Leases

Lessee

The Company leases certain buildings, plant and machinery, vehicles, and information technology ("IT") equipment for its own use. A lease is a contract that conveys the right to control the use of an identified asset (the leased asset) for a period of time in exchange for consideration. The lease term determined by the Company comprises the non-cancellable period of the lease contract together with both periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. For real estate leases, this assessment is based on an analysis by management of all relevant facts and circumstances including the leased asset's purpose, the economic and practical potential for replacing and any plans that the Company has in place for the future use of the asset. For lease agreements, we combine lease and non-lease components.

For leases with terms not exceeding twelve months (short-term leases), the Company recognizes the lease payments associated with those leases on a straight-line basis over the lease term as operating expense in the Consolidated Statements of Operations. Leases with a term of 12 months or less are not recorded in the Consolidated Balance Sheets. For these leases the Company recognized, on a straight-line basis over the lease term, lease expenses of $4 million, $5 million and $10 million for the year ended December 31, 2025, 2024 and 2023, respectively.

For all other leases, the right-of-use asset includes the amount of lease liability recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Correspondingly, the Company recognizes a lease liability, measured at the present value of lease payments to be made over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. The incremental borrowing rate is determined considering macro-economic factors such as the specific interest rate curve based on the relevant currency and term, as well as specific factors contributing to CNH's credit spread. The Company primarily uses the incremental borrowing rate as the discount rate for its lease liabilities.

For finance leases, the right-of-use asset is classified within "Property, plant and equipment, net" and the lease liability, within "Debt". Assets held under finance leases, which the Company assumes substantially all the risks and rewards of ownership, are recognized as assets of the Company at the lower of fair value or present value of the minimum lease payments.

In the case of operating leases, the right-of-use asset is classified within "Other assets" and the lease liability, within "Other liabilities". After the commencement date, the Company recognizes in profit or loss a single lease cost, calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis. In particular, after lease commencement, the lease liability is measured at the present value of any remaining lease payments, discounted by using the rate determined at lease commencement, consistently with the model used to calculate the liability related to the finance lease. Correspondingly, the right-of-use asset is measured as the lease liability adjusted by

accrued or prepaid rents (i.e., the aggregate difference between the cash payment and straight-line lease cost), remaining unamortized initial direct costs and lease incentives, and any impairments of the right-of-use asset.

For long-term leases recorded in the Consolidated Balance Sheets, the Company incurred operating lease expenses of $108 million, $106 million and $93 million for the years ended December 31, 2025, 2024 and 2023, respectively.

At December 31, 2025 and 2024, the Company recorded approximately $264 million and $275 million of right-of-use asset, respectively, and $272 million and $282 million of lease liability included in "Other assets" and "Other liabilities", respectively. At December 31, 2025 and 2024, the weighted-average remaining lease term (calculated on the basis of the remaining lease term and the lease liability balance for each lease) and the weighted-average discount rate for operating leases were 4.5 years and 4.6%, and 5.1 and 4.5%, respectively.

During the years ended December 31, 2025 and 2024, leased assets obtained in exchange for operating lease obligations were $77 million and $84 million, respectively. During the years ended December 31, 2025 and 2024, operating cash outflow for amounts included in the measurement of operating lease obligations was $108 million and $103 million, respectively.

Future minimum lease payments under non-cancellable leases as of December 31, 2025, were as follows (in millions of dollars):


	Operating Leases
2026	$	89
2027	70
2028	49
2029	34
2030	21
2031 and thereafter	44
Total future minimum lease payments	307
Less: Interest	35
Total	$	272

Lessor

The Company, primarily through its Financial Services segment, purchases leases and equipment from CNH dealers and other independent third parties that have leased equipment to retail customers under operating leases. Financial Services' investment in operating leases is based on the purchase price paid for the equipment. Income from these operating leases is recognized over the term of the lease. Our leases typically have terms of 3 to 5 years with options available for the lessee to purchase the equipment at the lease term date. The equipment is depreciated on a straight-line basis over the term of the lease to the estimated residual value at lease termination. Residual values are estimated at the inception of the lease and are reviewed quarterly. Realization of the residual values is dependent on Financial Services' future ability to re-market the equipment under then prevailing market conditions. Equipment model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Management believes that the estimated residual values are realizable. Expenditures for maintenance and repairs of the applicable equipment are the responsibility of the lessee.

Financial Services evaluates the carrying amount of equipment on operating leases for potential impairment when it determines a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed comparing projected undiscounted future cash flows to the carrying amount of the asset. If the test for recoverability identifies a possible impairment, the asset's fair value is measured in accordance with the fair value measurement framework. An impairment charge would be recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value.

Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded in inventory at the lower of net book value or estimated fair value of the equipment, less cost to sell, and is not depreciated. Matured operating lease inventory is reported in "Inventory."

A summary of equipment on operating leases as of December 31, 2025, and 2024 is as follows (in millions of dollars):


	As of December 31,
	2025		2024
Equipment on operating leases	$	1,963	$	1,831
Accumulated depreciation and other changes	(372)		(365)
Net equipment on operating leases	$	1,591	$	1,466

Depreciation expense on equipment under operating leases is recorded in "Other, net" and amounted to $197 million, $188 million and $187 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The following table sets out a maturity analysis of operating lease payments, showing the undiscounted lease payments to be received after the reporting date (in millions of dollars):


	Amount
2026	$	215
2027	147
2028	70
2029	33
2030	10
2031 and thereafter	1
Total undiscounted lease payments	$	476

Historical Timeline

Fiscal Year	Filed
2025	Feb 26, 2026	Showing above
2024	Feb 28, 2025

2023	Feb 29, 2024

2022	Feb 28, 2023

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

CNH Industrial N.V. Leases Disclosure

Historical Timeline

About Leases Disclosures

Other Available Disclosures