CNH provides and administers retail note and lease financing to end-use customers for the purchase of new and used equipment and components sold through its dealer network, as well as revolving charge account financing. The terms of retail notes and finance leases generally range from two to seven years, and interest rates vary depending on the prevailing market interest rates and certain incentive programs offered on behalf of and sustained by Industrial Activities. Revolving charge accounts are generally accompanied by higher interest rates than the Company's other retail financing products, require minimum monthly payments and do not have pre-determined maturity dates.

Wholesale receivables arise primarily from dealer floorplan financing, and to a lesser extent, 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 receives payment in full. The "interest-free" periods are determined based on the type of equipment sold and the time of year of the sale. The Company evaluates and assesses dealers on an ongoing basis as to their creditworthiness. CNH may be obligated to repurchase the dealer's equipment upon cancellation or termination of the dealer's contract for such causes as change in ownership, closeout of the business, or default. There were no significant losses in the three months ended June 30, 2024 and 2023 relating to the termination of dealer contracts.

As part of its overall funding strategy, CNH periodically transfers certain receivables into special purpose entities (“SPE”) as part of its asset-backed securitization ("ABS") programs or into factoring transactions.

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

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

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

Factoring transactions may be either with recourse or without recourse; certain without recourse transfers include deferred payment clauses (i.e., 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 continues to recognize the receivable transferred by this means in its consolidated statement of financial position and recognizes a financial liability of the same amount under asset-backed financing.

The secured borrowings related to the transferred receivables are obligations that are payable as the receivables are collected. At June 30, 2024 and December 31, 2023, the carrying amount of such restricted assets included in financing receivables are the following (in millions of dollars):

Allowance for credit losses for the three and six months ended June 30, 2024 and 2023 is as follows (in millions of dollars):


	Three Months Ended June 30, 2024				Six Months Ended June 30, 2024
	Retail		Wholesale		Retail		Wholesale
Opening Balance	$	330	$	50	$	310	$	53
Provision	52		3		90		2
Charge-offs	(42)		—		(53)		(1)
Recoveries	2		—		1		—
Foreign currency translation and other	(20)		(2)		(26)		(3)
Ending Balance	$	322	$	51	$	322	$	51


	Three Months Ended June 30, 2023				Six Months Ended June 30, 2023
	Retail		Wholesale		Retail		Wholesale
Opening Balance	$	264	$	63	$	270	$	64
Provision	19		(3)		36		(3)
Charge-offs	(10)		—		(21)		—
Recoveries	1		—		1		—
Foreign currency translation and other	6		—		(6)		(1)
Ending Balance	$	280	$	60	$	280	$	60

At June 30, 2024, the allowance for credit losses included an increase in retail reserves due to specific reserve needs primarily in South America due to increasing delinquencies. At June 30, 2023, the allowance for credit losses included an increase in reserves due to specific reserve needs primarily in South America, partially offset by a decrease in reserves of $15 million due to the sale of CNH Capital Russia. CNH Industrial will update the macroeconomic factors in future periods, as warranted. The provision for credit losses is included in selling, general and administrative expenses.

CNH assesses and monitors the credit quality of its financing receivables based on delinquency status. Receivables are considered past due if the required principal and interest payments have not yet been received as of the date such payments were due. Delinquency is reported on financing receivables greater than 30 days past due. Non-performing financing receivables represent receivables for which CNH has ceased accruing finance income. These receivables are generally 90 days past due. Accrued interest is charged-off to interest income. Interest income charged-off was not material for the three months and six months ended June 30, 2024.

Interest accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously suspended income is recognized at that time. As the terms for retail financing receivables are greater than one year, the performing/nonperforming information is presented by year of origination for North America, South America and Asia Pacific.


	31-60 Days Past Due		61-90 Days Past Due		Total Past Due		Current		Total Performing		Non- Performing		Total		Gross Charge-offs
Retail
North America
2024									$	2,307	$	2	$	2,309	$	2
2023									2,948		5		2,953		3
2022									1,773		4		1,777		3
2021									1,045		2		1,047		3
2020									400		1		401		1
Prior to 2020									151		1		152		2
Total	55		10		65		8,559		8,624		15		8,639		14
South America
2024									762		1		763		2
2023									1,540		21		1,561		20
2022									692		30		722		10
2021									393		11		404		3
2020									182		3		185		2
Prior to 2020									103		1		104		1
Total	241		1		242		3,430		3,672		67		3,739		38
Asia Pacific
2024									298		—		298		—
2023									468		—		468		—
2022									346		—		346		1
2021									178		1		179		—
2020									64		—		64		—
Prior to 2020									12		—		12		—
Total	5		4		9		1,357		1,366		1		1,367		1
Europe, Middle East, Africa	—		—		—		11		11		7		18		—
Total Retail	$	301	$	15	$	316	$	13,357	$	13,673	$	90	$	13,763	$	53
Wholesale
North America	$	—	$	—	$	—	$	5,733	$	5,733	$	28	$	5,761	$	—
South America	—		—		—		894		894		1		895		—
Asia Pacific	2		—		2		880		882		—		882		1
Europe, Middle East, Africa	10		3		13		2,517		2,530		3		2,533		—
Total Wholesale	$	12	$	3	$	15	$	10,024	$	10,039	$	32	$	10,071	$	1


	31-60 Days Past Due		61-90 Days Past Due		Total Past Due		Current		Total Performing		Non- Performing		Total		Gross Charge-offs
Retail
North America
2023									$	3,976	$	4	$	3,980	$	1
2022									2,133		4		2,137		10
2021									1,323		3		1,326		4
2020									561		2		563		3
2019									208		1		209		3
Prior to 2019									66		1		67		3
Total	44		3		47		8,220		8,267		15		8,282		24
South America
2023									1,986		9		1,995		—
2022									955		32		987		—
2021									573		13		586		2
2020									294		4		298		7
2019									123		2		125		1
Prior to 2019									107		1		108		1
Total	22		—		22		4,016		4,038		61		4,099		11
Asia Pacific
2023									609		—		609		—
2022									453		1		454		1
2021									255		1		256		1
2020									115		1		116		2
2019									31		1		32		2
Prior to 2019									3		—		3		1
Total	5		6		11		1,455		1,466		4		1,470		7
Europe, Middle East, Africa	—		—		—		6		6		11		17		—
Total Retail	$	71	$	9	$	80	$	13,697	$	13,777	$	91	$	13,868	$	42
Wholesale
North America	$	—	$	—	$	—	$	5,154	$	5,154	$	—	$	5,154	$	—
South America	—		—		—		1,404		1,404		2		1,406		4
Asia Pacific	4		2		6		870		876		—		876		1
Europe, Middle East, Africa	5		—		5		2,893		2,898		—		2,898		—
Total Wholesale	$	9	$	2	$	11	$	10,321	$	10,332	$	2	$	10,334	$	5

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.