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FULL YEAR: CNH SALES UP 8%, NET INCOME RISES 28%
Source: CNH news release

To read the entire release, click here

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.


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