cnhi-2022-12-31-en

CONTENTS


BOARD OF DIRECTORS AND AUDITOR ...................................................................................................................	2
A MESSAGE FROM THE CHAIR & CHIEF EXECUTIVE OFFICER .......................................................................	3
BOARD REPORT ..............................................................................................................................................................	7
PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION .......................................................	7
OUR COMMITMENT TO SUSTAINABLE DEVELOPMENT AND LONG-TERM VALUE CREATION ............	9
REPORT ON OPERATIONS .......................................................................................................................................	23
SELECTED FINANCIAL DATA ...............................................................................................................................	23
RISK FACTORS ........................................................................................................................................................	24
BUSINESS OVERVIEW ...........................................................................................................................................	37
RESEARCH AND DEVELOPMENT .......................................................................................................................	52
HUMAN RESOURCES ............................................................................................................................................	53
OPERATING AND FINANCIAL REVIEW AND PROSPECTS ...........................................................................	55
RISK MANAGEMENT AND CONTROL SYSTEM ...............................................................................................	76
CORPORATE GOVERNANCE ...............................................................................................................................	80
REMUNERATION REPORT ....................................................................................................................................	97
MAJOR SHAREHOLDERS .....................................................................................................................................	136
SUBSEQUENT EVENTS AND OUTLOOK ...........................................................................................................	141
CNH INDUSTRIAL CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2022 ............................	142
CONSOLIDATED INCOME STATEMENT ................................................................................................................	143
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ......................................................................	144
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................................	145
CONSOLIDATED STATEMENT OF CASH FLOWS ...............................................................................................	147
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................................	148
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ...........................................................................	149
COMPANY FINANCIAL STATEMENTS AT DECEMBER 31, 2022 ..........................................................................	227
INCOME STATEMENT .................................................................................................................................................	228
STATEMENT OF FINANCIAL POSITION .................................................................................................................	229
NOTES TO THE COMPANY FINANCIAL STATEMENTS ......................................................................................	230
OTHER INFORMATION ...................................................................................................................................................	256
APPENDIX - CNH INDUSTRIAL GROUP COMPANIES AT DECEMBER 31, 2022 .............................................	258
INDEPENDENT AUDITOR’S REPORT .........................................................................................................................	262

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, 2022)

Amsterdam Chamber of Commerce: reg. no. 56532474

Contents 1

BOARD OF DIRECTORS

AND AUDITOR


BOARD OF DIRECTORS Chair Suzanne Heywood
Chief Executive Officer
Scott W. Wine	INDEPENDENT AUDITOR
Directors	Ernst & Young Accountants LLP
Léo W. Houle(2)(3)(*)
Catia Bastioli (2)(3)(**)
Howard W. Buffett(2)(3)(**)
Karen Linehan(1)(**)(a)
Alessandro Nasi(2)(3)
Vagn Sørensen(1)(**)
Åsa Tamsons(1)(**)

(1)Member of the Audit Committee

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

(3)Member of the Human Capital and Compensation Committee

(*)Independent Director and Senior Non-Executive Director

(**)Independent Director

(a)Ms. Karen Linehan was appointed as Chair of the Audit Committee following the retirement of John B. Lanaway on September 1, 2022.

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

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: economic conditions in each of our markets, including the significant uncertainty caused by the war in the Ukraine; the duration and

economic, operational and financial impacts of the global COVID-19 pandemic; production and supply chain disruptions, including industry capacity

constraints, material availability, and global logistics delays and constraints; the many interrelated factors that affect consumer confidence and worldwide

demand for capital goods and capital goods-related products; 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; labor relations; interest rates and currency exchange rates;

inflation and deflation; energy prices; prices for agricultural commodities and material price increases; housing starts and other construction activity; our

ability to obtain financing or to refinance existing debt; price pressure on new and used equipment; the resolution of pending litigation and investigations

on a wide range of topics, including dealer and supplier litigation, 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; political and civil unrest; volatility and deterioration of capital and financial markets, including 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

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. 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 2

A MESSAGE FROM THE CHAIR &

CHIEF EXECUTIVE OFFICER

DELIVERING ON OUR CUSTOMER-INSPIRED STRATEGY AND INNOVATIONS IN 2022

CNH Industrial finished its first year as a focused agriculture and construction business with an impressive set of results

and accomplishments. Our dedicated team of over 38,000 employees redoubled their focus on customers and worked

tirelessly to deliver for them in spite of challenging supply chains, significant geopolitical risks and persistent inflation.

We face the future with energy and optimism, centered on our purpose of Breaking New Ground through Innovation,

Sustainability, and Productivity.

We unveiled this purpose, together with our new strategic priorities and 2024 financial objectives, at our Capital Markets

Day in February. Our targets and detailed product roadmaps for both the agriculture and construction segments were

welcomed by the financial community and other stakeholders. Given market uncertainties we were deliberately cautious

in our forecasting and, at least to some extent, this was validated by the adverse conditions that arose during 2022.

The agriculture and construction industries that support our business are cyclical, so we were pleased that demand in

both remained robust throughout the year, particularly in the Americas. Inflation was high throughout most of the world,

but our businesses were diligent about maintaining price over cost. We believe planning conservatively is the most

prudent way to manage the business for our stakeholders, but as we demonstrated in 2022, this does not prevent us

from capturing upside if markets outperform our expectations.

Our global team will always work with integrity and purpose to meet or exceed any standard we set. We wish to thank

them for embracing our priorities and making them their own. Alongside their daily work, they have been integral to our

Culture Transformation. This asks every person, in every part of the business, to adopt our cultural beliefs and take an

accountable and collaborative approach to achieve our common goals.

OUTSTANDING RESULTS AND A BRIGHT FUTURE FOR OUR AGRICULTURE BUSINESS(*)

With the support of his leadership team, Derek Neilson is implementing an ambitious plan to advance our agriculture

business. Case IH, New Holland Agriculture, and Steyr are globally recognized brands that have served farmers for

generations and are supported by a comprehensive network of knowledgeable and dedicated dealers.

The acquisition and subsequent integration of Raven Industries has been foundational to enhancing CNH Industrial’s

precision farming offerings and accelerating our intent of marrying our great iron with great tech, which we introduced at

our Capital Markets Day. Throughout 2022, by combining Raven’s significant expertise in digital agriculture, precision

technology and autonomous farming systems with our in-house capabilities, we reduced product development time and

cost while improving our equipment’s efficiency and productivity. One example of this was our introduction of the

industry’s first autonomous spreader, the Case IH Trident. We also launched driver-assisted products that are available

either as retrofits or integrated into our proprietary products. We know that precision farming is fundamental to our

customers and therefore we also substantially expanded our technical talent base – building on the significant talent

that Raven brings – increasing the size of this group by 50%. Overall R&D spending in agriculture increased by 40%,

also reflecting our intent to further accelerate the pace of our innovation.

We are proud of the new technology that we have been able to deliver for our customers this year, but will never stop

working to be better. By continuing to integrate sensor-driven data analysis, automation and autonomy, and more

sustainable powertrain solutions into our equipment, we will enhance farmers’ efficiency and productivity while helping

them protect the environment.

These technological developments, underpinned by strong operational execution, positively impacted product quality,

delivery, and dealer support and resulted in substantial Net Promoter Score gains. This strong execution, which was

particularly illustrated by our outstanding performance in the Americas, drove the segment’s record financial results for

the year: Net Sales of $18 billion, +22% vs. 2021; Adjusted EBIT of $2.5 billion +$646 million vs. 2021; and Adjusted

EBIT margin of 13.7% +140 bps vs. 2021.

IMPROVING RESULTS AND STRATEGIC OUTLOOK FOR CONSTRUCTION EQUIPMENT(*)

Our construction business also had a strong year in 2022, one that demonstrated both the successful turnaround

achieved by Stefano Pampalone and his team, and the future potential of this business. The team has continued to

improve the competitiveness of our offering and to position the business better to serve our dealers and customers.

They are taking full advantage of synergies between our agriculture and construction businesses such as supply chain,

real world applications, and component compatibility.

Letter from the Chair and the Chief Executive Officer 3

Our construction business is also beginning to see the results of our long-term investment in this segment. The first full

year with our newly-acquired Sampierana business – a European brand with specific expertise in mini excavators – saw

their products drive notable growth, particularly in Europe. We are investing in specific product lines, such as heavy

excavators, and are working hard to serve our customers in that high growth segment. Further investment is foreseen in

electrification and in selected markets where there are the biggest opportunities for growth, such as India.

Looking to the future we are conscious that the construction industry faces challenges with rising interest rates

impacting housing in many markets. However, having discontinued our sub-scale construction business in China last

year, we no longer have exposure to that difficult market. Infrastructure spending is also expected to be strong in North

America, and our lean organization is well positioned to respond to dynamic global construction market conditions.

All of these efforts saw the construction segment deliver record financials in 2022 including Net Sales of $3.6 billion,

+16% vs. 2021; Adjusted EBIT of $124 million +$34 million vs. 2021; and Adjusted EBIT margin of 3.5% +60 bps vs.

2021. While there is still much work to do to achieve our 2024 construction EBIT margin target of 5.5% to 6.5%, we are

confident that we can achieve this interim goal and additional profitable growth beyond it.

Our Full Year Financials(*) reflect the success of the company's efforts across both our segments. Consolidated

revenues were $23.6 billion - up 21% from the previous year. Net income - $2 billion - and earnings per share - $1.49 -

were the highest in our company's history. This solid growth is reflective of strong end markets and the sharp execution

of our strategy.


	2022	2021	Change
Consolidated revenues ($ billion)	23.6	19.5	+21%
Net income ($ billion)	2.0	1.8	+238 million
Diluted earnings per share ($)	1.49	1.32	0.17

In March, we launched a share buyback program which involved the intermittent repurchase of up to 100 million euros'

worth of the Company's common shares, which was concluded in September 2022. In July, we announced a further

$300 million share buyback program, $50 million of which we allocated in the year.

TECH MILESTONES

As part of our strategy to enhance our technology offering, in 2022 we expanded our R&D footprint, unveiled the

agriculture industry's first dynamic simulator for virtual testing, and invested to speed up the development of our

technology stack. We released competitive new products, and accelerated future initiatives, in both the agricultural and

construction businesses.

In particular, for precision technology related sales, we delivered more than 30% growth in 2022, and forecast a 10 -

15% annual growth rate across the next two to three years. In 2023 we expect these technologies to deliver an

estimated $1 billion in net sales contribution from precision technology components (these include technology

contained in wholegoods, retrofit components, and Raven third-party sales). The pace of our precision-enabled product

launches will accelerate in 2024 and beyond.

We inaugurated three R&D centers to further our global work in customer-inspired innovation. The India Technology

Center located in New Delhi, India, is focused on product development and digital solutions. The Advanced Engineering

Center in Scottsdale, Arizona, USA, develops digital, automation and autonomous technologies while our newly opened

facility in Detroit, Michigan, USA, is working on electrification projects.

In December, we showcased our precision technology and alternative fuels programs and products at our Tech Day.

Investors, analysts and journalists witnessed the real-world readiness of this ag-tech to boost efficiency, yields, and

ultimately profitability for farmers everywhere. Autonomous tillage, advanced combine automation and precision

spraying technology were just three of the productivity-enhancing technologies on display.

We also reaffirmed our leadership in alternative fuels in 2022 - both in electrification and natural gas. We unveiled

further electrified construction equipment models - focusing on the mini-excavator segment - which provide zero

emission and quiet operation, ideal when working in urban areas or inside buildings. We also introduced the world's first

liquefied natural gas pre-production prototype tractor, the New Holland T7 Methane Power LNG (T7 LNG). This follows

our commercial release of the world’s first compressed natural gas tractor which provides farmers with a profitable,

sustainable, and energy-independent means to work their land. The T7 LNG can be fueled by biomethane produced

from a farm's crop and livestock waste, providing significant fuel cost savings and substantial environmental benefits.

Biomethane can also be used to generate electricity, and its production creates organic fertilizer as a byproduct, further

reducing a farmer's input costs.

Letter from the Chair and the Chief Executive Officer 4

The T7 LNG is also an example of our ongoing work with partners that are applying new technologies to make farming

more efficient, sustainable and cost-effective. In this specific case we are working with Bennamann, an UK-based

expert in capturing and repurposing fugitive methane emissions for energy use.

Our collaboration with Bennamann is one example of the work of CNH Industrial Ventures, which was formed in early

2022 to manage our strategic partnerships with innovative enterprises. Its focus is to spearhead breakthrough change

in agriculture and construction through strategic investments. CNH Industrial Ventures is also managing a set of other

partnerships, including:

▪Monarch Tractor, a dynamic newcomer in the electrified agriculture vehicles space, with unique capabilities in

automation. We displayed our first joint result at Tech Day – the New Holland T4 Electric Power, the world’s first

electric utility tractor with autonomous features.

▪Augmenta, a machine vision solutions company founded by farmers in Greece, that provides a cost-effective

means of enabling see and act technology.

▪Stout Industrial Technology, a US-based startup focused on AI-powered smart agricultural implements, expands

our mechanical weeding product offering and will accelerate our development of further cultivation solutions.

FURTHER CONSOLIDATION FOR FINANCIAL SERVICES

Our financing division worked diligently to continue integrating our commercial lending solutions and enhance our

receivables portfolio in 2022. Our North American entities – CNH Industrial Capital America and CNH Industrial Capital

Canada – successfully completed the purchase of our commercial revolving account receivables, previously held by

Citibank under a white label agreement. This brought 163,000 customer accounts in-house for a portfolio totaling $238

million. It has given us the ability to directly support more of our customers and further enhances our flexibility and

product offering for the aftermarket needs of our dealers and customers.

OPERATIONAL EXCELLENCE

Our Purchasing, Logistics and Manufacturing teams worked steadfastly to mitigate supply chain pressures in 2022.

Their stalwart efforts allowed us, in conjunction with an overloaded supply base, to complete and ship units on time for

our dealers and customers.

Building better supplier relationships is the focus of our multi-year Strategic Sourcing Program (SSP). Its aim is to

ensure that we partner with the best suppliers in the world for each product category, working closely with them to

capture what we call ‘Best Total Value’. This approach considers a whole host of parameters - including quality, delivery,

service, working capital, and, of course, price - to deliver the optimal solution for the product or service being sourced.

We expect this program to drive significant margin expansion and long-term pricing stability in 2023 and beyond. To

launch the SSP, we held our first global supplier conventions in the fall of 2022, hosting over 800 existing and

prospective component suppliers for the initial phase.

Our plants and depots were the first areas of our company to implement the continuous improvement practices

introduced through our new CNH Industrial Business System (CBS). Building on our strong foundation of World Class

Manufacturing, CBS renews our emphasis on Lean and strategic breakthrough results to drive improvements in quality,

delivery and innovation, yielding better products and margins. This proven model adopts a simple and focused

approach to create value for customers and eliminate waste from every business process.

A YEAR OF ACHIEVEMENTS

We were pleased to receive continued recognition from leading financial, institutional and industry bodies in 2022. This

included both Fitch Ratings and Moody's Investors Service upgrading our ratings in the first quarter of 2022 - setting a

positive tone for the year with our shareholders; and our Brands receiving Innovation, Technology and Design awards

from leading international authorities.

SUSTAINABILITY STEWARDSHIP

We began a new chapter in our long-term commitment to sustainability by signing up to the Science-Based Targets

Initiative (SBTi) at the start of the year. It furthers our pledge to reducing our carbon footprint, ensuring the sustainable

lifecycle of our products and increasing the eco-efficiency of our operating sites, among other goals. We were again

recognized by inclusion in the CDP's A-List for global climate change stewardship, our 12th consecutive year being

named as the Industry top scorer by the Dow Jones Sustainability World and Europe Indices, and our 9th consecutive

MSCI ESG AAA rating.

We also continued to work on creating more equal opportunities through a series of projects at local level, such as the

upskilling of women for the construction sector. Our employee-enabling approach has helped us achieve certifications

as a Great Place to Work ® in seven of our major markets.

Letter from the Chair and the Chief Executive Officer 5

We also believe in supporting our local communities, with our focus this year of course being on Ukraine. At the start of

the war, we donated $500,000 to support humanitarian relief. Following this, we ran an employee fundraiser to collect

donations for the Red Cross and UNICEF, which we matched dollar for dollar.

These are just some of our numerous ESG initiatives and programs. You can find out more about these in our 2022

Sustainability Report, which will be issued on the day of our Annual General Meeting on April 14, 2023.

SOLID GOVERNANCE FOR SOLID GROWTH

Our Board of Directors remains instrumental in providing the oversight and wisdom required to ensure we are

embarking upon, and achieving, judicious plans and strategic priorities. They challenge the executive team on a wide

range of topics from precision technology to culture change, and they actively guide us to become a more focused,

efficient, and effective company. In September we mourned the loss of John Lanaway, our longstanding and incredibly

dedicated and effective Audit Chair and a greatly respected friend. He has been ably succeeded by Karen Linehan, who

is actively building on his legacy.

THE YEAR AHEAD

Building upon the solid foundations laid in 2022, we see continuing strength in most end markets, better performing

supply chains, and moderating inflation.

As such, we are providing the following 2023 outlook for our Industrial Activities:

▪Net sales(**) up between 6% and 10% year on year;

▪SG&A up, no more than 5% vs 2022;

▪Free Cash Flow of Industrial Activities(***) between $1.3 bn and $1.5 bn;

▪R&D expenses and capital expenditures at around $1.6 bn.

We have confidence in the demand for agricultural equipment and continued profitable growth from our construction

business.

2022 was a year of tremendous progress - financial, sustainable and technological - and we are excited to continue

Breaking New Ground and delivering products and services that advance the noble work of farmers and builders. In

closing, we would like to thank you for your ongoing support and partnership.

Sincerely,

Suzanne Heywood Scott W. Wine

CHAIR, CNH INDUSTRIALCHIEF EXECUTIVE OFFICER, CNH INDUSTRIAL

(*) Numbers presented under US-GAAP

(**) Net sales reflecting the exchange rate of 1.05 EUR/USD

(***) This items 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 6

BOARD REPORT

PRESENTATION OF FINANCIAL AND

CERTAIN OTHER INFORMATION

CNH Industrial N.V. (or “the Company”) is incorporated in, and 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. CNH

Industrial N.V. is the company initially formed by the business combination transaction, completed on September 29,

2013, between Fiat Industrial S.p.A. ("Fiat Industrial") and its majority owned subsidiary CNH Global N.V. ("CNH

Global"). Unless otherwise indicated or the context otherwise requires, the terms "we", “us”, “our”, “CNH Industrial” and

"the Group" refer to CNH Industrial and its subsidiaries.

CNH Industrial reports quarterly and annual consolidated financial results in accordance with accounting standards

generally accepted in the United States (“U.S. GAAP”) for U.S. Securities and Exchange Commission ("SEC") reporting

purposes, and 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") 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.

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, Middle East and Africa; (3) South America and (4) Asia Pacific. The geographic designations

have the following meanings:

▪North America: United States, Canada and Mexico;

▪Europe, Middle East, and Africa: member countries of the European Union, European Free Trade Association, the

United Kingdom, Ukraine and Balkans, Russia, Turkey, Uzbekistan, Pakistan, the African continent and the Middle

East;

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

▪Asia Pacific: Continental Asia (including the India subcontinent), Indonesia, and Oceania.

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 other

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 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.

Iveco Group N.V. Demerger

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.

On January 3, 2022, Iveco Group N.V. common shares began trading on the Euronext Milan, under the ticker symbol

‘IVG’. As a result of the Demerger, each holder of CNH Industrial N.V. common shares (and special voting shares as the

case may be) received one Iveco Group N.V. share for every five CNH Industrial N.V. common shares (or special voting

share as the case may be) held at close of business on the record date for allocation (January 4, 2022). Since January

Board Report Presentation of Financial and Certain Other Information 7

3, 2022, CNH Industrial N.V. and Iveco Group N.V. have been quoted separately on the regulated markets and operate

as independent listed companies, each with its own management and Board of Directors.

As the transaction took effect on January 1, 2022, the Consolidated Financial Statements at December 31, 2022, relate

to CNH Industrial remaining business. Moreover, in accordance with IFRS 5 – Non-current Assets Held for Sale and

Discontinued Operations for the corresponding information of earlier periods, the Iveco Group Business is classified

and presented as Discontinued Operations in these Consolidated Financial Statements.

For additional details of items presented under Discontinued Operations in the Consolidated Statements of Income,

Financial Position and Cash Flows, refer to the section “Significant accounting policies - Iveco Group Business Spin-off

and Discontinued Operations”.

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 Post-Demerger 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.

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" or the "On-

Highway Business"), which are classified as Discontinued Operations, as well as the Agriculture business, the

Construction business, and the related Financial Services business (collectively, the "Off-Highway Business") which are

classified as Continuing Operations, as following:

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, combines, 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. Regionally focused

brands include: STEYR, for agricultural tractors; Flexi-Coil specializing in tillage and seeding systems; Miller

manufacturing application equipment; Kongskilde providing tillage, seeding and hay & forage implements. Further,

starting in December 2021, Raven was included in the Agriculture segment bringing a leader in digital agriculture,

precision technology and the development of autonomous systems to CNH Industrial.

▪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, New Holland Construction and Eurocomach 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 engines, transmission

systems and axles for on- and off-road applications, as well as for marine and power generation.

Financial Services

▪Financial Services offers retail note and lease financing to end-use customers for the purchase of new and used

agricultural and construction equipment and components sold through CNH Industrial brands' dealer network, as well

as revolving charge account financing and other financial services. Financial Services also provides wholesale

financing to CNH Industrial brand dealers and distributors. Further, Financial Services provides trade receivables

factoring to CNH Industrial companies. The European operations of CNH Industrial Financial Services are supported

by the Iveco Group's Financial Services segment. CNH Industrial Financial Services provides financial services to

Iveco Group companies in the North America, South America and Asia Pacific regions.

Board Report Presentation of Financial and Certain Other Information 8

OUR COMMITMENT TO SUSTAINABLE

DEVELOPMENT AND LONG-TERM VALUE

CREATION

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

engaging 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 includes strategic sustainability targets in its Strategic Business Plan that are in line

with its 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 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 9

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

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

contributing to a better future. 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.

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 CNH Industrial’s annual Sustainability Report(1).

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

the Group 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, 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 Group’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 comprehensive 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 priorities and tracks

commitments undertaken; and

▪the annual Sustainability Report, which discloses the Group’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 its business decisions, increasingly integrating sustainability principles into its 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.

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.

(1) The 2022 Sustainability Report will be made available on the Company’s website as of April 14, 2023, the day of the 2022 Annual General Meeting of Shareholders.

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 Group, 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). 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.


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

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

four thematic areas showing how the Group 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.

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 CNH Industrial 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 Group’s strategy. Climate-

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

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(2) 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 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.

Targets 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 sustainability strategy is framed within the Company’s purpose, Breaking New Ground, 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 CNH Industrial to identify not only risk exposure, but also opportunities, on which the Group’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 Group’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. CNH Industrial 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. Resulting analyses are incorporated within the Group strategy to ensure full compliance with

applicable laws. CNH Industrial develops 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.). CNH Industrial also takes

advantage of the collaboration with strategic business partners, startups, and external expertise in the emerging

technology sector.

To ensure the timely delivery of its strategy, CNH Industrial 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.

(2) 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 13

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, CNH Industrial’s Enterprise Risk Management (“ERM”) framework is designed to

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

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

realization of opportunities.

CNH Industrial's ERM processes are aligned with the Group’s Sustainability Program and its strategic sustainability

targets and aspirational goals, including those related to climate change, which are articulated in the Group’s Strategic

Business Plan.

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

its 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 framework, 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 Group 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 Group’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 Group strategies'. These activities provided the basis for the development of the

Group’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. CO2 emissions are calculated according to the Greenhouse Gas Protocol (GHG Protocol), incorporated into

CNH Industrial Guidelines.


METRICS	2022	2021	2020
Plants in scope	30	30	31
Direct energy consumption from renewable sources (GJ/000)	16	6	2
Direct energy consumption from non-renewable sources (GJ/000)	2,354	2,170	1,758
Total direct energy consumption (GJ/000)	2,370	2,176	1,760
Total indirect energy consumption from renewable sources (GJ/000)	784	661	551
Total indirect energy consumption from non-renewable sources (GJ/000)	618	697	546
Total indirect energy consumption (GJ/000)	1,402	1,358	1,097
Direct CO2 emissions (Scope 1) (Mtons/000)	127	120	95
Indirect CO2 emissions (Scope 2 – market-based) (Mtons/000)	105	100	84
Indirect CO2 emissions (Scope 2 – location-based) (Mtons/000)	125	119	102
Total CO2 emissions (Scope 1 and Scope 2 – market-based) (Mtons/000)	232	220	179

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

increase energy efficiency:


TARGETS	REFERENCE PERIOD	2022 RESULTS
50% reduction vs. 2018 in CO2 /h of production by 2030	2030	-30.0%
90% of total electricity consumption derived from renewable sources	2030	59.5%

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

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 15

EU Taxonomy on sustainable activities

The EU Taxonomy classification system introduced by the Regulation 2020/852 establishes a list of environmentally

sustainable economic activities, supporting the EU Green Deal objectives. The Regulation provides for common

definitions that identify when an economic activity can be considered as environmentally sustainable.

There are currently six environmental(1) objectives 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 2023.

For each objective, the EU Taxonomy defines the list of economic activities that can substantially contribute to it,

provided that it meets the related technical screening criteria (TSC)(2).

Starting from 2022, companies are required to disclose the proportion of turnover, capital expenditure (CapEx), and

operating expenditure (OpEx) of Taxonomy eligible and non-eligible activities: 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. From this reporting year on, companies are required to disclose their aligned KPI as well: for each eligible

activity, company shall then assess if the activity:

•meets the substantial contribution criteria;

•meets the do no significant harm (DNSH) criteria; and

•complies with minimum safeguards referred to in Art. 18 of the Regulation 852.

Eligibility assessment of CNH Industrial economic activities’

CNH Industrial conducted an eligibility assessment of its core business activities and operations, comparing the latter

against the subsections of Annexes I and II of the Commission Delegated Regulation (EU) 2021/2139.

In this context, CNH Industrial identified as eligible the production of electric traction technologies, which falls within the

definition of the activity 3.6 – “Manufacture of other low carbon technologies”.

Moreover, the Group identified a list of additional activities, related to expenses incurred during 2022 that can be

considered individually as Taxonomy-eligible investments, as contributing to the aim to reduce Group’s greenhouse

emissions(3):

•4.15 - District heating/cooling distribution;

•4.16 - Installation and operation of electric heat pumps;

•4.25 - Production of heat/cool using waste heat;

•6.5 - Transport by motorbikes, passenger cars and light commercial vehicles;

•7.2 - Renovation of existing buildings;

•7.3 - Installation, maintenance and repair of energy efficiency equipment;

•7.5 - Installation, maintenance and repair of instruments and devices for measuring, regulation and

controlling energy performance of buildings;

•7.6 - Installation, maintenance and repair of renewable energy technologies.

Alignment Assessment

The activities carried out by the group were considered eligible, but not aligned, as it was not possible to assess their

compliance with all the technical screening criteria laid down in the Appendix A: Generic Criteria for DNSH to Climate

Change Adaptation. For all the expenses considered as eligible, as the Group did not assess the full compliance of the

suppliers to the TSC and MSS, a precautionary approach was preferred.

For eligible activity 3.6, the Group assessed whether or not the technical screening criteria was met. For activity 3.6, an

LCA verified by an independent third party for each solution is required, and it has to be compared to the best

performing alternative technology/product/solution available on the market.

The assessment led us to determine activity 3.6 as not aligned because LCA verification has not been completed and

does not satisfy requirements at this time.

For activities 4.15, 4.16, 4.25, 6.5, 7.2, 7.3, 7.5, 7.6 related to OpEX activity, the group assessed whether or not the

technical screening criteria were met. Using a conservative approach, we cannot confirm that all technical screening

criteria were met.

(1) Individual measures as identified in Delegated Act – Annex I Art. 8, § 1.1.2.2, point c, related to the purchase of output from Taxonomy-aligned economic activities.

(2) 1 - climate change mitigation; 2 - climate change adaptation; 3 - sustainable use and protection of water and marine resources; 4 - transition to a circular economy; 5 - pollution prevention and control; and

6 - protection and restoration of biodiversity and ecosystems.

(3) 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 16

Minimum Social Safeguard Assessment

Article 3 of the EU Taxonomy Regulation set a further requirement for the economic activities to be considered

sustainable. Not only the activities shall meet the TSC, but they shall also be socially sustainable by meeting the

minimum safeguards.

The Taxonomy Regulation requires that the entity conducting an eligible activity shall also implement measures to

ensure the alignment with the OECD (Organization for Economic Cooperation and Development) Guidelines for

Multinational Enterprises and with the UN Guiding Principles on Business and Human Rights. Those procedures

include the principles and rights set out in the eight fundamental conventions identified in the Declaration of the

International Labour Organisation (ILO) on Fundamental Principles and Rights at Work and the International Bill of

Human Rights.

In order to verify compliance with minimum safeguards on its activities, CNH Industrial conducted a specific

assessment activity.

As referenced in our Corporate Governance Chapter, CNH Industrial respects and promotes human rights in line with

national laws, the fundamental Conventions of the International Labour Organization (ILO), the UN’s Universal

Declaration of Human Rights, and the OECD Guidelines for Multinational Enterprises.

CNH Industrial is committed to ensuring respect for fundamental human rights wherever it operates and seeks to

promote respect for these principles by others where it has an influence, particularly among contractors, suppliers, and

other entities and individuals with whom it has a business relationship.

CNH Industrial monitors respect for human rights both internally, through the Internal Audit function, and for suppliers,

through an annual assessment process. CNH Industrial also seeks to implement a variety of measures (e.g., training

activities) to help employees understand and address human rights issues in the course of their work.

Accounting Policy (1.2.1)

For the determination of the 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.

As for the calculation of the numerator, only the balance sheet items related to the identified activities (3.6, 4.15, 4.16,

4.25, 6.5, 7.2, 7.3, 7.5, and 7.6) were considered. As 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)

CNH Industrial identified nine taxonomy eligible activities[EY2] , which do not meet all the relevant technical screening

criteria.

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

in the financial statement of CNH Industrial N.V.

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 electrical construction vehicles (activity

3.6 “Manufacture of other low carbon technologies”).

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 the eligible

activities and in particular capital expenditures on fixed assets and R&D costs capitalized of the

industrial activities.

The main investments within the eligible costs are referred to renovation of plants with the aim to make them more

energy sustainable and efficient on production; all the investments involve mainly the production plan and product

development test labs. It also includes investments in relation to alternative propulsion (low carbon technologies) R&D

and Capital investments.

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

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 eligible

activities and in particular innovation and advanced engineer development for Products Electrification

and alternative propulsion solutions and R&D not capitalized of industrial activities.

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.

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

Proportion of turnover from products associated with Taxonomy-aligned economic activities – disclosure covering year

2022:

Substantial contribution criteria

DNSH criteria (“Does not Significantly Harm”)

Economic

activities

Code(s)

Absolu-

turnover

Propor-

tion of

turnover

Climate

change

mitigati-

Climate

change

adapta-

tion

Water

and

marine

re-

source

Circu-

lar

eco-

nomy

Pollu-

tion

Biodi-

versity

and

ecosy-

stems

Climate

change

mitigati-

Climate

change

adapta-

tion

Water

and

marine

re-

source

Circu-

lar

eco-

nomy

Pollu-

tion

Biodi-

versity

and

ecosy-

stems

Mini-

mum

safe-

guards

Taxo-

nomy-

aligned

propor-

tion of

CapEx,

year

2022

Taxo-

nomy-

aligned

propor-

tion of

CapEx,

year

2021

Cate-

gory

(ena-

bling

acti-

vity)

Cate-

gory

(transi-

tional

activi-

ty)

Y/N

A. TAXONOMY

ELIGIBLE

ACTIVITIES

A.1.

Environmentally

sustainable

activities

(Taxonomy-

aligned)

Turnover of

environmentally

sustainable

activities

(Taxonomy-

aligned) (A.1)

—

A.2 Taxonomy-

Eligible but not

environmentally

sustainable

activities

(not Taxonomy-

aligned

activities)

Manufacture of

other low carbon

technologies

3.6

—

B. TAXONOMY-

NON-ELIGIBLE

ACTIVITIES

Turnover of

Taxonomy-non-

eligible activities

(B)

21,539

100%

Total (A + B)

21,540

100%

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

Proportion of CapEx from products associated with Taxonomy-aligned economic activities – disclosure covering year

2022:


				Substantial contribution criteria						DNSH criteria (“Does not Significantly Harm”)
Economic activities	Code(s)	Absolu- te CapEx	Propor- tion of CapEx	Climate change mitigati- on	Climate change adapta- tion	Water and marine re- source	Circu- lar eco- nomy	Pollu- tion	Biodi- versity and ecosy- stems	Climate change mitigati- on	Climate change adapta- tion	Water and marine re- source	Circu- lar eco- nomy	Pollu- tion	Biodi- versity and ecosy- stems	Mini- mum safe- guards	Taxo- nomy- aligned propor- tion of CapEx, year 2022	Taxo- nomy- aligned propor- tion of CapEx, year 2021	Cate- gory (ena- bling acti- vity)	Cate- gory (transi- tional activi- ty)
		$M	%	%	%	%	%	%	%	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	%	%	E	T
A. TAXONOMY- ELIGIBLE ACTIVITIES			%
A.1. Environmentally sustainable activities (Taxonomy- aligned)
CapEx of environmentally sustainable activities (Taxonomy- aligned) (A.1)		0	—														—	—	—	—
A.2 Taxonomy- Eligible but not environmentally sustainable activities (not Taxonomy- aligned activities)
Manufacture of other low carbon technologies	3.6	6,9	1%
District heating/ cooling distribution	4.15	0,1	—
Installation and operation of electric heat pumps	4.16	0	—
Production of heat/cool using waste heat	4.25	0,1	—
Renovation of existing buildings	7.2	11,3	2%
Installation, maintenance and repair of energy efficiency equipment	7.3	7,8	1%
Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings	7.5	0,5	—
Installation, maintenance and repair of renewable energy technologies	7.6	0,3	—
CapEx of Taxonomy- eligible but not environmentally sustainable activities (not Taxonomy- aligned activities) (A.2)		27,0	4%
Total (A.1 + A.2)		27,0	4%
B. TAXONOMY- NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non- eligible activities (B)		603,0	96%
Total (A + B)		630,0	100%

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

Proportion of OpEx from products associated with Taxonomy-aligned economic activities – disclosure covering year

2022:


				Substantial contribution criteria						DNSH criteria (“Does not Significantly Harm”)
Economic activities	Code(s)	Absolu- te CapEx	Propor- tion of CapEx	Climate change mitiga- tion	Climate change adapta- tion	Water and marine re- source	Circu- lar eco- nomy	Pollu- tion	Biodi- versity and ecosy- stems	Climate change mitiga- tion	Climate change adapta- tion	Water and marine re- source	Circu- lar eco- nomy	Pollu- tion	Biodi- versity and ecosy- stems	Mini- mum safe- guards	Taxo- nomy- aligned propor- tion of CapEx, year 2022	Taxo- nomy- aligned propor- tion of CapEx, year 2021	Cate- gory (ena- bling acti- vity)	Cate- gory (transi- tional acti- vity)
		M$	%	%	%	%	%	%	%	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	%	%	E	T
A. TAXONOMY- ELIGIBLE ACTIVITIES			%
A.1. Environmentally sustainable activities (Taxonomy- aligned)
OpEx of environmentally sustainable activities (Taxonomy- aligned) (A.1)		0	0%														0	—	—	—
A.2 Taxonomy- Eligible but not environmentally sustainable activities (not Taxonomy- aligned activities)
Manufacture of other low carbon technologies	3.6	60,4	8%
District heating/ cooling distribution	4.15	0	—
Installation and operation of electric heat pumps	4.16	0	—
Production of heat/ cool using waste heat	4.25	0	—
Renovation of existing buildings	7.2	1,0	—
Installation, maintenance and repair of energy efficiency equipment	7.3	0,8	—
Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings	7.5	0	—
Installation, maintenance and repair of renewable energy technologies	7.6	0	—
OpEx of Taxonomy- eligible but not environmentally sustainable activities (not Taxonomy- aligned activities) (A.2)		62,2	8%
Total (A.1 + A.2)		62,2	8%
B. TAXONOMY- NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non- eligible activities (B)		732,3	92%
Total (A + B)		794,5	100%

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 2022 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 20

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. labor 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.	No	Human Resources/Corporate Governance/Board of Directors
	Description of how the policy is implemented.	Yes	Human Resources/Corporate Governance/Board of Directors
	Results of the diversity policy.	Yes	Human Resources/Corporate Governance/Board of Directors

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

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 219,900 Construction 45,800
Activity	RT-IG-000.B	Number of Employees	Number	40,070
Energy Management	RT-IG-130a.1	(1) total energy consumed	Gigajoules (GJ)	3,771,226
		(2) percentage grid electricity	%	35.6
		(3) percentage renewable	%	21.2
Employee Health and Safety	RT-IG-320a.1	(1) total recordable incident rate (TRIR)(1)	Rate	0.300
		(2) fatality rate(2)	Rate	—
		(3) near miss frequency rate (NMFR)(3)	Rate	15.683
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	Not applicable to CNH Industrial
	RT-IG-410a.2	Sales-weighted fuel efficiency for non-road equipment	Gallons per hour	(4)
	RT-IG-410a.3	Sales-weighted fuel efficiency for stationary generators	Watts per hour	Not applicable to CNH Industrial
	RT-IG-410a.4	Sales-weighted emissions of:	Grams per kilowatt-hour	(4)
		(1) nitrogen oxides (NOx) and
		(2) particulate matter (PM) for:
		(a) marine diesel engines,
		(b) locomotive diesel engines,
		(c) on-road medium- and 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	159

(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.

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 2022, the Company was included for the 12th

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

(87/100) within the Machinery and Electrical Equipment Industry. Furthermore, CNH Industrial was included in the A List

of the CDP Climate Change program, in recognition of its actions to tackle climate change. Moreover, in 2022, CNH

Industrial received an MSCI ESG Rating of AAA, was awarded ISS ESG Prime Status, and was a responder to the

2022 Workforce Disclosure Initiative (WDI).

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

REPORT ON OPERATIONS

SELECTED FINANCIAL DATA


($ million)	2022	2021(1)	2020(1)	2019(*)	2018(**)
Net revenues	23,473	19,474	14,696	28,024	29,736
Profit/(loss) before taxes	2,635	1,922	(192)	1,208	1,914
Profit/(loss)	1,877	1,686	(270)	906	1,399
Attributable to:
Owners of the parent	1,867	1,677	(284)	874	1,368
Non-controlling interests	10	9	14	32	31
Basic earnings/(loss) per common share ($)	1.38	1.24	(0.21)	0.65	1.01
Diluted earnings/(loss) per common share ($)	1.37	1.23	(0.21)	0.65	1.01
Investments in tangible and intangible assets	635	521	390	1,063	1,033
of which: capitalized R&D costs	175	154	162	426	455
R&D expenditure(2)	873	646	502	1,050	1,080
Total Assets	40,075	51,122	50,556	49,182	48,650
Total Equity	7,559	8,426	6,735	7,863	7,472
Equity attributable to owners of the parent	7,559	8,393	6,651	7,819	7,443

(1)The data for the years ended December 31, 2021 and 2020 have been restated to exclude Iveco Group Business, consistent with Iveco Group's classification as a Discontinued Operation for the year

ended December 31, 2021. The spin-off of Iveco Group took effect on January 1, 2022 (refer to the Section - "Iveco Group Business Spin-off and Discontinued Operations" in the Notes to the

Consolidated Financial Statements).

(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.

Board Report Selected Financial Data 23

RISK FACTORS

This Annual Report contains forward-looking statements that are subject to risks and uncertainties. All statements other

than statements of historical fact included in this Annual Report are forward-looking statements. Forward-looking

statements provide our current expectations and projections relating to our financial condition, results of operations,

plans, objectives, future performance, and business. You can identify forward-looking statements as they do not relate

to historical or current facts and by words such as “believe,” “expect,” “estimate,” “anticipate,” “will,” “should,” “plan,”

“forecast,” “target,” “guide,” “project,” “intend,” “could,” and similar words or expressions.

All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially

from those that we expected. Important factors that could cause actual results to differ materially from our expectations,

or cautionary statements, and other important information about forward-looking statements are disclosed under the

section “Risk Factors,” and “Operating and Financial Review and Prospects,” in this Annual Report.

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. The following is a

cautionary discussion of risks, uncertainties and assumptions that we believe are material to our business. 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 risks are organized by headings, and each risk is discussed

separately, many are interrelated. We undertake no obligation to publicly update forward-looking statements, whether

as a result of new information, future events, or otherwise. You should, however, consult any subsequent disclosures

we make from time to time in materials filed with the SEC.

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. The 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.

The COVID pandemic, geopolitical instability, including the conflict between Russia and Ukraine, and other global

events have significantly increased economic and demand uncertainty. Some of the results of these events include

supply chain challenges, inflation, high interest rates, foreign currency exchange volatility, and volatility in global capital

markets. Supply chain challenges, including delays caused by shortages of raw materials, shipping containers and

labor availability, have increased production costs and impacted our profit margins. Additionally, the cost of raw

materials used in our products and the cost of freight have increased due to heightened inflation. These adverse

economic events have and may continue to adversely affect the Company’s operations.

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

Board Report Risk Factors 24

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

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

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

sanctions imposed by the United States, European Union, the United Kingdom 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;

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

including rare materials (they might be easily subjected to 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 and 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, the war in Ukraine has given rise to regional instability and resulted in heightened sanctions and counter-

sanctions. Our business in Ukraine and Russia has been impacted by the war and the Company has suspended all

shipments to Russia. We have experienced, and may continue to experience, risks related to the impact of the war in

Ukraine, including restrictions on our ability or willingness to do business with certain vendors or suppliers, the ability to

repatriate funds from the region, increases in the cost of raw materials and commodities, supply chain and logistics

challenges, access to natural gas, higher energy prices and foreign currency volatility. The extent of the impact of the

war in Ukraine on the global economy cannot be predicted, including the extent to which the conflict may heighten other

risks disclosed herein, any of which could have an adverse impact on our business, results of operation, cash flows or

financial condition.

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 general economic conditions and outlook, such as market volatility and rising interest rates;

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

▪the cost of farm inputs including the value of land, fertilizers, fuel, labor and other inputs

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

▪the demand for food products;

▪the availability of stocks from previous harvests; and

Board Report Risk Factors 25

▪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. 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.

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 have implemented

measures designed to slow inflationary pressure in their countries (e.g. higher interest rates, reduced financial assets

purchases). 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.

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

Board Report Risk Factors 26

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

digital solutions and emerging power 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,

equipment 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

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;

▪inability to retain key employees;

▪significant costs associated with terminating or modifying alliances; and

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

If issues were to arise with respect to an acquisition or the parties to one or more of our joint venture or 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.

Board Report Risk Factors 27

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, acts of war, 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. If such events occur, our financial results might be negatively

impacted. Our existing insurance and risk management 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.

Regulators in Europe and the U.S. have also focused efforts on increased disclosure related to climate change and

mitigation efforts.

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

Changing worldwide demand for farm outputs to meet the world’s growing food and alternative energy demands, driven

by a growing world population and government policies, including those related to climate change, 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 2022, 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 and labor shortages. 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.

Board Report Risk Factors 28

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 and geopolitical 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 have resulted in and could continue to result in significant increases to 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, 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 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

securities law in the Netherlands and U.S., dealer and supplier litigation, intellectual property rights disputes, product

warranty and defective product claims, product performance, asbestos, personal injury, regulatory and contract issues,

indirect tax 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. We are subject to regulation and oversight by securities regulatory authorities in a number of

jurisdictions including the Netherlands, Italy and the United States. In the United States, we recently adopted on a

voluntary basis the financial reporting standards and practices applicable to U.S. domestic issuers, which include

certain incremental filing and reporting requirements. These additional obligations may increase the cost for ensuring

compliance with the applicable reporting requirements and may subject us to an enhanced risk of regulatory

investigations and private litigation. 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

Board Report Risk Factors 29

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, 2022.

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.

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, our information technology networks and

infrastructure have been and may be vulnerable to intrusion, attacks or disruptions or shutdowns due to attacks by

cyber criminals, employee, supplier or dealer error or malfeasance or supply chain compromise.

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.

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, the failure of the Company to successfully renegotiate labor agreements as they expire

from time to time led, and could in the future lead, to work interruption or stoppage. Any strike, work stoppage, or other

dispute with labor unions distracts management from operating the business, may affect the Company's reputation,

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.

Board Report Risk Factors 30

Our ability to execute our strategy is dependent upon our ability to attract, develop and retain qualified

personnel

Our ability to compete successfully, to manage our business effectively, to expand our business and to execute our

strategic direction, 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. Higher rates of employee separations may adversely affect us through 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

equipment emissions, safety regulations, fuel requirements, restricted substances, or greenhouse gas emissions, could

lead to new or additional investments in product designs to comply with these regulations. Our internal combustion

engines are mainly supplied by FPT S.p.A., a company controlled by Iveco N.V., and compliance with emissions

regulations is contractually allocated to our suppliers. Failure of our suppliers to ensure compliance with the applicable

regulations may result in our Company be subject to administrative and legal proceedings and other material

consequences. Further, we may experience production delays if our suppliers are unable design and manufacture

components for our products that comply with environmental standards. For instance, as we are required to meet more

stringent engine emission reduction standards that are applicable to engines we incorporate into our products, we

expect to meet these requirements through the introduction of new technology to our products, engines and exhaust

after-treatment systems, as necessary. Failure to meet applicable requirements could materially affect our performance.

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 limit our ability to recoup

necessary investments in innovation and research and development.

We are subject to extensive laws and regulations, the violation of which could expose CNH Industrial to

potential liabilities, increased costs and other adverse effects.

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

Board Report Risk Factors 31

competition laws. 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, 2022.

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

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

we operate, which can impose significant additional costs and/or restrictions on our 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 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

Board Report Risk Factors 32

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, 2022.

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.

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 equipment and higher than expected 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

Group and can increase the Group’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.

Board Report Risk Factors 33

We may be exposed to shortfalls in our pension plans

At December 31, 2022, the funded status for our defined benefit pension, healthcare and other post-employment

benefits was a deficit of $379 million. 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, 2022, section “Significant Accounting Policies” paragraph “Use of Estimates”, as well as Note 22

“Provisions for employee benefits” to the Consolidated Financial Statements at December 31, 2022 .

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, 2022, we had an aggregate of $23,652 million (including $19,385 million relating to Financial

Services’ activities) of consolidated gross indebtedness, and our equity was $7,559 million, including non-controlling

interests. 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 South America, and from continued concerns about global economic growth, particularly in emerging markets.

Further, due to the cessation of the London Interbank Offered Rate (“LIBOR”), the Group has entered into financial

transactions such as credit agreements and certain derivative transactions that use the relevant new benchmark rates.

These new benchmark rates are calculated differently from LIBOR and have inherent differences, which could give rise

to uncertainties, including the limited historical data and volatility in the benchmark rates. The full effects of the transition

to these new benchmark rates remain uncertain.

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,

2022.

Board Report Risk Factors 34

CNH Industrial N.V. 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 N.V. as being tax resident elsewhere

CNH Industrial N.V. is not incorporated in the U.K.; therefore, in order to be resident in the U.K. for tax purposes, CNH

Industrial N.V.’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 His Majesty’s Revenue & Customs, or HMRC, suggest that CNH Industrial N.V. should be

regarded as being U.K.-resident on this basis. The competent authority ruling referred to below supports this analysis.

Although CNH Industrial N.V.’s “central management and control” is in the U.K., it would not be treated as U.K.-resident

if (a) CNH Industrial N.V. 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 N.V.’s central management and control is in the U.K., CNH Industrial N.V. is considered to be

resident in the Netherlands for Dutch corporate income tax and Dutch dividend withholding tax purposes because CNH

Industrial N.V. 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 N.V.

and impose withholding taxes on dividends distributed by CNH Industrial N.V.,which could have a material adverse

effect on our results of operations and financial condition.

CNH Industrial N.V.’s residence for Italian tax purposes is also largely a question of fact based on all the circumstances.

CNH Industrial N.V. has a management and organizational structure such that CNH Industrial N.V. should not be

deemed resident in Italy under Italian domestic law except to the extent of CNH Industrial N.V.'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 N.V. 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, which may have a material

adverse effect on our results of operations and financial condition.

Tax may be required to be withheld from dividend payments

The U.K. does not require U.K. tax-resident companies to withhold tax from dividend payments (except in

circumstances that are not relevant to CNH Industrial). 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,

dividend payments made by us to Dutch residents are still subject to Dutch dividend withholding tax under Dutch

domestic law and we have no obligation to gross-up or pay additional amounts in respect of such dividend payments.

This position with respect to dividend withholding is contingent upon CNH Industrial’s maintenance of its exclusive U.K.

tax residency and is subject to any future change of law.

In the case that withholding taxes are imposed on future dividends or distributions with respect to our common shares

due to a change in law or for any other reason, 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.

The Company could be characterized as a passive foreign investment company (PFIC) for U.S. federal income

tax purposes

The U.S. federal income tax rules provide specific tax rules applicable to shareholders in companies that meet the

definition of a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes. We believe that the

Company is not a passive foreign investment company, but this conclusion is a factual determination made annually

and may be subject to change. U.S. Holders of our ordinary shares may suffer adverse tax consequences if we are

characterized as a passive foreign investment company.

We may incur additional tax expense or become subject to additional tax exposure

We are subject to income taxes, as well as non-income-based taxes, in various jurisdictions in which we operate

around the world. Our tax liabilities are dependent upon the mix 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

to our transfer pricing approach, changes in tax legislation and rates, changes in generally accepted accounting

Board Report Risk Factors 35

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. We are also subject to ongoing tax

audits in the various jurisdictions in which we operate. Tax authorities may disagree with certain positions we have

taken and assess additional taxes. We regularly assess the likely outcomes of these audits in order to determine the

appropriateness of our tax provision. However, there can be no assurance that we will accurately predict the outcomes

of these audits, and the actual outcomes of these audits could have a material impact on our business, results of

operations, financial condition, and cash flows, see Note 9 “Income tax (expense) benefit” to the Consolidated Financial

Statements at December 31, 2022.

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 New York Stock Exchange (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. On February 1, 2023, the Company announced that it believes that its shareholders will be best served by a

single stock listing on the NYSE and that we are monitoring the ongoing initiatives of harmonization and simplification of

the legal and regulatory framework of the Italian financial system that could allow for a smooth transition to a single

listing on the NYSE. There can be no assurance that these initiatives will be completed or as beneficial as anticipated,

in which case the company will have to pursue other avenues to achieve the single listing on the NYSE. There can be

also no assurance or that the estimated efficiency will be realized as anticipated or at all. As a result, our stock price

might be more volatile than it would be if it was listed on a single stock exchange.

The loyalty voting program may affect the liquidity of our common shares and reduce our share price

CNH Industrial’s loyalty voting program was established to reward shareholders for maintaining long-term share

ownership by granting at inception initial shareholders and subsequently any other person holding shares continuously

for at least three years, the option to elect to receive special voting shares. Issuance of special voting shares is subject

to various conditions set forth in the Company's constituting documents, including the registration of the common

shares held by each shareholder requesting the issuance of special voting shares in the CNH Industrial Loyalty

shareholder holding such special voting shares intends to transfer its common shares from the CNH Industrial Loyalty

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, 2022, EXOR N.V. had a voting interest in CNH Industrial of

approximately 42.8%. For further information, see section “Major Shareholders” and Note 32 "Related party

transactions" to the Consolidated Financial Statements at December 31, 2022. 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 36

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 (jurisdiche 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, 2022 relate to the remaining CNH Industrial business. Moreover, in accordance with IFRS 5 – Non-current Assets

Held for Sale and Discontinued Operations, for the corresponding information of earlier periods, the Iveco Group

business is classified and presented as Discontinued Operations in these Consolidated Financial Statements.

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 Post-Demerger 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 equipment and services company

engaged in the design, production, marketing, sale, and financing of agricultural and construction equipment. We have

industrial and financial services company located in 32 countries and a commercial presence in approximately 170

countries.

Until December 31, 2021, CNH Industrial had the following five operating segments: