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, 2001.
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 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 LOGO]
NEWS RELEASE
CNH REPORTS THIRD QUARTER RESULTS
FOR MORE INFORMATION CONTACT:
JEFFREY T. WALSH Media Relations (1) 847 955 3939
ALBERT TREFTS JR. Investor Relations (1) 847 955 3821
- Third quarter EPS performance in line with expectations despite worsening
conditions in the construction equipment industry.
- Third quarter revenues unchanged year-over-year when adjusted for currency
and divestiture impact.
- Case IH and New Holland, the company's premier agricultural equipment
brands, continue to chalk up retail share gains across the Americas.
Lake Forest, IL (October 25, 2001) CNH Global N.V. (NYSE:CNH) today reported
third quarter consolidated revenues of $2.159 billion compared to $2.266 billion
last year. When adjusted for the impact of adverse foreign exchange rates and
divestitures, revenues were essentially unchanged.
On a net basis, CNH reported a third quarter loss of $113 million, compared to a
loss of $157 million, for the third quarter last year. The loss per share,
before restructuring, was $.37, in line with expectations. On a net basis, the
loss per share was $.41, compared to a loss of $.57 per share for the third
quarter last year.
For the first nine months of 2001, consolidated revenues totaled $7.302 billion
compared to $7.768 billion last year. Adjusted for the adverse impact of
currency and divestitures, consolidated revenues rose slightly compared to 2000.
Year to date, the adverse impact of foreign exchange rates on consolidated
revenues has totaled approximately $288 million; divestitures accounted for a
further negative impact of about $283 million.
Moreover, the composition of the company's year to date revenues has changed
significantly both in terms of the geographic mix of sales and the split between
construction and agricultural equipment. In 2001, sales in North America, and
sales of agricultural equipment worldwide, are accounting for a larger
proportion of the company's net revenues, reflecting both market strengths and
the company's share gains across many product lines.
"Throughout 2001, we have benefited from good performance by our premier global
agricultural equipment brands," said Paolo Monferino, CNH president and chief
executive officer. "In both North and Latin America, our Case IH and New Holland
- CNH Global N.V. Administrative Offices 100 South Saunders Rd, Lake Forest, IL
60045 U.S.A. http://www.cnh.com -
brands continue to chalk up impressive retail share gains. Each new product we
have introduced this year has received an enthusiastic reception in the
marketplace. With an impressive line-up of new products slated for introduction
in 2002, we expect to capitalize on our successes, strengthening our position as
the world's leading producer of agricultural tractors and combines."
Equipment Operations. Third quarter net sales from Equipment Operations were
---------------------
$2.011 billion, compared to $2.095 billion for the same period in 2000. Net
sales for the quarter increased slightly when adjusted for the impact of
unfavorable exchange rates, and divestitures.
Third quarter worldwide revenues from sales of agricultural equipment were up 3%
compared to the third quarter last year, unadjusted for currency impact and
divestitures. Adjusted for the negative impact of currency and divestitures in
2001, the increase would be 10%. During the quarter the company held worldwide
production of agricultural equipment 12% below retail sales for the period,
resulting in wholesale levels significantly below retail levels. In both North
America and Latin America, the strong performance of the Case IH and New Holland
brands produced share gains for the company across most product categories in an
up market. In Europe, both the industry and CNH sales were down in line with
expectations.
Construction equipment revenues for the quarter were down 16% on an unadjusted
basis. When adjusted for the impact of currency and divestitures, the decline
was 11% compared to last year. During the quarter, CNH reduced production of
construction equipment by 19%, with further significant reductions scheduled for
the fourth quarter. In North America, where retail sales in the segments of the
industry served by CNH were down 10%, the company outperformed the industry
overall, with the largest share gains achieved for crawler excavators. In Latin
America, CNH also outperformed the industry in a declining market, while in
Europe, the company's retail sales declined with the industry.
As a result, the company's gross margin for its agricultural businesses improved
year-over-year, while the margin for the construction equipment businesses
declined, reflecting the dramatic reduction in the overall volume of
construction equipment wholesales, pricing pressures, and an unfavorable market
mix. Overall, CNH Equipment Operation's gross margin declined compared to the
third quarter of 2000.
CNH achieved dramatic merger-related synergies across its administrative
activities. Compared to the same period last year, and for the third consecutive
quarter, Equipment Operations SG&A expenses declined year-over-year both in
absolute terms and as a percent of net sales of equipment. During the quarter,
the company reduced its employment level by 300 personnel. For the third
quarter, CNH achieved its merger-related profit improvement target of
approximately $69 million, bringing the 2001 year-to-date total to $195 million.
Financial Services. CNH Capital, the financial services unit of CNH Global,
-------------------
reported a net loss of $2 million for the third quarter of 2001 compared to a
net income of $12 million for the same period last year. ABS transactions by CNH
Capital in 2000 occurred in the first and third quarters, while in 2001, the
transactions have been planned for the second and fourth quarters. This
difference in the timing compared to 2000, as well as higher loan loss
provisions on the non-core businesses which the company exited at the beginning
of the year, were largely responsible for the shift in net income.
Page 2
Balance Sheet. The company's accounts receivable are higher year-over-year,
--------------
reflecting the significant growth in its North American agricultural businesses,
which require higher levels of dealer inventory. Nonetheless, on a trailing 12
month supply basis, CNH inventories of agricultural equipment are over 1 month
lower than the industry average. However, CNH total inventory levels are
essentially unchanged from 2000 levels, due mainly to the slowdown in sales of
construction equipment. The company's aggressive production cuts are reflected
in the significant drop in Equipment Operations accounts payable.
Market Outlook for Agricultural Equipment. For the balance of 2001, industry
------------------------------------------
sales of agricultural equipment in North and Latin America are expected to
remain strong, and the industry should finish the year up by about 7% over 2000
levels, while sales in Western Europe may decline by about 7%.
Market Outlook for Construction Equipment. The level of uncertainty in the
------------------------------------------
general economy is expected to impact industry sales of construction equipment
through the balance of the year. In North America, sales in the segments of the
construction equipment industry served by CNH may be down as much as 17% in
2001, while in Western Europe the decline may be about 11%. Pressure on volumes
is expected to continue through the first quarter of 2002.
CNH Outlook for 2001. The success of the integration process is demonstrated by
---------------------
the steady growth of merger-related profit improvements. In the company's
agricultural equipment businesses, the significant share gains achieved by Case
IH and New Holland and their continuing reduction in company and dealer
inventory have been vitally important to the company's success. Supply chain
process improvements are allowing CNH to consistently under-produce retail
demand while delivering improved levels of service to dealers and customers. In
the medium term, CNH expects its supply chain initiatives to improve asset
turnover and cash flow. In addition, CNH has initiated new process reengineering
initiatives to improve the effectiveness of its administrative activities and
its product development processes, and thereby reduce costs.
For most of the year, the strength of the company's agricultural equipment
businesses compensated for the weakness across the construction equipment
industry. However, increased global economic uncertainty may significantly
impact the performance of the company's construction equipment businesses. In
addition, production cuts in the fourth quarter may limit the opportunities for
CNH to achieve synergies in its industrial operations. As a result, CNH expects
that the company's net loss before restructuring for the fourth quarter of 2001
may be between $.20 and $.35 per share, compared to a loss of $.37 per share,
before restructuring, in 2000.
###
CNH management will hold a conference call later today to review its third
quarter 2001 results. The conference call webcast will begin at approximately
10:00 am U.S. EDT. This call is being webcast by CCBN and can be accessed
through the investor information section of the company's web site at
www.cnh.com.
CNH is the number one manufacturer of agricultural tractors and combines in the
world, the third largest maker of construction equipment, and has one of the
industry's largest equipment finance operations. Revenues in 2000 were over $10
billion. Based in the United States, CNH's network of dealers and distributors
operates in over 160 countries. CNH agricultural products are sold under the
Case IH, New Holland and Steyr brands.
Page 3
CNH construction equipment is sold under the Case, Fiatallis, Fiat-Hitachi,
Link-Belt, New Holland, and O&K brands.
Forward Looking Statements. The information contained herein involves
---------------------------
forward-looking statements based on what CNH considers key economic assumptions,
and involves risk and uncertainties that could cause actual results to differ.
Some significant factors for CNH include general economic and capital market
conditions, the cyclical nature of its business, foreign currency movements,
hedging practices, CNH's and its customers' access to credit, political
uncertainty and civil unrest in various areas of the world, pricing, product
initiatives and other actions taken by competitors, disruptions in production
capacity, excess inventory levels, the effect of changes in laws and regulations
(including government subsidies and international trade regulations),
technological difficulties, changes in environmental laws, employee and labor
relations, weather conditions, energy prices, real estate values, animal
diseases, crop pests, harvest yields, government farm programs and consumer
confidence, housing starts and construction activity, concerns pertaining to
genetically modified organisms, China's delayed entry into the World Trade
Organization, and fuel and fertilizer costs. Additionally, CNH's achievement of
the anticipated benefits of the merger of New Holland and Case, including the
realization of expected annual operating synergies, depends upon, among other
things, industry volumes, as well as CNH's ability to integrate effectively the
operations and employees of New Holland and Case, and to execute its
multi-branding strategy. Further information concerning factors that could
significantly impact expected results is included in the following sections of
CNH's Form 20-F for 2000, as filed with the Securities and Exchange Commission:
Key Information; Information on the Company; Operating and Financial Review and
Prospects; Directors, Senior Management and Employees; and Financial
Information.
Page 4
CNH GLOBAL N.V.
REVENUES AND NET SALES
(UNAUDITED - DOLLARS IN MILLIONS)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------------------ ----------------------------------------
% %
2001 2000 CHANGE 2001 2000 CHANGE
------------- ------------ ------------- ------------ ------------ ------------
Revenues:
Net sales
Agricultural equipment $1,374 $1,339 3% $4,541 $4,532 0%
Construction equipment 637 756 (16%) 2,253 2,709 (17%)
--------- -------- -------- --------
Total net sales 2,011 2,095 (4%) 6,794 7,241 (6%)
Financial Services 161 207 (22%) 555 597 (7%)
Eliminations and other (13) (36) (47) (70)
--------- -------- -------- --------
Total revenues $2,159 $2,266 (5%) $7,302 $7,768 (6%)
========= ======== ======== ========
Net sales:
North America $ 836 $ 898 (7%) $3,188 $3,242 (2%)
Western Europe 731 774 (6%) 2,386 2,728 (13%)
Latin America 140 171 (18%) 432 471 (8%)
Rest of World 304 252 21% 788 800 (2%)
--------- -------- -------- --------
Total net sales $2,011 $2,095 (4%) $6,794 $7,241 (6%)
========= ======== ======== ========
CNH GLOBAL N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS
(MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
EQUIPMENT FINANCIAL
CONSOLIDATED OPERATIONS SERVICES
THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
--------------------------- --------------------------- ------------------------
2001 2000 2001 2000 2001 2000
------------- ------------ ------------- ------------ ------------ ----------
Revenues
Net sales $ 2,011 $ 2,095 $ 2,011 $ 2,095 $ - $ -
Finance and interest income 148 171 40 13 161 207
--------- -------- --------- -------- -------- --------
Total 2,159 2,266 2,051 2,108 161 207
Costs and Expenses
Cost of goods sold 1,721 1,772 1,721 1,772 - -
Selling, general and administrative 272 290 208 231 66 61
Research and development 78 77 78 77 - -
Restructuring and other merger related costs 15 106 15 106 - -
Interest expense 170 189 134 127 87 109
Other, net 53 51 39 30 14 21
--------- -------- --------- -------- -------- --------
Total 2,309 2,485 2,195 2,343 167 191
Equity in income (loss) of unconsolidated
subsidiaries and affiliates:
Financial Services 2 1 (2) 12 2 1
Equipment Operations 1 1 1 1 - -
--------- -------- --------- -------- -------- --------
Income (loss) before taxes and minority interest (147) (217) (145) (222) (4) 17
Income tax provision (benefit) (34) (61) (32) (67) (2) 6
Minority interest - 1 - 2 - (1)
--------- -------- --------- -------- -------- --------
Net income (loss) $ (113) $ (157) $ (113) $ (157) $ (2) $ 12
========= ======== ========= ======== ======== ========
Basic and diluted earnings (loss) per
common share (EPS):
EPS before goodwill and restructuring and
other merger related costs ($0.29) ($0.23)
EPS before restructuring and other merger
related costs ($0.37) ($0.30)
EPS ($0.41) ($0.57)
See Notes to Interim Financial Statements.
CNH GLOBAL N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS
(MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
EQUIPMENT FINANCIAL
CONSOLIDATED OPERATIONS SERVICES
NINE MONTHS ENDED NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
--------------------------- --------------------------- ------------------------
2001 2000 2001 2000 2001 2000
------------- ------------ ------------- ------------ ------------ ----------
Revenues
Net sales $ 6,794 $ 7,241 $ 6,794 $ 7,241 $ - $ -
Finance and interest income 508 527 110 55 555 597
--------- -------- --------- -------- -------- --------
Total 7,302 7,768 6,904 7,296 555 597
Costs and Expenses
Cost of goods sold 5,642 6,034 5,642 6,034 - -
Selling, general and administrative 885 939 678 771 212 172
Research and development 225 253 225 253 - -
Restructuring and other merger related costs 29 115 29 115 - -
Interest expense 553 608 437 420 268 309
Other, net 174 136 112 77 62 59
--------- -------- --------- -------- -------- --------
Total 7,508 8,085 7,123 7,670 542 540
Equity in income (loss) of unconsolidated
subsidiaries and affiliates:
Financial Services 5 3 11 39 5 3
Equipment Operations (16) 3 (16) 3 - -
--------- -------- --------- -------- -------- --------
Income (loss) before taxes and minority interest (217) (311) (224) (332) 18 60
Income tax provision (benefit) (43) (69) (50) (91) 7 22
Minority interest 3 5 3 6 - (1)
--------- -------- --------- -------- -------- --------
Net income (loss) $ (177) $ (247) $ (177) $ (247) $ 11 $ 39
========= ======== ========= ======== ======== ========
Basic and diluted earnings (loss) per share (EPS):
EPS before goodwill and restructuring and other
merger related costs ($0.34) ($0.59)
EPS before restructuring and other merger
related costs ($0.56) ($0.87)
EPS ($0.64) ($1.29)
See Notes to Interim Financial Statements.
CNH GLOBAL N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
(MILLIONS)
(UNAUDITED)
EQUIPMENT FINANCIAL
CONSOLIDATED OPERATIONS SERVICES
--------------------------- --------------------------- --------------------------
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
2001 2000 2001 2000 2001 2000
------------- ------------ ------------- ------------ ------------ ------------
Assets
Cash and cash equivalents $ 397 $ 886 $ 243 $ 593 $ 154 $ 293
Accounts, notes receivable and other - net 7,044 6,150 2,114 1,815 5,045 4,427
Intersegment notes receivable - - 1,636 590 542 195
Inventories 2,304 2,374 2,304 2,374 - -
Property, plant and equipment - net 1,337 1,474 1,317 1,455 20 19
Equipment on operating leases - net 599 643 - - 599 643
Investment in Financial Services - - 1,102 1,122 - -
Investments in unconsolidated affiliates 265 282 235 258 30 24
Goodwill and intangibles 3,691 3,817 3,550 3,669 141 148
Other assets 1,945 1,951 1,479 1,361 466 651
--------- -------- --------- -------- -------- --------
Total Assets $17,582 $17,577 $13,980 $13,237 $6,997 $ 6,400
========= ======== ========= ======== ======== ========
Liabilities and Equity
Short-term debt $ 4,710 $ 4,186 $ 2,407 $ 2,529 $2,303 $ 1,657
Intersegment short-term debt - - 542 195 923 576
Accounts payable 1,193 1,256 1,167 1,221 121 97
Long-term debt 5,642 5,539 4,179 3,066 1,463 2,473
Intersegment long-term debt - - - - 713 14
Accrued and other liabilities 3,851 4,082 3,499 3,712 372 461
--------- -------- --------- -------- -------- --------
15,396 15,063 11,794 10,723 5,895 5,278
Equity 2,186 2,514 2,186 2,514 1,102 1,122
--------- -------- --------- -------- -------- --------
Total Liabilities and Equity $17,582 $17,577 $13,980 $13,237 $6,997 $ 6,400
========= ======== ========= ======== ======== ========
See Notes to Interim Financial Statements.
CNH GLOBAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(MILLIONS)
(UNAUDITED)
EQUIPMENT FINANCIAL
CONSOLIDATED OPERATIONS SERVICES
NINE MONTHS ENDED NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
--------------------------- --------------------------- ------------------------
2001 2000 2001 2000 2001 2000
------------- ------------ ------------- ------------ ------------ ----------
Operating Activities:
Net income (loss) $ (177) $ (247) $ (177) $ (247) $ 11 $ 39
Adjustments to reconcile net income (loss) to
net cash from operating activities:
Depreciation and amortization 312 324 233 256 79 68
Changes in operating assets and liabilities (1,182) 447 (387) 456 (795) (9)
Other, net (105) 76 (78) 40 (38) (3)
--------- -------- --------- -------- -------- --------
Net cash from operating activities (1,152) 600 (409) 505 (743) 95
--------- -------- --------- -------- -------- --------
Investing Activities:
Expenditures for property, plant and equipment (103) (133) (100) (127) (3) (6)
Expenditures for equipment on operating leases (248) (126) - - (248) (126)
Other, net (primarily acquisitions and
divestitures) 205 80 55 64 131 8
--------- -------- --------- -------- -------- --------
Net cash from investing activities (146) (179) (45) (63) (120) (124)
--------- -------- --------- -------- -------- --------
Financing Activities:
Intersegment activity - - (937) (46) 937 46
Net increase (decrease) in indebtedness 857 (254) 1,080 (215) (223) (39)
Dividends paid (28) (82) (28) (82) - -
Other, net - 1 - 1 19 8
--------- -------- --------- -------- -------- --------
Net cash from financing activities 829 (335) 115 (342) 733 15
--------- -------- --------- -------- -------- --------
Other, net (20) (38) (11) (38) (9) -
--------- -------- --------- -------- -------- --------
Increase (decrease) in cash and cash equivalents (489) 48 (350) 62 (139) (14)
Cash and cash equivalents, beginning of period 886 466 593 387 293 79
--------- -------- --------- -------- -------- --------
Cash and cash equivalents, end of period $ 397 $ 514 $ 243 $ 449 $ 154 $ 65
========= ======== ========= ======== ======== ========
See Notes to Interim Financial Statements.
CNH GLOBAL N.V.
Notes to Interim Financial Statements
-------------------------------------
(1) The accompanying financial statements reflect the consolidated results of
CNH Global N.V. and its consolidated subsidiaries ("CNH") and have been
prepared in accordance with generally accepted accounting principles in the
United States, or U.S. GAAP. The supplemental financial information
captioned "Equipment Operations" includes the results of operations of
CNH's agricultural and construction equipment operations, with the
Company's financial services businesses reflected on the equity basis. The
supplemental financial information captioned "Financial Services" reflects
the consolidation of CNH's credit subsidiaries.
(2) CNH has three reportable operating segments: agricultural equipment,
construction equipment and financial services. CNH evaluates segment
performance based on operating earnings. CNH defines operating earnings as
the income (loss) of Equipment Operations before interest, taxes and
restructuring and other merger related costs, including the income (loss)
of Financial Services on an equity basis. A reconciliation of Equipment
Operations' net income (loss) to operating earnings is as follows (in
millions):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2001 2000 2001 2000
----- ----- ----- -----
Net income (loss) $(113) $(157) $(177) $(247)
Income tax provision (benefit) (32) (67) (50) (91)
Interest expense 134 127 437 420
Restructuring and other merger
related costs 15 106 29 115
----- ----- ----- -----
Operating earnings $ 4 $ 9 $ 239 $ 197
===== ===== ===== =====
The following summarizes operating earnings by segment (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2001 2000 2001 2000
----- ----- ----- -----
Agricultural equipment $ 20 $ (19) $ 158 $ (14)
Construction equipment (14) 16 70 172
Financial services (2) 12 11 39
----- ----- ----- -----
Operating earnings $ 4 $ 9 $ 239 $ 197
===== ===== ===== =====
(3) CNH defines industrial operating margin as the net sales of Equipment
Operations less cost of goods sold, selling, general and administrative and
research and development. Industrial operating margin is as follows (in
millions):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2001 2000 2001 2000
----- ----- ----- -----
Net sales $2,011 $2,095 $6,794 $7,241
Less:
Cost of goods sold 1,721 1,772 5,642 6,034
Selling, general and
administrative 208 231 678 771
Research and development 78 77 225 253
------ ------ ------ ------
Operating margin $ 4 $ 15 $ 249 $ 183
====== ====== ====== ======
(4) The Company's effective income tax rates were 20% and 22% for the first
nine months of 2001 and 2000, respectively. The tax rates differ from the
Dutch statutory rate of 35% primarily due to differences in the
geographical mix of profits, losses in jurisdictions for which no immediate
tax benefit is recognizable, non-deductible expenses and changes in
valuation reserves attributable to prior-year losses.
CNH GLOBAL N.V.
Notes to Interim Financial Statements
-------------------------------------
(5) Earnings (loss) per common share ("EPS")
(in millions, except per share data):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2001 2000 2001 2000
----- ----- ----- -----
Net income (loss) $ (113) $ (157) $ (177) $ (247)
Restructuring and other merger related costs,
net of tax 11 74 22 80
------ ------ ------ ------
Net income (loss) before restructuring and other
merger related costs (102) (83) (155) (167)
Goodwill 21 19 62 54
------ ------ ------ ------
Net income (loss) before goodwill and restructuring
and other merger related costs $ (81) $ (64) $ (93) $ (113)
====== ====== ====== ======
Weighted-average shares outstanding 277.0 276.9 277.0 192.0
EPS before goodwill and restructuring and other
merger related costs $(0.29) $(0.23) $(0.34) $(0.59)
EPS before restructuring and other merger
related costs $(0.37) $(0.30) $(0.56) $(0.87)
EPS $(0.41) $(0.57) $(0.64) $(1.29)
(6) During the nine months ended September 30, 2001, CNH expensed $29 million
of restructuring and $15 million of other merger-related costs. The other
merger-related costs primarily relate to relocation costs paid on behalf of
employees, systems integration costs and other legal and professional fees
related to the merger of New Holland and Case. During the nine months ended
September 30, 2001, CNH reversed $15 million of restructuring reserves
through restructuring and other merger-related costs, primarily due to
changes in estimates related to closing, selling and downsizing existing
facilities. During the nine months ended September 30, 2001, CNH utilized
approximately $108 million and $37 million of its restructuring reserves
established during 2000 and 2001, respectively. The utilized amounts
primarily represent involuntary employee severance costs and cost related
to the sale of its tractor production facility in Doncaster, England, and
its components facility in St., France.
(7) CNH fully, unconditionally and irrevocably guarantees Case Corporation's
$784 million in outstanding 6.25% Notes due 2003, 7.25% Notes due 2005, and
7.25% Notes due 2016 that were issued pursuant to two registration
statements under the Securities Act of 1933, as amended. Reference is made
to Note 23, "Guarantee of Subsidiary's Outstanding Debt Securities," of
CNH's Form 20-F for the year ended December 31, 2000 for further
discussion.
(8) CNH reports its results of operations to Fiat S.p.A. ("Fiat") in accordance
with the accounting principles followed by Fiat. CNH net revenues reported
to Fiat exclude finance and interest income of the Equipment Operations,
which are classified as a component of net financial expenses. Fiat defines
results of operations as the income (loss) before net financial expenses,
taxes, restructuring and equity income (loss) in unconsolidated
subsidiaries. Net financial expenses primarily include finance and interest
income and expenses of the Equipment Operations. A summary of CNH's results
as reported to Fiat is as follows (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ----------------------
2001 2000 2001 2000
----------- ---------- ---------- ----------
Net revenues $2,154 $2,260 $7,256 $7,717
Results of operations $ (36) $ 6 $ 168 $ 100
CNH GLOBAL N.V.
Notes to Interim Financial Statements
-------------------------------------
(9) In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards (SFAS) No. 141, "Business Combinations" and
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires all
business combinations initiated after June 30, 2001, to be accounted for
using the purchase method. SFAS No. 142 addresses the recognition and
amortization of intangible assets acquired in a business combination as
well as the recognition of goodwill and subsequent assessment of
impairment. Effective January 1, 2002, the Company will no longer amortize
goodwill or intangible assets deemed to have indefinite lives. In addition,
the Company will make an initial assessment of potential impairment of
goodwill as specified under SFAS No. 142. The Company is currently
evaluating the impact of adopting SFAS No. 142.
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/ Debra E. Kuper
-----------------------------
Debra E. Kuper
Assistant Secretary
October 25, 2001