On a net basis, CNH reported a loss, before restructuring, of $102 million, or $.37 per share, for the fourth quarter, compared to a net loss, before restructuring, of $142 million, or $.95 per share, in the prior year period, on a pro forma basis. (Per share results for the 1999 period are based upon a lower number of shares. See footnote 6 for further information.)

Revenues for the fourth quarter were $2.2 billion, down from $2.5 billion in the same period last year, on a pro forma basis. The $214 million impact of unfavorable foreign exchange on sales of equipment more than accounted for the decline. Higher shipments of agricultural equipment during the quarter were offset by comparably lower shipments of construction equipment. For the full year, CNH's industrial operating margin was $172 million, up from $79 million in 1999, on a pro forma basis. This improvement was driven by $155 million in merger-related profit improvements.

CNH reported a net loss, before restructuring, for the year of $269 million, or $1.26 per share, in line with expectations. In 1999, the company had a net loss, before restructuring, of $175 million, or $1.17 per share, on a pro forma basis. (Per share results for 1999 are based upon a lower number of shares.) Revenues for the year were $10.0 billion, versus $10.7 billion in 1999, including the impact of $627 million in unfavorable foreign exchange on sales of equipment.

"In the fourth quarter, we saw improvement in our industrial business, as well as encouraging signs in the market share trend for the North American agricultural equipment market," said Paolo Monferino, president and chief executive officer. "We are fully committed to strengthening our core businesses and executing the elements of our restructuring plan, which is on schedule and achieving our savings targets."

Operating results for the full year and the fourth quarter reflect increased cost reduction levels, as compared to the prior year on a pro forma basis. These were achieved through merger integration activities and ongoing cost initiatives. In addition, overall pricing remained slightly positive. These were offset primarily by lower sales volumes and a change in product sales mix from the comparable periods in 1999, as well as economic cost increases. In addition, the impact of unfavorable foreign exchange contributed to lower results for the full year, but was less of a factor in the fourth quarter. On a net basis, the company's results reflect significantly lower contributions from the company's financial services business, particularly in the fourth quarter. For the full year, the company had a decreased tax benefit as compared to 1999.

As a result of its current market outlook, CNH expects the first quarter of 2001 to reflect continued improvement in its industrial operations. However, due to weaker performance from financial services and a normalized tax rate, the company currently expects a net loss, before restructuring, of $.20 to $.30 per share, slightly worse than the loss of $54 million, or $.20 per share, on a comparable common share count basis, in first quarter of 2000.

For the full year, CNH anticipates that the industrial operating margin could improve up to $400 million, reflecting at least $300 million in merger related profit improvements, including cross selling. However, continued inflationary and competitive pressures could slightly reduce profit margins. Including lower interest costs and an improved contribution from the company's financial services businesses, CNH expects a net loss, before restructuring, in 2001, which should improve by about $100 million for the prior year.

In light of the company's financial results, management intends to recommend a substantially reduced or eliminated company dividend to shareholders at the Annual General Meeting in May 2001.

Divestitures Completed, Integration Actions Continue

CNH has now completed all of the divestitures required by regulatory agencies in North America and Europe. During the fourth quarter, CNH completed the sale of its Fermec construction equipment business, based in Manchester, England, to Terex Corporation. In January, the company completed the sale of its tractor production facility in Doncaster, England, to Landini S.p.A. Further, CNH has reached an agreement with Landini to sell a component production facility in St. Dizier, France, that supports the Doncaster facility.

In total, CNH has divested six facilities, all in accordance with conditions set by regulatory agencies for approval of the November 1999 merger of Case Corporation and New Holland NV. These divestiture actions, and the related uncertainty created in the marketplace, significantly impacted the company's business in 2000.

In addition to these divestitures, the company has announced plans to close or sell certain facilities as part of CNH's merger integration plan. Further industrial rationalization actions are expected to be announced in the future. These steps are part of the company's merger integration plan that is expected to realize at least $600 million in annual profit improvements by 2003, including the $155 million realized in 2000.

Integration actions resulted in pre-tax restructuring charges of $42 million in the fourth quarter and $157 million for the full year. The company's current plan for industrial rationalization and restructuring of its selling, general and administrative organization are expected to result in further pre-tax restructuring charges of approximately $400 million over the next two to three years.

By year-end, CNH employment levels dropped to approximately 31,000, down from nearly 36,000 at the time of the merger and in line with the planned 24 percent reduction in employee headcount by the end of 2003. The 5,000 reduction includes approximately 1,200 employees that were part of divestitures. The balance is from the company's headcount reduction initiatives.

Worldwide Retail Equipment Sales

Worldwide retail unit sales in the agricultural equipment industry remained relatively unchanged in the fourth quarter. An industry gain in North America of 3 percent was offset by a 3 percent decline in Europe. In Latin America, the industry recorded a 23 percent increase in retail unit sales, while in CNH's remaining markets around the world, industry sales continued at the same levels as last year.

Retail unit sales of CNH agricultural equipment rose 7 percent from the company's combined sales in the same period last year. The increase was driven by strong sales growth in Latin America and in CNH's rest of world markets. In North America, retail sales continued at the level of last year as an overall increase in sales of tractors was offset by a decline in combines. The improvement in tractor sales reflect growth in mid-horsepower range units, but a drop in large row crop and four-wheel drive models. In Europe, CNH agricultural equipment retail unit sales were lower, reflecting ongoing weakness in industry combine sales and continued uncertainty around the divestiture of its Doncaster, England, operations, which was completed in January. Worldwide retail unit sales in the construction equipment industry were up 3 percent in the fourth quarter. Skid steer loader sales grew 9 percent and heavy construction equipment sales increased by 2 percent, while industry sales of loader backhoes declined by 6 percent. While the North American market remained unchanged from the comparable period, Europe reported a 3 percent gain in retail unit sales. In Latin America, industry sales were unchanged, but in CNH's other markets around the world, the industry showed a 10 percent improvement.

CNH retail unit sales of construction equipment were slightly lower in the fourth quarter, as compared to the company's combined sales in the fourth quarter of 1999. In North America, retail unit sales declined, partly due to limited availability of new product models and a significant decline in the loader backhoe market where CNH has a leading position. This decline offset strong CNH retail unit sales gains in Latin America, where sales of CNH construction equipment rose in all major product categories, and in rest of world markets. In Europe, CNH retail unit sales of construction equipment were relatively unchanged, as lower sales of loader backhoes were offset by higher sales of skid steers and heavy equipment.

Financial Services

CNH Capital, the financial services unit of CNH Global, reported a net loss of $13 million for the fourth quarter of 2000, compared to net income of $20 million for the same period last year, on a pro forma basis. Net income for the full year was $26 million, compared to $112 million in 1999, on a pro forma basis. The year-over-year decline in net income is primarily attributable to higher loan losses and increased provisions, particularly in the fourth quarter. Lower activity levels, coupled with lower gains on asset-backed securitizations also deteriorated the fourth quarter results.

In addition to prolonged weakness in the farm economy, CNH Capital's results were impacted by higher loan delinquencies in its diversified portfolio. This was primarily the result of late payments and bankruptcies in the North American commercial truck industry, which has been affected by higher interest rates and the continued climb in fuel prices. Consequently, CNH Capital decreased its volume of loan origination activity in its diversified business in the fourth quarter and has made the strategic decision to exit the commercial truck financing business and curtail other diversified financing activities.

CNH Capital's managed portfolio remained stable in the quarter at $11.6 billion, compared to September 30, 2000, but was up 9 percent compared to the prior year. The company's geographic expansion and diversification initiatives accounted for a portion of this year-over-year growth, along with the partial transfer of CNH U.S. wholesale receivables to CNH Capital's managed portfolio. "We have decided to refocus this business on the company's core activities and on supporting our strong base of equipment dealers and retail customers," said Michel Lecomte, chairman, CNH Capital. "We're fully committed to supporting our equipment operations and thus have decided, in these market conditions, to reduce activities in non-core business areas."

Market Outlook

Recent supply and demand reports for global agricultural commodities project continued pressure on commodity prices in 2001. Production remains strong in the Southern Hemisphere, including record soybean crops from Brazil, and analysts do not foresee lower planting levels in North America or Europe for the year ahead. In addition, recent forecasts for U.S. exports have been trimmed. These factors will impact the market for CNH's agricultural equipment, but will be somewhat offset by underlying demand resulting from the low sales levels of recent years and relatively strong farmers' balance sheets. However, the market could be affected by the current BSE crisis in Europe and other countries around the world. The scope of this situation has grown in recent weeks, and the complete impact on farm equipment sales isn't clear at this time. As a result of these factors, but not including the potential impact of BSE, CNH expects industry sales of agricultural equipment to be relatively unchanged from 2000. In its construction equipment business, CNH expects slightly lower industry sales worldwide, the result of a continued, gradual decline in North America as well as weaker market conditions in Europe. CNH anticipates that worldwide industry sales of loader backhoes in 2001 could decline by about 10 percent, sales of heavy construction equipment could be down about 5 percent, while industry sales of skid steer loaders could be flat to up slightly. The recent decline in interest rates in the U.S. is expected to support construction activity, but weakening overall economic conditions may temper new housing starts. In Latin America and in the company's remaining markets around the world, the company expects to see continued market improvement, resulting from more stable economic conditions.

In 2001, following the expected industry declines in Europe, CNH's European sales will be slightly lower than in 2000, which may have a slight negative impact on the company's margins. However, CNH expects launches of several new models of agricultural and construction equipment in the second half of the year that should improve the company's market position. These new models will expand the product offerings from CNH's brands, broadening the company's potential customer base. In addition, equipment sales are expected to be less impacted by customer and dealer uncertainty in 2001 as many of the merger-related issues have been resolved.

CNH plans to produce slightly below anticipated retail sales levels in 2001 in order to reduce field inventory levels. In 2001, CNH expects to achieve at least $300 million of further merger-related profit improvements, primarily through lower selling, general and administration expenses, lower purchasing costs, cross selling opportunities and initial savings from manufacturing rationalization actions. A significant portion of the company's manufacturing rationalization savings will not be realized until 2002. The company continues to expect to reduce its headcount by approximately 20 percent from a base of 36,000 by the end of 2003.

As a result of this current market outlook, CNH expects the first quarter of 2001 to reflect continued improvement in its industrial operations. However, due to weaker performance expected from financial services and a normalized tax rate, the company currently expects a net loss, before restructuring, of $.20 to $.30 per share, slightly worse than the loss of $54 million, or $.20 per share on a comparable common share count basis, in first quarter of 2000.

For the full year, CNH anticipates that the industrial operating margin could improve up to $400 million, reflecting at least $300 million in merger related profit improvements, including cross selling. However, continued inflationary and competitive pressures will slightly reduce profit margins. Including lower interest costs and an improved contribution from the company's financial services businesses, net income, before restructuring, in 2001 should improve by about $100 million.

With strong global brands, CNH is a leader in the agricultural equipment, construction equipment and financial services industries and had 2000 revenues of approximately $10 billion. CNH sells its products in 160 markets through a network of more than 10,000 dealers and distributors. CNH products are sold under the following brands: Case, Case IH, Fiatallis, Fiat-Hitachi, Link-Belt earth-moving equipment, New Holland, New Holland Construction, O&K and Steyr.

CNH management will hold a conference call later today to review its fourth quarter and full year 2000 results. The conference call webcast will begin at approximately 9:00 am U.S. CDT and can be accessed through the investor information section of the company's Web site at cnh.com.