CNH REPORTS FIRST QUARTER RESULTS

CNH reported a first quarter loss before restructuring charges of $46 million, unchanged from the first quarter of 2001, excluding goodwill amortization. The loss per share, before restructuring, was $.17 for the quarter, also unchanged from 2001 excluding goodwill amortization. On a net basis, the loss for the quarter was $49 million, unchanged from the first quarter of 2001 when goodwill amortization is excluded.

During the quarter the company announced its plan to increase equity and reduce debt through two separate and concurrent actions: a public offering of 50 million newly issued shares of common stock, and the issuance of equity to majority shareholder Fiat (FIA.MI) in exchange for $1.3 billion of debt. Presently, the company expects to close the equity offering and issue the new common shares in the second quarter of 2002.

"Strong retail demand for our Case IH and New Holland equipment allowed us to gain share in a flat industry and increase our agricultural revenue," Paolo Monferino, CNH president and chief executive officer, said. "In the weak construction equipment market, we have increased our share in the heavy equipment segment and significantly improved our backhoe loader share. At the same time, we reduced significantly our company and dealer inventories across all construction equipment product lines through production cuts of over 36%. We are extremely pleased that we were able to make such dramatic cuts in our production and wholesale activity with only a modest impact on our total revenues for the quarter."

Equipment Operations First Quarter Performance
First quarter net sales from Equipment Operations were $2.239 billion, compared to $2.286 billion for the same period in 2001. 2002 revenues were negatively impacted by the company's planned inventory reduction actions, the continued weakness in the construction equipment industry, and unfavorable foreign exchange rates, partially offset by stronger sales of agricultural equipment and incremental revenue from acquisitions.

Revenues from sales of agricultural equipment totaled $1.552 billion, up from $1.518 billion in 2001, even though industry sales were essentially flat on a global basis, as expected. When adjusted for the impact of adverse foreign exchange rates, sales of agricultural equipment rose 6%. In both North America and Latin America, unit sales of agricultural equipment were higher than in the first quarter of 2001, resulting in share gains in combines as well as in most categories of agricultural tractors. Gains in the Americas were partly offset by a slight drop in unit sales in Western Europe, Asia and developing markets. During the quarter, CNH overproduced retail unit demand in preparation for the selling season, but at a rate 15% lower than in 2001.

Compared to the first quarter of 2001, construction equipment revenues were down 11% to $687 million. Excluding sales by Kobelco, revenues declined by 16%, reflecting mainly the company's aggressive dealer destocking initiative, and secondarily the industry decline. In North America, the company maintained its share of the heavy equipment segment and significantly increased its backhoe loader share. In Western Europe, CNH gained share overall, particularly in heavy equipment. Compared to the first quarter of 2001, CNH cut both company and dealer inventories of construction equipment, reducing production by over 36%.

The major factor impacting CNH's Equipment Operations gross margin for the first quarter was the company's decision to cut production in order to manage dealer and company inventories. This resulted in lower wholesale volumes, lower absorption of fixed costs, compounded by an adverse country mix in construction equipment, which were partly offset by higher margins on newly launched products and material cost reductions. Adverse foreign exchange rates and higher employee benefit and pension costs also negatively impacted the gross margin.

Compared to the first quarter of 2001, Equipment Operations' SG&A expenses declined in absolute terms and as a percentage of revenues as the company's profit improvement initiatives and favorable foreign exchange rates more than offset additional expenses of about $5 million from newly consolidated acquisitions.

Since the merger, CNH has reduced its SG&A expenses as a percent of revenues from 11.8%, on a pro forma basis, to 9.6% in the first quarter of 2002, close to its SG&A target level of 9%, despite a significant reduction in revenues due to lower industry volumes, adverse foreign exchange rates and required divestitures.

CNH's merger-related profit improvements totaled $20 million in the first quarter bringing the total since the merger to $453 million. In addition, the process reengineering initiatives to improve the effectiveness of its administrative activities and its product development process, which were announced in the third quarter of 2001, have now yielded total savings of an additional $70 million over the past three quarters.

During the first quarter of 2002, the company's employment level was reduced by approximately 600 personnel, excluding acquisitions. This brings the total reduction in employment since the merger to approximately 8,500 personnel, or 24%, which was the target set, at the time of the merger, to be achieved by the end of 2003. Total employment, including new acquisitions, was approximately 29,100 on March 31, 2002.

Financial Services Operations
For the first quarter of 2002, CNH Capital reported net income of $9 million, compared to a net loss of $3 million for the same period last year. Lower loan losses and a gain on the successful completion of an ABS transaction earlier than planned in the year were partly offset by a reduced spread on new originations. Originations in the core business were up slightly compared to the first quarter of 2001.

Balance Sheet
In keeping with the normal seasonal pattern, Equipment Operations net debt increased during the quarter by $228 million, excluding the impact of the Kobelco acquisition ($155 million), versus an increase of $372 million in the first quarter of 2001.

Market Outlook for Agricultural Equipment
CNH anticipates that industry sales of agricultural equipment will remain at or near 2001 levels through the balance of 2002. In North America, the first quarter was flat overall, as expected. The company does not anticipate total industry sales to show any significant departure from 2001 levels through the balance of the year. Sales of under 40 horsepower tractors are now expected to remain at, or somewhat above, 2001 levels throughout the year. Sales of over 40 horsepower tractors are expected to remain at or slightly below 2001 levels through 2002. In Latin America, CNH expects industry sales to remain at 2001 levels at least through the third quarter of 2002. No significant change is anticipated in industry sales for Western Europe.

Market Outlook for Construction Equipment
CNH expects industry sales of construction equipment to remain weak in the second quarter in all its major markets except Latin America, which is expected to be essentially unchanged from 2001. In the second half of the year, industry sales of construction equipment should follow the anticipated economic recovery as it materializes. The company expects the upturn to occur first in North America, where fourth quarter sales could approach 2001 levels. Recovery in Western Europe is not expected to be as rapid.

CNH Outlook for the Second Quarter
Compared to 2001, CNH expects revenues to improve in the second quarter of 2002, as its agricultural equipment business continues to grow. The company expects that there will be continued pressure on margins, due to mix and continued destocking actions. For the quarter, CNH expects to report a profit, before restructuring, close to or slightly above the $.13 earnings per share, before restructuring and goodwill, recorded in the second quarter of 2001. This excludes any potential impact of the company's announced plans to reduce debt and increase equity.

CNH Outlook for 2002
CNH believes that the growing strength of its global agricultural business, along with anticipated second-half improvements in the construction equipment industry, will contribute significantly to the company's bottom line in the second half of the year. New product introductions should also contribute to the bottom line, particularly in the fourth quarter.

CNH expects to record improved bottom line performance in 2002 even as the company continues dealer destocking by keeping wholesale levels below retail sales levels and production below wholesale levels. Through the company's various profit improvement initiatives, including the reengineering of its key processes, CNH believes that further reductions in SG&A and R&D may be achieved during 2002. Based on current assumptions, CNH believes that the company's better than expected performance in the first quarter will be reflected in the full year result, bringing the expected loss per share in 2002 closer to breakeven, before restructuring, and without considering the potential impact of the company's initiatives to reduce debt and increase equity.