CNH Industrial provides and administers retail note and lease financing to end-use customers for the purchase of new and used equipment and components sold through its dealer network, as well as revolving charge account financing. The terms of retail notes and finance leases generally range from two to six years, and interest rates vary depending on the prevailing market interest rates and

certain incentive programs offered on behalf of and sustained by Industrial Activities. Revolving charge accounts are generally accompanied by higher interest rates than the Company's other retail financing products, require minimum monthly payments and do not have pre-determined maturity dates.

Wholesale receivables arise primarily from dealer floorplan financing, and to a lesser extent, the financing of dealer operations. Under the standard terms of the wholesale receivable agreements, these receivables typically have "interest-free" periods of up to twelve months and stated original maturities of up to twenty-four months, with repayment accelerated upon the sale of the underlying equipment by the dealer. Financial Services is compensated by Industrial Activities for providing the "interest free" period based on market interest rates. After the expiration of any "interest-free" period, interest is charged to dealers on outstanding balances until CNH Industrial receives payment in full. The "interest-free" periods are determined based on the type of equipment sold and the time of year of the sale. The Company evaluates and assesses dealers on an ongoing basis as to their creditworthiness. CNH Industrial may be obligated to repurchase the dealer's equipment upon cancellation or termination of the dealer's contract for such causes as change in ownership, closeout of the business, or default. There were no significant losses in the three months ended March 31, 2023 and 2022 relating to the termination of dealer contracts.

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

Certain securitization trusts are also VIEs and consequently, the VIEs are consolidated since the Company has both the power to direct the activities that most significantly impact the VIEs' economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs.

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

Factoring transactions may be either with recourse or without recourse; certain without recourse transfers include deferred payment clauses (for example, when the payment by the factor of a minor part of the purchase price is dependent on the total amount collected from the receivables), requiring first loss cover, meaning that the transferor takes priority participation in the losses, or requires a significant exposure to the cash flows arising from the transferred receivables to be retained. These types of transactions do not qualify for the derecognition of the assets, since the risks and rewards connected with collection are not substantially transferred and, accordingly, CNH Industrial continued to recognize the receivable transferred by this means in its consolidated statement of financial position and recognizes a financial liability of the same amount under asset-backed financing.

The secured borrowings related to the transferred receivables are obligations that are payable as the receivables are collected. At March 31, 2023 and December 31, 2022, the carrying amount of such restricted assets included in financing receivables above are the following (in millions):

At March 31, 2023, the allowance for credit losses included a decrease in reserves of $15 million due to the sale of the Russian financial services entities, partially offset by increased specific reserve needs and portfolio growth. CNH Industrial will update the macroeconomic factors in future periods, as warranted. The provision for credit losses is included in selling, general, and administrative expenses.

At December 31, 2022, the allowance for credit losses included increases in reserves due to growth in the retail portfolio and additionally included $15 million for domestic Russian receivables, $9 million for the addition of revolving charge accounts in North America and $7 million in China related to Construction customers.

CNH Industrial assesses and monitors the credit quality of its financing receivables based on whether a receivable is classified as Performing or Non-Performing. Receivables are considered past due if the required principal and interest payments have not yet been received as of the date such payments were due. Delinquency is reported on financing receivables greater than 30 days past due. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. These receivables are generally more than 90 days past due. Accrued interest is charged-off to interest income. Interest income charged-off was not material for the three months ended March 31, 2023 and 2022. Interest accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at such time. As the terms for retail financing receivables are


	March 31, 2023
	31-60 Days Past Due		61-90 Days Past Due		Total Past Due		Current		Total Performing		Non- Performing		Total		Charge-offs
Retail
North America
2023									$	650	$	—	$	650	$	—
2022									3,213		2		3,215		5
2021									1,843		1		1,844		1
2020									872		1		873		1
2019									397		—		397		1
Prior to 2019									219		1		220		1
Total	$	29	$	5	$	34	$	7,160	$	7,194	$	5	$	7,199	$	9
South America
2023									$	583	$	7	$	590	$	—
2022									1,128		10		1,138		—
2021									726		5		731		1
2020									406		2		408		—
2019									195		1		196		1
Prior to 2019									220		—		220		—
Total	$	30	$	1	$	31	$	3,227	$	3,258	$	25	$	3,283	$	2
Asia Pacific
2023									$	553	$	—	$	553	$	—
2022									355		—		355		—
2021									206		1		207		—
2020									77		—		77		—
2019									24		—		24		—
Prior to 2019									1		—		1		—
Total	$	9	$	9	$	18	$	1,198	$	1,216	$	1	$	1,217	$	—
Europe, Middle East, Africa	$	—	$	—	$	—	$	5	$	5	$	12	$	17	$	—
Total Retail	$	68	$	15	$	83	$	11,590	$	11,673	$	43	$	11,716	$	11
Wholesale
North America	$	—	$	—	$	—	$	3,790	$	3,790	$	—	$	3,790	$	—
South America	—		—		—		1,309		1,309		1		1,310		—
Asia Pacific	—		—		—		544		544		—		544		—
Europe, Middle East, Africa	6		—		6		2,575		2,581		—		2,581		—
Total Wholesale	$	6	$	—	$	6	$	8,218	$	8,224	$	1	$	8,225	$	—


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

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.