5,919,819, of which $3,499,835 was utilized.

NOTE 14: SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

CNH Industrial Capital America and New Holland Credit, which are 100%‑owned subsidiaries of CNH Industrial Capital LLC (the “Guarantor Entities”), 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 December 31, 2018 and 2017 and for the three years ended December 31, 2018. The condensed consolidating financial information reflects investments in consolidated subsidiaries under the equity method of accounting.

F-39

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	Condensed Statements of Comprehensive Income for the
	Year Ended December 31, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	9,170	$	192,099	$	—	$	201,269
Interest income on wholesale notes		—		(1,030)		67,929		—		66,899
Interest and other income from affiliates		70,880		200,821		297,443		(223,211)		345,933
Rental income on operating leases		—		187,089		54,493		—		241,582
Other income		—		87,710		2,842		(67,881)		22,671
Total revenues		70,880		483,760		614,806		(291,092)		878,354
EXPENSES
Interest expense:
Interest expense to third parties		156,839		(8,767)		169,675		—		317,747
Interest expense to affiliates		—		199,890		30,854		(223,211)		7,533
Total interest expense		156,839		191,123		200,529		(223,211)		325,280
Administrative and operating expenses:
Fees charged by affiliates		—		45,545		69,811		(67,881)		47,475
Provision for credit losses		—		8,445		23,254		—		31,699
Depreciation of equipment on operating leases		—		189,228		42,577		—		231,805
Other expenses		22		18,249		25,507		—		43,778
Total administrative and operating expenses		22		261,467		161,149		(67,881)		354,757
Total expenses		156,861		452,590		361,678		(291,092)		680,037
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(85,981)		31,170		253,128		—		198,317
Income tax provision (benefit)		(20,995)		11,010		51,457		—		41,472
Equity in income of consolidated subsidiaries accounted for under the equity method		221,831		201,671		—		(423,502)		—
NET INCOME	$	156,845	$	221,831	$	201,671	$	(423,502)	$	156,845
COMPREHENSIVE INCOME	$	110,009	$	174,995	$	161,250	$	(336,245)	$	110,009

F-40

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	Condensed Balance Sheets as of December 31, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	$	—	$	118,508	$	41,820	$	—	$	160,328
Restricted cash		—		—		639,543		—		639,543
Receivables, less allowance for credit losses		—		1,472,678		8,478,248		—		9,950,926
Affiliated accounts and notes receivable		2,310,137		2,122,129		2,268,477		(6,657,354)		43,389
Equipment on operating leases, net		—		1,357,493		366,724		—		1,724,217
Equipment held for sale		—		192,772		17,219		—		209,991
Investments in consolidated subsidiaries accounted for under the equity method		2,796,050		2,461,139		—		(5,257,189)		—
Goodwill and intangible assets, net		—		91,754		26,827		—		118,581
Other assets		11,140		56,517		20,681		(3,401)		84,937
TOTAL	$	5,117,327	$	7,872,990	$	11,859,539	$	(11,917,944)	$	12,931,912
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt, including current maturities of long-term debt	$	987,559	$	—	$	3,336,733	$	—	$	4,324,292
Accounts payable and other accrued liabilities		286,527		3,035,024		1,243,183		(3,848,956)		715,778
Affiliated debt		—		2,041,926		1,046,144		(2,811,799)		276,271
Long-term debt		2,487,509		(10)		3,772,340		—		6,259,839
Total liabilities		3,761,595		5,076,940		9,398,400		(6,660,755)		11,576,180
Stockholder’s equity		1,355,732		2,796,050		2,461,139		(5,257,189)		1,355,732
TOTAL	$	5,117,327	$	7,872,990	$	11,859,539	$	(11,917,944)	$	12,931,912

F-41

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	Condensed Statements of Cash Flows for the
	Year Ended December 31, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	142,488	$	488,329	$	143,064	$	(411,000)	$	362,881
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(9,080,473)		(9,991,699)		7,269,611		(11,802,561)
Collections of receivables		—		8,967,965		10,375,251		(7,270,276)		12,072,940
Purchase of equipment on operating leases, net		—		(146,618)		(65,391)		—		(212,009)
Change in property and equipment and software, net		—		(5,427)		—		—		(5,427)
Net cash from (used in) investing activities		—		(264,553)		318,161		(665)		52,943
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(211,322)		(128,802)		185,948		(154,176)
Net change in indebtedness		(12,488)		(54,285)		(140,562)		—		(207,335)
Dividends paid to CNH Industrial America LLC		(130,000)		—		(225,717)		225,717		(130,000)
Net cash from (used in) financing activities		(142,488)		(265,607)		(495,081)		411,665		(491,511)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(41,831)		(33,856)		—		(75,687)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of year		—		160,339		715,219		—		875,558
End of year	$	—	$	118,508	$	681,363	$	—	$	799,871

F-42

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	Condensed Statements of Comprehensive Income for the
	Year Ended December 31, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	16,206	$	185,327	$	—	$	201,533
Interest income on wholesale notes		—		(1,107)		66,828		—		65,721
Interest and other income from affiliates		100,033		243,273		326,346		(271,394)		398,258
Rental income on operating leases		—		197,859		53,750		—		251,609
Other income		—		94,408		1,906		(74,503)		21,811
Total revenues		100,033		550,639		634,157		(345,897)		938,932
EXPENSES
Interest expense:
Interest expense to third parties		164,836		2,125		144,167		—		311,128
Interest expense to affiliates		—		236,267		46,569		(271,394)		11,442
Total interest expense		164,836		238,392		190,736		(271,394)		322,570
Administrative and operating expenses:
Fees charged by affiliates		—		44,666		76,268		(74,503)		46,431
Provision for credit losses		—		11,090		29,808		—		40,898
Depreciation of equipment on operating leases		—		235,911		44,854		—		280,765
Other expenses		—		33,176		11,651		—		44,827
Total administrative and operating expenses		—		324,843		162,581		(74,503)		412,921
Total expenses		164,836		563,235		353,317		(345,897)		735,491
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(64,803)		(12,596)		280,840		—		203,441
Income tax provision (benefit)		(24,331)		(148,033)		125,316		—		(47,048)
Equity in income of consolidated subsidiaries accounted for under the equity method		290,961		155,524		—		(446,485)		—
NET INCOME	$	250,489	$	290,961	$	155,524	$	(446,485)	$	250,489
COMPREHENSIVE INCOME	$	294,462	$	334,934	$	192,936	$	(527,870)	$	294,462

F-43

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	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

F-44

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	Condensed Statements of Cash Flows for the
	Year Ended December 31, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	564,252	$	838,812	$	130,049	$	(922,660)	$	610,453
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(8,276,424)		(9,446,211)		6,808,056		(10,914,579)
Collections of receivables		—		8,316,852		9,897,291		(6,808,286)		11,405,857
Purchase of equipment on operating leases, net		—		(136,711)		(63,230)		—		(199,941)
Change in property and equipment and software, net		—		(1,614)		—		—		(1,614)
Net cash from (used in) investing activities		—		(97,897)		387,850		(230)		289,723
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(683,231)		48,874		922,890		288,533
Net change in indebtedness		(279,252)		(48,999)		(576,992)		—		(905,243)
Dividends paid to CNH Industrial America LLC		(285,000)		—		—		—		(285,000)
Net cash from (used in) financing activities		(564,252)		(732,230)		(528,118)		922,890		(901,710)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		8,685		(10,219)		—		(1,534)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of year		—		151,654		725,438		—		877,092
End of year	$	—	$	160,339	$	715,219	$	—	$	875,558

F-45

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	Condensed Statements of Comprehensive Income for the
	Year Ended December 31, 2016
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	15,990	$	195,516	$	—	$	211,506
Interest income on wholesale notes		—		(96)		69,006		—		68,910
Interest and other income from affiliates		97,254		232,020		324,262		(255,164)		398,372
Rental income on operating leases		—		196,911		46,620		—		243,531
Other income		—		103,422		2,837		(81,857)		24,402
Total revenues		97,254		548,247		638,241		(337,021)		946,721
EXPENSES
Interest expense:
Interest expense to third parties		162,264		6,209		129,408		—		297,881
Interest expense to affiliates		—		226,544		35,838		(255,164)		7,218
Total interest expense		162,264		232,753		165,246		(255,164)		305,099
Administrative and operating expenses:
Fees charged by affiliates		—		43,469		83,613		(81,857)		45,225
Provision for credit losses		—		9,879		20,967		—		30,846
Depreciation of equipment on operating leases		—		206,924		40,514		—		247,438
Other expenses		—		28,035		8,262		—		36,297
Total administrative and operating expenses		—		288,307		153,356		(81,857)		359,806
Total expenses		162,264		521,060		318,602		(337,021)		664,905
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(65,010)		27,187		319,639		—		281,816
Income tax provision (benefit)		(24,261)		10,204		108,361		—		94,304
Equity in income of consolidated subsidiaries accounted for under the equity method		228,261		211,278		—		(439,539)		—
NET INCOME	$	187,512	$	228,261	$	211,278	$	(439,539)	$	187,512
COMPREHENSIVE INCOME	$	204,914	$	245,663	$	225,994	$	(471,657)	$	204,914

F-46

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	Condensed Statements of Cash Flows for the Year Ended December 31, 2016
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	(102,001)	$	(9,907)	$	638,851	$	158,127	$	685,070
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(8,575,745)		(9,116,990)		6,888,764		(10,803,971)
Collections of receivables		—		8,660,606		9,775,641		(6,889,105)		11,547,142
Purchase of equipment on operating leases, net		—		(255,439)		(105,992)		—		(361,431)
Change in property and equipment and software, net		—		(887)		(3)		—		(890)
Net cash from (used in) investing activities		—		(171,465)		552,656		(341)		380,850
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		172,351		224,700		(286,842)		110,209
Net change in indebtedness		392,001		(21,166)		(1,477,741)		—		(1,106,906)
Dividends paid to CNH Industrial America LLC		(290,000)		—		(129,056)		129,056		(290,000)
Net cash from (used in) financing activities		102,001		151,185		(1,382,097)		(157,786)		(1,286,697)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(30,187)		(190,590)		—		(220,777)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of year		—		181,841		916,028		—		1,097,869
End of year	$	—	$	151,654	$	725,438	$	—	$	877,092

NOTE 15: SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED)

	For the Year Ended December 31, 2018
	First		Second		Third		Fourth		Fiscal
	Quarter		Quarter		Quarter		Quarter		Year
Revenues	$	226,371	$	226,141	$	211,281	$	214,561	$	878,354
Interest expense		78,428		78,804		81,557		86,491		325,280
Administrative and operating expenses		96,020		85,287		83,332		90,118		354,757
Income tax provision		12,120		14,422		8,111		6,819		41,472
Net income	$	39,803	$	47,628	$	38,281	$	31,133	$	156,845

F-47

CNH INDUSTRIAL CAPITAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands)

	For the Year Ended December 31, 2017
	First		Second		Third		Fourth		Fiscal
	Quarter		Quarter		Quarter		Quarter		Year
Revenues	$	232,834	$	229,863	$	234,889	$	241,346	$	938,932
Interest expense		74,728		78,797		79,772		89,273		322,570
Administrative and operating expenses		101,676		95,994		106,591		108,660		412,921
Income tax provision		18,037		16,885		14,387		(96,357)		(47,048)
Net income	$	38,393	$	38,187	$	34,139	$	139,770	$	250,489

NOTE 16: SUBSEQUENT EVENTS

On February 6, 2019, the Company, through a trust, issued $786,040 of amortizing asset-backed notes secured by U.S. retail loan receivables. 

F-48

EX-10.2

EXHIBIT 10.2

FOURTH AMENDED AND RESTATED

WHOLESALE AND PARTS CNHi CAPITAL FINANCING AGREEMENT

THIS FOURTH AMENDED AND RESTATED WHOLESALE AND PARTS CNHi CAPITAL FINANCING AGREEMENT is made effective as of the 31st day of December, 2017 by CNH Industrial America, LLC, a Delaware limited liability company ("CNHi America") and CNH Industrial Capital America LLC, a Delaware limited liability company ("CNHi Capital").

WHEREAS, CNHi America sells parts, supplies, inventory, equipment and other goods and services to dealers and distributors of agricultural, construction and industrial goods;

WHEREAS, CNHi Capital has made loans to dealers to finance their purchase of parts, supplies, inventory, equipment and other goods and services from CNHi America;

WHEREAS, CNHi America and CNHi Capital desire to modify the financing accommodations provided under this Agreement with respect to the parts, supplies, inventory, equipment and other goods and services sold by CNHi America to said dealers in the future;

WHEREAS, CNHi America was formerly known as Case, LLC, and is the successor in interest to New Holland North America, Inc. (“NHNA”);

WHEREAS, CNHi Capital is the successor in interest to New Holland Credit Company LLC (“NHCC”) under that certain Wholesale and Retail Credit Financing Agreement between NHCC and NHNA, dated as of April 30, 1991 (the “Original Agreement”), as previously amended by the terms of that certain Amended and Restated Wholesale and Parts Credit Financing Agreement dated as of July 1, 2003, that certain Second Amended and Restated Wholesale and Parts Credit Financing Agreement dated as of September 30, 2003 and that certain Third Amended and Restated Wholesale and Parts Credit Financing Agreement dated December 31, 2004 (the “NH Agreements”);

WHEREAS, CNHi America and CNHi Capital are parties to that certain Wholesale and Parts CNH Capital Financing Agreement between CNHi Capital (as successor in interest to Case Credit Corporation) and CNHi America dated as of July 1, 2003, as previously amended by the terms of that certain Amended and Restated Wholesale and Parts CNH Capital Financing Agreement dated as of September 30, 2003, that certain Second Amended and Restated Wholesale and Parts CNH Capital Financing Agreement dated December 31, 2004, and that certain Third Amended and Restated Wholesale and Parts CNH Capital Financing Agreement dated November 3, 2011 (the “Case Agreements”); and

WHEREAS, CNHi America and CNHi Capital desire to amend and restate the NH Agreements and the Case Agreements.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

DEFINITIONS

Unless otherwise defined in this Agreement, capitalized terms shall have the meaning given them in this Article.

"Agreement" means this Fourth Amended and Restated Wholesale and Parts CNHi Capital Financing Agreement.

"Business Day" means any day other than a Saturday, Sunday or other day CNHi Capital observes as a holiday.

“Capital Default” means a default by a Dealer pursuant to a CNHi Capital Financing Agreement.

“CNHi America Dealer Agreement” means the Sales and Service Agreement or other similar agreement between CNHi America and a Dealer pursuant to which CNHi America sells CNHi America Parts and Wholegoods to the Dealer.

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"CNHi America Parts and Wholegoods" means parts, supplies, inventory, equipment and other goods and services sold to Dealers by CNHi America, whether branded Case, Case IH, New Holland, New Holland Construction or under any other brand owned by or licensed to CNHi America and its affiliates, and includes, without limitation, replacement parts, attachments, supplies, garments, premiums, tooling, display cases, computers, software, flags, banners, posters, yellow page listings, training, warranty claims and any other services provided by CNHi America.

“CNHi America Sales Incentive” shall have the meaning given it in Article IV.

“CNHi America Subsidy” shall have the meaning given it in Section 3.2.

“CNHi Capital Financing Agreement” means any financing and/or security agreement or other similar agreement between CNHi Capital and a Dealer (including, without limitation, any financing or security agreement assigned to CNHi Capital by CNHi America or NHCC) pursuant to which CNHi Capital extends credit to or for the benefit of the Dealer and/or the Dealer grants CNHi Capital a security interest in any of the Dealer’s assets.

"Dealer" means a dealer authorized by CNHi America to sell or distribute any goods manufactured, sold or distributed by CNHi America and its affiliates and which has executed a CNHi America Dealer Agreement.

“Dealer Termination” shall mean the termination in accordance with the terms and conditions of the CNH Dealer Agreement by CNHi America or a Dealer of the CNHi America Dealer Agreement.

"Manufacturer Default" means a default by a Dealer pursuant to a CNHi America Dealer Agreement.

"Open Account" means an account established for a Dealer by CNHi Capital pursuant to which CNHi Capital finances parts and other miscellaneous items or services sold to the Dealer.

"Open Account Balance" means, as to any Open Account, the balance owing to CNHi Capital by the Dealer, including interest and other changes, less any amount owing to the Dealer as a credit.

"Open Account Credit Line" means the maximum dollar amount of financing that CNHi Capital will finance for a Dealer pursuant to a Open Account.

"Open Account Terms" means the terms under which CNHi America sells parts and other miscellaneous items or services (excluding wholegoods) to Dealers and pursuant to which CNHi Capital finances such goods for the Dealers, as modified from time to time.

“Repurchase Event” shall mean the occurrence of a Capital Default or a Dealer Termination.

"Trade-In Equipment" means (a) used equipment that is accepted in partial payment in connection with the sale or lease of a new item of CNHi America equipment or (b) any equipment that is in a trade-in chain that relates back to the sale or lease of a new item of CNHi America equipment.

"Wholesale Credit Line" means the maximum dollar amount of CNHi America wholegoods and parts inventory that CNHi Capital will consider financing for a Dealer.

"Wholesale Finance Plan" means a plan established by CNHi Capital, as modified from time to time in consultation with CNHi America, setting forth the terms and conditions of the wholesale financing for Dealers.

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ARTICLE II

WHOLESALE FINANCING

2.1      Applications. CNHi America shall provide to CNHi Capital such credit information, completed application forms and any and all other information and documents requested by CNHi Capital (in a format to be prescribed by CNHi Capital from time to time) to enable CNHi Capital to evaluate any request by a Dealer for a Wholesale Credit Line.  CNHi America agrees to use its reasonable best efforts to assure that all information provided by it to CNHi Capital will be accurate and complete.

2.2      Credit Decisions. CNHi Capital shall apply reasonable credit standards in determining the creditworthiness of Dealers.  CNHi Capital shall strive to respond to credit applications within two (2) weeks following receipt of all requested information and material.  If CNHi Capital conditions or rejects a Dealer application, CNHi Capital shall provide to CNHi America and, as required by applicable law, to the applicant, the reasons for such conditioning or rejection.

2.3      Wholesale Credit Lines; Terms and Conditions of Financing. CNHi Capital shall, in its sole discretion, establish for each Dealer the initial Wholesale Credit Lines for each Dealer and, from time to time, review such lines to be made available to each Dealer under the terms hereof.   CNHi Capital may, at its sole discretion, establish all of the terms and conditions relating to the financing of Dealers, including, without limitation, the amounts to be advanced and the interest rates to be charged to Dealers on financing provided by CNHi Capital.  CNHi Capital, at its sole discretion, may reduce, suspend, otherwise modify or terminate any Dealer’s Wholesale Credit Line and may amend or modify the terms and conditions of financing provided by CNHi Capital.

2.4      CNHi America Wholegoods Financing Eligibility.  The terms and conditions of CNHi America wholesale financing for Dealers shall be subject to the terms and conditions of the Wholesale Finance Plan as established and amended by CNHi Capital from time to time.  Without limiting the foregoing:

(a)      New Equipment.  New Case, CaselH, New Holland and New Holland Construction brand equipment or other equipment with brands owned by or licensed to CNHi America will be eligible for wholesale financing in an amount equal to the invoice price thereof plus freight and/or sundry charges.

(b)      Trade-In Equipment.  Trade-In equipment will be eligible for wholesale financing in an amount determined from time-to-time by CNHi America and notified in writing to CNHi Capital, as long as the amount financed is not greater than market value.  The minimum amount financed will be $1,500.

2.5      Advances, Creation and Ownership of Receivables.  Except as otherwise provided in Article VI, within 3 Business Days of receipt of an invoice from CNHi America representing the sale of CNHi America Parts or Wholegoods or other goods or services to a Dealer that (i) have been delivered or provided to a Dealer, or (ii) are In transit to a Dealer, CNHi Capital shall pay the amount of said invoice to CNHi America in immediately available funds. CNHi Capital may net against such advances any amounts due it pursuant to this Agreement, including, without limitation, all CNHi America Sales Incentives and any CNHi America Subsidy; provided, however, that as between CNHi America and the applicable Dealer, any amounts so deducted by CNHi Capital shall be deemed to have been received by CNHi America and the Dealer’s obligations in respect of the related invoice shall be reduced in a like amount. CNHi America and CNHi Capital intend that each payment made by CNHi Capital pursuant to the first sentence of this Section 2.5 shall constitute an advance by CNHi Capital to the applicable Dealer, the proceeds of which are paid by CNHi Capital to CNHi America on behalf of that Dealer to pay the purchase price of the CNHi America Parts or Wholegoods or other goods or services. Upon such payment, a receivable owing by the applicable Dealer to CNHi Capital arises, and such receivable is owned by CNHi Capital, not by CNHi America. To the extent that, notwithstanding the parties' intent as stated above, CNHi America is deemed to own any such receivable (and to the extent CNHi America owns any similar receivables as to which it has received an advance from CNHi Capital), CNHi America hereby sells, assigns, transfers and otherwise conveys to CNHi Capital all of CNHi America's right, title and interest in and to such receivables, any collateral security therefore, any related guaranties or other support obligations and any proceeds of any of the foregoing. CNHi Capital is authorized to file appropriate Uniform Commercial Code financing statements to perfect the foregoing grant and to take all actions necessary from time to time to continue the perfection of such grant.

2.6      CNHi America Representations and Warranties; Indemnification.  With respect to each invoice submitted by CNHi America to CNHi Capital for financing, and each advance made by CNHi Capital with respect thereto, CNHi

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America represents and warrants that (a) it has complied and will comply with its policy regarding the recognition of revenue for the sale of CNHi America Parts or Wholegoods and that it has satisfied the conditions precedent therein (“CNHi America Revenue Policy”), (b) it has complied and will comply with all applicable CNHi Capital policies, guidelines & procedures (collectively the “CNHi Capital Policy”) and (c) that the invoice represents a valid and enforceable obligation of the related Dealer that is not subject to any dispute, counterclaim or right of setoff of any kind or nature.  In the event a Dealer disputes in whole or in part the validity or enforceability of the invoice or the amount of the obligation of the Dealer represented thereby, CNHi America agrees to resolve such dispute with the Dealer within 60 days of its receipt of notice from CNHi Capital of the existence of such dispute. In the event CNHi America (a) fails to comply or satisfy the conditions precedent for the recognition of revenue as set forth in the CNHi America Revenue Policy as it exists as of the date of this Agreement, or (b)  fails to comply with the CNHi Capital Policy, or (c) resolve such disputes within such 60-day period or CNHi America, CNHi America agrees to make an indemnity payment to CNHi Capital in the amount of the then outstanding principal plus accrued interest, if any, owed by the Dealer. CNHi Capital may deduct such amounts from monies otherwise payable by CNHi Capital to CNHi America hereunder.

ARTICLE III

WHOLESALE FINANCE CHARGES

3.1      Subsidized Dealer Financing.  CNHi America shall establish from time to time the applicable period during which its Dealers are eligible to receive interest-free or reduced-rate financing for the purchase of CNHi America Parts and Wholegoods.

3.2      CNHi America Subsidy. In exchange for CNHi Capital’s agreement to provide interest-free or reduced-rate financing to the Dealer during such period described in Section 3.1, CNHi America shall pay CNHi Capital a subsidy (the “CNHi America Subsidy”).  The CNHi America Subsidy shall be calculated by CNHi Capital at its sole discretion.

3.3      Dealer Responsibility.  CNHi Capital shall establish from time to time interest rates and other charges applicable to financing and other services extended to Dealers under the Open Account and Wholesale Finance Plan terms.  CNHi Capital shall bill and collect directly from Dealers finance charges for which they are responsible.

ARTICLE IV

SALES INCENTIVES

From time to time CNHi America may offer incentives to Dealers that require a payment to the Dealer from CNHi America upon the Dealer’s sale or lease of an item of equipment (a “CNHi America Sales Incentive”).  CNHi Capital may accept an assignment from Dealers of their rights in such CNHi America Sales Incentives, and, upon receipt thereof, CNHi Capital may apply such amounts to reduce the amounts due from Dealers to CNHi Capital with respect to wholesale financing of such items of equipment.  CNHi America shall be solely responsible for resolving any and all disputes with Dealers relating to such CNHi America Sales Incentives.

ARTICLE V

WHOLESALE AUDITS

5.1      Physical Audits.  CNHi Capital shall conduct dealer inventory audits of equipment and parts covered by wholesale financing for Dealers.  The frequency of conducting such audits shall be determined by CNHi Capital in its sole discretion.  Such audits shall include CNHi America equipment that is on demonstration to prospective customers of a Dealer and equipment subject to any rental plan.

5.2      Audit Reports.  CNHi Capital shall prepare reports, including the location and status of equipment and/or parts, as appropriate, with respect to each inspection and audit of the Dealer, and CNHi Capital shall provide copies of such audit reports to CNHi America upon written request.

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ARTICLE VI

CREDIT WATCH AND STOP SHIP STATUS

6.1      Credit Watch Status. Upon a Capital Default, or if for any reason CNHi Capital deems itself insecure with respect to financing being provided to a Dealer, CNHi Capital may place such Dealer on a status of Credit Watch. CNHi Capital will provide prompt oral and written notification to CNHi America of such Credit Watch status.  CNHi Capital shall advise CNHi America of the reason for any Credit Watch status and actions necessary to remove the Credit Watch status.  Upon notice of any Credit Watch, all future wholegoods shipments to the affected Dealer must be approved in advance by CNHi Capital.

6.2      Open Account Stop Ship Status.  Upon a Capital Default, or if for any reason CNHi Capital deems itself insecure with respect to financing being provided to a Dealer, CNHi Capital may place Dealer's Open Account on Stop Ship status. CNHi Capital will provide prompt oral and written notification to CNHi America of such Stop Ship status.  CNHi Capital shall advise CNHi America of the reason for any Stop Ship status and actions necessary to reinstate CNHi America Open Account Terms.  Upon notification of such Stop Ship  status, CNHi America shall not ship any additional parts to the affected Dealer, or invoice any other miscellaneous charges to the affected Dealer’s open account.

6.3      Indemnification.  In the event CNHi America breaches any of the terms of its agreement set forth in Sections 6.1 or 6.2 above, CNHi America agrees to indemnify CNHi Capital for any and all loss, cost, damage or expense suffered by CNHi Capital as a result of such breach, including, without limitation, any loss of principal or interest for CNHi Capital arising as a result of such breach.

ARTICLE VII

CNHI AMERICA WHOLEGOODS AND PARTS REPURCHASE

7.1      Dealer Termination; Manufacturer Default.  CNHi America shall provide CNHi Capital with as much advance notice as possible of the occurrence of a Dealer Termination.  CNHi America shall also provide CNHi Capital with oral and written notice of the occurrence of a Manufacturer Default.  Upon the occurrence of a Repurchase Event, CNHi America shall assist CNHi Capital in the liquidation of the affected Dealer’s assets securing financing provided by CNHi Capital, and shall repurchase certain wholegoods and parts of the affected Dealer, all as herein provided.

7.2      Joint Audit.  Within 3 Business Days (or such longer periods as may be mutually agreed by CNHi America and CNHi Capital) following the occurrence of a Repurchase Event, CNHi America and CNHi Capital will conduct a joint audit of the Dealer.  A written report shall be prepared immediately and signed by representatives of both CNHi America and CNHi Capital.

7.3      Possession of CNHi America Parts and Wholegoods.  Upon the occurrence of a Repurchase Event, CNHi America and CNHi Capital shall attempt to obtain the Dealer's consent to remove all CNHi America Parts and Wholegoods and other collateral in which CNHi Capital holds a security interest.  If the Dealer refuses to surrender possession of the same, CNHi Capital, at its expense, shall take such legal action as may be necessary to effect possession.  CNHi America shall promptly accept all CNHi America Parts and Wholegoods when they have been made unconditionally available to CNHi America by CNHi Capital if such acceptance is required under applicable buy-back law or any agreement between CNHi America and such Dealer.  CNHi America shall promptly, at its sole expense, remove all such CNHi America Parts and Wholegoods from the Dealer’s location.

7.4      Purchase by CNHi America of Parts.   With respect to any new CNHi America parts made available to CNHi America that (i) are required to be repurchased from the Dealer by CNHi America under an applicable “buy-back law” or any agreement between CNHi America and such Dealer, and (ii) the proceeds of which are necessary to clear the obligations of the Dealer to CNHi Capital (or its assigns) in whole or in part, CNHi America shall, upon the occurrence of a Repurchase Event,  purchase such CNHi America parts and pay to CNHi Capital, as owner of the obligations of the Dealer with respect to such items of CNHi America parts (or as servicer for the owner), an amount equal to the lesser of a) the unpaid balance (including interest, charges, etc.) due from the Dealer on the date of repossession and b) the amount CNHi America is required to pay Dealer to repurchase the CNHi America Parts under applicable law or  CNHi America’s agreement(s) with the Dealer. Such amount shall be paid to CNHi Capital within 30 days following the date on which CNHi Capital makes such parts available to CNHi America.

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7.5      Marketing of CNHi America Parts.  With respect to all parts not covered by Section 7.4 above CNHi America will cooperate with CNHi Capital as requested in the sale thereof in a commercially reasonable manner on behalf of CNHi Capital, as owner or servicer of the related obligations.  CNHi America shall promptly deliver to CNHi Capital the proceeds of such sale, less such out-of-pocket expenses incurred in connection with such sale as agreed to in writing by CNHi America and CNHi Capital.

7.6      Wholegoods Repurchase by CNHi America.  With respect to new, unused, resalable CNHi America wholegoods made available to CNHi America that (i) are required to be repurchased from the Dealer by CNHi America  under an applicable “buy-back law” or any agreement between CNHi America and such Dealer, and (ii) the proceeds of which are necessary to clear the obligations of the Dealer to CNHi Capital (or its assigns) in whole or in part, CNHi America shall, upon the occurrence of a Repurchase Event, pay to CNHi Capital, as owner of the obligations of the Dealer to CNHi Capital with respect thereto (or as servicer for such owner) an amount equal to the lesser of (a) the unpaid balance due from the Dealer on the date of repossession, and (b) the amount CNHi America is required to pay Dealer to repurchase the CNHi America wholegoods under applicable law or CNHi America’s agreement(s) with the Dealer. Such amount shall be paid to CNHi Capital within 30 days following the date on which CNHi Capital makes such wholegoods available to CNHi America.

7.7      Marketing of Equipment.  With respect to all items of equipment not covered by Section 7.6 above , CNHi America will cooperate with CNHi Capital as requested in the sale thereof in a commercially reasonable manner on behalf of CNHi Capital, as owner or servicer of the related obligations.  CNHi America shall promptly deliver to CNHi Capital the proceeds of such sale, less such out-of-pocket expenses incurred in connection with such sale as agreed to in writing by CNHi America and CNHi Capital.

7.8      Collection Cooperation.  Each of CNHi Capital and CNHi America shall cooperate in the other's efforts to collect amounts due from Dealers following recovery of possession and disposition of CNHi America Parts and Wholegoods financed pursuant to this Agreement.

7.9      Compliance with Buy-Back Laws.  Nothing herein shall be construed as CNHi Capital's assumption of obligations arising under (a) federal or state buyback law, or any rules, regulations and court decisions thereunder, or (b) any agreements between a Dealer and CNHi America regarding any buy-backs by CNHi America.  CNHi America shall at all times ensure that the activities undertaken pursuant to this Article are in compliance with such laws, regulations/rules, and agreements.

7.10    Return Administration.  Promptly upon the occurrence of a Repurchase Event, CNHi America shall be responsible for causing the affected Dealer to produce picking tickets and reports necessary for the Identification of CNHi America parts to be repossessed or that are voluntarily returned by a Dealer (after Dealer Default or otherwise), and shall be responsible for valuing and determining the eligibility for return of all CNHi America Parts.

ARTICLE VIII

CNHi AMERICA GUARANTY OBLIGATIONS

CNHi America hereby guarantees all obligations, including the payment of finance charges, of a Dealer to CNHi Capital with respect to the following:

(a)          CNHi America Parts and Wholegoods sold or otherwise disposed of by the Dealer prior to the CNHi America invoice date therefor; and

(b)          All CNHi America Parts and Wholegoods with respect to which CNHi America failed to comply with its obligations under Sections 7.4 and 7.6 hereof.

CNHi America agrees to purchase from CNHi Capital, upon demand, all obligations of the Dealer with respect to financing guaranteed by CNHi America pursuant to Article VIII.

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ARTICLE IX

BOOKS, RECORDS AND REPORTS

CNHi America shall maintain books of account and other records with respect to matters governed by the provisions of this Agreement.  CNHi America shall afford CNHi Capital and its authorized agents reasonable access during normal business hours to such books of account and other records and CNHi America shall cause its personnel to assist in any examination thereof.  Any examination will be conducted in a manner that does not unreasonably interfere with normal business operations or customer or employee relations.

ARTICLE X

DEFAULT

The following shall constitute an event of default ("Event of Default") hereunder

10.1    Bankruptcy.  If with respect to either CNHi America or CNHi Capital there shall be the commencement, voluntary or involuntary, of any case, proceeding or other action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to such party, or seeking to adjudicate such party as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to such party or its debts, or seeking appointment of a receiver, trustee, custodian or other similar official for such party or any substantial part of its assets which remains undismissed, undischarged or unbonded for a period of 60 days from the entry thereof; or (ii) by or against such party of any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of any order or any such relief which shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or, (iii) by such party in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth above; In addition, the failure or inability of such party generally to, or the admission in writing by such party of its inability to, pay its debts as they become due shall be an Event of Default.

10.2     Agreements.  If either CNHi America or CNHi Capital shall materially violate any covenant or agreement contained herein or in any other agreement between the parties and such violation remains uncured for 30 days following Notice by the other party, with a demand to cure the noted violation.

ARTICLE XI

TERM AND TERMINATION

11.1     Default.  This Agreement may be terminated by either party upon Notice to the other party upon the occurrence of an Event of Default with respect to the other party.

11.2     Initial Term, Continuation; Termination Notice.  The initial term of this Agreement ends on December 31, 2018 (the “Initial Term”). Thereafter, this Agreement shall continue for additional one year terms and after the Initial Term either party may terminate this Agreement upon 90 days prior written Notice to the other party.

11.3     Survival of Rights.  The termination of this Agreement shall not modify or affect the rights or obligations of either party hereunder with respect to any financing extended by CNHi Capital prior to the effective date of termination.

ARTICLE XII

EFFECTIVE DATE

The rights and obligations of the parties hereunder shall be effective as of the date hereof, and shall apply with respect to any and all financing now or hereafter extended by CNHi Capital under the NH Agreements, the Case Agreements and/or this Agreement.

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ARTICLE XIII

EXCLUSIVITY

During the term of this Agreement CNHi America will not offer and will not participate with or assist any other person or entity in offering financial services of the type covered by this Agreement.

ARTICLE XIV

GENERAL PROVISIONS

14.1      Notices.  Except as otherwise provided herein, all notices, requests, consents, approvals or other communications hereunder (collectively "Notices") shall be in writing in the English language, shall be delivered by hand or sent by registered mail postage prepaid, by air courier delivery service or by facsimile transmission addressed as follows (or to such other person or destination as a party may be notice to the other indicate):

If to CNHi Capital:

CNH Industrial Capital America LLC

5729 Washington Ave.

Racine, WI  53406

Fax: (262) 636-5771

Attn: Director Commercial Lending

If to CNHi America:

CNH Industrial America LLC

700 State Street

Racine, WI 53403

Fax 262-636-5651

Attn: Office of the General Counsel

All such Notices and communications hereunder shall be deemed given when received, as evidenced by the acknowledgement of receipt issued with respect thereto by the applicable postal authorities, or the signed acknowledgement of receipt of the person to whom such Notice or communication shall have been addressed, or facsimile transmission answerback, as applicable.

14.2      Governing Law and Venue.  This Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin, without regard to any conflicts of law doctrine that would apply any other jurisdiction's law.

14.3      Entire Agreement.  This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and shall be deemed to amend and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions between the parties, whether oral or written, with respect to the subject matter hereof, including, without limitation, the NH Agreements and the Case Agreements.

14.4      Modifications and Amendments.  No amendment, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the parties hereto.

14.5      Waivers and Extensions. Any party to this Agreement may waive any right, breach, or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.

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14.6      Titles and Headings.  Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.

14.7      Successors and Assigns.  This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective permitted successors and assigns.

14.8      Assignment; No Third Party Beneficiaries.  This Agreement and the rights, duties and obligations hereunder may not be assigned or delegated by either party without the prior written consent of the other party Any assignment or delegation of rights, duties or obligations hereunder made without the prior written consent of the other party hereto shall be void and of no effect.  This Agreement is not intended to confer any rights or benefits on any persons other than the parties hereto.

14.9      Severability.  Any provision of this Agreement which is found to be invalid or unenforceable by any court in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or non-enforceability, and shall not affect the validity or enforceability of the remaining provisions hereof.

14.10    Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

IN  WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

CNH Industrial America LLC		CNH Industrial Capital America LLC
By:	/s/ Richard Konrath	By:	/s/ Douglas MacLeod
Name:	Richard Konrath	Name:	Douglas MacLeod
	(Printed)		(Printed)
Title:	Vice President – General Counsel	Title:	Chief Financial Officer

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EX-10.3

EXHIBIT 10.3

SECOND AMENDED AND RESTATED

WHOLESALE AND PARTS CNHi CAPITAL FINANCING AGREEMENT

THIS SECOND AMENDED AND RESTATED WHOLESALE AND PARTS CNHi CAPITAL FINANCING AGREEMENT is made as of this 31st day of December, 2017 by CNH Industrial Canada, Ltd., a Canada corporation (“CNHi”) and CNH Industrial Capital Canada Ltd., an Alberta corporation (“CNHi Capital”).

WHEREAS, CNHi sells parts, supplies, inventory, equipment and other goods and services to Dealers and distributors of agricultural, construction and industrial goods; and

WHEREAS, CNHi Capital has made loans to Dealers to finance their purchase of parts, supplies, inventory, equipment and other goods and services from CNHi; and

WHEREAS, CNHi desires to obtain financing accommodations for Dealers with respect to the CNHi Parts and Wholegoods it sells to Dealers in the future; and

WHEREAS, CNHi Capital wishes to provide such financing accommodations; and

WHEREAS, Case Credit Ltd. and CNHi entered into that Wholesale and Parts Credit Financing Agreement dated July 22, 2004 (the “Original Agreement”)as amended; and

WHEREAS, CNHi Capital is the successor by conversion of Case Credit Ltd. and the successor in interest to New Holland (Canada) Credit Company (“NHCC”), a partnership between Case Credit Ltd. and CNH Canada Ltd. pursuant to the that Partnership Interest Purchase Agreement dated May 1, 2005; and

WHEREAS, CNHi and CNHi Capital are parties to that certain Amended and Restated Wholesale and Parts CNH Capital Financing Agreement dated November 3, 2011 (the “Amended and Restated Agreement”); and

WHEREAS, CNHi and CNHi Capital desire to amend and restate the Amended and Restated Agreement in order to, among other things, modify the financing accommodations provided under the Original Agreement with respect to the parts, supplies, inventory, equipment and other goods and services sold by CNHi to said dealers in the future; and

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE 1

DEFINITIONS

Unless otherwise defined in this Agreement and the recitals hereto, capitalized terms shall have the meaning given them in this Article and in the CNHi Assignment.

“Advance” has the meaning given it in Section 2.5(b).

“Agreement” means this Second Amended and Restated Wholesale and Parts CNHi Capital Financing Agreement, as the same may be further amended, restated, modified or supplemented from time to time.

“Business Day” means any day other than a Saturday, Sunday or other day CNHi Capital observes as a holiday.

“Capital Default” means a default by a Dealer pursuant to a CNHi Dealer Agreement.

“CNHi Assignment” has the meaning given to it in Section 2.5(e).

“CNHi Capital Receivable” has the meaning given to it in Section 2.5(c).

“CNHi Dealer Agreement” means the Sales and Service Agreement or other similar agreement between CNHi and a Dealer pursuant to which CNHi sells CNHi Parts and Wholegoods to the Dealer.

“CNHi Parts and Wholegoods” means parts, supplies, inventory, equipment and other goods and services sold to Dealers by CNHi, whether branded Case, Case IH, New Holland, New Holland Construction or under any other brand owned by or licensed to CNHi and its affiliates, and includes, without limitation, replacement parts, attachments, supplies, garments, premiums, tooling, display cases, computers, software, flags, banners, posters, yellow page listings, training, warranty claims and any other services provided by CNHi.

“CNHi Receivable” has the meaning given it in Section 2.5(a).

“CNHi Sales Incentive” shall have the meaning given it in Article 4.

“CNHi Subsidy” shall have the meaning given it in Section 3.2.

“Collateral Security” means with respect to any Receivable: (a) the related Invoice, and (b) the Security Interest of CNHi in the related CNHi Parts and Wholegoods (granted under the related Invoice or otherwise) securing the CNHi Receivable.

“Dealer” means a dealer authorized by CNHi to sell or distribute any goods manufactured, sold or distributed by CNHi and its affiliates and which has executed a CNHi Dealer Agreement.

“Dealer Termination” shall mean the termination in accordance with the terms and conditions of the CNHi Dealer Agreement by CNHi or a Dealer of the CNHi Dealer Agreement.

“Invoice” has the meaning given it in Section 2.5(a).

“Manufacturer Default” means a default by a Dealer pursuant to a CNHi Dealer Agreement.

“Non-Quebec Dealer” has the meaning given to it in Section 2.5(b).

“Open Account” means an account established for a Dealer by CNHi Capital pursuant to which CNHi Capital finances parts and other miscellaneous items or services sold to the Dealer.

“Open Account Balance” means, as to any Open Account, the balance owing to CNHi Capital by the Dealer, including interest and other charges, less any amount owing to the Dealer as a credit.

“Open Account Credit Line” means the maximum dollar amount of financing that CNHi Capital will finance for a Dealer pursuant to an Open Account.

“Open Account Terms” means the terms under which CNHi sells parts and other miscellaneous items or services (excluding wholegoods) to Dealers and pursuant to which CNHi Capital finances such goods for the Dealers, as modified from time to time.

“Purchase Price” has the meaning given it in Section 2.5(c).

“Quebec Dealer” has the meaning given it in Section 2.5(c).

“Receivable” means CNHi Capital Receivables, including all CNHi Receivables which become or are to become CNHi Capital Receivables under Section 2.5.

“Repurchase Event” shall mean the occurrence of a Capital Default or a Dealer Termination.

“Securitization Agreements” has the meaning given to it in Section 2.5(f).

“Securitized Receivables” has the meaning given to it in Section 2.5(f).

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“Security Interest” means any security interest, mortgage, hypothec, reservation of ownership, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, participation interest, prior claim, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, and includes any reservation of ownership or retention of title created under a Wholesale Finance Plan with a Quebec Dealer or under an Invoice.

“Trade-In Equipment” means (a) used equipment that is accepted in partial payment in connection with the Dealer’s sale or lease of a new item of equipment, or (b) any equipment that is in a trade-in chain that relates back to the sale or lease of a new item of CNHi equipment.

“Wholesale Credit Line” means the maximum dollar amount of CNHi wholegoods and parts inventory that CNHi Capital will consider financing for a Dealer.

“Wholesale Finance Plan” means a plan established by CNHi Capital, as modified from time to time in consultation with CNHi, setting forth the terms and conditions of the wholesale financing for Dealers.

ARTICLE 2

WHOLESALE FINANCING

2.1         Applications

CNHi shall provide to CNHi Capital such credit information, completed application forms and any and all other information and documents requested by CNHi Capital from time to time to enable CNHi Capital to evaluate any request by a Dealer for a Wholesale Credit Line.  CNHi agrees to use its reasonable best efforts to assure that all information provided by it to CNHi Capital will be accurate and complete.

2.2         Credit Decisions

CNHi Capital shall apply reasonable credit standards in determining the creditworthiness of Dealers.  CNHi Capital shall strive to respond to credit applications within two (2) weeks following receipt of all requested information and material.  If CNHi Capital conditions or rejects a Dealer application, CNHi Capital shall provide to CNHi and, as required by applicable law, to the applicant, the reasons for such conditioning or rejection.

2.3         Wholesale Credit Lines; Terms and Conditions of Financing

CNHi Capital shall, in its sole discretion, establish for each Dealer the initial Wholesale Credit Lines for each Dealer and, from time to time, review such lines to be made available to each Dealer under the terms hereof.  CNHi Capital may, at its sole discretion, establish all of the terms and conditions relating to the financing of Dealers, including, without limitation, the amounts to be advanced and the interest rates to be charged to Dealers on financing provided by CNHi Capital.  CNHi Capital, at its sole discretion, may reduce, suspend, otherwise modify or terminate any Dealer’s Wholesale Credit Line and may amend or modify the terms and conditions of financing provided by CNHi Capital.

2.4         CNHi Parts and Wholegoods Financing Eligibility

The terms and conditions of CNHi wholesale financing for Dealers shall be subject to the provisions of the Wholesale Finance Plan as established and amended by CNHi Capital from time to time. Without limiting the foregoing:

(a)          New CNHi Parts and Wholegoods.  New Case, CaseIH, New Holland and New Holland Construction brand equipment or other equipment with brands owned by or licensed to CNHi will be eligible for wholesale financing in an amount equal to the invoice price thereof plus freight, handling, taxes and/or sundry charges.

(b)          Trade-In Equipment.  Trade-In Equipment will be eligible for wholesale financing in an amount determined from time-to-time by CNHi and notified in writing to CNHi Capital, as long as the amount financed plus freight, handling, taxes and/or sundry charges is not greater than market value.  The minimum amount financed will be CDN$1,500.

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2.5         Advances; Creation, Purchase and Ownership of Receivables

(a)          Except as otherwise provided in Article 6, within 3 Business Days of receipt of an invoice from CNHi representing the sale of CNHi Parts or Wholegoods or other goods or services to a Dealer (in each case, an “Invoice”) that (i) have been delivered or provided to a Dealer or (ii) are in transit to a Dealer, CNHi Capital shall pay the amount of said invoice to CNHi in immediately available funds the amounts due or owing by the Dealer under the Invoice (collectively, the “CNHi Receivable”). CNHi Capital may net against such advances any amounts due it pursuant to this Agreement, including, without limitation, all CNHi Sales Incentives and any CNHi Subsidy; provided, however, that as between CNHi and the applicable Dealer, any amounts so deducted by CNHi Capital shall be deemed to have been received by CNHi and the Dealer’s obligations in respect of the related invoice shall be reduced in a like amount.

(b)          As provided in the related Wholesale Finance Plans, CNHi and CNHi Capital intend that each payment made by CNHi Capital to CNHi for in respect of a CNHi Receivable shall constitute:

(i)           in the case of a CNHi Receivable and Invoice arising from the sale of CNHi Parts and Wholegoods made by CNHi to a Dealer located in the provinces or territories of Canada other than the Province of Quebec (a “Non-Quebec Dealer”), an advance by CNHi Capital to the applicable Non-Quebec Dealer (an “Advance”) in an amount equal to the aggregate outstanding balance of the CNHi Receivable, the proceeds of which Advance are paid by CNHi Capital to CNHi on behalf of that Non-Quebec Dealer to pay the purchase price of the related CNHi Parts and Wholegoods; and

(ii)          in the case of a CNHi Receivable and Invoice arising from the sale of CNHi Parts and Wholegoods made by CNHi to a Dealer located in the Province of Quebec (a “Quebec Dealer”), payment of the purchase price of the CNHi Receivable and the related Invoice, which purchase price shall be equal to the aggregate outstanding balance of the CNHi Receivable (a “Purchase Price”).

(c)          Upon making an Advance and paying the proceeds of the Advance to CNHi (net of any amounts that CNHi Capital is entitled to deduct pursuant to Section 2.5(a)): (i) a receivable (a “CNHi Capital Receivable”) in the amount of the Advance becomes owing by the applicable Non-Quebec Dealer to CNHi Capital, (ii) such CNHi Capital Receivable (including all terms and conditions of or applicable to the CNHi Capital Receivable and the Invoice pursuant to the Wholesale Finance Plan and all other amounts due and owing thereunder and all rights to payment thereof or thereunder (including interest thereon in accordance with the Wholesale Finance Plan) is governed by the Wholesale Finance Plan, (iii) the CNHi Capital Receivable is owned by CNHi Capital, not by CNHi, (iv) the CNHi Capital Receivable shall be secured by a purchase money security interest in the CNHi Parts and Wholegoods financed under the CNHi Capital Receivable, and (v) the CNHi Receivable owing by the Non-Quebec Dealer to CNHi is extinguished.

(d)          Upon payment by CNHi Capital to CNHi of the Purchase Price of a CNHi Receivable owing by a Quebec Dealer to CNHi (net of any amounts that CNHi Capital is entitled to deduct pursuant to Section 2.5(a)): (i) all right, title and interest of CNHi in and to the CNHi Receivable and the related Collateral Security (including all terms and conditions of or applicable to the CNHi Receivable and the Invoice pursuant to the Wholesale Finance Plan and all other amounts due and owing thereunder and all rights to payment thereof or thereunder (including interest thereon in accordance with the Wholesale Finance Plan) and any and all proceeds thereof shall thereupon be sold, assigned, transferred and otherwise conveyed by CNHi to CNHi Capital without the need for any instrument or assignment, and such CNHi Receivable shall thereupon become a CNHi Capital Receivable, (ii) such CNHi Capital Receivable (including all terms and conditions of or applicable to the CNHi Capital Receivable and the Invoice pursuant to the Wholesale Finance Plan and all other amounts due and owing thereunder and all rights to payment thereof or thereunder (including interest thereon in accordance with the Wholesale Finance Plan) is governed by the Wholesale Finance Plan, (iii) the CNHi Capital Receivable is owned by CNHi Capital, not by CNHi, and (iv) the CNHi Capital Receivable shall be secured by a Security Interest in the CNHi Parts and Wholegoods financed under the CNHi Capital Receivable.

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(e)          In connection with the foregoing:

(i)           on the date hereof, CNHi shall execute and deliver to CNHi Capital an assignment in the form annexed as Exhibit A hereto (the “CNHi Assignment”) for the purposes of assigning and transferring to CNHi Capital:

(A)         the universality of all present and future CNHi Receivables owing by Quebec Dealers under the Accounts that are or have been purchased or are to be purchased under Sections 2.5(a), (b)(ii) and (d) above;

(B)         as a further assurance and to the extent that, notwithstanding the parties’ intent as stated above, CNHi is deemed to own any CNHi Capital Receivable (or any related Advance) created under Section 2.5(a), (b)(i) and (c) or any interest therein (and to the extent CNHi owns any similar receivables as to which it has received an advance from CNHi Capital), the universality of all present and future CNHi Capital Receivables owing by Dealers under the Accounts;

(C)         all present and future Collateral Security with respect to the foregoing; and

(D)         any and all proceeds of any of the foregoing.

(ii)          CNHi Capital is authorized to file appropriate PPSA financing statements or similar documents to perfect the foregoing sales and/or assignments and to take all actions necessary from time to time to continue the perfection of such sales and/or assignments.

(f)           CNHi acknowledges that CNHi Capital intends to securitize all or substantially all of the Receivables referred to in this Section 2.5, and to the extent provided below the terms of this Agreement are subject to any contrary terms of the agreements governing any such securitization from time to time (including the Sale and Servicing Agreement (as defined in the Assignment)(collectively, the “Securitization Agreements”). Receivables that are subject to the terms of the Securitization Agreements at any point in time are referred to below as “Securitized Receivables.”

(g)          It is the intention of the parties hereto that all conveyances of Receivables, Collateral Security and proceeds by CNHi to CNHi Capital contemplated hereunder and provided by the CNHi Assignment be, and be construed as, absolute sales without recourse (except as explicitly provided herein) of such Receivables and other property by CNHi to CNHi Capital and the beneficial interest in and to such Receivables and other property shall not be part of the CNHi’s estate in the event of any bankruptcy or insolvency proceeding by or against CNHi under any bankruptcy or insolvency law.

2.6         CNHI Representations and Warranties; Indemnification.

With respect to each invoice submitted by CNHi to CNHi Capital for financing, and each advance made by CNHi Capital with respect thereto, CNHi represents and warrants that (a) it has complied and will comply with its policy regarding the recognition of revenue for the sale of CNHi Parts or Wholegoods as that policy exists as of the date of this Agreement and that it has satisfied the conditions precedent therein (“CNHi Revenue Policy”), (b) it has complied and will comply with all applicable CNHi Capital policies, guidelines & procedures (collectively the “CNHi Capital Policy”), and (c) that the invoice represents a valid and enforceable obligation of the related Dealer that is not subject to any dispute, counterclaim or right of setoff of any kind or nature.  In the event a Dealer disputes in whole or in part the validity or enforceability of the invoice or the amount of the obligation of the Dealer represented thereby, CNHi agrees to resolve such dispute with the Dealer within 60 days of its receipt of notice from CNHi Capital of the existence of such dispute.  In the event CNHi (a) fails to comply or satisfy the conditions precedent for the recognition of revenue as set forth in the CNHi Revenue Policy as it exists as of the date of this Agreement, or (b) fails to comply with the CNHi Capital Policy, or (c) fails to resolve such disputes within such 60 day period, CNHi agrees to make an indemnity payment to CNHi Capital in the amount of the then outstanding principal plus accrued interest, if any, owed by the Dealer. CNHi Capital may deduct such amounts from monies otherwise payable by CNHi Capital to CNHi hereunder.

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ARTICLE 3

WHOLESALE FINANCE CHARGES

3.1         Subsidized Dealer Financing.

CNHi shall establish from time to time the applicable period during which its Dealers are eligible to receive interest-free or reduced-rate financing for the purchase of CNHi Parts and Wholegoods.

3.2         CNHi Subsidy.

In exchange for CNHi Capital’s agreement to provide interest-free or reduced-rate financing to the Dealer during such period described in Section 3.1, CNHi shall pay CNHi Capital a subsidy (the “CNHi Subsidy”).  The CNHi Subsidy shall be calculated by CNHi Capital at its sole discretion.

3.3         Dealer Responsibility.

CNHi Capital shall establish from time to time interest rates and other charges applicable to financing and other services extended to Dealers under the Open Account and Wholesale Finance Plan terms.  CNHi Capital shall bill and collect directly from Dealers finance charges for which they are responsible.

ARTICLE 4

SALES INCENTIVES

4.1         Sales Incentive Agreement

From time to time CNHi may offer incentives to Dealers that require a payment to the Dealer from CNHi upon the Dealer’s sale or lease of an item of equipment (a “CNHi Sales Incentive”).  CNHi Capital may accept an assignment from Dealers of their rights in such CNHi Sales Incentives, and, upon receipt thereof, CNHi Capital may apply such amounts to reduce the amounts due from Dealers to CNHi Capital with respect to wholesale financing of such items of equipment.  CNHi shall be solely responsible for resolving any and all disputes with Dealers relating to such CNHi Sales Incentives.

ARTICLE 5

WHOLESALE AUDITS

5.1         Physical Audits

CNHi Capital shall conduct dealer inventory audits of equipment and parts covered by wholesale financing for Dealers.  The frequency of conducting such audits shall be determined by CNHi Capital in its sole discretion.  Such audits shall include CNHi equipment that is on demonstration to prospective customers of a Dealer and CNHi equipment subject to any rental plan.

5.2         Audit Reports

CNHi Capital shall prepare reports, including the location and status of equipment and/or parts, as appropriate, with respect to each inspection and audit of the Dealer, and CNHi Capital shall provide copies of such audit reports to CNHi upon written request.

ARTICLE 6

CREDIT WATCH AND STOP SHIP STATUS

6.1         Credit Watch Status

Upon a Capital Default or if for any reason CNHi Capital deems itself insecure with respect to financing being provided to a Dealer, CNHi Capital may place such Dealer on a status of Credit Watch.  CNHi Capital will provide prompt oral and written notification of such Credit Watch status.  CNHi Capital shall advise CNHi of the reason for any Credit Watch

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status and actions necessary to remove the Credit Watch status.  Upon notice of any Credit Watch, future wholegoods shipments to the affected Dealer must be approved in advance by CNHi Capital.

6.2         Open Account Stop Ship Status

Upon a Capital Default or if for any reason CNHi Capital deems itself insecure with respect to financing being provided to a Dealer, CNHi Capital may place such Dealer’s Open Account on Stop Ship status.  CNHi Capital will provide prompt oral and written notification of such Stop Ship status to CNHi.  CNHi Capital shall advise CNHi of the reason for any Stop Ship status and actions necessary to reinstate such Dealer’s Open Account Terms.  Upon notification of such Stop Ship status, CNHi shall not ship any additional parts to the affected Dealer or invoice any other miscellaneous charges to the affected Dealer’s Open Account.

6.3         Indemnification

In the event CNHi breaches any of the terms of its agreement set forth in Sections 6.1 or 6.2 above, CNHi agrees to indemnify CNHi Capital for any and all loss, cost, damage or expense suffered by CNHi Capital as a result of such breach, including, without limitation, any loss of principal or interest for CNHi Capital arising as a result of such breach.

ARTICLE 7

CNHI WHOLEGOODS AND PARTS REPURCHASE

7.1         Dealer Termination; Manufacturer Default

CNHi Canada shall provide CNHi Capital with as much advance notice as possible of the occurrence of a Dealer Termination.  CNHi Canada shall also provide CNHi Capital with oral and written notice of the occurrence of a Manufacturer Default.  Upon the occurrence of a Repurchase Event, CNHi Canada shall assist CNHi Capital in the liquidation of the affected Dealer’s assets securing financing provided by CNHi Capital, and shall repurchase certain wholegoods and parts of the affected Dealer, all as herein provided.  If a successor servicer is appointed for CNHi Capital under the Securitization Agreements, the successor servicer will succeed to CNHi Capital’s rights below with respect to Securitized Receivables and the related CNHi Parts and Wholegoods.  In such case, CNHi Capital shall be relieved of its obligations below insofar as they relate to Securitized Receivables.

7.2         Joint Audit

Within 3 Business Days (or such longer periods as may be mutually agreed by CNHi and CNHi Capital), following the occurrence of a Repurchase Event, CNHi and CNHi Capital will conduct a joint audit of the Dealer.  A written report shall be prepared immediately and signed by representatives of both CNHi and CNHi Capital.

7.3         Possession of CNHi Parts and Wholegoods

Upon the occurrence of a Repurchase Event, CNHi and CNHi Capital shall attempt to obtain the Dealer’s consent to remove all CNHi Parts and Wholegoods and other collateral in which CNHi Capital holds a Security Interest.  If the Dealer refuses to surrender possession of the same, CNHi Capital shall, at its sole expense, take such legal action as may be necessary to effect possession.  CNHi shall promptly accept all CNHi Parts and Wholegoods when they have been made unconditionally available to CNHi by CNHi Capital if such acceptance is required under applicable buy-back law or any agreement between CNHi and such Dealer.  CNHi shall promptly, at its sole expense, remove all such CNHi Parts and Wholegoods from the Dealer’s location.

7.4         Purchase by CNHi of Parts

With respect to any new CNHi parts made available to CNHi that (i) are required to be repurchased from the Dealer under applicable buy-back laws or buy-back agreements between CNHi and the Dealer, and (ii) the proceeds of which are necessary to clear the obligations of the Dealer to CNHi Capital (or its assigns) in whole or in part, CNHi shall, upon the occurrence of a Repurchase Event, shall purchase such CNHi parts and pay to CNHi Capital, as owner of the obligations of the Dealer with respect to such items of CNHi parts (or as servicer for the owner), an amount equal to the lesser of (a) the unpaid balance (including interest, charges, etc.) due from the Dealer on the date of repossession, or (b) the amount

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CNHi is required to pay Dealer to repurchase the CNHi parts under applicable law or CNHi’s agreements with the Dealer.  Such amount shall be paid to CNHi Capital within 30 days following the date on which CNHi Capital makes such parts available to CNHi.

7.5         Marketing of CNHi Parts

With respect to all parts not covered by Section 7.4 above, CNHi will cooperate with CNHi Capital as requested in the sale thereof in a commercially reasonable manner on behalf of CNHi Capital, as owner or servicer of the related obligations.  CNHI shall promptly deliver to CNHi Capital the proceeds of such sale, less such out-of-pocket expenses incurred in connection with such sale as agreed to in writing by CNHi and CNHi Capital.

7.6         Wholegoods Repurchase by CNHi

With respect to new, unused, resalable CNHi wholegoods made available to CNHi that (i) are required to be repurchased from the Dealer by CNHi under an applicable “buy-back law” or any agreement between CNHi and such Dealer, and (ii) the proceeds of which are necessary to clear the obligations of the Dealer to CNHi Capital (or its assigns) in whole or in part, CNHi shall, upon an occurrence of a Repurchase Event, pay to CNHi Capital, as owner of the obligations of the Dealer to CNHi Capital with respect thereto (or as servicer for such owner) an amount equal to the lesser of (a) the unpaid balance due from the Dealer on the date of repossession or (b) the amount CNHi is required to pay Dealer to repurchase the CNHi wholegoods under applicable law or CNHi’s agreement(s) with the Dealer. Such amount shall be paid to CNHi Capital within 30 days after the equipment has been made unconditionally available to CNHi.

7.7         Marketing of Equipment

With respect to all items of equipment not covered by Section 7.6 above, CNHi will cooperate with CNHi Capital as requested in the sale thereof in a commercially reasonable manner on behalf of CNHi Capital, as owner or servicer of the related obligations.  CNHi shall promptly deliver to CNHi Capital the proceeds of such sale, less such out-of-pocket expenses incurred in connection with such sale as agreed to in writing by CNHi and CNHi Capital.

7.8         Collection Cooperation

Each of CNHi Capital and CNHi shall cooperate in the other’s efforts to collect amounts due from Dealers following recovery of possession and disposition of CNHi Parts and Wholegoods financed pursuant to this Agreement.

7.9         Compliance with Buy-Back Laws

Nothing herein shall be construed as CNHi Capital’s assumption of obligations arising under (a) federal or provincial buy-back laws, or any rules, regulations and court decisions thereunder, or (b) any agreements between a Dealer and CNHi regarding any buy-backs by CNHi.  CNHi shall at all times ensure that the activities undertaken pursuant to this Article are in compliance with such laws, regulations/rules and agreements.

7.10       Return Administration

Promptly upon the occurrence of a Repurchase Event, CNHi shall be responsible for producing or causing the affected Dealer to produce picking tickets and reports necessary for the identification of CNHi parts to be repossessed or that are voluntarily returned by a Dealer (after Dealer Default or otherwise), and shall be responsible for valuing and determining the eligibility for return of all CNHi parts.

7.11       Securitized Receivables Obligations

Notwithstanding the foregoing provisions of this Article 7, after a Dealer Termination CNHi Capital may determine to liquidate or realize upon any Securitized Receivables and related Collateral Security without exercising its rights or remedies under this Agreement if CNHi Capital determines that it is obligated to do so or if it determines that the proceeds of realization of any Securitized Receivables and Collateral Security would greater than the proceeds realizable under this Agreement or otherwise.

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ARTICLE 8

CNHI GUARANTEE OBLIGATIONS

CNHi hereby guarantees all obligations, including the payment of finance charges, of a Dealer to CNHi Capital with respect to the following, to the extent that the following are not Securitized Receivables:

(a)          CNHi Parts and Wholegoods sold or otherwise disposed of by the Dealer prior to the CNHi invoice date therefor; and

(b)          all CNHi Parts and Wholegoods with respect to which CNHi failed to comply with its obligations under Sections 7.4 and 7.6 hereof.

CNHi agrees to purchase from CNHi Capital, upon demand, all obligations of the Dealer with respect to financing guaranteed by CNHi pursuant to this Article 8.

ARTICLE 9

BOOKS, RECORDS AND REPORTS

CNHi shall maintain books of account and other records with respect to matters governed by the provisions of this Agreement.  CNHi shall afford CNHi Capital and its authorized agents reasonable access during normal business hours to such books of account and other records and CNHi shall cause its personnel to assist in any examination thereof.  Any examination will be conducted in a manner that does not unreasonably interfere with normal business operations or customer or employee relations.

ARTICLE 10

DEFAULT

10.1       Events of Default

The following shall constitute an event of default (“Event of Default”) hereunder:

(a)          Bankruptcy.  If with respect to either CNHi or CNHi Capital there shall be the commencement, voluntary or involuntary, of any case, proceeding or other action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to such party, or seeking to adjudicate such party as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to such party or its debts, or seeking appointment of a receiver, trustee, custodian or other similar official for such party or any substantial part of its assets which remains undismissed, undischarged or unbonded for a period of 60 days from the entry thereof; or (ii) by or against such party of any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of any order or any such relief which shall not have been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof; or, (iii) by such party in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth above; In addition, the failure or inability of such party generally to, or the admission in writing by such party of its inability to, pay its debts as they become due shall be an Event of Default.

(b)          Agreements.  If either CNHi or CNHi Capital shall materially violate any covenant or agreement contained herein or in any other agreement between the parties and such violation remains uncured for 30 days following Notice by the other party, with a demand to cure the noted violation.

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ARTICLE 11

TERM AND TERMINATION

11.1       Default

This Agreement may be terminated by either party upon Notice to the other party upon the occurrence of an Event of Default with respect to the other party.

11.2       Initial Term; Continuation; Termination Notice

The initial term of this Agreement ends on December 31, 2018 (the “Initial Term”). Thereafter, this Agreement shall automatically continue for additional one-year terms, and after the Initial Term, either party may terminate this Agreement upon 90-days Notice (as defined below) to the other party.

11.3       Survival of Rights

The termination of this Agreement shall not modify or affect the rights or obligations of either party hereunder with respect to any financing extended by CNHi Capital prior to the effective date of termination.

ARTICLE 12

EFFECTIVE DATE

The rights and obligations of the parties hereunder shall be effective on the date hereof and shall apply with respect to any and all financing now or hereafter extended by CNHi Capital under the Wholesale Financing Plan and/or under this Agreement.

ARTICLE 13

EXCLUSIVITY

During the term of this Agreement CNHi will not offer and will not participate with or assist any other person or entity in offering financial services of the type covered by this Agreement.

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ARTICLE 14

GENERAL PROVISIONS

14.1       Notices

Except as otherwise provided herein, all notices, requests, consents, approvals or other communications hereunder (collectively “Notices”) shall be in writing in the English language, shall be delivered by hand or sent by registered mail postage prepaid, by air courier delivery service or by facsimile transmission addressed as follows (or to such other person or destination as a party may be notice to the other indicate):

If to CNHi Capital:

CNH Industrial Capital Canada Ltd.

5729 Washington Ave.

Racine, WI  53406

Fax: (262) 636-5771

Attn: Director Commercial Lending

If to CNHI:

CNH Industrial Canada, Ltd.

700 State Street

Racine, WI 53403

Fax 262-636-5651

Attn: Office of the General Counsel

All such Notices and communications hereunder shall be deemed given when received, as evidenced by the acknowledgement of receipt issued with respect thereto by the applicable postal authorities, or the signed acknowledgement of receipt of the person to whom such Notice or communication shall have been addressed, or facsimile transmission answerback, as applicable.

14.2       Governing Law and Venue

This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein, without regard to any conflicts of law doctrine that would apply any other jurisdiction’s law.

14.3       Entire Agreement

This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and shall be deemed to amend and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions between the parties, whether oral or written, with respect to the subject matter hereof, including, without limitation, the Original Agreement and the Amended and Restated Agreement.

14.4       Modifications and Amendments

No amendment, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the parties hereto.

14.5       Waivers and Extensions

Any party to this Agreement may waive any right, breach, or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement.  Waivers may be made in advance or after the right waived has arisen or the breach

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or default waived has occurred.  Any waiver may be conditional.  No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained.  No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.

14.6       Titles and Headings

Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.

14.7       Successors and Assigns

This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective permitted successors and assigns.

14.8       Assignment; No Third Party Beneficiaries

This Agreement and the rights, duties and obligations hereunder may not be assigned or delegated by either party without the prior written consent of the other party.  Any assignment or delegation of rights, duties or obligations hereunder made without the prior written consent of the other party hereto shall be void and of no effect.  This Agreement is not intended to confer any rights or benefits on any persons other than the parties hereto.

14.9       Severability

Any provision of this Agreement which is found to be invalid or unenforceable by any court in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or non-enforceability, and shall not affect the validity or enforceability of the remaining provisions hereof.

14.10     Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

CNH Industrial Canada, Ltd.			CNH Industrial Capital Canada Ltd.
By:	/s/ Richard Konrath		By:	/s/ Douglas MacLeod
	Name:	Richard Konrath		Name:	Douglas MacLeod
	Title:	Vice President – General Counsel		Title:	Chief Financial Officer

12

EXHIBIT A

FORM OF ASSIGNMENT

ASSIGNMENT

THIS ASSIGNMENT is made as of December 31, 2017 by CNH INDUSTRIAL CANADA, LTD., a Canada corporation (the “Seller”), as seller and assignor, in favour of CNH INDUSTRIAL CAPITAL CANADA LTD., an Alberta corporation (in such capacity, the “Purchaser”).

WHEREAS the Seller wishes to transfer certain specific, identified, existing and future Receivables and certain Collateral Security to the Purchaser and the Purchaser is willing to accept such transfer;

AND WHEREAS capitalized terms used in this Assignment shall have the respective meanings specified in Section 3 hereof;

NOW THEREFORE THIS ASSIGNMENT WITNESSES that, in consideration of the sum of $2.00 in the lawful currency of Canada now paid by the Purchaser to the Seller and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by the Seller) the Seller and the Purchaser agree as follows:

1.          The Seller does hereby sell, transfer, assign, set over and otherwise convey without recourse (except as expressly provided herein or in the Wholesale Sale and Servicing Agreement) to the Purchaser on the date hereof:

(a)        all of the Seller’s right, title and interest in, to and under the universality of (i) all of the Receivables in or under each Account as at the close of business on the Business Day immediately preceding the date hereof, (ii) all Receivables created in or under each Account on each Business Day after the Business Day immediately preceding the date hereof, and (iii) all Collateral Security with respect to such Receivables; and

(b)        all of the Seller’s right, title and interest in, to and under all monies due or to become due and all amounts received with respect to the property and assets described in paragraph (a) above and all proceeds (including “proceeds” as defined in the PPSA as in effect in the Province of Ontario) thereof, all created in connection with the Accounts.

2.          This Assignment is made pursuant to and upon the representations, warranties and agreements contained in the Sale and Servicing Agreement and is to be governed in all respects by the Wholesale and Parts CNHi Capital Financing Agreement.

3.          The Debtor hereby makes the Perfection Representations and Warranties to the Secured Party.  For purposes of this Section 3 Debtor shall mean the Seller, the Secured Party shall mean the Purchaser, and the Specified Agreement shall mean this Agreement.  The Debtor hereby authorizes the Servicer to file financing statements and similar instruments under the PPSA without the Debtor’s signature where allowed by applicable law.

-2-

4.          Terms used herein with initial capital or upper case letters which are not defined herein shall have the respective meanings assigned to them in the Sale and Servicing Agreement and the Wholesale and Parts CNHi Capital Financing Agreement, as applicable, and the terms specified in Schedule A hereto shall have the meanings assigned thereto in Schedule A.

IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly executed as of December 31, 2017.

CNH INDUSTRIAL CANADA, LTD.
By:	/s/ Richard Konrath
	Name:	Richard Konrath
	Title:	Vice President – General Counsel

Accepted and agreed as of December 31, 2017

CNH INDUSTRIAL CAPITAL CANADA LTD.
By:	/s/ Douglas MacLeod
	Name:	Douglas MacLeod
	Title:	Chief Financial Officer

SCHEDULE A

TO ASSIGNMENT

“Account” shall mean each Initial Account and each Automatic Additional Account.

“Automatic Additional Accounts” means each individual Wholesale Credit Line or Open Account established or created by the Seller or the Purchaser for a Dealer on or after the date of this Assignment.

“CNHi” means CNH Industrial Canada, Ltd.

“CNHi Parts and Wholegoods” means parts, supplies, inventory, equipment and other goods and services sold to Dealers by CNHi, whether branded Case, Case IH, New Holland, New Holland Construction or under any other brand owned by or licensed to CNHi and its affiliates, and includes, without limitation, replacement parts, attachments, supplies, garments, premiums, tooling, display cases, computers, software, flags, banners, posters, yellow page listings, training, warranty claims and any other services provided by CNHi.

“Collateral Security” means with respect to any Receivable: (a) the related invoice, and (b) the Lien of CNHI, if any, in the related CNHI Parts and Wholegoods (granted under the related invoice or otherwise) securing the Receivable.

“CNHi Capital” means CNH Industrial Capital Canada Ltd.

“Dealer” means a dealer authorized by CNHi to sell or distribute any goods manufactured, sold or distributed by CNHi and its affiliates and which has executed a CNHi Dealer Agreement.

“Initial Account” shall mean each individual Wholesale Credit Line or Open Account established or created by the Seller or the Purchaser with a Dealer pursuant to a Wholesale Finance Plan and existing on and as of the close of business on the Business Day preceding the date of this Assignment.

“Lien” means any security interest, mortgage, hypothec, reservation of ownership, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, participation interest, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, and includes any reservation of ownership or retention of title created under a Wholesale Finance Plan with a Quebec Dealer or under an invoice.

“Open Account” means an account established for a Dealer by CNHi Capital or CNHi pursuant to which CNHi Capital finances CNHi Parts sold to the Dealer.

“Open Account Terms” means the terms under which CNHi sells parts and other miscellaneous items and services (excluding wholegoods) to Dealers and pursuant to which CNHi and/or CNHi Capital finances such goods for the Dealers, as modified from time to time.

“PPSA” means (a) the personal property security legislation, as amended, supplemented or replaced from time to time, as in effect in each Province of Canada (other than Québec), (b) the Uniform Commercial Code, as amended, supplemented or replaced from time to time, as in effect in the State of Wisconsin, and (c) the Québec Civil Code, as amended, supplemented or replaced from time to time, as in effect in Québec.

“Person” shall mean any legal person, including any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, governmental entity or other entity of similar nature.

“Quebec Dealer” means a Dealer located or resident in the Province of Quebec.

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“Receivables” shall mean, with respect to an Account:

(a)          all amounts shown on the Seller’s records as amounts payable by the related Dealer to the Seller under the Account and the related Wholesale Finance Plan;

(b)          all amounts shown on the Purchaser’s or the Servicer’s records on and after the date hereof as amounts payable by the related Quebec Dealer under the Account and the related Wholesale Finance Plan in respect of credit sales, conditional sales or instalment sales made by the Seller to such Quebec Dealer on or after the date hereof to finance the acquisition of CNHi Parts and Wholegoods by such Dealer from the Seller; and

(c)          to the extent that the Seller may have any interest therein, all amounts shown on the Purchaser’s or the Servicer’s records as amounts payable by the related Dealer in respect of advances or extensions of credit made by the Purchaser to such Dealer after the date hereof to finance the acquisition of CNHi Parts and Wholegoods by such Dealer from the Seller.

“Rental Plan” means CNHi Rental Equipment Plan, CNHi Rental Flex Plan, Rent-To-Own Plan or any other rental plan from time to time established jointly by CNHi and CNHi Capital in connection with a Wholesale Credit Line and published in the Discounts and Terms.

“Sale and Servicing Agreement” means the Amended and Restated Sale and Servicing Agreement dated as of November 30, 2009 between the CNHi Capital Canada Ltd., an Alberta corporation, as seller, in favour of Computershare Trust Company of Canada, in its capacity as trustee of CNHi Capital Canada Wholesale Trust, as amended, restated, supplemented or otherwise modified from time to time.

“Servicer” shall mean CNHi Capital, in its capacity as Servicer under the Sale and Servicing Agreement, and its successors or assigns in such capacity under the Sale and Servicing Agreement.

“Wholesale and Parts CNHi Capital Financing Agreement” means the Second Amended and Restated Wholesale and Parts CNHi Capital Financing Agreement made as of the date hereof between CNH Industrial Canada, Ltd., a Canadian corporation, and CNH Industrial Capital Canada Ltd., an Alberta corporation.

“Wholesale Credit Line” means the maximum dollar amount of CNHi Parts and Wholegoods inventory that CNHi Capital will consider financing for a Dealer.

“Wholesale Finance Plan” means each plan established by CNHi Capital, as modified from time to time in consultation with CNHi, setting forth the terms and conditions of the wholesale financing for Dealers.

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Brett D. Davis, certify that:

1.I have reviewed this annual report on Form 10‑K 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: March 1, 2019	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 annual report on Form 10‑K 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: March 1, 2019	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 Annual Report on Form 10‑K for the year ended December 31, 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.

March 1, 2019	/s/ Brett D. Davis
	Brett D. Davis
	President
March 1, 2019	/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.

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Document and Entity Information	12 Months Ended
	Dec. 31, 2018 USD ($) shares
Document and Entity Information
Entity Registrant Name	CNH INDUSTRIAL CAPITAL LLC
Entity Central Index Key	0001552493
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float | $	$ 0
Entity Common Stock, Shares Outstanding | shares	0
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
REVENUES
Interest income on retail notes and finance leases									$ 201,269	$ 201,533	$ 211,506
Interest income on wholesale notes									66,899	65,721	68,910
Interest and other income from affiliates									345,933	398,258	398,372
Rental income on operating leases									241,582	251,609	243,531
Other income									22,671	21,811	24,402
Total revenues	$ 214,561	$ 211,281	$ 226,141	$ 226,371	$ 241,346	$ 234,889	$ 229,863	$ 232,834	878,354	938,932	946,721
Interest expense:
Interest expense to third parties									317,747	311,128	297,881
Interest expense to affiliates									7,533	11,442	7,218
Total interest expense	86,491	81,557	78,804	78,428	89,273	79,772	78,797	74,728	325,280	322,570	305,099
Administrative and operating expenses:
Fees charged by affiliates									47,475	46,431	45,225
Provision for credit losses									31,699	40,898	30,846
Depreciation of equipment on operating leases									231,805	280,765	247,438
Other expenses									43,778	44,827	36,297
Total administrative and operating expenses	90,118	83,332	85,287	96,020	108,660	106,591	95,994	101,676	354,757	412,921	359,806
Total expenses									680,037	735,491	664,905
INCOME BEFORE TAXES									198,317	203,441	281,816
Income tax provision (benefit)	6,819	8,111	14,422	12,120	(96,357)	14,387	16,885	18,037	41,472	(47,048)	94,304
NET INCOME	$ 31,133	$ 38,281	$ 47,628	$ 39,803	$ 139,770	$ 34,139	$ 38,187	$ 38,393	$ 156,845	$ 250,489	$ 187,512

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NET INCOME	$ 31,133	$ 38,281	$ 47,628	$ 39,803	$ 139,770	$ 34,139	$ 38,187	$ 38,393	$ 156,845	$ 250,489	$ 187,512
Other comprehensive income (loss):
Foreign currency translation adjustment									(48,009)	40,868	15,756
Pension liability adjustment									665	499	197
Change in derivative financial instruments									508	2,606	1,449
Total other comprehensive income (loss)									(46,836)	43,973	17,402
COMPREHENSIVE INCOME									$ 110,009	$ 294,462	$ 204,914

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 160,328	$ 226,946
Restricted cash	639,543	648,612
Receivables, less allowance for credit losses of $74,412 and $79,196, respectively	9,950,926	10,421,545
Affiliated accounts and notes receivable	43,389	73,133
Equipment on operating leases, net	1,724,217	1,781,489
Equipment held for sale	209,991	208,516
Goodwill	108,399	110,588
Other intangible assets, net	10,182	6,868
Other assets	84,937	34,381
TOTAL	12,931,912	13,512,078
Liabilities:
Short-term debt (including current maturities of long-term debt)	4,324,292	4,617,464
Accounts payable and other accrued liabilities	715,778	740,410
Affiliated debt	276,271	445,802
Long-term debt	6,259,839	6,332,763
Total liabilities	11,576,180	12,136,439
Commitments and contingent liabilities (Note 13)
Stockholder's equity:
Member's capital
Paid-in capital	843,643	843,559
Accumulated other comprehensive loss	(146,999)	(100,163)
Retained earnings	659,088	632,243
Total stockholder's equity	1,355,732	1,375,639
TOTAL	$ 12,931,912	$ 13,512,078

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Allowance for credit losses	$ 74,412	$ 79,196
Restricted cash	639,543	648,612
Receivables, less allowance for credit losses of $54,124 and $59,268, respectively	9,950,926	10,421,545
TOTAL	12,931,912	13,512,078
Short-term debt (including current maturities of long-term debt)	4,324,292	4,617,464
Long-term debt	6,259,839	6,332,763
Total liabilities	11,576,180	12,136,439
Consolidated variable interest entities ("VIEs")
Allowance for credit losses	54,124	59,268
Restricted cash	639,543	648,612
Receivables, less allowance for credit losses of $54,124 and $59,268, respectively	6,687,828	7,159,290
TOTAL	7,327,371	7,807,902
Short-term debt (including current maturities of long-term debt)	3,241,347	3,556,007
Long-term debt	3,442,286	3,692,963
Total liabilities	$ 6,683,633	$ 7,248,970

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 156,845	$ 250,489	$ 187,512
Adjustments to reconcile net income to net cash from (used in) operating activities:
Depreciation on property and equipment and equipment on operating leases	231,812	280,789	247,472
Amortization of intangibles	2,114	2,112	1,998
Provision for credit losses	31,699	40,898	30,846
Deferred income tax expense (benefit)	28,254	(80,910)	37,767
Changes in components of working capital:
Change in affiliated accounts and notes receivables	29,203	92,400	126,928
Change in other assets and equipment held for sale	(50,798)	9,074	46,403
Change in accounts payable and other accrued liabilities	(66,248)	15,601	6,144
Net cash from (used in) operating activities	362,881	610,453	685,070
CASH FLOWS FROM INVESTING ACTIVITIES
Cost of receivables acquired	(11,802,561)	(10,914,579)	(10,803,971)
Collections of receivables	12,072,940	11,405,857	11,547,142
Purchase of equipment on operating leases	(680,266)	(635,819)	(723,383)
Proceeds from disposal of equipment on operating leases	468,257	435,878	361,952
Change in property and equipment and software, net	(5,427)	(1,614)	(890)
Net cash from (used in) investing activities	52,943	289,723	380,850
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of affiliated debt	1,138,573	1,186,763	1,238,950
Payment of affiliated debt	(1,292,749)	(898,230)	(1,128,741)
Proceeds from issuance of long-term debt	3,240,771	3,740,616	3,911,733
Payment of long-term debt	(3,630,702)	(4,955,232)	(4,682,446)
Change in short-term borrowings, net	182,596	309,373	(336,193)
Dividend paid to CNH Industrial America LLC	(130,000)	(285,000)	(290,000)
Net cash from (used in) financing activities	(491,511)	(901,710)	(1,286,697)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(75,687)	(1,534)	(220,777)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of year	875,558	877,092	1,097,869
End of year	799,871	875,558	877,092
CASH PAID DURING THE PERIOD FOR INTEREST	316,675	322,469	301,563
CASH PAID DURING THE PERIOD FOR TAXES	$ 47,577	$ 47,726	$ 31,003

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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, 2015	$ 843,728	$ (161,538)	$ 769,242	$ 1,451,432
Increase (Decrease) in Stockholder's Equity
Net income			187,512	187,512
Dividend paid to CNH Industrial America LLC			(290,000)	(290,000)
Foreign currency translation adjustment		15,756		15,756
Stock compensation	372			372
Pension liability adjustment, net of tax		197		197
Change in derivative financial instruments, net of tax		1,449		1,449
BALANCE at Dec. 31, 2016	844,100	(144,136)	666,754	1,366,718
Increase (Decrease) in Stockholder's Equity
Net income			250,489	250,489
Dividend paid to CNH Industrial America LLC			(285,000)	(285,000)
Foreign currency translation adjustment		40,868		40,868
Stock compensation	(541)			(541)
Pension liability adjustment, net of tax		499		499
Change in derivative financial instruments, net of tax		2,606		2,606
BALANCE at Dec. 31, 2017	843,559	(100,163)	632,243	1,375,639
Increase (Decrease) in Stockholder's Equity
Net income			156,845	156,845
Dividend paid to CNH Industrial America LLC			(130,000)	(130,000)
Foreign currency translation adjustment		(48,009)		(48,009)
Stock compensation	84			84
Pension liability adjustment, net of tax		665		665
Change in derivative financial instruments, net of tax		508		508
BALANCE at Dec. 31, 2018	$ 843,643	$ (146,999)	$ 659,088	$ 1,355,732

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NATURE OF OPERATIONS

12 Months Ended

Dec. 31, 2018

BASIS OF PRESENTATION

NATURE OF OPERATIONS

NOTE 1: NATURE OF OPERATIONS

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.

To support CNH Industrial North America’s sales of agricultural and construction equipment products, the Company offers retail financing to end-use customers and wholesale financing to CNH Industrial North America equipment dealers, all of which are independently owned. The Company provides and administers retail financing, primarily retail installment sales contracts, finance leases and operating leases to end-use customers for the purchase or lease of new and used CNH Industrial North America equipment and other agricultural and construction equipment sold primarily through CNH Industrial North America dealers and distributors. In addition, the Company purchases equipment from dealers that is leased to retail customers under operating lease agreements. Wholesale financing consists primarily of dealer floorplan financing, which allows dealers the ability to maintain a representative inventory of products. In addition, the Company provides financing to dealers for equipment used in dealer-owned rental yards, parts inventory, working capital, and other financing needs. CNH Industrial Capital Canada purchases short-term wholesale receivables at a discount (“wholesale factoring”) from Iveco Argentina S.A. (“Iveco Argentina”), an indirect wholly-owned subsidiary of CNHI, from time to time. The purchase is consistent with factoring arrangements between CNHI’s industrial and financial services companies. The Company also finances other products, including insurance and equipment protection products underwritten through a third-party insurer. As a captive finance company, the Company is reliant on the operations of CNH Industrial North America, its dealers and end-use customers.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include 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.

Certain prior period balances have been reclassified to conform to the current year presentation.

Use of Estimates in the Preparation of Financial Statements

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.

Revenue Recognition

Finance and interest income on retail notes and finance leases and on wholesale notes is recorded using the effective yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the effective yield method. Recognition of income on receivables is suspended when management determines that collection of future income is not probable or when an account becomes 120 days delinquent, whichever occurs earlier. Income accrual is resumed if the receivable becomes contractually current and collection doubts are removed. Previously suspended income is recognized at that time. The Company applies cash received on nonaccrual financing receivables to first reduce any unrecognized interest and then the recorded investment and any other fees. 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. 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.

A substantial portion of the Company’s interest income arises from retail sales programs offered by CNH Industrial North America on which finance charges are waived or below-market rate financing programs are offered. When the Company acquires retail installment sales contracts and finance leases subject to below-market interest rates, including waived interest rate financing, the Company receives compensation from CNH Industrial North America based on the Company’s estimated costs and a targeted return on equity. This amount is initially recognized as an unearned finance charge and is recognized as interest income over the term of the retail notes and finance leases, and is included in “Interest and other income from affiliates” in the accompanying consolidated statements of income.

For selected wholesale receivables, CNH Industrial North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. These amounts are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income.

The Company is also compensated for lending funds to CNH Industrial North America. The amounts earned are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income.

Income from operating leases is recognized over the term of the lease on a straight-line basis. For selected operating leases, CNH Industrial North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. The amounts from CNH Industrial North America recognized as rental income on operating leases are included in “Interest and other income from affiliates.”

Foreign Currency Translation

The Company’s non‑U.S. subsidiaries maintain their books and accounting records using local currency as the functional currency. Assets and liabilities of these non‑U.S. subsidiaries are translated into U.S. dollars at period‑end exchange rates, and net exchange gains or losses resulting from such translation are included in “Accumulated other comprehensive income” in the accompanying consolidated balance sheets. Income and expense accounts of these non‑U.S. subsidiaries are translated at the average exchange rates for the period, and gains and losses from foreign currency transactions are included in net income in the period that they arise.

Cash and Cash Equivalents

Cash equivalents are highly liquid investments with an original maturity of three months or less. The carrying value of cash equivalents approximates fair value because of the short maturity of these investments.

Restricted Cash

Restricted cash includes principal and interest payments from retail notes and wholesale receivables owned by the consolidated VIEs that are payable to the VIEs’ investors, and cash pledged as a credit enhancement to the same investors. These amounts are held by depository banks in order to comply with contractual agreements.

Receivables

Receivables are recorded at amortized cost, net of allowances for credit losses and deferred fees and costs. Periodically, the Company sells or transfers retail and wholesale receivables to funding facilities or in securitization transactions. In accordance with the accounting guidance regarding transfers of financial assets and the consolidation of VIEs, the majority of the retail and wholesale receivables sold in securitizations do not qualify as sales and are recorded as secured borrowings with no gains or losses recognized at the time of securitization. Receivables associated with these securitization transactions and receivables that the Company has the ability and intent to hold for the foreseeable future are classified as held for investment. The substantial majority of the Company’s receivables, which include unrestricted receivables and restricted receivables for securitization investors, are classified as held for investment.

Allowance for Credit Losses

The allowance for credit losses is the Company’s estimate of losses on 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.

Equipment on Operating Leases

The Company purchases leases and equipment from CNH Industrial North America dealers and other independent third parties that have leased equipment to retail customers under operating leases. The Company’s investment in operating leases is based on the purchase price paid for the equipment. Income from these operating leases is recognized over the term of the lease. The equipment is depreciated on a straight-line basis over the term of the lease to the estimated residual value at lease termination. Residual values are estimated at the inception of the lease and are reviewed quarterly. Realization of the residual values is dependent on the Company’s future ability to re-market the equipment under then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Management believes that the estimated residual values are realizable. Expenditures for maintenance and repairs are the responsibility of the lessee.

The Company evaluates the carrying amount of equipment on operating leases for potential impairment when it determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability identifies a possible impairment, the asset’s fair value is measured in accordance with the fair value measurement framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value.

Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded at the lower of net book value or estimated fair value of the equipment, less cost to sell, and is not depreciated.

Goodwill and Intangible Assets

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired. Goodwill is deemed to have an indefinite useful life and is reviewed for impairment at least annually. During 2018 and 2017, the Company performed its annual impairment review as of December 31, and concluded that there was no impairment in either year. Other intangible assets consist of software and are being amortized on a straight‑line basis over five years.

Income Taxes

The provision for income taxes is determined using the asset and liability method. The Company recognizes a current tax liability or asset for the estimated taxes payable or refundable on tax returns for the current year and tax contingencies estimated to be settled with taxing authorities within one year. A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and tax loss carryforwards. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on available evidence.

Derivatives

The Company’s policy is to enter into derivative transactions to manage exposures that arise in the normal course of business and not for trading or speculative purposes. The Company records derivative financial instruments in the consolidated balance sheets as either an asset or liability measured at fair value. The fair value of the Company’s interest rate derivatives is based on discounting expected cash flows, using market interest rates, over the remaining term of the instrument. The fair value of the Company’s foreign exchange derivatives is based on market exchange rates, adjusted for the respective interest rate differentials (premiums or discounts). Changes in the fair value of derivative financial instruments are recognized in current income unless specific hedge accounting criteria are met. For derivative financial instruments designated to hedge exposure to changes in the fair value of a recognized asset or liability, the gain or loss is recognized in income in the period of change together with the offsetting loss or gain on the related hedged item. For derivative financial instruments designated to hedge exposure to variable cash flows of a forecasted transaction, the effective portion of the derivative financial instrument’s gain or loss is initially reported in accumulated other comprehensive income and is subsequently reclassified into income when the forecasted transaction affects income. The ineffective portion of the gain or loss is recorded in income immediately. For derivative financial instruments that are not designated as hedges but held as economic hedges, the gain or loss is recognized immediately in income.

For derivative financial instruments designated as hedges, the Company formally documents the hedging relationship to the hedged item and its risk management strategy. This includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities contained in the consolidated balance sheets and linking cash flow hedges to specific forecasted transactions or variability of cash flow. The Company assesses the effectiveness of its hedging instruments both at inception and on an ongoing basis. If a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer probable of occurring, or the derivative is terminated, the hedge accounting described above is discontinued and the derivative is marked to fair value and recorded in income through the remainder of its term.

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 (ASC 606) (“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, and the cumulative effect of applying the standard would be recognized at the earliest period shown 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 this 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 will 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 years ended December 31, 2017 and 2016 was to increase cash flows from changes in accounts payable and other accrued liabilities by $7,643 and $3,300, respectively, eliminate cash flows from changes in restricted cash of $71,876 and $86,176, respectively, and to decrease cash, cash equivalents and restricted cash by $64,233 and $82,876, respectively.

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 the 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, and early adoption is permitted. 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 (“ASC 840”) 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 original transition guidance in ASU 2016-02 required a modified retrospective approach. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), an amendment to ASU 2016-02, which provides entities with an additional transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. If the transition option in ASU 2018-11 is elected, reporting for the comparative periods presented in the financial statements in which the entity adopts the new leases standard will continue to be in accordance with ASC 840.

The Company will adopt the new standard effective January 1, 2019, using the modified retrospective approach which requires it to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, without recasting prior periods. The Company will elect certain practical expedients upon transition, including: not to reassess under the new guidance its prior conclusions about lease identification, lease classification and initial direct costs; and, those provided for short-term leases. The Company does not believe the adoption of the standard will have a material impact 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. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”), which amended ASC 326. 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”) and in October 2018, the FASB issued ASU No. 2018-16, Inclusion of the Secured Overnight Financial Rate (SOFR) Overnight Index Swap Rate (OIS) as a Benchmark Interest Rate for Hedge Accounting Purposes (“ASU 2018-16”), which together amend 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 does not believe the adoption of this standard will have a material impact 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 Act”). Included in the provisions of U.S. Tax Act 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 does not believe the adoption of this standard will have a material impact 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

12 Months Ended

Dec. 31, 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 year ended December 31, 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		(48,009)		419		726		(46,864)
Amounts reclassified from accumulated other comprehensive income (loss)		—		463		(34)		429
Tax effects		—		(217)		(184)		(401)
Net current-period other comprehensive income (loss)		(48,009)		665		508		(46,836)
Total	$	(146,726)	$	(2,497)	$	2,224	$	(146,999)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the year ended December 31, 2017:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		on 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		40,868		114		2,797		43,779
Amounts reclassified from accumulated other comprehensive income (loss)		—		702		749		1,451
Tax effects		—		(317)		(940)		(1,257)
Net current-period other comprehensive income (loss)		40,868		499		2,606		43,973
Total	$	(98,717)	$	(3,162)	$	1,716	$	(100,163)

The reclassifications out of AOCI and the location on the consolidated statements of income for the years ended December 31, 2018 and 2017 are as follows:

		2018		2017	Affected Line Item
Amortization of defined benefit pension items:
	$	(463)	$	(702)	Various line items individually insignificant
		(463)		(702)	Income before taxes
		114		273	Income tax benefit
	$	(349)	$	(429)	Net of tax
Unrealized losses on derivatives:
	$	34	$	(749)	Interest expense to third parties
		34		(749)	Income before taxes
		(9)		199	Income tax benefit
	$	25	$	(550)	Net of tax

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RECEIVABLES

12 Months Ended

Dec. 31, 2018

RECEIVABLES

RECEIVABLES

NOTE 4: RECEIVABLES

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

	2018		2017
Retail	$	753,388	$	768,502
Wholesale		747,191		671,740
Wholesale factoring		—		235,834
Finance lease		63,936		58,198
Restricted receivables		8,460,823		8,766,467
Gross receivables		10,025,338		10,500,741
Less: Allowance for credit losses		(74,412)		(79,196)
Total receivables, net	$	9,950,926	$	10,421,545

The Company provides and administers financing for retail purchases of new and used equipment sold through CNH Industrial North America’s dealer network. The terms of retail and other notes and finance leases generally range from two to six years, and interest rates vary depending on prevailing market interest rates and certain incentive programs offered by CNH Industrial North America.

Wholesale receivables arise primarily from the financing of the sale of goods to dealers and distributors by CNH Industrial North America, and to a lesser extent, the financing of dealer operations. Under the standard terms of the wholesale receivable agreements, these receivables typically have interest-free periods of up to twelve months and stated original maturities of up to twenty‑four months, with repayment accelerated upon the sale of the underlying equipment by the dealer. During the interest‑free period, the Company is compensated by CNH Industrial North America based on market interest rates. After the expiration of any interest‑free period, interest is charged to dealers on outstanding balances until the Company receives payment in full. The interest‑free periods are determined based on the type of equipment sold and the time of year of the sale. Interest rates are set based on market factors and the prime rate or LIBOR. The Company evaluates and assesses dealers on an ongoing basis as to their creditworthiness. CNH Industrial North America may be obligated to repurchase the dealer’s equipment upon cancellation or termination of the dealer’s contract for such causes as change in ownership, closeout of the business, or default. There were no significant losses in 2018, 2017 and 2016 relating to the termination of dealer contracts.

Wholesale factoring receivables represent short-term receivables purchased from Iveco Argentina.

Maturities of receivables as of December 31, 2018, are as follows:

2019	$	5,619,826
2020		1,548,323
2021		1,223,685
2022		900,707
2023 and thereafter		732,797
Total receivables	$	10,025,338

It has been the Company’s experience that substantial portions of retail receivables are repaid before their contractual maturity dates. As a result, the above table should not be regarded as a forecast of future cash collections. Retail, finance lease and wholesale receivables have significant concentrations of credit risk in the agricultural and construction business sectors. Short-term receivables purchased from Iveco Argentina have significant concentrations of credit risk in the agricultural and commercial vehicles business sectors in Argentina. On a geographic basis, there is not a disproportionate concentration of credit risk in any area of the United States, Canada or Argentina. The Company typically retains, as collateral, a security interest in the equipment associated with retail notes and wholesale receivables.

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 removed 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 December 31, 2018 and 2017:

	2018		2017
Retail	$	5,623,730	$	6,042,186
Wholesale		2,837,093		2,724,281
Total restricted receivables	$	8,460,823	$	8,766,467

Retail Receivables Securitizations

Within the U.S. retail receivables securitization programs, qualifying retail receivables are sold to limited purpose, bankruptcy‑remote SPEs. In turn, these SPEs establish separate trusts to which the receivables are transferred in exchange for proceeds from asset‑backed securities issued by the trusts. 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.

During the years ended December 31, 2018 and 2017, the Company executed $2,250,399 and $2,989,014, respectively, in term retail asset‑backed transactions in the U.S. and Canada. The securities in these transactions are backed by agricultural and construction equipment retail receivable contracts originated through CNH Industrial North America’s dealer network. As of December 31, 2018 and 2017, $4,808,679 and $5,567,786, respectively, of asset‑backed securities issued to investors were outstanding with weighted average remaining maturities of 30 months and 31 months, respectively. The Company believes that it is probable that it will continue to regularly utilize the term ABS markets.

The Company may retain all or a portion of the subordinated interests in the SPEs. No recourse provisions exist that allow holders of the asset‑backed securities issued by the trusts to put those securities back to the Company although the Company provides customary representations and warranties that could give rise to an obligation to repurchase from the trusts any receivables for which there is a breach of the representations and warranties. Moreover, the Company does not guarantee any securities issued by the trusts. The trusts have a limited life and generally terminate upon final distribution of amounts owed to investors or upon exercise of a cleanup‑call option by the Company, in its role as servicer.

The Company also has $1,566,870 in committed asset‑backed facilities through which it may sell on a monthly basis retail receivables generated in the United States and Canada. The Company has utilized these facilities in the past to fund the origination of receivables and has later repurchased and resold the receivables in the term ABS markets or found alternative financing for the receivables. The U.S. and Canadian facilities had an original funding term of two years and are renewable in September 2020 and December 2020, respectively. To the extent these facilities are not renewed, they will be repaid according to the amortization of the underlying receivables.

Wholesale Receivables Securitizations

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. As of December 31, 2018, debt issued through the U.S. master trust facility consists of two short-term facilities renewable at the discretion of the investors: $500,000 and $300,000.

The Canadian master trust facility consists of a C$585,750 ($429,788) facility renewable December 2020 at the discretion of the investor.

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.

Each of the facilities contains minimum payment rate thresholds that, if breached, could preclude the Company from selling additional receivables originated on a prospective basis and could force an early amortization of the debt.

Allowance for Credit Losses

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.

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 year ended December 31, 2018 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	73,610	$	5,586	$	79,196
Charge-offs		(39,375)		(1,567)		(40,942)
Recoveries		4,702		71		4,773
Provision (benefit)		28,277		3,422		31,699
Foreign currency translation and other		(270)		(44)		(314)
Ending balance	$	66,944	$	7,468	$	74,412
Ending balance: individually evaluated for impairment	$	15,801	$	4,825	$	20,626
Ending balance: collectively evaluated for impairment	$	51,143	$	2,643	$	53,786
Receivables:
Ending balance	$	6,441,054	$	3,584,284	$	10,025,338
Ending balance: individually evaluated for impairment	$	31,148	$	24,513	$	55,661
Ending balance: collectively evaluated for impairment	$	6,409,906	$	3,559,771	$	9,969,677

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 (benefit)		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

Allowance for credit losses activity for the year ended December 31, 2016 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	88,405	$	6,319	$	94,724
Charge-offs		(42,949)		(1)		(42,950)
Recoveries		3,228		522		3,750
Provision (benefit)		30,915		(69)		30,846
Foreign currency translation and other		(1,552)		77		(1,475)
Ending balance	$	78,047	$	6,848	$	84,895
Ending balance: individually evaluated for impairment	$	18,113	$	4,250	$	22,363
Ending balance: collectively evaluated for impairment	$	59,934	$	2,598	$	62,532
Receivables:
Ending balance	$	7,398,017	$	3,527,709	$	10,925,726
Ending balance: individually evaluated for impairment	$	31,383	$	43,659	$	75,042
Ending balance: collectively evaluated for impairment	$	7,366,634	$	3,484,050	$	10,850,684

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 December 31, 2018 and 2017 is as follows:

	2018		2017
Titanium	$	3,367,239	$	3,734,313
Platinum		1,942,784		2,002,791
Gold		943,816		952,404
Silver		152,338		146,051
Bronze		34,877		33,327
Total	$	6,441,054	$	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 December 31, 2018 and 2017 is as follows:

	2018		2017
A	$	1,582,179	$	1,222,813
B		1,292,331		1,425,591
C		527,735		439,353
D		182,039		308,264
Total	$	3,584,284	$	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 December 31, 2018 and 2017 is as follows:

	2018
													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	$	19,318	$	6,372	$	24,772	$	50,462	$	5,239,777	$	5,290,239	$	4,573
Canada	$	1,398	$	510	$	2,326	$	4,234	$	1,146,581	$	1,150,815	$	911
Wholesale
United States	$	484	$	10	$	1,368	$	1,862	$	2,788,655	$	2,790,517	$	387
Canada	$	3	$	—	$	436	$	439	$	793,328	$	793,767	$	1
Total
Retail	$	20,716	$	6,882	$	27,098	$	54,696	$	6,386,358	$	6,441,054	$	5,484
Wholesale	$	487	$	10	$	1,804	$	2,301	$	3,581,983	$	3,584,284	$	388

	2017
													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 December 31, 2018 and 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 thirteen-month average) are as follows:

	December 31, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Retail
United States	$	30,959	$	29,783	$	15,347	$	32,787
Canada	$	189	$	180	$	454	$	248
Wholesale
United States	$	24,513	$	22,985	$	4,825	$	27,269
Total
Retail	$	31,148	$	29,963	$	15,801	$	33,035
Wholesale	$	24,513	$	22,985	$	4,825	$	27,269

	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 December 31, 2018 and 2017, the Company’s impaired receivables individually evaluated for impairment without an allowance were immaterial. Interest income recognized on impaired receivables for the years ended December 31, 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 December 31, 2018 and 2017 are as follows:

	2018						2017
	Retail		Wholesale		Total		Retail		Wholesale		Total
United States	$	27,069	$	22,985	$	50,054	$	40,968	$	43,531	$	84,499
Canada	$	1,428	$	—	$	1,428	$	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 that is experiencing financial difficulties. As a collateral‑based lender, the Company typically will repossess collateral in lieu of restructuring receivables. As such, for retail receivables, concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables, concessions granted may include extended contract maturities, inclusion of interest‑only periods, modification of a contractual interest rate to a below market interest rate and waiving of interest and principal.

TDRs are reviewed along with other receivables as part of management’s ongoing evaluation of the adequacy of the allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable source of repayment, which is normally the liquidation of the 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 December 31, 2018, the Company had 254 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre‑modification value of these contracts was $8,118 and the post‑modification value was $7,272. Additionally, the Company had 371 accounts with a balance of $17,129 undergoing bankruptcy proceedings where a concession has not yet been determined. As of December 31, 2017, the Company had 272 retail and finance lease contracts classified as TDRs where a court has determined the concession. The pre‑modification value of these contracts was $8,583 and the post‑modification value was $7,710. Additionally, the Company had 423 accounts with a balance of $23,750 undergoing bankruptcy proceedings where a concession has not yet been determined. As the outcome of the bankruptcy cases is determined by the 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 December 31, 2018 and 2017.

As of December 31, 2018 and 2017, the Company’s wholesale TDRs were immaterial.

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EQUIPMENT ON OPERATING LEASES

12 Months Ended

Dec. 31, 2018

EQUIPMENT ON OPERATING LEASES

EQUIPMENT ON OPERATING LEASES

NOTE 5: EQUIPMENT ON OPERATING LEASES

A summary of equipment on operating leases as of December 31, 2018 and 2017 is as follows:

	2018		2017
Equipment on operating leases	$	2,052,822	$	2,139,099
Accumulated depreciation		(328,605)		(357,610)
Total equipment on operating leases, net	$	1,724,217	$	1,781,489

Depreciation expense totaled $231,805,  $280,765 and $247,438 for the years ended December 31, 2018, 2017 and 2016, respectively.

Lease payments owed to the Company for equipment under non‑cancelable operating leases (excluding deferred operating lease subsidy of $106,817) as of December 31, 2018 are as follows:

2019	$	169,387
2020		128,197
2021		69,883
2022		23,120
2023 and thereafter		5,173
Total lease payments	$	395,760

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GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2018

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

NOTE 6: GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows:

	2018		2017
Balance, beginning of year	$	110,588	$	108,715
Foreign currency translation adjustment		(2,189)		1,873
Balance, end of year	$	108,399	$	110,588

Goodwill is tested for impairment at least annually. During 2018, 2017 and 2016, the Company performed its annual impairment review as of December 31 and concluded that there were no impairments in any year.

As of December 31, 2018 and 2017, the Company’s intangible asset and related accumulated amortization for its software is as follows:

	2018		2017
Software	$	30,625	$	25,197
Accumulated amortization		(20,443)		(18,329)
Total software, net	$	10,182	$	6,868

The Company recorded amortization expense of $2,114,  $2,112 and $1,998 during 2018, 2017 and 2016, respectively.

Based on the current amount of software subject to amortization, the estimated annual amortization expense for each of the succeeding five years is as follows: $1,722 in 2019; $1,082 in 2020; $516 in 2021; $241 in 2022; and $55 in 2023.

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OTHER ASSETS

12 Months Ended

Dec. 31, 2018

OTHER ASSETS

OTHER ASSETS

NOTE 7: OTHER ASSETS

The components of other assets as of December 31, 2018 and 2017 are as follows:

	2018		2017
Tax receivables	$	39,174	$	6,566
Deferred tax assets		14,955		10,275
Derivative assets		16,665		10,144
Other current assets		14,143		7,396
Total other assets	$	84,937	$	34,381

XML

CREDIT FACILITIES AND DEBT

12 Months Ended

Dec. 31, 2018

CREDIT FACILITIES AND DEBT

CREDIT FACILITIES AND DEBT

NOTE 8: CREDIT FACILITIES AND DEBT

The following table summarizes the Company’s debt and credit facilities, borrowings thereunder and availability at December 31, 2018:

	2018
						Current
						Maturities of
		Total		Short-Term		Long-Term		Long-Term
	Maturity (1)	Facility/Debt		Outstanding		Outstanding		Outstanding		Available
Committed Asset-Backed Facilities
Retail - U.S.	Sep 2020	$	1,200,000	$	—	$	139,556	$	474,294	$	586,150
Retail - Canada	Dec 2020		366,870		—		18,095		27,861		320,914
Wholesale VFN - U.S.	Various		800,000		800,000		—		—		—
Wholesale VFN - Canada	Dec 2020		429,788		429,788		—		—		—
			2,796,658		1,229,788		157,651		502,155		907,064
Secured Debt
Amortizing retail term ABS - N.A.	Various		4,808,679		—		1,853,908		2,954,771		—
Unamortized issuance costs			(14,779)		—		—		(14,779)		—
			4,793,900		—		1,853,908		2,939,992		—
Unsecured Credit Lines and Facilities
Credit lines	Various		195,386		195,386		—		—		—
Revolving credit facilities	Various		825,569		—		—		330,183		495,386
			1,020,955		195,386		—		330,183		495,386
Unsecured Debt
Commercial paper	Various		389,000		389,000		—		—		—
Notes	Various		3,000,000		—		500,000		2,500,000		—
Hedging effects, discounts and unamortized issuance costs			(13,932)		(1,108)		(333)		(12,491)		—
			3,375,068		387,892		499,667		2,487,509		—
Total credit facilities and debt		$	11,986,581	$	1,813,066	$	2,511,226	$	6,259,839	$	1,402,450

(1) Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility.

A summary of the minimum annual repayments of long‑term debt as of December 31, 2018, for 2020 and thereafter is as follows:

2020	$	2,367,515
2021		2,023,312
2022		1,219,488
2023		109,084
2024 and thereafter		540,440
Total	$	6,259,839

The following table summarizes the Company’s credit facilities, borrowings thereunder and availability at December 31, 2017:

	2017
						Current
						Maturities of
		Total		Short-Term		Long-Term		Long-Term
	Maturity (1)	Facility/Debt		Outstanding		Outstanding		Outstanding		Available
Committed Asset-Backed Facilities
Retail - U.S.	Sep 2019	$	1,200,000	$	—	$	60,099	$	160,301	$	979,600
Retail - Canada	Dec 2019		398,730		—		57,814		158,401		182,515
Wholesale VFN - U.S.	Various		800,000		800,000		—		—		—
Wholesale VFN - Canada	Dec 2019		467,112		461,167		—		—		5,945
			2,865,842		1,261,167		117,913		318,702		1,168,060
Secured Debt
Amortizing retail term ABS - N.A.	Various		5,567,786		—		2,176,929		3,390,857		—
Other ABS financing - N.A.	Various		54,275		—		45,937		8,338		—
Unamortized issuance costs			(17,507)		—		—		(17,507)		—
			5,604,554		—		2,222,866		3,381,688		—
Unsecured Credit Lines and Facilities
Credit lines	Various		300,000		300,000		—		—		—
Revolving credit facilities	Various		659,492		—		—		159,492		500,000
			959,492		300,000		—		159,492		500,000
Unsecured Debt
Commercial paper	Various		115,000		115,000		—		—		—
Notes	Various		3,100,000		—		600,000		2,500,000		—
Hedging effects, discounts and unamortized issuance costs			(26,601)		(89)		607		(27,119)		—
			3,188,399		114,911		600,607		2,472,881		—
Total credit facilities and debt		$	12,618,287	$	1,676,078	$	2,941,386	$	6,332,763	$	1,668,060

(1) Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility.

Committed Asset‑Backed Facilities

The Company has access to committed asset‑backed facilities with several banks through which it may sell its receivables. The Company utilizes retail facilities to fund the origination of retail receivables and has exercised the option to periodically repurchase receivables and resell them in the term ABS markets (shown as “Amortizing retail term ABS - N.A.”) or found alternative financing for the receivables. Under these facilities, the maximum amount of proceeds that can be accessed at one time is $1,566,870. In addition, if the receivables sold are not repurchased by the Company, the related debt is paid only as the underlying receivables are collected. Such receivables have maturities not exceeding seven years. The Company believes it is probable that a majority of these receivables will be repurchased and resold in the ABS markets. Borrowings against these facilities accrue interest based on prevailing money market rates, plus an applicable margin.

The Company finances a portion of its wholesale receivable portfolio with the issue of Variable Funding Notes (“VFNs”) which are privately subscribed by certain banks and asset‑backed commercial paper conduits. These notes accrue interest based on prevailing money market rates, plus an applicable margin.

Secured Debt

Secured borrowings bear interest at either floating rates of LIBOR plus an applicable margin or fixed rates.

Unsecured Facilities and Debt

As of December 31, 2018, the Company had fully-drawn uncommitted credit lines totaling $195,386 with final maturities in June 2019 and July 2020. 

Committed unsecured facilities with banks as of December 31, 2018 totaled $825,569. These credit facilities, which are eligible for renewal at various future dates, are used primarily for working capital and other general corporate purposes. As of December 31, 2018, the Company had $330,183 outstanding under these credit facilities. Included in the remaining available credit commitments is $389,000 maintained primarily to provide backup liquidity for commercial paper borrowings.

In 2017, the Company established a commercial paper program to issue short-term, unsecured, unsubordinated commercial paper notes on a private placement basis. As of December 31, 2018, the aggregate principal amount of notes outstanding was $389,000.

As of December 31, 2018, the Company’s outstanding unsecured senior notes were as follows:

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
Hedging effects, discounts and unamortized issuance costs		(10,985)
Total	$	2,989,015

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

On April 16, 2018, the Company repaid $600,000 of its 3.625% unsecured notes due 2018.

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%.

Covenants

The indentures and credit agreements governing the Company’s unsecured funding transactions contain covenants that restrict the Company’s ability and/or that of its subsidiaries to, among other things, incur additional debt, make certain investments, enter into certain types of transactions with affiliates, use assets as security in other transactions, enter into sale or leaseback transactions and/or sell certain assets or merge with or into other companies. In addition, the Company is required to maintain a certain coverage level for leverage.

Interest Rates

The weighted‑average interest rate on total short‑term debt outstanding at December 31, 2018 and 2017 was 3.0% and 2.2%, respectively. The weighted‑average interest rate on total long‑term debt (including current maturities of long‑term debt) at December 31, 2018 and 2017 was 3.1% and 2.6%, respectively. The average rate is calculated using the actual rates at December 31, 2018 and 2017, weighted by the amount of outstanding borrowings of each debt instrument.

Support Agreement

Effective as of September 29, 2013, in connection with the merger of CNH Global N.V., the former indirect parent of CNH Industrial Capital (“CNH Global”), with and into CNHI, CNHI assumed all of CNH Global’s obligations under the support agreement, pursuant to which CNHI has agreed to, among other things, (a) make cash capital contributions to the Company, to the extent necessary to cause the ratio of net earnings available for fixed charges to fixed charges to be not less than 1.05 for each fiscal quarter (with such ratio determined, on a consolidated basis and in accordance with U.S. GAAP, for such fiscal quarter and the immediately preceding three fiscal quarters taken as a whole), (b) generally maintain an ownership of at least 51% of the voting equity interests in the Company and (c) cause the Company to have, as of the end of any fiscal quarter, a consolidated tangible net worth of at least $50,000. The support agreement is not intended to be and is not a guarantee by CNHI of any indebtedness or other obligation of the Company. The obligations of CNHI to the Company pursuant to this support agreement are to the Company only and do not run to, and are not enforceable directly by, any creditor of the Company. The support agreement may be modified, amended or terminated, at CNHI’s election, upon thirty days’ prior written notice to the Company and the rating agencies, if (a) the modification, amendment or termination would not result in a downgrade of the Company’s rated indebtedness; (b) the modification, amendment or notice of termination provides that the support agreement will continue in effect with respect to the Company’s rated indebtedness then outstanding; or (c) the Company has no long‑term rated indebtedness outstanding.

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INCOME TAXES

12 Months Ended

Dec. 31, 2018

INCOME TAXES

INCOME TAXES

NOTE 9: INCOME TAXES

The income and expenses of the Company and certain of its domestic subsidiaries are included in the consolidated income tax return of CNH Industrial U.S. Holdings, Inc., a wholly-owned subsidiary of CNHI. CNH Industrial U.S. Holdings, Inc. is the new parent of Case New Holland Inc., who remains the parent of CNH Industrial America. The Company’s Canadian subsidiaries file separate income tax returns, as do certain domestic subsidiaries. The Company and certain of its domestic subsidiaries are LLCs and, as a result, incur no income tax liability on a stand‑alone basis for tax purposes. However, for financial reporting, all tax accounts have been disclosed and the income tax expense is reflective for all of the companies included in the consolidated financial statements.

The sources of income before taxes for the years ended December 31, 2018, 2017, and 2016 are as follows, with foreign defined as any income earned outside the United States:

	2018		2017		2016
Domestic	$	120,375	$	121,729	$	193,765
Foreign		77,942		81,712		88,051
Income before taxes	$	198,317	$	203,441	$	281,816

The provision for income taxes for the years ended December 31, 2018, 2017 and 2016 is as follows:

	2018		2017		2016
Current income tax expense (benefit):
Domestic	$	(11,719)	$	16,151	$	38,845
Foreign		24,937		17,711		17,692
Total current income tax expense		13,218		33,862		56,537
Deferred income tax expense (benefit):
Domestic		34,304		(83,647)		33,798
Foreign		(6,050)		2,737		3,969
Total deferred income tax expense		28,254		(80,910)		37,767
Total tax provision	$	41,472	$	(47,048)	$	94,304

A reconciliation of CNH’s statutory and effective income tax rate for the years ended December 31, 2018, 2017, and 2016 is as follows:

	2018		2017		2016
Tax provision at statutory rate	21.0	%	35.0	%	35.0	%
State taxes	1.8		5.9		4.7
Foreign taxes	(3.4)		(8.5)		(5.2)
Tax contingencies	2.5		—		—
Withholding taxes and credits	1.5		—		—
Tax credits and incentives	(0.9)		(0.6)		(0.6)
Tax rate and legislative changes	(1.4)		(54.5)		—
Other	(0.2)		(0.4)		(0.4)
Total tax provision effective rate	20.9	%	(23.1)	%	33.5	%

The components of the Company’s net deferred tax liability as of December 31, 2018 and 2017 are as follows:

	2018		2017
Deferred tax assets:
Pension, postretirement and post-employment benefits	$	1,918	$	1,986
Marketing and sales incentive programs		53,259		39,836
Allowance for credit losses		17,534		18,539
Other accrued liabilities		7,825		471
Tax loss and tax credit carry forwards		4,314		1,892
Total deferred tax assets	$	84,850	$	62,724
Deferred tax liability:
Equipment on operating lease	$	320,070	$	268,129
Deferred tax liability, net (1)	$	(235,220)	$	(205,405)

(1) In the accompanying consolidated balance sheets, the US net deferred tax position in 2018 and 2017 is included in “Accounts payable and other accrued liabilities” while the Canadian net deferred tax position in 2018 and 2017 is included in “Other assets”.

Deferred taxes are provided to reflect timing differences between the financial and tax basis of assets and liabilities and tax carryforwards using currently enacted tax rates and laws. Management believes it is more likely than not the benefit of the deferred tax assets will be realized.

A reconciliation of the gross amounts of tax contingencies at the beginning and end of the year is as follows:

	2018		2017		2016
Balance, beginning of year	$	—	$	—	$	—
Additions based on tax positions related to prior years		4,274		—		—
Reductions for tax positions of prior years		—		—		—
Settlements		—		—		—
Balance, end of year	$	4,274	$	—	$	—

The total amount of unrecognized tax benefits that, if recognized, would affect the annual effective income tax rate is $4,274.

The Company recognizes interest and penalties accrued related to tax contingencies in income tax expense. During the years ended December 31, 2018, 2017 and 2016, the Company recognized approximately $686,  $0 and $0, respectively, in interest and penalties. The Company had approximately $686,  $0 and $0 for the expected future payment of interest and penalties accrued at December 31, 2018, 2017 and 2016, respectively.

The Company has open tax years from 2012 to 2018.  The Company does not believe the resolution of any outstanding tax examinations will have a material adverse effect on the Company’s financial position or its results of operations. On December 22, 2017, the U.S. enacted the U.S. Tax Act which included, among other things, a reduction in the corporate tax rate from 35% to 21% and a tax on deemed repatriation of the undistributed earnings of foreign subsidiaries. As a result, in the fourth quarter of 2017, the Company recorded an estimated net tax benefit of $111,000, which included the revaluation of its net deferred tax liability and the tax charge on the deemed repatriation. In the fourth quarter of 2018, the Company filed its 2017 U.S. corporate income tax return and subsequently booked an additional benefit of $2,739 to reflect the final increment of corporate tax reform, thus resulting in an overall benefit of $113,739. In addition, amongst other items, the U.S. Tax Act enacted a tax upon global intangible low tax income (the “GILTI tax”). The Company has made a policy election to account for the GILTI tax as a current period cost, rather than under the deferred tax method.

At December 31, 2018, there are no material deferred tax liabilities on undistributed earnings of subsidiaries outside of the U.S.

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FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2018

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS

NOTE 10: 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. Ineffectiveness recognized related to these hedging relationships was not significant for the years ended December 31, 2018, 2017 and 2016. These amounts are recorded in “Other expenses” in the consolidated statements of income. As of December 31, 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 53 months. As of December 31, 2018, the after‑tax gains deferred in accumulated other comprehensive income (loss) that will be recognized in interest expense over the next 12 months are approximately $712.

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 years ended December 31, 2018, 2017 and 2016.

Most of the Company’s interest rate derivatives 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. If the future notional amount of the Company’s interest rate derivatives is not known in advance, the derivatives are considered Level 3 derivatives. The fair market value of these derivatives is calculated using market data input and a forecasted future notional balance. The total notional amount of the Company’s interest rate derivatives was approximately $2,960,191 and $3,143,737 at December 31, 2018 and 2017, respectively. The thirteen‑month average notional amounts as of December 31, 2018 and 2017 were $2,947,318 and $3,246,576, 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 December 31, 2018 and 2017 in the consolidated balance sheets are recorded as follows:

	2018		2017
Derivatives Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	15,422	$	4,113
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	8,107	$	6,698
Derivatives Not Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	1,157	$	4,638
Foreign exchange contracts		86		1,393
Total	$	1,243	$	6,031
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	1,157	$	4,638
Foreign exchange contracts		—		325
Total	$	1,157	$	4,963

Pre‑tax gains (losses) on the consolidated statements of income and comprehensive income related to the Company’s derivatives for the years ended December 31, 2018, 2017 and 2016 are recorded in the following accounts:

	2018		2017		2016
Cash Flow Hedges
Recognized in accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives	$	726	$	2,797	$	1,277
Reclassified from accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives—Interest expense to third parties		34		(749)		(694)
Not Designated as Hedges
Foreign exchange contracts—Other expenses	$	(12,355)	$	1,155	$	4,128

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 December 31, 2018 and 2017, all of which are classified as Level 2:

	Level 2
	2018		2017
Assets
Interest rate derivatives	$	16,579	$	8,751
Foreign exchange contracts		86		1,393
Total assets	$	16,665	$	10,144
Liabilities
Interest rate derivatives	$	9,264	$	11,336
Foreign exchange contracts		—		325
Total liabilities	$	9,264	$	11,661

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

Items Measured at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from application of lower of cost or market accounting or impairment charges of individual assets.

Certain equipment held for sale measured at fair value on a nonrecurring basis at June 30, 2018 and December 31, 2017 was $144,913 and $123,503, respectively. The fair market value of these assets was based on an internal valuation methodology, which used industry guide book values adjusted for recent remarketing history and was classified as Level 3 under the fair value hierarchy. For the years ended December 31, 2018, 2017 and 2016, the Company recorded impairment losses on equipment held for sale of $2,894,  $5,646 and $11,400, respectively. In addition, the Company recorded (gains) losses on the sale of the equipment held of $11,018,  $9,784 and $(1,690) for the years ended December 31, 2018, 2017 and 2016, respectively. Both the impairment losses and the gains on the sale of equipment held were included in “Other expenses” in the accompanying consolidated statements of income.

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 December 31, 2018 and 2017 are as follows:

	2018				2017
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value *		Amount		Fair Value *
Receivables	$	9,950,926	$	9,859,920	$	10,421,545	$	10,379,020
Long-term debt	$	6,259,839	$	6,149,778	$	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.

Financial Assets

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

Financial Liabilities

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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GEOGRAPHICAL INFORMATION

12 Months Ended

Dec. 31, 2018

GEOGRAPHICAL INFORMATION

GEOGRAPHICAL INFORMATION

NOTE 11: GEOGRAPHICAL INFORMATION

Based on how its operations are managed and evaluated by management, the Company is viewed as one operating segment.

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

	2018		2017		2016
Revenues
United States	$	693,191	$	756,210	$	780,071
Canada		192,645		187,107		170,825
Eliminations		(7,482)		(4,385)		(4,175)
Total	$	878,354	$	938,932	$	946,721
Interest expense
United States	$	276,956	$	279,542	$	269,560
Canada		55,806		47,413		39,714
Eliminations		(7,482)		(4,385)		(4,175)
Total	$	325,280	$	322,570	$	305,099
Net income
United States	$	97,790	$	189,225	$	121,122
Canada		59,055		61,264		66,390
Total	$	156,845	$	250,489	$	187,512
Depreciation and amortization
United States	$	191,347	$	238,037	$	208,942
Canada		42,579		44,864		40,528
Total	$	233,926	$	282,901	$	249,470
Expenditures for equipment on operating leases
United States	$	533,706	$	507,349	$	555,219
Canada		146,560		128,470		168,164
Total	$	680,266	$	635,819	$	723,383
Provision for credit losses
United States	$	28,932	$	40,516	$	35,867
Canada		2,767		382		(5,021)
Total	$	31,699	$	40,898	$	30,846

	2018		2017		2016
Total assets
United States	$	10,482,805	$	10,738,403	$	12,016,606
Canada		2,511,839		2,838,754		2,400,814
Eliminations		(62,732)		(65,079)		(374,161)
Total	$	12,931,912	$	13,512,078	$	14,043,259
Managed receivables
United States	$	8,080,756	$	8,265,090	$	9,048,303
Canada		1,944,582		2,235,651		1,877,423
Total	$	10,025,338	$	10,500,741	$	10,925,726

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RELATED - PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2018

RELATED-PARTY TRANSACTIONS

RELATED-PARTY TRANSACTIONS

NOTE 12: 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 at December 31, 2018, 2017, and 2016 is as follows:

	2018		2017		2016
Subsidy from CNH Industrial North America
Retail	$	149,363	$	157,496	$	170,425
Wholesale		123,615		166,426		156,654
Operating lease		60,841		68,987		70,138
Income from Iveco Argentina
Wholesale factoring		10,881		5,199		—
Income from affiliated receivables
CNH Industrial North America		1,096		—		1,155
Other affiliates		137		150		—
Total interest and other income from affiliates	$	345,933	$	398,258	$	398,372

Interest expense to affiliates was $7,533,  $11,442 and $7,218, respectively, for the years ended December 31, 2018, 2017 and 2016. Fees charged by affiliates were $47,475 and $46,431 and $45,225 for the years ended December 31, 2018, 2017 and 2016, respectively, and represents payroll and other human resource services CNH Industrial America performs on behalf of the Company.

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

	2018				2017
	Rate	Maturity	Amount		Rate	Maturity	Amount
Affiliated receivables
CNH Industrial America	0%	—	$	24,724	0%	—	$	49,311
CNH Industrial Canada Ltd.	0%	—		6,233	0%	—		11,282
Other affiliates	0%	—		12,432	0%	—		12,540
Total affiliated receivables			$	43,389			$	73,133
Affiliated debt
CNH Industrial America	2.50%	2019	$	99,455	4.31%	2018	$	327,160
CNH Industrial Canada Ltd.	3.80%	2019		176,816	4.19%	2018		118,642
Total affiliated debt			$	276,271			$	445,802

Included in “Other Assets” in the accompanying balance sheet were tax receivables due from related parties of $39,174 and $3,513 as of December 31, 2018 and 2017, respectively. Accounts payable and other accrued liabilities, including tax payables, of $4,740 and $60,070, respectively, as of December 31, 2018 and 2017, were payable to related parties.

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2018

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 13: 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 and dealer financing managed portfolio. At December 31, 2018, the total credit limit available was $5,919,819, of which $3,499,835 was utilized.

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2018

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

NOTE 14: SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

CNH Industrial Capital America and New Holland Credit, which are 100%‑owned subsidiaries of CNH Industrial Capital LLC (the “Guarantor Entities”), 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 December 31, 2018 and 2017 and for the three years ended December 31, 2018. The condensed consolidating financial information reflects investments in consolidated subsidiaries under the equity method of accounting.

	Condensed Statements of Comprehensive Income for the
	Year Ended December 31, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	9,170	$	192,099	$	—	$	201,269
Interest income on wholesale notes		—		(1,030)		67,929		—		66,899
Interest and other income from affiliates		70,880		200,821		297,443		(223,211)		345,933
Rental income on operating leases		—		187,089		54,493		—		241,582
Other income		—		87,710		2,842		(67,881)		22,671
Total revenues		70,880		483,760		614,806		(291,092)		878,354
EXPENSES
Interest expense:
Interest expense to third parties		156,839		(8,767)		169,675		—		317,747
Interest expense to affiliates		—		199,890		30,854		(223,211)		7,533
Total interest expense		156,839		191,123		200,529		(223,211)		325,280
Administrative and operating expenses:
Fees charged by affiliates		—		45,545		69,811		(67,881)		47,475
Provision for credit losses		—		8,445		23,254		—		31,699
Depreciation of equipment on operating leases		—		189,228		42,577		—		231,805
Other expenses		22		18,249		25,507		—		43,778
Total administrative and operating expenses		22		261,467		161,149		(67,881)		354,757
Total expenses		156,861		452,590		361,678		(291,092)		680,037
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(85,981)		31,170		253,128		—		198,317
Income tax provision (benefit)		(20,995)		11,010		51,457		—		41,472
Equity in income of consolidated subsidiaries accounted for under the equity method		221,831		201,671		—		(423,502)		—
NET INCOME	$	156,845	$	221,831	$	201,671	$	(423,502)	$	156,845
COMPREHENSIVE INCOME	$	110,009	$	174,995	$	161,250	$	(336,245)	$	110,009

	Condensed Balance Sheets as of December 31, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	$	—	$	118,508	$	41,820	$	—	$	160,328
Restricted cash		—		—		639,543		—		639,543
Receivables, less allowance for credit losses		—		1,472,678		8,478,248		—		9,950,926
Affiliated accounts and notes receivable		2,310,137		2,122,129		2,268,477		(6,657,354)		43,389
Equipment on operating leases, net		—		1,357,493		366,724		—		1,724,217
Equipment held for sale		—		192,772		17,219		—		209,991
Investments in consolidated subsidiaries accounted for under the equity method		2,796,050		2,461,139		—		(5,257,189)		—
Goodwill and intangible assets, net		—		91,754		26,827		—		118,581
Other assets		11,140		56,517		20,681		(3,401)		84,937
TOTAL	$	5,117,327	$	7,872,990	$	11,859,539	$	(11,917,944)	$	12,931,912
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt, including current maturities of long-term debt	$	987,559	$	—	$	3,336,733	$	—	$	4,324,292
Accounts payable and other accrued liabilities		286,527		3,035,024		1,243,183		(3,848,956)		715,778
Affiliated debt		—		2,041,926		1,046,144		(2,811,799)		276,271
Long-term debt		2,487,509		(10)		3,772,340		—		6,259,839
Total liabilities		3,761,595		5,076,940		9,398,400		(6,660,755)		11,576,180
Stockholder’s equity		1,355,732		2,796,050		2,461,139		(5,257,189)		1,355,732
TOTAL	$	5,117,327	$	7,872,990	$	11,859,539	$	(11,917,944)	$	12,931,912

	Condensed Statements of Cash Flows for the
	Year Ended December 31, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	142,488	$	488,329	$	143,064	$	(411,000)	$	362,881
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(9,080,473)		(9,991,699)		7,269,611		(11,802,561)
Collections of receivables		—		8,967,965		10,375,251		(7,270,276)		12,072,940
Purchase of equipment on operating leases, net		—		(146,618)		(65,391)		—		(212,009)
Change in property and equipment and software, net		—		(5,427)		—		—		(5,427)
Net cash from (used in) investing activities		—		(264,553)		318,161		(665)		52,943
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(211,322)		(128,802)		185,948		(154,176)
Net change in indebtedness		(12,488)		(54,285)		(140,562)		—		(207,335)
Dividends paid to CNH Industrial America LLC		(130,000)		—		(225,717)		225,717		(130,000)
Net cash from (used in) financing activities		(142,488)		(265,607)		(495,081)		411,665		(491,511)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(41,831)		(33,856)		—		(75,687)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of year		—		160,339		715,219		—		875,558
End of year	$	—	$	118,508	$	681,363	$	—	$	799,871

	Condensed Statements of Comprehensive Income for the
	Year Ended December 31, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	16,206	$	185,327	$	—	$	201,533
Interest income on wholesale notes		—		(1,107)		66,828		—		65,721
Interest and other income from affiliates		100,033		243,273		326,346		(271,394)		398,258
Rental income on operating leases		—		197,859		53,750		—		251,609
Other income		—		94,408		1,906		(74,503)		21,811
Total revenues		100,033		550,639		634,157		(345,897)		938,932
EXPENSES
Interest expense:
Interest expense to third parties		164,836		2,125		144,167		—		311,128
Interest expense to affiliates		—		236,267		46,569		(271,394)		11,442
Total interest expense		164,836		238,392		190,736		(271,394)		322,570
Administrative and operating expenses:
Fees charged by affiliates		—		44,666		76,268		(74,503)		46,431
Provision for credit losses		—		11,090		29,808		—		40,898
Depreciation of equipment on operating leases		—		235,911		44,854		—		280,765
Other expenses		—		33,176		11,651		—		44,827
Total administrative and operating expenses		—		324,843		162,581		(74,503)		412,921
Total expenses		164,836		563,235		353,317		(345,897)		735,491
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(64,803)		(12,596)		280,840		—		203,441
Income tax provision (benefit)		(24,331)		(148,033)		125,316		—		(47,048)
Equity in income of consolidated subsidiaries accounted for under the equity method		290,961		155,524		—		(446,485)		—
NET INCOME	$	250,489	$	290,961	$	155,524	$	(446,485)	$	250,489
COMPREHENSIVE INCOME	$	294,462	$	334,934	$	192,936	$	(527,870)	$	294,462

	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
	Year Ended December 31, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	564,252	$	838,812	$	130,049	$	(922,660)	$	610,453
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(8,276,424)		(9,446,211)		6,808,056		(10,914,579)
Collections of receivables		—		8,316,852		9,897,291		(6,808,286)		11,405,857
Purchase of equipment on operating leases, net		—		(136,711)		(63,230)		—		(199,941)
Change in property and equipment and software, net		—		(1,614)		—		—		(1,614)
Net cash from (used in) investing activities		—		(97,897)		387,850		(230)		289,723
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(683,231)		48,874		922,890		288,533
Net change in indebtedness		(279,252)		(48,999)		(576,992)		—		(905,243)
Dividends paid to CNH Industrial America LLC		(285,000)		—		—		—		(285,000)
Net cash from (used in) financing activities		(564,252)		(732,230)		(528,118)		922,890		(901,710)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		8,685		(10,219)		—		(1,534)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of year		—		151,654		725,438		—		877,092
End of year	$	—	$	160,339	$	715,219	$	—	$	875,558

	Condensed Statements of Comprehensive Income for the
	Year Ended December 31, 2016
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	15,990	$	195,516	$	—	$	211,506
Interest income on wholesale notes		—		(96)		69,006		—		68,910
Interest and other income from affiliates		97,254		232,020		324,262		(255,164)		398,372
Rental income on operating leases		—		196,911		46,620		—		243,531
Other income		—		103,422		2,837		(81,857)		24,402
Total revenues		97,254		548,247		638,241		(337,021)		946,721
EXPENSES
Interest expense:
Interest expense to third parties		162,264		6,209		129,408		—		297,881
Interest expense to affiliates		—		226,544		35,838		(255,164)		7,218
Total interest expense		162,264		232,753		165,246		(255,164)		305,099
Administrative and operating expenses:
Fees charged by affiliates		—		43,469		83,613		(81,857)		45,225
Provision for credit losses		—		9,879		20,967		—		30,846
Depreciation of equipment on operating leases		—		206,924		40,514		—		247,438
Other expenses		—		28,035		8,262		—		36,297
Total administrative and operating expenses		—		288,307		153,356		(81,857)		359,806
Total expenses		162,264		521,060		318,602		(337,021)		664,905
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(65,010)		27,187		319,639		—		281,816
Income tax provision (benefit)		(24,261)		10,204		108,361		—		94,304
Equity in income of consolidated subsidiaries accounted for under the equity method		228,261		211,278		—		(439,539)		—
NET INCOME	$	187,512	$	228,261	$	211,278	$	(439,539)	$	187,512
COMPREHENSIVE INCOME	$	204,914	$	245,663	$	225,994	$	(471,657)	$	204,914

	Condensed Statements of Cash Flows for the Year Ended December 31, 2016
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	(102,001)	$	(9,907)	$	638,851	$	158,127	$	685,070
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(8,575,745)		(9,116,990)		6,888,764		(10,803,971)
Collections of receivables		—		8,660,606		9,775,641		(6,889,105)		11,547,142
Purchase of equipment on operating leases, net		—		(255,439)		(105,992)		—		(361,431)
Change in property and equipment and software, net		—		(887)		(3)		—		(890)
Net cash from (used in) investing activities		—		(171,465)		552,656		(341)		380,850
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		172,351		224,700		(286,842)		110,209
Net change in indebtedness		392,001		(21,166)		(1,477,741)		—		(1,106,906)
Dividends paid to CNH Industrial America LLC		(290,000)		—		(129,056)		129,056		(290,000)
Net cash from (used in) financing activities		102,001		151,185		(1,382,097)		(157,786)		(1,286,697)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(30,187)		(190,590)		—		(220,777)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of year		—		181,841		916,028		—		1,097,869
End of year	$	—	$	151,654	$	725,438	$	—	$	877,092

XML

SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2018

SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED)

SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED)

NOTE 15: SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED)

	For the Year Ended December 31, 2018
	First		Second		Third		Fourth		Fiscal
	Quarter		Quarter		Quarter		Quarter		Year
Revenues	$	226,371	$	226,141	$	211,281	$	214,561	$	878,354
Interest expense		78,428		78,804		81,557		86,491		325,280
Administrative and operating expenses		96,020		85,287		83,332		90,118		354,757
Income tax provision		12,120		14,422		8,111		6,819		41,472
Net income	$	39,803	$	47,628	$	38,281	$	31,133	$	156,845

	For the Year Ended December 31, 2017
	First		Second		Third		Fourth		Fiscal
	Quarter		Quarter		Quarter		Quarter		Year
Revenues	$	232,834	$	229,863	$	234,889	$	241,346	$	938,932
Interest expense		74,728		78,797		79,772		89,273		322,570
Administrative and operating expenses		101,676		95,994		106,591		108,660		412,921
Income tax provision		18,037		16,885		14,387		(96,357)		(47,048)
Net income	$	38,393	$	38,187	$	34,139	$	139,770	$	250,489

XML

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2018

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 16: SUBSEQUENT EVENTS

On February 6, 2019, the Company, through a trust, issued $786,040 of amortizing asset-backed notes secured by U.S. retail loan receivables.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include 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.

Certain prior period balances have been reclassified to conform to the current year presentation.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

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.

Revenue Recognition

Revenue Recognition

Finance and interest income on retail notes and finance leases and on wholesale notes is recorded using the effective yield method. Deferred costs on the origination of financing receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the effective yield method. Recognition of income on receivables is suspended when management determines that collection of future income is not probable or when an account becomes 120 days delinquent, whichever occurs earlier. Income accrual is resumed if the receivable becomes contractually current and collection doubts are removed. Previously suspended income is recognized at that time. The Company applies cash received on nonaccrual financing receivables to first reduce any unrecognized interest and then the recorded investment and any other fees. 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. 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.

A substantial portion of the Company’s interest income arises from retail sales programs offered by CNH Industrial North America on which finance charges are waived or below-market rate financing programs are offered. When the Company acquires retail installment sales contracts and finance leases subject to below-market interest rates, including waived interest rate financing, the Company receives compensation from CNH Industrial North America based on the Company’s estimated costs and a targeted return on equity. This amount is initially recognized as an unearned finance charge and is recognized as interest income over the term of the retail notes and finance leases, and is included in “Interest and other income from affiliates” in the accompanying consolidated statements of income.

For selected wholesale receivables, CNH Industrial North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. These amounts are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income.

The Company is also compensated for lending funds to CNH Industrial North America. The amounts earned are included in “Interest and other income from affiliates” in the accompanying consolidated statements of income.

Income from operating leases is recognized over the term of the lease on a straight-line basis. For selected operating leases, CNH Industrial North America compensates the Company based on the Company’s estimated costs and a targeted return on equity. The amounts from CNH Industrial North America recognized as rental income on operating leases are included in “Interest and other income from affiliates.”

Foreign Currency Translation

Foreign Currency Translation

The Company’s non‑U.S. subsidiaries maintain their books and accounting records using local currency as the functional currency. Assets and liabilities of these non‑U.S. subsidiaries are translated into U.S. dollars at period‑end exchange rates, and net exchange gains or losses resulting from such translation are included in “Accumulated other comprehensive income” in the accompanying consolidated balance sheets. Income and expense accounts of these non‑U.S. subsidiaries are translated at the average exchange rates for the period, and gains and losses from foreign currency transactions are included in net income in the period that they arise.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents are highly liquid investments with an original maturity of three months or less. The carrying value of cash equivalents approximates fair value because of the short maturity of these investments.

Restricted Cash

Restricted Cash

Restricted cash includes principal and interest payments from retail notes and wholesale receivables owned by the consolidated VIEs that are payable to the VIEs’ investors, and cash pledged as a credit enhancement to the same investors. These amounts are held by depository banks in order to comply with contractual agreements.

Receivables

Receivables

Receivables are recorded at amortized cost, net of allowances for credit losses and deferred fees and costs. Periodically, the Company sells or transfers retail and wholesale receivables to funding facilities or in securitization transactions. In accordance with the accounting guidance regarding transfers of financial assets and the consolidation of VIEs, the majority of the retail and wholesale receivables sold in securitizations do not qualify as sales and are recorded as secured borrowings with no gains or losses recognized at the time of securitization. Receivables associated with these securitization transactions and receivables that the Company has the ability and intent to hold for the foreseeable future are classified as held for investment. The substantial majority of the Company’s receivables, which include unrestricted receivables and restricted receivables for securitization investors, are classified as held for investment.

Allowance for Credit Losses

Allowance for Credit Losses

The allowance for credit losses is the Company’s estimate of losses on 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.

Equipment on Operating Leases

Equipment on Operating Leases

The Company purchases leases and equipment from CNH Industrial North America dealers and other independent third parties that have leased equipment to retail customers under operating leases. The Company’s investment in operating leases is based on the purchase price paid for the equipment. Income from these operating leases is recognized over the term of the lease. The equipment is depreciated on a straight-line basis over the term of the lease to the estimated residual value at lease termination. Residual values are estimated at the inception of the lease and are reviewed quarterly. Realization of the residual values is dependent on the Company’s future ability to re-market the equipment under then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Management believes that the estimated residual values are realizable. Expenditures for maintenance and repairs are the responsibility of the lessee.

The Company evaluates the carrying amount of equipment on operating leases for potential impairment when it determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability identifies a possible impairment, the asset’s fair value is measured in accordance with the fair value measurement framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value.

Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded at the lower of net book value or estimated fair value of the equipment, less cost to sell, and is not depreciated.

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired. Goodwill is deemed to have an indefinite useful life and is reviewed for impairment at least annually. During 2018 and 2017, the Company performed its annual impairment review as of December 31, and concluded that there was no impairment in either year. Other intangible assets consist of software and are being amortized on a straight‑line basis over five years.

Income Taxes

Income Taxes

The provision for income taxes is determined using the asset and liability method. The Company recognizes a current tax liability or asset for the estimated taxes payable or refundable on tax returns for the current year and tax contingencies estimated to be settled with taxing authorities within one year. A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and tax loss carryforwards. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on available evidence.

Derivatives

Derivatives

The Company’s policy is to enter into derivative transactions to manage exposures that arise in the normal course of business and not for trading or speculative purposes. The Company records derivative financial instruments in the consolidated balance sheets as either an asset or liability measured at fair value. The fair value of the Company’s interest rate derivatives is based on discounting expected cash flows, using market interest rates, over the remaining term of the instrument. The fair value of the Company’s foreign exchange derivatives is based on market exchange rates, adjusted for the respective interest rate differentials (premiums or discounts). Changes in the fair value of derivative financial instruments are recognized in current income unless specific hedge accounting criteria are met. For derivative financial instruments designated to hedge exposure to changes in the fair value of a recognized asset or liability, the gain or loss is recognized in income in the period of change together with the offsetting loss or gain on the related hedged item. For derivative financial instruments designated to hedge exposure to variable cash flows of a forecasted transaction, the effective portion of the derivative financial instrument’s gain or loss is initially reported in accumulated other comprehensive income and is subsequently reclassified into income when the forecasted transaction affects income. The ineffective portion of the gain or loss is recorded in income immediately. For derivative financial instruments that are not designated as hedges but held as economic hedges, the gain or loss is recognized immediately in income.

For derivative financial instruments designated as hedges, the Company formally documents the hedging relationship to the hedged item and its risk management strategy. This includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities contained in the consolidated balance sheets and linking cash flow hedges to specific forecasted transactions or variability of cash flow. The Company assesses the effectiveness of its hedging instruments both at inception and on an ongoing basis. If a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer probable of occurring, or the derivative is terminated, the hedge accounting described above is discontinued and the derivative is marked to fair value and recorded in income through the remainder of its term.

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 (ASC 606) (“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, and the cumulative effect of applying the standard would be recognized at the earliest period shown 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 this 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 will 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 years ended December 31, 2017 and 2016 was to increase cash flows from changes in accounts payable and other accrued liabilities by $7,643 and $3,300, respectively, eliminate cash flows from changes in restricted cash of $71,876 and $86,176, respectively, and to decrease cash, cash equivalents and restricted cash by $64,233 and $82,876, respectively.

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 the 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, and early adoption is permitted. 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 (“ASC 840”) 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 original transition guidance in ASU 2016-02 required a modified retrospective approach. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), an amendment to ASU 2016-02, which provides entities with an additional transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. If the transition option in ASU 2018-11 is elected, reporting for the comparative periods presented in the financial statements in which the entity adopts the new leases standard will continue to be in accordance with ASC 840.

The Company will adopt the new standard effective January 1, 2019, using the modified retrospective approach which requires it to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, without recasting prior periods. The Company will elect certain practical expedients upon transition, including: not to reassess under the new guidance its prior conclusions about lease identification, lease classification and initial direct costs; and, those provided for short-term leases. The Company does not believe the adoption of the standard will have a material impact 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. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”), which amended ASC 326. 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”) and in October 2018, the FASB issued ASU No. 2018-16, Inclusion of the Secured Overnight Financial Rate (SOFR) Overnight Index Swap Rate (OIS) as a Benchmark Interest Rate for Hedge Accounting Purposes (“ASU 2018-16”), which together amend 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 does not believe the adoption of this standard will have a material impact 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 Act”). Included in the provisions of U.S. Tax Act 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 does not believe the adoption of this standard will have a material impact 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 (Tables)

12 Months Ended

Dec. 31, 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 year ended December 31, 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		(48,009)		419		726		(46,864)
Amounts reclassified from accumulated other comprehensive income (loss)		—		463		(34)		429
Tax effects		—		(217)		(184)		(401)
Net current-period other comprehensive income (loss)		(48,009)		665		508		(46,836)
Total	$	(146,726)	$	(2,497)	$	2,224	$	(146,999)

The following table summarizes the change in the components of the Company’s AOCI balance and related tax effects for the year ended December 31, 2017:

	Currency				Unrealized
	Translation		Pension		(Losses) Gains
	Adjustment		Liability		on 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		40,868		114		2,797		43,779
Amounts reclassified from accumulated other comprehensive income (loss)		—		702		749		1,451
Tax effects		—		(317)		(940)		(1,257)
Net current-period other comprehensive income (loss)		40,868		499		2,606		43,973
Total	$	(98,717)	$	(3,162)	$	1,716	$	(100,163)

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

		2018		2017	Affected Line Item
Amortization of defined benefit pension items:
	$	(463)	$	(702)	Various line items individually insignificant
		(463)		(702)	Income before taxes
		114		273	Income tax benefit
	$	(349)	$	(429)	Net of tax
Unrealized losses on derivatives:
	$	34	$	(749)	Interest expense to third parties
		34		(749)	Income before taxes
		(9)		199	Income tax benefit
	$	25	$	(550)	Net of tax

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RECEIVABLES (Tables)

12 Months Ended

Dec. 31, 2018

Receivables

Summary of receivables

	2018		2017
Retail	$	753,388	$	768,502
Wholesale		747,191		671,740
Wholesale factoring		—		235,834
Finance lease		63,936		58,198
Restricted receivables		8,460,823		8,766,467
Gross receivables		10,025,338		10,500,741
Less: Allowance for credit losses		(74,412)		(79,196)
Total receivables, net	$	9,950,926	$	10,421,545

Maturities of receivables as of December 31, 2017, are as follows:

2019	$	5,619,826
2020		1,548,323
2021		1,223,685
2022		900,707
2023 and thereafter		732,797
Total receivables	$	10,025,338

Summary of restricted receivables

	2018		2017
Retail	$	5,623,730	$	6,042,186
Wholesale		2,837,093		2,724,281
Total restricted receivables	$	8,460,823	$	8,766,467

Schedule of allowance for credit losses activity

Allowance for credit losses activity for the year ended December 31, 2018 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	73,610	$	5,586	$	79,196
Charge-offs		(39,375)		(1,567)		(40,942)
Recoveries		4,702		71		4,773
Provision (benefit)		28,277		3,422		31,699
Foreign currency translation and other		(270)		(44)		(314)
Ending balance	$	66,944	$	7,468	$	74,412
Ending balance: individually evaluated for impairment	$	15,801	$	4,825	$	20,626
Ending balance: collectively evaluated for impairment	$	51,143	$	2,643	$	53,786
Receivables:
Ending balance	$	6,441,054	$	3,584,284	$	10,025,338
Ending balance: individually evaluated for impairment	$	31,148	$	24,513	$	55,661
Ending balance: collectively evaluated for impairment	$	6,409,906	$	3,559,771	$	9,969,677

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 (benefit)		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

Allowance for credit losses activity for the year ended December 31, 2016 is as follows:

	Retail		Wholesale		Total
Allowance for credit losses:
Beginning balance	$	88,405	$	6,319	$	94,724
Charge-offs		(42,949)		(1)		(42,950)
Recoveries		3,228		522		3,750
Provision (benefit)		30,915		(69)		30,846
Foreign currency translation and other		(1,552)		77		(1,475)
Ending balance	$	78,047	$	6,848	$	84,895
Ending balance: individually evaluated for impairment	$	18,113	$	4,250	$	22,363
Ending balance: collectively evaluated for impairment	$	59,934	$	2,598	$	62,532
Receivables:
Ending balance	$	7,398,017	$	3,527,709	$	10,925,726
Ending balance: individually evaluated for impairment	$	31,383	$	43,659	$	75,042
Ending balance: collectively evaluated for impairment	$	7,366,634	$	3,484,050	$	10,850,684

Schedule of aging of financing receivables

The aging of receivables as of December 31, 2018 and 2017 is as follows:

	2018
													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	$	19,318	$	6,372	$	24,772	$	50,462	$	5,239,777	$	5,290,239	$	4,573
Canada	$	1,398	$	510	$	2,326	$	4,234	$	1,146,581	$	1,150,815	$	911
Wholesale
United States	$	484	$	10	$	1,368	$	1,862	$	2,788,655	$	2,790,517	$	387
Canada	$	3	$	—	$	436	$	439	$	793,328	$	793,767	$	1
Total
Retail	$	20,716	$	6,882	$	27,098	$	54,696	$	6,386,358	$	6,441,054	$	5,484
Wholesale	$	487	$	10	$	1,804	$	2,301	$	3,581,983	$	3,584,284	$	388

	2017
													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

	December 31, 2018
			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Retail
United States	$	30,959	$	29,783	$	15,347	$	32,787
Canada	$	189	$	180	$	454	$	248
Wholesale
United States	$	24,513	$	22,985	$	4,825	$	27,269
Total
Retail	$	31,148	$	29,963	$	15,801	$	33,035
Wholesale	$	24,513	$	22,985	$	4,825	$	27,269

	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

	2018						2017
	Retail		Wholesale		Total		Retail		Wholesale		Total
United States	$	27,069	$	22,985	$	50,054	$	40,968	$	43,531	$	84,499
Canada	$	1,428	$	—	$	1,428	$	2,538	$	—	$	2,538

Retail

Receivables

Schedule of breakdown of the portfolio by its credit quality indicators

	2018		2017
Titanium	$	3,367,239	$	3,734,313
Platinum		1,942,784		2,002,791
Gold		943,816		952,404
Silver		152,338		146,051
Bronze		34,877		33,327
Total	$	6,441,054	$	6,868,886

Wholesale

Receivables

Schedule of breakdown of the portfolio by its credit quality indicators

	2018		2017
A	$	1,582,179	$	1,222,813
B		1,292,331		1,425,591
C		527,735		439,353
D		182,039		308,264
Total	$	3,584,284	$	3,396,021

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EQUIPMENT ON OPERATING LEASES (Tables)

12 Months Ended

Dec. 31, 2018

EQUIPMENT ON OPERATING LEASES

Summary of equipment on operating leases

	2018		2017
Equipment on operating leases	$	2,052,822	$	2,139,099
Accumulated depreciation		(328,605)		(357,610)
Total equipment on operating leases, net	$	1,724,217	$	1,781,489

Schedule of lease payments owed to the Company for equipment under non-cancelable operating leases

2019	$	169,387
2020		128,197
2021		69,883
2022		23,120
2023 and thereafter		5,173
Total lease payments	$	395,760

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GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2018

GOODWILL AND INTANGIBLE ASSETS

Schedule of changes in the carrying amount of goodwill

	2018		2017
Balance, beginning of year	$	110,588	$	108,715
Foreign currency translation adjustment		(2,189)		1,873
Balance, end of year	$	108,399	$	110,588

Schedule of the Company's intangible asset and related accumulated amortization for its software

	2018		2017
Software	$	30,625	$	25,197
Accumulated amortization		(20,443)		(18,329)
Total software, net	$	10,182	$	6,868

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OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2018

OTHER ASSETS

Schedule of components of other assets

	2018		2017
Tax receivables	$	39,174	$	6,566
Deferred tax assets		14,955		10,275
Derivative assets		16,665		10,144
Other current assets		14,143		7,396
Total other assets	$	84,937	$	34,381

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CREDIT FACILITIES AND DEBT (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of the Company's debt and credit facilities

	2018
						Current
						Maturities of
		Total		Short-Term		Long-Term		Long-Term
	Maturity (1)	Facility/Debt		Outstanding		Outstanding		Outstanding		Available
Committed Asset-Backed Facilities
Retail - U.S.	Sep 2020	$	1,200,000	$	—	$	139,556	$	474,294	$	586,150
Retail - Canada	Dec 2020		366,870		—		18,095		27,861		320,914
Wholesale VFN - U.S.	Various		800,000		800,000		—		—		—
Wholesale VFN - Canada	Dec 2020		429,788		429,788		—		—		—
			2,796,658		1,229,788		157,651		502,155		907,064
Secured Debt
Amortizing retail term ABS - N.A.	Various		4,808,679		—		1,853,908		2,954,771		—
Unamortized issuance costs			(14,779)		—		—		(14,779)		—
			4,793,900		—		1,853,908		2,939,992		—
Unsecured Credit Lines and Facilities
Credit lines	Various		195,386		195,386		—		—		—
Revolving credit facilities	Various		825,569		—		—		330,183		495,386
			1,020,955		195,386		—		330,183		495,386
Unsecured Debt
Commercial paper	Various		389,000		389,000		—		—		—
Notes	Various		3,000,000		—		500,000		2,500,000		—
Hedging effects, discounts and unamortized issuance costs			(13,932)		(1,108)		(333)		(12,491)		—
			3,375,068		387,892		499,667		2,487,509		—
Total credit facilities and debt		$	11,986,581	$	1,813,066	$	2,511,226	$	6,259,839	$	1,402,450

⁽¹⁾ Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility.

	2017
						Current
						Maturities of
		Total		Short-Term		Long-Term		Long-Term
	Maturity (1)	Facility/Debt		Outstanding		Outstanding		Outstanding		Available
Committed Asset-Backed Facilities
Retail - U.S.	Sep 2019	$	1,200,000	$	—	$	60,099	$	160,301	$	979,600
Retail - Canada	Dec 2019		398,730		—		57,814		158,401		182,515
Wholesale VFN - U.S.	Various		800,000		800,000		—		—		—
Wholesale VFN - Canada	Dec 2019		467,112		461,167		—		—		5,945
			2,865,842		1,261,167		117,913		318,702		1,168,060
Secured Debt
Amortizing retail term ABS - N.A.	Various		5,567,786		—		2,176,929		3,390,857		—
Other ABS financing - N.A.	Various		54,275		—		45,937		8,338		—
Unamortized issuance costs			(17,507)		—		—		(17,507)		—
			5,604,554		—		2,222,866		3,381,688		—
Unsecured Credit Lines and Facilities
Credit lines	Various		300,000		300,000		—		—		—
Revolving credit facilities	Various		659,492		—		—		159,492		500,000
			959,492		300,000		—		159,492		500,000
Unsecured Debt
Commercial paper	Various		115,000		115,000		—		—		—
Notes	Various		3,100,000		—		600,000		2,500,000		—
Hedging effects, discounts and unamortized issuance costs			(26,601)		(89)		607		(27,119)		—
			3,188,399		114,911		600,607		2,472,881		—
Total credit facilities and debt		$	12,618,287	$	1,676,078	$	2,941,386	$	6,332,763	$	1,668,060

⁽¹⁾ Maturity dates reflect maturities of the credit facility, which may be different than the maturities of the advances under the facility

Summary of the minimum annual repayments of long-term debt

2020	$	2,367,515
2021		2,023,312
2022		1,219,488
2023		109,084
2024 and thereafter		540,440
Total	$	6,259,839

Unsecured Debt

Schedule of the Company's debt and credit facilities

As of December 31, 2018, the Company’s outstanding unsecured senior notes were as follows:

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
Hedging effects, discounts and unamortized issuance costs		(10,985)
Total	$	2,989,015

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

INCOME TAXES

Schedule of sources of income before taxes

	2018		2017		2016
Domestic	$	120,375	$	121,729	$	193,765
Foreign		77,942		81,712		88,051
Income before taxes	$	198,317	$	203,441	$	281,816

Schedule of provision for income taxes

	2018		2017		2016
Current income tax expense (benefit):
Domestic	$	(11,719)	$	16,151	$	38,845
Foreign		24,937		17,711		17,692
Total current income tax expense		13,218		33,862		56,537
Deferred income tax expense (benefit):
Domestic		34,304		(83,647)		33,798
Foreign		(6,050)		2,737		3,969
Total deferred income tax expense		28,254		(80,910)		37,767
Total tax provision	$	41,472	$	(47,048)	$	94,304

Schedule of reconciliation of statutory and effective income tax rate

	2018		2017		2016
Tax provision at statutory rate	21.0	%	35.0	%	35.0	%
State taxes	1.8		5.9		4.7
Foreign taxes	(3.4)		(8.5)		(5.2)
Tax contingencies	2.5		—		—
Withholding taxes and credits	1.5		—		—
Tax credits and incentives	(0.9)		(0.6)		(0.6)
Tax rate and legislative changes	(1.4)		(54.5)		—
Other	(0.2)		(0.4)		(0.4)
Total tax provision effective rate	20.9	%	(23.1)	%	33.5	%

Schedule of components of net deferred tax liability

	2018		2017
Deferred tax assets:
Pension, postretirement and post-employment benefits	$	1,918	$	1,986
Marketing and sales incentive programs		53,259		39,836
Allowance for credit losses		17,534		18,539
Other accrued liabilities		7,825		471
Tax loss and tax credit carry forwards		4,314		1,892
Total deferred tax assets	$	84,850	$	62,724
Deferred tax liability:
Equipment on operating lease	$	320,070	$	268,129
Deferred tax liability, net (1)	$	(235,220)	$	(205,405)

(1) In the accompanying consolidated balance sheets, the US net deferred tax position in 2018 and 2017 is included in “Accounts payable and other accrued liabilities” while the Canadian net deferred tax position in 2018 and 2017 is included in “Other assets”.

Schedule of reconciliation of the gross amounts of tax contingencies at the beginning and end of the year

	2018		2017		2016
Balance, beginning of year	$	—	$	—	$	—
Additions based on tax positions related to prior years		4,274		—		—
Reductions for tax positions of prior years		—		—		—
Settlements		—		—		—
Balance, end of year	$	4,274	$	—	$	—

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FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2018

FINANCIAL INSTRUMENTS

Schedule of fair values of derivatives in the consolidated balance sheets

	2018		2017
Derivatives Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	15,422	$	4,113
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	8,107	$	6,698
Derivatives Not Designated as Hedging Instruments
Other assets:
Interest rate derivatives	$	1,157	$	4,638
Foreign exchange contracts		86		1,393
Total	$	1,243	$	6,031
Accounts payable and other accrued liabilities:
Interest rate derivatives	$	1,157	$	4,638
Foreign exchange contracts		—		325
Total	$	1,157	$	4,963

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

	2018		2017		2016
Cash Flow Hedges
Recognized in accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives	$	726	$	2,797	$	1,277
Reclassified from accumulated other comprehensive income (loss) (effective portion):
Interest rate derivatives—Interest expense to third parties		34		(749)		(694)
Not Designated as Hedges
Foreign exchange contracts—Other expenses	$	(12,355)	$	1,155	$	4,128

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

	Level 2
	2018		2017
Assets
Interest rate derivatives	$	16,579	$	8,751
Foreign exchange contracts		86		1,393
Total assets	$	16,665	$	10,144
Liabilities
Interest rate derivatives	$	9,264	$	11,336
Foreign exchange contracts		—		325
Total liabilities	$	9,264	$	11,661

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

	2018				2017
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value *		Amount		Fair Value *
Receivables	$	9,950,926	$	9,859,920	$	10,421,545	$	10,379,020
Long-term debt	$	6,259,839	$	6,149,778	$	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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GEOGRAPHICAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2018

GEOGRAPHICAL INFORMATION

Summary of geographic information

	2018		2017		2016
Revenues
United States	$	693,191	$	756,210	$	780,071
Canada		192,645		187,107		170,825
Eliminations		(7,482)		(4,385)		(4,175)
Total	$	878,354	$	938,932	$	946,721
Interest expense
United States	$	276,956	$	279,542	$	269,560
Canada		55,806		47,413		39,714
Eliminations		(7,482)		(4,385)		(4,175)
Total	$	325,280	$	322,570	$	305,099
Net income
United States	$	97,790	$	189,225	$	121,122
Canada		59,055		61,264		66,390
Total	$	156,845	$	250,489	$	187,512
Depreciation and amortization
United States	$	191,347	$	238,037	$	208,942
Canada		42,579		44,864		40,528
Total	$	233,926	$	282,901	$	249,470
Expenditures for equipment on operating leases
United States	$	533,706	$	507,349	$	555,219
Canada		146,560		128,470		168,164
Total	$	680,266	$	635,819	$	723,383
Provision for credit losses
United States	$	28,932	$	40,516	$	35,867
Canada		2,767		382		(5,021)
Total	$	31,699	$	40,898	$	30,846

	2018		2017		2016
Total assets
United States	$	10,482,805	$	10,738,403	$	12,016,606
Canada		2,511,839		2,838,754		2,400,814
Eliminations		(62,732)		(65,079)		(374,161)
Total	$	12,931,912	$	13,512,078	$	14,043,259
Managed receivables
United States	$	8,080,756	$	8,265,090	$	9,048,303
Canada		1,944,582		2,235,651		1,877,423
Total	$	10,025,338	$	10,500,741	$	10,925,726

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RELATED-PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2018

RELATED-PARTY TRANSACTIONS

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

	2018		2017		2016
Subsidy from CNH Industrial North America
Retail	$	149,363	$	157,496	$	170,425
Wholesale		123,615		166,426		156,654
Operating lease		60,841		68,987		70,138
Income from Iveco Argentina
Wholesale factoring		10,881		5,199		—
Income from affiliated receivables
CNH Industrial North America		1,096		—		1,155
Other affiliates		137		150		—
Total interest and other income from affiliates	$	345,933	$	398,258	$	398,372

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

	2018				2017
	Rate	Maturity	Amount		Rate	Maturity	Amount
Affiliated receivables
CNH Industrial America	0%	—	$	24,724	0%	—	$	49,311
CNH Industrial Canada Ltd.	0%	—		6,233	0%	—		11,282
Other affiliates	0%	—		12,432	0%	—		12,540
Total affiliated receivables			$	43,389			$	73,133
Affiliated debt
CNH Industrial America	2.50%	2019	$	99,455	4.31%	2018	$	327,160
CNH Industrial Canada Ltd.	3.80%	2019		176,816	4.19%	2018		118,642
Total affiliated debt			$	276,271			$	445,802

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2018

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Schedule of condensed statements of comprehensive income

	Condensed Statements of Comprehensive Income for the
	Year Ended December 31, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	9,170	$	192,099	$	—	$	201,269
Interest income on wholesale notes		—		(1,030)		67,929		—		66,899
Interest and other income from affiliates		70,880		200,821		297,443		(223,211)		345,933
Rental income on operating leases		—		187,089		54,493		—		241,582
Other income		—		87,710		2,842		(67,881)		22,671
Total revenues		70,880		483,760		614,806		(291,092)		878,354
EXPENSES
Interest expense:
Interest expense to third parties		156,839		(8,767)		169,675		—		317,747
Interest expense to affiliates		—		199,890		30,854		(223,211)		7,533
Total interest expense		156,839		191,123		200,529		(223,211)		325,280
Administrative and operating expenses:
Fees charged by affiliates		—		45,545		69,811		(67,881)		47,475
Provision for credit losses		—		8,445		23,254		—		31,699
Depreciation of equipment on operating leases		—		189,228		42,577		—		231,805
Other expenses		22		18,249		25,507		—		43,778
Total administrative and operating expenses		22		261,467		161,149		(67,881)		354,757
Total expenses		156,861		452,590		361,678		(291,092)		680,037
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(85,981)		31,170		253,128		—		198,317
Income tax provision (benefit)		(20,995)		11,010		51,457		—		41,472
Equity in income of consolidated subsidiaries accounted for under the equity method		221,831		201,671		—		(423,502)		—
NET INCOME	$	156,845	$	221,831	$	201,671	$	(423,502)	$	156,845
COMPREHENSIVE INCOME	$	110,009	$	174,995	$	161,250	$	(336,245)	$	110,009

	Condensed Statements of Comprehensive Income for the
	Year Ended December 31, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	16,206	$	185,327	$	—	$	201,533
Interest income on wholesale notes		—		(1,107)		66,828		—		65,721
Interest and other income from affiliates		100,033		243,273		326,346		(271,394)		398,258
Rental income on operating leases		—		197,859		53,750		—		251,609
Other income		—		94,408		1,906		(74,503)		21,811
Total revenues		100,033		550,639		634,157		(345,897)		938,932
EXPENSES
Interest expense:
Interest expense to third parties		164,836		2,125		144,167		—		311,128
Interest expense to affiliates		—		236,267		46,569		(271,394)		11,442
Total interest expense		164,836		238,392		190,736		(271,394)		322,570
Administrative and operating expenses:
Fees charged by affiliates		—		44,666		76,268		(74,503)		46,431
Provision for credit losses		—		11,090		29,808		—		40,898
Depreciation of equipment on operating leases		—		235,911		44,854		—		280,765
Other expenses		—		33,176		11,651		—		44,827
Total administrative and operating expenses		—		324,843		162,581		(74,503)		412,921
Total expenses		164,836		563,235		353,317		(345,897)		735,491
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(64,803)		(12,596)		280,840		—		203,441
Income tax provision (benefit)		(24,331)		(148,033)		125,316		—		(47,048)
Equity in income of consolidated subsidiaries accounted for under the equity method		290,961		155,524		—		(446,485)		—
NET INCOME	$	250,489	$	290,961	$	155,524	$	(446,485)	$	250,489
COMPREHENSIVE INCOME	$	294,462	$	334,934	$	192,936	$	(527,870)	$	294,462

	Condensed Statements of Comprehensive Income for the
	Year Ended December 31, 2016
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
REVENUES
Interest income on retail notes and finance leases	$	—	$	15,990	$	195,516	$	—	$	211,506
Interest income on wholesale notes		—		(96)		69,006		—		68,910
Interest and other income from affiliates		97,254		232,020		324,262		(255,164)		398,372
Rental income on operating leases		—		196,911		46,620		—		243,531
Other income		—		103,422		2,837		(81,857)		24,402
Total revenues		97,254		548,247		638,241		(337,021)		946,721
EXPENSES
Interest expense:
Interest expense to third parties		162,264		6,209		129,408		—		297,881
Interest expense to affiliates		—		226,544		35,838		(255,164)		7,218
Total interest expense		162,264		232,753		165,246		(255,164)		305,099
Administrative and operating expenses:
Fees charged by affiliates		—		43,469		83,613		(81,857)		45,225
Provision for credit losses		—		9,879		20,967		—		30,846
Depreciation of equipment on operating leases		—		206,924		40,514		—		247,438
Other expenses		—		28,035		8,262		—		36,297
Total administrative and operating expenses		—		288,307		153,356		(81,857)		359,806
Total expenses		162,264		521,060		318,602		(337,021)		664,905
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method		(65,010)		27,187		319,639		—		281,816
Income tax provision (benefit)		(24,261)		10,204		108,361		—		94,304
Equity in income of consolidated subsidiaries accounted for under the equity method		228,261		211,278		—		(439,539)		—
NET INCOME	$	187,512	$	228,261	$	211,278	$	(439,539)	$	187,512
COMPREHENSIVE INCOME	$	204,914	$	245,663	$	225,994	$	(471,657)	$	204,914

Schedule of condensed balance sheets

	Condensed Balance Sheets as of December 31, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	$	—	$	118,508	$	41,820	$	—	$	160,328
Restricted cash		—		—		639,543		—		639,543
Receivables, less allowance for credit losses		—		1,472,678		8,478,248		—		9,950,926
Affiliated accounts and notes receivable		2,310,137		2,122,129		2,268,477		(6,657,354)		43,389
Equipment on operating leases, net		—		1,357,493		366,724		—		1,724,217
Equipment held for sale		—		192,772		17,219		—		209,991
Investments in consolidated subsidiaries accounted for under the equity method		2,796,050		2,461,139		—		(5,257,189)		—
Goodwill and intangible assets, net		—		91,754		26,827		—		118,581
Other assets		11,140		56,517		20,681		(3,401)		84,937
TOTAL	$	5,117,327	$	7,872,990	$	11,859,539	$	(11,917,944)	$	12,931,912
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Short-term debt, including current maturities of long-term debt	$	987,559	$	—	$	3,336,733	$	—	$	4,324,292
Accounts payable and other accrued liabilities		286,527		3,035,024		1,243,183		(3,848,956)		715,778
Affiliated debt		—		2,041,926		1,046,144		(2,811,799)		276,271
Long-term debt		2,487,509		(10)		3,772,340		—		6,259,839
Total liabilities		3,761,595		5,076,940		9,398,400		(6,660,755)		11,576,180
Stockholder’s equity		1,355,732		2,796,050		2,461,139		(5,257,189)		1,355,732
TOTAL	$	5,117,327	$	7,872,990	$	11,859,539	$	(11,917,944)	$	12,931,912

Schedule of condensed statements of cash flows

	Condensed Statements of Cash Flows for the
	Year Ended December 31, 2018
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	142,488	$	488,329	$	143,064	$	(411,000)	$	362,881
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(9,080,473)		(9,991,699)		7,269,611		(11,802,561)
Collections of receivables		—		8,967,965		10,375,251		(7,270,276)		12,072,940
Purchase of equipment on operating leases, net		—		(146,618)		(65,391)		—		(212,009)
Change in property and equipment and software, net		—		(5,427)		—		—		(5,427)
Net cash from (used in) investing activities		—		(264,553)		318,161		(665)		52,943
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(211,322)		(128,802)		185,948		(154,176)
Net change in indebtedness		(12,488)		(54,285)		(140,562)		—		(207,335)
Dividends paid to CNH Industrial America LLC		(130,000)		—		(225,717)		225,717		(130,000)
Net cash from (used in) financing activities		(142,488)		(265,607)		(495,081)		411,665		(491,511)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(41,831)		(33,856)		—		(75,687)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of year		—		160,339		715,219		—		875,558
End of year	$	—	$	118,508	$	681,363	$	—	$	799,871

	Condensed Statements of Cash Flows for the
	Year Ended December 31, 2017
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	564,252	$	838,812	$	130,049	$	(922,660)	$	610,453
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(8,276,424)		(9,446,211)		6,808,056		(10,914,579)
Collections of receivables		—		8,316,852		9,897,291		(6,808,286)		11,405,857
Purchase of equipment on operating leases, net		—		(136,711)		(63,230)		—		(199,941)
Change in property and equipment and software, net		—		(1,614)		—		—		(1,614)
Net cash from (used in) investing activities		—		(97,897)		387,850		(230)		289,723
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		(683,231)		48,874		922,890		288,533
Net change in indebtedness		(279,252)		(48,999)		(576,992)		—		(905,243)
Dividends paid to CNH Industrial America LLC		(285,000)		—		—		—		(285,000)
Net cash from (used in) financing activities		(564,252)		(732,230)		(528,118)		922,890		(901,710)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		8,685		(10,219)		—		(1,534)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of year		—		151,654		725,438		—		877,092
End of year	$	—	$	160,339	$	715,219	$	—	$	875,558

	Condensed Statements of Cash Flows for the Year Ended December 31, 2016
	CNH
	Industrial		Guarantor		All Other
	Capital LLC		Entities		Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$	(102,001)	$	(9,907)	$	638,851	$	158,127	$	685,070
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired		—		(8,575,745)		(9,116,990)		6,888,764		(10,803,971)
Collections of receivables		—		8,660,606		9,775,641		(6,889,105)		11,547,142
Purchase of equipment on operating leases, net		—		(255,439)		(105,992)		—		(361,431)
Change in property and equipment and software, net		—		(887)		(3)		—		(890)
Net cash from (used in) investing activities		—		(171,465)		552,656		(341)		380,850
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity		—		172,351		224,700		(286,842)		110,209
Net change in indebtedness		392,001		(21,166)		(1,477,741)		—		(1,106,906)
Dividends paid to CNH Industrial America LLC		(290,000)		—		(129,056)		129,056		(290,000)
Net cash from (used in) financing activities		102,001		151,185		(1,382,097)		(157,786)		(1,286,697)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		—		(30,187)		(190,590)		—		(220,777)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of year		—		181,841		916,028		—		1,097,869
End of year	$	—	$	151,654	$	725,438	$	—	$	877,092

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SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2018

SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED)

Schedule of supplemental quarterly information (unaudited)

	For the Year Ended December 31, 2018
	First		Second		Third		Fourth		Fiscal
	Quarter		Quarter		Quarter		Quarter		Year
Revenues	$	226,371	$	226,141	$	211,281	$	214,561	$	878,354
Interest expense		78,428		78,804		81,557		86,491		325,280
Administrative and operating expenses		96,020		85,287		83,332		90,118		354,757
Income tax provision		12,120		14,422		8,111		6,819		41,472
Net income	$	39,803	$	47,628	$	38,281	$	31,133	$	156,845

	For the Year Ended December 31, 2017
	First		Second		Third		Fourth		Fiscal
	Quarter		Quarter		Quarter		Quarter		Year
Revenues	$	232,834	$	229,863	$	234,889	$	241,346	$	938,932
Interest expense		74,728		78,797		79,772		89,273		322,570
Administrative and operating expenses		101,676		95,994		106,591		108,660		412,921
Income tax provision		18,037		16,885		14,387		(96,357)		(47,048)
Net income	$	38,393	$	38,187	$	34,139	$	139,770	$	250,489

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue Recognition
Delinquency period of accounts considered for recognition of income	120 days	120 days
Minimum account delinquency period for an account to be classified as past due	30 days	30 days	30 days
Goodwill and Intangible Assets
Impairment of goodwill	$ 0	$ 0	$ 0
Amortization period of other intangible assets consisting of software	5 years

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Change in Accounting Principle (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Change in accounts payable and other accrued liabilities	$ (66,248)	$ 15,601	$ 6,144
Increase in cash and cash equivalents and restricted cash	$ (75,687)	(1,534)	(220,777)
Accounting Standards Update 2016-18 | Adjustment Due to Adoption of Standard
Change in accounts payable and other accrued liabilities		7,643	3,300
Change in restricted cash		71,876	86,176
Increase in cash and cash equivalents and restricted cash		$ (64,233)	$ (82,876)

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ACCUMULATED OTHER COMPREHENSIVE INCOME - Change in Components of AOCI (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Changes in accumulated other comprehensive income by component
Beginning balance, gross		$ (101,336)	$ (146,566)
Tax asset (liability)		1,173	2,430
Beginning balance, net of tax	$ (100,163)	(144,136)
Other comprehensive income (loss) before reclassifications	(46,864)	43,779
Amounts reclassified from accumulated other comprehensive income (loss)	429	1,451
Tax effects	(401)	(1,257)
Total other comprehensive income (loss)	(46,836)	43,973	17,402
Ending balance	(146,999)	(100,163)	(144,136)
Currency Translation Adjustment
Changes in accumulated other comprehensive income by component
Beginning balance, gross		(98,717)	(139,585)
Beginning balance, net of tax	(98,717)	(139,585)
Other comprehensive income (loss) before reclassifications	(48,009)	40,868
Total other comprehensive income (loss)	(48,009)	40,868
Ending balance	(146,726)	(98,717)	(139,585)
Pension Liability
Changes in accumulated other comprehensive income by component
Beginning balance, gross		(4,952)	(5,768)
Tax asset (liability)		1,790	2,107
Beginning balance, net of tax	(3,162)	(3,661)
Other comprehensive income (loss) before reclassifications	419	114
Amounts reclassified from accumulated other comprehensive income (loss)	463	702
Tax effects	(217)	(317)
Total other comprehensive income (loss)	665	499
Ending balance	(2,497)	(3,162)	(3,661)
Unrealized (Losses) Gains on Derivatives
Changes in accumulated other comprehensive income by component
Beginning balance, gross		2,333	(1,213)
Tax asset (liability)		(617)	323
Beginning balance, net of tax	1,716	(890)
Other comprehensive income (loss) before reclassifications	726	2,797
Amounts reclassified from accumulated other comprehensive income (loss)	(34)	749
Tax effects	(184)	(940)
Total other comprehensive income (loss)	508	2,606
Ending balance	$ 2,224	$ 1,716	$ (890)

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ACCUMULATED OTHER COMPREHENSIVE INCOME - Reclassifications out of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Reclassifications out of accumulated other comprehensive income and the location on the consolidated statements of income
Interest expense to third parties									$ (317,747)	$ (311,128)	$ (297,881)
Income before taxes									198,317	203,441	281,816
Income tax benefit	$ (6,819)	$ (8,111)	$ (14,422)	$ (12,120)	$ 96,357	$ (14,387)	$ (16,885)	$ (18,037)	(41,472)	47,048	$ (94,304)
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									(463)	(702)
Income before taxes									(463)	(702)
Income tax benefit									114	273
Net income									(349)	(429)
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									34	(749)
Income before taxes									34	(749)
Income tax benefit									(9)	199
Net income									$ 25	$ (550)

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RECEIVABLES - Summary of Receivables (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Receivables
Gross receivables	$ 10,025,338	$ 10,500,741	$ 10,925,726
Less: Allowance for credit losses	(74,412)	(79,196)	$ (84,895)	$ (94,724)
Total receivables, net	9,950,926	10,421,545
Restricted Receivables	8,460,823	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
Maturities of receivables as of December 31, 2018, are as follows:
2019	5,619,826
2020	1,548,323
2021	1,223,685
2022	900,707
2023 and thereafter	$ 732,797
Number of portfolio segments in which allowance for credit losses is segregated | item	3
Retail
Receivables
Gross receivables	$ 753,388	768,502
Restricted Receivables	$ 5,623,730	6,042,186
Retail | Minimum
Receivables
Stated original maturities	2 years
Retail | Maximum
Receivables
Stated original maturities	6 years
Wholesale
Receivables
Gross receivables	$ 747,191	671,740
Restricted Receivables	$ 2,837,093	2,724,281
Wholesale | Maximum
Receivables
Stated original maturities	24 months
Interest-free periods	12 months
Wholesale factoring
Receivables
Gross receivables		235,834
Finance lease receivables
Receivables
Gross receivables	$ 63,936	$ 58,198

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RECEIVABLES - Receivables Securitizations (Details) $ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)	Dec. 31, 2018 CAD ($)	Dec. 31, 2018 USD ($)
Receivables
Maximum borrowing capacity		$ 12,618,287		$ 11,986,581
Number of conduit facilities | item	2
Number of portfolio segments in which allowance for credit losses is segregated | item	3
Retail committed asset-backed facilities
Receivables
Asset-backed transactions securitized	$ 2,250,399	2,989,014
Outstanding amount of transactions securitized		$ 5,567,786		4,808,679
Remaining period of transactions securitized	30 months	31 months
Maximum borrowing capacity				1,566,870
Term of credit agreement	2 years
Conduit facilities, $500 million renewable in 2019
Receivables
Maximum borrowing capacity				500,000
Conduit facilities, $300 million renewable in 2019
Receivables
Maximum borrowing capacity				300,000
Conduit facilities renewable in December 2020 | Canada
Receivables
Maximum borrowing capacity			$ 585,750	$ 429,788

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RECEIVABLES - Allowance for Credit Losses Activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance for credit losses:
Beginning balance	$ 79,196	$ 84,895	$ 94,724
Charge-offs	(40,942)	(48,834)	(42,950)
Recoveries	4,773	4,065	3,750
Provision (benefit)	31,699	40,898	30,846
Foreign currency translation and other	(314)	(1,828)	(1,475)
Ending balance	74,412	79,196	84,895
Ending balance: individually evaluated for impairment	20,626	20,938	22,363
Ending balance: collectively evaluated for impairment	53,786	58,258	62,532
Receivables:
Ending balance	10,025,338	10,500,741	10,925,726
Ending balance: individually evaluated for impairment	55,661	82,719	75,042
Ending balance: collectively evaluated for impairment	9,969,677	10,418,022	10,850,684
Retail
Allowance for credit losses:
Beginning balance	73,610	78,047	88,405
Charge-offs	(39,375)	(46,460)	(42,949)
Recoveries	4,702	4,045	3,228
Provision (benefit)	28,277	39,842	30,915
Foreign currency translation and other	(270)	(1,864)	(1,552)
Ending balance	66,944	73,610	78,047
Ending balance: individually evaluated for impairment	15,801	18,018	18,113
Ending balance: collectively evaluated for impairment	51,143	55,592	59,934
Receivables:
Ending balance	6,441,054	6,868,886	7,398,017
Ending balance: individually evaluated for impairment	31,148	38,807	31,383
Ending balance: collectively evaluated for impairment	6,409,906	6,830,079	7,366,634
Wholesale
Allowance for credit losses:
Beginning balance	5,444	6,848	6,319
Charge-offs		(2,374)	(1)
Recoveries		20	522
Provision (benefit)		919	(69)
Foreign currency translation and other		31	77
Ending balance		5,444	6,848
Ending balance: individually evaluated for impairment		2,920	4,250
Ending balance: collectively evaluated for impairment		2,524	2,598
Receivables:
Ending balance	3,584,284	3,396,021	3,527,709
Ending balance: individually evaluated for impairment		43,912	43,659
Ending balance: collectively evaluated for impairment		3,352,109	$ 3,484,050
Wholesale factoring
Allowance for credit losses:
Beginning balance	142
Provision (benefit)		137
Foreign currency translation and other		5
Ending balance		142
Ending balance: collectively evaluated for impairment		142
Receivables:
Ending balance		235,834
Ending balance: collectively evaluated for impairment		235,834
Wholesale and wholesale factoring
Allowance for credit losses:
Beginning balance	5,586
Charge-offs	(1,567)
Recoveries	71
Provision (benefit)	3,422
Foreign currency translation and other	(44)
Ending balance	7,468	$ 5,586
Ending balance: individually evaluated for impairment	4,825
Ending balance: collectively evaluated for impairment	2,643
Receivables:
Ending balance	3,584,284
Ending balance: individually evaluated for impairment	24,513
Ending balance: collectively evaluated for impairment	$ 3,559,771

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RECEIVABLES - Breakdown of Receivables by Credit Quality Indicators (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Financing receivable, recorded investment
Gross receivables	$ 10,025,338	$ 10,500,741	$ 10,925,726
Retail
Financing receivable, recorded investment
Gross receivables	6,441,054	6,868,886	7,398,017
Retail | Titanium
Financing receivable, recorded investment
Gross receivables	3,367,239	3,734,313
Retail | Platinum
Financing receivable, recorded investment
Gross receivables	1,942,784	2,002,791
Retail | Gold
Financing receivable, recorded investment
Gross receivables	943,816	952,404
Retail | Silver
Financing receivable, recorded investment
Gross receivables	152,338	146,051
Retail | Bronze
Financing receivable, recorded investment
Gross receivables	34,877	33,327
Wholesale
Financing receivable, recorded investment
Gross receivables	3,584,284	3,396,021	$ 3,527,709
Wholesale | Grade A
Financing receivable, recorded investment
Gross receivables	1,582,179	1,222,813
Wholesale | Grade B
Financing receivable, recorded investment
Gross receivables	1,292,331	1,425,591
Wholesale | Grade C
Financing receivable, recorded investment
Gross receivables	527,735	439,353
Wholesale | Grade D
Financing receivable, recorded investment
Gross receivables	$ 182,039	$ 308,264

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RECEIVABLES - Aging of Receivables (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Financing receivable, recorded investment
Total Receivables	$ 10,025,338	$ 10,500,741	$ 10,925,726
Minimum account delinquency period for an account to be classified as past due	30 days	30 days	30 days
Retail
Financing receivable, recorded investment
Total Past Due	$ 54,696	$ 78,438
Current	6,386,358	6,790,448
Total Receivables	6,441,054	6,868,886	$ 7,398,017
Recorded Investment > 90 Days and Accruing	5,484	6,897
Retail | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	20,716	29,600
Retail | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	6,882	8,997
Retail | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	27,098	39,841
Retail | United States
Financing receivable, recorded investment
Total Past Due	50,462	73,006
Current	5,239,777	5,532,329
Total Receivables	5,290,239	5,605,335
Recorded Investment > 90 Days and Accruing	4,573	6,232
Retail | United States | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	19,318	27,590
Retail | United States | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	6,372	8,412
Retail | United States | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	24,772	37,004
Retail | Canada
Financing receivable, recorded investment
Total Past Due	4,234	5,432
Current	1,146,581	1,258,119
Total Receivables	1,150,815	1,263,551
Recorded Investment > 90 Days and Accruing	911	665
Retail | Canada | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	1,398	2,010
Retail | Canada | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	510	585
Retail | Canada | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	2,326	2,837
Wholesale
Financing receivable, recorded investment
Total Past Due	2,301	1,067
Current	3,581,983	3,394,954
Total Receivables	3,584,284	3,396,021	$ 3,527,709
Recorded Investment > 90 Days and Accruing	388	185
Wholesale | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	487	824
Wholesale | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	10	1
Wholesale | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	1,804	242
Wholesale | United States
Financing receivable, recorded investment
Total Past Due	1,862	1,039
Current	2,788,655	2,658,716
Total Receivables	2,790,517	2,659,755
Recorded Investment > 90 Days and Accruing	387	179
Wholesale | United States | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	484	802
Wholesale | United States | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due	10	1
Wholesale | United States | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	1,368	236
Wholesale | Canada
Financing receivable, recorded investment
Total Past Due	439	28
Current	793,328	736,238
Total Receivables	793,767	736,266
Recorded Investment > 90 Days and Accruing	1	6
Wholesale | Canada | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due	3	22
Wholesale | Canada | Greater than 90 Days
Financing receivable, recorded investment
Total Past Due	$ 436	6
Wholesale factoring
Financing receivable, recorded investment
Total Past Due		7,042
Current		228,792
Total Receivables		235,834
Wholesale factoring | 31-60 Days Past Due
Financing receivable, recorded investment
Total Past Due		5,652
Wholesale factoring | 61-90 Days Past Due
Financing receivable, recorded investment
Total Past Due		$ 1,390

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RECEIVABLES - Impaired Receivables (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Unpaid Principal Balance
Period considered for average recorded investment	13 months
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	$ 50,054	$ 84,499
Canada
Average Recorded Investment
Receivables on nonaccrual status	1,428	2,538
Retail | United States
Average Recorded Investment
Receivables on nonaccrual status	27,069	40,968
Retail | Canada
Average Recorded Investment
Receivables on nonaccrual status	1,428	2,538
Wholesale | United States
Average Recorded Investment
Receivables on nonaccrual status	22,985	43,531
Individually evaluated for impairment | Retail
Recorded Investment
With an allowance recorded	31,148	38,807
Unpaid Principal Balance
With an allowance recorded	29,963	36,903
Related Allowance	15,801	18,018
Average Recorded Investment
With an allowance recorded	33,035	41,001
Individually evaluated for impairment | Retail | United States
Recorded Investment
With an allowance recorded	30,959	38,035
Unpaid Principal Balance
With an allowance recorded	29,783	36,187
Related Allowance	15,347	17,518
Average Recorded Investment
With an allowance recorded	32,787	39,917
Individually evaluated for impairment | Retail | Canada
Recorded Investment
With an allowance recorded	189	772
Unpaid Principal Balance
With an allowance recorded	180	716
Related Allowance	454	500
Average Recorded Investment
With an allowance recorded	248	1,084
Individually evaluated for impairment | Wholesale
Recorded Investment
With an allowance recorded	24,513	43,912
Unpaid Principal Balance
With an allowance recorded	22,985	43,531
Related Allowance	4,825	2,920
Average Recorded Investment
With an allowance recorded	27,269	49,469
Individually evaluated for impairment | Wholesale | United States
Recorded Investment
With an allowance recorded	24,513	43,912
Unpaid Principal Balance
With an allowance recorded	22,985	43,531
Related Allowance	4,825	2,920
Average Recorded Investment
With an allowance recorded	$ 27,269	$ 49,469

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RECEIVABLES - Troubled Debt Restructuring of Receivables (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($) item
Troubled Debt Restructurings
Number of cases in which the court has not yet determined the concession | item	371	423
Pre-modification value for cases in which the court has not yet determined the concession	$ 17,129	$ 23,750
Retail
Troubled Debt Restructurings
Number of cases in which the court has determined the concession | item	254	272
Pre-modification value for cases in which the court has determined the concession	$ 8,118	$ 8,583
Post-modification value for cases in which the court has determined the concession	$ 7,272	$ 7,710

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EQUIPMENT ON OPERATING LEASES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
EQUIPMENT ON OPERATING LEASES
Equipment on operating leases	$ 2,052,822	$ 2,139,099
Less accumulated depreciation	(328,605)	(357,610)
Equipment on operating leases, net	1,724,217	1,781,489
Depreciation expense	231,805	$ 280,765	$ 247,438
Lease payments owed to the company for equipment under non-cancelable operating leases
Deferred operating lease subsidy	106,817
2019	169,387
2020	128,197
2021	69,883
2022	23,120
2023 and thereafter	5,173
Total lease payments	$ 395,760

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GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Changes in the carrying amount of goodwill
Balance, beginning of year	$ 110,588	$ 108,715
Foreign currency translation adjustment	(2,189)	1,873
Balance, end of year	108,399	110,588	$ 108,715
Impairment of goodwill	0	0	0
Company's intangible asset and related accumulated amortization for its software
Software	30,625	25,197
Accumulated amortization	(20,443)	(18,329)
Software, net	10,182	6,868
Amortization expense	2,114	$ 2,112	$ 1,998
Estimated annual amortization expense
2019	1,722
2020	1,082
2021	516
2022	241
2023	$ 55

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OTHER ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
OTHER ASSETS
Tax receivables	$ 39,174	$ 6,566
Deferred tax assets	14,955	10,275
Derivative assets	16,665	10,144
Other current assets	14,143	7,396
Total other assets	$ 84,937	$ 34,381

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CREDIT FACILITIES AND DEBT (Details) $ in Thousands			12 Months Ended
	Aug. 14, 2018 USD ($)	Apr. 16, 2018 USD ($)	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)
Debt
Maximum borrowing capacity			$ 11,986,581	$ 12,618,287
Short-Term Outstanding			1,813,066	1,676,078
Current Maturities of Long-Term Outstanding			2,511,226	2,941,386
Long-term debt			6,259,839	6,332,763
Available			1,402,450	$ 1,668,060
Minimum annual repayments of long-term debt
2020			2,367,515
2021			2,023,312
2022			1,219,488
2023			109,084
2024 and thereafter			$ 540,440
Other disclosure
Weighted-average interest rate on total short-term debt outstanding (as a percent)			3.00%	2.20%
Weighted- average interest rate on total long-term debt (as a percent)			3.10%	2.60%
CNH Global
Support Agreement
Number of preceding fiscal quarters added to the current quarter used in calculating the consolidated fixed charges coverage ratio under support agreement | item			3
Period of prior written notice			30 days
Long-term rated indebtedness outstanding			$ 0
CNH Global | Minimum
Support Agreement
Consolidated fixed charges coverage ratio			1.05
Ownership percentage required to be maintained in the company			51.00%
Consolidated tangible net worth threshold			$ 50,000
Unsecured Facilities
Debt
Maximum borrowing capacity			1,020,955	$ 959,492
Short-Term Outstanding			195,386	300,000
Long-term debt			330,183	159,492
Available			495,386	500,000
Uncommitted credit line
Debt
Maximum borrowing capacity			195,386	300,000
Short-Term Outstanding			195,386	300,000
Revolving credit facilities
Debt
Maximum borrowing capacity			825,569	659,492
Long-term debt			330,183	159,492
Available			495,386	500,000
Committed Asset-Backed Facilities
Debt
Maximum borrowing capacity			2,796,658	2,865,842
Short-Term Outstanding			1,229,788	1,261,167
Current Maturities of Long-Term Outstanding			157,651	117,913
Long-term debt			502,155	318,702
Available			$ 907,064	1,168,060
Committed Asset-Backed Facilities | Maximum
Other disclosure
Maturity period of receivables			7 years
Retail | Maximum
Debt
Maximum borrowing capacity			$ 1,566,870
Retail | United States
Debt
Maximum borrowing capacity			1,200,000	1,200,000
Current Maturities of Long-Term Outstanding			139,556	60,099
Long-term debt			474,294	160,301
Available			586,150	979,600
Retail | Canada
Debt
Maximum borrowing capacity			366,870	398,730
Current Maturities of Long-Term Outstanding			18,095	57,814
Long-term debt			27,861	158,401
Available			320,914	182,515
Wholesale VFN | United States
Debt
Maximum borrowing capacity			800,000	800,000
Short-Term Outstanding			800,000	800,000
Wholesale VFN | Canada
Debt
Maximum borrowing capacity			429,788	467,112
Short-Term Outstanding			429,788	461,167
Available				5,945
Secured Debt
Debt
Maximum borrowing capacity			4,793,900	5,604,554
Current Maturities of Long-Term Outstanding			1,853,908	2,222,866
Long-term debt			2,939,992	3,381,688
Unamortized issuance costs			(14,779)	(17,507)
Amortizing Retail Term ABS
Debt
Maximum borrowing capacity			4,808,679	5,567,786
Current Maturities of Long-Term Outstanding			1,853,908	2,176,929
Long-term debt			2,954,771	3,390,857
Other ABS Financing
Debt
Maximum borrowing capacity				54,275
Current Maturities of Long-Term Outstanding				45,937
Long-term debt				8,338
Unsecured Debt
Debt
Maximum borrowing capacity			3,375,068	3,188,399
Short-Term Outstanding			387,892	114,911
Current Maturities of Long-Term Outstanding			499,667	600,607
Long-term debt			2,487,509	2,472,881
Hedging effects, discounts and unamortized issuance costs			(13,932)	(26,601)
Heding effects, discounts and unamortized issuance costs, short-term outstanding			(1,108)	(89)
Hedging effects, discounts and unamortized issuance costs, current maturities			(333)	607
Hedging effects, discounts and unamortized issuance costs, long-term			(12,491)	(27,119)
Commercial paper
Debt
Maximum borrowing capacity			389,000	115,000
Short-Term Outstanding			389,000	115,000
Notes
Debt
Maximum borrowing capacity			3,000,000	3,100,000
Current Maturities of Long-Term Outstanding			500,000	600,000
Long-term debt			2,500,000	$ 2,500,000
Unsecured Senior Notes
Debt
Debt amount			2,989,015
Hedging effects, discounts and unamortized issuance costs			(10,985)
3.625% unsecured notes due 2018
Debt
Repayment of debt		$ 600,000
Other disclosure
Interest rate margin (as a percent)		3.625%
3.375% unsecured notes due 2019
Debt
Debt amount			$ 500,000
Other disclosure
Interest rate margin (as a percent)			3.375%
4.375% unsecured notes due 2020
Debt
Debt amount			$ 600,000
Other disclosure
Interest rate margin (as a percent)			4.375%
4.875% unsecured notes due 2021
Debt
Debt amount			$ 500,000
Other disclosure
Interest rate margin (as a percent)			4.875%
3.875% unsecured notes due 2021
Debt
Debt amount			$ 400,000
Other disclosure
Interest rate margin (as a percent)			3.875%
4.375% unsecured notes due 2022
Debt
Debt amount			$ 500,000
Other disclosure
Interest rate margin (as a percent)			4.375%
4.200% unsecured notes due 2024
Debt
Debt issued	$ 500,000
Debt amount			$ 500,000
Interest rate (as a percent)	4.20%
Issue price of debt (as a percent)	99.701%
Other disclosure
Interest rate margin (as a percent)			4.20%

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Sources of income before taxes
Domestic									$ 120,375	$ 121,729	$ 193,765
Foreign									77,942	81,712	88,051
INCOME BEFORE TAXES									198,317	203,441	281,816
Current income tax expense (benefit):
Domestic									(11,719)	16,151	38,845
Foreign									24,937	17,711	17,692
Total current income tax expense									13,218	33,862	56,537
Deferred income tax expense (benefit):
Domestic									34,304	(83,647)	33,798
Foreign									(6,050)	2,737	3,969
Total deferred income tax expense									28,254	(80,910)	37,767
Total tax provision	$ 6,819	$ 8,111	$ 14,422	$ 12,120	$ (96,357)	$ 14,387	$ 16,885	$ 18,037	$ 41,472	$ (47,048)	$ 94,304
Reconciliation of statutory and effective income tax rate
Tax provision at statutory rate (as a percent)									21.00%	35.00%	35.00%
State taxes (as a percent)									1.80%	5.90%	4.70%
Foreign taxes (as a percent)									(3.40%)	(8.50%)	(5.20%)
Tax contingencies (as a percent)									2.50%
Withholding taxes and credits									1.50%
Tax credits and incentives (as a percent)									(0.90%)	(0.60%)	(0.60%)
Tax rate and legislative changes (as a percent)									(1.40%)	(54.50%)
Other (as a percent)									(0.20%)	(0.40%)	(0.40%)
Total tax provision effective rate (as a percent)									20.90%	(23.10%)	33.50%

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INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Components of net deferred tax assets
Pension, postretirement and post employment benefits	$ 1,918	$ 1,986
Marketing and sales incentive programs	53,259	39,836
Allowance for credit losses	17,534	18,539
Other accrued liabilities	7,825	471
Tax loss and tax credit carry forwards	4,314	1,892
Total deferred tax assets	84,850	62,724
Deferred tax liabilities:
Equipment on operating lease	320,070	268,129
Deferred tax liability, net	$ (235,220)	$ (205,405)

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INCOME TAXES - Reconciliation of Tax Contingencies and Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of the gross amounts of tax contingencies at the beginning and end of the year
Additions based on tax positions related to the current year			$ 4,274
Balance, end of year	$ 4,274		4,274
Unrecognized tax benefits
Amount of unrecognized tax benefits that, if recognized, would affect the annual effective income tax rate	4,274		4,274
Interest and penalties related to unrecognized tax benefits			686	$ 0	$ 0
Expected future payment of interest and penalties accrued related to unrecognized tax benefits	686	$ 0	$ 686	$ 0	$ 0
Income tax examinations
U.S. federal corporate income tax rate (as a percent)			21.00%	35.00%	35.00%
Estimated net tax benefit		$ 111,000
Additional benefit	2,739
Overall tax benefit			$ 113,739
Undistributed earnings of non-U.S. subsidiaries	$ 0		$ 0

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FINANCIAL INSTRUMENTS - Generial Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Interest Rate Derivatives
Maximum length of time of interest rate derivative instruments designated in cash flow hedge relationships	53 months
After-tax losses deferred in accumulated other comprehensive income that will be recognized in interest expense over the next 12 months	$ (712)

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FINANCIAL INSTRUMENTS - Fair Market Value of Derivatives (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Fair market value of derivatives
Derivative assets designated as hedging instruments, classified in other assets	$ 15,422	$ 4,113
Derivative liabilities designated as hedging instruments, classified in accounts payable and other accrued liabilities	8,107	6,698
Interest rate derivatives, derivative assets not designated as hedging instruments, classified in other assets	1,157	4,638
Foreign exchange contracts, derivatives not designated as hedging instruments, classified in other assets	86	1,393
Derivative assets not designated as hedging instruments, classified in other assets	1,243	6,031
Interest rate derivatives, derivative not designated as hedging instruments, classified in accounts payable and other accrued liabilities	1,157	4,638
Foreign exchange contracts, derivatives not designated as hedging instruments, classified in accounts payable and other accrued liabilities		325
Derivative liabilities not designated as hedging instruments, classified in accounts payable and other accrued liabilities	1,157	4,963
Cash Flow Hedges, Recognized in accumulated other comprehensive income (loss) (effective portion), Interest rate derivatives	726	2,797	$ 1,277
Cash Flow Hedges, Reclassified from accumulated other comprehensive Income (loss) (effective portion), Interest rate derivatives - Interest expense to third parties	34	(749)	(694)
Foreign exchange contracts, other expenses, not designated as hedges	(12,355)	1,155	$ 4,128
Interest Rate Derivatives
Fair market value of derivatives
Total notional amount of interest rate derivatives	2,960,191	3,143,737
Thirteen-month average notional amounts of interest rate derivatives	$ 2,947,318	$ 3,246,576

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FINANCIAL INSTRUMENTS - Items Measured at Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Assets
Foreign exchange contracts	$ 86	$ 1,393
Liabilities
Foreign exchange contracts		325
Assets transferred between Level 1, Level 2 and Level 3	0	0
Recurring | Level 2
Assets
Interest rate derivatives	16,579	8,751
Foreign exchange contracts	86	1,393
Total assets	16,665	10,144
Liabilities
Interest rate derivatives	9,264	11,336
Foreign exchange contracts		325
Total liabilities	$ 9,264	$ 11,661

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FINANCIAL INSTRUMENTS - Fair Value on a Nonrecurring Basis and Other Financial Instruments (Details) - Equipment - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2018
Assets
Impairment on assets held for sale	$ 2,894	$ 5,646	$ 11,400
(Gains) losses on assets held for sale	$ 11,018	9,784	$ (1,690)
Non recurring basis | Level 3
Assets
Equipment held for sale		$ 123,503		$ 144,913

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FINANCIAL INSTRUMENTS - Carrying Amount and Estimated Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Financial Instruments Not Carried at Fair Value
Receivables	$ 9,950,926	$ 10,421,545
Long-term debt	6,259,839	6,332,763
Carrying Amount
Financial Instruments Not Carried at Fair Value
Receivables	9,950,926	10,421,545
Long-term debt	6,259,839	6,332,763
Estimated Fair Value
Financial Instruments Not Carried at Fair Value
Receivables	9,859,920	10,379,020
Long-term debt	$ 6,149,778	$ 6,314,182

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GEOGRAPHICAL INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Geographical Information
Revenues	$ 214,561	$ 211,281	$ 226,141	$ 226,371	$ 241,346	$ 234,889	$ 229,863	$ 232,834	$ 878,354	$ 938,932	$ 946,721
Interest expense	86,491	81,557	78,804	78,428	89,273	79,772	78,797	74,728	325,280	322,570	305,099
Net income	31,133	$ 38,281	$ 47,628	$ 39,803	139,770	$ 34,139	$ 38,187	$ 38,393	156,845	250,489	187,512
Depreciation and amortization									233,926	282,901	249,470
Expenditures for equipment on operating leases									680,266	635,819	723,383
Provision (benefit) for credit losses									31,699	40,898	30,846
Additional disclosures
Total assets	12,931,912				13,512,078				12,931,912	13,512,078	14,043,259
Managed receivables	10,025,338				10,500,741				10,025,338	10,500,741	10,925,726
Eliminations.
Geographical Information
Revenues									(7,482)	(4,385)	(4,175)
Interest expense									(7,482)	(4,385)	(4,175)
Additional disclosures
Total assets	(62,732)				(65,079)				(62,732)	(65,079)	(374,161)
United States
Geographical Information
Revenues									693,191	756,210	780,071
Interest expense									276,956	279,542	269,560
Net income									97,790	189,225	121,122
Depreciation and amortization									191,347	238,037	208,942
Expenditures for equipment on operating leases									533,706	507,349	555,219
Provision (benefit) for credit losses									28,932	40,516	35,867
Additional disclosures
Total assets	10,482,805				10,738,403				10,482,805	10,738,403	12,016,606
Managed receivables	8,080,756				8,265,090				8,080,756	8,265,090	9,048,303
Canada
Geographical Information
Revenues									192,645	187,107	170,825
Interest expense									55,806	47,413	39,714
Net income									59,055	61,264	66,390
Depreciation and amortization									42,579	44,864	40,528
Expenditures for equipment on operating leases									146,560	128,470	168,164
Provision (benefit) for credit losses									2,767	382	(5,021)
Additional disclosures
Total assets	2,511,839				2,838,754				2,511,839	2,838,754	2,400,814
Managed receivables	$ 1,944,582				$ 2,235,651				$ 1,944,582	$ 2,235,651	$ 1,877,423

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RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
RELATED-PARTY TRANSACTIONS
Total interest and other income from affiliates	$ 345,933	$ 398,258	$ 398,372
Affiliated receivables	43,389	73,133
Affiliated debt	276,271	445,802
Other information
Tax receivable due from related party	39,174	3,513
Accounts payable and other accrued liabilities payable to related parties	4,740	60,070
Interest expense to related affiliates	7,533	11,442	7,218
Fees charged by affiliates	47,475	46,431	45,225
Gross receivables	10,025,338	10,500,741	10,925,726
Wholesale
Other information
Gross receivables	747,191	671,740
CNH Industrial North America
RELATED-PARTY TRANSACTIONS
Retail	149,363	157,496	170,425
Wholesale	123,615	166,426	156,654
Operating lease	60,841	68,987	70,138
Lending funds	1,096		$ 1,155
CNH Industrial America
RELATED-PARTY TRANSACTIONS
Affiliated receivables	$ 24,724	$ 49,311
Rate of accounts and notes receivable (as a percent)	0.00%	0.00%
Rate of debt due (as a percent)	2.50%	4.31%
Affiliated debt	$ 99,455	$ 327,160
CNH Industrial Canada Ltd.
RELATED-PARTY TRANSACTIONS
Affiliated receivables	$ 6,233	$ 11,282
Rate of accounts and notes receivable (as a percent)	0.00%	0.00%
Rate of debt due (as a percent)	3.80%	4.19%
Affiliated debt	$ 176,816	$ 118,642
Iveco Argentina
RELATED-PARTY TRANSACTIONS
Wholesale factoring	10,881	5,199
Other affiliates
RELATED-PARTY TRANSACTIONS
Lending funds	137	150
Affiliated receivables	$ 12,432	$ 12,540
Rate of accounts and notes receivable (as a percent)	0.00%	0.00%

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COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Guarantees
Payment guarantees on the financial debt of various foreign financial services subsidiaries	$ 30,000
Wholesale and dealer financing
Guarantees
Total credit limit	5,919,819
Utilized	$ 3,499,835

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Statements of Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
REVENUES
Interest income on retail notes and finance leases									$ 201,269	$ 201,533	$ 211,506
Interest income on wholesale notes									66,899	65,721	68,910
Interest and other income from affiliates									345,933	398,258	398,372
Rental income on operating leases									241,582	251,609	243,531
Other income									22,671	21,811	24,402
Total revenues	$ 214,561	$ 211,281	$ 226,141	$ 226,371	$ 241,346	$ 234,889	$ 229,863	$ 232,834	878,354	938,932	946,721
Interest expense:
Interest expense to third parties									317,747	311,128	297,881
Interest expense to affiliates									7,533	11,442	7,218
Total interest expense	86,491	81,557	78,804	78,428	89,273	79,772	78,797	74,728	325,280	322,570	305,099
Administrative and operating expenses:
Fees charged by affiliates									47,475	46,431	45,225
Provision (benefit) for credit losses									31,699	40,898	30,846
Depreciation of equipment on operating leases									231,805	280,765	247,438
Other expenses									43,778	44,827	36,297
Total administrative and operating expenses	90,118	83,332	85,287	96,020	108,660	106,591	95,994	101,676	354,757	412,921	359,806
Total expenses									680,037	735,491	664,905
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method									198,317	203,441	281,816
Income tax provision (benefit)	6,819	8,111	14,422	12,120	(96,357)	14,387	16,885	18,037	41,472	(47,048)	94,304
NET INCOME	$ 31,133	$ 38,281	$ 47,628	$ 39,803	$ 139,770	$ 34,139	$ 38,187	$ 38,393	156,845	250,489	187,512
COMPREHENSIVE INCOME									110,009	294,462	204,914
CNH Industrial Capital LLC
REVENUES
Interest and other income from affiliates									70,880	100,033	97,254
Total revenues									70,880	100,033	97,254
Interest expense:
Interest expense to third parties									156,839	164,836	162,264
Total interest expense									156,839	164,836	162,264
Administrative and operating expenses:
Other expenses									22
Total administrative and operating expenses									22
Total expenses									156,861	164,836	162,264
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method									(85,981)	(64,803)	(65,010)
Income tax provision (benefit)									(20,995)	(24,331)	(24,261)
Equity in income of consolidated subsidiaries accounted for under the equity method									221,831	290,961	228,261
NET INCOME									156,845	250,489	187,512
COMPREHENSIVE INCOME									110,009	294,462	204,914
Guarantor Entities
REVENUES
Interest income on retail notes and finance leases									9,170	16,206	15,990
Interest income on wholesale notes									(1,030)	(1,107)	(96)
Interest and other income from affiliates									200,821	243,273	232,020
Rental income on operating leases									187,089	197,859	196,911
Other income									87,710	94,408	103,422
Total revenues									483,760	550,639	548,247
Interest expense:
Interest expense to third parties									(8,767)	2,125	6,209
Interest expense to affiliates									199,890	236,267	226,544
Total interest expense									191,123	238,392	232,753
Administrative and operating expenses:
Fees charged by affiliates									45,545	44,666	43,469
Provision (benefit) for credit losses									8,445	11,090	9,879
Depreciation of equipment on operating leases									189,228	235,911	206,924
Other expenses									18,249	33,176	28,035
Total administrative and operating expenses									261,467	324,843	288,307
Total expenses									452,590	563,235	521,060
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method									31,170	(12,596)	27,187
Income tax provision (benefit)									11,010	(148,033)	10,204
Equity in income of consolidated subsidiaries accounted for under the equity method									201,671	155,524	211,278
NET INCOME									221,831	290,961	228,261
COMPREHENSIVE INCOME									$ 174,995	334,934	245,663
CNH Industrial Capital America LLC
Condensed Statements of Comprehensive Income
Ownership percentage	100.00%								100.00%
New Holland Credit Company LLC
Condensed Statements of Comprehensive Income
Ownership percentage	100.00%								100.00%
All Other Subsidiaries
REVENUES
Interest income on retail notes and finance leases									$ 192,099	185,327	195,516
Interest income on wholesale notes									67,929	66,828	69,006
Interest and other income from affiliates									297,443	326,346	324,262
Rental income on operating leases									54,493	53,750	46,620
Other income									2,842	1,906	2,837
Total revenues									614,806	634,157	638,241
Interest expense:
Interest expense to third parties									169,675	144,167	129,408
Interest expense to affiliates									30,854	46,569	35,838
Total interest expense									200,529	190,736	165,246
Administrative and operating expenses:
Fees charged by affiliates									69,811	76,268	83,613
Provision (benefit) for credit losses									23,254	29,808	20,967
Depreciation of equipment on operating leases									42,577	44,854	40,514
Other expenses									25,507	11,651	8,262
Total administrative and operating expenses									161,149	162,581	153,356
Total expenses									361,678	353,317	318,602
Income (loss) before income taxes and equity in income of consolidated subsidiaries accounted for under the equity method									253,128	280,840	319,639
Income tax provision (benefit)									51,457	125,316	108,361
NET INCOME									201,671	155,524	211,278
COMPREHENSIVE INCOME									161,250	192,936	225,994
Eliminations
REVENUES
Interest and other income from affiliates									(223,211)	(271,394)	(255,164)
Other income									(67,881)	(74,503)	(81,857)
Total revenues									(291,092)	(345,897)	(337,021)
Interest expense:
Interest expense to affiliates									(223,211)	(271,394)	(255,164)
Total interest expense									(223,211)	(271,394)	(255,164)
Administrative and operating expenses:
Fees charged by affiliates									(67,881)	(74,503)	(81,857)
Total administrative and operating expenses									(67,881)	(74,503)	(81,857)
Total expenses									(291,092)	(345,897)	(337,021)
Equity in income of consolidated subsidiaries accounted for under the equity method									(423,502)	(446,485)	(439,539)
NET INCOME									(423,502)	(446,485)	(439,539)
COMPREHENSIVE INCOME									$ (336,245)	$ (527,870)	$ (471,657)

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents	$ 160,328	$ 226,946
Restricted cash	639,543	648,612
Receivables, less allowance for credit losses	9,950,926	10,421,545
Affiliated accounts and notes receivable	43,389	73,133
Equipment on operating leases, net	1,724,217	1,781,489
Equipment held for sale	209,991	208,516
Goodwill and intangible assets, net	118,581	117,456
Other assets	84,937	34,381
TOTAL	12,931,912	13,512,078	$ 14,043,259
Liabilities:
Short-term debt, including current maturities of long-term debt	4,324,292	4,617,464
Accounts payable and other accrued liabilities	715,778	740,410
Affiliated debt	276,271	445,802
Long-term debt	6,259,839	6,332,763
Total liabilities	11,576,180	12,136,439
Stockholder's equity	1,355,732	1,375,639	$ 1,366,718	$ 1,451,432
TOTAL	12,931,912	13,512,078
Eliminations
ASSETS
Affiliated accounts and notes receivable	(6,657,354)	(6,504,485)
Investments in consolidated subsidiaries accounted for under the equity method	(5,257,189)	(5,146,576)
Other assets	(3,401)	(4,065)
TOTAL	(11,917,944)	(11,655,126)
Liabilities:
Accounts payable and other accrued liabilities	(3,848,956)	(3,510,803)
Affiliated debt	(2,811,799)	(2,997,747)
Total liabilities	(6,660,755)	(6,508,550)
Stockholder's equity	(5,257,189)	(5,146,576)
TOTAL	(11,917,944)	(11,655,126)
CNH Industrial Capital LLC
ASSETS
Affiliated accounts and notes receivable	2,310,137	2,518,121
Investments in consolidated subsidiaries accounted for under the equity method	2,796,050	2,620,971
Other assets	11,140	7,548
TOTAL	5,117,327	5,146,640
Liabilities:
Short-term debt, including current maturities of long-term debt	987,559	1,015,520
Accounts payable and other accrued liabilities	286,527	283,445
Long-term debt	2,487,509	2,472,036
Total liabilities	3,761,595	3,771,001
Stockholder's equity	1,355,732	1,375,639
TOTAL	5,117,327	5,146,640
Guarantor Entities
ASSETS
Cash and cash equivalents	118,508	160,339
Receivables, less allowance for credit losses	1,472,678	1,367,951
Affiliated accounts and notes receivable	2,122,129	1,991,481
Equipment on operating leases, net	1,357,493	1,405,731
Equipment held for sale	192,772	191,710
Investments in consolidated subsidiaries accounted for under the equity method	2,461,139	2,525,605
Goodwill and intangible assets, net	91,754	88,440
Other assets	56,517	4,432
TOTAL	7,872,990	7,735,689
Liabilities:
Short-term debt, including current maturities of long-term debt		45,937
Accounts payable and other accrued liabilities	3,035,024	2,807,195
Affiliated debt	2,041,926	2,253,248
Long-term debt	(10)	8,338
Total liabilities	5,076,940	5,114,718
Stockholder's equity	2,796,050	2,620,971
TOTAL	7,872,990	7,735,689
All Other Subsidiaries
ASSETS
Cash and cash equivalents	41,820	66,607
Restricted cash	639,543	648,612
Receivables, less allowance for credit losses	8,478,248	9,053,594
Affiliated accounts and notes receivable	2,268,477	2,068,016
Equipment on operating leases, net	366,724	375,758
Equipment held for sale	17,219	16,806
Goodwill and intangible assets, net	26,827	29,016
Other assets	20,681	26,466
TOTAL	11,859,539	12,284,875
Liabilities:
Short-term debt, including current maturities of long-term debt	3,336,733	3,556,007
Accounts payable and other accrued liabilities	1,243,183	1,160,573
Affiliated debt	1,046,144	1,190,301
Long-term debt	3,772,340	3,852,389
Total liabilities	9,398,400	9,759,270
Stockholder's equity	2,461,139	2,525,605
TOTAL	$ 11,859,539	$ 12,284,875

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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Statements of Cash Flows (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	$ 362,881	$ 610,453	$ 685,070
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired	(11,802,561)	(10,914,579)	(10,803,971)
Collections of receivables	12,072,940	11,405,857	11,547,142
Purchase of equipment on operating leases, net	(212,009)	(199,941)	(361,431)
Change in property and equipment and software, net	(5,427)	(1,614)	(890)
Net cash from (used in) investing activities	52,943	289,723	380,850
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity	(154,176)	288,533	110,209
Net change in indebtedness	(207,335)	(905,243)	(1,106,906)
Dividend paid to CNH Industrial America LLC	(130,000)	(285,000)	(290,000)
Net cash from (used in) financing activities	(491,511)	(901,710)	(1,286,697)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(75,687)	(1,534)	(220,777)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of year	875,558	877,092	1,097,869
End of year	799,871	875,558	877,092
Eliminations
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	(411,000)	(922,660)	158,127
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired	7,269,611	6,808,056	6,888,764
Collections of receivables	(7,270,276)	(6,808,286)	(6,889,105)
Net cash from (used in) investing activities	(665)	(230)	(341)
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity	185,948	922,890	(286,842)
Dividend paid to CNH Industrial America LLC	225,717		129,056
Net cash from (used in) financing activities	411,665	922,890	(157,786)
CNH Industrial Capital LLC
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	142,488	564,252	(102,001)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in indebtedness	(12,488)	(279,252)	392,001
Dividend paid to CNH Industrial America LLC	(130,000)	(285,000)	(290,000)
Net cash from (used in) financing activities	(142,488)	(564,252)	102,001
Guarantor Entities
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	488,329	838,812	(9,907)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired	(9,080,473)	(8,276,424)	(8,575,745)
Collections of receivables	8,967,965	8,316,852	8,660,606
Purchase of equipment on operating leases, net	(146,618)	(136,711)	(255,439)
Change in property and equipment and software, net	(5,427)	(1,614)	(887)
Net cash from (used in) investing activities	(264,553)	(97,897)	(171,465)
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity	(211,322)	(683,231)	172,351
Net change in indebtedness	(54,285)	(48,999)	(21,166)
Net cash from (used in) financing activities	(265,607)	(732,230)	151,185
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(41,831)	8,685	(30,187)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of year	160,339	151,654	181,841
End of year	118,508	160,339	151,654
All Other Subsidiaries
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash from (used in) operating activities	143,064	130,049	638,851
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of receivables acquired	(9,991,699)	(9,446,211)	(9,116,990)
Collections of receivables	10,375,251	9,897,291	9,775,641
Purchase of equipment on operating leases, net	(65,391)	(63,230)	(105,992)
Change in property and equipment and software, net			(3)
Net cash from (used in) investing activities	318,161	387,850	552,656
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity	(128,802)	48,874	224,700
Net change in indebtedness	(140,562)	(576,992)	(1,477,741)
Dividend paid to CNH Industrial America LLC	(225,717)		(129,056)
Net cash from (used in) financing activities	(495,081)	(528,118)	(1,382,097)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(33,856)	(10,219)	(190,590)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of year	715,219	725,438	916,028
End of year	$ 681,363	$ 715,219	$ 725,438

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SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED)
Revenues	$ 214,561	$ 211,281	$ 226,141	$ 226,371	$ 241,346	$ 234,889	$ 229,863	$ 232,834	$ 878,354	$ 938,932	$ 946,721
Interest expense	86,491	81,557	78,804	78,428	89,273	79,772	78,797	74,728	325,280	322,570	305,099
Administrative and operating expenses	90,118	83,332	85,287	96,020	108,660	106,591	95,994	101,676	354,757	412,921	359,806
Income tax provision (benefit)	6,819	8,111	14,422	12,120	(96,357)	14,387	16,885	18,037	41,472	(47,048)	94,304
NET INCOME	$ 31,133	$ 38,281	$ 47,628	$ 39,803	$ 139,770	$ 34,139	$ 38,187	$ 38,393	$ 156,845	$ 250,489	$ 187,512

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SUBSEQUENT EVENTS (Details) $ in Thousands	Feb. 06, 2019 USD ($)
Subsequent event | Amortizing Retail Term ABS
Subsequent Events
Debt issued	$ 786,040