SOURCE: CNH

CNH

April 25, 2012 05:45 ET

CNH First Quarter 2012 Net Sales Increases 22%; Operating Profit up 65%; EPS $1.11

BURR RIDGE, IL--(Marketwire - Apr 25, 2012) - CNH Global N.V. (NYSE: CNH)

  • Net Sales increase 22% to $4.6 billion
    • Agricultural equipment +18% to $3.6 billion
    • Construction equipment +41% to $1.0 billion
  • Equipment Operations Operating Profit of $406 million, an increase of 65%
    • Operating Margin increased to 8.8% compared to 6.5% in Q1 2011
  • EPS attributable to CNH common shareholders at $1.11 per share, compared to $0.63 per share in Q1 2011
Quarter Ended Change
3/31/2012 3/31/2011
(US $ in millions, except per share data and percentages)
Net Sales of Equipment $ 4,639 $ 3,797 22.2 %
Equipment Operations Operating Profit $ 406 $ 246 65.0 %
Equipment Operations Operating Margin 8.8 % 6.5 % 2.3 pts
Financial Services Net Income $ 73 $ 54 35.2 %
Net Income Attributable to CNH $ 269 $ 152 77.0 %
Net Income Before Restructuring and Exceptional Items $ 269 $ 138 94.9 %
Diluted EPS Attributable to CNH common shareholders $ 1.11 $ 0.63 76.2 %

CNH Global N.V. (NYSE: CNH) today announced financial results for the quarter ended March 31, 2012. For the quarter, net sales increased 22% (25% on a constant currency basis) to $4.6 billion as a result of solid trading conditions for agricultural machinery (on the back of increased planted acreage driven by firm commodity prices) and construction equipment (driven largely by increased demand in the Americas). Equipment Operations posted an Operating Profit of $406 million as a result of higher revenues, increased industrial utilization, improved product mix, and improved net pricing.

The breakdown of net equipment sales in the quarter was 78% agricultural equipment and 22% construction equipment. The geographical distribution of net sales in the quarter was 45% North America, 31% EAME & CIS, 15% Latin America, and 9% APAC markets.

Equipment Operations used $508 million in cash flow from operations for the quarter to support an increase in net working capital resulting from an increase in production rates implemented to satisfy equipment demand. Capital expenditures totaled $101 million in the quarter, an 87% increase from the comparable period, largely as a result of investments in new manufacturing sites and product launches in both the agricultural and construction equipment segments; some 69% of the capital spend in the period was on new products and production capacity. CNH's Equipment Operations ended the period with a net cash position of $2.2 billion. The 31% effective tax rate for the first quarter is lower than the Group's full year 2012 forecasted effective tax rate of 32% to 35%, due primarily to a favorable geographic mix of earnings in the quarter.

Net income before restructuring and exceptional items for the quarter was $269 million as a result of strong top line and industrial operating performance, and a lower tax rate. This resulted in the Group generating diluted earnings per share of $1.11 (before restructuring and exceptional items), up 95% compared to $0.57 per share in the comparable period of 2011.

New Manufacturing Investments and Commercial Initiatives
On February 15, CNH hosted a Russian Government delegation at its consolidated JV industrial operations in Naberezhnye Chelny, Tatarstan, Russia. The event celebrated the completion of first stage production activities at the plant and the signing of a Memorandum of Understanding with the Republic of Tatarstan for the supply of 80 locally manufactured New Holland tractors and combines.

On March 5, CNH announced its plans to expand its manufacturing footprint in Brazil with an investment of R$600 million (approximately $320 million) to establish a new construction equipment plant in Montes Claros, Minas Gerais. This new facility is scheduled to begin operations in 2014. Production will be adjusted to follow the growth of the Brazilian market, and the facility will also relieve capacity constraints at the Belo Horizonte plant.

On March 8, CNH announced a long term strategic partnership with Orkel AS, the Norwegian market leader in high performance fixed chamber round balers, compactors and tractor trailers. CNH will acquire intellectual property rights and tooling for Orkel's fixed chamber round balers, and Orkel will become CNH's preferred engineering partner for the development of a high performance/heavy duty new generation of fixed chamber round balers. Orkel-CNH products will be sold under the Orkel, New Holland Agriculture and Case IH brands through their respective dealer networks.

On April 10, CNH announced its commitment to double its investment at the manufacturing site in Cordoba, Argentina, for the production of combines and tractors for the Latin American market.

2012 Full Year Market Outlook
Worldwide agricultural and construction equipment markets are expected to remain positive for 2012, with agricultural equipment retail unit demand projected to be flat to up 5% on the back of firm agricultural commodity prices. Construction equipment demand is expected to continue its recovery with industry retail unit sales expected to be up 5 to 10%.

2012 CNH US GAAP Earnings Outlook

  • Revenues up approximately 5%
  • Operating Margin in excess of 8.6%

SEGMENT RESULTS
Agricultural Equipment

Quarter Ended Change
3/31/2012 3/31/2011
(US $ in millions, except percentages)
Net Sales of Equipment $ 3,615 $ 3,071 17.7 %
Gross Profit $ 760 $ 591 28.6 %
Gross Margin 21.0 % 19.2 % 1.8 pts
Operating Profit $ 372 $ 263 41.4 %
Operating Margin 10.3 % 8.6 % 1.7 pts

Agricultural Equipment Industry and Market
Worldwide agricultural industry retail unit sales decreased 2% compared to the first quarter of 2012. Global tractor sales were slightly down (-2%) and global combine sales decreased 5% for the quarter. North American sales of tractors over 40 horsepower were up 5% while combine sales were down 40% mainly due to equipment availability. Latin America sales of tractors and combines decreased 8% and 1%, respectively, as a result of the drought conditions prevalent in the south of the continent. EAME & CIS markets improved for the quarter with tractor sales up 9% and combine sales up 21%. APAC unit retail sales were down 4% for tractors and 33% for combines.

CNH Agricultural Equipment First Quarter Results
CNH's net sales in the agricultural equipment sector increased 18% for the quarter (20% on a constant currency basis) driven by solid equipment demand resulting in mix and share improvements in every region but APAC. North American demand was heavily influenced by an earlier than normal planting season due to warmer climatic conditions in the mid-west United States. Operating margin increased 1.7 pts to 10.3% on higher unit volume, improved price realization, and favorable product mix.

First quarter market share performance for tractors was in line with the market, with global market share flat in tractors and up in combines. Market share for tractors was up in the EAME & CIS region and flat in every other region, including the important over 40 horsepower segment in North America. Combine market shares increased in North America and Europe as a result of broad acceptance of the Group's new Tier 4A/Stage IIIB compliant product offering and good equipment availability.

CNH worldwide production of agricultural equipment increased in the quarter in order to increase inventory levels to accommodate the spring and summer selling seasons. Company and dealer inventories rose during the quarter as the company increased production to anticipate and satisfy seasonal demand, while accommodating Tier 4A/Stage IIIB combine transition downtime at the manufacturing level.

In Europe, New Holland Agriculture won a FIMA outstanding innovation award for the SynchroKnife central header drive and four technical innovation awards for the Intelligent Trailer Braking system, the Smart Key technology, the Braud 9090X Olive harvester and the Steering-O-Matic Plus system for the TK4000 range of crawler tractors. In North America, at the National Farm Show, New Holland Agriculture introduced the T6 tractors featuring Tier 4A/Stage IIIB compliant engines, as well as the new MegaCutter tractor mounted disc mower-conditioners and New ProRotor rotary rakes. The T9 tractor was introduced to the Brazilian market and, in Argentina, New Holland launched the TDF and T8 tractor series.

Case IH began shipments of Maxxum EP and Steyr Profi ecotech tractors, 30 and 40 Series Titan Floaters, 920 and 930 Nutri-Placer applicators, the 950 Nutri-Tiller strip-till system, six new models of Axial-Flow Combines, all Tier 4A/Stage IIIB emission compliant. Further, the Module Express 635 cotton pickers were introduced on the Brazilian market.

Case IH introduced the new EfficientPower Axial Flow combine harvester 30 series in key markets such as Australia, China, Russia and Ukraine. Case IH's Axial-Flow 9230 combine harvester was awarded the PUCHAR, or "highest honor" award by the Polish Ministry of Agriculture and Rural Development at AGROTECH 2012 for offering the newest rotor threshing solution for multiple operating conditions in the industry.

Construction Equipment

Quarter Ended Change
3/31/2012 3/31/2011
(US $ in millions, except percentages)
Net Sales of Equipment $ 1,024 $ 726 41.0 %
Gross Profit $ 155 $ 92 68.5 %
Gross Margin 15.1 % 12.7 % 2.4 pts
Operating Profit $ 34 $ (17 ) na
Operating Margin 3.3 % (2.3 )% 5.6 pts

Construction Equipment Industry and Market
Global construction equipment industry retail unit sales declined 6% in the first quarter compared to the prior year, as declining demand in China drove the APAC region down 24%. Light equipment global demand was up 12% and heavy equipment demand declined 19%, with the APAC region down 31%. The North American market registered a substantial year-over-year improvement with demand up 45% (light equipment volumes up 52% and heavy equipment up 30%). EAME & CIS markets continued to improve, up 14%, as the industry continued to rebuild from the prior year's low levels. Latin America demand was up 9% for light equipment and down 1% for heavy equipment.

CNH Construction Equipment First Quarter Results
First quarter 2012 net sales in the construction equipment sector grew 41% (44% on a constant currency basis) as a result of market improvements in every region and especially in North America, where sales more than doubled compared to the same period last year. Increased sales and production volumes led to an operating result of $34 million or 3.3%, up from a loss of $(17) million for the first quarter 2011, as increased revenue, improved product pricing, and improved capacity utilization in North America and in Europe more than offset the negative currency effect of the Japanese Yen on purchased whole goods in the excavator product range.

First quarter market share was up in light equipment as the new products introduced in 2011 continue to be well-received by customers. Market share in the heavy equipment segment was in line with the market trend in every region with a gain in the Latin American market.

During the first quarter of 2012, New Holland Construction launched the new Tier 4A/Stage IIIB compliant B95C and B110C tractor loader backhoes in North America at the World of Concrete show in Las Vegas, Nevada. In Europe, the brand launched the LM625 telescopic handler, W270 and W300 wheel loaders, as well as the E175C and E195C crawler excavators. At the World of Concrete show in Las Vegas, Nevada, Kobelco Construction launched two new Tier 4A/Stage IIIB compliant excavator models: the Mark 9 SK485 excavator and Mark 9 SK210.

In North America, Case Construction Equipment launched new 580N, 580SN, 580SN wide track, and 590SN tractor loader backhoe models, all Tier 4A/Stage IIIB compliant, the new CX210C and CX470C crawler excavators, the 621F wheel loader, and the 885B motor grader. In Europe, the brand launched the new 1121F and 1021F wheel loader models and new CX210C and CX235C crawler excavator models.

CNH Financial Services First Quarter Results

Quarter Ended Change
3/31/2012 3/31/2011
(US $ in millions, except percentages)
Net Income $ 73 $ 54 35.2 %
On-Book Asset Portfolio $ 15,740 $ 14,806 6.3 %
Managed Asset Portfolio $ 18,211 $ 17,559 3.7 %

Net Income attributable to Financial Services was $73 million for the quarter, compared with $54 million in the comparable period of 2011. Results were higher due to a higher average portfolio and lower provisions for credit losses.

Compared to December 31, 2011, delinquent receivables greater than 30 days past due decreased from 2.0% to 1.9% of the total on-book portfolio.

Unconsolidated Equipment Operations Subsidiaries
First quarter results for the Group's unconsolidated Equipment Operations subsidiaries were $19 million, down from $24 million in the comparable period of 2011. The main contributors in net income were Turk Tractor (Turkey), Al Ghazi (Pakistan), the Group's two joint ventures in Japan, and CNH de Mexico.

Manufacturing Efficiency Recognized
The Racine, Wisconsin, tractor plant, which manufactures high horsepower tractors for worldwide distribution received a certification of registration to ISO 50001 for Energy Management System.

Equipment Operations Cash Flow and Net Debt

Quarter Ended
3/31/2012 3/31/2011
(US $ in millions)
Net Income $ 269 $ 145
Depreciation & Amortization 76 75
Cash Change in Working Capital* (856 ) (453 )
Other 3 (7 )
Net Cash (Used) by Operating Activities (508 ) (240 )
Net Cash (Used) by Investing Activities** (103 ) (99 )
All Other 108 68
Decrease in Net (Cash) $ (503 ) $ (271 )
Net (Cash) $ (2,228 ) $ (1,924 )
* Net cash change in receivables, inventories and payables including inter-segment receivables and payables.
** Excluding Net (Deposits In)/Withdrawals from Fiat Industrial Cash Management Systems, as they are a part of Net (Cash).

ABOUT CNH
CNH Global N.V. is a world leader in the agricultural and construction equipment businesses. Supported by approximately 11,300 dealers in approximately 170 countries, CNH brings together the knowledge and heritage of its Case and New Holland brand families with the strength and resources of its worldwide commercial, industrial, product support and finance organizations. CNH Global N.V., whose stock is listed on 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 April 25, 2012 to review first quarter 2012 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. Equipment Operations "working capital" is defined as accounts and notes receivable and other-net, excluding intersegment notes receivables, plus inventories less accounts payable. The U.S. dollar computation of cash generated from working capital, as defined, is impacted by the effect of foreign currency translation and other non-cash transactions. CNH defines the "change in net sales on a constant currency basis" as the difference between prior year actual net sales and current year net sales translated at prior year average exchange rates. Elimination of the currency translation effect provides constant comparisons without the distortion of currency rate fluctuations.

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

Our outlook is largely based on our interpretation of what we consider to be relevant economic assumptions and involves risks and uncertainties that could cause actual results to differ (possibly materially) from such forward-looking statements. Macro-economic factors including monetary policy, interest rates, currency exchange rates, inflation, deflation, credit availability and the intervention by governments and non-governmental organizations in an attempt to influence such factors can have a material impact on our customers and the demand for our goods. Crop production and commodity prices are strongly affected by weather and can fluctuate significantly. Housing starts and other construction activity are sensitive to, among other things, credit availability, interest rates and government spending. Some of the other significant factors that may affect our results include general economic and capital market conditions, the cyclical nature of our businesses, customer buying patterns and preferences, the impact of changes in geographical sales mix and product sales mix, foreign currency exchange rate movements, our hedging practices, investment returns, our and our customers' access to credit, restrictive covenants in our debt agreements, actions by rating agencies concerning the ratings on our debt and asset-backed securities and the credit ratings of Fiat Industrial, risks related to our relationship with Fiat Industrial the effect of the demerger transaction consummated by Fiat pursuant to which CNH was separated from Fiat's automotive business and became a subsidiary of Fiat Industrial, political uncertainty and civil unrest or war in various areas of the world, pricing, product initiatives and other actions taken by competitors, disruptions in production capacity, excess inventory levels, the effect of changes in laws and regulations (including those related to tax, healthcare, retiree benefits, government subsidies, engine emissions, and international trade regulations), 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, the cost and availability of supplies, raw material costs and availability, energy prices, real estate values, animal diseases, crop pests, harvest yields, government farm programs, consumer confidence, housing starts and construction activity, concerns related to modified organisms and fuel and fertilizer costs, and the growth of non-food uses for some crops (including ethanol and biodiesel production). 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, 2011.

Furthermore, in light of ongoing difficult macroeconomic conditions, both globally and in the industries in which we operate, it is particularly difficult to forecast our results and any estimates or forecasts of particular periods that we provide are uncertain. We can give no assurance that the expectations reflected in our forward-looking statements will prove to be correct. Our actual results could differ materially from those anticipated in these forward-looking statements. All written and oral forward-looking statements attributable to us are expressly qualified in their entirety by the factors we disclose that could cause our actual results to differ materially from our expectations. We undertake no obligation to update or revise publicly any forward-looking statements.

CNH GLOBAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND SUPPLEMENTAL INFORMATION
For the Three Months Ended March 31, 2012 and 2011
(Unaudited)
Consolidated Equipment Operations Financial Services
Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31,
2012 2011 2012 2011 2012 2011
(in millions, except per share data)
Revenues:
Net sales $ 4,639 $ 3,797 $ 4,639 $ 3,797 $ - $ -
Finance and interest income 260 285 34 44 332 339
4,899 4,082 4,673 3,841 332 339
Costs and Expenses:
Cost of goods sold 3,724 3,114 3,724 3,114 - -
Selling, general and administrative 433 415 360 321 73 94
Research, development and engineering 149 116 149 116 - -
Restructuring - 3 - 3 - -
Interest expense 185 199 88 96 129 139
Interest compensation to Financial Services - - 74 62 - -
Other, net 49 37 24 8 25 29
Total 4,540 3,884 4,419 3,720 227 262
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates 359 198 254 121 105 77
Income tax provision 112 80 77 54 35 26
Equity in income of unconsolidated subsidiaries and affiliates:
Financial Services 3 3 73 54 3 3
Equipment Operations 19 24 19 24 - -
Net income 269 145 269 145 73 54
Net loss attributable to noncontrolling interests - (7 ) - (7 ) - -
Net income attributable to CNH Global N.V $ 269 $ 152 $ 269 $ 152 $ 73 $ 54
Weighted average shares outstanding:
Basic 240 239
Diluted 241 241
Basic and diluted earnings per share ("EPS") attributable to CNH Global N.V. common shareholders:
Basic EPS $ 1.12 $ 0.63
Diluted EPS $ 1.11 $ 0.63

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, 2011.

The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include CNH Global N.V.'s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include CNH Global N.V.'s financial services business. Transactions between Equipment Operations and Financial Services have been eliminated to arrive at the consolidated data.

CNH GLOBAL N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
AND SUPPLEMENTAL INFORMATION
As of March 31, 2012 and December 31, 2011
(Unaudited)
Consolidated Equipment Operations Financial Services
March 31,
2012
December 31, 2011 March 31,
2012
December 31, 2011 March 31,
2012
December 31, 2011
(in millions)
ASSETS
Cash and cash equivalents $ 950 $ 2,055 $ 442 $ 1,251 $ 508 $ 804
Deposits in Fiat Industrial subsidiaries' cash management system 4,483 4,116 4,374 3,980 109 136
Accounts, notes receivable and other, net 15,652 14,491 1,159 894 14,952 14,072
Intersegment notes receivable - - 1,828 1,993 562 693
Inventories 4,329 3,662 4,329 3,662 - -
Property, plant and equipment, net 2,020 1,936 2,018 1,934 2 2
Equipment on operating leases, net 697 666 8 7 689 659
Investment in Financial Services - - 2,149 2,045 - -
Investments in unconsolidated affiliates 526 506 436 423 90 83
Goodwill and other intangibles 3,079 3,084 2,921 2,926 158 158
Other assets 3,454 3,577 2,153 2,065 1,301 1,512
Total Assets $ 35,190 $ 34,093 $ 21,817 $ 21,180 $ 18,371 $ 18,119
LIABILITIES AND EQUITY
Short-term debt $ 4,107 $ 4,072 $ 195 $ 144 $ 3,912 $ 3,928
Accounts payable 3,265 2,952 3,280 3,219 435 199
Long-term debt, including current maturities 13,159 13,038 3,659 3,656 9,500 9,382
Intersegment debt - - 562 693 1,828 1,993
Accrued and other liabilities 6,285 6,107 5,748 5,545 546 571
Total Liabilities 26,816 26,169 13,444 13,257 16,221 16,073
Equity 8,374 7,924 8,373 7,923 2,150 2,046
Total Liabilities and Equity $ 35,190 $ 34,093 $ 21,817 $ 21,180 $ 18,371 $ 18,119

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, 2011.

The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include CNH Global N.V.'s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include CNH Global N.V.'s financial services business. Transactions between Equipment Operations and Financial Services have been eliminated to arrive at the consolidated data.

CNH GLOBAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
AND SUPPLEMENTAL INFORMATION
For the Three Months Ended March 31, 2012 and 2011
(Unaudited)
Consolidated Equipment Operations Financial
Services
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended March 31,
2012 2011 2012 2011 2012 2011
(in millions)
Operating activities:
Net income $ 269 $ 145 $ 269 $ 145 $ 73 $ 54
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization 103 104 76 75 27 29
Intersegment activity - - (351 ) (202 ) 351 202
Changes in operating assets and liabilities (1,174 ) (565 ) (392 ) (192 ) (782 ) (373 )
Other, net (18 ) (4 ) (110 ) (66 ) 19 8
Net cash used by operating activities (820 ) (320 ) (508 ) (240 ) (312 ) (80 )
Investing activities:
Expenditures for property, plant and equipment (101 ) (54 ) (101 ) (54 ) - -
Expenditures for equipment on operating leases (101 ) (74 ) (1 ) - (100 ) (74 )
Net collections from retail receivables 12 82 - - 12 82
Net (deposits in) withdrawals from Fiat Industrial (322 ) (1,038 ) (353 ) (1,097 ) 31 59
Other, net 168 65 (1 ) (45 ) 171 110
Net cash (used) provided by investing activities (344 ) (1,019 ) (456 ) (1,196 ) 114 177
Financing activities:
Intersegment activity - - 60 (160 ) (60 ) 160
Net increase (decrease) in indebtedness 17 (781 ) 56 (410 ) (39 ) (371 )
Other, net 9 25 14 25 (7 ) -
Net cash provided (used) by financing activities 26 (756 ) 130 (545 ) (106 ) (211 )
Effect of foreign exchange rate changes on cash and cash equivalents 33 30 25 21 8 9
Decrease in cash and cash equivalents (1,105 ) (2,065 ) (809 ) (1,960 ) (296 ) (105 )
Cash and cash equivalents, beginning of the year 2,055 3,618 1,251 2,934 804 684
Cash and cash equivalents, end of the quarter $ 950 $ 1,553 $ 442 $ 974 $ 508 $ 579

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, 2011.

The supplemental Equipment Operations (with Financial Services on the equity basis) data in these statements include CNH Global N.V.'s agricultural and construction equipment operations. The supplemental Financial Services data in these statements include CNH Global N.V.'s financial services business. Transactions between Equipment Operations and Financial Services have been eliminated to arrive at the consolidated data.

CNH GLOBAL N.V.
TOTAL DEBT AND NET DEBT (CASH)
For the Three Months Ended March 31, 2012 and the Year Ended December 31, 2011
(Unaudited)
Consolidated Equipment Operations Financial Services
March 31, 2012 December 31, 2011 March 31, 2012 December 31, 2011 March 31, 2012 December 31, 2011
(in millions)
Short-term debt:
With Fiat Industrial subsidiaries $ 486 $ 325 $ 115 $ 80 $ 371 $ 245
Owed to securitization investors 2,241 2,302 - - 2,241 2,302
Other 1,380 1,445 80 64 1,300 1,381
Intersegment - - - 95 1,266 1,394
Total short-term debt 4,107 4,072 195 239 5,178 5,322
Long-term debt:
With Fiat Industrial subsidiaries 157 314 67 65 90 249
Owed to securitization investors 6,635 6,511 - - 6,635 6,511
Other 6,367 6,213 3,592 3,591 2,775 2,622
Intersegment - - 562 598 562 599
Total long-term debt 13,159 13,038 4,221 4,254 10,062 9,981
Total debt:
With Fiat Industrial subsidiaries 643 639 182 145 461 494
Owed to securitization investors 8,876 8,813 - - 8,876 8,813
Other 7,747 7,658 3,672 3,655 4,075 4,003
Intersegment - - 562 693 1,828 1,993
Total debt $ 17,266 $ 17,110 $ 4,416 $ 4,493 $ 15,240 $ 15,303
Less:
Cash and cash equivalents 950 2,055 442 1,251 508 804
Deposits in Fiat Industrial subsidiaries' cash management system 4,483 4,116 4,374 3,980 109 136
Intersegment notes receivable - - 1,828 1,993 562 693
Net debt (cash) $ 11,833 $ 10,939 $ (2,228 ) $ (2,731 ) $ 14,061 $ 13,670

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

CNH GLOBAL N.V.
SUPPLEMENTAL SCHEDULES
For the Three Months Ended March 31, 2012 and 2011
(Unaudited)
Three Months Ended March 31,
2012 2011 % Change
(in millions, except percentages)
1. Revenues and net sales:
Net sales
Agricultural equipment $ 3,615 $ 3,071 17.7 %
Construction equipment 1,024 726 41.0 %
Total net sales 4,639 3,797 22.2 %
Financial services 332 339 (2.1 )%
Eliminations and other (72 ) (54 )
Total revenues $ 4,899 $ 4,082 20.0 %
2. Net sales on a constant currency basis:
Agricultural equipment net sales $ 3,615 $ 3,071 17.7 %
Effect of currency translation 77 2.5 %
Agricultural equipment net sales on a constant currency basis $ 3,692 $ 3,071 20.2 %
Construction equipment net sales $ 1,024 $ 726 41.0 %
Effect of currency translation 20 2.8 %
Construction equipment net sales on a constant currency basis $ 1,044 $ 726 43.8 %
Total Equipment Operations net sales on a constant currency basis. $ 4,736 $ 3,797 24.7 %
Note: Net sales on a constant currency basis is a non-GAAP financial measure. See description of non-GAAP measures contained in this release.
CNH GLOBAL N.V.
SUPPLEMENTAL SCHEDULES
For the Three Months Ended March 31, 2012 and 2011
(Unaudited)
3. Equipment Operations gross and operating profit and margin:
Three Months Ended March 31,
2012 2011
(in millions, except percentages)
Net sales $ 4,639 100.0 % $ 3,797 100.0 %
Less:
Cost of goods sold 3,724 80.3 % 3,114 82.0 %
Equipment Operations gross profit 915 19.7 % 683 18.0 %
Less:
Selling, general and administrative 360 7.8 % 321 8.5 %
Research and development 149 3.2 % 116 3.1 %
Equipment Operations operating profit $ 406 8.8 % $ 246 6.5 %
Gross profit and margin:
Agricultural equipment $ 760 21.0 % $ 591 19.2 %
Construction equipment 155 15.1 % 92 12.7 %
Equipment Operations gross profit $ 915 19.7 % $ 683 18.0 %
Operating profit and margin:
Agricultural equipment $ 372 10.3 % $ 263 8.6 %
Construction equipment 34 3.3 % (17 ) (2.3 )%
Equipment Operations operating profit $ 406 8.8 % $ 246 6.5 %
4. Net income and diluted earnings per share before restructuring and exceptional items:
Three Months Ended March 31,
2012 2011
(in millions, except per share data)
Net income attributable to CNH $ 269 $ 152
Restructuring:
Restructuring, net of tax - 2
Exceptional items:
Gain on purchase of business, net of tax - (16 )
Net income before restructuring and exceptional items $ 269 $ 138
Weighted average common shares outstanding - diluted 241 241
Diluted earnings per share before restructuring and exceptional items $ 1.11 $ 0.57
CNH GLOBAL N.V.
SUPPLEMENTAL SCHEDULES
For the Three Months Ended March 31, 2012
(Unaudited)
5. Equipment Operations cash generated from working capital:
Balance as of December 31, 2011 Effect of Foreign Currency Translation Non-Cash Transactions Balance as of March 31, 2012 Cash Generated from (used by) Working Capital
(in millions)
Accounts, notes receivable and other -- net -- Total $ 894 $ (17 ) $ - $ 1,159 $ (248 )
Inventories 3,662 (76 ) 4 4,329 (595 )
Accounts payable -- Total (3,219 ) 74 - (3,280 ) (13 )
Working Capital $ 1,337 $ (19 ) $ 4 $ 2,208 $ (856 )
Note: Working Capital is a non-GAAP financial measure. See description of non-GAAP measures contained in this release.

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