CNH INDUSTRIAL N.V.

Legal and litigation · Litigation and legal proceedings

In the ordinary course of business, we are involved in litigation and investigations on a wide range of topics, including securities laws in the U.S., and the European Union, employee, 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.

Legal and litigation · Product liability and warranty claims

We are currently conducting environmental investigatory or remedial activities at certain properties that are currently or were formerly owned and/or operated by us. Failure to comply with these remedial measures in a timely manner could result in additional costs and other adverse consequences.

Tax and financial reporting · Tax compliance and changes in tax law

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

Human capital and workforce · Labor relations and union negotiations

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. 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.

Human capital and workforce · Talent acquisition and retention

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. Failure to attract and retain qualified personnel could impair our ability to execute our business strategy and meet our business objectives.

Core operations · Operational disruption and business continuity

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.

Core operations · Quality control and product defects

If the quality of the components or parts provided by our suppliers do not comply with regulatory requirements or otherwise do not meet our standards, it could adversely affect our business or reputation, as well as warranty costs.

Credit and liquidity · Credit risk and customer defaults

Fundamental in the operation of Financial Services is the credit risk associated with its customers/borrowers. 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.

Credit and liquidity · Liquidity and cash flow constraints

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.

Innovation and product development · Time to market and commercialization risks

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, or delays in bringing strategic new products to market, could result in reduced revenue and market share.

Strategic execution · Strategic transformation and turnaround risks

We may not realize all of the anticipated benefits from our business improvement and cost reduction initiatives. There can be no assurance that we will benefit from these initiatives or others to the extent anticipated, or that the estimated efficiency or cash flow improvements will be realized.

Strategic execution · Joint venture and partnership risks

If issues were to arise with respect to an acquisition or the parties to one or more of our joint ventures or strategic alliances or other relationships for managerial, financial, or other reasons, our product lines, businesses, results of operations and financial condition could be adversely affected.

Market position and competition · Competitive pressure and market share loss

We operate in highly competitive global and regional markets. 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.

Market position and competition · Industry consolidation and market concentration

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.

Customer and revenue · Changing customer preferences and behavior

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.

Innovation and product development · Intellectual property protection and infringement

We may face challenges to our intellectual property rights which could adversely affect our reputation, business and competitive position. Despite our controls and safeguards, our technology may be misappropriated by other parties.

Cybersecurity and data protection · Data breaches and cyber attacks

Despite our implementation of preventive and detective security controls, our IT networks and those of our partners have been, and may continue to be, targeted by increasingly sophisticated cyber threats, including malware, ransomware, phishing attempts, supply chain compromises, and attempts to breach system security through AI-enabled attack techniques.

Digital transformation and innovation · Technology obsolescence and evolution

There has been an increased focus in the industry on integrating automation, machine learning, and other emerging technologies, such as artificial intelligence, into agricultural and construction equipment. If we are unable to fully adopt such technologies into our products and processes as quickly or as effectively as our competitors, it could have an adverse effect on the demand for our products.

Natural and catastrophic events · Climate change and environmental impact

Furthermore, the potentially long-term physical impacts of severe weather events and other climate-related incidents 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.

Reputation and brand · Brand damage and negative publicity

Any actual or perceived vulnerability, unauthorized access, emissions-system tampering, or loss of data could reduce customer confidence, diminish sales, or result in legal claims, governmental inquiries, liability, or regulatory penalties, any of which could adversely affect our business, results of operations, and financial condition.