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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF JUNE, 2000.
CNH GLOBAL N.V.
(TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH)
WORLD TRADE CENTER
TOWER B, 10TH FLOOR
AMSTERDAM AIRPORT
THE NETHERLANDS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
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(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes No X
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(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- _______.)
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[CNH LOGO]
NEWS RELEASE
For Immediate Release
CNH EXPECTS LOWER EARNINGS FOR
SECOND QUARTER AND FULL YEAR
For more Racine, Wisconsin (June 21, 2000) - CNH Global
information contact: (N:CNH) said today that unfavorable market
conditions in North America and Latin America,
William B. Masterson compounded by uncertainty surrounding availability
01 262 636 5793 of products targeted for divestiture, would result
in lower earnings for the company's second quarter
and full year periods. CNH now expects to be
moderately unprofitable, before restructuring and
goodwill, for both the second quarter and full
year. While earnings for the year will be less
than the company previously expected, they will be
significantly better than 1999 results, on a pro
forma basis.
The company said that retail sales of agricultural
equipment through the first five months of the
year have been lower than anticipated, due to
continued low commodity prices and uncertainty
over this year's harvest prospects. These factors
have been particularly strong in North America,
resulting in significantly lower industry sales of
four-wheel drive tractors and combines. Recently
improved growing conditions have reduced the
outlook for increased commodity prices this year.
As a result, CNH now expects industry sales of
large agricultural equipment to decline by
approximately 10 to 15 percent this year as
compared to 1999. Industry retail sales in other
markets around the world are expected to be
relatively unchanged from the company's prior
expectations. Further, CNH sales have been
impacted by customer and dealer uncertainty
regarding 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.
In its construction equipment business, CNH is
also lowering production of some of its product
lines in anticipation of lower industry sales,
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.
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"We are reacting quickly to these market
conditions and are taking aggressive steps to
maintain low inventory levels in this
environment," said Jean-Pierre Rosso, chairman and
chief executive officer. "In addition, we are
accelerating our merger integration actions to
achieve our synergies as rapidly as possible,
while aggressively pursuing cost reduction
programs throughout our operations."
In addition to lowering production of agricultural
and construction equipment, CNH also will incur
lower margins and certain charges in the second
quarter and the full year, primarily due to
business conditions in Latin America. These
include a writedown of agricultural equipment
imported into Brazil from the United States that,
because of recently enacted Brazilian government
trade financing schemes, now have a significantly
lower market value. As a result, CNH is shifting
its sourcing strategy in Latin America to focus
more on domestically produced products. In
addition, Brazilian farmers who financed equipment
with loans tied to U.S. dollar indexes are finding
it increasingly difficult, following the
devaluation of the Brazilian Real, to meet larger
loan payments. As a result, the company is
increasing its loan loss provisions for Brazil.
CNH is also increasing its loan loss provisions in
North America due to prolonged weakness in the
agriculture sector.
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, Fermec,
Fiatallis, Fiat-Hitachi, Link-Belt (earth-moving
equipment), New Holland, O&K and Steyr.
FORWARD-LOOKING STATEMENTS
The information included in this news release
contains forward-looking statements and involves
risks 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, foreign
currency exchange rate movements, the company's
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,
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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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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
CNH Global N.V.
By: /s/ Kevin J. Hallagan
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Kevin J. Hallagan
Vice President, Associate General
Counsel and Assistant Secretary
June 22, 2000
