cnhi-2021-12-31-en

CONTENTS

BOARD OF DIRECTORS AND AUDITOR ...................................................................................................................

LETTER FROM THE CHAIR AND THE CHIEF EXECUTIVE OFFICER ................................................................

BOARD REPORT ..............................................................................................................................................................

PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION .......................................................

OUR COMMITMENT TO SUSTAINABLE DEVELOPMENT AND LONG-TERM VALUE CREATION ............

REPORT ON OPERATIONS .......................................................................................................................................

SELECTED FINANCIAL DATA ...............................................................................................................................

RISK FACTORS ........................................................................................................................................................

BUSINESS OVERVIEW ...........................................................................................................................................

RESEARCH AND DEVELOPMENT .......................................................................................................................

HUMAN RESOURCES ............................................................................................................................................

OPERATING AND FINANCIAL REVIEW AND PROSPECTS ...........................................................................

RISK MANAGEMENT AND CONTROL SYSTEM ...............................................................................................

CORPORATE GOVERNANCE ...............................................................................................................................

REMUNERATION REPORT ....................................................................................................................................

117

MAJOR SHAREHOLDERS .....................................................................................................................................

144

SUBSEQUENT EVENTS AND OUTLOOK ...........................................................................................................

145

CNH INDUSTRIAL CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2021 ............................

147

CONSOLIDATED INCOME STATEMENT ................................................................................................................

148

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ......................................................................

149

CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................................

150

CONSOLIDATED STATEMENT OF CASH FLOWS ...............................................................................................

152

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................................

154

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ...........................................................................

155

COMPANY FINANCIAL STATEMENTS AT DECEMBER 31, 2021 ..........................................................................

242

INCOME STATEMENT .................................................................................................................................................

243

STATEMENT OF FINANCIAL POSITION .................................................................................................................

244

NOTES TO THE COMPANY FINANCIAL STATEMENTS ......................................................................................

245

OTHER INFORMATION ...................................................................................................................................................

274

APPENDIX – CNH INDUSTRIAL GROUP COMPANIES AT DECEMBER 31, 2021

276

INDEPENDENT AUDITOR’S REPORT .........................................................................................................................

288

CNH Industrial N.V.

Corporate Seat: Amsterdam, the Netherlands

Principal Office: 25 St. James’s Street, London, SW1A 1HA, United Kingdom

Share Capital: €17,608,744.72 (as of December 31, 2021)

Amsterdam Chamber of Commerce: reg. no. 56532474

Contents 1

BOARD OF DIRECTORS

AND AUDITOR

BOARD OF DIRECTORS

Chair

Suzanne Heywood

Chief Executive Officer(a)

Scott W. Wine

Directors(b)

INDEPENDENT AUDITOR

Léo W. Houle(2)(3)(*)

Ernst & Young Accountants LLP

Catia Bastioli(2)(3)(**)(c)

Howard W. Buffett(2)(3)(**)

John Lanaway(1)(**)

Alessandro Nasi(2)(3)

Vagn Sørensen(1)(**)

Åsa Tamsons(1)(**)(c)

(1)Member of the Audit Committee

(2)Member of the Environmental, Social, and Governance Committee (formerly Governance and Sustainability Committee)

(3)Member of the Human Capital and Compensation Committee (formerly Compensation Committee)

(*)Independent Director and Senior Non-Executive Director

(**)Independent Director

(a)Mr. Scott W. Wine has served as Chief Executive Officer since January 4, 2021 and Executive Director since April 15, 2021.

(b)Ms. Jacqueline A. Tammenoms Bakker and Mr. Jacques Theurillat were members of the Board until April 15, 2021. Mr. Tufan Erginbilgic and Mr.

Lorenzo Simonelli were members of the Board until they voluntary resigned on December 23, 2021. Mr. Erginbilgic and Mr. Simonelli jointed the Iveco

Group Board of Directors effective January 1, 2022.

(c)Ms. Catia Bastioli and Ms. Åsa Tamsons were appointed by the shareholders as non-executive directors at the extraordinary general meeting of

shareholder of CNH Industrial N.V. held on December 23, 2021.

Disclaimer

All statements other than statements of historical fact contained in this filing, including competitive strengths; business strategy; future financial position or

operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital

structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements.

Forward looking statements also include statements regarding the future performance of CNH Industrial and its subsidiaries on a standalone basis. These

statements may include terminology such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “outlook”, “continue”,

“remain”, “on track”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “prospects”, “plan”, or similar terminology. Forward-looking statements,

including those related to the COVID-19 pandemic, are not guarantees of future performance. Rather, they are based on current views and assumptions

and involve known and unknown risks, uncertainties and other factors, many of which are outside our control and are difficult to predict. If any of these

risks and uncertainties materialize (or they occur with a degree of severity that the Company is unable to predict) or other assumptions underlying any of

the forward-looking statements prove to be incorrect, including any assumptions regarding strategic plans, the actual results or developments may differ

materially from any future results or developments expressed or implied by the forward-looking statements.

Factors, risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements include,

among others: the continued uncertainties related to the unknown duration and economic, operational and financial impacts of the global COVID-19

pandemic and the actions taken or contemplated by governmental authorities or others in connection with the pandemic on our business, our employees,

customers and suppliers; supply chain disruptions, including delays caused by mandated shutdowns, industry capacity constraints, material availability,

and global logistics delays and constraints; disruption caused by business responses to COVID-19, including remote working arrangements, which may

create increased vulnerability to cybersecurity or data privacy incidents; our ability to execute business continuity plans as a result of COVID-19; the many

interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products, including demand

uncertainty caused by COVID-19; general economic conditions in each of our markets, including the significant economic uncertainty and volatility caused

by COVID-19; travel bans, border closures, other free movement restrictions, and the introduction of social distancing measures in our facilities may affect

in the future our ability to operate as well as the ability of our suppliers and distributors to operate; changes in government policies regarding banking,

monetary and fiscal policy; legislation, particularly pertaining to capital goods-related issues such as agriculture, the environment, debt relief and subsidy

program policies, trade and commerce and infrastructure development; government policies on international trade and investment, including sanctions,

import quotas, capital controls and tariffs; volatility in international trade caused by the imposition of tariffs, sanctions, embargoes, and trade wars; actions

of competitors in the various industries in which we compete; development and use of new technologies and technological difficulties; the interpretation of,

or adoption of new, compliance requirements with respect to engine emissions, safety or other aspects of our products; production difficulties, including

capacity and supply constraints and excess inventory levels; labor relations; 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; price

pressure on new and used vehicles; the resolution of pending litigation and investigations on a wide range of topics, including dealer and supplier

litigation, follow-on private litigation in various jurisdictions after the settlement of the EU antitrust investigation of the Iveco Group announced on July 19,

2016, intellectual property rights disputes, product warranty and defective product claims, and emissions and/or fuel economy regulatory and contractual

issues; security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of CNH Industrial

and its suppliers and dealers; security breaches with respect to our products; our pension plans and other post-employment obligations; further

developments of the COVID-19 pandemic on our operations, supply chains, distribution network, as well as negative evolutions of the economic and

financial conditions at global and regional levels; political and civil unrest; volatility and deterioration of capital and financial markets, including other

pandemics, terrorist attacks in Europe and elsewhere; our ability to realize the anticipated benefits from our business initiatives as part of our strategic

plan; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or divestitures and

other similar risks and uncertainties, and our success in managing the risks involved in the foregoing.

Forward-looking statements are based upon assumptions relating to the factors described in this Annual Report, which are sometimes based upon

estimates and data received from third parties. Such estimates and data are often revised. Actual results may differ materially from the forward-looking

statements as a result of a number of risks and uncertainties, many of which are outside CNH Industrial's control. CNH Industrial expressly disclaims any

Board of Directors and Auditor 2

intention or obligation to provide, update or revise any forward-looking statements to reflect any change in expectations or any change in events,

conditions or circumstances on which these forward-looking statements are based.

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 “Risk Factors” of this Annual Report.

Further information concerning CNH Industrial, including factors that potentially could materially affect CNH Industrial’s financial results, is included in

CNH Industrial’s reports and filings with the U.S. Securities and Exchange Commission (“SEC”), the Autoriteit Financiële Markten (“AFM”) and

Commissione Nazionale per le Società e la Borsa (“CONSOB”).

All future written and oral forward-looking statements by CNH Industrial or persons acting on the behalf of CNH Industrial are expressly qualified in their

entirety by the cautionary statements contained herein or referred to above.

Board of Directors and Auditor 3

LETTER FROM THE CHAIR AND

THE CHIEF EXECUTIVE OFFICER

Dear Shareholders,

This year presented us with a wide range of challenges and opportunities, ranging from ongoing supply chain shortages

to the largest acquisition in CNH Industrial’s history. Despite this, our indefatigable team rose to the occasion and not

only navigated these, but also delivered record financial results.

Paramount in 2021 was completing the spin-off of our On-Highway business to create two strong and separately listed

industrial players: CNH Industrial (NYSE/MI: CNHI), focused on agriculture and construction, and Iveco Group (MI:

IVG), focused on commercial and mass transport, powertrain technologies and specialty vehicles. Our team planned

and executed this flawlessly, and we are incredibly excited about the future of each company as they address their

respective markets with renewed focus and vigor.

Alongside completing the critical last steps needed to prepare for the spin, we also continued to deliver for our

customers. In doing this we relied heavily on the lessons we learnt during the initial phases of the pandemic which have

made us more resilient and better positioned to achieve our strategic priorities. Though the pandemic persisted through

2021, we were able to find ways to continue to operate the business, working closely with our suppliers and dealers,

while helping our employees readjust to new ways of working.

To support this effort, we also changed our organization during 2021, making it leaner, flatter and more agile so that it

can better respond to the dynamic demand and delivery environment in which we now operate. In our new organization

we have more than doubled the number of employees in customer facing roles. This means that we have much greater

insight into the market opportunities for our products and are better able to address those opportunities.

Alongside our work on the spin and our structure, and despite the need to continue to navigate a challenging supplier

environment, we were still able to achieve record financial results in 2021, both as one company and separately as

CNH Industrial and Iveco Group. We would like to congratulate and thank all of our colleagues that made this

performance possible.

FINANCIAL HIGHLIGHTS

CNH Industrial reported strong full year performance in 2021, its final year of operations as a combined Off- and On-

Highway entity. We delivered consolidated revenues of $33.5 billion, up 29% from the previous year. Both our adjusted

EBIT from our Industrial Activities at $2,086 million(1) and our full year Net Income at $1.8 billion (which translates to

$1.28 in earnings per share) were the highest in our Company’s history. Market driven volume and disciplined pricing

were key drivers of our record earnings, alongside the team’s successful execution, which they achieved while often

managing very challenging supply chain and logistics issues. We also recorded another very strong year for positive

free cash flow of Industrial Activities(1), at over $1.8 billion as our operational execution improved.

(1) This item is a non-GAAP financial measure. Refer to the “Board Report - Operating and Financial Review and Prospects” section of this annual report

for information regarding non-GAAP financial measures.

Letter from the Chair and the Chief Executive Officer 4

MARKING TWO DISTINCT PATHS TO SUCCESS

Our Off-Highway and On-Highway businesses both announced important acquisitions, joint ventures and

memorandums of understanding during 2021. These have given both of these businesses significant additional access

to new technologies that will play important roles in their futures.

On the Off-Highway side of our business, now CNH Industrial, we announced the acquisition of Raven Industries. This

acquisition, the largest in CNH Industrial’s history, brings a US-based leader in precision agriculture technology into our

company, tremendously enhancing our technical capabilities. By combining CNH Industrial’s strong engineering

heritage with Raven’s technology, we will be able to introduce best-in-class products and solutions that deliver the

improved productivity and yields farmers desire.

During 2021, also within our Off-Highway business, our construction equipment leadership has successfully been

pursuing a turnaround plan. We built on this work by acquiring Sampierana S.p.A., a construction equipment company

based in Italy. Sampierana’s Eurocomach line enhances both our mini and midi excavator portfolio and our

electrification capabilities. We also announced a minority stake and exclusive multi-year technology licensing

agreement with US-based agricultural technology company Monarch Tractor to further our efforts in electrification and

autonomy in agriculture.

Our On-Highway business, now Iveco Group, held its first Investor Day in November 2021, in which it shared details of

its future business, its strategy and its financial ambitions through to 2026. Last year also saw the official inauguration

of our joint investment with the US-Based Nikola Corporation for heavy-duty Battery Electric Vehicles in Ulm, Germany,

and the start of production from that site.

In 2021, our On-Highway business began working with the French multinational Air Liquide to accelerate the

development of heavy-duty hydrogen mobility in Europe. It also made a significant step forward in announcing a

Memorandum of Understanding with US-based PlusAI to develop autonomous trucks and launch an autonomous

trucking pilot program in Europe and China.

OUR SHARED ESG SUCCESS

We were delighted that in 2021 we were again recognized as a sustainability leader in relation to both our facilities and

our products. This included being named as an Industry top scorer in the Dow Jones Sustainability World and Europe

Indexes for the 11th consecutive year; being recognized with a prestigious double ‘A’ score for global climate and water

stewardship by the CDP; earning an “S&P Global Gold Class” in S&P’s 2022 Sustainability Yearbook; and achieving an

EcoVadis Platinum medal in its prestigious annual sustainability assessment. Both CNH Industrial and Iveco Group

remain fully committed to their sustainability goals and these form an important part of each of their future plans.

2022 AS THE NEW CNH INDUSTRIAL

We have carried great momentum from 2021 into our first year as a fully focused agriculture and construction player,

starting with announcing our strong pro forma results and, at our Capital Markets Day in February, unveiling our

updated three-year strategic plan. Our plan prioritizes five key areas: Customer-Inspired Innovation; Technology

Leadership; Brand and Dealer Strength; Operational Excellence; and Sustainability Stewardship. Our plan, which we

have based around the needs and expectations of the farmers and construction professionals whom we serve, will

enable us to provide them with the world-class products and technologies they need to make their businesses ever

more successful.

This plan is supported by our CNH Industrial Business System, which we are using to drive ongoing operational

improvements across our activities. We will also continue to evolve our culture, making our company more attractive to

diverse groups, helping colleagues from different backgrounds build successful careers and ensuring that all colleagues

are rewarded not only for delivering results, but also for doing so in the right way.

Underlying and impelling all of this is our company purpose, revealed at our Capital Markets Day of Breaking New

Ground. This purpose captures our intention to move ahead of others, continually searching for better solutions and

breakthrough ideas. To achieve this, we will focus on three supporting pillars - Innovation, Sustainability and

Productivity. We will be innovative in our product launches, technology investments and approach to doing business.

Sustainability is our North Star and at the heart of every strategic decision we take. And underlying all of this is

productivity – helping us and the world’s farmers and construction professionals to do more, with less, and thus

enabling them to realize their businesses’ full potential.

Letter from the Chair and the Chief Executive Officer 5

2022 guidance(*)

While we are pleased with our 2021 results, we continue to expect supply chain challenges in 2022, which are likely to

diminish in the second half of the year. As these subside, we expect production and retail sales to increase.

We are therefore providing the following guidance for our 2022 Industrial Activities outlook:

▪Net sales(**) to grow 10% to 14% including currency translation effects;

▪SG&A expenses lower or equal to 7.5% of net sales;

▪Free Cash Flow in excess of $1 billion;

▪R&D expenses and Capital expenditures up at around $1.4 billion from around $1.0 billion in 2021.

In closing, we want again to wish Gerrit Marx, his leadership team and the entire Iveco Group organization the very best

as they move forward with great energy in their first year of independent operations. We are excited to see what our two

strong companies will achieve with their unleashed potentials.

We also want to thank you, our valued shareholders, for your continued support. We look forward to delivering great

results and rolling out new, customer-inspired developments that will advance agriculture and construction and provide

you with progressive returns.

Sincerely,

Suzanne Heywood Scott W. Wine

CHAIR, CNH INDUSTRIALCHIEF EXECUTIVE OFFICER, CNH INDUSTRIAL

(*) CNH Industrial manages its operations, assesses its performance and makes decision about allocation of resources based on financial results

prepared only in accordance with U.S. GAAP, and, accordingly, also the full year guidance presented below is prepared under U.S. GAAP.

(**) Net sales reflecting the exchange rate of 1.20 EUR/USD

Letter from the Chair and the Chief Executive Officer 6

BOARD REPORT

PRESENTATION OF FINANCIAL AND

CERTAIN OTHER INFORMATION

CNH Industrial N.V. (“CNH Industrial”) is incorporated under the laws of the Netherlands. CNH Industrial has its

corporate seat in Amsterdam, the Netherlands, and its principal office in London, England, United Kingdom. Unless

otherwise indicated or the context otherwise requires, as used in this Annual Report, the terms “CNH Industrial”, “we”,

“us”, and “our”, refer to CNH Industrial N.V. together with its consolidated subsidiaries.

CNH Industrial presents its Consolidated Financial Statements, prepared in accordance with International Financial

Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and adopted by the

European Union (“EU-IFRS”).

CNH Industrial reports quarterly and annual financial results both under accounting standards generally accepted in the

United States (“U.S. GAAP”) for SEC reporting purposes and under EU-IFRS for European listing purposes and for

Dutch law requirements. The reconciliation from EU-IFRS figures to U.S. GAAP is presented, on a voluntary basis, in

the Notes to the Consolidated Financial Statements. Financial statements under both sets of accounting principles use

the U.S. dollar as the presentation currency. Until December 31, 2021, prior to the demerger occurred on January 1,

2022 (as described in the Business Overview chapter) CNH Industrial reported its operations under five segments:

Agriculture, Construction, Commercial and Specialty Vehicles, Powertrain, and Financial Services. The activities carried

out by Agriculture, Construction, Commercial and Specialty Vehicles, and Powertrain, as well as corporate functions,

are collectively referred to as “Industrial Activities”.

We have prepared our annual consolidated financial statements presented in this Annual Report in accordance with

EU-IFRS and with Part 9 of Book 2 of the Dutch Civil Code. Our consolidated financial statements are prepared with the

U.S. dollar as the presentation currency and, unless otherwise indicated, all financial data set forth in this Annual Report

are expressed in U.S. dollars.

Certain financial information in this report has been presented by geographic region. Our geographic regions are: (1)

North America; (2) Europe; (3) South America and (4) Rest of World. The geographic designations have the following

meanings:

▪North America: United States, Canada and Mexico;

▪Europe: member countries of the European Union, European Free Trade Association, the United Kingdom, Ukraine

and Balkans;

▪South America: Central and South America, and the Caribbean Islands; and

▪Rest of World: Continental Asia (including Turkey and Russia), Oceania and member countries of the Commonwealth

of Independent States, the African continent, and Middle East.

Certain industry and market share information in this Annual Report has been presented on a worldwide basis which

includes all countries. In this Annual Report, management estimates of market share information are generally based

on retail unit sales data in North America, on registrations of equipment in most of Europe, Brazil, and various Rest of

World markets, and on retail and shipment unit data collected by a central information bureau appointed by equipment

manufacturers associations, including the Association of Equipment Manufacturers in North America, the Committee for

European Construction Equipment in Europe, the Associação Nacional dos Fabricantes de Veículos Automotores

(“ANFAVEA”) in Brazil, the Japan Construction Equipment Manufacturers Association, and the Korea Construction

Equipment Manufacturers Association, as well as on other shipment data collected by independent service bureaus.

Not all agricultural or construction equipment is registered, and registration data may thus underestimate, perhaps

substantially, actual retail industry unit sales demand, particularly for local manufacturers in China, Southeast Asia,

Eastern Europe, Russia, Turkey, Brazil, and any country where local shipments are not reported. For Commercial

Vehicles, regions are defined as: Europe (the 27 countries where our Commercial Vehicles business competes,

excluding the United Kingdom and Ireland, for market share and total industry volume (“TIV”) reporting purposes),

South America (Brazil, Argentina and Venezuela) and Rest of World (Russia, Turkey, South East Asia, Australia and

New Zealand). In addition, there may be a period of time between the shipment, delivery, sale and/or registration of a

unit, which must be estimated, in making any adjustments to the shipment, delivery, sale, or registration data to

determine our estimates of retail unit data in any period.

Board Report Presentation of Financial and Certain Other Information 7

OUR COMMITMENT TO SUSTAINABLE

DEVELOPMENT AND LONG-TERM VALUE

CREATION

CNH Industrial is committed to a better future, integrating sustainability in its day-to-day activities and involving all

employees. The full integration of environmental and social considerations with economic objectives enables the Group

to identify potential risks and seize additional development opportunities, resulting in a process of continuous, and

sustainable, improvement that creates value over the long-term.

As evidence of this, CNH Industrial included strategic sustainability targets in its Strategic Business Plan that are in line

with the Company’s priorities; these in turn are based on internal assessment and stakeholder engagement.

The priorities and targets are aligned with the six UN Sustainable Development Goals ("SDGs") most relevant to CNH

Industrial:

▪SDG 2: Zero hunger - end hunger, achieve food security and improved nutrition, and promote sustainable agriculture;

▪SDG 3: Good health and well-being - ensure healthy lives and promote wellbeing for all at all ages;

▪SDG 8: Decent work and economic growth - promote sustained, inclusive, and sustainable economic growth, full and

productive employment, and decent work for all;

▪SDG 10: Reduced inequalities - reduce inequality within and among countries;

▪SDG 12: Responsible consumption and production - ensure sustainable consumption and production patterns;

▪SDG 13: Climate action - take urgent action to combat climate change and its impacts.

These SDGs will inspire CNH Industrial’s future endeavors in terms of sustainability targets, practices, and projects.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 8

The targets were incorporated into the Sustainability Plan, which expresses CNH Industrial’s commitment to contribute

to development in harmony with people and the environment. The Sustainability Plan, which also includes short-term

targets, is updated annually to report the progress of existing projects and establish new targets to ensure continuous

improvement, essential for long-term growth and value creation.

The Sustainability Model facilitates the identification of aspirational goals and strategic sustainability targets. The Model

illustrates the relationship between CNH Industrial and the external drivers that affect its business (or have the potential

to do so) and provides an overview of how the Group is structured to deal with and manage them. These external

drivers are the variables that continuously feed, guide, and steer the internal mechanisms of CNH Industrial. They

consist of global challenges, customer needs, and the regulatory framework.

Global challenges(1) are long-term global changes affecting governments, economies, and societies. They reflect

ongoing changes across the globe and emerging social needs. Customer needs identify customer priorities and

demand for products and services. The regulatory framework fosters continuous improvement through legislation,

regulation, and industry standards.

(1) The global challenges selected by CNH Industrial are: climate change; food scarcity and food security; and the innovative and digital world.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 9

CNH Industrial responds to these external drivers with a shared corporate purpose, defined as "Powering Sustainable

Transformation", and an individual purpose for each segment, consistent across the Group and viable over the

medium-to-long term, as well as with a set of values that lie at the core of CNH Industrial’s day-to-day activities.

CNH Industrial's purpose and values are implemented through:

▪strategic planning, including medium-to-long term targets;

▪a system of principles, rules, and procedures in which roles and responsibilities are clearly defined; and

▪a process that anticipates and manages current and future economic, environmental, and social risks and

opportunities.

Moving closer to the core of the Model, the emphasis shifts from strategy and governance to the operational aspects of

the Group. These consist of processes and applications such as manufacturing and logistics, product development and

innovation, and employee behavior and stakeholder engagement, all of which must be integrated into the entire value

chain to achieve CNH Industrial’s core objective: the creation of sustainable, long-term value for all stakeholders.

Sustainability is a core element of CNH Industrial’s Corporate Governance, with senior management playing a direct

and active role. The Environmental, Social, and Governance Committee (the "Environmental, Social, and Governance

Committee") of the Board of Directors ("Board") is responsible for, among other things, assisting the Board in:

monitoring and evaluating reports on CNH Industrial’s sustainable development policies and practices, management

standards, strategy, global performance and governance; reviewing, assessing, and making recommendations on

strategic sustainability guidelines, including occupational health and safety and climate-related issues; and reviewing

the Company’s annual Sustainability Report(2).

(2) The 2021 Sustainability Report will be made available on the Company’s website as of April 13, 2022, the day of the 2021 Annual General Meeting of

Shareholders.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 10

CNH Industrial has established an organizational structure made up of global and regional sustainability committees

and the Sustainability Team in order to optimize the management of sustainability aspects within the Group.

The Sustainability Steering Committee (“SSC”) is a committee of the Senior Leadership Team ("SLT"), and is

responsible for identifying sustainability strategies, integrating them with business needs, adopting a medium-to-long

term vision, and providing a forum for communication and benchmarking among the geographic areas.

The SSC is chaired by the Chief Diversity & Inclusion, Sustainability and Transformation Officer, and is coordinated by

the Sustainability Unit. The permanent members of the committee are the SLT members.

The Sustainability Team is a network of experts responsible for incorporating sustainability criteria more effectively into

Company strategy and for ensuring the necessary support for sustainability planning and reporting. The Sustainability

Team is overseen by the Chief Diversity & Inclusion, Sustainability and Transformation Officer and comprises personnel

with global expertise (the Sustainability Unit and twenty-five Sustainability Points of Reference), as well as the Global

Social Initiatives team, composed of the representatives for local community initiatives.

CNH Industrial's sustainability management system consists of the following tools:

▪the Code of Conduct, approved by the Board of Directors, and related policies that set out the Company’s approach

to key topics;

▪a set of policies to manage specific issues, as well as the Human Capital Management Guidelines, Green Logistics

Principles, and the Supplier Code of Conduct;

▪the materiality analysis, which defines social and environmental priorities;

▪stakeholder engagement on material topics;

▪a set of approximately 200 sustainability-related Key Performance Indicators, designed to provide comprehensive

coverage of all the key environmental, social, and governance aspects, in line with the GRI Sustainability Reporting

Standards ("GRI Standards") and the Sustainability Accounting Standards (“SASB Standards”) and those of the

major sustainability rating agencies;

▪the Sustainability Plan, also including the strategic sustainability targets, which identifies action priorities and tracks

commitments undertaken; and

▪the annual Sustainability Report, which discloses the Company’s sustainability performance.

The Sustainability Report, prepared on a voluntary basis and in line with GRI Standards and SASB Standards,

integrates the economic aspects described herein with a comprehensive view of the environmental and social

performance of CNH Industrial’s operations.

Materiality analysis

The materiality analysis is a tool that CNH Industrial uses to ensure close alignment between the material topics

identified and the Company's business decisions, increasingly integrating sustainability principles into the Company's

daily activities. According to this approach, topics are considered material if they reflect CNH Industrial’s economic,

environmental, and social impact, or influence the decisions of stakeholders.

In the past six years, the material topics have been evaluated through stakeholder engagement to assess:

▪their relevance to CNH Industrial, based on feedback from the SSC members (feedback updated in 2019);

▪their relevance to stakeholders, based on feedback from a sample of 2,068 stakeholders (55 in 2021) including

employees, customers, dealers, opinion leaders, public institutions, non-governmental organizations, investors, and

journalists.

CNH Industrial managers and stakeholders were engaged through an online survey or direct interviews. They were

asked to evaluate the 14 material topics identified, ranking the five most significant based on their impact on the

economy, the environment, and society.

CNH Industrial's Materiality Matrix reflects how frequently each material topic was selected. It was shared with the SLT

members, reviewed by the SSC, and reviewed and approved by the Chief Executive Officer ("CEO"). The final phase

involved third party assurance of compliance, in which the Matrix development process was audited by an independent

company.

CNH Industrial also performed a specific analysis in order to identify the link between the SDGs most relevant to the

business (the 6 SDGs aligned with the commitments stated in the Sustainability Plan) and the 14 material topics. A

circle's size in the matrix reflects the degree to which the corresponding topic matches an SDG.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 11

The Materiality Matrix confirms the greater significance of business-related aspects, in line with the sustainability

priorities defined within CNH Industrial's Strategic Business Plan. Specifically, from a circular economy perspective, the

material topic Circular product life cycle was considered, both within and outside the Company, as one of the most

relevant to CNH Industrial, highlighting the importance of adopting alternative solutions that minimize the impact of a

product’s life cycle. CO2 and other air emissions was also one of the most relevant topics, considering not only the

impact of manufacturing processes, but also of the entire value chain (logistics, supply chain, and product use). Even

the topic Occupational health and safety ranked among the most relevant to both the Company and its stakeholders,

highlighting the importance of an approach based on effective preventive and protective measures that involves all

employees.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 12

CNH Industrial’s materiality analysis employs a multi-year approach. The Materiality Matrix is updated annually to

incorporate changes in stakeholder perceptions and any new aspect that may become significant for the Company or

its stakeholders.

Topic

Reference

PRODUCT & INNOVATION

Circular Product life cycle

Business Overview/Industry Overview

Autonomous vehicles

Business Overview/Industry Overview

Connectivity

Business Overview/Industry Overview

Self-sustaining food systems

Business Overview/Industry Overview

Trade, regulations, and public debate

Business Overview/Industry Overview

BEHAVIORS & ENGAGEMENT

Occupational health and safety

Human Resources/Employees

Local community engagement

Corporate Governance/Community Relations

Value chain management

Business Overview/Suppliers

Employee engagement

Human Resources/Employees

Digital workplaces

N.A.

PROCESSES & APPLICATIONS

CO2 and other air emissions

Business Overview/Plants and Manufacturing Processes

Renewable energy

Business Overview/Plants and Manufacturing Processes

Water and waste efficiency

Business Overview/Plants and Manufacturing Processes

Innovation-to-zero

Business Overview/Plants and Manufacturing Processes;

Human Resources/Employees

Taskforce on Climate-related Financial Disclosures

CNH Industrial is committed to climate change mitigation and aims for full transparency in its management of climate-

related risks and opportunities through the disclosures provided in this section, in accordance with the

recommendations of the Task Force on Climate-related Financial Disclosures ("TCFD"). The following section contains

four thematic areas showing how the Company is addressing climate-change risks and opportunities: Governance,

Strategy, Risk Management, and Metrics and Targets. For further details, please see the TCFD correspondence table at

the end of this section.

Governance

The highest responsibility for defining and implementing the strategy of CNH Industrial is assigned to the Board of

Directors. The Environmental, Social, and Governance Committee of the Board of Directors is responsible, among

other things, for assisting the Board in reviewing and guiding the strategy and risk management policies related to

climate change. Moreover, the Committee is responsible for monitoring the implementation of the measures to meet

climate change targets, such as CO2 emissions and energy efficiency. The Committee meets quarterly and, at least

twice per year, the Chief Diversity & Inclusion, Sustainability and Transformation Officer updates the Environmental,

Social, and Governance Committee on the progress of CO2 emissions reduction and energy efficiency in manufacturing

and logistic processes, as well as for suppliers.

At the management level, the highest responsibility for initiatives focusing on energy efficiency and on the management

of CO2 emissions at CNH Industrial lies with the Senior Leadership Team (“SLT”).

SLT members are also members of the Sustainability Steering Committee (“SSC”). The SSC is responsible for

defining sustainability strategy and for integrating sustainability aspects into operating processes, and is chaired by the

Chief Diversity & Inclusion, Sustainability and Transformation Officer.

The operating segments of the Company are fully responsible for the global growth and performance of their

respective businesses, thereby increasing focus and accountability. For this reason, the different segments have

nominated specific committees responsible for the implementation and monitoring of the Company’s strategy. Climate-

change issues are regularly discussed by these committees to ensure responsible management of climate risks and to

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 13

identify trends and opportunities, including potential impacts of new product development and new market

considerations.

Additionally, the Risk Management Center of Competence addresses all stages of pure risk(3) management, including

risk identification, analysis, and treatment (including loss prevention).

To further align the management commitment to climate-change mitigation, part of the CEO’s and other SLT members’

remuneration is linked to the sustainability targets, such as the reduction of CO2 emissions per production unit. The

remuneration of the management is reviewed and approved by the Compensation Committee of the Board of Directors.

Objectives are defined for business unit and energy managers and are related to energy consumption reduction and

greenhouse gas (GHG) emissions reduction. Targets are included in the Performance Management Process.

Strategy

CNH Industrial’s strategy is framed within the Company’s purpose, defined as “Powering Sustainable

Transformation”, which incorporates a set of values that lie at the core of the Company’s day-to-day activities and are

intrinsically linked to its future business success. Specific to climate change, and as described further below, CNH

Industrial has an established risk management process that includes the assessment and monitoring of climate-related

risk. These assessments are used by the Company to identify not only risk exposure, but also opportunities, on which

the Company’s climate change strategy is based. The identification of these climate-related risks and opportunities,

along with the analysis of sustainability macrotrends, led to the definition of a decarbonization strategy, which in turn

has been incorporated within, and regularly influences, the Company’s Strategic Business Plan. To further address the

potential impacts of climate change, CNH Industrial has implemented relevant projects and a number of other specific

climate-related topics and has defined long-term strategic targets.

Climate-related risks and opportunities are embedded within CNH Industrial’s strategy to ensure resiliency of its

business model in light of shifting global challenges. The Company has established specific functions and structures

within its respective operating segments to monitor the relevant emerging policies and regulatory developments at

local and global level (especially in Europe, where regulatory pressure is more significant). Resulting analyses are

incorporated within the Company strategy to ensure full compliance with applicable laws. The shift in consumer

preferences and demand toward sustainable transport solutions, driven by both an increase in climate-related

awareness and strong stimulus coming from regulators, may result in potential risks for manufacturers that must adapt

to the evolving market. To counter this, CNH Industrial applies these evolutions in the development of its product

portfolio to steer the focus of research and development toward sustainable technologies (e.g. “green” fuels, electric

and hydrogen propulsion technologies, digitalization and related intelligent capabilities that include precision farming

and smart water management, etc.). The Company also takes advantage of collaboration with strategic business

partners, startups, and external expertise in the emerging technology sector.

To ensure the timely delivery of its strategy, the Company has established specific targets linked to the environmental

performance of its manufacturing processes, logistics, and product portfolio, as outlined in the section Metrics and

Targets below.

CNH Industrial developed a scenario analysis which led to the identification of the Internal Price of Carbon (“IPoC”), an

indicator that enables it to prioritize energy-saving projects based on their ability to generate the greatest reduction in

CO2 emissions. The IPoC is used as a decision-making tool whenever an initiative is presented to the Company’s

Investment Committee.

(3) Pure risks are risks resulting from natural causes or accidental or malicious acts (fires, explosions, floods, etc.) that may result not only in damage to

goods or facilities, but also in the short or long-term interruption of operations.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 14

Risk Management

Enterprise Risk Management

Risk management is an important component of CNH Industrial’s overall culture and is integral to the achievement of its

long-term business plan. Accordingly, the Company’s Enterprise Risk Management (“ERM”) process has been designed

to assist in the identification, evaluation, and prioritization of business risks, followed by a coordinated and balanced

application of resources to minimize, monitor, and control the probability or impact of adverse events or to maximize the

realization of opportunities.

The ERM process is linked to the Company’s Sustainability Program and its strategic sustainability targets and

aspirational goals, including those related to climate change, which are articulated in the Company’s Strategic Business

Plan.

The effects of climate change represent a key emerging risk to CNH Industrial and, as referenced above, examples of

the Company’s related mitigation actions include investments in technology as part of its decarbonization strategy, and

efforts to reduce energy consumption in manufacturing processes.

More details on CNH Industrial’s enterprise risk management process, including its risk appetite for individual risk

categories, can be found in the Risk Management and Control System section of this Report.

Pure Risk Management

In order to strengthen sustainability and resilience within CNH Industrial, the Company also works to develop and

launch forward-looking solutions to better understand the impacts of natural hazards and to respond accordingly. The

ability to assess the losses and costs associated with natural hazards is essential for better decision making on hazard-

mitigation investments and planning.

CNH Industrial’s Risk Management function has developed an innovative risk management methodology in

collaboration with the Company’s EHS (Environment Health & Safety) departments, a major international consultancy

and certification firm, and an insurance partner. This methodology has enabled CNH Industrial to: (i) obtain objective,

quantified knowledge of insurable environmental exposures; (ii) improve risk profiles according to the segments’ EHS

strategies; (iii) identify and clearly communicate priorities and benefits; (iv) effectively inform the insurance market about

the loss prevention activities in place to prevent or mitigate potential environmental losses; (v) obtain adequate

environmental insurance coverage, commensurate with risk exposures and current loss prevention activities; (vi) carry

out prevention activities in line with Company strategies. These activities provided the basis for the development of the

Company’s first environmental maps, which quantify the overall level of risk using a scientific, certified self-assessment

tool. The results were presented to the insurance market as evidence that CNH Industrial’s environmental risks are

known, well-quantified, and properly managed. The results also led to comprehensive global insurance coverage. A

similar approach is being followed for earthquake and flood risks.

Metrics and targets

CNH Industrial has developed various indicators and tools to assess its contribution, exposure, and resilience to climate

change. Annually, the Company reports its climate change impacts and performance according to the requirements of

the GRI Standards in its Sustainability Report. CO2 emissions are calculated according to the Greenhouse Gas Protocol

(GHG Protocol), incorporated into Company Guidelines.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 15

METRICS

2021

2020

2019

Plants in scope

Direct energy consumption from renewable sources (GJ/000)

Direct energy consumption from non-renewable sources (GJ/000)

3,307

2,726

3,095

Total direct energy consumption (GJ/000)

3,313

2,728

3,109

Total indirect energy consumption from renewable sources (GJ/000)

2,043

1,680

1,943

Total indirect energy consumption from non-renewable sources (GJ/000)

1,428

1,182

1,301

Total indirect energy consumption (GJ/000)

3,471

2,862

3,244

Direct CO2 emissions (Scope 1) (Mtons/000)

186

151

171

Indirect CO2 emissions (Scope 2 – market-based) (Mtons/000)

147

133

157

Indirect CO2 emissions (Scope 2 – location-based) (Mtons/000)

264

236

309

Total CO2 emissions (Scope 1 and Scope 2 – market-based) (Mtons/000)

333

284

328

Based on the climate-related risks and opportunities identified, CNH Industrial sets targets to reduce emissions and

increase energy efficiency:

TARGETS

REFERENCE

PERIOD

2021

RESULTS

Monitoring of CO2 emissions of 100% of key suppliers

2022

73.0%

'-20%vs 2014 in kg of CO2 emissions per ton of goods transported (including spare parts)

2024

+10.0%

25% of product portfolio available with natural gas powertrains

2024

20.0%

-30% vs 2014 in energy consumption per production unit at Company plants worldwide

2030

-32.5%

'-60% vs 2014 in CO2 emissions per production unit at Company plants worldwide (2024

target: -50% vs 2014 in CO2 emissions per production unit)

2030

-55.0%

90% of total electricity consumption derived from renewable sources (2024 target: 80% of

total electricity consumption derived from renewable sources)

2030

74.9%

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 16

TCFD correspondence table

Thematic area

Recommended TCFD disclosures

Reference

Governance Disclose the

organization’s governance around

climate-related risks and

opportunities.

a) Describe the board’s oversight of

climate-related risks and opportunities.

§ Annual Report: Our commitment to sustainable development

and Long-term Value Creation; Corporate Governance/Board of

Directors; the Environmental, Social, and Governance

Committee

§ CDP Climate Change Questionnaire: C1 - Governance

§ Sustainability Report: Our Governance Model/Governance

Structure; Manufacturing Processes/Energy management

b) Describe management’s role in

assessing and managing climate-related

risks and opportunities.

§ Annual Report: Our commitment to sustainable development

and Long-term Value Creation

§ CDP Climate Change Questionnaire: C1 - Governance

§ Sustainability Report: Our Governance Model/Governance

Structure; Manufacturing Processes/Energy management

Strategy Disclose the actual and

potential impacts of climate-related

risks and opportunities on the

organization’s businesses, strategy,

and financial planning where such

information is material.

a) Describe the climate-related risks and

opportunities the organization has

identified over the short, medium, and

long term.

§ Annual Report: Business Overview/Industry Overview; Risk

Management and Control System

§ CDP Climate Change Questionnaire: C2 - Risks and

Opportunities; C3 - Business strategy

§ Sustainability Report: Our commitment to the future/

Materiality Analysis; Manufacturing Processes/Energy

Management; Purchasing Processes; Sustainable Products

b) Describe the impact of climate-related

risks and opportunities on the

organization’s businesses, strategy, and

financial planning.

§ Annual Report: Business Overview/Industry Overview; Risk

Management and Control System

§ CDP Climate Change Questionnaire: C2 - Risks and

Opportunities; C3 - Business strategy

§ Sustainability Report: Our commitment to the future/

Materiality Analysis; Manufacturing Processes/Energy

Management; Purchasing Processes; Sustainable Products

c) Describe the resilience of the

organization’s strategy, taking into

consideration different climate-related

scenarios, including a 2°C or lower

scenario.

§ Annual Report: Business Overview/Industry Overview; Risk

Management and Control System

§ CDP Climate Change Questionnaire: C2 - Risks and

Opportunities; C3 - Business strategy

§ Sustainability Report: Our commitment to the future/

Materiality Analysis; Manufacturing Processes/Energy/

Management; Purchasing Processes; Sustainable Products

Risk Management Disclose how the

organization identifies, assesses,

and manages climate-related risks.

a) Describe the organization’s processes

for identifying and assessing climate-

related risks.

§ Annual Report: Risk Management and Control System

§ CDP Climate Change Questionnaire: C2 - Risks and

Opportunities

§ Sustainability Report: Our Governance Model/Risk

Management

b) Describe the organization’s processes

for managing climate-related risks.

§ Annual Report: Risk Management and Control System;

Business Overview/Plants and Manufacturing Processes

§ CDP Climate Change Questionnaire: C2 - Risks and

Opportunities

§ Sustainability Report: Our Governance Model/Risk

management; Manufacturing Processes/Energy Management;

Purchasing Processes; Sustainable Products

c) Describe how processes for identifying,

assessing, and managing climate-related

risks are integrated into the organization’s

overall risk management.

§ Annual Report: Risk Management and Control System

§ CDP Climate Change Questionnaire: C2 - Risks and

Opportunities

§ Sustainability Report: Our Governance Model/Risk

Management

Metrics & targets Disclose the

metrics and targets used to assess

and manage relevant climate-related

risks and opportunities where such

information is material.

a) Disclose the metrics used by the

organization to assess climate-related

risks and opportunities in line with its

strategy and risk management process.

§ Annual Report: Business Overview/Plants and Manufacturing

Processes

§ CDP Climate Change Questionnaire: C4 - Targets and

performance; C6 - Emissions data; C8 - Energy

§ Sustainability Report: Manufacturing Processes/Energy

Management; Energy Performance

b) Disclose Scope 1, Scope 2, and, if

appropriate, Scope 3 greenhouse gas

(GHG) emissions, and the related risks.

§ Annual Report: Business Overview/Plants and Manufacturing

Processes

§ CDP Climate Change Questionnaire: C4 - Targets and

Performance; C6 - Emissions data; C8 - Energy

§ Sustainability Report: Manufacturing Processes/Energy

Management; Energy Performance

c) Describe the targets used by the

organization to manage climate-related

risks and opportunities and performance

against targets.

§ Annual Report: Business Overview/Plants and Manufacturing

Processes

§ CDP Climate Change Questionnaire: C4 - Targets and

Performance; C6 - Emissions data; C8 - Energy

§ Sustainability Report: Manufacturing Processes/Energy

Management; Energy performance

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 17

EU Taxonomy on sustainable activities

The EU taxonomy classification system establishes a list of environmentally sustainable economic activities, supporting

the EU Green Deal objectives. The Regulation provides appropriate definitions for which economic activities can be

considered environmentally sustainable. There are six environmental targets in the EU Taxonomy, two of which are now

regulated: Climate Change Mitigation and Climate Change Adaptation, while the remaining four will be regulated during

2022.

For each objective, the EU taxonomy provides a list of economic activities that can substantially contribute to it,

provided that the activity meets the related technical screening criteria(1).

For this first year of reporting, companies are required to disclose the proportion of turnover, capital expenditure

(CapEx), and operating expenditure (OpEx) of taxonomy eligible and non-eligible activities related to climate change

objectives: i.e. those activities included within Annexes 1 and 2 of Delegated Act 2139/2021 irrespective of whether they

meet any or all of the technical screening criteria laid down in those delegated acts. The assessment of the actual

alignment with the technical screening criteria is required from the next reporting year.

CNH Industrial activities considered eligible according to the EU taxonomy are included in two economic activity

groups: Manufacture of low carbon technologies for transport (3.3), and Transport by motorbikes, passenger cars, and

light commercial vehicles (6.5).

After investigating and consulting on EU Taxonomy’s list of activities, the KPIs related are included in the table below.

2021

Proportion of taxonomy eligible

economic activities

Proportion of taxonomy non-

eligible economic activities

Turnover

30%

70%

CapEx

27%

73%

OpEx

91%

Accounting Policy (1.2.1)

For the determination of the 3 KPIs, the Group's Sustainability department, and the Accounting and Finance

Department were involved, which, based on the indications given in Annex 1 to Delegated Act 2178/2021, identified the

values to be included in the KPIs from the balance sheet items, as described in the next paragraph.

In the numerator, only the balance sheet items related to the identified activities (3.3 and 6.5) were considered. For the

calculation of the denominator, all the items provided for by the regulations at a consolidated CNH Industrial N.V. level

were included, as specified within the contextual information paragraph.

Assessment of compliance with Regulation (EU) 2020/852 (1.2.2)

Group identified two taxonomy eligible activities:

•Manufacture of low carbon technologies for transport (3.3), considering the sales from the Commercial Vehicles

segment (CV) manufactured by the Group and vehicle maintenance and repair. Revenues from the sale of spare

parts and individual components are excluded from the numerator.

•Transport by motorbikes, passenger cars, and light commercial vehicles (6.5), considering active leasings for CV

vehicles.

To avoid any double counting in the calculation of the 3 KPIs, the values were determined directly from the items

included in the financial statement of CNH Industrial N.V.

(1) The list of economic activities and the related technical screening criteria are laid down in Annex 1 and Annex 2 of the Commission Delegated Act

2021/2139 supplementing Regulation (EU) 2020/852

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 18

Contextual information (1.2.3)

Turnover KPI:

a.The denominator was identified based on Group’s consolidated net turnover from industrial activities.

b.The numerator was identified including net sales from sales of Trucks and Buses (New and Used) and

Services, revenues from repair and maintenance, and leasing fees. Revenues related to Specialty Vehicles

(Defence and Fire Fighting), from the remaining segments of the industrial activities, and revenues from Spare

Parts are excluded.

CapEx KPI:

a.The denominator consists of additions to tangible and intangible fixed assets during the financial year, before

depreciation, amortization, and any re-measurements, including those resulting from revaluations and

impairments, as well as excluding changes in fair value.

b.The numerator equals capital expenditures, that are part of the denominator, referred to CV vehicles: buses,

light, medium, and heavy trucks.

OpEx KPI:

a.The denominator includes all direct non-capitalized costs related to maintenance, building renovation

measures, research and development, short-term lease, and any other direct expenditures relating to the day-

to-day servicing of assets of property, plant, and equipment.

b.The numerator equals the direct non-capitalized costs that are part of the denominator referred to CV vehicles:

buses, light, medium, and heavy trucks.

There are no amounts in the reported values related to economic activities included in the taxonomy conducted for the

internal consumption of the Group.

Within the CapEx and OpEx items, there are no items related to a plan to expand the economic activities aligned to the

taxonomy.

Methodologies

This Non-Financial Statement addresses the requirements of the Dutch Decree dated March 14, 2017 on Non-Financial

Information, that implemented the Directive 2014/95/EU into Dutch law. This Non-Financial Statement is based on the

GRI Sustainability Reporting Standards ("GRI Standards") and the Sustainability Accounting Standards (“SASB

Standards”).

Defining the contents of this Non-Financial Statement is a process based on principles of materiality, stakeholder

inclusiveness, sustainability context, and completeness. Ensuring the quality of information concerns principles of

balance, comparability, accuracy, timeliness, clarity, and reliability.

Environmental and social issues included in the Annual Report were selected on the basis of the materiality analysis

and focus on key phases in the product life cycle. For further information on CNH Industrial's commitment to

sustainable development, see the 2021 Sustainability Report.

The contents related to the different requirements stated in the Dutch Decree are included in this Annual Report in

different sections. The table below shows the internal references where to find the information for each requirement.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 19

EU Directive Non-Financial Information and Diversity information reference table

Topic

Subtopic

Included

(yes/no)

Reference

Business model

Yes

Business Overview; Our Commitment to Sustainable

Development and Long-term Value Creation;

Corporate Governance/Code of Conduct

Relevant social and

personnel matters (e.g.

HR, safety etc.)

A description of the policies

pursued, including due diligence.

Yes

Corporate Governance/Code of Conduct; Human

Resources/Employees; Business Overview/Suppliers

The outcome of those policies.

Yes

Corporate Governance/Code of Conduct; Human

Resources/Employees; Business Overview/Suppliers

Principle risks in own operations

and within value chain.

Yes

Risk Management and Control System; Human

Resources/Employees; Business Overview/Suppliers

How risks are managed.

Yes

Risk Management and Control System; Human

Resources/Employees; Business Overview/Suppliers

Non-financial key performance

indicators.

Yes

Human Resources/Employees; Business Overview/

Suppliers

Relevant Environmental

matters (e.g. climate-

related impacts)

A description of the policies

pursued, including due diligence.

Yes

Corporate Governance/Code of Conduct; Business

Overview/Plants and Manufacturing Processes

The outcome of those policies.

Yes

Corporate Governance/Code of Conduct; Business

Overview/Plants and Manufacturing Processes

Principle risks in own operations

and within value chain.

Yes

Risk Management and Control System; Business

Overview/Plants and Manufacturing Processes

How risks are managed.

Yes

Risk Management and Control System; Business

Overview/Plants and Manufacturing Processes

Non-financial key performance

indicators.

Yes

Business Overview/Plants and Manufacturing

Processes

Relevant matters with

respect for human rights

(e.g. labour protection)

A description of the policies

pursued, including due diligence.

Yes

Corporate Governance/Code of Conduct; Corporate

Governance/Respect for Human Rights

The outcome of those policies.

Yes

Corporate Governance/Code of Conduct; Corporate

Governance/Respect for Human Rights

Principle risks in own operations

and within value chain.

Yes

Risk Management and Control System; Corporate

Governance/Respect for Human Rights

How risks are managed.

Yes

Risk Management and Control System; Corporate

Governance/Respect for Human Rights

Non-financial key performance

indicators.

Yes

Corporate Governance/Respect for Human Rights

Relevant matters with

respect to anti-corruption

and bribery

A description of the policies

pursued, including due diligence.

Yes

Corporate Governance/Code of Conduct; Corporate

Governance/Anti-Corruption and Bribery

The outcome of those policies.

Yes

Corporate Governance/Code of Conduct; Corporate

Governance/Anti-Corruption and Bribery

Principle risks in own operations

and within value chain.

Yes

Risk Management and Control System; Corporate

Governance/Anti-Corruption and Bribery

How risks are managed.

Yes

Risk Management and Control System; Corporate

Governance/Anti-Corruption and Bribery

Non-financial key performance

indicators.

Yes

Corporate Governance/Anti-Corruption and Bribery

Insight into the diversity

(executive board and the

supervisory board)

A description of the policies

pursued.

Yes

Corporate Governance/Board of Directors

Diversity targets

Corporate Governance/Board of Directors

Description of how the policy is

implemented

Yes

Corporate Governance/Board of Directors

Results of the diversity policy

Yes

Corporate Governance/Board of Directors

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 20

SASB INDEX

TOPIC

SASB CODE

METRIC

UNIT OF

MEASURE

RESPONSE

COMMENT

Activity

RT-IG-000.A

Number of units produced

by product category

Number

Agriculture 196,000

Construction 42,000

Commercial & Specialty

Vehicles 161,178 Powertrain

798,700

RT-IG-000.B

Number of Employees

Number

71,895

Energy Management

RT-IG-130a.1

(1) total energy consumed

Gigajoules (GJ)

6,783,826

(2) percentage grid

electricity

39.1

(3) percentage renewable

30.2

Employee Health and Safety

RT-IG-320a.1

(1) total recordable incident

rate (TRIR)(1)

Rate

0.388

(2) fatality rate(2)

Rate

—

(3) near miss frequency rate

(NMFR)(3)

Rate

6.208

Fuel Economy & Emissions

in Use-Phase

RT-IG-410a.1

Sales-weighted fleet fuel

efficiency for medium- and

heavy-duty vehicles

Gallons per 1,000 ton-

miles

(4)

RT-IG-410a.2

Sales-weighted fuel

efficiency for non-road

equipment

Gallons per hour

RT-IG-410a.3

Sales-weighted fuel

efficiency for stationary

generators

Watts per hour

RT-IG-410a.4

Sales-weighted emissions

of:

Grams per kilowatt-hour

(1) nitrogen oxides (NOx)

and

(2) particulate matter (PM)

for:

(a) marine diesel engines,

(b) locomotive diesel

engines,

heavy-duty engines, and

(d) other non-road diesel

engines

Materials Sourcing

RT-IG-440a.1

Description of the

management of risks

associated with the use of

critical materials

n/a

CNH Industrial’s products are

highly complex, typically

containing thousands of parts

that come from many different

direct suppliers within the

Company’s vast global supply

network. This means that the

Company must rely on its direct

suppliers to work with their

upstream supply chain to detect

the presence and evaluate the

origin of any critical substances

contained in components or

materials it purchases. The

Company has adopted policies,

programs, and procedures to

manage risks related to material

sourcing and to promote

responsible sourcing,

particularly with regard to tin,

tantalum, tungsten, and gold

(referred to as conflict minerals

or 3TG), as well as cobalt (see

Suppliers section).

Remanufacturing Design &

Services

RT-IG-440b.1

Revenue from

remanufactured products

and remanufacturing

services

$ million

127

(1) The total recordable incident rate is the number of recordable work-related injuries and illnesses divided by the number of hours worked, multiplied by

200,000.

(2) The fatality rate is the number of work-related fatalities divided by the number of hours worked, multiplied by 200,000.

(3) The near miss frequency rate is the number of work-related near misses divided by the number of hours worked, multiplied by 200,000.

(4) Given the diversity of its products, the Company is currently identifying a methodology for the calculation of sales-weighted fuel efficiency and

emissions data.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 21

Presence in Sustainability Indices

Inclusion in sustainability indices, and the ratings received from specialized sector-specific agencies, further reflect the

robustness of CNH Industrial’s commitment to sustainability. In 2021, the Company was included for the 11th

consecutive year in the Dow Jones Sustainability Indices (DJSI) World and Europe, achieving the highest score

(88/100) out of 126 companies assessed within the Machinery and Electrical Equipment Industry. Furthermore, for the

first time, CNH Industrial was simultaneously included in the prestigious A List of both the CDP Climate Change and

CDP Water Security programs, in recognition of its actions to tackle climate change and to protect water security. It also

won the S&P Global Gold Class Sustainability Award 2022, and was awarded ISS ESG Prime status.

As at December 31, 2021, the Company was included in the following indexes: Euronext Vigeo Europe 120, Euronext

Vigeo Eurozone 120, MIB ESG Index, ECPI Global Agriculture Liquid Equity, ECPI World ESG Equity, ECPI Euro ESG

Equity, ECPI Global Developed ESG Best-in-Class, STOXX Global ESG Leaders Index, STOXX Global ESG

Environmental Leaders Index, STOXX Global ESG Social Leaders Index, STOXX Global Low Carbon Footprint Index,

STOXX Global Reported Low Carbon Index(1), Refinitiv Diversity & Inclusion Index, and Integrated Governance Index

(IGI). Moreover, in 2021, CNH Industrial received an MSCI ESG Rating of AAA and was a responder to the 2021

Workforce Disclosure Initiative (WDI).

(1) Those listed are the main global STOXX indexes in which CNH Industrial is included.

Board Report Our Commitment to Sustainable Development and Long-term Value Creation 22

REPORT ON OPERATIONS

SELECTED FINANCIAL DATA

CNH INDUSTRIAL PRE-DEMERGER(1)

($ million)

2021

2020

2019(*)

2018(**)

2017(***)

Net revenues

33,481

25,984

28,024

29,736

27,624

Profit/(loss) before taxes

2,135

(750)

1,208

1,914

740

Profit/(loss)

1,777

(695)

906

1,399

456

Attributable to:

Owners of the parent

1,740

(750)

874

1,368

439

Non-controlling interests

Basic earnings/(loss) per common share ($)

1.28

(0.55)

0.65

1.01

0.32

Diluted earnings/(loss) per common share ($)

1.28

(0.55)

0.65

1.01

0.32

Investments in tangible and intangible assets

1,189

848

1,063

1,033

896

of which: capitalized R&D costs

475

364

426

455

404

R&D expenditure(2)

1,249

950

1,050

1,080

986

Total Assets

51,122

50,556

49,182

48,650

50,798

Total Equity

8,426

6,735

7,863

7,472

6,684

Equity attributable to owners of the parent

8,393

6,651

7,819

7,443

6,671

(1)Until December 31, 2021, CNH Industrial N.V. owned and controlled the Commercial and Specialty Vehicles business, the Powertrain business and

the related Financial Services business (together the “Iveco Group Business”), as well as the Agriculture business, the Construction business and

the related Financial Services business. Effective January 1, 2022, the Iveco Group Business was separated from CNH Industrial N.V. in

accordance with Section 2:334a (3) of the Dutch Civil Code (Burgerlijk Wetboek) by way of a legal statutory demerger (juridische afsplitsing) to

Iveco Group N.V. (the “Demerger”). The financial data presented in this table refers to CNH Industrial prior to the Demerger (“CNH Industrial Pre-

Demerger” or "CNHI Pre-Demerger").

(2)Includes capitalized development costs and research and development (“R&D”) costs charged directly to the income statement.

(*)Effective January 1, 2019, CNH Industrial has adopted the IFRS 16 – Leases using the modified retrospective approach, without recasting prior

periods.

(**)Effective January 1, 2018, CNH Industrial adopted IFRS 15 – Revenue from Contracts with Customers using the full retrospective approach. On the

same date, CNH Industrial adopted IFRS 9 – Financial Instruments retrospectively, except for hedge accounting which was applied prospectively,

without recasting prior periods.

(***)2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated standard for revenue recognition (IFRS 15).

CONTINUING AND DISCONTINUED OPERATIONS(1)

2021

2020

($ million)

Continuing

Operations

Discontinued

Operations

Continuing

Operations

Discontinued

Operations

Net revenues

19,474

14,963

14,696

11,892

Profit/(loss) before taxes

1,922

213

(192)

(558)

Profit/(loss)

1,686

(270)

(425)

Attributable to:

Owners of the parent

1,677

(284)

(466)

Non-controlling interests

Basic earnings/(loss) per common share ($)

1.24

0.05

(0.21)

(0.34)

Diluted earnings/(loss) per common share ($)

1.23

0.05

(0.21)

(0.34)

Investments in tangible and intangible assets

521

668

390

458

of which: capitalized R&D costs

154

321

162

202

R&D expenditure

646

603

502

448

(1)As requested by the IFRS 5 - Non-current assets held for sale and discontinued operations, Iveco Group Business was classified and presented as

Discontinued Operations in these Consolidated Financial Statements. This table shows the selected financial data for 2021 and 2020 with a

breakdown provided for Continuing Operations (the Agriculture business, the Construction business and the related Financial Services business)

and Discontinued Operations (Iveco Group Business).

Board Report Selected Financial Data 23

RISK FACTORS

The following risks should be considered in conjunction with the other risks described in the Disclaimer, Risk

Management and Control System section and Notes to the Consolidated Financial Statements. These risks may affect

our trading results and, individually or in the aggregate, could cause our actual results to differ materially from past and

projected future results. Some of these risks and uncertainties could affect particular lines of business, while others

could affect all of our businesses. Although the risks are organized by headings, and each risk is discussed separately,

many are interrelated. The following discussion of risks may contain forward-looking statements that are intended to be

covered by the Disclaimer. Except as may be required by law, we undertake no obligation to publicly update forward-

looking statements, whether as a result of new information, future events, or otherwise. It is impossible to predict or

identify all risk factors and, consequently, you should not consider the following factors to be a complete discussion of

risks and uncertainties that may affect us. For the 2021 financial statements contained in this Annual Report, the

Group’s assessment is that no material uncertainties (as defined in paragraph 25 of IAS 1 - Presentation of Financial

Statements) exist about its ability to continue as a going concern.

COVID-19 RISKS

The COVID-19 pandemic could materially adversely affect our business, financial condition, results of

operations and/or liquidity

COVID-19 was first identified in late 2019, spread globally and was declared a global pandemic by the World Health

Organization in March 2020. Efforts to combat the virus have been complicated by viral variants and uneven access to,

and acceptance and effectiveness of, vaccines globally. The global spread of the virus led governments around the

world to implement numerous measures to contain the virus, such as travel bans, mandated shutdowns, border

closures and other restrictions on the free movement of people and goods. These measures have impacted, and may

further impact, our future ability to operate as well as the ability of our suppliers and distributors to operate. Any future

closing of manufacturing facilities due to government mandates, insufficient staffing, weaker demand, or supply

constraints, or similar limitations or restrictions for our suppliers, or the impact of the COVID-19 pandemic on our ability

to execute business continuity plans, could have a material adverse effect on our business, financial position, results of

operations, and/or liquidity.

Disruption caused by business responses to the COVID-19 pandemic, including remote working arrangements, may

create increased vulnerability to cybersecurity or data privacy incidents, including breaches of information technology

and systems. Risks related to information technology and systems are described in our risk factor “A cybersecurity

breach could interfere with our operations, compromise confidential information, negatively impact our corporate

reputation and expose us to liability”.

From an economic perspective, COVID-19 initially led to a global recession and there is no certainty that the economies

in which we operate will experience sustained economic recovery. The COVID-19 pandemic has also significantly

increased economic and demand uncertainty and has led to disruptions in our supply chain, higher raw materials

pricing and volatility in demand for our products and in global capital markets. The COVID-19 pandemic may materially

adversely impact many of our customers, borrowers and other third parties and may affect their ability to fulfill their

obligations to us in a timely manner.

The extent to which the COVID-19 pandemic will continue to impact our business, financial condition, results of

operations and/or liquidity will depend on the scale, duration, severity and geographic reach of future developments,

which are highly uncertain and cannot be predicted, including notably the possibility of “further waves” of COVID-19

infections or the appearance of new variants in the virus. There have been instances of re-imposed local lockdowns

where infection rates have started to increase again and there is a risk that widespread measures such as strict social

distancing and curtailing or ceasing normal business activities may be reintroduced in the future until effective

treatments or vaccines have been deployed. In late 2021, in response to a rapid acceleration of infections, the

governments of several European countries including France, Germany, Italy and the United Kingdom have started re-

imposing increasingly stringent public health measures. Continued uncertainties and persistent effects also include:

disruptions in the supply chain and a prolonged delay in resumption of operations by one or more key suppliers, or the

failure of key suppliers; our ability to meet commitments to our customers on a timely basis as a result of increased

costs and supply challenges; the ability to receive goods on a timely basis and at anticipated costs; increased logistics

costs; delays in our strategic initiatives as a result of the uncertain environment; absence of employees due to illness;

the impact of the pandemic on our customers and dealers, and delays in their plans to purchase new equipment;

requests by our customers or dealers for, or government mandated, payment deferrals and contract modifications; the

impact of disruptions in the global capital markets and/or declines in our financial performance, outlook or credit ratings,

which could impact our ability to obtain funding in the future; and the impact of the pandemic on demand for our

Board Report Risk Factors 24

products and services as discussed above. In addition, the COVID-19 pandemic may exacerbate many of the other

risks described in this Annual Report.

STRATEGIC RISKS

Global economic conditions impact our businesses

Our results of operations and financial position are and will continue to be influenced by macroeconomic factors –

including changes in gross domestic product, the level of consumer and business confidence, changes in interest rates,

the availability of credit, inflation and deflation, energy prices, and the cost of commodities or other raw materials –

which exist in the countries and regions in which we operate. Such macroeconomic factors vary from time to time and

their effect on our results of operations and financial position cannot be specifically and singularly assessed and/or

isolated.

Economic conditions vary across regions and countries, and demand for our products and services generally increases

in those regions and countries experiencing economic growth and investment. Slower economic growth or a change in

global mix of regions and countries experiencing economic growth and investment could have an adverse impact on

our business, results of operations and financial condition. In a weaker economic environment, dealers and customers

may delay or cancel plans to purchase our products and services and may not be able to fulfill their obligations to us in

a timely fashion. Our suppliers may also be impacted by economic pressures, which may adversely affect their ability to

fulfill their obligations to us or the price or availability of supplies we require. These factors could result in product

delays, increased accounts receivable, defaults and inventory challenges. In addition, demand for our products and

services can be significantly impacted by concerns regarding the diverse economic and political circumstances in the

European Union, the debt burden of several countries in the European Union, the risk that one or more European Union

countries could come under increasing pressure to leave the European Union and the long-term stability of the euro as

a single common currency. These concerns, along with persistent disparity with respect to the widely varying economic

conditions amongst the individual countries of the European Union, and their implications for the euro as well as market

perceptions concerning these and related issues, have led to further pressure on economic growth and may lead to

new periods of economic volatility and recession in the European Union. Similarly, in Brazil and Argentina,

macroeconomic conditions remain volatile. It is unclear what the macroeconomic effects will be of the economic

stimulus actions taken by various countries in order to mitigate the adverse economic impact of the COVID-19

pandemic and the resulting increase in government debt. If there is continued deterioration in the global economy or the

economies of key countries or regions, the demand for our products and services would likely decrease and our results

of operations, financial position and cash flows could be materially and adversely affected.

We are exposed to political, economic, trade and other risks beyond our control as a result of operating a

global business

We manufacture and sell products and offer services in several continents and numerous countries around the world

including those experiencing varying degrees of political and economic instability. Given the global nature of our

activities, we are exposed to risks associated with international business activities that may increase our costs, impact

our ability to manufacture and sell our products and require significant management attention. These risks include:

▪changes in laws, regulations and policies that affect, among other things:

◦import and export duties and quotas;

◦currency restrictions;

◦the design, manufacture and sale of our products, including, for example, engine emissions regulations;

◦interest rates and the availability of credit to our dealers and customers;

◦property, contract rights and intellectual property;

◦where, to whom, and what type of products may be sold, including new or additional trade or economic

sanctions imposed by the U.S., EU or other governmental authorities and supranational organizations (e.g.,

the United Nations); and

◦taxes;

▪regulations from changing world organization initiatives and agreements;

▪changes in the dynamics of the industries and markets in which we operate;

▪labor disruptions;

Board Report Risk Factors 25

▪disruption in the supply of raw materials and components (e.g. as a result of pandemics), including rare

materials (the latter might be more easily the target of sudden cost increases due to a variety of factors,

including speculative measures or unforeseen political changes);

▪changes in governmental debt relief and subsidy program policies in certain significant markets, including the

Brazilian government discontinuing programs subsidizing interest rates on equipment loans;

▪withdrawal from or changes to trade agreements or trade terms, negotiation of new trade agreements and the

imposition of new (and retaliatory) tariffs on certain countries or covering certain products or raw materials or

embargoes, including developments in U.S.-China trade relations; and

▪war, civil unrest and acts of terrorism.

In recent years, acts of terrorism have occurred around the world, leading to personal safety anxieties and political

instability in many countries and, ultimately, an impact on consumers’ confidence. More recently, growing populist and

nationalist political movements in several major developed countries, changes in or uncertainty surrounding global trade

policies and other unanticipated changes to the previous geopolitical order may have negative effects on the global

economy.

Further, escalating tensions between Russia and Ukraine and massive military actions between Russia and Ukraine

could adversely impact macroeconomic conditions, give rise to regional instability and result in heightened economic

sanctions from the U.S., EU, and UK which may adversely affect us and our business in Russia, Ukraine and potentially

elsewhere in Eastern Europe, including possible restrictions on our ability to do business with certain vendors or

suppliers as well as the ability to repatriate funds from the region. We have conducted business in jurisdictions that may

be subject to trade or economic sanction regimes and such sanctions could be expanded. If we fail to comply with

sanction regimes or other similar laws or regulations we could be subject to damages and potentially other financial

penalties, suspension of licenses, or a cessation of operations at our businesses, as well as damage to our brands’

images and reputations.

There can be no guarantee that we will be able to quickly and completely adapt our business model to changes that

could result from the foregoing, and any such changes may have an adverse effect on our business, results of

operations and financial condition.

Reduced demand for equipment would reduce our sales and profitability

The agricultural equipment market is influenced by factors such as:

▪the price of agricultural commodities and the ability to competitively export agricultural commodities;

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

▪the demand for food products;

▪the availability of stocks from previous harvests; and

▪agricultural policies, including aid and subsidies to agricultural enterprises provided by governments and/or

supranational organizations, policies impacting commodity prices or limiting the export or import of commodities, and

alternative fuel mandates.

In addition, droughts, floods and other unfavorable climatic conditions, especially during the spring, a particularly

important period for generating sales orders, could have a negative impact on decisions to buy agricultural equipment

and, consequently, on our revenues.

The construction equipment market is influenced by factors such as:

▪public infrastructure spending;

▪new residential and non-residential construction; and

▪capital spending in oil and gas and, to a lesser extent, in mining.

The above factors can significantly influence the demand for agricultural and construction equipment and consequently,

our financial results. Additionally, demand for our products is influenced by engine emissions and other applicable legal

requirements, as well as the effective date of such requirements. If demand for our products is less than we expect, we

may experience excess inventories and be forced to incur additional charges and our profitability will suffer, including

lower fixed costs absorption associated with lower production levels at our plants. Our business may be negatively

impacted if we experience excess inventories or if we are unable to adjust on a timely basis our production schedules

or our purchases from suppliers to reflect changes in customer demand and market fluctuations.

Board Report Risk Factors 26

Competitive activity, or failure by us to respond to actions by our competitors, could adversely affect our

results of operations

We operate in highly competitive global and regional markets. Depending on the particular country and product, we

compete with other international, regional and local manufacturers and distributors of agricultural and construction

equipment. Certain of our global competitors have substantial resources and may be able to provide products and

services at little or no profit, or even at a loss, to compete with certain of our product and service offerings. We compete

primarily on the basis of product performance, innovation, quality, distribution, customer service, and price. Aggressive

pricing or other strategies pursued by competitors, unanticipated product or manufacturing delays, quality issues, or our

failure to price our products competitively could adversely affect our business, results of operations and financial

position. Additionally, there has been a trend toward consolidation in the construction equipment industries that has

resulted in larger and potentially stronger competitors in those industries. The markets in which we compete are highly

competitive in terms of product quality, innovation, pricing, fuel economy, reliability, safety, customer service and

financial services offered. Competition, particularly on pricing, has increased significantly in the markets in which we

compete. Should we be unable to adapt effectively to market conditions, this could have an adverse effect on our

business, results of operations and financial condition.

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

Most countries where our products and services are sold have established central banks to regulate monetary systems

and influence economic activities, generally by adjusting interest rates. Some governments may implement measures

designed to slow economic growth in their countries (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 further

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 or our suppliers, which could adversely

impact our business, results of operations and financial condition. Government initiatives that are intended to stimulate

demand for products sold by us, such as changes in tax treatment or purchase incentives for new equipment, can

significantly 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. As noted above, it is

unclear what the macroeconomic effects will be of the economic stimulus actions taken by various countries in order to

mitigate the adverse economic impact of the COVID-19 pandemic and the resulting increase in government debt.

Our future performance depends on our ability to innovate and on market acceptance of new or existing

products

Our success depends on our ability to maintain or increase our market share in existing markets and to expand into

new markets through the development of innovative, high-quality products that provide adequate profitability. We have a

strategic plan covering investments in innovation designed to further develop existing, and create new, product and

service offerings responsive to customer needs, including developing and delivering connected and digital solutions,

automation, electrification and autonomy. Achievement of these objectives is dependent on a number of factors,

including our ability to maintain key dealer relationships, our ability to design and produce products that meet our

customers’ quality, performance and price expectations, our ability to develop connected and digital solutions that

improve the profitability and sustainability of customers through their production systems, our ability to develop effective

sales, dealer training and marketing programs, and the ability of our dealers to support and service connected and

digital solutions. Failure to develop and offer innovative products that compare favorably to those of our principal

competitors in terms of price, quality, functionality, features, mobility and connected services, vehicle electrification, fuel

cell technology and autonomy, or delays in bringing strategic new products to market, or the inability to adequately

protect our intellectual property rights or supply products that meet regulatory requirements, including engine emissions

requirements, could result in reduced revenue and market share, which could have a material adverse effect on our

business, results of operations and financial condition.

We may face challenges to our intellectual property rights which could adversely affect our reputation,

business and competitive position

We own important intellectual property, including patents, trademarks, copyrights and trade secrets. Our intellectual

property plays an important role in maintaining our competitive position in the markets that we serve. Our competitors

may develop technologies that are similar or superior to our proprietary technologies or design around the intellectual

property that we own or license. Despite our controls and safeguards, our technology may be misappropriated by

employees, competitors or third parties. The pursuit of remedies for any misappropriation of intellectual property is

expensive and the ultimate remedies may be insufficient. Further, in jurisdictions where the enforcement of intellectual

property rights is less robust, the risk of misappropriation of our intellectual property is higher notwithstanding the efforts

we undertake to protect it. Developments or assertions by or against us relating to intellectual property rights, and any

Board Report Risk Factors 27

inability to protect or enforce our rights sufficiently, could adversely affect our business, competitive position and results

of operations.

We may not realize all of the anticipated benefits from our business initiatives and cost management initiatives

As part of our strategic plan, we are actively engaged in a number of initiatives to strengthen our business and increase

our productivity, market positioning, efficiency and cash flow, all of which we expect will have a positive long-term effect

on our business, results of operations and financial condition. These initiatives include our enhanced focus on digital,

precision farming and alternative propulsion, as well as other initiatives aimed at improving our product portfolio and

customer focus. There can be no assurance that these initiatives or others will be beneficial to the extent anticipated, or

that the estimated efficiency or cash flow improvements will be realized as anticipated or at all. If these initiatives are

not implemented successfully, they could have an adverse effect on our operations. We also expect to take targeted

restructuring actions as we continue to optimize our cost structure and improve the efficiency of our operations. In order

to complete these actions, we will incur charges. Failure to realize anticipated savings or benefits from our cost

reduction actions could have a material adverse effect on our business, prospects, financial condition, liquidity, results

of operations and cash flows.

We may not be able to realize anticipated benefits from any acquisitions and, further, challenges associated

with strategic alliances may have an adverse impact on our results of operations

We have engaged in the past, and may engage in the future, in investments or mergers and acquisitions or enter into,

expand or exit from strategic alliances and joint ventures that could involve risks that could prevent us from realizing the

expected benefits of the transactions or the achievement of strategic objectives or could divert management’s time and

attention. Such risks, many of which are outside our control, include:

▪technological and product synergies, economies of scale and cost reductions not occurring as expected;

▪unexpected liabilities;

▪incompatibility of operating, information or other systems;

▪unexpected changes in laws;

▪inability to retain key employees;

▪protecting intellectual property rights;

▪inability to source certain products or components (or the cost thereof);

▪significant costs associated with terminating or modifying alliances; and

▪problems in retaining customers and integrating operations, services, personnel, and customer bases.

If problems or issues were to arise among the parties to one or more strategic alliances or other relationships for

managerial, financial, or other reasons, or if such strategic alliances or other relationships were terminated, our product

lines, businesses, results of operations and financial condition could be adversely affected.

Our business may be affected by climate change, unfavorable weather conditions 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 our 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, droughts, diseases and pests can have a negative impact on

agricultural production. The resulting negative impact on farm income can strongly affect demand for our agricultural

equipment in any given period.

In addition, natural disasters, pandemic illness, acts of terrorism 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 our manufacturing facilities or distribution centers,

temporary or long-term disruption in the supply of parts or component products and disruption and delay in the transport

of our products to dealers and customers. 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 potentially long-term physical impacts of climate change on our facilities, suppliers and customers and

therefore on our operations are highly uncertain and will be driven by the circumstances developing in various

geographical regions. These may include long-term changes in temperature and water availability. These potential

physical effects may adversely impact the demand for our products and the cost, production, sales and financial

performance of our operations.

Board Report Risk Factors 28

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 a growing world population and government policies, 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 our equipment and result in higher research and development costs related to equipment fuel

standards.

International trade policies may impact demand for our products and our competitive position

Government policies on international trade and investment such as sanctions, import quotas, capital controls or tariffs,

whether adopted by non-governmental bodies, individual governments or addressed by regional trade blocks, may

affect the demand for our products, technology and services, impact the competitive position of our products or prevent

us from being able to sell products to certain customers or in certain countries. The implementation of more

protectionist trade policies, such as more detailed inspections, higher tariffs, or new barriers to entry, in countries where

we sell products and provide services could negatively impact our business, results of operations and financial position.

For example, a government’s adoption of trade sanctions or “buy national” policies or retaliation by another government

against such policies could have a negative impact on our results of operations.

OPERATIONAL RISKS

We depend on suppliers for raw materials, parts and components

We rely upon many suppliers for raw materials, parts and components that we require to manufacture our products. We

cannot guarantee that we will be able to maintain access to raw materials, parts and components, and in some cases,

this access may be affected by factors outside of our control and the control of our suppliers. Certain components and

parts used in our products are available from a single supplier and cannot be quickly sourced from other suppliers.

Significant disruptions to the supply chain resulting from shortages of raw materials, components, and whole-goods can

adversely affect our ability to meet customer demand. For example, during 2021, as economies around the world have

reopened, sharp increases in demand have exacerbated significant disruptions to the global supply chain stemming

from the COVID-19 pandemic, which have affected our ability to receive certain materials and components on a timely

basis and at anticipated costs. These supply chain disruptions have been caused and compounded by many factors,

including changes in supply and demand, industry capacity constraints, labor shortages and the COVID pandemic.

Global logistics network challenges include ocean freight capacity constraints, international port delays, trucking and

chassis shortages, railway and air freight capacity, and labor availability constraints, which have resulted in delays,

shortages of key manufacturing components, increased order backlogs, and increased transportation costs. While we

diligently monitor our supply chain risk and seek to respond promptly to address supply chain and logistics bottlenecks,

there can be no assurance that our mitigation plans will be effective to prevent disruptions that may arise from

shortages of materials that we use in the production of our products. Uncertainties related to the magnitude and

duration of global supply chain disruptions have adversely affected, and may continue to adversely affect, our business

and outlook.

We use a variety of raw materials in our businesses, including steel, aluminum, lead, resin and copper, and precious

metals such as platinum, palladium and rhodium. The availability and price of these raw materials fluctuate, particularly

during times of economic volatility or regulatory instability or in response to changes in tariffs, and while we seek to

manage this exposure, we may not be successful in mitigating these risks. Further, increases in the prices for raw

materials can significantly increase our costs of production, which could have a material adverse effect on our business,

results of operations and financial condition, particularly if we are unable to offset the increased costs through an

increase in product pricing.

Our existing operations and expansion plans in emerging markets could entail significant risks

Our ability to grow our businesses depends to an increasing degree on our ability to increase market share and operate

profitably worldwide and, in particular, in emerging market countries, such as Brazil, Russia, India, China, Argentina and

Turkey. In addition, we could increase our use of suppliers located in such countries. Our implementation of these

strategies will involve a significant investment of capital and other resources and exposes us to multiple and potentially

conflicting cultural practices, business practices and legal requirements that are subject to change, including those

related to tariffs, trade barriers, investments, property ownership rights, taxation, and sanction and export control

requirements. For example, we may encounter difficulties in obtaining necessary governmental approvals in a timely

manner. In addition, we may experience delays and incur significant costs in constructing facilities, establishing supply

channels, and commencing manufacturing operations. Further, customers in these markets may not readily accept our

Board Report Risk Factors 29

products as compared with products manufactured and commercialized by our competitors. The emerging market

countries may also be subject to a greater degree of economic and political volatility that could adversely affect our

financial position, results of operations and cash flows. Many emerging market economies have experienced slower

growth, volatility, and other economic challenges in recent periods and may be subject to a further slowdown in gross

domestic product expansion and/or be impacted by domestic political or currency volatility, potential hyperinflationary

conditions, and/or increase of public debt.

Dealer equipment sourcing and inventory management decisions could adversely affect our sales

We sell our products primarily through independent dealers and are subject to risks relating to their inventory

management decisions and operating and sourcing practices. Our dealers carry inventories of finished products and

parts as part of ongoing operations and adjust those inventories based on their assessment of future sales

opportunities and market conditions, including the level of used equipment inventory. If our dealers’ inventory levels are

higher than they desire, they may postpone product purchases from us, which could cause our sales to be lower than

the end-user demand for our products and negatively impact our results. Similarly, our sales could be negatively

impacted through the loss of time-sensitive sales if our dealers do not maintain inventory sufficient to meet customer

demand. Further, dealers who carry other products that compete with our products may focus their inventory purchases

and sales efforts on goods provided by other suppliers due to industry demand or profitability. Such inventory

adjustments and sourcing decisions can adversely impact our sales, results of operations and financial condition.

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

contingent obligations

In the ordinary course of business, we are involved in litigation and investigations on a wide range of topics, including

dealer and supplier litigation, intellectual property rights disputes, product warranty and defective product claims,

product performance, asbestos, personal injury, engine emissions and/or fuel economy regulatory and contract issues,

and environmental claims. The industries in which we operate are also periodically reviewed or investigated by

regulators, which could lead to enforcement actions, fines and penalties or the assertion of private litigation claims. The

ultimate outcome of these legal matters pending against us is uncertain, and although such legal matters are not

expected individually to have a material adverse effect on our financial position or profitability, such legal matters could,

in the aggregate, in the event of unfavorable resolutions thereof, have a material adverse effect on our results of

operations and financial condition. Furthermore, we could in the future be 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. We establish reserves based on our assessment of contingencies, including

contingencies related to legal claims asserted against us. Subsequent developments in legal proceedings may affect

our assessment and estimates of the loss contingency recorded as a reserve and require us to make payments that

exceed our reserves, which could have a material adverse effect on our results of operations and/or financial position.

For further information see Note 27 “Commitments and contingencies” to the Consolidated Financial Statements at

December 31, 2021.

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. These systems include supply chain, manufacturing, distribution, invoicing and

collection of payments from dealers or other purchasers of our products and from customers of our financial services

business, and connectivity services with and among equipment. 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 our customers, suppliers and

dealers, as well as personally identifiable information of our dealers, customers and employees, in data centers and on

information technology networks. Operating these information technology systems and networks, and processing and

maintaining this data, in a secure manner, are critical to our business operations and strategy. Increased information

technology security threats (e.g. worms, viruses, malware, phishing attacks, ransomware, and other malicious threats)

and more sophisticated computer crime pose a significant risk to the security of our systems and networks and the

confidentiality, availability and integrity of our data. Cybersecurity attacks could also include attacks targeting customer

data or the security, integrity and/or reliability of the hardware and software installed in our products. The foregoing risks

are heightened in the current environment where our employees have been working and continue to work from home

due to the COVID-19 pandemic.

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, these attacks have proliferated and there

can be no assurance that our actions will be sufficient to successfully prevent attacks or to mitigate potential risks to our

Board Report Risk Factors 30

systems, networks, data, and products. Furthermore, third parties on which we rely, including internet, mobile

communications technology and cloud service providers, pose their own 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, dealers and suppliers to risks of misuse of information or systems, the compromising of

confidential information, loss of financial resources, manipulation and destruction of data, defective products, production

downtimes 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 or scope of insurance coverage we maintain may be inadequate to cover claims or liabilities relating to a

cybersecurity attack.

Security breaches with respect to our products could interfere with our business and our dealers, and/or

customers, exposing us to liability that would cause our business and reputation to suffer

Some of our products include connectivity hardware typically used for telematics services and remote system updates.

While we have implemented security measures intended to prevent unauthorized access to these products, malicious

actors have reportedly attempted, and may attempt in the future, to gain unauthorized access to such products

including through such connectivity hardware in order to gain control of the products, change the products’ functionality,

user interface, or performance characteristics, or gain access to data stored in or generated by the products. Any

unauthorized access to or control of our products or systems or any loss of data could result in legal claims against us

or government investigations. In addition, reports of unauthorized access to our products, systems, and data,

regardless of their veracity, may result in the perception that the products, systems, or data are capable of being

hacked, which could harm our brands, prospects, and operating results.

Following the spin-off of our On-Highway business, our financial profile has changed, and we will be a

somewhat smaller, less diversified company than prior to the spin-off

The spin-off will result in each of the On-Highway Business and the Off-Highway Business being smaller, less

diversified companies with more businesses concentrated in their respective industries. As a result, we may be more

vulnerable to changing market conditions particularly those affecting the agricultural sector, which could have a material

adverse effect on our business, financial condition and results of operations. In addition, the diversification of our

revenues, costs, and cash flows will diminish as a standalone company, such that our results of operations, cash flows,

working capital and financing requirements may be subject to increased volatility and our ability to fund capital

expenditures and investments, pay dividends and service debt may be diminished. Following the spin-off we may also

have more limited capital allocation efficiency and flexibility, as we will no longer be able to use cash flow from the

combined business to fund investments into one of our businesses. We may however, benefit from no longer being a

source of capital and support for the On-Highway business.

We face risks associated with our employment relationships

In many countries where we operate, our employees are protected by laws and/or collective labor agreements that

guarantee them, through local and national representatives, the right of consultation on specific matters, including

repurposing, downsizing or closure of production facilities and reductions in personnel. Laws and/or collective labor

agreements applicable to us could impair our flexibility in reshaping and/or strategically repositioning our business

activities. Therefore, our ability to efficiently deploy personnel or implement permanent or temporary redundancy

measures is subject to government approvals and/or the agreement of labor unions where such laws and agreements

are applicable. Furthermore, we are at greater risk of work interruptions or stoppages than non-unionized companies

and any work interruption or stoppage could significantly impact the volume of products we manufacture and sell, which

could have a material adverse effect on our business, results of operations and financial condition. In addition, the

COVID-19 pandemic has resulted in material changes in how and where employees work.

Our ability to execute our strategy is dependent upon our ability to attract, motivate and retain qualified

personnel

Our ability to compete successfully, to manage our business effectively, to expand our business and to execute our

strategic direction, in particular the implementation of our Strategic Business Plan, depends, in part, on our ability to

attract, motivate and retain qualified personnel in key functions and markets. In particular, we are dependent on our

ability to attract, motivate and retain qualified personnel with the requisite education, skills, background, talents and

industry experience. Failure to attract and retain qualified personnel, whether as a result of an insufficient number of

qualified applicants, difficulty in recruiting new personnel, or the inability to integrate and retain qualified personnel,

could impair our ability to execute our business strategy and meet our business objectives. These may be affected by

the loss of employees, particularly when departures involve larger numbers of employees, such as those experienced

by many employers and industries since 2020. Higher rates of employee separations may adversely affect us through

Board Report Risk Factors 31

decreased employee morale, the loss of knowledge of departing employees, and the devotion of resources to recruiting

and onboarding new employees.

COMPLIANCE RISKS

We are subject to increasingly stringent and evolving laws that impose significant compliance costs.

We are subject to comprehensive and constantly evolving laws, regulations and policies in numerous jurisdictions

around the world. We expect the extent of legal requirements affecting our businesses and our costs of compliance to

continue to increase in the future. Such laws govern, among other things, products – with requirements on emissions of

polluting gases and particulate matter, increased fuel efficiency and safety becoming increasingly strict – and industrial

plants – with requirements for reduced air emissions, treatment of waste and water, and prohibitions on soil

contamination also becoming increasingly strict. To comply with such laws, we make significant investments in research

and development and capital expenditures and expect to continue to incur substantial costs in the future. Failure to

comply with such laws could limit or prohibit our ability to sell our products in a particular jurisdiction, expose us to

penalties or clean-up costs, civil or criminal liability and sanctions on certain of our activities, as well as damage to

property or natural resources. Liabilities, sanctions, damages and remediation efforts related to any non-compliance

with such laws, including those that may be adopted or imposed in the future, could negatively impact our ability to

conduct our operations and our results of operations and financial condition. In addition, there can be no assurance that

we will not be adversely affected by costs, liabilities or claims with respect to any subsequently acquired operations.

Further, environmental, health and safety regulations change from time to time, as may related interpretations and other

guidance. For example, changes in environmental and climate change laws, including laws relating to engine and

vehicle emissions, safety regulations, fuel requirements, restricted substances, or greenhouse gas emissions, could

lead to new or additional investments in product designs and could increase environmental compliance expenditures. If

these laws are either changed or adopted and impose significant operational restrictions and compliance requirements

on our products or operations, they could result in higher capital expenditures and negatively impact our business,

results of operations, financial position and competitive position.

Changes to existing laws and regulations or changes to how they are interpreted or the implementation of new, more

stringent laws or regulations could adversely affect our business by increasing compliance costs, limiting our ability to

offer a product or service, requiring changes to our business practices, or otherwise making our products and services

less attractive to customers. For example, so-called “right to repair” legislation proposals in certain states and at the

federal level in the U.S. could require us to provide access to the software code embedded in our products, which,

among other harmful consequences, could create product safety issues, compromise engine emissions and

performance controls, adversely affect the protection of our intellectual property, and discourage innovation and

investments in research and development.

We are subject to extensive laws and regulations

Due to the global scope of our operations, we are subject to many laws and regulations that apply to our operations

around the world, including the U.S. Foreign Corrupt Practices Act, and the U.K. Bribery Act, as well as a range of

national anti-corruption and antitrust or competition laws that apply to conduct in a particular jurisdiction. These anti-

corruption laws prohibit improper payments in cash or anything of value to improperly influence third parties to obtain or

retain business or gain a business advantage. These laws tend to apply regardless of whether those practices are legal

or culturally acceptable in a particular jurisdiction. Over the past several years there has been an increase in the

enforcement of anti-corruption and antitrust or competition laws both globally and in particular jurisdictions and we have

from time to time been subject to investigations and charges claiming violations of anti-corruption or antitrust or

competition laws, including Iveco’s settlement of the EU antitrust investigation announced on July 19, 2016. Following

this settlement, Iveco, the Company and other parties have been defending against private litigation commenced in

Europe. We are committed to operating in compliance with all applicable laws, in particular, anti-corruption and antitrust

or competition laws. We have implemented a program to promote compliance with these laws and to reduce the

likelihood of potential violations. Our compliance program, however, may not in every instance protect us from acts

committed by our employees, agents, contractors, or collaborators that may violate the applicable laws or regulations of

the jurisdictions in which we operate. Such improper actions could subject us to civil or criminal investigations and

monetary, injunctive and other penalties as well as damage claims. Investigations of alleged violations of these laws

tend to be expensive and require significant management time and attention, and these investigations of purported

violations, as well as any publicity regarding potential violations, could harm our reputation and have a material adverse

effect on our business, results of operations and financial position. For further information see Note 27 “Commitments

and contingencies” to the Consolidated Financial Statements at December 31, 2021.

Changes in privacy laws could disrupt our business

The regulatory framework for privacy and data security issues worldwide is rapidly evolving and is likely to remain

uncertain for the foreseeable future. We collect personal information and other data as part of our business operations.

This data is subject to a variety of U.S. and foreign laws and regulations. For example, the European Union's General

Board Report Risk Factors 32

Data Protection Regulation imposes more stringent data protection requirements and provides for significant penalties

for noncompliance. New privacy laws will continue to come into effect around the world. We may be required to incur

significant costs to comply with these and other 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.

New regulations or changes in financial services regulations could adversely impact us

Our Financial Services’ operations are highly regulated by governmental and banking authorities in the locations where

they operate, which can impose significant additional costs and/or restrictions on their business. In the U.S., for

example, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank

Act”), including its regulations, as well as other efforts at regulatory reform in financial services may substantially affect

the origination, servicing, and securitization programs of our Financial Services segment as well as limit the ability of

our customers to enter into hedging transaction or finance purchases of our equipment. 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 asset-backed securities ("ABS") markets through, among other things, a mandated risk retention

requirement for securitizers and a direction to regulate credit rating agencies. Future regulations may affect our ability to

engage in 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.

FINANCIAL AND TAXATION RISKS

Difficulty in obtaining financing or refinancing existing debt could impact our financial performance

Our performance will depend on, among other things, our ability to finance debt repayment obligations and planned

investments from operating cash flow, available liquidity, the renewal or refinancing of existing bank loans and/or

facilities and access to capital markets or other sources of financing. A decline in revenues could have a negative

impact on the cash-generating capacity of our operations. Consequently, we could find ourselves in the position of

having to seek additional financing and/or having to refinance existing debt, including in unfavorable market conditions

with limited availability of funding and a general increase in funding costs. Instability in global capital markets, including

market disruptions, limited liquidity and interest rate and exchange rate volatility, could reduce our access to capital

markets or increase the cost of our short and long-term financing. Any difficulty in obtaining financing could have a

material adverse effect on our business, results of operations and financial position.

Our ability to access the capital markets or other forms of financing and related costs are highly dependent on, among

other things, the credit ratings of CNH Industrial N.V., its subsidiaries, ABS and other debt instruments. 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 cost of capital, potentially limit our access to sources of

financing, and have a material adverse effect on our business, results of operations and financial condition.

We are subject to exchange rate fluctuations, interest rate changes and other market risks

We operate in numerous markets worldwide and are exposed to market risks stemming from fluctuations in currency

and interest rates, including as a result of changes in monetary or fiscal policies of governmental authorities from time

to time. 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 our 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 those other currencies affect the value of those items reflected in our consolidated financial statements, even if

their value remains unchanged in their original currency. Changes in currency exchange rates between the U.S. dollar

and other currencies have had, and will continue to have, an impact on our results of operations and financial condition.

We use various forms of financing to cover the funding requirements of our Industrial Activities and for financing offered

to customers and dealers by Financial Services. Financial Services normally implements a matching policy to offset the

impact of differences in interest rates on the financed portfolio and related liabilities. Nevertheless, any future changes

in interest rates can result in increases or decreases in revenues, finance costs and margins.

Although we seek to manage our currency risk and interest rate risk, including through hedging activities, there can be

no assurance that we will be able to do so successfully, and our business, results of operations and financial position

could be adversely affected. In addition, by utilizing these instruments, we potentially forego the benefits that may result

from favorable fluctuations in currency exchange and interest rates. For additional information, see Note 30 “Information

on financial risks” to the Consolidated Financial Statements at December 31, 2021.

We also face risks from currency devaluations. Currency devaluations result in a diminished value of funds

denominated in the currency of the country suffering the devaluation.

Board Report Risk Factors 33

Because Financial Services provides financing for a significant portion of our sales worldwide, our operations

and financial results could be impacted materially should negative economic conditions affect the financial

services industry

Negative economic conditions can have an adverse effect on the financial services industry in which Financial Services

operates. Financial Services, through wholly-owned financial services companies and joint ventures, provides financing

for a significant portion of our sales worldwide. Financial Services may experience credit losses that exceed its

expectations and adversely affect its financial condition and results of operations. Financial Services’ inability to access

funds at cost-effective rates to support its financing activities could have a material adverse effect on our business.

Financial Services’ liquidity and ongoing profitability depend largely on timely access to capital in order to meet future

cash flow requirements and to fund operations and costs associated with engaging in diversified funding activities.

Additionally, negative market conditions could reduce customer confidence levels, resulting in declines in credit

applications and increases in delinquencies and default rates, which could materially impact Financial Services’ write-

offs and provision for credit losses. Financial Services may also experience residual value losses that exceed its

expectations caused by lower pricing for used vehicles or equipment and higher than expected vehicle or equipment

returns at lease maturity.

We are subject to interest rate risks and changes in interest rates can reduce demand for equipment, adversely

affect the interest margins in our Financial Services segment, and limit access to capital markets while

increasing borrowing costs

Rising interest rates could have a dampening effect on overall economic activity as well as on the financial health of our

customers, either of which could negatively affect customer demand for our products and services as well as

customers’ ability to service any financing provided by our Financial Services segment. In addition, credit market

dislocations could have an impact on funding costs, which in turn may make it more difficult for our Financial Services

Segment to offer customers competitive financing rates. While we aim to limit the exposure of our net financial assets to

changes in prevailing interest rates, interest rates volatility could have an adverse effect on our net interest rate margin-

i.e., the difference between the yield we earn on assets and the interest rates we pay. Actions by credit rating agencies,

such as downgrades or negative changes to ratings outlooks, can affect the availability and cost of funding for the

Company and can increase the Company’s cost of capital and hurt its competitive position.

An increase in delinquencies or repossessions could adversely affect the results of Financial Services

Fundamental in the operation of Financial Services is the credit risk associated with its customers/borrowers. The

creditworthiness of each customer, rates of delinquency and default, repossessions and net losses on loans to

customers are impacted by many factors, including: relevant industry and general economic conditions; the availability

of capital; the terms and conditions applicable to extensions of credit; the experience and skills of the customer’s

management team; commodity prices; political events, including government mandated moratoria on payments;

weather; and the value of the collateral securing the extension of credit. An increase in delinquencies or defaults, or a

reduction in repossessions could have an adverse impact on the performance of Financial Services and our earnings

and cash flows. In addition, although Financial Services evaluates and adjusts its allowance for credit losses related to

past due or non-performing receivables on a regular basis, adverse economic conditions or other factors that might

cause deterioration of the customers' financial health could change the timing and level of payments received and thus

necessitate an increase in Financial Services’ reserves for estimated losses, which could have a material adverse effect

on Financial Services’ and our results of operations and cash flows.

We may be exposed to shortfalls in our pension plans

At December 31, 2021, the funded status for our defined benefit pension, healthcare and other post-employment

benefits was an underfunded status of $1,062 million that is included in the consolidated statement of financial position

related to CNH Industrial prior to the Demerger ("CNH Industrial Pre-Demerger" or "CNHI Pre-Demerger"), of which

$595 million was related to Continuing Operations and $467 million related to Discontinued Operations. The funded

status is the balance between the present value of the defined benefit obligation and the fair value of related assets, in

case of funded plans (plans managed by a separate fund, “trust”). Consequently, the funded status is subject to many

factors, as discussed in the Consolidated Financial Statements at December 31, 2021, section “Significant Accounting

Policies” paragraph “Use of Estimates”, as well as Note 22 “Provisions for employee benefits”.

To the extent that our obligations under a plan are unfunded or underfunded, we will have to use cash flows from

operations and other sources to pay our obligations as they become due. In addition, since the assets that currently

fund these obligations are primarily invested in debt instruments and equity securities, the value of these assets is

subject to changes due to market fluctuations.

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, 2021, we had an aggregate of $24,255 million (including $19,509 million relating to Financial

Services’ activities) of consolidated gross indebtedness, and our equity was $8,426 million, including noncontrolling

Board Report Risk Factors 34

interests. At December 31, 2021, $21,689 million and $2,566 million of the aggregate consolidated gross indebtedness

was related to Continuing Operations and to Discontinued Operations, respectively. 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;

▪our future cash flow may be exposed to the risk of interest rate volatility (see above);

▪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.

These risks are exacerbated by the ongoing volatility in the financial markets, in part resulting from perceived strains on

the finances and creditworthiness of several governments and financial institutions, particularly in the European Union

and Latin America, and from continued concerns about global economic growth, particularly in emerging markets, as a

result of, among others, the COVID-19 pandemic.

Further, our indebtedness under some of our instruments including certain derivative transactions may bear interest at

variable interest rates or have other terms based on LIBOR. The LIBOR benchmark has been subject to national,

international, and other regulatory guidance and proposals for reform. In July 2017, the U.K. Financial Conduct

Authority announced that it intends to stop persuading or compelling banks to submit rates for calculation of LIBOR

after 2021. Although this deadline has subsequently been extended to June 2023, these reforms may cause LIBOR to

perform differently than in the past and in particular may do so in the future as the deadline approaches potentially

making it unsuitable to use as a benchmark. The consequences of any potential cessation, modification or other reform

of LIBOR cannot be predicted at this time. Any new benchmark rate will likely not replicate LIBOR exactly, which could

impact new variable rate credit facilities and derivative transaction. Any changes to benchmark rates could have an

impact on our cost of funds and our access to the capital markets, which could impact our results of operations and

cash flows. Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our

securities.

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 to, among other things:

▪incur additional indebtedness by certain subsidiaries;

▪make certain investments;

▪enter into certain types of transactions with affiliates;

▪sell or acquire certain assets or merge with or into other companies; and/or

▪use assets as security in other transactions.

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 CNH Industrial’s credit ratings or those of one or more of its

subsidiaries. For further information, see Note 24 “Debt” to the Consolidated Financial Statements at December 31,

2021.

CNH Industrial operates and will continue to operate, as a company that is resident in the U.K. for tax

purposes; other tax authorities may treat CNH Industrial as being tax resident elsewhere

CNH Industrial is not incorporated in the U.K.; therefore, in order to be resident in the U.K. for tax purposes, CNH

Industrial’s central management and control must be located (in whole or in part) in the U.K. The test of central

management and control is largely a question of fact based on all the circumstances. The decisions of the U.K. courts

and the published practice of Her Majesty’s Revenue & Customs, or HMRC, suggest that CNH Industrial should be

Board Report Risk Factors 35

regarded as being U.K.-resident on this basis. The competent authority ruling referred to below supports this analysis.

Although CNH Industrial’s “central management and control” is in the U.K., it would not be treated as U.K.-resident if (a)

CNH Industrial were concurrently resident in another jurisdiction (applying the tax residence rules of that jurisdiction)

which has a double tax treaty with the U.K.; and (b) that tax treaty allocates exclusive residence to that other

jurisdiction.

Although CNH Industrial’s central management and control is in the U.K., CNH Industrial is considered to be resident in

the Netherlands for Dutch corporate income tax and Dutch dividend withholding tax purposes because CNH Industrial

is incorporated in the Netherlands. The U.K. and Dutch competent authorities have agreed, following a mutual

agreement procedure (as contemplated by the Netherlands-U.K. tax treaty), that CNH Industrial will be regarded as

solely resident in the U.K. for purposes of the application of the Netherlands-U.K. tax treaty provided that CNH

Industrial operates as planned and provides appropriate required evidence to the U.K. and Dutch competent tax

authorities. If the facts upon which the competent authorities issued this ruling change over time, this ruling may be

withdrawn or cease to apply and in that case the Netherlands may levy corporate income tax on CNH Industrial and

impose withholding taxes on dividends distributed by CNH Industrial.

CNH Industrial’s residence for Italian tax purposes is also largely a question of fact based on all the circumstances.

CNH Industrial has a management and organizational structure such that CNH Industrial should not be deemed

resident in Italy under Italian domestic law except to the extent of CNH Industrial's Italian branch, and should be

deemed resident exclusively in the U.K. from the date of its incorporation for purposes of the Italy-U.K. tax treaty.

Because this analysis is highly factual and may depend on future changes in CNH Industrial’s management and

organizational structure, there can be no assurance regarding the final determination of its tax residence. Should CNH

Industrial be treated as an Italian tax resident, CNH Industrial would be subject to corporate income tax in Italy on its

worldwide income and may be required to comply with withholding tax on dividends and other distributions and/or

reporting obligations under Italian law, which could result in additional costs and expenses.

Tax may be required to be withheld from dividend payments

Although the U.K. and Dutch competent authorities have ruled that we should be treated as solely resident in the U.K.

for the purposes of the Netherlands-U.K. double tax treaty, under Dutch domestic law dividend payments made by us to

Dutch residents are still subject to Dutch dividend withholding tax and we would have no obligation to pay additional

amounts in respect of such payments.

Should withholding taxes be imposed on future dividends or distributions with respect to our common shares, whether

such withholding taxes are creditable against a tax liability to which a shareholder is otherwise subject depends on the

laws of such shareholder’s jurisdiction and such shareholder’s particular circumstances. Shareholders are urged to

consult their tax advisors in respect of the consequences of the potential imposition of withholding taxes.

We may incur additional tax expense or become subject to additional tax exposure

We are subject to income taxes in many jurisdictions around the world. Our tax liabilities are dependent upon the

location of earnings among these different jurisdictions. Our future results of operations could be adversely affected by

changes in the consolidated effective tax rate as a result of a change in the mix of earnings in countries with differing

statutory tax rates, changes in our overall profitability, changes in tax legislation and rates, changes in generally

accepted accounting principles and changes in the valuation of deferred tax assets and liabilities. If our effective tax

rates were to increase, or if the ultimate determination of our taxes owed is for an amount in excess of amounts

previously accrued or paid, our operating results, cash flows, and financial position could be adversely affected. For

further information, see Note 9 “Income tax (expense) benefit” to the Consolidated Financial Statements at December

31, 2021.

RISKS RELATED TO OUR COMMON SHARES

Our maintenance of two exchange listings may adversely affect liquidity in the market for our common shares

and could result in pricing differentials of our common shares between the two exchanges

The dual listing of our common shares on the NYSE and the Euronext Milan (previously named MTA) may split trading

between the two markets and adversely affect the liquidity of the shares in one or both markets and the development of

an active trading market for our common shares on the NYSE and may result in price differentials between the

exchanges. Differences in the trading schedules, trading volume and investor bases, as well as volatility in the

exchange rate between the two trading currencies, among other factors, may result in different trading prices for our

common shares on the two exchanges or otherwise adversely affect liquidity and trading prices of our shares.

Board Report Risk Factors 36

The loyalty voting program may affect the liquidity of our common shares and reduce our share price

CNH Industrial’s loyalty voting program is intended to reward shareholders for maintaining long-term share ownership

by granting initial shareholders and persons holding shares continuously for at least three years, the option to elect to

receive special voting shares. Special voting shares cannot be traded and, immediately prior to the transfer of our

common shares from the CNH Industrial Loyalty Register, any corresponding special voting shares shall be transferred

to CNH Industrial for no consideration (om niet). This loyalty voting program is designed to encourage a stable

shareholder base and, conversely, it may deter trading by those shareholders who are interested in gaining or retaining

special voting shares. Therefore, the loyalty voting structure may reduce liquidity in our common shares and adversely

affect their trading price.

The loyalty voting program may prevent or frustrate attempts by our shareholders to change our management

and hinder efforts to acquire a controlling interest in us, and the market price of our common shares may be

lower as a result

The provisions of our Articles of Association establishing the loyalty voting program may make it more difficult for a third

party to acquire, or attempt to acquire, control of us, even if a change of control is considered favorably by shareholders

holding a majority of our common shares. As a result of the loyalty voting program, a relatively large proportion of the

voting power of our common shares could be concentrated in a relatively small number of shareholders who would

have significant influence over us. As of December 31, 2021, EXOR N.V. had a voting interest in CNH Industrial of

approximately 42.5%. For further information, see section “Major Shareholders”. Such shareholders participating in the

loyalty voting program could effectively prevent change of control transactions that may otherwise benefit our

shareholders.

The loyalty voting program may also prevent or discourage shareholders’ initiatives aimed at changes in our

management.

Board Report Risk Factors 37

BUSINESS OVERVIEW

INTRODUCTION

During 2021, CNH Industrial completed a strategic project to separate the Commercial and Specialty Vehicles business,

the Powertrain business, and the related Financial Services business (together the “Iveco Group Business”) from the

Agriculture business, the Construction business, and the related Financial Services business.

The Iveco Group Business was separated from CNH Industrial N.V. in accordance with Section 2:334a (3) of the Dutch

Civil Code (Burgerlijk Wetboek) by way of a legal statutory demerger (juridische afsplitsing) to Iveco Group N.V. (the

"Demerger"), effective January 1, 2022. A description of the principal phases leading up to completion of the Demerger

is provided in the Notes to the Consolidated Financial Statements.

As the transaction took effect on January 1, 2022, the consolidated financial statements for the year ended December

31, 2021 relate to CNH Industrial Pre-Demerger. Moreover, in accordance with IFRS 5 – Non-current Assets Held for

Sale and Discontinued Operations, as the Demerger became highly probable in December, the Iveco Group Business

is classified and presented as Discontinued Operations in these consolidated financial statements. That presentation

has resulted in the following:

▪for both years 2021 and 2020 (the latter presented for comparative purposes), the operating results of Iveco Group

Business are presented in a single line item "Profit/(Loss) from Discontinued Operations, net of tax" within the

Consolidated Income Statement;

▪all assets and liabilities (excluding equity) relating to Iveco Group Business at December 31, 2021 are reclassified as

Assets held for distribution and Liabilities held for distribution, respectively, within the Consolidated Statement of

Financial Position;

▪for both years 2021 and 2020 (the latter presented for comparative purposes), the cash flows arising from the Iveco

Group Business (as Discontinued Operations) are presented in the Consolidated Statement of Cash Flows as

separate line items under cash flows from operating, investing and financing activities.

For additional detail of items presented under Discontinued Operations in the Consolidated Statements of Income,

Financial Position and Cash Flows, refer to the section "Scope of Consolidation - Discontinued Operations - Iveco

Group Business".

Additionally, as the Demerger is a “business combination involving entities or businesses under common control”, it is

outside the scope of application of IFRS 3 – Business Combinations and IFRIC 17- Distributions of Non-cash Assets to

Owners. Accordingly, in the 2022 consolidated financial statements for CNH Industrial and Iveco Group, the opening

position for items in the statement of financial position will be equivalent to the carrying amounts reported in the

consolidated financial statements of CNH Industrial Pre-Demerger.

GENERAL

Until December 31, 2021, CNH Industrial was a leading global capital goods company engaged in the design,

production, marketing, sale, and financing of 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. At the same date, CNH Industrial had

industrial and financial services companies located in 44 countries and a commercial presence in approximately 180

countries.

Following the Demerger, effective January 1, 2022, CNH Industrial is a leading global capital goods company engaged

in the design, production, marketing, sale, and financing of agricultural and construction equipment.

Until December 31, 2021, CNH Industrial had the following five operating segments:

Continuing Operations – Industrial Activities Segments

▪Agriculture 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 under the New Holland Agriculture and Case IH

brands, as well as the STEYR, Kongskilde and Överum brands in Europe and the Miller brand, primarily in North

America and Australia.

Board Report Business Overview 38

▪Construction designs, manufactures and distributes a full line of construction equipment including excavators,

crawler dozers, graders, wheel loaders, backhoe loaders, skid steer loaders, and compact track loaders. Construction

equipment is sold under the CASE Construction Equipment and New Holland Construction brands.

Discontinued Operations – Industrial Activities Segments

▪Commercial and Specialty Vehicles designs, manufactures and distributes a full range of light, medium, and heavy

vehicles for the transportation and distribution of goods under the IVECO brand, city-buses, commuter buses under

the IVECO BUS (previously Iveco Irisbus) and HEULIEZ BUS brands, quarry and mining equipment under the

IVECO ASTRA brand, firefighting vehicles under the Magirus brand, and vehicles for civil defense and peace-keeping

missions under the Iveco Defence Vehicles brand.

▪Powertrain designs, manufactures and distributes, under the FPT Industrial brand, a range of combustion engines,

alternative propulsion systems, transmission systems and axles for on- and off-road applications, as well as for

marine and power generation.

▪Financial Services

Financial Services, prior to the Demerger, offered a range of financial products and services to dealers and

customers of both Off-Highway and On-Highway Industrial Activities segments. Financial Services provided and

administered retail financing to customers for the purchase or lease of new and used vehicles and other equipment

sold by CNH Industrial brand dealers. In addition, Financial Services provided wholesale financing to CNH Industrial

brand dealers. Wholesale financing consists primarily of floor plan financing and allows the dealers to purchase and

maintain a representative inventory of products. Financial Services also provided trade receivables factoring services

to CNH Industrial companies.

Following the Demerger, the European operations of CNH Industrial Financial Services will be separated as follows:

the receivable portfolios related to the captive activity of each group (CNH Industrial and Iveco Group), together with

the related funding, will be attributed to each group, while the servicing of these separated portfolios will be

performed by Iveco Group’s Financial Services segment. CNH Industrial will provide financial services to Iveco Group

companies in the rest of the world.

Net Revenues by Segment and by Region:

Net revenues by segment in the years ended December 31, 2021 and 2020 were as follows:

2021

2020

($ million)

Continuing

Operations

Discontinued

Operations

Eliminations

CNHI Pre-

Demerger

Continuing

Operations

Discontinued

Operations

Eliminations

CNHI Pre-

Demerger

Agriculture

14,754

—

14,754

10,916

—

10,916

Construction

3,081

—

3,081

2,170

—

2,170

Commercial and

Specialty Vehicles

—

12,204

—

12,204

—

9,420

—

9,420

Powertrain

—

4,435

—

4,435

—

3,633

—

3,633

Eliminations and

Other

—

(1,831)

(917)

(2,748)

(11)

(1,273)

(563)

(1,847)

Total of Industrial

Activities

17,835

14,808

(917)

31,726

13,075

11,780

(563)

24,292

Financial Services

1,664

230

(32)

1,862

1,644

188

(25)

1,807

Eliminations and

Other

(25)

(75)

(7)

(107)

(23)

(76)

(16)

(115)

Total

19,474

14,963

(956)

33,481

14,696

11,892

(604)

25,984

Board Report Business Overview 39

Net revenues by region in the years ended December 31, 2021 and 2020 were as follows:

2021

2020

($ million)

Continuing

Operations

Discontinued

Operations

Eliminations

CNHI Pre-

Demerger

Continuing

Operations

Discontinued

Operations

Eliminations

CNHI Pre-

Demerger

Europe

5,317

11,122

(603)

15,836

4,299

8,960

(394)

12,865

North America

7,804

281

(100)

7,985

6,012

190

(66)

6,136

South America

3,132

1,388

(168)

4,352

2,034

710

(97)

2,647

Rest of World

3,221

2,172

(85)

5,308

2,351

2,032

(47)

4,336

Total

19,474

14,963

(956)

33,481

14,696

11,892

(604)

25,984

INDUSTRY OVERVIEW

Agriculture

The operators of dairy, livestock and row crop producing farms, as well as independent contractors that provide

services to such farms, purchase most agricultural equipment. Row crop farmers typically purchase tractors at the mid-

to-upper end of the horsepower ("hp") range, combines and harvesting equipment and crop production equipment.

Dairy and livestock farmers typically utilize tractors in the mid-to-lower hp range and crop preparation and crop

packaging implements. The key factors influencing sales of agricultural equipment are the level of net farm income and,

to a lesser extent, general economic conditions, interest rates and the availability of financing and related subsidy

programs, farm land prices and farm debt levels. Net farm income is primarily impacted by the volume of acreage

planted, commodity and/or livestock prices and stock levels, the impacts of fuel ethanol demand, crop yields, farm

operating expenses (including fuel and fertilizer costs), fluctuations in currency exchange rates, government subsidies,

tax incentives and trade policies. Farmers tend to postpone the purchase of equipment when the farm economy is

deteriorating and to increase their purchases when economic conditions improve. The availability, quality, and cost of

used equipment for sale also affect the level of new equipment sales. Weather conditions are a major determinant of

crop yields and therefore affect equipment-buying decisions. In addition, geographical variations in weather from

season-to-season may affect sales volumes differently in different markets. Government policies may affect the market

for agricultural equipment by regulating the amount of acreage planted, with direct subsidies affecting specific

commodity prices, or with other payments made directly to farmers. Global organization initiatives, such as those of the

World Trade Organization, also can affect the market with demands for changes in governmental policies and practices

regarding agricultural subsidies, tariffs and acceptance of genetically modified organisms such as seed, feed and

animals.

Demand for agricultural equipment also varies seasonally by region and product, primarily due to differing climates and

farming calendars. Peak retail demand for tractors and planting, seeding, and application equipment typically occurs in

March through June in the Northern hemisphere and in September through December in the Southern hemisphere.

Dealers order equipment year-round but harvesting equipment orders in the Northern hemisphere generally increase in

the late fall and winter so that the dealers can receive inventory prior to the peak retail selling season, which generally

extends from March through June. In the Southern hemisphere, dealers generally order between August and October

so they can receive inventory prior to the peak retail-selling season, which extends from November through February.

Agriculture's production levels are based upon estimated retail demand, which takes into account, among other things,

the timing of dealer shipments (which occur in advance of retail demand), dealer and Company inventory levels, the

need to retool manufacturing facilities to produce new or different models, and the efficient use of labor and facilities.

Production levels are adjusted to reflect changes in estimated demand and dealer inventory levels. However, because

production and wholesale shipments adjust throughout the year to take into account the factors described above,

wholesale sales of agricultural equipment products in any given period may not reflect the timing of dealer orders and

retail demand for that period. This situation has been emphasized during the current pandemic environment where the

global supply chain has been disrupted for a series of reasons linked with production not able to match demand and

transportation becoming congested with increases in lead times and expenses.

Customer preferences regarding farming practices, and thus product types and features, vary by region. In North

America, Australia and other areas where soil conditions, climate, economic factors and population density allow for

intensive mechanized agriculture, farmers generally demand high capacity, sophisticated machines equipped with the

most advanced technology. In Europe, where farms are generally smaller in size than those in North America and

Australia, there is greater demand for somewhat smaller, yet equally sophisticated, machines. In the developing regions

of the world where labor is more abundant and infrastructure, soil conditions and/or climate are not conducive to

intensive agriculture, customers generally prefer simple, robust and durable machines with relatively lower acquisition

and operating costs. In many developing countries, tractors are the primary, if not the sole, type of agricultural

equipment used, and much of the agricultural work in such countries that cannot be performed by tractors is carried out

Board Report Business Overview 40

by hand. A growing number of part-time farmers, hobby farmers and customers engaged in landscaping, municipality

and park maintenance, golf course and roadside mowing in Western Europe and North America prefer relatively simple,

low-cost agricultural equipment. Our position as a geographically diversified manufacturer of agricultural equipment and

our broad geographic network of dealers allows us to provide customers in each significant market with equipment that

meets their specific requirements.

Major trends in the North American and Western European agricultural industries include a reduction in number but

growth in size of farms, supporting increased demand for higher capacity agricultural equipment. In addition, we believe

that the use of technology and other precision farming solutions (including the development of autonomously operated

equipment) to enhance productivity and profitability are becoming more important in the buyers’ purchasing decision. In

South America and in other emerging markets, the number of farms is growing, and mechanization is replacing manual

labor. In Rest of World, long-term demographic trends, increasing urbanization, and low level of farm mechanization

represent the key drivers of demand for agricultural equipment.

Government farm programs, including the amount and timing of government payments, are a key income driver for

farmers raising certain commodity crops in the United States (the "U.S.") and the European Union. The existence of a

high level of subsidies in these markets for agricultural equipment reduces the effects of cyclicality in the agricultural

equipment business. The effect of these subsidies on agricultural equipment demand depends largely on the U.S. Farm

Bill and programs administered by the United States Department of Agriculture, the Common Agricultural Policy of the

European Union and World Trade Organization negotiations. Additionally, the Brazilian government subsidizes the

purchase of agricultural equipment through low-rate financing programs administered by the Banco Nacional de

Desenvolvimento Economico e Social (“BNDES”). These programs have a significant influence on sales.

Agricultural equipment manufacturers are subject to, among other things, continuous changes in engine emission

regulations and restrictions. These changes require frequent changes in engine technology, which can involve

significant research and development investments. Manufacturers generally attempt to pass these incremental costs on

their customers, but these price increases must be balanced with the affordability of the equipment. Each market may

have its own unique emissions regulations, which adds a level of complexity required to meet global product needs.

Global demand for renewable fuels increased considerably in recent years driven by consumer preference, government

renewable fuel mandates, renewable fuel tax and production incentives. Biofuels, which include fuels such as ethanol

and biodiesel, have become one of the most prevalent types of renewable fuels. The primary type of biofuel supported

by government mandates and incentives varies by region. North America and Brazil are promoting ethanol first and

then biodiesel, while Europe is primarily focused on biodiesel.

The demand for biofuels has created an associated demand for agriculturally based feedstocks, which are used to

produce biofuels. Currently, most of the ethanol in the U.S. and Europe is extracted from corn, while in Brazil it is

extracted from sugar cane. Biodiesel is typically extracted from soybeans and rapeseed oil in the U.S. and Brazil, and

from rapeseed and other oil seeds as well as food waste by-products in Europe. The use of corn and soybeans for

biofuel has been one of the main factors affecting the supply and demand relationships, as well as the price for these

crops. The economic feasibility of biofuels is significantly impacted by the price of oil. As the price of oil falls, biofuels

become a less attractive alternative energy source. This relationship will, however, be impacted by government policy

and mandates as governments around the world consider ways to combat global warming and avoid potential energy

resource issues in the future.

Sustainability and being a Clean Energy Leader has been a focus of CNH Industrial since 2009. During the 2021 United

Nations Climate Change Conference, COP26 event in Scotland, there was an emphasis on carbon reduction with

significant attention on livestock and dairy farming and their impact on emissions from animal waste. With the use of a

bio-digester, animal waste and food waste can be processed to produce bio-methane. CNH Industrial has developed a

Methane Powered Tractor, which started production in 2021, that runs on methane produced on the farm from the

animal and food waste. The CNH Industrial developed Methane Powered Tractor was twice awarded the prestigious

Sustainable Tractor of the Year award, most recently at the 2022 EIMA international show and several Methane Power

tractors were retailed after intensive testing around the world. Moreover, in 2021 CNH Industrial has participated with a

minority equity share participation into the U.K. based technology start-up, Bennamann, which has developed an on-

site kit for small-medium size livestock farms to capture and repurpose fugitive methane as a green fuel from their

waste and generate bio-methane which would allow a successful implementation of the circular economy in the core of

that Agricultural space where we see concerning CO2 emissions.

This approach also improves the sustainability of farmland management practices through minimizing artificial inputs

such as manufactured fertilizer, lowering operational costs and reducing pollutants. This concept will contribute to the

dairy farms decarbonization and the ‘Energy Independent’ approach is currently being tested across a number of pilot

farms in South West England. Bio-methane production started demonstrating the viability of the closed loop energy

system.

The most significant change in U.S. crop production was the increase in acreage devoted to corn, typically using land

previously planted with soybeans and cotton. In addition, a change in crop rotation resulted in more acres of corn being

Board Report Business Overview 41

planted. As a result, agricultural producers are faced with new challenges for managing crop residues and are changing

the type of equipment they use and how they use it.

Although the demand for new agricultural equipment tends to decrease during periods of economic stagnation or

recession, the aftersales market is historically less volatile than the new equipment market and, therefore, helps limit

the impact of declines in new equipment sales on the operating results of full-line manufacturers, such as Agriculture.

Construction

The construction equipment market consists of two principal segments: heavy construction equipment (excluding the

mining and the specialized forestry equipment markets in which we do not participate), with equipment generally

weighing more than 12 metric tons, and light construction equipment, with equipment generally weighing less than 12

metric tons.

In developed markets, customers tend to prefer more sophisticated machines equipped with the latest technology and

features to improve operator productivity. In developing markets, customers tend to prefer equipment that is relatively

less costly and has greater perceived durability. In North America and Europe, where the cost of machine operators is

higher relative to fuel costs and machine depreciation, customers typically emphasize productivity, performance and

reliability. In other markets, where the relative cost for machine operators is lower, customers often continue to use

equipment after its performance and efficiency have begun to diminish.

Customer demand for power and operating capacity does not vary significantly from market to market. However, in

many countries, restrictions on equipment weight or dimensions, as well as road regulations or job site constraints can

limit demand for larger machines.

Although the demand for new construction equipment tends to decrease during periods of economic stagnation or

recession, the aftersales market is historically less volatile than the new equipment market and, therefore, helps limit

the impact of declines in new equipment sales on the operating results of full-line manufacturers, such as Construction.

Heavy Construction

Heavy construction equipment typically includes general construction equipment such as large wheel loaders and

excavators, and road building and site preparation equipment such as graders, compactors and dozers. Purchasers of

heavy construction equipment include construction companies, municipalities, local governments, rental fleet owners,

quarrying and mining companies, waste management companies and forestry-related concerns.

Sales of heavy construction equipment depend on the expected volume of major infrastructure construction and repair

projects such as highway, tunnel, dam and harbor projects, which depend on government spending and economic

growth. Demand for aggregate mining and quarrying equipment is more closely linked to the general economy and

commodity prices, while growing demand for environmental equipment is becoming less sensitive to the economic

cycle. In North America, a portion of heavy equipment demand has historically been linked to the development of new

housing subdivisions, where the entire infrastructure needs to be created, thus linking demand for both heavy and light

construction equipment. The heavy equipment industry generally follows macroeconomic cyclicality, linked to growth in

gross domestic product.

Light Construction

Light construction equipment is also known as compact and service equipment, and it includes skid-steer loaders,

compact track loaders, tractor loaders, rough terrain forklifts, backhoe loaders, small wheel loaders and excavators.

Purchasers of light construction equipment include contractors, residential builders, utilities, road construction

companies, rental fleet owners, landscapers, logistics companies, and farmers. The principal factor influencing sales of

light construction equipment is the level of residential and commercial construction, remodeling and renovation, which is

influenced by interest rates and the availability of financing. Other major factors include the construction of light

infrastructure, such as utilities, cabling and piping and maintenance expenditures. The principal use of light construction

equipment is to replace relatively high-cost, slower manual work. Product demand in the United States and Europe has

generally tended to mirror housing starts, but with lags of six to twelve months. In areas where labor is abundant, and

the cost of labor is inexpensive relative to other inputs, such as in India, Africa and South America, the light construction

equipment market is generally smaller. These regions represent potential areas of growth for light construction

equipment in the medium to long-term as labor costs rise relative to the cost of equipment or the supply of labor

contraction leading to increased mechanization.

Equipment rental is a significant element of the construction equipment market. Compared to the U.K. and Japan,

where there is an established market for long-term equipment rentals as a result of favorable tax treatment, the rental

market in North America and Western Europe (except for the U.K.) consists mainly of short-term rentals of light

construction equipment to individuals or small contractors for which the purchase of equipment is not cost effective or

that need specialized equipment for specific jobs. In North America, the main rental product has traditionally been the

backhoe loader and, in Western Europe, it has been the mini-excavator. As the market has evolved, a greater variety of

light and heavy equipment products have become available to rent. In addition, rental companies have allowed

Board Report Business Overview 42

contractors to rent machines for longer periods instead of purchasing the equipment, enabling contractors to complete

specific job requirements with greater flexibility and cost control. Large, national rental companies can significantly

impact the construction equipment market, with purchase volumes being driven by their decisions to increase or

decrease the size of their rental fleets based on rental utilization rates.

Seasonal demand for construction equipment fluctuates somewhat less than for agricultural equipment. Nevertheless,

in North America and Western Europe, housing construction generally slows during the winter months. North American

and European industry retail demand for construction equipment is generally strongest in the second and fourth

quarters.

Agricultural and Landscaping customers also contribute to a significant portion of the North America light equipment

market. In this segment the main applications are related to material handling.

In markets outside of North America, Western Europe and Japan, equipment demand may also be partially satisfied by

importing used equipment. Used heavy construction equipment from North America may fulfill demand in the South

American market and equipment from Western Europe may be sold to Central and Eastern European, North African

and Middle Eastern markets. Used heavy and light equipment from Japan is mostly sold to other Southeast Asian

markets, while used excavators from Japan are sold to almost every other market in the world. This flow of used

equipment is highly influenced by exchange rates, the weight and dimensions of the equipment and the different local

regulations in terms of safety and/or engine emissions.

The construction equipment industry has seen an increase in the use of hydraulic excavators and wheel loaders in

earth-moving and material handling applications. In addition, the light equipment sector has grown as more manual

labor is being replaced on construction sites by machines with a variety of attachments for specialized applications,

such as skid steer loaders, compact track loaders and mini-crawler excavators.

Commercial and Specialty Vehicles

Trucks and Commercial Vehicles

The world truck market is generally divided into two segments: Light Commercial Vehicles (“LCV”) market (gross

vehicle weight (“GVW”) 3.5-7.49 metric tons), and Medium and Heavy (“M&H”) truck market (GVW above 7.5 metric

tons). The M&H segment is characterized by a higher level of engineering specialization due to the technologies and

production systems utilized, while the LCV segment has many engineering and design characteristics in common with

the automobile industry. In addition, operators of M&H trucks often require vehicles with a higher degree of

customization than the more standardized products that serve the LCV market. Customers generally purchase heavy

trucks for one of three primary uses: long distance haulage, construction haulage, and/or distribution.

The regional variation in demand for trucks and commercial vehicles is influenced by differing economic conditions,

levels of infrastructure development, and geographic region, all of which lead to differing transport requirements.

M&H truck demand tends to be closely aligned with the general economic cycle and the capital investment cycle

including the general level of interest rates and, governmental subsidy programs, particularly in more developed

markets such as Europe, North America and Japan, as economic growth provides increased demand for haulage

services and an incentive for transporters to invest in more efficient, less polluting, higher capacity vehicles and renew

vehicle fleets. The product life cycle for M&H trucks typically covers a seven to ten-year period.

Although economic cycles have a significant influence on demand for M&H trucks in emerging economies, the

processes of industrialization and infrastructure development have generally driven long-term growth trends in these

countries. As a country’s economy becomes more industrialized and its infrastructure develops, transport needs tend to

grow in response to increases in production and consumption. Developing economies, however, tend to display

volatility in short-term demand resulting from government intervention, changes in the availability of financial resources

and protectionist trade policies. In developing markets, demand for M&H trucks increases when it becomes more cost-

effective to transport heavier loads, especially as the infrastructure, primarily roads and bridges, becomes capable of

supporting heavier trucks. At the same time, the need to transport goods tends to increase in these markets, resulting in

increased demand for LCV.

Industry forecasts indicate that transportation of goods by road, currently the predominant mode of transport, will

remain so for the foreseeable future. Furthermore, Iveco also offers personalized aftersales customer assistance

programs that provide a wide range of modular and flexible maintenance and repair contracts, as well as warranty

extension services, to meet a variety of customers’ needs and to support the vehicle’s value over time: demand for

those services, as well as for parts, is a function of the number of vehicles in use. Although demand for new commercial

vehicles tends to decrease during periods of economic stagnation or recession, the demand for those services is

historically less volatile than the new vehicle market and, therefore, helps limit the impact of declines in new vehicle

sales on the operating results of full-line manufacturers, such as Commercial and Specialty Vehicles.

Commercial vehicles markets are subject to intense competition based on initial sales price, cost and performance of

vehicles over their life cycle (i.e., purchase price, operating and maintenance costs and residual value of the vehicle at

Board Report Business Overview 43

the end of its useful life), services and service-related products and the availability of financing options. High reliability

and low variable costs contribute to customer profitability over the life of the vehicle and are usually important factors in

an operator’s purchase decision. Additional competitive factors include the manufacturer’s ability to address customer

transport requirements, driver safety, comfort, and brand loyalty through vehicle design.

Demand for trucks varies seasonally by region and by product class. In Europe, the peak retail demand occurs in the

second and fourth quarters due to key fleet customer demands and customer budgetary cycles. In South America,

demand is relatively stable throughout the year except for increased demand for heavy trucks in the first and fourth

quarters from customers who transport foodstuffs. In Rest of World, sales tend to be higher in the second and fourth

quarters due to local holiday periods.

Although we believe that diesel remains, for the foreseeable future, a key fuel source for commercial vehicles and

industrial equipment in general, the adoption of new engine technological solutions and growing public opinion in favor

of more environmentally friendly solutions are pushing for increased penetration of both alternative and renewable fuels

(such as compressed natural gas (“CNG”), liquefied natural gas (“LNG”), and methane and hydrogen) and full electric

vehicles.

The car industry is leading autonomous vehicle development, but commercial vehicles are also making advances in

platooning and autonomous technologies. We expect this development to intensify. We believe that the growing

automation in transportation and infrastructure solutions through the use of self-driving vehicles will also allow the

industry to provide greater safety, fuel savings, and transport efficiency.

Buses

The global bus business is organized by mission, from city and intercity transport to tourism purposes, with a capacity

ranging from 7 to 150 seated/standing passengers. IVECO BUS (previously Iveco Irisbus) and HEULIEZ BUS target

markets include urban and intercity buses. Operators in this industry include three types of manufacturers: those

specialized in providing chassis to bodybuilders, those that build bodies on chassis produced by third parties, and

those, like IVECO BUS, that produce the entire vehicle.

The primary customers of the bus segment are tour and intercity bus service operators, while the principal customers of

the city bus segment are the transport authorities in urban areas.

Deregulation and privatization of transport services in many markets have favored concentration towards large private

companies operating in one country, in more than one neighboring country, or at an international level. Demand has

increased for highly standardized, high-use products for large fleets, with financing and maintenance agreements or

kilometric pricing. Deregulation and privatization have also increased competition between large transport service

companies, raising the level of vehicle use and increasing the choice of brands for operators in the market.

Sales for urban and intercity buses are generally higher in the second half of the year, due to public entities budgeting

processes, tender rules, and bus production lead-time.

Powertrain

The dynamics of the industrial powertrain business vary across the different market segments in which the various

propulsion systems are used. For vehicle and equipment applications, product development is driven by regulatory

requirements (i.e., legislation on pollutant emissions and, increasingly, CO2 emissions), as well as the need to reduce

total operating costs: customers are seeking more efficient propulsion systems that lower the total cost of ownership

and improve productivity.

For on-road applications in developed markets, where economy and infrastructure drive demand for local and haulage

transportation, demand for engines is driven by general economic conditions, capital investment, industrialization, and

infrastructure developments.

In the bus and marine markets, engine demand is increasingly influenced by the environmental policies of governments

and local authorities (i.e., requirements for natural gas, hybrid and electric solutions).

Demand for off-road applications in the agricultural industry is influenced by many factors, including the price of

agricultural commodities and the relative level of new and used inventories, the profitability of agricultural enterprises,

net farm income, the demand for food products, agricultural policies, as well as climatic conditions. At the same time,

the construction equipment business is driven by general economic factors and the level of public investment in

infrastructure, which affects the need for replacement of old equipment and investment in more innovative solutions to

boost productivity.

Increasingly stringent emission regulations in Europe, the U.S. and Asia represent an opportunity for Powertrain to gain

a competitive advantage through technological solutions developed for engines and after-treatment systems (such as

our High Efficiency SCR technology). Alternative fuels represent a viable alternative to diesel for transport vehicles, as

they are more environment friendly and offer better fuel economy than diesel while performing comparably to diesel

Board Report Business Overview 44

engines (e.g. LNG for Buses and Commercial Vehicles). Increasing demand for alternative propulsion systems (such as

electrified powertrain or fuel cell) is expected to continue, as related technologies are growing quickly and will offer

business opportunities in the industrial sector. The increasing trend among mid-sized original equipment manufacturers

("OEMs") to outsource engine development, due to the significant research and development expenditures required to

meet the new emission requirements, presents an opportunity for Powertrain to increase sales to third party customers.

COMPETITION

The industries in which we operate are highly competitive. We believe that we have many competitive strengths that will

enable us to improve our position in markets where we are already well established while we direct additional resources

to markets and products with high growth potential.

We compete with: (i) large global full-line equipment manufacturers with a presence in every market and a broad range

of products that cover most customer needs, (ii) manufacturers who are product specialists focused on particular

industry segments on either a global or regional basis, (iii) regional full-line manufacturers, some of which are

expanding worldwide to build a global presence, and (iv) local, low-cost manufacturers in individual markets, particularly

in emerging markets such as Eastern Europe, India and China.

Our competitive strengths include well-recognized brands, a full range of competitive products and features, a strong

presence, distribution and customer service network. There are multiple factors that influence a buyer’s choice of

industrial equipment. These factors include the strength and quality of the distribution network, brand loyalty, product

features, quality and performance, availability of a full product range, pricing, technological innovations, product

availability, financing terms, parts and warranty programs, resale value and customer service and satisfaction. The

ability to meet or exceed applicable engine emissions standards as they take effect is also a key competitive factor,

particularly in those markets where such standards are the subject of frequent legislative or regulatory scrutiny and

change, such as Europe and North America. Emission regulations are becoming a significant competitive factor at

global level with new legislation in India and China. We continually seek to improve in each of these areas but focus

primarily on providing high-quality and high-value products and on supporting those products through our dealer

networks. Customers’ perceptions of product value in terms of productivity, reliability, resale value and dealer support

are formed over many years. Buyers tend to favor brands based on experience with the product and the dealer.

The efficiency of our manufacturing, logistic and scheduling systems are dependent on forecasts of industry volumes

and our anticipated share of industry sales, which is predicated on our ability to compete successfully with others in the

marketplace. We compete based on product performance, customer service, quality, innovation and price. The

environment remains competitive from a pricing standpoint, and actions taken to maintain our competitive position in

the current challenging economic environment could result in lower than anticipated price realization. The ability of our

supply chain and manufacturing system to timely deliver finished goods is also critical to meeting customer

expectations. Failure to do so might imply losses of market share and competitiveness.

Our main competitors in the agricultural equipment market are Deere & Company, AGCO Corporation, Claas Group,

Argo Tractors S.p.A., the Same Deutz Fahr Group, and Kubota Tractor Corporation.

Our principal competitors in the construction equipment market are Caterpillar Inc., Komatsu Ltd., J C Bamford

Excavators Ltd., Hitachi Construction Machinery Co, Ltd., Volvo Group, Liebherr Group, Doosan Group, Kubota Tractor

Corporation, and Deere & Company.

Our principal competitors in the commercial and specialty vehicles market are Daimler Truck, the Traton Group, the

Stellantis Group, Paccar Inc., the Volvo Group, Rosenbauer International AG, Rheinmetall AG, Oshkosh Corporation.

The main competitors of Powertrain include Cummins Inc., Daimler Group, Deere & Company, Deutz AG, Traton Group,

Volvo Group, Yanmar Co., Ltd, Caterpillar/Perkins and Weichai Power Co. Ltd.

PRODUCTS

Agriculture

To capitalize on customer loyalty to its dealers and its brands, Agriculture’s product lines are sold primarily under the

Case IH and New Holland Agriculture brands as well as the STEYR brand in Europe and the Miller brand, primarily in

North America and Australia. Certain agricultural equipment products are also sold under the Kongskilde, Överum, K-

Line and JF brands. We believe that these brands enjoy high levels of brand identification and loyalty among both

customers and dealers.

Although newer generation tractors have a high percentage of common mechanical components, each brand and

product remains differentiated by features, color, interior and exterior styling, warranty terms, technology offering, and

model designation. Flagship products such as row crop tractors and large combine harvesters may have significantly

greater differentiation.

Board Report Business Overview 45

Distinctive features that are specific to a particular brand such as the Supersteer® tractor axle or Twin Rotor combine

threshing technology for New Holland, the Case IH tracked four-wheel drive tractor, Quadtrac®, and the front axle

mounted hitch for STEYR tractors remain an important part of each brand’s unique identity.

Agriculture’s product lines include tractors, combine harvesters, hay and forage equipment, seeding and planting

equipment, and self-propelled sprayers. Agriculture also specializes in other key market segments like cotton picker

packagers and sugar cane harvesters, where Case IH is a worldwide leader, and in self-propelled grape harvesters,

where New Holland Agriculture is a worldwide leader. These brands each offer parts and support services for all of their

product lines. Our agricultural equipment is sold with a limited warranty that typically runs from one to three years.

Case IH and New Holland Agriculture brands enable their customers to visualize and share in-depth real-time machine

information within the respective AFS-PLM Farm solution and offers data sharing to a vast number of third party

providers at full control of the customer. Agriculture launched the AGXTENDTM brand, focused exclusively on

aftermarket precision farming technology solutions. AGXTENDTM is designed to provide our dealers and customers

access to innovative and more sustainable productivity enhancing precision farming technologies operating seamlessly

with the rest of the CNH Industrial Digital and Precision Solution offering.

AFS and PLM Farm (Previously AgDNA) is an industry leading Farm Management Information System (FMIS) that

automatically collects and analyzes data from equipment manufactured by CNH Industrial and third-party

manufacturers. The cloud-based platform analyzes equipment, agronomic and environmental data to deliver actionable

insights directly to customers' smartphones and tablets to help them maximize the agronomic performance of their CNH

Industrial and other equipment to increase farm profitability.

Raven Industries, Inc., formerly a long-term strategic supplier, was acquired in order to expand our portfolio of precision

agriculture technology offerings and to accelerate the development of advanced machine automation and autonomous

agriculture technology.

Raven Applied Technology designs, manufactures, sells, and services innovative precision agriculture products,

autonomous solutions, and information management tools, which are collectively referred to as precision agriculture

equipment, that help farmers reduce costs, more precisely control inputs, and improve farm yields for the global

agriculture market. The Applied Technology product families include application controls, GPS-guidance steering

systems, field computers, automatic boom controls, advanced machine automation including autonomous agriculture

technology and platforms, information management tools, and injection systems. Applied Technology's services include

high-speed in-field internet connectivity and cloud-based data management.

Construction

Construction’s product lines are sold primarily under the CASE Construction Equipment and New Holland Construction

brands. CASE provides a wide range of products on a global scale, including crawler excavators and mini-excavators.

The New Holland Construction brand family also markets a full product line of construction equipment in South America

and focuses on light equipment distributed by the Agriculture network in the other regions.

Construction's products often share common components to achieve economies of scale in manufacturing, purchasing,

and development. Construction differentiates these products based on the relative product value, technology, design

concept, productivity, product serviceability, color, and styling to preserve the unique identity of each brand.

Heavy construction equipment product lines include general construction equipment such as large excavators and

wheel loaders, and road building and site preparation equipment such as compactors, graders and dozers. Light

construction equipment is also known as compact and service equipment, and its product lines include backhoe

loaders, skid steer and tracked loaders, mini- and midi- excavators, and compact wheel loaders. The brands each offer

parts and support services for all of their product lines. Our construction equipment is generally sold with a limited

warranty that typically runs from one to two years.

We continue to evaluate our Construction business with a view toward increasing efficiencies and profitability as well as

evaluating its strategic alliances to improve its position in key markets. In 2021, we completed the acquisition of

Sampierana S.p.A., which provides Construction direct control over technology and manufacturing of Mini Excavators.

Commercial and Specialty Vehicles

Trucks and Commercial Vehicles (IVECO and IVECO ASTRA)

Under the IVECO brand, we produce a range of light, medium, and heavy trucks and commercial vehicles for both on-

road and off-road use, with approximately 3,700 different models available. Our key products include the Daily, a

vehicle that covers the 3.5 – 7.5 ton vehicle weight range, the Eurocargo, that covers the 7.5 – 16 ton range, and the

Heavy Duty Trucks with vehicle weight range > 16 ton, which include the Trakker, a vehicle capable of off-road

transport, and the S-Way, dedicated to on-road transport. Starting from 2019, IVECO started a process of complete

renewal of the heavy product offering with the launch of the S-Way (the new range for long haulage and distribution)

Board Report Business Overview 46

and X-Way (dedicated to construction logistics and municipalities); the new T-Way for off-road was introduced in 2021.

The product offering is complemented by a series of aftersales and used vehicle assistance services.

Light vehicles include on-road vans and chassis cabs used for short and medium distance transportation and

distribution of goods, and off-road trucks for use in quarries and other work sites. We have an estimated 25% market

share in Europe in professional heavy cab chassis (above 5 ton GVW). We also offer shuttle vehicles used by public

transportation authorities, tourist operators, hotels and sports clubs and campers for recreational travel.

The M&H vehicle product lines include on-road chassis cabs designed for medium and long-distance hauling and

distribution. Medium GVW off-road models are typically used for building roads, winter road maintenance, construction,

transportation, maintenance of power lines and other installations in off-road areas, civil protection and roadside

emergency service. Heavy GVW off-road models are designed to operate in virtually any climate and on any terrain and

are typically used to transport construction plant materials, transport and mix concrete, maintain roads in winter and

transport exceptionally heavy loads.

We offer ecological diesel and natural gas engines on our entire range of vehicles. We continue to develop engines with

specific components and configurations optimized for use with CNG and LNG and we have developed a

comprehensive roadmap for the introduction in the market of a complete range of zero emission vehicles (from Light to

Heavy).

Under the IVECO ASTRA brand, we build vehicles that can enter otherwise inaccessible quarries and mines and move

large quantities of material, such as rock or mud, and perform heavy-duty tasks in extreme climatic conditions. Our

product range for IVECO ASTRA includes mining and construction vehicles, rigid and articulated dump trucks and other

special vehicles.

On September 3, 2019, CNH Industrial announced a strategic and exclusive Heavy-Duty Truck partnership with Nikola

Corporation, a U.S. based company pursuing fuel cell truck technology development. In this context, CNH Industrial,

through its wholly owned subsidiary Iveco S.p.A., made an initial subscription to Nikola's share capital (approximately

2.5% shareholding) through a cash contribution of $50 million and an in-kind contribution of $50 million, granting Nikola

access to IVECO S-Way technology.

During the second quarter of 2020, Nikola completed a business combination with VectoIQ Acquisition Corp., a publicly-

traded special purpose acquisition company. Under the terms and conditions of the business combination, the former

shareholders of Nikola received 1.901 shares of VectoIQ for each share held in Nikola and became shareholders of

VectoIQ, which, in turn, changed its name to “Nikola Corporation”. The combined company's shares continue to be

listed on NASDAQ under the new ticker symbol “NKLA”. Before the completion of the business combination, CNH

Industrial increased its investment in Nikola, to $250 million. At December 31, 2021 Iveco S.p.A. beneficially owned

approximately 6.208% of Nikola Corporation's common stock.

Iveco S.p.A. and Nikola Corporation are jointly developing cab over battery-electric vehicle (“BEV”) and hydrogen fuel

cell electric vehicle (“FCEV”) trucks, which will be manufactured in Europe through a legal entity 50/50 owned by Iveco

S.p.A. and Nikola Corporation, and in the U.S. by Nikola Corporation. During 2020, Iveco S.p.A. and Nikola entered into

a series of agreements to establish the European legal entity, including two licenses granted by the two shareholders to

allow this legal entity to manufacture BEVs and at a later stage FCEVs. Furthermore, under these agreements, Iveco

S.p.A. will be the manufacturer for any EU emission-related purposes of the vehicles produced and distributed in EU by

this European legal entity and will responsible for their distribution in the EU different jurisdictions. The set-up activities

of the joint venture started in the fourth quarter of 2020 and are progressing according to internal schedules and

production started in Q4 2021.

Buses (IVECO BUS and HEULIEZ BUS)

Under the IVECO BUS and HEULIEZ BUS brands, we offer local and inter-city commuter buses, minibuses, school

buses and tourism coaches, and we are leader in inter-city buses as well as in low and zero emissions solutions.

IVECO BUS is one of the major European manufacturers in the passenger transport sector, with an estimated market

share of 26% in heavy buses in Europe, and is expanding its activities globally. HEULIEZ BUS produces city buses for

public transportation and is a leader in France for the urban bus market. We have a competitive footprint in Europe, the

Middle East and Africa and is looking to grow in Latin America through portfolio expansion. Our bus segment also

benefits from sharing technology with IVECO trucks and commercial vehicles.

Specialty Vehicles (Magirus and Iveco Defence Vehicles)

Under the Magirus brand, we manufacture vehicles designed to respond to natural disasters and civil emergencies,

such as fires, floods, earthquakes and explosions, using new digital and innovative technologies. Iveco Defence

Vehicles develops and manufactures specialized vehicles for defense missions and civil protection.

Board Report Business Overview 47

Powertrain

Powertrain is dedicated to the design, development, manufacture and sale of combustion engines, alternative

propulsion systems, transmissions, and axles under the FPT Industrial brand.

FPT Industrial has a wide product offering, including six engine ranges (F1, F5, S8000, NEF, Cursor, V20) from 2 to 20

liter and from 42 hp up to 1,006 hp. Furthermore, FPT Industrial offers the most complete Natural Gas engines line-up

on the market for industrial applications, including engine ranges from 136 hp up to 460 hp. FPT Industrial’s product

portfolio includes engines for buses and for light, medium and heavy commercial vehicles, engines for industrial

machinery including construction, agricultural and industrial equipment, engines for special-purpose vehicles and

engines for power generation units and marine applications.

FPT Industrial’s product line-up is completed by versions that use alternative fuels, including engines that run on natural

gas and engines compatible with renewable diesel (such as hydro-treated vegetable oil, xTL). With more than 20 years

of experience in the research, development and production of natural gas engine technologies for industrial

applications, FPT Industrial is an industry leader in this field. In 2018 a dedicated E-Powertrain team was established to

develop dedicated projects in the e-powertrain field in industrial applications.

Launches. During 2021, FPT Industrial collected a series of product launches and news. In February, the Brand

presented a three-year partnership with Fontanafredda, which includes is the supply of a concept of New Holland

Agriculture TK Methane Power crawler vineyard tractor with biomethane to enable the world’s first zero-emissions

harvest of a Barolo cru. The tractor is fueled FPT Industrial F28 Natural Gas engines and worked in the Vigna La Rosa

cru that produces the grapes for the legendary Barolo of the same name, a wine which has been included in the Wine

Spectator Top 100 of the world’s best wines. In April, during the 19th Shanghai International Automobile Industry

Exhibition, FPT Industrial presented the innovative Cursor 9, Cursor 11, and Cursor 13 engines meeting in advance the

GBVI emission standards that were fully implemented in China, starting from July 1, 2021. The three new engines

unveiled together with SFH fully expressed brand product strength, based on continuous technological development.

The key advancements equipping the Cursor GBVI engines are the Ti-V (Titanium – Vanadium), guaranteeing the

engine to be unstoppable, and the eVGT (Electronically-controlled Variable Geometry Turbocharger) for Cursor 13,

making the GBVI the best choice for heavy duty truck. In the same month, with a global digital launch called “Marine

Virtual Experience”, FPT Industrial presented its further extension of the marine engine line-up for pleasure and

commercial applications, specifically tuned for meeting the requirements of a wider audience. The core of the launch

was the unveiling of the new C90 170 Stage V dedicated to heavy-duty missions and featuring an optimized fuel map

that avoids the need for a urea-based after treatment system. The other highlight was the presentation of the keel

cooling system, a solution for effectively cooling engines operating in sandy, muddy and shallow water, without the risk

of obstructing the seawater filters and damaging the seawater pumps. During the digital presentation FPT Industrial

also showed the N40 170 Stage V and the N67 450 N. Furthermore, the Brand expands its products and services

portfolio offering for USA and Canada customers with the launch of a new and comprehensive line of high-quality, high-

performance lubricants. From October 18 to 23, FPT Industrial took part in EIMA International 2021, the International

Agricultural and Gardening Machinery Exhibition being held in Bologna (Italy). This was the occasion of displaying the

F28 engine in its NG and hybrid versions, together with the N67 NG, the F34 Stage V PowerPack and the N45.

Deliveries. In March, FPT Industrial was chosen as preferred engine supplier by TATA DAEWOO Commercial Vehicles

for the launch of the new “the CEN”, an innovative formula of semi-medium truck designed to make a strong impact on

the domestic South Korean market. In April, in Korea, LS Mtron has become the first Korean tractor manufacturer to

adopt the class-leading F34 Stage V engine from FPT Industrial. Offering 55kW of maximum power at 2200 rpm and

375Nm of torque at 1400 rpm, the F34 Stage V is the driving force behind the new LS Mtron XP7074 Utility class 2 AG

tractor. In the last quarter, Amazon signed an agreement for the supply of 1,064 IVECO S-Way CNG trucks which are

equipped with the Cursor 13 Natural Gas engines. Amazon has already taken delivery of the first batch of 216 units to

be operated by its partners in Europe, and another 848 units are on order with deliveries to start in mid-2022. Built in

the WCM Gold-Level Plant in Bourbon-Lancy (France), FPT Industrial’s Cursor 13 NG engine represents the best low

environmental impact alternative for long-range operations. To be even more close to its customers, FPT Industrial

launched MyFPT, an App for smartphone for all engine users. Clients all around the world can have at their fingertips

data, user's manuals and service schedules for FPT Industrial engines and machinery equipped with the brand's

engines. The App also ensures the status of the power unit in real time (such as the RPM, temperature, consumption,

etc.) and granted assistance with a simple “tap”. In May, the Brand signed two Memoranda of Understanding with Landi

Renzo Group, a leading company in the design, production and distribution of Compressed Natural Gas, Liquefied

Natural Gas and Hydrogen components and systems, with the aim of exploring the possibility of collaborating on Clean

Fuel projects. The Memoranda are focused on the possible development of Natural Gas and Hydrogen technology

respectively.

Prizes and achievements. 2021 was a year of prizes for the Brand. At the beginning of 2021, FPT Industrial received

the Good Design Award for its Cursor X, the innovative Multi-power, Modular, Multi-application and Mindful 4.0 power

source concept. Founded in Chicago in 1950 by Eero Saarinen and Charles and Ray Eames, and currently managed

by The Chicago Athenaeum: Museum of Architecture and Design and The European Centre for Architecture Art Design

Board Report Business Overview 48

and Urban Studies, Good Design remains the oldest and the world’s most recognized program for design excellence

worldwide. After that, FPT Industrial celebrated the “Sustainable Tractor of the Year 2021” received by the Claas AXION

960 CEMOS. The winning tractor is fitted with the latest generation of FPT Industrial’s Cursor 9 Stage V engine. This 6-

cylinder engine delivers maximum power of 327 kW /460 hp at 1,800 rpm and maximum torque of 1,860 Nm at 1,400

rpm. In July 2021, FPT Industrial and its Bourbon-Lancy plant, France, was awarded with the Gold Medal for the World

Class Manufacturing. The road to the highest honor was built on solid pillars and high knowledge, and key gold points

mentioned were: quality, machining maintenance and karakuri system. The Bourbon-Lancy plant celebrated also the

production of the 10,000th Cursor 13 NG engine, rolling off the line of its line on March 9. Moreover, in October, the

2022 “Tractor of the Year” was given to New Holland T6.180 Methane Power, powered by the FPT Industrial N67 NG

engine; the jury underlined the step forward towards more sustainable farming of the powering system. In the end of the

year, the innovation, sustainability and the design of the Red Horizon was awarded as Gold Winner of the 2021 edition

of the New York Product Design Awards. The jury selected the Red Horizon for the Watercraft Category for successfully

consolidating technology, performance, power and design in a beautiful zero emission powerboat concept.

SALES AND DISTRIBUTION

Agriculture and Construction

Agriculture sells and distributes products through approximately 2,500 full-line dealers and distributors with over 6,500

points of sale. Construction sells and distributes products through approximately 470 full-line dealers and distributors

with over 1,500 points of sale. Agriculture’s and Construction’s dealers are almost all independently owned and

operated. Some Agriculture dealers also sell construction equipment. In the United States, Canada, Mexico, most of

Western Europe, Brazil, Argentina, India, China, Russia, Thailand, Australia, and South Africa products are generally

distributed directly through the independent dealer network. In the rest of the world, products are either sold to

independent distributors who then resell to dealers, or to importers who have their own branches to sell product to retail

customers. In both cases, the importers/distributors can take advantage of their size and knowledge of the market to

minimize their marketing costs.

Consistent with our brand promotion program, we generally seek to have dealers sell a full range of our products.

Typically, greater market penetration is achieved where each dealer sells the full line of products from only one of the

brands. Although appointing dealers to sell more than one brand is not part of our business model, some joint dealers

exist, either for historic reasons or in limited markets where it is not feasible to have a separate dealer for each brand.

In some cases, dealerships are operated under common ownership but with separate points of sale for each brand. In

each region, we seek to optimize our distribution strategy to maximize customer satisfaction and sales while reducing

structural costs.

In North America and Australia, a trade-in of used equipment typically accompanies the sale of new equipment to end-

users. We often provide marketing assistance to our dealers to support the sale of used, trade-in equipment through

subsidized financing incentives, inventory carrying cost defrayment, or other methods.

Exclusive, dedicated dealers generally provide a higher level of market penetration. Some dealers may sell

complementary products manufactured by other suppliers to complete their product offerings or to satisfy local demand

for a particular specialty application or segment.

A strong dealer network with wide geographic coverage is a critical element in the success of Agriculture and

Construction. We work to enhance our dealer network through the expansion of our product lines and customer

services, including enhanced financial services offerings, and an increased focus on dealer support. To assist dealers in

building rewarding relationships with their customers, focused customer satisfaction programs have been introduced

and they are expected to incorporate customer input into the relevant product development and service delivery

processes.

As the equipment rental business becomes a more significant factor in both the agricultural and construction equipment

markets, Agriculture and Construction are continuing to support their dealer network by facilitating sales of equipment to

the local, regional and national rental companies through their dealers as well as by encouraging dealers to develop

their own rental activities. A strong dealer service network is required to maintain the rental equipment, and to help

ensure that the equipment remains at peak performance levels both during its life as rental equipment and afterward

when resold into the used equipment market. Agriculture and Construction have launched several programs to support

their dealer service and rental operations, including training, improved dealer standards, financing, and advertising. As

the rental market is a capital-intensive sector and sensitive to cyclical variations, we expand such activities gradually,

with special attention to managing the resale of rental units into the used equipment market by our dealers, who can

utilize this opportunity to improve their customer base and generate additional parts and service business.

Board Report Business Overview 49

We believe that it is generally more cost-effective to distribute our agricultural and construction equipment products

through independent dealers, although Agriculture and Construction maintain a limited number of company-owned

dealerships in some markets. As of December 31, 2021, we operated two Agriculture and Construction dealerships in

North America and six company-owned Agriculture and Construction dealerships in Europe. We also operate a

selective dealer development program, in territories with growth potential but underdeveloped representation by our

agricultural and construction equipment brands, that typically involves a transfer of ownership to a qualified operator

through a buy-out or private investment after a few years.

Commercial and Specialty Vehicles

Commercial and Specialty Vehicles’ worldwide distribution strategy is based on a network of independent dealers, in

addition to its own dealerships and branches. As of December 31, 2021, Commercial and Specialty Vehicles had

approximately 670 dealers globally (of which 16 were directly owned by us and 11 were branches). All dealers sell

spare parts for the relevant vehicles. Commercial and Specialty Vehicles bolsters its distribution strategy by offering

incentives to its dealers based on target achievements for sales of new vehicles and parts and providing high quality

aftersales services.

As of December 31, 2021, Commercial and Specialty Vehicles had approximately 5,000 sales and/or service network

points. In addition to Commercial and Specialty Vehicles' standard one-year full vehicle warranty and two-year

powertrain warranty, Commercial and Specialty Vehicles offers personalized aftersales customer assistance programs.

A key element of Commercial and Specialty Vehicles’ growth strategy is its distribution network. In Western Europe,

Eastern Europe, Turkey, Russia, Australia and Latin America, continued consolidation of the distribution network is

aimed at improving service to customers (such as the implementation of the Truck Stations network of specialized

workshops), increasing profitability and reducing overall distribution costs. In Africa and the Middle East, the distribution

network is being expanded to fully exploit growth in these markets.

In the U.K., Commercial and Specialty Vehicles is one of the OEMs that sells trucks and other commercial vehicles to

companies which offer commercial vehicle rental solutions, such as Ryder, Fraikin and Burntree, among others.

Powertrain

Powertrain provides propulsion solution products for Commercial and Specialty Vehicles, Agriculture, and Construction

segments, powertrain generation units and marine applications. Additionally, Powertrain’s commercial strategy and

business model are focused on the development of a portfolio of medium-to-large OEM customers. Powertrain has

entered into long-term supply agreements with a growing number of third-party customers.

At December 31, 2021, Powertrain has a network of approximately 66 distributors and 703 dealers/service points

globally that cover its entire product range and related market sectors. Large OEMs use their own internal networks to

obtain parts and services for purchased equipment, while small OEMs frequently rely on us for delivery of parts and

services through Powertrain’s worldwide network.

PRICING AND PROMOTION

The retail price of any particular piece of equipment or vehicle is determined by the individual dealer or distributor and

generally depends on market conditions, features, options and, potentially, regulatory requirements. Retail sale prices

may differ from the manufacturer-suggested list prices, as a result of different factors (markets' demand, customers'

specific requirements, local market conditions, general economic conditions, access to financing, etc.). We sell most of

our portfolio to our dealers and distributors at wholesale prices that reflect a discount from the manufacturer-suggested

list prices. In the ordinary course of business, we engage in promotional campaigns that may include price incentives or

preferential financing terms with respect to the purchase of products.

We regularly advertise our products to the community of farmers, builders, transporters and agricultural and

construction contractors, as well as to distributors and dealers in each of our major markets. To reach our target

audience, we use a combination of general media, specialized design and trade magazines, the Internet and direct

mail. We also regularly participate in major international and national trade shows and engage in co-operative

advertising programs with distributors and dealers. The promotion strategy for each brand varies according to the target

customers for that brand.

PARTS AND SERVICES

The quality and timely availability of parts and services are important competitive factors for each of our businesses, as

they are significant elements in overall dealer and customer satisfaction and important considerations in a customer’s

original equipment purchase decision. We supply parts, many of which are proprietary, to support items in the current

product line as well as for products we have sold in the past. We also offer personalized aftersales customer assistance

programs that provide a wide range of modular and flexible maintenance and repair contracts, as well as warranty

Board Report Business Overview 50

extension services, to meet a variety of customers’ needs and to support the vehicle’s value over time. Many of our

products can have economically productive lives of up to 20 years when properly maintained, and each unit has the

potential to produce a long-term parts and services revenue stream for us and our dealers.

As of December 31, 2021 we operated and administered 46 parts depots worldwide either directly, through a joint

venture, or through arrangements with warehouse service providers. This network includes 9 parts depots in North

America, 14 in Europe, 3 in South America, and 20 in Rest of World. The network includes 31 parts depots that support

Agriculture, 27 that support Construction, 19 that support Commercial and Specialty Vehicles and 6 that support

Powertrain. These depots supply parts to dealers and distributors, which are responsible for sales to retail customers.

Our parts depots and parts delivery systems provide customers with access to substantially all the parts required to

support our products.

JOINT VENTURES

As part of a strategy to enter and expand in new markets, we are also involved in several commercial and/or

manufacturing joint ventures. At December 31, 2021, they included the following:

▪in Japan, we own 50.0% of New Holland HFT Japan Inc. (“HFT”), which distributes its products in Japan. HFT

imports and sells the full range of New Holland agricultural equipment;

▪in Pakistan, we own 43.2% of Al Ghazi Tractors Ltd., which manufactures and distributes New Holland tractors;

▪in Turkey, we own 37.5% of Turk Traktor ve Ziraat Makineleri A.S., which manufactures and distributes various

models of both New Holland and Case IH tractors;

▪in Mexico, we own 50.0% of CNH de Mexico S.A. de C.V., which manufactures New Holland agricultural equipment

and distributes our agricultural equipment through one or more of its wholly-owned subsidiaries;

▪in China, we control 60% of SAIC Fiat Powertrain Hongyan Ltd (“SFH”), a manufacturing company located in

Chongqing, which produces diesel engines under license from us to be sold in the Chinese market and to be

exported to Europe, the U.S. and Latin America;

▪in South Africa, we own 60.0% of Iveco South Africa Works (Pty) Ltd., which manufactures medium and heavy-duty

commercial vehicles and buses; and

▪in Germany, we own 50.0% of Nikola Iveco Europe GmbH, which will manufacture cab over battery-electric vehicle

and hydrogen fuel cell electric vehicle trucks, jointly developed by Iveco S.p.A. and Nikola Corporation.

FINANCIAL SERVICES

Financial Services offers a range of financial products and services to dealers and customers in the various regions in

which it operates. The principal products offered are retail loan and lease financing for the purchase or lease of new

and used equipment and vehicles, wholesale financing to dealers and factoring of trade receivables from CNH

Industrial companies. Wholesale financing consists primarily of dealer floor plan financing and gives the dealers the

ability to maintain a representative inventory of new products. In addition, Financial Services provides financing to

dealers for used equipment and vehicles taken in trade, equipment utilized in dealer-owned rental yards, parts

inventory, working capital and other financing needs. As a captive finance business, Financial Services is reliant on and

supports the operations of Agriculture, Construction, Commercial and Specialty Vehicles, and Powertrain, their dealers,

and customers.

Financial Services supports the growth of Industrial Activities by developing and structuring financial products with the

objective of increasing equipment and vehicle sales as well as profitability and customer loyalty. Financial Services’

strategy is to grow a core financing business to support the sale of our equipment and vehicles while at the same time

maintaining its portfolio credit quality, service levels, operational effectiveness and customer satisfaction. Financial

Services also offers products to finance third party equipment and vehicles sold through our dealer network or within

our core businesses. Financed third party equipment and vehicles include used equipment and vehicles taken in trade

on our products or equipment used in conjunction with or attached to our products.

In North America, customer and dealer financing activities, which support the sales of Agriculture and Construction, are

managed through our wholly-owned financial services companies.

In Europe, there are two joint ventures that provide retail financing to customers of Agriculture, Construction, and

Commercial and Specialty Vehicles, depending on the country of origin. CNH Industrial Capital Europe S.a.S., a joint

venture with BNP Paribas Group, is 49.9% owned by CNH Industrial N.V. and accounted for under the equity method,

until the Demerger. Post-Demerger, CNH Industrial N.V. will own 24.95% and Iveco Group will own 24.95%. Transolver

Finance Establecimiento Financiero de Credito S.A. (“Transolver Finance”), a joint venture with the Santander Group, is

49% owned by CNH Industrial N.V. and accounted for under the equity method until the Demerger. Post-Demerger,

Transolver Finance will be part of the Iveco Group. Transolver Finance also provides wholesale financing to dealers.

Additionally, there are vendor programs with banking partners that provide customer financing of Agriculture,

Board Report Business Overview 51

Construction, and Commercial and Specialty Vehicles, in different countries. Customer and dealer financing activities

not included in the joint ventures or vendor programs, such as factoring of trade receivables, are managed through our

wholly-owned financial services companies until the Demerger. Post-Demerger these activities will be serviced by the

Iveco Group, who will receive a fee for services rendered.

Post-Demerger, in Europe, the Middle East and Africa (EMEA), the Iveco Group Financial Services organization will

provide services to the CNH Industrial Post-Demerger financial services on customer financing and factoring regulated

in a specific Master Service Agreement (Financial Services Master Service Agreement). In Europe, CNH Industrial

Financial Services S.A. (renamed in 2022 as Iveco Capital Financial Services S.A.), a French specialized credit

institution with passporting to operate in main European countries, wholly-owned by Iveco Group, will manage CNH

Industrial Post-Demerger dealer financing through a dedicated securitization. CNH Industrial Capital Solutions S.p.A.

will retain the securitization program junior notes.

For South America, customer and dealer financing activities in Brazil are managed through our wholly-owned financial

services company, Banco CNH Industrial Capital S.A. (“Banco CNH Industrial Capital”), which support the sales of

Agriculture, Construction, and Commercial and Specialty Vehicles. For customer financing, Banco CNH Industrial

Capital mainly serves as a lender for funding provided by BNDES, a federally-owned financial institution linked to the

Brazilian Ministry of Development, Industry and Foreign Trade. In Argentina, customer and dealer financing activities,

which support the sales of Agriculture, Construction, and Commercial and Specialty Vehicles, are managed through a

wholly-owned financial services company. Vendor programs with banking partners are also in place in Argentina.

Post-Demerger, for South America, Banco CNH Industrial Capital S.A. will support and serve sales of Iveco Group with

a Vendor Program. Banco CNH Industrial Capital will continue to serve as a lender for Iveco Group. In Argentina, CNH

Industrial Post-Demerger Financial Services will support and serve sales of Iveco Group with a Vendor Program.

For Rest of World, customer and dealer financing activities in Australia, New Zealand, Russia and India are managed

through wholly-owned financial services companies. In China, dealer financing activities are managed through wholly-

owned financial services companies. Post-Demerger CNH Industrial Financial Services will provide dealer and

customer financing activities for Iveco Group in Australia, New Zealand and Russia. CNH Industrial Financial Services

will continue to provide customer and dealer financing activities for CNH Industrial activities in Australia, New Zealand,

Russia, India and dealer financing activities in China.

Customer Financing

Financial Services has certain retail underwriting and portfolio management policies and procedures that are specific to

Agriculture, Construction, and Commercial and Specialty Vehicles. This distinction allows Financial Services to reduce

risk by deploying industry-specific expertise in each of these businesses. We provide retail financial products primarily

through our dealers, who are trained in the use of the various financial products. Dedicated credit analysis teams

perform retail credit underwriting. The terms for financing equipment and vehicle retail sales typically provide for

retention of a security interest in the equipment or vehicles financed.

Financial Services’ guidelines for minimum down payments for equipment and vehicles generally range from 5% to 30%

of the actual sales price, depending on equipment types, repayment terms, and customer credit quality. Finance

charges are sometimes waived for specified periods or reduced on certain equipment sold or leased in advance of the

season of use or in connection with other sales promotions. For periods during which finance charges are waived or

reduced on the retail notes or leases, Financial Services generally receives compensation from the applicable Industrial

Activities segment based on Financial Services’ estimated costs and a targeted return on equity. The cost is recognized

as a reduction in net sales for the applicable Industrial Activities segment.

Dealer Financing

Financial Services provides wholesale floor plan financing for nearly all our dealers. This allows them to acquire and

maintain a representative inventory of products. Financial Services also 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. For floor plan financing, Financial Services generally provides a fixed period of “interest free” financing

to the dealers. This practice helps to level fluctuations in factory demand and provides a buffer from the impact of sales

seasonality. For the “interest-free” period, the applicable Industrial Activities segment compensates Financial Services

based on Financial Services’ estimated costs and a targeted return on equity. The cost is recognized as a reduction in

net sales for the applicable Industrial Activities segment. After the expiration of any “interest-free” period, interest is

charged to dealers on outstanding balances until Financial Services receives payment in full.

A wholesale underwriting group reviews dealer financial information and payment performance to establish credit lines

for each dealer. In setting these credit lines, Financial Services seeks to meet the reasonable requirements of each

dealer while managing its exposure to any one dealer. The credit lines are secured by the equipment or vehicles

financed. Dealer credit agreements generally include a requirement to repay the particular financing at the time of the

retail sale of the unit. Financial Services leverages employees, third party contractors, and new digital technologies like

“geo-fencing” to conduct periodic stock audits at each dealership to confirm that the financed equipment or vehicle is

Board Report Business Overview 52

maintained in inventory. These audits are unannounced, and their frequency varies by dealer and depends on the

dealer’s financial strength, payment history, and prior performance.

Factoring

Financial Services also provides intragroup factoring of trade and other receivables. This activity involves the purchase

(without recourse) of receivables of CNH Industrial companies, originating from the different Industrial Activities

segments, and due from third or related parties.

Sources of Funding

The long-term profitability of Financial Services’ activities largely depends on the cyclical nature of the industries in

which we operate, interest rate volatility, and the ability to access funding on competitive terms. Financial Services

funds its operations and lending activity through a combination of term receivable securitizations, committed secured

and unsecured facilities, uncommitted lines of credit, unsecured bonds, unsecured commercial paper, affiliated

financing, and retained earnings. Financial Services’ current funding strategy is to maintain sufficient liquidity and

flexible access to a wide variety of financial instruments and funding options.

Financial Services has periodically accessed the asset-backed securities (“ABS”) markets in the United States,

Canada, and Australia, as part of its retail and wholesale financing programs when those markets offer funding

opportunities on competitive terms. Financial Services has also accessed the unsecured bond market in the United

States, Brazil, Argentina and Australia and commercial paper markets in the United States and France to diversify its

funding sources. Financial Services’ ability to access these markets will depend, in part, upon general economic

conditions and Financial Services’ financial condition and portfolio performance. These factors can be negatively

affected by cyclical swings in the industries in which we operate.

Competition

The financial services industry is highly competitive. Financial Services competes primarily with banks, equipment

finance and leasing companies and other financial institutions. Typically, this competition is based upon the financial

products and services offered, customer service, financial terms, and interest rates charged. Financial Services’ ability

to compete successfully depends upon, among other things, the availability and competitiveness of funding resources,

the development of competitive financial products and services, and licensing or other governmental regulations.

LEGAL PROCEEDINGS

As a global company with a diverse business portfolio, CNH Industrial in the ordinary course of business is exposed to

numerous legal risks, including, without limitation, dealer and supplier litigation, intellectual property right disputes,

product warranty and defective product claims, product performance, asbestos, personal injury, emissions and/or fuel

economy regulatory and contractual issues, competition law and other investigations and environmental claims. The

most significant of these matters are described in Note 27 “Commitments and contingencies” to the Consolidated

Financial Statements for the year ended December 31, 2021.

The outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse

decisions in one or more of these proceedings, claims or investigations could require CNH Industrial to pay substantial

damages or fines or undertake service actions, recall campaigns or other costly actions. It is therefore possible that

legal judgments could give rise to expenses that are not covered, or not fully covered, by insurers’ compensation

payments and could affect CNH Industrial’s financial position and results. When it is probable that an outflow of

resources embodying economic benefits will be required to settle obligations and this amount can be reliably estimated,

CNH Industrial recognizes specific provisions for this purpose.

Although the ultimate outcome of legal matters pending against CNH Industrial and its subsidiaries cannot be predicted,

management believes the reasonable possible range of losses for these unresolved legal matters in addition to the

amounts accrued would not have a material effect on our Consolidated Financial Statements.

Follow-up on Damages Claims: in 2011 Iveco S.p.A. ("Iveco"), which, following the Demerger, is now part of Iveco

Group N.V., and its competitors in the European Union were subject to an investigation by the European Commission

(the “Commission”) into certain business practices in the European Union (in the period 1997-2011) in relation to

Medium & Heavy trucks. On July 19, 2016, the Commission announced a settlement with Iveco ("the Decision").

Following the Decision, the Company, Iveco and Iveco Magirus AG ("IMAG") have been named as defendants in

proceedings across Europe. The consummation of the Demerger will not allow CNH Industrial to be excluded from

current and future follow on proceedings originating from the Decision because under EU competition law a company

cannot use corporate reorganizations to avoid liability for private damage claims. In the event one or more of these

judicial proceedings would result in a decision against CNH Industrial ordering it to compensate such claimants as a

result of the conduct that was the subject matter of the Decision, and Iveco and IMAG does not comply with such

decisions, as a result of various intercompany arrangements, then CNH Industrial will ultimately have recourse against

Iveco and IMAG for the reimbursement of the damages effectively paid to such claimants. The extent and outcome of

these claims cannot be predicted at this time.

Board Report Business Overview 53

FPT Emissions Investigation: on July 22, 2020, a number of CNH Industrial's offices in Europe were visited by

investigators in the context of a request for assistance by the public prosecutors of Frankfurt am Main, Germany and

Turin, Italy in relation to alleged noncompliance of two engine models produced by FPT Industrial S.p.A. ("FPT"), which

is now part of the Iveco Group N.V., installed in certain Ducato (a vehicle distributed by Stellantis) and Iveco Daily

vehicles. FPT is providing its full cooperation to properly address the requests received. FPT, other companies of Iveco

Group, and in certain instances CNH Industrial and other third parties have received various requests for compensation

by German and Austrian customers on various contractual and tort grounds, including requests for damages resulting

out of the termination of the purchase contracts, or in the form of requests for an alleged lower residual value of their

vehicles as a consequence of the alleged non-compliance with type approval regulations regarding emissions. In

certain instances, other customers have brought judicial claims on the same legal and factual bases. Although, at the

date hereof, the Company has been informed by the Iveco Group that it has no evidence of any wrongdoing, it cannot

predict at this time the extent and outcome of these requests and directly or indirectly related legal proceedings,

including customer claims or potential class actions alleging emissions non-compliance.

INSURANCE

We maintain insurance with third party insurers to cover various risks arising from our business activities including, but

not limited to, risk of loss or damage to our assets or facilities, business interruption losses, general liability, automobile

liability, product liability and directors' and officers' liability insurance. We believe that we maintain insurance coverage

that is customary in our industry. We use a broker that is a subsidiary of Stellantis N.V. ("Stellantis", formerly Fiat

Chrysler Automobiles N.V. which, effective January 16, 2021, merged with Peugeot S.A. by means of a cross-border

legal merger) to place a portion of our insurance coverage.

PLANTS AND MANUFACTURING PROCESSES

As of December 31, 2021, we owned 70 manufacturing facilities. We also own other significant properties including

spare parts depots, research laboratories, test tracks, warehouses, and office buildings.

We make capital expenditures in the regions in which we operate principally related to initiatives to introduce new

products, enhance manufacturing efficiency and improve capacity, and for maintenance and engineering. In 2021, our

total capital expenditures in long-lived assets, excluding assets sold with buy-back commitments and equipment on

operating leases, were $1,189 million of which 74% was spent in Europe, 15% in North America, 6% in South America

and 5% in Rest of World, respectively. These capital expenditures were funded through a combination of cash

generated from operating activities and borrowings under short-term facilities. In 2020, our total capital expenditures

were $848 million. 2021, capital expenditures were higher than in 2020 as expenditures returned to more normal levels

from the pandemic-affected low levels experienced last year.

Board Report Business Overview 54

The following table provides information about our manufacturing and engineering facilities for Continuing Operations

as of December 31, 2021:

Italy

Bagno di Romagna

Earthmoving machines

Jesi

Tractors

Lecce

Wheel loaders, compact track loaders, telehandlers; graders; R&D center

130

Modena

Components (Agriculture and Construction)

102

S. Matteo

R&D center (Agriculture)

United States

Benson

Sprayers, cotton pickers; R&D center

Burlington

Backhoe loaders, forklift trucks; R&D center

Burr Ridge (Hinsdale)

R&D center (Agriculture, Construction and Diesel engines)

Fargo

Tractors, wheeled loaders; R&D center

Goodfield

Soil management equipment; R&D center

Grand Island

Tractors and combines

128

Mt. Joy

R&D center (Agriculture)

Mt. Vernon

Tracks; R&D center

New Holland

Hay & Forage; R&D center

104

Racine

Tractors, transmissions

105

Sioux Falls

Ag Assembly Mfg, Repair Shop, Training and R&D center

St. Nazianz

Self-propelled sprayers

Wichita

Skid steer loaders; R&D center

France

Coex

Grape Harvesters; R&D center

Croix

Cabins (Agriculture)

Tracy-Le-Mont

Hydraulic cylinders (Agriculture and Construction)

Brazil

Belo Horizonte

Crawler excavators, crawler dozers, wheel loaders, graders, backhoe loaders;

R&D center

Curitiba

Combines and tractors; R&D center

117

Piracicaba

Sugar cane harvesters, coffee harvesters, sprayers; R&D center

Sorocaba

Combines and other Agriculture; R&D center

188

China

Harbin

Combines, tractors, balers; R&D center

121

Urumqi

Cotton pickers

Belgium

Antwerp

Components (Agriculture)

Zedelgem

Combines, forage harvesters and balers; R&D center

154

India

Noida

Tractors; R&D center

Pithampur

Backhoe loaders, earth compactors, crawler excavator; R&D center

Pune

Sugar cane harvesters and combines; R&D center

Poland

Kutno

Row crop, cultivators, harvesters; R&D center

Plock

Combines, balers and headers; R&D center

129

Others

Cordoba (Argentina)

Tractors and combines

St. Valentin (Austria)

Tractors; R&D center

Cowra (Australia)

Tillage; R&D center

Saskatoon (Canada)

Sprayers, seeders; R&D center

Queretaro (Mexico)

Components (Agriculture and Construction)

Naberezhnye Chelny (Russia)

Tractors and combines

Wieringerwerf (Netherlands)

Ag Assembly Mfg

Location

Primary Functions

Approximate

Covered Area

(Sqm/000)

Board Report Business Overview 55

Överum (Sweden)

Ploughs; R&D center

Basildon (United Kingdom)

Tractors; R&D center

129

Location

Primary Functions

Approximate

Covered Area

(Sqm/000)

The following table provides information about our manufacturing and engineering facilities for Discontinued Operations

as of December 31, 2021:

Italy

Brescia

Medium vehicles, cabs, chassis; R&D center

276

Brescia

Firefighting vehicles; R&D center

Bolzano

Defense vehicles; R&D center

Foggia

Engines; drive shafts; R&D center

151

Piacenza

Quarry and construction vehicles; R&D center

Suzzara

Light vehicles; R&D center

170

Torino

Transmissions and axles

239

Torino

Engines

142

Torino

R&D center (Commercial and Specialty Vehicles)

Torino

R&D center (Powertrain)

France

Annonay

Buses (Coaches & City); R&D center

114

Bourbon Lancy

Engines; R&D center

107

Fecamp

Engines (power generation units)

Fourchambault

Engines (remanufacturing)

Rorthais

Buses (City); R&D center

Venissieux

R&D center (Commercial and Specialty Vehicles)

Brazil

Sete Lagoas

Heavy, medium and light vehicles; R&D center

160

Sete Lagoas

Defense vehicles

Sete Lagoas

Engines; R&D center

Germany

Ulm

Firefighting vehicles; R&D center

Ulm

R&D center (Commercial and Specialty Vehicles)

China

Chongqing

Engine; R&D centers

Chongqing

ATS plant

Shanghai

R&D center (Powertrain)

—

Argentina

Cordoba

(Medium/Heavy) Trucks and buses; R&D center

Cordoba

Engines

Spain

Madrid

Heavy vehicles; R&D center

134

Valladolid

Light vehicles, heavy cab components

United Kingdom

Coventry

R&D center (Powertrain)

Shoream-by-Sea

R&D center (Powertrain)

—

Others

Dandenong (Australia)

Trucks (heavy); R&D center

Vysoke Myto (Czech Republic)

Buses (City & Intercity); R&D center

125

Gwangju (South Korea)

R&D center (Powertrain)

—

Arbon (Switzerland)

R&D center (Powertrain)

Burr Ridge (United States)

R&D center (Diesel engines)

Location

Primary Functions

Approximate

Covered Area

(Sqm/000)

Board Report Business Overview 56

World Class Manufacturing

In striving to consolidate and maintain high standards of excellence in its manufacturing systems, CNH Industrial

applies principles of World Class Manufacturing (“WCM”), the innovative program for continuous improvement that

encompasses the most effective manufacturing methodologies. These include: Total Quality Control (“TQC”), Total

Productive Maintenance (“TPM”), Total Industrial Engineering (“TIE”), and Just In Time (“JIT”). Applying rigorous

methods and procedures, WCM aims to eliminate all types of waste and loss, including zero injuries, zero defects, zero

breakdowns, zero waste, reduced inventories, and punctual delivery of parts by suppliers to plants, and thereafter to

dealers and end users. The WCM system is applied to all departments, embracing numerous topics including safety in

the workplace, the environment, quality, logistics, in-house and specialist maintenance, human resources, and process

and product engineering (involving the reorganization of work stations, the installation of new machinery, and new

product launches). Actions for continuous improvement are driven by the Cost Deployment pillar of WCM, which

precisely identifies all plant wastes and losses, guides the activities of the corporate functions in charge of containing

and eliminating the sources of waste, evaluates project feasibility, and assesses and certifies the results achieved by

carefully monitoring specific performance indicators.

One of the main features of WCM is the way it incentivizes employees to engage and take responsibility, contributing

directly to process optimization through a consistent system for collecting suggestions. This allows individuals to

acquire and develop skills and good practices that are then shared across plants, forming a network of expertise and

knowledge for the benefit of the Group. In 2021, approximately 464,000 suggestions were collected across the plants

where WCM principles are applied, with an average of 12.2 per employee. The projects implemented in 2021 within

WCM generated savings of approximately $36.8 million.

Each WCM pillar involves a seven-step approach and auditing process, culminating in several awards (bronze, silver,

gold, and world class). As of December 31, 2021, 51 plants were participating in the program, representing 99% of

revenues from sales of products manufactured in Group’s plants. By the end of 2021, 3 plants have gold awards, 16

plants have silver awards and 25 plants have bronze awards.

Environmental impacts of manufacturing processes

The Group’s manufacturing facilities are subject to a variety of laws designed to protect the environment, particularly

with respect to solid and liquid wastes, air emissions, energy usage and water consumption. CNH Industrial is

committed to continuously improving the environmental performance of its manufacturing processes, beyond the

requirements of legislation, adopting the best technologies available and acting responsibly to preserve natural

resources and to fight climate change. These are important priorities due to the nature and extent of their environmental

and economic impact, and highlighted by their political, technological, and economic implications, in terms of both

sustainable procurement and impact mitigation. Environmental protection at CNH Industrial is focused on prevention,

conservation, information, and people engagement, thus facilitating long-term management. CNH Industrial has

adopted an Environmental Policy that describes the short, medium, and long-term commitments toward responsible

management of environmental aspects, such as: energy, natural resources, raw materials, hazardous substances,

polluting emissions, waste, natural habitats, and biodiversity.

These aspects are included in CNH Industrial's environmental management system and energy management system

and in the environmental pillar of WCM; the systems require compliance with guidelines, procedures, and operating

instructions, and regular internal audits and reviews by management. This dual approach facilitates the effective

management of all environmental aspects deriving from manufacturing processes, the adequate evaluation of

outcomes and the achievement of challenging targets set within the Sustainability Plan.

The materiality analysis identified air emissions (covered by the material topic CO2 and other air emissions), the use of

renewable energy, the consumption of water, and the management of waste as the most significant environmental

aspects for both the Company and its stakeholders.

The highest responsibility for initiatives focusing on energy efficiency, management of CO2 emissions and

environmental protection lies with the SLT.

Receipt of a certification for environmental or energy management confirms that an organization has a system capable

of keeping the impacts of its operations under control, and that it systematically seeks to improve this system in a way

that is coherent, effective and, above all, sustainable. The participation in the ISO 14001 and ISO 50001 certification

process is on a voluntary basis. As of December 31, 2021, 58 plants were ISO 14001 certified, while ISO 50001 energy

management systems were implemented in 54 plants, representing about 99.9% of energy consumption.

Consolidated monitoring and reporting systems are used to keep track of environmental performance, measure the

effectiveness of actions taken to achieve targets, and plan new initiatives for continuous improvement, through the

management of appropriate Key Performance Indicators (KPIs). These indicators can be analyzed at different

aggregate levels (plant, segment, geographic region, or Group), which allows for the simultaneous and parallel

engagement of different corporate functions at various levels to meet targets.

Board Report Business Overview 57

In 2021, the main environmental KPIs maintained the positive trend recorded in recent years, in line with the targets set

in the Sustainability Plan, reconfirming CNH Industrial’s significant commitment to environmental protection.

Environmental and energy targets

Target year

Target

Energy consumption (GJ per hour of production)

2030

-30% vs 2014

CO2 emissions (tons per hour of production)

2024

-50% vs 2014

2030

-60% vs 2014

Electric energy consumption from renewable sources (%)

2024

2030

VOC emissions (g/m2)

2022

-27% vs 2014

Water withdrawals (m3 per hour of production)

2022

-24% vs 2014

Hazardous waste generation (kg per hour of production)

2022

-36% vs 2014

Waste recovered (%)

2024

95%

Environmental and energy performance(1)

2021/2020(%)

2021

2020

Energy consumption (GJ per hour of production)

-8.5%

0.08610

0.09415

CO2 emissions (tons per hour of production)

-12.7%

0.00408

0.00467

Electric energy consumption from renewable sources (%)

74.9

72.0

VOC emissions (g/m2)

-6.3%

39.9

42.5

Water withdrawals (m3 per hour of production)

-13.6%

0.065

0.075

Hazardous waste generation (kg per hour of production)

-15.6%

0.22

0.26

Waste recovered (%)

95.1

93.9

(1)Environmental performance relates to 54 fully consolidated plants, representing 99.5% of revenues from sales of products manufactured in Group’s

plants. Energy performance relates to 55 fully consolidated plants, representing 99.7% of revenues from sales of products manufactured in Group’s

plants.

CO2 emissions were calculated according to GHG Protocol standards, implemented through CNH Industrial guidelines. The indicator includes scope

1 and scope 2 emissions, as per the market-based methodology of the GHG Protocol.

The hours of production refer to the number of manufacturing hours, defined as hours of presence of hourly employees within the manufacturing

scope required to manufacture a product.

The performance of the indicators is in line with the targets set.

CNH Industrial’s expenditure on environmental protection measures totaled approximately $48 million in 2021 and

included: approximately $35 million on waste disposal and emissions treatment and almost $13 million on prevention

and environmental management. In 2021, about $7.1 million was invested in improving energy performance, leading to

a reduction in energy consumption of approximately 173 TJ and a corresponding reduction in CO2 emissions of over

12,000 tons.

Numerous projects were implemented in 2021 to optimize environmental and energy management. For example, the

plant in Sankt Valentin (Austria) modified the paint mist extraction method within its driveline painting process, switching

its separation system from wet to dry. In addition to reducing hazardous waste by 33 tons and the paintshop’s water

consumption by 56 cubic meters, the conversion generated a total of approximately $74,400 in savings on separation

system maintenance and waste disposal costs.

SUPPLIERS

CNH Industrial adopts a responsible approach to the management of its supply chain, establishing relationships that go

beyond commercial transactions, fostering long-lasting and mutually satisfying collaborations with qualified partners that

share the Group’s principles. CNH Industrial has adopted the Supplier Code of Conduct that provides the framework for

responsible supply chain management. In addition to compliance with local legislation, the Supplier Code of Conduct

calls for observance of human rights and working conditions, respect for the environment, and business ethics. All

suppliers carrying on business with CNH Industrial are deemed to agree and accept the contents of the Supplier Code

of Conduct and such agreement and acceptance is evidenced by the supplier continuing to do business with CNH

Industrial.

At December 31, 2021, CNH Industrial had approximately 4,142 global direct materials suppliers.

CNH Industrial’s standards of environmental and social responsibility have been fully integrated into its supply chain

management. Supplier selection is an operational phase of the procurement process and is regulated by specific

procedures. Supplier selection is based not only on cost, product innovation, production flexibility, and the quality and

competitiveness of their products and services, but also on their compliance with CNH Industrial’s social, ethical and

environmental principles. The assessment process is built on objective criteria and tools aimed at ensuring fairness and

equal opportunities for all parties involved.

Board Report Business Overview 58

Furthermore, to assess whether suppliers meet the sustainability standards set by CNH Industrial and, where

necessary, take steps towards improvement and realignment, a monitoring process has been designed and

implemented. During the first step of the process, suppliers are requested to self-assess their policies and practices on

sustainability through a questionnaire, mainly focused on the following issues: human rights, environment, compliance

and ethics, diversity, and health and safety. The questionnaires are analyzed and used to perform a risk assessment,

which allows the Company to identify critical suppliers whose compliance with sustainability criteria requires

assessment, through follow-up, on-site audits. The audits are performed at suppliers’ plants by either CNH Industrial

Supplier Quality Engineers (SQEs) or independent external auditors. In 2021, 1,389 suppliers completed the

questionnaire and 95 audits were performed remotely. The analysis of the results highlighted the widespread

implementation of sustainability initiatives, with a significant number of suppliers adopting their own social and

environmental systems, setting specific targets and drafting periodic reports. In some cases, corrective action plans for

areas in need of improvement were formulated in collaboration with suppliers; they are monitored through follow-up

discussions and meetings between supplier and auditor. The monitoring process is considered also as a way to

promote continuous improvement along the supply chain.

Continuous improvement is also seen in WCM Purchasing, which has continued providing its advice to suppliers

intending to implement the WCM system. As at December 31, 2021, the total number of supplier plants that had

adopted the World Class Manufacturing ("WCM") program was 220. This means they now apply what is considered to

be one of the world’s leading set of manufacturing standards.

In addition, another important supplier engagement activity carried out in 2021, the CDP Supply Chain initiative,

concerns the mitigation of environmental impacts. In keeping with the previous year, 125 suppliers were selected to fill

out the CDP questionnaire, to get a clear picture of their strategies to tackle climate change and of their current, or still

to be implemented, initiatives to reduce CO2 emissions.

Moreover, CNH Industrial has implemented a compliance program and policy intended to promote responsible sourcing

of tin, tantalum, tungsten, and gold (“3TG”) from the Democratic Republic of Congo (DRC) and surrounding region

(conflict minerals), where revenues from the extraction of natural resources have historically funded armed conflict and

human rights abuses. CNH Industrial’s Conflict Minerals Policy was adopted in 2013 and is available on the Company

website. The Policy is intended to promote sourcing 3TG from responsible sources in the Democratic Republic of

Congo and surrounding region. The Company annually performs its supply chain due diligence consistent with OECD

guidelines. CNH Industrial is committed to making reasonable efforts to establish, and to require each supplier to

disclose, whether 3TG are used or contained in products purchased by the Company and the source of that 3TG.

Board Report Business Overview 59

RESEARCH AND DEVELOPMENT

In a continuously and rapidly changing competitive environment, CNH Industrial’s research activities are a vital

component of its long-term growth strategy. Each year the Company makes substantial investments in research and

development. Such continuous investment and development activities are critically important to the continuing success

of the Group.

Research and development times are reduced, where possible, to accelerate time-to-market, while taking advantage of

specialization and experience in different markets. Technical and operational synergies and rapid technical

communication form the basis of our research and development process. CNH Industrial’s innovation process consists

of a series of clear-cut steps, from the evaluation of innovative concepts up to the final step before production. CNH

Industrial believes innovation is essential to offering customers highly technological, eco-friendly, safe, and ergonomic

products with a low Total Cost of Ownership (“TCO”).

In this spirit, research activities focus primarily on the development of products that can: reduce polluting and CO2

emissions; use biofuels; adopt electric and hydrogen traction systems; incorporate advanced precision farming

functionality and autonomous driving. For this reason, the Company’s research and development activities focus mainly

on: efficient diesel engines, decarbonization, digitalization, and automation.

In 2021, our expenditure on research and development (including capitalized development costs and costs charged

directly to operations during the year) totaled $1,249 million, or 3.7% of net revenues from Industrial Activities.

Research and development activities involved approximately 6,100 employees at 59 sites (30 sites related to

Continuing Operations and 29 sites related to Discontinued Operations) around the world of which approximately 900

employees were located at 13 sites in emerging countries(1).

The following table shows our total research and development expenditures, including capitalized development costs

and costs charged directly to operations during the year, by segment for the years ended December 31, 2021 and

2020:

($ million)

2021

2020

Agriculture

560

426

Construction

Commercial and Specialty Vehicles

417

297

Powertrain

186

151

Other Activities

—

Total of Industrial Activities

1,249

950

Financial Services

—

Eliminations

—

Total

1,249

950

We own a significant number of patents, trade secrets, and trademarks related to our products and services, and that

number is expected to grow as our research and development activities continue. At year end, we had 14,647 active

patents (in addition to 3,935 applications pending). We file patent applications in Europe, the United States and in other

jurisdictions around the world to protect technology and innovations considered important to our businesses. Certain

trademarks contribute to our identity and the recognition of our products and services are an integral part of our

business, and their loss could have a material adverse effect on our financial results.

(1) Emerging Markets are defined as low, lower-middle or upper-middle income countries as per the World Bank list of economies as at June 2020.

Board Report Research and Development 60

HUMAN RESOURCES

EMPLOYEES

The ability to attract, retain, and further develop qualified employees is crucial to the success of CNH Industrial’s

businesses and its ability to create value over the long-term. CNH Industrial’s business is, by its nature, labor intensive

and this is reflected in the high number of Group hourly employees.

The following tables show the breakdown of the number of employees by segment and by region at December 31,

2021 and 2020:

2021

2020

(number)

Continuing

Operations

Discontinued

Operations

CNHI Pre-

Demerger

Continuing

Operations

Discontinued

Operations

CNHI Pre-

Demerger

Agriculture

31,103

—

31,103

25,162

—

25,162

Construction

5,770

—

5,770

5,173

—

5,173

Commercial and Specialty

Vehicles

—

25,332

—

24,230

Powertrain

—

8,213

—

8,197

Other Activities

136

Total of Industrial Activities

36,943

33,611

70,554

30,403

32,495

62,898

Financial Services(*)

820

521

1,341

649

469

1,118

Total

37,763

34,132

71,895

31,052

32,964

64,016

(*) Starting from 2021, Financial Services includes Capital staffs.

2021

2020

(number)

Continuing

Operations

Discontinued

Operations

CNHI Pre-

Demerger

Continuing

Operations

Discontinued

Operations

CNHI Pre-

Demerger

Europe

14,111

29,151

43,262

13,056

28,615

41,671

North America

11,181

11,244

7,985

8,048

South America

7,936

3,606

11,542

6,058

2,842

8,900

Rest of World

4,535

1,312

5,847

3,953

1,444

5,397

Total

37,763

34,132

71,895

31,052

32,964

64,016

As of December 31, 2021, CNH Industrial had 71,895 employees, an increase of 7,879 from the 64,016 employees at

year-end 2020. The change was mainly attributable to the difference between new hires (approximately 13,000) and

departures (approximately 7,300) during the year. A further increase of approximately 2,100 employees was due to

changes in the scope of the operations, mainly related to the acquisitions of Raven Industries Inc. in the U.S.,

Sampierana S.p.A. in Italy and of four divisions of Capital Equipment Group in South Africa. Raven Industries, a leader

in the precision agriculture technology, will significantly improve CNH Industrial’s competitive position and will add

strong innovation capabilities to accelerate our precision and digital strategy. Sampierana is a company specializing in

the development, manufacture and commercialization of earthmoving machines, undercarriages and spare parts.

Sampierana’s portfolio solidifies our presence in critical market segments and provides our dealers and customer

access to industry-leading products backed by our brand, distribution, and manufacturing experience. Capital

Equipment Group transaction enables CNH Industrial to expand its direct distribution network of Case IH Agriculture,

Case Construction Equipment and aftermarket services in Southern Africa, and drives continuous development of new

and improved services for our customer in the region. Excluding the changes in the scope of operations, the increase

compared to year-end 2020 is attributable mainly to the hiring of fixed-term and open-term workers in manufacturing

due to the production volumes increase driven by strong demand in the market, primarily in the Agriculture segment in

South America, North America and Europe, in the Construction segment in South America and North America and in

the Commercial and Specialty Vehicles mainly in South America and, to a lesser extent, in Europe. Moderate increase

in Research and Development personnel to strengthen the pool of skills and competencies in view of technology

Board Report Human Resources 61

transitions, particularly electrification, autonomous driving, alternative propulsion solutions, digitalization and cloud web

based software technologies.

As stated in CNH Industrial's Code of Conduct, occupational health and safety is an employee's fundamental right and

a key part of Group’s sustainability model and included in the Materiality Matrix as one of the most material topics for

CNH Industrial and its stakeholders. Safety management engages all employees in creating a culture of accident

prevention and risk awareness, sharing common occupational health and safety ethical principles to achieve

improvement targets. One of the initiatives developed by CNH Industrial is an effective health and safety management

system that conforms to ISO 45001 international standard. As demonstration of the Group's commitment in this area,

58 plants are ISO 45001 certified. In 2021, approximately $131.3 million was spent on improving health and safety

protection. The investments in health and safety allowed, as an additional benefit, savings on the insurance premiums

paid to the Italian National Institute for Insurance against Accidents at Work (INAIL) for a total of approximately $1.8

million in 2021. To achieve the challenging targets that the Group has set, all employees are involved in informational

activities and in classrooms and hands-on training consistent with their roles and responsibilities. CNH Industrial

provided 412,820 hours of training on occupational health and safety in 2021. Approximately 43,400 employees were

engaged in training on the job activities on occupational health and safety, 81.9% of whom were hourly. Owing to the

Group’s many initiatives, the overall employee injury frequency rate in 2021 was 1.725 injuries per 1,000,000 hours

worked, a 11.3% decrease compared to the previous year. The target set for 2024 is to reduce by 50% the employee

injury frequency rate compared to 2014 data.

The Group realizes that the nature of today’s socio-economic context calls for leaders with the ability to evolve and

develop. A solid people management process is the key to success, as it includes employees in the formulation of the

Group’s business goals, takes advantage of employee talent and fuels workforce motivation. CNH Industrial is

committed to supporting its employees with development opportunities and recognizing and rewarding their

achievements and contribution to business results. In 2021, CNH Industrial spent approximately $1.9 million on

employee training. In total, 1,041,982 training hours were provided to 43,036 individuals. The target set for 2022 is to

engage 100% of employees worldwide in training activities.

As evidenced by the materiality analysis, both employee engagement in sustainability matters and digital workplaces

are key contributors to being a more sustainable Company. These material topics affect, both directly and indirectly,

how employees adapt their approach to the changing workplace environment. Employee engagement, leveraged to

increase employee awareness of sustainability topics (especially in terms of environmental protection, health and

proper nutrition, and food security and waste), plays an important role in reaching the Company’s goals, as reflected in

the targets set in terms of training, employee volunteering, and wellbeing initiatives promoting healthy lifestyles. As

regards digital workplaces, the Company promotes the use of new technologies to improve work quality and efficiency,

employee work-life balance (remote work), and the exchange of information, in part to foster innovation.

DIVERSITY AND INCLUSION

The Company rejects all forms of discrimination that is based on race, ethnicity, gender, sexual orientation, personal or

social status, health, physical condition, disability, age, nationality, religious or personal beliefs, political opinion or

against any other protected group.

The responsibility for diversity and inclusion ("D&I") lies primarily with the Senior Leadership Team ("SLT"), committed

to creating a truly diverse and inclusive workplace where everyone benefits from equal opportunities based on their

abilities and skills. Offering career and advancement opportunities free from discrimination while encouraging and

respecting diversity are among the commitments emphasized in CNH Industrial’s Human Capital Management

Guidelines and Human Rights Policy, available on the Company’s website and Intranet portal.

The Human Resources (HR) head of each segment/function collaborates with Business Management to ensure that, in

every aspect of the employment relationship - be it recruitment, training, compensation, promotion, or relocation -

employees are treated on the basis of their ability to meet the requirements of the job.

The Senior Leadership Team proved its full engagement and determination to champion the issue by signing the D&I

Commitment Statements, rejecting any form of discrimination, and pledging to create an environment where everyone

benefits from equal opportunities based on their abilities and skills.

COLLECTIVE BARGAINING

In the United States, unions represent a small portion of our production and maintenance employees. The collective

bargaining agreement with the United Automobile, Aerospace and Agricultural Implement Workers of America, which

represents approximately 950 hourly production and maintenance employees in Burlington, Iowa and Racine,

Wisconsin, continues through April 30, 2022. The collective bargaining agreement with the International Association of

Machinists and Aerospace Workers, which represents approximately 600 of our employees in Fargo, North Dakota,

continues through April 28, 2024.

Board Report Human Resources 62

In Europe, most employees are covered by collective labor agreements (“CLAs”) stipulated either by a CNH Industrial

subsidiary or by the employer association for the specific industry which the CNH Industrial subsidiary belongs to.

In Italy, approximately 16,800 CNH Industrial employees are covered by the CLA that continues through December 31,

2022 and approximately 440 CNH Industrial managers are covered by the 2016 CLA extended on October 21, 2020

until December 31, 2022. The approximately 210 employees and 8 managers of Sampierana S.p.A., whose 90% of

capital stock was purchased on December 30, 2021 by CNH Industrial, are covered, respectively, by the National CLA

of Metal Industry and by the National CLA for managers of the Metal Industry.

Board Report Human Resources 63

OPERATING AND FINANCIAL REVIEW

AND PROSPECTS

INTRODUCTION

The results presented in this Annual Report are prepared in accordance with EU-IFRS and use the U.S. dollar as the

presentation currency.

On November 30, 2021, CNH Industrial completed its acquisition of Raven Industries, Inc., (“Raven”) a U.S.-based

leader in precision agriculture technology. Furthermore, on December 30, 2021, CNH Industrial completed the purchase

of 90% of the capital stock of Sampierana S.p.A., a construction equipment company based in Italy. Financial

information included in this Annual Report reflects the consolidation, on a line-by-line basis, of the preliminary fair value

of acquired assets and liabilities of both companies, with no material impacts on 2021 net income and free cash flow of

Industrial Activities.

ALTERNATIVE PERFORMANCE MEASURES (OR “NON-GAAP FINANCIAL MEASURES”)

CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial’s

management believes that these non-GAAP financial measures provide useful and relevant information regarding its

operating results and enhance the readers' ability to assess CNH Industrial's financial performance and financial

position. Management uses these non-GAAP measures to identify operational trends, as well as to make decisions

regarding future spending, resource allocations and other operational decisions as they provide additional transparency

with respect to our core operations. These non-GAAP financial measures have no standardized meaning under EU-

IFRS or U.S. GAAP and are unlikely to be comparable to other similarly titled measures used by other companies and

are not intended to be substitutes for measures of financial performance and financial position as prepared in

accordance with EU-IFRS or U.S. GAAP.

As of December 31, 2021, CNH Industrial's non-GAAP financial measures are defined as follows:

▪Adjusted EBIT of Industrial Activities under EU-IFRS: is defined as profit/(loss) before taxes, Financial Services'

results, Industrial Activities' financial expenses, restructuring costs, and certain non-recurring items. In particular, non-

recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent

in nature and not reflective of on-going operational activities.

▪Adjusted EBIT of Industrial Activities under U.S. GAAP: is derived from financial information prepared in accordance

with U.S. GAAP and is defined as net income (loss) before income taxes, Financial Services' results, Industrial

Activities' interest expenses ,net, foreign exchange gains/losses, finance and non-service component of pension and

other post-employment benefit costs, restructuring expenses, and certain non-recurring items.

▪Adjusted Diluted EPS under U.S. GAAP: is derived from financial information prepared in accordance with U.S.

GAAP and is computed by dividing Adjusted Net Income (loss) attributable to CNH Industrial N.V. by a weighted-

average number of common shares outstanding during the period that takes into consideration potential common

shares outstanding deriving from the CNH Industrial share-based payment awards, when inclusion is not anti-dilutive.

When we provide guidance for adjusted diluted EPS, we do not provide guidance on an earnings per share basis

because the GAAP measure will include potentially significant items that have not yet occurred and are difficult to

predict with reasonable certainty prior to year-end.

▪Net Cash (Debt) and Net Cash (Debt) of Industrial Activities under EU-IFRS: Net Cash (Debt) is defined as total Debt

plus Derivative liabilities, net of Cash and cash equivalents, Current securities, Derivative assets and other current

financial assets (primarily current securities, short-term deposits and investments towards high-credit rating

counterparties). We provide the reconciliation of Net Cash (Debt) to Total (Debt), which is the most directly

comparable GAAP financial measure included in our consolidated statement of financial position. Due to different

sources of cash flows used for the repayment of the debt between Industrial Activities and Financial Services (by

cash from operations for Industrial Activities and by collection of financing receivables for Financial Services),

management separately evaluates the cash flow performance of Industrial Activities using Net Cash (Debt) of

Industrial Activities.

▪Net Cash (Debt) and Net Cash (Debt) of Industrial Activities under U.S. GAAP: are derived from financial information

prepared in accordance with U.S. GAAP. Net Cash (Debt) under U.S. GAAP is defined as total debt less

intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets (primarily

current securities, short-term deposits and investments towards high-credit rating counterparties) and derivative

hedging debt.

▪Free Cash Flow of Industrial Activities (or Industrial Free Cash Flow) under EU-IFRS: refers to Industrial Activities,

only, and is computed as consolidated cash flow from operating activities less: cash flow from operating activities of

Board Report Operating and Financial Review and Prospects 64

Financial Services; investments of Industrial Activities in property, plant and equipment and intangible assets; as well

as other changes and intersegment eliminations.

▪Free Cash Flow of Industrial Activities (or Industrial Free Cash Flow) under U.S. GAAP: refers to Industrial Activities,

only, and is computed as consolidated cash flow from operating activities less: cash flow from operating activities of

Financial Services; investments of Industrial Activities in assets sold under buy-back commitments, assets under

operating leases, property, plant and equipment and intangible assets; change in derivatives hedging debt of

Industrial Activities; as well as other changes and intersegment eliminations.

▪Available Liquidity under IFRS: is defined as cash and cash equivalents (including restricted cash), undrawn

committed facilities and other current financial assets (primarily current securities, short-term deposits and

investments towards high-credit rating counterparties).

▪Change excl. FX or Constant Currency: we discuss the fluctuations in revenues on a constant currency basis by

applying the prior year average exchange rates to current year’s revenues expressed in local currency in order to

eliminate the impact of foreign exchange rate fluctuations.

Iveco Group Business Spin-off