Revenues for the second quarter were $2.9 billion, down slightly from the same period last year, on a pro forma basis. The decline was a result of unfavorable foreign exchange impacts, which negatively affected second quarter sales by $150 million, compared to 1999.

"We are taking a number of actions to maximize our operating performance in light of weaker retail sales of agricultural equipment in North America," said Jean-Pierre Rosso, chairman and chief executive officer. "However, we are continuing to see the impact of higher interest rates and unfavorable foreign exchange on our bottom line.

"We have completed or announced major steps in our merger integration process, which we expect to deliver at least $500 million in annual savings by 2003," Rosso added.

Second quarter results reflect cost reductions achieved through merger integration activities and ongoing cost initiatives, as compared to the prior year on a pro forma basis. In addition, pricing continued to be slightly positive and the company recorded a gain on the previously planned sale of a components business in Europe. These were offset by economic cost increases and a significant negative foreign exchange impact, along with the items cited by the company on June 21, 2000, including lower sales volumes and product mix, higher loan loss provisions, a writedown of product inventory in Brazil, and the impact of higher interest rates for both the equipment and financial services businesses.

For the first six months of 2000, CNH had operating earnings of $188 million, compared to $253 million in the same period last year, on a pro forma basis. The company had a net loss, before goodwill and restructuring, of $49 million, or $.33 per share, for the first six months of 2000, versus net income, before goodwill and restructuring, of $31 million, or $.21 per share, on a pro forma basis. Including the impact of goodwill, the company had a first half net loss before restructuring of $84 million, or $.56 per share, versus a net loss before restructuring, on a pro forma basis, of $3 million, or $.02 per share.

Revenues for the first six months were $5.5 billion, compared to $5.7 billion in the same period last year, on a pro forma basis. In the first half of the year, unfavorable foreign exchange rates negatively impacted revenues, compared to 1999.

Consistent with its business and market outlook, the company expects third quarter results, before restructuring and goodwill, to be a loss of approximately $.25 per share, compared to a loss of $.09 per share, before restructuring and goodwill, for the third quarter of 1999, on a pro forma basis. The third quarter of 2000 reflects an increased number of common shares outstanding at the beginning of the period. For the full year, the company continues to expect to be moderately unprofitable, before restructuring and goodwill, and anticipates that its results will be better than 1999, on a pro forma basis.

Merger Integration Plan Completed, Actions Announced

CNH recently announced significant elements of its merger integration plan. These include the closure of three manufacturing facilities in North America and one in Europe. In addition, the company intends to sell two facilities in North America and has completed the sale of a components business in Europe. The sale of these facilities is a result of the company's plan to further increase outsourcing of non-core components from its facilities around the world. The transfer of production at the affected facilities to new locations will be timed with the introduction of new global product platforms.

Manufacturing of some product lines will be transferred within CNH as part of the merger integration plan. Hay and forage equipment will be transferred from the Grand Island, Nebraska, facility to the Belleville, Pennsylvania, plant, while skid steers will be moved from Belleville to the Wichita, Kansas, facility, where Case skid steer lines are currently manufactured. In total, these integration consolidation actions will result in a global workforce reduction of approximately 1,800 employees. The company expects to announce further actions later this year in other regions of the world.

In addition, divestiture of certain company plants and operations, which are in accordance with the conditions under which regulatory agencies in North America and Europe approved the business merger of Case and New Holland, are expected to reduce CNH's global headcount by approximately 1,700. These include the previously announced divestiture agreements for CNH facilities in Winnipeg, Canada; Hesston, Kansas; Breganze, Italy; and Manchester, England. The company continues to pursue the divestiture of its operations in Doncaster, England.

In combination with previous integration actions taken by the company, these announced steps, when completed, would reduce CNH's global workforce by approximately 5,000 people.

CNH Equity Financing Moves Increase Share Count

On June 30, 2000, a $1.4 billion advance to capital from Fiat that was part of the original financing of New Holland's purchase of Case Corporation, was converted into CNH common shares. This resulted in the issuance of 127,918,782 additional shares of common stock, bringing the total number of shares outstanding to 277,503,782.

On July 3, 2000, the company commenced a share rights offering, under which shareholders of record as of June 30, 2000, are eligible to purchase 1.2021154 shares for every one share of common stock that they own, at a price of $10.9444 for each additional share purchased. The subscription period for this offering concludes on August 4, 2000, and could result in an increase in the number of common shares outstanding.

Worldwide Retail Equipment Sales

Worldwide retail unit sales of CNH agricultural equipment were slightly lower than the company's combined sales in the second quarter of 1999, compared to no change in industry sales. In North America, CNH sales of large agricultural equipment were negatively impacted by uncertainty surrounding the divestiture of New Holland's large row-crop and four-wheel-drive tractor business, as well as industry expectations of a new line of Case IH four-wheel drive tractors, and new products launched by competitors. As a result, sales of CNH high-horsepower tractors were lower than in the previous period. The industry was lower in four-wheel drives, but reported gains in row-crop tractors. CNH sales of combines were down in North America, while the industry was unchanged from the second quarter of 1999. However, retail sales of CNH combines worldwide exceeded industry gains on the strength of its global markets. In Europe, CNH agricultural equipment sales were lower, in line with the industry, reflecting uncertainty around the divestiture of its Doncaster, England, operations. In Latin America, sales were higher, while the industry declined. In other markets around the world, CNH reported strong gains in retail sales, while the market declined.

Retail unit sales of CNH construction equipment kept pace with the industry in North America, while sales in Europe and Latin America were lower than the industry. In North America, the industry and CNH were slightly lower than the strong levels of 1999, while in Europe, the market increased in the second quarter, fueled by economic growth and building on the strong performance of last year. In Latin America, retail sales of CNH skid steers grew at a rapid pace, but the growth was more than offset by lower sales of heavy construction equipment. In other markets around the world, CNH retail sales were up substantially, far exceeding the industry.

Financial Services

CNH Capital, the financial services unit of CNH Global, reported net income of $13 million for the second quarter of 2000, compared to $30 million for the same period last year, on a pro forma basis. Net income for the first half was $27 million, compared to $60 million in the comparable period last year, on a pro forma basis. The year-over-year decrease in net income is attributable to increased loan loss provisions in its core equipment and diversified portfolios as well as integration costs and lower margins on receivables and lower gains on asset-backed securitizations resulting from a rising interest rate environment. Sustained weakness in the farm economy continues to put pressure on the large agricultural equipment segment of the business. During the quarter, CNH Capital increased its loan loss provisions in North America due to the prolonged weakness in this sector.

CNH Capital's managed portfolio increased to $11.8 billion, up more than 14 percent as compared to the prior year, on a combined basis. The company's geographic expansion and diversification initiatives accounted for a portion of this growth, along with the transfer of CNH U.S. wholesale receivables to CNH Capital's managed portfolio.

During the quarter, CNH Capital acquired U.S. wholesale receivables from the Case business, consistent with New Holland's business practice. A related asset-back securitization program was also transferred during the quarter. As a result of these actions, CNH Capital's net assets increased by $257 million by June 30, 2000.

CNH Capital continues to execute its growth strategy. Significant progress was made during the period toward establishing a pan-European bank with headquarters in Ireland. Plans also include opening branch offices in the company's major markets throughout Western Europe by 2002.

"We're pleased with the progress we continue to make toward growing our business in all regions of the world, despite significant market pressures in our core business," stated Ted R. French, chairman, CNH Capital. "We're committed to leveraging our strength as one of the world's largest equipment finance businesses to ensure that financing is available for our equipment customers in all regions of the world."

In financial services, the current pressure from higher interest rates is expected to continue during 2000. Over time, the company can incorporate rate changes into its pricing, but until they stabilize, higher interest rates are expected to negatively impact earnings.

Market Outlook

The outlook for CNH's agricultural equipment and construction equipment markets is consistent with statements made by the company on June 21, 2000. This is being driven by the global impact of lower commodity prices and the anticipated effect of higher interest rates on construction activity in North America. In addition, rising interest rates and unfavorable foreign exchange continue to adversely impact the company's equipment and financial services operations.

Recently improved growing conditions have reduced the outlook for increased commodity prices this year. These factors have been particularly strong in North America, resulting in significantly lower industry sales of four-wheel drive tractors and combines through the first six months of 2000. As a result, CNH expects North American industry sales of large agricultural equipment to decline by approximately 10 to 15 percent this year as compared to 1999. CNH sales through the first half of 2000 have been impacted by customer and dealer uncertainty regarding the availability of products that the company agreed to divest as conditions for regulatory approval of the business merger of New Holland and Case Corporation. In addition to these demand factors, market conditions have made it increasingly difficult for the company to realize planned pricing increases this year. The company expects these conditions to continue for the balance of the year. In its other markets around the world, the company expects the industry to be moderately lower than 1999.

In its construction equipment business, the company expects slightly lower industry sales in North America, compared to the strong levels of last year, due to the impact of higher interest rates on construction activity. The company now expects overall construction activity in North America to be slightly lower for the balance of 2000, particularly in the housing sector. In Europe, the sales outlook remains slightly higher than last year due to stronger market conditions. In Latin America and other markets around the world, the company continues to expect significant sales improvement compared to relatively low 1999 levels as a result of more stable economic conditions. The gains in Europe, Latin America and the rest of the world are expected to offset the anticipated decline in North America.

With strong global brands, CNH is a leader in the agricultural equipment, construction equipment and financial services industries and had combined 1999 revenues of approximately $11 billion. CNH sells its products in 160 markets through a network of more than 10,000 dealers and distributors. CNH products are sold under the following brands: Case, Case IH, Fiatallis, Fiat-Hitachi, Link-Belt earth-moving equipment, New Holland, New Holland Construction, O&K and Steyr.

Forward Looking Statements

The information included in this news release contains forward-looking statements and involves risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The company's outlook is predominantly based on its interpretation of what it considers key economic assumptions. 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 the company include general economic and capital market conditions, the cyclical nature of our business, currency exchange rate movements, our hedging practices, the company's and its customers' access to credit, political uncertainty and civil unrest in various areas of the world, pricing, product initiatives and other actions taken by competitors, disruptions in production capacity, excess inventory levels, the effect of changes in laws and regulations (including government subsidies and international trade regulations), the effect of conversion to the Euro, technological difficulties, changes in environmental laws, and employee and labor relations. Additionally, CNH's achievement of the anticipated benefits of the merger of New Holland and Case, including the realization of expected annual operating synergies, depends upon, among other things, its ability to integrate effectively the operations and employees of New Holland and Case, and to execute its multi-branding strategy. Further information concerning factors that could significantly impact expected results is included in the following sections of the company's Form 20-F for 1999, as filed with the Securities and Exchange Commission: Business ? Business Strategy, Employees, Environmental Matters, Seasonality and Production Schedules and Competition; Legal Proceedings; and Management's Discussion and Analysis of Financial Condition and Results of Operations.

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