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• Full year 2008 Net Income was $825 million, up $266 million or 48%
• Record Gross Margin performance in Agricultural Equipment offset weakness in Construction Equipment.
• Full Year Operating Margin 8.6%, up 0.4 percentage points

BURR RIDGE, IL. - (MARKETWIRE) - CNH Global N.V. (NYSE: CNH - News) January 22, 2009:
Continuing agricultural equipment sales growth combined with a favorable mix of higher horsepower agricultural tractor and combine harvester sales offset adverse construction equipment market conditions. CNH's full year 2008 diluted earnings per share before restructuring, after tax of $3.59 is 38% higher than 2007.

"In the fourth quarter of 2008, CNH delivered another quarter of year-over-year increases in operating profit, while for the full year our Equipment Operations Gross and Operating Margins hit their highest levels in the history of the company," said Harold Boyanovsky, CNH President and Chief Executive Officer. "That's a solid track record, achieved through constant focus on our brands, our products and our results. Our Agricultural Equipment business growth continued in the quarter, especially in the cash grain segments. Sales of Construction Equipment were lower than fourth quarter 2007 as global markets declined precipitously, leading us to substantially reduce production. In light of continuing volatility in financial markets and consequent uncertainty in the equipment market, we are preparing for a turbulent 2009 and expect the first quarter to be particularly challenging."

Case IH Agriculture launched 12 new products in North America, including Puma tractors with a Continuously Variable Transmission, from 135 to 195 HP, Patriot 3330 Sprayers with 1,000 gallon tank capacity, the LB 3 Series of Large Square Balers, and heavy-duty Disc Mowers and Mower Conditioners. In the International Region, Case IH launched three models of mid-range single rotor Axial-Flow 88-Series combines, three updated models of the flagship Axial-Flow 20-Series combines and four updated LB large square balers.
New Holland Agriculture in Europe launched five TK4000 series crawler tractors offering different widths and track sizes and four T3000 tractors, from 35 to 55 HP, meeting the needs of agricultural, horticultural, ground care and municipal users. In North America, T4000 F/V specialty orchard tractors were launched, while in the International Region, New Holland launched 17 products, ranging from FR9000 forage harvesters to TS6000 Series over 100 HP tractors. The EIMA Show in Bologna, Italy in mid-November recognized the brand's T4050F Tractor (97 HP) with its "Best of Specialized" award and recognized the T6080 tractor (155 HP) as joint winner of its "Golden Tractor for Design" award.
Case Construction continued its worldwide rollout of additional models of B Series CX crawler excavators, featuring enhanced noise reduction (both inside and outside the cab) and fuel savings. Highlighted in the quarter were the CX470B crawler excavators, in the 45 to 50 metric ton market segments, as well as new graders and crawler dozers.
New Holland Construction launched two pipe-laying dozer models in North America, the D85B and D95B with a sideboom attachment offering a lift capacity of 20,000 lbs. In Latin America, it introduced the new E215B 48 metric ton Tier III crawler excavator and the D150B crawler dozer with full hydrostatic transmission. The D150B powertrain features a new CNH Common Rail engine with 12% greater maximum power while offering 10% greater fuel efficiency.

Strong worldwide agricultural equipment industry retail unit sales growth of higher horsepower tractors and combines in the fourth quarter and full year, combined with improved CNH market share, drove Agricultural Equipment's Net Sales up 8% for the quarter and 30% for the full year compared with 2007. On a constant currency basis net sales were up 18% for the quarter and up 27% for the year. For the year, growth in industry sales of higher horsepower tractors and combines exceeded the growth of the overall agricultural equipment market.

Construction Equipment's Net Sales declined 48% in the fourth quarter, including a reduction of approximately 10% due to changes in exchange rates. Worldwide construction equipment industry retail unit sales declined approximately 37%, with industry retail unit sales of light construction equipment, where CNH has a stronger market position, down approximately 44% and industry retail unit sales of heavy equipment down 27%. In anticipation of the market decline, CNH idled most of its construction equipment production facilities for part of the quarter to reduce inventories and destock dealers, under-producing retail unit sales by 18%. Industry retail unit sales in Latin American and Rest-of-World markets, which had been strong through September, declined dramatically in the fourth quarter, 10% and 32% respectively. The fourth quarter worldwide industry retail unit sales decline brought the full year total industry retail unit sales decline to approximately 11% below 2007 levels. Construction Equipment's Net Sales for the year declined 11%, including positive effects of exchange rate changes (3%), which were offset by industry volume declines and our destocking actions. Construction Equipment's market share was stable for both the quarter and the year.

CNH's Agricultural Equipment net sales growth, mix improvements and pricing actions were partially offset by weakness in Construction Equipment caused by the global decline in industry retail unit sales, CNH's destocking actions and the negative impacts of exchange rate changes and economic cost increases. This resulted in a 5% increase in CNH's Gross Profit in the fourth quarter compared with 2007. Agricultural Equipment's fourth quarter Gross Margin improved 4.6 percentage points compared with 2007, aided by a significant reduction in industrial bottleneck costs, while Construction Equipment's Gross Margin declined resulting in a net 2.9 percentage point improvement in Equipment Operations Gross Margin relative to the prior year.
For full year 2008, CNH's Gross Profit increased $495 million compared with 2007, driven by positive effects of volume and mix in the Agricultural Equipment business. Agricultural Equipment's Gross Profit improved $723 million while Construction Equipment's Gross Profit declined by $228 million.


Equipment Operations Operating Profit grew 13% in the fourth quarter compared with 2007 driven by significant improvements in Agricultural Equipment's Gross Profit.

Agricultural Equipment's Operating Margin reached a fourth quarter record of 11.7%, reflecting the Gross Margin improvement and operating leverage on R&D and SG&A costs. Agricultural Equipment's Operating Margin for the full year of 10.6% also was a record.
Construction Equipment's Operating Margin turned negative in the quarter reflecting the significant industry volume declines, effects of destocking actions and negative operating leverage on R&D and SG&A costs. Construction Equipment's Operating Margin for the full year declined to 2.6%, primarily due to the lower volumes and negative operating leverage on R&D and SG&A costs.


CNH Financial Services' on-book asset portfolio totaled $9.8 billion at December 31, 2008, up 5.7% from the prior year, primarily due to the lack of ABS transactions and the growth in the Agricultural Equipment business. Fourth quarter Net Income of $51 million was up $17 million from a year ago, reflecting higher on-book assets. Loss provisions were $38 million in the fourth quarter compared to $13 million in the same period in the prior year, resulting primarily from the downturn in the construction equipment market and additional reserves in Brazil.
For the full year, Financial Services' Net Income was $242 million, up 6% from the prior year, reflecting higher income from a larger portfolio of on-book assets which was partially offset by the reduced level of ABS income in 2008.
In North America, all of Financial Services' maturing credit facilities were renewed and new transactions were closed for a total value exceeding $1 billion, effectively replacing the traditional public ABS funding which was not available in the quarter. For the year, Financial Services raised approximately $4 billion of funding in North America, including $1.1 billion from the public issuance of ABS. Funding needs in Europe and Australia were similarly met by a combination of new credit facilities and other financial transactions, such as the sale of receivable portfolios.

CNH's fourth quarter 2008 Net Income of $114 million was flat with 2007. For the quarter, Equipment Operations "Other, net" expense increased by $36 million reflecting primarily foreign currency losses. Net interest expense and Interest Compensation to Financial Services also increased, reflecting higher interest rates and borrowing levels while Equity Income in Unconsolidated Subsidiaries declined by $51 million. Results include restructuring charges, after tax, of $3 million in the fourth quarter of 2008, compared with $6 million in the comparable period for the prior year. Net income excluding restructuring charges, after tax, was $117 million, down 2.5% compared to $120 million in the prior year. Equipment Operations' effective tax rate, before restructuring, of 42.4% in the quarter.
For full year 2008, CNH's Net Income of $825 million was up 48% from $559 million in 2007. The primary drivers of the improvement were increases in Equipment Operations Operating Profit, improved performance of Financial Services and decreases in Equipment Operations "Other, net", restructuring costs and the Equipment Operations effective tax rate. The decrease in Equipment Operations "Other, net" for the year was primarily due to decreases in pension expense applicable to former employees and litigation. Equity Income in Unconsolidated Subsidiaries declined by $49 million. Results include restructuring charges, after tax, of $28 million in 2008, compared with $61 million in 2007. Net income, excluding restructuring charges, after tax, was $853 million, up 38% compared to $620 million in the prior year. Equipment Operations' effective tax rate, before restructuring, for the full year was 33.7% compared with 45.9% in 2007 reflecting an increase in earnings in low tax rate jurisdictions and an increase in tax credits in certain jurisdictions, which reduced Equipment Operations 2008 taxes by approximately $100 million compared with 2007.


Equipment Operations' Net Cash position decreased in the fourth quarter by $467 million to a $423 million Net Debt position. Cash generated from earnings was offset by increases in working capital, seasonal changes in accrued liabilities and capital expenditures of $230 million.
In the quarter, the increase in working capital was primarily due to increases in inventories offset by a reduction in receivables. Inventories increased due to the slower than anticipated growth of many agricultural equipment markets, especially in Latin America and Rest of World. The decrease in receivables resulted from declines in Construction Equipment Net Sales, partially offset by higher levels of Agricultural Equipment Net Sales, especially in Rest-of-World markets.
For full year 2008, Equipment Operations' Net Cash position decreased by $909 million due to higher levels of inventory (primarily construction equipment), a $120 million contribution to the U.S. defined benefit pension plan, $492 million of capital expenditures and the $118 million annual dividend payment to shareholders that occurred in the second quarter.
Financial Services Net Debt decreased by $1,558 million during the fourth quarter to $8.2 billion at December 31, 2008 due primarily to lower levels of wholesale financing receivables. Compared with December 31, 2007, Financial Services Net Debt increased by $377 million from $7.9 billion, due in large part to higher levels of retail financing receivables.

Although we anticipate that full year global agricultural fundamentals will remain strong, we believe worldwide industry retail unit sales will be impacted by tight financial and credit conditions in certain regions. We anticipate that cash grain commodity prices will remain at higher levels than in 2007 while farm production input cost pressures will abate. In addition, we believe global wheat and coarse grain production will exceed consumption resulting in higher corn, soybean and wheat stocks-to-use ratios. We expect that U.S. Net Farm Cash Income will be at near-record levels, but unevenly distributed across market segments. Consequently, we expect worldwide industry retail unit sales of Over-40 horsepower tractors to be down by 5 to 10% and industry retail unit sales of combines to be down 15 to 20%. We expect continued weakness in the Under-40 horsepower tractor segment in North America with industry retail unit sales down approximately 20%, due in large part to the ongoing weakness in the North American residential construction and housing markets.
For the first quarter of 2009, CNH expects global agricultural equipment industry retail unit sales to be weaker than in the full year, reflecting increased levels of farmer uncertainty related to financial and economic conditions, tight financial and credit conditions in certain markets and adverse weather impacts in the southern hemisphere. Consequently, in the first quarter, we expect worldwide industry retail unit sales of Over-40 horsepower tractors to decline by 10 to 15% and industry retail unit sales of combines to be down 20 to 25%. We expect the Under-40 horsepower tractor segment in North America to be down approximately 20%.
We expect the weakness in global construction equipment industry sales to continue into 2009, with industry retail unit sales down a further 15 to 20% compared with full year 2008, although we anticipate that light equipment markets, where CNH has a stronger presence, will decline by more than the heavy equipment markets. We expect declines to occur in all major markets, including significant declines in Western European and Latin American markets. We do not expect that global or OECD GDP will grow and we expect construction activity levels will continue to weaken, due to the tight global financial and credit conditions. Although unprecedented levels of governmental stimulus actions are being enacted throughout the world, we expect that such actions will have an impact in late 2009 or possibly into 2010, and may only serve as an offset to new declines in other construction equipment market segments.
For the first quarter of 2009, CNH expects global construction equipment industry retail unit sales to be down approximately 35 to 40% compared with the first quarter of 2008. We expect that industry retail unit sales of light construction equipment, where CNH has a stronger market presence, will be down about 45%, with heavy construction equipment sales down 25 to 30%. The most significant declines are expected to be in the Western European and Latin American markets.

CNH expects Equipment Operations Net Sales for full year 2009 to be down 10 to 20% from 2008 as some first-half strength in North American high horsepower tractors and combines is offset by declines in all other agricultural equipment markets and further weakness in construction equipment sales. To compensate for lower levels of market demand and to reduce inventory levels, CNH plans to idle its construction equipment factories for much of the first half of the year and agricultural equipment facilities producing lower horsepower equipment are expected to produce below the forecasted level of retail sales.
To deal with financial market volatility and illiquidity in the asset backed security market, CNH is taking a conservative approach to growth in Financial Services' portfolios. The company expects Financial Services' ongoing emphasis on strict underwriting controls and disciplined receivables management will result in continued solid performance of its receivables portfolio.
These expectations are based upon the ability of the Financial Services business to secure funding. As of December 31, 2008 total funding of CNH by Fiat S.p.A. was $5.2 billion. In light of continuing volatility in the financial markets, CNH has no assurance that funding at such levels will continue. Therefore, CNH is exploring other sources of funding, either directly or by way of third party financing provided directly to its customers. In these circumstances we anticipate that the profitability of Financial Services will be significantly limited. This should not have a negative impact on Equipment Operations sales and margins.

CNH Global N.V. is a world leader in the agricultural and construction equipment businesses. Supported by more than 11,000 dealers in 160 countries, CNH brings together the knowledge and heritage of its Case and New Holland brand families with the strength and resources of its worldwide commercial, industrial, product support and finance organizations. CNH Global N.V., whose stock is listed at the New York Stock Exchange (NYSE:CNH), is a majority-owned subsidiary of Fiat S.p.A. (FIA.MI). More information about CNH and its Case and New Holland products can be found online at www.cnh.com.

CNH management will hold a conference call later today, to review its fourth quarter and full year 2008 results. The conference call Webcast will begin at approximately 7:00 a.m. U.S. Central Time; 8:00 a.m. U.S. Eastern Time. This call can be accessed through the investor information section of the company's Web site at www.cnh.com and is being carried by CCBN.
Forward-looking statements. This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this press release, including statements regarding our competitive strengths, business strategy, future financial position, operating results, budgets, projected costs and plans and objectives of management, are forward-looking statements. These statements may include terminology such as "may," "will," "expect," "could," "should," "intend," "estimate," "anticipate," "believe," "outlook," "continue," "remain," "on track," "goal," or similar terminology.
Our outlook is predominantly based on our interpretation of what we consider key economic assumptions and involves risks and uncertainties that could cause actual results to differ. Crop production and commodity prices are strongly affected by weather and can fluctuate significantly. Housing starts and other construction activity are sensitive to the availability of credit and to interest rates and government spending. Some of the other significant factors which may affect our results include general economic and capital market conditions, the cyclical nature of our business, customer buying patterns and preferences, foreign currency exchange rate movements, our hedging practices, our customers' access to credit, actions by rating agencies concerning the ratings of our debt securities and asset backed securities, risks related to our relationship with Fiat S.p.A., political uncertainty and civil unrest or war in various areas of the world, pricing, product initiatives and other actions by competitors, disruptions in production capacity, excess inventory levels, the effect of changes in laws and regulations (including government subsidies and international trade regulations), the results of legal proceedings, technological difficulties, results of our research and development activities, changes in environmental laws, employee and labor relations, pension and health care costs, relations with and the financial strength of dealers, the cost and availability of supplies from our suppliers, raw material costs and availability, energy prices, real estate values, animal diseases, crop pests, harvest yields, government farm programs and consumer confidence, housing starts and construction activity, concerns related to modified organisms and fuel and fertilizer costs. Additionally, our achievement of the anticipated benefits of our margin improvement initiatives depends upon, among other things, industry volumes as well as our ability to effectively rationalize our operations and to execute our brand strategy. Further information concerning factors that could significantly affect expected results is included in our annual report on Form 20-F for the year ended December 31, 2007.
We can give no assurance that the expectations reflected in our forward-looking statements will prove to be correct. Our actual results could differ materially from those anticipated in these forward-looking statements. All written and oral forward-looking statements attributable to us are expressly qualified in their entirety by the factors we disclose that could cause our actual results to differ materially from our expectations. We undertake no obligation to update or revise publicly any forward-looking statements.