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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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Commission File Number: 000-55510

CNH INDUSTRIAL CAPITAL LLC

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Limited Liability Company Interests

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

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ⌧ Yes  ◻ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ⌧ Yes  ◻ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ◻

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ◻

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ◻ Yes  ⌧ No

As of March 1, 202215, 2024, all of the limited liability company interests of the registrant were held by CNH Industrial America LLC, a wholly-owned subsidiary of CNH Industrial N.V.

The registrant meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this Form with certain reduced disclosures as permitted by those instructions.

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PART I

Item 1.  Business

Overview

CNH Industrial Capital LLC (together with its consolidated subsidiaries, “CNH Industrial Capital,” the “Company” or “we”) is an indirect wholly-owned subsidiary of CNH Industrial N.V. (“CNHI” and together with its consolidated subsidiaries, “CNH Industrial”“CNH”) and is headquartered in Racine, Wisconsin. As a captive finance company, our primary business is to underwrite and manage financing products for end-use customers and dealers of CNH Industrial America LLC (“CNH Industrial America”) and CNH Industrial Canada Ltd. (“CNH Canada”) (collectively, “CNH Industrial North America”) and provide other related financial products and services to support the sale of agricultural and construction equipment sold by CNH Industrial North America. We also provide wholesale and retail financing products related to new and used equipment manufactured by entities other than CNH IndustrialNorth America, as well as financing for the purchase of parts, service, rentals, implements and attachments from CNH North America dealers which may or may not be manufactured or provided by CNH North America. We are often able to offer financing to customers at advantageous interest rates or other terms (such as longer contract terms, longer warranty terms or parts and service incentives), due to our participation in subsidized financing programs sponsored by CNH Industrial North America, which reimburses us for some or all of the cost of such terms. The primary operating subsidiaries of CNH Industrial Capital LLC include CNH Industrial Capital America LLC (“CNH Industrial Capital America”), New Holland Credit Company, LLC (“New Holland Credit”) and CNH Industrial Capital Canada Ltd. (“CNH Industrial Capital Canada”). CNH Industrial Capital America is the primary financing and business entity of CNH Industrial Capital for the United States that enters into retail and wholesale financing arrangements with end-use customers and equipment dealers, and CNH Industrial Capital Canada performs the same functions in Canada, while New Holland Credit acts as the servicer for retail and wholesale receivablesfinancing products originated by CNH Industrial Capital America.

CNH Industrial is the company initially formed by a business combination transaction, completed September 29, 2013, between Fiat Industrial S.p.A. (“Fiat Industrial”) and CNH Global N.V. (“CNH Global”), the former indirect parents of CNH Industrial Capital. As a result of this transaction, CNH Industrial Capital LLC and its primary operating subsidiaries, including CNH Industrial Capital America, New Holland Credit and CNH Industrial Capital Canada, are indirect wholly-owned subsidiaries of CNHI (with all of the equity interests in CNH Industrial Capital LLC owned by CNHI through intermediate companies, through which CNHI exercises indirect control over CNH Industrial Capital LLC). CNHI is incorporated in and under the laws of The Netherlands. CNHI has its corporate seat in Amsterdam, The Netherlands, and its principal office in London,Basildon, Essex, England.

Until December 31, 2021, CNH Industrial ownedCapital provides and controlled the Agriculture equipment business, the Construction equipment business, and the related Financial Services business (collectively, the “Off-Highway business”) as well as the Commercial and Specialty Vehicles business, the Powertrain business and the related Financial Services business (collectively, the “On Highway business” or the “Iveco Group business”). Effective January 1, 2022, the Iveco Group business was separated from CNHI by way of a demerger under Dutch law to Iveco Group N.V. (the Demerger) and Iveco Group became a public listed company independent from CNH Industrial.

CNH Industrial Capital offers retail loan and leaseadministers financing to end-use customers for the purchase or lease of new and used equipment and components sold through CNH North America’s dealer network, as well as revolving charge account financing and other financial services. CNH Industrial Capital also provides wholesale financing to CNH Industrial North America equipment dealers and distributors, (allall of which are independently owned and operated). Wholesale financing consists primarily of dealer floorplan financing and gives dealers the ability to maintain a representative inventory of new products. In addition, CNH Industrial Capital provides financing to dealers for used equipment taken in trade, equipment utilized in dealer-owned rental yards, parts inventory, working capital and other financing needs.operated. As a holding company, CNH Industrial Capital LLC generally does not conduct operations of its own but relies on its subsidiaries for the generation and distribution of profits.

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

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

As of December 31, 2021,2023, CNH Industrial Capital had total assets of $12.2$16.0 billion and total stockholder’s equity of $1.2$1.6 billion. For the year ended December 31, 2021,2023, CNH Industrial Capital had total revenues of $789.2 million$1.1 billion and net income of $230.2$215.1 million. As of December 31, 2021,2023, CNH Industrial Capital had outstandingthird-party debt (excluding debt owed to affiliates) of $9.9$13.4 billion, approximately 69%64% of which represented secured debt as of such date.

Relationship with CNH Industrial

Until December 31, 2021, CNH Industrial organizedorganizes its operations into fivethree operating segments: Agriculture, Construction Commercial and Specialty Vehicles, Powertrain and Financial Services. CNH Industrial’s fiveCollectively, these three segments design, produce, market, sell and finance agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for those vehicles and engines for marine and power generation applications.equipment. CNH Industrial has industrial and financial services companies located in 4432 countries and a commercial presence in approximately 180164 countries around the world.

CNH Industrial’sCNH’s Agricultural segment designs, manufactures and distributes a full line of farm machinery and implements, including two-wheel and four-wheel drive tractors, crawler tractors, (Quadtrac^®), combines, cotton pickers, grape and sugar cane harvesters, hay and forage equipment, planting and seeding equipment, soil preparation and cultivation implements, and material handling equipment. CNH is also a leading provider of technology dedicated to Precision Agriculture. Agricultural equipment is sold in North America under the New Holland Agriculture and Case IH brands. Regionally-focused brands as well as theinclude: STEYR Kongskildefor tractors; Flexi-Coil specializing in tillage and Överum brands in Europeseeding systems; and Miller manufacturing application equipment. The Raven brand supports Precision Agriculture, digital technology and the Miller brand, primarilydevelopment of autonomous systems. Hemisphere, acquired in North America2023, provides high-performance satellite positioning technology for the agriculture and Australia.construction industries.

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Although our primary focus is to finance CNH Industrial North America equipment, we also provide retail and wholesale financing products related to new and used agricultural and construction equipment manufactured by entities other than CNH IndustrialNorth America, as well as financing for the purchase of parts, service, rentals, implements and attachments from CNH North America dealers which may or may not be manufactured or provided by CNH North America. We are still, however, dependent on CNH Industrial North America for substantially all of our business, with revenues related to financing provided to CNH Industrial North America dealers and retail customers purchasing and/or leasing from CNH Industrial North America and its dealers accounting for over 90% of our total revenues for the year ended December 31, 2021,2023, and with loan portfolios attributable to such financing accounting for over 90% of our total managed receivables as of December 31, 2021.2023.

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

We borrow from our affiliates as one of the funding sources for our operations and lending activity. As of December 31, 20212023 and 2020,2022, we had outstanding affiliate borrowings of $2.1$132.5 million and $187.3$341.5 million, respectively, representing 0.02%1.0% and 1.8%3.2% of our total indebtedness, respectively.

CNH Industrial North America also provides us with other types of operational and administrative support, such as payroll and other human resource services. For the years ended December 31, 20212023 and 2020,2022, we incurred fees charged by our affiliates of $47.4$53.8 million and $45.9$50.9 million, respectively, representing 16%21% and 12%20%, respectively, of our total administrative and operating expenses.

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

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Wholesale (21.8%34.6% of managed portfoliogross receivables as of December 31, 20212023): Wholesale financing consists primarily of dealer floorplan financing, which gives dealers the ability to maintain a representative inventory of products. In addition, CNH Industrial Capital provides wholesale financing to dealers to finance purchases of new andfor used agricultural and construction equipment and parts. In addition, CNH Industrial Capital extends credit to dealers fortaken in trade, equipment utilized in dealer owned rental yards, parts inventory, working capital and other financing needs. Currently, credit is extended to approximately 800770 CNH Industrial North America dealers (with each being a separate legal entity) with approximately 1,5001,750 locations in North America.

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

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

Competition

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

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

Employees

The ability to attract, retain, and further develop qualified employees is crucial to the success of CNH Industrial Capital’s business and its ability to create value over the long-term. As of December 31, 2021,2023, the Company had approximately 340369 employees, none of which were represented by unions.

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Item 1A.  Risk Factors

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

The following risks are considered the most significant to the Company’s business based upon current knowledge, information and assumptions. This discussion of risk factors should be considered in conjunction with Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations beginning on page 1718, including the risks and the other risksuncertainties described in the Cautionary Note Regardingon Forward-Looking Statements beginning on page 27.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 operating results and, individually or in the aggregate, could cause our actual results to differ materially from past and projected future results. Except as may be required by law, weWe undertake no obligation to publicly update these risks or any forward-looking statements, whether as a result of new information, future events, or otherwise. It is impossible to predict or identify all risk factors and, consequently, youYou should, not consider the following factors to be a complete discussion of risks and uncertainties that may affect us. We invite you tohowever, consult further relatedany subsequent disclosures we make from time to time in materials filed with or furnished to the United States Securities and Exchange Commission (“SEC”).

COVID-19 Risk

The COVID-19 pandemic could materially adversely affect our business, financial condition, results of operations and/or liquidity.

COVID-19 was first identified in late 2019, spread globally and was declared a global pandemic by the World Health Organization in March 2020. Efforts to combat the virus have been complicated by viral variants and uneven access to, and acceptance and effectiveness of, vaccines globally. The global spread of the virus led governments around the world to implement numerous measures to contain the virus, such as travel bans, mandated shutdowns, border closures and other restrictions on the free movement of people and goods. These measures have impacted and may further impact our future ability to operate as well as the ability of our suppliers and distributors to operate. Any future closing of manufacturing facilities due to government mandates, insufficient staffing, weaker demand, or supply constraints, or similar limitations or restrictions for suppliers, or the impact of the COVID-19 pandemic on our ability to execute business continuity plans, could have a material adverse effect on our business, financial condition, results of operations, and/or liquidity.

Disruption caused by business responses to the COVID-19 pandemic, including remote working arrangements, may create increased vulnerability to cybersecurity or data privacy incidents, including breaches of information technology and systems. Risks related to information technology and systems are described in our risk factor “A cybersecurity breach could interfere with our operations, compromise confidential information, negatively impact our corporate reputation and expose us to liability”.

From an economic perspective, the COVID-19 pandemic has significantly increased economic and demand uncertainty and has led to disruptions in CNH Industrial North America’s supply chain, higher raw materials pricing, and volatility in demand for CNH Industrial North America’s products and in global capital markets. The COVID-19 pandemic may materially adversely impact many of our customers and other third parties, and may affect their ability to fulfill their obligations to us in a timely manner.

The extent to which the COVID-19 pandemic will continue to impact our business, financial condition, results of operations and/or liquidity will depend on the scale, duration, severity and geographic reach of future developments, which are highly uncertain and cannot be predicted, including notably the possibility of “further waves” of COVID-19 infections or the appearance of new variants in the virus. There have been instances of re-imposed local lockdowns where infection rates have started to increase again and there is a risk that widespread measures such as strict social distancing and curtailing or ceasing normal business activities may be reintroduced in the future until effective treatments or vaccines have been fully deployed. Continued uncertainties and persistent effects also include: the impact of the pandemic on our customers and dealers, and delays in their plans to purchase equipment; requests by our customers or dealers for, or government mandated, payment deferrals and contract modifications; difficulties in collecting financial receivables resulting in increased allowances for credit losses; a deterioration in the market value of used equipment resulting in further reserve requirements; the impact of

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Further, due to the cessation of the London Interbank Offered Rate (“LIBOR”), the Company 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 and/or that of our subsidiaries to, among other things:

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

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

Although we do not believe any of these covenants materially restrict our operations currently, a breach of one or more of the covenants could result in adverse consequences that could negatively impact our businesses, results of operations and financial condition. These consequences may include the acceleration of amounts outstanding under certain of our credit facilities, triggering an obligation to redeem certain debt securities, termination of existing unused commitments by our lenders, refusal by our lenders to extend further credit under one or more of the facilities or to enter into new facilities or the lowering or modification of CNHI’s or our credit ratings. We cannot assure you that we will continue to comply with each restrictive covenant at all times, particularly if we were to encounter challenging and volatile market conditions. For further information, see Note 8: Credit Facilities and Debt to the consolidated financial statements for the year ended December 31, 2021.2023.

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Risks Related to Our Business, Strategy and Operations

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

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

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

We are subject to interest rate risks, and changes in interest rates cancould reduce demand for CNH Industrial North America equipment, adversely affect our interest margins, and limit access to capital markets while increasing borrowing costs. Rising

Changing 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 CNH Industrial North America’s products and our services as well as customers’ ability to service anyrepay their financing provided byobligations to us. In addition, credit market dislocations could have an impact on funding costs, which in turn may makemaking it more difficult for us to offer customers competitive financing. While we aim to limit the exposure of our net financial assets to changes in prevailing interest rates, interest rate volatility could have an adverse effect on our net interest rate margin, i.e., the difference between the yield we earn on assets and the interest rates we pay. Actions by credit rating agencies, such as downgrades or negative changes to ratings outlooks, can affect the availability and cost of funding for the Company and can increase the Company’s cost of capital and hurt its competitive position.

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

CNH Industrial North America  sponsorssubsidizes certain marketingof our promotional financing programs that allow us to offer lower rate financing to customers atand other advantageous interest rates or otherfinancing terms (such as longer contract terms, longerrepayment and warranty terms orperiods, and special parts and service incentives). This support from CNH Industrial North America provides us with a material competitive advantage in offering financing  to customersfor the purchase or lease of CNH Industrial North America’s products. Any elimination or reduction of these marketing programs, which affectssubsidies could negatively impact our ability to offer competitively pricedcompetitive financing options to customers, could in turn reduce the percentage of CNH Industrial North America’scustomer demand for our financing products financed by us and couldservices, and have a material adverse effect on our business, financial condition, results of operations and cash flows. For the years ended December 31, 2021, 20202023, 2022 and 2019,2021, we recognized revenues from CNH Industrial North America for marketing programs of $427.2 million, $266.5 million and $296.5 million, $323.8 millionrespectively, representing 40%, 34% and $343.2 million, respectively, each representing 38% of our total revenues for that year.the years ended December 31, 2023, 2022 and 2021, respectively.

CNH Industrial North America also provides us with other types of operational and administrative support, such as payroll and other human resource services. For the years ended December 31, 2021, 20202023, 2022 and 2019,2021, we incurred fees charged by our affiliates of $47.4$53.8 million, $45.9$50.9 million and $46.6$47.4 million, respectively, representing 16%21%, 12%20% and 13%16%, respectively, of our total administrative and operating expenses.

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

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

Deterioration in the quality of our financial assets, an increase in delinquencies or defaults, or a reduction in collateral recovery rates could have an adverse impact on our financial performance. These risks become more acute in an economic slowdown or recession due to decreased demand for (or availability of) credit, declining asset values, changes in government subsidies, reductions in collateral to receivable balance ratios, and an increase in delinquencies, defaults, insolvencies, foreclosures and losses. In such circumstances, our receivable servicing and litigation costs may also increase. In addition, governments may pass laws, or implement regulations, that modify rights and obligations under existing agreements, or which prohibit or limit the exercise of contractual rights, which events occurred in response to the COVID-19 pandemic in certain jurisdictions.rights.

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

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

Because a significant number of our receivables are generated at fixed interest rates, our business is subject tofinancial performance may be impacted by fluctuations in interest rates. Although we seek to match fund the majority of our assets, with approximately 74%61% of our receivables and approximately 76%68% of our funding at a fixed rate, respectively, as of December 31, 2021,2023, changes in market interest rates may influence our financing costs, returns on financial investments and the valuation of derivative contracts and could reduce our earnings and/or cash flow.

We are subject to currency exchange risk to the extent that our costs are denominated in currencies other than those in which we earn revenues. In addition, the reporting currency for the consolidated financial statements is the U.S. dollar. Certain of our assets, liabilities, expenses and revenues are denominated in other currencies. Those assets, liabilities, expenses and revenues are translated into the U.S. dollardollars 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 the consolidated financial statements, even if their value remains unchanged in the original currency. Changes in currency exchange rates between the U.S. dollar and other currencies have had, and will continue to have, an impact on our financial condition and results of operations.

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

Although we seek to manage interest rate, exchange rate and market liquidity risks with a variety of techniques, including a match funding program, the selective use of derivatives and a diversified funding program, there can be no assurance that we will be able to do so successfully, and our financial condition and results of operations could be adversely affected. In addition, by utilizing these techniques, we potentially forego the benefits that may result from favorable fluctuations in interest rates and exchange rates.

Our models could fail to properly anticipate and manage risk.

We use models to forecast future losses, revenues and expenses, for capital planning purposes, and to manage a variety of financial and operational risks. These models are subject to inherent limitations due to imperfect assumptions, uncertainty regarding outcomes, and unaccounted for and emerging risks. The models we employ may not be sufficiently predictive of future results due to limited historical patterns, unanticipated market changes and customer behavior. They may be negatively impacted by human error and may not be effective if we fail to review them for flaws, test them for predictive accuracy and recalibrate them from time to time as appropriate. Notwithstanding the steps we take to develop and maintain predictive models, our models could fail to properly anticipate and help us manage risk and could result in operational and financial harm to us.

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

Governments may implementhave implemented measures designed to slow economic growthinflationary pressure (e.g., higher interest rates, reduced bank lending and other anti-inflation measures)financial asset purchases). RisingChanging interest rates could have a dampening effect on the overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect demand for our products and our customers’ ability to repay obligations to us. Central banks and other policy arms of many countries may take actions to vary the amount of liquidity and credit available in an economy. The impact from a change in liquidity and credit policies could negatively affect the customers and markets we serve, which could adversely impact our business, financial condition and results of operations. Government initiatives that are intended to stimulate or reduce demand for products sold by CNH Industrial North America, 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, financial condition and results of operations. As noted above, it is unclear what the macroeconomic effects will be of the economic stimulus actions taken by various countries in order to mitigate the adverse economic impact of the COVID-19 pandemic and of the resulting increase in government debt.

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

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

Our operations are highly regulated by governmental authorities which can impose significant additional costs and/or restrictions on our business. For example, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), including its regulations, as well as other efforts at regulatory reform in financial services, may substantially affect our origination, servicing and securitization programs as well as limit the ability of our customers to enter into hedging transactions or finance purchases of CNH Industrial North America equipment. The Dodd-Frank Act also strengthened the regulatory oversight ofincludes extensive provisions regulating these securities and related capital market activities by the SEC and increased 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

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Regulators in the U.S. have also focused efforts on requiring and promoting enhanced disclosure related to sustainability.  We may face liabilities in connection with our efforts to comply with these disclosure requirements as well as expectations by our stakeholders of enhanced disclosures regarding our climate change initiatives.

Global economic conditions impact our business.

Our results of operations and financial position are and will continue to be influenced by macroeconomic factors, including changes in 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. 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.

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

Changing worldwide demand for farm outputs to meet the world’s growing food and alternative energy demands, driven in part by government policies and a growing world population 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 CNH Industrial North America equipment and result in higher research and development costs related to equipment fuel standards.

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

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

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

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

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

As of December 31, 2021,2023, our total operating lease residual values were $1.4$1.0 billion.

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

We are involved in various lawsuits and other legal proceedings that arise in the ordinary course of our business. The industries in which we and CNH North America operate are also periodically reviewed or investigated by regulators, which could lead to enforcement actions, fines and penalties or the assertion of private litigation claims. The ultimate outcome of thethese 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 subsidiaries is uncertain.results of operations and financial condition. Furthermore, we could in the future become subject to judgments or enter into settlements of lawsuits and claims that could have a material adverse effect on our results of operations in any particular period. In addition, while we maintain insurance coverage with respect to certain risks, we may not be able to obtain such insurance on acceptable terms in the future, if at all, and any such insurance may not provide adequate coverage against claims under such policies.

Our affiliates may cease to provide us with financing support.

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

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

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 invoicing and collection of payments from CNH Industrial North America’s dealers and from our customers. 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 and CNH Industrial North America’s dealers, as well as personally identifiable information of those dealers, customers and our employees, in data centers and on information technology networks. Operating these information technology systems and networks in a secure manner, 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, including through the use of artificial intelligence and machine learning, 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. The foregoing risks are heightened in the current environment where our employees perform their duties both in the office and from home due to the COVID-19 pandemic.

While we actively manage information technology security risks within our control through security measures, business continuity plans and employee training around phishing and other cyber risks, these attacksour information technology networks and infrastructure have proliferatedbeen and there canmay be no assurance that our actions will be sufficientvulnerable to successfully preventintrusion, attacks or disruptions or shutdowns due to mitigate potential risks to our systems, networks, data and products. Furthermore, third parties on which we rely, including internet, mobile communications technology and cloud service providers, pose their own information security risk to us.attacks by cyber criminals, employee, supplier or dealer error or malfeasance.

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

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We have identified material weaknesses in our internal control over financial reporting. If our remediation of these material weaknesses is not effective, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition and/or results of operations and investors may lose confidence in the accuracy and completeness of our financial reports.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As of September 30, 2023, as previously reported, we identified a material weakness in our internal control over financial reporting, which persisted as of December 31, 2023. The material weakness relates to the design and implementation of information technology (“IT”), general controls in the areas of user access limits and segregation of duties related to our enterprise resource planning (“ERP”) application.

In addition, as of December 31, 2023, we determined that we have an additional material weakness in our internal control over financial reporting. This material weakness relates to the design and implementation of general controls over classification in our Statement of Cash Flows of changes in certain intercompany and operating lease receivables from our investing activities, and of bond discounts and debt issuance costs from our debt financing activities.

These material weaknesses have not resulted in the need to revise any of our previously published financial results. We are in the process of taking steps intended to remediate the material weaknesses.

With respect to the IT-related material weakness, our efforts have included enhancing our IT general controls framework that addresses risks associated with user access and security, application change management and IT operations. We are implementing enhanced compensating controls and providing focused training for control owners to help sustain effective control operations and comprehensive remediation efforts relating to segregation of duties to strengthen user access controls and security.

With respect to the material weakness relating to the classification of items within our Statement of Cash Flows, our management plans to enhance the Company’s controls and review activity to assess and validate the classification of items in the operating, investing or financing sections within our Statement of Cash Flows. The Company’s remediation plan is expected to include the following actions: (i) reviewing and enhancing the Company’s organizational structure including technical training and supervision of individuals responsible for the preparation and review of the Statement of Cash Flows; and (ii) engaging with third-party resources to assist with the enhancement and formalization of roles and review responsibilities related to the technical review process for the Statement of Cash Flows.

While we believe these efforts have improved, and will continue to improve, our internal controls and address the underlying causes of the material weaknesses, the material weaknesses will not be remediated until our remediation plans have been fully implemented and we have concluded that the improvements added to our current control environment are operating effectively for a sufficient period of time. We cannot be certain that the steps we are taking will be sufficient to remediate the control deficiencies that led to the material weaknesses in our internal control over financial reporting or prevent future material weaknesses or control deficiencies from occurring. In addition, we cannot be certain that we have identified all material weaknesses in our internal control over financial reporting, or that in the future we will not have additional material weaknesses in our internal control over financial reporting.

If we fail to effectively remediate the material weaknesses in our internal control over financial reporting, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may be unable to accurately or timely report our financial condition or results of operations. We also could become subject to sanctions or investigations by the SEC or other regulatory authorities. In addition, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investors may lose confidence in the accuracy and completeness of our financial reports and we may face restricted access to the capital markets.

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Item 1B.  Unresolved Staff Comments

None.

Item 1C. Cybersecurity

We assess, identify and manage risks from cybersecurity threats through CNH’s Information Technology Security and Compliance organization (“Cybersecurity Program”), which is part of CNH’s larger enterprise risk management framework. The Cybersecurity Program is currently overseen by the Audit Committee of the Board of Directors for CNH (the “CNH Audit Committee”) and is managed by CNH’s Chief Information and Digital Officer (the “CNH CIO”) and a dedicated CNH Chief Information Security Officer (the “CNH CISO”). The CNH CISO has over 10 years of experience in cybersecurity and has held numerous positions in the cybersecurity sector, including serving as a Global Director of Information Security at another global high-tech manufacturing company. The CNH CISO's organization has oversight of cybersecurity strategy, policy, standards, architecture and processes for the security of our enterprise network and, information assets. The CNH CISO’s organization monitors and manages, and works to identify and assess, cybersecurity risk through various technologies, resources, processes and policies that are updated to align with the changing threat landscape, our evolving business needs and global regulatory requirements. Our strategy includes risk assessments, risk and threat analysis, utilization of security tools, cybersecurity-related tabletop and phishing exercises designed to simulate cybersecurity incidents, and security awareness and technical security trainings.

We use a range of defenses to help protect against cybersecurity threats and to work to secure our assets, reduce detection time and improve recoverability. These include the ongoing monitoring of our systems, including with the assistance of third-party vendors, conducting exercises with employees and senior management, including our executive officers, to promote awareness and improve internal processes. In addition, to promote security awareness throughout the Company, employees with an email address received training and access to security awareness materials in 2023. Further, we are implementing a program for the assessment and monitoring of security standards and control procedures for external suppliers and vendors.

Under the Cybersecurity Program, cybersecurity matters are generally managed by a combination of functional groups that report to CNHI’s global leadership team, as appropriate, on matters such as enterprise level cybersecurity initiatives, threat intelligence and product cybersecurity risks and remediations.

CNH’s Board of Directors (the “CNH Board”) addresses our cybersecurity risk management as part of its general oversight function. The CNH Audit Committee is responsible for overseeing our key risks and controls relating to information systems, including our assessment and mitigation of material risks from cybersecurity threats. The CNH Audit Committee receives periodic reports, summaries or presentations related to cybersecurity threats, risk, mitigation and related processes from the CNH CIO and the CNH CISO. In addition, on at least an annual basis, the CNH Board receives reports, summaries or presentations from the CNH CIO and the CNH CISO related to cybersecurity threats, risk, mitigation and related processes.

The CNH CISO maintains and periodically updates a Cybersecurity Incident Response Plan which is a guide for how to respond effectively and efficiently to cybersecurity incidents in a coordinated manner in the interest of minimizing the risk of harm to our customers, operations, partners, employees and third parties, consistent with our legal obligations. As of the date of this report, we do not believe that risks from cybersecurity threats have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition. However, we recognize the ever-evolving cyber risk landscape and cannot provide any assurances that we will not be subject to a material cybersecurity incident in the future. For a description of risks related to our information technology systems, including cybersecurity threats, see Item 1A, “Risk Factors.”

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Item 2.  Properties

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

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Item 3.  Legal Proceedings

CNH Industrial Capital is party to various litigation matters and claims arising from its operations. Management believes that the outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on CNH Industrial Capital’s financial condition or results of operations.

Item 4.  Mine Safety Disclosures

Not applicable.

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

All of CNH Industrial Capital LLC’s limited liability company interests are owned by CNH Industrial America, which is indirectly wholly-owned by CNHI. There is currently no established trading market for CNH Industrial Capital LLC’s limited liability company interests. CNH Industrial Capital LLC received capital contributions of $75 million from CNH America in 2023. CNH Industrial Capital LLC paid cash dividends of $250 million, $130$135 million and $265$250 million to CNH Industrial America in 2021, 20202022 and 2019,2021, respectively.

Item 6.  [Reserved]

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Trends and Economic Conditions

During 2020In combination with the economic recovery factors and repercussions from geopolitical events, the global economy continues to a lesser extent in 2021,experience volatile disruptions including to the effects of the COVID-19 pandemiccommodity, labor and the related actions of governments and other authoritiestransportation markets. These disruptions have contributed to contain COVID-19 spread havean inflationary environment which has affected, and may continue to affect, our operationalthe price and financial performance. Governments in the U.S.availability of certain products and Canada designated part ofservices necessary for CNH Industrial North America’s businesses as essential critical infrastructure businesses. This designation allows usoperations. For example, CNH North America experienced supply chain disruptions and inflationary pressures in 2022 and, while these trends improved in 2023, CNH North America continues to operateexperience some disruptions. The reduction in support of our dealers and customerssupply chain disruptions contributed to the extent possible. We also continue to prioritize the health, safety and well-being of our employees.improved efficiencies in its manufacturing operations, but purchasing costs remain elevated.

In addition, CNH IndustrialNorth America continues to monitor global economic conditions and the impact of the COVID-19 pandemicmacroeconomic pressures, including repercussions from rising interest rates, fluctuating currency exchange rates, inflation and recession fears, on all aspects of its business, its employeescustomers and its results of operations, financial condition and cash flows in 2021. For additional risks related to the COVID-19 pandemic, see “Item 1A. Risk Factors – COVID-19 Risks.”

Global supply chain represented the main challenge for CNH Industrial’s operations in 2021, with multiple bottlenecks resulting in increased raw material prices, intermittent sub-component availability, notably for semiconductors, and increased transportation costs.

Until December 31, 2021, CNH Industrial owned and controlled the Off-Highway business as well as the Iveco Group business. Effective January 1, 2022, the Iveco Group business was separated from CNHI by way of a demerger under Dutch law to Iveco Group N.V. (the Demerger) and Iveco Group became a public listed company independent from CNH Industrial.suppliers.

Our business is closely relatedtied to the agricultural and construction equipment industries because we offer financing products for such equipment. For the year ended December 31, 2021, CNH Industrial’s2023, CNH’s net sales of agricultural equipment and net sales of construction equipment generated in North America were $5.1$7.2 billion and $1.4$2.3 billion, respectively, representing increases of 35%6% and 50%31% from the same period in 2020,2022, respectively.

In general, our receivable mix between agricultural and construction equipment financing directionally reflects the mix of equipment sales by CNH Industrial North America. As such, changes in the agricultural industry or with respect to our agricultural equipment borrowerscustomers may affect the majority of our portfolio.

As a finance company, we are subject to interest rate risks. Changing interest rates can reduce demand for CNH North America equipment, adversely affect our interest margins while increasing our borrowing costs. Most of our retail customer receivables (which, as used herein, “retail customer receivables” refers primarily to retail notes and finance leases) are fixed rate, while our revolving charge accounts and wholesale receivables are a combination of fixed and floating rate. We manage interest rate risks via a match funding program and the selective use of derivatives.

Net income was $230.2$215.1 million for the year ended December 31, 2021,2023, compared to $143.3$219.1 million for the year ended December 31, 2020.2022. The increasedecrease in net income was primarily due to lowerincreased borrowing costs, higher provisions for credit losses, an increased net interest margin and lower lossesgains on used equipment sales due to decreased operating lease maturities and increased labor costs, partially offset by a lowerhigher average managed portfolio. The receivables balance greater than 30 days past due as a percentage of managedgross receivables was 0.5%0.8%, 0.7%1.0% and 0.7%0.5% at December 31, 2021, 20202023, 2022 and 2019,2021, respectively.

In addition to the impacts from COVID-19 previously discussed, macroeconomicMacroeconomic issues for us include the uncertainty of governmental actions with respect to monetary, fiscal and legislative policies, the global economic recovery, changes in demand and pricing for used equipment, capital market disruptions, trade agreements, and financial regulatory reform. Significant volatility in the price of certain commodities could also impact CNH Industrial North America’s and our results.

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Results of Operations

Year Ended December 31, 20212023 Compared to Year Ended December 31, 20202022

Revenues

Revenues for the years ended December 31, 20212023 and 20202022 were as follows (dollars in thousands):

Revenues totaled $789.2Total revenues were $1,072.7 million for the year ended December 31, 20212023 compared to $844.4$791.8 million for the year ended December 31, 2020.2022. A lowerhigher average portfolio andcoupled with a lowerhigher average yield for the total portfolio drove the year-over-year decreaseincrease in total revenues. The average yield for the managed portfolio was 7.0%7.9% for the year ended December 31, 2021,2023, compared to 7.3%6.7% for the year ended December 31, 2020.2022.

Interest income on retail notes and finance leases for the year ended December 31, 20212023 was $155.0$288.1 million, representing a decreasean increase of $28.2$71.5 million from the year ended December 31, 2020.2022. The increase was due to the favorable impacts of $57.2 million from higher interest rates and $14.3 million from higher average earning assets.

Rental income on operating leases for the year ended December 31, 2023 was $237.2 million, representing a decrease of $11.2 million from the year ended December 31, 2022. The decrease was primarily due to a $34.6 millionthe unfavorable impact of $25.5 million from lower interest rates, partiallyaverage earning assets, offset by a $6.4$14.3 million favorable impact from higher average earning assets.interest rates.

Revolving charge accounts income was $39.6 million for the year ended December 31, 2023.

Interest income on wholesale notes for the year ended December 31, 20212023 was $31.0$66.0 million, representing a decreasean increase of $22.1$37.4 million from the year ended December 31, 2020.2022. The decreaseincrease was primarily due to the unfavorablefavorable impacts of $16.8$23.6 million from lowerhigher interest rates and $13.8 million from higher average earning assets and $5.3 million from lower interest rates.assets.

Interest and other income from affiliates for the year ended December 31, 20212023 was $297.6$434.3 million, representing a decreasean increase of $26.8$166.0 million from the year ended December 31, 2020.2022. Compensation from CNH Industrial North America for retail low-rate financing programs and interest waiver programs offered to customers was $142.9$140.2 million and $154.0$123.9 million for the years ended December 31, 20212023 and 2020,2022, respectively. The decreaseincrease was primarily due to pricing. For the year ended December 31, 2021, compensation from CNH Industrial North America for wholesale marketing programs was $94.7 million compared to $108.5 million for the prior year. The decrease was primarily due to a lower utilization of interest-free periods.mix in pricing programs. For select operating leases, compensation from CNH Industrial North America for the difference between market rental rates and the amounts paid by customers was $59.0$40.8 million and $61.3$47.2 million for the years ended December 31, 20212023 and 2020,2022, respectively.

Rental income on operating leases The decrease was primarily due to lower average earning assets. For revolving charge accounts, compensation from CNH North America for low-rate financing programs and interest waiver programs offered to customers was $4.1 million for the year ended December 31, 2021 was $267.6 million, representing an increase of $11.7 million from2023. For the year ended December 31, 2020.2023, compensation from CNH North America for wholesale marketing programs was $242.1 million compared to $95.1 million for the prior year. The increase was primarily due to the favorable impacts of $9.3 million from higher interest rates and $2.4 million fromoriginations combined with higher average earning assets.base rates.

Other income for the year ended December 31, 20212023 was $38.0$7.6 million, representing an increasea decrease of $10.2$22.5 million from the year ended December 31, 2020.2022, which is largely attributable to the Company no longer receiving third-party commission income related to a private-label revolving charge account product.

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Expenses

Expenses for the years ended December 31, 20212023 and 20202022 were as follows (dollars in thousands):

InterestTotal interest expense totaled $195.8was $534.2 million for the year ended December 31, 20212023 compared to $280.0$241.8 million for the year ended December 31, 2020.2022. The decreaseincrease was primarily due to the favorableunfavorable impacts of $72.0$245.1 million from lowerhigher average interest rates and $47.3 million from higher average total debt and $12.2 million from lower average interest rates.debt. The average debt cost was 2.0%4.5% for the year ended December 31, 20212023 compared to 2.7%2.4% for the year ended December 31, 2020.2022.

The benefitprovision for credit losses was $7.5$11.6 million for the year ended December 31, 20212023 was relatively flat compared to a provision of $59.0$11.2 million for the year ended December 31, 2020. The decrease in the provision for credit losses in 2021 was due to the improved outlook for the agricultural industry and a reduced expected impact on credit conditions from the COVID-19 pandemic.2022.

Depreciation of equipment on operating leases increaseddecreased by $1.9$22.6 million for the year ended December 31, 20212023 compared to the year ended December 31, 2020,2022, primarily due to mix of products in thea lower average operating lease portfolio.

Other expenses, decreasednet increased by $21.3$20.7 million for the year ended December 31, 20212023 compared to the prior year, primarily due to improved pricinglower gains on used equipment sales.sales as a result of decreased operating lease maturities.

The effective tax rate for the yearsyear ended December 31, 2021 and 20202023 was a provision of 23.3%.22.4%, compared to 24.4% for the year ended December 31, 2022.

Receivables and Equipment on Operating Leases Originated and Held

Receivables and equipment on operating lease originations for the years ended December 31, 20212023 and 20202022 were as follows (dollars in thousands):

The year-over-year increaseincreases in retail and wholesale originations was primarily due to an increase in unit sales of CNH Industrial North America equipment. The year-over-year decrease in operating lease originations was primarily due to customers’ preference for retail financing products.

Totalcustomer receivables and equipment on operating leases held aswere primarily due to better penetration rates. Wholesale originations increased due to higher shipment volumes of December 31, 2021 and 2020 were as follows (dollars in thousands):CNH North America equipment. During the fourth quarter of 2022, we began offering revolving charge account financing.

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Receivables and equipment on operating leases held as of December 31, 2023 and 2022 were as follows (dollars in thousands):

The total balance of retail customer receivables balance greater than 30 days past due as a percentage of the retail customer receivables was 0.7% and 1.1%1.2% at both December 31, 20212023 and 2020, respectively.2022. The total wholesale receivables balance greater than 30 days past due as a percentage of the wholesale receivables was not significant at December 31, 20212023 or 2020. 2022. The total revolving charge account receivables balance greater than 30 days past due as a percentage of the revolving charge account receivables was 5.0% and 12.0% at December 31, 2023 and 2022, respectively.

Total retail customer receivables on nonaccrual status which represent receivables for which we have ceased accruing finance income, were $27.2$60.9 million and $37.5$53.5 million at December 31, 20212023 and 2020,2022, respectively. TotalAs of December 31, 2023, total revolving charge account receivables on nonaccrual status were immaterial and there were no revolving charge account receivables on nonaccrual status as of December 31, 2022. As of December 31, 2023 and 2022, there were no wholesale receivables on nonaccrual status was $35.4 million at December 31, 2020.status.

Total receivable charge-offs and recoveries, by product, for the years ended December 31, 20212023 and 20202022 were as follows (dollars in thousands):

Our allowance for credit losses on all receivables financed totaled $116.0$114.7 million at December 31, 20212023 and $136.1$125.0 million at December 31, 2020.2022.

The allowance is subject to a quarterly evaluation based on many quantitative and qualitative factors, including historical loss experience by product category, portfolio duration, delinquency trends, forward lookingforward-looking macroeconomic factors (in particular, those conditions directly affecting the profitability and financial strength of our customers), and collateral value. No single factor determines the adequacy of the allowance. Different assumptions or changes in forward lookingforward-looking economic assumptions would result in changes to the allowance for credit losses and the provision for credit losses. These qualitative factors are subjective and require a degree of management judgment.

We believe our allowance is sufficient to provide for losses in our receivable portfolio as of December 31, 2021.2023.

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Year Ended December 31, 20202022 Compared to Year Ended December 31, 20192021

Comparisons for the year ended December 31, 20202022 to the year ended December 31, 20192021 are discussed in Item 7 of the Company’s 20202022 annual report filed with the SEC on March 3, 2021.February 28, 2023.

Liquidity and Capital Resources

The following discussion of liquidity and capital resources principally focuses on our statements of cash flows, balance sheets and capitalization. CNH Industrial Capital’s current funding strategy is to maintain sufficient liquidity and flexible access to a wide variety of financial instruments.instruments and funding options.

In the past, securitization has been one of our most economical sources of funding and, therefore, the majority of our originated receivables are securitized, with the cash generated from such receivables utilized to repay the related debt or purchase new receivables.

In addition, we have secured and unsecured facilities, a repurchase agreement, commercial paper, unsecured notes,bonds, affiliate borrowings and cash to fund our liquidity needs.

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Repurchase Agreement

On September 26, 2023, the Company entered into a Global Master Repurchase Agreement which expires in September 2024. At December 31, 2023, the Company had C$299.9 million ($226.3 million) outstanding under the repurchase agreement, with an obligation to repurchase the underlying receivables in 30 days. Our repurchase agreements are treated as financing arrangements for accounting purposes.

Unsecured Facilities and Debt

Committed and uncommitted unsecured facilities with banks as of December 31, 20212023, totaled $620$815.8 million. These credit facilities, which are eligible for renewal at various future dates, are used primarily for working capital and other general corporate purposes. As of December 31, 2021,2023, we had $126$415.8 million outstanding under these credit facilities. The remaining available credit commitments are maintained primarily to provide backup liquidity for our commercial paper borrowings, as needed. There was noborrowings. Our outstanding commercial paper totaled $347.9 million as of December 31, 2021.2023.

As of December 31, 2021,2023, our unsecured senior notes were as follows (dollars in thousands):

On May 24, 2021,April 10, 2023, CNH Industrial Capital LLC completed an offering of $600 million in aggregate principal amount of 1.450%4.550% unsecured notes due 2028, with an issue price of 98.857%.

On August 11, 2023, CNH Industrial Capital Canada Ltd. completed a private placement offering of C$400 million ($298 million) in aggregate principal amount of its 5.500% unsecured notes due 2026, with an issue price of 99.208% of their principal amount.99.883%.

In a private placement onOn September 28, 2021,13, 2023, CNH Industrial Capital CanadaLLC completed an offering of C$300$500 million ($236 million) in aggregate principal amount of 1.500%5.500% unsecured notes due 2024,2029, with an issue price of 99.936% of their principal amount.99.399%.

Credit Ratings

Our ability to obtain funding is affected by credit ratings of our debt, which are closely related to the outlook for and the financial condition of CNHI, and the nature and availability of our support agreement with CNHI.

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To access public debt capital markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our securities as an indicator of credit quality for fixed income investors. A credit rating agency may change or withdraw our ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Each agency’s rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets.

On January 7, 2022, Fitch upgraded the Long-Term Issuer DefaultNovember 30, 2023, Standard & Poor's ("S&P") Global Ratings (“IDR”) and seniorraised its long-term debt ratings ofissuer credit rating on CNH Industrial Capital LLC and CNH Industrial Capital Canada to ‘BBB+’ from ‘BBB-’‘BBB’. S&P Global Ratings also affirmed the 'A-2' short-term issuer credit rating. Additionally, S&P Global Ratings raised the issue-level ratings on CNH Industrial Capital LLC's senior unsecured debt, to 'BBB+' from 'BBB'. The outlook is stable. Fitch has also upgraded CNH Industrial Capital LLC’s short-term IDR and commercial paper ratings to ‘F2’ from ‘F3’. On February 25, 2022, Moody’s upgraded the senior unsecured ratings of CNH Industrial Capital LLC and CNH Industrial Capital Canada to ‘Baa2’ from ‘Baa3’. The rating outlook is stable. Our long-term credit ratings from both Fitch Ratings and Moody’s Investor Services remained unchanged at ‘BBB’ from S&P Global Ratings with stable outlook.outlooks.

Our current credit ratings are as follows:

Our debt is fully investment grade, which we believe will allow us to access funding at better rates.

Affiliate Sources

CNH Industrial Capital borrows, as needed, from CNH Industrial.CNH. This source of funding is primarily used to finance various assets and provides additional flexibility when evaluating market conditions and potential third-party financing options. We had affiliated debt of $2$132.5 million and $187$341.5 million as of December 31, 20212023 and 2020,2022, respectively.

Equity Position

Our equity position also supports our ability to access various funding sources. Our stockholder’s equity at December 31, 20212023 and 20202022 was $1.2$1.6 billion and $1.3 billion, respectively. During 2021,2023, CNH Industrial Capital LLC paidreceived cash dividendscapital contributions of $250$75.0 million tofrom CNH Industrial America.

Liquidity

While we expect securitization to continue to represent a material portion of our capital structure and affiliated borrowings to remain a marginal source of funding, we will continue to diversify our funding sources and expand our investor base to support our investment grade credit ratings. These diversified funding sources include committed asset-backed facilities, a repurchase agreement, unsecured notes, bank facilities and a commercial paper program.

The liquidity available for use varies due to: (a) changes in origination volumes, reflecting the financing needs of our customers, and is influenced by the timing of any refinancing of underlying receivables; and (b) the execution of our funding strategy of maintaining a sufficient level of liquidity and flexible access to a wide variety of financial instruments.

Debt

Our consolidated debt as of December 31, 2023 and 2022 is set forth in the table below (dollars in thousands):

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Debt

Our consolidated debt as of December 31, 2021 and 2020 is set forth in the table below (dollars in thousands):

Cash Cash Equivalents and Restricted Cash and Cash Equivalents

The following table shows cash and restricted cash and cash equivalents and restricted cash as of December 31, 20212023 and 20202022 (dollars in thousands):

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

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

Off-Balance Sheet Arrangements

For additional information, see “Note 13: Commitments and Contingencies” to our consolidated financial statements for the year ended December 31, 2021.2023.

Contractual Obligations

The following table sets forth the aggregate amounts of our contractual obligations and commitments as of December 31, 20212023 with definitive payment terms that will require significant cash outlays in the future (dollars in thousands).

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The Guarantees are general unsecured obligations of the applicable Guarantor Entities and rank senior in right of payment to all future obligations of such Guarantor Entities that are, by their terms, expressly subordinated in right of payment to such Guarantees and pari passu in right of payment with all existing and future unsecured indebtedness of such Guarantor Entities that are not so subordinated.

The Guarantor Entities’ obligations under their applicable Guarantees are limited as necessary to prevent the Guarantees from constituting a fraudulent conveyance under applicable law. If the Guarantees were rendered voidable, they could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the applicable Guarantor Entities and, depending on the amount of the indebtedness, such Guarantor Entities’ liability on the Guarantees to which they are parties could be reduced to zero.

The Guarantees of the Guarantor Entities will be automatically released:

The following tables present summarized financial information for the obligor groups of the U.S. Senior Notes and the Canadian Senior Notes. The obligor group consists of the issuer and guarantors for the applicable senior notes. Intercompany balances and transactions between the issuer and guarantors have been eliminated. The investments in, and equity in income from, non-guarantor subsidiaries has been excluded.

For the years ended December 31, 20212023 and 2020,2022, the summarized statement of income information for the obligor group of the U.S. Senior Notes was as follows (dollars in thousands):