CNH agricultural equipment market outlook for 2006

Industry unit retail sales of under-40 horsepower tractors in North America are expected to be down 5 to 10% from the high levels of 2005. Sales of over-40 horsepower tractors in North America are expected to remain at about the same level as in 2005. Agricultural tractor markets in Western Europe and Rest-of-World could be down as much as 5%, while tractor industry unit retail sales in Latin America could be down about 10%.

Worldwide industry unit retail sales of combine harvesters may be down 5 to 10%, with similar declines in each major market.

CNH general outlook for 2006
CNH expects that its net sales of equipment for the full year will increase by about 2 to 5%. Improvements in market share, continuing pricing and ongoing margin improvements at Equipment Operations will drive better results. Profitability at Financial Services and at CNH's joint ventures is expected to remain in line with 2005. The benefit of the improvement at Equipment Operations will be partially offset by another increase in CNH's effective tax rate.

CNH has recently undertaken a thorough and comprehensive review of its global operations designed to close its performance gap to best-in-class industry competitors. It has designed and is in the process of implementing a three-year plan to achieve this objective. As a result, CNH anticipates net income before restructuring for 2006 will improve compared to the prior year, but the full benefit of this plan will not be visible until 2008.

In addition, full-year restructuring costs, net of tax, are expected to be slightly higher than in 2005, as CNH recognizes the balance of the costs related to the planned manufacturing rationalization in Europe.

The company expects to contribute approximately $120 million to its U.S. defined benefit pension plan in 2006. After considering this contribution, Equipment Operations expects to generate cash and to use that cash to further reduce its net debt by approximately $250 million, as compared with year-end 2005 levels.