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 October 2010
Commission File No. 333-05752
CNH GLOBAL N.V.
(Translation of Registrant’s Name Into English)
World Trade Center
Tower B, 10th Floor
Amsterdam Airport
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- .)
CNH GLOBAL N.V.
Form 6-K for the month of October 2010
List of Exhibits:
| 1. | News Release entitled, “CNH Third Quarter Revenue Rises 20% to $3.5 billion on Improved Demand for Agricultural and Construction Equipment” |
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.
| CNH Global N.V. | ||
| By: | /s/ Richard Tobin | |
| Richard Tobin | ||
| Chief Financial Officer | ||
October 21, 2010
FOR IMMEDIATE RELEASE
For more information contact:
Gerry Spahn, Investor Relations +1 (630) 887-2385
CNH Third Quarter Revenue Rises 20% to $3.5 billion on Improved Demand
for Agricultural and Construction Equipment
| • | Net Sales up 20% to $3.5 billion (with minimal impact from foreign exchange) |
| • | Agricultural Equipment +12.8% |
| • | Construction Equipment +52.4% |
| • | Operating Profit of $239 million, up $167 million, at a 6.8% margin |
| • | Third quarter EPS before exceptional items at $0.43 per share, compared to loss of $0.09 per share in third quarter 2009 |
| • | FY 2010 revenue and operating profit expected to beat high end of April guidance |
| Quarter Ended | Change | |||||||||||
| (US$ in millions) |
9/30/2010 | 9/30/2009 | ||||||||||
| Net Sales of Equipment |
$ | 3,540 | $ | 2,960 | 19.6 | % | ||||||
| Equipment Operations Operating Profit |
$ | 239 | $ | 72 | 231.9 | % | ||||||
| Equipment Operations Operating Margin |
6.8 | % | 2.4 | % | 4.4 | % | ||||||
| Financial Services Net Income |
$ | 47 | $ | 32 | 46.9 | % | ||||||
| Net Income (Loss) attributable to CNH |
$ | 83 | $ | (25 | ) | nm | ||||||
| Net Income (Loss) Before Restructuring and Exceptional Items |
$ | 102 | $ | (22 | ) | nm | ||||||
| Diluted EPS Before Restructuring and Exceptional Items |
$ | 0.43 | $ | (0.09 | ) | nm | ||||||
| Equipment Operations Operating Cash Flow - YTD |
$ | 1,239 | $ | 362 | 242.3 | % | ||||||
| Equipment Operations Net (Cash) Debt |
$ | (1,762 | ) | $ | 183 | nm | ||||||
BURR RIDGE, IL. — (MARKET WIRE) — CNH Global N.V. (NYSE: CNH) announced financial results for the third quarter ended September 30, 2010. For the quarter, Net Sales increased 19.6% (19.8% on a constant currency basis) to $3.5 billion due to solid performances delivered in the Americas and Rest of World regions augmented by a stabilization of trading conditions in Europe. Equipment Operations posted an Operating Profit of $239 million as a result of higher volumes, reduced industrial costs, and favorable product mix.
Net Sales were 78% agricultural equipment and 22% construction equipment for the quarter, as improving construction equipment unit demand continued to bring the Group’s revenue distribution back to historical norms. The geographical distribution of revenue for the period was 44% North America, 19% Western Europe, 19% Latin America, and 18% Rest of World.
Equipment Operations generated $1.2 billion in cash flow from operating activities over the first three quarters of the year. Year-to-date capital expenditures totaled $153 million, a 11% increase from the comparable period, primarily in preparation for new product launches and engine emissions compliance upgrade; full year capital expenditures are expected to be in the $300 million range. CNH’s Equipment Operations ended the period
Page 1
with a net cash position of $1.8 billion, an increase of $1.9 billion compared to the end of the third quarter in 2009. The 33% effective tax rate for the third quarter 2010 is within the Group’s long term expectations of 32% to 36%, as a result of tax incentive and tax return to provision filing differences, which largely offset the impact of not recording a tax benefit on losses in Europe for which conditions for their recognition are not currently satisfied.
Net Income before restructuring and exceptional items for the period of $102 million ($83 million inclusive of exceptional items) resulted in the Group generating a third quarter EPS of $0.43 ($0.35 inclusive of exceptional items) compared to a loss of $0.09 in the comparable prior year period.
2010 Market Outlook
CNH anticipates that global agricultural equipment markets will be up 0-5% for FY 2010. The CNH outlook for the global construction equipment markets is for an increase of 40% to 45% in 2010.
2010 CNH Outlook
In view of the Group’s performance through the first three quarters and current forecasts for trading activity in the remainder of the year, CNH anticipates that it will achieve the following financial target: Net Sales in excess of $14.3 billion, Operating Profit of $900 million and net industrial cash of $1.3 billion.
SEGMENT RESULTS
Agricultural Equipment
| Quarter Ended | Change | |||||||||||
| (US$ in millions) |
9/30/2010 | 9/30/2009 | ||||||||||
| Net Sales of Equipment |
$ | 2,769 | $ | 2,454 | 12.8 | % | ||||||
| Gross Profit |
$ | 547 | $ | 441 | 24.0 | % | ||||||
| Gross Margin |
19.8 | % | 18.0 | % | 1.8 | % | ||||||
| Operating Profit |
$ | 235 | $ | 160 | 46.9 | % | ||||||
| Operating Margin |
8.5 | % | 6.5 | % | 2.0 | % | ||||||
Agricultural Equipment Industry and Market
Worldwide agricultural industry retail unit sales decreased 1% compared to the third quarter of 2009. Global tractor sales fell 1% while global combine sales grew 6% for the quarter.
North American markets rose 2%, with tractor sales up 2% and combine sales up 7% on continued strong demand from the large cash crop segments. Sustained commodity prices and the continuation of government support programs drove demand in Latin America where tractor sales rose 21% and combine sales were up 16%. The decline in equipment demand moderated in Western European markets which were down 5% for the quarter, with tractor sales falling 4% and combine sales down 13%. Rest of World markets were down 6%, with a 6% drop in tractor sales and a 7% rise in combine sales.
Page 2
CNH Agricultural Equipment Third Quarter Results
Net Sales in the agricultural equipment segment increased 12.8% for the quarter (13.4% on a constant currency basis) on the back of growth in demand in the Americas that more than offset the difficult, but stabilizing, trading conditions in Europe and Rest of World markets. Operating Margin increased to 8.5% from 6.5% from the comparable period in 2009. This improved profit performance was largely the result of improved industrial economics, product mix, and favorable geographic distribution of revenues.
Company and dealer inventories ended the period largely in line with estimated market demand and historical norms for the period. CNH production for the period was slightly below the pace of retail sales due to seasonal plant shutdowns, inventory balancing, and in preparation for new product launches.
CNH continued to invest in its agricultural equipment product portfolio and industrial capacity during the third quarter. The Company continued to significantly invest in the launch of Tier 4/Stage IIIA product introductions with dealer and customer training programs completed during the period for the first products in the line-up, 4-wheel drive tractors. Investments in the Group’s industrial footprint for both whole goods manufacturing and components supply continued in conjunction with the product plan announced in April 2010.
Construction Equipment
| Quarter Ended | Change | |||||||||||
| (US$ in millions) |
9/30/2010 | 9/30/2009 | ||||||||||
| Net Sales of Equipment |
$ | 771 | $ | 506 | 52.4 | % | ||||||
| Gross Profit |
$ | 98 | $ | 7 | nm | |||||||
| Gross Margin |
12.7 | % | 1.4 | % | 11.3 | % | ||||||
| Operating Profit |
$ | 4 | $ | (88 | ) | nm | ||||||
| Operating Margin |
0.5 | % | (17.4 | )% | 17.9 | % | ||||||
Construction Equipment Industry and Market
Global construction equipment industry retail unit sales rose 47% in the third quarter compared to the prior year, with light equipment up 34% and heavy equipment up 59%. North American demand was up 34%, with light equipment volumes up 34% and heavy equipment rising 33%. Western European markets rose 27% as the industry began to rebuild from the prior year’s low levels. In Latin America, the market was up 85%, driven by strong demand from projects in public and private sectors. Industry sales in Rest of World markets rose 54% with continued strong demand in the Asia-Pacific region, primarily the heavy equipment segment in China.
Page 3
CNH Construction Equipment Third Quarter Results
CNH’s construction equipment segment Net Sales grew considerably, 52.4% (51.0% on a constant currency basis) driven by a robust recovery in demand in all regions compared with the low base in the third quarter 2009. The segment posted an Operating Profit for the quarter of $4 million, compared to the $88 million loss in the comparable quarter in 2009, largely as a result of increased volume, reduced industrial costs, and increased capacity utilization.
Finished goods unit inventory levels (company and dealer) for the segment declined from the comparative quarter. Due to inventory management in the prior period, production exceeded retail volume by 4% for the period as the Group began to re-stock its dealer network with fresh product and in preparation for new product launches.
New product launches announced in April 2010 in both light and heavy construction equipment remain on track with performance, safety, styling, and emissions compliance features incorporated in the new designs. The first global launch of the new Tier 4 compliant backhoe, produced in three different regions, is on schedule with product deliveries commencing in October.
CNH Financial Services Third Quarter Results
| Quarter Ended | Change | |||||||||||
| (US$ in millions) |
9/30/2010 | 9/30/2009 | ||||||||||
| Net Income |
$ | 47 | $ | 32 | 46.9 | % | ||||||
| On-Book Asset Portfolio |
$ | 14,772 | $ | 9,901 | 49.2 | % | ||||||
| Managed Asset Portfolio |
$ | 17,414 | $ | 17,830 | (2.3 | )% | ||||||
Financial Services’ Net Income for the quarter ending September 30, 2010 was $47 million, an increase of $15 million compared to the quarter ending September 30, 2009, as a result of higher loan originations in the agricultural equipment business and improved interest margins which were partially offset by higher provisions for credit losses in the agricultural portfolio. Due to the adoption of new accounting standards on January 1, 2010, Financial Services was required to consolidate $5.7 billion of receivables and related liabilities in its balance sheet. Consequently, on-book receivables are higher compared to September 2009.
The managed asset portfolio decreased $416 million from September 2009 due to lower retail originations in the construction equipment market over the last 24 months. Delinquency indicators showed improvements in all loan portfolios.
Unconsolidated Equipment Operations Subsidiaries
Third quarter results for the Group’s unconsolidated Equipment Operations subsidiaries improved to $15 million from a $5 million net loss in the comparable period in the prior year as a result of robust market conditions in Turkey in agricultural equipment and improved relative performance of the Group’s construction equipment joint ventures.
Page 4
Other
Exceptional and Other Items
On July 28, 2010, the Company completed the redemption of its $500 million in notes due in 2014, and as a result, CNH incurred a pretax loss of $22 million ($14 million after tax) on retirement of debt in the third quarter of 2010.
Equipment Operations Cash Flow and Net Debt
| Fiscal Year-to-Date (nine months ended) |
||||||||
| (US$ in millions) |
9/30/2010 | 9/30/2009 | ||||||
| Net Income (loss) |
$ | 232 | $ | (243 | ) | |||
| Depreciation & Amortization |
208 | 195 | ||||||
| Cash Change in Working Capital* |
335 | 295 | ||||||
| Other |
464 | 115 | ||||||
| Net Cash Provided (Used) by Operating Activities |
1,239 | 362 | ||||||
| Net Cash Provided (Used) by Investing Activities** |
(147 | ) | (151 | ) | ||||
| All Other |
140 | 29 | ||||||
| (Increase)/Decrease in Net Debt (Cash) |
$ | 1,232 | $ | 240 | ||||
| Net (Cash) Debt |
$ | (1,762 | ) | $ | 183 | |||
| * | Net cash change in receivables, inventories and payables including inter-segment receivables and payables. |
| ** | Excluding Net (Deposits In)/Withdrawals from Fiat Cash Pools, as they are a part of Net Debt (Cash). |
ABOUT CNH
CNH Global N.V. is a world leader in the agricultural and construction equipment businesses. Supported by more than 11,600 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 S.p.A. (FIA.MI). More information about CNH and its Case and New Holland products can be found online at www.cnh.com.
Page 5
CNH CONFERENCE CALL AND WEBCAST
CNH management will hold a conference call on October 21, 2010 to review third quarter 2010 results. The conference call webcast will begin at 7:00 a.m. U.S. Central Time; 8:00 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.
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 affiliates cash management pool 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. Exceptional items include charges or income that may mask underlying operating results or business trends such as the impact of divestitures, retirement of debt and changes in law. 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
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.
Page 6
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 S.p.A., the effect of the contemplated demerger pursuant to which CNH would be separated from Fiat S.p.A.’s automotive business, 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, 2009.
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.
Page 7
CNH GLOBAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND SUPPLEMENTAL INFORMATION
For the Three Months Ended September 30, 2010 and 2009
(Unaudited)
| Consolidated | Equipment Operations | Financial Services | ||||||||||||||||||||||
| Three Months Ended September 30, |
Three Months Ended September 30, |
Three Months Ended September 30, |
||||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||
| (in millions, except per share data) | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||
| Net sales |
$ | 3,540 | $ | 2,960 | $ | 3,540 | $ | 2,960 | $ | — | $ | — | ||||||||||||
| Finance and interest income |
282 | 238 | 45 | 33 | 355 | 295 | ||||||||||||||||||
| 3,822 | 3,198 | 3,585 | 2,993 | 355 | 295 | |||||||||||||||||||
| Costs and Expenses: |
||||||||||||||||||||||||
| Cost of goods sold |
2,895 | 2,512 | 2,895 | 2,512 | — | — | ||||||||||||||||||
| Selling, general and administrative |
411 | 363 | 294 | 278 | 117 | 85 | ||||||||||||||||||
| Research, development and engineering |
112 | 98 | 112 | 98 | — | — | ||||||||||||||||||
| Restructuring |
6 | 9 | 6 | 8 | — | 1 | ||||||||||||||||||
| Interest expense |
228 | 172 | 128 | 84 | 153 | 131 | ||||||||||||||||||
| Interest compensation to Financial Services |
— | — | 65 | 54 | — | — | ||||||||||||||||||
| Other, net |
73 | 84 | 43 | 42 | 30 | 35 | ||||||||||||||||||
| Total |
3,725 | 3,238 | 3,543 | 3,076 | 300 | 252 | ||||||||||||||||||
| Income (loss) before income taxes and equity in income (loss) of unconsolidated subsidiaries and affiliates |
97 | (40 | ) | 42 | (83 | ) | 55 | 43 | ||||||||||||||||
| Income tax provision (benefit) |
32 | (8 | ) | 21 | (21 | ) | 11 | 13 | ||||||||||||||||
| Equity in income (loss) of unconsolidated subsidiaries and affiliates: |
||||||||||||||||||||||||
| Financial Services |
3 | 2 | 47 | 32 | 3 | 2 | ||||||||||||||||||
| Equipment Operations |
15 | (5 | ) | 15 | (5 | ) | — | — | ||||||||||||||||
| Net income (loss) |
83 | (35 | ) | 83 | (35 | ) | 47 | 32 | ||||||||||||||||
| Net income (loss) attributable to noncontrolling interests |
— | (10 | ) | — | (10 | ) | — | — | ||||||||||||||||
| Net income (loss) attributable to CNH Global N.V. |
$ | 83 | $ | (25 | ) | $ | 83 | $ | (25 | ) | $ | 47 | $ | 32 | ||||||||||
| Weighted average shares outstanding: |
||||||||||||||||||||||||
| Basic |
238 | 237 | ||||||||||||||||||||||
| Diluted |
239 | 237 | ||||||||||||||||||||||
| Basic and diluted earnings (loss) per share (“EPS”) attributable to CNH Global N.V. common shareholders: |
||||||||||||||||||||||||
| Basic EPS |
$ | 0.35 | $ | (0.11 | ) | |||||||||||||||||||
| Diluted EPS |
$ | 0.35 | $ | (0.11 | ) | |||||||||||||||||||
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, 2009.
The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include primarily CNH Global N.V.’s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include primarily 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 Nine Months Ended September 30, 2010 and 2009
(Unaudited)
| Consolidated | Equipment Operations | Financial Services | ||||||||||||||||||||||
| Nine Months Ended September 30, |
Nine Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||
| (in millions, except per share data) | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||
| Net sales |
$ | 10,715 | $ | 9,570 | $ | 10,715 | $ | 9,570 | $ | — | $ | — | ||||||||||||
| Finance and interest income |
838 | 680 | 107 | 97 | 1,038 | 829 | ||||||||||||||||||
| 11,553 | 10,250 | 10,822 | 9,667 | 1,038 | 829 | |||||||||||||||||||
| Costs and Expenses: |
||||||||||||||||||||||||
| Cost of goods sold |
8,770 | 8,172 | 8,770 | 8,172 | — | — | ||||||||||||||||||
| Selling, general and administrative |
1,236 | 1,087 | 909 | 840 | 327 | 247 | ||||||||||||||||||
| Research, development and engineering |
323 | 286 | 323 | 286 | — | — | ||||||||||||||||||
| Restructuring |
8 | 82 | 8 | 78 | — | 4 | ||||||||||||||||||
| Interest expense |
620 | 509 | 287 | 236 | 464 | 379 | ||||||||||||||||||
| Interest compensation to Financial Services |
— | — | 176 | 143 | — | — | ||||||||||||||||||
| Other, net |
202 | 251 | 114 | 147 | 88 | 101 | ||||||||||||||||||
| Total |
11,159 | 10,387 | 10,587 | 9,902 | 879 | 731 | ||||||||||||||||||
| Income (loss) before income taxes and equity in income (loss) of unconsolidated subsidiaries and affiliates |
394 | (137 | ) | 235 | (235 | ) | 159 | 98 | ||||||||||||||||
| Income tax provision |
213 | 71 | 177 | 45 | 36 | 26 | ||||||||||||||||||
| Equity in income (loss) of unconsolidated subsidiaries and affiliates: |
||||||||||||||||||||||||
| Financial Services |
8 | 6 | 131 | 78 | 8 | 6 | ||||||||||||||||||
| Equipment Operations |
43 | (41 | ) | 43 | (41 | ) | — | — | ||||||||||||||||
| Net income (loss) |
232 | (243 | ) | 232 | (243 | ) | 131 | 78 | ||||||||||||||||
| Net income (loss) attributable to noncontrolling interests |
(11 | ) | (25 | ) | (11 | ) | (25 | ) | — | — | ||||||||||||||
| Net income (loss) attributable to CNH Global N.V. |
$ | 243 | $ | (218 | ) | $ | 243 | $ | (218 | ) | $ | 131 | $ | 78 | ||||||||||
| Weighted average shares outstanding: |
||||||||||||||||||||||||
| Basic |
238 | 237 | ||||||||||||||||||||||
| Diluted |
238 | 237 | ||||||||||||||||||||||
| Basic and diluted earnings (loss) per share (“EPS”) attributable to CNH Global N.V. common shareholders: |
||||||||||||||||||||||||
| Basic EPS |
$ | 1.02 | $ | (0.92 | ) | |||||||||||||||||||
| Diluted EPS |
$ | 1.02 | $ | (0.92 | ) | |||||||||||||||||||
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, 2009.
The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include primarily CNH Global N.V.’s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include primarily 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
CNH GLOBAL N.V.
CONDENSED CONSOLIDATED BALANCE SHEET
AND SUPPLEMENTAL INFORMATION
As of September 30, 2010 (Unaudited) and December 31, 2009
| Consolidated | Equipment Operations | Financial Services | ||||||||||||||||||||||
| September 30, 2010 |
December 31, 2009 |
September 30, 2010 |
December 31, 2009 |
September 30, 2010 |
December 31, 2009 |
|||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||
| ASSETS |
||||||||||||||||||||||||
| Cash and cash equivalents |
$ | 1,182 | $ | 1,263 | $ | 334 | $ | 290 | $ | 848 | $ | 973 | ||||||||||||
| Deposits in Fiat affiliates cash management pools |
3,214 | 2,251 | 3,126 | 2,144 | 88 | 107 | ||||||||||||||||||
| Accounts, notes receivable and other - net |
14,511 | 8,426 | 893 | 788 | 13,906 | 7,952 | ||||||||||||||||||
| Intersegment notes receivable |
— | — | 3,443 | 2,398 | 490 | 634 | ||||||||||||||||||
| Inventories |
2,998 | 3,297 | 2,998 | 3,297 | — | — | ||||||||||||||||||
| Property, plant and equipment, net |
1,722 | 1,764 | 1,720 | 1,761 | 2 | 3 | ||||||||||||||||||
| Equipment on operating leases - net |
626 | 646 | 1 | 3 | 625 | 643 | ||||||||||||||||||
| Investment in Financial Services |
— | — | 2,090 | 2,377 | — | — | ||||||||||||||||||
| Investments in unconsolidated affiliates |
439 | 415 | 358 | 330 | 81 | 85 | ||||||||||||||||||
| Goodwill and other intangibles |
3,057 | 3,091 | 2,900 | 2,935 | 157 | 156 | ||||||||||||||||||
| Other assets |
3,028 | 2,055 | 1,848 | 1,557 | 1,180 | 498 | ||||||||||||||||||
| Total Assets |
$ | 30,777 | $ | 23,208 | $ | 19,711 | $ | 17,880 | $ | 17,377 | $ | 11,051 | ||||||||||||
| LIABILITIES AND EQUITY |
||||||||||||||||||||||||
| Short-term debt |
$ | 3,736 | $ | 1,972 | $ | 120 | $ | 136 | $ | 3,616 | $ | 1,836 | ||||||||||||
| Accounts payable |
2,077 | 1,915 | 2,171 | 2,061 | 183 | 151 | ||||||||||||||||||
| Long-term debt, including current maturities |
12,126 | 7,436 | 4,531 | 3,532 | 7,595 | 3,904 | ||||||||||||||||||
| Intersegment debt |
— | — | 490 | 634 | 3,443 | 2,398 | ||||||||||||||||||
| Accrued and other liabilities |
5,705 | 5,075 | 5,267 | 4,708 | 449 | 384 | ||||||||||||||||||
| Total Liabilities |
23,644 | 16,398 | 12,579 | 11,071 | 15,286 | 8,673 | ||||||||||||||||||
| Equity |
7,133 | 6,810 | 7,132 | 6,809 | 2,091 | 2,378 | ||||||||||||||||||
| Total Liabilities and Equity |
$ | 30,777 | $ | 23,208 | $ | 19,711 | $ | 17,880 | $ | 17,377 | $ | 11,051 | ||||||||||||
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, 2009.
The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include primarily CNH Global N.V.’s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include primarily 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
CNH GLOBAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
AND SUPPLEMENTAL INFORMATION
For the Nine Months Ended September 30, 2010 and 2009
(Unaudited)
| Consolidated | Equipment Operations | Financial Services | ||||||||||||||||||||||
| Nine Months Ended September 30, |
Nine Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||
| Operating activities: |
||||||||||||||||||||||||
| Net income (loss) |
$ | 232 | $ | (243 | ) | $ | 232 | $ | (243 | ) | $ | 131 | $ | 78 | ||||||||||
| Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: |
||||||||||||||||||||||||
| Depreciation and amortization |
299 | 289 | 208 | 195 | 91 | 94 | ||||||||||||||||||
| Intersegment activity |
— | — | (123 | ) | (52 | ) | 123 | 52 | ||||||||||||||||
| Changes in operating assets and liabilities |
108 | 646 | 923 | 442 | (815 | ) | 204 | |||||||||||||||||
| Other, net |
(137 | ) | (58 | ) | (1 | ) | 20 | (17 | ) | (6 | ) | |||||||||||||
| Net cash provided (used) by operating activities |
502 | 634 | 1,239 | 362 | (487 | ) | 422 | |||||||||||||||||
| Investing activities: |
||||||||||||||||||||||||
| Expenditures for property, plant and equipment |
(153 | ) | (139 | ) | (153 | ) | (138 | ) | — | (1 | ) | |||||||||||||
| Expenditures for equipment on operating leases |
(262 | ) | (207 | ) | — | — | (262 | ) | (207 | ) | ||||||||||||||
| Net collections from retail receivables |
24 | 785 | — | — | 24 | 785 | ||||||||||||||||||
| Net withdrawals from (deposits in) Fiat affiliates cash management pools |
(988 | ) | 1,158 | (1,002 | ) | 975 | 14 | 183 | ||||||||||||||||
| Other, net |
138 | 106 | 6 | (13 | ) | 112 | 119 | |||||||||||||||||
| Net cash provided (used) by investing activities |
(1,241 | ) | 1,703 | (1,149 | ) | 824 | (112 | ) | 879 | |||||||||||||||
| Financing activities: |
||||||||||||||||||||||||
| Intersegment activity |
— | — | (989 | ) | (63 | ) | 989 | 63 | ||||||||||||||||
| Net increases (decreases) in indebtedness |
647 | (1,997 | ) | 946 | (842 | ) | (299 | ) | (1,155 | ) | ||||||||||||||
| Dividends paid |
— | — | — | — | (250 | ) | (150 | ) | ||||||||||||||||
| Other, net |
(11 | ) | (15 | ) | (11 | ) | (15 | ) | 20 | — | ||||||||||||||
| Net cash provided (used) by financing activities |
636 | (2,012 | ) | (54 | ) | (920 | ) | 460 | (1,242 | ) | ||||||||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents |
22 | 119 | 8 | 14 | 14 | 105 | ||||||||||||||||||
| Increase (decrease) in cash and cash equivalents |
(81 | ) | 444 | 44 | 280 | (125 | ) | 164 | ||||||||||||||||
| Cash and cash equivalents, beginning of period |
1,263 | 633 | 290 | 173 | 973 | 460 | ||||||||||||||||||
| Cash and cash equivalents, end of period |
$ | 1,182 | $ | 1,077 | $ | 334 | $ | 453 | $ | 848 | $ | 624 | ||||||||||||
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, 2009.
The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include primarily CNH Global N.V.’s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include primarily 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
CNH GLOBAL N.V.
TOTAL DEBT AND NET DEBT (CASH)
For the Nine Months Ended September 30, 2010 and 2009
(Unaudited)
| Consolidated | Equipment Operations | Financial Services | ||||||||||||||||||||||
| September 30, 2010 |
December 31, 2009 |
September 30, 2010 |
December 31, 2009 |
September 30, 2010 |
December 31, 2009 |
|||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||
| Short-term debt: |
||||||||||||||||||||||||
| With Fiat affiliates |
$ | 151 | $ | 537 | $ | 19 | $ | 7 | $ | 132 | $ | 530 | ||||||||||||
| Owed to securitization investors |
2,044 | — | — | — | 2,044 | — | ||||||||||||||||||
| Other |
1,541 | 1,435 | 101 | 129 | 1,440 | 1,306 | ||||||||||||||||||
| Intersegment |
— | — | — | 161 | 2,903 | 1,594 | ||||||||||||||||||
| Total short-term debt |
3,736 | 1,972 | 120 | 297 | 6,519 | 3,430 | ||||||||||||||||||
| Long-term debt: |
||||||||||||||||||||||||
| With Fiat affiliates |
1,334 | 2,352 | 568 | 931 | 766 | 1,421 | ||||||||||||||||||
| Owed to securitization investors |
4,102 | — | — | — | 4,102 | — | ||||||||||||||||||
| Other |
6,690 | 5,084 | 3,963 | 2,601 | 2,727 | 2,483 | ||||||||||||||||||
| Intersegment |
— | — | 490 | 473 | 540 | 804 | ||||||||||||||||||
| Total long-term debt |
12,126 | 7,436 | 5,021 | 4,005 | 8,135 | 4,708 | ||||||||||||||||||
| Total debt: |
||||||||||||||||||||||||
| With Fiat affiliates |
1,485 | 2,889 | 587 | 938 | 898 | 1,951 | ||||||||||||||||||
| Owed to securitization investors |
6,146 | — | — | — | 6,146 | — | ||||||||||||||||||
| Other |
8,231 | 6,519 | 4,064 | 2,730 | 4,167 | 3,789 | ||||||||||||||||||
| Intersegment |
— | — | 490 | 634 | 3,443 | 2,398 | ||||||||||||||||||
| Total debt |
$ | 15,862 | $ | 9,408 | $ | 5,141 | $ | 4,302 | $ | 14,654 | $ | 8,138 | ||||||||||||
| Less: |
||||||||||||||||||||||||
| Cash and cash equivalents |
1,182 | 1,263 | 334 | 290 | 848 | 973 | ||||||||||||||||||
| Deposits in Fiat affiliates cash management pools |
3,214 | 2,251 | 3,126 | 2,144 | 88 | 107 | ||||||||||||||||||
| Intersegment notes receivable |
— | — | 3,443 | 2,398 | 490 | 634 | ||||||||||||||||||
| Net debt (cash) |
$ | 11,466 | $ | 5,894 | $ | (1,762 | ) | $ | (530 | ) | $ | 13,228 | $ | 6,424 | ||||||||||
Note: Net Debt (Cash) is a non-GAAP financial measure. See description of non-GAAP measures contained in this release.
5
CNH GLOBAL N.V.
SUPPLEMENTAL SCHEDULES
For the Three and Nine Months Ended September 30, 2010 and 2009
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
| (in millions, except percentages) | ||||||||||||||||||||||||
| 1. Revenues and net sales: |
||||||||||||||||||||||||
| Net sales |
||||||||||||||||||||||||
| Agricultural equipment |
$ | 2,769 | $ | 2,454 | 12.8 | % | $ | 8,543 | $ | 8,037 | 6.3 | % | ||||||||||||
| Construction equipment |
771 | 506 | 52.4 | % | 2,172 | 1,533 | 41.7 | % | ||||||||||||||||
| Total net sales |
3,540 | 2,960 | 19.6 | % | 10,715 | 9,570 | 12.0 | % | ||||||||||||||||
| Financial services |
355 | 295 | 20.3 | % | 1,038 | 829 | 25.2 | % | ||||||||||||||||
| Eliminations and other |
(73 | ) | (57 | ) | (200 | ) | (149 | ) | ||||||||||||||||
| Total revenues |
$ | 3,822 | $ | 3,198 | 19.5 | % | $ | 11,553 | $ | 10,250 | 12.7 | % | ||||||||||||
| 2. Net sales on a constant currency basis: |
||||||||||||||||||||||||
| Agricultural equipment net sales |
$ | 2,769 | $ | 2,454 | 12.8 | % | $ | 8,542 | $ | 8,037 | 6.3 | % | ||||||||||||
| Effect of currency translation |
13 | 0.6 | % | (247 | ) | (3.1 | )% | |||||||||||||||||
| Agricultural equipment net sales on a constant currency basis |
$ | 2,782 | $ | 2,454 | 13.4 | % | $ | 8,295 | $ | 8,037 | 3.2 | % | ||||||||||||
| Construction equipment net sales |
$ | 771 | $ | 506 | 52.4 | % | $ | 2,172 | $ | 1,533 | 41.7 | % | ||||||||||||
| Effect of currency translation |
(7 | ) | (1.4 | )% | (91 | ) | (5.9 | )% | ||||||||||||||||
| Construction equipment net sales on a constant currency basis |
$ | 764 | $ | 506 | 51.0 | % | $ | 2,081 | $ | 1,533 | 35.8 | % | ||||||||||||
| Total Equipment Operations net sales on a constant currency basis |
$ | 3,546 | $ | 2,960 | 19.8 | % | $ | 10,376 | $ | 9,570 | 8.4 | % | ||||||||||||
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
CNH GLOBAL N.V.
SUPPLEMENTAL SCHEDULES
For the Three and Nine Months Ended September 30, 2010 and 2009
(Unaudited)
3. Equipment Operations gross and operating profit and margin:
| Three Months
Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||||||||||
| (in millions, except percentages) | ||||||||||||||||||||||||||||||||
| Net sales |
$ | 3,540 | 100.0 | % | $ | 2,960 | 100.0 | % | $ | 10,715 | 100.0 | % | $ | 9,570 | 100.0 | % | ||||||||||||||||
| Less: |
||||||||||||||||||||||||||||||||
| Cost of goods sold |
2,895 | 81.8 | % | 2,512 | 84.9 | % | 8,770 | 81.8 | % | 8,172 | 85.4 | % | ||||||||||||||||||||
| Equipment Operations gross profit |
645 | 18.2 | % | 448 | 15.1 | % | 1,945 | 18.2 | % | 1,398 | 14.6 | % | ||||||||||||||||||||
| Less: |
||||||||||||||||||||||||||||||||
| Selling, general and administrative |
294 | 8.3 | % | 278 | 9.4 | % | 909 | 8.5 | % | 840 | 8.8 | % | ||||||||||||||||||||
| Research and development |
112 | 3.2 | % | 98 | 3.3 | % | 323 | 3.0 | % | 286 | 3.0 | % | ||||||||||||||||||||
| Equipment Operations operating profit |
$ | 239 | 6.8 | % | $ | 72 | 2.4 | % | $ | 713 | 6.7 | % | $ | 272 | 2.8 | % | ||||||||||||||||
| Gross profit and margin: |
||||||||||||||||||||||||||||||||
| Agricultural equipment |
$ | 547 | 19.8 | % | $ | 441 | 18.0 | % | $ | 1,671 | 19.6 | % | $ | 1,381 | 17.2 | % | ||||||||||||||||
| Construction equipment |
98 | 12.7 | % | 7 | 1.4 | % | 274 | 12.6 | % | 17 | 1.1 | % | ||||||||||||||||||||
| Equipment Operations gross profit |
$ | 645 | 18.2 | % | $ | 448 | 15.1 | % | $ | 1,945 | 18.2 | % | $ | 1,398 | 14.6 | % | ||||||||||||||||
| Operating profit and margin: |
||||||||||||||||||||||||||||||||
| Agricultural equipment |
$ | 235 | 8.5 | % | $ | 160 | 6.5 | % | $ | 732 | 8.6 | % | $ | 545 | 6.8 | % | ||||||||||||||||
| Construction equipment |
4 | 0.5 | % | (88 | ) | (17.4 | )% | (19 | ) | (0.9 | )% | (273 | ) | (17.8 | )% | |||||||||||||||||
| Equipment Operations operating profit |
$ | 239 | 6.8 | % | $ | 72 | 2.4 | % | $ | 713 | 6.7 | % | $ | 272 | 2.8 | % | ||||||||||||||||
4. Net income (loss) and diluted earnings (loss) per share before restructuring and exceptional items:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| (in millions, except per share data) | ||||||||||||||||
| Net income (loss) attributable to CNH |
$ | 83 | $ | (25 | ) | $ | 243 | $ | (218 | ) | ||||||
| Restructuring, after tax: |
||||||||||||||||
| Restructuring |
6 | 9 | 8 | 82 | ||||||||||||
| Tax benefit |
(1 | ) | (6 | ) | (1 | ) | (26 | ) | ||||||||
| Restructuring, after tax |
5 | 3 | 7 | 56 | ||||||||||||
| Exceptional items: |
||||||||||||||||
| Loss from debt redemption, net of tax |
14 | — | 14 | — | ||||||||||||
| Gain from the sale of business, net of tax |
— | — | (4 | ) | — | |||||||||||
| Tax charge for Medicare Part D retiree drug subsidy |
— | — | 20 | — | ||||||||||||
| Net income (loss) before restructuring and exceptional items |
$ | 102 | $ | (22 | ) | $ | 280 | $ | (162 | ) | ||||||
| Weighted average common shares outstanding - diluted |
239 | 237 | 238 | 237 | ||||||||||||
| Diluted earnings (loss) per share before restructuring and exceptional items |
$ | 0.43 | $ | (0.09 | ) | $ | 1.17 | $ | (0.68 | ) | ||||||
Note: Equipment Operations Gross and Operating Profit, Net Income and Diluted Earnings Per Share Before Restructuring and Exceptional Items are non-GAAP financial measures. See description of non-GAAP measures contained in this release.
7
5. Equipment Operations cash generated from working capital
| Balance as of December 31, 2009 |
Effect of Foreign Currency Translation |
Non-Cash Transactions |
Balance as of September 30, 2010 |
Cash Generated from Working Capital |
||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Accounts, notes receivable and other – net – Total |
$ | 788 | $ | 9 | $ | 9 | $ | 893 | $ | (87 | ) | |||||||||
| Inventories |
3,297 | (28 | ) | — | 2,998 | 271 | ||||||||||||||
| Accounts payable - Total |
(2,061 | ) | 41 | — | (2,171 | ) | 151 | |||||||||||||
| Working Capital |
$ | 2,024 | $ | 22 | $ | 9 | $ | 1,720 | $ | 335 | ||||||||||
Note: Working Capital is a non-GAAP financial measure. See description of non-GAAP measures contained in this release.
8
 2010 Third
Quarter Financial Results
October 21, 2010 |
 Management
Participants Harold Boyanovsky
President and Chief Executive Officer
Richard Tobin
Chief Financial Officer
Marco Casalino
Vice President and Treasurer
Gerry Spahn
Senior Director, Investor Relations
2
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Forward Looking
Statement This
presentation
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
presentation,
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
S.p.A.,
the
effect
of
the
contemplated
demerger
pursuant
to
which
CNH
would
be
separated
from
Fiat
S.p.A.'s
automotive
business,
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,
2009.
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.
3
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Highlights
Net sales of equipment of $3.5 billion, up 20% in the third quarter and $10.7 billion, up 12%
for the first nine months
Agricultural equipment up 12.8% in the third quarter and 6.3% for the first nine months
Construction equipment up 52.4% in the third quarter and 41.7% for the first nine
months Equipment operations operating profit increase of $167 Million compared to Q3 2009,
and $441 million compared to the first nine months of 2009
Q3 Operating Margin increased to 6.8% compared to 2.4% in Q3 2009
Year
to
Date
Operating
Margin
increased
to
6.7%
compared
to
2.8%
in
2009
Equipment
operations
net
cash
position
increased
by
$1.2
Billion
to
$1.8
Billion
for
the
nine
months
Net income before restructuring and exceptional items of $102 Million in the third quarter and
$280 for the first nine months
Q3 2010
YTD 2010
Basic EPS:
$0.35/share $1.02/share
Diluted EPS:
$0.35/share $1.02/share
Basic EPS before restructuring and exceptional items:
$0.43/share $1.18/share
Diluted EPS before restructuring and exceptional items:
$0.43/share $1.17/share
4
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Financial Highlights
– Third Quarter
5
* See Appendix for Definition and U.S. GAAP Reconciliation
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
U.S. GAAP, US$ in mils. -
Except per share data and percentage
Percent
09/30/10
09/30/09
Change
Net Sales of Equipment
3,540
$
2,960
$
20
%
Equipment Operations Operating Profit *
239
$
72
$
232
%
Financial Services Net Income
47
$
32
$
47
%
Net Income (Loss) Before Restructuring and Exceptional Items *
102
$
(22)
$
nm
Diluted EPS Before Restructuring and Exceptional Items *
0.43
$
(0.09)
$
nm
Equipment Operations Operating Cash Flow -
YTD
1,239
$
362
$
242
%
Equipment Operations Net Debt (Cash) *
(1,762)
$
183
$
nm
Quarter Ended |
 Net Sales by
Geographic Region* –
Third Quarter
6
* See Appendix for Geographic Information
(U.S. GAAP, US$ in mils.)
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
+16%
+29%
-11%
+54%
+20%
Net Sales
Change Y-o-Y
Rate of
Change
vs. H1 ‘10 |
 Net Sales and
Operating Profit* Review –
Third Quarter
7
Operating Profit
Net Sales
* See Appendix for Definition and U.S. GAAP Reconciliation
Agricultural
Equipment
Construction Equipment
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
(U.S. GAAP, US$ in mils.) |
 Equipment Operations
Operating Profit* Evolution –
Third Quarter
8
* See Appendix for Definition and U.S. GAAP Reconciliation
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
(U.S. GAAP, US$ in mils.)
•
Volume: Higher volumes in both AG and CE; improved product and geographic mix
•
Production cost: Reduced industrial cost in addition to increased capacity utilization and
absorption in CE •
SG&A cost improved as percentage of revenue as company realizes top-line growth
•
R&D up slightly as CNH continues to invest in its product portfolio
|
 CNH Global Reach
–
Contribution from Equipment Operations JV’s
9
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
Significant Unconsolidated
Subsidiaries
Turkey
TTF -
Tractors
Japan
KCM -
Excavators
HFT –
Tractors
Pakistan
Al Ghazi –
Tractors
India
L&T –
Tractor Loader Backhoes
Global Joint Ventures continue to improve
contribution
•
Agricultural Equipment
•
Robust performance in Turkey
•
Construction Equipment
•
Better performance as various global markets
rebound
•
Improved profitability in Japan
Other International Region
Consolidated Subsidiaries
Russia
Kamaz -
Tractors, Combines, CE
China
Harbin –
Tractors
Shanghai -
Tractors
Uzbekistan
Tashkent -
Tractors, Planters |
 Equipment Operations
Change in Net Debt (Cash)* –
Year to Date
10
*
See Appendix for Definition and US GAAP Reconciliation
**
Net change in receivables, inventories and payables including inter-segment receivables
and payables ***
Excluding
Net
(Deposits
In)
Withdrawals
from
Fiat
Cash
Pools,
as
they
are
part
of
Net
Debt
(Cash)
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
(U.S. GAAP, US$ in mils.)
2010
2009
Net Income (loss)
232
$
(243)
$
Depreciation & Amortization
208
195
Cash Change in Working Capital **
335
295
Other
464
115
Net Cash From Operating Activities
1,239
362
Net Cash From Investing Activities ***
(147)
(151)
All Other, Including FX Impact for the Period
140
29
(Increase) / Decrease in Net Debt (Cash)
1,232
$
240
$
Cash Changes in Working Capital
Account Receivables
(87)
$
623
$
Inventories
271
928
Account Payables
151
(1,256)
Cash Change in Working Capital **
335
$
295
$
Year to Date |
 Inventory Reductions
(In Units of Equipment)
11
•
Third Quarter Underproduction vs. Retail 1%
•
3% Reduction in Forward Months of Supply
•
Third Quarter Overproduction vs. Retail 4%
•
44% Reduction in Forward Months of Supply
Source: CNH Internal Elaboration
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
Construction Equipment
(Light & Heavy)
Agricultural Equipment
(Major Equipment) |
 Market
Outlook 12
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Agriculture Equipment
Industry Drivers –
IHS Global Insight
13
Global Commodity Prices per Metric Ton
US Net Farm Income -
(US$ in billions)
Source: IHS Global Insight October 2010
Gl
Insight 10y Ave
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Construction
Equipment Industry Drivers –
IHS Global Insight
14
US Nonresidential Construction Spending
(US$ in billions)
US Housing Starts
(in millions units)
Global GDP Trends
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
Source: IHS Global Insight October 2010
2008
2009
2010F
2011F
2012F
2013F
2014F
World
1.6%
-2.0%
3.6%
3.1%
3.5%
3.6%
3.7%
North America
0.0%
-2.6%
2.8%
2.4%
2.9%
2.9%
3.2%
Europe
0.5%
-4.1%
1.7%
1.7%
2.0%
2.2%
2.3%
CIS
5.2%
-7.4%
4.3%
4.5%
4.2%
4.1%
3.9%
Asia less Japan
5.6%
4.7%
7.9%
6.5%
6.6%
6.7%
6.8%
Latin America
5.2%
-0.3%
5.3%
4.7%
4.9%
4.7%
4.8%
Growth environment above 2.5% |
 Industry Units
Volume* Third Quarter Agricultural and Construction Equipment
15
Q3 ’10
Industry
(change vs.
prior year)
CNH
(performance
relative to mkt)
World Wide
(1%)
+
North America
2%
-
<40hp
(1%)
Flat
40+hp
6%
-
Western Europe
(4%)
+
Latin America
21%
Flat
Rest of World
(6%)
+
World Wide
6%
-
North America
7%
-
Western Europe
(13%)
Flat
Latin America
16%
-
Rest of World
7%
+
World Wide AG Equipment
(1%)
+
Q3 ’10
Industry
(change vs.
prior year)
CNH
(performance relative
to mkt)
World Wide
34%
+
North America
34%
Flat
Western Europe
28%
Flat
Latin America
74%
Flat
Rest of World
32%
+
World Wide
59%
Flat
North America
33%
Flat
Western Europe
26%
Flat
Latin America
94%
-
Rest of World
65%
Flat
World Wide CE Equipment
47%
Flat
Tractors
Combines
Light
Heavy
CNH Internal Elaboration -
Preliminary Results (Units in thousands)
* See Appendix for Geographic Information
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
  Tier 4
Emissions Solutions
16
CNH will utilize SCR technology for engines with more than
100hp. Enhanced solution for high horsepower agricultural
applications:
•High power demands
•Operate in harsh
environments •Improved fuel
efficiency •
IMPROVES CUSTOMER’S BOTTOM LINE
EGR IS THE SOLUTION FOR ENGINES <100HP
CNH will utilize EGR technology for engines with less than
100hp. Solution for light to medium agricultural equipment:
•Smaller EGR components can meet
Tier 4 requirements •Less
constraints on fuel efficiency SCR IS THE SOLUTION FOR ENGINES
>100HP Tier 4 timeline
Tier 4 timeline
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 CASE IH
high-horsepower tractors 17
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
MAGNUM series
•
Largest, best in class cab
•
Cab Suspension and New Multi-Control Armrest
•
Tier 4 compliant with lower running costs and better fuel
efficiency
•
Up to 14% Power Growth for heavy draft loads
•
15%-20% better than our Tier 3 Magnum and 5%-10%
better than competition
STEIGER 4WD series
•
Best-in-class -
600 HP Tractor
•
Best-in-class -
eight hydraulic remotes
•
Best-in-class
–
largest
cab
with
40°
Swivel
seat
and
Multi-Control Armrest
•
Best-in-class -
Hydraulic flow
•
Exclusive -
Suspension cab
•
More fuel capacity
•
Tier 4 compliant with lower running costs and better fuel
efficiency
•
10% operating cost
improvement |
 New Holland high
horsepower tractors 18
T8 Range
•
New maneuverable compact long wheelbase
•
Fully integrated cast front linkage
•
Best-in-class operating comfort
•
Tier 4 compliant with lower running costs and better fuel
efficiency
T9 4WD Range
•
Two versions:
•
Standard up to 557 hp
•
Heavy duty up to 669 hp
•
Best in class hydraulic performance
•
Tier 4 compliant with lower running costs and better fuel
efficiency
•
10% operating cost improvement
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Construction
Equipment – New Backhoe
Tractor Loader
Backhoe
30%
19
* % of 2009 CNH CE retail sales
New Tractor Loader Backhoe
•New Machine from ground up
•
Expanded product line: 4 models replacing 3 models
•New CNH lift technology:
•
Best in class backhoe lifting capabilities
•
Backhoe lifting capabilities comparable to mid-size excavator
•Produced in North America, Latin America and Europe for sale
in local markets
•North America and Europe models Tier 4 compliant
•Delivery to dealer network underway
•
Retail launch of Case brand N-series in Q4
•
New Holland product to follow
19
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Construction
Equipment …
continued product flow
20
All-new Skid Steer Loader: Q1 2011
Next in the product pipeline
New Motor Grader:
•Q4 2010 launch in NA, LA and Europe
for both brands •Upgraded
cab styling for improved visibility and improved ergonomics
•New FPT Tier 3 engine
•
Redesigned cab with better
visibility and more room
•
Isolated boom arms with Super
Boom design
•
Redesigned cab, 25% wider
•
Increase lift capacity
•
Easier and faster to service, 13%
improvement in serviceability
Skid Steer
Loader
26%
Tractor Loader
Backhoe
30%
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
* % of 2009 CNH CE retail sales |
 Industry Units
Volume* Full Year Outlook Agricultural and Construction Equipment
•
Global AG demand positive vs. last year
•
Strong fundamentals in NA & LA expected to drive market demand in 2010
•
Continued weak, but stabilizing, conditions limiting equipment demand in WE
•
Worldwide aggregate industry demand for Light & Heavy Construction Equipment is expected to
be up 40-45% with growth in all regions
21
FY ’10
Industry
(change vs.
prior year)
World Wide
0-5%
North America
0-5%
<40hp
0-5%
40+hp
0-5%
Western Europe
(10-15%)
Latin America
15-20%
Rest of World
0-5%
World Wide
Flat
North America
5-10%
Western Europe
(25-30%)
Latin America
25-30%
Rest of World
Flat
World Wide AG Equipment
0-5%
FY ’10
Industry
(change vs.
prior year)
World Wide
~30%
North America
~15%
Western Europe
15-20%
Latin America
65-70%
Rest of World
45-50%
World Wide
55-60%
North America
5-10%
Western Europe
10-15%
Latin America
75-80%
Rest of World
65-70%
World Wide CE Equipment
40-45%
Tractors
Combines
Light
Heavy
* See Appendix for Geographic Information
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 2010 Outlook
•
Agricultural market expected to remain solid through the year end
•
Construction market continued slow structural improvement
•
New product launches
•
Construction equipment
•
New backhoe in Q4
•
New
Grader
for
the
North
American,
European
and
Brazilian
markets
in
Q4
•
New skid steer in Q1 2011
•
Agricultural equipment
•
New utility tractor Q4
•
Tier 4 deployment in high horsepower agricultural equipment in 2011
•
2010 financial targets update
•
CNH anticipates that it will achieve the following financial targets: Net Sales in excess of
$14.3 billion, Operating
Profit
of
$900
million
and
net
industrial
cash
of
$1.3
billion
22
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 For Further
Information Please Contact Investor Relations:
Gerry Spahn
phone:
1-630-887-2385
e-mail: gerry.spahn@cnh.com
Federico Catasta
phone:
1-630-887-3745
e-mail: federico.catasta@cnh.com
Case New Holland Inc.
6900 Veterans Boulevard
Burr Ridge, Illinois 60527
USA
Fax:
1-630-887-3890
E-mail:
wwinvestorrelations@cnh.com
Website:
www.cnh.com
23
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Appendix
|
 Financial Data
– Year to Date
25
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Financial Highlights
– Year to Date
26
* See Appendix for Definition and U.S. GAAP Reconciliation
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
U.S. GAAP, US$ in mils. -
Except per share data and percentage
Percent
09/30/10
09/30/09
Change
Net Sales of Equipment
10,715
$
9,570
$
12
%
Equipment Operations Operating Profit *
713
$
272
$
162
%
Financial Services Net Income
131
$
78
$
68
%
Net Income (Loss) Before Restructuring and Exceptional Items *
280
$
(162)
$
nm
Diluted EPS Before Restructuring and Exceptional Items *
1.17
$
(0.68)
$
nm
Equipment
Operations
Operating
Cash
Flow
1,239
$
362
$
242
%
Equipment Operations Net Debt (Cash) *
(1,762)
$
183
$
nm
Year to Date |
 Net Sales by
Geographic Region* –
Year to Date
27
* See Appendix for Geographic Information
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
(U.S. GAAP, US$ in mils.)
+12%
+11%
-12%
+76%
+12%
Net Sales
Change Y-o-Y
Rate of
Change
vs. H1 ‘10 |
 Net Sales and
Operating Profit* Review –
Year to Date
28
Operating Profit
Net Sales
* See Appendix for Definition and U.S. GAAP Reconciliation
$5,905
$7,205
$9,935
$8,037
$8,543
$3,221
$3,689
$3,769
$1,533
$2,172
$9,126
$10,894
$13,704
$9,570
$10,715
$0
$5,000
$10,000
$15,000
2006
2007
2008
2009
2010
Agricultural Equipment
Construction Equipment
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
(U.S. GAAP, US$ in mils.)
$341
$635
$1,024
$545
$732
$295
$325
$164
($273)
$636
$960
$1,188
$272
$713
($19)
($250)
$0
$250
$500
$750
$1,000
$1,250
2006
2007
2008
2009
2010 |
 Equipment Operations
Operating Profit* Evolution –
Year to Date
29
* See Appendix for Definition and U.S. GAAP Reconciliation
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
(U.S. GAAP, US$ in mils.) |
 Geographic
Information and Market Share/Position Data 30
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Definitions
•
Geographic Area as Defined by CNH are:
-
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.
•
Market Share / Market Position Data
-
Certain
industry
and
market
share
information
in
this
report
has
been
presented
on
a
worldwide
basis
which
includes
all
countries,
with
the exception of India.
-
In
this
report,
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, Southeast Asia, Eastern Europe, Russia, Turkey, Brazil
and any country where local shipments are not reported .
-
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
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 CNH
Agricultural and Construction Equipment –
Net Sales Change Details*
32
* See Appendix for Geographic Information
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
% Change
vs
2009
of which
Currency
% Change
vs
2009
of which
Currency
(U.S. GAAP, US$ in mils.)
North America
29%
1%
11%
3%
AG
22
1
9
3
CE
88
1
25
2
Western Europe
(11)%
(9)%
(12)%
(2)%
AG
(12)
(10)
(14)
(2)
CE
(9)
(7)
(1)
(3)
Latin America
54%
9%
76%
20%
AG
36
7
61
18
CE
85
12
105
25
Rest of World
16%
3%
12%
4%
AG
11
4
6
6
CE
41
(4)
40
(2)
World
20%
-
12%
4%
AG
13
(1)
6
3
CE
52
1
42
6
Q3 2010
Year to Date 2010 |
 Agricultural and Construction Industry
–
Other Country’s Details * Third Quarter
33
Industry % Change Year over Year
Tractors
Combines
Light Eq
Heavy Eq
Western Europe
(4)%
(13)%
28%
26%
France
(22)%
34%
50%
34%
Germany
8%
2%
46%
29%
Italy
(15)%
(32)%
3%
8%
Spain
4%
-
(15)%
(21)%
UK
(7)%
(34)%
13%
42%
All Other
11%
(36)%
37%
22%
Latin America
21%
16%
74%
94%
Brazil
24%
10%
57%
63%
Argentina
61%
125%
104%
170%
All Other
40%
8%
90%
143%
Rest of World
(6)%
7%
32%
65%
Australia & New Zealand
(10)%
(16)%
(2)%
32%
Eastern Europe **
8%
(37)%
10%
19%
CIS ***
196%
18%
488%
652%
China
(24)%
nm
62%
62%
Pakistan
9%
-
(60)%
(33)%
Turkey
192%
245%
127%
193%
South Africa
8%
44%
110%
76%
All Other
19%
(2)%
21%
85%
AG
CE
*
See Appendix for Geographic Information
**
Eastern Europe includes: Albania, Bosnia Herzegovina, Bulgaria, Croatia, Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Macedonian Republic, Malta, Monaco, Montenegro,
Poland, Romania, Serbia, Slovakia, Slovenia ***
CIS: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Republic of Moldova,
Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Agricultural and Construction Industry
–
Other Country’s Details * Year to Date
34
Industry % Change Year over Year
Tractors
Combines
Light Eq
Heavy Eq
Western Europe
(15)%
(33)%
21%
15%
France
(32)%
(33)%
28%
21%
Germany
(13)%
(42)%
25%
16%
Italy
(17)%
(23)%
19%
22%
Spain
(10)%
(12)%
(2)%
(3)%
UK
(13)%
(24)%
16%
20%
All Other
(5)%
(34)%
18%
6%
Latin America
30%
40%
90%
114%
Brazil
41%
40%
83%
115%
Argentina
55%
66%
142%
165%
All Other
66%
18%
79%
106%
Rest of World
9%
4%
55%
84%
Australia & New Zealand
(17)%
(21)%
63%
68%
Eastern Europe **
2%
(18)%
(3)%
(0)%
CIS ***
(5)%
39%
383%
372%
China
3%
265%
91%
90%
Pakistan
11%
-
20%
(59)%
Turkey
181%
447%
198%
307%
South Africa
(4)%
(41)%
135%
52%
All Other
9%
(4)%
43%
80%
AG
CE
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
*
See Appendix for Geographic Information
**
Eastern Europe includes: Albania, Bosnia Herzegovina, Bulgaria, Croatia, Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Macedonian Republic, Malta, Monaco, Montenegro,
Poland, Romania, Serbia, Slovakia, Slovenia ***
CIS: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Republic of Moldova,
Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan |
 Credit
Lines 35
The following table summarizes CNH credit lines and total debt at September 30, 2010:
(U.S. GAAP, US$ in mils.)
Line
Available
Line
Available
Consol.
Eq.Op.
FS
Consol.
Consol.
Eq.Op.
FS
Consol.
Committed Lines with Third Parties
1,412
1,412
1,247
165
-
1,060
1,060
952
108
-
ABCP Facilities and BNDES Financing *
5,600
4,168
-
4,168
1,432
3,713
2,461
-
2,461
1,252
Uncommitted Lines with Third Parties
1,547
1,086
46
1,040
461
566
299
37
262
267
Committed Revolving Credit Facility with Fiat
-
-
-
-
-
1,000
418
16
402
582
Uncommitted Lines with Fiat
2,699
340
4
336
2,359
2,848
580
2
578
2,268
Total Credit Lines
11,258
7,006
1,297
5,709
4,252
9,187
4,818
1,007
3,811
4,369
of which with Fiat support
4,108
1,749
413
1,336
2,359
5,255
2,405
450
1,955
2,850
Bonds
2,720
2,720
-
1,723
1,723
-
Third Party Loans *
4,992
51
4,941
975
18
957
Fiat Loans
1,144
583
561
1,892
920
972
Intersegment Loans
-
490
3,443
-
634
2,398
Total Notes and Loans
8,856
3,844
8,945
4,590
3,295
4,327
Total Debt
15,862
5,141
14,654
9,408
4,302
8,138
December 31 2009
Drawn
September 30 2010
Drawn
*
Items impacted by the adoption of FAS 166 & FAS 167 on January 1, 2010
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Equipment Operations
Long Term Debt * 36
*
Including Current Maturities of Long Term Debt.
**
Public Notes are reported net of any premium/discount.
***
Called as of June 28, 2010 with redemption on July 28, 2010
The following table summarizes CNH's Equipment Operations long term debt maturities at
September 30, 2010 and December 31, 2009:
(U.S. GAAP, US$ in mils.)
September 30,
2010
December 31,
2009
Public Notes **
Payable in 2013 (September)
980
$
973
$
Payable in 2014*** (March)
-
500
Payable in 2016 (January)
250
250
Payable in 2017 (June)
1,490
-
Total Public Notes
2,720
1,723
Funding from Fiat Affiliates
Fiat Committed Revolving Facility
-
16
Notes Payable in 2012
(August) 68
115
Notes Payable in 2017 (June)
500
800
Total Funding from Fiat Affiliates
568
931
Other Long Term Uses of Credit Lines
1,196
861
Other Long Term Debt
47
17
Long Term Intersegment
490
473
Total Long Term Debt
5,021
$
4,005
$
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Non-GAAP
Measures 37
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 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
financial
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
in
this
presentation.
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.
Non-GAAP measures include:
•Net
Income
(Loss)
Before
Restructuring
and
Exceptional
Items
•Operating
Profit
•Net
Debt
38
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Net Income
(Loss) Before Restructuring and Exceptional Items
(U.S. GAAP, US$ in mils., except per share data)
2010
2009
2010
2009
Net income (loss) attributable to CNH
83
$
(25)
$
243
$
(218)
$
Restructuring, after tax:
Restructuring
6
9
8
82
Tax benefit
(1)
(6)
(1)
(26)
Restructuring, after tax
5
3
7
56
Exceptional items:
Loss from debt redemption, net of tax
14
-
14
-
Gain from the sale of business, net of tax
-
-
(4)
-
Tax charge for Medicare Part D retiree drug subsidy
-
-
20
-
Net Income (loss) before restructuring and exceptional
items
102
$
(22)
$
280
$
(162)
$
Weighted average common shares outstanding - diluted
238.7
237.4
238.5
237.4
Diluted earnings (loss) per share before restructuring and
exceptional items
0.43
$
(0.09)
$
1.17
$
(0.68)
$
Third Quarter
Year-to-Date
39
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
CNH defines net income (loss) before restructuring and exceptional item as net income (loss)
attributable to CNH, less restructuring charges and exceptional items, after tax.
Exceptional items include charges or income that may mask underlying operating results.
We believe that net income (loss) before restructuring and exceptional items is a
useful figure for measuring the performance of our operations. |
 Equipment
Operations Operating Profit 40
CNH
defines
Equipment
Operations
Gross
Profit
as
net
sales
less
of
equipment
cost
of
goods
sold. CNH defines Equipment Operations Operating Profit as Gross
Profit less selling, general
and
administrative
and
research
and
development
costs.
Operating
Margin
is
Operating
Profit
expressed
as
a
percentage
of
net
sales
of
equipment.
The
following
table
summarizes
the
computation
of
Equipment
Operations
Gross
and
Operating
Profit
for
all
periods
presented:
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010
(U.S. GAAP, US$ in mils.)
2010
% of
Net Sales
2009
% of
Net Sales
2010
% of
Net Sales
2009
% of
Net Sales
Net sales
3,540
$
2,960
$
10,715
$
9,570
$
Less:
Cost of goods sold
2,895
2,512
8,770
8,172
Gross Profit
645
18.2%
448
15.1%
1,945
18.2%
1,398
14.6%
Less:
Selling, general and administrative
294
278
909
840
Research and development
112
98
323
286
Operating Profit
239
$
6.8%
72
$
2.4%
713
$
6.7%
272
$
2.8%
U.S. GAAP Operating Profit by Segment
Agricultural Equipment
235
$
8.5%
160
$
6.5%
732
$
8.6%
545
$
6.8%
Construction Equipment
4
$
0.5%
(88)
$
(17.4)%
(19)
$
(0.9)%
(273)
$
(17.8)%
Third Quarter
Year-to-Date |
 Equipment
Operations IFRS to GAAP Analysis 41
(US$ in mils.)
2010
2009
2010
2009
Trading Profit Under IFRS
Agricultural Equipment
222
$
171
$
665
$
498
$
Construction Equipment
6
(123)
(24)
(328)
Financial Services
51
49
155
156
Trading Profit Under IFRS
279
97
796
326
The following reconciles trading profit to operating profit under US GAAP:
Equipment Operations Trading Profit Under IFRS
228
$
48
$
641
$
170
$
Accounting for Benefit Plans
(6)
(10)
(13)
(30)
Intangible Asset Amortization,
Primarily Development Costs
(52)
(43)
(135)
(98)
IFRS Reclassifications *
61
52
174
137
Other Adjustments
(35)
(17)
(68)
(54)
Total Adjustments
(32)
(18)
(42)
(45)
Plus: U.S. GAAP "Other, net"
43
42
114
147
U.S. GAAP Operating Profit
239
$
72
$
713
$
272
$
Third Quarter
Year -to-Date
*
The net reclassification of interest compensation to Financial Services to cost of goods sold
and the interest component of unfunded benefit plans to interest expense CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 Net
Debt The
following
table
sets
forth
total
debt
and
“Net
Debt
(Cash)”
-
total
debt
(including
intersegment
debt)
less
cash
and
cash
equivalents,
deposits
in
Fiat
affiliates
cash
management
pools
and
intersegment
notes
receivable
-
as
of
September
30,
2010
and
December
31,
2009:
42
30-Sep-10
31-Dec-09
30-Sep-10
31-Dec-09
30-Sep-10
31-Dec-09
With Fiat affiliates
151
$
537
$
19
$
7
$
132
$
530
$
Owed to securitization investors
2,044
-
-
-
2,044
-
Other
1,541
1,435
101
129
1,440
1,306
Intersegment
-
-
-
161
2,903
1,594
Total short-term debt
3,736
$
1,972
$
120
$
297
$
6,519
$
3,430
$
With Fiat affiliates
1,334
$
2,352
$
568
$
931
$
766
$
1,421
$
Owed to securitization investors
4,102
-
-
-
4,102
-
Other
6,690
5,084
3,963
2,601
2,727
2,483
Intersegment
-
-
490
473
540
804
Total long-term debt
12,126
$
7,436
$
5,021
$
4,005
$
8,135
$
4,708
$
With Fiat affiliates
1,485
$
2,889
$
587
$
938
$
898
$
1,951
$
Owed to securitization investors
6,146
-
-
-
6,146
-
Other
8,231
6,519
4,064
2,730
4,167
3,789
Intersegment
-
-
490
634
3,443
2,398
Total debt
15,862
$
9,408
$
5,141
$
4,302
$
14,654
$
8,138
$
Cash and cash equivalents
1,182
$
1,263
$
334
$
290
$
848
$
973
$
Deposits in Fiat affiliates cash management pools
3,214
2,251
3,126
2,144
88
107
Intersegment notes receivable
-
-
3,443
2,398
490
634
Net debt (cash)
11,466
$
5,894
$
(1,762)
$
(530)
$
13,228
$
6,424
$
Less:
Consolidated
Equipment Operations
Financial Services
(in millions)
Short-term debt:
Long-term debt:
Total debt:
CNH
Global
N.V.
Third
Quarter
2010
Conference
Call
-
October
21,
2010 |
 End
|