CNH Full Year 2006 Net Income up 79 Percent From 2005

Market Wire, January, 2007

Gross Margin

Equipment Operations gross margin for agricultural and construction equipment increased by 17% to $2.2 billion, compared to 2005. As a percent of net sales, gross margin increased 2.1 percentage points to 18.0%.

--  Agricultural equipment gross margin increased both in dollars and as a
    percent of net sales compared to the prior year. Positive net price
    recovery and manufacturing efficiencies, more than offset the impact of
    company actions to reduce inventories and weaker combine industry volumes.
--  Construction equipment gross margin also increased both in dollars and
    as a percent of net sales. Positive net price recovery, higher volumes and
    manufacturing efficiencies contributed to the improvement.
    

Industrial Operating Margin

Equipment Operations industrial operating margin increased 32% to $800 million, or 6.6% of net sales, compared to $605 million, or 5.1% of net sales in 2005. The higher gross margin noted above drove the improvement, while R&D rose to 3% of net sales, with increased investments in product innovation and quality; SG&A also increased but remains slightly below our full year target of 8.5% of net sales.

FINANCIAL SERVICES - Full Year 2006 Financial Results

Financial Services operations reported 11% higher net income of $222 million, compared to $200 million last year, reflecting portfolio growth in North America and Brazil and higher gains on asset backed securitizations partially offset by higher funding costs, higher SG&A, including increased provisions for credit losses on the Brazilian agricultural portfolio as a result of government sponsored renegotiation programs, and higher other expense.

NET DEBT AND OPERATING CASH FLOW

Equipment Operations Net Debt (defined as total debt less cash and cash equivalents, deposits in Fiat affiliates cash management pools and intersegment notes receivables) was $263 million on December 31, 2006, compared to $378 million at September 30, 2006 and $719 million at December 31, 2005. Net debt to net capitalization was 4.9% at December 31, 2006, down from 12.5% at December 31, 2005. As of December 31, 2006, CNH had 236.2 million common shares outstanding.

In the quarter, net debt decreased by $115 million. $191 million of cash was generated by operating activities, primarily from earnings and decreased working capital. Working capital (defined as accounts and notes receivable, excluding inter-segment notes receivable, plus inventories less accounts payables), net of currency variations, decreased by approximately $160 million in the quarter, as receivables and inventories declined. Capital expenditures, in the quarter, were $99 million.

For the year, net debt decreased by $456 million. $715 million of cash was generated by operating activities, primarily from earnings. Working capital, net of currency variations, decreased by approximately $58 million in the year. Capital expenditures, for the year, were $213 million.

At incurred currency rates, working capital at December 31, 2006 was $2,110 million, up $42 million from $2,068 million at December 31, 2005.