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• Despite significant industry-wide decline in sales, CNH records positive Operating Profit of $72 million
• Stringent working capital management generated cash flow of $255 million
• Strengthened liquidity as a result of two large funding transactions
• Significant Construction Equipment restructuring milestones achieved

BURR RIDGE, IL. - (MARKETWIRE) - CNH Global N.V. (NYSE: CNH - News) October 21, 2009:
Notwithstanding a slowdown in its Agricultural Equipment Net Sales (23% year-over-year) and a dramatic reduction in its Construction Equipment Net Sales (56% year-over-year), CNH reported Operating Profit of $72 million in the third quarter (down from $339 million in the third quarter of 2008) on Net Sales of $2,960 million (32% lower than the third quarter of 2008). CNH maintained its program of aggressive production controls to offset the effects of continuing weak market conditions. Accounts receivable reduction of $281 million and inventory reduction of $440 million were the primary drivers of improved cash flow which reduced Equipment Operations' Net Debt by $155 million.
CNH's third quarter 2009 diluted net loss per share, attributable to CNH common shareholders, was $(0.11) compared with earnings of $1.06 in the third quarter of 2008. The Net Loss attributable to CNH was $25 million in the quarter compared with Net Income attributable to CNH of $252 million in the same period of 2008. These results include restructuring charges, after tax, of $3 million, compared with $7 million in the prior year. CNH's third quarter 2009 diluted loss per share attributable to CNH common shareholders, excluding restructuring, after tax, was $(0.09) compared with earnings of $1.09 in the third quarter of 2008.
The diluted net loss per share attributable to CNH common shareholders, for the first nine months of 2009, was $(0.92), compared with earnings of $2.99 in the first nine months of 2008. Income tax negatively impacted Net Loss attributable to CNH by approximately $115 million due primarily to the geographic mix of earnings and losses. The Net Loss attributable to CNH was $218 million in the first nine months of 2009 compared with Net Income attributable to CNH of $711 million in the same period of 2008. These results include restructuring charges, after tax, of $56 million compared with $25 million in the first nine months of 2008. CNH's diluted net loss per share attributable to CNH common shareholders, excluding restructuring, after tax, for the first nine months of 2009 was $(0.68) compared with earnings of $3.10 in the first nine months of 2008.

"In the third quarter, faced with the continuing negative effects of the economic downturn, we saw the benefits of keeping a tight grip on production and costs. Equipment Operations' inventories and receivables were significantly reduced, generating positive cash flow from operating activities. Salaried and agency positions have also come down considerably and we are on track to achieve our year-end objective of reducing personnel by 11 to 12%. On the construction side, we implemented the management reorganization previously announced and now have a structure that is better aligned with the current construction equipment market. We remain committed to product quality and new product development. In addition we will continue to evaluate new opportunities to strengthen our position in the market, such as our recently announced JV plans in Russia," said Harold Boyanovsky, CNH President and Chief Executive Officer.
"In the fourth quarter, the actions already in place will result in improvements to our operating results and a continuation of positive Equipment Operations' cash flow. We expect to further reduce working capital by $700 million in the fourth quarter, resulting in a full year working capital reduction of approximately $1 billion. We remain confident about the future of both our Agricultural and Construction Equipment businesses and expect to see improvement beginning in the fourth quarter."

Case IH Agriculture launched the Austoft 8000 series sugar cane harvester which delivers a 35% increase in chopper power and electronic ground drive with cruise control. It also prepared for its fourth quarter launch of updated Maxxum, Puma and Magnum tractors covering the entire 100 to 225 horsepower range.
New Holland Agriculture launched its new flagship T7000 series tractors (167 to 225 horsepower) with continuously variable "Auto Command" transmissions and new armrest control console in North America and Western Europe.
Case Construction added the high performance 650L to its crawler dozer line. The 650L delivers more performance, a lower overall operating height and weight and productivity boosting maintenance features. It delivers 74 net horsepower through a Tier-3 turbocharged engine with electronic fuel injection.

On October 8, CNH and Russia's Kamaz JSC, a global truck maker, announced plans to develop an industrial and commercial alliance to further strengthen CNH's leadership position in Russia's agricultural and construction equipment markets. The two companies intend to establish an industrial joint venture which, in the initial phase, will produce combines, tractors and agricultural implements, as well as some construction equipment, in Naberezhnye Chelny, Tatarstan. The JV will begin operation in 2010 and will produce machines from the CNH family of brands. CNH and Kamaz will also integrate their commercial networks to distribute equipment from CNH brands, both locally produced and imported, throughout the Russian Federation. Kamaz is the largest Russian manufacturer of heavy-duty trucks. Its sales and service network reaches all regions of Russia and the CIS through 127 dealers and more than 100 service centers.


Agricultural Equipment's Net Sales declined by 23% in the quarter and 19% for the first nine months of the year compared with 2008. Despite the overall industry decline, there was relative strength in the highest horsepower tractor markets in North America and CNH's tractor market share for the quarter was up in North America. Our market share for combines was up in Latin American and stable in Western European markets in the quarter. To reduce inventories, we under-produced retail unit sales by 16% in the quarter and by 10% for the first nine months of the year.
Construction Equipment's Net Sales declined 56% in the quarter, and 59% for the first nine months of the year compared with 2008, driven by continued weakness in the construction equipment industry. CNH continued to idle much of its construction equipment production capacity during the quarter to further reduce both dealer and company inventories, under-producing retail unit sales by 58%.


CNH's Gross Profit in the third quarter was $448 million compared with $816 million in the third quarter of 2008. Gross Margin was 15.1% in the third quarter of 2009 compared with 14.8% in the second quarter of 2009 and 18.9% in the third quarter of 2008. CNH achieved positive pricing in the quarter, however, this was more than offset by lower sales volume.
For the first nine months of 2009, CNH's Gross Profit was $1,398 million compared with $2,580 million in the first nine months of 2008. Gross Margin was 14.6% compared with 18.8% in the first nine months of 2008.


Equipment Operations' Operating Profit was $72 million in the third quarter, compared with $339 million in the third quarter of 2008. As a result of strict cost controls and personnel reductions, our SG&A expenditures were reduced by $92 million (including $18 million of currency) compared with the third quarter of 2008. R&D expenditures were $9 million (including $6 million of currency) lower compared with the third quarter of 2008, reflecting a continued high level of investment in our current and future product line-up. Agricultural Equipment's Operating Margin was 6.5% in the third quarter while Construction Equipment's Operating Margin was negative.


CNH Capital's continued participation in the ABS markets, bank funding transactions and European factoring programs, as well as improving financial market conditions, enabled Financial Services to reduce its on-book portfolio by 14% from September 30, 2008. Third quarter Net Income excluding restructuring charges, after tax, of $33 million was down $36 million from a year ago, reflecting primarily lower average levels of on-book receivables, higher interest costs and increased credit loss expense. Loss expense increased from $17 million in the third quarter of 2008 to $43 million in the third quarter of 2009, due to the downturn in the U.S. and European construction equipment markets and additional reserves recorded for Brazil's retail agricultural equipment portfolio. The North American agricultural equipment portfolio quality remained high.
For the nine months, Financial Services' Net Income excluding restructuring charges, after tax, was $81 million, down from $191 million in the prior year. For the first nine months of 2009, credit loss expense was $124 million compared with $60 million in the prior year.
Globally, Financial Services closed new transactions, in the quarter, for a total value exceeding $1.1 billion, including a $583 million U.S. wholesale ABS TALF transaction, a $311 million retail ABS transaction in Australia and a $244 million expansion of its European factoring program. For the nine months, Financial Services closed new transactions totaling approximately $4.1 billion of new funding globally and believes that funding conditions have improved significantly since the beginning of the year. Financial Services will continue to evaluate government sponsored programs and other alternatives when considering future financing transactions.

Third quarter 2009 Net Loss attributable to CNH was $25 million, compared with Net Income attributable to CNH of $252 million in the third quarter of 2008. The decline in Net Income includes a loss of $5 million in Equipment Operations' unconsolidated subsidiaries, compared with a profit of $13 million in the prior year, reflecting primarily the results of the Company's unconsolidated construction equipment joint ventures. Results include restructuring charges, after tax, of $3 million in the third quarter of 2009, compared with $7 million in the comparable period for the prior year. CNH's Net Loss attributable to CNH, excluding restructuring charges, after tax, was $22 million, compared with a profit of $259 million in the prior year.
For the nine months, the Net Loss attributable to CNH of $218 million was down compared with Net Income attributable to CNH of $711 million in 2008. The Net Loss includes a loss of $41 million in Equipment Operations' unconsolidated subsidiaries, a decline of $87 million compared with the profit of $46 million in the prior year, reflecting primarily the results of the company's unconsolidated construction equipment joint ventures. Results include restructuring charges, after tax, of $56 million in 2009, compared with $25 million in 2008. The Net Loss attributable to CNH, excluding restructuring charges, after tax, was $162 million, compared to Net Income attributable to CNH, excluding restructuring charges, after tax, of $736 million in the prior year.


Equipment Operations' Net Debt was reduced in the third quarter by $155 million to $183 million. The $132 million of cash generated by Operating Activities was reduced by net cash used for Investing Activities of $52 million, which primarily relates to capital expenditures.
In the quarter, working capital decreased by $255 million, primarily due to decreases in inventories and receivables totaling $721 million, which were partially offset by a reduction in payables of $466 million. Inventories decreased by $440 million and receivables decreased by $281 million.
For the nine month period, Equipment Operations' Net Debt position was reduced by $240 million. The $362 million of cash generated by Operating Activities was partially absorbed by capital expenditures, while other impacts, including the effects of exchange rate changes, were slightly positive.
Financial Services' Net Debt decreased by $7 million during the quarter to $8,121 million at September 30, 2009. Compared with December 31, 2008, Financial Services' Net Debt decreased by $122 million from $8,243 million.
Consolidated Net Debt at quarter-end totaled $8.3 billion, down $162 million from the end of the second quarter, and down $362 million from year-end 2008. Consolidated Total Debt with Fiat affiliates less Deposits in Fiat affiliates cash management pools totaled $2.4 billion at quarter-end, down from $3.5 billion at June 30, 2009 and down $751 million from $3.2 billion at December 31, 2008.
In August, CNH issued $1.0 billion of Senior Notes, due 2013, using the proceeds to strengthen liquidity and to repay maturing short-term liabilities, substantially lengthening the maturity profile of its debt.

Planned pre-tax restructuring charges for 2009 now total approximately $120 million of which approximately $80 million is expected to be cash expenditures. Significant Construction Equipment restructuring milestones have been achieved. CNH's reorganization of its Construction Equipment internal management structure has been completed. CNH has reached agreement with the Minister of Labor and President of Region Emilia Romagna, as well as all trade unions, to move loader backhoe and compact wheel loader production to its plant in Lecce, Italy. CNH remains committed to working together with all parties to find industrial alternatives and investors for the Imola site.
Salaried personnel reduction actions taken through the third quarter have resulted in a 11% cumulative reduction in permanent and temporary salaried and agency positions, including a cumulative reduction of approximately 24% in construction equipment related positions. Additional actions to be taken in the fourth quarter of 2009 are expected to result in a full year company-wide reduction in permanent and temporary salaried and agency positions of 11 to 12%.

We believe that medium and long term global agricultural fundamentals remain strong, but worldwide industry retail unit sales continue to be impacted by current economic and credit conditions. Full year 2009 worldwide tractor industry retail unit sales are expected to be down 10 to 15% from the record levels of 2008, while combine industry retail unit sales could be down 20 to 25%.
For the fourth quarter of 2009, we expect global agricultural equipment industry retail unit sales to continue to soften and be down 20 to 25%, with worldwide industry retail unit sales of Over-40 horsepower tractors to decline by 20 to 25% and industry retail unit sales of combines to be down 15 to 20%. We expect the Under-40 horsepower tractor segment in North America to be down approximately 40%. We continue to expect pockets of strength in some of the highest horsepower tractor industry sales, tractors in China and the Asia Pacific region and for sugar cane harvesters in Brazil.
We expect global construction equipment industry retail unit sales to continue at levels close to those we experienced in the first nine months of the year, with full year industry retail unit sales down 40 to 45% compared with full year 2008, with light equipment markets down by 45 to 50%, and the heavy equipment markets declining by approximately 40%.
For the fourth quarter of 2009, we expect global construction equipment industry retail unit sales to be at the same relative levels as earlier in the year, but the percentage declines compared with the fourth quarter of 2008 to be less than earlier in the year. Due to the magnitude of the declines in the fourth quarter of 2008, the year-over-year comparisons for the fourth quarter of 2009 are less pronounced. In total, we expect the industry retail unit sales to be down approximately 30 to 35%, with industry retail unit sales of light construction equipment to be down 25 to 30% and heavy construction equipment sales down approximately 30 to 35%.

"We remain optimistic about the future prospects for our agricultural and construction equipment businesses and believe that the actions we have been taking, to ensure that CNH and its dealers and distributors are ready and able to compete aggressively as market conditions improve, will begin to show results in the fourth quarter," Boyanovsky said. "CNH continues to manage its business through the industry downturn by controlling cost, reducing company and dealer inventories and improving operating efficiency. At the same time CNH is restructuring its construction equipment operations and improving company liquidity."
Although CNH expects Equipment Operations' Net Sales for full year 2009 to be down 25 to 30% from 2008, including a reduction of approximately 5% related to currency translation, net sales for the fourth quarter are expected to be down approximately 10%. In the fourth quarter, CNH intends to produce fewer units than it expects to retail (10 to 15% for agricultural equipment and 50 to 55% for construction equipment), which will drive continued cash flow generation.

CNH Global N.V. is a world leader in the agricultural and construction equipment businesses. Supported by more than 11,300 dealers in 170 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 third quarter and first nine months 2009 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, 2008.
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.