SOURCE: CNH

CNH

January 31, 2013 04:47 ET

CNH Full Year 2012 Net Sales of $19.4 Billion, Net Income Before Restructuring and Exceptional Items Up 28%

BURR RIDGE, IL--(Marketwire - Jan 31, 2013) - CNH Global N.V. (NYSE: CNH)

  • Full year Net Sales of $19.4 billion +8% (+12% constant currency basis)
    • Agricultural equipment net sales of $15.7 billion +10% (+15% constant currency basis)
    • Construction equipment net sales of $3.8 billion -3% (+2% constant currency basis)
  • Full year Equipment Operations' Operating Profit of $1.7 billion, at a margin of 8.6% for the period
  • Full year diluted EPS (before restructuring and exceptional items) attributable to CNH common shareholders at $4.83 per share, compared to $3.82 per share in 2011
  • Special Dividend of $10 per common share paid on December 28, 2012 in connection to the combination transaction between CNH Global N.V. and Fiat Industrial S.p.A.
               
  Quarter Ended       Year Ended    
  12/31/2012   12/31/2011   Change   12/31/2012   12/31/2011   Change
  (US $ in millions, except per share data and percentages)
Net Sales of Equipment $ 4,929   $ 4,768   3%   $ 19,427   $ 18,059   8%
Equipment Operations Operating Profit $ 280   $ 238   18%   $ 1,674   $ 1,465   14%
Equipment Operations Operating Margin   5.7%     5.0%   0.7 pts     8.6%     8.1%   0.5 pts
Financial Services Net Income $ 79   $ 66   20%   $ 301   $ 225   34%
Net Income Attributable to CNH $ 195   $ 193   1%   $ 1,142   $ 939   22%
Net Income Before Restructuring and Exceptional Items $ 230   $ 189   22%   $ 1,179   $ 918   28%
Diluted EPS Before Restructuring and Exceptional Items $ 0.92   $ 0.79   16%   $ 4.83   $ 3.82   26%
                               

CNH Global N.V. (NYSE: CNH) today announced financial results for the quarter and year ended December 31, 2012. Net sales for the year increased 8% (12% on a constant currency basis) to $19.4 billion as solid global demand for agricultural equipment more than offset the negative effects of the more difficult trading conditions in the construction equipment segment and foreign currency translation. Equipment Operations posted an operating profit of $1.7 billion, or 8.6% of net sales for the year, as increased volumes and positive net pricing in both segments compensated for increased SG&A expenditures and R&D expense (+24%), primarily related to significant investments in new products and Tier 4 engine emissions compliance programs.

Equipment net sales in 2012 were 81% agricultural equipment and 19% construction equipment. The geographic distribution of net sales in the year was 44% North America, 31% EAME & CIS, 15% Latin America, and 10% APAC markets.

Equipment Operations generated $979 million in cash flow from operations for the full year, down $118 million or 11% from 2011, as the increased net working capital needed to support increased business activity more than offset improved net sales and operating performance. Full year capital expenditures totaled $556 million, a 36% increase from 2011, largely as a result of investments in new manufacturing sites and product launches in both the agricultural and construction equipment segments. Capital expenditures on new product development (inclusive of interim and final Tier 4 emission compliant equipment) and production capacity represented 61% of the total CAPEX spent during the year.

CNH's Equipment Operations ended the period with a net cash position of $3.0 billion. The Group's 29% effective tax rate for 2012 is lower than its full year 2012 forecast effective tax rate of 32% to 35% as a result of certain favorable tax items during the fourth quarter. For 2013, the CNH Group forecasts a full year effective tax rate of 31% to 34%.

Full year net income, before restructuring and exceptional items, was $1.2 billion, an increase of 28%, driven by continued solid market conditions in the agricultural sector, satisfactory industrial performance, and improved results by the Group's financial services business, offsetting the increased costs of research and development and the negative currency translation in the period. This resulted in the Group generating diluted earnings per share of $4.83 (before restructuring and exceptional items), up 26% compared to $3.82 per share for the full year 2011.

On December 26, 2012, CNH, as a result of an ongoing strategic review of its construction equipment business, announced it is moving into the next phase of its business relationship with Kobelco Construction Machinery Co., Ltd. Effective January 1, 2013, the non-exclusive licensing and supply agreements will allow CNH to pursue a global strategy leveraging the industry-leading technologies and resources available to it as part of the Fiat Industrial Group. The new business relationship includes the unwinding of all the joint ventures between the parties, which resulted in CNH recording an exceptional non-cash charge of $35 million during the period.

2013 Full Year Market Outlook

  • Agricultural equipment unit volume is expected to be flat to up 5%
  • Construction equipment unit volume is expected to be flat to up 5%

CNH Announces Its Guidance For The Full Year 2013 

  • Revenues up ~5%
  • Operating Margin between 8.5% and 9.0%

SEGMENT RESULTS
Agricultural Equipment

                               
  Quarter Ended       Year Ended    
  12/31/2012   12/31/2011   Change   12/31/2012   12/31/2011   Change
  (US $ in millions, except percentages)
Net Sales of Equipment $ 4,014   $ 3,695   9%   $ 15,657   $ 14,183   10%
Gross Profit $ 803   $ 685   17%   $ 3,359   $ 2,904   16%
Gross Margin   20.0%     18.5%   1.5 pts     21.5%     20.5%   1 pts
Operating Profit $ 322   $ 241   34%   $ 1,680   $ 1,410   19%
Operating Margin   8.0%     6.5%   1.5 pts     10.7%     9.9%   0.8 pts
                               

CNH Agricultural Equipment Full Year Results
CNH's full year net sales of agricultural equipment increased 15% on a constant currency basis (10% on a reported basis) driven by increased volume, positive net pricing, and favorable product mix. All of the Group's geographic regions reported increased revenue on a constant currency basis. Operating profit increased by $270 million to $1.7 billion at an operating margin of 10.7%, up 80 basis points compared to 2011.

Worldwide agricultural equipment market share performance was in line with the market for both tractors and combines.

CNH worldwide production of agricultural equipment trailed retail sales in the fourth quarter, resulting in a strong cash generation from working capital in the quarter, as the Group implemented the scheduled production slowdown to reduce company and dealer inventory to year-end desired levels.

During 2012, Case IH Agriculture continued its introduction of Efficient Power Tier 4A/Stage IIIB emission compliant equipment in Europe and North America with the launch of Maxxum 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 and the new narrow track 4WD Steiger Rowtrac. The new 30 Series Efficient Power Axial Flow combines were introduced in Australia, China, Russia and Ukraine. The Module Express 635 cotton pickers, the Axial-Flow 7120 and 8120 combine models and, through a strategic alliance with Semeato, an expanded no-till planter offering were introduced in the Brazilian market.

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 and the Puma 145 tractor, with Efficient Power, was awarded "HIT of the Fair" at the XIII Mazowieckie Dni Rolnictwa (Mazovian Agricultural Days) exhibition in Poland. In Brazil, Revista Rural magazine honored the Case IH sugar cane harvester with the "Top of Mind" award. As announced in November 2012, the American Society of Agricultural and Biological Engineers (ASABE) recognized Case IH for innovation with the 2013 AE50 awards, specifically for the new 2013 Axial-Flow combine cab, the pivoting grain spout on the Axial-Flow combine, the Nutri-Placer 920 and the Precision Disk 500 air disk drill.

During 2012, New Holland Agriculture introduced the new BigBaler range, with up to 20% increased capacity and up to 5% denser bales, in Europe, Australia and North America. New Holland Agriculture leveraged the newly signed agreements with Semeato and Orkel, launching the new SOLTT planting equipment in Brazil and the Roll Baler, the new series of professional fixed chamber roll balers, in Europe. In Brazil, New Holland Agriculture completed the introduction of the CR5080, CR6080SL and CR9080 Twin Rotor combines with models from class 5 to class 9 and launched the T9 4WD and T7 tractors. In Europe, New Holland Agriculture introduced new FR forage harvesters, including two Tier 4A/Stage IIIB models from 450 to 824 hp and several new tractors including the ground care Boomer Compact 3000 range, upgraded with the EasyDrive continuously variable transmission, the compact T3F, dedicated to small and mid-sized orchard and viticulture operators, the TI3 and TI4 equal sized wheel tractors, designed for hay-making operations and field maintenance, and new additions to the Tier 4A/Stage IIIB T5 range, now also available with the 4 step powershift Electro Command transmission. In North America, New Holland Agriculture launched the Tier 4A/Stage IIIB compliant T6 tractors, the new MegaCutter tractor mounted disc mower-conditioners, the new ProRotor rotary rakes and the new 840CD rigid draper head specifically designed to match the CR series Twin Rotor and the CX8000 super-conventional combines, which provide uniform crop flow up to 45-foot cutting widths. New Holland Agriculture launched the new fuel efficient TD5 tractor series in South Africa and Far East markets. In addition, New Holland Agriculture introduced the TT Compact tractor series, with fuel-efficient engines from 35 to 47 hp, in key African markets including South Africa, Morocco and Tunisia. In the Far East, New Holland Agriculture also launched the new TS6 tractor series, featuring four models ranging from 110 to 139 hp. In China, New Holland Agriculture displayed its Braud 9080L, the first grape harvester ever to be presented in the country.

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 Brazil, the ISOBUS communication system between tractor and the SOLTT planter received the top prize in the Innovation Category at Expointer, the largest fair in Southern Brazil. Also in North America, New Holland Agriculture won six 2013 AE50 awards for Engineering Innovation for the 840CD rigid draper head, the Advanced Operator Control System for H8000 Series Speedrower self-propelled windrowers, the BigBaler Series, the IntelliFill System for FR Series forage harvesters, the ABS SuperSteer anti-lock braking system for T7 Series tractors, and the homologation option for T9 Series tractors granting free road circulation in the EU. In Europe, the new BigBaler series was recognized with the SIMA Silver Innovation Medal and the T4060F tractor with the 2013 Best of Specialized tractor award.

Construction Equipment

                               
  Quarter Ended       Year Ended    
  12/31/2012   12/31/2011   Change   12/31/2012   12/31/2011   Change
  (US $ in millions, except percentages)
Net Sales of Equipment $ 915   $ 1,073   -15%   $ 3,770   $ 3,876   -3%
Gross Profit $ 102   $ 132   -23%   $ 502   $ 529   -5%
Gross Margin   11.1%     12.3%   -1.2 pts     13.3%     13.6%   -0.3 pts
Operating Profit $ (42)   $ (3)   N/A   $ (6)   $ 55   N/A
Operating Margin   (4.6)%     (0.3)%   -4.3 pts     (0.2)%     1.4%   -1.6 pts
                               

CNH Construction Equipment Full Year Results
CNH's construction equipment full year 2012 net sales increased 2% on a constant currency basis (-3% on a reported basis) as modest industry recovery in North America and Eastern Europe did not offset the continued demand slowdown in the other geographic regions. In response to the demand downturn, finished goods production in the fourth quarter was curtailed (21% vs. retail) to reduce company and dealer inventory levels to the prevailing market conditions which contributed to the $6 million operating loss for the year.

CNH's worldwide construction equipment market share was in line with the market, with gains in Latin America.

CNH's worldwide production of construction equipment was 21% below retail sales during the quarter, as the Group continued to balance inventory levels, as anticipated during the year, in line with the forecasted worldwide demand levels in 2013.

During 2012, Case Construction continued its product rejuvenation plan introducing, in North America, new Tier 4A/Stage IIIB compliant tractor loader backhoe models, the new CX210C and CX470C crawler excavator, the 621F wheel loader, the H Series rough-terrain forklift and 570N XT tractor loader and the 885B motor grader. In Europe, Case Construction launched the new wheel loader models 1121F and 1021F, new crawler excavator models CX210C and CX235C and the new WX 8 wheeled excavators series equipped with three-pump hydraulic system. The new 521F and 621F wheel loaders with Tier 3 engines were introduced in Africa, the Middle East, the CIS and Central Asia. In Russia, Case Construction presented its range of Tier 3 compliant SR and SV skid steer and TR compact track loaders, while in India the brand launched the SR130 and SR150 models.

In North America, Construction Equipment magazine recognized the Case motor grader B Series among the Top 100 products for 2012, while Better Roads magazine elected the Case 621F wheel loader as one of the Top 25 products in 2012, due to its fuel efficiency and increased productivity.

During 2012, New Holland Construction launched, in Europe, the LM625 telescopic handler, the W270 and W300 wheel loaders, new C series crawler excavator including short-radius model and the new wheeled excavator B Series PRO, all Tier 4A/Stage IIIB emission compliant. The new Tier 4A/Stage IIIB compliant B95C and B110C loader backhoe tractors were introduced in North America at the World of Concrete show in Las Vegas, Nevada. New Holland Construction continued to focus on emerging markets, introducing the new C series crawler excavator and wheel loader with Tier 3 engines to key markets in Africa, the Middle East, the CIS and Central Asia. In Latin America, New Holland Construction launched the new LM1445 and LM1745 telehandlers, extending the lift-height range to 17 meters, and the new E55B compact excavator. New Holland Construction now offers one of the most complete compact product lines in Latin America.

Financial Services

                               
  Quarter Ended       Year Ended    
  12/31/2012   12/31/2011   Change   12/31/2012   12/31/2011   Change
  (US $ in millions, except percentages)
Net Income $ 79   $ 66   20%   $ 301   $ 225   34%
On-Book Asset Portfolio $ 16,539   $ 14,636   13%   $ 16,539   $ 14,636   13%
Managed Asset Portfolio $ 18,884   $ 17,089   11%   $ 18,884   $ 17,089   11%
                               

CNH Financial Services Full Year Results
Full year net income attributable to Financial Services increased 34% to $301 million compared with $225 million in 2011. Increased results were primarily due to a higher average portfolio, lower general and administrative expenses and a lower provision for credit losses, partially offset by narrower financial margins.

At December 31, 2012, delinquent receivables greater than 30 days past due were 1.2% of the total managed receivables, down from 2.0% at December 31, 2011.

CNH Capital LLC
The following is disclosed on behalf of CNH's North American financial services subsidiary, CNH Capital LLC and its consolidated subsidiaries ("CNH Capital").

                               
  Quarter Ended       Year Ended    
  12/31/2012   12/31/2011   Change    12/31/2012   12/31/2011   Change 
  (US $ in millions, except percentages)
Net Income $ 44   $ 44   0%   $ 212   $ 200   6%
On-Book Asset Portfolio $ 11,609   $ 10,141   14%   $ 11,609   $ 10,141   14%
Managed Asset Portfolio $ 11,656   $ 10,249   14%   $ 11,656   $ 10,249   14%
                               

CNH Capital LLC Full Year Results
Full year net income attributable to CNH Capital was up 6% primarily due to a higher average portfolio, partially offset by narrower financial margins and a higher provision for credit losses.

At December 31, 2012, delinquent receivables greater than 30 days past due were 0.5% of the total managed receivables, down from 0.8% at December 31, 2011.

Unconsolidated Equipment Operations Subsidiaries
Full year results for the Group's unconsolidated Equipment Operations subsidiaries were $91 million, down $13 million from the full year 2011 results.

Combination Transaction Proposal From Fiat Industrial
On November 25, 2012, the unconflicted members of CNH's board of directors met and unanimously determined to recommend the CNH Board of Directors (acting through its unconflicted members) to approve the revised offer presented by Fiat Industrial S.p.A. on November 19, 2012 (the "Final Fiat Industrial Proposal"). Also on November 25, 2012, the CNH Board of Directors (acting through its unconflicted members) unanimously approved (1) the Final Fiat Industrial Proposal, (2) that CNH enter into the definitive merger agreement (the "Merger Agreement"), (3) the amendment of the company's Articles of Association (as contemplated in the Merger Agreement), and (4) the payment of a special dividend in the amount of $10 per common share.

On December 17, 2012, at an extraordinary meeting of shareholders, CNH shareholders approved the amendment of the company's Articles of Association and the payment of a special dividend in the amount of $10 per common share. The special dividend was paid on December 28, 2012, to the holders of CNH common shares (but not to the holders of common shares B, the sole owner of which is Fiat Netherlands Holding N.V., which is a wholly-owned subsidiary of Fiat Industrial S.p.A.).

Equipment Operations Cash Flow and Net Debt

                 
    Year to Date  
    12/31/2012     12/31/2011  
    (US $ in millions)  
Net Income   $ 1,133     $ 924  
Depreciation & Amortization     331       311  
Cash Change in Working Capital*     (329 )     (189 )
Other     (156 )     51  
Net Cash Provided by Operating Activities     979       1,097  
Net Cash (Used) by Investing Activities**     (598 )     (489 )
All Other     (92 )     (72 )
Increase in Net (Cash)   $ 289     $ 536  
Net (Cash)   $ (3,020 )   $ (2,731 )
                 

* 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 January 31, 2013, to review full year and fourth 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 Industrial 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, our ability to consummate the pending business combination transaction with Fiat Industrial and to realize the anticipated benefits of such transaction, 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 December 31, 2012 and 2011
(Unaudited)
 
    Consolidated     Equipment Operations     Financial Services
    Three Months Ended     Three Months Ended     Three Months Ended
    December 31,     December 31,     December 31,
    2012     2011     2012     2011     2012   2011
    (in millions, except per share data)
Revenues:                                            
  Net sales   $ 4,929     $ 4,768     $ 4,929     $ 4,768     $ -   $ -
  Finance and interest income     258       273       39       39       327     342
      5,187       5,041       4,968       4,807       327     342
Costs and Expenses:                                            
  Cost of goods sold     4,024       3,951       4,024       3,951       -     -
  Selling, general and administrative     524       503       444       425       80     78
  Research, development and engineering     181       154       181       154       -     -
  Interest expense     154       193       81       96       108     133
  Interest compensation to Financial Services     -       -       73       72       -     -
  Other, net     119       67       83       40       36     27
Total     5,002       4,868       4,886       4,738       224     238
                                             
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates     185       173       82       69       103     104
Income tax provision     26       11       (1 )     (29 )     27     40
Equity in income of unconsolidated subsidiaries and affiliates:                                            
  Financial Services     3       2       79       66       3     2
  Equipment Operations     26       25       26       25       -     -
Net income     188       189       188       189       79     66
  Net loss attributable to noncontrolling interests     (7 )     (4 )     (7 )     (4 )     -     -
Net income attributable to CNH Global N.V.   $ 195     $ 193     $ 195     $ 193     $ 79   $ 66
                                             
Weighted average shares outstanding - Basic:                                            
  Common Shares     30       240                              
  Class B Common Shares     212       -                              
                                             
Weighted average shares outstanding - Diluted:                                            
  Common Shares     31       241                              
  Class B Common Shares     212       -                              
                                             
Basic and diluted earnings per share ("EPS") attributable to Common Shares and Class B Common Shares:              
  Basic EPS   $ 0.78     $ 0.81                              
  Diluted EPS   $ 0.78     $ 0.80                              
                                             
Cash dividends per share                                            
    Common Shares   $ 10.00     $ -                              
    Class B Common Shares   $ -     $ -                              
                                               

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 STATEMENTS OF OPERATIONS
AND SUPPLEMENTAL INFORMATION
For the Year Ended December 31, 2012 and 2011
(Unaudited)
 
    Consolidated     Equipment Operations     Financial Services
    Year Ended     Year Ended     Year Ended
    December 31,     December 31,     December 31,
    2012     2011     2012     2011     2012   2011
    (in millions, except per share data)
Revenues:                                            
  Net sales   $ 19,427     $ 18,059     $ 19,427     $ 18,059     $ -   $ -
  Finance and interest income     1,020       1,126       148       172       1,307     1,387
      20,447       19,185       19,575       18,231       1,307     1,387
Costs and Expenses:                                            
  Cost of goods sold     15,566       14,626       15,566       14,626       -     -
  Selling, general and administrative     1,810       1,843       1,535       1,442       275     401
  Research, development and engineering     652       526       652       526       -     -
  Restructuring     2       -       2       -       -     -
  Interest expense     675       786       330       386       482     547
  Interest compensation to Financial Services     -       -       298       286       -     -
  Other, net     290       253       172       140       118     113
Total     18,995       18,034       18,555       17,406       875     1,061
                                             
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates     1,452       1,151       1,020       825       432     326
Income tax provision     423       343       279       230       144     113
Equity in income of unconsolidated subsidiaries and affiliates:                                            
  Financial Services     13       12       301       225       13     12
  Equipment Operations     91       104       91       104       -     -
Net income     1,133       924       1,133       924       301     225
  Net loss attributable to noncontrolling interests     (9 )     (15 )     (9 )     (15 )     -     -
Net income attributable to CNH Global N.V.   $ 1,142     $ 939     $ 1,142     $ 939     $ 301   $ 225
                                             
Weighted average shares outstanding - Basic:                                            
  Common Shares     29       239                              
  Class B Common Shares     212       -                              
                                             
Weighted average shares outstanding - Diluted:                                            
  Common Shares     30       240                              
  Class B Common Shares     212       -                              
                                             
Basic and diluted earnings per share ("EPS") attributable to Common Shares and Class B Common Shares:              
  Basic EPS   $ 4.68     $ 3.92                              
  Diluted EPS   $ 4.68     $ 3.91                              
                                             
Cash dividends per share                                            
    Common Shares   $ 10.00     $ -                              
    Class B Common Shares   $ -     $ -                              
                                                 

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 December 31, 2012 and December 31, 2011
(Unaudited)
 
    Consolidated   Equipment Operations   Financial Services
    Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
    2012   2011   2012   2011   2012   2011
    (in millions)
ASSETS                                    
Cash and cash equivalents   $ 2,008   $ 2,055   $ 827   $ 1,251   $ 1,181   $ 804
Deposits in Fiat Industrial subsidiaries' cash management system     4,232     4,116     4,005     3,980     227     136
Accounts, notes receivable and other, net     16,168     14,491     824     894     15,812     14,072
Intersegment notes receivable     -     -     2,476     1,993     554     693
Inventories     3,734     3,662     3,734     3,662     -     -
Property, plant and equipment, net     2,220     1,936     2,218     1,934     2     2
Equipment on operating leases, net     767     666     -     7     767     659
Investment in Financial Services     -     -     2,318     2,045     -     -
Investments in unconsolidated affiliates     345     506     244     423     101     83
Goodwill and other intangibles     3,069     3,084     2,909     2,926     160     158
Other assets     2,883     3,577     1,690     2,065     1,193     1,512
                                     
  Total Assets   $ 35,426   $ 34,093   $ 21,245   $ 21,180   $ 19,997   $ 18,119
                                     
LIABILITIES AND EQUITY                                    
Short-term debt   $ 3,797   $ 4,072   $ 361   $ 144   $ 3,436   $ 3,928
Accounts payable     2,821     2,952     2,932     3,219     351     199
Long-term debt, including current maturities     14,266     13,038     3,373     3,656     10,893     9,382
Intersegment debt     -     -     554     693     2,476     1,993
Accrued and other liabilities     5,908     6,107     5,392     5,545     522     571
                                     
  Total Liabilities   $ 26,792   $ 26,169   $ 12,612   $ 13,257   $ 17,678   $ 16,073
Equity     8,634     7,924     8,633     7,923     2,319     2,046
                                     
  Total Liabilities and Equity   $ 35,426   $ 34,093   $ 21,245   $ 21,180   $ 19,997   $ 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 Year Ended December 31, 2012 and 2011  
(Unaudited)  
   
    Consolidated     Equipment Operations     Financial Services  
        Year Ended     Year Ended     Year Ended  
        December 31,     December 31,     December 31,  
    2012     2011     2012     2011     2012     2011  
    (in millions)  
Operating activities:                                                
  Net income   $ 1,133     $ 924     $ 1,133     $ 924     $ 301     $ 225  
  Adjustments to reconcile net income to net cash provided by (used in) operating activities:                                                
    Depreciation and amortization     457       426       331       311       126       115  
    Intersegment activity     -       -       (16 )     58       16       (58 )
    Changes in operating assets and liabilities     (400 )     (396 )     (193 )     (45 )     (207 )     (351 )
    Other, net     (5 )     40       (276 )     (151 )     42       51  
                                                 
Net cash provided by (used in) operating activities     1,185       994       979       1,097       278       (18 )
                                                 
Investing activities:                                                
  Expenditures for property, plant and equipment     (556 )     (408 )     (556 )     (408 )     -       -  
  Expenditures for equipment on operating leases     (476 )     (396 )     (7 )     (2 )     (469 )     (394 )
  Net additions from retail receivables     (1,261 )     (455 )     -       -       (1,261 )     (455 )
  Net (deposits in) withdrawals from Fiat Industrial     (57 )     (2,419 )     32       (2,395 )     (89 )     (24 )
  Other, net     348       128       (35 )     (79 )     313       207  
                                                 
Net cash used in investing activities     (2,002 )     (3,550 )     (566 )     (2,884 )     (1,506 )     (666 )
                                                 
Financing activities:                                                
  Intersegment activity     -       -       (616 )     391       616       (391 )
  Net increase (decrease) in indebtedness     1,011       1,068       (24 )     (272 )     1,035       1,340  
  Dividends paid     (261 )     -       (261 )     -       (68 )     (85 )
  Other, net     54       1       84       33       36       (32 )
                                                 
Net cash provided by (used in) financing activities     804       1,069       (817 )     152       1,619       832  
                                                 
Effect of foreign exchange rate changes on cash and cash equivalents     (34 )     (76 )     (20 )     (48 )     (14 )     (28 )
                                                 
(Decrease) Increase in cash and cash equivalents     (47 )     (1,563 )     (424 )     (1,683 )     377       120  
Cash and cash equivalents, beginning of year     2,055       3,618       1,251       2,934       804       684  
                                                 
Cash and cash equivalents, end of year   $ 2,008     $ 2,055     $ 827     $ 1,251     $ 1,181     $ 804  
                                                 

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 Year Ended December 31, 2012 and the Year Ended December 31, 2011
(Unaudited)
 
    Consolidated   Equipment Operations     Financial Services
    Dec. 31,   Dec. 31,   Dec. 31,     Dec. 31,     Dec. 31,   Dec. 31,
    2012   2011   2012     2011     2012   2011
    (in millions)
Short-term debt:                                        
  With Fiat Industrial subsidiaries   $ 313   $ 325   $ 102     $ 80     $ 211   $ 245
  Owed to securitization investors     3,013     2,302     -       -       3,013     2,302
  Other     471     1,445     259       64       212     1,381
  Intersegment     -     -     -       95       1,922     1,394
Total short-term debt     3,797     4,072     361       239       5,358     5,322
Long-term debt:                                        
  With Fiat Industrial subsidiaries     44     314     19       65       25     249
  Owed to securitization investors     7,326     6,511     -       -       7,326     6,511
  Other     6,896     6,213     3,354       3,591       3,542     2,622
  Intersegment     -     -     554       598       554     599
Total long-term debt     14,266     13,038     3,927       4,254       11,447     9,981
Total debt:                                        
  With Fiat Industrial subsidiaries     357     639     121       145       236     494
  Owed to securitization investors     10,339     8,813     -       -       10,339     8,813
  Other     7,367     7,658     3,613       3,655       3,754     4,003
  Intersegment     -     -     554       693       2,476     1,993
Total debt   $ 18,063   $ 17,110   $ 4,288     $ 4,493     $ 16,805   $ 15,303
Less:                                        
  Cash and cash equivalents     2,008     2,055     827       1,251       1,181     804
  Deposits in Fiat Industrial subsidiaries' cash management system     4,232     4,116     4,005       3,980       227     136
  Intersegment notes receivable     -     -     2,476       1,993       554     693
Net debt (cash)   $ 11,823   $ 10,939   $ (3,020 )   $ (2,731 )   $ 14,843   $ 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 and the Year Ended December 31, 2012 and 2011  
(Unaudited)  
   
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2012     2011     % Change     2012     2011     % Change  
    (in millions, except percentages)  
1. Revenues and net sales:                                            
  Net sales                                            
    Agricultural equipment   $ 4,014     $ 3,695     8.6 %   $ 15,657     $ 14,183     10.4 %
    Construction equipment     915       1,073     -14.7 %     3,770       3,876     -2.7 %
      Total net sales     4,929       4,768     3.4 %     19,427       18,059     7.6 %
  Financial services     327       342     -4.4 %     1,307       1,387     -5.8 %
  Eliminations and other     (69 )     (69 )           (287 )     (261 )      
  Total revenues   $ 5,187     $ 5,041     2.9 %   $ 20,447     $ 19,185     6.6 %
                                             
                                             
2. Net sales on a constant currency basis:                                            
                                             
  Agricultural equipment net sales   $ 4,014     $ 3,695     8.6 %   $ 15,657     $ 14,183     10.4 %
  Effect of currency translation     98             2.7 %     624             4.4 %
    Agricultural equipment net sales on a constant currency basis   $ 4,112     $ 3,695     11.3 %   $ 16,281     $ 14,183     14.8 %
                                             
  Construction equipment net sales   $ 915     $ 1,073     -14.7 %   $ 3,770     $ 3,876     -2.7 %
  Effect of currency translation     30             2.8 %     186             4.8 %
    Construction equipment net sales on a constant currency basis   $ 945     $ 1,073     -11.9 %   $ 3,956     $ 3,876     2.1 %
                                                 
    Total Equipment Operations net sales on a constant currency basis   $ 5,057     $ 4,768     6.1 %   $ 20,237     $ 18,059     12.1 %
                                             

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 and the Year Ended December 31, 2012 and 2011
(Unaudited)
 

3. Equipment Operations gross and operating profit and margin:

             
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2012     2011     2012     2011  
    (in millions, except percentages)  
                                                 
Net sales   $ 4,929   100.0 %   $ 4,768   100.0 %   $ 19,427   100.0 %   $ 18,059   100.0 %
Less:                                                
  Cost of goods sold     4,024   81.6 %     3,951   82.9 %     15,566   80.1 %     14,626   81.0 %
Equipment Operations gross profit   $ 905   18.4 %   $ 817   17.1 %   $ 3,861   19.9 %   $ 3,433   19.0 %
Less:                                                
  Selling, general and administrative     444   9.0 %     425   8.9 %     1,535   7.9 %     1,442   8.0 %
  Research and development     181   3.7 %     154   3.2 %     652   3.4 %     526   2.9 %
Equipment Operations operating profit   $ 280   5.7 %   $ 238   5.0 %   $ 1,674   8.6 %   $ 1,465   8.1 %
                                                 
Gross profit and margin:                                                
  Agricultural equipment   $ 803   20.0 %   $ 685   18.5 %   $ 3,359   21.5 %   $ 2,904   20.5 %
  Construction equipment     102   11.1 %     132   12.3 %     502   13.3 %     529   13.6 %
Equipment Operations gross profit   $ 905   18.4 %   $ 817   17.1 %   $ 3,861   19.9 %   $ 3,433   19.0 %
                                                 
Operating profit and margin:                                                
  Agricultural equipment   $ 322   8.0 %   $ 241   6.5 %   $ 1,680   10.7 %   $ 1,410   9.9 %
  Construction equipment     (42 ) -4.6 %     (3 ) -0.3 %     (6 ) -0.2 %     55   1.4 %
Equipment Operations operating profit   $ 280   5.7 %   $ 238   5.0 %   $ 1,674   8.6 %   $ 1,465   8.1 %
                                                 
 
 
CNH GLOBAL N.V.
SUPPLEMENTAL SCHEDULES
For the Three Months and the Year Ended December 31, 2012
(Unaudited)
 

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

             
    Three Months Ended
December 31,
    Year Ended
December 31,
 
    2012   2011     2012   2011  
    (in millions, except per share data)  
                             
  Net income attributable to CNH   $ 195   $ 193     $ 1,142   $ 939  
                               
  Restructuring, net of tax     -     1       1     -  
  Exceptional item:                            
    Loss on sale of business     35     -       35     -  
    (Gain) on purchase of business, net of tax     -     (5 )     -     (21 )
  Net income before restructuring and exceptional items   $ 230   $ 189     $ 1,178   $ 918  
                             
Weighted average shares outstanding - Diluted:                            
    Common Shares     31     241       30     240  
    Class B Common Shares     212     -       212     -  
                                 
    Diluted EPS before restructuring and exceptional items for Common Shares and Class B Common Shares   $ 0.92   $ 0.79     $ 4.83   $ 3.82  
                             

5. Equipment Operations cash (used) by working capital:

                             
    Balance as of December 31, 2011     Effect of Foreign Currency Translation   Non-Cash Transactions     Balance as of December 31, 2012     Cash generated (used) by Working Capital  
    (in millions)  
                                       
Accounts, notes receivable and other - net - Total   $ 894     $ 45   $ (88 )   $ 824     $ 113  
Inventories     3,662       19     49       3,734       (140 )
Accounts payable - Total     (3,219 )     15     -       (2,932 )     (302 )
Working Capital   $ 1,337     $ 79   $ (39 )   $ 1,626     $ (329 )
                                       

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

Contact Information

  • For more information contact:
    CNH Investor Relations
    +1 (630) 887-3745