Edgar Filing: CNH GLOBAL N V

FILED PURSUANT TO RULE 424B4
FILE NO. 333-84954
PROSPECTUS

50,000,000 SHARES

[CNH GLOBAL LOGO]

CNH GLOBAL N.V.
COMMON SHARES
----------------------
CNH Global N.V. is selling 50,000,000 of its common shares. The U.S.
underwriters are offering 40,000,000 shares in the U.S. and Canada and the
international managers are offering 10,000,000 shares outside the U.S. and
Canada.

As of April 30, 2002, Fiat S.p.A. owned 84.6% of the common shares of CNH
through Fiat Netherlands Holding N.V. Concurrently with the offering of our
shares, Fiat and one of its subsidiaries, which collectively hold $1.3 billion
principal amount of CNH debt, will contribute this amount to CNH in exchange for
a number of common shares equal to $1.3 billion divided by the public offering
price. At a public offering price of $4.00 per share, we will issue a total of
325,000,000 common shares to Fiat and this subsidiary. Following the offering
and concurrent Fiat debt exchange, Fiat will own 85.8% of the common shares of
CNH.

The shares of CNH trade on the New York Stock Exchange under the symbol
"CNH." On June 10, 2002, the last sale price of the shares as reported on the
New York Stock Exchange was $4.34 per share.

INVESTING IN THE COMMON SHARES INVOLVES RISKS THAT ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 11 OF THIS PROSPECTUS.
----------------------

PER SHARE TOTAL
--------- -----

Public offering price....................................... $4.00 $200,000,000
Underwriting discount....................................... $.18 $9,000,000
Proceeds, before expenses, to CNH........................... $3.82 $191,000,000

The U.S. underwriters may also purchase up to an additional 6,000,000
shares from CNH at the public offering price, less the underwriting discount,
within 30 days from the date of this prospectus to cover overallotments. The
international managers may similarly purchase up to an additional 1,500,000
shares from CNH.

Neither the U.S. Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.

The shares will be ready for delivery on or about June 14, 2002.
----------------------

MERRILL LYNCH & CO.
JPMORGAN
SALOMON SMITH BARNEY
----------------------
The date of this prospectus is June 11, 2002.

TABLE OF CONTENTS

PAGE
----

Summary..................................................... 1
Forward-Looking Statements.................................. 10
Risk Factors................................................ 11
Where You Can Find More Information......................... 23
Presentation of Financial and Certain Other Information..... 24
Use of Proceeds............................................. 25
Fiat Debt Exchange.......................................... 25
Price Range of Common Shares................................ 26
Dividends................................................... 27
Dilution.................................................... 28
Capitalization.............................................. 29
Selected Financial Data..................................... 30
Management's Discussion and Analysis of Financial Condition 33
and Results of Operations.................................
Business.................................................... 72
Management.................................................. 105
Principal Shareholder....................................... 111
Related Party Transactions.................................. 111
Legal Proceedings........................................... 113
Description of Share Capital................................ 113
Share Certificates and Transfer............................. 117
Taxation.................................................... 118
Service of Process and Enforcement of Civil Liabilities..... 124
Underwriting................................................ 125
Expenses.................................................... 128
Legal Matters............................................... 128
Experts..................................................... 128
Index to Financial Statements............................... F-1

------------------------

You should rely only on the information contained or incorporated by
reference in this prospectus. We have not, and the underwriters have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should assume that the information appearing in this prospectus is accurate only
as of the date on the front cover of this prospectus. Our business, financial
condition, results of operations and prospects may have changed since that date.

This prospectus is not a prospectus as referred to in article 3.2.b of the
Dutch Securities Act 1995 ("Wet toezicht effectenverkeer 1995"). In respect of
the offer made herein, the Netherlands Authority for the Financial Markets
("Autoriteit Financiele Markter") has granted an exemption from the prohibition
as referred to in article 3.1 of the aforesaid act.

SUMMARY

This summary highlights information in other sections of this prospectus.
It does not contain all the information that is important to you. You should
read this summary together with the more detailed information and consolidated
financial statements and notes appearing elsewhere in this prospectus. You
should carefully consider, among other factors, the matters discussed under
"Risk Factors." Unless the context otherwise requires, the terms "CNH," "the
company," "we" and "our" as used in this prospectus refer to CNH Global N.V. and
its consolidated subsidiaries.

OUR BUSINESS

GENERAL

We are one of the world's leaders in the engineering, manufacturing,
marketing and distribution of agricultural and construction equipment. We
organize our operations into three business segments: agricultural equipment,
construction equipment and financial services. We believe that we are the
largest manufacturer of agricultural equipment in the world based on units sold,
one of the largest manufacturers of construction equipment based on units sold
and have one of the industry's largest equipment finance operations. We market
our products globally through our highly recognized Case, Case IH, New Holland,
Steyr, Fiat-Hitachi, FiatAllis, O&K and Kobelco brand names. We manufacture our
products in 47 facilities throughout the world and distribute our products in
over 160 countries through an extensive network of approximately 11,700 dealers
and distributors.

For the year ended December 31, 2001, our total revenues were approximately
$9.7 billion, of which approximately 63% were attributable to agricultural
equipment, 30% to construction equipment and 7% to financial services.
Approximately 46% of our net sales of equipment were generated in North America,
35% in Western Europe, 7% in Latin America and the remaining 12% in the Rest of
World, including Eastern Europe, the Pacific Rim, Africa and the Middle East.
For the year ended December 31, 2001, our net loss was $332 million.

THIS OFFERING

As part of our overall plan to strengthen our balance sheet, we are
offering 50 million common shares to the public. We intend to use substantially
all of the net proceeds of this offering to repay outstanding debt of CNH, some
of which may be owed to a Fiat affiliate. The balance of the net proceeds, if
any, will be used for working capital and other general corporate purposes.

FIAT DEBT EXCHANGE

Concurrently with the offering of our shares, Fiat and one of its
subsidiaries, which collectively hold $1.3 billion principal amount of CNH debt,
will contribute this amount to CNH in exchange for a number of common shares
equal to $1.3 billion divided by the public offering price. At a public offering
price of $4.00 per share, we will issue a total of 325,000,000 common shares to
Fiat and this subsidiary. Following the offering and the concurrent Fiat debt
exchange, Fiat will own 85.8% of the common shares of CNH. As a result of this
debt exchange transaction and this offering, we will have reduced the total debt
of our Equipment Operations, excluding intersegment borrowings between Equipment
Operations and Financial Services, from $5.6 billion to $4.1 billion. On a pro
forma basis, after giving effect to these transactions, our interest expense for
2001 would have been $509 million as compared to $585 million, and we would have
reduced our weighted average interest rate on Equipment Operations debt from
5.24% to 5.20%. On a pro forma basis, our net loss per share for 2001 would have
been $0.43, which includes restructuring charges and goodwill amortization of
$0.24 per share, as compared to a net loss per share of $1.20, which includes
restructuring charges and goodwill amortization of $0.59 per share. The pro
forma loss per share is based on pro forma shares outstanding of 652.1 million
and a pro forma net loss of $283 million.

SUPPORT OF THE FIAT GROUP

Our operations have the strong support of the Fiat Group, one of the
largest industrial groups in the world with major operations in auto and truck
making, components, aerospace, insurance, publishing and other sectors. Fiat's
management has stated that it considers the production and sale of agricultural
and construction equipment to be a primary focus of the Fiat Group and a
significant component of Fiat's global strategy. As of December 31, 2001, Fiat
provided us with approximately $5.9 billion in intercompany loans, which are an
important source of liquidity for our operations. Fiat has agreed to maintain
its existing treasury and debt financing arrangements with us for as long as it
maintains control of us and in any event until December 31, 2004.

MERGER INTEGRATION AND DEVELOPMENT PLAN

CNH combines the operations of New Holland and Case as a result of their
merger in November 1999. Management believes that the benefits of this
combination include:

- strengthening our position as a global, full-line manufacturer and
distributor of agricultural and construction equipment products;

- leveraging some of the most well-recognized brands in agricultural and
construction equipment; and

- reducing costs by integrating and rationalizing the manufacturing, supply
chain management, distribution and administrative functions of the
combined companies.

As a result of our merger integration and development plan, we expect to
achieve over $600 million in annual merger-related profit improvements by
year-end 2003, including the approximately $433 million of annual profit
improvements achieved in 2001 as compared to the base levels of revenues and
costs incurred in the combined operations of New Holland and Case for the full
year 1999. In addition, our goal is to achieve an additional $250 million in
annual merger-related and other profit improvements by year-end 2005, relating
mainly to savings in materials costs and rationalization of our plants and parts
depots.

OUR BUSINESS SEGMENTS

We operate through distinct agricultural equipment and construction
equipment segments, which together are known as our Equipment Operations, and in
addition provide financial services through our Financial Services segment.

Agricultural Equipment -- We believe we are the largest global manufacturer
of agricultural tractors based on units sold, and we have leading positions in
combines, hay and forage equipment and specialty harvesting equipment. Our brand
family consists of the Case IH and New Holland worldwide brands and Steyr, a
regional European brand.

Construction Equipment -- We have leading positions in the full spectrum of
heavy and light construction equipment including backhoe loaders, wheeled and
crawler excavators, wheel loaders, graders, dozers and skid steer loaders. Our
brand family consists of our Case, New Holland, Fiat-Hitachi, FiatAllis, O&K and
Kobelco brands.

Financial Services -- To support the sale of our Equipment Operations'
products, our Financial Services operations offer retail financing to qualified
end users and wholesale financing to our dealers, primarily in North America. As
of December 31, 2001, our total serviced portfolio of receivables was
approximately $11.0 billion.

We also manufacture and distribute replacement parts for our Equipment
Operations. We have historically enjoyed strong margins and consistent earnings
on our parts sales. We believe that our ability to offer quality and timely
parts and service through our extensive dealer networks is an important factor
in achieving overall customer satisfaction and a strong contributor to our end
users' original equipment purchase decision.

OUR COMPETITIVE STRENGTHS

Our competitive strengths include:

- Global Presence

- Well-Recognized Brands

- Full Range of Competitive Products

- Implementation of a Low-Cost, Highly Flexible Manufacturing System

- Strong Financial Services Capabilities

- Experienced Management

- Support of the Fiat Group

We operate in highly competitive, cyclical industries. Our ability to
respond timely to changing competitive and economic conditions may be impacted
by our size in the construction equipment industry relative to our key
competitors, our significant amount of indebtedness, potentially higher funding
costs and our management's focus on merger integration and cost savings
initiatives.

OUR BUSINESS STRATEGY

The following are the key elements of our strategy:

Multiple Brands -- We are leveraging our world-class Case, Case IH, New
Holland, Fiat-Hitachi, FiatAllis, O&K and Kobelco brands and multiple
distribution networks to further strengthen our position in all principal
existing markets and enhance growth opportunities by entering new market
segments.

Improve Cost Competitiveness -- We are restructuring our manufacturing
processes, reducing our selling, general and administrative costs and developing
common product platforms in order to achieve economies of scale and enhance
efficiency.

Reengineer Core Processes -- We have commenced projects, beyond those
envisioned at the time of the merger, to further enhance the efficiency of our
core business processes.

New Products -- We introduced many new products in 2001 and intend to do so
again in 2002. By 2004, we anticipate that almost 90% of our total revenue,
excluding parts revenue, will be generated by new products introduced since the
merger.

Global Expansion to New Markets -- We view geographical expansion as a
major source of future growth and will expand primarily into markets
characterized by rapidly increasing food, housing and infrastructure demand.

Expand our Services Operations -- We are extending our services to earn
revenue from our customers' expenditures on products and services other than
those we currently provide.

LIQUIDITY AND CAPITAL RESOURCES

We rely primarily upon lines of credit, credit facilities, liquidity
facilities and asset-backed securities to support our financing needs. A
significant portion of our financing comes from Fiat and related entities. We
have securitization programs to sell, on a revolving basis, wholesale
receivables generated in the United States, Canada and Europe. We also have
access to the asset-backed term market in the United States and Canada. Overall,
we maintain sufficient committed lines of credit and liquidity facilities to
cover our expected funding needs on both a short-term and long-term basis. At
March 31, 2002, we had approximately $3.9 billion available under our $7.9
billion total lines of credit.

RECENT DEVELOPMENTS

First Quarter 2002 Results

We reported consolidated revenues of $2,389 million in the first quarter of
2002 compared with $2,454 million in the first quarter of 2001. Our first
quarter revenues were adversely impacted by unfavorable foreign exchange rates
and partially offset by stronger sales of agricultural equipment and incremental
revenues from acquisitions, such as Kobelco's North American operations. For the
first quarter of 2002, we reported a loss of $49 million, which included
restructuring charges, net of tax, of $3 million, as compared to a loss of $70
million, which included restructuring charges, net of tax, of $3 million and $21
million of goodwill, in the first quarter of 2001. Our loss per share for the
quarter was $0.18 per share, which includes restructuring charges of $0.01 per
share.

Alliances and Joint Ventures

On January 10, 2002, we announced completion of our global alliance with
Kobelco Construction Machinery Co., Ltd., the world's fourth largest
manufacturer of hydraulic excavators, and its parent Kobe Steel, Ltd., one of
Japan's leading steelmakers. We formed this alliance to pursue the development,
production and sale of crawler excavators, including mini-excavators, on a
worldwide basis. This strategic worldwide alliance with Kobelco gives us access
to key crawler excavator technology. We also gain a presence in the Asia-Pacific
construction equipment market as Kobelco's exclusive OEM supplier of all
non-excavator construction equipment products, which complements our strong
presence in the North American and European markets.

In connection with our alliance with Kobelco, we acquired a 10% interest in
Kobelco Construction Machinery in Japan and a 65% interest in Kobelco America.
Kobelco acquired 100% of our construction equipment operations in Australia,
Asia and China, becoming an exclusive distributor of the Case and New Holland
brands of construction equipment in this region.

In the third quarter of 2002, we will increase our interest in Kobelco
Construction Machinery in Japan to 20%. During the same period, our European
regional alliance with Hitachi Construction Machinery Company, Ltd. will end. At
that time, the operations of Fiat-Hitachi and Kobelco Construction Machinery
(Europe) B.V. will be combined to create Fiat-Kobelco Construction Machinery in
Europe. We will own 75% of the new entity and Kobelco Construction Machinery
will hold a 20% interest. Sumitomo Corporation will maintain its 5% stake.

Under the terms of the global alliance, we have the option to increase our
interest in Kobelco Construction Machinery in Japan to 35% by the third quarter
of 2004. Similarly, Kobelco Construction Machinery in Japan has the option to
increase its interest in Fiat-Kobelco Construction Machinery in Europe to 35% by
the same period.

In Europe, crawler excavators will be sold under both the Fiat-Kobelco and
Kobelco brands. Sumitomo Construction Machinery will continue to supply crawler
excavators to the Case Construction network and brand.

In January 2002, an additional joint venture in China, Shanghai New Holland
Agricultural Machinery Corp., Ltd., commenced operations. Shanghai New Holland
was formed by an agreement between Shanghai Tractor and Internal Combustion
Engine Corporation ("Shanghai Tractor"), a wholly-owned subsidiary of Shanghai
Automotive Industry Corporation, and our New Holland brand of agricultural
equipment. The joint venture company will manufacture, distribute and ultimately
export agricultural tractors under 100 horsepower.

We hold a 60% equity share and Shanghai Tractor holds a 40% share in
Shanghai New Holland. We plan to increase annual output at Shanghai New Holland
to over 18,000 tractors and approximately 16,000 engines by 2007. Shanghai New
Holland is based in Shanghai Tractor's existing facility in Shanghai and will
produce both New Holland and Shanghai Tractor branded tractors.

own 50.1% of the shares of CNH Capital Europe SAS, which will hold the retail
financing portfolio, and we will own the remaining 49.9% of the shares. BNP
Paribas Lease Group will provide funding and administrative services for CNH
Capital Europe SAS, while CNH Capital's own European operations will be
responsible for the marketing and origination of financial products. The final
agreement is subject to approval by the board of directors of each company and
by the Banque de France.

Other Events

On March 28, 2002, we sold $674 million of retail receivables to a
qualified special purpose entity pursuant to an asset-backed securitization
transaction in which the special purpose entity issued $1 billion of securities,
backed by the receivables sold, to outside investors. We will sell additional
retail receivables to the special purpose entity in the second quarter of 2002
to complete the funding of the transaction. Proceeds from the sale were used to
repay outstanding borrowings and finance the origination of new receivables.

On May 13, 2002, President Bush signed into law the Farm Security and Rural
Investment Act of 2002. The new law will increase subsidies to the U.S. farming
industry by $31 billion over six years.

Effective January 1, 2002, we adopted Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets." Beginning January 1,
2002, goodwill and indefinite-lived intangible assets will be tested for
impairment annually, and will be tested for impairment between annual tests if
an event occurs or circumstances change that would indicate the carrying amount
may be impaired. We are currently performing the required transitional
impairment tests of goodwill and indefinite-lived intangible assets. SFAS No.
142 prescribes a two-phase process for impairment testing of goodwill. The first
phase, required to be completed by June 30, 2002, tests for impairment. The
second phase (if necessary), required to be completed by December 31, 2002,
measures the amount of impairment. Currently, we have identified three reporting
units under the criteria set forth by SFAS No. 142: Agricultural Equipment,
Construction Equipment and Financial Services. We have engaged an independent
third-party valuation firm to assist with the fair value determinations of our
reporting units and indefinite-lived intangible assets. To determine fair value,
we plan to rely on two valuation models: guideline company method and discounted
cash flow. We are nearing completion of the first phase of the transitional
impairment tests. Preliminary results indicate that we may incur a goodwill
impairment charge of up to $300 million associated with our Construction
Equipment reporting unit. Preliminary results also indicate that the fair value
of our Agricultural Equipment reporting unit, Financial Services reporting unit
and indefinite-lived intangible assets exceed their respective carrying amounts
and therefore we do not expect these reporting units or intangible assets to be
impaired.

THE OFFERING

Common shares offered:

U.S. offering........................... 40,000,000 shares

International offering.................. 10,000,000 shares
-----------------
Total............................ 50,000,000 shares

Shares outstanding after the offering and
Fiat debt exchange........................... 652,100,298 shares

Fiat debt exchange........................... Concurrently with the offering of our shares,
Fiat and one of its subsidiaries, which
collectively hold $1.3 billion principal
amount of CNH debt, will contribute this
amount to CNH in exchange for a number of
common shares equal to $1.3 billion divided
by the public offering price. At a public
offering price of $4.00 per share, we will
issue a total of 325,000,000 common shares to
Fiat and this subsidiary.

Overallotment option......................... The U.S. underwriters may also purchase up to
an additional 6,000,000 shares from CNH at
the public offering price, less the
underwriting discount, within 30 days from
the date of this prospectus to cover
overallotments. The international managers
may similarly purchase up to an additional
1,500,000 shares from CNH.

Use of proceeds.............................. We intend to use substantially all of the net
proceeds of the offering to repay
indebtedness. The balance of the net
proceeds, if any, will be used for working
capital and other general corporate purposes.
See "Use of Proceeds."

Risk factors................................. See "Risk Factors" and other information
included in this prospectus for a discussion
of factors you should carefully consider
before deciding to invest in shares of the
common shares.

New York Stock Exchange symbol............... CNH

Common shares outstanding after this offering are based on 277,100,298
shares outstanding as of March 31, 2002 and exclude outstanding options to
purchase approximately 9,777,483 of our common shares and 19,071,049 of our
common shares reserved for future grants or issuance under our share
compensation plans.

Unless we specifically state otherwise, all information in this prospectus
does not include shares issued upon exercise of the underwriters' overallotment
option.
----------------------

CNH Global N.V. is a corporation organized under the laws of the Kingdom of
The Netherlands, with a registered office in the World Trade Center, Amsterdam
Airport, Tower B, 10th Floor, Schiphol Boulevard 217, 1118 BH Amsterdam, The
Netherlands (telephone number: +(31)-20-446-0429). It was incorporated on August
30, 1996. Our agent for purposes of service of process in the United States is
Roberto Miotto, 100 South Saunders Road, Lake Forest, Illinois 60045 (telephone
number: +(1)-847-955-3910).

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

The following table sets forth summary historical and pro forma financial
data for CNH for the periods indicated. The summary actual historical data as of
and for the years ended December 31, 2001 and 2000 have been derived from our
audited financial statements. Certain reclassifications of prior year amounts
have been made in order to conform with the current year presentation.

Management believes that a comparison of the actual financial results for
the years 2001 and 2000 to the actual financial results for the years 1999 and
1998 is not meaningful in particular due to the magnitude of the Case
acquisition on November 12, 1999, which approximately doubled the annual
revenues and asset base of CNH. Thus, management has prepared 1999 and 1998
unaudited consolidated pro forma statements of operations to illustrate the
estimated effects of the acquisition of Case by New Holland as if this
transaction had occurred at January 1, 1998. The pro forma data reflect the
impact of the fair value adjustments to the Case assets and liabilities
acquired, as well as incremental goodwill amortization and interest expense for
the related acquisition financing. This information is not necessarily
indicative of what our actual results of operations or financial position would
have been had the Case acquisition actually been consummated as of the dates
assumed and is not indicative of our results of operations for any future
periods.

The unaudited "as adjusted" financial data as of and for the year ended
December 31, 2001 reflect our historical results as adjusted for the following
transactions as if they had occurred on January 1, 2001: (1) the issuance of
50,000,000 common shares in this offering at a public offering price of $4.00
per share and the use of the proceeds of the issuance to repay indebtedness, and
(2) the issuance of a total of 325,000,000 common shares at a price of $4.00 per
share to Fiat and one of its subsidiaries in exchange for the contribution to
CNH of an aggregate of $1.3 billion of CNH debt that Fiat and the subsidiary
hold. This information is not necessarily indicative of what our actual results
of operations or financial position would have been had these transactions
actually been consummated on the dates assumed and is not indicative of our
results of operations for any future period.

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------
AS ADJUSTED ACTUAL ACTUAL PRO FORMA ACTUAL PRO FORMA ACTUAL
2001 2001 2000 1999 1999 1998 1998
----------- ------- ------- ----------- --------- ----------- ---------
(UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED)
----------- ----------------- ----------- --------- ----------- ---------
(IN MILLIONS, EXCEPT RATIOS AND PER SHARE DATA)

CNH CONSOLIDATED
Revenues.................................. $ 9,715 $ 9,715 $10,041 $10,644 $ 6,273 $11,860 $ 5,697
Net income (loss)......................... (283) (332) (381) (181) 148 41 258
Diluted earnings (loss) per share......... (0.43) (1.20) (1.79) (1.21) 0.97 0.28 1.73
Weighted average diluted shares
outstanding............................. 652 277 213 149 165 149 149

EQUIPMENT OPERATIONS(1)
STATEMENTS OF OPERATIONS DATA:
Net sales of equipment.................... $ 9,030 $ 9,030 $ 9,337 $ 9,929 $ 5,949 $11,212 $ 5,474
Cost of goods sold........................ 7,586 7,586 7,820 8,280 4,884 9,088 4,348
Selling, general and administrative....... 915 915 1,007 1,173 657 1,137 536
Research, development and engineering..... 306 306 338 357 196 376 152
Restructuring and other merger related
costs................................... 97 97 157 19 19 172 40
Interest expense.......................... 509(2) 585 542 519 154 487 79
Net income (loss)......................... (283)(3) (332) (381) (181) 148 41 258

EQUIPMENT OPERATIONS(1)
BALANCE SHEET DATA (AS OF YEAR END):
Total assets........................... $14,233 $14,233 $13,237 $12,928 $12,928 $ 5,274
Cash and cash equivalents.............. 378 378 593 387 387 588
Short-term debt(4)..................... 1,599(5) 2,387 2,724 3,879 3,879 553
Long-term debt, including current
maturities(4)........................ 4,156(6) 4,856 3,066 1,098 1,098 125
Shareholders' equity................... 3,401(2)(7) 1,909 2,514 1,164 1,710 1,784

OTHER DATA:
EBITDA(8).............................. $ 467 $ 467 $ 338 $ 561 $ 476 $ 900 $ 581
Goodwill amortization.................. 75 75 64 68 4 84 10
Depreciation and other amortization.... 244 244 272 312 156 307 116
Capital expenditures................... 221 221 213 309 209 370 149
Net cash provided (used) by operating
activities........................... (268) (268) 285 317 14 70
Net cash provided (used) by investing
activities........................... (169) (169) (140) (4,609) (4,538) (215)
Net cash provided (used) by financing
activities........................... 241 241 107 4,092 4,394 (69)
EBITDA/Interest expense................ 0.92x 0.80x 0.62x 1.08x 3.09x 1.85x 7.35x
Total debt/Total capitalization (as of
year end)(9)......................... 63% 79% 70% 81% 74% 28%
Total employees (as of year end)....... 27,200 27,200 29,900 33,700 33,700 34,600 21,000

---------------

(1) Equipment Operations data represents CNH's agricultural and construction
equipment operations with CNH's financial services operations accounted for
under the equity method.

(2) Represents reduction in interest expense of $76 million resulting from Fiat
debt exchange (accounting for $71 million of such reduction) and application
of the proceeds from the shares offered hereby (accounting for $5 million of
such reduction).

(3) Using the company's statutory tax rate gives effect to reduction in interest
expense resulting from the Fiat debt exchange and the application of the
proceeds from the issuance of the shares offered hereby.

(4) Short-term and long-term debt of Equipment Operations include $1,636 million
at December 31, 2001 that has been loaned to finance Financial Services. Net
of intersegment loans to Financial Services, total short-term and long-term
debt of Equipment Operations as of the dates indicated above were:

AS PRO
ADJUSTED ACTUAL ACTUAL FORMA
2001 2001 2000 1999
----------- ------ ------ ---------
(IN MILLIONS)

Short-term debt.................................... $1,075 $1,863 $2,148 $3,851
Long-term debt, including current maturities....... 3,044 3,744 3,052 1,084

(5) Represents reduction in short-term debt of $788 million resulting from the
Fiat debt exchange (accounting for $600 million of such reduction) and
application of the proceeds from the shares offered hereby (accounting for
$188 million of such reduction).

(6) Represents reduction in long-term debt of $700 million resulting from the
Fiat debt exchange.

(7) Reflects increase in shareholders' equity resulting from issuance of common
shares offered hereby and in the Fiat debt exchange offset by a reduction in
shareholders' equity for a dividend of $0.10 per share, or $38 million, that
would have been paid had those shares been outstanding. Any dividends
declared in the future will be paid in respect of all outstanding shares,
including the shares issued to Fiat in the Fiat debt exchange.
(footnotes continue to next page)

(8) Earnings before interest, income taxes, depreciation and amortization for
Equipment Operations only including Financial Services on an equity basis.
Management believes that EBITDA is a useful measure of operating
performance. EBITDA does not represent cash flow from operations as defined
by U.S. GAAP, is not necessarily indicative of cash available to fund all
cash flow needs and should not be considered as an alternative to net income
or net cash provided (used) by operating activities under U.S. GAAP for
purposes of evaluating our results of operations. EBITDA as presented by CNH
may not be comparable to similarly titled measures reported by other
companies.

(9) Total debt/Total capitalization, taking into account short-term and
long-term debt of Equipment Operations net of intersegment loans to
Financial Services, would have been 55%, 75%, 67% and 81% at the dates
indicated in footnote (4).

FORWARD-LOOKING STATEMENTS

This prospectus 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 or incorporated by reference in this
prospectus, including statements regarding our competitive strengths, business
strategy, future financial position, budgets, projected costs and plans and
objectives of management, are forward-looking statements. These statements may
include terminology such as "may," "will," "expect," "should," "intend,"
"estimate," "anticipate," "believe," "continue," or similar terminology.

Our outlook is predominantly based on our interpretation of what we
consider key economic assumptions and involves risks and uncertainties that
could cause actual results to differ. Crop production and commodity prices are
strongly affected by weather and can fluctuate significantly. Housing starts and
other construction activity are sensitive to interest rates and government
spending. Some of the other significant factors for us include general economic
and capital market conditions, the cyclical nature of our business, customer
buying patterns and preferences, foreign currency exchange rate movements, our
hedging practices, our and our 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, energy prices, real estate values, animal diseases, crop pests,
harvest yields, government farm programs and consumer confidence, housing starts
and construction activity, concerns related to modified organisms and fuel and
fertilizer costs. Additionally, our 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 our ability to integrate effectively the operations and employees of New
Holland and Case, and to execute our multiple brand strategy. Further
information concerning factors that could significantly impact expected results
is included in "Risk Factors" and in the following sections of our 2001 20-F
Report, which is incorporated by reference into this prospectus: "Item 3. Key
Information;" "Item 4. Information on the Company -- CNH Business Strategy,"
"-- Environmental Matters," "-- Seasonality and Production Schedules" and
"-- Competition;" "Item 5. Operating and Financial Review and Prospects;" and
"Item 6. Directors, Senior Management and Employees -- Employees."

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.

RISK FACTORS

An investment in our common shares involves risk. Before you invest in the
common shares, you should consider carefully the risks described below, together
with all of the other information included in this prospectus. Any of the
factors described below, individually or in the aggregate, could have a material
adverse effect on our business, financial condition, results of operations or
the price of its common shares.

RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS

WE MAY NOT FULLY REALIZE, OR REALIZE WITHIN THE ANTICIPATED TIME FRAME, THE
ANTICIPATED BENEFIT OF THE MERGER OF NEW HOLLAND AND CASE.

CNH combines the operations of New Holland and Case as a result of their
merger on November 12, 1999. A key strategic objective of the merger is the
realization of at least $600 million in expected profit improvements by year-end
2003. We have already achieved approximately $433 million of annual profit
improvements in 2001 as compared to the base levels of revenues and costs
incurred in the combined operations of New Holland and Case for the full year
1999. In addition, our goal is to achieve an additional $250 million in annual
merger-related and other profit improvements by year-end 2005, relating mainly
to savings in materials costs and rationalization of our plants and parts
depots. Our ability to realize at least the remaining $167 million of
merger-related profit improvements by year-end 2003 or our goal of an additional
$250 million of merger-related and other profit improvements by year-end 2005
depends on, among other things, our ability to complete the following
cost-containment initiatives:

- Reduction of manufacturing cost -- Through February 2002, we have
divested, closed or reconfigured approximately 15 plants and eight parts
depots in order to concentrate production in lower-cost plants and
increase capacity utilization. We are in the process of closing or
reconfiguring six more plants. In addition, we need to complete our plans
for outsourcing non-core manufacturing activities.

- Rationalization of supplier base -- We have undertaken a project to
rationalize our supplier base, reducing the number of our suppliers from
over 6,000 to approximately 3,000 by 2004. By the end of 2001, we had
reduced the number of our suppliers to approximately 5,100.

Our failure to complete these initiatives could cause us not to realize
fully our anticipated profit improvements, which could weaken our competitive
position and adversely affect our financial condition and results of operations.

OUR SUCCESS DEPENDS ON THE IMPLEMENTATION OF NEW PRODUCT INTRODUCTIONS, WHICH
WILL REQUIRE SUBSTANTIAL EXPENDITURES.

Our long-term results depend upon our ability to introduce and market new
products successfully. The success of our new products will depend on a number
of factors, including:

- the economy;

- competition;

- customer acceptance; and

- the strength of our dealer networks.

As both we and our competitors continuously introduce new products or
refine versions of existing products, we cannot predict the market shares our
new products will achieve. Over the next few years, we expect that new products
will generate a substantial portion of our revenues. Any manufacturing delays or
problems with our new product launches could adversely affect our operating
results. We have experienced delays in the introduction of new products in the
past and we cannot assure you that we will not experience delays in the future.
In addition, introducing new products could result in a decrease in revenues
from our existing products. You should read the discussion under the heading
"Business -- Products and Markets" for a more detailed discussion regarding our
new and existing products.

Consistent with our strategy of offering new products and product
refinements, we expect to continue to use a substantial amount of capital for
further product development and refinement. We may need more capital for product
development and refinement than is available to us, which could adversely affect
our business, financial condition or results of operations.

PRODUCTION CAPACITY CONSTRAINTS AND INVENTORY FLUCTUATIONS COULD ADVERSELY
AFFECT OUR RESULTS OF OPERATIONS.

Changes in demand for our products and our program to rationalize our
manufacturing facilities and realign our manufacturing process have at times
resulted in, and may in the future result in, temporary constraints upon our
ability to produce the quantities necessary to fill orders and thereby effect
sales in a timely manner. A prolonged delay in our ability to fulfill orders on
a timely basis could adversely affect our operations. In addition, we rely upon
single suppliers for certain components, primarily those that require joint
development between us and our suppliers. An interruption in the supply of or a
significant increase in the price of any component part could adversely affect
our profitability or our ability to obtain and fulfill orders. Moreover, our
continuous development and production of new products often involves the
retooling of existing manufacturing facilities. This retooling may limit our
production capacity at certain times in the future, which could adversely affect
our results of operations.

Our sales are influenced by the volume of inventories of finished products
maintained by us and our dealers. Our management believes that we and our
dealers have generally managed inventories in a relatively prudent manner, which
could cause us to lose certain sales as a result of product unavailability at
certain locations during periods of increased demand. However, in periods of
sudden declines in industry demand, larger inventories could lead to substantial
excesses in supply over demand, causing future reductions in our manufacturing
schedules and adversely impacting our operating results.

OUR UNIONIZED LABOR FORCE AND OUR CONTRACTUAL AND LEGAL OBLIGATIONS UNDER
COLLECTIVE BARGAINING AGREEMENTS AND LABOR LAWS COULD SUBJECT US TO GREATER
RISKS OF WORK INTERRUPTION OR STOPPAGE AND IMPAIR OUR ABILITY TO ACHIEVE COST
SAVINGS.

Labor unions represent most of our production and maintenance employees
worldwide. Although we believe our relations with our unions are positive, we
cannot be certain that future issues with labor unions will be resolved
favorably or that we will not experience a work interruption or stoppage which
could adversely affect our business.

In Europe, our employees are protected by various worker protection laws
which afford employees, through local and central works councils, rights of
consultation with respect to specific matters involving their employers'
business and operations, including the downsizing or closure of facilities and
employment terminations. These laws and the collective bargaining agreements to
which we are subject could impair our flexibility in streamlining existing
manufacturing facilities and in restructuring our business.

AN INCREASE IN HEALTH CARE OR PENSION COSTS COULD ADVERSELY AFFECT OUR RESULTS
OF OPERATIONS.

Health care inflation rates in the United States have increased
significantly, leading to higher costs for both active and retired employees.
Should such inflation rates continue, we may record additional charges or make
changes to our benefit plans. In addition, recent fluctuations in the financial
markets have caused the valuation of the assets in our defined benefit pension
plans to decrease, which has resulted in an under-funding of some of our defined
benefit pension plans and the recognition of a minimum pension liability on our
balance sheet. We cannot assure you that future fluctuations in the financial
markets will not result in additional under-funding of our defined benefit
pension plans and require contributions by us that could adversely affect our
financial position.

FUTURE UNANTICIPATED EVENTS MAY REQUIRE US TO TAKE ADDITIONAL RESERVES RELATING
TO OUR NON-CORE FINANCING ACTIVITIES.

Beginning in 1998, as part of a diversification strategy for its Financial
Services operations, Case expanded into the financing of trucks and trailers,
marine vessels and agricultural and construction equipment sold through its
competitors' dealers. As a result of a deterioration in these markets, we
recorded significant losses in 2000 and 2001 in our Financial Services
operations. In late 2000 and throughout 2001, we discontinued lending in these
non-core areas. We believe we have established adequate reserves for possible
losses on these receivables from our non-core financing activities. However,
future unanticipated events may affect our customers' ability to repay their
obligations or reduce the value of the underlying assets and therefore require
us to increase our reserves, which could materially adversely affect our
financial condition and results of operations.

WE ARE SUBJECT TO CURRENCY EXCHANGE RATE FLUCTUATIONS AND INTEREST RATE
CHANGES, WHICH COULD ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.

We conduct operations in many areas of the world involving transactions
denominated in a variety of currencies. We are subject to currency exchange rate
risk to the extent that our costs are denominated in currencies other than those
in which we earn revenues. Similarly, changes in interest rates affect our
results of operations by increasing or decreasing borrowing costs and finance
income. In 2001, unfavorable currency exchange rate fluctuations had an adverse
impact on our financial condition and results of operations, while lower
interest rates had a slightly favorable impact. We manage these risks, which
arise in the ordinary course of business, through the use of financial hedging
instruments. We have historically entered into, and expect to continue to enter
into, hedging arrangements with counterparties that are members of the Fiat
Group. As with all hedging instruments, there are risks associated with the use
of foreign currency forward exchange contracts, as well as interest rate swap
agreements and other risk management contracts. While the use of such hedging
instruments provides us with protection from certain fluctuations in currency
exchange and interest rates, we potentially forego the benefits that might
result from favorable fluctuations in currency exchange and interest rates. In
addition, any default by the counterparties to these transactions, including by
counterparties that are members of the Fiat Group, could adversely affect us.

Despite our use of financial hedging transactions, we cannot assure you
that currency exchange rate or interest rate fluctuations will not adversely
affect our results of operations, cash flow, financial condition or the price of
our common shares.

TO REALIZE ADDITIONAL COST SAVINGS AND SYNERGIES, WE MUST COMPLETE THE
INTEGRATION AND REENGINEERING OF A NUMBER OF CORE MANAGEMENT PROCESSES.

Our ability to realize cost savings and synergies from the merger of New
Holland and Case will depend, in part, on our success in completing the
integration and, in many cases, reengineering of the different management
systems used throughout the two companies before the merger. We are focusing our
efforts, among other things, on reengineering product development and supply
chain management, as well as integrating the finance, information systems, human
resources and other administrative functions of the New Holland and Case
operations. This integration process has taken longer than we anticipated due to
the departure of a significant number of former Case executives and corporate
staff after the merger and the complexity of coordinating geographically
widespread organizations.

TURNOVER IN FINANCE AND ACCOUNTING STAFF MAY ADVERSELY IMPACT OUR FINANCIAL
REPORTING PROCESS.

Turnover in corporate staff in our finance and accounting area has
prolonged the process of integrating our Case and New Holland operations and
created the risk that we may not have accurate and timely information for
decision making and financial reporting purposes. Our independent auditors noted
this risk to our management and Board of Directors in connection with our 2000
and 2001 audits. Management has implemented, and is continuing to implement, a
plan to address these issues, including hiring additional

personnel and the adoption of uniform accounting procedures throughout our
operations. We believe that the measures we are taking, once fully implemented,
will resolve the matters noted by our auditors before the audit of our 2002
financial statements. However, we cannot assure you that we will be successful
in implementing this plan within that timeframe.

WE ARE EXPOSED TO POLITICAL, ECONOMIC AND OTHER RISKS FROM OPERATING A
MULTINATIONAL BUSINESS.

Our business is multinational and subject to the political, economic and
other risks that are inherent in operating in numerous countries. These risks
include those of adverse government regulation, including the imposition of
import and export duties and quotas, currency restrictions, expropriation and
potentially burdensome taxation. We cannot predict with any degree of certainty
the costs of compliance or other liability related to such laws and regulations
in the future and such future costs could significantly affect our business,
financial condition and results of operations.

On July 17, 2001, the European Commission issued a Statement of Objections
alleging that our French and Italian subsidiaries adopted practices leading to
the prevention of sales outside of dealer territories. We submitted a reply to
the European Commission and a hearing was held on January 28, 2002. As of the
date of this prospectus, the Commission has not provided a ruling. The
Commission has the power to assess a wide range of fines, penalties and
sanctions, which may be significant. Any fines would be assessed by the
Commission only after a ruling by the Commission that these subsidiaries engaged
in anti-competitive practices. We believe that the allegations should be
dismissed. However, we are unable to predict the outcome of this proceeding and,
while we intend to appeal the decision if the outcome is unfavorable, we cannot
assure you that any fine that the European Commission might impose would not
have a material adverse impact on our business, financial condition and results
of operations.

Political developments and government regulations and policies in the
countries in which we operate directly affect the demand for agricultural
equipment. For example, a decrease or elimination of current price protections
for commodities in the European Union or of subsidy payments for farmers in the
U.S. would likely result in a decrease in demand for agricultural equipment. A
decrease in the demand for agricultural equipment could adversely affect our
sales, growth and results of operations.

WE MAY BECOME SUBJECT TO U.S. WITHHOLDING TAX ON INTERCOMPANY LENDING, WHICH
WOULD ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.

CNH Global N.V., the Dutch parent company, makes intercompany loans to our
U.S. subsidiaries. The Netherlands -- United States Income Tax Convention, as
amended, exempts from U.S. withholding tax the payment of interest to us on
intercompany lending provided that, among other considerations, our shares are
substantially and regularly traded. To qualify for this exemption, one of the
requirements is that the annual trading volume of our common shares must be at
least 6% of the average number of our issued and outstanding common shares. We
believe that we presently satisfy the trading volume requirements of the
Netherlands-U.S. treaty. Our trading volume, annualized based on trading volume
from January to April 2002, was 12.3%. If the trading volume were to decline
below the 6% threshold, the interest payments that would be subject to
withholding tax would give rise to an annual incremental tax expense of
approximately $15 million. If this were to occur, we would consider alternative
funding strategies that may mitigate this cost. However, we cannot ensure that
such strategies would be successful.

RISKS PARTICULAR TO THE INDUSTRIES IN WHICH WE OPERATE

WE OPERATE IN A HIGHLY CYCLICAL INDUSTRY, WHICH COULD ADVERSELY AFFECT OUR
GROWTH AND RESULTS OF OPERATIONS.

Our business depends upon general activity levels in the agricultural and
construction industries. Historically, these industries have been highly
cyclical. Our Equipment Operations and Financial Services operations are subject
to many factors beyond our control, such as:

- the credit quality, availability and prevailing terms of credit for
customers;

- our access to credit;

- adverse political and economic developments in our existing markets;

- the response of our competitors to adverse cyclical conditions; and

- dealer inventory management.

In addition, our operating profits are susceptible to a number of
industry-specific factors, including:

Agricultural Equipment Industry

- changes in farm income and farm land value;

- the level of worldwide farm output and demand for farm products;

- commodity prices;

- government agricultural policies and subsidies;

- limits on agricultural imports; and

- weather.

Construction Equipment Industry

- prevailing levels of construction, especially housing starts, and levels
of industrial production;

- public spending on infrastructure;

- volatility of sales to rental companies;

- real estate values; and

- interest and inflation rates.

Financial Services

- cyclical nature of the above mentioned agricultural and construction
equipment industries which are the primary customers for our financial
services;

- interest rates;

- general economic and capital market conditions; and

- used equipment prices.

The nature of the agricultural and construction equipment industries are
such that a downturn in demand can occur suddenly, resulting in excess
inventories and production capacity and reduced prices for new and used
equipment. These downturns may be prolonged and may result in significant losses
to us during affected periods. Equipment manufacturers, including us, have
responded to downturns in the past by reducing production and discounting
product prices. These actions have resulted in restructuring charges and lower
earnings for us in past affected periods. In the event of future downturns, we
may need to undertake additional restructuring.

SIGNIFICANT COMPETITION IN THE INDUSTRIES IN WHICH WE OPERATE MAY RESULT IN
OUR COMPETITORS OFFERING NEW OR BETTER PRODUCTS AND SERVICES OR LOWER PRICES,
WHICH COULD RESULT IN A LOSS OF CUSTOMERS AND A DECREASE IN OUR REVENUES.

The agricultural equipment industry is highly competitive, particularly in
North America, Europe, Australia and Latin America. We compete primarily with
large global full-line suppliers, including Deere & Company and AGCO
Corporation; manufacturers focused on particular industry segments, including
Kubota Corporation and various implement manufacturers; regional manufacturers
in mature markets, including Claas KGaA and SAME Duetz-Fahr Group, that are
expanding worldwide to build a global presence; and local, low cost
manufacturers in individual markets, particularly in emerging markets such as
Eastern Europe, India and China.

The construction equipment industry is highly competitive, particularly in
Western Europe, North America, Latin America and the Asia Pacific region. We
compete primarily with global full-line suppliers with a presence in every
market and a broad range of products that cover most customer needs, including
Caterpillar Inc., Komatsu Construction Equipment and Volvo Construction
Equipment Corporation; regional full-line manufacturers, which have a strong
position in one market but not a global presence, including Deere & Company,
J.C. Bamford Excavators Ltd. and Liebherr-Holding GmbH; and product specialists
operating on either a global or a regional basis, including Ingersoll-Rand
Company (Bobcat), Hitachi Ltd., Sumitomo Construction, Manitou B.F., Merlo UK
Ltd., Gehl Company, Mustang Manufacturing Company, Inc., Yanmar Agricultural
Equipment Co. Ltd. and Kubota Corporation.

If we are unable to compete successfully with other agricultural or
construction equipment manufacturers, we could lose customers and our revenues
may decline. In addition, competitive pressures in the agricultural and
construction equipment businesses may affect the market prices of our new and
used equipment, which, in turn, may adversely affect our sales margins and
results of operations.

Banks, finance companies and other financial institutions compete with our
Financial Services operations. We may be unable to compete successfully in our
Financial Services operations with larger companies that have substantially
greater resources or that offer more services than we do.

STRUCTURAL DECLINES IN THE DEMAND FOR AGRICULTURAL OR CONSTRUCTION EQUIPMENT
COULD ADVERSELY AFFECT OUR SALES AND RESULTS OF OPERATIONS.

The agricultural equipment business experienced a period of major
structural decline in the number of units sold and substantial industry-wide
overcapacity during the 1980s and early 1990s followed by a period of
consolidation among agricultural equipment manufacturers. Following a brief
period of increasing industry volumes in the mid to late 1990s, the number of
units sold, particularly of high horsepower agricultural tractors and combines,
began to steadily decline again in 1999. This decline continued in 2000 and
2001. Our sales of agricultural equipment declined in line with the industry. In
response to these adverse conditions, many companies, including us, have
undertaken restructuring programs to further reduce capacity. We cannot assure
you that the agricultural equipment industry will not continue to experience
declines or that unit sales will ever return to levels experienced in the mid to
late 1990s.

The construction equipment business also experienced a major structural
decline in the number of units sold during 2001. Our sales of construction
equipment declined in line with the industry. As with the agricultural equipment
industry, we cannot assure you that the construction equipment industry will not
continue to experience a decrease in demand.

A decrease in industry-wide demand for agricultural and construction
equipment or a lack of recovery in the number of unit sales could result in
lower sales of our equipment and hinder our ability to operate profitably.

AN OVERSUPPLY OF USED AND RENTAL EQUIPMENT MAY ADVERSELY AFFECT OUR SALES AND
RESULTS OF OPERATIONS.

In recent years, short-term lease programs and commercial rental agencies
for agricultural and construction equipment have expanded significantly in North
America. In addition, there has been
16

consolidation of some commercial rental agencies into nationwide rental
conglomerates, such as United Rentals, Inc. and NationsRent, Inc. These larger
rental companies have become sizeable purchasers of new equipment and can have a
significant impact on total industry sales, particularly in light construction
equipment.

When this equipment comes off lease or is replaced with newer equipment by
rental agencies, there may be a significant increase in the availability of
late-model used equipment which could adversely impact used equipment prices. If
used equipment prices decline significantly, sales of new equipment could be
depressed. As a result, an oversupply of used equipment could adversely affect
demand for, or the market prices of, our new and used equipment. In addition, a
decline in used equipment prices could have an adverse effect on residual values
for leased equipment, which could adversely affect our financial performance.

THE AGRICULTURAL EQUIPMENT INDUSTRY IS HIGHLY SEASONAL, AND SEASONAL
FLUCTUATIONS MAY CAUSE OUR RESULTS OF OPERATIONS TO FLUCTUATE SIGNIFICANTLY
FROM QUARTER TO QUARTER.

The agricultural equipment business is highly seasonal, because farmers
traditionally purchase agricultural equipment in the spring and fall in
connection with the main planting and harvesting seasons. Our net sales and
income from operations have historically been the lowest in the first quarter
and the highest in the second quarter.

WE ARE SUBJECT TO EXTENSIVE ENVIRONMENTAL LAWS AND REGULATIONS, AND OUR COSTS
RELATED TO COMPLIANCE WITH, OR OUR FAILURE TO COMPLY WITH, EXISTING OR FUTURE
LAWS AND REGULATIONS COULD ADVERSELY AFFECT OUR BUSINESS AND RESULTS OF
OPERATIONS.

Our operations and products are subject to increasingly stringent
environmental laws and regulations in the countries in which we operate. Such
regulations govern, among other things, emissions into the air, discharges into
water, the use, handling and disposal of hazardous substances, waste disposal
and the remediation of soil and groundwater contamination. We regularly expend
significant resources to comply with regulations concerning the emissions levels
of our manufacturing facilities and the emissions levels of our equipment
products. In addition, we are currently conducting environmental investigations
or remedial activities at a number of our properties. We expect to make
environmental and related capital expenditures in connection with reducing the
emissions of our existing facilities and our manufactured equipment in the
future, depending on the levels and timing of new standards. In 2001, we
capitalized approximately $3.0 million of costs relating to compliance with
environmental regulations. Our costs of complying with these or any other
current or future environmental regulations may be significant. In addition, if
we fail to comply with existing or future laws and regulations, we may be
subject to governmental or judicial fines or sanctions.

RISKS RELATED TO OUR SUBSTANTIAL INDEBTEDNESS

OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.

We are highly leveraged and have substantial debt in relation to our
shareholders' equity. As of December 31, 2001, we had an aggregate of $9,863
million of outstanding indebtedness, and we are heavily dependent on
asset-backed securitization (ABS) transactions to fund our Financial Services
activities in North America and Australia. Although this offering and the Fiat
debt exchange are part of our overall plan to reduce our indebtedness, we will
continue to be highly leveraged following the completion of these transactions.

Our high level of debt could have important consequences to our investors,
including:

- we may not be able to secure additional funds for working capital,
capital expenditures, debt service requirements or general corporate
purposes;

- we will need to use a substantial portion of our cash flow from
operations to pay principal of and interest on our debt, which will
reduce the amount of funds available to us for other purposes;

- we are more highly leveraged than our primary competitors, which could
put us at a competitive disadvantage;

- we may not be able to adjust rapidly to changing market conditions, which
may make us more vulnerable in the event of a downturn in general
economic conditions or our business; and

- we may not be able to access the ABS markets, which may adversely affect
our ability to fund our Financial Services business.

To service our indebtedness, we will need to generate a significant amount
of cash, which will depend on many factors beyond our control.

Our ability to satisfy our debt obligations will depend on our ability to
generate cash in the future. Our ability to generate cash is subject to general
economic, financial, competitive, legislative, regulatory and other factors that
are beyond our control. If the cash flow from our operating activities is
insufficient, we may take actions, such as delaying or reducing capital
expenditures, attempting to restructure or refinance our debt, selling assets or
operations, or seeking additional equity capital. Any or all of these actions
may not be sufficient to allow us to service our debt obligations. Further, we
may be unable to take any of these actions on satisfactory terms, in a timely
manner or at all. The failure to generate sufficient funds to pay our debts or
to successfully undertake any of these actions could, among other things,
materially adversely affect our business and the market value of our common
shares.

RESTRICTIVE COVENANTS IN OUR DEBT INSTRUMENTS COULD LIMIT OUR FINANCIAL AND
OPERATING FLEXIBILITY AND SUBJECT US TO OTHER RISKS.

The agreements governing our indebtedness include certain covenants that
restrict, among other things:

- sales and leasebacks of assets above certain levels of tangible assets;

- the creation of certain liens; and

- consolidations, mergers and transfers of all or substantially all of our
assets.

We are currently in compliance with the covenants and restrictions
contained in our debt agreements. However, our ability to continue to comply
with such agreements may be affected by events beyond our control, including
prevailing economic, financial and industry conditions. In addition, upon the
occurrence of an event of default under our debt agreements, the lenders could
elect to declare all amounts outstanding under our debt agreements, together
with accrued interest, to be immediately due and payable.

CREDIT DOWNGRADES OF US AND FIAT HAVE AFFECTED OUR ABILITY TO BORROW FUNDS AND
MAY CONTINUE TO DO SO.

Our ability to borrow funds and our cost of funding depend on our and
Fiat's credit ratings, as Fiat currently provides us with direct funding, as
well as guarantees in connection with some of our external financing
arrangements.

Beginning in the fourth quarter of 2000 and continuing through 2001, our
ability to access the commercial paper market through the Case Corporation and
Case Credit programs was significantly reduced due to downgrades in the credit
ratings of those subsidiaries. In April 2001, Standard & Poor's Ratings Services
downgraded the long-term corporate credit ratings of CNH, Case Corporation and
Case Credit Corporation and related entities to BB from BBB- and also lowered
the short-term debt ratings of such entities to B, with a negative outlook. In
April 2001, Moody's Investors Service Inc. lowered its long-term and short-term
debt ratings of Case Corporation to Ba2 and NP from Baa3 and P-3, respectively,
also with a negative outlook. At the same time, Moody's downgraded Fiat's
long-term debt rating from A3 to Baa2. In addition, in June 2001, Standard &
Poor's downgraded Fiat's short-term rating from A-2 to A-3.

downgrade. In April 2002, Standard & Poor's placed Fiat's A-3 short-term
corporate credit rating on credit watch with negative implications. In May 2002,
Fitch Ratings announced that it had placed Fiat's BBB senior unsecured and F2
short-term ratings on Rating Watch Negative. At the same time, Fitch's F2
short-term rating for New Holland Credit Company's U.S. commercial paper
program, which is guaranteed by Fiat, was placed on Rating Watch Negative.

We cannot assure you that the rating agencies will not further downgrade
our or Fiat's credit ratings. These downgrades have already affected our ability
to borrow funds, and further ratings downgrades of either our or Fiat's debt
could adversely affect our ability to access the capital markets or borrow funds
at current rates. Our E155 million securitization program for the sale of
receivables contains a provision that might require us to terminate the sale of
receivables into the facility in the event of a ratings downgrade of Fiat's
long-term unsecured debt below BB- (by Standard & Poor's) or Ba3 (by Moody's).
We are attempting to restructure this facility so that a ratings downgrade is
linked to an increase in the level of the collateral, instead of the termination
of the sale of receivables into the facility. However, we cannot ensure that our
efforts will be successful.

OUR EVALUATION OF ALTERNATIVE SOURCES OF FUNDING AT COMPETITIVE RATES FOR CNH
CAPITAL IS AT AN EARLY STAGE; WE MAY NOT BE SUCCESSFUL IN IMPLEMENTING ANY OF
THESE ALTERNATIVES.

In the event that we were to consummate one or more of the above-described
joint venture transactions or related funding arrangements relating to CNH
Capital, it is likely that there would be a material impact on CNH Capital's
results of operations, financial condition, liquidity and capital resources. Due
to the very preliminary stage of our evaluation process, we cannot assure that
we will be successful in identifying suitable partners or in concluding such
transaction(s) or arrangement(s) on terms satisfactory to us, or that we will
realize the anticipated savings in cost of funding, enhanced range of products
and services, improved competitiveness and other projected benefits from such
transaction(s) or arrangement(s).

RISKS RELATED TO AN INVESTMENT IN OUR COMMON SHARES

OUR SHARE PRICE MAY BE VOLATILE, WHICH MAY MAKE IT MORE DIFFICULT TO REALIZE A
GAIN ON YOUR INVESTMENT IN OUR COMMON SHARES.

The trading volume and market price of our common shares could be subject
to wide fluctuations in response to factors such as the following, some of which
are beyond our control:

- quarterly variations in our operating results;

- operating results that vary from the expectations of securities analysts
and investors;

- changes in expectations as to our future financial performance, including
financial estimates by securities analysts and investors;

- changes in our relationship with Fiat;

- the introduction of new products or technologies by us or our
competitors;

- changes in results of operations and market valuations of other companies
in the agricultural and construction equipment industries;

- changes in laws and regulations;

- announcements by third parties of significant claims or proceedings
against us;

- announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments; and

- general economic and competitive conditions.

FUTURE SALES OF SHARES OF OUR COMMON SHARES MAY NEGATIVELY AFFECT OUR SHARE
PRICE.

Future sales of substantial amounts of shares of our common shares in the
public market, or even the potential for such sales, could adversely affect the
price of our common shares and could impair our ability to raise capital through
future sales of our equity securities. Upon completion of this offering and the
Fiat debt exchange, we will have 652,100,298 shares outstanding. All of the
shares sold in this offering, plus any shares issued upon exercise of the
underwriters' overallotment option, will be freely tradeable without restriction
under the Securities Act, unless purchased by our affiliates.

Fiat has advised us that it intends to continue to hold all of our common
shares that it owns following this offering. Fiat is not subject to any
contractual obligation to maintain its ownership position in our shares, except
that it has agreed not to sell or otherwise dispose of any of our shares of
common shares for a period of 90 days after the date of this prospectus without
the prior written consent of the underwriters. We cannot assure you that Fiat
will maintain its ownership of our common shares after the 90 day period
following this offering. Sales or distributions by Fiat of substantial amounts
of our common shares in the public market or to its shareholders could adversely
affect prevailing market prices for our common shares.

OUR SHAREHOLDERS MAY HAVE MORE LIMITED RIGHTS IN CERTAIN CIRCUMSTANCES THAN
SHAREHOLDERS OF A U.S. CORPORATION.

We are incorporated under the laws of The Netherlands, and our corporate
affairs are governed by our articles of association and regulations of our board
of directors and the laws of The Netherlands. Principles of law relating to
matters such as the validity of corporate procedures, the fiduciary duties of
our management, directors and controlling shareholders and the rights of our
shareholders differ from those that would apply if we were incorporated in a
jurisdiction within the United States. As a result, our shareholders may have
more difficulty in protecting their interests in the face of actions by our
management, directors or controlling shareholder than they might have as
shareholders of a corporation incorporated in a U.S. jurisdiction.

YOU MAY NOT BE ABLE TO SERVE PROCESS ON US AND ENFORCE CIVIL LIABILITIES
AGAINST US FOR CLAIMS BASED ON U.S. SECURITIES LAWS.

CNH is a corporation organized under the laws of The Netherlands. In
addition, some of the members of our Board of Directors, some of our officers
and some of the experts named in this prospectus reside outside the United
States. As a result, you may not be able to effect service of process within the
United States upon CNH or those persons or to enforce against them, either in
the United States or outside the United States, judgments of U.S. courts,
including judgments based on the civil liability provisions of the U.S. federal
securities laws. Also, a substantial portion of our assets and the assets of
those persons is located outside the United States; therefore, you may not be
able to collect a judgment within the United States.

state court in the United States has been based on grounds which are
internationally acceptable and that proper legal procedures have been observed,
the Dutch court should give binding effect to that final judgment unless it
violates public policy in The Netherlands. Nauta Dutilh has advised us that it
does not express an opinion as to whether enforcement by a Dutch court of a
judgment would be effected in any currency other than Euro or as to the
determination of the applicable exchange rate from U.S. Dollars to Euro.
Furthermore, it is not clear under Dutch law whether judgments awarding punitive
damages would be enforced.

THE LOSS OF SERVICES OF ARTHUR ANDERSEN LLP COULD ADVERSELY AFFECT INVESTORS IN
OUR COMMON SHARES OR CAUSE US SIGNIFICANT COST OR DELAY.

Arthur Andersen LLP and its international affiliates provide us with
auditing services, including issuing an audit report with respect to our
financial statements contained in this prospectus. Arthur Andersen LLP is the
subject of civil litigation, and is currently defending an obstruction of
justice charge in a criminal trial in the U.S. District Court for the Southern
District of Texas with respect to its activities in connection with Enron Corp.
It is possible that the criminal proceeding against Arthur Andersen LLP may
result in a conviction. As a result of the foregoing, Arthur Andersen LLP may
fail, may merge with or have its assets sold to a third party, or may lose
critical personnel. In the event that Arthur Andersen LLP fails or does not
otherwise continue in business, Arthur Andersen LLP may be unable to provide us
with its consent to being named as an expert or the inclusion of its audit
report in this prospectus and, moreover, may have insufficient assets to satisfy
any claims made by investors or by us with respect to this offering. The SEC may
decline to accept financial statements audited by Arthur Andersen LLP if the
firm is convicted or is unable to represent to us that there was appropriate
continuity of Arthur Andersen LLP personnel working on our audit and
availability of national office consultation. In the event that Arthur Andersen
LLP is unable to continue to provide audit services to us, or if the SEC
declines to accept financial statements audited by Arthur Andersen LLP, we could
experience significant additional cost or delay in completing our periodic
reports required to be filed with the SEC.

RISKS RELATED TO OUR RELATIONSHIP WITH FIAT

BECAUSE FIAT OWNS A SIGNIFICANT MAJORITY OF OUR COMMON SHARES, INVESTORS WILL
NOT BE ABLE TO AFFECT THE OUTCOME OF ANY SHAREHOLDER VOTE OR CHANGE IN CONTROL.

Following the completion of this offering and the Fiat debt exchange, Fiat
will continue to own, either directly or indirectly through Fiat Netherlands
Holding N.V. or through other wholly owned subsidiaries, over 80% of our
outstanding common shares. For as long as Fiat continues to own shares of our
common shares representing more than 50% of the combined voting power of our
common shares, it will be able to direct the election of all of the members of
our board of directors and determine the outcome of all matters submitted to a
vote of our shareholders, including matters involving:

- mergers or other business combinations;

- the acquisition or disposition of assets;

- the incurrence of indebtedness; and

- the payment of dividends on our common shares.

Fiat's high level of ownership of our shares may have the effect of
delaying, deterring or preventing a change in control, may discourage bids for
our common shares at a premium over their market price and may otherwise
adversely affect the market price of our common shares.

OUR TRANSACTIONS WITH FIAT MAY CREATE CONFLICTS OF INTEREST DUE TO FIAT'S
OWNERSHIP OF OUR COMMON SHARES.

We rely on Fiat to provide us with financial support, and we also purchase
goods and services from Fiat. Fiat's ownership of a substantial majority of our
common shares and ability to direct the election of

all the members of our board of directors could create, or appear to create,
potential conflicts of interest when Fiat is faced with decisions that could
have different implications for Fiat and us.

IN THE EVENT THAT FIAT DECIDES NOT TO OR IS UNABLE TO CONTINUE TO FINANCE OUR
OPERATIONS OR PROVIDE US WITH CERTAIN PRODUCTS AND SERVICES, OUR COSTS COULD
INCREASE, WHICH WOULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.

We rely on Fiat to provide either guarantees or funding in connection with
some of our external financing needs, including the short-term credit facilities
that we used to finance the merger of Case and New Holland. Fiat has agreed to
maintain its existing treasury and debt financing arrangements with us for as
long as it maintains control of us and, in any event, at least until December
31, 2004. After that time, Fiat has committed that it will not terminate our
access to these financing arrangements without affording us an appropriate time
period to develop suitable substitutes. The terms of any alternative sources of
financing may not be as favorable as those provided or facilitated by Fiat. We
also rely on Fiat to provide us with some other financial products to hedge our
foreign exchange and interest rate risk, cash management services and other
accounting and administrative services. The terms of any alternative sources of
these products or services may not be as favorable as those provided or
facilitated by Fiat.

WHERE YOU CAN FIND MORE INFORMATION

We file annual reports and other information with the U.S. Securities and
Exchange Commission. You may read and copy any document we file at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings also are available to you at the SEC's
web site at http://www.sec.gov.

The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents that are considered part of this prospectus.
Information that we file later with the SEC will automatically update and
supersede the previously filed information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this
offering has been completed.

- Annual Report on Form 20-F for the year ended December 31, 2001, which we
refer to as our "2001 20-F Report."

- The description of our common shares contained in Amendment No. 2 to New
Holland N.V.'s Registration Statement on Form F-1 filed on October 31,
1996 (Registration No. 333-5752), including any amendment or report filed
for the purpose of updating such description.

- Current Reports on Form 6-K dated January 10, 2002, January 18, 2002,
January 23, 2002, February 5, 2002, February 8, 2002, February 19, 2002,
March 20, 2002, March 27, 2002, April 11, 2002, April 19, 2002, April 25,
2002, May 8, 2002, May 13, 2002 and May 16, 2002.

You may request copies of these filings at no cost, by writing or
telephoning us at the following address or by accessing our web site at
http://www.cnh.com (this URL is an inactive textual reference only):

CNH Global N.V.
Global Management Offices
100 South Saunders Road
Lake Forest, Illinois 60045
Attention: Roberto Miotto
Senior Vice President, General Counsel and Secretary
(847) 955-3910

PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION

CNH Global N.V., formerly New Holland N.V., is incorporated in The
Netherlands under Dutch law.

CNH combines the operations of New Holland and Case Corporation as a result
of their business merger on November 12, 1999. Effective with the closing of the
merger, we changed our name to CNH Global N.V. As used in this prospectus, "CNH"
refers to CNH Global N.V. and its consolidated subsidiaries. In addition, "CNH"
may refer to New Holland N.V. for financial information prior to the merger.

As of April 30, 2002, Fiat S.p.A. owned approximately 84.6% of CNH's common
shares. Fiat is one of the largest industrial conglomerates in the world with
major operations in auto making components, capital equipment, space, insurance,
publishing and other sectors.

CNH has prepared its annual consolidated financial statements in accordance
with generally accepted accounting principles in the United States or U.S. GAAP,
and certain reclassifications have been made to conform the historical New
Holland financial statements to the CNH presentation. The accompanying financial
statements reflect the historical operating results of CNH, including the
results of operations of Case since the merger date. CNH has prepared its
consolidated financial statements in U.S. Dollars and, unless otherwise
indicated, all financial data set forth in this prospectus is expressed in U.S.
Dollars.

Certain financial information in this prospectus has been presented
separately by geographic area. CNH defines its geographic areas as (1) North
America, (2) Western Europe, (3) Latin America and (4) Rest of World. As used in
this prospectus, all references to "North America," "Western Europe," "Latin
America" and "Rest of World" are defined as follows:

- North America -- United States and Canada.

- Western Europe -- Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Iceland, Ireland, Italy, Luxembourg, The Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland and the United Kingdom.

- Latin America -- Mexico, Central and South America, and the Caribbean
Islands.

- Rest of World -- Those areas not included in North America, Western
Europe and Latin America, as defined above.

Certain market and share information in this prospectus has been presented
as "worldwide," which includes all countries, with the exception of India and
China. In this prospectus, management estimates of market share information are
generally based on registrations of equipment in most of Europe and on retail
data collected by a central information bureau from equipment manufacturers in
North America, as well as on shipment data collected by an independent service
bureau. Not all agricultural and construction equipment is registered, and
registration data may thus underestimate actual retail demand. In many
countries, there may also be a period of time between the delivery, sale and
registration of a vehicle; as a result, delivery or registration data for a
particular period may not correspond directly to retail sales in such a period.

USE OF PROCEEDS

We estimate that the net proceeds from our sale of common shares will be
approximately $188 million, based on a public offering price of $4.00 per share
and after deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us. These expenses include approximately
$1.1 million of Netherlands capital tax payable in connection with the offering.
If the overallotment option is exercised in full, we estimate that the net
proceeds will be approximately $216 million.

We intend to use substantially all of the approximately $188 million of net
proceeds of this offering to repay a portion of our outstanding short-term
indebtedness with a Fiat affiliate. This short-term debt is refinanced on a
monthly basis and bears interest at floating rates. As of December 31, 2001,
this debt had an average interest rate of 2.5%. The balance of the net proceeds,
if any, will be used for working capital and other general corporate purposes.

FIAT DEBT EXCHANGE

AMOUNT INTEREST
MATURITY (IN MILLIONS) RATE
-------- ------------- --------

June 17, 2002 $ 600 2.57%
February 10, 2003 400 7.71%
May 10, 2004 300 7.92%
------
Total $1,300 5.46%
======

Following the debt exchange for common shares and this public offering, the
total net indebtedness of our Equipment Operations as of December 31, 2001 would
be reduced from $5.6 billion to $4.1 billion, excluding intersegment borrowings
between Equipment Operations and Financial Services. After giving effect to the
debt exchange and this offering we will have reduced our weighted average
interest rate on equipment operations debt from 5.24% to 5.20% and we will have
approximately $3.8 billion available under our $7.7 billion total lines of
credit.

Standard & Poor's Corporate Value Consulting, a division of The McGraw-Hill
Companies, Inc., has issued an opinion to us on the date of this prospectus
regarding the fairness of the Fiat debt exchange to CNH from a financial point
of view.

PRICE RANGE OF COMMON SHARES

Our common shares are quoted on the New York Stock Exchange under the
symbol CNH. The following table provides the high and low closing prices of our
common shares as reported on the New York Stock Exchange for each of the periods
indicated:

COMMON SHARE PRICE

HIGH LOW
---- ---

MOST RECENT SIX MONTHS
June 2002 (through June 10)................................. $ 5.55 $ 4.34
May 2002.................................................... 5.82 5.15
April 2002.................................................. 5.75 4.69
March 2002.................................................. 5.22 3.96
February 2002............................................... 5.95 3.90
January 2002................................................ 6.43 5.75
December 2001............................................... 6.45 5.23

YEAR ENDED DECEMBER 31, 2001
First Quarter............................................... $ 9.75 $ 6.35
Second Quarter.............................................. 6.89 5.45
Third Quarter............................................... 7.99 5.70
Fourth Quarter.............................................. 6.45 5.10
Full Year................................................... 9.75 5.10

YEAR ENDED DECEMBER 31, 2000
First Quarter............................................... $14.81 $ 9.13
Second Quarter.............................................. 14.69 8.63
Third Quarter............................................... 11.56 7.56
Fourth Quarter.............................................. 10.06 8.63
Full Year................................................... 14.81 7.56

1999........................................................ $18.00 $ 8.75
1998........................................................ $28.31 $ 9.75
1997........................................................ $30.81 $21.00

On June 10, 2002 the last reported sales price of our common shares as
reported on the New York Stock Exchange was $4.34 per share. There were 1,001
holders of record of our common shares in the United States as of April 30,
2002.

DIVIDENDS

Our board of directors may establish reserves out of our annual profits at
a general meeting of shareholders. The holders of common shares have discretion
as to the use of that portion of our annual profits remaining after the board of
directors establishes these reserves. The board of directors may resolve at the
annual general meeting that we pay dividends out of our share premium account or
out of any other reserve available for shareholder distributions under Dutch
law. However, we may not pay dividends if the payment would reduce shareholders'
equity to an amount less than the aggregate share capital plus required
statutory reserves. The board of directors may resolve that we pay interim
dividends, but the payments are also subject to these statutory restrictions and
an interim statement of assets and liabilities, which proves we have met the
statutory restrictions. If a shareholder does not collect any cash dividend or
other distribution within six years after the date on which it became due and
payable, the right to receive the payment reverts to CNH.

On March 25, 2002, our board of directors recommended a dividend for the
year 2001 of $0.10 per share, payable on June 3, 2002 to shareholders of record
on May 20, 2002. Our shareholders approved the payment of this dividend at our
annual general meeting of shareholders in Amsterdam, The Netherlands on May 7,
2002 and the dividend was paid on June 3, 2002. We distributed cash dividends of
$28 million, or $0.10 per share, in the year ended December 31, 2001. We
distributed cash dividends of $82 million, or $0.55 per share, in each of the
years ended December 31, 2000, 1999, 1998 and 1997.

Our board of directors may propose to pay future dividends and the amount
of any dividend. Our shareholders must resolve on these proposals at their
annual general meeting.

Our ability to pay cash dividends will depend upon many factors, including
our competitive position, financial condition, earnings and capital
requirements. CNH is a holding company and depends on dividends and other
advances from its subsidiaries to fund cash dividends. The ability of CNH and
its operating subsidiaries to pay dividends depends on limitations under the
loans and other agreements to which they are a party, as well as limitations
imposed by the jurisdictions in which they operate, including any required
allocation of earnings to statutory reserves. As a result, the ability of these
subsidiaries to pay dividends may be limited. Accordingly, we cannot assure you
that dividends will be declared or paid.

Dividends from several of our subsidiaries, including our U.S.
subsidiaries, are subject to withholding taxes that will reduce the amount of
such dividends available to us. Dividends paid by us to our shareholders are
subject to Dutch withholding tax at the current rate of 25%. The withholding tax
rate applicable to a shareholder who is not a resident of The Netherlands may be
lower as a result of an income tax convention between The Netherlands and the
shareholder's country of residence.

DILUTION

Our negative net tangible book value as of December 31, 2001 on a U.S. GAAP
basis was $1,738 million, or approximately $6.27 per share. Negative net
tangible book value per share represents the excess of our total liabilities
over total tangible assets, divided by the number of common shares outstanding.
Dilution in net tangible book value per share represents the difference between
the amount per share paid by purchasers of common shares in this offering and
the net tangible book value per share immediately after the completion of this
offering. After giving effect to the sale of the 50,000,000 common shares
offered by us in this offering, less the underwriting discount and estimated
offering expenses payable by us, our negative net tangible book value at
December 31, 2001 would have been $1,550 million, or $4.74 per share. This
represents an immediate increase in net tangible book value of $1.53 per share
to existing shareholders and an immediate dilution in net tangible book value of
$8.74 per share to new investors in this offering. The following table
illustrates this dilution on a per share basis:

Negative net tangible book value per share as of December
31, 2001.................................................. $(6.27)
Initial price to public per share......................... $ 4.00
Increase per share attributable to this offering.......... $ 1.53
Negative net tangible book value per share after the
offering.................................................. $(4.74)
Dilution in net tangible book value per share to new
investors................................................. $ 8.74

After giving effect to the $1,300 million Fiat debt exchange, less
estimated offering expenses payable by us, and this offering at the same time,
the following table illustrates this dilution on a per share basis:

Negative net tangible book value per share as of December
31, 2001.................................................. $(6.27)
Initial price to public and Fiat debt exchange per
share.................................................. $ 4.00
Increase per share attributable to this offering.......... $ 0.75
Increase per share attributable to Fiat debt exchange..... $ 5.13
Negative net tangible book value per share after the
offering.................................................. $(0.39)
Dilution in net tangible book value per share to new
investors................................................. $ 4.39

The following table sets forth, as of December 31, 2001, the differences
between the number of common shares purchased from us, the total consideration
paid and the average price per share paid by existing holders of common shares
and by the new investors, after deducting the underwriting discount and
estimated offering expenses payable by us.

SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------- ------------------- PRICE PER
NUMBER PERCENTAGE AMOUNT PERCENTAGE SHARE
------ ---------- ------ ---------- ---------
(IN MILLIONS)

Existing shareholders................ 277.1 84.7% $1,909 91.0% $6.89
New investors........................ 50.0 15.3 188 9.0 3.76
----- ----- ------ ----- -----
Total.............................. 327.1 100.0% $2,097 100.0% $6.41
===== ===== ====== ===== =====

Giving consideration to the $1,300 million Fiat debt exchange and this
offering at the same time, the following table illustrates this dilution on a
per share basis:

SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------- ------------------- PRICE PER
NUMBER PERCENTAGE AMOUNT PERCENTAGE SHARE
------ ---------- ------ ---------- ---------
(IN MILLIONS)

Existing shareholders................ 277.1 42.5% $1,909 56.3% $6.89
New investors........................ 50.0 7.7 188 5.5 3.76
Fiat debt exchange................... 325.0 49.8 1,293 38.1 3.98
----- ----- ------ ----- -----
Total.............................. 652.1 100.0% $3,390 100.0% $5.20
===== ===== ====== ===== =====

CAPITALIZATION

The following table sets forth the capitalization of CNH as of December 31,
2001 (1) on an actual basis, (2) on a pro forma basis assuming the sale of
50,000,000 common shares in this offering at a public offering price of $4.00
per share and the application of the net proceeds to repay indebtedness and (3)
on a pro forma basis assuming the sale of 50,000,000 common shares as described
in (2) and the application of the net proceeds as well as the issuance of a
total of 325,000,000 common shares to Fiat and one of its subsidiaries at a
price of $4.00 per share in consideration for the contribution to CNH of an
aggregate of $1.3 billion of CNH debt held by Fiat and this subsidiary.

The following table assumes no exercise of the underwriters' overallotment
option.

This table should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our financial
statements and accompanying notes and other financial data included elsewhere in
this prospectus.

AS OF DECEMBER 31, 2001
-----------------------------------------
ACTUAL AS ADJUSTED(1) AS ADJUSTED(2)
------- -------------- --------------
(IN MILLIONS)

Cash and cash equivalents............... $ 663 $ 663 $ 663
======= ======= =======
Debt:
Short-term debt....................... $ 3,217 $ 3,029 $ 2,429
Long-term debt, including current
portion............................ 6,646 6,646 5,946
------- ------- -------
Total debt......................... 9,863 9,675 8,375
Shareholders' equity:
Common shares, par value E0.45 per
share, 700,000,000 shares
authorized, 277,683,830 shares
issued on an actual basis,
327,683,830 shares issued on a Pro
Forma as Adjusted basis(1) and
652,683,830 shares issued on a Pro
Forma as Adjusted basis(2)......... 143 164 302
Paid-in capital....................... 2,995 3,162 4,317
Retained earnings..................... (573) (575)(3) (562)(3)
Treasury shares, 583,532 shares, at
cost............................... (7) (7) (7)
Other shareholders' equity............ (649) (649) (649)
------- ------- -------
Total shareholders' equity......... 1,909 2,095 3,401
------- ------- -------
Total capital.................... $11,772 $11,770 $11,776
======= ======= =======

---------------

(1) Reflects the sale of 50,000,000 common shares in this offering at a public
offering price of $4.00 per share and the application of the net proceeds to
pay indebtedness.

(2) Reflects the sale of 50,000,000 common shares in this offering at a public
offering price of $4.00 per share and the application of the net proceeds to
pay indebtedness and the Netherlands capital tax on the Fiat debt exchange,
as well as the issuance of a total of 325,000,000 common shares to Fiat and
one of its subsidiaries at a price of $4.00 per share in consideration for
the contribution to CNH of an aggregate of $1.3 billion of CNH debt held by
Fiat and this subsidiary.

(3) Using the Company's statutory tax rate gives effect to reduction in interest
expense resulting from the Fiat debt exchange and the application of the
proceeds from the issuance of the shares offered hereby. Assumes a dividend
of $0.10 per share, equal to the dividend paid to existing shareholders of
record as of May 20, 2002.

SELECTED FINANCIAL DATA

The financial data set forth below at December 31, 2001 and 2000, and for
the years ended December 31, 2001, 2000 and 1999, have been derived from the
audited consolidated financial statements of CNH included herein. Financial data
at December 31, 1999, 1998, and 1997, and for the years ended December 31, 1998
and 1997, have been derived from our published financial statements.

CNH has presented the selected historical financial data as of and for each
of the five years ended December 31, 2001 in accordance with U.S. GAAP, and
certain reclassifications have been made to conform the historical financial
statements to the 2001 presentation.

CNH acquired Case on November 12, 1999, which approximately doubled the
annual revenues and asset base of CNH. The accompanying selected financial data
reflects the historical operating results of CNH, including the results of
operations of Case since November 12, 1999. As a result of this acquisition, the
historical financial statements may not be comparable from year to year.

FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------
2001 2000 1999 1998 1997
-------- -------- -------- ------- -------
(IN MILLIONS, EXCEPT RATIOS AND PER SHARE DATA)
CONSOLIDATED
--------------------------------------------------
STATEMENTS OF OPERATIONS DATA:

REVENUES:
$ 9,030 $ 9,337 $ 5,949 $5,474 $5,798
Net sales....................................
685 704 324 223 193
Finance and interest income..................
------- ------- ------- ------ ------
9,715 10,041 6,273 5,697 5,991
COSTS AND EXPENSES:
7,586 7,820 4,884 4,348 4,521
Cost of goods sold...........................
1,224 1,277 726 585 568
Selling, general and administrative..........
306 338 196 152 129
Research, development and engineering........
Restructuring and other merger related 104 157 19 40 --
costs.....................................
726 793 266 162 137
Interest expense.............................
193 186 (16) 11 23
Other expense (income), net..................
------- ------- ------- ------ ------
10,139 10,571 6,075 5,298 5,378
EQUITY IN INCOME (LOSS) OF UNCONSOLIDATED
SUBSIDIARIES AND AFFILIATES:
6 2 -- -- 1
Financial Services...........................
(14) 4 9 14 17
Equipment Operations.........................
------- ------- ------- ------ ------
Income (loss) before taxes and minority (432) (524) 207 413 631
interest.....................................
(105) (153) 55 148 240
Income tax provision (benefit).................
5 10 4 7 3
Minority interest..............................
------- ------- ------- ------ ------
$ (332) $ (381) $ 148 $ 258 $ 388
Net income (loss)..............................
======= ======= ======= ====== ======
PER SHARE DATA:
$ (1.20) $ (1.79) $ 0.99 $ 1.73 $ 2.60
Basic earnings (loss) per share..............
(1.20) (1.79) 0.97 1.73 2.60
Diluted earnings (loss) per share............
0.10 0.55 0.55 0.55 0.55
Cash dividends declared per common share.......
Weighted average shares outstanding:
277 213 149 149 149
Basic........................................
277 213 165 149 149
Diluted......................................

FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------
2001 2000 1999 1998 1997
-------- -------- -------- ------- -------
(IN MILLIONS, EXCEPT RATIOS AND PER SHARE DATA)

EQUIPMENT OPERATIONS(1)
STATEMENTS OF OPERATIONS DATA: --------------------------------------------------

REVENUES:
Net sales.................................... $ 9,030 $ 9,337 $ 5,949 $5,474 $5,798
Finance and interest income.................. 149 68 17 -- --
------- ------- ------- ------ ------
9,179 9,405 5,966 5,474 5,798
COSTS AND EXPENSES:
Cost of goods sold........................... 7,586 7,820 4,884 4,348 4,521
Selling, general and administrative.......... 915 1,007 657 536 524
Research, development and engineering........ 306 338 196 152 129
Restructuring and other merger related
costs..................................... 97 157 19 40 --
Interest expense............................. 585 542 154 79 75
Other expense (income), net.................. 112 100 (29) 10 21
------- ------- ------- ------ ------
9,601 9,964 5,881 5,165 5,270
EQUITY IN INCOME (LOSS) OF UNCONSOLIDATED
SUBSIDIARIES AND AFFILIATES:
Financial Services........................... 4 26 72 60 68
Equipment Operations......................... (14) 4 9 14 17
------- ------- ------- ------ ------
Income (loss) before taxes and minority
interest..................................... (432) (529) 166 383 613
Income tax provision (benefit)................. (105) (159) 14 118 222
Minority interest.............................. 5 11 4 7 3
------- ------- ------- ------ ------
Net income (loss).............................. $ (332) $ (381) $ 148 $ 258 $ 388
======= ======= ======= ====== ======

FINANCIAL SERVICES
--------------------------------------------------
REVENUES:
Net sales.................................... $ -- $ -- $ -- $ -- $ --
Finance and interest income.................. 739 799 412 361 317
------- ------- ------- ------ ------
739 799 412 361 317
COSTS AND EXPENSES:
Cost of goods sold........................... -- -- -- -- --
Selling, general and administrative.......... 314 274 69 49 44
Research, development and engineering........ -- -- -- -- --
Restructuring and other merger related
costs..................................... 7 -- -- -- --
Interest expense............................. 339 410 217 221 186
Other expense (income), net.................. 81 86 13 1 2
------- ------- ------- ------ ------
741 770 299 271 232
EQUITY IN INCOME (LOSS) OF UNCONSOLIDATED
SUBSIDIARIES AND AFFILIATES:
Financial Services........................... 6 2 -- -- 1
Equipment Operations......................... -- -- -- -- --
------- ------- ------- ------ ------
Income (loss) before taxes and minority
interest..................................... 4 31 113 90 86
Income tax provision (benefit)................. -- 6 41 30 18
Minority interest.............................. -- (1) -- -- --
------- ------- ------- ------ ------
Net income (loss).............................. $ 4 $ 26 $ 72 $ 60 $ 68
======= ======= ======= ====== ======

FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------------
2001 2000 1999 1998 1997
---------- ---------- ---------- --------- ---------
(IN MILLIONS, EXCEPT RATIOS, EMPLOYEES AND PER SHARE DATA)
CONSOLIDATED
------------------------------------------------------------
BALANCE SHEET DATA (AS OF YEAR END):

$17,212 $17,577 $17,678 $7,296 $6,330
Total assets.................................
Long-term debt, including current 6,646 5,539 4,558 1,011 651
maturities................................
1,909 2,514 1,710 1,784 1,621
Shareholders' equity.........................
143 143 88 88 88
Common Shares E0.45 par value................
EQUIPMENT OPERATIONS(1)
------------------------------------------------------------
BALANCE SHEET DATA (AS OF YEAR END):
$14,233 $13,237 $12,928 $5,274
Total assets.................................
Long-term debt, including current 4,856 3,066 1,098 125
maturities................................
1,909 2,514 1,710 1,784
Shareholders' equity.........................
EQUIPMENT OPERATIONS(1)
------------------------------------------------------------
OTHER DATA:
$ 467 $ 338 $ 476 $ 581 $ 804
EBITDA(2)....................................
75 64 4 10 8
Goodwill amortization........................
244 272 156 116 111
Depreciation and other amortization..........
------- ------- ------- ------ ------
319 336 160 126 119
Depreciation and amortization................
221 213 209 149 153
Capital expenditures.........................
Net cash provided (used) by operating (268) 285 14 70 444
activities................................
Net cash provided (used) by investing (169) (140) (4,538) (215) (234)
activities................................
Net cash provided (used) by financing 241 107 4,394 (69) (115)
activities................................
0.80x 0.62x 3.09x 7.35x 10.72x
EBITDA/Interest expense......................
Total debt/Total capitalization (as of year 79% 70% 74% 28%
end)......................................
27,200 29,900 33,700 21,000 18,700
Total employees (as of year end).............

---------------

(1) Equipment Operations data represents CNH's agricultural and construction
equipment operations with CNH's Financial Services operations accounted for
under the equity method.

(2) Earnings before interest, income taxes, depreciation and amortization.
Management believes that EBITDA is a useful measure of operating
performance. EBITDA does not represent cash flow from operations as defined
by U.S. GAAP, is not necessarily indicative of cash available to fund all
cash flow needs and should not be considered as an alternative to net income
or net cash provided (used) by operating activities under U.S. GAAP for
purposes of evaluating our results of operations. EBITDA as presented by CNH
may not be comparable to similarly titled measures reported by other
companies.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

This prospectus contains forward-looking statements within the meaning of
the Securities Act. Discussions containing forward-looking statements may be
found throughout this prospectus, including the materials presented under
"Summary," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business." Actual events or results may differ
materially from those discussed in the forward-looking statements as a result of
various factors, including the risks presented under "Risk Factors" and the
matters in this prospectus generally.

We have prepared our financial statements in accordance with generally
accepted accounting principles in the United States or U.S. GAAP. The impact of
acquisitions, particularly the impact of the Case and New Holland merger, has
affected the comparability of the respective prior-year data. We have made
certain reclassifications of prior year amounts to conform with the current year
presentation.

Our agricultural and construction equipment businesses are collectively
referred to as our Equipment Operations. Our financial services businesses are
collectively referred to as Financial Services. Unless otherwise indicated, all
financial data set forth herein is expressed in U.S. Dollars.

RECENT DEVELOPMENTS

OVERVIEW OF FIRST QUARTER RESULTS

EQUIPMENT OPERATIONS

In the first quarter of 2002, net sales were $2,239 million compared with
$2,286 million for the same period in 2001. Revenues for the first quarter of
2002 were negatively impacted by our planned inventory reduction actions, the
continued weakness in the construction equipment industry and unfavorable
foreign exchange rates, partially offset by incremental revenue derived from
acquisitions. Revenues from sales of agricultural equipment increased to a total
of $1,552 million from $1,518 million in the first quarter of 2001. When
adjusted for the impact of adverse foreign exchange rates, sales of agricultural
equipment rose by 6%. In both North America and Latin America, unit sales of
agricultural equipment were higher than in the first quarter of 2001, resulting
in an increase in our market share in combines and most categories of
agricultural tractors. These gains in North America and Latin America were
partly offset by a slight decrease in unit sales in Western Europe, Asia and
developing markets. During the quarter, we overproduced retail unit demand in
preparation for the selling season at a 15% lower rate than in the first quarter
of 2001.

Construction equipment revenues decreased by 11% to $687 million compared
to the first quarter of 2001. Excluding sales by Kobelco, revenues declined by
16%, reflecting mainly our aggressive dealer destocking initiative and,
secondarily, an overall decline in the industry. In North America, we maintained
our share of the heavy equipment segment and significantly increased our backhoe
loader share. In Western Europe, we gained market share overall, particularly in
heavy equipment. In the first quarter of 2002, we cut both our and dealer
inventories of construction equipment, reducing production by over 36% compared
to the first quarter of 2001.

The major factor impacting our Equipment Operations gross margin for the
first quarter was our decision to cut production in order to control dealer and
our inventories. This resulted in lower wholesale

volumes and lower absorption of fixed costs compounded by an adverse country mix
in construction equipment, which were partly offset by higher margins on newly
launched products and material cost reductions. Adverse foreign exchange rates
and higher projected pension and related costs also negatively impacted our
gross margin.

Compared to the first quarter of 2001, Equipment Operations' selling,
general and administrative expenses declined in absolute terms and as a
percentage of revenues as our profit improvement initiatives and favorable
foreign exchange rates more than offset additional expenses of approximately $5
million from newly consolidated acquisitions. Since the merger, we have reduced
our selling, general and administrative expenses as a percent of revenues from
11.8%, on a pro forma basis, to 9.6%, closer to our selling, general and
administrative expense target level of 9% of revenues, despite a significant
reduction in revenues due to lower industry volumes, adverse foreign exchange
rates and required divestitures.

FINANCIAL SERVICES

CNH Capital reported net income of $9 million in the first quarter of 2002
compared to a net loss of $3 million for the same period in 2001. On March 28,
2002, we sold $674 million of retail receivables to a qualified special purpose
entity pursuant to an asset-backed securitization transaction in which the
special purpose entity issued $1 billion of securities, backed by the
receivables sold, to outside investors. We will sell additional retail
receivables to the special purpose entity in the second quarter of 2002 to
complete the funding of the transaction. Proceeds from the sale were used to
repay outstanding borrowings and finance the origination of new receivables.

MERGER-RELATED ACTIVITY

Our merger-related profit improvements totaled $20 million in the first
quarter of 2002, bringing the total since the merger to $453 million. In
addition, our process reengineering initiatives to improve the effectiveness of
our administrative activities and product development process, which were
announced in the third quarter of 2001, have now yielded total savings of an
additional $70 million.

During the first quarter of 2002, our employment level was reduced by
approximately 600 personnel, excluding acquisitions. This brings the total
reduction in employment since the merger to approximately 8,500 personnel, or
24%, which was the target established at the time of the merger to be achieved
by the end of 2003. Total employment, with acquisitions, was approximately
29,100 at March 31, 2002.

OTHER EVENTS

We will own 75% of the new entity and Kobelco Construction Machinery will hold a
20% interest. Sumitomo Corporation will maintain its 5% stake.

In January 2002, an additional joint venture in China, Shanghai New Holland
Agricultural Machinery Corp., Ltd., was formed by an agreement between Shanghai
Tractor and Internal Combustion Engine Corporation, a wholly-owned subsidiary of
Shanghai Automotive Industry Corporation, and our New Holland brand of
agricultural equipment. The joint venture company will manufacture, distribute
and ultimately export agricultural tractors under 100 horsepower.

On February 4, 2002, our shareholders approved adoption of certain
amendments to our articles of association, including an increase in our
authorized share capital to E450 million, comprising 700 million common shares
and 300 million preference shares. In addition, the shareholders have authorized
the board of directors to resolve on any future issuance of shares for a period
of five years.

On March 9, 2002, President Bush signed into law the Job Creation and
Workers Assistance Act of 2002 (P.L. 107-147), which temporarily extends the
U.S. net operating loss carryback period from two years to five years for net
operating losses incurred in 2001 and 2002. In April 2002, we filed and received
a refund for approximately $105 million relating to the carryback of
approximately $270 million of our 2001 net operating losses.

On May 13, 2002, President Bush signed into law the Farm Security and Rural
Investment Act of 2002. The new law will increase subsidies to the U.S. farming
industry by $31 billion over six years.

On May 13, 2002, we announced a new long-term partnership with BNP Paribas
Lease Group, a subsidiary of BNP Paribas, to provide retail financing across
Europe. The new partnership will cover all of our brands and commercial
activities in Europe. Under the partnership, BNP Paribas Lease Group will own
50.1% of the shares of CNH Capital Europe SAS, which will hold the retail
financing portfolio, and we will own the remaining 49.9% of the shares. BNP
Paribas Lease Group will provide funding and administrative services for CNH
Capital Europe SAS, while CNH Capital's own European operations will be
responsible for the marketing and origination of financial products. The final
agreement is subject to approval by the board of directors of each company and
by the Banque de France.

OUTLOOK

MARKET OUTLOOK FOR AGRICULTURAL EQUIPMENT

We anticipate that industry sales of agricultural equipment will remain at
or near 2001 levels through the balance of 2002. In North America, the first
quarter was flat overall, as expected. We do not anticipate total industry sales
to show any significant departure from 2001 levels through the balance of the
year. Sales of under 40 horsepower tractors are now expected to remain at, or
somewhat above, 2001 levels throughout the year. Sales of over 40 horsepower
tractors are expected to remain at or slightly below 2001 levels through 2002.
In Latin America, we expect industry sales to remain at 2001 levels at least
through the third quarter of 2002. No significant change is anticipated in
industry sales for Western Europe.

MARKET OUTLOOK FOR CONSTRUCTION EQUIPMENT

We expect industry sales of construction equipment to remain weak in the
second quarter in all of our major markets except Latin America, which is
expected to be essentially unchanged from 2001. In the second half of the year,
industry sales of construction equipment should follow the anticipated economic
recovery as it materializes. We expect the upturn to occur first in North
America, where fourth quarter sales could approach 2001 levels. We do not expect
recovery in Western Europe to be as rapid.

OUTLOOK FOR SECOND QUARTER RESULTS

Compared to 2001, we expect revenues to improve in the second quarter of
2002 from continued growth in our agricultural equipment business. We expect
that there will be continued pressure on margins, due to mix and continued
destocking actions. For the quarter, we expect to report a profit of
approximately $0.06 per share, which includes approximately $0.08 per share
attributable to restructuring and excludes any potential impact of this offering
and the Fiat debt exchange. Further information concerning factors that could
significantly impact expected results is included in "Risk Factors" and
"Forward-Looking Statements."

OUTLOOK FOR FULL YEAR 2002 RESULTS

We believe that the growing strength of our global agricultural business,
along with anticipated second-half improvements in the construction equipment
industry, will contribute significantly to our bottom line in the second half of
the year. New product introductions should also contribute to the bottom line,
particularly in the fourth quarter of 2002.

We expect to again record improved operating performance in 2002 even as we
continue dealer destocking by keeping wholesale levels below retail sales levels
and production below wholesale levels. Through our various profit improvement
initiatives, including the reengineering of our key processes, we believe that
further reductions in selling, general and administrative expenses and research
and development expenses may be achieved during 2002. Based on current
assumptions, we believe that our better than expected performance in the first
quarter will be reflected in the full year result, substantially reducing the
expected loss per share in 2002 without considering the potential impact of our
initiatives to reduce debt and increase equity.

OPERATING RESULTS

The "Consolidated" data in this section includes CNH Global N.V. and its
consolidated subsidiaries and conforms to the requirements of Statement of
Financial Accounting Standards ("SFAS") No. 94. In the supplemental
consolidating data in this section, "Equipment Operations" (with "Financial
Services" on the equity basis) include primarily CNH Global N.V.'s agricultural
and construction equipment operations. The supplemental "Financial Services"
consolidating data in this section include primarily CNH Global N.V.'s financial
services business. Transactions between "Equipment Operations" and "Financial
Services" have been eliminated to arrive at the "Consolidated" data. This
presentation is consistent with the other consolidated and supplemental
financial information presented throughout this prospectus.

2001 COMPARED TO 2000

Revenues

Consolidated revenues for 2001 totaled approximately $9,715 million as
compared to approximately $10,041 million in 2000. Adjusted for the adverse
impact of foreign exchange rates ($311 million) and divestitures ($351 million),
consolidated revenues rose by 3% compared to 2000 despite a declining equipment
market. The largest component of our consolidated revenues is our net sales of
agricultural and construction equipment, which were $9,030 million in 2001 as
compared to approximately $9,337 million in 2000. Adjusted for the impact of
unfavorable exchange rates ($311 million) and divestitures ($351 million), net
sales of equipment rose by 4% compared to 2000.

Net Sales of Equipment

Net sales of our Equipment Operations for the years ended December 31, 2001
and 2000 by geographic area were as follows:

2001 2000
------ ------
(IN MILLIONS)

NET SALES
Western Europe.............................................. $3,168 $3,613
North America............................................... 4,197 4,072
Latin America............................................... 587 633
Rest of World............................................... 1,078 1,019
------ ------
Total net sales........................................... $9,030 $9,337
====== ======

Net sales of equipment decreased in 2001 reflecting approximately $311
million in unfavorable currency translation, and divestitures accounted for a
further negative impact of $351 million. Overall in 2001, world market demand
for major agricultural equipment product lines was approximately 6% lower than
in 2000, as increased demand for tractors and combines in North America and
Latin America was more than offset by decreased demand in Western European and
Rest of World markets. World market demand for major construction equipment
product lines in 2001 decreased in virtually all major product lines and major
market areas. Our mix of sales weakened slightly as our overall backhoe loader
market share declined. However, in the important North American agricultural
equipment market, our market share increased, reflecting the beginning of a
recovery from our first year after the merger.

Agricultural Equipment

2001 2000
------ ------
(IN MILLIONS)

NET SALES
Western Europe.............................................. $1,970 $2,181
North America............................................... 2,876 2,510
Latin America............................................... 420 413
Rest of World............................................... 807 773
------ ------
Total net sales........................................... $6,073 $5,877
====== ======

Net sales of agricultural equipment in 2001 were approximately 3% higher
than in 2000. A slight increase in unit sales of tractors (by less than one
percentage point) was partially offset by the unfavorable effects of currency
translation and divestitures. Overall worldwide tractor market demand in 2001,
as measured in units, decreased by about 6% from 2000 levels, while overall
combine demand increased by about 4%. Despite divestitures, our overall
worldwide retail market share was less than one percentage point higher in 2001
compared with 2000.

In Western Europe, net sales of agricultural equipment decreased by 10%,
reflecting lower tractor and combine unit sales and the 3% decline in the
average value of the Euro and the 5% decline in the average value of the British
Pound, in each case as compared with the U.S. Dollar from 2000 to 2001. Overall
tractor market demand, as measured in units, decreased by about 7% in 2000 and
overall combine market demand decreased by about 13%.

In North America, net sales of agricultural equipment increased by about
15% in 2001 compared with 2000, reflecting higher tractor and combine unit
sales. Total market demand for agricultural tractors in North America increased
by about 10%, led by a 10% increase in demand for under 40 horsepower tractors.
Industry demand for mid-sized (40 to 100 horsepower) tractors increased by about
8%, demand for large two wheel drive tractors over 100 horsepower also increased
by approximately 11% while demand

for four wheel drive tractors increased by more than 13%. Combine market demand
increased by about 9%.

In Latin America, net sales of agricultural equipment in 2001 were 2%
higher than in 2000. Unit sales increased by about 13% and pricing and mix were
favorable, but the average value of the Brazilian Real declined by approximately
22% in 2001 compared with 2000. Total market demand for agricultural tractors in
Latin America increased by 8%, led by approximately 15% higher market demand for
tractors in Brazil, based on unit sales, as the Brazilian government sustained
its programs to assist farmers in purchasing equipment. Total market demand for
combines rose by about 11%, with total industry unit sales of combines in Brazil
increasing by about 9%.

In markets throughout the Rest of the World, net sales of agricultural
equipment in 2001 increased by approximately 4% compared to 2000. Unit sales of
tractors in 2001 were higher than in 2000, while unit sales of combines were
essentially unchanged. This was offset by a decline in the value of the
Australian Dollar as compared with the U.S. Dollar by about 11% from 2000 to
2001.

Construction Equipment

2001 2000
------ ------
(IN MILLIONS)

NET SALES
Western Europe.............................................. $1,198 $1,432
North America............................................... 1,321 1,562
Latin America............................................... 167 220
Rest of World............................................... 271 246
------ ------
Total net sales........................................... $2,957 $3,460
====== ======

Net sales of construction equipment decreased by approximately 15% in 2001
compared with 2000. The decline in net sales reflects lower unit sales in most
product lines and in most markets, as construction activity slowed during the
year, and to the unfavorable effects of currency translations. Our overall unit
sales decreased in 2001 by about 17%. Overall worldwide market demand as
measured in units decreased by about 11% from 2000 to 2001, led by a 16% decline
in worldwide market demand for backhoe loaders, for which we are the industry
leader. Worldwide industry demand for skid steer loaders declined by
approximately 11% and worldwide market demand for heavy construction equipment
declined by approximately 9%. Our overall worldwide retail market share declined
by less than one percentage point in 2001 compared with 2000.

In Western Europe, net sales of construction equipment decreased by 16%,
reflecting 14% lower unit sales, the 3% decline in the value of the Euro and the
5% decline in the value of the British Pound from 2000 to 2001 and the impact of
the Fermec divestiture. Overall market demand, as measured in units, decreased
by approximately 10% in 2001.

In North America, net sales of construction equipment decreased by
approximately 15% in 2001 compared with 2000. Retail unit sales of our equipment
declined by approximately two percentage points more than the total market
demand for construction equipment which decreased by about 12%, including a 16%
decline in demand for backhoe loaders, an 11% decline in demand for heavy
construction equipment and an 11% decline in demand for skid steer loaders. Our
sales decline reflects the phase in/phase out launch of the new Case M Series
backhoe loader in the first quarter of 2001, in addition to the overall market
decline.

In Latin America, net sales of construction equipment decreased by 24% in
2001 compared with 2000. The decrease in net sales was principally due to the
decline in the average value of the Brazilian Real by approximately 22% in 2001
compared with 2000, lower sales of parts, and a slight decrease of 1% in unit
sales in that region. Total market demand, as measured in units, decreased by
about 9%, including a 32% decline in market demand for skid steer loaders and a
17% decline in Latin American market

demand for backhoe loaders, partially offset by a 4% increase in market demand
for heavy construction equipment.

In markets throughout the Rest of World, where we have a minimal presence
outside of Australia, net sales of construction equipment increased by 10% in
2001 compared with 2000. The increase in net sales was principally due to
improved pricing and higher sales of parts, partially offset by a decline in
unit sales by about 17% and an 11% decline in the value of the Australian Dollar
as compared with the U.S. Dollar from 2000 to 2001. Total market demand
decreased by approximately 10%.

Finance and Interest Income

Consolidated finance and interest income declined from $704 million in 2000
to $685 million in 2001. Finance and interest income in Equipment Operations
increased to $149 million in 2001 as compared to $68 million in 2000, reflecting
primarily the increased interest costs of the increased intersegment lending
from Equipment Operations to Financial Services compared with 2000.

Financial services revenues totaled $739 million in 2001, down $60 million
from the $799 million reported a year ago. The decline in revenues was primarily
caused by a $70 million decrease in finance and interest income earned on retail
and wholesale receivables in 2001 due principally to a 2% decrease in the
average yield, offset by an 8.3% increase in the average balance of outstanding
retail and wholesale receivables. The decline in finance and interest income was
offset by an increase in securitization related revenues to $143 million from
$133 million in the prior year. This increase was principally related to
increases in gains recorded on securitization transactions executed during the
falling interest rate environment of 2001.

Costs and Expenses

Costs of goods sold decreased by $234 million to $7,586 million in 2001,
but as a percentage of net sales of equipment increased slightly from 83.8% in
2000 to 84.0% in 2001. Gross margin (net sales of equipment less cost of goods
sold), expressed as a percentage of net sales of equipment, was 16.0% in 2001 as
compared to 16.2% in 2000. This decline in gross margin reflected a decline in
the gross margin of construction equipment that was only partially offset by an
increase in the gross margin of agricultural equipment. In total, gross margin
deterioration was principally due to lower absorption of fixed costs, pricing
pressures and unfavorable mix, all primarily related to construction equipment,
that was partially offset by favorable agricultural equipment volume, pricing
and a total of $133 million of merger-related profit improvements, primarily
related to lower material costs.

In 2001, selling, general and administrative ("SG&A") expenses declined by
$53 million to $1,224 million from $1,277 million in the prior year. This
decrease is more than explained by the decline in SG&A expenses in Equipment
Operations to $915 million in 2001 from $1,007 million in 2000, or expressed as
a percentage of net sales of equipment, a decrease from 10.8% in 2000 to 10.1%
in 2001. The decrease in SG&A expenses in Equipment Operations was driven
primarily by the reduction in salaried headcount. These reductions were
principally due to the divestitures required by the U.S. and European regulatory
authorities, ongoing cost reduction initiatives and merger integration profit
improvement activities initiated by us. These actions resulted in a reduction in
SG&A expenses of approximately $110 million in 2001. Partially offsetting the
decline in SG&A expenses of Equipment Operations, SG&A expenses in Financial
Services increased by $40 million, primarily due to higher loan loss provisions
of approximately $30 million, on a pre-tax basis, which were mainly due to loans
made in the non-core businesses.

During 2000, the portfolio of receivables originated through dealers other
than CNH's dealers ("non-core" dealers) in North America began experiencing
significantly higher credit losses than the core CNH dealer originated
portfolios. At the end of 2000, we decided to cease purchasing non-CNH dealer
originated receivables outside of the agricultural and construction equipment
markets. During 2001, we continued to experience deteriorating performance in
delinquencies and the underlying collateral values of these liquidating
portfolios as well as in the agricultural and construction equipment industry
receivables
39

originated through non-CNH dealers, as compared to portfolios in the same
industries originated by CNH dealers. Based on these continuing trends, we
increased our loss provisions in 2001 and made the decision in January 2002 to
cease origination of all non-core receivables and focus on providing financing
to support our dealers and end-use customers.

Although we believe that the cessation of originations in these non-core
portfolios has significantly mitigated the potential for additional future
charges, additional loan loss provisions for these portfolios may be necessary
if further, unanticipated deterioration in market conditions affecting the
underlying industries were to occur. The following information summarizes the
significance of these North American non-core portfolios relative to our total
loan portfolios and certain performance-related data as of December 31, 2001 and
2000:

2001 2000
----- ------
(DOLLARS IN
MILLIONS)

Non-core portfolio.......................................... $ 939 $1,413
Percentage of total portfolio............................... 10% 14%
Delinquency percentage*..................................... 25% 18%
Annual loss percentage...................................... 6.45% 3.6%
Loss provision provided..................................... $ 110 $ 72

---------------

* Calculated as the percentage of loans in the relevant portfolio more than 30
days past due.

By comparison, delinquency percentages for CNH's North American core
portfolio were 4.3% and 4.5% for 2001 and 2000, respectively, and annual loss
percentages for the North American core portfolio were 0.8% and 1.1% for 2001
and 2000, respectively.

Ongoing research and development expenses expressed as a percentage of net
sales of equipment remained relatively unchanged at 3.4% in 2001 compared with
3.6% in 2000.

Our consolidated employment level has been reduced to approximately 28,100.
During 2001, divestitures accounted for a reduction of approximately 1,300
personnel. Total employment has now been reduced by approximately 7,900, or 22%,
since the merger; salaried employment has been reduced by 25%.

During 2001, we recorded $104 million in restructuring and other merger
related costs for the CNH Merger Integration Plan, including $97 million in
Equipment Operations and $7 million in Financial Services. These restructuring
and other merger related costs relate to severance and other employee-related
costs, write-down of assets, loss on the sale of assets and businesses, costs
related to closing, selling, and downsizing existing facilities and other merger
related costs. The CNH Merger Integration Plan realized $278 million in annual
profit improvements related to product offerings made available through our
multiple distribution channels in 2001 in addition to the $155 million realized
in 2000. These annual profit improvements total $433 million in ongoing profit
improvements compared to the base levels of revenues and costs incurred in the
combined operations of New Holland and Case for the full year 1999. During 2000,
we recorded $157 million in restructuring and other merger related costs for the
CNH Merger Integration Plan. See Note 4, "Restructuring" to the Consolidated
Financial Statements for a detailed analysis of our restructuring programs.

The merger-related profit improvements are being achieved in the following
areas:

expanded the market reach of many of our products by making relatively minor
changes to existing products and rebranding them for distribution in another
dealer network. Cross-selling revenues are measured by product line and
accounted for approximately $177 million in additional revenue for us in 2001
and merger-related profit improvements of $35 million.

Materials Costs -- We have been able to achieve cost savings on materials
in a number of ways. The merger has permitted us to benefit from the savings
associated with higher volume materials purchases. In addition, we have
reevaluated our supplier network and, in some cases, changed suppliers to
enhance cost savings. Our manufacturing reengineering initiatives have further
reduced materials costs through the more efficient design of some of our
components.

For 2001, our management has classified all materials cost savings as
merger-related profit improvements. Materials cost savings were approximately
$50 million in 2000 and $75 million in 2001.

Manufacturing, Depot and Other -- We have realized further cost savings by
implementing our plan to rationalize production and close manufacturing plants
and parts depots. These actions are evaluated on a plant-by-plant basis and are
net of any costs that we incur in order to close a particular plant. Plant
rationalization and closures resulted in net cost savings of $58 million in
2001. As the plant and depot rationalization plan continues, we expect continued
merger-related cost savings in this area.

Selling, General and Administrative -- The merger and our merger-related
restructuring plans have reduced SG&A expenses throughout our business by
combining functions, reducing of employment levels and outsourcing non-core
functions. Our management has determined to classify all profit improvements
from reductions in SG&A expenses for the period from the merger to the end of
2001 (and only for that period) as merger-related profit improvements.
Accordingly, we realized merger-related profit improvements from SG&A reductions
of $96 million and $110 million in 2000 and 2001, respectively, and will not
record any such improvements in future periods.

The reduction in consolidated interest expense from $793 million in 2000 to
$726 million in 2001 was principally due to lower average interest rates,
partially offset by increased borrowings. Interest expense in Equipment
Operations increased to $585 million in 2001 from $542 million in 2000 primarily
as a result of increased borrowings to support increased intersegment lendings
by Equipment Operations to Financial Services, which yielded lower funding costs
than Financial Services would otherwise have been able to obtain. The decrease
in Financial Services interest expense of $71 million to $339 million was mainly
due to lower average funding costs, partially offset by higher average borrowing
levels to support the higher balances of retail and wholesale receivables. In
2001, we incurred $358 million in interest expense relating to its financing
from Fiat as compared to $291 million in 2000.

Other, net increased to $193 million in 2001 from $186 million in 2000. The
increase in other expenses was primarily attributable to unfavorable foreign
exchange impacts.

During 2001, total equity in income (loss) of unconsolidated subsidiaries
and affiliates declined by $14 million to a net loss of $8 million as compared
to net income of $6 million in 2000. Financial services equity in income of
unconsolidated subsidiaries increased $4 million during 2001 due primarily to
the cost reductions related to the termination of origination activities of
certain joint venture arrangements in Europe. Equity in income from our
unconsolidated Equipment Operations activities decreased from a profit of $4
million in 2000 to a loss of $14 million in 2001. The decline was primarily due
to the devaluation of the Turkish Lira in the first quarter of 2001.

Tax Rates -- Consolidated

Our principal wholly owned manufacturing operations are located in the
United States, Italy, the United Kingdom, Belgium, France, Germany, Canada and
Brazil and these jurisdictions therefore have the most significant impact on the
effective tax rate for CNH as a whole. The highest statutory tax rate in these
countries in the year ended December 31, 2001 and 2000, respectively, was 42%
and 53% in Germany. The lowest statutory tax rates in these countries were 30%
in the United Kingdom for both 2001 and 2000. Our effective tax rate was
approximately 24% in 2001 and 29% in 2000. For an analysis of the
41

principal factors affecting our effective tax rate, see Note 16, "Income Taxes"
to the Consolidated Financial Statements.

Net Income

The consolidated net loss in 2001 was $332 million, compared with a net
loss of $381 million in 2000. On a diluted basis, losses were $1.20 and $1.79
per share in 2001 and 2000, respectively. On a consolidated basis, the loss
before restructuring and other merger related costs, net of tax, was $253
million in 2001 as compared to a net loss of $269 million in 2000.

Effect of Currency Translation

For financial reporting purposes, we convert the financial results of each
of our operating companies into U.S. Dollars, using average exchange rates
calculated with reference to those rates in effect during the year. As a result,
any change from year to year in the U.S. Dollar value of the other currencies in
which we incur costs or receive income is reflected in a currency translation
effect on our financial results.

The impact of currency translation on the results of Financial Services
operations is minimal, reflecting the geographic concentration of such
operations within the United States. For Equipment Operations, the impact of
currency translation on net sales generally is largely offset by the translation
impact on costs and expenses.

During 2001, the average change in the currencies of our major operations
as compared with the U.S. Dollar were declines in the values of the Euro by 3%,
the Australian Dollar by 11%, the British Pound by 5% and the Brazilian Real by
22%. The value of the Canadian Dollar declined by 4% and the value of the
Japanese Yen declined by 13%. The impact of these movements reduced net sales by
3% and reduced the absolute gross margin by 5%. The impact on net income was
approximately $10 million unfavorable, as the impact on overhead costs was
favorable.

2000 COMPARED TO 1999

The acquisition of Case in November 1999 was the primary factor underlying
the differences between our actual results for 2000 and 1999. Therefore,
following this section, we present a comparison of our actual results for 2000
and our pro forma results for 1999 which illustrate the effects of the Case
acquisition as if it had occurred at January 1, 1999. Please refer to this
discussion for additional meaningful information regarding variances between our
2000 actual results and our 1999 pro forma results.

Revenues

Consolidated revenues for 2000 totaled $10,041 million as compared to
$6,273 million in 1999. The largest component of our consolidated revenues is
our net sales of agricultural and construction equipment which were $9,337
million in 2000, up 57% from $5,949 million in 1999. The increase in net sales
in 2000 was largely due to the full year impact of the Case acquisition and the
acquisition of Flexi-Coil in January 2000, offset in part by approximately $425
million in unfavorable currency translation on net sales of equipment and lower
industry volumes.

Net Sales of Equipment

Net sales of our Equipment Operations for the years ended December 31, 2000
and 1999 by geographic area were as follows:

2000 1999
------ ------
(IN MILLIONS)

NET SALES
Western Europe............................................ $3,613 $2,918
North America............................................. 4,072 2,076
Latin America............................................. 633 386
Rest of World............................................. 1,019 569
------ ------
Total net sales........................................ $9,337 $5,949
====== ======

Agricultural Equipment

2000 1999
------ ------
(IN MILLIONS)

NET SALES
Western Europe............................................ $2,181 $1,826
North America............................................. 2,510 1,347
Latin America............................................. 413 273
Rest of World............................................. 773 458
------ ------
Total net sales........................................ $5,877 $3,904
====== ======

Construction Equipment

2000 1999
------ ------
(IN MILLIONS)

NET SALES
Western Europe............................................ $1,432 $1,092
North America............................................. 1,562 729
Latin America............................................. 220 113
Rest of World............................................. 246 111
------ ------
Total net sales........................................ $3,460 $2,045
====== ======

Finance and Interest Income

Consolidated finance and interest income increased from $324 million in
1999 to $704 million in 2000. Finance and interest income in Equipment
Operations increased to $68 million in 2000 as compared to $17 million in 1999.

Financial services revenues totaled $799 million in 2000, an increase of
$387 million from the $412 million reported in 1999. The increase in revenues
was primarily driven by increased finance and interest income earned on retail
and wholesale receivables and the incremental gains recorded on the
securitization transactions as a result of the acquisition of Case and Case
Credit.

Costs and Expenses

Costs of goods sold increased by $2,936 million to $7,820 million in 2000,
and as a percentage of net sales of equipment to 83.8% in 2000 from 82.1% in
1999. Gross margin (net sales of equipment less cost

of goods sold) in 2000, expressed as a percentage of net sales of equipment, was
16.2% compared to 17.9% in 1999.

Consolidated SG&A expenses increased by $551 million in 2000 to $1,277
million as compared to $726 million in the prior year. SG&A expenses of the
Equipment Operations were $350 million higher in 2000 than $657 million in 1999,
primarily due to the acquisition of Case. The increase in Financial Services
SG&A expenses from $69 million in 1999 to $274 million in 2000, was primarily
due to the acquisition of Case Credit and to $147 million in higher pre-tax loan
loss provisions in 2000 as compared to 1999 and the higher cost of supporting
expansion of credit activities in Europe aimed at improving our level of
financing in Europe relative to our equipment sales. The increase in loan loss
provisions was primarily due to increased delinquencies and losses in the
non-core diversified financing businesses and, to a lesser extent, to prolonged
weakness in the North American farm economy.

Ongoing research and development expenses as a percentage of net sales of
equipment were approximately 3.6% and 3.3% in 2000 and 1999, respectively.

During 2000, we recorded $157 million in restructuring and other
merger-related costs for the CNH Merger Integration Plan. These restructuring
and other merger-related costs relate to severance and other employee-related
costs, write-down of assets, loss on the sale of assets and businesses, costs
related to closing, selling and downsizing existing facilities and other
merger-related costs. We realized $155 million in annual profit improvements in
2000 compared to the base levels of revenues and costs incurred in the combined
operations of New Holland and Case for the full year 1999. In 1999, we recorded
additional restructuring charges of $19 million related to headcount actions
contemplated under the 1998 restructuring program initiated by CNH, then New
Holland, to better align our operations in response to the then current economic
and market conditions. See Note 4, "Restructuring" to the Consolidated Financial
Statements for a detailed analysis of our restructuring programs.

Consolidated interest expense increased from $266 million in 1999 to $793
million in 2000 primarily as a result of higher debt levels related to the Case
acquisition and higher interest rates. In 2000, we incurred $291 million in
interest expense relating to financing from Fiat as compared to $79 million in
1999.

Other, net increased to an expense of $186 million in 2000 from income of
$16 million in 1999 primarily related to the amortization of goodwill in 2000
related to the acquisition of Case and to the consolidation of Case Credit
within Financial Services.

During 2000, total equity in income of unconsolidated subsidiaries and
affiliates decreased by $3 million from net income of $9 million in 1999 to net
income of $6 million in 2000. Financial Services equity in income of
unconsolidated subsidiaries increased by $2 million and equity in income from
our unconsolidated Equipment Operations activities decreased by $5 million.

Tax Rates -- Consolidated

Our principal wholly owned manufacturing operations are located in the
United States, the United Kingdom, Italy, Belgium, France, Germany, Canada and
Brazil and these jurisdictions therefore have the most significant impact on the
effective tax rate for us as a whole. The highest statutory tax rate in these
countries in the year ended December 31, 2000 and 1999, respectively, was 53% in
Germany. The lowest statutory tax rates in these countries in the years ended
December 31, 2000 and 1999, were 30% and 31%, respectively, in the United
Kingdom. Our effective tax rate was approximately 29% in 2000 and 27% in 1999.
For an analysis of the principal factors affecting our effective tax rate, see
Note 16, "Income Taxes" to the Consolidated Financial Statements.

Net Income

Net loss in 2000 was $381 million compared with net income of $148 million
in 1999. Diluted earnings (loss) per share for 2000 were a loss of $1.79 as
compared to earnings of $0.97 in 1999. Net loss before restructuring and other
merger related costs, net of tax, was $269 million in 2000 as compared to
44

net income of $162 million in 1999. The decrease in earnings was primarily
attributable to the Case acquisition, including acquisition related costs and
increased interest expense, as well as the amortization of fair value purchase
accounting adjustments and goodwill related to the merger.

Effect of Currency Translation

The impact of currency translation on the results of Financial Services
operations is minimal, reflecting the geographic concentration of such
operations. For Equipment Operations, the impact of currency translation on net
sales generally is largely offset by the translation impact on costs and
expenses.

During 2000, the average change in the currencies of our major operations
as compared with the U.S. Dollar were declines in the values of the Euro by 13%,
the Australian Dollar by 10%, the British Pound by 6% and the Brazilian Real by
1%. The value of the Canadian Dollar remained stable and the value of the
Japanese Yen improved by 5%. The impact on net income was approximately $30
million unfavorable, as the impact on overhead costs, on other costs and on
taxes was favorable.

2000 COMPARED TO 1999 PRO FORMA RESULTS

Management believes that a comparison of the actual financial results for
the years 2000 and 1999 is not entirely meaningful due to the magnitude, in
particular, of the Case acquisition, which approximately doubled the revenue and
asset base of CNH. Thus, management has prepared 1999 unaudited consolidated pro
forma statements of operations to illustrate the estimated effects of the
acquisition of Case by New Holland as if this transaction had occurred at
January 1, 1999. The pro forma data reflect the impact of the fair value
adjustments to the Case assets and liabilities acquired, as well as incremental
goodwill amortization and interest expense for the related acquisition
financing.

COMPARISON OF THE YEARS ENDED
DECEMBER 31, 2000 (ACTUAL) AND 1999 (PRO FORMA)

CONSOLIDATED EQUIPMENT OPERATIONS FINANCIAL SERVICES
--------------------- -------------------- ------------------
PRO FORMA PRO FORMA PRO FORMA
1999 1999 1999
2000 (UNAUDITED) 2000 (UNAUDITED) 2000 (UNAUDITED)
------- ----------- ------ ----------- ---- -----------
(IN MILLIONS, EXCEPT PER SHARE DATA)

REVENUES:
Net sales....................... $ 9,337 $ 9,929 $9,337 $ 9,929 $ -- $ --
Finance and interest income..... 704 744 68 74 799 785
------- ------- ------ ------- ---- ----
10,041 10,673 9,405 10,003 799 785
COSTS AND EXPENSES:
Cost of goods sold.............. 7,820 8,320 7,820 8,320 -- --
Selling, general and
administrative............... 1,277 1,315 1,007 1,173 274 142
Research, development and
engineering.................. 338 357 338 357 -- --
Restructuring and other merger
related costs................ 157 19 157 19 -- --
Interest expense................ 793 794 542 519 410 390
Other, net...................... 186 150 100 73 86 77
------- ------- ------ ------- ---- ----
10,571 10,955 9,964 10,461 770 609
EQUITY IN INCOME OF UNCONSOLIDATED
SUBSIDIARIES AND AFFILIATES:
Financial Services.............. 2 -- 26 112 2 --
Equipment Operations............ 4 1 4 1 -- --
------- ------- ------ ------- ---- ----
Income (loss) before taxes and
minority interest............... (524) (281) (529) (345) 31 176
Income tax provision (benefit).... (153) (97) (159) (161) 6 64
Minority interest................. 10 4 11 4 (1) --
------- ------- ------ ------- ---- ----
Net income (loss)................. $ (381) $ (188) $ (381) $ (188) $ 26 $112
======= ======= ====== ======= ==== ====
PER SHARE DATA:
Basic earnings (loss) per share... $ (1.79) $ (1.26)
Diluted earnings (loss) per
share........................... (1.79) (1.26)

Revenues

Consolidated revenues for 2000 totaled approximately $10,041 million
including the impact of $627 million in unfavorable foreign exchange, as
compared to approximately $10,673 million in 1999 on a pro forma basis. The
largest component of our consolidated revenues is our net sales of agricultural
and construction equipment, which were $9,337 million in 2000 as compared to
approximately $9,929 million in 1999 on a pro forma basis. In the following
discussions, all references to CNH's 1999 net sales or units sold will refer to
1999 on a pro forma or combined basis, as if the acquisition of Case by New
Holland had occurred at January 1, 1999, unless specifically stated otherwise.

Net Sales of Equipment

Net sales of our Equipment Operations for the years ended December 31, 2000
and 1999 by geographic area were as follows:

PRO FORMA
2000 1999
------ -----------
(UNAUDITED)
(IN MILLIONS)

NET SALES
Western Europe............................................ $3,613 $4,179
North America............................................. 4,072 4,114
Latin America............................................. 633 573
Rest of World............................................. 1,019 1,063
------ ------
Total net sales........................................ $9,337 $9,929
====== ======

Net sales of equipment decreased in 2000, as increased unit sales of
agricultural equipment were more than offset by decreased unit sales of
construction equipment and approximately $625 million in unfavorable currency
translation on sales of equipment. Overall world market demand for major
agricultural and construction equipment product lines increased slightly by 2%
in 2000, driven by increased demand for under 40 horsepower tractors in North
America; increased demand for skid steer loaders in North America, Western
Europe and Latin America; and by increased demand for heavy construction
equipment in Western Europe and Rest of World markets. Demand for large tractors
in North America, combines in Western Europe, and backhoe loaders in North
America and Western Europe declined. Our mix of sales weakened and our overall
market share declined slightly (by less than one percentage point), reflecting
strong competitive responses to the Case and New Holland merger, particularly in
North America, dealer and customer uncertainties as to the product lines
affected by merger-related divestitures and the timing of new product
introductions by us and new products launched by competitors, and the relative
mix of strengthening versus weakening markets and our share in those markets.

Agricultural Equipment

PRO FORMA
2000 1999
------ -----------
(UNAUDITED)
(IN MILLIONS)

NET SALES
Western Europe............................................ $2,181 $2,581
North America............................................. 2,510 2,313
Latin America............................................. 413 368
Rest of World............................................. 773 882
------ ------
Total net sales........................................ $5,877 $6,144
====== ======

Net sales of agricultural equipment decreased by 4% in 2000 compared with
1999. The decline in net sales occurred as higher unit sales and the addition of
Flexi-Coil were more than offset by unfavorable product mix and the unfavorable
effects of currency translation. Overall worldwide tractor market demand in
2000, as measured in units, decreased by approximately 3% from 1999 levels,
while overall combine demand decreased by approximately 2%.

In Western Europe, net sales of agricultural equipment decreased by 15%,
reflecting lower unit sales and the 13% decline in the value of the Euro and the
6% decline in the value of the British Pound, in each case as compared with the
U.S. Dollar from 1999 to 2000. Overall tractor market demand, as measured in
units, decreased by approximately 7% in 2000 and overall combine market demand
decreased by approximately 19%.

In North America, net sales of agricultural equipment increased by
approximately 9% in 2000 compared with 1999. Total market demand for
agricultural tractors in North America increased by approximately 9%, led by a
13% increase in demand for under 40 horsepower tractors. Industry demand for
mid-sized (40 to 100 horsepower) tractors increased by approximately 5% while
demand for large two wheel drive tractors over 100 horsepower declined by 1% and
demand for four wheel drive tractors declined by approximately 9%, reflecting
continued low commodity prices. Combine market demand increased by approximately
5%.

In Latin America, net sales increased by 12% in 2000 compared with 1999.
Unit sales increased by approximately 22%. Total market demand for agricultural
tractors in Latin America increased by 10%, led by higher market demand in
Brazil as the Brazilian government sustained its programs to assist farmers in
purchasing equipment. Total market demand for combines rose by approximately
22%.

In markets throughout the Rest of World, net sales of agricultural
equipment decreased by 12% in 2000 compared with 1999 despite an 8% increase in
unit sales of tractors and combines. The decline in net sales principally
reflects the 10% decline in the value of the Australian Dollar as compared with
the U.S. Dollar from 1999 to 2000, and a weaker mix of tractor sales
particularly in the weakening Australian market.

Construction Equipment

PRO FORMA
2000 1999
------ -----------
(UNAUDITED)
(IN MILLIONS)

NET SALES
Western Europe............................................ $1,432 $1,598
North America............................................. 1,562 1,801
Latin America............................................. 220 205
Rest of World............................................. 246 181
------ ------
Total net sales........................................ $3,460 $3,785
====== ======

Net sales of construction equipment decreased by approximately 9% in 2000
compared with 1999. The decline in net sales was primarily attributable to an 8%
decline in unit sales in North America as construction activity slowed during
the year and to the unfavorable effects of currency translations. Overall unit
sales decreased in 2000 by approximately 2%. Overall worldwide market demand as
measured in units, increased by approximately 5% from 1999 to 2000.

In Western Europe, net sales of construction equipment decreased by 10%,
reflecting a slight increase of 3% in unit sales offset by the 13% decline in
the value of the Euro and the 6% decline in the value of the British Pound, both
as compared with the U.S. Dollar from 1999 to 2000. Overall market demand, as
measured in units, increased by approximately 8% in 2000.

In North America, net sales of construction equipment decreased by about
13% in 2000 compared with 1999. Total market demand for construction equipment
decreased by approximately 1%, including 10% declines in demand for backhoe
loaders and heavy construction equipment, partially offset by an 11% increase in
demand for skid steer loaders.

In Latin America, net sales of construction equipment increased by 7% in
2000 compared with 1999. The increase in net sales was principally due to a
strong increase of 18% in unit sales in that region. Total market demand
increased by approximately 4%.

In markets throughout the Rest of World, net sales of construction
equipment increased by 36% in 2000 compared with 1999 as unit sales increased
significantly by 33%. Total market demand increased by approximately 18%.

Finance and Interest Income

Consolidated finance and interest income declined from $744 million in 1999
to $704 million in 2000. Finance and interest income in Equipment Operations
decreased to $68 million in 2000 as compared to $74 million in 1999.

Financial services revenues totaled $799 million in 2000, an increase of
$14 million from the $785 million in 1999 on a pro forma basis. The increase in
revenues was primarily driven by increased finance and interest income earned on
retail and wholesale receivables offset by reduced gains on securitization
transactions executed during the rising interest rate environment of 2000.

Costs and Expenses

Costs of goods sold decreased by $500 million to $7,820 million in 2000,
but as a percentage of net sales of equipment remained unchanged at 83.8% in
both 2000 and 1999. Gross margin (net sales of equipment less cost of goods
sold), expressed as a percentage of net sales of equipment, was 16.2% in 2000,
the same as in 1999. Lower shipments of higher margin construction equipment
more than offset higher shipments of lower margin agricultural equipment.
Slightly weaker product mix and unfavorable impacts of currency translation were
offset by slightly positive pricing, the addition of Flexi-Coil results and $55
million of merger-related profit improvements, primarily related to lower
material costs.

During 2000, consolidated SG&A expenses were $1,277 million, $38 million
lower than in the comparable period in 1999. This decrease is more than
explained by the fact that SG&A expenses of the Equipment Operations decreased
to $1,007 million in 2000 from $1,173 million in 1999, or expressed as a
percentage of net sales of equipment decreased from 11.8% in 1999 to 10.8% in
2000, despite lower net sales. The decrease in expenses was primarily driven by
reductions in salaried headcount. These reductions were principally due to the
divestitures required by the U.S. and European regulatory authorities, ongoing
cost reduction initiatives and merger integration profit improvement activities
initiated by us. These actions resulted in a reduction of almost $100 million in
2000.

The increase in Financial Services SG&A expenses was primarily due to $119
million in higher pre-tax loan loss provisions in 2000 as compared to 1999 on a
pro forma basis and higher cost of supporting expansion of credit activities in
Europe aimed at improving our level of financing in Europe relative to our
equipment sales. The increase in loan loss provisions was primarily due to
increased delinquencies and losses in the non-core diversified financing
businesses and to a lesser extent to prolonged weakness in the North American
farm economy. This increase in diversified financing business delinquencies
largely stemmed from late payments and bankruptcies in the North American
commercial truck industry in the past year. Consequently, we decreased our
volume of loan originations during the fourth quarter by 35% in our diversified
business under the Soris brand.

Ongoing research and development expenses as a percentage of net sales of
equipment were unchanged at approximately 3.6%.

Consolidated salaried employment levels declined from approximately 14,900
at December 31, 1999 to approximately 12,700 at December 31, 2000. This decline
was consistent with the decline in overall employment levels from nearly 36,000
at the time of the merger to approximately 31,000 at December 31, 2000, and in
line with the planned 24% reduction in total employment levels by the end of
2003. This 5,000 reduction includes approximately 1,200 employees that were part
of divestitures. The balance is from our headcount reduction initiatives.

During 2000, we recorded $157 million in restructuring and other
merger-related costs for the CNH Merger Integration Plan. These restructuring
and other merger-related costs relate to severance and other employee-related
costs, write-down of assets, loss on the sale of assets and businesses, costs
related to closing, selling and downsizing existing facilities and other
merger-related costs. We realized $155 million in annual profit improvements in
2000. In 1999, we recorded additional restructuring charges of $19 million
related to headcount actions contemplated under the 1998 restructuring program
initiated by CNH, then New Holland, to better align our operations in response
to the then current economic and
49

market conditions. See Note 4, "Restructuring" to the Consolidated Financial
Statements for a detailed analysis of our restructuring programs.

In 2000, consolidated interest expense of $793 million remained unchanged
from the $794 million of interest expense in 1999. Interest expense of our
Equipment Operations increased from $519 million in 1999 to $542 million in 2000
primarily as a result of higher debt levels and higher interest rates. Financial
services interest expense was $410 million and $390 million in 2000 and 1999, on
a pro forma basis respectively. The increase in interest expense was primarily
as a result of higher interest rates partially offset by slightly lower debt
levels.

Other, net increased from $150 million in 1999 to $186 million in 2000. The
increase in other expenses was primarily attributable to unfavorable foreign
exchange impacts.

During 2000, total equity in income of unconsolidated subsidiaries and
affiliates increased by $5 million from net income of $1 million in 1999 to net
income of $6 million in 2000. Financial Services equity in income of
unconsolidated subsidiaries increased by $2 million and equity in income from
our unconsolidated Equipment Operations activities increased by $3 million.

Tax Rates -- Consolidated

Our principal wholly owned manufacturing operations are located in the
United States, the United Kingdom, Italy, Belgium, France, Germany, Canada and
Brazil and these jurisdictions therefore have the most significant impact on the
effective tax rate for us as a whole. The highest statutory tax rate in these
countries in the year ended December 31, 2000 and 1999, respectively, was 53% in
Germany. The lowest statutory tax rates in these countries in the years ended
December 31, 2000 and 1999, were 30% and 31%, respectively, in the United
Kingdom. Our effective tax rate was approximately 29% in 2000 and 35% in 1999.
For an analysis of the principal factors affecting our effective tax rate, see
Note 16, "Income Taxes" to the Consolidated Financial Statements.

Net Income

In 2000, net income declined from a loss of $188 million in 1999 on a pro
forma basis to a loss of $381 million. Basic and fully diluted earnings per
share declined from a loss of $1.26 in 1999 on a pro forma basis to a loss of
$1.79.

RESTRUCTURING

We record restructuring liabilities at the time our management approves and
commits us to a restructuring plan that identifies all significant actions to be
taken and the expected completion date of the plan is within a reasonable period
of time. The restructuring liability includes those restructuring costs that (1)
can be reasonably estimated, (2) are not associated with or do not benefit
activities that will be continued and (3) are not associated with or are not
incurred to generate revenues after the plan's commitment date. Restructuring
costs are incurred as a direct result of the plan and (1) are incremental to
other costs incurred by us in the conduct of our activities prior to the
commitment date, or (2) existed prior to the commitment date under a contractual
obligation that will either continue after the exit plan is completed with no
economic benefit to the enterprise or reflect a penalty to cancel a contractual
obligation.

1998 RESTRUCTURING PROGRAM

In 1998, we reviewed our manufacturing, selling and administrative
processes in an effort to strengthen our competitive position and to better
align our operations in response to current economic and market conditions. As a
result, we announced a pretax restructuring charge of $40 million for severance
and other costs related to headcount reductions. We refer to these actions as
the 1998 Restructuring Program. The 1998 Restructuring Program included
termination costs to eliminate approximately 420 salaried and 600 hourly
positions. These termination payments included the cost of severance and

contractual benefits in accordance with collective bargaining agreements and CNH
policy, and also included costs for outplacement services, medical and
supplemental vacation and retirement payments.

In connection with the 1998 acquisition of O&K, we recorded additional
restructuring reserves of approximately $29 million for employee and dealer
termination costs. These costs were recorded in conjunction with the allocation
of the initial O&K purchase price.

In 1999, we also recorded additional restructuring charges of $19 million
related to the remaining headcount actions contemplated under the 1998
Restructuring Program. These charges primarily represent severance and other
related costs for the elimination of approximately 340 of the remaining salaried
positions under the original plan. In 1999, we expended $52 million for
severance costs as contemplated under our restructuring programs. In 1999, we
reversed $26 million of purchase accounting reserves, as we were unable to
complete required actions within one year of the O&K acquisition. The reversal
of the $26 million restructuring reserve was recorded against the initial O&K
purchase accounting goodwill.

In 2000, we expended $12 million for severance and other employee costs as
contemplated under the 1998 Restructuring Program. The 1998 Restructuring
Program was completed in 2000 and there have been no other actions under this
program.

The following tables set forth our activities for the years ended December
31, 1999 and 2000 under the 1998 Restructuring Program (in millions):

1999 ACTIVITY
----------------------------------------------------------------
BALANCE AT BALANCE AT
DECEMBER 31, RESERVES CHANGES IN DECEMBER 31,
1998 ADDITIONS UTILIZED* ESTIMATES 1999
------------ --------- --------- ---------- ------------

Severance and other employee-
related costs................ $71 $19 $(52) $(26) $12
Cost related to
closing/selling/ downsizing
existing facilities.......... -- -- -- -- --
--- --- ---- ---- ---
Total restructuring.......... $71 $19 $(52) $(26) $12
=== === ==== ==== ===

2000 ACTIVITY
----------------------------------------------------------------
BALANCE AT BALANCE AT
DECEMBER 31, RESERVES CHANGES IN DECEMBER 31,
1999 ADDITIONS UTILIZED* ESTIMATES 2000
------------ --------- --------- ---------- ------------

Severance and other employee-
related costs................ $12 $-- $(12) $ -- $--
Cost related to
closing/selling/ downsizing
existing facilities.......... -- -- -- -- --
--- --- ---- ---- ---
Total restructuring.......... $12 $-- $(12) $ -- $--
=== === ==== ==== ===

---------------

* Includes currency translation.

CNH MERGER INTEGRATION PLAN

As part of our merger integration, we have evaluated the divestiture or
closure of certain manufacturing locations and parts depots. Through the
consolidation of all functional areas, including the impact of divestiture
actions required by the European and U.S. regulatory agencies in connection with
the merger, we expect to significantly reduce our worldwide workforce. The CNH
Merger Integration Plan takes into consideration duplicate capacity and other
synergies including purchasing and supply chain management, and selling, general
and administrative functions. These restructuring actions will be recorded and
implemented through at least 2004.

The CNH Merger Integration Plan is comprised of two separate programs, the
Case Purchase Accounting Restructuring Program and the CNH Merger Integration
Program. The Case Purchase

Accounting Restructuring Program encompasses all actions of the CNH Merger
Integration Plan related to Case that qualify for purchase accounting treatment
under EITF 95-3. The CNH Merger Integration Program encompasses all other
actions of the CNH Merger Integration Plan, primarily under EITF 94-3 and SFAS
No. 121.

Case Purchase Accounting Restructuring Program

During May 1999, management of both companies assembled several integration
teams to identify cost savings from workforce reductions, duplicate capacity and
other synergy related activities from the acquisition. The preliminary actions
identified by these integration teams were approved by management prior to the
acquisition in November 1999. Detailed restructuring actions that related to
former Case locations or employees that qualified for purchase accounting
treatment under EITF 95-3 were recorded to the Case Purchase Accounting
Restructuring Program during the fourth quarter of 1999 and during 2000. All
restructuring actions relating to non-Case locations or employees or Case
actions that were approved, committed and communicated more than one year after
the acquisition were recorded as restructuring and other merger related costs
under the CNH Merger Integration Program.

As of December 31, 1999, we had recorded $90 million in merger-related
restructuring reserves for severance and other employee-related costs associated
with identified headcount reductions as part of our initial plan to integrate
the Case operations. These costs were recorded in conjunction with the
preliminary allocation of the Case purchase price. During 2000, we recorded an
additional $225 million in merger integration restructuring reserves related to
Case's operations, net of changes in estimates. These costs were recorded in
conjunction with the finalization of the Case Purchase Accounting Restructuring
Program. The additional merger integration restructuring reserves primarily
relate to severance and other employee-related costs and costs related to
closing, selling and downsizing existing facilities. During 2001, we reversed
$31 million in merger integration restructuring reserves related to Case's
operations and recorded such reversal against goodwill. More employees left us
voluntarily than was originally estimated, and the cost to exit certain
facilities was lower than anticipated.

The severance and other employee-related costs reserved for in 2000
amounted to $78 million and relate to severance costs required to reduce the
remainder of the approximately 2,200 Case employees identified in the CNH Merger
Integration Plan. We eliminated administrative and back office personnel, as
well as manufacturing personnel in the facilities that we have closed or
downsized. These termination accruals included the cost of severance and
contractual benefits in accordance with collective bargaining agreements, other
agreements and CNH policy, and also included costs for outplacement services,
medical and supplemental vacation and retirement payments.

In 2000, we expended $61 million of termination payments related to
severance and other employee-related costs. In addition, we reversed $39 million
of severance and other employee-related costs and recorded such reversal against
goodwill, as more employees left us voluntarily than was originally estimated,
resulting in a lower cost than anticipated. As of December 31, 2000, we had
terminated approximately 1,500 Case employees related to the Case Purchase
Accounting Restructuring Program.

In 2001, we expended $50 million of termination payments related to
severance and other employee-related costs under programs which were reserved in
2000. In addition, we reversed $12 million of severance and other
employee-related costs and recorded such reversal against goodwill, as more
employees left CNH voluntarily than we originally estimated resulting in a lower
cost than anticipated. As of December 31, 2001, we had terminated approximately
2,200 Case employees related to the Case Purchase Account Restructuring Program.

The reserves for costs related to closing, selling, and downsizing existing
facilities of $185 million were taken to effect required divestitures and
eliminate excess capacity and duplicate facilities, and primarily relate to the
following actions of the Case Purchase Accounting Restructuring Program:

- Sale of Case's CX and MXC product lines and the Doncaster, United
Kingdom, plant in which they are assembled and its related component
manufacturing plant in St. Dizier, France;

- Sale of Case's large square balers product line, which is assembled in
Neustadt, Germany;

- Sale of Case's Fermec brand loader/backhoe and industrial tractor product
lines and the Fermec manufacturing plant in Manchester, United Kingdom;

- Sale of Case's ownership interest in Hay and Forage Industries in
Hesston, Kansas, a 50% joint venture with AGCO Corporation that produces
hay and forage implements;

- Closure of Case's Concord plant in Fargo, North Dakota, which produces
air seeders;

- Closure of Case's manufacturing plant in Sorocaba, Brazil;

- Sale of Case's Carr Hill Works, Doncaster, England, components facility;

- Closure of Case's Racine, Wisconsin, tractor manufacturing facility; and

- Other actions which take into consideration duplicate capacity and
realization of other synergies, including purchasing and supply chain
management, research and development and selling, general and
administrative functions related to Case's operations.

In 2000, we utilized $72 million of costs related to
closing/selling/downsizing existing facilities related to the programs described
above.

In 2001, we utilized $91 million of costs related to
closing/selling/downsizing existing facilities related to the programs described
above which were reserved in 2000. In addition, we reversed $19 million of cost
related to closing/selling/downsizing existing facilities and recorded such
reversal against goodwill, as the cost to exit certain facilities was lower than
anticipated.

The following table sets forth our activities for the years ended December
31, 1999, 2000 and 2001 under the Case Purchase Accounting Restructuring Program
(in millions):

Severance and other employee-
related costs................ $-- $90 $-- $-- $90
--- --- --- --- ---
Total restructuring.......... $-- $90 $-- $-- $90
=== === === === ===

Severance and other employee-
related costs................ $90 $ 78 $ (61) $(39) $ 68
Cost related to
closing/selling/downsizing
existing facilities.......... -- 185 (72) -- 113
Other costs.................... -- 1 -- -- 1
--- ---- ----- ---- ----
Total restructuring.......... $90 $264 $(133) $(39) $182
=== ==== ===== ==== ====

2001 ACTIVITY
----------------------------------------------------------------
BALANCE AT BALANCE AT
DECEMBER 31, RESERVES CHANGES IN DECEMBER 31,
2000 ADDITIONS UTILIZED* ESTIMATES 2001
------------ --------- --------- ---------- ------------

Severance and other employee-
related costs................ $ 68 $-- $ (50) $(12) $ 6
Cost related to
closing/selling/downsizing
existing facilities.......... 113 -- (91) (19) 3
Other costs.................... 1 -- -- -- 1
---- --- ----- ---- ---
Total restructuring.......... $182 $-- $(141) $(31) $10
==== === ===== ==== ===

---------------

* Includes currency translation.

The specific restructuring measures and associated estimated costs were
based on management's best business judgment under prevailing circumstances.
Management believes that the Case Purchase Accounting Restructuring Program
reserve balance of $10 million at December 31, 2001, is adequate to carry out
the restructuring activities as outlined above, and we anticipate that all
actions will be completed by September 30, 2002. As prescribed under U.S. GAAP,
if future events warrant changes to the reserve, such adjustments will be
reflected in the applicable statements of operations as "Restructuring and other
merger related costs," or in the applicable balance sheets as an adjustment to
goodwill, as appropriate. All actions recorded in the Case Purchase Accounting
Restructuring Program have been completed and there are no unresolved activities
except for the remaining payments as indicated above. All additional
restructuring actions relating to Case locations or employees will be recorded
as "Restructuring and other merger related costs" under the CNH Merger
Integration Program. We expect to fund the remaining cash requirements of the
Case Purchase Accounting Restructuring Program with cash flows from operations
and additional borrowings under our credit facilities.

CNH Merger Integration Program

During 2000, we recorded $157 million in restructuring and other merger
related costs related to the CNH Merger Integration Program, which did not
qualify for purchase accounting treatment. These restructuring and other merger
related costs primarily relate to severance and other employee-related costs,
writedown of assets, loss on the sale of assets and businesses, costs related to
closing, selling, downsizing existing facilities and other merger related costs.
During 2001, we recorded an additional $122 million in restructuring and other
merger related costs related to the CNH Merger Integration Program. These
restructuring and other merger related costs primarily relate to severance and
other employee-related costs, costs related to closing, selling, downsizing
existing facilities and other merger related costs.

The severance and other employee-related costs reserved for in 2000
amounted to $43 million and relate to severance costs required to reduce our
headcount by approximately 2,100 employees as identified in the CNH Merger
Integration Plan. We are eliminating administrative and back office personnel,
as well as manufacturing personnel in the facilities that we will close or
downsize. These termination accruals include the cost of severance and
contractual benefits in accordance with collective bargaining agreements, other
agreements and CNH policy, and also include costs for outplacement services,
medical and supplemental vacation and retirement payments.

In 2000, we expended $31 million of termination payments related to
severance and other employee-related costs. As of December 31, 2000, we had
terminated approximately 400 employees related to the CNH Merger Integration
Program.

During 2001, we reserved for an additional $74 million and expended $40
million relating to severance and other employee-related costs. As of December
31, 2001, we had terminated approximately 1,900 employees related to the CNH
Merger Integration Program.

The reserves for writedown of assets, loss on the sale of assets and
businesses, and costs related to closing, selling, and downsizing existing
facilities of $18 million in 2001 and $79 million in 2000 were taken due to
required divestitures, excess capacity and duplicate facilities, and primarily
relate to the following actions of the CNH Merger Integration Program:

- Sale of our New Holland Laverda combine harvester product line (excluding
hillside) and the Breganze, Italy facility in which they are made;

- Sale of our New Holland Versatile, Genesis and G/70 series four-wheel and
two-wheel drive tractor lines, together with the Winnipeg, Canada, plant
in which they are made;

- Closure of our administrative offices in Brentford, United Kingdom;

- Rationalization of the crawler excavator product line produced at the
Crepy, France, facility;

- Transfer of production of the loader/backhoe product line produced at the
Crepy, France, facility to the Imola, Italy, facility;

- Outsourcing of various components produced at the Burlington, Iowa,
facility; and

- Other actions, which take into consideration elimination of duplicate
capacity and realization of other synergies including purchasing and
supply chain management, research and development and selling, general
and administrative functions related to our operations.

As management approves and commits us to a restructuring action, we
determine the assets that will be disposed in the restructuring actions and
calculate an impairment loss by writing down the assets to the lower of their
carrying amount or fair market value less the cost to sell. The fair market
value of the assets is determined as the amount at which the asset could be
bought or sold in a current transaction between willing parties. All of the
asset impairments recorded by us were related to assets to be disposed of, and
all of these assets have been disposed of at December 31, 2001. The impairment
charges amounted to $15 million and $19 million in 2001 and 2000, respectively.
Exit cost liabilities of $3 million and $60 million were accrued in 2001 and
2000, respectively. We utilized $37 million and $9 million of these exit cost
liabilities in 2001 and 2000, respectively. In addition, we reversed $15 million
of these exit cost liabilities in 2001 to restructuring and other merger related
costs as the cost to exit certain facilities was lower than anticipated. These
activities are included within writedown of assets, loss on sale of assets and
business and costs related to closing/selling/downsizing existing facilities on
the accompanying tables.

The other merger related costs of $15 million and $28 million for the years
ended December 31, 2001 and 2000, respectively, relate to incremental costs that
we incurred in conjunction with our merger integration activities. These costs
are classified as "Restructuring and other merger related costs" on the
consolidated statements of operations. These expenses consist primarily of
consulting expenses, systems integration expenses and employee relocation
expenses.

The following table sets forth our activities for the years ended December
31, 2000 and 2001, under the CNH Merger Integration Program (in millions):

Severance and other employee-
related costs................ $-- $ 43 $(31) $-- $12
Writedown of assets............ -- 12 (12) -- --
Loss on sale of assets and
businesses................... -- 7 (7) -- --
Cost related to
closing/selling/downsizing
existing facilities.......... -- 60 (9) -- 51
Other restructuring costs...... -- 7 (1) -- 6
Other merger related costs..... -- 28 (28) -- --
-- ---- ---- -- ---
Total restructuring.......... $-- $157 $(88) $-- $69
== ==== ==== == ===

Severance and other employee-
related costs................ $12 $ 74 $ (40) $ -- $46
Cost related to
closing/selling/downsizing
existing facilities.......... 51 18 (52) (15) 2
Other restructuring costs...... 6 15 (2) (3) 16
Other merger related costs..... -- 15 (15) -- --
--- ---- ----- ---- ---
Total restructuring.......... $69 $122 $(109) $(18) $64
=== ==== ===== ==== ===

---------------

* Includes currency translation.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The preparation of our financial statements in conformity with generally
accepted accounting principles in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as the date of
the financial statements and the reported amounts of revenues and expenses
during the reported periods. Actual results may differ from these estimates
under different assumptions or conditions. Our senior management has discussed
the development and selection of the critical accounting policies, related
accounting estimates and the disclosure set forth below with the Audit Committee
of our Board of

Directors. We believe that our most critical accounting policies, which are
those that require management's most difficult, subjective and complex
judgments, are as follows.

Allowance for Doubtful Accounts

Our wholesale and retail note receivables have significant concentration of
credit risk in the agricultural and construction equipment industry and are
subject to potential credit losses. We have reserved for the expected credit
losses based on past experience with similar receivables including current and
historical past due amounts, dealer termination rates, write-offs and
collections. Total receivables and the allowance for doubtful accounts at
December 31, 2001 is $6,460 million and $300 million, respectively. We believe
that our reserves are adequate; however, if the financial condition of our
customers deteriorates resulting in an impairment of their ability to make
payments, additional allowances may be required.

Equipment on Operating Lease Residual Values

CNH's Financial Services segment purchases equipment that is leased to
retail customers under operating leases from dealers. Income from these
operating leases is recognized over the term of the lease. Financial Services'
investment in operating leases is based upon estimated residual values of the
leased equipment, which are calculated at the lease inception date. The total
value of equipment on operating leases, net of accumulated depreciation, is $612
million at December 31, 2001. Realization of the residual values is dependent on
Financial Services' future ability to market the equipment under the then
prevailing market conditions. CNH continually evaluates whether events and
circumstances have occurred which impact the estimated residual values of
equipment on operating leases. Although realization is not assured, management
believes that the estimated residual values are realizable.

Off Balance Sheet Financing

Reference is made to Note 14, "Accounts and Notes Receivable" of the
Consolidated Financial Statements for further information on our accounting
practices related to wholesale and retail receivables securitizations.

Sales Allowances

We grant certain sales incentives to stimulate sales of our products to
retail customers. The expense for such incentive programs is reserved for and
recorded as a deduction in arriving at net sales at the time of sales to the
dealer. The amounts of incentives to be paid are estimated based upon future
market demand for our products, competitive pricing and interest rates, among
other things. If market conditions were to decline, we may take actions to
increase customer incentives possibly resulting in an increase in the reduction
of net sales at the time the incentive is offered.

Recoverability of Long-lived Assets

Long-lived assets includes property, plant and equipment, goodwill and
other intangible assets such as patents and trademarks. Reference is made to
Note 2, "Summary of Significant Accounting Policies" of the Consolidated
Financial Statements for further information on our accounting practices related
to Long-lived assets. Our estimates of undiscounted cash flow related to
recoverability of these assets may differ from actual cash flow due to, among
other things, technological changes, economic conditions and the achievement of
the anticipated benefits of the business merger between Case and New Holland.

Realization of Deferred Tax Assets

CNH recorded deferred tax assets of $2,474 million and valuation reserves
against these assets of $986 million as of December 31, 2001, of which $1,209
million of the deferred tax assets and corresponding valuation reserves of $574
million represent tax loss carryforwards. CNH has recorded these valuation
reserves to reduce its deferred tax assets to the amount that is more likely
than not to be realized. While CNH has considered future taxable income and
ongoing prudent and feasible tax planning
57

strategies in assessing the need for valuation allowances, in the event CNH were
to determine that it would be able to realize its deferred tax assets in the
future in excess of its net recorded amount, an adjustment to the deferred tax
asset would increase income in the period such determination was made. Likewise,
should CNH determine that it would not be able to realize all or part of its net
deferred tax asset in the future, an adjustment to the deferred tax asset would
be charged to income in the period such determination was made. If adjustments
are required to the valuation reserves related to tax loss carryforwards of Case
that existed at the date of the acquisition of Case, any future decreases in
those Case valuation reserves would not impact the statement of operations,
rather an adjustment would be made to the goodwill recorded in the Case
acquisition. Any future increases in the Case valuation reserves for those
deferred tax assets in existence at the acquisition date will impact future tax
expense.

Reference is made to Note 16, "Income Taxes" of the Consolidated Financial
Statements for further information on our accounting practices related to the
realizability of deferred tax assets.

Modification Programs and Warranty Costs

Reference is made to Note 2, "Summary of Significant Accounting Policies"
of the Consolidated Financial Statements for further information on our
accounting practices related to modification programs and warranty costs. Our
warranty obligation is affected by component failure rates, replacement costs
and dealer service costs, partially offset by recovery from certain of our
vendors. If actual failure rates or costs to replace and install new components
differ from our estimates, a revision in the modification and warranty liability
would be required.

Pension and Other Post-Retirement Benefits

We sponsor pension and other retirement plans in various countries. In the
U.S., the United Kingdom and Germany we have major defined benefit plans which
are separately funded. Several statistical and judgmental factors which attempt
to anticipate future events are used in calculating the expense and liability
related to the plans. These factors include assumptions about the discount rate,
expected return on plan assets, rate of future compensation increases and health
care cost trend rates, as determined by us within certain guidelines. In
addition, our actuarial consultants also use subjective factors such as
withdrawal and mortality rates to estimate these factors. The actuarial
assumptions used by us may differ materially from actual results due to changing
market and economic conditions, higher or lower withdrawal rates, longer or
shorter life spans of participants and changes in actual costs of health care.
These differences may result in a significant impact to the amount of pension
and other post-retirement benefit expenses recorded by us. Although plan assets
have earned a rate of return of less than 9% in the past two years, we believe
historical long-term results continue to support a long-term rate of return on
plan assets of 9%. We plan to use a 9% assumption for 2002. We will continue to
review and update this assumption on an annual basis. In addition, we have
increased the initial health care cost trend rate assumption from 8% in 2001 to
10% in 2002. We anticipate an approximate $60 million increase in 2002 costs for
employee benefit plans and post-retirement benefits primarily related to an
increase in the health care cost trend rate assumption, the impact of actual
health care cost increases exceeding trend rate assumptions, the impact of
actual returns on plan assets in recent years being less than the expected
long-term rate of return assumption and prior plan changes as a result of
harmonizing the Case and New Holland benefit plans.

Revenue Recognition

Our Equipment Operations segment records sales of equipment and replacement
parts when title and all risks of ownership have transferred to the independent
dealer or other customer. For further information related to when risk of loss
transfers in various countries, see Note 2, "Summary of Significant Accounting
Policies" of the Consolidated Financial Statements. Management's judgments and
estimates in reserving for collectibility of receivables, sales incentives and
product warranties related to sales, are discussed in further detail in the
discussion above of our other critical accounting policies.

Our Financial Services segment records earned finance charges (interest
income) on retail and other notes receivables and finance leases using the
effective interest method.

FINANCIAL REPORTING

Our independent auditors have brought to the attention of our management
and the Audit Committee of our Board of Directors that turnover in our corporate
staff has affected several of our reporting functions. The problems identified
related to the following areas: consolidation adjustments; account
reconciliations; account analysis; and data for financial statement
classification and footnote disclosure. We have been able to provide complete
and accurate information by lengthening the closing process, implementing
additional reviews, analyzing the results and adding temporary resources where
needed.

Additionally, we are currently completing the integration of our accounting
processes by issuing procedures to harmonize our processes, simplifying our
legal entity structure, rationalizing our accounting procedures and systems in
Europe, hiring additional staff and improving our reporting systems.

We believe that the measures we are taking, once fully implemented, will
resolve the matters noted by our auditors before the audit of our 2002 financial
statements. The Audit Committee of our Board of Directors is reviewing our
progress in implementing these plans.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities," which
has been amended by SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities -- Deferral of the Effective Date of SFAS No. 133, an
amendment of SFAS No. 133" and SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities, an amendment of SFAS No. 133." SFAS
No. 133 is effective for fiscal years beginning after June 15, 2000 and will be
applied to: (a) derivative instruments; and (b) certain derivative instruments
embedded in hybrid contracts that were issued, acquired or substantively
modified after December 31, 1998. SFAS No. 133 requires that every derivative
instrument be recorded on the balance sheet as an asset or liability measured at
its fair value and that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met.

We adopted SFAS No. 133 on January 1, 2001. SFAS No. 133 requires that as
of the date of initial adoption, the difference between the fair market value of
derivative instruments recorded on the balance sheet and the previous carrying
amount of those derivatives be reported in net income or other comprehensive
income, as appropriate, as the cumulative effect of a change in accounting
principle in accordance with Accounting Principles Board Opinion 20, "Accounting
Changes." To the extent that these amounts are recorded in other comprehensive
income, they will be reversed into earnings in the period in which the hedged
transaction occurs. Adoption of this accounting standard resulted in cumulative
net of tax reductions in other comprehensive income of approximately $9 million
as of January 1, 2001 and had no significant impact on net income. The adoption
also resulted in an increase to assets and liabilities recorded on the balance
sheet of approximately $9 million and $18 million, respectively.

In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities -- A
Replacement of FASB Statement 125." SFAS No. 140 is effective for transfers
occurring after March 31, 2001 and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000. The
Company adopted the disclosure provisions related to the securitization of
financial assets on December 31, 2000. All remaining provisions were adopted in
the second quarter of 2001. This adoption did not have a significant impact on
us.

investment's carrying value as interest income using the effective yield method.
Beneficial interests must be measured at fair value with other than temporary
impairments being recorded in income. We adopted this pronouncement in April
2001 and adoption of this pronouncement did not have a significant impact on our
financial position or results of operations.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations." SFAS
No. 141 addresses financial accounting and reporting for business combinations.
This Statement requires that all business combinations be accounted for by the
purchase method. As required by SFAS No. 141, we adopted this new accounting
standard for all business combinations initiated after June 30, 2001. The
adoption of SFAS No. 141 did not have a material impact on our financial
statements.

In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 addresses financial accounting and reporting for
intangible assets and goodwill. The Statement requires that goodwill and
intangible assets having indefinite useful lives not be amortized but rather be
tested at least annually for impairment. Intangible assets that have finite
useful lives will continue to be amortized over their useful lives. As required
by SFAS No. 142, we adopted this new accounting standard on January 1, 2002.
Application of the non-amortization provision of SFAS No. 142 is expected to
result in a pretax increase in earnings of approximately $116 million per year
related to goodwill and approximately $11 million per year related to acquired
trademarks with indefinite lives. Beginning January 1, 2002, goodwill and
indefinite-lived intangible assets will be tested for impairment annually, and
will be tested for impairment between annual tests if an event occurs or
circumstances change that would indicate the carrying amount may be impaired.
Impairment testing for goodwill is done at a reporting unit level. Currently, we
have identified three reporting units under the criteria set forth by SFAS No.
142: Agricultural Equipment, Construction Equipment and Financial Services. We
are currently performing the required transitional impairment tests of goodwill
and indefinite-lived intangible assets. SFAS No. 142 prescribes a two-phase
process for impairment testing of goodwill. The first phase, required to be
completed by June 30, 2002, tests for impairment. The second phase (if
necessary), required to be completed by December 31, 2002, measures the amount
of impairment. We have engaged an independent third-party valuation firm to
assist with the fair value determinations of our reporting units and indefinite-
lived intangible assets. To determine fair value, we plan to rely on two
valuation models: guideline company method and discounted cash flow. We are
nearing completion of the first phase of the transitional impairment tests.
Preliminary results indicate that we may incur a goodwill impairment charge of
up to $300 million associated with our Construction Equipment reporting unit.
Preliminary results also indicate that the fair value of our Agricultural
Equipment reporting unit, Financial Services reporting unit and indefinite-lived
intangible assets exceed their respective carrying amounts and therefore we do
not expect these reporting units or intangible assets to be impaired. During
2001, we continued to evaluate the recoverability of goodwill in compliance with
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of."

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 addresses financial accounting and
reporting for obligations associated with the retirement of tangible, long-lived
assets and the associated asset retirement costs. This Statement requires that
the fair value of a liability for an asset retirement obligation be recognized
in the period in which it is incurred by capitalizing it as part of the carrying
amount of the long-lived assets. As required by SFAS No. 143, we will adopt this
new accounting standard on January 1, 2003. We believe the adoption of SFAS No.
143 will not have a material impact on our financial statements.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This Statement establishes a
single accounting model for the impairment or disposal of long-lived assets. As
required by SFAS No. 144, we will adopt this new accounting standard on January
1, 2002. We believe the adoption of SFAS No. 144 will not have a material impact
on our financial statements.

LIQUIDITY AND CAPITAL RESOURCES

The discussion of liquidity and capital resources focuses on the balance
sheets, statements of cash flows and off-balance sheet financing. Our operations
are capital intensive and subject to seasonal variations in financing
requirements for dealer receivables and inventories. Whenever necessary, funds
from operating activities are supplemented from external sources. We expect to
have available to us cash from operations and from sources of debt finance
sufficient to fund our working capital requirements, capital expenditures,
including acquisitions, and debt service at least through the end of 2004.

Consolidated long-term debt as of December 31, 2001 was $6,646 million,
including $1,061 million of current maturities. The consolidated long-term debt
consists of $1,359 million in bonds and medium term notes, $4,043 million of
affiliated notes and $221 million of medium term loans with banks. The remaining
$1,023 million was related to the use of credit lines with banks.

Short term debt was $3,217 million, including $483 million of usage of
asset-backed commercial paper, $1,847 million of usage of credit lines with Fiat
and Fiat affiliates, $217 million of credit lines with banks and $670 million of
sales of receivables with recourse.

As of December 31, 2001, our total debt was $9,863 million. Net of cash,
consolidated debt was $9,200 million. The related party debt was $5,890 million,
with an additional $1,024 million guaranteed by Fiat or a Fiat subsidiary.

Net of intersegment activity and cash and cash equivalents, the Equipment
Operations net debt was $5,229 million and the Financial Services debt was
$3,971 million.

On December 31, 2001, our outstanding debt with Fiat and its affiliates was
approximately 60% of the total debt, compared with 46% at December 31, 2000. In
2001, we paid a guarantee fee of between 0.0625% per annum and 0.125% per annum
on the average amount outstanding under facilities guaranteed by Fiat. Fiat has
agreed to maintain its existing treasury and debt financing arrangements with us
for as long as it maintains control of CNH and, in any event, at least until
December 31, 2004. After that time, Fiat has committed that it will not
terminate our access to these financing arrangements without affording us an
appropriate time period to develop suitable substitutes.

Net Indebtedness

Our consolidated net indebtedness, defined as short- and long-term
borrowings less cash and cash equivalents, is as follows (in millions):

AT DECEMBER 31,
---------------
2001 2000
------ ------

Short-term borrowings....................................... $3,217 $4,186
Long term-borrowings, including current maturities.......... 6,646 5,539
Cash and cash equivalents................................... (663) (886)
------ ------
Net indebtedness............................................ $9,200 $8,839
====== ======

The year-over-year increase in total net indebtedness at December 31, 2001
was mainly due to the combination of expenditures for plant, property and
equipment, cash restructuring and the annual dividend, as the cash impact of the
net loss, net of depreciation and amortization expenses, was essentially
breakeven. The increase in our long term borrowing at December 31, 2001,
primarily reflects a lengthening of the maturity of some of our short-term debt.

Cash Flow from Operating Activities

FOR THE YEARS ENDED
DECEMBER 31,
---------------------
2001 2000 1999
----- ---- ------
(IN MILLIONS)

Equipment Operations........................................ $(268) $285 $ 14
Financial Services.......................................... 86 523 1,071
----- ---- ------
Consolidated................................................ $(182) $808 $1,085
===== ==== ======

In 2001, cash used by operating activities primarily related to increased
working capital and cash restructuring payments and losses in Equipment
Operations.

In 2000, cash provided by consolidated operating activities primarily
related to reduced working capital. Equipment Operations generated cash by
reducing receivables and inventories in response to the continued weakness in
the agricultural equipment industry. Cash generated by Financial Services was
primarily the result of retail receivable sales in ABS transactions, partially
offset by the growth in the retail receivables portfolio.

In 1999, the cash generated by operating activities was due to decreases in
levels of inventory and receivables, partially offset by lower earnings.
Production cuts to realign high year-end inventories with lower market demand
reduced inventory and receivable levels. The increased cash provided by
operating activities for Financial Services resulted from a retail ABS
transaction of approximately $1,000 million in value.

Cash Flow from Investing Activities

Cash used by investment activities was $272 million in 2001, and $296
million in 2000, as in each year total expenditures for property, plant and
equipment and equipment on operating leases were partially offset by proceeds
from divestitures. Cash used by investment activities in 1999 was $4,552
million, substantially all of which was for the acquisition of Case, including
related costs and expenses.

Expenditures for property, plant and equipment in 2001, 2000 and 1999
totaled $229 million, $228 million and $210 million, respectively. We made these
capital expenditures to acquire the property, plant and equipment necessary to
introduce new products, enhance manufacturing efficiency, integration of
operations and further environmental and safety programs.

Cash Flow from Financing Activities

For 2001, cash provided by financing activities was $263 million as we
refinanced our maturing debt and increased its ratio of long-term debt to total
debt. For 2000, cash used by financing activities was $42 million. During 2000,
we also refinanced our maturing debt and increased its ratio of long-term debt
to total debt. For 1999, cash provided by financing activities was $3,327
million, primarily resulting from funds raised to finance the acquisition of
Case.

Securitization Programs for Sale of Receivables

Retail

We securitize and transfer financial assets, using financial asset
securitization procedures, as an alternative funding source to borrowing.
Securitization of assets allows us to diversify funding sources in an attempt to
lower our overall cost of funds. We use special purpose entities ("SPEs") in
securitization transactions to achieve, for the benefit of securitization
investors, isolation of the sold receivables so that the receivables securing
the securities issued by the SPE would be beyond the reach of our creditors. The
use of SPEs in this way allows the SPE to issue highly-rated securities in a
highly-liquid and efficient market, thereby providing us with a cost-effective
source of funding. Termination of the activities described below would reduce
the number of funding resources currently available to us for funding our
finance

activities. Any such reduction of funding sources would create a risk of
increasing our cost of funds and reducing our profit margins, which could
materially adversely affect our results of operations.

Our receivable asset securitization program is further described in Note
14, "Accounts and Notes Receivable" to the Consolidated Financial Statements. In
the program, retail finance receivables are sold to limited purpose,
bankruptcy-remote, consolidated subsidiaries of CNH. In turn, these subsidiaries
establish separate trusts to which they transfer the receivables in exchange for
the proceeds from asset-backed securities and make payments on the securities.
At December 31, 2001, $4.1 billion of asset-backed securities issued to
investors out of U.S. and Canadian trusts were still outstanding with weighted
average remaining maturities of 17 months and 16 months, respectively.

Due to the nature of the assets held by the trusts and the limited nature
of each trust's activities, they are each classified as a qualifying special
purpose entity under SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." In accordance with SFAS
No. 140, assets and liabilities of QSPEs are not consolidated in the Company's
Consolidated Balance Sheets.

We agree to service the receivables transferred to the QSPEs for a fee and
earn other related ongoing income customary with the programs and in accordance
with generally accepted accounting principles. We also may retain all or a
portion of senior and subordinated interests in the QSPEs; these interests are
reported as assets in our Consolidated Balance Sheets. The amount of the fees
earned and the levels of retained interests that we maintain are quantified and
described in Note 14, "Accounts and Notes Receivable" to the Consolidated
Financial Statements.

No recourse provisions exist that allow holders of the QSPEs' asset-backed
securities to put those securities back to us. Moreover, we do not guarantee any
securities listed by the QSPEs. Our exposure related to these QSPEs is limited
to the cash deposits held for the benefit of the QSPEs' investors and the
retained interests in the QSPEs, all of which are reported in our consolidated
balance sheets. The retained interests are subject to similar prepayment and
credit loss risks as the ownership of the underlying receivables sold to the
trusts. The QSPEs have a limited life and generally terminate upon final
distribution of amounts owed to investors or upon exercise of a cleanup-call
option by us, in our role as Servicer, when the servicing of the sold contracts
becomes burdensome. The QSPEs do not own stock of us or any of our affiliates.

Wholesale

We also sell wholesale receivables on a revolving basis to privately
structured securitization facilities. The receivables are initially sold to
wholly-owned, bankruptcy remote SPEs, which are consolidated by us, but legally
isolate the receivables from our creditors. These transactions are utilized as
an alternative to the issuance of debt and allow us to realize a lower cost of
funds due to the asset-backed nature of the receivables and the credit
enhancements offered to investors.

Upon the sale of additional receivables, receivables are removed from the
balance sheet and proceeds are received for the difference between the
receivables sold and the undivided interests in receivables that are required to
be retained by us. In the event of a reduction in the receivables pool sold
caused by charge-offs, the investors in the facility have recourse against our
retained interests in the sold receivables. These retained interests fluctuate
with the size of the sold portfolio as they are specified as percentages of the
sold receivables. Investors have no recourse to us in excess of these retained
interests. We continue to service the sold receivables and receive a fee, which
approximates the fair value of the servicing obligation.

These facilities consist of a 364-day, $400 million facility that is
renewable annually (most recently in March 2002) at the sole discretion of the
purchasers, a seven-year committed, $650 million non-renewable facility that
expires in October 2003 and a 364-day, C$325 million facility that is renewable
annually (most recently in April 2002) upon agreement of the parties, E155
million of which expires in April 2004. At December 31, 2001, $1,037 million and
C$303 million were outstanding under these facilities. Additional information
regarding these transactions is described in Note 14, "Accounts and Notes
Receivable" to the Consolidated Financial Statements.

At December 31, 2001, these facilities contained provisions that were
directly tied to either our long-term unsecured debt rating or Fiat's short-term
or long-term unsecured debt ratings. In the event of a ratings downgrade of our
or Fiat's debt to specific levels, events of termination of new sales would have
been triggered. Under these events of termination, we would have been restricted
from selling additional receivables into the facilities as they were originated,
and the existing debt outstanding on the facilities would have liquidated
commensurate with the liquidations on the pool of receivables financed through
the facilities. The ratings triggers related to these facilities were:

- sales to the 364-day, $400 million facility would have been terminated if
either CNH Global N.V.'s long-term rating were downgraded below BB- (by
Standard & Poor's) or Ba3 (by Moody's), Fiat's short-term rating were
downgraded below A3 (by Standard & Poor's) or Fiat's long-term rating
were downgraded below BBB- (by Standard & Poor's) or Baa3 (by Moody's);

- sales to the seven-year committed $650 million facility would have been
terminated if Fiat's long-term rating were downgraded below BB- (by
Standard & Poor's) or Ba3 (by Moody's), and the bank had the option to
terminate sales to this facility at its discretion if Fiat's short-term
rating were downgraded below A3 (by Standard & Poor's) or P3 (by Moody's)
or Fiat's long-term rating were downgraded below BBB- (by Standard &
Poor's) or Baa3 (by Moody's);

- sales to the 364-day, C$325 million facility would have been terminated
if either CNH Global N.V.'s long-term rating were downgraded below BB (by
Standard & Poor's) or Ba2 (by Moody's) or Fiat's long-term rating were
downgraded below BBB (by Standard & Poor's) or Baa2 (by Moody's); and

- sales to the E155 million facility would have been terminated if Fiat's
long-term rating were downgraded below BB- (by Standard & Poor's) or Ba3
(by Moody's).

At December 31, 2001 and as of the date of this prospectus, our long-term
unsecured debt was rated BB by Standard & Poor's and Ba2 by Moody's, Fiat's
short-term unsecured debt was rated A3 by Standard & Poor's and P2 by Moody's
and Fiat's long-term unsecured debt was rated BBB by Standard & Poor's and Baa2
by Moody's.

Since December 31, 2001, we have restructured the first three facilities
listed above so that a ratings downgrade is linked to an increase in the level
of the collateral, instead of the termination of new sales of receivables into
the facilities. We are attempting to restructure the E155 million facility;
however, we cannot ensure that our efforts will be successful.

In the event that these credit rating downgrades occur, and we are unable
to obtain financing under this securitization facility, our financing capacity
under our other sources of funding, including committed and uncommitted lines of
credit and intercompany borrowing with Fiat and Fiat affiliates, would be used
to facilitate continued receivables origination. To the extent that the current
facilities and credit lines are not sufficient, our loan origination activity
could be reduced, impacting the financial results of the Financial Services
organization. See also "-- Funding Strategy."

FUTURE LIQUIDITY AND CAPITAL RESOURCES

We rely upon loan agreements, commercial paper, lines of credit and
liquidity facilities and asset-backed securitization programs to support our
financing needs. A significant portion of our financing has historically come
from Fiat and Fiat affiliates.

Our liquidity needs could increase in the event of an extended economic
slowdown or recession. Reduced commodity prices and farm cash receipts, as well
as decreased levels of commercial, residential and major infrastructure
construction or other adverse economic conditions, would impair the ability of
our dealers and retail end users to meet their payment obligations. Higher
industry levels of used equipment may affect resale prices and result in
decreased cash flows. In addition, in an economic slowdown or recession, our
servicing and litigation costs would increase. Any sustained period of increased
delinquencies, losses or costs would have an adverse effect on our liquidity.

Term Loan Agreements and Other Long-Term Debt

At the time of the merger of New Holland and Case, we borrowed $3,000
million from two 364-day credit facilities specifically established to finance
the acquisition. Of this amount $200 million was repaid in December 1999. The
remaining $2,800 million was refinanced during 2000 with $2,000 million in term
loans with a Fiat subsidiary with maturities from 2002 to 2005 and a weighted
average interest rate of 7.6% and $800 million in short-term borrowings. The
$600 million loan that matured in February 2002 has been refinanced by such Fiat
subsidiary on a renewable, one-month basis.

In 2001 we negotiated with a subsidiary of Fiat additional term loans for
$1,499 million with final maturities in 2003 and 2006.

We also established medium-term note programs prior to 2000. As of December
31, 2001, our subsidiaries have remaining availability of $425 million in
medium-term notes issuable pursuant to an $800 million U.S. shelf registration
statement; $266 million of medium-term notes issuable under a $470 million
Canadian program; and $179 million of medium-term notes issuable under a $306
million Australian program. Due to the downgrades in our credit ratings
described below, we have not issued any medium-term notes under any of these
programs since 2000.

Commercial Paper

We also have the following commercial paper programs (in millions):

PROGRAM AVAILABILITY
SIZE DECEMBER 31, 2001
------- -----------------

United States............................................... $1,500 $1,500
Australia................................................... 200 200
------ ------
Total....................................................... $1,700 $1,700
====== ======

Under the terms of our commercial paper programs, the principal amounts of
the commercial paper outstanding, combined with amounts outstanding under the
committed credit facilities, cannot exceed the total amount available under the
committed credit facilities. Borrowings under the New Holland Credit Company's
$1,500 million commercial paper program are guaranteed by Fiat.

Beginning in the fourth quarter of 2000 and continuing through 2001, our
ability to access the commercial paper market through the Case Corporation and
Case Credit programs was significantly reduced due to downgrades in the credit
ratings of those subsidiaries. New Holland Credit Company's $1.5 billion program
was not impacted by the rating agencies' actions in the fourth quarter of 2000.
In April 2001, Standard & Poor's downgraded the long-term corporate credit
ratings of CNH, Case Corporation and Case Credit Corporation and related
entities to BB from BBB- and also lowered the short-term debt ratings of such
entities to B, with a negative outlook. In April 2001, Moody's lowered its
long-term and short-term debt ratings of Case Corporation to Ba2 and NP from
Baa3 and P-3, respectively, also with a negative outlook. At the same time,
Moody's downgraded Fiat's long-term debt rating from A3 to Baa2. In addition, in
June 2001, Standard & Poor's downgraded Fiat short-term rating from A-2 to A-3.

In February 2002, Moody's announced that it was reviewing the long-term
debt rating of Ba2 for Case Corporation and Case Credit, as well as Fiat's Baa2
long-term and P-2 short term debt ratings, for possible downgrade. In April
2002, Standard & Poor's placed Fiat's A-3 short-term corporate credit rating on
credit watch with negative implications. In May 2002, Fitch Ratings announced
that it had placed Fiat's BBB senior unsecured and F2 short-term ratings on
Rating Watch Negative. At the same time, Fitch's F2 short-term rating for New
Holland Credit Company's U.S. commercial paper program, which is guaranteed by
Fiat, was placed on Rating Watch Negative. The impact of these ratings
downgrades on our short-term funding was to preclude us from accessing the
commercial paper market through the New Holland Credit Company, Case Corporation
and Case Credit Corporation programs.

In view of these rating agency actions, we have decided to access the
asset-backed commercial paper markets in various countries in which we operate
as a core source of funding for our Financial Services operations. Currently,
our asset-backed commercial paper programs to finance the origination of retail
receivables are the following (in millions):

PROGRAM AVAILABILITY
SIZE DECEMBER 31, 2001
------- -----------------

United States (expiring in January 2003).................... $1,200 $941
Australia (expiring in 2008)................................ 224 --
------ ----
Total....................................................... $1,424 $941
====== ====

Credit Facilities

The following table summarizes our credit facilities at December 31, 2001
(in millions):

MATURITY AMOUNT DRAWN AVAILABLE GUARANTOR
-------- ------ ------ --------- ---------

Committed Lines
Revolving credit facility with third
party................................ 2005 $1,800 $ 0 $1,800 Fiat
Revolving credit facility with Fiat
affiliates........................... 2002-03 1,000 1,000 0
Revolving credit facility with third
party................................ 2004 500 500 0 Fiat
Credit facilities with third parties
shared with some Fiat subsidiaries... 2002-03 420 0 420 Fiat
Credit facilities with third parties... 2002-04 250 0 250 Fiat
Other committed lines.................. various 716 615 101
------ ------ ------
Total committed lines................ 4,686 2,115 2,571
Uncommitted lines...................... various 1,556 1,286 270
Asset-backed commercial paper liquidity
facilities........................... 1,424 483 941
------ ------ ------
TOTAL CREDIT FACILITIES.............. $7,666 $3,884 $3,782
====== ====== ======
Credit facilities with Fiat
affiliates or guaranteed by Fiat
affiliates........................ various $3,970 $1,500 $2,470

At December 31, 2001, we had approximately $3,782 million available under
our $7,666 million total lines of credit. Borrowings under the revolving credit
facilities bear interest at (1) EURIBOR plus an applicable margin, (2) LIBOR,
plus an applicable margin, or (3) banker's bills of acceptance rates, plus an
applicable margin. Borrowings against commercial paper and asset-backed
commercial paper liquidity facilities bear interest at prevailing commercial
paper rates. The weighted-average interest rate on consolidated short-term
borrowings at December 31, 2001, was 3.58%.

Liquidity Facilities

We also have securitization programs through which we may sell, on a
revolving basis, wholesale receivables generated in the United States, Canada
and Europe. Under these facilities, the maximum amount of proceeds that can be
accessed at one time is approximately $1,500 million, and is subject to change
based on the level of eligible wholesale receivables. We expect to sell
additional pools of receivables in the future.

Asset-Backed Securitization Programs

We also maintain access to the asset-backed term market in the United
States and Canada. On May 9, 2001, CNH Capital Corporation, the Financial
Services arm of CNH, announced a $900 million asset-backed securitization by CNH
Receivables, Inc. In addition, on November 15, 2001, CNH Capital

announced an approximate $1,000 million asset-backed securitization by CNH
Capital Receivables Inc. The securities are backed by U.S. agricultural and
construction equipment retail receivables contracts originated through our
dealerships. On November 29, 2001, CNH Capital executed an asset-backed
securitization transaction in Canada in the amount of C$279 million. CNH Capital
applied the proceeds from the securitizations to repay outstanding debt.

We intend to continue our financing activity in the United States and
Canadian asset backed term markets and to enter the asset-backed term market in
Australia in 2002.

FUNDING STRATEGY

We maintain sufficient committed lines of credit and liquidity facilities
to cover our expected funding needs on both a short-term and long-term basis. We
manage our aggregate short-term borrowings so as not to exceed availability
under our committed lines of credit. We access capital and banking markets,
predominantly through commercial paper issuances and committed and uncommitted
credit facilities, to fund our short-term financing requirements and to ensure
near-term liquidity. As funding needs are determined to be of a longer-term
nature, we access medium- and long-term debt markets, as appropriate, to
refinance short-term borrowings and replenish our short-term liquidity.

In managing our future liquidity requirements, we expect to pursue a
financing strategy that includes:

- consolidating existing bank credit arrangements and other borrowing
facilities available to us, developing common standards for borrowing
terms and conditions;

- maintaining a relationship with Fiat, including access to its treasury
and debt financing resources when appropriate;

- maintaining continuous access to a variety of financing sources,
including U.S. and international capital markets and commercial bank
lines; and

- funding Financial Services with a combination of financing and
receivables securitizations.

Increasingly, the most significant source of liquidity for our Financial
Services operations has been our ability to finance the receivables we originate
in the secondary markets through loan securitizations. Adverse changes in the
securitization market could impair our ability to originate, purchase and sell
receivables or other assets on a favorable or timely basis, as well as affect
the interest rate spreads we earn on the receivables we originate, and could
have an adverse effect on our liquidity.

If we are unable to securitize our finance receivables, our financing
capacity under our other sources of funding, including our lines of credit and
liquidity facilities, would have to increase for the volume of our receivables
originations to continue to grow. These facilities typically provide financing
of a certain percentage of the underlying collateral and are subject to the
availability of eligible collateral and, in many cases, the willingness of the
banking firms to continue to provide financing. Some of these agreements provide
for annual terms which are extended by mutual agreement of the parties for an
additional annual term. Although we expect to replace our financing when our
current facilities expire, there can be no assurance that we will obtain
financing on favorable terms, if at all. To the extent that we are unable to
arrange any third party or other financing, our loan origination activities
would be adversely affected, which could have a material adverse effect on our
operations, financial results and cash position.

of either our or Fiat's debt could adversely affect CNH Capital's ability to
continue to offer attractive financing to its dealers and end-user customers. On
a global level, we will continue to evaluate alternatives to ensure that CNH
Capital continues to have access to capital on favorable terms in support of its
business, including through equity investments by global or regional partners in
joint venture or partnership opportunities, new funding arrangements or a
combination of any of the foregoing. Joint ventures allow us to utilize the
partner's balance sheet strength and credit rating to support CNH Capital's
funding requirements on more advantageous terms.

In the event that we were to consummate one or more of the above-described
joint venture transactions or related funding arrangements relating to CNH
Capital, it is likely that there would be a material impact on CNH Capital's
results of operations, financial condition, liquidity and capital resources. Due
to the very preliminary stage of our evaluation process, we cannot assure that
we will be successful in identifying suitable partners or in concluding such
transaction(s) or arrangement(s) on terms satisfactory to us, or that we will
realize the anticipated savings in cost of funding, enhanced range of products
and services, improved competitiveness or other projected benefits from such
transaction(s) or arrangement(s).

CONTRACTUAL OBLIGATIONS

The following table sets forth the aggregate amounts of our contractual
obligations and commitments with definitive payment terms which will require
significant cash outlays in the future. The commitment amounts are as of
December 31, 2001.

PAYMENTS DUE BY PERIOD
-----------------------------------------------------------------
TOTAL LESS THAN 1 YEAR 1-3 YEARS 4-5 YEARS AFTER 5 YEARS
------ ---------------- --------- --------- -------------
(IN MILLIONS)

Long-Term Debt..................... $6,646 $1,061 $2,738 $2,304 $543
Operating Leases(1)................ 162 38 45 15 64
Unconditional Purchase
Obligations...................... -- -- -- -- --
Other Long-Term Obligations(2)..... 21 14 7 -- --
------ ------ ------ ------ ----
Total Contractual Cash
Obligations...................... $6,829 $1,113 $2,790 $2,319 $607
====== ====== ====== ====== ====

---------------

(1) Minimum rental commitments.
(2) Relating to our Shanghai joint venture.

Financial Services private label credit cards had various commitments to
extend credit, net of balances outstanding of approximately $2,100 million and
approximately $1,600 million for the years ended December 31, 2001 and 2000,
respectively.

In addition, we estimate that for 2002, expenditures for property, plant
and equipment and other investments amounting to $229 million in the aggregate
will be required to complete projects authorized as of December 31, 2001, for
which we have made substantial commitments. We also estimate that for 2002,
investments in connection with our alliance with Kobelco will be approximately
$235 million. We expect that our contractual commitments and these commitments
will be funded with cash flows from operations and additional borrowings under
our credit facilities.

INFLATION

Inflation impacts our business in both the costs of production and the
demand for our products.

A significant portion of the cost of our machinery is comprised of material
costs. Therefore, material price inflation could result in increased
manufacturing costs through supplier price increases to us. Our ability to
recover increased supplier costs would be dependent, in part, on our
competitors' responses to these economic conditions. Manufacturing cost
increases in excess of increased pricing in the market could have an adverse
effect on us.

Increases in inflation tend to cause higher interest rates. The demand for
agricultural and, to a greater extent, construction equipment, is negatively
impacted by high interest rates. As interest rates on farm debt escalate,
farmers tend to delay equipment purchases. Our construction equipment business
is heavily tied to the housing construction sector, and in the face of rising
mortgage rates, potential homeowners tend to delay purchases. Increases in the
level of worldwide inflation could have a negative effect on the level of demand
for agricultural and construction equipment.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in both foreign currency
exchange rates and interest rates. We monitor our exposure to these risks, and
manage the underlying economic exposures through the use of financial
instruments such as forward contracts, currency options, interest rate swaps,
interest rate caps and forward starting swaps. We do not hold or issue
derivative or other financial instruments for speculative or trading purposes.

Foreign Currency Risk Management

We have significant international manufacturing operations. Foreign
exchange risk exists to the extent that we have payment obligations or receipts
denominated in currencies other than the functional currency of the various
manufacturing operations. To manage these exposures, we identify naturally
offsetting positions and then purchase hedging instruments to protect the
remaining net anticipated exposures. In addition, we hedge the anticipated
repayment of intercompany loans to foreign subsidiaries denominated in foreign
currencies. For further information on our foreign exchange rate risk
management, see Note 15, "Financial Instruments," to the Consolidated Financial
Statements.

We manufacture products and purchase raw materials from many locations
around the world. Our cost base is diversified over a number of European,
Asia-Pacific, and Latin American currencies, as well as the U.S. Dollar. The
diversified cost base counterbalances some of the cash flow and earnings impact
of non-U.S. Dollar revenues and minimizes the effect of foreign exchange rate
movements on consolidated earnings. Due to periodic mismatches in cash inflows
and outflows, currencies that may have a possible impact on earnings are the
Euro, British Pound, Canadian Dollar, Australian Dollar, Brazilian Real and
Japanese Yen. The primary currencies for cash outflows were the British Pound,
Japanese Yen and Euro. The primary currencies for cash inflows were the Canadian
Dollar and Australian Dollar.

We regularly monitor our currency exchange rate exposure, execute
policy-defined hedging strategies and review the ongoing effectiveness of such
strategies. Foreign exchange forward contracts and option contracts are utilized
for recognized receivables and payables and firmly committed or anticipated cash
inflows and outflows. The use of these derivative instruments allows us to
reduce our overall exposure to exchange rate movements, since the gains and
losses on these contracts substantially offset losses and gains on the
underlying assets, liabilities and cash flows being hedged.

For the purposes of assessing specific risks, we perform a sensitivity
analysis to determine the effects that market risk exposures may have on the
fair value of (a) all foreign exchange forward and option contracts, (b) all
foreign currency denominated debt and (c) all foreign exposures for the U.S.
dollar denominated financial assets and liabilities for CNH's Latin American
subsidiaries. The sensitivity analysis excludes the value of other foreign
currency denominated receivables and payables because of their short-term
maturities. Further, this calculation does not include anticipated foreign
currency cash flows related to the underlying business transactions. The
sensitivity analysis computes the impact on the fair value on the above
exposures due to a hypothetical 10% change in the foreign currency exchange
rates, assuming no change in interest rates. The net potential loss would be
approximately $39 million and $16 million at December 31, 2001 and 2000,
respectively.

Our management believes that the above movements in foreign exchange rates
would have an offsetting impact on the underlying business transactions that the
financial instruments are used to hedge. The sensitivity model assumes an
adverse shift in all foreign currency exchange spot and forward rates. As
consistently and simultaneously unfavorable movements in all relevant exchange
rates are unlikely, this
69

assumption may overstate the impact of exchange rate fluctuations on such
financial instruments. The fair market valuation and sensitivity analysis of
option contracts are provided by a third party based on our request to compute
the fair value change of a 10% movement in the foreign exchange rate in which
the contracts are based. We do not have a model to value such contracts as their
use is limited and the value is not significant to our financial position.

We also have investments in Europe, Canada, Latin America and Asia which
are subject to foreign currency risk. These currency fluctuations for those
countries not under inflation accounting result in non-cash gains and losses
that do not impact net income, but instead are recorded as "Accumulated other
comprehensive income" in our consolidated balance sheet. At December 31, 2001,
we performed a sensitivity analysis on our investment in significant foreign
operations that have foreign currency exchange risk. We calculated that the fair
value impact would be $209 million and $219 million at December 31, 2001 and
2000, respectively, as a result of a hypothetical 10% change in foreign currency
exchange rates, assuming no change in interest rates. We do not hedge our net
investment in non-U.S. entities because those investments are viewed as
long-term in nature. We have limited investments in subsidiaries in highly
inflationary economies. The change in fair value of these investments can have
an impact on our consolidated statements of income. In particular, the
devaluation of the Turkish Lira in 2001 impacted our net income by $20 million
due to the change in net investment of our joint venture operations in Turkey.

In addition to the foreign exchange risks identified, we recognize that we
may be subject to foreign exchange translation risk. This risk may arise when
translating net income of our foreign operations into U.S. Dollars. Depending on
movements in foreign exchange rates, this may have an adverse impact on our
Consolidated Financial Statements. Earnings exposures to the major currencies
include the Euro, British Pound, Canadian Dollar and Australian Dollar.
Exposures to other currencies include the Brazilian Real, Argentine Peso,
Mexican Peso, Danish Krone, Indian Rupee, and Chinese Renminbi. In reviewing
historical trends in currency exchange rates, adverse changes of 20% have been
experienced in the past and could be experienced in the future. Certain
currencies, such as the Mexican Peso, Brazilian Real, and Argentine Peso have
experienced short-term movements ranging from 30% to 90% due to the devaluation
of its respective currency.

As the expected future net income from our operations are dependent on
multiple factors and foreign currency rates in these countries would not be
expected to move in an equal and simultaneous fashion, we have not performed a
sensitivity analysis related to this potential exposure. This potential exposure
has resulted in net income impacts to us of $10 million in 2001 and $30 million
in 2000. We do not hedge the potential impact of foreign currency translation
risk on net income from our foreign operations in our normal course of business
operations as net income of our operations are not typically remitted to the
United States on an ongoing basis.

Interest Rate Risk Management

We are exposed to market risk from changes in interest rates. We monitor
our exposure to this risk and manage the underlying exposure both through the
matching of financial assets and liabilities and through the use of financial
instruments, including swaps, caps, and forward starting swaps, for the net
exposure. These instruments aim to stabilize funding costs by managing the
exposure created by the differing maturities and interest rate structures of our
financial assets and liabilities. We do not hold or issue derivative or other
financial instruments for speculative or trading purposes. For further
information on our interest rate risk management, see Note 15, "Financial
Instruments," to the Consolidated Financial Statements.

We use a model to monitor interest rate risk and to achieve a predetermined
level of matching between the interest rate structure of our financial assets
and liabilities. Fixed-rate financial instruments, including receivables, debt,
ABS certificates and other investments, are segregated from floating-rate
instruments in evaluating the potential impact of changes in applicable interest
rates. The potential change in fair market value of financial instruments
including derivative instruments held at December 31, 2001 and 2000, resulting
from a hypothetical, instantaneous 10% change in the interest rate applicable to
such

financial instruments would be approximately $33 million and $31 million,
respectively, based on the discounted values of their related cash flows.

We use discounted cash flow models to perform the sensitivity analysis on
fixed-rate financial instruments. Cash flows for financing receivables are
discounted at the current prevailing rate for each receivable portfolio. Cash
flows for borrowings are discounted at the treasury yield curve. Cash flows for
interest rate swaps are projected and discounted using forward rates from the
industry standard swap yield curve. ABS certificates and other investments are
discounted at the current prevailing market interest rate for each separate
investment portfolio. Our sensitivity analysis on financial receivables and debt
obligations excludes variable rate instruments because the changes in market
interest rates would not significantly affect the fair value of such
instruments.

The above sensitivity analyses are based on the assumption of a 10%
movement of the interest rates used to discount each homogeneous category of
financial assets and liabilities. A homogeneous category is defined according to
the currency in which financial assets and liabilities are denominated and the
applicable interest rate index. As a result, our inherent rate risk sensitivity
model may overstate the impact of interest rate fluctuations for such financial
instruments, as consistently unfavorable movements of all interest rates are
unlikely.

Commodity Price Risk Management

Commodity prices impact our Equipment Operations' sales and Financial
Services' originations. Commodity risk is managed through geographic and
enterprise diversification. It is not possible to determine the impact of
commodity prices on earnings, cash flows or fair values of the Financial
Services' portfolio.

Changes in Market Risk Exposure as Compared to 2000

Our exposures and strategy for managing our exposures to interest rate,
foreign currency and commodity price risk have not changed significantly from
2000.

BUSINESS

GENERAL

We market our products globally through our highly recognized Case, Case
IH, New Holland, Steyr, Fiat-Hitachi, FiatAllis, O&K and Kobelco brand names. We
manufacture our products in 47 facilities throughout the world and distribute
our products in over 160 countries through an extensive network of approximately
11,700 dealers and distributors.

We are the only global, full-line company in both the agricultural and
construction equipment industries, with strong and usually leading positions in
every significant geographic and product category in both businesses. Our global
scope and scale includes integrated engineering, manufacturing, marketing and
distribution of equipment on five continents.

In agricultural equipment, we believe we are the leading global
manufacturer of agricultural tractors and we also have leading positions in
combines, hay and forage equipment and specialty harvesting equipment. In
construction equipment, we are the world leader in backhoe loaders and wheeled
excavators, second in the world in skid steer loaders and the market leader in
Western Europe in crawler excavators. We also have leading positions in wheel
loaders, crawler dozers and graders. In addition, we provide a complete range of
replacement parts and services to support our equipment. In 2001, our sales of
agricultural equipment represented approximately 63% of our net revenues, sales
of construction equipment represented approximately 30% of our net revenues and
Financial Services represented approximately 7% of our net revenues. Our net
sales from Equipment Operations were approximately $9,030 million in 2001.

We believe that we are the most geographically diversified manufacturer and
distributor of agricultural equipment in the industry. In 2001, approximately
46% of our net sales were generated from sales in North America, approximately
35% in Western Europe, approximately 7% in Latin America and approximately 12%
in the Rest of World including the Asia-Pacific region, Africa, the Middle East
and Eastern Europe. Our broad manufacturing base includes facilities in Europe
(Belgium, France, Italy and the United Kingdom), Latin America (Brazil), North
America (the United States and Canada), India and Australia. We also participate
in manufacturing joint ventures in China, Mexico, Turkey, Uzbekistan and
Pakistan, where these operations are among the market leaders.

In North America, we offer a range of Financial Services products,
including retail financing for the purchase or lease of new and used CNH and
other equipment manufacturers' products and other retail financing programs. To
facilitate the sale of our products, we offer wholesale financing to dealers.
Wholesale financing consists primarily of floor plan financing and allows
dealers to maintain a representative inventory of products. Our retail financing
alternatives are intended to be competitive with financing available from third
parties. We offer retail financing in Brazil and Australia through wholly owned
subsidiaries and in Western Europe through a joint venture with a major European
bank. These activities represent future growth opportunities. At December 31,
2001, our serviced portfolio of receivables, including receivables owned and
receivables serviced for others, was approximately $11.0 billion. Our revenues
from Financial Services were approximately $739 million in 2001.

MERGER INTEGRATION AND DEVELOPMENT PLAN

CNH combines the operations of New Holland and Case as a result of their
merger in November 1999. Effective with the closing of the merger, New Holland
changed its name to CNH. As used in this prospectus, all references to "New
Holland" or "Case" refer to (1) the pre-merger business and/or

operating results of either New Holland or Case on a stand-alone basis, or (2)
the continued use of the New Holland and Case product brands. New Holland
acquired Case for $4,600 million in cash, including related costs and expenses.
We financed the merger with total borrowings of $3,000 million under short-term
credit facilities, an advance to capital of $1,400 million from Fiat Netherlands
Holding N.V., formerly New Holland Holdings N.V., a wholly owned subsidiary of
Fiat, and available cash of $200 million. Management believes that the benefits
of this combination include:

- strengthening our position as a global, full-line manufacturer and
distributor of agricultural and construction equipment products;

- leveraging some of the most well-recognized brands in agricultural and
construction equipment; and

- reducing costs by integrating and rationalizing the manufacturing, supply
chain management, distribution and administrative functions of the
combined companies.

The merger-related profit improvements are being achieved in the following
areas:

Cross-Selling -- The merger of New Holland and Case has allowed us to
enhance revenues and gross profits by selling historical New Holland products to
Case customers and historical Case products to New Holland customers. As an
interim step towards our planned common platform approach, we have expanded the
market reach of many of our products by making relatively minor changes to
existing products and rebranding them for distribution in another dealer
network. Cross-selling revenues are measured by product line and accounted for
approximately $177 million in additional revenue for us in 2001 and
merger-related profit improvements of $35 million.

For 2001, our management has classified all materials cost savings as
merger-related profit improvements. Materials cost savings were approximately
$50 million in 2000 and $75 million in 2001.

Selling, General and Administrative -- The merger and our merger-related
restructuring plans have reduced SG&A expenses throughout our business by
combining functions, reducing employment levels and outsourcing non-core
functions. Our management has determined to classify all profit improvements
from reductions in SG&A expenses for the period from the merger to the end of
2001 (and only for that period) as merger-related profit improvements.
Accordingly, we realized merger-related profit improvements from SG&A reductions
of $96 million and $110 million in 2000 and 2001, respectively, and will not
record any such improvements in future periods.

In approving the merger, the European and U.S. regulatory authorities
identified a number of competitive concerns related to the combined operations
of Case and New Holland in specified product lines and markets. We have
addressed these competitive concerns by divesting the required product lines and
facilities. For a listing of our acquisitions and divestitures see Note 3,
"Acquisitions and Divestitures of Businesses and Investments" to the
Consolidated Financial Statements.

RECENT DEVELOPMENTS

On January 10, 2002, we announced completion of our global alliance with
Kobelco Construction Machinery Co., Ltd., the world's fourth largest
manufacturer of hydraulic excavators, and its parent Kobe Steel, Ltd., one of
Japan's leading steelmakers. We formed this alliance to pursue the development,
production and sale of crawler excavators, including mini-excavators, on a
worldwide basis. This strategic worldwide alliance with Kobelco gives us access
to key crawler excavator technology. Furthermore we gained a significant
presence in the Asia-Pacific construction equipment market as Kobelco's
exclusive OEM supplier of all non-excavator construction equipment products,
which complements our strong presence in the North American and European
markets.

In January 2002, an additional joint venture in China, Shanghai New Holland
Agricultural Machinery Corp., Ltd., commenced operations. Shanghai New Holland
was formed by an agreement between Shanghai Tractor and Internal Combustion
Engine Corporation, a wholly-owned subsidiary of Shanghai Automotive Industry
Corporation, and our New Holland brand of agricultural equipment. The joint
venture company will manufacture, distribute and ultimately export agricultural
tractors under 100 horsepower.

See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Recent Developments" for additional information on
recent developments relating to CNH.

INDUSTRY OVERVIEW

Agricultural Equipment

Management has estimated that the total worldwide market for agricultural
machinery was equal to approximately $39 billion in 2001, of which approximately
$13 billion is in North America and approximately $13 billion is in Europe. In
general, management estimates are based upon officially available data, our own
shipment and pricing data and estimates from industry sources.

The operators of food, livestock and grain producing farms, as well as
independent contractors that provide services to such farms, purchase most
agricultural equipment. The key factors influencing sales of agricultural
equipment are the level of total farm cash receipts and, to a lesser extent,
general economic conditions, interest rates and the availability of financing.
Farm cash receipts are impacted by the volume of acreage planted, commodity
prices, crop yields, farm operating expenses, including fuel and fertilizer
costs, and government subsidies or payments. Farmers tend to postpone the
purchase of equipment when the farm economy is depressed, and to increase their
purchases when economic conditions improve. Weather conditions are a major
determinant of crop yields and therefore also affect equipment buying decisions.
In addition, the geographical variations in weather from season to season may
result in one market contracting while another market is experiencing growth.
Government policies affect the market for our agricultural equipment through
regulation of the levels of acreage planted and crop prices.

Demand for agricultural equipment also varies seasonally by region and
product, primarily due to differing climates and farming calendars. Peak retail
demand for tractors and tillage machines occurs in the March through June months
in the Northern Hemisphere and in the September through November months in the
Southern Hemisphere. Equipment dealers generally order harvesting equipment in
the Northern Hemisphere in the fall and winter so they can receive inventory
during the winter and spring prior to the peak equipment selling season, which
begins in May and June. Similarly, in the Southern Hemisphere, equipment dealers
generally order between September and November for the primary selling season,
which extends from November through February. For combine harvesters and hay and
forage equipment, the retail selling season is concentrated in the few months
around harvest time. Furthermore, manufacturers may choose to space their
production and dealer shipments throughout the year so that wholesale sales of
these products in a particular period are not necessarily indicative of retail
demand.

Customer preferences regarding product types and features vary by region.
In North America, Europe, Australia and other areas where soil conditions,
climate, economic factors and population density allow for intensive mechanized
agriculture, farmers demand high capacity, sophisticated machines equipped with

current technology. In Europe, where farms are generally smaller than those in
North America and Australia, there is greater demand for somewhat smaller, yet
sophisticated, machines. In the developing regions of the world where labor is
abundant and infrastructure, soil conditions and/or climate are not adequate for
intensive agriculture, customers prefer simple, robust and durable machines with
lower purchase and operating costs. In many developing countries, tractors are
the primary, if not the sole, agricultural equipment, and much of the
agricultural work in such countries that cannot be performed by tractor is
carried out by hand. In addition, a growing number of part-time or hobby farmers
in Western Europe and North America also prefer simple, low-cost agricultural
equipment. Our position as the most geographically diversified manufacturer of
agricultural equipment and our broad geographic network of dealers allows us to
supply customers in each of these significant markets in accordance with their
specific equipment requirements.

Government subsidies are a key income driver for farmers raising certain
commodities in the U.S. and Western Europe. The level of support can range from
30% to over 50% of the annual income for these farms in years of low global
commodity prices or natural disasters. The existence of a high level of
subsidies in these markets for agricultural equipment reduces the effects of
cyclicality in the agricultural equipment business. The ability to forecast the
effect of these subsidies on agricultural equipment demand depends on either the
U.S. Farm Bill (typically revised every five years) or the Common Agricultural
Policy (CAP) of the European Union (typically revised every seven years). On May
13, 2002, President Bush signed into law the Farm Security and Rural Investment
Act of 2002. The new law will increase subsidies to the U.S. farming industry by
$31 billion over six years. Management expects that the new law will increase
the immediate demand for agricultural equipment and enhance industry prospects
for 2003.

The CAP was revised in 2000, but has not yet resulted in the dramatic
lowering of subsidies. Instead the effect of the 2000 reform was to provide more
incentives to produce higher quality, value added products and to support rural
development and rural quality of life. This may result in a change in the nature
of equipment purchases from crop production activities to different types of
machines that support those initiatives.

The following graph sets forth retail unit sales in North America and
Western Europe of certain agricultural equipment during the periods indicated:
[AGRICULTURAL EQUIPMENT SHIPMENTS GRAPH]

NORTH AMERICA NORTH AMERICA WESTERN EUROPE WESTERN EUROPE
TRACTORS COMBINES TRACTORS COMBINES
------------- ------------- -------------- --------------

1991 106790.00 11227.00 175366.00 10864.00
1992 101825.00 9473.00 154553.00 8647.00
1993 111085.00 10423.00 142976.00 6737.00
1994 119228.00 10269.00 154389.00 6638.00
1995 121000.00 11277.00 163780.00 7117.00
1996 128878.00 11966.00 180793.00 9081.00
1997 144623.00 12965.00 178885.00 10246.00
1998 150653.00 12441.00 180949.00 11399.00
1999 153952.00 8000.00 185562.00 9433.00
2000 165672.00 6912.00 171141.00 7448.00
2001 182000.00 7646.00 161500.00 6579.00

---------------

Sources: North America -- Association of Equipment Manufacturers; Canadian Farm
and Industrial Equipment Institute.
Western Europe -- Management estimates based on equipment registrations
in each country.

Major trends in the agricultural industry include a growth in farm size and
machinery capacity, concurrent with a decline in the number of farms and units
of equipment sold. The agricultural equipment industry, in most markets, began
to experience an increase in demand in the early 1990's as a result of both
higher commodity prices from an increased demand for food and low levels of
grain stocks worldwide. The amount of land under cultivation also increased as
government agricultural support programs shifted away from mandatory set-aside
programs. This trend was maintained through 1997, but the markets started to
decline in 1998 as a result of unfavorable economic conditions in certain parts
of the world, lower commodity prices and reduced aid to developing countries. In
2000, global prices for agricultural commodities remained low and, as a result,
overall industry demand for high horsepower agricultural equipment continued at
depressed levels, with worldwide industry demand for high horsepower
agricultural tractors and combines even slightly lower than in 1999. In 2001,
worldwide industry unit sales of high horsepower agricultural equipment
continued to decline.

In North America, and to a lesser extent in certain other regions, there
has been significant growth in the under 40 horsepower tractor industry. In
2001, approximately 96,000 under 40 horsepower tractors were sold, compared to
approximately 35,500 in 1991. The growth in this segment has been due primarily
to the generally favorable economic conditions in North America. The customers
for these tractors include homeowners, turf and land care industries, commercial
contractors, public agencies, rental businesses, golf courses, hobby and part
time farmers and industrial plants. Recently, this customer segment demand has
started shifting towards higher horsepower tractors, particularly in the 40 to
60 and 60 to 90 horsepower segments. Purchasers of these products also use a
large number of attachments such as front end loaders, mowers and snow blowers.
Customers often purchase multiple attachments, which can provide significant
revenue and margin opportunities for suppliers of the core products.

Construction Equipment

Management estimates that the worldwide market for construction equipment
was equal to approximately $58 billion in 2001. The total worldwide market for
those product segments in which we compete is equal to approximately $38 billion
of which approximately $16 billion is in North America and approximately $12
billion is in Europe. International markets outside of North America and Western
Europe comprise approximately 25% of total demand for markets in which we are
active. The largest component of international sales volume is hydraulic
excavators, representing about $15 billion in annual industry sales.

The United States and Canada represent about 40% of the total world demand
as measured in both units and revenues of construction equipment. Approximately
50% of all backhoe loaders sold in the world are sold in North America, as well
as 80% of all skid steer loaders and 60% of all dozers. North America's
loader/backhoe market is more than two times larger than Western Europe's. The
Western European market represents approximately 33% of the worldwide unit
volume and approximately 30% of worldwide construction equipment revenues.
Hydraulic excavators represent the largest volume segment in this region with
more than half of the annual sales of construction equipment. Western Europe
also accounts for 43% of the world demand for excavators and 65% of world demand
for telehandlers sold. The Asia-Pacific markets represent approximately 20% of
the total world market demand and 40% of excavator sales revenue and volume. For
the Asia-Pacific market in total, three out of every four pieces of construction
equipment sold are excavators. The remaining world markets represent
approximately 7% of market demand for new construction equipment, but are a much
larger portion of the demand for used equipment. These regional differences in
product demand enable small national manufacturers to survive, in countries like
Italy, Germany and Japan, even though they may produce relatively small numbers
of units.

We divide construction equipment into two principal segments: heavy
construction equipment, which is over 12 metric tons, and light construction
equipment, which is under 12 metric tons. Purchasers of heavy construction
equipment include construction companies, municipalities, local governments,
rental fleet owners, quarrying and mining companies, waste management companies
and forestry related concerns. Purchasers of light construction equipment
include contractors, rental fleet owners, landscapers, logistics companies and
farmers.

The principal factor influencing sales of light construction equipment is
the level of residential and commercial construction, remodeling and renovation,
which in turn is influenced by interest rates. Other major factors include the
level of light infrastructure construction such as utilities, cabling and piping
and maintenance expenditures. The principal use of light construction equipment
is to replace relatively high cost manual work. Product demand in the United
States and Europe has generally tended to mirror housing starts, but with lags
of six to 12 months. However, the recent financial difficulties and
restructurings of national rental companies in North America have adversely
impacted demand despite relatively strong levels of housing starts. In areas
where the cost of labor is inexpensive relative to other inputs such as Africa,
China and Latin America, the light construction equipment market segment is
virtually non-existent. These areas represent potential growth areas for light
equipment in the medium to long term as the cost of labor rises relative to the
cost of equipment. Therefore, higher volumes and economies of scale in
manufacturing, as well as tight cost controls, are important in maintaining
product profitability.

Sales of heavy construction equipment are particularly dependent on the
level of major infrastructure construction and repair projects such as highways,
dams and harbors, which is a function of government spending and economic
growth. Furthermore, demand for mining and quarrying equipment applications is
linked more to the general economy and commodity prices, while growing demand
for environmental equipment applications is becoming less sensitive to the
economic cycle.

The heavy equipment industry in North America, as well as in Europe, is
primarily a replacement market that follows cyclical economic patterns. Cycles
in the United States and Western Europe tend to be about ten years in duration.
The industry in emerging markets generally exhibits an overall growth trend, but
with unpredictable and volatile cycles. In prior years, demand for heavy
construction equipment
77

in North America had been increasing as interest rates remained relatively
stable and the level of government spending on infrastructure projects
increased. In 2000, with increasing interest rates, industry demand for heavy
construction equipment in North America did decline compared with 1999. In
Europe, demand had also been increasing, primarily as a result of higher
spending by European governments. In 2001, worldwide industry unit sales of
construction equipment began to decline dramatically, especially in the latter
half of the year.

The equipment rental business has recently become a more significant factor
in the construction equipment industry. With the exception of the U.K. and
Japanese markets, where there is a long history of machine rentals due to the
structure of the local tax codes, the rental market started with short period
rentals of light equipment to individuals or small contractors who could not
afford to purchase the equipment. In this environment, the backhoe loader in
North America and the mini-excavator in Western Europe were the principal rental
products. More recently, a greater variety of light equipment products as well
as many types of heavy equipment have become available to rent. In addition,
rental companies have allowed contractors to rent machines for longer periods
instead of purchasing the equipment, which allows contractors to complete
specific job requirements with greater flexibility and cost control.
Furthermore, in some countries, longer term rentals also benefit from favorable
tax treatment. The recent rapid consolidation of local and regional rental
companies in North America into national and large regional companies combined
with the economic and financial market declines have created financial pressures
on these market participants. They have, in turn, substantially reduced their
new equipment purchases, despite a relatively solid level of general economic
activity. Overall, this trend toward higher levels of rental activity in the
market may tend to reduce the correlation of industry unit demand for new
equipment with the basic economic industry drivers. On the other hand, increased
rental market activity could lead to more pronounced demand cyclicality in the
industry, as rental companies rush to adjust the size of their fleets as demand
or rental rates change.

Seasonal demand fluctuations for construction equipment are somewhat less
significant than for agricultural equipment. Nevertheless, in North America and
Western Europe, housing construction generally slows down during the winter
months. North American and European industry retail demand for construction
equipment is generally strongest in the second and fourth quarters.

Worldwide customer preferences for construction equipment products are
similar to preferences for agricultural equipment products. In developed
markets, customers tend to favor more sophisticated machines equipped with the
latest technology and comfort features. In developing markets, customers tend to
favor more basic equipment with greater perceived durability. Customers in North
America and Europe, where operator cost often exceeds fuel cost and machine
depreciation, place strong emphasis on product reliability. In other markets,
customers often continue to use a particular piece of equipment even after its
performance and efficiency begins to diminish. Customer demand for power
capacity does not vary significantly from one market to another. However, in
many countries, restrictions on the weight or dimensions of the equipment, such
as road regulations or job site constraints, may limit demand for large
machines.

In general, most construction equipment sold in mature markets such as
North America and Europe replaces older equipment. In contrast, demand in less
mature markets includes replacements as well as net increases in equipment
demand for new products. In these markets, equipment demand also is partially
covered by used equipment sourced from the more developed and mature markets
including: used heavy construction equipment from North America in the Latin
American markets; both heavy and light used equipment from Western Europe in
Central and Eastern European, North African and Middle Eastern markets; both
heavy and light used equipment from Japan in other South East Asian markets; and
excavators from the Japanese market in almost every other market in the world.
These flows of used equipment are highly influenced by exchange rates and the
weight and dimensions of the sourced equipment, which limit the market for large
equipment due to road regulations and job site constraints.

The following graph sets forth the components for 1991 to 2001 heavy and
light construction equipment retail unit sales in North America and Western
Europe:
[CONSTRUCTION EQUIPMENT INDUSTRY SHIPMENT GRAPH]

NORTH AMERICA LIGHT NORTH AMERICA HEAVY WESTERN EUROPE LIGHT WESTERN EUROPE HEAVY
CE CE CE CE
------------------- ------------------- -------------------- --------------------

1991 49854.00 29116.00 57684.00 26992.00
1992 46225.00 25049.00 57684.00 26992.00
1993 56961.00 31271.00 51543.00 20903.00
1994 68723.00 37394.00 58846.00 26411.00
1995 75655.00 41688.00 65621.00 29957.00
1996 84968.00 41710.00 65418.00 23943.00
1997 97394.00 47772.00 70781.00 26367.00
1998 110532.00 55137.00 74640.00 33256.00
1999 117494.00 51334.00 89791.00 36912.00
2000 122362.00 46506.00 99256.00 41746.00
2001 106500.00 43500.00 93700.00 40400.00

---------------
Sources: North America -- Association of Equipment Manufacturers; Canadian Farm
and Industrial Equipment Institute.
Western Europe -- Management estimates based on shipment data in each
country.

Major trends in the construction equipment industry include the transition
in machinery usage from crawler dozers to modern hydraulic excavators and wheel
loaders in excavation and material handling applications. In addition, the light
to medium sized equipment sector has experienced significant growth as more
manual labor is being replaced on construction sites by machines with a myriad
of attachments for each specialized application, such as skid steer loaders in
North America and mini-excavators in the Rest of World.

Recent low levels of public spending on new infrastructure, particularly in
North America and Western Europe, has limited recent growth in the heavy
equipment segments of the market and consequently, the market for light to
medium sized equipment has grown as a percentage of total construction equipment
sales. In 2000, the worldwide industry market demand for major construction
equipment products overall was up about 5% from 1999, but with mixed results by
product and geographic segment. In 2001, however, overall market demand declined
by approximately 11% with declines in each major product category and major
market area.

COMPETITIVE STRENGTHS

We believe that our competitive strengths enable us to focus on markets and
products with growth potential while maintaining and improving our position in
the markets in which we are already established. This allows us to develop and
produce our products at the lowest possible cost level and support those
products with enhanced service capabilities, all leading to improved
profitability and a stronger financial position.

Global Presence

Our extensive global dealer networks provide us with access to the most
significant markets for our agricultural and construction equipment products. We
operate multiple distinct dealer networks, which are

aligned along the global Case and New Holland brand families. Through these
networks, we seek to supply our customers with a full line of products to
facilitate multiple purchases. We also gain significant customer intelligence
from our dealers, allowing us to continually adapt or cross sell our product
offerings to meet our customers' changing needs. In addition, our dealers
provide high quality service and support, which helps us maintain what we
believe is one of the industry's highest customer satisfaction and loyalty
levels. We also support our dealers' efforts by offering them favorable
financing products such as retail and floorplan financing.

Well-Recognized Brands

Our brands are market leaders in most segments of the agricultural and
construction equipment markets. We are the largest producer of agricultural
tractors, combines and construction equipment in the world based on number of
units sold. The merger of Case and New Holland brought to CNH some of the
industry's most respected and recognized global brands. Through differentiation
such as distinct coloring, styling and technical features, each brand offers
products that are tailored to meet the needs of the customers they serve.
Although each brand is distinct, the brands share a common reputation for
quality and dependability that we believe to be the hallmark of our global
manufacturing and product development processes.

Full Range of Competitive Products

We are the only full-line company in both the agricultural and construction
equipment industries, with strong and usually leading positions in every
significant geographic and product category in both businesses. We combine our
internal design and manufacturing strengths with those of our suppliers, joint
venture partners and alliances to develop product solutions and meet our
worldwide customers' needs at competitive cost levels.

Implementation of a Low-Cost, Highly Flexible Manufacturing System

We are integrating our manufacturing facilities and joint ventures into a
global manufacturing network designed to source products from the most
economically advantageous locations and to reduce our exposure to any particular
market. This initiative involves manufacturing common platforms and components
at a limited number of focused manufacturing facilities. These components will
then be delivered to assembly facilities where the final product will be
tailored to market needs. This will enable us to lower our fixed cost base and
rationalize our supply chain, which in turn provides us with the flexibility to
adjust our production levels and costs to industry cycles while maintaining
minimum levels of inventory.

We are concentrating our efforts on core technologies and competencies
while leveraging our research and development activities with those of our
suppliers to develop and produce our new products at a lower cost, higher
quality and on a more timely basis than we could do alone. Through increased
flexibility and improved manufacturing efficiency, we will continue to reduce
our costs to enhance profitability even at constant volume levels.

Strong Financial Services Capabilities

Our strong Financial Services operations support our Equipment Operations
business by providing wholesale financing to our dealers and retail loans to
final customers. We are expanding this important service offering in additional
major markets to facilitate equipment sales. We believe a successful, integrated
financing capability will offer us a consistent source of earnings through
cyclical variation in the agricultural and construction equipment markets. We
may seek to utilize partnerships and joint ventures to grow our financing
capabilities in new markets.

Experienced Management

Our global management team has extensive experience in the global
agricultural and construction equipment industries. The collective experience of
this team has been the driving force behind our
80

restructuring initiatives. Our people come from all over the world, and our
diversity is one of our greatest strengths. This strong multinational character
gives us confidence in our ability to integrate our Case and New Holland
activities as well as our new partners, such as Kobelco, into the CNH family,
gaining their skills and expertise while enhancing the continued development of
new products and services for our markets around the world.

Support of the Fiat Group

Our relationship with the Fiat Group provides us with advantages in terms
of financial liquidity and support, sharing of technical and manufacturing
processes, and access to a talented pool of experienced management. Fiat
financially supports us with intercompany loans that help diversify our sources
of capital to fund our operations. We also benefit from the transfer of
technology and ideas from other areas of the Fiat Group to improve the processes
within our organizations, and from our diesel engine alliance with Iveco N.V.,
the truck-making subsidiary of Fiat and Cummins Inc., to produce the next
generation of diesel engines that meet future emissions requirements.

Furthermore, as evidenced by the experience of some of our key members of
management, the entities that compose the Fiat Group offer a significant talent
base for CNH management.

CNH BUSINESS STRATEGY

Our strategic objectives are to:

- deliver profitability throughout the cycle and achieve higher margins
than either Case or New Holland earned prior to the merger by realizing
merger-related profit improvements, continuing sales growth and
increasing customer satisfaction;

- generate cash through improved earnings, reduced working capital and
improved asset utilization, and use that cash to reduce our debt and
strengthen our balance sheet; and

- continue to position CNH to take advantage of future opportunities for
product and market expansion, both in the short to medium term in areas
such as Latin America and Eastern Europe and through our global alliance
with Kobelco and, in the longer term, in areas such as China and India.

As a global full-line competitor in both the agricultural and construction
equipment markets, CNH plans to grow its business through market expansion and
product offering enlargement. We expect that our commitment to cost controls and
more efficient use of resources will create value for our shareholders through
improved profitability and an enhanced financial position. We believe that our
focus on further improving our products, distribution and services will lead to
increased customer satisfaction and loyalty, promoting future financial
stability and improved returns.

CNH is managed as a global company, supporting its multiple brands and
multiple dealer networks in both its agricultural and construction equipment
businesses. Our manufacturing and engineering operations are managed with global
product line responsibilities, while our sales and marketing activities are
managed on a regional basis by brand.

The following are the key elements of our strategy for achieving our
objectives:

Multiple Brands

We are leveraging our world-class Case, Case IH, New Holland, Fiat-Hitachi,
FiatAllis, O&K and Kobelco brands and multiple distribution networks to further
strengthen our position in all principal existing markets and enhance growth
opportunities by entering new market segments. We believe this strategy will
maintain a high level of dealer and customer loyalty, enhance our global market
position and leverage the combined product portfolio to create cross-selling
opportunities among brands.

A key element of this strategy is to strengthen our dealer networks, moving
towards dealers that are more focused on particular brands. We believe that more
focused dealers tend to be more dedicated to enhancing their brand's market
position and building their own customer service capabilities in order to
increase customer loyalty and earn a larger share of their customers' equipment
and service expenditures. We have reassured our dealers that their brands and
networks will not be consolidated as other companies have done following
consolidations in the industry.

Improve Cost Competitiveness

Restructure Manufacturing Process -- By consolidating our supplier base and
rationalizing our logistics systems, we plan to reduce the number of our
suppliers from 6,000 at the time of the merger to 3,000 by 2004. This will
increase the volumes sourced from each supplier, permitting CNH to reduce its
costs and allowing suppliers to realize economies of scale. As of year-end 2001,
we have reduced the number of our suppliers to 5,100.

We will reduce distribution complexity and costs by reducing the number of
parts depots from 45 to 31 and instituting a new global common parts system. As
of year-end 2001, we had reduced the number of parts depots to 39. Also, under
our new global parts packaging system, some high volume common parts will be
distinctly packaged for each brand or brand family but most other parts will
utilize common CNH packaging. This will further reduce our costs of servicing
new products by capitalizing on the common spare parts requirements of the
common components in the new products.

By rationalizing our manufacturing activities, we will reduce excess
capacity and firmly focus each facility, creating a lean, flexible manufacturing
system. We will reduce our number of plants, both through required and voluntary
divestitures or closures and through downsizing, from 60 at the time of the
merger to 39 by the end of 2004, excluding new acquisitions. We had 45 plants as
of year-end 2001. As a result of the Kobelco global alliance and the Shanghai
joint venture the number of plants has increased to 47. In the process, we will
redistribute production of various products among the remaining plants to firmly
focus each facility on either the production of components or the assembly of
one product category. We will concentrate on certain key technologies or
competencies while outsourcing non-core activities.

Selling, General and Administrative Costs -- We plan to reduce selling,
general and administrative costs to approximately 9.0% of net sales of Equipment
Operations by 2004, as compared to 10.8% in the first year of operations after
the merger, by eliminating duplicative functions while reducing salaried and
administrative positions.

Common Components/Platforms for New Products -- Over time, CNH will develop
global products that optimize the use of common design elements and share
capital-intensive components. We will reduce the number of tractor, combine and
construction equipment product platforms from 74 to 45 without reducing the
number of final product lines. We intend to use a fewer number of global product
platforms with differentiated product features for our different brands. This
should permit us to lower product development and manufacturing costs and
complexity and increase production efficiencies, while reducing inventories,
order-to-delivery cycle times and invested capital requirements. In addition, we
will maintain strong brand identities for the different brands based on
precision of handling, productivity, operation controllability, product
serviceability, color and styling.

Reengineer Core Processes

We have commenced projects, beyond those envisioned at the time of the
merger, to further enhance the efficiency of our core business processes,
including:

- improving and integrating our manufacturing and supply chain systems by
reducing lead times to both customers and the manufacturing process,
increasing manufacturing flexibility, reducing dealer inventories and
increasing asset turnover;

- focusing on key manufacturing technologies within our production system
and outsourcing non-core technologies;

- developing partnerships that improve quality and support our product
development efforts on the supply side;

- rationalizing our legal entity structure to merge duplicative subsidiary
entities and eliminate dormant subsidiaries;

- developing new value added services that we can provide through our
dealers and our Financial Services activities;

- outsourcing non-core business processes, such as information technology
data center operations; and

- providing shared administrative services supporting all brands and
geographic areas.

These programs will permit us to improve profitability while reducing our
working capital and the amount of assets employed in the business, allowing us
to improve our financial returns, asset turnover and cash flow.

New Products

We introduced many new products in 2001 and intend to do so again in 2002.
By 2004, we anticipate that almost 90% of our net sales of equipment, excluding
parts, will be generated by new products introduced since the merger.

To retain existing customers and attract new customers, we plan to continue
to invest in product development to strengthen and broaden our product lines.
CNH will:

- introduce products with leading-edge technology, such as the new CX
combine and a new line of short radius excavators based on Kobelco
technology;

- tailor product offerings for entering new geographic markets and customer
segments;

- upgrade equipment models with an emphasis on quality, reliability and
product simplification, such as the new Axial-Flow combine and the Case M
Series backhoe loader; and

- pursue complementary product lines through strategic partnerships, joint
ventures and acquisitions, such as the strategic worldwide alliance with
Kobelco, which gives us access to key crawler excavator technology.

Global Expansion to New Markets

We view geographical expansion as a major source of future growth and will
expand primarily into markets characterized by rapidly increasing food, housing
and infrastructure demand. On the construction equipment side, our commitment to
growth is evidenced by the recently completed global alliance with Kobelco
Construction Machinery Co., Ltd. of Japan. This alliance opens Japan and the
other markets of the Asia-Pacific region to CNH-built heavy and light equipment.
We have demonstrated our commitment to expansion in our agricultural business
through our joint venture with Shanghai Tractor and Internal Combustion Engine
Corporation, China's leading producer of agricultural tractors.

Expand our Services Operations

We are extending our services to earn revenue from our customers'
expenditures on products and services other than those we currently provide.

Equipment Operations:

- Management continues to evaluate opportunities to increase the range of
products and services offered to our existing customers. These may
include equipment maintenance, repairs and extended warranty plans.

Financial Services Strategy:

- Refocus on core business -- We have refocused our Financial Services
operations on the core business of supporting agricultural and
construction equipment sales to our base of equipment dealers and retail
customers throughout the world. We have exited the commercial lending
business and ended retail financing activities outside our own dealer
networks.

- Broaden service offering outside North America -- We have reorganized our
European businesses to better support our customers and dealers and to
provide new products and services. At the same time, we are developing
our core Financial Services business in Brazil. We will use joint
ventures and alliances to expand our Financial Services businesses
outside of North America to both accelerate new product and service
introductions and to utilize our partners' sources of funding and
established presence. We plan to expand our support to dealers and
customers in as many areas of the world as is feasible, but more
gradually than previously envisioned and, if possible, using less
invested capital.

- Pursue strategic partnerships -- We are developing partnership
arrangements as appropriate with other financial services providers to
broaden our product offering, improve customer service, diversify our
funding sources and gain access to funding at more attractive rates.

COMPETITION

The construction equipment industry is highly competitive, particularly in
Western Europe, North America, Latin America and the Asia-Pacific region. We
compete primarily with global full-line suppliers with a presence in every
market and a broad range of products that cover most customer needs, including
Caterpillar Inc., Komatsu Construction Equipment and Volvo Construction
Equipment Corporation; regional full-line manufacturers, which have a strong
position in one market, but not a global presence, including Deere & Company,
J.C. Bamford Excavators Ltd. and Liebherr-Holding GmbH, and product specialists
operating on either a global or a regional basis, including Ingersoll-Rand
Company (Bobcat), Hitachi Ltd., Sumitomo Construction, Manitou B.F., Merlo UK
Ltd., Gehl Company, Mustang Manufacturing Company, Inc., Yanmar Agricultural
Equipment Co. Ltd. and Kubota Corporation.

We believe that multiple factors influence a buyer's choice of equipment.
These factors include brand loyalty, product performance, availability of a full
product range, the strength and quality of a company's dealers, the quality and
pricing of products, technological innovations, product availability, financing
terms, parts and warranty programs, resale value, customer service and
satisfaction and timely delivery. We continually seek to improve in each of
these areas, but focus primarily on providing high-quality and high-value
products and supporting those products through our dealer networks. In both the
agricultural and construction equipment industries, buyers tend to favor brands
based on experience with the product and the dealer. Customers' perceptions of
value in terms of product productivity, reliability, resale value and dealer
support are formed over many years.

The financial services industry is highly competitive. We compete primarily
with banks, finance companies and other financial institutions. Typically, this
competition is based upon customer service, financial terms and interest rates
charged.

PRODUCTS AND MARKETS

We design, manufacture and distribute agricultural and construction
equipment and provide financial services through several subsidiaries and joint
ventures. We sell and distribute our products in more than 160 markets through
an extensive network of approximately 11,700 dealers and distributors.

Our net sales of agricultural equipment represented 67% of 2001 equipment
sales, and net sales of construction equipment represented 33% of such revenues.
For the year ended December 31, 2001, our net sales of equipment were generated
from the following geographic areas: North America 46%, Western Europe 35%,
Latin America 7% and Rest of World 12%.

Agricultural Equipment

Agricultural equipment represented approximately 67% of our total net sales
of equipment in 2001. Our primary product lines of agricultural equipment, sold
under the Case IH and New Holland brands, include tractors, combine harvesters,
hay and forage equipment, seeding and planting equipment, tillage equipment,
sprayers, and grape, cotton and sugar cane harvesters. In addition, large
numbers of Construction Equipment products, such as telehandlers, skid steer
loaders and backhoe loaders, are sold to agricultural equipment customers. We
also sell tractors under the Steyr brand in Western Europe.

In order to capitalize on customer loyalty to dealers and our company,
relative distribution strengths and historical brand identities, we continue to
use the Case IH, Steyr (tractors only) and New Holland brands, and to produce in
the historical colors of each brand. Management believes that these brands enjoy
high levels of brand identification and loyalty among both customers and
dealers. Although new generation tractors will have a higher percentage of
common mechanical components, each brand and product remains significantly
differentiated by color, interior and exterior styling, internal operator
features and model designation. In addition, flagship products such as row crop
tractors and large combine harvesters have even greater differentiation.
Distinctive features that are specific to a particular brand such as the
Supersteer(R) axle for New Holland, the Case IH tracked four wheel drive
tractor, Quadtrac(R), and front axle mounted hitch for Steyr have been retained
as part of each brand's identity.

[TRACTOR GRAPHIC]

Tractors -- Tractors are used to pull, push and provide power for farm
machinery and other agricultural equipment. Tractors are classified by
horsepower size. We manufacture and market a broad range of tractors under the
Case IH, New Holland and Steyr brands ranging in size from 12 to 450 gross
horsepower, including a line of specialty tractors designed for particular
applications. We also market a line of lawn and garden tractors. Tractors
represented approximately 50% of our sales of agricultural equipment in 2001.

The New Holland tractor brand is the market leader in Europe's major
markets, including Italy, the United Kingdom, France and Spain, and in a number
of other important markets including South Korea, Australia, Thailand, Turkey
and South Africa. New Holland is also among the market leaders in Latin America,
where it has the leading share of the overall tractor market, and has the third
largest share of the market in the United States and Canada. Case IH tractors
are among the market leaders in the high horsepower segments in North America,
Australia, Germany and the U.K., while Steyr brand is the market leader in
Austria and has a strong position in Germany and Switzerland.

Our tractor product offering covers every market segment, including
compact, utility/specialty, all-purpose light, all-purpose heavy, over 100
horsepower and four wheel drive tractors. Compact tractors under 40 horsepower
are used either on farms as general purpose vehicles, in small plot applications
or in the growing off farm segment, where customers such as landscapers,
homeowners and golf courses need a small scale, fully functioning agricultural
style tractor.

Utility/specialty tractors range from 45 to 75 horsepower and are
specifically designed for all-purpose farm operations, with special versions for
orchard and vineyard applications, which require narrower or lower profiles and
tighter turning circles. We offer a wide range of models to cover all the
applications in both the New Holland and Case IH brands and also produce a
utility tractor for the German market under the Steyr brand. These products
consist of all-purpose, full specification tractors designed to serve as the
primary tractor for smaller farms and as a utility or chore tractor for larger
farms. We currently offer these tractors through the New Holland brand, while
the Case IH brand purchases orchard and vineyard products from Agritalia S.p.A.
for resale to dealers, and the Steyr brand produces a utility tractor for the
German market with unique features such as front mounted power take-off.

All-purpose tractors range from 70 to 100 horsepower (light) and 100 to 125
horsepower (heavy) and have a wide range of applications from light tillage to
lifting heavy implements. Generally, the tractors in this range are the primary
tractors for small to medium size farming applications. We produce four all-
purpose light tractors ranging from 67 to 95 horsepower and six heavy
all-purpose tractors ranging from 90 to 125 horsepower. We offer a large variety
of specifications, including mechanical or hydraulic transmissions and cab and
non-cab versions, which allow us to configure tractors for different markets.
For example, we offer a specialized tool carrier tractor that can be driven in
either direction and takes a variety of attachments. This bi-directional tractor
is exclusive to us and unique in the marketplace.

In the over 100 horsepower row-crop segment, we also offer a wide variety
of tractors ranging up to 235 horsepower. Tractors in this segment are primarily
used by large scale farming operations, often focusing on production of cash
grain crops and broadacre applications. We also offer a number of models with a
continuously variable transmission that is ideally suited to both agricultural
applications and highway usage, an important requirement of the European market.

The highest horsepower tractor segment is the articulated four wheel drive
tractor of between 275 and 400 horsepower. Tractors within this segment are the
primary tillage and seeding tractors for the largest farming operations. Our
tracked design version, Quadtrac(R), also has growing applications in the earth
moving segment of the construction equipment markets.

[COMBINE GRAPHIC]

Combine Harvesters -- Combine harvesters are large, self-propelled machines
used for harvesting coarse and cereal grain crops, primarily soybeans, corn,
wheat, barley, oats and rice. These machines cut, convey, thresh and clean
grain. Crops are harvested by an attachable header and fed into the combine,
where the crop is separated from the stalk. The crop is then temporarily stored
in the combine's bin before being placed in trucks or other equipment for
transportation.

New Holland's combine harvesters are the market leaders in most of Europe's
major markets, including Italy, Spain, France and the United Kingdom. We have
the leading share of the Brazilian market and a significant market presence in
the grain producing regions of Canada's prairie provinces. Case IH has a strong
position in North America and is a leader in Australia, Eastern Europe and
Central Asia. We offer two basic harvesting technologies, rotary and
conventional, each of which possesses advantages with respect to certain crops
and conditions. Our newly launched CX conventional combine is the first of a new
generation of modular combines designed so that either of the two different
threshing systems can be installed in the same basic combine frame.

[FORAGE GRAPHIC]

Hay and Forage Equipment -- Hay and forage equipment is used primarily to
harvest or mow, package and condition hay and forage crops for livestock feed.
We are the market leader in most of the principal categories of hay and forage
equipment in North America and the market leader in large rectangular balers in
many of Europe's major markets including France, the United Kingdom and Spain.
In addition we are the market leader in a number of important Rest of World
markets including Australia and New Zealand.

This product line includes:

- self-propelled windrowers and tractor-powered mower/conditioners, which
cut and condition hay crops using either cutting disks or sicklebars;

- hay tedders and rakes, which are designed to reduce drying time and place
hay crops in windrows;

- round balers, which pick up and roll windrowed hay into circular bales;

- square balers, which pick up and compress windrowed hay into rectangular
bales; and

- forage harvesters, which may be either self-propelled or pulled by a
tractor and which cut and gather standing or windrowed crops and
condition the material for animal feed or other uses.

We also produce and market a number of related products, including manure
spreaders, grinder/mixers, self-propelled bale wagons that automatically pick
up, stack and transport hay bales and forage blowers used to fill vertical
silos.

[SEEDER GRAPHIC] [PLANTER GRAPHIC]

Seeding and Planting -- There are two main methods of planting seed: (1)
single seed placement, which is generally used for crops grown in rows such as
corn; or (2) continuous seed placement using the gravity method through a grain
drill or forced air dispersion with an air seeder, generally used for small
grain crops such as wheat. We have leading product entries in both categories.
One of the most critical pieces of equipment on a farm is the seeding equipment,
because it ensures maximum yield potential for the crop. Farmers use a large
variety of seeding mechanisms and machines, and seed placement varies by both
crop type and soil conditions particularly. Our new single seed placement
products employ advanced single seed planting technology, which removes the need
for consistent seed size in planting.

Tillage -- We offer a range of tillage products including disc harrows,
chisel ploughs and new combination machines that perform a variety of tillage
functions in one pass. Our focus on managing the soil and water held in the soil
to help plants thrive has enabled our tillage products to achieve significant
market share in their categories.

[SPRAYER GRAPHIC]

Sprayers -- Equipment for spraying fertilizers or pesticides can be either
self-propelled or pull type. We have a line of both types of sprayers and a
strong position in the North American market. We have successfully integrated
components from other self-propelled machinery such as the large four wheel
drive tractor onto the sprayer units, achieving manufacturing synergies while
providing better features for the customers.

Grape Harvesters -- Grape harvesters separate grapes from their stems and
convey them into a stainless steel tank mounted on the back of the harvester.
Our range comprises nine models of differing sizes and features, including both
self-propelled and trailed versions. Our harvesters are currently market leaders
in France and enjoy a leading share of the European market for self-propelled
grape harvesters. We also export grape harvesters to customers in the
wine-producing regions of Australia, Chile and South Africa.

Sugar Cane Harvesters -- Sugar cane harvesters cut and process standing
green sugar cane, extract dirt and trash and load the cut cane into waiting
transport bins to be carried to the mill. We have the industry leading sugar
cane harvester, produced in leading cane growing markets in Australia and
Brazil, and have launched new products specifically targeted at the developing
markets of India and China.

[COTTON PICKER GRAPHIC]

Cotton Pickers -- Cotton pickers are large self-propelled machines that
pick the cotton boll out of the cotton flower, separating the cotton fibers from
any impurities that might contaminate the crop. We are one of only two global
manufacturers of these machines in the world and have a leading position with
both highly productive six row machines and more basic two row machines in North
America, Australia, Brazil and China.

Construction Equipment

Construction equipment represented approximately 33% of our total net sales
of equipment in 2001. Our present brand and product portfolio is the heritage of
many companies that have been merged into the global Case or New Holland brand
families. Case Construction provides a full line of products on a global scale.
The New Holland family has a regionalized focus capitalizing on heritage brand
names and customer relationships. For example, Fiat-Hitachi, which will soon
become Fiat/Kobelco, focuses on the Japanese-technology segment of the European
market, O&K focuses on the segment of the Western European market that prefers
German-developed technology and FiatAllis has a strong full-line offering, which
serves the Latin American market.

Our new generation products, currently being developed and introduced,
share common components to achieve economies of scale in R&D and manufacturing.
We will differentiate these products based on the relative product value and
volume in areas such as precision of handling, productivity, operator
controllability, product serviceability, color and styling to preserve the
unique identity of each brand.

Heavy Construction Equipment

Our company is a market leader in heavy construction equipment in Western
Europe, Africa, the Middle East and Latin America. We also have a growing
position in the North American market in many heavy construction equipment
product lines such as crawler hydraulic excavators, wheeled hydraulic
excavators, wheel loaders and crawler dozers.

[CRAWLER GRAPHIC]

Crawler Excavators -- Crawler excavators are anthropomorphic machines on a
360-degree rotating crawler tread base equipped with one arm that can perform a
wide variety of applications with extremely precise control by the operator.
Excavators are classified by the weight of the machine and heavy crawler
excavators weigh more than 12 metric tons. Our product offerings range from 13
metric tons up to 90 metric tons. Excavators are versatile machines that can
utilize a wide variety of attachments and are very efficient in terms of
operating cost per ton of earth moved. Generally, the crawler excavator is the
principal heavy construction equipment product that draws customers into
dealerships. Upon purchasing a particular excavator, they tend to purchase
additional heavy construction products of the same brand to simplify maintenance
and service requirements. Crawler excavators are the most popular construction
equipment machine in the Asia-Pacific market, where three out of every four
machines sold are excavators. We are the market leader in Western Europe,
providing leading German and Japanese technology through our O&K and
Fiat-Hitachi (soon to be Fiat/Kobelco) product offerings.

[WHEELED EXCAVATOR GRAPHIC]

Wheeled Excavators -- Wheeled excavators are a specialty excavator product
on a wheeled base rather than a crawler base, typically used in the Western
European market. We are the market leader in wheeled excavators both worldwide
and in Western Europe. Wheeled excavators, like backhoes, are self-
transporting, while crawler excavators must be transported by truck from
location to location.

[WHEEL LOADER GRAPHIC]

Wheel Loaders -- Wheel loaders are four wheel drive articulated machines
equipped with a front loader bucket. The engine is located behind the driver for
better operator visibility. Wheel loaders are classified by engine horsepower
and we offer a broad product range from 80 horsepower to 450 horsepower.
88

One of the more traditional earth moving machines, wheel loaders also are
popular for non-construction applications such as bulk material handling, waste
management and snow removal, contributing to a more stable level of industry
demand for these products. We believe that we hold the number four position in
the world wheel loader market.

[DOZER GRAPHIC]

Dozers -- Sometimes called crawler dozers, tractor dozers or bulldozers,
dozers were the first machines developed specifically for earth moving
applications. A dozer is a steel-tracked tractor with a robust frame and
equipped with a blade on the front for pushing dirt. Market demand for dozers
has generally been declining on a long-term basis as operators switch to other
machines, such as excavators and wheel loaders, which are more cost efficient in
most earth moving applications. However, the dozer market has only a few
manufacturers and is generally less competitive than the market for other
construction equipment product lines. Dozers are classified by engine horsepower
and our product offering ranges from 60 horsepower to 350 horsepower. In
addition, as they have steel tracks and are generally operated under relatively
harsh conditions, dozers tend to generate a substantial demand for spare parts.

[GRADER GRAPHC]

Graders -- Graders are sophisticated multi-wheeled machines with a low
hanging blade that are used to level uneven terrain such as for creating or
repairing roads. The grader is, by definition, a road making machine, but it can
be used for any job where accurate leveling is required including airport
construction or snow removal. Graders also are used extensively for maintaining
unpaved roads, particularly in rural areas and lesser developed countries.
Graders range from basic machines used to maintain unpaved roads to machines
equipped with sophisticated electronic controls and laser leveling gauges for
creating or maintaining perfectly level surfaces. Our product range covers all
applications, from the simple, but robust, machines sold by FiatAllis in Brazil
to the most sophisticated O&K graders using German technology, which are the
market leaders in Western Europe.

Dumpers -- Dump trucks haul bulk materials and are a natural complement for
hauling materials handled by our construction products, particularly in
off-highway applications. Dumpers are generally classified by tons of loading
capacity, and our product offering ranges from 25 tons up to 30 tons of loading
capacity. We purchase dumper products from Iveco, the truck-making subsidiary of
the Fiat Group, for resale to our dealers.

Light Construction Equipment

As a world leader in light construction equipment products such as backhoe
loaders and skid steer loaders, our products have a strong market position
worldwide. We plan to maintain and improve this position by leveraging economies
of scale in both manufacturing and distribution. In order to improve our
profitability, we are undertaking a number of steps, including consolidating two
manufacturing plants to one, creating one common production platform from two
platforms, outsourcing non-core manufacturing items and implementing design cost
reductions.

[BACKHOE LOADER GRAPHIC]

Backhoe Loaders -- Backhoe loaders, based on a tractor shaped chassis,
combine two of the most important operations of earth-moving equipment, loading
and excavating. Our backhoe loaders range from the newest mini-backhoe loader at
50 horsepower designed for light maintenance and landscaping activities to the
largest 110 horsepower four wheel drive, four wheel steering machine, which
combines the excavating capability of a midi-excavator with the loading capacity
and maneuverability of a compact
89

wheel loader. The backhoe loader is one of the most popular light equipment
products in the North American and European markets, with a fundamental role in
construction applications where flexibility and mobility are required. We are
the market leader in backhoe loaders in North America and Latin America and we
hold a strong position in the Western European market.

[LOADER GRAPHIC]

Skid Steer Loaders -- The skid steer loader is a versatile, compact
four-wheeled machine. It can be considered a tool carrier with a wide array of
tool-type attachments that can be utilized for a variety of operations, such as
loading, digging, cleaning, snow removal, boring, lifting, transporting, towing
or planting trees. Skid steer loaders are classified by their lifting capacity.
Our products cover all market segments from 500 pounds to over 3,000 pounds
lifting capacity. We are the second largest producer of skid steer loaders in
the world and offer industry leading products in each of the two different
lifting arm designs, parallel lift and radial lift. North America is the largest
market for this product, accounting for over 75% of world demand.

[EXCAVATOR GRAPHIC]

Mini/Midi-Excavators -- Mini-excavators include all excavators that weigh
less than 12 tons. Mini-excavators are the most popular light equipment product
in the Western European and Japanese markets. Our new global alliance partner,
Kobelco, has the strongest reputation in the world for mini/midi-excavators and
is the developer of the short radius technology, which allows the machine's arm
to turn 360 degrees within the space of its own tracks. This flexibility creates
additional opportunities for machine usage in extremely tight working
conditions.

[TELEHANDLER GRAPHIC]

Telehandlers -- Telehandlers are four wheel drive, four wheel steering
machines equipped with a telescoping arm designed for lifting, digging and
loading. Telehandlers are classified by the length of the telescoping arm, and
our products cover the entire range from six to 16 meters. Smaller machines are
often used in agricultural applications while larger machines are often used for
industrial and construction applications. Larger machines can also perform some
light earth moving operations. Telehandlers can accommodate a wide range of
attachments and have become more and more popular on construction sites,
replacing tower cranes, mobile cranes, platforms and loaders, each of which
requires two operators to perform what the telehandler does with one operator.
Approximately 60% of the world market demand for these units is in Western
Europe.

[LOADER GRAPHIC]

Compact Wheel Loaders -- Compact wheel loaders are wheel loaders ranging
from 40 horsepower to 80 horsepower. We have a strong position in this segment
due to the cross-selling of the O&K product through its multiple brand networks.

New Products and Markets

Common Platforms -- We continuously review opportunities for the expansion
of our product lines and the geographic range of our activities. To this end, we
are enhancing our new product development program by establishing common
platforms for our different product lines. Using common platforms allows us to
balance the benefits of product differentiation with the efficiency achieved
through greater
90

manufacturing volumes of shared components. Common platforms allow us to
preserve the strengths of the various New Holland and Case brands, while
reducing the total number of product platforms and generating significant cost
savings. We have already begun to implement the common platform strategy by
producing New Holland branded equipment at former Case facilities and Case
branded equipment at former New Holland facilities, allowing us to promote a
differentiated product offering in more markets around the world. Over time, we
intend to develop new platforms that will each serve as the basis for
differentiated New Holland and Case branded products. We also plan to establish
common platforms for the production of axles, transmissions and engines for each
of our tractor, combine and construction equipment product lines.

By 2002, we expect that 35% to 40% of our agricultural equipment products
and 40% to 45% of our construction equipment products will be new products
developed on common platforms, an increase from 10% and 25%, respectively, in
2001. The first application of the common platform approach has been the all-new
high horsepower four wheel drive tractors, the Case IH STX line and the New
Holland TJ line, which are differentiated to appeal to their respective customer
bases, but share significant common componentry.

The New Holland CX combine harvester, launched in 2001, has a number of
innovations including an exclusive integrated precision farming system, higher
capacity crop processing and a control center designed for maximum ease of
operation and operator comfort. The CX combine has won major agricultural awards
across Europe and was named Combine of the Year by Agritecnica, a German
agricultural trade show.

International Joint Ventures -- To increase our global presence and gain
access to technology, we participate in a number of international manufacturing
joint ventures and strategic partnerships. We are integrating our manufacturing
facilities and joint ventures into a global manufacturing network designed to
source products from the most economically advantageous locations and to reduce
our exposure to any particular market.

On January 10, 2002, we announced the completion of our global alliance
with Kobelco Construction Machinery Co., Ltd., the world's fourth largest
manufacturer of hydraulic excavators, and its parent Kobe Steel, Ltd., one of
Japan's leading steelmakers. We formed this alliance to pursue the development,
production and sale of crawler excavators, including mini-excavators, on a
worldwide basis. This strategic worldwide alliance with Kobelco gives us access
to key crawler excavator technology. We also gain a presence in the Asia-Pacific
construction equipment market as Kobelco's exclusive OEM supplier of all
non-excavator construction equipment products, which complements our strong
presence in the North American and European markets.

In 2001, we announced that we had strengthened our presence in China by
entering into an agreement with Shanghai Tractor and Internal Combustion Engine
Corporation to form a joint venture company, Shanghai New Holland Agricultural
Machinery Corp., Ltd. to manufacture, distribute and ultimately support
agricultural tractors. In January 2002, the Shanghai joint venture commenced
operations to begin manufacturing and distribution of agricultural tractors
under 100 horsepower. This joint venture complements our Harbin joint venture in
China, which manufactures and distributes tractors over 100 horsepower.

RESTRUCTURING

Our management formulated a plan to integrate the operations of the Case
and New Holland businesses at the time of the merger. Our goal was to divest or
close more than 30% of our manufacturing locations, including those required to
be divested by the regulatory authorities, and integrate our manufacturing
systems, reduce capacity and increase capacity utilization. In addition, we
planned to close approximately 14 of our 45 parts depots while migrating to one
global parts system and common parts packaging for parts that could be utilized
by multiple brands or distribution networks. As of year-end 2001, we have closed
14 plants and six parts depots. Through the consolidation of all functional
areas, we

planned to reduce our worldwide workforce by approximately 24% by 2003. As of
year-end 2001, our worldwide workforce had been reduced by 22% (including
divested companies).

We divested the following assets in connection with the merger, as required
by European and U.S. regulatory authorities:

- Case's CX and MXC agricultural tractor product lines and the Doncaster,
UK and St. Dizier, France plants;

- Case's Fermec brand loader/backhoe and industrial tractor lines and the
Manchester, UK plant;

- Case's ownership in Hay and Forage Industries in Hesston, Kansas and the
related hay and forage product lines;

- New Holland's Versatile large four wheel drive and Genesis over-140
horsepower tractor lines and the Winnipeg, Canada plant;

- New Holland's Laverda combine harvester and the Breganze, Italy plant;
and

- Case's large square baler product line, which was assembled in Neustadt,
Germany.

In 2001 and 2000, we recorded consolidated pre-tax restructuring and other
merger related costs of $104 million and $157 million, respectively. These
merger integration restructuring charges relate to severance and other
employee-related costs, write-down of assets, loss on the sale of assets and
businesses, costs related to closing, selling and downsizing existing facilities
and other merger related costs. During 2001, we reversed $31 million of purchase
accounting reserves through goodwill, primarily due to changes in estimates
related to involuntary employee severance and closing, selling and downsizing
existing facilities. In 1999, we recorded restructuring charges of $19 million
related to headcount actions contemplated under the 1998 restructuring initiated
by CNH, then New Holland, to better align its operations in response to the then
current economic and market conditions. See Note 4, "Restructuring" to the
Consolidated Financial Statements for further analysis of the Company's
restructuring programs.

MANUFACTURING

We manufacture equipment and components in 47 manufacturing facilities,
including 15 facilities in the United States, five in Italy, four in France,
three each in Brazil and China, two each in Belgium, Germany, Mexico, the United
Kingdom and Uzbekistan, and one each in Australia, Austria, Canada, India,
Pakistan, Poland and Turkey. This total includes facilities which are operated
through joint ventures and alliances. Similar manufacturing techniques are
employed in the production of agricultural and construction equipment, resulting
in certain economies and efficiencies.

Manufacturing Systems and Capacity

Historically, the Case manufacturing model was designed with a higher
degree of vertical integration. The New Holland manufacturing model had a lower
degree of vertical integration and was able to respond more quickly to changes
in demand associated with cyclical businesses. As part of our integration
strategy, we have established the following manufacturing systems
rationalization objectives:

- rationalizing manufacturing plants;

- resizing manufacturing capacity for flat market demand;

- reducing vertical integration through strategic outsourcing;

- focusing our manufacturing facilities;

- maintaining a manufacturing presence close to major markets; and

- maintaining and/or improve product quality during the restructuring
period.

Plant Rationalization -- We have reduced worldwide manufacturing facilities
from 60 plants in 1999 to 45 plants at December 31, 2001. This has been
accomplished through the consolidation of manufacturing activities into existing
facilities, the sale of non-core operations and the required regulatory
divestitures of specific plants and product lines. We plan to further reduce the
number of manufacturing facilities to 39 plants (excluding acquisitions) by the
end of 2004. Manufacturing capacity utilization is projected to increase from
approximately 44% utilization in 1999 and approximately 48% utilization at the
end of 2001 to approximately 70% utilization by the end of 2004.

Manufacturing Capacity Sizing -- We have sought a balance between high
capacity utilization and responsiveness to growth opportunities. We have sized
our manufacturing capacity to a flat market demand while introducing
modularization of both product and process design to add flexibility to the
manufacturing process. Our lean manufacturing techniques also improve
flexibility by reducing exposure to rapidly changing market demands. We also
manage the business cycle by establishing flexible work rules and setting
staffing levels that are supported by temporary employees.

Strategic Outsourcing -- Our strategic outsourcing improves efficiency and
competitiveness in several ways. The benefits of outsourcing include:

- allowing our investments to focus on core competency operations;

- leveraging the expertise of our supply base;

- simplifying manufacturing complexity;

- reducing exposure to business cycles; and

- mitigating capital expenditures due to new technology or changes in
regulation.

Our use of strategic outsourcing also extends to non-core services such as
information systems and maintenance. Through strategic sourcing, we expect to
increase the variable cost content of our production cost to 80%.

Focused Manufacturing Facilities -- Our more focused manufacturing strategy
will capitalize on facilities that are focused on manufacturing a single
product, to the extent possible. We believe that this approach achieves
economies of scale and improved quality.

Presence Close to Market -- We continue to utilize regional manufacturing
locations that are strategically located close to our primary markets. This
geographic proximity impacts all areas of the supply chain and enhances our
responsiveness to changing market demands.

Maintain/Improve Quality -- Throughout the manufacturing capacity
rationalization process, our primary focus has been on maintaining and improving
product quality by embedding key quality improvement activities into the
process, such as global product development and current product management
processes.

Manufacturing Facilities

Our facilities are well maintained, in good operating condition and are
suitable for their present purposes. These facilities, including the planned
restructuring actions and planned capital expenditures, are expected to meet our
manufacturing needs in the foreseeable future. Planned capacity is adequate to
satisfy anticipated retail demand and the operations are designed to be flexible
enough to accommodate the planned product design changes required to meet market
conditions and new product programs.

The following table provides information about our principal manufacturing,
engineering and administrative facilities, excluding joint ventures, as of
December 31, 2001:

APPROXIMATE
COVERED
LOCATION PRIMARY FUNCTIONS AREA* OWNERSHIP STATUS
-------- --------------------------------- ----------- ----------------

UNITED STATES
Belleville, PA.......... Skid Steer Loaders; Manure 540 Owned
Spreaders
Benson, MN.............. Agricultural Sprayers 219 Owned
Burlington, IA.......... Loader/Backhoes; Crawler/Dozers; 989 Owned
Fork Lift Trucks
Burr Ridge, IL.......... Technology (Engineering) Center 549 Owned
Dublin, GA.............. Compact Tractors 60 Leased
East Moline, IL......... Combine Harvesters; Cotton 2,375 Owned
Pickers; Grain Heads
Fargo, ND............... Tractors; Wheel Loaders 531 Owned
Goodfield, IL........... Soil Management (Tillage 233 Owned
Equipment)
Grand Island, NE........ Combine Harvesters; Hay & Forage 680 Owned
Lake Forest, IL......... Global Management Offices 65 Leased
New Holland, PA......... Administrative Facilities; Hay & 1,190 Owned
Forage; Engineering Center
Racine, WI.............. Tractor Assembly; Transmissions; 2,834 Owned
Foundry
Racine, WI.............. Principal Administrative 400 Owned/Leased
Facilities
Wichita, KS............. Skid Steer Loaders; Directional 455 Owned
Drills; Trenchers
ITALY
Imola................... Loader/Backhoes; Engineering 384 Owned
Center
Jesi.................... Tractors 710 Owned
Lecce................... Construction Equipment; 1,550 Owned
Engineering Center
Modena.................. Components 1,150 Owned
San Matteo.............. Research and Development 540 Owned
San Mauro............... Construction Equipment; 590 Owned
Engineering Center
FRANCE
Coex.................... Grape Harvesters; Engineering 280 Owned
Center
Crepy-En-Valois......... Excavators; Loader/Backhoes 676 Owned
Croix................... Cabs 466 Owned
Tracy-Le-Mont........... Hydraulic Cylinders 204 Owned
Villepinte.............. Administrative Facilities 55 Leased
UNITED KINGDOM
Basildon................ Tractors; Components; Engineering 1,390 Owned
Center
Lincoln................. Agricultural Sprayers 24 Owned

APPROXIMATE
COVERED
LOCATION PRIMARY FUNCTIONS AREA* OWNERSHIP STATUS
-------- --------------------------------- ----------- ----------------

GERMANY
Berlin.................. Construction Equipment; 1,113 Leased
Engineering Center
Dortmund................ Administrative Facilities; Test 348 Leased
and Parts Centers
Heidelberg.............. Administrative and Warehouse 162 Owned
Facilities
Neustadt................ Forage and Combine Harvesters 515 Owned
BRAZIL
Curitiba................ Tractors; Combine Harvesters; 760 Owned
Engineering Center
Belo Horizonte.......... Construction Equipment; 510 Owned
Engineering Center
Piracicaba.............. Sugar Cane Harvesters 108 Owned
CANADA
Saskatoon............... Air-Seeding Equipment; 750 Owned
Engineering Center
BELGIUM
Antwerp................. Components 850 Leased
Zedelgem................ Combine Harvesters; Hay & Forage; 1,590 Owned
Tractor Loaders; Engineering
Center
OTHERS
Bundaberg, Australia.... Sugar Cane Harvesters 206 Owned
St. Valentin, Austria... Tractors 398 Leased
New Delhi, India........ Tractors; Engineering Center 360 Owned
Plock, Poland........... Combine Harvesters 1,020 Owned

---------------

* in thousands of square feet

In addition, we own or lease a number of other manufacturing and
non-manufacturing facilities, including office facilities, parts depots and
dealerships, worldwide.

FINANCIAL SERVICES

Overview

CNH Capital is the captive financing arm of CNH, providing financial
services to dealers and customers through wholly owned subsidiaries in North
America, Australia, Brazil and parts of Western Europe and through joint venture
arrangements in France and Germany. The principal products offered on a
worldwide basis are retail loans to final customers and wholesale financing to
our dealers. CNH Capital has a serviced portfolio of approximately $11.0
billion, through its wholly owned subsidiaries in the U.S. (accounting for 72%
of the serviced portfolio), Canada (12%), Western Europe (10%), Australia (4%)
and Brazil (2%). CNH Capital provides retail loans, leases and insurance
products to end-user customers as the local market requires and provides a
variety of wholesale and insurance products to our dealer network.

CNH Capital's mission is to improve the effectiveness of its finance
activities in supporting the growth of our equipment sales and contribute to
building dealer and end-user brand loyalty. Its strategy for meeting these
objectives is to grow its core financing business through higher financing
penetration of our equipment sales, expansion of its services offering, new
product development and marketing promotions

and events. In addition, CNH Capital is focused on improving credit quality and
service levels and increasing operational effectiveness. CNH Capital also plans
to grow significantly its financing business in Western Europe as it leverages
existing partnerships with major European banks and broadens its financing
activities to cover CNH-branded products in all the countries it services. CNH
Capital also seeks to expand its financing of used equipment through our dealers
and of related services, including expanded insurance offerings.

Access to funding at competitive rates is key to the growth of CNH
Capital's core business and expansion of its financing activities into new
product and geographic markets. Further ratings downgrades of either our or
Fiat's debt could adversely affect CNH Capital's ability to continue to offer
attractive financing to its dealers and end-user customers. On a global level,
we will continue to evaluate alternatives to ensure that CNH Capital continues
to have access to capital on favorable terms in support of its business,
including through equity investments by global or regional partners in joint
venture or partnership opportunities, new funding arrangements or a combination
of any of the foregoing. Joint venture or partnerships with third parties often
allow us to be more responsive to customer needs, introduce a wider range of
products more rapidly and to enter geographic and product markets at a faster
pace. Joint ventures may also reduce uncertainty and operational risks while
utilizing the partner's balance sheet strength and credit rating to support CNH
Capital's funding requirements on more advantageous terms.

Finance Operations

In North America, CNH Capital combines the former financial services
companies of New Holland and Case, offering a wide variety of financial products
including wholesale equipment financing for our dealers and end users, retail
loans, finance leases, operating leases, credit cards, rental programs and
insurance products. We have integrated the back office functions of these
predecessor companies, creating synergies from common practices and leveraging
common technology, but have established separate sales and underwriting groups
to service the Agricultural Equipment and Construction Equipment businesses.
This distinction allows CNH Capital to strengthen customer service and reduce
risk by deploying industry-specific expertise in each of these businesses.

In the past, in North America, we provided financing options to dealers and
non-captive third parties to finance inventory, working capital, real estate
acquisitions, construction and remodeling, business acquisitions, dealer systems
and service and maintenance equipment. We also offered a broad range of retail
and wholesale financing products, including equipment and commercial loans and
leases for other North American manufacturers' products, dealers, distributors
and their customers. Due to the higher credit losses in these businesses, CNH
Capital has discontinued all of the diversified retail financing business in the
marine, trucking and forestry industries and in dealer financing not related to
its wholesale equipment sales. We are restructuring back to a captive Financial
Services company dedicated solely to the support of our dealers and customers
across all our brands. The non-core portfolios that we are exiting represent
less than 10% of CNH Capital's current serviced portfolio. CNH Capital also
strengthened its organization by hiring personnel with specific expertise in our
Equipment Operations industries, and by creating a special work-out team to deal
with troubled credits more effectively.

Outside of North America, CNH Capital is developing its capabilities to
service our dealers and customers in more stable markets as legal regulations,
business and funding conditions and market and economic conditions permit.
Building on our experience in North America, we are introducing products

developed in North America into other markets to expand the product offerings
and customer service capabilities in those markets. CNH Capital continues to
evaluate and implement the most efficient cost structures for expanding its
Financial Services business outside of North America. Through joint venture
agreements, such as in France and Germany, we seek to leverage our partners'
established expertise, cost efficiencies, access to low cost sources of funding
and established market presence.

Today, CNH Capital is focusing primarily on efficient risk management,
operational efficiency and strong customer service. We have significantly
expanded our risk management procedures at all stages of the financing process,
including definition, underwriting, remarketing and recovery. CNH Capital has a
dedicated team to address operational improvement opportunities, including the
complete re-engineering of some key processes. CNH and its predecessors have a
long history of successful financing relationships with North American
agricultural and construction equipment customers. We leverage our strong
relationships with our existing financing customers to implement innovative
customer tools and higher service standards. In 2002, new initiatives include
online credit applications with automatic approval, electronic issuance
contracts and web-based auctions for remarketing of used equipment.

At the retail level, CNH Capital sells retail financial products primarily
through our dealers, whom we train in the use of the various financial products.
Our sales force may assist directly with some of the larger or more complex
financing proposals. Retail credit underwriting is performed by dedicated credit
analysis teams. The North American credit analysis teams utilize several retail
and lease score cards to assist in the underwriting process. CNH Capital
customizes these score cards for its business, including data from customer
financial statements and credit bureaus, as well as details of the deal
structure. Teams in other regions rely primarily on financial statements, credit
reporting and direct credit inquiries in analyzing credit risk, but may also use
some standardized score cards or matrices.

At the dealer financing level in North America, CNH Capital provides
wholesale floor plan financing for our dealers, which allows dealers to maintain
a representative inventory of products. CNH Capital also provides some borrowing
base and real estate loans on a limited basis. For our floor plan financing, we
generally provide a fixed period of "free" financing for the dealers, during
which the manufacturer of the equipment on the floor pays the finance charges.
This practice helps to level fluctuations in factory demand and provides a
buffer from the impact of seasonal sales. After the "free" period, if the
equipment remains unsold, the dealer pays for interest costs.

A wholesale underwriting group reviews dealer financials and payment
performance to establish credit lines for each dealer. In setting these credit
lines, we seek to meet the reasonable requirements of each dealer while
controlling our exposure to any one dealer. The credit lines are secured by the
dealer's unsold equipment assets and are used to facilitate wholesale sales. The
dealer credit agreements include a requirement to pay at the time of the retail
sale. CNH Capital employees conduct periodic stock audits at each dealership to
confirm that financed equipment is still in inventory. The frequency of these
audits varies by dealer and depends on the dealer's financial strength, payment
history and prior performance.

Marketing personnel from CNH Capital work with our equipment operations
commercial staff to develop and structure financial products that will optimize
equipment sales and generate Financial Services income. CNH Capital also
develops products to finance additional equipment sold through our dealer
network or within the core businesses of agricultural or construction equipment.
This equipment includes used equipment taken in trade on a new CNH product and
equipment aligned or attached to our equipment.

We compete primarily with banks, finance companies and other financial
institutions. Typically, this competition is based upon customer service and
finance rates charged. Long-term profitability in our Financial Services
operations is largely dependent on the cyclical nature of the agricultural and
construction equipment industries, interest rate volatility and access to
low-cost funding sources. CNH Capital relies on the financial markets,
intercompany lending and asset-backed securitizations to provide funding for its
activities. Presently, CNH Capital's funding strategy in North America is to
securitize all new originations, as quickly as possible and to let the existing
portfolio of discontinued business run off the books to reduce overall funding
requirements.
97

We are evaluating developing full service rental business activities that
would expand the rental concept beyond the traditional business of providing
operating leases or daily rental contracts. Such activities would provide a full
service proposition to fleet owners, large contractors and other businesses,
including service, equipment maintenance, repair, fleet management, logistics
services and insurance. Such business models have developed in some Western
European heavy equipment markets and could be applicable to our agricultural and
construction equipment markets.

Asset-Backed Securitizations

CNH Capital periodically has accessed the asset-backed securities market in
the United States and Canada and will continue to rely on the availability of
liquidity through that market to fund its retail financing programs. We
anticipate that, depending on continued market interest and other economic
factors, it will continue to securitize its retail receivables in the United
States and Canadian markets. CNH Capital's access to the asset-backed securities
market will depend in part upon its financial condition, portfolio performance
and market conditions. These factors can be negatively affected by cyclical
swings in our industries of operation. CNH Capital typically has entered into
two securitization transactions per year since the merger, one in the first six
months of the year to securitize receivables originated in that period and
similarly, one in the second six months of the year. Securitization
transactions, in the United States, are typically approximately $1.0 billion in
size and in Canada are generally C$200 million to C$400 million in size. CNH
Capital applies the proceeds of the securitizations to repay outstanding debt
that was funding the receivables while on our balance sheet.

SUPPLIERS

We purchase a number of materials and components from third-party
suppliers. In general, we are not dependent on any single supplier or exposed in
any substantial way to price fluctuations in respect of the materials or
commodities we purchase.

We are currently rationalizing our supply chain to substantially reduce the
number of our suppliers from over 6,000 at the time of the merger to
approximately 3,000. In implementing this program, we plan to build mutually
beneficial partnerships with long-term suppliers based on increased volumes and
shared product development activities. We believe that a reduction in the number
of suppliers will result in more cost-effective arrangements, lower investment
requirements, greater access to technological developments and lower per-unit
costs. Although we are increasing our dependence on our remaining suppliers,
most of the products that we purchase from our suppliers are available from
other sources. As of year-end 2001, we have reduced the number of our suppliers
to 5,100.

In addition to the equipment manufactured by us and our joint ventures, we
also purchase both agricultural and construction equipment from other sources
for resale to our dealers. The terms of purchase from an original equipment
manufacturer, or OEM, allow us to market the equipment under our brands. As part
of our normal course of business, under these arrangements we generally forecast
our equipment needs based on market demand for periods of two to four months and
thereafter are effectively committed to purchase such equipment for those
periods. Certain manufactured components are also purchased on an OEM basis. OEM
purchases allow us to offer a broader line of products and range of models to
our dealer network and global customer base. In 2001, the total value of OEM
purchases comprised less than 8% of our total purchases. In 2001, approximately
25% of these purchases were as a result of supply contracts associated with the
divestitures, which will terminate in the next two years.

DISTRIBUTION AND SALES

We possess one of the industry's most extensive dealer networks. We sell
and distribute our products through approximately 11,700 dealers and
distributors in more than 160 countries worldwide. Dealers typically sell either
agricultural equipment or construction equipment, although some dealers sell
both types of equipment. Construction equipment dealers tend to be fewer in
number, larger in size, better

capitalized and located in more urban areas. Agricultural dealers tend to be
greater in number, but smaller in size and located in rural areas.

Large construction equipment dealers often complete their product offering
with products from more than one manufacturer due to historical relationships
that have persisted through the consolidation of the industry.

Exclusive, dedicated dealers generally provide a higher level of market
penetration for the entire CNH product line than dealers who sell the same
products from more than one brand. Therefore, such dealers complement our
strategy of full product lines for all global brands. Some of our dealers in the
United States, Germany and Australia may sell more than one brand of equipment,
often including models sold by our competitors. Elsewhere, our dealers are
generally exclusive, but may share complementary products manufactured by other
suppliers in other product categories in order to complete their product
offerings, or where there was a historical relationship with another product
line that existed before that product was available through us. This is
particularly true of specialty products, such as equipment adapted for
particular crops or uses.

In connection with our program of promoting our unified brand names and
identity, we generally seek to have our dealers sell a full line of our products
(such as tractors, crop production and crop harvesting). Generally, we achieve
greater market penetration where each of our dealers sells the full line of
products from only one CNH brand. Although appointing dealers that sell more
than one of our brands is not part of our business model, some joint dealers
exist, either for historical reasons or in limited markets where is it not
feasible to have separate dealers for each CNH brand. In some limited cases,
dealerships are operated under common ownership with separate facilities for
each of our brands.

In North America, Mexico, most of Europe, Brazil and Australia, the
distribution of our products is generally accomplished directly through the
dealer network. In other parts of the world, our products are sold initially to
distributors who then resell them to dealers in an effort to take advantage of
such distributors' expertise and to minimize our marketing costs. Generally,
each of our distributors has responsibility for an entire country.

We believe that it is generally more cost-effective to distribute our
products through independent dealers, and therefore we maintain company-owned
dealerships only in markets where we have experienced difficulty in establishing
satisfactory independent dealer relationships. At December 31, 2001, we operated
57 company-owned dealerships, located in the U.S., Canada and Germany. In the
mature markets, we expect a decrease in the number of our dealers in the coming
years, as the process of farm consolidation pressures dealers' financial
positions. In North America, we operate a dealer development program that allows
approved dealer candidates to purchase dealerships from us over a fixed period
of time, with payments being made from the dealer's profits.

A strong dealer network with wide geographic coverage is a critical element
in the success of any manufacturer of agricultural and construction equipment.
We possess one of the industry's broadest dealer networks and are working to
further enhance the network through the expansion of our lines of products and
customer services (including enhanced Financial Services) and an increased focus
on dealer support. To assist our dealers in building rewarding relationships
with their customers, we have introduced focused customer satisfaction programs
and seek to incorporate customer input into our product development and service
delivery processes.

As the equipment rental business becomes a more significant factor in the
both the agricultural and construction equipment markets, we are continuing to
support our dealer network by facilitating sales of equipment to the local,
regional and national rental companies through our dealers as well as by
encouraging dealers to develop their own rental activities. We believe that a
strong dealer service network is required to maintain the rental equipment and
to insure that the equipment remains at peak performance levels both during its
life as rental equipment and afterward when resold into the second hand market.
As a leader in light construction equipment, the most requested rental products,
our product performance is key to maintaining our quality reputation, its
attractiveness to the rental customer and its

resale value on the used equipment markets. We have launched several programs to
support our dealer service and rental operations including training, improved
dealer standards, financing, and advertising. Also, as the rental market is a
capital-intensive activity and sensitive to variations in construction demand,
we believe that any such activities should be expanded gradually, with special
attention to managing the resale of rental units into the secondary market by
our dealers, who can utilize this opportunity to improve their customer base and
generate additional parts business.

In North America, we are contractually obligated to repurchase new
equipment, new parts, business signs and manuals from former dealers following
our termination of the dealership if the former dealer so elects. Outside of
North America, repurchase obligations and practices vary by region. In addition
to the contractual repurchase obligation, certain jurisdictions have
agricultural and construction equipment dealership laws that require us to
repurchase new equipment and new parts at statutory amounts.

In Japan, CNH and H. Shibamoto each own 50% of New Holland HFT Japan Inc.
("HFT"), which distributes our products in that country. HFT imports and sells a
full range of New Holland's agricultural equipment through approximately 60
retail sales and service centers located throughout Japan. In order to complete
its product offering, HFT also sells certain equipment manufactured by other
producers. HFT is the leading importer of agricultural tractors in the highly
competitive Japanese market and has a leading share of the Japanese markets for
combine harvesters and self-propelled forage harvesters.

PRICING AND PROMOTION

The actual retail price of any particular piece of equipment is determined
by the individual dealer or distributor and generally depends on market
conditions, features and options. Actual retail sales prices may be lower than
the suggested list prices. We sell equipment to our dealers and distributors at
wholesale prices, which reflect a discount from the suggested list price. In the
ordinary course of its business, we engage in promotional campaigns that may
include price incentives or preferential credit terms on the purchase of certain
products.

To ensure proper sale value for our equipment, we analyze competitors'
prices to assess the correct price levels for our equipment in each market. In
the agricultural business, under both the New Holland and Case IH brands,
products can be offered at different price points for basic products or fully
featured, leading technology products. This pricing mechanism allows us to reach
different customers without significant discounting in equipment prices.

We regularly advertise our products to the community of farmers,
contractors, builders and agricultural and construction contractors, as well as
to distributors and dealers in each of our major markets. To reach our target
audience, we use a combination of general media, specialized design and trade
magazines and direct mail. We also regularly participate in major international
and national trade shows and engage in co-operative advertising programs with
major distributors and dealers. The promotion strategy of the Case IH and New
Holland brands varies according to our customer targets for those brands.

PARTS AND SERVICES

The replacement parts and associated service business is a major source of
revenue for both our company and our dealers. The quality and timely
availability of parts and service are important competitive factors, as they are
significant elements in overall customer satisfaction and strong contributors to
the original equipment purchase decision. Our sales of parts represented
approximately 19% of our total net sales in 2001.

We supply a complete range of parts, many of which are proprietary, to
support items in our current product line as well as for products that we have
sold in the past. As many of the products that we sell can have economically
productive lives of up to 20 years when properly maintained, each unit that is
retailed into the marketplace has the potential to produce a long-term revenue
stream for both CNH and

100

our dealers. Sales of replacement parts have historically been less subject to
sharp changes in demand than sales of new equipment and typically generate
higher gross margins than sales of new equipment.

In order to improve the distribution of replacement parts and the
efficiency of our parts and services network, we have entered into arrangements
with three major suppliers of warehousing services. TNT provides warehousing
services in Latin America and APL Logistics provides similar services for most
of the Case/Case IH distribution channel in North America on a fee for service
basis. In North America, Caterpillar Logistics Services, Inc., a subsidiary of
Caterpillar Inc., provides warehousing services to us with respect to parts
operations for the New Holland brand, also on a fee for service basis. We handle
logistical arrangements directly with respect to parts operations in other areas
of the world.

At December 31, 2001, we operated and administered 39 parts depots
worldwide, either directly or through arrangements with our warehouse service
providers, including 21 in North America, 12 in Europe, two in Latin America and
four in Australia and New Zealand. These depots supply parts to distributors,
which are responsible for sales to retail customers. Management believes that
these parts depots and our parts delivery systems provide our customers with
timely access to substantially all of the parts required to support our
equipment. We have reduced the number of parts depots from 45 to 39 at the end
of 2001, as part of the ongoing restructuring activities associated with the
merger of New Holland and Case, and we plan further reductions to 31 depots by
2003.

Through the establishment of common platforms and systems for various
product lines, we have enhanced the efficiency and cost effectiveness of our
parts business by centralizing the production of these components.

As part of the expansion of our product range and the renewal of most of
our agricultural and construction equipment product lines, many new parts have
entered or will enter into our parts system. To take advantage of the
significant number of shared parts being designed for the new common component
system, we have developed a new common parts packaging system for parts that can
be used by any of our multiple brands. A small number of high volume common
parts will be distinctly packaged for each brand or brand family, even if the
parts are identical. These would typically be the parts that a customer might
see in a dealer's showroom. All remaining parts will utilize common CNH
packaging to minimize costs and distribution complexity.

The development of a common global parts system for all products and brands
is another key merger profit improvement action that is facilitating the depot
rationalization program. We also expect the new parts system to improve parts
inventory management and customer service levels. The new system is expected to
be installed in North American locations by the first quarter of 2003 and in
Western Europe by the first quarter of 2004.

SERVICE AND WARRANTY

Our products are warranted to the end user to ensure end-user confidence in
design workmanship and material quality. Warranty lengths vary depending on
competitive standards established within individual markets. In general,
warranties tend to be for one to three years, with some as short as six months,
and cover all parts and labor for non-maintenance repairs and wear items,
provided operator abuse, improper use or negligence did not necessitate the
repair. Warranty on some products is limited by hours of use, and purchased
warranty is available on most products. Dealers submit claims for warranty
reimbursement to us and are credited for the cost of repairs if the repairs meet
our prescribed standards. Warranty expense is accrued at the time of sale, and
purchased warranty revenue is deferred and amortized over the life of the
warranty contract.

Our distributors and dealers provide service support outside of the
warranty period. Our service engineers or service training specialists train
service personnel in one of several CNH training facilities around the world or
on location at dealerships.

101

SEASONALITY AND PRODUCTION SCHEDULES

Seasonal industry conditions affect our sales of agricultural equipment
and, to a lesser extent, construction equipment. Our production levels are based
upon estimated retail demand. These estimates take into account the timing of
dealer shipments, which are in advance of retail demand, dealer inventory
levels, the need to retool manufacturing facilities to produce new or different
models and the efficient use of manpower and facilities. We adjust our
production levels to reflect changes in estimated demand, dealer inventory
levels, labor disruptions and other matters not within our control. However,
because we spread our production and wholesale shipments throughout the year to
take into account the factors described above, wholesale sales of agricultural
equipment products in any given period may not reflect the timing of dealer
orders and retail demand.

RESEARCH, DEVELOPMENT AND ENGINEERING

Our research, development and engineering personnel design, engineer,
manufacture and test new products, components and systems. We incurred $306
million and $338 million of research, development and engineering costs in the
years ended December 31, 2001 and 2000, respectively.

We also benefit from the research, development and engineering expenditures
of our joint ventures, which are not included in our research, development and
engineering expenditure figures, and from the continuing engineering efforts of
our suppliers.

REGULATION

We operate in multiple jurisdictions and are subject to competition law and
other laws and regulations of those jurisdictions. On July 17, 2001, the
European Commission issued a Statement of Objections alleging that our French
and Italian subsidiaries adopted practices limiting sales outside of dealer
territories. We submitted a reply to the European Commission and a hearing was
held on January 28, 2002. As of the date of this prospectus, the Commission had
not provided a ruling. The European Commission has the power to assess a wide
range of fines, penalties and sanctions, which may be significant. Any fines
would be assessed by the Commission only after a ruling by the Commission that
these subsidiaries engaged in anti-competitive practices. We believe that the
allegations should be dismissed. However, we are unable to predict the outcome
of this proceeding and, while we intend to appeal the decision if the outcome is
unfavorable, we cannot assure you that any fine that the European Commission
might impose would not have a material adverse impact on our business, financial
condition and results of operations.

ENVIRONMENTAL MATTERS

Our operations and products are subject to extensive environmental laws and
regulations in each of the countries in which we operate. We are voluntary
participants in several government-sponsored initiatives that benefit the
environment. We have an ongoing Pollution Prevention Program to reduce
industrial waste, air emissions and water usage by incorporating adjustments in
business activity, recycling efforts and hazard assessments of raw materials. We
have a program designed to implement environmental management practices and
compliance, to promote continuing environmental improvements and to identify and
evaluate environmental risks at manufacturing and other facilities worldwide.

Our engines and equipment are subject to extensive statutory and regulatory
requirements that impose standards with respect to air emissions. Further
emissions reductions in the future from non-road engines and equipment have been
promulgated or are contemplated in the United States as well as by non-U.S.
regulatory authorities in many jurisdictions throughout the world. We expect
that we may make significant capital and research expenditures to comply with
these standards now and in the future. We anticipate that these costs are likely
to increase as emissions limits become more stringent. At this time, however, we
are not able to quantify the dollar amount of such expenditures as the levels
and timing are not agreed by the regulatory bodies. The failure to comply with
these emission limits could result in adverse effects on future financial
results.
102

We will incur capital expenditures in connection with matters relating to
environmental control and will also be required to spend additional amounts in
connection with ongoing compliance with current and future laws and regulations.
Capital expenditures for environmental control and compliance in 2001 were not
material and projections for 2002 and 2003 are not expected to be material. The
Clean Air Act Amendments of 1990 and European Commission directives affect
directly the operations of all of our manufacturing facilities in the United
States and Europe currently and in the future. The manufacturing processes
affected include painting, coating and foundry operations. Although capital
expenditures for environmental control equipment and compliance costs in future
years will depend on legislative, regulatory and technological developments that
cannot accurately be predicted at this time, we anticipate that these costs are
likely to increase as environmental requirements become more stringent. We
believe that these capital costs, exclusive of product-related costs, will not
have a material adverse effect on our financial position or results of
operations.

Pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, or CERCLA, and other federal and state laws that impose similar
liabilities, we have received inquiries for information or notices of our
potential liability regarding 39 non-owned sites to which Case allegedly sent
hazardous substances for disposal ("Waste Sites"). Seventeen of the Waste Sites
are on the National Priority List promulgated pursuant to CERCLA. At 35 of the
Waste Sites, the monetary amount or extent of our liability has been resolved,
we have not been named as a potentially responsible party ("PRP"), or our
liability is likely de minimis in comparison with other PRPs. Because estimates
of remediation costs are subject to revision as more information becomes
available about the extent and cost of remediation and because settlement
agreements can be reopened under certain circumstances, our potential liability
for remediation costs associated with the 39 Waste Sites could change. Moreover,
because liability under CERCLA and similar laws can be joint and several, we
could be required to pay amounts in excess of its pro rata share of remediation
costs. However, when appropriate, our understanding of the financial strength of
other PRPs has been considered in the determination of our potential liability.
We believe that the costs associated with the Waste Sites will not have a
material adverse effect on our financial position or results of operations.

We have conducted environmental investigatory or remedial activities at
certain properties that are currently or were formerly owned and/or operated or
which are being decommissioned. We believe that the outcome of these activities
will not have a material adverse effect on our financial position or results of
operations. The preceding paragraphs regarding environmental matters are
forward-looking statements, and the actual costs could differ materially from
those costs currently anticipated due to the nature of the historical disposal
and release activities typical of manufacturing and related operations that have
occurred in the United States and other countries, and as a result of laws which
now and in the future may impose liability for previously lawful disposal and
release activities. As we have in the past, we will fund our costs of
environmental compliance from operating cash flows.

INSURANCE

We maintain insurance with third-party insurers and with affiliates of Fiat
to cover various risks resulting from our business activities including, but not
limited to, risk of loss or damage to our facilities, business interruption
losses, general liability, product liability, automobile liability and directors
and officers liability insurance. Management believes that our present level of
insurance coverage is adequate to cover such potential losses arising out of
these and other insurable risks.

PATENTS AND TRADEMARKS

Agricultural Equipment -- We are promoting the New Holland, Case IH and
Steyr brands and logos as the primary brand names for our agricultural equipment
products. We sell some products under heritage brand names or sub-brand names
such as Ford, Braud, FiatAllis, Flexi-Coil, Austoft, Concord, DMI and Tyler. We
also have a one-year, renewable, royalty-bearing license from Fiat to use the
FiatAgri trademark.

103

Construction Equipment -- For construction equipment under New Holland, we
are promoting the New Holland Construction, O&K, Kobelco, Fiat-Hitachi and
FiatAllis brands in particular regions of the world. For construction equipment
under Case, we are promoting the Case construction brand name and logo.

Most of these brand names have been registered as trademarks in the
principal markets in which we use them. Other than the New Holland, Case, IH and
Case IH trademarks, we do not believe that our business is materially dependent
on any single patent or trademark or group of patents or trademarks.

CNH, through New Holland and Case, has a significant tradition of
technological innovation in the agricultural and construction equipment
industries. We hold over 2,600 patents, with 1,350 additional applications
pending. We believe that we are among the market leaders for patented
innovations in the product classes in which we compete.

EMPLOYEES

At December 31, 2001, we had approximately 28,100 employees. There were
17,500 employees in the agricultural equipment business, 6,400 in the
construction equipment business and 950 in the financial services business, with
the remaining 3,250 shared by all business units. As broken down by geographic
location, there were 10,300 employees in North America, 14,500 employees in
Western Europe, 1,800 employees in Latin America and 1,500 employees in the Rest
of World.

Our employment levels are down from nearly 36,000 at the time of the merger
and in line with the planned 24% reduction in employee headcount by the end of
2003. The 8,500 reduction includes approximately 2,000 employees that were part
of the divestitures. The balance is from our headcount reduction initiatives.
This consolidation includes a general reduction in salaried workforce, the
consolidation of back-office support activities and the outsourcing of non-core
support activities such as information systems and accounting services.
Consistent with the decline in overall employment levels, salaried employment
has declined by approximately 25% from approximately 14,900 at year-end 1999 to
approximately 11,300. This decline in salaried employment is a key contributing
factor to the decline in our Equipment Operations selling, general and
administrative ("SG&A") costs as a percentage of Equipment Operations net sales
from 11.8% in 1999 on a pro forma basis to 10.8% in 2000, with a further
reduction to 10.1% in 2001. Our longer term target is to reduce SG&A costs as a
percentage of Equipment Operations net sales to approximately 9.0% at current
conditions.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Our directors and our executive officers elected by the Board of Directors
are as set forth below:

DIRECTOR/
EXECUTIVE
NAME POSITION WITH CNH OFFICER SINCE
---- ----------------- -------------

Jean-Pierre Rosso.............. Director and Chairman 1999
Paolo Cantarella............... Director 1996
Alberto F. Cerruti............. Director* 2001
Damien Clermont................ Director 1999
Alfredo Diana.................. Director 1999
Edward A. Hiler................ Director 2002
Katherine M. Hudson............ Director 1999
Kenneth Lipper................. Director 1996
Paolo Monferino................ Director, President and Chief Executive 1999
Officer
James L.C. Provan.............. Director 1995
Michel Lecomte................. Chief Financial Officer, and President, 2000
Financial Services and President, CNH Capital
Richard M. Christman........... President, Case IH Agricultural Business 2000
Harold D. Boyanovsky........... President, Worldwide Agricultural Equipment 1999
Products
Fausto Lanfranco............... President, Worldwide Construction Equipment 1996
Business
William T. Kennedy............. President, New Holland Agricultural Business 1996
Roberto Miotto................. Senior Vice President, General Counsel and 1991
Secretary
Giovanni B. Ravina............. Senior Vice President, Human Resources 2000

---------------

* Alberto F. Cerruti resigned as Director in February 2002.

Jean-Pierre Rosso, Director and Chairman, born on July 11, 1940, has served
as Chairman of the Board of Directors of CNH since November 12, 1999 and as its
Chief Executive Officer until November 7, 2000. Prior to this, Mr. Rosso served
as Chairman and Chief Executive Officer of Case from October 1997 until November
1999. From March 1996 through October 1997, he served as Case's Chairman,
President and Chief Executive Officer, and from April 1994 through March 1996,
he served as its President and Chief Executive Officer. Prior to April 1994, Mr.
Rosso served in various capacities with Honeywell, Inc., a producer of advanced
technology products, including as President of the Home and Building Control
Business from 1992 through April 1994, and as President of its European
operations from 1987 through 1991. Mr. Rosso is also director of ADC
Telecommunications, Inc., Medtronic, Inc., and Credit Lyonnais.

Paolo Cantarella, Director, born on December 4, 1944, has served as
director of CNH, and previously of New Holland, its predecessor, since April
1996. Mr. Cantarella has been the Chief Executive Officer of Fiat and the
Chairman of Fiat Auto S.p.A., Iveco N.V., and Vice President of IHF
(Internazionale Holding Fiat S.A.), having served in a variety of senior
executive positions with the Fiat Group. Mr. Cantarella announced his
resignation as Chief Executive Officer of Fiat on June 10, 2002. He is also a
member of the Board of HdP (Holding di Partecipazioni Industriali S.p.A.).
Previously, Mr. Cantarella was the Managing Director and head of Fiat Auto
S.p.A., the Fiat Group's Automobile Sector.

105

Alberto F. Cerruti, born on May 17, 1940, served as director of CNH from
May 2001 until his resignation in February 2002. Prior to that, Mr. Cerruti
spent his entire career at General Electric ("GE"), starting in 1964 until his
retirement in January 2001. From 1964 to 1967, Mr. Cerruti worked with GE's
Corporate Audit Staff. In 1973, he became GE's Manager-Finance, Italian
Operations. Between 1977 and 1982, he was GE's Manager-Finance, Africa and
Middle East Division in London, Europe Business Division in Brussels and Europe
and Africa Operations in London. He became GE's Manager-Finance International
Sector in 1983 and in 1987, GE's Manager, Corporate Tax Operation. He was
appointed GE's Vice-President International Finance and Business Support in
1988, and GE's Vice President Mergers and Acquisitions from 1993 until his
retirement.

Damien Clermont, Director, born on July 12, 1951, has served as director of
CNH since October 1999. Mr. Clermont has served as Chief Financial Officer of
Fiat S.p.A. since 1999. He also served as Senior Vice President, Planning and
Strategy, of Fiat from April 1996. Prior to joining Fiat, Mr. Clermont held
several key management positions with the Schneider Group, a leading producer of
electrical equipment, including Senior Vice President, Strategic Planning and
member of its Executive Committee. Mr. Clermont also held positions with
France's Total Company (oil) in the International Finance Department, where he
served as Head of International Cash Management.

Alfredo Diana, Director, born on June 2, 1930, has served as a director of
CNH since November 1999. Prior to that, Mr. Diana served as the Italian governor
of the International Fund for Agricultural Development from 1977 to 1999. He was
an elected member of the European Parliament in 1979, and an elected senator of
the Italian Republic in 1983. Mr. Diana held several government positions,
including President of the General Federation of Agriculture, Commissioner and
President of the Experimental Institute for fruit-growing, Vice President of the
National Council of Economy and Labour, President of the National Council for
Forestry and Timber, and Minister of Agriculture and Forestry in the first Amato
and Ciampi governments. He was also President of Tecnagro, an association for
innovations in agriculture, and president of Montedison agricultural services.
Mr. Diana is also the president of the Italian Agricultural Society.

Dr. Edward A. Hiler, Director, born on May 14, 1939, was named a director
of CNH on May 7, 2002. Dr. Hiler presently serves the Texas A&M University
system as vice chancellor for Agriculture and Life Sciences and dean of the
College of Agriculture and Life Sciences. Since joining the faculty of Texas A&M
as an assistant professor in 1966, Dr. Hiler has held a series of positions
including professor and head of the University's Department of Agricultural
Engineering, and deputy chancellor for Academic and Research Programs of the
Texas A&M University system. Dr. Hiler earned his Ph.D. in Agricultural
Engineering at The Ohio State University. He has served as president of the
American Society of Agricultural Engineers and is an elected member of the
National Academy of Engineering. He consults on aspects of water conservation,
environmental quality, and energy from biological processes to various
government agencies and the Congress of the United States. A licensed
professional engineer, Dr. Hiler is the author of over 100 professional
publications.

Katherine M. Hudson, Director, born on January 19, 1947, has served as a
director of CNH since November 1999. Ms. Hudson has served as the President and
Chief Executive Officer of Brady Corporation, an international manufacturer of
identification and material solution products, since January 1994. Prior to
assuming her position with that company, she was Vice President and General
Manager of the Professional, Printing and Publishing Imaging Division of Eastman
Kodak Company. Prior to the business merger of New Holland N.V. and Case
Corporation, Ms. Hudson served as a director of Case since 1996. In addition to
Brady, Ms. Hudson is also a director of Charming Shoppes, Inc.

Kenneth Lipper, Director, born on June 19, 1941, has served as a director
of CNH since 1996. He is the Chairman of Lipper & Company, Inc., an investment
management and investment banking company founded in 1987. Previously, he was
the Deputy Mayor of the City of New York under Mayor Edward Koch from 1983 to
1985. He was a managing director and general partner of Salomon Brothers during
the years 1976-1982 and a general partner at Lehman Brothers during the years
1969-1975. Mr. Lipper was the Director of Industrial Policy for the Office of
Foreign Direct Investment at the U.S. Department of

106

Commerce from 1968 to 1969. Mr. Lipper was an associate lawyer with the law firm
of Fried, Frank, Harris, Shriver & Jacobson from 1967 to 1968.

Paolo Monferino, Director, President and Chief Executive Officer, born on
December 15, 1946, served as President and Chief Operating Officer of CNH from
March 24, 2000 to November 7, 2000. On November 8, 2000, Mr. Monferino was
appointed a director and President and Chief Executive Officer, leading the
overall management of CNH, including the execution of the Company's wide-ranging
integration plan. Mr. Monferino has more than 16 years of experience in the
agricultural and construction equipment business beginning in the United States
with FiatAllis, a joint venture between Fiat's construction equipment business
and Allis Chalmers. In 1983, he was named chief executive officer of FiatAllis'
Latin American operations in Brazil. Two years later, he was appointed chief
operating officer at FiatAllis and in 1987 was named the chief operating officer
at FiatAgri, the farm machinery division of the Fiat Group. Following Fiat
Geotech's 1991 acquisition of Ford New Holland, Monferino was named executive
vice president of the new company headquartered in London. He was responsible
for strategy and business development, including product, marketing and
industrial policies.

James L.C. Provan, Director, born on December 19, 1936, has served as
director of CNH, and previously of New Holland, since 1995. Mr. Provan was first
elected as a Member of the European Parliament in 1979, where he has served on
the Agricultural and Rural Affairs Committee, the Conservative National Union
Executive Committee, and the Transport and Tourism Committee. Mr. Provan is also
the Chairman of the Rowett Research Institute, Aberdeen, one of Europe's leading
nutritional research centers.

Michel Lecomte, Chief Financial Officer, and President, Financial Services
and President, CNH Capital, born on January 27, 1949, was appointed Chief
Financial Officer and President, Financial Services and President, CNH Capital
of CNH on November 8, 2000. Prior to joining CNH, Mr. Lecomte served as Chief
Financial Officer of Iveco, a sector of the Fiat Group and Transolver, Iveco's
financial services business. From 1989 to 1996, he served as chief financial
officer of the Framatome Group based in France. Mr. Lecomte also served as chief
financial officer of CertainTeed Corporation in the U.S. from 1984 to 1989.

Harold D. Boyanovsky, President, Worldwide Agricultural Equipment Products,
born on August 15, 1944, has served as President, Worldwide Agricultural
Equipment Products of CNH since November 1999. Prior to the business merger of
New Holland N.V. and Case Corporation, he served as a Senior Vice President of
Case from May 1997 to November 1999. Between November 1999 and December 1966,
Mr. Boyanovsky served in a variety of executive positions with Case and
International Harvester.

Richard M. Christman, President, Case IH Agricultural Business, born on May
23, 1950, was appointed President, Case IH Agricultural Business on July 1,
2000. From November 1999 to July 2000, he served as Senior Vice President,
Strategy and Business Development of CNH. Prior to the business merger of New
Holland N.V. and Case Corporation, Mr. Christman served as a Senior Vice
President of Case from May 1996 to November 1999. Between November 1999 and June
1975, Mr. Christman served in a variety of executive positions with Case.

William T. Kennedy, President, New Holland Agricultural Business, born on
January 1, 1943, has served as President, New Holland Agricultural Business of
CNH since November 1999. Prior to the business merger of New Holland N.V. and
Case Corporation, he served as Executive Vice President, Chief Marketing
Officer, New Holland, between September 1996 and November 1999. Between May 1991
and September 1996, Mr. Kennedy served as Chief Operating Officer, North
American Operations. Between June 1964 to May 1991, he served in a variety of
Management positions with the predecessor companies Ford New Holland and Sperry
New Holland.

Fausto Lanfranco, President, Worldwide Construction Equipment Business,
born on July 20, 1944, has served as President, Worldwide Construction Equipment
Business of CNH since November 1999. Prior to the business merger of New Holland
N.V. and Case Corporation, Mr. Lanfranco served as Managing Director of Fiat
Hitachi Excavators and was in charge of New Holland Earthmoving Equipment

107

Operations. In this capacity he was responsible for the strategic repositioning
of this business in the worldwide scenario. Between 1991 and 1996 Mr. Lanfranco
was assigned responsibility for the Strategies and Industrial Policies
Department of Fiat Corporate. In 1983 he joined Fiat Group and between 1983 and
1991 Mr. Lanfranco served in a variety of executive positions in the Components
Sector. Mr. Lanfranco worked for Olivetti between 1971 and 1983 where he held
managerial positions in the Planning, Research & Development and Production
departments in Mexico, the US and Far East. In his last assignment for Olivetti
he was in charge of the Consumer Products Division.

Roberto Miotto, Senior Vice President, General Counsel and Secretary, born
on December 15, 1946, has served as Senior Vice President, General Counsel and
Secretary of CNH since November 1999. Prior to the business merger of New
Holland N.V. and Case Corporation, Mr. Miotto served as Vice President, General
Counsel and Secretary of New Holland N.V. Prior to that, Mr. Miotto served in a
variety of executive positions with the Fiat Group.

Giovanni B. Ravina, Senior Vice President, Human Resources, born on April
21, 1951, was appointed Senior Vice President, Human Resources of CNH, effective
December 1, 2000. Prior to joining CNH, he served as Managing Director, Fiat
India. Between September 1978 and December 2000, Mr. Ravina served in a variety
of executive positions with the Fiat Group.

COMPENSATION

We maintain a management bonus program that links a portion of the
compensation paid to senior executives to our achievement of financial
performance criteria specified by the Nominating and Compensation Committee of
CNH's Board of Directors.

The aggregate amount of compensation paid by CNH to its directors and
executive officers that held office during 2001 was approximately $14.7 million.
The aggregate amount paid or set aside by CNH with respect to pension and
similar benefits during 2001 totaled approximately $248,000. Certain CNH
officers were a party to "Change in Control" agreements in 1999 that provided
for severance benefits if the officer's employment terminated other than for
"cause" within 12 months following a potential change in control or within 24 to
36 months following a change in control. Those agreements were either exercised
or amended in 2000. The amendment included three annual installment payments,
the first of which was paid in 2000. The aggregate amounts paid by CNH to its
executive officers for the first installment, paid in 2000, were approximately
$0.8 million and for the second installment, paid in 2001, was approximately
$0.8 million.

There are currently no director's service contracts providing for benefits
upon termination of employment.

CNH OUTSIDE DIRECTORS' COMPENSATION PLAN

In 1999, we established the CNH Global N.V. Outside Directors' Compensation
Plan ("CNH Directors' Plan") which was amended in 2000. The CNH Directors' Plan
provides for (1) the payment of an annual retainer fee and committee chair fee
(collectively, the "Annual Fees") to independent outside members of the Board in
the form of common shares of CNH; (2) an annual grant of options to purchase
common shares of CNH; (3) an opportunity to receive up to 50% of their Annual
Fees in cash; and (4) an opportunity to convert all or a portion of their Annual
Fees into stock options. Each of our outside directors is paid a fee of $1,250
plus expenses for each Board of Directors and committee meeting attended.
Outside directors also receive an annual retainer fee of $35,000. In addition,
each outside director who chairs a committee is paid an annual retainer fee of
$5,000 per committee chair held. The value of these fees is included in the
aggregate compensation amount set forth above. Under the CNH Directors' Plan,
all outside director annual retainer fees are paid in the form of CNH common
shares unless a director elects to receive a portion of his or her fees, up to a
maximum of 50%, in cash. In addition, outside directors may also elect to forego
payment of all or any portion of their fees otherwise payable in common shares
and to instead receive an option to purchase common shares at a purchase price
equal to the fair market value of the common shares on the date that such fees
would otherwise have been
108

paid to the director. The number of shares subject to such an option will be
equal to the amount of fees that the director elected to forego, multiplied by
four and divided by the fair market value of a common share on the date the fees
would otherwise have been paid to the director. Stock options granted as a
result of such an election vest immediately upon grant, but the shares purchased
under the option cannot be sold for six months following the date of grant.
Outside directors also receive an annual grant of options to purchase CNH common
shares that will vest on the third anniversary of the grant date. The exercise
price of all options granted under the CNH Directors' Plan is equal to or
greater than the fair market value of our common shares on the date of grant.
There are one million common shares reserved for issuance under this plan.
Exercise prices for options outstanding under the CNH Directors' Plan at
December 31, 2001 ranged from $5.25 to $15.41. The remaining weighted average
contractual life of the options issued pursuant to the CNH Directors' Plan is
approximately nine years. As of December 31, 2001, there were 758,429 common
shares available for issuance under the CNH Directors' Plan. During the last two
years, changes in shares subject to issuance under stock options were as
follows:

FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------
2001 2000
------------------ ------------------
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
------- -------- ------- --------

Outstanding at beginning of year................ 120,757 $11.85 18,750 $15.41
Granted....................................... 142,277 6.04 102,007 11.19
Forfeited..................................... (21,463) 12.09 -- --
------- -------
Outstanding at end of year...................... 241,571 8.40 120,757 11.85
======= =======
Exercisable at end of year...................... 159,071 7.73 64,507 10.72
======= =======

---------------

* Weighted-average

CNH EQUITY INCENTIVE PLAN

In 1999, we established the CNH Equity Incentive Plan or CNH EIP, which was
amended in 2001. The CNH EIP provides for grants of various types of awards to
officers and employees of CNH and its subsidiaries. There are 28 million common
shares reserved for issuance under this plan. Options granted under the CNH EIP
have an exercise price that is no less than the fair market value of the common
shares on the date of grant. Certain options vest ratably over three or four
years from the award date, while certain performance-based options vest subject
to the attainment of specified performance criteria. Such performance-based
options vest no later than seven years from the award date. All options expire
after ten years. The exercise price for options outstanding under the CNH EIP at
December 31, 2001 ranged from $6.34 to $13.77. The remaining weighted average
contractual life of the options issued pursuant to the CNH EIP is approximately
nine years. Prior to 2001, the exercise prices of all options granted under the
CNH EIP were equal to or greater than the fair market value of our common shares
on the respective grant dates. During 2001, we granted stock options with an
exercise price less than the quoted market price of our common shares at the
date of the grant. The $3,729,600 of compensation cost

109

has been deferred and is being charged to expense over the four-year service
period of the related options. During the last two years, changes in shares
subject to issuance under stock options were as follows:

FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------
2001 2000
-------------------- ---------------------
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
--------- -------- ---------- --------

Outstanding at beginning of year............ 5,201,937 $13.77 5,291,050 $13.77
Granted................................... 5,328,000 6.34 2,299,500 13.77
Forfeited................................. (994,025) 12.75 (2,388,613) 13.77
--------- ----------
Outstanding at end of year.................. 9,535,912 9.73 5,201,937 13.77
========= ==========
Exercisable at end of year.................. 1,777,927 13.77 621,168 13.77
========= ==========

Under the CNH EIP, shares may also be granted as restricted shares. We
establish the period of restriction for each award and hold the shares during
the restriction period. Certain restricted shares vest over six months to seven
years, while certain performance-based restricted shares vest subject to the
attainment of specified performance criteria. Such performance-based restricted
shares vest no later than seven years from the award date. For the year ended
December 31, 2000, 75,000 restricted shares were awarded at no cost to
employees, at a weighted-average value of $12.81, and no restricted shares were
awarded during 2001. At December 31, 2001, restricted common shares outstanding
totaled 33,600 shares.

As of December 31, 2001, there were 18,312,620 common shares available for
issuance under the CNH EIP.

FIAT STOCK OPTION PROGRAM

Certain employees of ours are eligible to participate in stock option plans
of Fiat ("Fiat Plans") whereby participants are granted options to purchase
ordinary shares of Fiat ("Fiat Shares"). The number of options granted to our
employees to purchase Fiat Shares was 222,000, 67,500 and 23,000 for the years
ended December 31, 2001, 2000 and 1999, respectively. The exercise price, as
determined by the average official price of Fiat Shares on the Italian Stock
Exchange during the twenty-day period preceding the date of grant, was E28.45,
E30.63 and E18.00 for the options granted under the Fiat Plans in 2001, 2000 and
1999, respectively. These exercise prices as compared to the actual prices of
Fiat Shares on the date of grant of E29.30, E33.46 and E18.06 in 2001, 2000 and
1999, respectively, were not significantly different and did not result in a
material amount of compensation expense under these plans. The 2001 and 2000
options vest ratably over a four year period and 1999 options vest ratably over
a three year period. All options under the Fiat Plans expire eight years after
the grant date.

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PRINCIPAL SHAREHOLDER

Our outstanding capital stock consists of common shares, par value E0.45
per share. As of April 30, 2002, there were 277,100,298 common shares
outstanding. As of April 30, 2002, 47,265,048 of the common shares were held of
record in the United States by 1,001 holders (including 3,911,400 shares held on
behalf of Fiat Netherlands Holding N.V.) and represented, in the aggregate,
17.6% of the number of common shares outstanding. Since certain of the common
shares are held by brokers or other nominees, the number of direct record
holders in the United States may not be fully indicative of the number of direct
beneficial owners in the United States or of where the direct beneficial owners
of such shares are resident.

The following table sets forth the ownership of shares in CNH:

NUMBER OF
OUTSTANDING PERCENTAGE
COMMON OWNERSHIP
SHAREHOLDERS SHARES INTEREST
------------ ----------- ----------

Fiat Netherlands Holding N.V................................ 234,330,182 84.6%
Other shareholders.......................................... 42,770,116 15.4
----------- -----
Total..................................................... 277,100,298 100.0%
=========== =====

Paolo Monferino, Jean-Pierre Rosso, Roberto Miotto, Alfredo Diana,
Katherine Hudson, Kenneth Lipper, James Provan, Fausto Lanfranco, Richard
Christman and William Kennedy, each a director or executive officer of CNH,
individually and collectively own less than 1% of our common shares.

We are controlled by our largest single shareholder, Fiat Netherlands
Holding N.V., a wholly owned subsidiary of Fiat. Fiat Netherlands Holding N.V.
increased its ownership interest in CNH from 71.1% to 84.5% of our outstanding
common shares in connection with the conversion on June 30, 2000 of Fiat
Netherlands Holding N.V.'s $1,400 million advance to capital into additional CNH
common shares. As of February 28, 2002, Fiat Netherlands Holding N.V. owned
234,330,182 common shares (including the 3,911,400 shares referred to above),
representing 84.6% of CNH's outstanding common shares as of such date. As a
result, Fiat controls all matters submitted to a vote of CNH's shareholders,
including approval of annual dividends, election and removal of its directors
and approval of extraordinary business combinations. Fiat Netherlands Holding
N.V. has the same voting rights as CNH's other shareholders.

RELATED PARTY TRANSACTIONS

On November 12, 1999, Fiat Netherlands Holding N.V., the majority
shareholder of CNH, contributed $1.4 billion to CNH in the form of an advance to
capital to partially finance the merger of New Holland and Case. On June 30,
2000, Fiat Netherlands Holding N.V. received 127,918,782 CNH common shares, or
the number of shares that it could have purchased with $1.4 billion at $10.94
per share, a price determined by averaging the daily closing prices (after
excluding the highest and lowest prices) of CNH common shares on the New York
Stock Exchange during the 20 trading days immediately preceding June 30, 2000.
The Board of Directors of CNH approved and we paid a discretionary return to
Fiat Netherlands Holding N.V. on its advance to capital of $56 million, an
annual rate of 6.25%.

We continue to rely on Fiat to provide either guarantees or funding in
connection with some of its external debt financing needs. At December 31, 2001,
our outstanding debt with Fiat and its affiliates was approximately 60% of the
total debt, compared with 46% at December 31, 2000. In 2001, we paid a guarantee
fee of between 0.0625% per annum and 0.125% per annum on the average amount
outstanding under facilities guaranteed by Fiat. Fiat has agreed to maintain its
existing treasury and debt financing arrangements with us for as long as it
maintains control of CNH and, in any event, at least until December 31, 2004.
After that time, Fiat has committed that it will not terminate our access to
these financing arrangements without affording us an appropriate time period to
develop suitable substitutes. The

111

terms of any alternative sources of financing may not be as favorable as those
provided or facilitated by Fiat.

We purchase some of our engines and other components from the Fiat Group,
and companies of the Fiat Group provide us with administrative services such as
accounting, cash management and legal services. In addition, we may from time to
time enter into hedging arrangements with counterparties that are members of the
Fiat Group. In 2001, we purchased approximately $108 million in goods, including
$85 million for engines purchased from Iveco, and approximately $131 million in
services from companies in the Fiat Group. Our principal purchases of goods from
Fiat and its affiliates include diesel engines from Iveco, electric and
mechanical components from Magneti Marelli S.p.A., castings from Teksid S.p.A.,
and spare parts from Geico S.p.A. Our principal purchases of services from Fiat
and its affiliates include accounting and audit, maintenance of plant and
equipment, research and development, information systems and training. We also
purchase tractors from our Mexican joint venture for resale in the United
States. For material related party transactions, we generally solicit and
evaluate bid proposals prior to entering into any such transactions, and in such
instances, the Audit Committee generally conducts a review to determine that
such transactions are on arm's-length terms. Management believes that the terms
of these sales and purchases are at least as favorable to us as those available
from unaffiliated third parties.

Fiat provides accounting services to us in Europe and Brazil through an
affiliate that uses shared service centers to provide such services at
competitive costs to various Fiat companies and third party customers. Fiat
provides internal audit services at the direction of our internal audit area in
certain locations where it is more cost effective to use existing Fiat
resources. Routine maintenance of our plants and facilities in Europe is
provided by a Fiat affiliate skilled in such work that also provides similar
services to third parties. We purchase network and hardware support from a joint
venture that Fiat has formed with IBM. Fiat also provides training services
through an affiliate that is skilled at providing employee training. We purchase
research and development from an Italian joint venture set up by Fiat and owned
by various Fiat subsidiaries. This joint venture benefits from Italian
government incentives granted to promote work in the less developed areas of
Italy. Our management believes that the terms of the contracts entered into with
Fiat and its affiliates are at least as favorable as those available from
unaffiliated third parties.

In addition, we outsource a portion of our information services to Global
Value Services, S.p.A., a joint venture between Fiat and IBM Italia S.p.A.

If the goods or services or financing arrangements described above were not
available from Fiat, we would have to obtain them from other sources. We can
offer no assurance that such alternative sources would provide goods and
services on terms as favorable as those offered by Fiat.

Fiat has executed, on our behalf, certain foreign exchange and interest
rate-related contracts. As of December 31, 2001, we and our subsidiaries were
parties to derivative or other financial instruments having an aggregate
contract value of $515 million to which affiliates of Fiat were counterparties.
Our management believes that the terms of the contracts entered into with Fiat
and its affiliates are at least as favorable to those available from
unaffiliated third parties.

Additionally, we participate in the stock option program of Fiat as
described in Note 13, "Shareholders' Equity and Stock-Based Compensation" to the
Consolidated Financial Statements.

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LEGAL PROCEEDINGS

We are party to various legal proceedings in the ordinary course of our
business, including product warranty, dealer disputes, workers compensation, and
customer and employment matters. In addition, certain of our Brazilian
subsidiaries are currently contesting certain claims made by the Brazilian tax
authorities related to taxation and employer social contributions. Although we
cannot accurately predict the amount of any liability that may arise with
respect to any of these matters, we do not expect any proceeding, if determined
adversely to us, to have a material adverse effect on our consolidated financial
position, results of operations or cash flows. Although we vigorously defend all
claims, we make provision for potential liabilities when we deem them probable
and reasonably estimable. These provisions are based on current information and
legal advice and are adjusted from time to time according to developments.

On July 17, 2001, the European Commission issued a Statement of Objections
alleging that our French and Italian subsidiaries adopted practices limiting
sales outside of dealer territories. We submitted a reply to the European
Commission and a hearing was held on January 28, 2002. As of the date of this
prospectus, the Commission had not provided a ruling. The European Commission
has the power to assess a wide range of fines, penalties and sanctions, which
may be significant. Any fines would be assessed by the Commission only after a
ruling by the Commission that these subsidiaries engaged in anti-competitive
practices. We believe that the allegations should be dismissed. However, we are
unable to predict the outcome of this proceeding and, while we intend to appeal
the decision if the outcome is unfavorable, we cannot assure you that any fine
that the European Commission might impose would not have a material adverse
impact on our business, financial condition and results of operations.

We are party to a lawsuit filed against us in the U.S. District Court for
the Southern District of Florida alleging that the plaintiffs have an interest
in respect of O&K Mining GmbH ("O&K"), which is 75% owned by us. The plaintiffs
allege that O&K was expropriated from their Jewish grandfather in the 1930's
during the Nazi era and sold to other companies. The plaintiffs claim that they
own a 25% interest in O&K and are seeking restitution of that 25% interest as
well as monetary damages amounting to profits, dividends and other income
derived therefrom. We believe these allegations are without merit and intend
vigorously to defend the case.

DESCRIPTION OF SHARE CAPITAL

The material provisions of our Articles of Association and particular
provisions of Dutch law relevant to our statutory existence are summarized
below. This summary does not restate our Articles of Association or relevant
Dutch law in their entirety. While we believe that this summary contains all of
the information about the Articles of Association important to your decision to
subscribe for the common shares, it does not include all of the provisions that
you may feel are important. It is the Articles of Association, and not this
summary, that will define your rights as a holder of our common shares.

AUTHORIZED CAPITAL

Our authorized share capital is E450,000,000, consisting of 700,000,000
common shares and 300,000,000 preference shares with a par value of E0.45 per
share. No preference shares have been issued. We will issue common shares only
in registered form. We have appointed JPMorgan Chase Bank (formerly Morgan
Guaranty Trust Company of New York) as our agent to maintain the share register
relating to the common shares and to act as transfer agent and registrar for the
common shares.

DIVIDENDS

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distributions under Dutch law. However, we may not pay dividends if the payment
would reduce shareholders' equity to an amount less than the aggregate share
capital plus required statutory reserves. The board of directors may resolve
that we pay interim dividends, but the payments are also subject to these
statutory restrictions. If a shareholder does not collect any cash dividend or
other distribution within six years after the date on which it became due and
payable, the right to receive the payment reverts to CNH.

At any general meeting of shareholders, our shareholders may declare
dividends in the form of cash (in U.S. Dollars), common shares or a combination
of both.

SHAREHOLDER MEETINGS AND VOTING RIGHTS

Each shareholder has a right to attend general meetings of shareholders,
either in person or by proxy, and to exercise voting rights in accordance with
the provisions of our Articles of Association. We must hold at least one general
meeting of shareholders each year. This meeting must be convened at one of four
specified locations in The Netherlands within six months after the end of our
fiscal year. Our board of directors may convene additional general meetings as
often as it deems necessary, or upon the call of holders representing at least
10% of our outstanding common shares or other persons entitled to attend the
general meetings. Dutch law does not restrict the rights of holders of common
shares who do not reside in the Kingdom of The Netherlands to hold or vote their
common shares.

We will give notice of each meeting of shareholders by notice published in
at least one national daily newspaper distributed throughout The Netherlands and
in any other manner that we may be required to follow in order to comply with
applicable stock exchange requirements. In addition, we will notify registered
holders of the common shares by letter, cable, telex or telefax. We will give
this notice no later than the fifteenth day prior to the day of the meeting. As
deemed necessary by the board of directors, the notice will include or be
accompanied by an agenda identifying the business to be considered at the
meeting or will state that the agenda will be available for shareholders and
other persons who are entitled to attend the general meeting, at our offices or
places of business.

Each share is entitled to one vote. Unless otherwise required by our
Articles of Association or Dutch law, shareholders may validly adopt resolutions
at the general meeting by a majority vote. Except in circumstances specified in
the Articles of Association or provided under Dutch law, there is no quorum
requirement for the valid adoption of resolutions. In this prospectus,
references to actions by the shareholders refer to actions taken by resolution.

We are exempt from the proxy rules under the U.S. Securities Exchange Act
of 1934.

BOARD OF DIRECTORS; ADOPTION OF ANNUAL ACCOUNTS

The shareholders elect the members of our board of directors at a general
meeting. The shareholders may also dismiss or suspend any member of the board of
directors at any time by the vote of a majority of the votes cast at a general
meeting.

Our board of directors must prepare our annual accounts and make them
available to the shareholders for inspection at our offices within five months
after the end of our fiscal year. Under some special circumstances, Dutch law
permits an extension of this period for up to six additional months by approval
of the shareholders at a general meeting. During this period, including any
extension, the board of directors must submit the annual accounts to the
shareholders for adoption at a general meeting.

Under Dutch law, the board of directors must consider in the performance of
its duties the interests of CNH, its shareholders and its employees, in all
cases with reasonableness and fairness.

When our shareholders adopt the annual accounts prepared by the board of
directors, they may discharge the members of the board of directors from
potential liability with respect to the exercise of their duties during the
fiscal year covered by the accounts. This discharge may be given subject to such
reservations as the shareholders deem appropriate and is subject to a
reservation of liability required under

114

Dutch law. Examples of reservations of liability required by Dutch law include:
(1) liability of members of management boards and supervisory boards upon the
bankruptcy of a company; and (2) general principles of reasonableness and
fairness. Under Dutch law, a discharge of liability does not extend to matters
not properly disclosed to shareholders. As of the financial year 2002, the
discharge of the board of directors must be a separate item on the agenda of the
general meeting and the members of the board of directors are no longer
automatically discharged by adoption of the annual accounts.

LIQUIDATION RIGHTS

In the event of our dissolution or liquidation, we will distribute the
assets remaining after payment of all debts, the liquidation of all expenses
first to the holders of preference shares, (i) any shortfall in any previous
year of the percentage as determined by the general meeting of the par value of
their preference shares and the share premium reserve of the preference shares,
(ii) the nominal value of their preference shares and (iii) the amount of the
share premium reserve of the preference shares. The amount which remains shall
be distributed to the holders of common shares proportionate on all common
shares and if only preference shares are issued, to the holders of preference
shares proportionate on all preference shares. On shares that CNH holds in
treasury, no liquidation payments shall be made and payment to the holders of
preference shares, when issued, the amount paid in on the preference shares and
unpaid dividends, to holders of our common shares in proportion to the par value
of common shares held. In the event of a liquidation, we will make no
distribution with respect to common shares that we hold.

ISSUE OF SHARES; PREFERENCE RIGHTS

Our board of directors has the power to issue common shares and/or
preference shares if and to the extent that a general meeting of shareholders
has designated the board to act as the authorized body for this purpose. A
designation of authority to the board of directors to issue shares remains
effective for the period specified by the general meeting and may be up to five
years from the date of designation. A general meeting of shareholders may renew
this designation for additional periods of up to five years. Without this
designation, only the general meeting of shareholders has the power to authorize
the issuance of common shares. At a general meeting of shareholders in February
2002, the shareholders authorized our board of directors to issue shares and/or
rights to purchase shares for five years.

Our shareholders have a ratable preference right to subscribe for common
shares that we issue for cash unless a general meeting of shareholders, or its
designee, limits or eliminates this right. In addition, the right of our
shareholders in the United States to subscribe for common shares pursuant to
this preference right may be limited under some circumstances to a right to
receive approximately the market value of the right, if any, in cash. Our
shareholders have no ratable preference subscription right with respect to
common shares issued for consideration other than cash. If a general meeting of
shareholders delegates its authority to the board of directors for this purpose,
then the board of directors will have the power to limit or eliminate the
preference rights of shareholders. In the absence of this designation, the
general meeting of shareholders will have the power to limit or eliminate these
rights. Such a proposal requires the approval of at least two-thirds of the
votes cast by shareholders at a general meeting if less than half of the issued
share capital is represented at the meeting. Designations of authority to the
board of directors may remain in effect for up to five years and may be renewed
for additional periods of up to five years. At our extraordinary general meeting
of shareholders on February 4, 2002, CNH shareholders authorized our board of
directors to limit or eliminate the preference rights of shareholders for five
years following the date of the meeting.

These provisions apply equally to any issue by us of rights to subscribe
for common shares.

Under Dutch law shareholders are not liable for further capital calls by
CNH.

115

REPURCHASES OF SHARES

We may acquire common shares, subject to applicable provisions of Dutch law
and of our Articles of Association, to the extent:

- our shareholders' equity, less the amount to be paid for the common
shares to be acquired, exceeds the sum of (1) our share capital account
plus (2) any reserves required to be maintained by Dutch law; and

- after the acquisition of common shares, we and our subsidiaries would not
hold, or hold as pledgees, common shares having an aggregate par value
that exceeds 10% of our issued share capital account, as these amounts
would be calculated under generally accepted accounting principles in The
Netherlands.

Our board of directors may repurchase common shares only if our
shareholders have authorized the repurchases. Under Dutch law, an authorization
to repurchase common shares will remain in effect for a maximum of 18 months.

REDUCTION OF SHARE CAPITAL

At a general meeting of shareholders, our shareholders may vote to reduce
the issued share capital by cancelling shares held by us or by reducing the par
value of our shares. In either case, this reduction would be subject to
applicable statutory provisions. Holders of at least two-thirds of the votes
cast must vote in favor of a resolution to reduce our issued share capital if
less than half of the issued share capital is present at the general meeting in
person or by proxy.

AMENDMENT OF THE ARTICLES OF ASSOCIATION

A majority of the votes cast by holders of our common shares at a general
meeting must approve any resolution proposed by our board of directors to amend
the Articles of Association or to wind up CNH. Any such resolution proposed by
one or more shareholders must likewise be approved by a majority of the votes
cast at a general meeting of shareholders.

DISCLOSURE OF HOLDINGS

Under Dutch law regarding the disclosure of holdings in listed companies,
if our common shares are admitted to official quotation or listing on Euronext
or on any other stock exchange in the European Union, registered holders and
some beneficial owners of our common shares and preference shares, when issued,
must promptly notify CNH and the Securities Board of The Netherlands if their
shareholding reaches, exceeds or thereafter falls below 5%, 10%, 25%, 50% or
66 2/3% of our outstanding common shares. For this purpose, shareholding
includes economic interests, voting rights or both. Failure to comply with this
requirement would constitute a criminal offense and could result in civil
sanctions, including the suspension of voting rights.

LIMITATIONS ON RIGHT TO HOLD OR VOTE SHARES

Our Articles of Association and relevant provisions of Dutch law do not
currently impose any limitations on the right of holders of shares to hold or
vote their shares.

LISTING

Our common shares are listed on the New York Stock Exchange under the
symbol "CNH."

116

SHARE CERTIFICATES AND TRANSFER

We will issue shares only in registered form. We will maintain, or cause
our agent to maintain, the register of shares in two parts. The registrar will
maintain at its principal office in New York that portion of our share register
relating to shares held by public shareholders who are not affiliates of Fiat.
The registrar will act as transfer agent and registrar with respect to those
shares. Our registered office in The Netherlands will maintain the part of the
share register relating to our remaining shares until such time as those shares
are held by public shareholders who are not affiliates of Fiat.

Share certificates in the English language will evidence the shares offered
in this offering. Shareholders may transfer their shares on our record books at
the registrar's office. Shareholders may also exchange certificates representing
these shares for certificates representing shares in other authorized
denominations at the registrar's office.

Under Dutch law and our Articles of Association, any transfer of registered
shares requires a written instrument of transfer and a written acknowledgment of
that transfer by CNH, or by the registrar acting in its name. Except when CNH is
a party to the legal act, the rights attached to the shares may be exercised
only after CNH has acknowledged the legal act or the written instrument has been
served on CNH in accordance with the Dutch civil code or CNH has acknowledged
the legal act by registration in the shareholders' register.

117

TAXATION

UNITED STATES TAXATION

The following discussion of the material U.S. federal income tax
consequences of the ownership and disposition of our common shares by a U.S.
Holder (as defined below) is the opinion of Shearman & Sterling, our special
United States federal income tax counsel. The discussion is based on the
Internal Revenue Code of 1986, as amended (the "Code"), its legislative history,
existing and proposed regulations, published rulings of the Internal Revenue
Code ("IRS") and court decisions as currently in effect. Such authorities are
subject to change or repeal, possibly on a retroactive basis.

This discussion does not contain a full description of all tax
considerations that may be relevant to ownership of our common shares or a
decision to purchase such shares. In particular, the discussion is directed only
to U.S. Holders that will hold our common shares as capital assets and whose
functional currency is the U.S. dollar. Furthermore, the discussion does not
address the U.S. federal income tax treatment of holders that are subject to
special tax rules such as banks and other financial institutions, security
dealers, dealers in currencies, securities traders who elect to account for
their investment in shares on a mark-to-market basis, persons that hold shares
as a position in a straddle or conversion transaction, insurance companies,
tax-exempt entities and holders of ten percent or more of the voting shares of
CNH. The discussion also does not consider any state, local or non-U.S. tax
considerations and does not cover any aspect of U.S. federal tax law other than
income taxation.

Prospective purchasers and of our common shares are advised to consult
their own tax advisors about the U.S., federal, state, local or other tax
consequences to them of the purchase, beneficial ownership and disposition of
our common shares.

For purposes of this discussion, you are a "U.S. Holder" if you are a
beneficial owner of our common shares who is (i) an individual citizen or
resident of the United States for U.S. federal income tax purposes, (ii) a
corporation created or organized under the laws of the United States or a state
thereof, (iii) an estate the income of which is subject to U.S. federal income
taxation regardless of its source, or (iv) a trust subject to primary
supervision of a U.S. court and the control of one or more U.S. persons.

Taxation of Dividends

The gross amount of cash dividends paid by us in respect of our common
shares (including amounts withheld in respect of Dutch taxes) will be included
in the gross income of a U.S. Holder as ordinary income on the day on which the
dividends are actually or constructively received by the U.S. Holder, and will
not be eligible for the dividends-received deduction generally allowed to U.S.
corporations in respect of dividends received from other U.S. corporations. For
this purpose, a "dividend" will include any distribution paid by us with respect
to our common shares but only to the extent such distribution is not in excess
of our current and accumulated earnings and profits, as determined under U.S.
federal income tax principles.

Subject to applicable limitations under the Code and the Treasury
regulations and subject to the discussion below, any Dutch withholding tax
imposed on dividends in respect of our common shares will be treated as a
foreign income tax eligible for credit against a U.S. Holder's U.S. federal
income tax liability (or, at a U.S. Holder's election, may be deducted in
computing taxable income). Such dividends will constitute foreign-source
"passive income" or, possibly, "financial services income," for U.S. foreign tax
credit purposes. Under the Code, foreign tax credits will not be allowed for
withholding taxes imposed in respect of certain short-term or hedged positions
in securities. Further, the Internal Revenue Service has announced that future
regulations could disallow foreign tax credits (including on a retroactive
basis) in respect of arrangements in which a U.S. Holder's reasonably expected
economic profit, after non-U.S. taxes, is insubstantial compared to the value of
the expected foreign tax credits. No such regulations have been issued to date.
The rules regarding U.S. foreign tax credits are very complex. U.S. Holders
should consult their own tax advisors concerning the implications of U.S.
foreign tax credit rules in light of their particular circumstances.
118

We generally will fund dividend distributions on our common shares with
dividends received from our non-Dutch subsidiaries. Assuming that the necessary
conditions and requirements are met under Dutch law, we may be entitled to a
reduction in the amount in respect of Dutch withholding taxes payable to the
Dutch tax authorities, which reduction would equal 3% of the amount of Dutch
withholding tax withheld by us in respect of dividends distributed by us to our
shareholders. There is a risk that such a reduction may constitute a partial
subsidy in respect of the Dutch withholding tax payable on our dividends and,
thus, that a U.S. Holder would not be entitled to a foreign tax credit with
respect to the amount of the reduction so allowed to us.

Taxation of Capital Gains

Upon a sale or other taxable disposition of our common shares, a U.S.
Holder will recognize gain or loss equal to the difference between the amount
realized in the sale or other taxable disposition and the tax basis of the
common shares. Such gain or loss will be capital gain or loss and will be a
long-term capital gain or loss if the shares were held for more than one year.
Non-corporate U.S. Holders (including individuals) can qualify for preferential
rates of U.S. federal income taxation in respect of long-term capital gains. The
deduction of capital losses is subject to limitations under the Code. Gain
realized by a U.S. Holder on a sale or other disposition of our common shares
generally will be treated as U.S.-source income for U.S. foreign tax credit
purposes.

Backup Withholding Tax

Information reporting requirements will apply to U.S. Holders other than
certain exempt recipients (such as corporations) with respect to (i)
distributions made on our common shares and proceeds received on disposition of
such shares paid within the United States, and (ii) proceeds received on a
disposition of such shares that is effected at a United States office of a
broker. Furthermore, a 30% (to be reduced to 29% for years 2004 and 2005, and
28% for 2006 and thereafter) backup withholding tax may apply to such amounts if
the U.S. Holder fails to provide an accurate taxpayer identification number or
to report interest and dividends required to be shown on its U.S. federal income
tax returns or otherwise fails to comply with or establish an exemption from
such backup withholding tax. The amount of backup withholding imposed on a
payment to a U.S. Holder may be refunded by the IRS or allowed as a credit
against the U.S. federal income tax of the U.S. Holder provided that the
required information is properly furnished to the IRS.

NETHERLANDS TAXATION

This taxation summary solely addresses the material Dutch tax consequences
of the acquisition and the ownership and disposition of CNH shares offered in
this offering. It is a general summary that only applies to Non-Resident holder
of shares (as defined below) and it does not discuss every aspect of taxation
that may be relevant to a particular holder of shares under special
circumstances or who is subject to special treatment under applicable law. This
summary also assumes that CNH is organized, and its business will be conducted,
in the manner outlined in this prospectus. Changes in the organizational
structure or the manner in which CNH conducts its business may invalidate this
summary.

Unless stated otherwise, this summary is based on the tax laws of The
Netherlands as they are in force and in effect on the date of this prospectus.
These laws could change and a change could be effective retroactively. This
summary will not be updated to reflect changes in laws and if such change occurs
the information in this summary could become invalid.

Any potential investor should consult his own tax advisor for more
information about the tax consequences of acquiring, owning and disposing of
shares in particular circumstances.

We have not addressed every potential tax consequence of an investment in
shares under the laws of The Netherlands.

119

DUTCH TAXATION OF NON-RESIDENT HOLDERS OF SHARES

General

The summary of the Dutch taxes set out in this section "-- Dutch Taxation
of Non-Resident Holders of Shares" only applies to a holder of shares who is a
Non-Resident holder of shares.

A holder of shares is a Non-Resident holder of shares if:

- he is neither resident, nor deemed to be resident, in The Netherlands for
purposes of Dutch taxation and, in the case of an individual, has not
elected to be treated as a resident of The Netherlands for Dutch income
tax purposes; and

- in the case of an individual, he neither is nor has been, nor is deemed
to be nor has been deemed to be, an employee of CNH nor of any entity
related to CNH; and

- his shares do not form part, and are not deemed to form part, of a
substantial interest (aanmerkelijk belang) in CNH, unless such interest
forms part of the assets of an enterprise.

If a person holds an interest in CNH, such interest forms part or is deemed
to form part of a substantial interest in CNH if any one or more of the
following circumstances is present.

1. Such person alone or, in case such person is an individual,
together with his partner has, directly or indirectly, the ownership of,
shares of CNH representing 5% or more of the total issued and outstanding
capital (or the issued and outstanding capital of any class of shares) of
CNH, or rights to acquire, directly or indirectly, shares, whether or not
already issued, that represent at any time 5% or more of the total issued
and outstanding capital (or the issued and outstanding capital of any class
of shares) of CNH or the ownership of profit participating certificates
(winstbewijzen)that relate to 5% or more of the annual profit of CNH or to
5% or more of the liquidation proceeds of CNH.

2. Such person's partner or any of the relatives by blood or by
marriage in the direct line (including foster children) of this person or
of his partner has a substantial interest in CNH.

3. Such person's shares, profit participating certificates or rights
to acquire shares or profit participating certificates in CNH have been
acquired by such person or are deemed to have been acquired by such person
under a non-recognition provision.

For purposes of the above, a person who is only entitled to the benefits
from shares or profit participating certificates (for instance a holder of a
right of usufruct) is deemed to be a holder of shares or profit participating
certificates, as the case may be, and his entitlement to benefits is considered
a share or a profit participating certificate, as the case may be.

Taxes on Income and Capital Gains

A Non-Resident holder of shares will not be subject to any Dutch taxes on
income or capital gains in respect of dividends distributed by CNH (other than
the dividend withholding tax described below) or in respect of any gain realized
on the disposal of shares, unless:

i. he derives profits from an enterprise, whether as an entrepreneur
or pursuant to a co-entitlement to the net worth of an enterprise,
other than as an entrepreneur or a shareholder, which enterprise is
either managed in The Netherlands or, in whole or in part, carried
on through a permanent establishment or a permanent representative
in The Netherlands and his shares are attributable to that
enterprise; or

ii. (in the case of an individual) he derives benefits from shares
that are taxable as benefits from miscellaneous activities in The
Netherlands (resultaat uit overige werkzaamheden in Nederland).

120

The concept "dividends distributed by CNH" as used in this section
includes, but is not limited to, the following:

- distributions in cash or in kind, deemed and constructive distributions
(including, as a rule, consideration for the repurchase of shares by CNH
(other than a repurchase as a temporary investment) in excess of the
average capital recognized as paid-in for Dutch dividend withholding tax
purposes), and repayments of capital not recognized as paid-in for Dutch
dividend withholding tax purposes;

- liquidation proceeds and proceeds of redemption of CNH shares in excess
of the average capital recognized as paid-in for Dutch dividend
withholding tax purposes;

- the par value of shares issued by CNH to a holder of shares or an
increase of the par value of shares, as the case may be, to the extent
that it does not appear that a contribution, recognized for Dutch
dividend withholding tax purposes, has been made or will be made; and

- partial repayment of capital, recognized as paid-in for Dutch dividend
withholding tax purposes, if and to the extent that there are net profits
(zuivere winst), unless (a) the general meeting of shareholders of CNH
has resolved in advance to make such repayment and (b) the par value of
the shares concerned has been reduced by an equal amount by way of an
amendment to the articles of association of CNH.

A Non-Resident holder of shares may, inter alia, derive benefits from CNH
shares that are taxable as benefits from miscellaneous activities in The
Netherlands in the following circumstances:

- if his investment activities go beyond the activities of an active
portfolio investor, for instance in case of the use of insider knowledge
(voorkennis) or comparable forms of special knowledge; or

- if he makes CNH shares available or is deemed to make CNH shares
available, legally or in fact, directly or indirectly, to a connected
party (verbonden persoon) as described in articles 3.91 and 3.92 of the
Dutch Income Tax Act 2001;

if such activities are performed or deemed to be performed in The
Netherlands.

Dividend Withholding Tax

Dividends distributed by CNH to a Non-Resident holder of shares are subject
to a withholding tax imposed by The Netherlands at a statutory rate of 25%. See
"-- Taxes on Income and Capital Gains" for a description of the concept
"dividends distributed by CNH".

If a double tax treaty is in effect between The Netherlands and the country
of residence of a Non-Resident holder of shares, such holder may be eligible for
a full or partial relief from the Dutch dividend withholding tax provided that
such relief is duly claimed. Legislation is in force, but not effective,
pursuant to which a credit for Dutch dividend withholding tax will for Dutch
domestic tax purposes only be available to the beneficial owner (uiteindelijk
gerechtigde) of dividends distributed by CNH. A new legislative proposal that
deals with the beneficial ownership of dividends has passed the Second Chamber
of Parliament on November 15, 2001. The intention is that this new legislation
will take effect retroactively to April 27, 2001. The legislation that is in
force, but not effective, will then be abrogated. The Dutch tax authorities have
taken the position that the beneficial ownership test can also be applied to
deny relief from Dutch dividend withholding tax under double tax treaties and
the Tax Arrangement for the Kingdom.

If a Non-Resident holder of shares is resident in The Netherlands Antilles
or Aruba or in a member state of the EU or in a country that has concluded a
double tax treaty with The Netherlands, CNH is not required to withhold Dutch
dividend withholding tax from a dividend distributed by CNH to such holder of
shares to the extent that the temporary special distribution tax, discussed
below in the section "-- Distribution Tax" applies to the distribution.

121

Under the convention of December 18, 1992, between the Kingdom of The
Netherlands and the United States of America for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income
(the "U.S./NL Income Tax Treaty"), the Dutch dividend withholding tax rate on
dividends paid by CNH on shares held by a Non-Resident holder of shares who is
resident in the United States and who is entitled to the benefits of the U.S./NL
Income Tax Treaty will generally be reduced to 15%. The U.S./NL Income Tax
Treaty provides for a complete exemption for dividends received by exempt
pension trusts and exempt organizations, as defined therein. Except in the case
of exempt organizations, the reduced dividend withholding tax rate under the
U.S./NL Income Tax Treaty may be available at source, upon payment of a dividend
in respect of such shares, provided that the holder thereof or, if applicable,
the paying agent, has supplied CNH with the appropriate Dutch tax forms in
accordance with the Dutch implementation regulations under the U.S./NL Income
Tax Treaty. If such forms are not duly and timely supplied, CNH will be required
to withhold the dividend withholding tax at the Dutch statutory rate of 25%. In
such case, a Non-Resident holder of shares who is resident in the United States
and who is entitled to the benefits of the U.S./NL Income Tax Treaty may obtain
a refund of the difference between the amount withheld and the amount that The
Netherlands was entitled to levy in accordance with the U.S./NL Income Tax
Treaty by filing the appropriate forms with the Dutch tax authorities within the
term set therefor.

Reduction. If CNH has received a profit distribution from a foreign entity,
or a repatriation of foreign branch profit, that is exempt from Dutch corporate
income tax and that has been subject to a foreign withholding tax of at least
5%, CNH may be entitled to a reduction of the amount of Dutch dividend
withholding tax withheld that must be paid over to the Dutch tax authorities in
respect of dividends distributed by CNH.

Non-Resident holders of shares are urged to consult their tax advisors
regarding the general creditability or deductibility of Dutch dividend
withholding tax and, in particular, the impact on such investors of CNH's
potential ability to receive a reduction as meant in the previous paragraph.

Gift and Inheritance Taxes

A person who acquires shares as a gift (in form or in substance), or who
acquires or is deemed to acquire shares on the death of an individual, will not
be subject to Dutch gift tax or to Dutch inheritance tax, as the case may be,
unless:

- the donor or the deceased is resident or deemed to be resident in The
Netherlands for purposes of gift or inheritance tax (as the case may be);
or

- the shares are or were attributable to an enterprise or part of an
enterprise that the donor or the deceased carried on through a permanent
establishment or a permanent representative in The Netherlands at the
time of the gift or of the death of the deceased; or

- the donor makes a gift of shares, then becomes a resident or deemed
resident of The Netherlands, and dies as a resident or deemed resident of
The Netherlands within 180 days after the date of the gift.

If the donor or the deceased is an individual who holds Dutch nationality,
he will be deemed to be resident in The Netherlands for purposes of Dutch gift
and inheritance taxes if he has been resident in The Netherlands at any time
during the ten years preceding the date of the gift or his death. If the donor
is an individual who does not hold Dutch nationality, or an entity, he or it
will be deemed to be resident in The Netherlands for purposes of Dutch gift tax
if he or it has been resident in The Netherlands at any time during the twelve
months preceding the date of the gift.

Furthermore, in exceptional circumstances, the donor or the deceased will
be deemed to be resident in The Netherlands for purposes of Dutch gift and
inheritance taxes if the beneficiary of the gift, or all beneficiaries under the
estate jointly, as the case may be, make an election to that effect.

122

Distribution Tax

CNH is subject to a temporary special distribution tax at a rate of 20% to
the extent that dividends distributed by CNH during the period from January 1,
2001 up to and including December 31, 2005 are classified as "excessive." For
purposes of this distribution tax, dividends distributed by CNH are considered
to be "excessive" to the extent that, during a particular calendar year, the
total thereof exceeds the highest of the following three amounts:

- 4% of the market capitalization of CNH at the beginning of the relevant
calendar year;

- twice the amount of the average annual dividends (exclusive of
extraordinary distributions) distributed in the three calendar years
immediately preceding January 1, 2001; and

- CNH's consolidated commercial results for the preceding book year,
subject to certain adjustments.

See "-- Dutch Taxation of Non-Resident Holders of Shares -- Taxes on Income
and Capital Gains" for a description of the concept "dividends distributed by
CNH."

The special distribution tax will not be due if and to the extent the
aggregate of dividends distributed by CNH during the period from January 1, 2001
up to and including December 31, 2005 exceeds the fair market value of the
assets at the end of the book year ending on December 31, 2000, net of
liabilities and provisions and reduced by the paid-in capital. The special
distribution tax will be reduced in proportion to the percentage of the shares
that were held, at the time of the "excessive" distribution, during an
uninterrupted period of three years, by individuals or entities (other than
investment institutions (beleggingsinstellingen) as defined in the Dutch
Corporate Income Tax Act 1969) holding at least 5% of the nominal paid-in
capital, provided such shareholders are resident in The Netherlands, The
Netherlands Antilles or Aruba, or in a member state of the EU, or in a country
that has concluded a double tax treaty with The Netherlands. In that connection,
shares that were held on September 14, 1999 are deemed to have been held on that
date during an uninterrupted period of three years. The special distribution tax
is not a withholding tax; it is imposed directly on CNH. Therefore, if it is
reduced because certain shareholders own at least 5% of the nominal paid-in
capital, CNH will receive the benefit of the reduction and it will inure
indirectly not only to the shareholders whose shareholdings caused the reduction
to apply.

Capital Tax

CNH is subject to Netherlands capital tax at a rate of 0.55% on any
contribution received in respect of shares.

Other Taxes and Duties

No Dutch registration tax, transfer tax, stamp duty or any other similar
documentary tax or duty will be payable in The Netherlands in respect of or in
connection with the subscription, issue, placement, allotment or delivery of CNH
shares.

123

SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES

Nauta Dutilh, special Dutch counsel to CNH, has advised CNH that the United
States and The Netherlands do not currently have a treaty providing for
reciprocal recognition and enforcement of judgments, other than arbitration
awards, in civil and commercial matters. Therefore, a final judgment for the
payment of money rendered by any federal or state court in the United States
based on civil liability, whether or not predicated solely upon United States
federal securities laws, would not be directly enforceable in The Netherlands.
However, if the party in whose favor a final judgment is rendered brings a new
suit in a competent court in The Netherlands, that party may submit to a Dutch
court the final judgment rendered in the United States. If the Dutch court finds
that the jurisdiction of the federal or state court in the United States has
been based on grounds which are internationally acceptable and that proper legal
procedures have been observed, the Dutch court should give binding effect to
that final judgment unless it violates public policy in The Netherlands. Nauta
Dutilh has advised us that it does not express an opinion as to whether
enforcement by a Dutch court of a judgment would be effected in any currency
other than Euro or as to the determination of the applicable exchange rate from
U.S. Dollars to Euro. Furthermore, it is not clear under Dutch law whether
judgments awarding punitive damages would be enforced.

124

UNDERWRITING

We intend to offer the shares in the U.S. and Canada through the U.S.
underwriters and elsewhere through the international managers. Merrill Lynch,
Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and Salomon
Smith Barney Inc. are acting as the U.S. representatives of the U.S.
underwriters named below. Subject to the terms and conditions described in a
U.S. purchase agreement between us and the U.S. underwriters, and concurrently
with the sale of 10,000,000 shares to the international managers, we have agreed
to sell to the U.S. underwriters, and the U.S. underwriters severally have
agreed to purchase from us, the number of shares listed opposite their names
below.

NUMBER
U.S. UNDERWRITER OF SHARES
---------------- ---------

Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 22,000,000
J.P. Morgan Securities Inc.................................. 9,000,000
Salomon Smith Barney Inc.................................... 9,000,000
-----------
Total.......................................... 40,000,000
===========

We have also entered into an international purchase agreement with the
international managers for sale of the shares outside the U.S. and Canada for
whom Merrill Lynch International, J.P. Morgan Securities Ltd., Salomon Brothers
International Limited and UniCredit Banca Mobiliare Societa per Azioni are
acting as lead managers. Subject to the terms and conditions in the
international purchase agreement, and concurrently with the sale of 40,000,000
shares to the U.S. underwriters pursuant to the U.S. purchase agreement, we have
agreed to sell to the international managers, and the international managers
severally have agreed to purchase, 10,000,000 shares from us. The public
offering price per share and the total underwriting discount per share are
identical under the U.S. purchase agreement and the international purchase
agreement.

The U.S. underwriters and the international managers have agreed to
purchase all of the shares sold under the U.S. and international purchase
agreements if any of these shares are purchased. If an underwriter defaults, the
U.S. and international purchase agreements provide that the purchase commitments
of the nondefaulting underwriters may be increased or the purchase agreements
may be terminated. The closings for the sale of shares to be purchased by the
U.S. underwriters and the international managers are conditioned on one another.

We have agreed to indemnify the U.S. underwriters and the international
managers against certain liabilities, including liabilities under the Securities
Act, or to contribute to payments the U.S. underwriters and international
managers may be required to make in respect of those liabilities.

The underwriters are offering the shares, subject to prior sale, when, as,
and if issued to and accepted by them, subject to approval of legal matters by
their counsel, including the validity of the shares, and other conditions
contained in the purchase agreements, such as the receipt by the underwriters of
officer's certificates and legal opinions. The underwriters reserve the right to
withdraw, cancel, or modify offers to the public and to reject orders in whole
or in part.

COMMISSIONS AND DISCOUNTS

The U.S. representatives have advised us that the U.S. underwriters propose
initially to offer the shares to the public at the public offering price on the
cover page of this prospectus and to dealers at that price less a concession not
in excess of $.10 per share. The U.S. underwriters may allow, and the dealers
may reallow, a discount not in excess of $.10 per share to other dealers. After
the public offering, the public offering price, concession, and discount may be
changed. The following table shows the public offering price, underwriting
discount and proceeds to us before our expenses. The information

125

assumes either no exercise or full exercise by the U.S. underwriters and the
international managers of their overallotment options.

PER SHARE WITHOUT OPTION WITH OPTION
--------- -------------- -----------

Public offering price.......................... $4.00 $200,000,000 $230,000,000
Underwriting discount.......................... $.18 $9,000,000 $10,350,000
Proceeds, before expenses, to CNH.............. $3.82 $191,000,000 $219,650,000

The expenses of the offering, not including the underwriting discount, are
estimated at $3.1 million and are payable by CNH.

OVERALLOTMENT OPTION

We have granted options to the U.S. underwriters to purchase up to
6,000,000 additional shares at the public offering price less the underwriting
discount. The U.S. underwriters may exercise these options for 30 days from the
date of this prospectus solely to cover any overallotments. If the U.S.
underwriters exercise these options, each will be obligated, subject to
conditions contained in the purchase agreements, to purchase a number of
additional shares proportionate to that U.S. underwriter's initial amount
reflected in the above table.

We have also granted options to the international managers, exercisable for
30 days from the date of this prospectus, to purchase up to 1,500,000 additional
shares to cover any overallotments on terms similar to those granted to the U.S.
underwriters.

INTERSYNDICATE AGREEMENT

The U.S. underwriters and the international managers have entered into an
intersyndicate agreement that provides for the coordination of their activities.
Under the intersyndicate agreement, the U.S. underwriters and the international
managers may sell shares to each other for purposes of resale at the public
offering price, less an amount not greater than the selling concession. Under
the intersyndicate agreement, the U.S. underwriters and any dealer to whom they
sell shares will not offer to sell or sell shares to persons who are non-U.S. or
non-Canadian persons or to persons they believe intend to resell to persons who
are non-U.S. or non-Canadian persons, except in the case of transactions under
the intersyndicate agreement. Similarly, the international managers and any
dealer to whom they sell shares will not offer to sell or sell shares to U.S.
persons or Canadian persons or to persons they believe intend to resell to U.S.
or Canadian persons, except in the case of transactions under the intersyndicate
agreement.

NO SALES OF SIMILAR SECURITIES

We, our executive officers and directors, and Fiat S.p.A. and its
affiliates have agreed, with exceptions, not to sell or transfer any of our
common shares for 90 days after the date of this prospectus without first
obtaining the written consent of Merrill Lynch. Specifically, we and these other
individuals have agreed not to directly or indirectly

- offer, pledge, sell or contract to sell any common shares;

- sell any option or contract to purchase any common shares;

- purchase any option or contract to sell any common shares;

- grant any option, right or warrant for the sale of any common shares;

- lend or otherwise dispose of or transfer any common shares;

- request or demand that we file a registration statement related to our
common shares; or

- enter into any swap or other agreement that transfers, in whole or in
part, the economic consequence of ownership of any common shares whether
any such swap or transaction is to be settled by delivery of shares or
other securities, in cash or otherwise.

126

This lockup provision applies to common shares and to securities
convertible into or exchangeable or exercisable for or repayable with common
shares. It also applies to common shares owned now or acquired later by the
person executing the agreement or for which the person executing the agreement
later acquires the power of disposition. This lockup provision does not limit
our ability to grant options to purchase common shares under stock option plans
or to issue common shares under our employee stock purchase plan.

NEW YORK STOCK EXCHANGE LISTING

The common shares are listed on the NYSE under the symbol "CNH."

PRICE STABILIZATION, SHORT POSITIONS AND PENALTY BIDS

Until the distribution of our the shares is completed, SEC rules may limit
the underwriters from bidding for or purchasing our common shares. However, the
U.S. representatives may engage in transactions that stabilize the price of our
common shares, such as bids or purchases that peg, fix or maintain that price.

The underwriters may purchase and sell our common shares in the open
market. These transactions may include short sales, stabilizing transactions and
purchases to cover positions created by short sales. Short sales involve the
sale by the underwriters of a greater number of shares than they are required to
purchase in the offering. "Covered" short sales are sales made in an amount not
greater than the underwriters' option to purchase additional shares from the
issuer in the offering. The underwriters may close out any covered short
position by either exercising their option to purchase additional shares or
purchasing shares in the open market. In determining the source of shares to
close out the covered short position, the underwriters will consider, among
other things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through the
overallotment option. "Naked" short sales are any sales in excess of such
option. The underwriters must close our any naked short position by purchasing
shares in the open market. A naked short position is more likely to be created
if the underwriters are concerned that there may be downward pressure on the
price of the common shares in the open market after pricing that could adversely
affect investors who purchase in the offering. Stabilizing transactions consist
of various bids for or purchases of our common shares made by the underwriters
in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such underwriter in stabilizing or short covering
transactions.

Similar to other purchase transactions, the underwriters' purchases to
cover the syndicate short sales may have the effect of raising or maintaining
the market price of our common shares or preventing or retarding a decline in
the market price of our common shares. As a result, the price of our common
shares may be higher than the price that might otherwise exist in the open
market. Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of our common shares. In addition, neither
we nor any of the U.S. representatives makes any representation that the
representatives will engage in these transactions or that these transactions,
once commenced, will not be discontinued without notice.

OTHER RELATIONSHIPS

Each of the underwriters and their affiliates have engaged in, and may in
the future engage in, investment banking and other commercial dealings in the
ordinary course of business with us and our majority shareholder, Fiat S.p.A.
They have received customary fees and commissions for these transactions.
Affiliates of J.P. Morgan Securities Inc. are the administrative agents under
certain of our credit agreements.

127

A total of 12 members of our senior management will purchase a total of
approximately 90,000 common shares in this offering from the underwriters at the
public offering price.

Merrill Lynch will be facilitating internet distribution for the offering
to some of its internet subscription customers. Merrill Lynch intends to
allocate a limited number of shares for sale to its online brokerage customers.
An electronic prospectus is available on the website maintained by Merrill
Lynch. Other than the prospectus in electronic format, the information on the
Merrill Lynch website relating to the offering is not a part of this prospectus.

EXPENSES

The following table sets forth the estimated expenses in connection with
the offering described in this prospectus:

Securities and Exchange Commission registration fee......... $ 24,573
New York Stock Exchange listing fee......................... 131,800
National Association of Securities Dealers, Inc. filing
fee....................................................... 30,500
Netherlands capital tax..................................... 1,100,000
Printing expenses........................................... 500,000
Legal fees and expenses..................................... 600,000
Accountants' fees and expenses.............................. 325,000
Fees and expenses of registrar.............................. 15,000
Miscellaneous expenses...................................... 398,127
----------
Total..................................................... $3,125,000
==========

LEGAL MATTERS

Nauta Dutilh, our Dutch counsel, will pass upon the validity under Dutch
law of the common shares. Loyens & Loeff, our Dutch counsel, have provided
advice with respect to Dutch tax matters. Some legal matters in connection with
the offering will be passed upon for CNH by Shearman & Sterling, New York, New
York and for the underwriters by Winston & Strawn, Chicago, Illinois.

EXPERTS

The audited consolidated financial statements and schedules of CNH Global
N.V. for the years ended December 31, 2001 and 2000 included in this prospectus
have been audited by Arthur Andersen LLP, independent accountants, whose report
thereon is also included in this prospectus. The audited consolidated financial
statements and schedules of CNH Global N.V. for the year ended December 31,
1999, except as they relate to Case Corporation, a wholly owned subsidiary of
CNH Global N.V., have been audited by PricewaterhouseCoopers N.V., independent
accountants, and, insofar as the consolidated financial statements and schedules
relate to Case Corporation, by Arthur Andersen LLP, independent public
accountants, whose reports thereon are also included. Such financial statements
have been so included in reliance on the reports of such independent public
accountants given on the authority of such firms as experts in auditing and
accounting.

The consolidated financial statements of Case Corporation have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, which is included herein in reliance upon the
authority of said firm as experts in giving said reports.

128

INDEX TO FINANCIAL STATEMENTS

CNH GLOBAL N.V. AND SUBSIDIARIES

PAGE
----

Reports of independent public accountants................... F-2
Consolidated statements of operations for the years ended F-5
December 31, 2001, 2000 and 1999..........................
Consolidated balance sheets as of December 31, 2001 and F-6
2000......................................................
Consolidated statements of cash flows for the years ended F-7
December 31, 2001, 2000 and 1999..........................
Consolidated statements of changes in shareholders' equity F-8
for the years ended December 31, 2001, 2000 and 1999......
Notes to consolidated financial statements.................. F-9

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of CNH Global N.V.:

We have audited the accompanying consolidated balance sheets of CNH Global
N.V. (a Netherlands Corporation) and its subsidiaries as of December 31, 2001
and 2000, and the related statements of operations, cash flows, and changes in
shareholders' equity for the years then ended. These consolidated financial
statements and the supplemental financial statements referred to below are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and the supplemental
financial statements based on our audits. The financial statements of CNH Global
N.V. for the year ended December 31, 1999, were audited by other auditors whose
report dated February 1, 2000, expressed an unqualified opinion on those
statements.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of CNH Global
N.V. and subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The supplemental financial
statements of Equipment Operations and Financial Services are presented for the
purposes of additional analysis and are not a required part of the basic
consolidated financial statements. This information has been subjected to the
auditing procedures applied in our audits of the basic consolidated financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
February 7, 2002

F-2

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of CNH Global N.V.

We have audited the accompanying consolidated statement of operations, cash
flows and changes in shareholders' equity of CNH Global N.V. (formerly New
Holland N.V.) and its subsidiaries for the year ended December 31, 1999, all
expressed in U.S. Dollars. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial
statements of the Company's wholly owned subsidiary, Case Corporation, which was
acquired on November 12, 1999, which statements reflect total assets of
U.S.$11,613 million at December 31, 1999, and net sales and revenues of U.S.$684
million for the period from date of acquisition through December 31, 1999. Those
statements were audited by other auditors whose report has been furnished to us,
and our opinion expressed herein, insofar as it relates to the amounts included
for Case Corporation, is based solely on the report of the other auditors.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the results of operations and their
cash flows of CNH Global N.V. and its subsidiaries for the year ended December
31, 1999, in conformity with generally accepted accounting principles in the
United States.

Our audits, and the audit of the other auditors, were made for the purpose
of forming an opinion on the consolidated financial statements taken as a whole.
The supplemental financial information for the financial position and results of
operations of the Equipment Operations and Financial Services businesses of CNH
Global N.V. is presented for purposes of additional analysis and is not a
required part of the basic consolidated financial statements. This information
has been subjected to the auditing procedures applied in our audits of the
consolidated financial statements and, in our opinion, based on our audits and
the report of the other auditors, is fairly stated in all material respects in
relation to the basic consolidated financial statements taken as a whole.

PRICEWATERHOUSECOOPERS N.V.

Amsterdam, The Netherlands
February 1, 2000

F-3

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of CNH Global N.V.

We have audited the consolidated balance sheet of Case Corporation (a
Delaware Corporation and wholly owned subsidiary of CNH Global N.V.) and
subsidiaries as of December 31, 1999 and the related statements of operations,
shareholders' investment and cash flows for the period November 12, 1999 to
December 31, 1999. These consolidated financial statements and the supplemental
financial statements referred to below are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements and the supplemental financial statements based on our
audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Case
Corporation and subsidiaries as of December 31, 1999 and the results of their
operations and their cash flows for the period November 12, 1999 to December 31,
1999, in conformity with accounting principles generally accepted in the United
States.

Our audit was made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The supplemental financial
statements of Equipment Operations and Financial Services are presented for
purposes of additional analysis and are not a required part of the basic
consolidated financial statements. This information has been subjected to the
auditing procedures applied in our audit of the basic consolidated financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin
January 24, 2000

F-4

CNH GLOBAL N.V.

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

CONSOLIDATED EQUIPMENT OPERATIONS FINANCIAL SERVICES
------------------------ ------------------------ ------------------
2001 2000 1999 2001 2000 1999 2001 2000 1999
------ ------ ------ ------ ------ ------ ---- ---- ----
(IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE DATA)

REVENUES:
Net sales............................ $9,030 $9,337 $5,949 $9,030 $9,337 $5,949 $ -- $ -- $ --
Finance and interest income.......... 685 704 324 149 68 17 739 799 412
------ ------ ------ ------ ------ ------ ---- ---- ----
9,715 10,041 6,273 9,179 9,405 5,966 739 799 412
COSTS AND EXPENSES:
Cost of goods sold................... 7,586 7,820 4,884 7,586 7,820 4,884 -- -- --
Selling, general and
administrative..................... 1,224 1,277 726 915 1,007 657 314 274 69
Research, development and
engineering........................ 306 338 196 306 338 196 -- -- --
Restructuring and other merger
related costs...................... 104 157 19 97 157 19 7 -- --
Interest expense -- Fiat
affiliates......................... 358 291 79 308 257 47 50 34 32
Interest expense -- other............ 368 502 187 277 285 107 289 376 185
Other, net........................... 193 186 (16) 112 100 (29) 81 86 13
------ ------ ------ ------ ------ ------ ---- ---- ----
10,139 10,571 6,075 9,601 9,964 5,881 741 770 299
EQUITY IN INCOME (LOSS) OF
UNCONSOLIDATED SUBSIDIARIES AND
AFFILIATES:
Financial Services................... 6 2 -- 4 26 72 6 2 --
Equipment Operations................. (14) 4 9 (14) 4 9 -- -- --
------ ------ ------ ------ ------ ------ ---- ---- ----
Income (loss) before taxes and minority
interest............................. (432) (524) 207 (432) (529) 166 4 31 113
Income tax provision (benefit)......... (105) (153) 55 (105) (159) 14 -- 6 41
Minority interest...................... 5 10 4 5 11 4 -- (1) --
------ ------ ------ ------ ------ ------ ---- ---- ----
Net income (loss)...................... $ (332) $ (381) $ 148 $ (332) $ (381) $ 148 $ 4 $ 26 $ 72
====== ====== ====== ====== ====== ====== ==== ==== ====
PER SHARE DATA:
Basic earnings (loss) per share........ $(1.20) $(1.79) $ 0.99
====== ====== ======
Diluted earnings (loss) per share...... $(1.20) $(1.79) $ 0.97
====== ====== ======

The "Consolidated" data in this statement include CNH Global N.V. and its
consolidated subsidiaries and conform to the requirements of SFAS No. 94. The
supplemental "Equipment Operations" (with "Financial Services" on the equity
basis) data in this statement include primarily CNH Global N.V.'s agricultural
and construction equipment operations. The supplemental "Financial Services"
data in this statement include primarily CNH Global N.V.'s financial services
business. Transactions between "Equipment Operations" and "Financial Services"
have been eliminated to arrive at the "Consolidated" data. The accompanying
notes to consolidated financial statements are an integral part of these
Statements of Operations.
F-5

CNH GLOBAL N.V.

CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2001 AND 2000

EQUIPMENT FINANCIAL
CONSOLIDATED OPERATIONS SERVICES
----------------- ----------------- ---------------
2001 2000 2001 2000 2001 2000
------- ------- ------- ------- ------ ------
(IN MILLIONS OF DOLLARS, EXCEPT SHARE DATA)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................... $ 663 $ 886 $ 378 $ 593 $ 285 $ 293
Accounts and notes receivable........................... 4,010 3,637 1,790 1,591 2,466 2,152
Intersegment notes receivable........................... -- -- 524 576 344 195
Inventories............................................. 2,204 2,374 2,204 2,374 -- --
Deferred income taxes................................... 454 436 333 398 121 38
Prepayments and other................................... 100 242 97 79 3 219
------- ------- ------- ------- ------ ------
TOTAL CURRENT ASSETS.................................. 7,431 7,575 5,326 5,611 3,219 2,897
------- ------- ------- ------- ------ ------
Long-Term Receivables..................................... 2,150 2,513 203 224 1,947 2,275
Intersegment Long-Term Notes Receivable................... -- -- 1,112 14 -- --
Property, Plant and Equipment, net........................ 1,354 1,474 1,333 1,455 21 19
OTHER ASSETS:
Investments in unconsolidated subsidiaries and
affiliates............................................ 266 282 235 258 31 24
Investment in Financial Services........................ -- -- 1,147 1,122 -- --
Equipment on operating leases, net...................... 612 643 -- -- 612 643
Goodwill and intangibles................................ 3,647 3,817 3,508 3,669 139 148
Other................................................... 1,752 1,273 1,369 884 383 394
------- ------- ------- ------- ------ ------
TOTAL OTHER ASSETS.................................... 6,277 6,015 6,259 5,933 1,165 1,209
------- ------- ------- ------- ------ ------
TOTAL................................................. $17,212 $17,577 $14,233 $13,237 $6,352 $6,400
======= ======= ======= ======= ====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt -- Fiat
affiliates............................................ $ 732 $ 155 $ 617 $ 88 $ 113 $ 243
Current maturities of long-term debt -- other........... 329 1,494 20 36 311 1,282
Short-term debt -- Fiat affiliates...................... 1,847 2,043 1,373 1,568 474 475
Short-term debt -- other................................ 1,370 2,143 670 961 700 1,182
Intersegment short-term debt............................ -- -- 344 195 524 576
Accounts payable........................................ 1,217 1,256 1,287 1,221 166 97
Restructuring liability................................. 74 251 67 250 7 1
Other accrued liabilities............................... 1,784 1,868 1,650 1,694 144 264
------- ------- ------- ------- ------ ------
TOTAL CURRENT LIABILITIES............................. 7,353 9,210 6,028 6,013 2,439 4,120
------- ------- ------- ------- ------ ------
Long-Term Debt -- Fiat Affiliates......................... 3,311 2,230 3,002 2,045 309 185
Long-Term Debt -- Other................................... 2,274 1,660 1,217 897 1,057 763
Intersegment Long-Term Debt............................... -- -- -- -- 1,112 14
OTHER LIABILITIES:
Pension, postretirement and postemployment benefits..... 1,173 973 1,163 961 10 13
Other................................................... 1,120 916 843 734 277 182
------- ------- ------- ------- ------ ------
TOTAL OTHER LIABILITIES............................... 2,293 1,889 2,006 1,695 287 195
------- ------- ------- ------- ------ ------
Commitments and Contingencies (Note 18)
Minority Interest......................................... 72 74 71 73 1 1
SHAREHOLDERS' EQUITY:
Common Shares, E0.45 par value; authorized 444,444,460
shares, issued 277,683,830 shares in 2001 and 2000.... 143 143 143 143 37 37
Paid-in capital......................................... 2,995 2,991 2,995 2,991 918 856
Treasury stock, 583,532 shares in 2001 and 508,332
shares in 2000, at cost............................... (7) (6) (7) (6) -- --
Retained earnings (deficit)............................. (573) (213) (573) (213) 242 238
Accumulated other comprehensive income (loss)........... (646) (399) (646) (399) (50) (9)
Unearned compensation on restricted shares and options.... (3) (2) (3) (2) -- --
------- ------- ------- ------- ------ ------
TOTAL SHAREHOLDERS' EQUITY............................ 1,909 2,514 1,909 2,514 1,147 1,122
------- ------- ------- ------- ------ ------
TOTAL................................................. $17,212 $17,577 $14,233 $13,237 $6,352 $6,400
======= ======= ======= ======= ====== ======

CNH GLOBAL N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

CONSOLIDATED EQUIPMENT OPERATIONS FINANCIAL SERVICES
------------------------- --------------------------- --------------------------
2001 2000 1999 2001 2000 1999 2001 2000 1999
------- ----- ------- ------- ------- ------- ------ ------- -------
(IN MILLIONS OF DOLLARS)

OPERATING ACTIVITIES:
Net income (loss)........................ $ (332) $(381) $ 148 $ (332) $ (381) $ 148 $ 4 $ 26 $ 72
Adjustments to reconcile net income
(loss) to net cash provided (used) by
operating activities:
Depreciation and amortization.......... 424 429 183 319 336 160 105 93 23
Deferred income tax expense
(benefit)............................ (174) (229) 45 (91) (196) 31 (83) (33) 14
(Gain) loss on disposal of fixed
assets............................... 3 (6) (5) 3 (8) (7) -- 2 2
Undistributed (earnings) losses of
unconsolidated subsidiaries.......... 17 (6) (9) 19 (30) (81) (6) (2) --
Changes in operating assets and
liabilities:
(Increase) decrease in receivables... (264) 1,033 615 (153) 655 (449) (111) 378 948
(Increase) decrease in inventories... 48 36 256 48 36 256 -- -- --
(Increase) decrease in prepayments
and other current assets........... 137 57 (185) (23) 154 (135) 160 (115) (67)
(Increase) decrease in other
assets............................. (155) (66) (441) (239) 15 (147) 84 (99) (150)
Increase (decrease) in payables...... 78 (80) 27 111 (147) 99 (33) 67 5
Increase (decrease) in other accrued
liabilities........................ 5 135 (45) 133 10 (104) (128) 160 84
Increase (decrease) in other
liabilities........................ 217 (10) 555 127 (56) 419 90 46 136
Other, net............................... (186) (104) (59) (190) (103) (176) 4 -- 4
------- ----- ------- ------- ------- ------- ------ ------- -------
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES............................... (182) 808 1,085 (268) 285 14 86 523 1,071
------- ----- ------- ------- ------- ------- ------ ------- -------
INVESTING ACTIVITIES:
Acquisitions and investments, net of cash
acquired............................... (8) (58) (4,394) (62) (84) (4,442) (1) 1 36
Proceeds from sale of businesses and
assets................................. 287 170 86 114 157 83 173 13 3
Expenditures for property, plant and
equipment.............................. (229) (228) (210) (221) (213) (209) (8) (15) (1)
Expenditures for equipment on operating
leases................................. (322) (180) (63) -- -- -- (322) (180) (63)
Other, net............................... -- -- 29 -- -- 30 -- -- (1)
------- ----- ------- ------- ------- ------- ------ ------- -------
NET CASH PROVIDED (USED) BY INVESTING
ACTIVITIES............................... (272) (296) (4,552) (169) (140) (4,538) (158) (181) (26)
------- ----- ------- ------- ------- ------- ------ ------- -------
FINANCING ACTIVITIES:
Intersegment activity.................... -- -- -- (1,102) (318) 363 1,102 318 (363)
Proceeds from issuance of long-term
debt -- Fiat affiliates................ 1,646 1,531 173 1,499 1,967 33 147 45 140
Proceeds from issuance of long-term
debt -- other.......................... 824 -- 95 824 -- 28 -- -- 67
Payment of long-term debt -- Fiat
affiliates............................. (129) (243) (48) (13) -- -- (116) (243) (48)
Payment of long-term debt -- other....... (1,197) (323) (64) (529) (32) (59) (668) (772) (5)
Net increase (decrease) in short-term
revolving credit facilities............ (853) (841) 1,945 (410) (1,349) 2,803 (443) 508 (858)
Capital contributions.................... -- -- -- -- -- -- 55 25 12
Advance to capital....................... -- -- 1,400 -- -- 1,400 -- -- --
Dividends paid........................... (28) (82) (82) (28) (82) (82) -- -- --
Other, net............................... -- (84) (92) -- (79) (92) -- (5) --
------- ----- ------- ------- ------- ------- ------ ------- -------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES............................... 263 (42) 3,327 241 107 4,394 77 (124) (1,055)
------- ----- ------- ------- ------- ------- ------ ------- -------
Effect of foreign exchange rate changes on
cash and cash equivalents................ (32) (50) (71) (19) (46) (71) (13) (4) --
------- ----- ------- ------- ------- ------- ------ ------- -------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.............................. (223) 420 (211) (215) 206 (201) (8) 214 (10)
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR..................................... 886 466 677 593 387 588 293 79 89
------- ----- ------- ------- ------- ------- ------ ------- -------
CASH AND CASH EQUIVALENTS, END OF YEAR..... $ 663 $ 886 $ 466 $ 378 $ 593 $ 387 $ 285 $ 293 $ 79
======= ===== ======= ======= ======= ======= ====== ======= =======

CNH GLOBAL N.V.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

ACCUMULATED
OTHER
RETAINED COMPREHENSIVE COMPREHENSIVE
COMMON PAID-IN TREASURY UNEARNED EARNINGS INCOME INCOME
SHARES CAPITAL STOCK COMPENSATION (DEFICIT) (LOSS) TOTAL (LOSS)
------ ------- -------- ------------ --------- ------------- ------ -------------
(IN MILLIONS OF DOLLARS)

BALANCE, JANUARY 1, 1999........ $ 88 $1,637 $-- $-- $ 184 $(125) $1,784
Comprehensive income:
Net income.................... -- -- -- -- 148 -- 148 $ 148
Translation adjustment........ -- -- -- -- -- (162) (162) (162)
Pension liability
adjustment.................. -- -- -- -- -- 22 22 22
-----
Total..................... $ 8
=====
Dividends declared.............. -- -- -- -- (82) -- (82)
Issuance of restricted shares... -- 8 -- (8) -- -- --
---- ------ --- --- ----- ----- ------
BALANCE, DECEMBER 31, 1999...... 88 1,645 -- (8) 250 (265) 1,710
Comprehensive income:
Net income (loss)............. -- -- -- -- (381) -- (381) $(381)
Translation adjustment........ -- -- -- -- -- (133) (133) (133)
Pension liability
adjustment.................. -- -- -- -- -- (1) (1) (1)
-----
Total..................... $(515)
=====
Dividends declared.............. -- -- -- -- (82) -- (82)
Capital contributions on stock
issuance...................... 55 1,345 -- -- -- -- 1,400
Recognition of compensation on
restricted stock.............. -- -- -- 1 -- -- 1
Issuance of restricted shares,
net of forfeitures............ -- 1 (6) 5 -- -- --
---- ------ --- --- ----- ----- ------
BALANCE, DECEMBER 31, 2000...... 143 2,991 (6) (2) (213) (399) 2,514
Comprehensive income:
Net income (loss)............. -- -- -- -- (332) -- (332) $(332)
Translation adjustment........ -- -- -- -- -- (110) (110) (110)
Pension liability adjustment
(net of tax $89 million).... -- -- -- -- -- (117) (117) (117)
Derivative financial
instruments:
Gains (losses) deferred (net
of tax $12 million)....... -- -- -- -- -- (47) (47) (47)
(Gains) losses reclassified
to earnings............... -- -- -- -- -- 27 27 27
-----
Total..................... $(579)
=====
Dividends declared.............. -- -- -- -- (28) -- (28)
Recognition of compensation on
restricted stock.............. -- -- -- 2 -- -- 2
Issuance of restricted shares,
net of forfeitures............ -- -- (1) 1 -- -- --
Issuance of stock options....... -- 4 -- (4) -- -- --
---- ------ --- --- ----- ----- ------
BALANCE, DECEMBER 31, 2001...... $143 $2,995 $(7) $(3) $(573) $(646) $1,909
==== ====== === === ===== ===== ======

The accompanying notes to consolidated financial statements are an integral part
of these Statements of Changes in Shareholders' Equity.

F-8

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: NATURE OF OPERATIONS

CNH Global N.V. ("CNH"), formerly New Holland N.V., is incorporated in The
Netherlands under Dutch law. CNH's Equipment Operations manufacture, market and
distribute a full line of agricultural and construction equipment on a worldwide
basis. CNH's Financial Services operations offers a broad array of financial
services products, including retail financing for the purchase or lease of new
and used CNH and other manufacturers' products and other retail financing
programs. To facilitate the sale of its products, CNH offers wholesale financing
to dealers.

CNH is controlled by Fiat Netherlands Holding N.V., a wholly owned
subsidiary of Fiat S.p.A. ("Fiat"), a company organized under the laws of Italy,
which owned approximately 84.6% of the outstanding shares of CNH at December 31,
2001.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated financial statements present the operating results,
financial position and cash flows of CNH as of and for the year ended December
31, 2001. The comparability of CNH's operating results for the years ended
December 31, 2001 and 2000, with 1999 data, is significantly affected by the
full year impact of (1) the inclusion of Case Corporation's ("Case's") results
of operations; (2) the incremental financing and other costs related to the
merger; (3) the amortization of fair value adjustments to the Case assets
acquired and liabilities assumed; and (4) the amortization of goodwill.
Reference is made to Note 3, "Acquisitions and Divestitures of Businesses and
Investments" for further information regarding the acquisition of Case.

PRINCIPLES OF CONSOLIDATION AND PRESENTATION

CNH has prepared the accompanying consolidated financial statements in
accordance with accounting principles generally accepted in the United States or
U.S. GAAP. The accompanying financial statements reflect the historical
operating results of CNH, including the results of operations of Case since the
merger date. CNH has prepared its consolidated financial statements in U.S.
Dollars and, unless otherwise indicated, all financial data set forth in these
financial statements is expressed in U.S. Dollars. In accordance with Statement
of Financial Accounting Standards ("SFAS") No. 94, "Consolidation of All
Majority-Owned Subsidiaries," the financial statements include the accounts of
CNH's majority-owned subsidiaries, except where control is expected to be
temporary, and reflect the interests of the minority owners of the subsidiaries
that are not fully owned for the periods presented, as applicable. The
operations and key financial measures and financial analysis differ
significantly for manufacturing and distribution businesses and financial
services businesses; therefore, management believes that certain supplemental
disclosures are important in understanding the consolidated operations and
financial results of CNH. In addition, CNH's principal competitors present
supplemental data on a similar basis. Therefore, users of CNH's financial
statements can use the supplemental data to make meaningful comparisons of CNH
and its principal competitors. The financial statements reflect the consolidated
results of CNH and also include, on a separate and supplemental basis, the
consolidation of CNH's equipment operations and financial services operations as
follows:

Equipment Operations -- The financial information captioned "Equipment
Operations" reflects the consolidation of all majority-owned subsidiaries except
for CNH's Financial Services business. CNH's Financial Services business has
been included using the equity method of accounting whereby the net income and
net assets of CNH's financial services business are reflected, respectively, in
"Equity in Income (Loss) of Unconsolidated Subsidiaries and
Affiliates -- Financial Services" in the accompanying statements of operations,
and in "Investment in Financial Services" in the accompanying balance sheets.

F-9

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Financial Services -- The financial information captioned "Financial
Services" reflects the consolidation of CNH's financial services business.

All significant intercompany transactions, including activity within and
between "Equipment Operations" and "Financial Services," have been eliminated in
deriving the consolidated financial data. Intersegment notes receivable,
intersegment long-term notes receivable, intersegment short-term debt and
intersegment long-term debt represent intersegment financing between Equipment
Operations and Financial Services.

Investments in unconsolidated subsidiaries and affiliates that are at least
20% owned, or where CNH exercises significant influence, are accounted for using
the equity method. Under this method, the investment is initially recorded at
cost and is increased or decreased by CNH's proportionate share of the entity's
respective profits or losses, and decreased by amortization of any related
goodwill. Dividends received from these entities reduce the carrying value of
the investments. Investments wherein CNH owns less than 20% and where CNH does
not exercise significant influence are stated at lower of cost or net realizable
value.

RECLASSIFICATIONS

Certain reclassifications of prior year amounts have been made in order to
conform with the current year presentation.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reported period. Actual results could differ
from those estimates.

REVENUE RECOGNITION

Equipment Operations record sales of equipment and replacement parts when
title and all risks of ownership have transferred to the independent dealer or
other customer. In the United States and the majority of international
locations, equipment and replacement parts title transfers to the dealer upon
shipment. In Australia and some other international locations, certain equipment
and replacement parts are shipped to dealers on a consignment basis under which
title and risk of ownership are not transferred to the dealer. Under these
circumstances sales are not recorded until a retail customer has purchased the
goods. Dealers may not return equipment or replacement parts while the
applicable dealer contract remains in place. In the U.S. and Canada, if a dealer
contract is terminated for any reason, CNH is obligated to repurchase new
equipment from the dealer. CNH has credit limits and other safeguards in place
to monitor the financial stability of its dealers. In cases where dealers are
unable to pay for equipment or parts, CNH attempts to have these goods returned
or negotiate a settlement of the outstanding receivables. CNH may provide
certain sales incentives to dealers to stimulate sales to retail customers. The
expense of such incentives is recorded as a deduction in arriving at net sales
at the time the sale is recognized by CNH.

For all sales, no significant uncertainty exists surrounding the
purchaser's obligation to pay for the equipment and replacement parts and CNH
records appropriate provisions for doubtful receivables as necessary.
Receivables are due upon the earlier of payment terms discussed below or sale to
the retail customer. Fixed payment schedules exist for all sales to dealers but
payment terms vary by geographic market and product line. In connection with
these payment terms, CNH offers wholesale financing to many of its dealers
including interest-free financing for specified periods of time which also vary
by

F-10

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

geographic market and product line. Interest is charged to dealers subsequent to
the completion of the interest free period. Interest free periods average 4.5
months on approximately 65% of sales for the agricultural equipment business and
3.0 months on approximately 74% of sales for the construction equipment
business. Sales to dealers that do not qualify for an interest free period are
subject to payment terms of 30 days or less.

Financial Services records earned finance charges (interest income) on
retail and other notes receivables and finance leases using the effective
interest method.

MODIFICATION PROGRAMS AND WARRANTY COSTS

The costs of major programs to modify products in the customer's possession
are accrued when these costs can be identified and quantified. Normal warranty
costs are recorded at the time of sale.

ADVERTISING

CNH expenses advertising costs as incurred. Advertising expense totaled $78
million, $96 million and $51 million, for the years ended December 31, 2001,
2000 and 1999, respectively.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred.

FOREIGN CURRENCY TRANSLATION

CNH's non-U.S. subsidiaries and affiliates maintain their books and
accounting records using local currency as the functional currency, except for
those operating in hyperinflationary economies. Assets and liabilities of
non-U.S. subsidiaries are translated into U.S. Dollars at period-end exchange
rates, and net exchange gains or losses resulting from such translation are
included in "Accumulated other comprehensive income (loss)" in the accompanying
balance sheets. Income and expense accounts of non-U.S. subsidiaries are
translated at the average exchange rates for the period, and gains and losses
from foreign currency transactions are included in net income (loss) in the
period during which they arise. The U.S. Dollar is used as the functional
currency for subsidiaries and affiliates operating in highly inflationary
economies for which both translation adjustments and gains and losses on foreign
currency transactions are included in the determination of net income (loss) in
the period during which they arise.

The Turkish Lira was significantly devalued against the U.S. Dollar during
the first quarter of 2001. As a result CNH recorded a net exchange loss of
approximately $20 million related to its investments in New Holland Trakmak
Tracktor Ve Ziraat Makineleri A.S. and Turk Traktor Ve Ziraat Makineleri A.S.

The Brazilian Real was significantly devalued against the U.S. Dollar
during the first quarter of 1999. As a result of its unhedged foreign exchange
exposure in its Brazilian companies, CNH recorded a net exchange loss of
approximately $15 million. Also in the first quarter of 1999, CNH reorganized
its corporate activities for tax and treasury planning purposes and transferred
U.S. Dollar deposits to a foreign subsidiary with Euro functional currency. As a
result of the translation of the monetary asset described above during this
period, an exchange gain of approximately $30 million was recognized. The
aforementioned net foreign exchange gains and losses are reflected in "Other,
net" in the accompanying statements of operations.

ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities," which
has been amended by SFAS

F-11

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

No. 137, "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of SFAS No. 113, an amendment of
SFAS No. 133" and SFAS No. 138, "Accounting for Certain Derivative Instruments
and Certain Hedging Activities, an amendment of SFAS No. 133." SFAS No. 133 is
effective for fiscal years beginning after June 15, 2000 and will be applied to:
(a) derivative instruments; and (b) certain derivative instruments embedded in
hybrid contracts that were issued, acquired or substantively modified after
December 31, 1998. SFAS No. 133 requires that every derivative instrument be
recorded on the balance sheet as an asset or liability measured at its fair
value and that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met.

We adopted SFAS No. 133 on January 1, 2001. SFAS No. 133 requires that as
of the date of initial adoption, the difference between the fair market value of
derivative instruments recorded on the balance sheet and the previous carrying
amount of the those derivatives be reported in net income or other comprehensive
income, as appropriate, as the cumulative effect of a change in accounting
principle in accordance with Accounting Principles Board Opinion 20, "Accounting
Changes." To the extent that these amounts are recorded in other comprehensive
income, they will be reversed into earnings into the period in which the hedged
transaction occurs. Adoption of this accounting standard resulted in cumulative
net of tax reductions in other comprehensive income of approximately $9 million
as of January 1, 2001 and had no significant impact on net income. The adoption
also resulted in an increase to assets and liabilities recorded on the balance
sheet of approximately $9 million and $18 million, respectively.

In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities -- A
Replacement of FASB Statement 125". SFAS No. 140 is effective for transfers
occurring after March 31, 2001 and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000. The
Company adopted the disclosure provisions related to the securitization of
financial assets on December 31, 2000. All remaining provisions were adopted in
the second quarter of 2001. This adoption did not have a significant impact on
us.

In January 2001, the Emerging Issues Task Force issued EITF Issue No.
99-20, "Recognition of Interest Income and Impairment on Purchased and Retained
Beneficial Interests in Securitized Financial Assets". According to this
pronouncement, we must recognize cash flows in excess of the initial
investment's carrying value as interest income using the effective yield method.
Beneficial interests must be measured at fair value with other than temporary
impairments being recorded in income. We adopted this pronouncement in April
2001 and adoption of this pronouncement did not have a significant impact on our
financial position or results of operations.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations." SFAS
No. 141 addresses financial accounting and reporting for business combinations.
This Statement requires that all business combinations be accounted for by the
purchase method. As required by SFAS No. 141, CNH adopted this new accounting
standard for all business combinations initiated after June 30, 2001. The
adoption of SFAS No. 141 did not have a material impact on CNH's financial
statements.

F-12

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

indicate the carrying amount may be impaired. Impairment testing for goodwill is
done at a reporting unit level. Currently, CNH has identified three reporting
units under the criteria set forth by SFAS No. 142: Agricultural Equipment,
Construction Equipment and Financial Services. CNH is currently performing the
required transitional impairment tests of goodwill and indefinite-lived
intangible assets. SFAS No. 142 prescribes a two-phase process for impairment
testing of goodwill. The first phase, required to be completed by June 30, 2002,
tests for impairment. The second phase (if necessary), required to be completed
by December 31, 2002, measures the amount of impairment. CNH has engaged an
independent third-party valuation firm to assist with the fair value
determinations of its reporting units and indefinite-lived intangible assets. To
determine fair value, CNH plans to rely on two valuation models: guideline
company method and discounted cash flow. CNH has not yet determined the
financial impact, if any, of these transitional impairment tests. During 2001
CNH continued to evaluate the recoverability of goodwill in compliance with SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of."

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 addresses financial accounting and
reporting for obligations associated with the retirement of tangible, long-lived
assets and the associated asset retirement costs. This Statement requires that
the fair value of a liability for an asset retirement obligation be recognized
in the period in which it is incurred by capitalizing it as part of the carrying
amount of the long-lived assets. As required by SFAS No. 143, CNH will adopt
this new accounting standard on January 1, 2003. CNH believes the adoption of
SFAS No. 143 will not have a material impact on its financial statements.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This Statement establishes a
single accounting model for the impairment or disposal of long-lived assets. As
required by SFAS No. 144, CNH will adopt this new accounting standard on January
1, 2002. CNH believes the adoption of SFAS No. 144 will not have a material
impact on its financial statements.

CASH AND CASH EQUIVALENTS

Cash equivalents are comprised of all highly liquid investments with an
original maturity of three months or less. Cash equivalents also include amounts
deposited with affiliates, principally Fiat and its affiliates, which are
repayable to CNH upon one day's notice. The carrying value of cash equivalents
approximates fair value because of the short maturity of these investments.

RECEIVABLES

Receivables are recorded at face value, net of allowances for doubtful
accounts.

INVENTORIES

Inventories are stated at the lower of cost or net realizable value. Cost
is determined by the first-in, first-out (FIFO) method. The cost of finished
goods and work in progress includes the cost of raw materials, other direct
costs and production overheads. Net realizable value is the estimate of the
selling price in the ordinary course of business, less the cost of completion
and selling. Provision is made for obsolete and slow-moving inventories.

F-13

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

EQUIPMENT ON OPERATING LEASES

Financial Services purchases equipment that is leased to retail customers
under operating leases from dealers. Income from operating leases is recognized
over the term of the lease. Financial Services' investment in operating leases
is based on the purchase price paid for the equipment. The investment is
depreciated on a straight-line basis over the term of the lease to the estimated
residual value at lease termination which is calculated at the inception of the
lease date. Realization of the residual values is dependent on Financial
Services' future ability to market the equipment under the then prevailing
market conditions. CNH continually evaluates whether events and circumstances
have occurred which impact the estimated residual values of equipment on
operating leases. Although realization is not assured, management believes that
the estimated residual values are realizable. Expenditures for maintenance and
repairs are the responsibility of the lessee.

GOODWILL AND INTANGIBLES

Goodwill represents the excess of the purchase price paid plus the
liabilities assumed over the fair value of the tangible and identifiable
intangible assets purchased. Goodwill is amortized on a straight-line basis over
10 to 30 years. Goodwill relating to acquisitions of unconsolidated subsidiaries
and affiliates is included in "Investments in unconsolidated subsidiaries and
affiliates" in the accompanying balance sheets, and the related amortization is
charged to "Equity in Income (Loss) of Unconsolidated Subsidiaries and
Affiliates" in the accompanying statements of operations. CNH continually
evaluates whether events and circumstances have occurred that indicate the
remaining estimated useful life of goodwill may warrant revision or that the
remaining balance of goodwill may not be recoverable. When factors indicate that
goodwill should be evaluated for possible impairment, CNH uses an estimate of
the undiscounted cash flows over the remaining life of the goodwill in measuring
whether the goodwill is recoverable.

At December 31, 2001 and 2000, goodwill totaled $3,146 million and $3,183
million, respectively, while accumulated amortization of goodwill was $336
million and $215 million at those respective dates. Amortization expense totaled
$116 million, $106 million and $20 million for the years ended December 31,
2001, 2000 and 1999, respectively.

Negative goodwill represents the excess of the fair value of the tangible
and identifiable intangible assets purchased, with the fair value of non-current
assets having been reduced to zero, over the purchase price paid plus
liabilities assumed. Negative goodwill is being amortized on a straight-line
basis over approximately 3 years. At December 31, 2001 and 2000, negative
goodwill, net of accumulated amortization, totaled $0 and $33 million,
respectively.

Intangibles consist primarily of acquired dealer networks, trademarks,
product drawings and patents, and are being amortized on a straight-line basis
over 5 to 30 years. At December 31, 2001 and 2000, intangibles, net of
accumulated amortization, totaled $837 million and $849 million, respectively.
Amortization expense totaled $39 million, $36 million and $6 million for the
years ended December 31, 2001, 2000 and 1999, respectively.

Reference is made to Note 3, "Acquisitions and Divestitures of Businesses
and Investments," for further information regarding goodwill and intangibles.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost, less accumulated
depreciation. Expenditures for improvements that increase asset values and
extend useful lives are capitalized. Expenditures for

F-14

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

maintenance and repairs are expensed as incurred. Depreciation is provided on a
straight-line basis over the estimated useful lives of the respective assets as
follows:

Buildings and improvements.................................. 10-40 years
Plant and machinery......................................... 5-16 years
Other equipment............................................. 3-10 years

CNH capitalizes interest costs as part of the cost of constructing certain
facilities and equipment. CNH capitalizes interest costs only during the period
of time required to complete and prepare the facility or equipment for its
intended use. The amount of interest capitalized in 2001, 2000 and 1999 is not
significant in relation to the consolidated financial results.

CNH assesses the recoverability of assets to be held and used by comparing
the carrying amount of an asset to future undiscounted net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceed the fair value of the assets, based on a discounted
cash flow analysis.

SOFTWARE DEVELOPED FOR INTERNAL USE

CNH defines internal-use software as software acquired or internally
developed or modified solely to meet the internal needs of CNH. Internal and
external costs incurred during the preliminary project stage are expensed as
incurred. Capitalization of such costs begins upon completion of the preliminary
project stage, assessment of technological feasibility and upon management's
authorization and commitment to fund the software project. Capitalization ceases
at the point at which the computer software project is substantially complete
and the software is ready for its intended use. Internal and external costs for
data conversion, training and maintenance are expensed as incurred, and overhead
costs are not capitalized. The capitalized costs of software acquired or
developed for internal use are amortized on a straight-line basis over the
useful life of the software, generally not exceeding 5 years.

INCOME TAXES

CNH follows an asset and liability approach for financial accounting and
reporting for income taxes. CNH recognizes a current tax liability or asset for
the estimated taxes payable or refundable on tax returns for the current year. A
deferred tax liability or asset is recognized for the estimated future tax
effects attributable to temporary differences and carryforwards. The measurement
of current and deferred tax liabilities and assets is based on provisions of the
enacted tax law; the effects of future changes in tax laws or rates are not
anticipated. The measurement of deferred tax assets is reduced, if necessary, by
the amount of any tax benefits that, based on available evidence, are more
likely than not expected to be realized.

RETIREMENT PROGRAMS

CNH operates numerous defined benefit and defined contribution pension
plans, the assets of which are held in separate trustee-administered funds. The
pension plans are generally funded by payments from employees and CNH. The cost
of providing pension and other postretirement benefits is based upon actuarial
valuations and is charged to income during the period of the employees' service.
The liability for termination indemnities is accrued in accordance with labor
legislation in each country where such benefits are required.

F-15

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DERIVATIVES

The Company uses derivative financial instruments to manage its interest
rate exposures and foreign currency exposures. CNH does not hold or issue such
instruments for trading purposes. Hedge accounting is applied if the changes in
the fair market value of the derivative instruments are highly correlated to
changes in the fair market value of the anticipated transactions and recognized
assets and liabilities. As these instruments are primarily accounted for as
hedges of anticipated transactions or recognized assets and liabilities,
unrealized fair value gains and losses are not recognized in earnings as of the
balance sheet date to the extent that the hedge is effective. The effective
portion of unrealized gains and losses are recognized in earnings in the period
in which the hedged transaction affects earnings. Subsequent to the adoption of
SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" on
January 1, 2001, the fair value of all derivatives are recorded as assets or
liabilities on the Consolidated Balance Sheets.

Reference is made to Note 15, "Financial Instruments," for further
information regarding CNH's use of derivative financial instruments.

NOTE 3: ACQUISITIONS AND DIVESTITURES OF BUSINESSES AND INVESTMENTS

ACQUISITIONS

Flexi-Coil Ltd.

On January 4, 2000, CNH completed the acquisition of the remaining 61%
ownership interests in Flexi-Coil Ltd. Prior to that date, CNH had maintained a
39% ownership interest in Flexi-Coil Ltd. Flexi-Coil designs, manufactures and
sells various agricultural implements used for planting, seeding, tillage and
spraying. The purchase price for the additional 61% ownership interest was C$74
million. The acquisition was accounted for as a step purchase and, accordingly,
the accompanying consolidated financial statements included the results of
operations of Flexi-Coil Ltd. from January 4, 2000. The total purchase price
paid plus the liabilities assumed was C$257 million. The goodwill associated
with the acquisition of Flexi-Coil Ltd. totalled C$122 million and is being
amortized on a straight-line basis over 30 years.

Case

On November 12, 1999, New Holland N.V. ("New Holland") acquired Case
Corporation ("Case") for $4,600 million in cash, including related costs and
expenses, pursuant to an agreement and plan of merger dated as of May 15, 1999,
by and among Case, New Holland, the merging subsidiary and Fiat. As a result of
the merger, Case as the surviving company, became a wholly owned subsidiary of
New Holland. Effective with the closing of the merger, New Holland changed its
name to CNH. CNH financed the merger with total borrowings of $3,000 million
under short-term credit facilities, an advance to capital of $1,400 million from
New Holland Holdings N.V. and available cash of $200 million. Reference is made
to Note 11, "Principal Shareholder's Advance to Capital."

The merger was accounted for as a purchase and, accordingly, the
accompanying consolidated financial statements include the results of operations
of Case as of the merger date. Case engaged in two types of operations. Case's
equipment operations manufacture, market and distribute a full line of
agricultural equipment and light to medium sized construction equipment on a
worldwide basis. Case's financial services business provided financing for
retail installment sales contracts and leases, commercial lending within the
equipment industry, multiple lines of insurance products and offers a
private-label credit card.

The total purchase price of $4,600 million was allocated to the assets and
liabilities of Case based upon their respective fair values, including
identifiable intangibles consisting of acquired trademarks, dealer networks,
product drawings and patents, with the remainder allocated to goodwill. The
purchase price paid

F-16

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

plus the liabilities assumed exceeded the fair value of the tangible and
identifiable intangible assets purchased by $2,400 million, on a preliminary
basis. During 2000, CNH finalized its purchase accounting for the Case
acquisition resulting in additional goodwill of $376 million. The additional
goodwill resulted primarily from additional restructuring liabilities related to
the Case business and fair value adjustments to property, plant and equipment.
During 2001, CNH reversed $31 million of purchase accounting reserves through
goodwill, primarily due to changes in estimates related to involuntary employee
severance and closing, selling and downsizing existing facilities. Reference is
made to Note 4, "Restructuring," for further information regarding CNH's
restructuring programs. The goodwill associated with Case's equipment operations
of $2,616 million and Case's financial services business of $129 million is
being amortized on a straight-line basis over 30 and 20 years, respectively. The
fair value adjustments to Case's historical balance sheet were as follows (in
millions):

PURCHASE
PRICE
ALLOCATION
----------

Net assets at historical cost*.............................. $2,057
Fair value adjustments:
Identifiable intangibles.................................. 817
Property, plant and equipment............................. (52)
Inventory................................................. 39
Elimination of historical goodwill........................ (292)
Deferred income taxes..................................... (100)
Pension, postretirement and postemployment benefits....... (167)
Restructuring liability related to the Case business...... (284)
Accounts and notes receivable............................. (29)
Other, net................................................ (134)
------
1,855
Goodwill.................................................... 2,745
------
Total..................................................... $4,600
======

---------------

* Includes liabilities assumed of $6,622 million.

CNH has prepared the following unaudited pro forma statements of operations
to illustrate the estimated effects of the acquisition of Case by New Holland as
if this transaction had occurred as of the beginning of the period presented.
The pro forma data reflects the impact of the preliminary fair market value
adjustments to the Case assets and liabilities acquired, as well as incremental
interest expense related to the merger financing. These adjustments are being
amortized over the periods estimated to be benefited and primarily include
additional amortization of the fair value adjustments for acquired receivables
and inventories, identifiable intangibles and goodwill. The pro forma data does
not include the impact of the final purchase accounting adjustments recorded
during 2000. The impact of the final purchase accounting adjustments on the
consolidated pro forma statements of operations is considered to be nominal.

F-17

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999

1999
---------------
(IN MILLIONS OF
DOLLARS, EXCEPT
PER SHARE
DATA)
(UNAUDITED)

Revenues:
Net sales................................................. $9,929
Finance and interest income............................... 744
------
10,673
Costs and Expenses:
Cost of goods sold........................................ 8,320
Selling, general and administrative....................... 1,315
Research, development and engineering..................... 357
Restructuring and other merger related costs.............. 19
Interest expense.......................................... 794
Other, net................................................ 150
------
10,955
Equity in income of unconsolidated subsidiaries and
affiliates................................................ 1
------
Income (loss) before taxes and minority interest............ (281)
Income tax provision (benefit).............................. (97)
Minority interest........................................... 4
------
Net income (loss)........................................... $ (188)
======
Per share data:
Basic earnings (loss) per share........................... $(1.26)
======
Diluted earnings (loss) per share......................... $(1.26)
======

CNH has presented this unaudited pro forma financial data for illustrative
purposes only. This pro forma data is not necessarily indicative of (1) the
results of operations that would have occurred had the transaction been
effective as of the beginning of the year presented, or (2) the results of
operations that CNH will attain in the future. In addition, the pro forma
financial data does not reflect any synergies or cost savings that may occur as
a result of the merger.

The pro forma financial data does not include the impact of any regulatory
divestitures as required by the European Commission or the U.S. Department of
Justice pursuant to the merger.

DIVESTITURES

During April 2001, CNH sold its Carr Hill Works, Doncaster, England,
components facility to Graziano Trasmissioni S.p.A.

In January 2001, CNH sold its tractor manufacturing plant in Doncaster,
England, to Landini S.p.A.

During 2000, CNH entered into an OEM agreement with Lindner whereby CNH
would build Steyr model M-948 and M-958 (and equivalent Case IH models) for sale
by Lindner.

F-18

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In December 2000, CNH completed the divestiture of its Fermec Holdings
Limited construction equipment business to Terex Corporation. Terex acquired the
Manchester, England, plant, and the Fermec loader/backhoe and industrial tractor
product lines.

In July 2000, CNH completed the sale of its New Holland Versatile, Genesis
and G/70 series four-wheel and two-wheel drive tractor lines, together with the
Winnipeg, Canada, plant in which they are made, to Buhler Versatile Inc., a
subsidiary of Buhler Industries Inc.

In May 2000, CNH completed the sale of its interest in Hay and Forage
Industries to AGCO Corporation.

In May 2000, CNH completed the sale of its large square balers assembled in
Neustadt, Germany to Landini S.p.A.

In May 2000, CNH completed the sale of selected agricultural equipment
assets to ARGO S.p.A., the holding company of Landini S.p.A. The transaction
includes a plant in Breganze, Italy, and the Laverda line of non-hillside
combines that are produced there.

NOTE 4: RESTRUCTURING

CNH records restructuring liabilities at the time management approves and
commits CNH to a restructuring plan that identifies all significant actions to
be taken and the expected completion date of the plan is within a reasonable
period of time. The restructuring liability includes those restructuring costs
that (1) can be reasonably estimated, (2) are not associated with or do not
benefit activities that will be continued, and (3) are not associated with or
are not incurred to generate revenues after the plan's commitment date.
Restructuring costs are incurred as a direct result of the plan and (1) are
incremental to other costs incurred by CNH in the conduct of its activities
prior to the commitment date, or (2) existed prior to the commitment date under
a contractual obligation that will either continue after the exit plan is
completed with no economic benefit to the enterprise or reflect a penalty to
cancel a contractual obligation.

1998 RESTRUCTURING PROGRAM

In 1998, CNH reviewed its manufacturing, selling and administrative
processes in an effort to strengthen its competitive position and to better
align its operations in response to current economic and market conditions. As a
result, CNH announced a pretax restructuring charge of $40 million for severance
and other costs related to headcount reductions. CNH refers to these actions as
the 1998 Restructuring Program. The 1998 Restructuring Program included
termination costs to eliminate approximately 420 salaried and 600 hourly
positions. These termination payments included the cost of severance and
contractual benefits in accordance with collective bargaining agreements and CNH
policy, and also included costs for outplacement services, medical and
supplemental vacation and retirement payments.

In connection with the 1998 acquisition of Orenstein & Koppel
Aktiengesellschaft ("O&K"), CNH recorded additional restructuring reserves of
approximately $29 million for employee and dealer termination costs. These costs
were recorded in conjunction with the allocation of the initial O&K purchase
price.

In 1999, CNH also recorded additional restructuring charges of $19 million
related to the remaining headcount actions contemplated under the 1998
Restructuring Program. These charges primarily represent severance and other
related costs for the elimination of approximately 340 of the remaining salaried
positions under the original plan. In 1999, CNH expended $52 million for
severance costs as contemplated under its restructuring programs. In 1999, CNH
reversed $26 million of purchase accounting reserves, as

F-19

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CNH was unable to complete the required actions within one year of the
acquisition. The reversal of the $26 million restructuring reserve was recorded
against the initial O&K purchase accounting goodwill.

In 2000, CNH expended $12 million for severance and other employee costs as
contemplated under the 1998 Restructuring Program. The 1998 Restructuring
Program is complete and there are no other actions expected under this program.

The following tables set forth the CNH activities for the years ended
December 31, 1999 and 2000 under the 1998 Restructuring Program (in millions):

Severance and other employee-
related costs................ $71 $19 $(52) $(26) $12
Cost related to
closing/selling/downsizing
existing facilities.......... -- -- -- -- --
--- --- ---- ---- ---
Total restructuring.......... $71 $19 $(52) $(26) $12
=== === ==== ==== ===

Severance and other employee-
related costs................ $12 $-- $(12) $-- $--
Cost related to
closing/selling/downsizing
existing facilities.......... -- -- -- -- --
--- -- ---- -- --
Total restructuring....... $12 $-- $(12) $-- $--
=== == ==== == ==

---------------
* Includes currency translation.

CNH MERGER INTEGRATION PLAN

As part of its merger integration, CNH has evaluated the divestiture or
closure of certain manufacturing locations and parts depots. Through the
consolidation of all functional areas, including the impact of divestiture
actions required by the European and U.S. regulatory agencies in connection with
the merger, CNH expects to significantly reduce its worldwide workforce. The CNH
Merger Integration Plan takes into consideration duplicate capacity and other
synergies including purchasing and supply chain management, and selling, general
and administrative functions. These restructuring actions will be recorded and
implemented through at least 2004.

The CNH Merger Integration Plan is comprised of two separate programs, the
Case Purchase Accounting Restructuring Program and the CNH Merger Integration
Program. The Case Purchase Accounting Restructuring Program encompasses all
actions of the CNH Merger Integration Plan related to Case that qualify for
purchase accounting treatment under EITF 95-3. The CNH Merger Integration
Program encompasses all other actions of the CNH Merger Integration Plan that
qualify for the establishment of restructuring reserves under primarily EITF
94-3 and SFAS No. 121.

F-20

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CASE PURCHASE ACCOUNTING RESTRUCTURING PROGRAM

As of December 31, 1999, CNH had recorded $90 million in merger-related
restructuring reserves for severance and other employee-related costs associated
with identified headcount reductions as part of CNH's initial plan to integrate
the Case operations. These costs were recorded in conjunction with the
preliminary allocation of the Case purchase price. During 2000, CNH recorded an
additional $225 million in merger integration restructuring reserves related to
Case's operations, net of changes in estimates. These costs were recorded in
conjunction with the finalization of the Case Purchase Accounting Restructuring
Program. The additional merger integration restructuring reserves primarily
relate to severance and other employee-related costs and costs related to
closing, selling, and downsizing existing facilities. During 2001, CNH reversed
$31 million in merger integration restructuring reserves related to Case's
operations to goodwill. More employees left CNH voluntarily than was originally
estimated and the cost to exit certain facilities was lower than anticipated.

The severance and other employee-related costs reserved for in 2000
amounted to $78 million and relate to severance costs required to reduce the
remainder of the approximately 2,200 Case employees identified in the CNH Merger
Integration Plan. CNH eliminated administrative and back office personnel, as
well as manufacturing personnel in the facilities that CNH has closed or
downsized. These termination accruals included the cost of severance and
contractual benefits in accordance with collective bargaining agreements, other
agreements and CNH policy, and also included costs for outplacement services,
medical and supplemental vacation and retirement payments.

In 2000, CNH expended $61 million of termination payments related to
severance and other employee-related costs. In addition, CNH reversed $39
million of severance and other employee-related costs to goodwill, as more
employees left CNH voluntarily than was originally estimated resulting in a
lower cost than anticipated. As of December 31, 2000, CNH had terminated
approximately 1,500 Case employees related to the Case Purchase Accounting
Restructuring Program.

In 2001, CNH expended $50 million of termination payments related to
severance and other employee-related costs under programs which were reserved in
2000. In addition, CNH reversed $12 million of severance and other
employee-related costs to goodwill, as more employees left CNH voluntarily than
was originally estimated resulting in a lower cost than anticipated. As of
December 31, 2001, CNH had terminated approximately 2,200 Case employees related
to the Case Purchase Accounting Restructuring Program.

Reserves for costs related to closing, selling, and downsizing existing
facilities of $185 million were taken due to required divestitures, excess
capacity and duplicate facilities, and primarily relate to the following actions
of the Case Purchase Accounting Restructuring Program:

- Sale of Case's CX and MXC product lines and the Doncaster, United
Kingdom, plant in which they are assembled and its related component
manufacturing plant in St. Dizier, France;

- Sale of Case's large square balers product line which is assembled in
Neustadt, Germany;

F-21

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

- Sale of Case's Fermec brand loader/backhoe and industrial tractor product
lines and the Fermec manufacturing plant in Manchester, United Kingdom;

- Sale of Case's ownership interest in Hay and Forage Industries in
Hesston, Kansas, a 50% joint venture with AGCO Corporation that produces
hay and forage implements;

- Closure of Case's Concord plant in Fargo, North Dakota, which produces
air seeders;

- Closure of Case's manufacturing plant in Sorocaba, Brazil;

- Sale of Case's Carr Hill Works, Doncaster, England, components facility;

- Closure of Case's Racine, Wisconsin, tractor manufacturing facility; and

- Other actions which take into consideration duplicate capacity and other
synergies including purchasing and supply chain management, research and
development and selling, general and administrative functions related to
Case's operations.

In 2000, CNH utilized $72 million of costs related to
closing/selling/downsizing existing facilities related to the programs described
above.

In 2001, CNH utilized $91 million of costs related to
closing/selling/downsizing existing facilities related to the programs described
above which were reserved in 2000. In addition, CNH reversed $19 million of
costs related to closing/selling/downsizing existing facilities to goodwill, as
the cost to exit certain facilities was lower than anticipated.

The following table sets forth the CNH activities for the years ended
December 31, 1999, 2000 and 2001 under the Case Purchase Accounting
Restructuring Program (in millions):

1999 ACTIVITY
-------------------------------------------------
BALANCE AT BALANCE AT
DECEMBER 31, RESERVES CHANGES IN DECEMBER 31,
1998 ADDITIONS UTILIZED* ESTIMATES 1999
------------ --------- --------- ---------- ------------

Severance and other employee-
related costs................ $-- $90 $-- $-- $90
-- --- -- -- ---
Total restructuring.......... $-- $90 $-- $-- $90
== === == == ===

2000 ACTIVITY
-------------------------------------------------
BALANCE AT BALANCE AT
DECEMBER 31, RESERVES CHANGES IN DECEMBER 31,
1999 ADDITIONS UTILIZED* ESTIMATES 2000
------------ --------- --------- ---------- ------------

Severance and other employee-
related costs................ $90 $ 78 $ (61) $(39) $ 68
Cost related to
closing/selling/downsizing
existing facilities.......... -- 185 (72) -- 113
Other costs.................... -- 1 -- -- 1
--- ---- ----- ---- ----
Total restructuring....... $90 $264 $(133) $(39) $182
=== ==== ===== ==== ====

F-22

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2001 ACTIVITY
-------------------------------------------------
BALANCE AT BALANCE AT
DECEMBER 31, RESERVES CHANGES IN DECEMBER 31,
2000 ADDITIONS UTILIZED* ESTIMATES 2001
------------ --------- --------- ---------- ------------

Severance and other employee-
related costs................ $ 68 $-- $ (50) $(12) $ 6
Cost related to
closing/selling/downsizing
existing facilities.......... 113 -- (91) (19) 3
Other costs.................... 1 -- -- -- 1
---- -- ----- ---- ---
Total restructuring....... $182 $-- $(141) $(31) $10
==== == ===== ==== ===

---------------

* Includes currency translation.

The specific restructuring measures and associated estimated costs were
based on management's best business judgment under prevailing circumstances.
Management believes that the Case Purchase Accounting Restructuring Program
reserve balance of $10 million at December 31, 2001, is adequate to carry out
the restructuring activities as outlined above, and CNH anticipates that all
actions will be completed by September 30, 2002. As prescribed under U.S. GAAP,
if future events warrant changes to the reserve, such adjustments will be
reflected in the applicable statements of operations as "Restructuring and other
merger related costs," or in the applicable balance sheets as an adjustment to
goodwill, as appropriate. All actions recorded in the Case Purchase Accounting
Restructuring Program have been completed and there are no unresolved activities
except for the remaining payments as indicated above. All additional
restructuring actions relating to Case locations or employees will be recorded
as restructuring and other merger related costs under the CNH Merger Integration
Program. CNH expects to fund the remaining cash requirements of the Case
Purchase Accounting Restructuring Program with cash flows from operations and
additional borrowings under its credit facilities.

CNH MERGER INTEGRATION PROGRAM

During 2000, CNH recorded $157 million in restructuring and other merger
related costs related to the CNH Merger Integration Program, which did not
qualify for purchase accounting treatment. These restructuring and other merger
related costs primarily relate to severance and other employee-related costs,
writedown of assets, loss on the sale of assets and businesses, costs related to
closing, selling, downsizing existing facilities and other merger related costs.
During 2001, CNH recorded an additional $122 million in restructuring and other
merger related costs related to the CNH Merger Integration Program. These
restructuring and other merger related costs primarily relate to severance and
other employee-related costs, costs related to closing, selling, downsizing
existing facilities and other merger related costs.

The severance and other employee-related costs reserved for in 2000
amounted to $43 million and relate to severance costs required to reduce CNH
headcount by approximately 2,100 employees as identified in the CNH Merger
Integration Plan. CNH is eliminating administrative and back office personnel,
as well as manufacturing personnel in the facilities that CNH will close or
downsize. These termination accruals include the cost of severance and
contractual benefits in accordance with collective bargaining agreements, other
agreements and CNH policy, and also include costs for outplacement services,
medical and supplemental vacation and retirement payments.

In 2000, CNH expended $31 million of termination payments related to
severance and other employee-related costs. As of December 31, 2000, CNH had
terminated approximately 400 employees related to the CNH Merger Integration
Program.

F-23

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

During 2001, CNH reserved for an additional $74 million and expended $40
million relating to severance and other employee-related costs. As of December
31, 2001, CNH had terminated approximately 1,900 employees related to the CNH
Merger Integration Program.

Reserves for the writedown of assets, loss on the sale of assets and
businesses, and costs related to closing, selling, and downsizing existing
facilities, of $18 million in 2001 and $79 million in 2000, were taken due to
required divestitures, excess capacity and duplicate facilities, and primarily
relate to the following actions of the CNH Merger Integration Program:

- Sale of CNH's New Holland Laverda combine harvester product line
(excluding hillside models) and the Breganze, Italy facility in which
they are made;

- Sale of CNH's New Holland Versatile, Genesis and G/70 series four-wheel
and two-wheel drive tractor lines, together with the Winnipeg, Canada,
plant in which they are made;

- Closure of CNH's administrative offices in Brentford, United Kingdom;

- Rationalization of the crawler excavator product line produced at the
Crepy, France facility;

- Transfer production of the loader/backhoe product line produced at the
Crepy, France facility to the Imola, Italy facility;

- Outsourcing of various components produced at the Burlington, Iowa
facility; and

As management approves and commits CNH to a restructuring action, CNH
determines the assets that will be disposed in the restructuring actions and
calculates an impairment loss by writing down the assets to the lower of their
carrying amount or fair market value less the cost to sell. The fair market
value of the assets is determined as the amount at which the asset could be
bought or sold in a current transaction between willing parties. All of the
asset impairments recorded by CNH were related to assets to be disposed of, and
all of these assets have been disposed of at December 31, 2001. The impairment
charges amounted to $15 million and $19 million in 2001 and 2000, respectively.
Exit cost liabilities of $3 million and $60 million were accrued in 2001 and
2000, respectively. CNH utilized $37 million and $9 million of these exit cost
liabilities in 2001 and 2000, respectively. In addition, CNH reversed $15
million of these exit cost liabilities in 2001 to restructuring and other merger
related costs as the cost to exit certain facilities was lower than anticipated.
These activities are included within writedown of assets, loss on sale of assets
and business and costs related to closing/selling/downsizing existing facilities
on the accompanying tables.

The other merger related costs of $15 million and $28 million for the years
ended December 31, 2001 and 2000, respectively, relate to incremental costs
incurred by CNH in conjunction with the merger integration activities at CNH.
These costs are classified as "Restructuring and other merger related costs" in
the accompanying statements of operations. These expenses consist primarily of
consulting expenses, systems integration expenses and employee relocation
expenses.

F-24

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the CNH activities for the years ended
December 31, 2000 and 2001, under the CNH Merger Integration Program (in
millions):

Severance and other employee-
related costs................ $-- $ 43 $ (31) $ -- $12
Writedown of assets............ -- 12 (12) -- --
Loss on sale of assets and
businesses................... -- 7 (7) -- --
Cost related to
closing/selling/ downsizing
existing facilities.......... -- 60 (9) -- 51
Other restructuring costs...... -- 7 (1) -- 6
Other merger related costs..... -- 28 (28) -- --
--- ---- ----- ---- ---
Total restructuring.......... $-- $157 $ (88) $ -- $69
=== ==== ===== ==== ===

Severance and other employee-
related costs................ $12 $ 74 $ (40) $ -- $46
Cost related to
closing/selling/ downsizing
existing facilities.......... 51 18 (52) (15) 2
Other restructuring costs...... 6 15 (2) (3) 16
Other merger related costs..... -- 15 (15) -- --
--- ---- ----- ---- ---
Total restructuring.......... $69 $122 $(109) $(18) $64
=== ==== ===== ==== ===

---------------

* Includes currency translation.

F-25

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5: INVENTORIES

Inventories consist of the following (in millions):

DECEMBER 31,
---------------
2001 2000
------ ------

Raw materials............................................... $ 270 $ 341
Work-in-process............................................. 244 301
Finished goods.............................................. 1,690 1,732
------ ------
Total inventories......................................... $2,204 $2,374
====== ======

NOTE 6: PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment is as follows (in millions):

DECEMBER 31,
-----------------
2001 2000
------- -------

Land, buildings and improvements............................ $ 564 $ 760
Plant and machinery......................................... 1,678 1,529
Other equipment............................................. 274 235
Construction in progress.................................... 145 177
------- -------
2,661 2,701
Accumulated depreciation.................................... (1,307) (1,227)
------- -------
Net property, plant and equipment......................... $ 1,354 $ 1,474
======= =======

Depreciation expense totaled $207 million, $243 million and $141 million
for the years ended December 31, 2001, 2000 and 1999, respectively.

NOTE 7: EQUIPMENT ON OPERATING LEASES

A summary of Financial Services' equipment on operating leases is as
follows (in millions):

DECEMBER 31,
------------
2001 2000
----- ----

Equipment on operating leases............................... $ 738 $741
Accumulated depreciation.................................... (126) (98)
----- ----
Net equipment on operating leases......................... $ 612 $643
===== ====

Depreciation expense totaled $92 million, $78 million and $18 million for
the years ended December 31, 2001, 2000 and 1999, respectively.

F-26

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Lease payments owed to CNH for equipment under non-cancelable operating
leases as of December 31, 2001, are as follows (in millions):

AMOUNT
------

2002........................................................ $118
2003........................................................ 87
2004........................................................ 43
2005........................................................ 22
2006........................................................ 5
2007 and thereafter......................................... --
----
Total....................................................... $275
====

NOTE 8: INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES

A summary of investments in unconsolidated subsidiaries and affiliates is
as follows (in millions):

DECEMBER 31,
-------------
2001 2000
----- -----

Investments using:
Equity method............................................. $249 $275
Cost method............................................... 17 7
---- ----
Total.................................................. $266 $282
==== ====

At December 31, 2001, investments accounted for using the equity method
primarily include interests CNH has in various ventures in the United States,
Turkey, Mexico, Japan and Pakistan.

In addition, CNH has various ownership interests in dealer development
companies. Dealer development companies are legal entities in North America
through which approved dealer candidates purchase a CNH dealership over a fixed
period of years.

NOTE 9: SHORT-TERM DEBT

CNH has various lines of credit and liquidity facilities that include
borrowings under both committed credit facilities and uncommitted lines of
credit and similar agreements. CNH also has the ability to issue commercial
paper in the United States and Australia. Under the terms of CNH's commercial
paper programs, the principal amount of the commercial paper outstanding,
combined with the amounts outstanding under the committed credit facilities,
cannot exceed the total amount available under the committed credit facilities.

CNH has historically obtained, and may continue to obtain, a significant
portion of its external financing from Fiat, on terms that CNH believes are at
least as favorable as those available from unaffiliated third parties. The debt
owed by CNH to Fiat is unsecured. In 2001, CNH paid a guarantee fee of between
0.0625% per annum and 0.125% per annum on the average amount outstanding under
facilities guaranteed by Fiat. Fiat has agreed to maintain its existing treasury
and debt financing arrangements with CNH for as long as it maintains control of
CNH and, in any event, until December 31, 2004. After that time, Fiat has
committed that it will not terminate CNH's access to these financing
arrangements without affording CNH an appropriate time period to develop
suitable substitutes.

F-27

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes our credit facilities at December 31, 2001
(in millions):

MATURITY AMOUNT DRAWN AVAILABLE GUARANTOR
-------- ------ ------ --------- ---------

Committed Lines
Revolving credit facility with third
party................................ 2005 $1,800 $ 0 $1,800 Fiat
Revolving credit facility with Fiat
affiliates........................... 2002-03 1,000 1,000 0
Revolving credit facility with third
party................................ 2004 500 500 0 Fiat
Credit facilities with third parties
shared with some Fiat subsidiaries... 2002-03 420 0 420 Fiat
Credit facilities with third parties... 2002-04 250 0 250 Fiat
Other committed lines.................. various 716 615 101
------ ------ ------
Total committed lines................ 4,686 2,115 2,571
Uncommitted lines...................... various 1,556 1,286 270
Asset-backed commercial paper liquidity
facilities........................... 1,424 483 941
------ ------ ------
Total credit facilities.............. $7,666 $3,884 $3,782
====== ====== ======
Credit facilities with Fiat
affiliates or guaranteed by Fiat
affiliates........................ various $3,970 $1,500 $2,470

A summary of short-term debt is as follows (in millions):

DECEMBER 31,
---------------
2001 2000
------ ------

Equipment Operations
Credit agreements*........................................ $ 670 $ 857
Commercial paper.......................................... -- 104
Short-term debt with Fiat affiliates...................... 1,373 1,568
Short-term debt payable to Financial Services............. 344 195
------ ------
Total short-term debt -- Equipment Operations.......... 2,387 2,724
------ ------
Financial Services
Credit agreements*........................................ 217 436
Commercial paper.......................................... -- 546
Asset-backed commercial paper liquidity facility.......... 483 200
Short-term debt with Fiat affiliates...................... 474 475
Short-term debt payable to Equipment Operations........... 524 576
------ ------
Total short-term debt -- Financial Services............ 1,698 2,233
------ ------
Less intersegment short-term debt........................... (868) (771)
------ ------
Total short-term debt.................................. $3,217 $4,186
====== ======

---------------

* The credit agreements for both Equipment Operations and Financial Services
include borrowings under both committed credit facilities and uncommitted
lines of credit and similar arrangements.

The weighted-average interest rates on consolidated short-term debt at
December 31, 2001 and 2000, were 3.58% and 6.82%, respectively. The average rate
is calculated utilizing the actual rates at

F-28

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

December 31, 2001 and 2000 weighted by the amount of the outstanding borrowings
of each debt instrument.

Borrowings under nonaffiliated third party revolving credit facilities bear
interest at: (1) EURIBOR, plus an applicable margin; (2) LIBOR, plus an
applicable margin; or (3) banker's bills of acceptance rates, plus an applicable
margin.

The applicable margin on third party debt depends upon:

- the initial maturity of the facility/credit line;

- the rating of short-term/long-term unsecured debt at the time the
facility/credit line is negotiated; in cases where Fiat provides a
guarantee, the margin negotiated reflects Fiat's credit standing at the
time the facility/credit line was arranged;

- the extent of overcollateralization, in the case of receivables warehouse
facilities; and

- the level of availability of credit lines for CNH in different
jurisdictions.

The applicable margin for related party debt is based on Fiat intercompany
borrowing and lending rates applied to all of its affiliates. These rates are
determined by Fiat on the basis of its cost of funding for debt of different
maturities. As Fiat's creditworthiness has been consistently and significantly
better than that of CNH, the cost of the related party debt has been lower than
the corresponding rates that CNH could have been required to pay to unaffiliated
third parties providing similar financing arrangements.

The range of applicable margins in 2001 has been between 0.25% and 1.21%.

Borrowings against asset-backed commercial paper liquidity facilities bear
interest at prevailing commercial paper rates. Borrowings may be obtained in
U.S. Dollars and certain other foreign currencies. Certain of CNH's revolving
credit facilities contain contingent requirements in respect of the maintenance
of financial conditions and impose some restrictions in respect of new liens on
assets and changes in ownership of certain subsidiaries. At December 31, 2001,
CNH was in compliance with all debt covenants. The nonaffiliated third party
committed credit facilities generally provide for facility fees on the total
commitment, whether used or unused, and also provide for annual agency fees to
the administrative agents for the facilities.

F-29

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 10: LONG-TERM DEBT

A summary of long-term debt is as follows (in millions):

DECEMBER 31,
-----------------
2001 2000
------- -------

Equipment Operations
Public Notes:
Payable in 2003, interest rate of 6.25%................... $ 279 $ 291
Payable in 2005, interest rate of 7.25%................... 248 273
Payable in 2016, interest rate of 7.25%................... 275 288
Third Party Secured Loans:
Payable in 2007, interest rate of 3.91%................... 129 --
Payable in 2007, interest rate of 3.92%................... 11 --
Payable in 2008, interest rate of 3.85%................... 81 --
Notes with Fiat affiliates:
Payable in 2002, interest rate of 7.01%................... 600 600
Payable in 2003, interest rate of 7.71%................... 400 400
Payable in 2003, interest rate of 3.95%................... 199 --
Payable in 2003, interest rate of 4.69%................... 200 --
Payable in 2003, interest rate of 4.69%................... 100 --
Payable in 2004, interest rate of 7.92%................... 400 400
Payable in 2005, interest rate of 7.81%................... 600 600
Payable in 2006, interest rate of 3.37%................... 450 --
Payable in 2006, interest rate of 3.46%................... 550 --
Other affiliated notes, weighted average interest rate of
4.55% and 5.61%, respectively ......................... 120 133
Other debt.................................................. 214 81
------- -------
4,856 3,066
Less-current maturities..................................... (637) (124)
------- -------
Total long-term debt -- Equipment Operations........... 4,219 2,942
------- -------
Financial Services
Public Notes:
Payable in 2001, interest rate of 6.13%................... -- 99
Payable in 2002, interest rate of 6.15% and 6.22%,
respectively .......................................... 140 998
Payable in 2003, interest rate of 6.13%................... 191 196
Payable in 2007, interest rate of 6.75%................... 144 143
Notes payable in 2002, interest rate of 2.48% and 6.17%,
respectively ............................................. 82 82
Long-term portion of borrowings under committed revolving
credit facility, weighted-average interest rate of 2.40%
and 6.25%, respectively................................... 500 500
Long-term debt with Fiat affiliates, weighted-average
interest rate of 4.22% and 5.67%, respectively ........... 424 252
Intersegment debt with Equipment Operations, interest rate
of 3.86% and 6.54%, respectively ......................... 1,112 14
Other debt.................................................. 309 203
------- -------
2,902 2,487
Less -- current maturities.................................. (424) (1,525)
------- -------
Total long-term debt -- Financial Services............. 2,478 962
Less long-term debt payable to Equipment Operations......... (1,112) (14)
------- -------
Total long-term debt................................... $ 5,585 $ 3,890
======= =======

F-30

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A summary of the minimum annual repayments of long-term debt, less current
maturities of long-term debt, as of December 31, 2001, are as follows (in
millions):

AMOUNT
------

2003........................................................ $1,598
2004........................................................ 1,140
2005........................................................ 957
2006........................................................ 1,347
2007 and thereafter......................................... 543
------
Total..................................................... $5,585
======

In November 1997, CNH issued 10 billion Yen of medium-term notes maturing
in October 2002. The notes are guaranteed by a subsidiary of Fiat and bear
interest based upon the Japanese LIBOR rate. Simultaneously with the issuance of
the notes, CNH entered into an interest rate and currency swap that fixed the
amount payable at $82 million, on which interest is payable based on the U.S.
Dollar LIBOR rate. The interest rate at December 31, 2001 and 2000 is 2.48% and
6.17%, respectively.

NOTE 11: PRINCIPAL SHAREHOLDER'S ADVANCE TO CAPITAL

On November 12, 1999, Fiat Netherlands Holding N.V., the majority
shareholder of CNH, contributed $1,400 million to CNH in the form of an advance
to capital to partially finance the merger of New Holland and Case. On June 30,
2000, Fiat Netherlands Holding N.V. received 127,918,782 CNH common shares, or
the number of shares that it could have purchased with $1,400 million at $10.94
per share, a price determined by averaging the daily closing prices (after
excluding the highest and lowest prices) of CNH common shares on the New York
Stock Exchange during the 20 trading days immediately preceding June 30, 2000.
The Board of Directors of CNH approved and CNH paid a discretionary return to
Fiat Netherlands Holding N.V. on its advance to capital of $56 million, an
annual rate of 6.25%.

NOTE 12: SHARE RIGHTS OFFERING

Shareholders of record as of June 30, 2000 were eligible to purchase
1.2021154 shares for every one share of common stock that they owned at a price
of $10.94 per share. On August 11, 2000, CNH issued 30,048 common shares through
the share rights offering.

NOTE 13: SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

As of December 31, 2001, CNH has 444,444,460 authorized common shares, of
which 277,683,830 shares were issued and 277,100,298 shares were outstanding. As
of December 31, 2001, CNH has 583,532 treasury shares which represent
cancellations of restricted shares under the CNH Equity Incentive Plan.

F-31

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

During the last three years, changes in CNH common shares issued were as
follows:

FOR THE YEARS ENDED DECEMBER 31,
---------------------------------
2001 2000 1999
--------- --------- ---------
(SHARES ISSUED, IN THOUSANDS)

Issued as of beginning of year.......................... 277,684 149,660 149,000
Issuances of CNH Common Shares:
CNH Equity Incentive Plan............................. -- 75 660
Conversion of advance to capital...................... -- 127,919 --
Share rights offering................................. -- 30 --
------- ------- -------
Issued as of end of year........................... 277,684 277,684 149,660
======= ======= =======

A dividend of $0.10 per common share, totaling $28 million, was declared
and paid during 2001. Dividends of $0.55 per common share, totaling $82 million,
were declared and paid in each of the years 2000 and 1999.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive income (loss) are as
follows (in millions):

DECEMBER 31,
-------------
2001 2000
----- -----

Cumulative translation adjustment........................... $(507) $(398)
Minimum pension liability adjustment, net of taxes ($89
million and $0, respectively)............................. (119) (1)
Deferred gains (losses) on derivative financial instruments,
net of taxes ($12 million and $0, respectively)........... (20) --
----- -----
Total..................................................... $(646) $(399)
===== =====

CNH OUTSIDE DIRECTORS' COMPENSATION PLAN

In 1999, CNH established the CNH Global N.V. Outside Directors'
Compensation Plan ("CNH Directors' Plan"). As amended, the CNH Directors' Plan
provides for (1) the payment of an annual retainer fee and committee chair fee
(collectively, the "Annual Fees") to independent outside members of the Board in
the form of common shares of CNH; (2) an annual grant of options to purchase
common shares of CNH; (3) an opportunity to receive up to 50% of their Annual
Fees in cash; and (4) an opportunity to convert all or a portion of their Annual
Fees into stock options. The exercise prices of all options granted under the
CNH Directors' Plan are equal to or greater than the fair market value of CNH
common shares on the respective grant dates. There are one million common shares
reserved for issuance under this plan. Exercise prices for options outstanding
under the CNH Directors' Plan at December 31, 2001 ranged from $5.25 to $15.41.
The remaining weighted average contractual life of the options issued pursuant
to the CNH Directors' Plan is approximately nine years. As of December 31, 2001,
there were

F-32

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

758,429 common shares available for issuance under the CNH Directors' Plan.
During the last three years, changes in shares subject to issuance under stock
option were as follows:

FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------
2001 2000 1999
------------------ ------------------ -----------------
EXERCISE EXERCISE EXERCISE
SHARES PRICE* SHARES PRICE* SHARES PRICE
------- -------- ------- -------- ------ --------

Outstanding at beginning of
year......................... 120,757 $11.85 18,750 $15.41 -- N/A
Granted........................ 142,277 6.04 102,007 11.19 18,750 $15.41
Forfeited...................... (21,463) 12.09 -- N/A -- N/A
------- ------- ------
Outstanding at end of year..... 241,571 8.40 120,757 11.85 18,750 15.41
======= ======= ======
Exercisable at end of year..... 159,071 7.73 64,507 10.72 -- N/A
======= ======= ======

---------------

* Weighted-average

The following table summarizes the outstanding stock options at December
31, 2001:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------------- ----------------------
SHARES WEIGHTED AVERAGE EXERCISE SHARES EXERCISE
RANGE OF EXERCISE PRICE OUTSTANDING CONTRACTUAL LIFE PRICE* EXERCISABLE PRICE*
----------------------- ----------- ---------------- -------- ----------- --------

$ 5.25 - 8.00................ 142,277 9.5 years $ 6.04 104,777 $ 6.20
$ 8.01 - 11.25................ 42,333 8.6 years $10.28 42,333 $10.28
$11.26 - 15.41................ 56,961 8.3 years $12.92 11,961 $12.13

---------------

* Weighted-average

CNH EQUITY INCENTIVE PLAN

In 1999, CNH established the CNH Equity Incentive Plan ("CNH EIP"). As
amended, the CNH EIP provides for grants of various types of awards to officers
and employees of CNH and its subsidiaries. There are 28 million common shares
reserved for issuance under this plan. Certain options vest ratably over three
or four years from the award date, while certain performance-based options vest
subject to the attainment of specified performance criteria. Such
performance-based options vest no later than seven years from the award date.
All options expire after ten years. As of December 31, 2001, there were two
separate awards of options under the CNH EIP with exercise prices of $6.34 and
$13.77 that had remaining weighted average contractual lives of approximately
ten and eight years, respectively. Prior to 2001, the exercise prices of all
options granted under the CNH EIP were equal to or greater than the fair market
value of CNH common shares on the respective grant dates. During 2001, CNH
granted stock options with an exercise price less than the quoted market price
of CNH stock at the date of grant. The 2001 exercise price was based upon the
average official price on the New York Stock Exchange during the thirty-day
period preceding the date of grant. The $3,729,600 of compensation cost related
to the 2001 award has been deferred and is being charged to expense over the
four-year service period of the related

F-33

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

options. During the last three years, changes in shares subject to issuance
under stock option were as follows:

FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
2001 2000 1999
-------------------- --------------------- --------------------
EXERCISE EXERCISE EXERCISE
SHARES PRICE* SHARES PRICE SHARES PRICE
--------- -------- ---------- -------- --------- --------

Outstanding at beginning of
year....................... 5,201,937 $13.77 5,291,050 $13.77 -- N/A
Granted.................... 5,328,000 6.34 2,299,500 13.77 5,291,050 $13.77
Forfeited.................. (994,025) 12.75 (2,388,613) 13.77 -- N/A
--------- ---------- ---------
Outstanding at end of year... 9,535,912 9.73 5,201,937 13.77 5,291,050 13.77
========= ========== =========
Exercisable at end of year... 1,777,927 13.77 621,168 13.77 -- N/A
========= ========== =========

---------------

* Weighted-average

Under the CNH EIP, shares may also be granted as restricted shares. CNH
establishes the period of restriction for each award and holds the stock during
the restriction period. Certain restricted shares vest over six months to seven
years, while certain performance-based restricted shares vest subject to the
attainment of specified performance criteria. Such performance-based restricted
shares vest no later than seven years from the award date. For the years ended
December 31, 2000 and 1999, 75,000 and 660,000 restricted shares, respectively,
were awarded at no cost to employees, at weighted-average values of $12.81 and
$11.94, respectively. No restricted shares were awarded during 2001. At December
31, 2001, restricted common shares outstanding totaled 33,600 shares.

As of December 31, 2001, there were 18,312,620 common shares available for
issuance under the CNH EIP.

FIAT STOCK OPTION PROGRAM

Certain employees of CNH are eligible to participate in stock option plans
of Fiat ("Fiat Plans") whereby participants are granted options to purchase
ordinary shares of Fiat ("Fiat Shares"). The number of options granted to CNH
employees to purchase Fiat Shares was 222,000, 67,500 and 23,000 for the years
ended December 31, 2001, 2000 and 1999, respectively. The exercise price, as
determined by the average official price of Fiat Shares on the Italian Stock
Exchange during the twenty-day period preceding the date of grant, was E28.45,
E30.63 and E18.00 for the options granted under the Fiat Plans in 2001, 2000 and
1999, respectively. These exercise prices as compared to the actual prices of
Fiat Shares on the date of grant of E29.30, E33.46 and E18.06 in 2001, 2000 and
1999, respectively, were not significantly different and did not result in a
material amount of compensation expense under these plans. The 2001 and 2000
options vest ratably over a four year period and 1999 options vest ratably over
a three year period. All options under the Fiat Plans expire eight years after
the grant date.

F-34

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SFAS NO. 123 DISCLOSURE

CNH has retained the intrinsic value method of accounting for stock-based
compensation in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." For disclosure purposes only under
SFAS No. 123, "Accounting for Stock-Based Compensation," the Black-Scholes
pricing model was used to calculate the "fair value" of stock options. Based on
this model, the weighted-average fair values of stock options awarded during
2001 were $2.48 and $2.94 per option for the CNH Directors' Plan and the CNH
EIP, respectively. Based on this model, the weighted-average fair values of
stock options awarded during 2000 were $4.83 and $3.43 per option for the CNH
Directors' Plan and the CNH EIP, respectively. The weighted-average fair values
of stock options awarded during 1999 were $5.12 and $3.58 per option for the CNH
Directors' Plan and the CNH EIP, respectively.

Pro forma net income (loss) and earnings (loss) per share assuming the fair
value of accounting for stock-based compensation as prescribed under SFAS No.
123, are as follows:

2001 2000 1999
------ ------ -----

Net income (loss) to common (in millions):
As reported............................................... $ (332) $ (381) $ 148
Pro Forma................................................. $ (336) $ (384) $ 148
Net income (loss) to common assuming dilution* (in
millions):
As reported............................................... $ (332) $ (381) $ 160
Pro Forma................................................. $ (336) $ (384) $ 160
Basic earnings (loss) per share:
As reported............................................... $(1.20) $(1.79) $0.99
Pro Forma................................................. $(1.21) $(1.80) $0.99
Diluted earnings (loss) per share:
As reported............................................... $(1.20) $(1.79) $0.97
Pro Forma................................................. $(1.21) $(1.80) $0.97

---------------

* No effect in 2001 and 2000 as impact is antidilutive.

The weighted-average assumptions used under the Black-Scholes pricing model
were as follows:

CNH
DIRECTORS' CNH
PLAN EIP
---------- ----

2001 Assumptions:
Risk-free interest rate................................... 4.3% 4.1%
Dividend yield............................................ 1.5% 1.5%
Stock price volatility.................................... 47.0% 47.0%
Option life (years)....................................... 5.0 4.5

F-35

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CNH
DIRECTORS' CNH
PLAN EIP
---------- ----

2000 Assumptions:
Risk-free interest rate................................... 5.1% 5.1%
Dividend yield............................................ 0.9% 0.9%
Stock price volatility.................................... 46.0% 46.0%
Option life (years)....................................... 5.0 5.0
1999 Assumptions:
Risk-free interest rate................................... 6.3% 6.5%
Dividend yield............................................ 4.0% 4.0%
Stock price volatility.................................... 43.0% 43.0%
Option life (years)....................................... 5.0 5.4

NOTE 14: ACCOUNTS AND NOTES RECEIVABLE

Wholesale notes and accounts arise primarily from the sale of wholegoods to
dealers and distributors. Under the standard terms of the wholesale receivable
agreements, these receivables typically have interest-free periods of up to
twelve months and stated original maturities of up to twenty-four months, with
repayment accelerated upon the sale of the underlying equipment by the dealer.
After the expiration of any interest-free period, interest is charged to dealers
on outstanding balances until payment is received by CNH. The interest-free
periods are determined based on the type of equipment sold and the time of year
of the sale. Interest rates are set based on market factors and the prime rate
or LIBOR. CNH evaluates and assesses dealers on an ongoing basis as to their
creditworthiness.

CNH provides and administers financing for retail purchases of new and used
equipment sold through its dealer networks. CNH purchases retail installment
sales, loan and finance lease contracts from its dealers. The terms of retail
and other notes and finance leases generally range from two to six years, and
interest rates on retail and other notes and finance leases vary depending on
prevailing market interest rates and certain incentive programs offered by CNH.

A summary of accounts and notes receivables is as follows (in millions):

DECEMBER 31,
---------------
2001 2000
------ ------

Wholesale notes and accounts................................ $2,734 $2,096
Retail and other notes and finance leases................... 3,026 3,461
Other....................................................... 700 862
------ ------
Total receivables......................................... 6,460 6,419
Less -- Allowance for doubtful accounts..................... (300) (269)
Less -- Current portion..................................... (4,010) (3,637)
------ ------
Total long-term receivables, net.......................... $2,150 $2,513
====== ======

F-36

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Maturities of long-term receivables as of December 31, 2001, are estimated
as follows (in millions):

AMOUNT
------

2003........................................................ $ 827
2004........................................................ 575
2005........................................................ 370
2006........................................................ 205
2007 and thereafter......................................... 173
------
Total long-term receivables, net.......................... $2,150
======

It has been CNH's experience that substantial portions of retail
receivables are repaid before their contractual maturity dates. As a result, the
above table is not to be regarded as a forecast of future cash collections.

Wholesale, retail and finance lease receivables have significant
concentrations of credit risk in the agricultural and construction business
sectors, the majority of which are in North America. CNH typically retains, as
collateral, a security interest in the equipment associated with wholesale and
retail notes receivable.

WHOLESALE RECEIVABLES SECURITIZATIONS

CNH sells wholesale receivables on a revolving basis to privately
structured securitization facilities. The receivables are initially sold to
wholly-owned bankruptcy remote special purpose entities ("SPEs"), which are
consolidated by CNH, but legally isolate the receivables from the creditors of
CNH. These transactions are utilized as an alternative to the issuance of debt
and allow CNH to realize a lower cost of funds due to the asset-backed nature of
the receivables and the credit enhancements offered to investors.

Upon the sale of additional receivables, receivables are removed from the
balance sheet and proceeds are received for the difference between the
receivables sold and the undivided interests in receivables that are required to
be retained by CNH. In the event of a reduction in the receivables pool sold
caused by charge-offs, the investors in the facility have recourse against our
retained interests in the sold receivables. These retained interests fluctuate
with the size of the sold portfolio as they are specified as percentages of the
sold receivables. Investors have no recourse to CNH in excess of these retained
interests. CNH continues to service the sold receivables and receives a fee,
which approximates the fair value of the servicing obligation.

These facilities consist of a 364-day, $400 million facility that is
renewable annually (most recently in March 2002) at the sole discretion of the
purchasers, a seven-year committed, $650 million non-renewable facility that
expires in October 2003 and a 364-day, C$325 million facility that is renewable
annually (most recently in April 2002) upon agreement of the parties. At
December 31, 2001, $1,037 million and C$303 million were outstanding under these
facilities.

At December 31, 2001, $1,037 million and C$303 million were outstanding
under these facilities, consisting of $1,208 million and C$361 million of
wholesale receivables sold less CNH's retained undivided interests of $171
million and C$58 million. At December 31, 2000, $1,050 million and C$250 million
were outstanding under these facilities, consisting of $1,279 million and C$343
million of wholesale receivables sold less CNH's retained undivided interests of
$229 million and C$93 million. The retained interests provide recourse to
investors in the event of default and are recorded at cost, which approximates
fair value due to the short-term nature of the receivables, in "Accounts and
notes receivable" in the accompanying consolidated balance sheets.

F-37

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The cash flows between CNH and the facilities in 2001 and 2000 included:

UNITED STATES CANADA
--------------- -----------
2001 2000 2001 2000
------ ------ ---- ----

Proceeds from new securitizations..................... $ 115 $ 195 $ 75 $150
Repurchase of receivables............................. 128 80 22 50
Proceeds from collections reinvested in the
facilities.......................................... 3,046 1,794 810 374

In addition to the securitizations described above, certain foreign
subsidiaries of CNH securitized or discounted receivables without recourse. For
the year ended December 31, 2001, $134 million of wholesale receivables were
sold of which $60 million remained outstanding under these programs. For the
year ended December 31, 2000, $489 million of wholesale receivables were sold of
which $187 million remained outstanding under these programs. CNH records a
discount each time receivables are sold to the counterparties in the facilities.
This discount, which reflects the difference between interest income earned on
the receivables sold and interest expense paid to investors in the facilities,
along with related transaction expenses, is computed at the then prevailing
market rates as stated in the sale agreement.

At December 31, 2001 and 2000, certain subsidiaries of CNH sold with
recourse wholesale receivables totaling $530 million and $218 million,
respectively. The receivables sold are recorded in "Wholesale notes and
accounts" in the preceding summary of accounts and notes receivable and the
proceeds received from the sales are recorded as short-term debt as the
transactions do not meet the criteria for derecognition in a transfer of
financial assets.

RETAIL RECEIVABLES SECURITIZATIONS

In CNH's receivable asset securitization program, retail finance
receivables are sold by its wholly owned subsidiaries, Case Credit Corporation
and New Holland Credit Company, to limited purpose, bankruptcy-remote,
consolidated subsidiaries of CNH. In turn, these subsidiaries establish separate
trusts to which they transfer the receivables in exchange for the proceeds from
asset-backed securities issued by the trusts. The trusts activities are limited
to acquiring the receivables, issuing asset-backed securities and making
payments on the securities.

Due to the nature of the assets held by the trusts and the limited nature
of each trust's activities they are each classified as a qualifying special
purpose entity ("QSPE") under SFAS No. 14, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." In accordance
with SFAS No. 140, assets and liabilities of the QSPEs are not consolidated in
the Company's consolidated balance sheets.

No recourse provisions exist that allow holders of the QSPEs' asset-backed
securities to put those securities back to CNH. Moreover, CNH does not guarantee
any securities issued by the QSPEs. CNH's exposure related to these QSPEs is
limited to the cash deposits held for the benefit of the QSPEs' investors and
the retained interests in the QSPEs, all of which are reported in CNH's
Consolidated Balance Sheets. The retained interests are generally subject to
similar prepayment and credit loss risks as the ownership of the underlying
receivables sold to the trusts. The QSPEs have a limited life and generally
terminate upon final distribution of amounts owed to investors or upon exercise
of a cleanup-call option by CNH, in its role as Servicer, when the servicing of
the sold contracts becomes burdensome. The QSPEs do not own stock of CNH or any
of its affiliates.

CASE CREDIT CORPORATION

Case Credit Corporation securitized retail notes with a net principal value
of $2.1 billion and $2.6 billion in 2001 and 2000, respectively. In 2001, $1.2
billion of the receivables sold were originated by Case Credit Corporation and
$0.9 billion were originated and sold to Case Credit Corporation at fair value
by New Holland Credit Company and New Holland Credit Company Canada, wholly
owned subsidiaries of CNH Global N.V. In 2000, $1.6 billion of the receivables
sold were originated by Case Credit

F-38

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Corporation and $1.0 billion were originated and sold to Case Credit Corporation
at fair value by New Holland Credit Company and New Holland Credit Company
Canada, wholly owned subsidiaries of CNH Global N.V.

CNH recognized gains on the sales of these receivables of $87 million and
$61 million in 2001 and 2000, respectively. These gains were calculated based on
comparing the fair value of the net proceeds received from the sale to the
allocated carrying value of assets sold. The allocated carrying value of assets
sold is determined by allocating the previous carrying amount of these assets to
the assets sold and the retained interests based on their relative fair values.

In conjunction with these sales, Case Credit Corporation retains certain
interests in the sold receivables including interest-only strips, subordinated
tranches of ABS securities issued ("ABS certificates"), rights to service the
sold receivables and cash reserve accounts held in escrow. ABS certificates are
classified as held to maturity securities as they are not subject to prepayment
risk. These certificates are initially recorded at their allocated carrying
value as a component of "Other assets" in the accompanying consolidated balance
sheets. All other retained interests are also initially recorded at their
allocated carrying value as "Accounts and notes receivables" in the accompanying
balance sheets.

Cash reserve accounts are created through the reduction of proceeds
received by Case Credit Corporation from sales to provide security to investors
in the event that cash collections from the receivables are not sufficient to
remit principal and interest payments on the securities. In 2001 and 2000, the
creation of new cash reserve accounts reduced proceeds from the sales of retail
receivables by $45 million and $57 million, respectively. Total cash reserve
escrow account balances were $172 million and $194 million at December 31, 2001
and 2000, respectively. Interest-only strips represent Case Credit
Corporation's retained interest in the interest collected on the securitized
receivables in excess of the interest paid to investors in the asset-backed
securities. The fair value of the interest-only strip component of the retained
interests is determined based on the present value of future expected cash
flows. The key assumptions used in the present value calculations are credit
loss, prepayment and interest rates. These assumptions represent management's
best estimates of these rates based on current market conditions. As an
additional form of credit enhancement to investors, Case Credit Corporation
incurred a recourse liability of up to $19 million, which obligates Case Credit
Corporation to fund shortfalls in collections related to one of the
securitizations completed in 2000. No such form of credit enhancement to
investors was incurred related to securitizations completed in 2001.

CNH services all securitized receivables and is entitled to receive a 1.00%
annual servicing fee as compensation for these services. Beginning in the third
quarter of 1999, CNH determined that this servicing fee exceeds the fair value
of the services provided and began to record a servicing asset. Servicing assets
recorded were $19 million and $18 million for 2001 and 2000, respectively, and
are included in "Finance and interest income" in the accompanying statements of
operations. These assets are amortized over the period in which CNH earns the
related servicing fees. Amortization of servicing assets was $14 million and $8
million in 2001 and 2000, respectively. The amortization is included in "Finance
and interest income" in the accompanying statements of operations. Total
servicing assets equaled $23 million and $18 million, which approximates fair
value at December 31, 2001 and 2000, respectively. The fair value of the
servicing asset is determined by discounting future cash flows based on current
discount and prepayment rate assumptions.

Case Credit Corporation stratifies its servicing assets based on geographic
location and original term. As a result, Case Credit Corporation has two
categories of servicing assets as of December 31, 2001 and 2000. One category
consists of serviced assets located in the United States with 3 to 5 year
original terms, which amounted to $20 million and $15 million as of December 31,
2001 and 2000, respectively. The other category consists of serviced assets
located in Canada with 3 to 5 year original terms, which amounted to $3 million
as of December 31, 2001 and 2000.

F-39

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Case Credit Corporation is required to remit the cash collected on the
serviced portfolio to the investors within two business days. At December 31,
2001 and 2000, $26 million and $17 million, respectively, of unremitted cash
payable is included in "Accounts payable" in the accompanying balance sheets.

Weighted average assumptions utilized in measuring the initial fair value
of retained interests for securitizations completed during 2001 and 2000 were as
follows:

U.S. CANADA
------------- -------------
2001 2000 2001 2000
----- ----- ----- -----

Constant prepayment rate............................... 17.00% 17.00% 20.00% 20.00%
Annual credit loss rate................................ 0.87% 0.66% 1.00% 0.56%
Discount rate.......................................... 3.75% 6.91% 3.87% 6.18%
Weighted average maturity in months.................... 22 23 21 19

Case Credit Corporation monitors the fair value of its retained interests
outstanding each period by discounting expected future cash flows based on
similar assumptions. The fair value is compared to the carrying value of the
retained interest and any excess of carrying value over fair value results in an
adjustment to the asset with a corresponding offset to earnings. These
differences are recorded in earnings as they are deemed to be unrecoverable.
Case Credit Corporation reduced the value of its retained interests by $76
million and $25 million in 2001 and 2000, respectively, based on this analysis,
with an expense charged to "Selling, general and administrative" expense in the
accompanying statements of operations. The primary cause of this reduction was
the continued increase in credit losses recognized related to sold notes and the
increase in the assumption used to estimate future credit losses.

Total losses incurred on CNH's serviced portfolio were $135 million and
$128 million in 2001 and 2000, respectively. The principal balance of accounts
with payments greater than 30 days delinquent was $343 million and $434 million,
which represented 7.7% and 8.2% of CNH's managed retail and other notes and
finance leases at December 31, 2001 and 2000, respectively.

The significant assumptions used in estimating the fair values of retained
interests from sold receivables and the sensitivity of the current fair value to
immediate 10% and 20% adverse changes at December 31, 2001 and 2000 are as
follows:

UNITED STATES

IMPACT ON FAIR VALUE (IN MILLIONS UNLESS STATED OTHERWISE)

2001 2000
------------------------------ ------------------------------
DECEMBER 31, DECEMBER 31,
2001 10% 20% 2000 10% 20%
ASSUMPTION CHANGE CHANGE ASSUMPTION CHANGE CHANGE
------------ ------ ------ ------------ ------ ------

Constant prepayment rate......... 17.00% $0.4 $ 0.9 17.00% $0.4 $1.0
Annual credit loss rate.......... 1.48% $6.4 $12.6 0.60% $2.7 $5.3
Discount rate.................... 3.12% $0.0 $ 0.1 6.89% $0.8 $1.7
Weighted-average remaining
maturity....................... 17 months 18 months

RECEIVABLES SECURITIZED IN
-----------------------------
1998 1999 2000 2001
----- ----- ----- -----

Actual and expected static pool losses as of December 31,
2001..................................................... 2.71% 3.31% 2.43% 1.32%
Actual and expected static pool losses as of December 31,
2000..................................................... 2.09% 1.61% 1.11%

F-40

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CANADA

IMPACT ON FAIR VALUE (IN MILLIONS UNLESS STATED OTHERWISE)

Constant prepayment rate......... 20.00% $0.2 $0.3 20.00% $0.2 $0.6
Annual credit loss rate.......... 1.10% $0.8 $1.5 0.55% $0.3 $0.6
Discount rate.................... 3.97% $0.0 $0.0 6.15% $0.1 $0.2
Weighted-average remaining
maturity....................... 16 months 17 months

RECEIVABLES SECURITIZED IN
-----------------------------
1998 1999 2000 2001
----- ----- ----- -----

Actual and expected static pool losses as of December 31,
2001..................................................... 1.48% 2.50% 1.03% 1.65%
Actual and expected static pool losses as of December 31,
2000..................................................... .93% 1.10% .82%

Static pool losses are calculated by summing the actual and projected
future credit losses and dividing them by the original balance of each pool of
assets securitized. Weighted average remaining maturity represents the weighted
average number of months that the current collateral balance is expected to
remain outstanding.

The changes shown above are hypothetical. They are computed based on
variations of individual assumptions without considering the interrelationship
between these assumptions. As a change in one assumption may affect the other
assumptions, the magnitude of the impact on fair value of actual changes may be
greater or less than those illustrated above. These changes are based on a
balance of securitized receivables outstanding as of December 31, 2001 and 2000
of $3.8 billion and $4.0 billion, respectively.

Case Credit Corporation's cash flows related to securitization activities
for 2001 and 2000 can be summarized as follows (in millions):

DECEMBER 31,
---------------
2001 2000
------ ------

Proceeds from new retail securitizations.................... $2,070 $2,560
Servicing fees received(1).................................. $ 22 $ 28
Cash received on other retained interests................... $ 46 $ 50
Net cash paid on closed deals(2)............................ $ 96 $ 123

---------------

(1) Does not reflect servicing fees earned in Canada as CNH is paid for these
services if there are residual funds available when the Trusts are
liquidated.

(2) Includes cash paid to repurchase receivables, net of returns of investments
in retained interests.

NEW HOLLAND CREDIT COMPANY

During 1999, CNH consummated its first securitization of retail notes
originated by New Holland Credit Company. As a result of the transaction, $1.1
billion of retail notes were sold and CNH recorded a gain on the sale of
approximately $27 million, and such gain was recorded in "Finance and interest
income" in the accompanying statements of operations.

F-41

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

IMPACT ON FAIR VALUE (IN MILLIONS UNLESS STATED OTHERWISE)

2001 2000
----------------------------- -----------------------------
DECEMBER 31, DECEMBER 31,
2001 10% 20% 2000 10% 20%
ASSUMPTION CHANGE CHANGE ASSUMPTION CHANGE CHANGE
------------ ------ ------ ------------ ------ ------

Constant prepayment rate....... 17.00% $0.0 $0.0 17.00% $0.0 $0.1
Annual credit loss rate........ 0.59% $0.1 $0.2 0.60% $0.4 $0.7
Discount rate.................. 3.12% $0.0 $0.0 6.89% $0.1 $0.1
Weighted-average remaining
maturity..................... 12 months 15 months

RECEIVABLES SECURITIZED IN
1999
--------------------------

Actual and expected static pool losses as of December 31,
2001...................................................... 1.64%
Actual and expected static pool losses as of December 31,
2000...................................................... 1.13%

New Holland Credit Company's cash flows related to securitization
activities for 2001 and 2000 can be summarized as follows (in millions):

DECEMBER 31,
-------------
2001 2000
----- -----

Servicing fees received(1).................................. $2 $4
Cash received on other retained interests................... $3 $9

---------------

(1) Does not reflect servicing fees earned in Canada as CNH is paid for these
services if there are residual funds available when the Trusts are
liquidated.

NOTE 15: FINANCIAL INSTRUMENTS

FAIR MARKET VALUE OF FINANCIAL INSTRUMENTS

The estimated fair market values of financial instruments that do not
approximate their carrying values in the financial statements are as follows (in
millions):

DECEMBER 31,
-------------------------------------
2001 2000
----------------- -----------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- ------ -------- ------

Accounts and notes receivable, net................ $6,160 $6,191 $6,150 $6,191
Long-term debt.................................... $5,585 $5,704 $3,890 $3,576

F-42

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The fair value of accounts and notes receivable was based on discounting
the estimated future payments at prevailing market rates. The fair value, which
approximates carrying value, of the interest only strip component of CNH's
accounts and notes receivables was based on loss, prepayment and interest rate
assumptions approximating those currently experienced by CNH. The carrying
amounts of ABS certificates and certificates of deposit approximate their fair
value. The fair value of fixed-rate, long-term debt was based on both quoted
prices and the market value of debt with similar maturities and interest rates;
the carrying amount of floating-rate, long-term debt was assumed to approximate
its fair value. As derivatives are recorded at fair market value on the balance
sheet, the carrying amounts and fair market values are equivalent for CNH's
foreign exchange forward contracts, currency options, interest rate swaps and
interest rate caps.

DERIVATIVES

CNH utilizes derivative instruments to mitigate its exposure to interest
rate and foreign currency exposures. Derivatives used as hedges are effective at
reducing the risk associated with the exposure being hedged and are designated
as a hedge at the inception of the derivative contract. CNH does not hold or
issue such instruments for trading purposes. The credit and market risk under
these agreements is reduced through diversification among counterparties with
high credit ratings. These counterparties include certain Fiat subsidiaries.

FOREIGN EXCHANGE CONTRACTS

CNH has entered into foreign exchange forward contracts, swaps, and options
in order to manage and preserve the economic value of cash flows in
non-functional currencies. CNH conducts its business on a multinational basis in
a wide variety of foreign currencies and hedges foreign currency exposures
arising from various receivables, liabilities and expected inventory purchases.
Derivative instruments which are utilized to hedge the foreign currency risk
associated with anticipated inventory purchases in foreign currencies are
designated as cash flow hedges. Gains and losses on these instruments, to the
extent that they have been effective, are deferred in other comprehensive loss
and recognized in earnings when the related inventory is sold. Ineffectiveness
recognized related to these hedge relationships was not significant. The
maturity of these instruments does not exceed 12 months and the net of tax
losses deferred in other comprehensive income to be recognized in earnings over
the 12 months ended December 31, 2002 are insignificant. The effective portion
of changes in the fair value of the derivatives are recorded in other
comprehensive income and are recognized in the statement operations when the
hedge item affects earnings.

CNH has also designated certain forwards and swaps as fair value hedges of
certain short-term receivables and liabilities denominated in foreign
currencies. The effective portion of the fair value gains or losses on these
instruments are reflected in earnings and are offset by fair value adjustments
in the underlying foreign currency exposures. Ineffectiveness related to these
hedge relationships was not material.

Options and forwards not designated as hedging instruments are also used to
hedge the impact of variability in exchange rates on foreign operational cash
flow exposures. The changes in the fair values of these instruments are
recognized directly in earnings, and are expected to generally offset the
foreign exchange gains or losses on the exposures being managed, although the
gain or loss on the exposure being hedged may be recorded in a different period
than the gains or losses on the derivative instruments.

INTEREST RATE DERIVATIVES

CNH has entered into interest rate swaps agreements in order to manage
interest rate exposures arising in the normal course of business for Financial
Services. Interest rate swaps that have been designated in cash flow hedging
relationships are being used by CNH to mitigate the risk of rising interest
rates related to the anticipated issuance of short-term LIBOR based debt in
future periods. Gains and
F-43

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

losses on these instruments, to the extent that the hedge relationship has been
effective, are deferred in other comprehensive income and recognized in interest
expense over the period in which CNH recognizes interest expense on the related
debt. Ineffectiveness recognized related to these hedge relationships was not
significant and is recorded in "other, net" in the accompanying statements of
operations. The maximum length of time over which CNH is hedging its interest
rate exposure through the use of derivative instruments designated in cash flow
hedge relationships is 48 months, and CNH expects approximately $13 million net
of tax losses deferred in other comprehensive income to be recognized in
earnings over the 12 months ended December 31, 2002.

Interest rate swaps that have been designated in fair value hedge
relationships are being used by CNH to mitigate the risk of reductions in the
fair value of existing fixed rate long term bonds and medium-term notes due to
decreases in LIBOR based interest rates. This strategy is used mainly for the
interest rate exposures for Equipment Operations. Gains and losses on these
instruments are reflected in interest expense in the period in which they occur
and an offsetting gain or loss is also reflected in interest expense based on
changes in the fair value of the debt instrument being hedged due to changes in
LIBOR based interest rates. There was no ineffectiveness as a result of fair
value hedge relationships in 2001.

CNH enters into forward starting interest rate swaps as hedges of the gains
that are recognized upon the sale of receivables in ABS transactions as
described in Note 14, "Accounts and Notes Receivable." These instruments protect
the Company from rising interest rates, which impact the rates paid on the
securities issued to investors in connection with these transactions. The
changes in the fair market value of these instruments are highly correlated to
changes in the fair value of the anticipated cash flows on the securities to be
issued. Gains and losses are deferred in other comprehensive income and
recognized in "Finance and interest income" in the accompanying statements of
operations at the time of the ABS issuance. Ineffectiveness of these hedge
relationships was not significant in 2001.

CNH also utilizes both back-to-back interest rate swaps and back-to-back
interest rate caps that are not designated in hedge relationships. Unrealized
and realized gains and losses resulting from fair value changes in these
instruments are recognized directly in earnings. These instruments are used to
mitigate interest rate risk related to the Company's asset-backed commercial
paper facility and various limited purpose business trusts associated with the
Company's retail note asset-backed securitization programs in North America.
These facilities and trusts require CNH to enter into interest rate swaps and
caps. To ensure that these transactions do not result in the Company being
exposed to this risk, CNH enters into an offsetting interest rate swap or cap
with substantially similar terms. Net gains and losses on these instruments were
insignificant for 2001.

NOTE 16: INCOME TAXES

The sources of income (loss) before taxes and minority interest are as
follows (in millions):

FOR THE YEARS ENDED
DECEMBER 31,
--------------------
2001 2000 1999
----- ----- ----

The Netherlands source...................................... $ 10 $ (37) $(22)
Foreign sources............................................. (442) (487) 229
----- ----- ----
Income (loss) before taxes................................ $(432) $(524) $207
===== ===== ====

F-44

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The provision (benefit) for income taxes consisted of the following (in
millions):

FOR THE YEARS ENDED
DECEMBER 31,
--------------------
2001 2000 1999
----- ----- ----

Current income taxes........................................ $ 69 $ 76 $10
Deferred income taxes....................................... (174) (229) 45
----- ----- ---
Total tax provision (benefit)............................. $(105) $(153) $55
===== ===== ===

A reconciliation of CNH's statutory and effective income tax provision
(benefit) is as follows (in millions):

FOR THE YEARS ENDED
DECEMBER 31,
--------------------
2001 2000 1999
----- ----- ----

Tax provision (benefit) at the Dutch statutory rate of
35%....................................................... $(151) $(183) $72
Foreign income taxed at different rates..................... (29) (12) 6
Effect of tax loss carryforwards............................ (16) (8) 18
Change in valuation allowance............................... 54 46 (16)
Nondeductible goodwill...................................... 29 25 2
Dividend withholding taxes and credits...................... 2 (4) (3)
Other....................................................... 6 (17) (24)
----- ----- ---
Total tax provision (benefit)............................. $(105) $(153) $55
===== ===== ===

The components of the net deferred tax asset are as follows (in millions):

DECEMBER 31,
---------------
2001 2000
------ ------

Deferred tax assets:
Marketing and selling incentives.......................... $ 135 $ 211
Bad debt reserves......................................... 113 71
Postretirement and postemployment benefits................ 297 222
Inventories............................................... 37 73
Warranty reserves......................................... 83 76
Restructuring reserves.................................... 28 73
Other reserves............................................ 572 467
Tax loss carryforwards.................................... 1,209 814
Less: Valuation allowance................................. (986) (849)
------ ------
Total deferred tax assets.............................. 1,488 1,158
------ ------
Deferred tax liabilities:
Fixed assets basis difference/depreciation................ 168 269
Intangibles............................................... 278 275
Inventories............................................... 20 22
Other..................................................... 370 215
------ ------
Total deferred tax liabilities......................... 836 781
------ ------
Net deferred tax assets.............................. $ 652 $ 377
====== ======

F-45

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The net deferred tax assets are reflected in the accompanying balance
sheets as follows (in millions):

DECEMBER 31,
--------------
2001 2000
------ -----

Current deferred tax asset.................................. $ 454 $ 436
Long-term deferred tax asset................................ 1,086 672
Current deferred tax liability.............................. (108) (33)
Long-term deferred tax liability............................ (780) (698)
------ -----
Net deferred tax asset................................. $ 652 $ 377
====== =====

CNH has net operating tax loss carryforwards in a number of foreign tax
jurisdictions within its global operations. The net tax value of these
carryforwards and the years in which they expire are as follows: $1 million in
2002; $1 million in 2003; $3 million in 2004; $9 million in 2005; $1 million in
2006; and $629 million with expirations dates from 2007 through 2021. CNH also
has net operating tax loss carryforwards of $565 million with indefinite lives.
As a result of regulatory divestitures required by the relevant authorities
pursuant to the merger, certain tax loss carryforwards related to the Case
business may be at risk. The actual risk and degree of certainty are not known
or quantifiable at this time.

During 2001, 2000 and 1999, CNH generated income in certain jurisdictions
that supported reductions in the valuation allowance and recognized losses in
certain jurisdictions that supported increases in the valuation allowance. CNH
has recorded deferred tax assets in tax jurisdictions where CNH has been
profitable, as management believes it is more likely than not that such assets
will be realizable in the future. CNH also continues to have valuation
allowances in certain tax jurisdictions where net operating losses exist. CNH
has recorded deferred tax assets in jurisdictions where it has not been
profitable but where it expects to generate sufficient taxable income in the
future to realize the deferred tax assets. In particular, in 2001 and 2000, CNH
recorded deferred tax assets related to U.S. tax loss carryforwards in the
amount of $248 million and $185 million, respectively. The amount of the
deferred tax assets considered realizable, however, could be reduced by a
valuation allowance if future taxable income during the carryforward period does
not occur. If a valuation allowance were required for the deferred tax assets,
then net income would be reduced by the amount of the valuation allowance in the
year in which it is established. Realization of deferred tax assets is dependent
on generating future income and is thus subject to change.

With respect to the valuation allowances recorded against the deferred tax
assets of Case and its subsidiaries as of the acquisition date, any reduction in
these valuation allowances will, in the future, be treated as a reduction to the
goodwill recorded in conjunction with the acquisition and will not impact future
periods' tax expense. As of December 31, 2001, and December 31, 2000, the
valuation allowance that is potentially subject to being allocated to goodwill
as part of the Case acquisition totaled $540 million.

At December 31, 2001, the undistributed earnings of foreign subsidiaries
totaled approximately $1,904 million. In most cases, such earnings will continue
to be reinvested. Provision has generally not been made for additional taxes on
the undistributed earnings of foreign subsidiaries. These earnings could become
subject to additional tax if they are remitted as dividends or if CNH were to
dispose of its investment in the subsidiaries. It has not been practical to
estimate the amount of additional taxes that might be payable on the foreign
earnings, and CNH believes that additional tax credits and tax planning
strategies would largely eliminate any tax on such earnings.

CNH paid (received) cash of $63 million, $(129) million, and $99 million,
for taxes during 2001, 2000 and 1999, respectively.

F-46

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17: EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS

DEFINED BENEFIT AND POSTRETIREMENT BENEFIT PLANS

CNH has various defined benefit plans that cover certain employees.
Benefits are based on years of service and, for most salaried employees, on
final average compensation. CNH's funding policies are to contribute to the
plans amounts necessary to, at a minimum, satisfy the funding requirements as
prescribed by the laws and regulations of each country. Plan assets consist
principally of listed equity and fixed income securities.

CNH has postretirement health and life insurance plans that cover the
majority of its U.S. and Canadian employees. For New Holland U.S. salaried and
hourly employees, and for Case U.S. non represented hourly and Case U.S. and
Canadian salaried employees, the plans cover employees retiring on or after
attaining age 55 who have had at least 10 years of service with the respective
company. For Case U.S. and Canadian hourly employees, the plans generally cover
employees who retire pursuant to their respective hourly plans. These benefits
may be subject to deductibles, copayment provisions and other limitations, and
CNH has reserved the right to change these benefits, subject to the provisions
of any collective bargaining agreement. CNH U.S. and Canadian employees hired
after January 1, 2001 and January 1, 2002, respectively, are not eligible for
postretirement health and life insurance benefits under the CNH plans.

In connection with CNH's acquisition of O&K in December 1998, CNH recorded
an unfunded pension obligation of approximately $140 million related to pension
rights of non-active employees of O&K who are retired or whose employment has
been terminated and who have vested rights. The pension obligation reserve of
approximately $140 million has been calculated in accordance with German
statutory requirements. Effective January 1, 1999, CNH entered into an agreement
with the seller of O&K whereby the seller, in return for a payment of $140
million (in equivalent Deutsche Marks) from O&K, has agreed to reimburse O&K for
all future pension payments, including death benefits and medical support
liabilities and any funding obligations under the collective bargaining
agreement related to the non-active employees of O&K. An irrevocable, revolving
bank guarantee was obtained to back the seller's guarantee of the future pension
payment reimbursement. The actuarial present value related to this benefit
obligation that is recorded on the balance sheet and reflected in the
rollforward below was $126 million at December 31, 2001. CNH has an equal,
corresponding other asset on their balance sheet to reflect the payment made by
CNH to the seller in conjunction with the acquisition.

Former parent companies of New Holland and Case have retained certain
accumulated pension benefit obligations and related assets and certain
accumulated postretirement health and life insurance benefit obligations.

The following assumptions were utilized in determining the funded status of
CNH's defined benefit pension plans:

FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
2001 2000
---------------- ----------------
CNH CNH CNH CNH
U.S. NON-U.S. U.S. NON-U.S.
PLANS PLANS PLANS PLANS
(CNH) ----- -------- ----- --------

Weighted-average discount rates..................... 7.25% 5.91% 7.50% 5.92%
Rate of increase in future compensation............. 4.00% 3.81% 4.00% 4.18%
Weighted-average, long-term rates of return on plan
assets............................................ 9.00% 7.31% 9.00% 7.10%

F-47

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 1999
---------------------------------------
NEW HOLLAND CASE
------------------ ------------------
U.S. NON-U.S. U.S. NON-U.S.
PLANS PLANS PLANS PLANS
(NEW HOLLAND AND CASE) ------ --------- ------ ---------

Weighted-average discount rates..................... 7.50% 5.50% 7.50% 5.85%
Rate of increase in future compensation............. 4.00% 3.80% N/A 4.30%
Weighted-average, long-term rates of return on plan
assets............................................ 9.00% 7.50% 9.00% 9.37%

The following assumptions were utilized in determining the accumulated
postretirement benefit obligation of CNH's postretirement health and life
insurance plans:

FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
2001 2000
---------------- ----------------
CNH CNH CNH CNH
U.S. CANADIAN U.S. CANADIAN
PLANS PLAN PLANS PLAN
(CNH) ----- -------- ----- --------

Weighted-average discount rates..................... 7.25% 6.50% 7.50% 6.50%
Rate of increase in future compensation............. 4.00% 3.50% 3.42% N/A
Weighted-average, assumed healthcare cost trend
rate.............................................. 8.00% 8.50% 6.50% 8.00%
Weighted-average, assumed ultimate healthcare cost
trend rate........................................ 5.50% 5.00% 5.50% 5.50%
Year anticipated attaining ultimate healthcare cost
trend rate........................................ 2006 2008 2002 2005

FOR THE YEAR ENDED
DECEMBER 31, 1999
------------------------------
NEW HOLLAND CASE
----------- ----------------
U.S. U.S. CANADIAN
PLANS PLANS PLAN
(NEW HOLLAND AND CASE) ----------- ----- --------

Weighted-average discount rates......................... 7.50% 7.50% 7.00%
Rate of increase in future compensation................. 4.00% 3.00% 3.00%
Weighted-average, assumed health care cost trend rate... 7.50% 7.00% 8.50%
Weighted-average, assumed ultimate healthcare cost trend
rate.................................................. 5.50% 5.50% 5.50%
Year anticipated attaining ultimate healthcare cost
trend rate............................................ 2002 2002 2005

The measurement period for CNH's defined benefit pension plans and
postretirement health and life insurance plans is January 1 through December 31.
The following depicts (in millions):

OTHER
POSTRETIREMENT
PENSION BENEFITS BENEFITS
----------------- ---------------
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
2001 2000 2001 2000
------- ------- ------ ------

CHANGE IN BENEFIT OBLIGATIONS:
Actuarial present value of benefit obligation at beginning
of measurement period..................................... $1,791 $1,631 $ 595 $ 598
Service cost................................................ 29 37 12 11
Interest cost............................................... 114 112 50 44
Plan participants' contributions............................ 7 7 -- --
Actuarial (gain) loss....................................... 30 (33) 248 15
Currency fluctuations....................................... (39) (67) (2) --
Gross benefits paid......................................... (132) (99) (31) (29)

F-48

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTHER
POSTRETIREMENT
PENSION BENEFITS BENEFITS
----------------- ---------------
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
2001 2000 2001 2000
------- ------- ------ ------

Plan amendments............................................. 2 24 (31) (44)
Acquisitions/divestitures................................... (41) 189 -- --
Curtailment gain............................................ (4) (10) -- --
Settlement loss............................................. 2 -- -- --
Adjustments to reflect re-measurement of benefit
obligation................................................ -- -- 22 --
------ ------ ----- -----
Actuarial present value of benefit obligation at end of
measurement period........................................ 1,759 1,791 863 595
------ ------ ----- -----
CHANGE IN PLAN ASSETS:
Plan assets at fair value at beginning of measurement
period.................................................... 1,526 1,571 -- --
Actual return on plan assets................................ (88) 36 -- --
Currency fluctuations....................................... (39) (33) -- --
Employer contributions...................................... 65 57 31 29
Plan participants' contributions............................ 7 7 -- --
Gross benefits paid......................................... (132) (99) (31) (29)
Acquisitions/divestitures................................... (38) (13) -- --
Adjustments to reflect re-measurement of benefit
obligation................................................ -- -- -- --
------ ------ ----- -----
Plan assets at fair value at end of measurement period...... 1,301 1,526 -- --
------ ------ ----- -----
FUNDED STATUS:.............................................. (458) (265) (863) (595)
Unrecognized prior service cost............................. 25 28 (59) (42)
Unrecognized net loss resulting from plan experience and
changes in actuarial assumptions.......................... 328 97 268 6
Remaining unrecognized net asset at initial application..... -- -- 55 64
------ ------ ----- -----
Net amount recognized at end of year........................ $ (105) $ (140) $(599) $(567)
====== ====== ===== =====

OTHER
POSTRETIREMENT
PENSION BENEFITS BENEFITS
----------------- ---------------
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
2001 2000 2001 2000
------- ------- ------ ------

AMOUNTS RECOGNIZED IN THE STATEMENT OF FINANCIAL POSITION
CONSIST OF:
Prepaid benefit cost........................................ $ 63 $ 167 $ -- $ --
Accrued benefit liability................................... (399) (308) (599) (567)
Intangible asset............................................ 23 -- -- --
Deferred tax assets......................................... 89 -- -- --
Accumulated other comprehensive income...................... 119 1 -- --
----- ----- ----- -----
Net amount recognized at end of year........................ $(105) $(140) $(599) $(567)
===== ===== ===== =====

F-49

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTHER
POSTRETIREMENT
PENSION BENEFITS BENEFITS
-------------------- ----------------------
FOR THE YEARS ENDED DECEMBER 31,
2001 2000 1999 2001 2000 1999
----- ----- ---- ---- -------- ----
(IN MILLIONS)

COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost.................................... $ 29 $ 37 $ 18 $ 12 $11 $ 6
Interest cost................................... 114 112 60 50 44 24
Expected return on assets....................... (119) (146) (84) -- -- --
Amortization of:
Transition asset.............................. -- -- (1) 9 9 9
Prior service cost............................ 3 3 2 (13) (4) (1)
Actuarial loss................................ 3 -- 1 6 -- --
----- ----- ---- ---- --- ---
Net periodic benefit cost....................... 30 6 (4) 64 60 38
Curtailment (gain) loss......................... 1 17 -- -- (4) --
----- ----- ---- ---- --- ---
Total (income) expense........................ $ 31 $ 23 $ (4) $ 64 $56 $38
===== ===== ==== ==== === ===

The aggregate projected benefit obligation, aggregate accumulated benefit
obligation and aggregate fair value of plan assets for pension plans with
benefit obligations in excess of plan assets were $1,744 million, $1,591 million
and $1,282 million, respectively, as of December 31, 2001, and $805 million,
$755 million and $507 million, respectively, as of December 31, 2000.

Increasing the assumed healthcare cost trend rate by one percentage point
would increase the total accumulated postretirement benefit obligation at
December 31, 2001, by approximately $72 million, and would increase the
aggregate of the service cost and interest cost components of the net 2001
postretirement benefit cost by approximately $7 million. Decreasing the assumed
healthcare cost trend rate by one percentage point would decrease the total
accumulated postretirement benefit obligation at December 31, 2001, by
approximately $60 million, and would decrease the aggregate of the service cost
and interest cost components of the net 2001 postretirement benefit cost by
approximately $6 million.

OTHER PROGRAMS

In Belgium, early retirement liabilities were accrued in connection with
the restructuring of CNH's Belgian facilities initiated in 1991. Such
liabilities were $10 million and $14 million at December 31, 2001 and 2000,
respectively. Programs in other countries are provided through payroll tax and
other social contributions in accordance with local statutory requirements.

As required by Italian labor legislation, an accrual for employee severance
indemnities has been provided for a portion of CNH's Italian employees' annual
salaries, indexed for inflation. At December 31, 2001 and 2000, the indemnity
accruals were $72 million and $73 million, respectively.

DEFINED CONTRIBUTION PLANS

Effective January 1, 2001, both the Case and New Holland entities provide
an identical defined contribution plan for their U.S. salaried employees. The
CNH plan allows employee elective deferrals on a pretax basis of up to 10% of
pay with CNH matching such deferrals at a rate of 70 cents for each dollar
deferred. In addition to matching contributions, CNH provides a fixed
contribution of five percent of eligible salary per year. During 2001, CNH
contributed $15 million and $8 million in matching contributions and fixed
contributions, respectively. Subject to CNH's operating results, CNH may make

F-50

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

additional profit sharing contributions to the retirement savings plan. CNH made
no profit sharing contributions in 2001.

Effective January 1, 2001, both the Case and New Holland entities provide
an identical defined contribution plan for their U.S. non-represented hourly
employees. The CNH plan allows employee elective deferrals on a pretax basis of
up to 15% of base compensation with CNH matching such deferrals at a rate of 50%
on the first 10% of a participant's contribution. During 2001, CNH contributed
$5 million in matching contributions.

Prior to January 1, 2001, CNH had various defined contribution plans that
covered certain U.S. and non-U.S. employees. New Holland had a savings plan for
its U.S. salaried and hourly employees whereby employees could make pretax
contributions of up to 15% of base compensation. New Holland would match 50% of
the first 10% of a participant's contribution. This matching contribution was
directed based on the participant's investment elections. New Holland
contributed $5 million to its prior savings plan in both 2000 and 1999. Case had
a retirement savings plan pursuant to the Internal Revenue Code for its U.S.
salaried employees. Under the retirement savings plan, certain salaried
participants could make pretax contributions of up to 10% of base compensation.
Case would match 100% of the first 8% of a participant's contribution in cash.
Annually, Case made a fixed contribution to the retirement savings plan equal to
4% of each participant's eligible compensation. During 2000 and 1999, Case
contributed $15 million and $2 million, respectively, in matching contributions
to its prior retirement savings plan and additional fixed contributions of $3
million and $9 million in 2000 and 1999, respectively. These contributions are
net of forfeitures applied of $8 million and $0 in 2000 and 1999, respectively.
Subject to CNH's operating results, Case and New Holland may have made
additional profit sharing contributions to the retirement savings plan. Case
made additional profit sharing contributions of $0 and $4 million in 2000 and
1999, respectively.

NOTE 18: COMMITMENTS AND CONTINGENCIES

ENVIRONMENTAL

CNH is involved in environmental remediation activities with regard to
potential liabilities under U.S. federal, U.S. state and non-U.S. environmental
laws. These activities involve non-owned Waste Sites and properties currently or
formerly owned by CNH where it is believed there has been a release of hazardous
substances. These properties comprise a number of sites currently or formerly
operated by CNH or its predecessors. Expenditures for ongoing compliance with
environmental regulations that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations and which do not contribute to current or future
revenue generation are expensed. Liabilities are recorded when environmental
assessments indicate that remedial efforts are probable and the costs can be
reasonably estimated. Estimates of the liability are provided in ranges to
reflect uncertainties due to a variety of factors that include lack of direct
knowledge of historic industrial and waste handling activities that may have
resulted in releases of hazardous substances, inherent limitations of subsurface
soil and groundwater investigatory techniques, future changes in the laws,
including their interpretation and implementation by governmental authorities,
changes in remedial technologies and future land use. Probable liabilities may
also be the subject of both asserted and unasserted claims, including those by
government authorities that may be dormant or pursued over extremely long time
periods. Moreover, because liability under CERCLA and similar laws can be
strict, joint and several, CNH could be required to pay amounts in excess of its
pro rata share of remediation costs at the Waste Sites. Settlements and
government-approved and completed remediation projects can, in certain
circumstances, be reopened based on newly discovered conditions and be subject
to further remedial activities or settlement payments.

F-51

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Based upon information currently available, management estimates potential
environmental liabilities including remediation, decommissioning, restoration,
monitoring, and other closure costs associated with current or formerly owned or
operated facilities, the Waste Sites, and other claims to be in the range of $46
million to $98 million. As of December 31, 2001, environmental reserves of
approximately $69 million had been established to address these specific
estimated potential liabilities. Such reserves are undiscounted. After
considering these reserves, management is of the opinion that the outcome of
these matters will not have a material adverse effect on CNH's financial
position or results of operations.

PRODUCT LIABILITY

Product liability claims against CNH arise from time to time in the
ordinary course of business. There is an inherent uncertainty as to the eventual
resolution of unsettled claims. However, in the opinion of management, any
losses with respect to existing claims will not have a material adverse effect
on CNH's financial position or results of operations.

OTHER LITIGATION

CNH is the subject of various other legal claims arising from its
operations, including product warranty, dealer disputes, workmen's compensation,
customs and employment matters. In addition, certain of CNH's Brazilian
subsidiaries are currently contesting certain claims made by the Brazilian tax
authorities related to taxation and employer social contributions.

On July 17, 2001, the European Commission issued a Statement of Objections
alleging that CNH's French and Italian subsidiaries adopted practices limiting
sales outside of dealer territories. CNH submitted a reply to the European
Commission and a hearing was held on January 28, 2002, however the Commission
has not provided a ruling. The Commission has the power to assess a wide range
of fines, penalties and sanctions, which may be significant. Any fines would be
assessed by the Commission only after a ruling by the Commission that these
subsidiaries engaged in anti-competitive practices. CNH believes that the
allegations should be dismissed. However, while CNH intends to appeal the
decision if the outcome is unfavorable, any fine that the European Commission
might impose could have a material adverse impact on CNH's business, financial
condition and results of operations.

Management is of the opinion that the resolution of these claims,
individually and in the aggregate, will not have a material adverse effect on
CNH's financial position or results of operations.

COMMITMENTS

Minimum rental commitments at December 31, 2001, under non-cancelable
operating leases with lease terms in excess of one year are as follows (in
millions):

AMOUNT
------

2002........................................................ $ 38
2003........................................................ 26
2004........................................................ 19
2005........................................................ 15
2006 and thereafter......................................... 64
----
Total minimum rental commitments.......................... $162
====

Total rental expense for all operating leases was $44 million, $38 million
and $27 million for the years ended December 31, 2001, 2000 and 1999,
respectively.

F-52

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 19: EARNINGS (LOSS) PER SHARE

The following reconciles the numerators and denominators of the basic and
diluted earnings per share computations for income from continuing operations
(in millions, except per share data):

FOR THE YEARS ENDED
DECEMBER 31,
-----------------------
2001 2000 1999
------ ------ -----

BASIC
Net income (loss)........................................... $ (332) $ (381) $ 148
Weighted-average shares outstanding......................... 277 213 149
Basic earnings (loss) per share............................. $(1.20) $(1.79) $0.99
====== ====== =====
DILUTED
Net income (loss)........................................... $ (332) $ (381) $ 148
Effect of dilutive securities (when dilutive):
Conversion of advance to capital subscription............. N/A N/A 12
------ ------ -----
Net income (loss) after adjustment for dilutive
conversions............................................... $ (332) $ (381) $ 160
====== ====== =====
Weighted-average shares outstanding --Basic................. 277 213 149
Effect of dilutive securities (when dilutive):
Conversion of advance to capital subscription............. N/A N/A 16
------ ------ -----
Weighted-average shares outstanding --Diluted............... 277 213 165
====== ====== =====
Diluted earnings per share.................................. $(1.20) $(1.79) $0.97
====== ====== =====

Reference is made to Note 11, "Principal Shareholder's Advance to Capital,"
for further information regarding the advance to capital.

NOTE 20: SEGMENT AND GEOGRAPHICAL INFORMATION

SEGMENT INFORMATION

CNH has three reportable segments: Agricultural Equipment, Construction
Equipment and Financial Services. Certain reclassifications have been made to
conform the historical segment and geographical information to the current CNH
management reporting format.

AGRICULTURAL EQUIPMENT

The agricultural equipment segment manufactures and distributes a full line
of farm machinery and implements, including two-wheel and four-wheel drive
tractors, combines, cotton pickers, grape and sugar cane harvesters, hay and
forage equipment, planting and seeding equipment, soil preparation and
cultivation implements and material handling equipment.

CONSTRUCTION EQUIPMENT

The construction equipment segment manufactures and distributes a full line
of construction equipment and has leading positions in excavators, crawler
dozers, graders, wheel loaders, loader/backhoes, skid steer loaders and
trenchers.

FINANCIAL SERVICES

The financial services segment is engaged in broad-based financial services
for the global marketplace through various wholly owned subsidiaries and joint
ventures in North America, Latin America, Europe and Australia. CNH provides and
administers retail financing to end-use customers for the purchase or lease of
new and used CNH and other agricultural and construction equipment sold by CNH
dealers and
F-53

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

distributors. CNH also facilitates the sale of insurance products and other
financing programs to retail customers. In addition, CNH provides wholesale
financing to CNH dealers and rental equipment operators, as well as financing
options to dealers to finance working capital, real estate and other fixed
assets and maintenance equipment in connection with their operations.

The accounting policies of the segments are described in Note 2, "Summary
of Significant Accounting Policies." CNH evaluates segment performance based on
operating earnings. CNH defines operating earnings as the income (loss) of
Equipment Operations before interest expense, taxes and restructuring and other
merger related costs, including the income of Financial Services on an equity
basis. Transfers between segments are accounted for at market value.

CNH's reportable segments are strategic business units that offer different
products and services. Each segment is managed separately as they require
different technology and marketing strategies.

A summary of CNH's reportable segment information is set forth in the
following table (in millions):

FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
2001 2000 1999
-------- -------- --------

REVENUES:
Net sales
Agricultural equipment.............................. $ 6,073 $ 5,877 $ 3,904
Construction equipment.............................. 2,957 3,460 2,045
------- ------- -------
Total net sales.................................. 9,030 9,337 5,949
External financial services......................... 685 704 324
Intersegment financial services..................... 54 95 88
Eliminations and other.............................. (54) (95) (88)
------- ------- -------
Total............................................ $ 9,715 $10,041 $ 6,273
======= ======= =======
SEGMENT PROFIT (LOSS):
Agricultural equipment................................ $ 177 $ (95) $ 146
Construction equipment................................ 64 228 117
Financial services.................................... 4 26 72
------- ------- -------
Total............................................ $ 245 $ 159 $ 335
======= ======= =======
RECONCILIATION OF SEGMENT PROFIT (LOSS) TO
CONSOLIDATED NET INCOME (LOSS):
Segment profit........................................ $ 245 $ 159 $ 335
Equipment Operations:
Income tax (provision) benefit...................... 105 159 (14)
Interest expense.................................... (585) (542) (154)
Restructuring and other merger related costs........ (97) (157) (19)
------- ------- -------
Net income (loss)................................ $ (332) $ (381) $ 148
======= ======= =======

F-54

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
2001 2000 1999
-------- -------- --------

INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND
AFFILIATES (AT THE END OF YEAR):
Agricultural equipment................................ $ 169 $ 203 $ 254
Construction equipment................................ 66 55 51
Financial services.................................... 31 24 23
------- ------- -------
Total............................................ $ 266 $ 282 $ 328
======= ======= =======
DEPRECIATION AND AMORTIZATION:
Agricultural equipment................................ $ 232 $ 253 $ 130
Construction equipment................................ 87 83 33
Financial services.................................... 105 93 20
------- ------- -------
Total............................................ $ 424 $ 429 $ 183
======= ======= =======
SEGMENT ASSETS (AT THE END OF YEAR):
Agricultural equipment................................ $ 6,410 $ 6,895 $ 7,207
Construction equipment................................ 2,893 3,275 3,614
Financial services.................................... 6,352 6,400 6,009
Eliminations and other................................ 1,557 1,007 848
------- ------- -------
Total............................................ $17,212 $17,577 $17,678
======= ======= =======
EXPENDITURES FOR ADDITIONS TO LONG-LIVED ASSETS*:
Agricultural equipment................................ $ 160 $ 134 $ 167
Construction equipment................................ 61 79 46
Financial services.................................... 330 195 60
------- ------- -------
Total............................................ $ 551 $ 408 $ 273
======= ======= =======

---------------

* Includes equipment on operating leases and property, plant and equipment.

F-55

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

GEOGRAPHICAL INFORMATION

The following highlights the results of CNH's operations by geographic
area, by origin (in millions):

UNITED UNITED
STATES CANADA KINGDOM ITALY BELGIUM OTHER TOTAL
------ ------ ------- ------ ------- ------ -------

At December 31, 2001, and for the year
then ended:
Total revenues.......................... $4,156 $606 $1,276 $1,636 $665 $1,376 $ 9,715
====== ==== ====== ====== ==== ====== =======
Long-lived assets*...................... $1,166 $103 $ 88 $ 190 $ 89 $ 330 $ 1,966
====== ==== ====== ====== ==== ====== =======
At December 31, 2000, and for the year
then ended:
Total revenues.......................... $4,344 $406 $1,348 $1,530 $423 $1,990 $10,041
====== ==== ====== ====== ==== ====== =======
Long-lived assets*...................... $1,265 $114 $ 141 $ 144 $ 85 $ 368 $ 2,117
====== ==== ====== ====== ==== ====== =======
At December 31, 1999, and for the year
then ended:
Total revenues.......................... $1,809 $293 $ 902 $1,589 $511 $1,169 $ 6,273
====== ==== ====== ====== ==== ====== =======
Long-lived assets*...................... $1,439 $ 77 $ 221 $ 237 $ 81 $ 377 $ 2,432
====== ==== ====== ====== ==== ====== =======

---------------

* Includes equipment on operating leases and property, plant and equipment.

CNH is organized under the laws of the Kingdom of The Netherlands.
Geographical information for CNH pertaining to The Netherlands is not
significant or not applicable, as CNH primarily maintains a corporate presence
in that country.

NOTE 21: RELATED PARTY INFORMATION

CNH has historically obtained, and may continue to obtain, a significant
portion of its external financing and certain foreign exchange and interest
rate-related contracts from Fiat and its affiliates, on terms that CNH believes
are at least as favorable as those available from unaffiliated third parties. At
December 31, 2001, CNH's outstanding debt with Fiat and its affiliates was
approximately 60% of its total debt. In addition, Fiat guarantees $802 million
of CNH debt outstanding at December 31, 2001. In 2001, CNH paid a guarantee fee
of between 0.0625% per annum and 0.125% per annum on the average amount
outstanding under facilities guaranteed by Fiat. Reference is made to Note 9,
"Short-Term Debt" and Note 10, "Long-Term Debt" for further information
regarding financing with Fiat.

CNH purchases some of its engines and other components from the Fiat Group,
and companies of the Fiat Group provide CNH administrative services such as
accounting and audit, maintenance of plant and equipment, research and
development, information systems and training. In addition, CNH sells certain
products to subsidiaries and affiliates of Fiat.

CNH's principal purchases of goods from Fiat and its affiliates include
diesel engines from Iveco N.V., electric and mechanical components from Magneti
Marelli S.p.A., castings from Teksid S.p.A. and lubricants from Fiat
Lubrificanti S.p.A. CNH also purchases tractors from its Mexican joint venture
for resale in the United States.

Fiat has executed, on behalf of CNH, certain foreign exchange and interest
rate-related contracts. As of December 31, 2001, CNH and its subsidiaries were
parties to derivative or other financial instruments having an aggregate
contract value of $515 million to which affiliates of Fiat were counterparties.

F-56

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Fiat provides accounting services to CNH in Europe and Brazil through an
affiliate that uses shared service centers to provide such services at
competitive costs to various Fiat companies and third party customers. Fiat
provides internal audit services at the direction of CNH's internal audit area
in certain locations where it is more cost effective to use existing Fiat
resources. Routine maintenance of our plants and facilities in Europe is
provided by a Fiat affiliate skilled in such work that also provides similar
services to third parties. CNH purchases network and hardware support from a
joint venture that Fiat has formed with IBM. Fiat also provides training
services through an affiliate that is skilled at providing employee training.
CNH purchases research and development from an Italian joint venture set up by
Fiat and owned by various Fiat subsidiaries. This joint venture benefits from
Italian government incentives granted to promote work in the less developed
areas of Italy. CNH's management believes that the terms of the contracts
entered into with Fiat and its affiliates are at least as favorable as those
available from unaffiliated third parties.

Additionally, CNH participates in the stock option program of Fiat as
described in Note 13, "Shareholders' Equity and Stock-Based Compensation."

The following table summarizes CNH's sales, purchases, and finance income
and expense with affiliates of Fiat and CNH dealer development companies and
joint ventures (in millions):

FOR THE YEARS ENDED
DECEMBER 31,
---------------------
2001 2000 1999
----- ----- -----

Sales of equipment.......................................... $ 13 $ 16 $ 14
Sales to affiliated companies and joint ventures............ 199 256 259
---- ---- ----
Total sales to affiliates................................. $212 $272 $273
==== ==== ====
Purchase of materials, production parts, merchandise and
services.................................................. $239 $367 $295
Finance and interest income................................. $ 31 $ 34 $ 32
Interest expense............................................ $358 $291 $ 79

CNH management believes that the terms of sales and purchases provided to
CNH by Fiat and its affiliates are at least as favorable as those available from
unaffiliated third parties.

NOTE 22: OTHER ACCRUED LIABILITIES

A summary of other accrued liabilities is as follows (in millions):

DECEMBER 31,
---------------
2001 2000
------ ------

Warranty provisions......................................... $ 190 $ 256
Marketing and sales incentive programs...................... 321 340
Accrued payroll............................................. 126 152
Value-added taxes and other taxes payable................... 13 250
Other accrued expenses...................................... 1,134 870
------ ------
Total other accrued liabilities........................ $1,784 $1,868
====== ======

NOTE 23: GUARANTEE OF SUBSIDIARY'S OUTSTANDING DEBT SECURITIES

At December 31, 2001, CNH fully, unconditionally and irrevocably guaranteed
Case's $802 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. The following

F-57

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

condensed financial statements present CNH Global N.V. (the parent company and
guarantor of the debt securities), Case Corporation (the issuer of the debt
securities), and all other subsidiaries. The 1999 statement of operations and
statement of cash flows for Case Corporation include activity from November 12,
1999, the date of the merger, through December 31, 1999. In addition, for 1999,
the costs of maintaining the CNH corporate offices were allocated to the
operating subsidiaries. For 2000 and 2001, the costs of the corporate offices
were not allocated and a substantial majority of such cost was included in the
Case Corporation condensed statements of operations.

The consolidated financial statements of Case Corporation include the
push-down of the Case purchase accounting adjustments and related acquisition
debt to reflect the assets and liabilities at their respective fair values,
including identifiable intangibles. The acquisition debt is reflected as an
intercompany arrangement between CNH Global N.V. and Case Corporation in the
accompanying financial statements to this note and is accordingly eliminated in
arriving at the consolidated results. Reference is made to Note 3, "Acquisition
and Divestitures of Businesses and Investments" for further information
regarding the Case merger and related purchase accounting.

F-58

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2001

CNH
GLOBAL CASE ALL OTHER
N.V. CORPORATION SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ----------- ------------ ------------ ------------
(IN MILLIONS OF DOLLARS)

REVENUES:
Net sales.................... $ -- $4,107 $5,087 $(164) $9,030
Finance and interest
income.................... -- 474 360 (149) 685
----- ------ ------ ----- ------
-- 4,581 5,447 (313) 9,715
COSTS AND EXPENSES:
Cost of goods sold........... -- 3,570 4,149 (133) 7,586
Selling, general and
administrative............ 5 805 424 (10) 1,224
Research, development and
engineering............... -- 154 152 -- 306
Restructuring and other
merger related costs...... -- 51 53 -- 104
Interest expense............. 3 400 492 (169) 726
Other, net................... 3 250 (101) 41 193
----- ------ ------ ----- ------
11 5,230 5,169 (271) 10,139
EQUITY IN INCOME (LOSS) OF
UNCONSOLIDATED SUBSIDIARIES
AND AFFILIATES............... (322) 1 (9) 322 (8)
----- ------ ------ ----- ------
Income (loss) before taxes and
minority interest............ (333) (648) 269 280 (432)
Income tax provision
(benefit).................... (1) (192) 88 -- (105)
Minority interest.............. -- (3) 8 -- 5
----- ------ ------ ----- ------
Net income (loss).............. $(332) $ (453) $ 173 $ 280 $ (332)
===== ====== ====== ===== ======

F-59

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2000

CNH
GLOBAL CASE ALL OTHER
N.V. CORPORATION SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ----------- ------------ ------------ ------------
(IN MILLIONS OF DOLLARS)

REVENUES:
Net sales.................... $ -- $4,000 $5,342 $ (5) $9,337
Finance and interest
income.................... -- 503 223 (22) 704
----- ------ ------ ---- ------
-- 4,503 5,565 (27) 10,041
COSTS AND EXPENSES:
Cost of goods sold........... -- 3,541 4,284 (5) 7,820
Selling, general and
administrative............ 17 690 572 (2) 1,277
Research, development and
engineering............... -- 180 158 -- 338
Restructuring and other
merger related costs...... -- 34 123 -- 157
Interest expense............. 43 416 354 (20) 793
Other, net................... 6 207 (27) -- 186
----- ------ ------ ---- ------
66 5,068 5,464 (27) 10,571
EQUITY IN INCOME (LOSS) OF
UNCONSOLIDATED SUBSIDIARIES
AND AFFILIATES............... (314) 2 45 273 6
----- ------ ------ ---- ------
Income (loss) before taxes and
minority interest............ (380) (563) 146 273 (524)
Income tax provision
(benefit).................... 1 (160) 6 -- (153)
Minority interest.............. -- -- 10 -- 10
----- ------ ------ ---- ------
Net income (loss).............. $(381) $ (403) $ 130 $273 $ (381)
===== ====== ====== ==== ======

F-60

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1999

CNH
GLOBAL CASE ALL OTHER
N.V. CORPORATION SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ----------- ------------ ------------ ------------
(IN MILLIONS OF DOLLARS)

REVENUES:
Net sales........................ $ -- $620 $5,329 $ -- $5,949
Finance and interest income...... -- 64 260 -- 324
---- ---- ------ ----- ------
-- 684 5,589 -- 6,273
COSTS AND EXPENSES:
Cost of goods sold............... -- 563 4,321 -- 4,884
Selling, general and
administrative................ 11 105 610 -- 726
Research, development and
engineering................... -- 27 169 -- 196
Restructuring and other merger
related costs................. -- -- 19 -- 19
Interest expense................. 10 50 206 -- 266
Other, net....................... 8 9 (33) -- (16)
---- ---- ------ ----- ------
29 754 5,292 6,075
EQUITY IN INCOME (LOSS) OF
UNCONSOLIDATED SUBSIDIARIES AND
AFFILIATES....................... 179 -- -- (170) 9
---- ---- ------ ----- ------
Income (loss) before taxes and
minority interest................ 150 (70) 297 (170) 207
Income tax provision (benefit)..... 2 (25) 78 -- 55
Minority interest.................. -- -- 4 -- 4
---- ---- ------ ----- ------
Net income (loss).................. $148 $(45) $ 215 $(170) $ 148
==== ==== ====== ===== ======

F-61

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED BALANCE SHEETS

AS OF DECEMBER 31, 2001

CNH
GLOBAL CASE ALL OTHER
N.V. CORPORATION SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ----------- ------------ ------------ ------------
(IN MILLIONS OF DOLLARS)

ASSETS:
Cash and cash equivalents........ $ -- $ 355 $ 308 $ -- $ 663
Accounts, notes receivable and
other, net.................... 4,927 3,521 842 (3,130) 6,160
Inventories...................... -- 795 1,409 -- 2,204
Property, plant and equipment,
net........................... -- 729 625 -- 1,354
Equipment on operating leases,
net........................... -- 475 137 -- 612
Investment in unconsolidated and
affiliates.................... 1,674 192 2,687 (4,287) 266
Goodwill and intangibles......... -- 3,350 297 -- 3,647
Other assets..................... -- 1,251 1,001 54 2,306
------ ------- ------ ------- -------
TOTAL ASSETS....................... $6,601 $10,668 $7,306 $(7,363) $17,212
====== ======= ====== ======= =======
LIABILITIES AND EQUITY:
Short-term debt.................. $ 997 $ 2,434 $1,055 $(1,269) $ 3,217
Accounts payable................. 57 445 1,046 (331) 1,217
Long-term debt................... 3,501 3,023 1,621 (1,499) 6,646
Accrued and other liabilities.... 137 1,900 2,101 85 4,223
------ ------- ------ ------- -------
4,692 7,802 5,823 (3,014) 15,303
Equity........................... 1,909 2,866 1,483 (4,349) 1,909
------ ------- ------ ------- -------
TOTAL LIABILITIES AND EQUITY....... $6,601 $10,668 $7,306 $(7,363) $17,212
====== ======= ====== ======= =======

F-62

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED BALANCE SHEETS

AS OF DECEMBER 31, 2000

CNH ALL
GLOBAL CASE OTHER
N.V. CORPORATION SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ----------- ------------ ------------ ------------
(IN MILLIONS OF DOLLARS)

ASSETS:
Cash and cash equivalents........... $ -- $ 146 $ 740 $ -- $ 886
Accounts, notes receivable and
other, net....................... 3,154 3,625 3,673 (4,302) 6,150
Inventories......................... -- 1,080 1,294 -- 2,374
Property, plant and equipment,
net.............................. -- 887 587 -- 1,474
Equipment on operating leases,
net.............................. -- 555 88 -- 643
Investment in unconsolidated and
affiliates....................... 2,564 111 2,292 (4,685) 282
Goodwill and intangibles............ -- 3,512 305 -- 3,817
Other assets........................ -- 1,122 829 -- 1,951
------ ------- ------ ------- -------
TOTAL ASSETS.......................... $5,718 $11,038 $9,808 $(8,987) $17,577
====== ======= ====== ======= =======

LIABILITIES AND EQUITY:
Short-term debt..................... $3,188 $ 2,575 $1,850 $(3,427) $ 4,186
Accounts payable.................... 16 611 770 (141) 1,256
Long-term debt...................... -- 2,751 3,522 (734) 5,539
Accrued and other liabilities....... -- 1,935 2,147 -- 4,082
------ ------- ------ ------- -------
3,204 7,872 8,289 (4,302) 15,063
Equity.............................. 2,514 3,166 1,519 (4,685) 2,514
------ ------- ------ ------- -------
TOTAL LIABILITIES AND EQUITY.......... $5,718 $11,038 $9,808 $(8,987) $17,577
====== ======= ====== ======= =======

F-63

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2001

CNH ALL
GLOBAL CASE OTHER
N.V. CORPORATION SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ----------- ------------ ------------ ------------
(IN MILLIONS OF DOLLARS)

OPERATING ACTIVITIES:
Net income (loss).................. $ (332) $(453) $ 173 $ 280 $(332)
Adjustments to reconcile net income
(loss) to net cash from
operating activities............ (1,271) 331 2,743 (1,653) 150
------- ----- ------- ------- -----
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES......................... (1,603) (122) 2,916 (1,373) (182)
------- ----- ------- ------- -----
INVESTING ACTIVITIES:
Expenditures for property, plant
and equipment................... -- (84) (145) -- (229)
Expenditures for equipment on
operating leases................ -- (237) (85) -- (322)
Other, net (primarily acquisitions
and divestitures)............... 244 193 (406) 248 279
------- ----- ------- ------- -----
NET CASH PROVIDED (USED) BY INVESTING
ACTIVITIES......................... 244 (128) (636) 248 (272)
------- ----- ------- ------- -----
FINANCING ACTIVITIES:
Net increase (decrease) in
indebtedness.................... 1,387 193 (2,605) 1,316 291
Advance to capital................. -- -- -- -- --
Dividends paid..................... (28) -- (88) 88 (28)
Other, net......................... -- 279 -- (279) --
------- ----- ------- ------- -----
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES......................... 1,359 472 (2,693) 1,125 263
------- ----- ------- ------- -----
Other, net........................... -- (13) (19) -- (32)
------- ----- ------- ------- -----
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS........................ -- 209 (432) -- (223)
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR............................ -- 146 740 -- 886
------- ----- ------- ------- -----
CASH AND CASH EQUIVALENTS, END OF
YEAR............................... $ -- $ 355 $ 308 $ -- $ 663
======= ===== ======= ======= =====

F-64

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2000

CNH
GLOBAL CASE ALL OTHER
N.V. CORPORATION SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ----------- ------------ ------------ ------------
(IN MILLIONS OF DOLLARS)

OPERATING ACTIVITIES:
Net income (loss)............ $(381) $(403) $ 130 $ 273 $ (381)
Adjustments to reconcile net
income (loss) to net cash
from operating
activities................ 298 745 (530) 676 1,189
----- ----- ------ ------- ------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES......... (83) 342 (400) 949 808
----- ----- ------ ------- ------
INVESTING ACTIVITIES:
Expenditures for property,
plant and equipment....... -- (121) (107) -- (228)
Expenditures for equipment on
operating leases.......... -- (112) (68) -- (180)
Other, net (primarily
acquisitions and
divestitures)............. (67) 61 51 67 112
----- ----- ------ ------- ------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES......... (67) (172) (124) 67 (296)
----- ----- ------ ------- ------
FINANCING ACTIVITIES:
Net increase (decrease) in
indebtedness.............. 366 (251) 1,261 (1,252) 124
Advance to capital........... -- -- -- -- --
Dividends paid............... (82) -- (156) 156 (82)
Other, net................... (131) 20 (53) 80 (84)
----- ----- ------ ------- ------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES......... 153 (231) 1,052 (1,016) (42)
----- ----- ------ ------- ------
Other, net..................... (3) (7) (40) -- (50)
----- ----- ------ ------- ------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS............. -- (68) 488 -- 420
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR............ -- 214 252 -- 466
----- ----- ------ ------- ------
CASH AND CASH EQUIVALENTS, END
OF YEAR...................... $ -- $ 146 $ 740 $ -- $ 886
===== ===== ====== ======= ======

F-65

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1999

CNH
GLOBAL CASE ALL OTHER
N.V. CORPORATION SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ----------- ------------ ------------ ------------
(IN MILLIONS OF DOLLARS)

OPERATING ACTIVITIES:
Net income (loss).......... $ 148 $(45) $ 215 $ (170) $ 148
Adjustments to reconcile
net income (loss) to net
cash from operating
activities.............. (2,338) 376 690 2,209 937
------- ---- ------- ------- -------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES....... (2,190) 331 905 2,039 1,085
------- ---- ------- ------- -------
INVESTING ACTIVITIES:
Expenditures for property,
plant and equipment..... -- (50) (160) -- (210)
Expenditures for equipment
on operating leases..... -- (34) (29) -- (63)
Other, net (primarily
acquisitions and
divestitures)........... (1,823) 212 (2,788) 120 (4,279)
------- ---- ------- ------- -------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES....... (1,823) 128 (2,977) 120 (4,552)
------- ---- ------- ------- -------
FINANCING ACTIVITIES:
Net increase (decrease) in
indebtedness............ 2,822 (246) 1,309 (1,784) 2,101
Advance to capital......... 1,400 -- -- -- 1,400
Dividends paid............. (82) -- (167) 167 (82)
Other, net................. (137) 1 586 (542) (92)
------- ---- ------- ------- -------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES....... 4,003 (245) 1,728 (2,159) 3,327
------- ---- ------- ------- -------
Other, net................... (3) -- (68) -- (71)
------- ---- ------- ------- -------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS....... (13) 214 (412) -- (211)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR.......... 13 -- 664 -- 677
------- ---- ------- ------- -------
CASH AND CASH EQUIVALENTS,
END OF YEAR................ $ -- $214 $ 252 $ -- $ 466
======= ==== ======= ======= =======

F-66

CNH GLOBAL N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 24: SUBSEQUENT EVENTS

In January 2002, CNH finalized its global alliance with Kobelco
Construction Machinery Co., Ltd. and Kobe Steel, Ltd. for the development,
production and selling of crawler excavators, including mini-excavators, on a
worldwide basis.

In January 2002, CNH's second joint venture in China, Shanghai New Holland
Agricultural Machinery Corp., Ltd., commenced operations. Shanghai New Holland
Agricultural Machinery Corp., Ltd., was formed by an agreement between Shanghai
Tractor and Internal Combustion Engine Corporation, a wholly-owned subsidiary of
Shanghai Automotive Industry Corporation, and CNH's New Holland brand of
agricultural equipment. The joint venture company will manufacture, distribute
and ultimately export agricultural tractors under 100 horsepower.

On February 4, 2002, CNH's shareholders approved adoption of certain
amendments to the articles of association of CNH, among which is an increase in
CNH's authorized share capital to E450 million, divided into 700 million common
shares and 300 million preferred shares. In addition, the shareholders have
authorized the board of directors to resolve on any future issuance of shares
for a period of five years.

EVENTS (UNAUDITED) SUBSEQUENT TO DATE OF AUDITORS' REPORT

On March 9, 2002, President Bush signed into law the Job Creation and
Workers Assistance Act of 2002 (P.L. 107-147), which temporarily extends the
U.S. net operating loss carryback period from two years to five years for net
operating losses incurred in 2001 and 2002. In April 2002, the Company filed and
received a refund for approximately $105 million relating to the carryback of
approximately $270 million of its 2001 net operating losses.

On March 28, 2002, CNH sold $674 million of retail receivables to a
qualified special purpose entity ("QSPE") pursuant to an asset-backed
securitization transaction in which the QSPE issued $1 billion of securities,
backed by the receivables sold, to outside investors. CNH will sell additional
retail receivables to the QSPE in the second quarter of 2002 to complete the
funding of the transaction. Proceeds from the sale were used to repay
outstanding borrowings and finance the origination of new receivables.

F-67

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

50,000,000 SHARES

[CNH GLOBAL LOGO]

CNH GLOBAL N.V.

COMMON SHARES

---------------------

PROSPECTUS
---------------------

MERRILL LYNCH & CO.

JPMORGAN

SALOMON SMITH BARNEY

JUNE 11, 2002

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