JPMorgan. Basics and Industrials Conference. New York, NY

Transcription

1 JPMorgan Basics and Industrials Conference New York, NY June 11, 2007

2 Forward Looking Statements & Non-GAAP Measures This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of All statements other than statements of historical fact contained in this presentation, 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,, could, should, intend, estimate, anticipate, believe, outlook, continue, remain, on track, comfortable with, design, target, objective, 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, relations with and the strength of our dealers, 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 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, 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. 2

3 Globally Balanced Equipment Company Global Scale and Presence Net Sales of Equipment: $12.4 billion in Q1 07 LTM (+4.0% YOY) Strong Brand Recognition AG CE Adjusted Equipment EBITDA: $949 million in Q1 07 LTM (+24.5% YOY) 11,500 dealers & distributors in 160 countries 39 manufacturing facilities on five continents Geographically Diversified Leading Positions in Key Markets Strong Support from Financial Services Business Q1 07 LTM Revenues by Business Q1 07 LTM Equipment Sales by Region Construction Equipment 33% Agricultural Equipment W. Europe 33% 42% North America 60% Financial Services 7% Latin America 9% 16% Rest of World 3

4 Q Highlights First Quarter 2007 Retail unit volumes showed particular strength in higher horsepower agricultural tractors and combines. Construction Equipment industry retail unit sales outside of North America were particularly strong. Another quarter of positive net price recovery for both Agricultural and Construction Equipment operations. Our Agricultural equipment market share improved and our Construction equipment share was stable. CNH acquired Kobelco-Case Machinery (Shanghai) Co. Ltd. Last Twelve Months Diluted EPS before restructuring, net of tax of $1.79 vs. $1.06 in Q LTM. Net income, excluding restructuring, net of tax of $422 million up $172 million from Q LTM. Equipment Operations Gross Margin up 2.15 percentage points to 18.5%. Net Debt of Equipment Operations down year over year $615 million to $6 million. Major market Agricultural Equipment Industry unit volumes off 1%, CNH stable. Worldwide Construction Equipment Industry unit volumes up 7%, CNH up 2%. Financial Services Net Income up 15.8%. 4

5 First Quarter - Industrial Operating Margin* Evolution (in Millions) (30) (3) (11) $219 $ Volume / Mix Net Pricing Economics & Currency S,G&A R&D Other 2007 * See Appendix for Definition and GAAP Reconciliation Variance by Causal Factor 5

6 CNH Performance Momentum Equipment Net Sales US GAAP $ Billion AG CE Q1-07 LTM : 6.1% CAGR 1, % % % Note: 1 Adjusted EBITDA is Equipment Operations net income before cumulative change in accounting principle, net interest expense (excluding compensation to financial services), income taxes, depreciation and amortization, and restructuring Equipment Adjusted EBITDA 1 US GAAP $ Million Margin (%) % 7.1% 6.0% 6.2% Q1-07 LTM : 21.7% CAGR 8% 7% 6% 5% 4% 3% 2% 1% 0% 6

7 Consolidated Profitability & Leverage Net Income, before Restructuring and Goodwill 1 US GAAP $ Million Leverage 2 US GAAP $ Million (63) (170) Q1-07 LTM Q1-07 LTM Net Debt Debt / Adjusted EBITDA 1 Net income before restructuring, goodwill, and cumulative change in accounting principle 2 Adjusted EBITDA is Equipment Operations net income before cumulative change in accounting principle, net interest expense (excluding compensation to financial services), income taxes, depreciation and amortization, and restructuring 0 7

8 First Quarter - Agricultural Equipment Industry Volume Trend Tractors [Preliminary Results] (Units in Thousands) Combines '00 '01 '02 '03 '04 '05 '06 '07 Tractors North America Western Europe Latin America Rest Of World Total Combines 0 8

9 First Quarter - Agriculture Equipment Industry & Share [Preliminary Results] Industry % Change CNH Share Change Tractors - World Wide (4) FLAT - North America 1 + Under 40 HP (4) + Over 40 HP Western Europe Latin America 17 FLAT - Rest of World (11) FLAT Combines - World Wide North America Western Europe (3) FLAT - Latin America Rest of World 21-9

10 AG Business Overview AG Equipment Sales US GAAP $ Billion Q1 07 LTM Full line provider focusing on large cash grain farms and equipment (220 models in 13 product lines) Global player (2006 Actual): Distribution of Net Sales North America 56% Western Europe 24% Latin America 6% Rest-of-World 14% : 5.0% CAGR AG Industrial Operating Margin US GAAP $ Million Q1 07 LTM Full line provider focusing on livestock/dairy and bigger equipment outside of North America Leader in specialist markets segments (eg. Vineyard) Global player (2006 Actual): Distribution of Net Sales North America 32% Western Europe 43% Latin America 7% Rest-of-World 18% 10

11 First Quarter Construction Equipment Industry Volume Trend 175 [Preliminary Results] 150 (Units in Thousands) '00 '01 '02 '03 '04 '05 '06 '07 Heavy Skid Steer Loaders & Backhoe Loaders Other Light 11

12 First Quarter - Construction Equipment Industry & Share [Preliminary Results] Industry % Change CNH Share Change Loader Backhoes - World Wide North America (25) FLAT - Western Europe 35 FLAT - Latin America Rest of World 59 + Skid Steer Loaders - World Wide (6) - - North America (15) - - Western Europe 0 FLAT - Latin America 34 FLAT - Rest of World 29 FLAT Heavy Equipment - World Wide 10 FLAT - North America (11) FLAT - Western Europe 19 FLAT - Latin America 35 FLAT - Rest of World 17 FLAT 12

13 CE Business Overview CE Equipment Sales US GAAP $ Billion Q1 07 LTM 21 (74) : 7.5% CAGR CE Industrial Operating Margin US GAAP $ Million Q1 07 LTM Full liner specialized in residential construction and specialist contractor Alliances with Sumitomo in the Excavator business Global player (2006 Actual): Distribution of Net Sales North America 62% Western Europe 26% Latin America 10% Rest-of-World 2% Full line provider in Europe, More focus on the light to med in North America Excavators technology in alliances with Kobelco Global player (2006 Actual): Distribution of Net Sales North America 36% Western Europe 53% Latin America 10% Rest-of-World 1% 13

14 CNH Capital Profile Managed Portfolio - Q1 07 Present in 17 Countries Retail Financing 66% Loans and Leases to End Use Customers > CNH New Equipment > Used Equipment > Allied Equipment Wholesale Financing Cross Sales 31% 3% Dealer Floor Plan Programs Commercial Loans to Dealers Insurance Products for Dealers and Customers Credit Cards for Retail Customers (NA Only) NA $10.1bn LAR $1.9bn EUR $3.2bn ANZ $0.8bn Equipment Remarketing Services Standalone Joint Ventures Remarketing > North America Established > European Operation in Formative Stage Approximately 1,000 Employees 14

15 Financial Services Managed Portfolio (US GAAP $ Billion) Portfolio Quality, North America % of Total Managed Captive Retail Assets On-book Off-book % 4.00% 3.00% Over 30 days past due U.S. Captive Retail Average Loss Ratio Total % % % % % % 1.00% Over 90 days past due Year end Q1 07 LTM Net Income 0.00% Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 $60 $93 $159 $200 $222 $235 15

16 Agricultural Equipment Industry Drivers Global Stocks-to-Use Ratios Global Commodity Prices 40% Corn Wheat Soybeans (in $/MT) $300 Corn Wheat Soybeans 35% $250 30% $200 25% 20% $150 15% $100 10% '98 '99 '00 '01 '02 '03 '04F '05F '06F '07F $50 '98 '99 '00 '01 '02 '03 '04F '05F '06F '07F Source: Global Insight April 19, 2007 Note: Marketing year ending May 31 of year indicated for Wheat and August 31 for Corn and Soybean 16

17 Agricultural Equipment Industry Drivers (US$ in Bils) $1,200 US AG Commodity Exports (US$ in Bils) $90 US Net Farm Income $1,100 $80 $1,000 $70 $900 $60 10 years Average $800 $50 $700 $40 $600 '97 '98 '99 '00 '01 '02 '03F '04 '05 '06F '07F $30 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06F '07F Source: Global Insight April 19,

18 Construction Equipment Industry Drivers (Millions of Units) 2.20 US Housing Starts (US $ Bils) $1,200 US Construction Spending 2.00 $1, $1, $900 $800 $700 $ '97 '98 '99 '00 '01 '02 '03 '04 '05 '06F '07F $ '00 '01 '02 '03 '04 05F 06F '07F Source: Global Insight April 19,

19 Agricultural Equipment Industry Volume Trends [Preliminary Results] Industry Unit Volumes Tractors Combines (Units in Thousands) '99 '00 '01 '02 '03 '04 '05 '06 '07 F North America Western Europe Latin America Rest Of World Total Tractors outlook Total Combines Tractors 19

20 Full Year Agricultural Equipment Industry Volume Outlook Industry % Change Tractors - World Wide North America (over 40 hp) Western Europe FLAT - Latin America Rest of World 0-5 Combines - World Wide ~ 10 - North America Western Europe ~ 5 - Latin America ~ 35 - Rest of World

21 Construction Equipment Industry Volume Trends [Preliminary Results] 700 Industry Unit Volumes (Units in Thousands) '99 '00 '01 '02 '03 '04 '05 '06 '07 F Heavy Skid Steer Loaders & Backhoe Loaders Other Light Heavy Outlook Light Outlook Note: 1 Other Light Equipment includes Mini & Midi-crawler excavators, Midi-wheeled excavators, telehandlers and compact wheel loaders 21

22 Full Year Construction Equipment Industry Volume Outlook Industry % Change Light Equipment - World Wide ~ 5 - North America (10-15) - Western Europe Latin America Rest of World Heavy Equipment - World Wide ~ 5 - North America (5-10) - Western Europe ~ 15 - Latin America ~ 15 - Rest of World ~ 10 22

23 Agricultural Equipment New Products Case IH Class 7 Combine New Holland T T7000 Case IH Puma Tractor Q 1 New Holland CR9060 Combine New Holland Telehandlers Rest of Year Case IH Sugar Cane Harvester Case IH Cotton Picker New Holland Forage Harvester 23

24 Construction Equipment New Products Q 1 Case 721E 921E Wheel Loaders New Holland E215 E330 introduced in LA E245 Tier 3 Excavator New Holland new Skid Steer Loader introduced in LA Case CXB Hydraulic Excavators Tier 3 Case Articulated Dump Truck New Holland Telehandlers Rest of Year Case 50 th Anniversary Backhoe New Holland Mini Excavators 24

25 Equipment Operations Drivers Regain historical positions in global markets and Improve capacity utilization Improve Quality & Reliability to Best-in-Class levels Add resources & training to Dealer & Customer Support Grow Parts Business with Emphasis on parts availability, service and after-sales excellence Leverage alliances and expansion in Emerging markets Reduce Corporate Structure Costs 25

26 Financial Services Drivers Establish preferred brand positioning with dealers and customers Increase percent of units financed and expand utilization of credit card, consumer and insurance products Drive operational efficiencies through loan origination system investments Expand product and market offering 26

27 Full Year Equipment Operations Targets US $ in billions USGAAP Net Sales of Equipment $18.0 $16.0 $14.0 $ % $10.0 $8.0 $6.0 $ % $ % $ % 7.6% ~$ % 9.2% ~$ % 11.0% 9.9% 10.2% ~$16.0 ~$15.5 Operating Margin 12.0% 10.0% 8.0% 6.0% 4.0% $4.0 $ % $ % 2004A 2005A 2006A 2007E 2008E 2009E 2010E Net Sales of Equipment Operating margin range - Low Operating margin range - High 27

28 For Further Information: Please Contact: Albert S. Trefts, Jr. Senior Director, Investor Relations & Capital Markets CNH Global N.V. Case New Holland, Inc. 100 South Saunders Road Lake Forest, Illinois USA Tel: Fax: Website: 28

29 APPENDIX 29

30 Geographic Information Certain financial and market information in this presentation has been presented separately by geographic area. CNH defines its geographic areas as (1) North America, (2) Western Europe, (3) Latin America and (4) Rest of World. As used in this presentation, all references to North America, Western Europe, Latin America and Rest of World are defined as follows: North America - United States and Canada Western Europe - Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom Latin America - Mexico, Central and South America, and the Caribbean Islands Rest of World - Those areas not included in North America, Western Europe and Latin America as defined above. This area will include China, but not India, unless specifically noted. 30

31 Market Share / Market Position Data We rely on and refer to information and statistics regarding the industries in which we operate. We obtained this market data from Independent industry publications or other publicly available information. Although we believe that these sources are reliable we do not guarantee the accuracy and completeness of this information. Certain market and share information has been presented as worldwide, which includes all countries with the exception of India. Management estimates of market share information are generally based on retail unit data in North America, on registrations of equipment in most of Europe, Brazil, and various Rest of World markets and on retail and shipment unit data collected by a central information bureau appointed by Equipment Manufacturers Associations including the Association of Equipment Manufacturers in North America, the Committee for European Construction Equipment in Europe, the ANFAVEA in Brazil, the Japan Construction Equipment Manufacturers Association and the Korea Construction Equipment Manufacturers Association, as well as on other shipment data collected by an independent service bureau. Not all agricultural or construction equipment is registered, and registration data may thus underestimate, perhaps substantially, actual retail industry unit sales demand, particularly for local manufacturers in China, India, Russia, Turkey, and Brazil. In addition, there may also be a period of time between the shipment, delivery, sale and/or registration of a unit, which must be estimated, in making any adjustments to the shipment, delivery, sale, or registration data to determine our estimates of retail unit data in any period. 31

32 Equipment Operations Net Sales and Adjusted EBITDA - Annual USGAAP $ Million AG $ 5,877 $ 6,073 $ 6,404 $ 7,123 $ 8,000 $ 7,844 $ 7,809 CE 3,460 2,957 2,927 2,946 3,545 3,962 4,306 Net Sales $ 9,337 $ 9,030 $ 9,331 $ 10,069 $ 11,545 $ 11,806 $ 12,115 Adjusted EBITDA Net Income / (Loss) $ (381) $ (332) $ (426) $ (157) $ 125 $ 163 $ Cum Change in Acctg Princ Net Interest Expense Interest Comp to FS (99) (99) (76) (79) (113) (159) (235) + Income Taxes (159) (105) (48) (97) (39) Deprec & Amort Equip. Opns Restructuring Fin Serv Restructuring Adjusted EBITDA $ 328 $ 323 $ 420 $ 501 $ 687 $ 735 $ 861 Adjusted EBITDA % 3.5% 3.6% 4.5% 5.0% 6.0% 6.2% 7.1% 32

33 Equipment Operations Net Sales and Adjusted EBITDA - LTM USGAAP $ Million Q Q Q Q Q Q Q1 07 LTM AG $ 1,793 $ 1,935 $ 2,275 $ 1,695 $ 1,904 $ 2,117 $ 7,992 CE 1,028 1,015 1, ,085 1,124 4,414 Net Sales $ 2,821 $ 2,950 $ 3,497 $ 2,679 $ 2,989 $ 3,241 $ 12,406 Adjusted EBITDA Net Income / (Loss) $ 7 $ 43 $ 147 $ 67 $ 35 $ 95 $ Cum Change in Acctg Princ Net Interest Expense Interest Comp to FS (44) (50) (66) (55) (64) (55) (240) + Income Taxes (6) (27) Deprec & Amort Equip. Opns Restructuring Fin Serv Restructuring Adjusted EBITDA $ 171 $ 157 $ 329 $ 185 $ 190 $ 245 $ 949 Adjusted EBITDA % 6.1% 5.3% 9.4% 6.9% 6.4% 7.6% 7.6% 33

34 Equipment Operations Net Sales, Operating Margin - Annual USGAAP $ Million AG $ 5,877 $ 6,073 $ 6,404 $ 7,123 $ 8,000 $ 7,844 $ 7,809 CE 3,460 2,957 2,927 2,946 3,545 3,962 4,306 Net Sales $ 9,337 $ 9,030 $ 9,331 $ 10,069 $ 11,545 $ 11,806 $ 12,115 Gross Margin $ $ 1,517 $ 1,444 $ 1,429 $ 1,479 $ 1,763 $ 1,872 $ 2,182 Gross Margin % 16.2% 16.0% 15.3% 14.7% 15.3% 15.9% 18.0% Total R&D Total SG&A 1, ,015 AG CE (74) Industrial Op. Margin $ $ 172 $ 223 $ 262 $ 381 $ 567 $ 605 $ 800 AG 1.1% 3.3% 5.2% 5.1% 4.8% 4.3% 5.5% CE 3.1% 0.7% -2.5% 0.6% 5.1% 6.7% 8.7% Industrial Op. Margin % 1.84% 2.47% 2.81% 3.78% 4.91% 5.12% 6.60% 34

35 Equipment Operations Net Sales, Operating Margin - LTM USGAAP $ Million Q Q Q Q Q Q Q1 07 LTM AG $ 1,793 $ 1,935 $ 2,275 $ 1,695 $ 1,904 $ 2,117 $ 7,992 CE 1,028 1,015 1, ,085 1,124 4,414 Net Sales $ 2,821 $ 2,950 $ 3,497 $ 2,679 $ 2,989 $ 3,241 $ 12,406 Gross Margin $ $ 455 $ 488 $ 686 $ 470 $ 538 $ 601 $ 2,295 Gross Margin % 16.1% 16.5% 19.6% 17.5% 18.0% 18.5% 18.5% Total R&D Total SG&A ,057 AG $ 38 $ 79 $ 182 $ 80 $ 86 $ 133 $ 480 CE Industrial Op. Margin $ $ 127 $ 154 $ 324 $ 158 $ 164 $ 219 $ 865 AG 1.3% 2.7% 5.2% 3.0% 2.9% 4.1% 3.9% CE 3.2% 2.5% 4.1% 2.9% 2.6% 2.7% 3.1% Industrial Op. Margin % 4.5% 5.2% 9.3% 5.9% 5.5% 6.8% 7.0% 35

36 Equipment Operations Operating Margin to Net Income - Annual USGAAP $ Million Net Sales $9,337 $9,030 $9,331 $10,069 $11,545 $11,806 $12,115 Industrial Op. Margin $172 $223 $262 $381 $567 $605 $800 Other Op. Expense (100) (112) (62) (149) (186) (188) (233) CNH Capital Net Inc Other Subsidiaries Inc. 4 (14) Int. Comp to Fin Serv. (99) (99) (76) (79) (113) (159) (235) Adjusted EBIT $ $3 $2 $199 $259 $448 $497 $602 Adjusted EBIT% 0.0% 0.0% 2.1% 2.6% 3.9% 4.2% 5.0% Net Interest Expense (375) (337) (290) (238) (236) (212) (144) PBT ($372) ($335) ($91) $21 $212 $285 $458 Taxes & Minorities (19) (51) (72) Net Income bef.restr. ($269) ($253) ($67) $30 $193 $234 $386 Memo: - Adjusted EBITDA $328 $323 $420 $501 $687 $735 $861 36

37 Equipment Operations Operating Margin to Net Income - LTM USGAAP $ Million Q Q Q Q Q Q Q1 07 LTM Net Sales $ 2,821 $ 2,950 $ 3,497 $ 2,679 $ 2,989 $ 3,241 $12,406 Industrial Op. Margin $ 127 $ 154 $ 324 $ 158 $ 164 $ 219 $865 Other Op. Expense (50) (66) (53) (59) (55) (57) (224) CNH Capital Net Inc Other Subsidiaries Inc Int. Comp to Fin Serv. (44) (50) (66) (55) (64) (55) (240) Adjusted EBIT $ $100 $100 $275 $116 $111 $179 $681 Adjusted EBIT% 3.5% 3.4% 7.9% 4.3% 3.7% 5.5% 5.5% Net Interest Expense (50) (41) (47) (31) (25) (34) (137) PBT $50 $59 $228 $85 $86 $145 $544 Taxes & Minorities (9) (13) (74) (14) 5 (40) (123) Net Income bef.restr. $41 $46 $154 $71 $91 $105 $421 Memo: - Adjusted EBITDA $171 $157 $329 $185 $190 $245 $949 37

38 Equipment Operations Balance Sheet & Debt to Cap Ratio Trend USGAAP $ Million 12 / / / / / / / / 06 Asse ts Cash and cash equivalents $ 387 $ 593 $ 378 $ 469 $ 486 $ 637 $ 858 $ 703 Deposits in Fiat Cash Management Pools ,315 1, Accounts, notes receivable 2,504 1,815 1,993 2,021 2,347 1,596 1,243 1,314 Intersegment notes receivable (1) ,636 1,783 1,012 1,114 1,067 1,445 Inventories 2,422 2,374 2,204 2,054 2,478 2,515 2,466 2,735 Property, plant and equipment - net 1,867 1,455 1,333 1,437 1,518 1,470 1,303 1,366 Investments in unconsol subs 1,385 1,380 1,382 1,347 1,605 1,792 1,940 2,142 Goodwill and intangibles 3,338 3,669 3,508 3,245 3,248 3,090 3,018 2,927 Other assets 983 1,361 1,799 2,011 2,141 1,644 1,486 1,386 Total Assets $ 12,928 $ 13,237 $ 14,233 $ 14,367 $ 16,150 $ 14,994 $ 13,959 $ 14,514 Liabilities and Equity Short-term debt $ 3,879 $ 2,724 $ 2,387 $ 2,238 $ 1,522 $ 1,088 $ 826 $ 488 Accounts payable 1,373 1,221 1,287 1,555 1,836 1,679 1,641 1,939 Long-term debt 1,098 3,066 4,856 3,538 3,193 3,084 2,396 2,419 Accrued and other liabilities 4,868 3,712 3,794 4,275 4,725 4,114 4,044 4,548 Total Liabilities $ 11,218 $ 10,723 $ 12,324 $ 11,606 $ 11,276 $ 9,965 $ 8,907 $ 9,394 Equity 1,710 2,514 1,909 2,761 4,874 5,029 5,052 5,120 Total Liabilities and Equity $ 12,928 $ 13,237 $ 14,233 $ 14,367 $ 16,150 $ 14,994 $ 13,959 $ 14,514 Calculation of Net Debt Total Gross Debt $ 4,977 $ 5,790 $ 7,243 $ 5,776 $ 4,715 $ 4,172 $ 3,222 $ 2,907 Less Intersegment Notes Receivable (1) (42) (590) (1,636) (1,783) (1,012) (1,114) (1,067) (1,445) Debt needed only for Equipment Operations $ 4,935 $ 5,200 $ 5,607 $ 3,993 $ 3,703 $ 3,058 $ 2,155 $ 1,462 Less Cash (387) (593) (378) (469) (1,801) (1,773) (1,436) (1,199) Net Debt only for Equipment Operations $ 4,548 $ 4,607 $ 5,229 $ 3,524 $ 1,902 $ 1,285 $ 719 $ 263 Capitalization Ratio Equity $ 1,710 $ 2,514 $ 1,909 $ 2,761 $ 4,874 $ 5,029 $ 5,052 $ 5,120 Total Net Capitalization $ 6,258 $ 7,121 $ 7,138 $ 6,285 $ 6,776 $ 6,314 $ 5,771 $ 5,383 Net Debt to total Net Capitalization 72.7% 64.7% 73.3% 56.1% 28.1% 20.4% 12.5% 4.9% 38

39 Equipment Operations Balance Sheet & Debt to Cap Ratio Trend - Quarterly USGAAP $ Million Q Q Q Q Q Q Asse ts Cash and cash equivalents $ 858 $ 827 $ 752 $ 784 $ 703 $ 594 Deposits in Fiat Cash Management Pools Accounts, notes receivable 1,243 1,295 1,400 1,276 1,314 1,341 Intersegment notes receivable (1) 1,067 1,199 1,752 1,186 1,445 1,619 Inventories 2,466 2,665 2,657 2,780 2,735 3,037 Property, plant and equipment - net 1,303 1,297 1,300 1,303 1,295 1,293 Investments in unconsol subs 1,940 2,017 2,020 2,061 2,142 2,238 Goodwill and intangibles 3,018 3,008 3,003 2,988 2,998 2,987 Other assets 1,486 1,477 1,507 1,631 1,386 1,403 Total Assets $ 13,959 $ 14,342 $ 15,005 $ 14,704 $ 14,514 $ 15,243 Liabilities and Equity Short-term debt $ 826 $ 679 $ 722 $ 605 $ 488 $ 588 Accounts payable 1,641 1,756 1,990 1,815 1,939 2,302 Long-term debt 2,396 2,525 2,533 2,438 2,419 2,362 Accrued and other liabilities 4,044 4,235 4,424 4,470 4,548 4,796 Total Liabilities $ 8,907 $ 9,195 $ 9,669 $ 9,328 $ 9,394 $ 10,048 Equity 5,052 5,147 5,336 5,376 5,120 5,195 Total Liabilities and Equity $ 13,959 $ 14,342 $ 15,005 $ 14,704 $ 14,514 $ 15,243 Calculation of Net Debt Total Gross Debt $ 3,222 $ 3,204 $ 3,255 $ 3,043 $ 2,907 $ 2,950 Less Intersegment Notes Receivable (1) (1,067) (1,199) (1,752) (1,186) (1,445) (1,619) Debt needed only for Equipment Operations $ 2,155 $ 2,005 $ 1,503 $ 1,857 $ 1,462 $ 1,331 Less Cash (1,436) (1,384) (1,366) (1,479) (1,199) (1,325) Net Debt only for Equipment Operations $ 719 $ 621 $ 137 $ 378 $ 263 $ 6 Capitalization Ratio Equity $ 5,052 $ 5,147 $ 5,336 $ 5,376 $ 5,120 $ 5,195 Total Net Capitalization $ 5,771 $ 5,768 $ 5,473 $ 5,754 $ 5,383 $ 5,201 Net Debt to total Net Capitalization 12.5% 10.8% 2.5% 6.6% 4.9% 0.1% 39

40 Equipment Operations Free Cash Flow Strength US GAAP $ Million Cash from Operating Activities 336 (468) Capital Expenditures (213) (221) (237) (192) (179) (152) (213) Free Cash Flow 123 (689) 466 (126) Acquisitions / Divestitures (236) (29) (20) (10) (2) CNH Global Dividend (82) (28) (28) (33) (33) (34) (59) Currency & Other (173) 43 2 (190) (30) (87) 15 Series A Preferred Share Exchange - - 1,501 2, Reduction / (Increase) in Net Debt (59) (622) 1,705 1,

41 Equipment Operations Free Cash Flow Strength - LTM US GAAP $ Million Q Q Q Q Q Q Q1 07 LTM Cash from Operating Activities (180) Capital Expenditures (71) (24) (32) (58) (99) (39) (228) Free Cash Flow (238) Acquisitions / Divestitures (1) 37 (31) (9) 1 (34) (73) CNH Global Dividend - - (59) (59) Currency & Other 27 (37) Series A Preferred Share Exchange Reduction / (Increase) in Net Debt (241)

42 END 42