CNH Full Year 2006 Net Income up 79 Percent From 2005

Market Wire, January, 2007

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"). SFAS No. 157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years, with early adoption permitted. CNH has not yet determined the impact, if any; the implementation of SFAS No. 157 may have on its financial position or results of operations.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108 "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" ("SAB No. 108"). SAB No. 108 provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. The SEC staff believes that registrants should quantify errors using both a balance sheet and an income statement approach and evaluate whether either approach results in a misstatement that, when all relevant quantitative and qualitative factors are considered, is material and therefore must be quantified. SAB No. 108 was effective for fiscal years ending on or after November 15, 2006. The application of SAB No. 108 did not have an impact on CNH's financial position or results of operations.

2. Stock-Based Compensation Plans -- CNH has stock-based employee compensation plans which are described more fully in "Note 18: Option and Incentive Plans," to our 2005 Form 20-F. In January 2006, CNH adopted SFAS No. 123 Revised, "Share Based Payment" ("SFAS No. 123 Revised"). SFAS No. 123 Revised requires the use of a fair value based method of accounting for stock-based employee compensation. The statement has been applied using a Modified Prospective Method, under which compensation cost is recognized beginning on the effective date and continuing until participants are fully vested. Adopting SFAS No. 123 Revised resulted in additional expense of approximately $1 million during 2006.

In September 2006, CNH granted approximately 2.2 million performance based, non-vested share awards under its Equity Incentive Plan ("EIP") to approximately 200 of the Company's top executives. These shares were to cliff vest when 2008 audited results are approved by the Board of Directors (estimated to be February 2009) if specified fiscal year 2008 targets were achieved. In December 2006, CNH extended this grant by providing participants an additional opportunity for potential partial payouts should these targets not be achieved until 2009 or 2010. All other terms remained unchanged. The grant date fair value on the date of the modification ranges from $27.35 per share to $26.27 depending on the service period over which the grant ultimately vests. The fair value is based on the market value of CNH's common shares on the date of the grant modification and is adjusted for the estimated value of dividends which are not available to participants during the vesting period. Depending on the period during which targets are achieved, the estimated expense over the service period can range from approximately $28 million to $52 million (current estimate is $38 million). If specified targets are not achieved by 2010, the shares granted will not vest.