CNH Industrial (CNH) Risk Analysis

The provisions of our Articles of Association establishing the loyalty voting program may make it more difficult for a third party to acquire, or attempt to acquire, control of CNH, even if a change of control is considered favorably by shareholders holding a majority of our common shares. As a result of the loyalty voting program, a relatively large proportion of the voting power of our common shares could be concentrated in a relatively small number of shareholders who would have significant influence over us. As of January 31, 2026, EXOR N.V. had a voting interest in CNH of approximately 45.6%. For further information, see "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" and "Note 22: Related Party Information" to the Consolidated Financial Statements at December 31, 2025. Such shareholders participating in the loyalty voting program could effectively prevent change of control transactions that may otherwise benefit our shareholders. The loyalty voting program may also prevent or discourage shareholders' initiatives aimed at changes in our management.

The agreements governing our outstanding debt securities and other credit agreements to which we are a party from time to time contain, or may contain, covenants that restrict our ability to, among other things:

We have engaged in the past, and may engage in the future, in investments and mergers and acquisitions or enter into, expand or exit from strategic alliances and joint ventures. These involve risks that could prevent us from realizing the expected benefits of the transactions or the achievement of strategic objectives or could divert management's time and attention. Such risks, many of which are outside our control, include: ?technological and product synergies, economies of scale and cost reductions not occurring as expected;?unexpected liabilities;?incompatibility of operating, information or other systems;?inability to retain key employees;?significant costs associated with terminating or modifying alliances;?increased reliance on new partners and third-party suppliers; and ?problems in retaining customers and integrating operations, services, personnel, and customer bases. If issues were to arise with respect to an acquisition or the parties to one or more of our joint ventures or strategic alliances or other relationships for managerial, financial, or other reasons, or if such strategic alliances or other relationships were terminated, our product lines, businesses, results of operations and financial condition could be adversely affected.

Our precision technology solutions include both hardware and software components that relate to guidance, connectivity, automation, and autonomy. We must be able to successfully acquire, develop, and introduce new precision technology solutions that improve productivity and result in sustainable farming techniques in order to remain competitive. We expect to make significant investments in research and development expenses, collaborative arrangements, and other sources of technology to drive these outcomes. Such investments may not produce attractive solutions for our customers. We may also have to depend on third parties to supply certain hardware or software components or data services in our precision technology products. Our dealer's ability to support such solutions may also impact on our customers' acceptance and demand for such products. Further, we utilize automation and machine learning and artificial intelligence in some of our products. While the use of these emerging technologies can present significant benefits, it also creates risks and challenges as the use of artificial intelligence and other emerging technologies represent novel business models without an established track record. Data sourcing, technology, integration and process issues, program bias into decision-making algorithms, security problems, and the protection of privacy could impair the adoption and acceptance of autonomous machine solutions. If we are not able to deliver precision technology solutions with differentiated features and functionality, or if these solutions are not effective, customers may not adopt technology solutions, which could have a material adverse effect on the Company's reputation and business.

Our products rely on embedded software, electronic control units, connectivity modules, telematics interfaces, and networked communication systems. These technologies expose our equipment to cybersecurity threats, including attempts to gain unauthorized access, manipulate firmware or configuration data, spoof or disrupt in-vehicle network messages, alter machine performance characteristics, or disable or circumvent emissions-control or safety-related systems. A successful compromise could result in unintended machine behavior, loss of availability of critical functions, system disruption, data manipulation, or unauthorized modification of operational, regulatory-compliance, or safety-related settings. While we employ secure-by-design engineering practices, cybersecurity testing, and product-lifecycle controls, residual vulnerabilities may remain and cannot always be fully mitigated prior to product release. Newly discovered vulnerabilities, evolving threat activity, aftermarket tuning devices, or customer or third-party attempts to increase engine horsepower or defeat emissions-control systems may require corrective updates, enhanced monitoring, or other measures. Failure to identify, prevent, or remediate such risks could result in regulatory enforcement actions, civil or criminal penalties, warranty or product-liability claims, customer disputes, or reputational harm. In addition, reports or perceptions, whether accurate or not, of unauthorized access to our products, systems, or data may create the impression that our products are vulnerable to malicious or unauthorized manipulation. 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.

Our results of operations and financial position are and will continue to be influenced by macroeconomic factors – including changes in gross domestic product, the level of consumer and business confidence, changes in interest rates, the availability of credit, inflation and deflation, energy prices, the cost of commodities or other raw materials, and the imposition of trade tariffs and other trade policies – which exist in the countries and regions in which we operate. Such macroeconomic factors vary from time to time and their effect on our results of operations and financial position cannot be specifically and singularly assessed and/or isolated. Economic conditions vary across regions and countries, and demand for our products and services generally increases in those regions and countries experiencing economic growth and investment. Slower economic growth or a change in global mix of regions and countries experiencing slower economic growth and investment could have an adverse impact on our business, results of operations and financial condition. In a weaker economic environment, dealers and customers may delay or cancel plans to purchase our products and services and may not be able to fulfill their obligations to us in a timely fashion. In addition, changes in the economic environment could have an adverse impact on our Financial Services customers' ability to service their loans in a timely manner or increase the number of defaults. Our suppliers may also be impacted by economic pressures, which may adversely affect their ability to fulfill their obligations to us or the price or availability of supplies we require. These factors could result in product delays, increased accounts receivable balances, defaults and inventory challenges. Our success largely depends on the vitality of the agricultural industry, which tends to exhibit cyclicality. Negative conditions in the agricultural industry cause weakened demand for our products and services, might limit our access to funding and adversely affect our operating efficiencies. Historically, the agricultural industry has been cyclical and subject to a variety of economic and other factors. Sales of agricultural equipment, in turn, are also cyclical and generally reflect the economic health of the agricultural industry. The economic health of the agricultural industry is affected by numerous factors, including changes in general economic conditions farm income, farm input costs, farmland values, and debt levels and financing costs, all of which are influenced by the levels of commodity and protein prices, world grain stocks, acreage available and planted, crop yields, agricultural product demand, soil conditions, farm input costs, government policies, government subsidies and weather and climate conditions. Downturns in the agricultural industry due to these and other factors, which could vary by market, have in the past resulted in, and could in the future continue to result in, decreases in demand for agricultural equipment, adversely affecting our performance. Moreover, the unpredictable nature of many of these factors and the resulting volatility in demand make it difficult for us to accurately predict sales and optimize production. This, in turn, can result in higher costs, including inventory carrying costs and underutilized manufacturing capacity. During previous downturns in the agricultural industry, we experienced significant and prolonged declines in our performance, and we expect our business to remain subject to similar market fluctuations in the future. In 2025, unfavorable market conditions resulted in lower sales volumes, lower production, lower manufacturing capacity utilization, higher sales discounts, and a higher provision for credit losses. We expect certain of these conditions to persist in fiscal year 2026. Changes in interest rates and the agricultural market business cycle are driven by factors outside of our control; however, we are calibrating production, inventory levels, and commercial programs to current conditions and will adjust as markets stabilize.

We manufacture and sell products and offer services in several continents and numerous countries around the world including those experiencing varying degrees of political and economic instability. Given the global nature of our activities, we are exposed to risks associated with international business activities that may increase our costs, impact our ability to manufacture and sell our products and require significant management attention. These risks include: - changes in, and uncertainty concerning, laws, regulations and policies, and particularly changes and uncertainty that affect, among other things: –International trade in particular jurisdictions, including tariffs, and other counter measures that restrict the import and export of our products, components and raw materials;–currency restrictions;–the design, manufacture and sale of our products;–interest rates and the availability of credit to our dealers and customers;–where, to whom, and what type of products may be sold, including new or additional trade or economic sanctions imposed by the United States, European Union, the United Kingdom or other governmental authorities and supranational organizations (e.g., the United Nations); and –taxes;?economic and political instability in the markets in which we operate;- regulations from changing world organization initiatives and agreements;- changes in the dynamics of the industries and markets in which we operate;- labor disruptions;- disruption in the supply of raw materials and components (e.g. as a result of trade regulations, pandemics or sanctions), including rare materials (they might be easily subjected to sudden cost increases due to a variety of factors, including speculative measures or unforeseen political changes);- changes in governmental farm programs or subsidy programs in certain significant markets, including the Brazilian government discontinuing programs subsidizing interest rates on equipment loans;- withdrawal from or changes to trade agreements or trade terms, negotiation of new trade agreements and the imposition of new (and retaliatory) tariffs on certain countries or covering certain products and raw materials or embargoes; and - war, civil unrest and acts of terrorism. In recent years, acts of terrorism have occurred around the world, leading to personal safety anxieties and political instability in many countries and, ultimately, an impact on consumers' confidence. More recently, changing policies following recent elections in several major developed countries, changes in or uncertainty surrounding global trade policies and other unanticipated changes to the previous geopolitical order may have negative effects on the global economy, which could limit our ability to capitalize on current and future growth opportunities in international markets. Further, the continuing war in Ukraine and heightened tensions in the Middle East, including the Red Sea have given rise to regional instability which has in the past, and may in the future continue, to impact our supply chain and operations. There can be no guarantee that we will be able to quickly and completely adapt our business model to changes that could result from the foregoing, and any such changes may have an adverse effect on our business, results of operations and financial condition.

International trade developments or changes in national laws and policies can affect demand for our products and our competitive position. Government laws and policies on international trade and investment including sanctions, import quotas, capital controls, tariffs or other retaliatory measures imposed in response to tariffs, whether adopted by non-governmental bodies, individual governments or addressed by regional trade blocks, affect the demand for our products, technology and services, impact the competitive position of our products and, in some instances may prevent us from being able to sell products to certain customers or in certain countries. The U.S. government has announced and/or implemented significant new tariffs, including targeted duties on imported steel and aluminum products, as well as baseline tariffs affecting the majority of global imports. These measures have resulted in (and may in the future result in additional) counter tariffs and other retaliatory measures by other countries. Furthermore, restrictions in trade resulting from such measures, as well as the resulting impact on global trade and general economic conditions, has had an adverse effect on our business, results of operations and financial condition; has adversely impacted the availability to us of certain products in certain countries and has disrupted our supply chains, with related impacts to our financial position and results of operations; has impacted the purchasing power and creditworthiness of our customers, resulting in reduced demand in our Industrial Activities segments or losses in our Financial Services segment; and could exacerbate inflation, diminish investment and result in broader negative impacts, including economic instability that may adversely impact demand for our products. In addition, to the extent we are unable to fully recover higher costs resulting from such measures, our margins and profitability could decline. We may be unable to increase prices concurrently with the implementation of new tariffs, which could result in a prolonged period before our prices align with the higher costs incurred from these tariffs. This delay in price adjustment may adversely affect our profit margins and overall financial performance. While there remains significant uncertainty around future policy decisions, we currently expect tariff-related cost pressures to remain elevated into 2026, particularly in North America, and we continue to adjust sourcing, pricing, and production plans in response.

At December 31, 2025, the funded status for our defined benefit pension, healthcare and other postemployment benefit plans was a deficit of $327 million. The funded status is subject to many factors, as discussed in "Management's Discussion and Analysis of Financial Conditions and Results of Operation-Critical Accounting Estimates-Pension and Other Postemployment Benefits," as well as "Note 13: Employee Benefit Plans and Postretirement Benefits" to the Consolidated Financial Statements for the year ended December 31, 2025. To the extent that our obligations under a plan are unfunded or underfunded, we will have to use cash flows from operations and other sources to pay our obligations as they become due. In addition, since the assets that currently fund these obligations are primarily invested in debt instruments and equity securities, the value of these assets is subject to changes due to market fluctuations.

The agricultural equipment market is influenced by a number of factors such as: - the general economic conditions and outlook, such as market volatility and rising interest rates;- the price of agricultural commodities and the ability to competitively export agricultural commodities;- the cost of borrowing;- the profitability of agricultural enterprises, farmers' income and their capitalization;- the demand for food products;- the availability of stocks from previous harvests; and - agricultural policies, including aid and subsidies to agricultural enterprises provided by governments and/or supranational organizations, policies impacting commodity prices or limiting the export or import of commodities, and alternative fuel mandates. In addition, droughts, floods, fires and other unfavorable climatic conditions, especially during the spring, a particularly important period for generating sales orders, have in the past, and could in the future continue, to have a negative impact on decisions to buy agricultural equipment and, consequently, on our revenues. The construction equipment market is influenced by factors such as: - public infrastructure spending;- new residential and non-residential construction;- capital spending in oil and gas and, to a lesser extent, mining; and - cost of borrowing. The above factors can significantly influence the demand for agricultural and construction equipment and consequently, our financial results. If demand for our products is less than we expect, we may experience excess inventories and be forced to incur additional charges and our profitability will suffer, including lower fixed costs absorption associated with lower production levels at our plants. Our business may be negatively impacted if we experience excess inventories or if we are unable to adjust on a timely basis our production schedules or our purchases from suppliers to reflect changes in customer demand and market fluctuations.

We sell our products primarily through independent dealers and are subject to risks relating to their inventory management decisions and operating and sourcing practices. Our dealers carry inventories of finished products and parts and adjust those inventories based on their assessment of future sales opportunities and market conditions, including the level of used equipment inventory. If our dealers' inventory levels are higher than they desire, they may postpone product purchases from us, which could cause our sales to be lower than the end-user demand for our products and negatively impact our results. Similarly, our sales could be negatively impacted through the loss of time-sensitive sales if our dealers do not maintain an inventory sufficient to meet customer demand. Further, dealers who carry other products that compete with our products may focus their inventory purchases and sales efforts on goods provided by other suppliers due to industry demand or profitability. Such inventory adjustments and sourcing decisions can adversely impact our sales, results of operations, and financial conditions.