CNH Full Year 2006 Net Income up 79 Percent From 2005

Market Wire, January, 2007

Also in September 2006, CNH granted approximately 2.0 million performance based stock options which will result in an estimated expense over the vesting period of approximately $10 million (at targeted performance levels) under its EIP. One-third of the options will vest when 2006 audited results are approved by the Board of Directors (estimated to be February 2007) if specified fiscal 2006 targets are achieved. The remaining options will vest equally on the first and second anniversary of the initial vesting date. The actual number of shares vesting may exceed 2.0 million if CNH's performance exceeds targets; however, if minimum target levels are not achieved, the options will not vest. The grant date fair value of $5.78 per option was determined using the Black-Scholes pricing model.

The assumptions used in this model were:

Risk-free interest rate         4.52%
Expected volatility            34.71%
Expected life              3.25 years
Dividend yield                  1.34%

The risk-free interest rate was based on the current U.S. Treasury rate for a bond of approximately the expected life of the options. The expected volatility was based on the historical activity of CNH's common shares looking back over a period equal to the expected life of the options. The expected life was based on the average of the vesting term of 30 months and the original contract term of five years. The expected dividend yield was based on the annual dividend of $.25 per share which has been paid on CNH's common shares over the last three years.

3. Accounts and Notes Receivable -- In CNH's receivable asset securitization programs, retail finance receivables are sold to limited purpose, bankruptcy remote, consolidated subsidiaries of CNH. In turn, these subsidiaries establish separate trusts to which they transfer the receivables in exchange for the proceeds from asset-backed securities sold by the trusts. Due to the nature of the assets held by the trusts and the limited nature of each trust's activities, they are each classified as a qualifying special purpose entity ("QSPE") under SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS No. 140"). In accordance with SFAS No. 140, assets and liabilities of the QSPEs are not consolidated in the Company's consolidated balance sheets. The amounts outstanding under these programs were $5.1 billion and $4.7 billion at December 31, 2006 and 2005, respectively. In addition to the retail securitization programs, certain subsidiaries of CNH securitized or discounted wholesale receivables without recourse. As of December 31, 2006 and 2005, $3.7 billion and $3.1 billion, respectively remained outstanding under these programs.

Included in the securitized or discounted wholesale receivables without recourse amount noted above is a wholesale securitization program in Europe under which Equipment Operations entities sell receivables while a Financial Services subsidiary subscribes to notes representing undivided retained interests. At December 31, 2006 and 2005, the amounts outstanding under this program were $843 million and $709 million, respectively and Financial Services had an undivided retained interest of $318 million and $251 million, respectively.