SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of January 2012

Commission File No. 333-05752

 

 

CNH GLOBAL N.V.

(Translation of Registrant’s Name Into English)

 

 

World Trade Center Airport

Schiphol Boulevard 217

1118 BH Schiphol, Amsterdam

The Netherlands

(Address of Principal Executive Offices)

 

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F  x            Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(7):  ¨

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes  ¨             No  x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-             .)

 

 

 

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CNH GLOBAL N.V.

Form 6-K for the month of January 2012

List of Exhibits:

 

1.	News Release entitled, “CNH Full Year 2011 Revenue Increases 25%; Operating Profit up 65%; EPS $3.82”

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

January 31, 2012

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FOR IMMEDIATE RELEASE

For more information contact:

CNH Investor Relations                                +1 (630) 887-3745

CNH Full Year 2011 Revenue Increases 25%; Operating Profit

up 65%; EPS $3.82

 

o

Full year Net Sales increase 25% to $18.1 billion

 

•

Agricultural equipment +23% to $14.2 billion

 

•

Construction equipment +32% to $3.9 billion

 

o

Full year Equipment Operations

 

•

Operating Profit of $1.5 billion, an increase of 65%

 

•

Operating Margin increased to 8.1% compared to 6.1% in 2010

 

o

Full year EPS before exceptional items at $3.82 per share, compared to $2.08 per share in 2010

 

		Quarter Ended								Change				Year Ended								Change
		12/31/11				12/31/10								12/31/11				12/31/10
(US $ in millions, except per share data and percentages)
Net Sales of Equipment		$	4,768			$	3,759				27	%		$	18,059			$	14,474				25	%
Equipment Operations Operating Profit		$	238			$	176				35	%		$	1,465			$	889				65	%
Equipment Operations Operating Margin			5.0	%			4.7	%			0.3 pts				8.1	%			6.1	%			2 pts
Financial Services Net Income		$	66			$	28				136	%		$	225			$	159				42	%
Net Income Attributable to CNH		$	193			$	209				-8	%		$	939			$	452				108	%
Net Income Before Restructuring and Exceptional Items		$	189			$	216				-13	%		$	918			$	496				85	%
Diluted EPS Before Restructuring and Exceptional Items		$	0.79			$	0.90				-12	%		$	3.82			$	2.08				84	%

BURR RIDGE, IL — (January 31, 2012) — CNH Global N.V. (NYSE: CNH) today announced financial results for the year ended December 31, 2011. For the year, net sales increased 25% (22% on a constant currency basis) to $18.1 billion as agricultural equipment markets continue to perform well across the Group's geographical portfolio, and as a result of the continued recovery in the construction equipment market segment. Equipment Operations posted an Operating Profit of $1.5 billion on the strength of higher demand, with resulting increases in plant utilization, a favorable mix and improved net pricing for agricultural equipment, partially offset by fourth quarter European engine stock-piling costs.

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Net equipment sales for the year were 79% agricultural equipment and 21% construction equipment. The geographical distribution of revenue for the period was 42% North America, 32% EAME & CIS, 16% Latin America, and 10% APAC markets.

Year-to-date capital expenditures totaled $408 million, a 36% increase from the comparable prior period largely as a result of engine environmental compliance programs and new product launches in both the agricultural and construction equipment segments; 72% of the capital spend was on new products and production capacity in the period. Equipment Operations generated $1.1 billion of operating cash flow during 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 $2.7 billion. The 30% effective tax rate for 2011 is lower than the Group’s full year expectations of 32% to 38%, due primarily to the geographic mix of earnings that resulted in better utilization of the Group’s tax attributes. The full year 2012 forecasted effective tax rate is between 32% and 35%.

Net income before restructuring and exceptional items for the year was $918 million as a result of improved top line and industrial operating performance, better results from the Group's unconsolidated subsidiaries and a lower comparable tax rate. This resulted in the Group generating a significant increase in diluted earnings per share to $3.82 (before restructuring and exceptional items) compared to $2.08 per share in 2010.

2012 Full Year Market Outlook

Demand in the agricultural and construction equipment markets is expected to remain positive for 2012. Agricultural equipment demand is projected to be flat to up 5% on the back of firm agricultural commodity prices and construction equipment demand is expected to continue its recovery with industry unit sales expected to be up 15 to 20%.

2012 CNH U.S. GAAP Earnings Outlook

CNH expects to improve on 2011 performance as follows (U.S. GAAP):

 

•

Revenues up approximately 5%

 

•

Operating Margin in excess of 8.6%

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SEGMENT RESULTS

Agricultural Equipment

 

		Quarter Ended								Change				Year Ended								Change
		12/31/11				12/31/10								12/31/11				12/31/10
(US $ in millions, except percentages)
Net Sales of Equipment		$	3,695			$	2,985				24	%		$	14,183			$	11,528				23	%
Gross Profit		$	685			$	561				22	%		$	2,904			$	2,232				30	%
Gross Margin			18.5	%			18.8	%			-0.3 pts				20.5	%			19.4	%			1.1 pts
Operating Profit		$	241			$	211				14	%		$	1,410			$	943				50	%
Operating Margin			6.5	%			7.1	%			-0.6 pts				9.9	%			8.2	%			1.7 pts

Agricultural Equipment Industry and Market

Worldwide agricultural industry unit sales increased 12% compared to 2010. Global tractor sales grew 12% while global combine sales grew 16%. North American tractor sales, both over and under 40 horsepower segments, were up 2%, and combine sales were down 5%. Latin America sales of tractors decreased 2% and combine sales increased 21%. EAME & CIS markets continued to improve in 2011, with tractor sales up 25% and combine sales up 39%. APAC markets were up 12% in tractor sales and up 22% in combine sales.

CNH Agricultural Equipment Full Year Results

CNH’s net sales in the agricultural equipment sector increased 23% in 2011 (20% on a constant currency basis) as a result of solid trading conditions in every region. Net sales in the EAME & CIS markets continued their growth with comparative reported revenue up 36% 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 in Europe 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 1.7 percentage point increase in comparative operating margin to 9.9% (despite transitional costs of engine stock-piling for 2012 incurred in the fourth quarter).

Worldwide agricultural equipment market share was in line with industry demand with continued positive performance in tractors overall in Europe and in the high horsepower segment in North America, as the FPT powered Tier 4A/Stage IIIB compliant equipment was well received by the market for its fuel savings and performance characteristics. Combine market share was up in North America, despite decreased year over year industry retail sales, and in the APAC region. Market share was down in the EAME & CIS region where unit retail

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sales increased, although at a rate less than the market overall, as a result of local content tariff restrictions. In Latin America, market share performance was stable for tractors and combines despite difficult trading conditions in the fourth quarter and a difficult environment for cross border transactions. Industrial production trailed retail sales in the fourth quarter as a result of good retail activity as demonstrated by the fourth quarter market share performance, and in an overall effort to manage down company and dealer inventories reflected in the Group’s fourth quarter cash flow from working capital. As a result, the Group begins 2012 with a healthy profile of both new and used finished goods inventory.

During 2011, New Holland Agriculture consolidated its leadership as Tier 4A/Stage IIIB compliant equipment provider introducing, in Europe and in North America, new CX and flagship CR Series combines, all featuring the ECOBlue SCR technology delivering up to 10% lower fuel consumption and an increase of up to 7% in maximum horsepower versus previous models. In Latin America, the brand launched, the 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 the new SP3500 sprayer. In November, New Holland Agriculture introduced the new mid-range tractor series TD5, T5 and T6 completely remodeling the offering below 120hp, with the T5 and T6 now featuring Tier 4A/Stage IIIB engines at the Agritechnica fair. The second generation NH2 hydrogen powered tractor, which will be tested this year on the first Energy Independent farm, was also displayed at the same venue. The Agritechnica jury recognized the new CR combine with the "Machine of the Year 2012" award for the efficient Tier 4A/Stage IIIB engines, the new super-lightweight aluminum Varifeed header and the state-of-the-art SmartTrax rubber tracks system. New Holland’s innovative technologies also received with five silver medals at the fair by the DLG jury.

In the first half of 2011, Case IH expanded its Tier 4A/Stage IIIB emission compliant offering in Europe and North America releasing the Magnum 235-340 hp Series tractors with global arm rest controls and 4WD Steiger 350–500 hp Series tractors with row crop frames and cab suspension and the 4WD Steiger/Quadrac 550–600 hp series tractors with best-in-class fuel efficiency and hydraulic flow. At the Farm Progress Show in the U.S., the brand introduced the new Efficient Power Axial-Flow 30 Series combines, Patriot 4430 sprayer and Maxxum tractors series, all Tier 4A/Stage IIIB emission compliant. In Latin America, Case IH launched the new Magnum tractor series and the new Axial Flow 2566, the brand’s first ever class 5 combine for the region in the third quarter.

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Case IH sugar cane harvesters were honored with the ”Top of Mind” award by the Brazilian trade publication Revista Rural. The Case IH Diesel Saver Automatic Productivity Management (APM) System was awarded the ASABE 2011 Rain Bird Engineering Concept of the Year Award for its fully integrated drive-train management system available on the Case IH Steiger 4WD and QUADTRAC tractors. The new Case IH Patriot 4430 sprayer was chosen as the “2011 CropLife IRON Product of the Year”, receiving more than half of all votes cast. Also, the Case IH’s Early Riser Planter received an Honorable Mention as one of the best products for 2011 in the No-Till Equipment category, as selected by readers of the North American publication No-Till Farmers. Finally, Case IH Axial Flow combines were found by independent researchers at Göttingen University (Germany) to have the lowest overall operating costs, and spare parts costs of all models tested.

In North America the CNH agricultural brands won five AE50 innovation awards from the American Society of Agricultural and Biological Engineers (ASABE) as announced in January 2012. The awards recognized the New Holland T8 and T9 tractors, the SynchroKnife drive, the MowMax II independent modular disc cutterbar and the add-on Cornrower attachment and for the Case IH Steiger 600 tractor.

Construction Equipment

 

		Quarter Ended								Change				Year Ended								Change
		12/31/11				12/31/10								12/31/11				12/31/10
(US $ in millions, except percentages)
Net Sales of Equipment		$	1,073			$	774				39	%		$	3,876			$	2,946				32	%
Gross Profit		$	132			$	77				71	%		$	529			$	351				51	%
Gross Margin			12.3	%			9.9	%			2.4 pts				13.6	%			11.9	%			1.7 pts
Operating Profit		$	(3	)		$	(35	)			Nm			$	55			$	(54	)			Nm
Operating Margin			(0.3	)%			(4.5	)%			4.2 pts				1.4	%			(1.8	)%			3.2 pts

Construction Equipment Industry and Market

Global construction equipment industry unit sales rose 27% in 2011 compared to the prior year, with positive trends in every region. Light equipment was up 30% and heavy equipment up 23%. North American demand was up 38% and EAME & CIS markets rose 35% as the industry continued to rebuild from the prior year's low levels. In Latin America, the market was up 25%, driven by strong demand from projects in both the public and private sectors. In APAC markets, industry sales were up 19% for the year, although significantly weaker in the second half of the year.

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CNH Construction Equipment Full Year Results

2011 net sales in the construction equipment sector grew 32% (28% on a constant currency basis), with improvements in every region. Operating profit improved in 2011 to $55 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.

Worldwide construction equipment market share for 2011 was in line with industry growth in both the light and heavy segments. In North America, the successful launch of new products in the light equipment range continued to gain traction. Losses in market share recorded in the first half of the year due to product launch manufacturing downtime, being regained over the second half. For heavy equipment, the supply of whole-goods and componentry improved in the second half of 2011 as Japanese suppliers returned to normalcy and the APAC excavator market slowed down. Trading conditions in Europe deteriorated in the fourth quarter as a result of the European financial crisis, and in Latin America the demand for heavy equipment diminished as infrastructure spending was deferred into 2012. As a consequence, global production utilization was flexed down in the fourth quarter to reflect the demand expectations of the individual markets and to ensure that finished goods inventories at the company and dealer levels were matched with demand on a worldwide basis.

At the ConExpo trade show in Las Vegas, Case Construction introduced the new B Series motor grader and the F Series wheel loader, with the largest models specifically engineered for quarry, aggregate and truck-loading applications. Also launched during 2011 were three new model of the DV Series double drum compactors and the PT240, the brand's first pneumatic tire compactor. The new 40-ton-class CX470C crawler excavator, Tier 4A/Stage IIIB emission compliant, was introduced in the North American and European markets. 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, in North America, as “Contractor’s Choice” machines for 2011 by Road & Bridges magazine.

New Holland Construction presented its new C Series crawler excavator, featuring Tier 4A/Stage IIIB compliant SCR engines that deliver a 10% increase in productivity in terms of cubic meters per hour and up to 10% lower fuel consumption in ECO mode compared to the B Series. Also introduced in the quarter were the new 200 Series Skid Steer and Compact Track loaders, a total of nine new models were presented to the markets.

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CNH Financial Services Fourth Quarter and Full Year Results

 

		Quarter Ended								Change				Year Ended								Change
		12/31/11				12/31/10								12/31/11				12/31/10
(US $ in millions, except percentages)
Net Income		$	66			$	28				136	%		$	225			$	159				42	%
On-Book Asset Portfolio		$	14,636			$	14,274				3	%		$	14,636			$	14,274				3	%
Managed Asset Portfolio		$	17,089			$	16,996				1	%		$	17,089			$	16,996				1	%

Net income attributable to Financial Services was up 42% to $225 million for the year, compared with $159 million in 2010. Results were higher due to improved financial margins and a lower provision for credit losses, partially offset by a higher annual effective tax rate.

At December 31, 2011, delinquent receivables greater than 30 days past due were 2.0%, down from 5.2% at December 31, 2010.

Unconsolidated Equipment Operations’ Subsidiaries

Full year results for the Group's unconsolidated Equipment Operations’ subsidiaries improved by 18% to $104 million compared to 2010. The major contributors continued to be Turk Tractor (Turkey), Al Ghazi (Pakistan), CNH de Mexico and the Group’s two joint ventures in Japan.

New Manufacturing Investment in China

On December 23, 2011 CNH has announced an initial investment of $90 million to build a new manufacturing plant in Harbin, in the Heilongjiang Province, northeast China. The new facility will produce high horsepower tractors, combine harvesters and other machinery featuring advanced technology and will expand the Group’s manufacturing base in China, where it currently assembles high horsepower tractors and other agricultural equipment in Harbin, and operates a manufacturing plant dedicated to low and medium horsepower tractors in Shanghai.

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Equipment Operations Cash Flow and Net Debt

 

		Year Ended
		12/31/11				12/31/10
		(US $ in millions)
Net Income		$	924			$	438
Depreciation & Amortization			311				291
Cash Change in Working Capital*			(189	)			786
Other			51				296
Net Cash Provided by Operating Activities			1,097				1,811
Net Cash (Used) by Investing Activities**			(489	)			(313	)
All Other			(72	)			167
Increase in Net (Cash)		$	536			$	1,665
Net (Cash)		$	(2,731	)		$	(2,195	)

 

*	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).

Cash and cash equivalents plus Deposits in Fiat Industrial S.p.A. subsidiaries’ cash management system increased by $654 million to $5.2 billion for the full year.

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), 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 January 31, 2012 to review full year and fourth quarter 2011 results. The conference call webcast will begin at 10:00 a.m. U.S. Central Time (11:00 a.m. U.S. Eastern 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.

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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 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.

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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.

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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.

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CNH GLOBAL N.V.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND SUPPLEMENTAL INFORMATION

For the Three Months Ended December 31, 2011 and 2010

(Unaudited)

 

		Consolidated								Equipment Operations								Financial Services
		Three Months Ended December 31,								Three Months Ended December 31,								Three Months Ended December 31,
		2011				2010				2011				2010				2011				2010
		(in millions, except per share data)
Revenues:
Net sales		$	4,768			$	3,759			$	4,768			$	3,759			$	—			$	—
Finance and interest income			273				296				39				47				342				357
			5,041				4,055				4,807				3,806				342				357
Costs and Expenses:
Cost of goods sold			3,951				3,121				3,951				3,121				—				—
Selling, general and administrative			503				462				425				334				78				128
Research, development and engineering			154				128				154				128				—				—
Restructuring			—				8				—				8				—				—
Interest expense			193				210				96				108				133				148
Interest compensation to Financial Services			—				—				72				62				—				—
Other, net			67				104				40				77				27				27
Total			4,868				4,033				4,738				3,838				238				303
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates			173				22				69				(32	)			104				54
Income tax provision (benefit)			11				(136	)			(29	)			(165	)			40				29
Equity in income of unconsolidated subsidiaries and affiliates:
Financial Services			2				3				66				28				2				3
Equipment Operations			25				45				25				45				—				—
Net income			189				206				189				206				66				28
Net loss attributable to noncontrolling interests			(4	)			(3	)			(4	)			(3	)			—				—
Net income attributable to CNH Global N.V.		$	193			$	209			$	193			$	209			$	66			$	28
Weighted average shares outstanding:
Basic			240				238
Diluted			241				239
Basic and diluted earnings per share (“EPS”) attributable to CNH Global N.V. common shareholders:
Basic EPS		$	0.81			$	0.88
Diluted EPS		$	0.80			$	0.87

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.

 

1

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CNH GLOBAL N.V.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND SUPPLEMENTAL INFORMATION

For the Year Ended December 31, 2011 and 2010

(Unaudited)

 

		Consolidated								Equipment Operations								Financial Services
		Year Ended December 31,								Year Ended December 31,								Year Ended December 31,
		2011				2010				2011				2010				2011				2010
		(in millions, except per share data)
Revenues:
Net sales		$	18,059			$	14,474			$	18,059			$	14,474			$	—			$	—
Finance and interest income			1,126				1,134				172				154				1,387				1,395
			19,185				15,608				18,231				14,628				1,387				1,395
Costs and Expenses:
Cost of goods sold			14,626				11,891				14,626				11,891				—				—
Selling, general and administrative			1,843				1,698				1,442				1,243				401				455
Research, development and engineering			526				451				526				451				—				—
Restructuring			—				16				—				16				—				—
Interest expense			786				830				386				395				547				612
Interest compensation to Financial Services			—				—				286				238				—				—
Other, net			253				306				140				191				113				115
Total			18,034				15,192				17,406				14,425				1,061				1,182
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates			1,151				416				825				203				326				213
Income tax provision			343				77				230				12				113				65
Equity in income of unconsolidated subsidiaries and affiliates:
Financial Services			12				11				225				159				12				11
Equipment Operations			104				88				104				88				—				—
Net income			924				438				924				438				225				159
Net loss attributable to noncontrolling interests			(15	)			(14	)			(15	)			(14	)			—				—
Net income attributable to CNH Global N.V.		$	939			$	452			$	939			$	452			$	225			$	159
Weighted average shares outstanding:
Basic			239				238
Diluted			240				239
Basic and diluted earnings per share (“EPS”) attributable to CNH Global N.V. common shareholders:
Basic EPS		$	3.92			$	1.90
Diluted EPS		$	3.91			$	1.89

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.

 

2

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CNH GLOBAL N.V.

CONDENSED CONSOLIDATED BALANCE SHEETS

AND SUPPLEMENTAL INFORMATION

As of December 31, 2011 and December 31, 2010

(Unaudited)

 

		Consolidated								Equipment Operations								Financial Services
		December 31, 2011				December 31, 2010				December 31, 2011				December 31, 2010				December 31, 2011				December 31, 2010
		(in millions)
ASSETS
Cash and cash equivalents		$	2,055			$	3,618			$	1,251			$	2,934			$	804			$	684
Deposits in Fiat Industrial subsidiaries’ cash management system			4,116				—				3,980				—				136				—
Deposits in Fiat S.p.A. subsidiaries’ cash management system			—				1,760				—				1,643				—				117
Accounts, notes receivable and other, net			14,491				14,028				894				911				14,072				13,495
Intersegment notes receivable			—				—				1,993				2,273				693				562
Inventories			3,662				2,937				3,662				2,937				—				—
Property, plant and equipment, net			1,936				1,786				1,934				1,784				2				2
Equipment on operating leases, net			666				622				7				2				659				620
Investment in Financial Services			—				—				2,045				2,007				—				—
Investments in unconsolidated affiliates			506				490				423				407				83				83
Goodwill and other intangibles			3,084				3,064				2,926				2,906				158				158
Other assets			3,577				3,284				2,065				1,848				1,512				1,436
Total Assets		$	34,093			$	31,589			$	21,180			$	19,652			$	18,119			$	17,157
LIABILITIES AND EQUITY
Short-term debt		$	4,072			$	3,863			$	144			$	125			$	3,928			$	3,738
Accounts payable			2,952				2,367				3,219				2,586				199				150
Long-term debt, including current maturities			13,038				12,434				3,656				3,968				9,382				8,466
Intersegment debt			—				—				693				562				1,993				2,273
Accrued and other liabilities			6,107				5,545				5,545				5,032				571				522
Total Liabilities			26,169				24,209				13,257				12,273				16,073				15,149
Equity			7,924				7,380				7,923				7,379				2,046				2,008
Total Liabilities and Equity		$	34,093			$	31,589			$	21,180			$	19,652			$	18,119			$	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.

 

3

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CNH GLOBAL N.V.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

AND SUPPLEMENTAL INFORMATION

For the Year Ended December 31, 2011 and 2010

(Unaudited)

 

		Consolidated								Equipment Operations								Financial Services
		Year Ended December 31,								Year Ended December 31,								Year Ended December 31,
		2011				2010				2011				2010				2011				2010
		(in millions)
Operating activities:
Net income		$	924			$	438			$	924			$	438			$	225			$	159
Adjustments to reconcile net income to net cash (used) provided by operating activities:
Depreciation and amortization			426				415				311				291				115				124
Intersegment activity			—				—				58				37				(58	)			(37	)
Changes in operating assets and liabilities			(396	)			656				(45	)			919				(351	)			(263	)
Other, net			40				(107	)			(151	)			126				51				5
Net cash provided (used) by operating activities			994				1,402				1,097				1,811				(18	)			(12	)
Investing activities:
Expenditures for property, plant and equipment			(408	)			(301	)			(408	)			(301	)			—				—
Expenditures for equipment on operating leases			(396	)			(365	)			(2	)			—				(394	)			(365	)
Net (additions) collections from retail receivables			(455	)			101				—				—				(455	)			101
Net (deposits in) withdrawals from Fiat Industrial/Fiat S.p.A. subsidiaries’ cash management systems			(2,419	)			462				(2,395	)			481				(24	)			(19	)
Other, net			128				57				(79	)			(12	)			207				49
Net cash (used) provided by investing activities			(3,550	)			(46	)			(2,884	)			168				(666	)			(234	)
Financing activities:
Intersegment activity			—				—				391				254				(391	)			(254	)
Net increase (decrease) in indebtedness			1,068				945				(272	)			371				1,340				574
Dividends paid			—				—				—				—				(85	)			(397	)
Other, net			1				1				33				1				(32	)			20
Net cash provided (used) by financing activities			1,069				946				152				626				832				(57	)
Effect of foreign exchange rate changes on cash and cash equivalents			(76	)			53				(48	)			39				(28	)			14
(Decrease) increase in cash and cash equivalents			(1,563	)			2,355				(1,683	)			2,644				120				(289	)
Cash and cash equivalents, beginning of the year			3,618				1,263				2,934				290				684				973
Cash and cash equivalents, end of the year		$	2,055			$	3,618			$	1,251			$	2,934			$	804			$	684

 

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.

 

4

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CNH Global N.V.

TOTAL DEBT AND NET DEBT (CASH)

For the Year Ended December 31, 2011 and the Year Ended December 31, 2010

(Unaudited)

 

		Consolidated								Equipment Operations								Financial Services
		December 31, 2011				December 31, 2010				December 31, 2011				December 31, 2010				December 31, 2011				December 31, 2010
		(in millions)
Short-term debt:
With Fiat Industrial subsidiaries		$	325			$	—			$	80			$	—			$	245			$	—
With Fiat S.p.A. subsidiaries			—				194				—				43				—				151
Owed to securitization investors			2,302				2,488				—				—				2,302				2,488
Other			1,445				1,181				64				82				1,381				1,099
Intersegment			—				—				95				52				1,394				1,730
Total short-term debt			4,072				3,863				239				177				5,322				5,468
Long-term debt:
With Fiat Industrial subsidiaries			314				—				65				—				249				—
With Fiat S.p.A. subsidiaries			—				584				—				67				—				517
Owed to securitization investors			6,511				5,868				—				—				6,511				5,868
Other			6,213				5,982				3,591				3,901				2,622				2,081
Intersegment			—				—				598				510				599				543
Total long-term debt			13,038				12,434				4,254				4,478				9,981				9,009
Total debt:
With Fiat Industrial subsidiaries			639				—				145				—				494				—
With Fiat S.p.A. subsidiaries			—				778				—				110				—				668
Owed to securitization investors			8,813				8,356				—				—				8,813				8,356
Other			7,658				7,163				3,655				3,983				4,003				3,180
Intersegment			—				—				693				562				1,993				2,273
Total debt		$	17,110			$	16,297			$	4,493			$	4,655			$	15,303			$	14,477
Less:
Cash and cash equivalents			2,055				3,618				1,251				2,934				804				684
Deposits in Fiat Industrial subsidiaries’ cash management system			4,116				—				3,980				—				136				—
Deposits in Fiat S.p.A. subsidiaries’ cash management system			—				1,760				—				1,643				—				117
Intersegment notes receivable			—				—				1,993				2,273				693				562
Net debt (cash)		$	10,939			$	10,919			$	(2,731	)		$	(2,195	)		$	13,670			$	13,114

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

 

5

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CNH GLOBAL N.V.

SUPPLEMENTAL SCHEDULES

For the Three Months and Year Ended December 31, 2011 and 2010

(Unaudited)

 

		Three Months Ended December 31,												Year Ended December 31,
		2011				2010				% Change				2011				2010				% Change
		(in millions, except percentages)
1. Revenues and net sales:
Net sales
Agricultural equipment		$	3,695			$	2,985				23.8	%		$	14,183			$	11,528				23.0	%
Construction equipment			1,073				774				38.6	%			3,876				2,946				31.6	%
Total net sales			4,768				3,759				26.8	%			18,059				14,474				24.8	%
Financial services			342				357				(4.2	)%			1,387				1,395				(0.6	)%
Eliminations and other			(69	)			(61	)							(261	)			(261	)
Total revenues		$	5,041			$	4,055				24.3	%		$	19,185			$	15,608				22.9	%
2. Net sales on a constant currency basis:
Agricultural equipment net sales		$	3,695			$	2,985				23.8	%		$	14,183			$	11,528				23.0	%
Effect of currency translation			36								1.2	%			(323	)							(2.8	)%
Agricultural equipment net sales on a constant currency basis		$	3,731			$	2,985				25.0	%		$	13,860			$	11,528				20.2	%
Construction equipment net sales		$	1,073			$	774				38.6	%		$	3,876			$	2,946				31.6	%
Effect of currency translation			12								1.6	%			(99	)							(3.4	)%
Construction equipment net sales on a constant currency basis		$	1,085			$	774				40.2	%		$	3,777			$	2,946				28.2	%
Total Equipment Operations net sales on a constant currency basis		$	4,816			$	3,759				28.1	%		$	17,637			$	14,474				21.9	%

Note: Net sales on a constant currency basis is a non-GAAP financial measure. See description of non-GAAP measures contained in this release.

 

6

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CNH GLOBAL N.V.

SUPPLEMENTAL SCHEDULES

For the Three Months and Year Ended December 31, 2011 and 2010

(Unaudited)

3. Equipment Operations gross and operating profit and margin:

 

		Three Months Ended December 31,																Year Ended December 31,
		2011								2010								2011								2010
		(in millions, except percentages)
Net sales		$	4,768				100.0	%		$	3,759				100.0	%		$	18,059				100.0	%		$	14,474				100.0	%
Less:
Cost of goods sold			3,951				82.9	%			3,121				83.0	%			14,626				81.0	%			11,891				82.2	%
Equipment Operations gross profit			817				17.1	%			638				17.0	%			3,433				19.0	%			2,583				17.8	%
Less:
Selling, general and administrative			425				8.9	%			334				8.9	%			1,442				8.0	%			1,243				8.6	%
Research and development			154				3.2	%			128				3.4	%			526				2.9	%			451				3.1	%
Equipment Operations operating profit		$	238				5.0	%		$	176				4.7	%		$	1,465				8.1	%		$	889				6.1	%
Gross profit and margin:
Agricultural equipment		$	685				18.5	%		$	561				18.8	%		$	2,904				20.5	%		$	2,232				19.4	%
Construction equipment			132				12.3	%			77				9.9	%			529				13.6	%			351				11.9	%
Equipment Operations gross profit		$	817				17.1	%		$	638				17.0	%		$	3,433				19.0	%		$	2,583				17.8	%
Operating profit and margin:
Agricultural equipment		$	241				6.5	%		$	211				7.1	%		$	1,410				9.9	%		$	943				8.2	%
Construction equipment			(3	)			(0.3	)%			(35	)			(4.5	)%			55				1.4	%			(54	)			(1.8	)%
Equipment Operations operating profit		$	238				5.0	%		$	176				4.7	%		$	1,465				8.1	%		$	889				6.1	%

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

 

		Three Months Ended December 31,								Year Ended December 31,
		2011				2010				2011				2010
		(in millions, except per share data)
Net income attributable to CNH		$	193			$	209			$	939			$	452
Restructuring:
Restructuring, net of tax			1				7				—				14
Exceptional items:
(Gain) on purchase/sale of business, net of tax			(5	)			—				(21	)			(4	)
Loss from debt redemption, net of tax			—				—				—				14
Tax charge for Medicare Part D retiree drug subsidy			—				—				—				20
Net income before restructuring and exceptional items		$	189			$	216			$	918			$	496
Weighted average common shares outstanding - diluted			241				239				240				239
Diluted earnings per share before restructuring and exceptional items		$	0.79			$	0.90			$	3.82			$	2.08

 

7

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CNH GLOBAL N.V.

SUPPLEMENTAL SCHEDULES

For the Year Ended December 31, 2011

(Unaudited)

5. Equipment Operations cash generated from working capital:

 

		Balance as of December  31, 2010				Effect of Foreign Currency Translation				Non-Cash Transactions				Balance as of December 31, 2011				Cash Generated from (used by) Working Capital
		(in millions)
Accounts, notes receivable and other – net – Total		$	911			$	67			$	(37	)		$	894			$	(13	)
Inventories			2,937				153				(29	)			3,662				(849	)
Accounts payable - Total			(2,586	)			(109	)			69				(3,219	)			673
Working Capital		$	1,262			$	111			$	3			$	1,337			$	(189	)

Note: Working Capital is a non-GAAP financial measure. See description of non-GAAP measures contained in this release.

 

8

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