Asia PR News

LAKE FOREST, Ill., July 28 /PRNewswire-AsiaNet/ –

- Construction Equipment Profit Improvement Continues
- CNH Capital Continues Strong Performance
- Agricultural Equipment Market in Latin America Deteriorates
- Materials Costs and Supply Issues Constrain Results

CNH Global N.V. (NYSE: CNH) today reported second quarter 2005 net income
of $114 million, compared to second quarter 2004 net income of $83 million.
Results include restructuring charges, net of tax, of $4 million in the second
quarter of 2005, and $24 million in last year’s second quarter. Second quarter
diluted earnings per share were up 36% to $.49, compared to $.36 in the second
quarter of 2004.

"Net income was slightly better than expected, despite a greater than
anticipated deterioration of the agricultural sector in Latin America," said
Harold Boyanovsky, CNH President and Chief Executive Officer. "Higher
materials costs and shortages of some key supplies constrained results. We
expect these trends to impact performance in the second half as well.

"Nevertheless, the robust growth of the global construction equipment
industry contributed to the continuing improvement in CNH results in this
sector, and CNH Capital continued its strong performance."

Highlights from the quarter included the following:
- In all regions, pricing actions enabled the company to recover
increased materials costs in the quarter. This was particularly
favorable news for both the agricultural equipment and construction
equipment businesses in Europe, which had not been able to offset
materials cost increases earlier. However, materials costs are not
moderating as much as the company had anticipated.
- After delaying their launch to ensure quality and reliability, CNH
began shipping its new generation of skid steer loaders and track
loaders. The company anticipates improved volumes in the third and
fourth quarters of 2005.
- In the quarter, Equipment Operations net debt declined by $726 million.
- CNH’s Case construction equipment business was awarded a five-year
contract by the U.S. government. Case will supply more than 500
backhoe loaders, coupled with parts and service, in a contract valued at
$51 million, with the first delivery in 2006.
- CNH Capital leveraged improved portfolio performance and strong
investor demand for its $750 million wholesale receivables asset backed
securitization ("ABS") transaction, confirming CNH Capital’s funding
capacity.

EQUIPMENT OPERATIONS - Second Quarter Financial Results
Net sales of equipment, comprising the company’s agricultural and
construction equipment businesses, were $3.4 billion for the second quarter,
compared to $3.3 billion for the same period in 2004, with most of the
increase due to currency variations.

CNH Agricultural Equipment Net Sales
- Agricultural equipment net sales were $2.3 billion for the second
quarter, essentially unchanged from the prior year, but down 3%
excluding currency variations.
- Sales in Latin America declined by approximately 60%, excluding
currency variations, continuing last quarter’s sharp market contraction,
in particular for combines. Sales in Europe were down 10%, excluding
currency, in line with combine industry declines and the company’s
de-stocking actions. Sales in Rest of World markets were up 12% and up
4% in North America in a flat industry environment.
- Second quarter 2005 production of agricultural tractors and combines
was approximately 2% lower than retail unit sales.

CNH Construction Equipment Net Sales
- Net sales of construction equipment were $1.1 billion for the second
quarter, an increase of 13%, compared to $1.0 billion in the second
quarter 2004, and up 10% excluding currency variations.
- Three of four regions contributed to sales growth in the quarter: North
America was up 15% exclusive of currency variations and Latin America
was over 50%, but on a smaller base. Sales in Europe decreased 2%, as
the company continued to adjust its sales and marketing activities as a
result of its previously announced brand rationalization. Sales in
Rest of World markets were up 1%.
- Production of CNH’s major construction equipment products was higher
than retail unit sales by approximately 10%.

Gross Margin
Equipment Operations gross margin (net sales of equipment less cost of
goods sold) for agricultural and construction equipment was $574 million in
the second quarter of 2005, compared to $551 million in the second quarter
last year.

- Agricultural equipment gross margin declined slightly compared to the
prior year’s second quarter, as most of the improvement in North
America was offset by a substantial decline in volumes of higher-margin
combines in Latin America and Europe.
- Construction equipment gross margin was higher than in the prior-year
second quarter, benefiting from volume improvements, mostly in North
America, and increased pricing, which were partially offset by
materials costs that were greater than anticipated, and other economics
increases.

Industrial Operating Margin
Equipment Operations industrial operating margin (defined as net sales,
less cost of goods sold, SG&A and R&D costs) was $248 million in the second
quarter of 2005, or 7.3% of net sales, compared to $256 million or 7.8%, in
the same period of 2004. The improvement in gross margin dollars, noted
above, was offset by an increase in selected investments to better support
CNH’s dealers, improve product quality, enhance global sourcing initiatives,
and strengthen European logistics operations.

Adjusted EBITDA
Adjusted EBITDA for Equipment Operations was $274 million for the quarter,
or 8.1% of net sales, compared to $259 million in the second quarter of 2004,
or 7.9% of net sales. Interest coverage was 5.1 times for the second quarter
2005, compared to 4.3 times for the prior year second quarter.

FINANCIAL SERVICES - Second Quarter Financial Results
Financial Services operations reported second quarter 2005 net income of
$44 million, compared to $29 million for the second quarter last year.
Improved yields on the wholesale portfolio and higher retail and wholesale ABS
volumes were the principal factors contributing to the improvement in net
income compared to the prior period.

CNH CONSOLIDATED INCOME BEFORE TAXES, MINORITY INTEREST AND EQUITY IN
INCOME OF UNCONSOLIDATED SUBSIDIARIES

CNH’s consolidated second quarter 2005 income before taxes, minority
interest and equity in income of unconsolidated subsidiaries was $165
million, compared to $108 million for the second quarter last year. The
year-over-year improvement of $57 million reflects the combination of the
improvements in Equipment Operations and at Financial Services in the period,
compared with the second quarter 2004. These results include pre-tax
restructuring charges of $6 million in the second quarter of 2005 and $39
million in last year’s second quarter.

CNH - Year-to-Date Financial Results
CNH’s net income for the first six months was $129 million, compared to
$74 million for the first six months of 2004. Results include restructuring
charges, net of tax, of $8 million in the first half of 2005, and $37 million
in the first half of 2004. First half diluted earnings per share were up 72%
to $.55, compared to $.32 in the first half of 2004.

EQUIPMENT OPERATIONS - Year-to-Date Financial Results
Net sales of equipment, comprising the company’s agricultural and
construction equipment businesses, were $6.2 billion for the first six months
of 2005, compared to $5.9 billion for the same period in 2004. Net of
currency variations, net sales increased by 2% over the prior year’s first
half.
Adjusted EBITDA for Equipment Operations was $404 million for the first
half of 2005, or 6.5% of net sales, compared to $387 million in the first half
of 2004, or 6.5% of net sales. Interest coverage was 3.6 times for the first
half of 2005, compared to 3.1 times for the prior year first half.

FINANCIAL SERVICES - Year-to-Date Financial Results
Financial Services operations reported first half 2005 net income of $93
million, compared to $56 million for the first half last year. This
improvement reflects the first quarter 2005 $1.4 billion retail asset backed
securitization transaction, lower risks costs associated with the improvements
in Financial Services receivables portfolio quality, improved yields on the
wholesale portfolio, and higher retail and wholesale ABS volumes in the second
quarter.

CNH CONSOLIDATED INCOME BEFORE TAXES, MINORITY INTEREST AND EQUITY IN
INCOME OF UNCONSOLIDATED SUBSIDIARIES

CNH’s consolidated first half 2005 income before taxes, minority interest,
and equity in income of unconsolidated subsidiaries was $188 million, compared
to $99 million for the first half last year. The year-over-year improvement
of $89 million reflects the combination of the improvements in Equipment
Operations and at Financial Services in the period, compared with the first
half of 2004. These results include pre-tax restructuring charges of $11
million in the first half of 2005 and $58 million in last year’s first half.

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
inter-segment receivables) was $824 million at June 30, 2005, compared to $1.6
billion on March 31, 2005 and $1.8 billion at June 30, 2004. The decline in
net debt in the quarter reflected $882 million in cash from operating
activities.

A decrease in working capital (defined as accounts and notes receivable,
excluding inter-segment notes receivable, plus inventories less accounts
payable), net of currency variations, contributed approximately $472 million
to cash from operating activities, in the quarter. This decrease is primarily
driven by an expansion of our accounts receivables securitization program,
particularly in Europe, of approximately $345 million. This represents a
further step in CNH’s initiative to consolidate management of receivables
within its Financial Services operations.

Excluding the expansion of our accounts receivables program, working
capital decreased by $127 million, compared with an increase of approximately
$106 million in the second quarter last year. At incurred currency rates,
working capital on June 30, 2005 was $2.4 billion, compared to $3.1 billion on
June 30, 2004.

In addition to the improvements in working capital, net income, seasonal
increases in accruals, and a $60 million dividend from Financial Services to
Equipment Operations contributed the balance of the cash from operating
activities in the quarter.

CNH expects to become an eligible borrower under Fiat S.p.A.’s recently
closed 1 billion Euro credit facility agreement. Under the new facility, CNH
will be allocated exclusive rights to 300 million Euros of the syndicated
credit line, plus the opportunity to access the remainder of any unutilized
capacity. This arrangement will replace CNH’s expiring $1.8 billion credit
line which was never utilized and was a back-up to support CNH’s then-existing
commercial paper program. With the new facility, other existing facilities
and liquidity on its balance sheet, CNH believes its liquidity needs are
adequately covered.

Financial Services net debt increased approximately $800 million to $4.0
billion on June 30, 2005 from $3.2 billion on March 31, 2005, reflecting
primarily the increased portfolio of receivables under management.

CNH OUTLOOK FOR 2005
CNH believes that for the full year 2005, the agricultural equipment
market will be at the same level as last year, although slightly different by
region than was previously anticipated. CNH expects that total tractor
industry sales in North America should be slightly lower than was previously
forecast, but over-40-horsepower tractors are expected to be better than last
year by 5%-10%. In Western Europe, the industry unit sales of tractors should
be down about 5%, as previously forecast. In Latin America, CNH expects that
full-year tractor industry volumes will be about 25% below last year and sales
of combines will be down 60%-65%. Industry sales in rest-of-world markets are
now expected to be up slightly.

CNH believes that, for the construction equipment industry, all regions
will be stronger except for Western Europe, which will be slightly weaker than
previously expected. CNH’s estimates of major agricultural and construction
equipment industry retail unit sales, by major market area, are included in
the supplemental information provided at the end of the release.

CNH expects that its net sales of equipment for the full year 2005 will
increase by up to 5%. Including selected investments to better support CNH’s
dealers, improve product quality, enhance global sourcing initiatives, and
strengthen European logistics operations, the company expects that its
consolidated income before taxes, minority interest and equity in income of
unconsolidated subsidiaries will improve by 60%-70%. This improvement is due
to reduced restructuring expenses, improvement in Financial Services results,
and improvements in Equipment Operations. The full benefit of these expected
improvements will be partially offset by an increase in our effective tax rate
when compared to 2004. As a result, we anticipate net income before
restructuring will improve by approximately 10% to 15% compared with the full
year 2004, depending upon market conditions and commodity cost evolution. Net
of tax, restructuring costs for the full year are expected to be approximately
$65 million.

For the third quarter, the company expects its revenues from net sales of
equipment to increase slightly compared with the third quarter of 2004.
Including the effects of our increased spending for SG&A and R&D, CNH expects
that net income, excluding restructuring costs, will be approximately the same
as in the third quarter last year. Net of tax, restructuring costs for the
third quarter are expected to be approximately $10 million.

Further, the company expects Equipment Operations to generate
approximately $250 million of cash flow during the year, after including its
third-quarter contribution to its US defined benefit pension plans of about
$100 million, as previously anticipated. CNH expects to use that cash to
further reduce Equipment Operations net debt, when compared with year-end 2004
levels.

CNH management will hold a conference call later today to review its
second quarter results. The conference call webcast will begin at
approximately 10:00 a.m. U.S. Eastern Time. This call can be accessed through
the investor information section of the company’s web site at www.cnh.com and
is being carried by CCBN.

CNH is the power behind leading agricultural and construction equipment
brands of the Case and New Holland brand families. Supported by more than
11,400 dealers in 160 countries, CNH brings together the knowledge and
heritage of its brands with the strength and resources of its worldwide
commercial, industrial, product support and finance organizations. More
information about CNH and its products can be found on line at www.cnh.com.

Forward looking statements. This press release includes "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact contained in
this press release, including statements regarding our competitive strengths,
business strategy, future financial position, budgets, projected costs and
plans and objectives of management, are forward-looking statements. These
statements may include terminology such as "may," "will," "expect," "should,"
"intend," "estimate," "anticipate," "believe," "outlook," "continue,"
"remain," "on track," "goal," or similar terminology.

Our outlook is predominantly based on our interpretation of what we
consider key economic assumptions and involves risks and uncertainties that
could cause actual results to differ. Crop production and commodity prices are
strongly affected by weather and can fluctuate significantly. Housing starts
and other construction activity are sensitive to interest rates and government
spending. Some of the other significant factors for us include general
economic and capital market conditions, the cyclical nature of our business,
customer buying patterns and preferences, foreign currency exchange rate
movements, our hedging practices, our and our customers’ access to credit,
actions by rating agencies concerning the ratings on our debt and asset backed
securities and the ratings of Fiat S.p.A., risks related to our relationship
with Fiat S.p.A., political uncertainty and civil unrest or war in various
areas of the world, pricing, product initiatives and other actions taken by
competitors, disruptions in production capacity, excess inventory levels, the
effect of changes in laws and regulations (including government subsidies and
international trade regulations), technological difficulties, results of our
research and development activities, changes in environmental laws, employee
and labor relations, pension and health care costs, the cost and availability
of supplies from our suppliers, raw material costs and availability, energy
prices, real estate values, animal diseases, crop pests, harvest yields,
government farm programs and consumer confidence, housing starts and
construction activity, concerns related to modified organisms and fuel and
fertilizer costs. Additionally, our achievement of the anticipated benefits of
our profit improvement initiatives depends upon, among other things, industry
volumes as well as our ability to effectively rationalize our operations and
to execute our dual brand strategy. Further information concerning factors
that could significantly affect expected results is included in our Form 20-F
for the year ended December 31, 2004.

We can give no assurance that the expectations reflected in our forward-
looking statements will prove to be correct. Our actual results could differ
materially from those anticipated in these forward-looking statements. All
written and oral forward-looking statements attributable to us are expressly
qualified in their entirety by the factors we disclose that could cause our
actual results to differ materially from our expectations. We undertake no
obligation to update or revise publicly any forward-looking statements.

CNH GLOBAL N.V.
CONSOLIDATED SELECTED FINANCIAL DATA
(Millions, except per share data)
(Unaudited)

June 30, December 31,
2005 2004

BALANCE SHEETS

Total assets $18,622 $18,080
Short-term debt $2,209 $2,057
Long-term debt, including current maturities $4,909 $4,906
Total Liabilities $13,647 $13,051
Shareholders’ equity $4,975 $5,029

Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
STATEMENTS OF OPERATIONS

Revenues:
Net sales $3,394 $3,262 $6,217 $5,925
Finance and interest income and
other 177 136 357 280
Total revenues $3,571 $3,398 $6,574 $6,205
Net income $114 $83 $129 $74
Per share data:
Basic earnings per share $0.58 $0.62 $0.64 $0.56
Diluted earnings per share $0.49 $0.36 $0.55 $0.32
Dividends per share $0.25 $0.25 $0.25 $0.25

STATEMENTS OF CASH FLOWS

Net cash from operating activities $(120) $260
Net cash from investing activities (78) (1,259)
Net cash from financing activities 107 942
Other, net 3 (11)
Increase (decrease) in cash and cash equivalents (88) (68)
Cash and cash equivalents, beginning of period 931 619
Cash and cash equivalents, end of period $843 $551

Note:
For a complete set of CNH’s condensed consolidated financial statements,
please go to www.cnh.com

SOURCE: CNH Global N.V.

CONTACT: Rich Nelson,
External Communications,
+1-847-955-3939, or

Albert Trefts, Jr.,
Investor Relations,
+1-847-955-3821

Web site: http://www.cnh.com