CNH Full Year 2006 Net Income up 79 Percent From 2005

CNH Global N.V. (NYSE: CNH) today reported fourth quarter 2006 net income of $35 million, up compared to net income of $7 million in the fourth quarter of 2005. Results include restructuring charges, net of tax, of $58 million in the fourth quarter of 2006, and $36 million in 2005. Net income excluding restructuring charges, net of tax, was $93 million, up substantially compared to $43 million in the prior year. Fourth quarter diluted earnings per share were $0.15, compared with $0.03 per share in 2005. Before restructuring, net of tax, fourth quarter diluted earnings were $0.39 per share, compared with $0.17 per share in 2005.

Full year 2006 net income of $292 million was up 79 percent compared to net income of $163 million in 2005. Results include restructuring charges, net of tax, of $71 million in 2006, and $60 million in 2005. Net income excluding restructuring charges, net of tax, was $363 million, up 63% from $223 million in 2005. Full year diluted earnings per share were $1.23, compared with $0.70 per share in 2005. Before restructuring, net of tax, full year diluted earnings were $1.53 per share, compared with $0.95 per share in 2005.

"Our Equipment Operations gross margin improvement continued into the fourth quarter, up 1.9 percentage points compared with last year and up 2.1 percentage points for the full year compared with last year. By refocusing our efforts on our dealers and customers, we have set the stage for continued future improvements," said Harold Boyanovsky, CNH president and chief executive officer. "While we are pleased with the progress made in 2006, we have set even more aggressive targets to continue improving results in 2007."

Financial highlights for the fourth quarter include the following:

--  The company continued to improve its product value positioning with
    customers and was able to maintain pricing at a higher level than its total
    economics and currency-related cost increases, resulting in another quarter
    of positive net price recovery for both Agricultural and Construction
    Equipment operations.
--  Restructuring costs totaling $58 million, net of taxes, were booked in
    the quarter, principally related to the actions announced in October, aimed
    at readjusting CNH's organizational structure to evolving business needs.
--  The company adopted the FASB's SFAS No. 158 at year-end 2006, whereby
    CNH recognized the funded status of its pension and other post-retirement
    benefit plans on its balance sheet. The result was a reduction of CNH's
    Shareholders' Equity by $397 million, net of tax.
--  Research and development spending increased 17% from the same period
    in 2005, reflecting CNH's continued investments in product innovation and
    quality.

EQUIPMENT OPERATIONS - Fourth Quarter Financial Results

Net sales of equipment, comprising the company's agricultural and construction equipment businesses, were $3.0 billion for 2006, compared to $2.8 billion for the same period in 2005. Net of currency variations, net sales increased 2%.

Agricultural Equipment Net Sales

--  Agricultural equipment net sales increased 6% to $1.9 billion,
    compared with the prior year. Excluding currency variations, net sales were
    up 2%.
--  Net sales, excluding currency variations, were up 48% in Latin
    America, 20% in Rest-of-World markets and 7% in Western Europe, but down
    14% in North America.
--  Sales increased due to positive effects of exchange rate changes,
    positive pricing and sales of new products. Unfavorable volume and mix was
    a partial offset, as increased unit sales of specialty harvesting and hay &
    forage products were offset by lower sales of tractors and combines, as the
    company under-produced worldwide retail sales of agricultural tractors and
    combines by 15% to reduce inventories.

Construction Equipment Net Sales

--  Construction equipment net sales increased 6% to $1.1 billion,
    compared to the prior year. Net sales were up 2% excluding currency
    variations.
--  Net sales increased 18% in Western Europe in a strong industry
    environment, 31% in Latin America and 36% in Rest-of-World markets,
    excluding currency variations. Net sales in North America declined 15%,
    excluding currency variations, in a weaker industry environment.
--  Net sales increased due to positive effects of exchange rate changes
    and positive pricing. Unfavorable volume and mix was a partial offset, as
    increased unit sales of light construction equipment products, including
    backhoe loaders and compact track loaders were offset by lower sales of
    heavy construction equipment, as the company under-produced worldwide
    retail sales of construction equipment by 4%.

Gross Margin

Equipment Operations gross margin (defined as net sales of equipment less cost of goods sold) for agricultural and construction equipment increased by 18% to $538 million, compared to the fourth quarter of 2005. As a percent of net sales, gross margin increased 1.9 percentage points to 18.0%.