CNH Full Year 2006 Net Income up 79 Percent From 2005

Equipment Operations industrial operating margin (defined as net sales of equipment, less cost of goods sold, SG&A and R&D costs) increased 29% to $164 million, or 5.5% of net sales, compared to $127 million, or 4.5% of net sales in the fourth quarter of 2005. The higher gross margin noted above drove the improvement, while increased SG&A costs and investments in R&D to enhance product innovation and improve product quality were a partial offset.

FINANCIAL SERVICES - Fourth Quarter Financial Results

Financial Services operations reported a 7% increase in net income, to $59 million, reflecting portfolio growth and higher gains on asset backed securitizations partially offset by the impact of higher funding costs.

CNH Full Year 2006 Financial Results

CNH's net income before restructuring, net of tax, for the full year rose 63% to $363 million, compared to $223 million for 2005. Before restructuring, net of tax, diluted earnings per share were $1.53, compared with $0.95 per share in 2005.

CNH Full Year Highlights:

--  The company's improved product value positioning with customers
    allowed it to maintain pricing at a higher level than its total economics
    and currency-related cost increases, resulting in positive net price
    recovery for both Agricultural and Construction Equipment Operations.
--  Research and development spending increased 21% from 2005, reflecting
    CNH's continued investments in product innovation and quality.
--  Restructuring costs totaling $71 million, net of taxes, were booked in
    the year, principally related to the actions announced in October.
--  Inventory levels at the end of 2006 of 4.0 forward months of supply,
    were slightly lower than at the end of 2005.

EQUIPMENT OPERATIONS - Full Year 2006 Financial Results

Net sales of equipment, comprising the company's agricultural and construction equipment businesses, were $12.1 billion, up 3% compared to $11.8 billion in 2005. Net of currency variations, net sales increased 2%.

--  Agricultural equipment net sales of $7.8 billion were essentially the
    same as in 2005. Excluding currency variations, net sales were down 1%. Net
    sales increased for positive pricing, favorable effects of exchange rate
    changes and sales of new products. Unfavorable volume and mix was the
    offset, from weaker combine industry sales in the company's major markets
    and the impact of the company's actions to under-produce retail unit sales
    of its major agricultural equipment products. Net sales, excluding currency
    variations, were up 10% in Rest-of-World markets, 14% in Latin America and
    1% in Western Europe, but down 10% in North America.

--  Construction equipment net sales increased 9% to $4.3 billion,
    compared to the prior year. Net sales increased for positive pricing, sales
    of new products, favorable volume and mix and favorable effects of exchange
    rate changes. Net sales were up 8% excluding currency variations. Net sales
    increased 12% in Western Europe, 37% in Latin America and 24% in Rest-of-
    World markets, excluding currency variations. Net sales in North America
    declined 3%, excluding currency variations, in a weaker industry
    environment. The company's production of total heavy and light construction
    equipment was equal to retail unit sales, for the full year.