CNH Second Quarter 2011 Revenue Increases 24%; Operating Profit up 58%

Marketwired

BURR RIDGE, IL--(Marketwire - 07/25/11) - CNH Global N.V. (NYSE:CNH - News)

  • Net Sales increase 24% to $4.9 billion
    • Agricultural equipment +22% to $3.9 billion
    • Construction equipment +30% to $1 billion
  • Equipment Operations Operating Profit of $521 million, an increase of 58%
    • Operating Margin increased to 10.7% compared to 8.4% in Q2 2010
  • EPS before exceptional items at $1.33 per share, compared to $0.59 per share in 2010
 
Quarter Ended
--------------------------
6/30/2011 6/30/2010 Change
------------ ---------------------
(US $ in millions, except per share data and percentages)
Net Sales of Equipment $ 4,881 $ 3,938 24%
Equipment Operations Operating Profit $ 521 $ 330 58%
Equipment Operations Operating Margin 10.7% 8.4% 2.3 pts
Financial Services Net Income $ 52 $ 33 58%
Net Income Attributable to CNH $ 320 $ 144 122%
Net Income Before Restructuring and
Exceptional Items $ 320 $ 140 129%
Diluted EPS Before Restructuring and
Exceptional Items $ 1.33 $ 0.59 125%


CNH Global N.V. (NYSE:CNH - News) today announced financial results for the quarter ended June 30, 2011. For the quarter, net sales increased 24% (18% on a constant currency basis) to $4.9 billion as a result of favorable trading conditions for agricultural equipment, as well as higher comparative construction equipment demand in every region. Equipment Operations posted an Operating Profit of $521 million as a result of higher revenues, increased industrial utilization and improved product pricing.Net equipment sales for the quarter were 79% agricultural equipment and 21% construction equipment. The geographical distribution of revenue for the period was 42% North America, 35% EAME & CIS, 15% Latin America, and 8% APAC markets.Year to date capital expenditures totaled $126 million, a 40% increase from the comparable prior period largely as a result of new product launches in both the agricultural and construction equipment segments; 71% of the capital spend was on new products and production capacity in the period. Equipment Operations generated $232 million of operating cash flow during the first six months of the year as net sales levels and operating performance more than offset the increased net working capital needed to support business activity. CNH's Equipment Operations ended the period with a net cash position of $2.4 billion. The 34% effective tax rate for the second quarter of 2011 (49% second quarter of 2010) is within the Group's full year expectations of 32% to 38%.Net income before restructuring and exceptional items for the quarter was $320 million as a result of improved top line and industrial operating performance, improved results from the Group's unconsolidated subsidiaries, and a lower tax rate. This resulted in the Group generating a significant increase in diluted earnings per share to $1.33 (before restructuring and exceptional items) compared to $0.59 per share in the comparable period of 2010.On April 26, CNH announced its plans to set up a local manufacturing site in Cordoba, Argentina for the production of combines and tractors for the Latin American market. The initial investment of over $100 million will include the launch of new, localized product lines and the expansion of the Fiat Industrial complex in Cordoba.2011 Full Year Market Outlook
Demand in the agricultural and construction equipment markets is expected to remain firm for the balance of 2011 on the back of a positive environment in agricultural commodity prices and the consequent increase in planting and farming income estimates. Further, the environment for construction equipment continues to improve.FY 2011 World Wide Unit Growth Forecast
Agricultural equipment demand up 5% to 10%
Construction equipment demand up 25% to 30%2011 CNH Earnings Outlook:
On the back of the year to date operating performance, and in view of the outlook for its markets for the balance of 2011, the CNH Group is upgrading its full year financial targets as follows: full year revenue growth of 15-20% and an operating margin at the upper end of its previously disclosed range of 7.1% to 7.9%.SEGMENT RESULTS
Agricultural Equipment
 
Quarter Ended
------------------------------
6/30/2011 6/30/2010 Change
-------------------------------------------
(US $ in millions, except percentages)
Net Sales of Equipment $ 3,851 $ 3,148 22%
Gross Profit $ 850 $ 644 32%
Gross Margin 22.1% 20.5% 1.6 pts
Operating Profit $ 496 $ 317 56%
Operating Margin 12.9% 10.1% 2.8 pts


Agricultural Equipment Industry and Market
Worldwide agricultural industry unit sales increased 13% compared to the second quarter of 2010. Global tractor sales grew 13% while global combine sales grew 17% for the quarter. North American tractor sales were down 3%, with the high horsepower 4WD class up 1%, and combine sales were down 14%, partially offsetting the strong market growth of the first quarter, and maintaining a 7% growth on a year to date basis. Latin America sales of tractors decreased 5% and combine sales increased 58%. EAME & CIS markets improved for the quarter, with tractor and combine sales up 30%. APAC markets were up 15% in tractor sales and flat in combine sales.CNH Agricultural Equipment Second Quarter Results
CNH's net sales in the agricultural equipment sector increased 22% for the quarter (16% on a constant currency basis) as a result of solid trading conditions in every region. Net sales in the EAME & CIS markets continued their positive growth trajectory with comparative reported revenue up 40% on the back of firm demand across all product segments. As a result of this increased unit volume in Europe and the CIS, comparative industrial capacity utilization increased driving positive cost absorption. This benefit coupled with improved price realization and favorable product mix (to larger horsepower tractor and combine segments) resulted in a 2.8 percentage point increase in comparative operating margin to 12.9% for the period.Second quarter tractor market share performance was in line with the overall market growth as a result of a positive performance in Europe, and in the important over 40 hp segment in North America driven by very good market response to the introduction of high horsepower tractors and combines equipped with the FPT Selective Catalytic Reduction (SCR) Tier 4A/Stage IIIB engines delivering increased power and reduced fuel consumption and overall operating costs compared to equivalent CNH Tier 3 equipment. Combine market share recovered in the second quarter in the North American and EAME & CIS regions. Industrial production and retail sales were closely aligned during the period with resulting company and dealer inventory levels remaining largely unchanged.In Latin America, New Holland Agriculture launched the new CR6080, the only class 6 combine manufactured in Brazil, equipped with a 300 hp engine, a 9,000 liters grain tank and the segment's largest cab. The brand also introduced the new T8 tractor range, from 273 to 389 hp, the industry's highest horsepower tractors produced in Brazil, focused on cash grain and sugar cane business and equipped with the SideWinder II armrest with fully integrated ergonomic controls for precision farming solutions, as well as the TL Exitus tractor ideal for spraying applications. The New Holland product offering has been expanded by the new SP3500 sprayer. In Europe the brand introduced a new hydraulic Powershuttle transmission on the TD5000 tractor, ideal for loader work and for fast directional changes.In North America, Case IH began shipments of Tier 4A/Stage IIIB compliant Steiger/Quadrac 550-600 hp series tractors with best-in-class fuel efficiency and hydraulic flow, as well as the Module Express 635 Cotton Picker now equipped with a 400 hp engine. In addition, Case IH sugar cane harvesters were honored with the 'Top of Mind' award by the Brazilian trade publication Revista Rural. In Europe, the Steyr Tractor brand launched the Kompakt S series, while Case IH launched the AFS Pro model 700 monitors in all EfficientPower tractor models.The Case IH Puma CVX EP and the New Holland T8.390 are two of the finalists for the 'Tractor of the Year 2012' award assigned by a panel of industry magazines representing 20 European countries.Construction Equipment
 
Quarter Ended
------------------------------
6/30/2011 6/30/2010 Change
-------------------------------------------
(US $ in millions, except percentages)
Net Sales of Equipment $ 1,030 $ 790 30%
Gross Profit $ 138 $ 117 18%
Gross Margin 13.4% 14.8% -1.4 pts
Operating Profit $ 25 $ 13 92%
Operating Margin 2.4% 1.6% 0.8 pts


Construction Equipment Industry and Market
Global construction equipment industry unit sales rose 24% in the second quarter compared to the prior year, with light equipment up 29% and heavy equipment up 20%. North American demand was up 37%, for both light and heavy equipment. EAME & CIS markets rose 33% as the industry continued to rebuild from the prior year's low levels. In Latin America, the market was up 27%, driven by strong demand from projects in both the public and private sectors. Industry sales in APAC markets grew 16%.CNH Construction Equipment Second Quarter Results
Second quarter 2011 net sales in the construction equipment sector grew 30% (24% on a constant currency basis) as a result of market improvements in every region and in particular in the North American market. Operating profit improved 92% for the quarter to $25 million as a result of unit demand of newly launched products in the light and heavy equipment segments, increased industrial utilization, and positive comparative pricing. This positive performance was more than enough to offset the impact of tight supply conditions of Japanese supplied components and wholegoods during the quarter negatively impacting equipment availability and industrial efficiency. The Group expects that this situation will improve over the balance of the year.Second quarter market share was down in light equipment due to low inventory levels as a result of slower than expected introduction of new key products started in the previous quarters. In the month of June, retail sales of these new products have increased and the Company believes that this trend will continue in the second half of the year leading to a more normalized share position. The Company maintained its market share in the heavy equipment segment.Company and dealer inventories ended the period higher than in the first quarter as production rates of newly launched products continued to improve allowing the company to begin to restock the dealer network from low levels in the first quarter.During the second quarter of 2011 Case Construction launched the new locally manufactured B-series motor graders in the Latin American markets. In North America the Case 850L crawler dozer, the Case 580M loader/backhoe, the Case 440 Series 3 skid steer loader and the Case 621E wheel loader were recognized as "Contractor's Choice" machines for 2011 by Road & Bridges magazine.New Holland Construction launched its new 200 Series of skid steer loaders (SSL) and compact track loaders (CTL), for a total of nine SSL and three CTL in the African, Middle East and CIS markets. The 200 Series features both radial-lift and vertical-lift models to better satisfy contractors' needs.CNH Financial Services Second Quarter Results
 
Quarter Ended
----------------------------------
6/30/2011 6/30/2010 Change
----------------------------------------
(US $ in millions, except percentages)
Net Income $ 52 $ 33 58%
On-Book Asset Portfolio $ 15,642 $ 14,519 8%
Managed Asset Portfolio $ 18,449 $ 16,998 9%


Net Income attributable to Financial Services was $52 million for the quarter, compared with $33 million in the comparable period of 2010. Financial Services generated improved financial margins on a higher average portfolio as a result of increased industrial unit sales and improved funding costs. Risk cost provisions were lower as past due amounts continued to decline.Compared to December 31, 2010, delinquent receivables greater than 30 days past due amounts declined to 4.5% of the total managed portfolio, an improvement of 0.7 percentage points. Past dues have improved 1.5 percentage points compared to June 30, 2010.Unconsolidated Equipment Operations' Subsidiaries
Second quarter results for the Group's unconsolidated Equipment Operations' subsidiaries improved to $35 million compared with $21 million in the comparable period of 2010. The major contributors were Turk Tractor (Turkey), Al Ghazi (Pakistan), and the Group's two joint ventures in Japan.Equipment Operations Cash Flow and Net Debt
 
Year to Date
---------------------------------
6/30/2011 6/30/2010
---------------------------------
(US $ in millions)
Net Income $ 464 $ 149
Depreciation & Amortization 155 137
Cash Change in Working Capital* (496) 478
Other 109 507
--------------- ----------------
Net Cash (Used) Provided by Operating
Activities 232 1,271
Net Cash (Used) by Investing Activities** (177) (84)
All Other 164 53
--------------- ----------------
Increase/(Decrease) in Net (Cash) $ 219 $ 1,240
--------------- ----------------
Net (Cash) $ (2,414) $ (1,770)

* Net cash change in receivables, inventories and payables including inter-segment receivables and payables.
** Excluding Net (Deposits In)/Withdrawals from Fiat or Fiat Industrial Cash Management Systems, as they are a part of Net (Cash).ABOUT CNH
CNH Global N.V. is a world leader in the agricultural and construction equipment businesses. Supported by approximately 11,300 dealers in approximately 170 countries, CNH brings together the knowledge and heritage of its Case and New Holland brand families with the strength and resources of its worldwide commercial, industrial, product support and finance organizations. CNH Global N.V., whose stock is listed at the New York Stock Exchange (NYSE:CNH - News), is a majority-owned subsidiary of Fiat Industrial S.p.A. (FI.MI). More information about CNH and its Case and New Holland products can be found online at www.cnh.com.CNH CONFERENCE CALL AND WEBCAST
CNH management will hold a conference call on July 25, 2011 to review second quarter 2011 results. The conference call webcast will begin at 9:00 a.m. U.S. Central Daylight Savings Time; 10:00 a.m. U.S. Eastern Daylight Savings Time. This call can be accessed through the investor information section of the company's website at www.cnh.com and will be transmitted by CCBN.NON-GAAP MEASURES
CNH utilizes various figures that are "Non-GAAP Financial Measures" as this term is defined under Regulation G as promulgated by the SEC. In accordance with Regulation G, CNH has detailed either the computation of these measures from multiple U.S. GAAP figures or reconciled these non-GAAP financial measures to the most relevant U.S. GAAP equivalent in the accompanying tables to this press release. Some of these measures do not have standardized meanings and investors should consider that the methodology applied in calculating such measures may differ among companies and analysts. CNH's management believes these non-GAAP measures provide useful supplementary information to investors in order that they may evaluate CNH's financial performance using the same measures used by our management. These non-GAAP financial measures should not be considered as a substitute for, nor superior to, measures of financial performance prepared in accordance with U.S. GAAP.CNH defines "Equipment Operations Gross Profit" as net sales of equipment less costs classified as cost of goods sold. CNH defines "Equipment Operations Operating Profit" as gross profit less costs classified as selling, general and administrative and research and development costs. CNH defines "Equipment Operations Gross Margin" as gross profit as a percent of net sales of equipment. CNH defines "Equipment Operations Operating Margin" as operating profit as a percent of net sales of equipment. "Net Debt (Cash)" is defined as total debt (including intersegment debt) less cash and cash equivalents, deposits in Fiat or Fiat Industrial affiliates cash management system and intersegment notes receivable. CNH defines "Net income (loss) and diluted EPS before restructuring and exceptional items" as Net income (loss) attributable to CNH, less restructuring charges and exceptional items, after tax. Equipment Operations "working capital" is defined as accounts and notes receivable and other-net, excluding intersegment notes receivables, plus inventories less accounts payable. The U.S. dollar computation of cash generated from working capital, as defined, is impacted by the effect of foreign currency translation and other non-cash transactions. CNH defines the "change in net sales on a constant currency basis" as the difference between prior year actual net sales and current year net sales translated at prior year average exchange rates. Elimination of the currency translation effect provides constant comparisons without the distortion of currency rate fluctuations.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, operating results, budgets, projected costs and plans and objectives of management, are forward-looking statements. These statements may include terminology such as "may," "will," "expect," "could," "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 the availability of credit and to interest rates and government spending. Some of the other significant factors which may affect our results 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 customers' access to credit, restrictive covenants in our debt agreements, actions by rating agencies concerning the ratings of our debt securities and asset backed securities, risks related to our relationship with Fiat Industrial S.p.A., the effect of the demerger transaction consummated by Fiat S.p.A. pursuant to which CNH was separated from Fiat S.p.A.'s automotive business and has become a subsidiary of Fiat Industrial S.p.A, political uncertainty and civil unrest or war in various areas of the world, pricing, product initiatives and other actions by competitors, disruptions in production capacity, excess inventory levels, the effect of changes in laws and regulations (including those related to tax, healthcare, retiree benefits, government subsidies and international trade), the results of legal proceedings, technological difficulties, results of our research and development activities, changes in environmental laws, employee and labor relations, pension and health care costs, relations with and the financial strength of dealers and critical suppliers, 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 margin improvement initiatives depends upon, among other things, industry volumes as well as our ability to effectively rationalize our operations and to execute our brand strategy. Further information concerning factors that could significantly affect expected results is included in our annual report on Form 20-F for the year ended December 31, 2010.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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND SUPPLEMENTAL INFORMATION
For the Three Months Ended June 30, 2011 and 2010
(Unaudited)

Equipment Financial
Consolidated Operations Services
---------------- ---------------- ---------------
Three Months Three Months Three Months
Ended June 30, Ended June 30, Ended June 30,
---------------- ---------------- ---------------
2011 2010 2011 2010 2011 2010
------- ------- ------- ------- ------- -------
(in millions, except per share data)
Revenues:
Net sales $ 4,881 $ 3,938 $ 4,881 $ 3,938 $ -- $ --
Finance and interest
income 284 273 44 33 353 343
------- ------- ------- ------- ------- -------
5,165 4,211 4,925 3,971 353 343
------- ------- ------- ------- ------- -------

Costs and Expenses:
Cost of goods sold 3,893 3,177 3,893 3,177 -- --
Selling, general and
administrative 455 431 342 319 113 112
Research, development
and engineering 125 112 125 112 -- --
Interest expense 203 190 100 78 140 151
Interest compensation
to Financial Services -- -- 76 64 -- --
Other, net 67 73 41 39 26 34
------- ------- ------- ------- ------- -------
Total 4,743 3,983 4,577 3,789 279 297
------- ------- ------- ------- ------- -------

Income before income
taxes and equity in
income of
unconsolidated
subsidiaries and
affiliates 422 228 348 182 74 46
Income tax provision 142 111 116 96 26 15
Equity in income of
unconsolidated
subsidiaries and
affiliates:
Financial Services 4 2 52 33 4 2
Equipment Operations 35 21 35 21 -- --
------- ------- ------- ------- ------- -------
Net income 319 140 319 140 52 33
Net loss attributable to
noncontrolling
interests (1) (4) (1) (4) -- --
------- ------- ------- ------- ------- -------
Net income attributable
to CNH Global N.V. $ 320 $ 144 $ 320 $ 144 $ 52 $ 33
======= ======= ======= ======= ======= =======



Weighted average shares
outstanding:
Basic 240 238
======= =======
Diluted 241 238
======= =======

Basic and diluted
earnings per share
("EPS") attributable to
CNH Global N.V. common
shareholders:
Basic EPS $ 1.34 $ 0.60
======= =======
Diluted EPS $ 1.33 $ 0.60
======= =======



These Condensed Consolidated Statements of Operations should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the year ended December 31, 2010.The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include CNH Global N.V.'s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include CNH Global N.V.'s financial services business. Transactions between Equipment Operations and Financial Services have been eliminated to arrive at the consolidated data.
 
CNH GLOBAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND SUPPLEMENTAL INFORMATION
For the Six Months Ended June 30, 2011 and 2010
(Unaudited)

Equipment Financial
Consolidated Operations Services
---------------- ---------------- ---------------
Six Months Ended Six Months Ended Six Months
June 30, June 30, Ended June 30,
---------------- ---------------- ---------------
2011 2010 2011 2010 2011 2010
------- ------- ------- ------- ------- -------
(in millions, except per share data)
Revenues:
Net sales $ 8,678 $ 7,175 $ 8,678 $ 7,175 $ -- $ --
Finance and interest
income 569 556 88 62 692 683
------- ------- ------- ------- ------- -------
9,247 7,731 8,766 7,237 692 683
------- ------- ------- ------- ------- -------

Costs and Expenses:
Cost of goods sold 7,007 5,875 7,007 5,875 -- --
Selling, general and
administrative 870 825 663 615 207 210
Research, development
and engineering 241 211 241 211 -- --
Restructuring 3 2 3 2 -- --
Interest expense 402 392 196 159 279 311
Interest compensation
to Financial Services -- -- 138 111 -- --
Other, net 104 129 49 71 55 58
------- ------- ------- ------- ------- -------
Total 8,627 7,434 8,297 7,044 541 579
------- ------- ------- ------- ------- -------

Income before income
taxes and equity in
income of
unconsolidated
subsidiaries and
affiliates 620 297 469 193 151 104
Income tax provision 222 181 170 156 52 25
Equity in income of
unconsolidated
subsidiaries and
affiliates:
Financial Services 7 5 106 84 7 5
Equipment Operations 59 28 59 28 -- --
------- ------- ------- ------- ------- -------
Net income 464 149 464 149 106 84
Net loss attributable to
noncontrolling
interests (8) (11) (8) (11) -- --
------- ------- ------- ------- ------- -------
Net income attributable
to CNH Global N.V. $ 472 $ 160 $ 472 $ 160 $ 106 $ 84
======= ======= ======= ======= ======= =======



Weighted average shares
outstanding:
Basic 239 238
======= =======
Diluted 241 238
======= =======

Basic and diluted
earnings per share
("EPS") attributable to
CNH Global N.V. common
shareholders:
Basic EPS $ 1.97 $ 0.67
======= =======
Diluted EPS $ 1.96 $ 0.67
======= =======


These Condensed Consolidated Statements of Operations should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the year ended December 31, 2010.The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include CNH Global N.V.'s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include CNH Global N.V.'s financial services business. Transactions between Equipment Operations and Financial Services have been eliminated to arrive at the consolidated data.
 
CNH GLOBAL N.V
CONDENSED CONSOLIDATED BALANCE SHEET
AND SUPPLEMENTAL INFORMATION
As of June 30, 2011 and December 31, 2010
(Unaudited)

Equipment Financial
Consolidated Operations Services
----------------- ----------------- -----------------
June December June December June December
30, 31, 30, 31, 30, 31,
2011 2010 2011 2010 2011 2010
-------- -------- -------- -------- -------- --------
(in millions)
ASSETS
Cash and cash
equivalents $ 1,548 $ 3,618 $ 949 $ 2,934 $ 599 $ 684
Deposits in Fiat
Industrial
subsidiaries' cash
management system 3,543 -- 3,444 -- 99 --
Deposits in Fiat
S.p.A. subsidiaries'
cash management
system -- 1,760 -- 1,643 -- 117
Accounts, notes
receivable and other
- net 15,434 14,028 1,165 911 14,683 13,495
Intersegment notes
receivable -- -- 2,334 2,273 641 562
Inventories 3,741 2,937 3,741 2,937 -- --
Property, plant and
equipment, net 1,910 1,786 1,908 1,784 2 2
Equipment on operating
leases - net 648 622 3 2 645 620
Investment in
Financial Services -- -- 2,183 2,007 -- --
Investments in
unconsolidated
affiliates 484 490 394 407 90 83
Goodwill and other
intangibles 3,117 3,064 2,957 2,906 160 158
Other assets 3,535 3,284 2,196 1,848 1,339 1,436
-------- -------- -------- -------- -------- --------
Total Assets $ 33,960 $ 31,589 $ 21,274 $ 19,652 $ 18,258 $ 17,157
======== ======== ======== ======== ======== ========

LIABILITIES AND EQUITY
Short-term debt $ 4,434 $ 3,863 $ 190 $ 125 $ 4,244 $ 3,738
Accounts payable 2,983 2,367 3,115 2,586 275 150
Long-term debt,
including current
maturities 12,068 12,434 3,482 3,968 8,586 8,466
Intersegment debt -- -- 641 562 2,334 2,273
Accrued and other
liabilities 6,346 5,545 5,718 5,032 635 522
-------- -------- -------- -------- -------- --------
Total Liabilities 25,831 24,209 13,146 12,273 16,074 15,149
Equity 8,129 7,380 8,128 7,379 2,184 2,008
-------- -------- -------- -------- -------- --------
Total Liabilities and
Equity $ 33,960 $ 31,589 $ 21,274 $ 19,652 $ 18,258 $ 17,157
======== ======== ======== ======== ======== ========

These Condensed Consolidated Balance Sheets should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the year ended December 31, 2010.The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include CNH Global N.V.'s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include CNH Global N.V.'s financial services business. Transactions between Equipment Operations and Financial Services have been eliminated to arrive at the consolidated data.
 


CNH GLOBAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
AND SUPPLEMENTAL INFORMATION
For the Six Months Ended June 30, 2011 and 2010
(Unaudited)

Equipment Financial
Consolidated Operations Services
---------------- ---------------- ----------------
Six Months Ended Six Months Ended Six Months Ended
June 30, June 30, June 30,
---------------- ---------------- ----------------
2011 2010 2011 2010 2011 2010
------- ------- ------- ------- ------- -------
(in millions)
Operating activities:
Net income $ 464 $ 149 $ 464 $ 149 $ 106 $ 84
Adjustments to
reconcile net income
to net cash (used)
provided by
operating
activities:
Depreciation and
amortization 216 198 155 137 61 61
Intersegment
activity -- -- (234) (89) 234 89
Changes in operating
assets and
liabilities (750) (24) 62 1,127 (812) (1,151)
Other, net (108) (130) (215) (53) 1 (11)
------- ------- ------- ------- ------- -------
Net cash (used)
provided by operating
activities (178) 193 232 1,271 (410) (928)
------- ------- ------- ------- ------- -------

Investing activities:
Expenditures for
property, plant and
equipment (126) (90) (126) (90) -- --
Expenditures for
equipment on
operating leases (192) (174) -- -- (192) (174)
Net collections from
retail receivables (38) 98 -- -- (38) 98
Net (deposits in)
withdrawals from
Fiat Industrial/Fiat
S.p.A. subsidiaries'
cash management
systems (1,702) (1,369) (1,727) (1,376) 25 7
Other, net 201 133 (51) 6 252 107
------- ------- ------- ------- ------- -------
Net cash (used)
provided by investing
activities (1,857) (1,402) (1,904) (1,460) 47 38
------- ------- ------- ------- ------- -------

Financing activities:
Intersegment activity -- -- 53 (642) (53) 642
Net decreases in
indebtedness (131) 1,391 (438) 1,396 307 (5)
Other, net 28 (543) 28 (543) -- (130)
------- ------- ------- ------- ------- -------
Net cash (used)
provided by financing
activities (103) 848 (357) 211 254 507
------- ------- ------- ------- ------- -------
Effect of foreign
exchange rate changes
on cash and cash
equivalents 68 (28) 44 (10) 24 (18)
------- ------- ------- ------- ------- -------
Decrease in cash and
cash equivalents (2,070) (389) (1,985) 12 (85) (401)
Cash and cash
equivalents,
beginning of period 3,618 1,263 2,934 290 684 973
------- ------- ------- ------- ------- -------
Cash and cash
equivalents, end of
period $ 1,548 $ 874 $ 949 $ 302 $ 599 $ 572
======= ======= ======= ======= ======= =======




These Condensed Consolidated Statements of Cash Flows should be read in conjunction with the Company's Audited Consolidated Financial Statements and Notes for the year ended December 31, 2010.The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include CNH Global N.V.'s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include CNH Global N.V.'s financial services business. Transactions between Equipment Operations and Financial Services have been eliminated to arrive at the consolidated data.
 
CNH Global N.V.
TOTAL DEBT AND NET DEBT (CASH)
For the Six Months Ended June 30, 2011 and the Year Ended December 31, 2010
(Unaudited)


Equipment Financial
Consolidated Operations Services
----------------- ------------------- -----------------
June December June December June December
30, 31, 30, 31, 30, 31,
2011 2010 2011 2010 2011 2010
-------- -------- --------- --------- -------- --------
(in millions)
Short-term debt:
With Fiat
Industrial
subsidiaries $ 310 $ -- $ 88 $ -- $ 222 $ --
With Fiat S.p.A.
subsidiaries -- 194 -- 43 -- 151
Owed to
securitization
investors 2,675 2,488 -- -- 2,675 2,488
Other 1,449 1,181 102 82 1,347 1,099
Intersegment -- -- 93 52 1,753 1,730
-------- -------- --------- --------- -------- --------
Total short-term
debt 4,434 3,863 283 177 5,997 5,468
-------- -------- --------- --------- -------- --------
Long-term debt:
With Fiat
Industrial
subsidiaries 478 -- 72 -- 406 --
With Fiat S.p.A.
subsidiaries -- 584 -- 67 -- 517
Owed to
securitization
investors 5,979 5,868 -- -- 5,979 5,868
Other 5,611 5,982 3,410 3,901 2,201 2,081
Intersegment -- -- 548 510 581 543
-------- -------- --------- --------- -------- --------
Total long-term debt 12,068 12,434 4,030 4,478 9,167 9,009
-------- -------- --------- --------- -------- --------
Total debt:
With Fiat
Industrial
subsidiaries 788 -- 160 -- 628 --
With Fiat S.p.A.
subsidiaries -- 778 -- 110 -- 668
Owed to
securitization
investors 8,654 8,356 -- -- 8,654 8,356
Other 7,060 7,163 3,512 3,983 3,548 3,180
Intersegment -- -- 641 562 2,334 2,273
-------- -------- --------- --------- -------- --------
Total debt $ 16,502 $ 16,297 $ 4,313 $ 4,655 $ 15,164 $ 14,477
======== ======== ========= ========= ======== ========
Less:
Cash and cash
equivalents 1,548 3,618 949 2,934 599 684
Deposits in Fiat
Industrial
subsidiaries'
cash management
system 3,543 -- 3,444 -- 99 --
Deposits in Fiat
S.p.A.
subsidiaries'
cash management
system -- 1,760 -- 1,643 -- 117
Intersegment notes
receivable -- -- 2,334 2,273 641 562
-------- -------- --------- --------- -------- --------
Net debt (cash) $ 11,411 $ 10,919 $ (2,414) $ (2,195) $ 13,825 $ 13,114
======== ======== ========= ========= ======== ========

Note: Net Debt (Cash) is a non-GAAP financial measure. See description of non-GAAP measures contained in this release.
 


CNH GLOBAL N.V.
SUPPLEMENTAL SCHEDULES
For the Three Months and Six Months Ended June 30, 2011 and 2010
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
% %
2011 2010 Change 2011 2010 Change
------- ------- ------ ------- ------- ------
(in millions, except percentages)
1. Revenues and net
sales:
Net sales
Agricultural
equipment $ 3,851 $ 3,148 22.3% $ 6,922 $ 5,773 19.9%
Construction
equipment 1,030 790 30.4% 1,756 1,402 25.2%
------- ------- ------- -------
Total net sales 4,881 3,938 23.9% 8,678 7,175 20.9%
Financial services 353 343 2.9% 692 683 1.3%
Eliminations and
other (69) (70) (123) (127)
------- ------- ------- -------
Total revenues $ 5,165 $ 4,211 22.7% $ 9,247 $ 7,731 19.6%
======= ======= ======= =======


2. Net sales on a
constant currency
basis:

Agricultural
equipment net sales $ 3,851 $ 3,148 22.3% $ 6,922 $ 5,773 19.9%
Effect of currency
translation (187) (5.9)% (232) (4.0)%
------- ------- ------- -------
Agricultural
equipment net
sales on a
constant currency
basis $ 3,664 $ 3,148 16.4% $ 6,690 $ 5,773 15.9%
======= ======= ======= =======

Construction
equipment net sales $ 1,030 $ 790 30.4% $ 1,756 $ 1,402 25.2%
Effect of currency
translation (53) (6.7)% (72) (5.1)%
------- ------- ------ -------
Construction
equipment net
sales on a
constant currency
basis $ 977 $ 790 23.7% $ 1,684 $ 1,402 20.1%
======= ======= ======= =======

Total Equipment
Operations net
sales on a
constant currency
basis $ 4,641 $ 3,938 17.9% $ 8,374 $ 7,175 16.7%
======= ======= ======= =======

Note: Net sales on a constant currency basis is a non-GAAP financial measure. See description of non-GAAP measures contained in this release.
 
CNH Global N.V.
SUPPLEMENTAL Schedules
For the Three and Six Months Ended June 30, 2011 and 2010
(Unaudited)

3. Equipment Operations gross and operating profit and margin:

Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
2011 2010 2011 2010
------------- ------------- ------------- -------------
(in millions, except percentages)

Net sales $4,881 100.0% $3,938 100.0% $8,678 100.0% $7,175 100.0%
Less:
Cost of goods
sold 3,893 79.8% 3,177 80.7% 7,007 80.7% 5,875 81.9%
------ ------ ------ ------
Equipment
Operations gross
profit 988 20.2% 761 19.3% 1,671 19.3% 1,300 18.1%
Less:
Selling, general
and
administrative 342 7.0% 319 8.1% 663 7.6% 615 8.6%
Research and
development 125 2.6% 112 2.8% 241 2.8% 211 2.9%
------ ------ ------ ------
Equipment
Operations
operating profit $ 521 10.7% $ 330 8.4% $ 767 8.8% $ 474 6.6%
====== ====== ====== ======

Gross profit and
margin:
Agricultural
equipment $ 850 22.1% $ 644 20.5% $1,441 20.8% $1,124 19.5%
Construction
equipment 138 13.4% 117 14.8% 230 13.1% 176 12.6%
------ ------ ------ ------
Equipment
Operations gross
profit $ 988 20.2% $ 761 19.3% $1,671 19.3% $1,300 18.1%
====== ====== ====== ======

Operating profit
and margin:
Agricultural
equipment $ 496 12.9% $ 317 10.1% $ 759 11.0% $ 497 8.6%
Construction
equipment 25 2.4% 13 1.6% 8 0.5% (23) (1.6)%
------ ------ ------ ------
Equipment
Operations
operating profit $ 521 10.7% $ 330 8.4% $ 767 8.8% $ 474 6.6%
====== ====== ====== ======



4. Net income and diluted earnings per share before restructuring and
exceptional items:

Three Months Ended Six Months Ended
June 30, June 30,
------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
(in millions, except per share data)

Net income attributable to CNH $ 320 $ 144 $ 472 $ 160
--------- --------- --------- ---------
Restructuring:
Restructuring, net of tax -- -- 2 2
Exceptional items:
(Gain) on purchase/sale of
business, net of tax -- (4) (16) (4)
Tax charge for Medicare Part D
retiree drug subsidy -- -- -- 20
--------- --------- --------- ---------
Net income before restructuring
and exceptional items $ 320 $ 140 $ 458 $ 178
========= ========= ========= =========
Weighted average common shares
outstanding - diluted 241 238 241 238
========= ========= ========= =========
Diluted earnings per share before
restructuring and exceptional
items $ 1.33 $ 0.59 $ 1.90 $ 0.75
========= ========= ========= =========



CNH GLOBAL N.V.
SUPPLEMENTAL SCHEDULES
For the Six Months Ended June 30, 2011
(Unaudited)

5. Equipment Operations cash generated from working capital

Balance as Balance as Cash
of Effect of of Generated
December Foreign June from
31, Currency Non-Cash 30, Working
2010 Translation Transactions 2011 Capital
----------- ----------- ------------ ----------- -----------
(in millions)

Accounts, notes
receivable and
other - net -
Total $ 911 $ (46) $ (36) $ 1,165 $ (172)
Inventories 2,937 (146) (24) 3,741 (634)
Accounts
payable -
Total (2,586) 160 59 (3,115) 310
----------- ----------- ------------ ----------- -----------
Working Capital $ 1,262 $ (32) $ (1) $ 1,791 $ (496)
=========== =========== ============ =========== ===========
Note: Working Capital is a non-GAAP financial measure. See description of non-GAAP measures contained in this release.
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