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• EPS of $.16 per share before restructuring and exceptional items from a loss of $.53 per share in the comparable period
• Reported net sales up 6% (-2% constant currency basis), as good market conditions in Latin America for construction equipment and rotary combines helped to offset weaker conditions in Europe.
• Operating Profit Margin up 310 basis points to 4.4%
• Positive equipment operating cash flow for the quarter, net cash position improves to $756 million

BURR RIDGE, IL. - (MARKETWIRE) - CNH Global N.V. (NYSE: CNH - News) April 21, 2010: CNH Global today announced financial results for the first quarter of 2010. Net Sales rose 6.1% to $3,237 million for the first quarter. The Company reported an Operating Profit of $144 million from Equipment Operations for the quarter, up $105 million from the comparable period. Diluted Earnings Per Share Before Restructuring and Exceptional Items was $0.16 compared to a loss of $0.53 per share for first quarter 2009.
In a mixed agricultural capital goods trading environment, CNH was able to post improved profit performance over the prior year. Demand in North America was firm and Latin America strong on stable commodity pricing. The improving market conditions resulted in better than forecasted demand for agricultural equipment in the Americas, particularly tractors and combines, in a competitive pricing environment. Trading conditions in Western Europe and the CIS remained at reduced levels due to a continuing decline of overall economic conditions, while Asia and the Middle East demonstrated signs of improvement. The negative impact from reduced tractor unit sales and weaker demand in certain geographical markets was offset by improved mix of rotary combines in the Company's product portfolio, the benefits of prior period restructuring actions, and improved industrial economics lifting agricultural equipment gross margins 210 basis points from the comparable prior period.
The construction equipment sector displayed similar dynamics with unevenly distributed geographical demand mirroring overall differences in economic activity. For CNH, this resulted in good performance on the back of the Company's strong presence in Latin America and certain countries in Asia, combined with an improved industrial performance in North America which came off a low base. These served to offset a sluggish demand environment in Western Europe resulting in year-over-year top line growth of 27%. The sector's operating loss for the period narrowed as a result of cost alignment actions taken in 2009, reduced manufacturing input costs, and a favorable geographical mix despite the Company's sub-scale exposure to the high growth China market, and difficult pricing conditions in Western Europe and North America. For construction equipment, the Company continued to under produce retail sales during the quarter in an effort to work off finished goods inventory in low demand geographies and in preparation for new product launches of Tier IV equipment. Plans are in place for a step up of production in support of markets demonstrating improving demand conditions.
Equipment Operations generated $117 million in cash flow from operating activities. This was used to finance net capital expenditures of $32 million and to pay down debt. CNH Equipment Operations ended the quarter with a net cash position of $756 million, up 43% from the end of fiscal year 2009 and 185% from the same period last year.
"Our first quarter results highlight the impact of a more stable market and the results of our work to reduce costs. We have reduced structural costs and this is the main driver of our improved financial performance," said Harold Boyanovsky, CNH President and CEO. "We are encouraged to see the market improvements, but we will continue to exercise tight controls over our operations."
CNH Capital successfully completed $1.3 billion in retail and wholesale financing transactions during the quarter as the ABS market conditions continued to improve.
Net Income Attributable to CNH was $16 million in the first quarter of 2010 compared with a net loss of $126 million in the same period of 2009. Diluted Earnings Per Share was $0.07 for the quarter, compared with a loss of $0.53 per share in the first quarter of 2009. For the first quarter of 2010, the Company incurred consolidated tax expense of $70 million, which included $26 million of tax charges due to the geographic mix of earnings and the $20 million impact of the new U.S. Patient Protection and Affordable Care Act.

CNH confirms its strategic business plan revenue and trading profit objectives for 2010 as disclosed on April 21, 2010 in a separate press release issued by CNH in coordination with the issuance of its first quarter results.


Worldwide agricultural industry retail unit sales increased 14% compared to the first quarter of 2009. Global retail tractor sales rose 14% and global retail combine sales fell 2% for the quarter. Tractor and combine sales rose slightly in North America while they declined sharply in Western Europe, where economic conditions continue to be challenging. Latin America saw significant increases in both tractor and combine markets on strong growth and commodity prices. Rest of World markets saw significantly stronger tractor sales, and weaker combine volumes.
CNH market share for tractors declined in North America, especially in the under 40 hp segment where the Company is reducing inventory in preparation for the introduction of new models later this year. European market share remained stable and Latin American market share declined due to heavy competitive pricing in the high volume, small and mid-sized categories. Share in Rest of World markets fell slightly.
CNH market share for combines was up in the first quarter. In North America, CNH increased market share by targeting key cash crop customers. In Western Europe, market share was stable, while Latin American market share rose significantly on strong demand for newly introduced CNH rotary combines. The Company picked up market share in Rest of World markets. CNH benefited from increased demand in Turkey where its brands are strongly positioned in the agricultural capital goods sector. In March 2010, the Company finalized an agreement to jointly manufacture agriculture and construction equipment with OJSC KAMAZ in Russia.
Global industry unit volume of construction equipment rose 31% in the first quarter compared to the prior year, with light equipment up 21% and heavy equipment up 40%. In both the North American and Western European markets, demand for the light and heavy segments continued to decline, albeit at reduced rates. In Latin America, the market rebounded compared to a weak first quarter last year on strong infrastructure and construction spending. Rest of World markets' industry sales of construction equipment jumped more than 50% for light and heavy equipment, dominated by demand in China on the back of infrastructure and commodity related spending.
In North America, CNH market share was in line for heavy and fell slightly in the light segments amid intense pricing competition. In Western Europe, CNH share was comparable with the prior year in the light equipment segment and increased in the heavy equipment segment. CNH share in Latin America was down for light equipment while market share increased in the heavy segment as our local manufacturing base was able to meet demand for key customers in a very tight market. In Rest of World markets, CNH saw no significant change in market share.

CNH anticipates that global agriculture equipment markets will be flat to up 5% in 2010. The CNH outlook for the global construction equipment markets is for an increase of approximately 15-20% in 2010.


Agricultural Equipment's Net Sales were up 2.1% in the first quarter versus the comparable period in 2009 (-5.4% on a constant currency basis). Construction equipment revenue rose 27.3% against first quarter last year (16.5% on a constant currency basis), as production significantly increased against 2009 with improved market conditions and reduction of finished goods inventory.


Equipment Operations' Gross Profit in the first quarter was $539 million, up 26.8% from the comparable period last year. The 280 basis point increase in gross margin was primarily driven by better fixed cost absorption in the construction equipment operations, more favorable net pricing, and the results of prior period restructuring actions to lower industrial costs.
Operating Margin was 4.4%, and operating profit improved $105 million over the comparable period last year. Agricultural Equipment Operating Margin increased 180 basis points for the quarter to 6.9%; Construction Equipment Operating Margin improved from (19.0%) in the first quarter last year to (5.9%).


For the first quarter, Financial Services' Net Income Before Restructuring and Exceptional Items was $51 million, compared to $2 million in the respective period a year earlier. First quarter 2009 results included a $33 million ABS loss under that period's accounting standards. A higher level of on-book receivables, improved net interest margins, increased originations, and continued cost containment initiatives with respect to general and administrative expenses were positive factors in the profit improvement.
As of the beginning of 2010, Financial Services adopted new accounting guidance (FASB Statements No. 166, Accounting for Transfers of Financial Assets, and No. 167, Amendments to FASB Interpretation No. 46(R)) that required the Company to consolidate a significant portion of its securitization trusts. Certain transactions that historically had been accounted for off balance sheet, are now accounted for on the Financial Services balance sheet. The financial information presented prior to January 1, 2010 has not been adjusted for comparison purposes as CNH adopted this guidance prospectively.



CNH Global N.V. is a world leader in the agricultural and construction equipment businesses. Supported by more than 11,600 dealers in approximately 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 first quarter 2010 results. The conference call Webcast will begin at approximately 1:00 p.m. U.S. Central Time; 2:00 p.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, restrictive covenants in our debt agreements, 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 those related to tax, healthcare, retiree benefits, government subsidies and international trade), 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 and critical suppliers, 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, 2009.
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.