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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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36-3359573
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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2701 Navistar Drive, Lisle, Illinois
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60532
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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(Do not check if a smaller reporting company)
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Page
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PART I—Financial Information
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II—Other Information
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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•
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estimates we have made in preparing our financial statements;
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•
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our development of new products and technologies;
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•
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anticipated sales, volume, demand, and markets for our products;
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•
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anticipated performance and benefits of our products and technologies, including our advanced clean engine solutions;
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•
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our business strategies relating to, and our ability to meet, federal and state regulatory heavy-duty diesel emissions standards applicable to certain of our engines, including the timing and costs of compliance and consequences of noncompliance with such standards, as well as our ability to meet other federal, state and foreign regulatory requirements;
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•
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our business strategies and long-term goals, and activities to accomplish such strategies and goals;
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•
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our expectations to achieve the objectives of our "Drive-to-Deliver" turnaround plan, including: (i) leading vehicle uptime, (ii) creating a lean enterprise, (iii) generating future financial growth, and (iv) improving market share profitably;
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•
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anticipated results from our Return-on-Invested-Capital ("ROIC") methodology and the benchmarking study to create a pathway to achieve profitability;
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•
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anticipated results from the realignment of our leadership and management structure;
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•
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anticipated benefits from acquisitions, strategic alliances, and joint ventures we complete;
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•
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our expectations relating to the dissolution of our Blue Diamond Truck joint venture with Ford Motor Company ("Ford") expected in February 2015;
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•
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our expectations and estimates relating to restructuring activities, including restructuring and integration charges and timing of cash payments related thereto, and operational flexibility, savings, and efficiencies from such restructurings;
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•
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our expectations relating to the possible effects of anticipated divestitures and closures of businesses;
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•
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our expectations relating to our cost-reduction actions, including our enterprise-wide reduction-in-force, and other actions to reduce discretionary spending;
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•
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our expectations relating to our ability to service our long-term debt;
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•
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our expectations relating to our retail finance receivables and retail finance revenues;
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•
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our anticipated costs relating to the implementation of our emissions compliance strategy and other product modifications that may be required to meet other federal, state, and foreign regulatory requirements;
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•
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liabilities resulting from environmental, health and safety laws and regulations;
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•
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our anticipated capital expenditures;
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•
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our expectations relating to payments of taxes;
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•
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our expectations relating to warranty costs;
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•
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our expectations relating to interest expense;
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•
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our expectations relating to impairment of goodwill and other assets;
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•
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our expectations relating to the outcome of our pending labor negotiations;
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•
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costs relating to litigation and similar matters;
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•
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estimates relating to pension plan contributions and unfunded pension and postretirement benefits;
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•
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trends relating to commodity prices; and
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•
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anticipated trends, expectations, and outlook relating to matters affecting our financial condition or results of operations.
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Item 1.
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Financial Statements
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Three Months Ended July 31,
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Nine Months Ended July 31,
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||||||||||||
(in millions, except per share data)
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2014
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2013
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2014
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2013
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||||||||
Sales and revenues
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Sales of manufactured products, net
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$
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2,806
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$
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2,820
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$
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7,683
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$
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7,905
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Finance revenues
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38
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41
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115
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119
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Sales and revenues, net
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2,844
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2,861
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7,798
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8,024
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Costs and expenses
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|
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Costs of products sold
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2,417
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2,547
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6,899
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7,196
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Restructuring charges
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16
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6
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27
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14
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Asset impairment charges
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4
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17
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173
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17
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Selling, general and administrative expenses
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241
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308
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717
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905
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Engineering and product development costs
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80
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99
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253
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310
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||||
Interest expense
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78
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76
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234
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240
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|
||||
Other expense (income), net
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(11
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)
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22
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(5
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)
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(35
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)
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Total costs and expenses
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2,825
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3,075
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8,298
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8,647
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Equity in income of non-consolidated affiliates
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2
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3
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5
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6
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Income (loss) from continuing operations before income taxes
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21
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(211
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)
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(495
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)
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(617
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)
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Income tax expense
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(14
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)
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(16
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)
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(25
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)
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(53
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)
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Income (loss) from continuing operations
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7
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(227
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)
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(520
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)
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(670
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)
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Income (loss) from discontinued operations, net of tax
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1
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(10
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)
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3
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(40
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)
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Net Income (loss)
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8
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(237
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)
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(517
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)
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(710
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)
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Less: Net income attributable to non-controlling interests
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10
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10
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30
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34
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Net loss attributable to Navistar International Corporation
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$
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(2
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)
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$
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(247
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)
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$
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(547
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)
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$
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(744
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)
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Amounts attributable to Navistar International Corporation common shareholders:
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Loss from continuing operations, net of tax
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$
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(3
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)
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$
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(237
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)
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$
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(550
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)
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$
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(704
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)
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Income (loss) from discontinued operations, net of tax
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1
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(10
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)
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3
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(40
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)
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Net loss
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$
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(2
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)
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$
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(247
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)
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$
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(547
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)
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$
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(744
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)
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Earnings (loss) per share:
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Basic:
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Continuing operations
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$
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(0.04
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)
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$
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(2.94
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)
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$
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(6.77
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)
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$
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(8.76
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)
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Discontinued operations
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0.02
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(0.12
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)
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0.04
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(0.49
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)
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||||
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$
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(0.02
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)
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$
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(3.06
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)
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$
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(6.73
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)
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$
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(9.25
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)
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Diluted:
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|
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||||||||
Continuing operations
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$
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(0.04
|
)
|
|
$
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(2.94
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)
|
|
$
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(6.77
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)
|
|
$
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(8.76
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)
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Discontinued operations
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0.02
|
|
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(0.12
|
)
|
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0.04
|
|
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(0.49
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)
|
||||
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$
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(0.02
|
)
|
|
$
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(3.06
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)
|
|
$
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(6.73
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)
|
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$
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(9.25
|
)
|
|
|
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|
||||||||
Weighted average shares outstanding:
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|
|
|
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||||||||
Basic
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81.4
|
|
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80.6
|
|
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81.3
|
|
|
80.4
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|
||||
Diluted
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81.4
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|
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80.6
|
|
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81.3
|
|
|
80.4
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(in millions)
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
2014
|
|
2013
|
|
2014
|
|
2013
|
|||||||||
Net loss attributable to Navistar International Corporation
|
$
|
(2
|
)
|
|
$
|
(247
|
)
|
|
$
|
(547
|
)
|
|
$
|
(744
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(3
|
)
|
|
(91
|
)
|
|
(17
|
)
|
|
(71
|
)
|
||||
Defined benefit plans (net of tax of $(3), $1, $(4), and $2, respectively)
|
33
|
|
|
39
|
|
|
83
|
|
|
117
|
|
||||
Total other comprehensive income (loss)
|
$
|
30
|
|
|
$
|
(52
|
)
|
|
$
|
66
|
|
|
$
|
46
|
|
Total comprehensive income (loss) attributable to Navistar International Corporation
|
$
|
28
|
|
|
$
|
(299
|
)
|
|
$
|
(481
|
)
|
|
$
|
(698
|
)
|
|
July 31,
|
|
October 31,
|
||||
(in millions, except per share data)
|
2014
|
|
2013
|
||||
ASSETS
|
(Unaudited)
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
547
|
|
|
$
|
755
|
|
Marketable securities
|
618
|
|
|
830
|
|
||
Trade and other receivables, net
|
568
|
|
|
737
|
|
||
Finance receivables, net
|
1,707
|
|
|
1,597
|
|
||
Inventories
|
1,462
|
|
|
1,210
|
|
||
Deferred taxes, net
|
39
|
|
|
72
|
|
||
Other current assets
|
202
|
|
|
258
|
|
||
Total current assets
|
5,143
|
|
|
5,459
|
|
||
Restricted cash
|
121
|
|
|
91
|
|
||
Trade and other receivables, net
|
26
|
|
|
29
|
|
||
Finance receivables, net
|
302
|
|
|
338
|
|
||
Investments in non-consolidated affiliates
|
72
|
|
|
77
|
|
||
Property and equipment (net of accumulated depreciation and amortization of $2,533 and $2,440, respectively)
|
1,657
|
|
|
1,741
|
|
||
Goodwill
|
38
|
|
|
184
|
|
||
Intangible assets (net of accumulated amortization of $106 and $97, respectively)
|
98
|
|
|
138
|
|
||
Deferred taxes, net
|
153
|
|
|
159
|
|
||
Other noncurrent assets
|
92
|
|
|
99
|
|
||
Total assets
|
$
|
7,702
|
|
|
$
|
8,315
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable and current maturities of long-term debt
|
$
|
1,020
|
|
|
$
|
1,163
|
|
Accounts payable
|
1,572
|
|
|
1,502
|
|
||
Other current liabilities
|
1,425
|
|
|
1,596
|
|
||
Total current liabilities
|
4,017
|
|
|
4,261
|
|
||
Long-term debt
|
4,184
|
|
|
3,922
|
|
||
Postretirement benefits liabilities
|
2,450
|
|
|
2,564
|
|
||
Deferred taxes, net
|
14
|
|
|
33
|
|
||
Other noncurrent liabilities
|
1,083
|
|
|
1,136
|
|
||
Total liabilities
|
11,748
|
|
|
11,916
|
|
||
Redeemable equity securities
|
2
|
|
|
4
|
|
||
Stockholders’ deficit
|
|
|
|
||||
Series D convertible junior preference stock
|
3
|
|
|
3
|
|
||
Common stock (86.8 shares issued, $0.10 par value per share and 220 shares authorized, all at both dates)
|
9
|
|
|
9
|
|
||
Additional paid-in capital
|
2,499
|
|
|
2,477
|
|
||
Accumulated deficit
|
(4,610
|
)
|
|
(4,063
|
)
|
||
Accumulated other comprehensive loss
|
(1,758
|
)
|
|
(1,824
|
)
|
||
Common stock held in treasury, at cost (5.5 and 6.3 shares, respectively)
|
(225
|
)
|
|
(251
|
)
|
||
Total stockholders’ deficit attributable to Navistar International Corporation
|
(4,082
|
)
|
|
(3,649
|
)
|
||
Stockholders’ equity attributable to non-controlling interests
|
34
|
|
|
44
|
|
||
Total stockholders’ deficit
|
(4,048
|
)
|
|
(3,605
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
7,702
|
|
|
$
|
8,315
|
|
|
Nine Months Ended July 31,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(517
|
)
|
|
$
|
(710
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
177
|
|
|
225
|
|
||
Depreciation of equipment leased to others
|
79
|
|
|
105
|
|
||
Deferred taxes, including change in valuation allowance
|
(4
|
)
|
|
19
|
|
||
Asset impairment charges
|
173
|
|
|
25
|
|
||
Gain on sales of investments and businesses, net
|
—
|
|
|
(13
|
)
|
||
Amortization of debt issuance costs and discount
|
38
|
|
|
43
|
|
||
Stock-based compensation
|
12
|
|
|
19
|
|
||
Provision for doubtful accounts, net of recoveries
|
12
|
|
|
16
|
|
||
Equity in income of non-consolidated affiliates, net of dividends
|
4
|
|
|
5
|
|
||
Write-off of debt issuance cost and discount
|
1
|
|
|
6
|
|
||
Other non-cash operating activities
|
(27
|
)
|
|
(60
|
)
|
||
Changes in other assets and liabilities, exclusive of the effects of businesses disposed
|
(292
|
)
|
|
354
|
|
||
Net cash provided by (used in) operating activities
|
(344
|
)
|
|
34
|
|
||
Cash flows from investing activities
|
|
|
|
|
|||
Purchases of marketable securities
|
(1,210
|
)
|
|
(1,070
|
)
|
||
Sales of marketable securities
|
1,092
|
|
|
664
|
|
||
Maturities of marketable securities
|
330
|
|
|
164
|
|
||
Net change in restricted cash and cash equivalents
|
(30
|
)
|
|
(9
|
)
|
||
Capital expenditures
|
(57
|
)
|
|
(136
|
)
|
||
Purchases of equipment leased to others
|
(157
|
)
|
|
(351
|
)
|
||
Proceeds from sales of property and equipment
|
40
|
|
|
22
|
|
||
Investments in non-consolidated affiliates
|
—
|
|
|
(25
|
)
|
||
Proceeds from sales of affiliates
|
6
|
|
|
50
|
|
||
Net cash provided by (used in) investing activities
|
14
|
|
|
(691
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuance of securitized debt
|
105
|
|
|
279
|
|
||
Principal payments on securitized debt
|
(32
|
)
|
|
(501
|
)
|
||
Proceeds from issuance of non-securitized debt
|
603
|
|
|
390
|
|
||
Principal payments on non-securitized debt
|
(617
|
)
|
|
(438
|
)
|
||
Net increase in notes and debt outstanding under revolving credit facilities
|
87
|
|
|
87
|
|
||
Principal payments under financing arrangements and capital lease obligations
|
(20
|
)
|
|
(55
|
)
|
||
Debt issuance costs
|
(14
|
)
|
|
(16
|
)
|
||
Proceeds from financed lease obligations
|
44
|
|
|
276
|
|
||
Issuance of common stock
|
—
|
|
|
14
|
|
||
Proceeds from exercise of stock options
|
18
|
|
|
9
|
|
||
Dividends paid by subsidiaries to non-controlling interest
|
(40
|
)
|
|
(35
|
)
|
||
Other financing activities
|
—
|
|
|
4
|
|
||
Net cash provided by financing activities
|
134
|
|
|
14
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(12
|
)
|
|
(19
|
)
|
||
Decrease in cash and cash equivalents
|
(208
|
)
|
|
(662
|
)
|
||
Cash and cash equivalents at beginning of the period
|
755
|
|
|
1,087
|
|
||
Cash and cash equivalents at end of the period
|
$
|
547
|
|
|
$
|
425
|
|
(in millions)
|
Series D
Convertible Junior Preference Stock |
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Accumulated
Deficit |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Common
Stock Held in Treasury, at cost |
|
Stockholders'
Equity Attributable to Non-controlling Interests |
|
Total
|
||||||||||||||||
Balance as of October 31, 2013
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
2,477
|
|
|
$
|
(4,063
|
)
|
|
$
|
(1,824
|
)
|
|
$
|
(251
|
)
|
|
$
|
44
|
|
|
$
|
(3,605
|
)
|
Net income (loss)
|
|
|
|
|
|
|
(547
|
)
|
|
|
|
|
|
30
|
|
|
(517
|
)
|
|||||||||||||
Total other comprehensive income
|
|
|
|
|
|
|
|
|
66
|
|
|
|
|
|
|
66
|
|
||||||||||||||
Transfer from redeemable equity securities upon exercise or expiration of stock options
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
2
|
|
||||||||||||||
Stock-based compensation
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
7
|
|
||||||||||||||
Stock ownership programs
|
|
|
|
|
(9
|
)
|
|
|
|
|
|
26
|
|
|
|
|
17
|
|
|||||||||||||
Equity component of convertible debt instruments, net of tax expense of $16
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
27
|
|
||||||||||||||
Equity component of repurchased convertible debt instruments, net of tax benefit of $3
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
||||||||||||||
Cash dividends paid to non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
(40
|
)
|
|
(40
|
)
|
||||||||||||||
Balance as of July 31, 2014
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
2,499
|
|
|
$
|
(4,610
|
)
|
|
$
|
(1,758
|
)
|
|
$
|
(225
|
)
|
|
$
|
34
|
|
|
$
|
(4,048
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance as of October 31, 2012
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
2,440
|
|
|
$
|
(3,165
|
)
|
|
$
|
(2,325
|
)
|
|
$
|
(272
|
)
|
|
$
|
45
|
|
|
$
|
(3,265
|
)
|
Net income (loss)
|
|
|
|
|
|
|
(744
|
)
|
|
|
|
|
|
34
|
|
|
(710
|
)
|
|||||||||||||
Total other comprehensive income
|
|
|
|
|
|
|
|
|
46
|
|
|
|
|
|
|
46
|
|
||||||||||||||
Transfer from redeemable equity securities upon exercise or expiration of stock options
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
1
|
|
||||||||||||||
Stock-based compensation
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
14
|
|
||||||||||||||
Stock ownership programs
|
|
|
|
|
(9
|
)
|
|
|
|
|
|
17
|
|
|
|
|
8
|
|
|||||||||||||
Cash dividends paid to non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
(35
|
)
|
|
(35
|
)
|
||||||||||||||
Issuance of common stock, net of issuance cost and fees
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
14
|
|
||||||||||||||
Deconsolidation of a non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
|
(9
|
)
|
||||||||||||||
Other
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
||||||||||||||
Balance as of July 31, 2013
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
2,459
|
|
|
$
|
(3,909
|
)
|
|
$
|
(2,279
|
)
|
|
$
|
(255
|
)
|
|
$
|
35
|
|
|
$
|
(3,937
|
)
|
|
Nine Months Ended July 31,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Balance at beginning of period
|
$
|
1,349
|
|
|
$
|
1,118
|
|
Costs accrued and revenues deferred
|
235
|
|
|
342
|
|
||
Divestitures
|
—
|
|
|
(3
|
)
|
||
Currency translation adjustment
|
(2
|
)
|
|
(3
|
)
|
||
Adjustments to pre-existing warranties
(A)(B)
|
65
|
|
|
252
|
|
||
Payments and revenues recognized
|
(391
|
)
|
|
(484
|
)
|
||
Balance at end of period
|
1,256
|
|
|
1,222
|
|
||
Less: Current portion
|
578
|
|
|
618
|
|
||
Noncurrent accrued product warranty and deferred warranty revenue
|
$
|
678
|
|
|
$
|
604
|
|
(A)
|
Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and circumstances related to these factors could materially change our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available.
|
(B)
|
In the first quarter of 2013, we recognized
$13 million
of charges for adjustments to pre-existing warranties for a specific warranty issue related to component parts from a supplier. Also during the first quarter of 2013, we reached an agreement for reimbursement from this supplier for this amount and other costs previously accrued. As a result of this agreement, we recognized a recovery of
$27 million
within
Costs of products sold
and recorded a receivable within
Other current assets
. In the second quarter of 2013, we recognized a warranty recovery of
$13 million
within
Loss from discontinued operations, net of tax
and recorded a receivable within
Other current assets.
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Sales and revenues, net
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
73
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes
|
$
|
1
|
|
|
$
|
(10
|
)
|
|
$
|
3
|
|
|
$
|
(40
|
)
|
Income tax benefit (expense)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income (loss) from discontinued operations, net of tax
|
$
|
1
|
|
|
$
|
(10
|
)
|
|
$
|
3
|
|
|
$
|
(40
|
)
|
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Goodwill impairment charge
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
142
|
|
|
$
|
—
|
|
Intangible asset impairment charge
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
Other asset impairment charges
|
|
4
|
|
|
17
|
|
|
24
|
|
|
17
|
|
||||
Total asset impairment charges
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
173
|
|
|
$
|
17
|
|
(in millions)
|
Balance at October 31, 2013
|
|
Additions
|
|
Payments
|
|
Adjustments
|
|
Balance at July 31, 2014
|
||||||||||
Employee termination charges
|
$
|
15
|
|
|
$
|
12
|
|
|
$
|
(12
|
)
|
|
$
|
(2
|
)
|
|
$
|
13
|
|
Employee relocation costs
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||||
Lease vacancy
|
18
|
|
|
1
|
|
|
(6
|
)
|
|
—
|
|
|
13
|
|
|||||
Other
|
1
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Restructuring liability
|
$
|
34
|
|
|
$
|
14
|
|
|
$
|
(21
|
)
|
|
$
|
(2
|
)
|
|
$
|
25
|
|
(in millions)
|
Balance at
October 31, 2012 |
|
Additions
|
|
Payments
|
|
Adjustments
|
|
Balance at July 31, 2013
|
||||||||||
Employee termination charges
|
$
|
72
|
|
|
$
|
3
|
|
|
$
|
(54
|
)
|
|
$
|
(5
|
)
|
|
$
|
16
|
|
Employee relocation costs
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||||
Lease vacancy
|
17
|
|
|
6
|
|
|
(6
|
)
|
|
2
|
|
|
19
|
|
|||||
Other
|
—
|
|
|
5
|
|
|
(4
|
)
|
|
—
|
|
|
1
|
|
|||||
Restructuring liability
|
$
|
89
|
|
|
$
|
17
|
|
|
$
|
(67
|
)
|
|
$
|
(3
|
)
|
|
$
|
36
|
|
(in millions)
|
July 31, 2014
|
|
October 31, 2013
|
||||
Retail portfolio
|
$
|
739
|
|
|
$
|
751
|
|
Wholesale portfolio
|
1,296
|
|
|
1,207
|
|
||
Total finance receivables
|
2,035
|
|
|
1,958
|
|
||
Less: Allowance for doubtful accounts
|
26
|
|
|
23
|
|
||
Total finance receivables, net
|
2,009
|
|
|
1,935
|
|
||
Less: Current portion, net
(A)
|
1,707
|
|
|
1,597
|
|
||
Noncurrent portion, net
|
$
|
302
|
|
|
$
|
338
|
|
(A)
|
The current portion of finance receivables is computed based on contractual maturities. Actual cash collections typically vary from the contractual cash flows because of prepayments, extensions, delinquencies, credit losses, and renewals.
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Retail notes and finance leases revenue
|
$
|
16
|
|
|
$
|
19
|
|
|
$
|
49
|
|
|
$
|
60
|
|
Wholesale notes interest
|
22
|
|
|
21
|
|
|
59
|
|
|
60
|
|
||||
Operating lease revenue
|
15
|
|
|
13
|
|
|
44
|
|
|
37
|
|
||||
Retail and wholesale accounts interest
|
7
|
|
|
8
|
|
|
20
|
|
|
21
|
|
||||
Gross finance revenues
|
60
|
|
|
61
|
|
|
172
|
|
|
178
|
|
||||
Less: Intercompany revenues
|
(22
|
)
|
|
(20
|
)
|
|
(57
|
)
|
|
(59
|
)
|
||||
Finance revenues
|
$
|
38
|
|
|
$
|
41
|
|
|
$
|
115
|
|
|
$
|
119
|
|
|
Three Months Ended July 31, 2014
|
|
Three Months Ended July 31, 2013
|
||||||||||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
||||||||||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
22
|
|
|
$
|
2
|
|
|
$
|
38
|
|
|
$
|
62
|
|
|
$
|
22
|
|
|
$
|
2
|
|
|
$
|
34
|
|
|
$
|
58
|
|
Provision for doubtful accounts, net of recoveries
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
3
|
|
|
5
|
|
||||||||
Charge-off of accounts
(A)
|
(2
|
)
|
|
—
|
|
|
(3
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Other
(B)
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
||||||||
Allowance for doubtful accounts, at end of period
|
$
|
24
|
|
|
$
|
2
|
|
|
$
|
34
|
|
|
$
|
60
|
|
|
$
|
22
|
|
|
$
|
2
|
|
|
$
|
35
|
|
|
$
|
59
|
|
|
Nine Months Ended July 31, 2014
|
|
Nine Months Ended July 31, 2013
|
||||||||||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
||||||||||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
21
|
|
|
$
|
2
|
|
|
$
|
37
|
|
|
$
|
60
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
51
|
|
Provision for doubtful accounts, net of recoveries
|
10
|
|
|
—
|
|
|
3
|
|
|
13
|
|
|
1
|
|
|
2
|
|
|
13
|
|
|
16
|
|
||||||||
Charge-off of accounts
(A)
|
(7
|
)
|
|
—
|
|
|
(5
|
)
|
|
(12
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||||||
Other
(B)
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
||||||||
Allowance for doubtful accounts, at end of period
|
$
|
24
|
|
|
$
|
2
|
|
|
$
|
34
|
|
|
$
|
60
|
|
|
$
|
22
|
|
|
$
|
2
|
|
|
$
|
35
|
|
|
$
|
59
|
|
(A)
|
We repossess sold and leased vehicles on defaulted finance receivables and leases, and place them into
Inventories.
Losses recognized at the time of repossession and charged against the allowance for doubtful accounts were less than
$1 million
for the
three and nine months ended July 31, 2014
as well as for the
three and nine months ended July 31, 2013
.
|
(B)
|
Amounts include currency translation.
|
|
July 31, 2014
|
|
October 31, 2013
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Impaired finance receivables with specific loss reserves
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Impaired finance receivables without specific loss reserves
|
2
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Specific loss reserves on impaired finance receivables
|
7
|
|
|
—
|
|
|
7
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||
Finance receivables on non-accrual status
|
19
|
|
|
—
|
|
|
19
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
July 31, 2014
|
|
October 31, 2013
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Current, and up to 30 days past due
|
$
|
649
|
|
|
$
|
1,290
|
|
|
$
|
1,939
|
|
|
$
|
699
|
|
|
$
|
1,204
|
|
|
$
|
1,903
|
|
30-90 days past due
|
72
|
|
|
2
|
|
|
74
|
|
|
44
|
|
|
2
|
|
|
46
|
|
||||||
Over 90 days past due
|
18
|
|
|
4
|
|
|
22
|
|
|
8
|
|
|
1
|
|
|
9
|
|
||||||
Total finance receivables
|
$
|
739
|
|
|
$
|
1,296
|
|
|
$
|
2,035
|
|
|
$
|
751
|
|
|
$
|
1,207
|
|
|
$
|
1,958
|
|
(in millions)
|
July 31,
2014 |
|
October 31,
2013 |
||||
Finished products
|
$
|
900
|
|
|
$
|
692
|
|
Work in process
|
80
|
|
|
58
|
|
||
Raw materials
|
482
|
|
|
460
|
|
||
Total inventories
|
$
|
1,462
|
|
|
$
|
1,210
|
|
(in millions)
|
July 31, 2014
|
|
October 31, 2013
|
||||
Manufacturing operations
|
|
|
|
||||
Senior Secured Term Loan Credit Facility, as Amended, due 2017, net of unamortized discount of $4 for both periods
|
$
|
693
|
|
|
$
|
693
|
|
8.25% Senior Notes, due 2021, net of unamortized discount of $21 and $22, respectively
|
1,179
|
|
|
1,178
|
|
||
3.00% Senior Subordinated Convertible Notes, due 2014, net of unamortized discount of $2 and $26, respectively
|
165
|
|
|
544
|
|
||
4.50% Senior Subordinated Convertible Notes, due 2018, net of unamortized discount of $20 and $23, respectively
|
180
|
|
|
177
|
|
||
4.75% Senior Subordinated Convertible Notes, due 2019, net of unamortized discount of $41
|
370
|
|
|
—
|
|
||
Debt of majority-owned dealerships
|
34
|
|
|
48
|
|
||
Financing arrangements and capital lease obligations
|
52
|
|
|
77
|
|
||
Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040
|
225
|
|
|
225
|
|
||
Promissory Note
|
13
|
|
|
20
|
|
||
Financed lease obligations
|
195
|
|
|
218
|
|
||
Other
|
35
|
|
|
39
|
|
||
Total Manufacturing operations debt
|
3,141
|
|
|
3,219
|
|
||
Less: Current portion
|
254
|
|
|
658
|
|
||
Net long-term Manufacturing operations debt
|
$
|
2,887
|
|
|
$
|
2,561
|
|
(in millions)
|
July 31, 2014
|
|
October 31, 2013
|
||||
Financial Services operations
|
|
|
|
||||
Asset-backed debt issued by consolidated SPEs, at fixed and variable rates, due serially through 2019
|
$
|
850
|
|
|
$
|
778
|
|
Bank revolvers, at fixed and variable rates, due dates from 2014 through 2020
|
1,091
|
|
|
1,018
|
|
||
Commercial paper, at variable rates, program matures in 2015
|
75
|
|
|
21
|
|
||
Borrowings secured by operating and finance leases, at various rates, due serially through 2018
|
47
|
|
|
49
|
|
||
Total Financial Services operations debt
|
2,063
|
|
|
1,866
|
|
||
Less: Current portion
|
766
|
|
|
505
|
|
||
Net long-term Financial Services operations debt
|
$
|
1,297
|
|
|
$
|
1,361
|
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||||||||||||||||||
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||||||||||||||
(in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||
Service cost for benefits earned during the period
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
15
|
|
|
$
|
4
|
|
|
$
|
5
|
|
Interest on obligation
|
39
|
|
|
36
|
|
|
17
|
|
|
16
|
|
|
118
|
|
|
108
|
|
|
51
|
|
|
47
|
|
||||||||
Amortization of cumulative loss
|
23
|
|
|
31
|
|
|
4
|
|
|
7
|
|
|
70
|
|
|
95
|
|
|
12
|
|
|
22
|
|
||||||||
Amortization of prior service benefit
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||||
Contractual termination benefits
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Premiums on pension insurance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||||
Expected return on assets
|
(48
|
)
|
|
(48
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|
(144
|
)
|
|
(142
|
)
|
|
(24
|
)
|
|
(25
|
)
|
||||||||
Net postretirement benefits expense
|
$
|
31
|
|
|
$
|
25
|
|
|
$
|
14
|
|
|
$
|
15
|
|
|
$
|
67
|
|
|
$
|
78
|
|
|
$
|
40
|
|
|
$
|
46
|
|
•
|
Level 1—based upon quoted prices for
identical
instruments in active markets,
|
•
|
Level 2—based upon quoted prices for
similar
instruments, prices for identical or similar instruments in markets that are not active, or model-derived valuations, all of whose significant inputs are observable, and
|
•
|
Level 3—based upon one or more significant unobservable inputs.
|
|
July 31, 2014
|
|
October 31, 2013
|
||||||||||||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury bills
|
$
|
260
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
260
|
|
|
$
|
396
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
396
|
|
Other
|
358
|
|
|
—
|
|
|
—
|
|
|
358
|
|
|
434
|
|
|
—
|
|
|
—
|
|
|
434
|
|
||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||||
Interest rate caps
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Total assets
|
$
|
618
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
619
|
|
|
$
|
830
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
835
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Guarantees
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
Three Months Ended July 31,
|
||||||||||||||
|
2014
|
|
2013
|
||||||||||||
(in millions)
|
Guarantees
|
|
Commodity contracts
|
|
Guarantees
|
|
Commodity contracts
|
||||||||
Balance at May 1
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at July 31
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
Change in unrealized gains on assets and liabilities still held
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Nine Months Ended July 31,
|
||||||||||||||
|
2014
|
|
2013
|
||||||||||||
(in millions)
|
Guarantees
|
|
Commodity contracts
|
|
Guarantees
|
|
Commodity contracts
|
||||||||
Balance at November 1
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at July 31
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
Change in unrealized gains on assets and liabilities still held
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(in millions)
|
July 31, 2014
|
|
October 31, 2013
|
||||
Level 2 financial instruments
|
|
|
|
||||
Carrying value of impaired finance receivables
(A)
|
$
|
18
|
|
|
$
|
15
|
|
Specific loss reserve
|
(7
|
)
|
|
(6
|
)
|
||
Fair value
|
$
|
11
|
|
|
$
|
9
|
|
(A)
|
Certain impaired finance receivables are measured at fair value on a nonrecurring basis. An impairment charge is recorded for the amount by which the carrying value of the receivables exceeds the fair value of the underlying collateral, net of remarketing costs. Fair values of the underlying collateral are determined by reference to dealer vehicle value publications adjusted for certain market factors.
|
|
As of July 31, 2014
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
299
|
|
|
$
|
299
|
|
|
$
|
296
|
|
Notes receivable
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
9
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Facility, as Amended, due 2017
|
—
|
|
|
—
|
|
|
699
|
|
|
699
|
|
|
693
|
|
|||||
8.25% Senior Notes, due 2021
|
1,246
|
|
|
—
|
|
|
—
|
|
|
1,246
|
|
|
1,179
|
|
|||||
3.00% Senior Subordinated Convertible Notes, due 2014
(A)
|
168
|
|
|
—
|
|
|
—
|
|
|
168
|
|
|
165
|
|
|||||
4.50% Senior Subordinated Convertible Notes, due 2018
(A)
|
—
|
|
|
—
|
|
|
206
|
|
|
206
|
|
|
180
|
|
|||||
4.75% Senior Subordinated Convertible Notes, due 2019
(A)
|
—
|
|
|
—
|
|
|
436
|
|
|
436
|
|
|
370
|
|
|||||
Debt of majority-owned dealerships
|
—
|
|
|
—
|
|
|
34
|
|
|
34
|
|
|
34
|
|
|||||
Financing arrangements
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
|
49
|
|
|||||
Loan Agreement related to 6.50% Tax Exempt Bonds, due 2040
|
—
|
|
|
236
|
|
|
—
|
|
|
236
|
|
|
225
|
|
|||||
Promissory Note
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|
13
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
195
|
|
|
195
|
|
|
195
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
|
35
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2019
|
—
|
|
|
—
|
|
|
848
|
|
|
848
|
|
|
850
|
|
|||||
Bank revolvers, at fixed and variable rates, due dates from 2014 through 2020
|
—
|
|
|
—
|
|
|
1,063
|
|
|
1,063
|
|
|
1,091
|
|
|||||
Commercial paper, at variable rates, program matures in 2015
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
75
|
|
|||||
Borrowings secured by operating and finance leases, at various rates, due serially through 2018
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
|
47
|
|
|
As of October 31, 2013
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
390
|
|
|
$
|
390
|
|
|
$
|
390
|
|
Notes receivable
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|
14
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Facility, as Amended, due 2017
|
—
|
|
|
—
|
|
|
720
|
|
|
720
|
|
|
693
|
|
|||||
8.25% Senior Notes, due 2021
|
1,274
|
|
|
—
|
|
|
—
|
|
|
1,274
|
|
|
1,178
|
|
|||||
3.00% Senior Subordinated Convertible Notes, due 2014
(A)
|
586
|
|
|
—
|
|
|
—
|
|
|
586
|
|
|
544
|
|
|||||
4.50% Senior Subordinated Convertible Notes, due 2018
(A)
|
—
|
|
|
—
|
|
|
203
|
|
|
203
|
|
|
177
|
|
|||||
Debt of majority-owned dealerships
|
—
|
|
|
—
|
|
|
48
|
|
|
48
|
|
|
48
|
|
|||||
Financing arrangements
|
—
|
|
|
—
|
|
|
44
|
|
|
44
|
|
|
73
|
|
|||||
Loan Agreement related to 6.50% Tax Exempt Bonds, due 2040
|
—
|
|
|
229
|
|
|
—
|
|
|
229
|
|
|
225
|
|
|||||
Promissory Note
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|
20
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
218
|
|
|
218
|
|
|
218
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
36
|
|
|
36
|
|
|
39
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2019
|
—
|
|
|
—
|
|
|
775
|
|
|
775
|
|
|
778
|
|
|||||
Bank revolvers, at fixed and variable rates, due dates from 2014 through 2019
|
—
|
|
|
—
|
|
|
990
|
|
|
990
|
|
|
1,018
|
|
|||||
Commercial paper, at variable rates, program matures in 2015
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
21
|
|
|||||
Borrowings secured by operating and finance leases, at various rates, due serially through 2017
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
|
49
|
|
(A)
|
The carrying value represents the consolidated financial statement amount of the debt which excludes the allocation of the conversion feature to equity, while the fair value is based on quoted market prices for Level 1 convertible notes which include the equity feature and internally developed valuation techniques such as discounted cash flow modeling for Level 3 convertible notes which include the equity feature.
|
|
July 31, 2014
|
||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
(in millions)
|
Location in
Consolidated Balance Sheets
|
|
Fair Value
|
|
Location in
Consolidated Balance Sheets
|
|
Fair Value
|
||||
Foreign currency contracts
|
Other current assets
|
|
$
|
—
|
|
|
Other current liabilities
|
|
$
|
1
|
|
Interest rate caps
|
Other current assets
|
|
1
|
|
|
Other noncurrent liabilities
|
|
—
|
|
||
Total fair value
|
|
$
|
1
|
|
|
|
|
$
|
1
|
|
|
October 31, 2013
|
||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
(in millions)
|
Location in
Consolidated Balance Sheets
|
|
Fair Value
|
|
Location in
Consolidated Balance Sheets
|
|
Fair Value
|
||||
Foreign currency contracts
|
Other current assets
|
|
$
|
4
|
|
|
Other current liabilities
|
|
$
|
—
|
|
Interest rate caps
|
Other noncurrent assets
|
|
1
|
|
|
Other current liabilities
|
|
—
|
|
||
Total fair value
|
|
$
|
5
|
|
|
|
|
$
|
—
|
|
|
Location in Consolidated Statements of Operations
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|||||||||
Foreign currency contracts
|
Other expense (income), net
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
2
|
|
|
$
|
(6
|
)
|
Interest rate caps
|
Interest expense
|
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Cross currency swaps
|
Other expense (income), net
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
|
(1
|
)
|
||||
Commodity forward contracts
|
Costs of products sold
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
||||
Total loss (gain)
|
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
$
|
4
|
|
|
$
|
(6
|
)
|
(in millions)
|
Currency
|
|
Notional Amount
|
|
Maturity
|
||
As of July 31, 2014
|
|
|
|
|
|
||
Forward exchange contract
|
EUR
|
|
€
|
3
|
|
|
August 2014
|
Forward exchange contract
|
EUR
|
|
€
|
4
|
|
|
September 2014
|
Forward exchange contract
|
EUR
|
|
€
|
5
|
|
|
October 2014
|
Forward exchange contract
|
BRL
|
|
US$
|
20
|
|
|
October 2014
|
As of October 31, 2013
|
|
|
|
|
|
||
Option collar contracts
|
EUR
|
|
€
|
2
|
|
|
October 2013
|
Forward exchange contract
|
CAD
|
|
C$
|
90
|
|
|
October 2013
|
Option collar contract
|
CAD
|
|
C$
|
50
|
|
|
October 2013
|
Option collar contract
|
BRL
|
|
US$
|
25
|
|
|
October 2013
|
•
|
Our
North America Truck
segment manufactures and distributes Class 4 through 8 trucks, buses, and military vehicles under the International and IC Bus ("IC") brands, along with production of engines under the MaxxForce brand name, in the North America markets that include sales in the U.S., Canada, and Mexico. In an effort to strengthen and maintain our dealer network, this segment occasionally acquires and operates dealer locations for the purpose of transitioning ownership.
|
•
|
Our
North America Parts
segment provides customers with proprietary products needed to support the International commercial and military truck, IC Bus, MaxxForce engine lines, as well as our other product lines. Our North America Parts segment also provides a wide selection of other standard truck, trailer, and engine aftermarket parts. At
July 31, 2014
, this segment operated
eleven
regional parts distribution centers that provide 24-hour availability and shipment. Also included in the North America Parts segment are the operating results of BDP, which manages the sourcing, merchandising, and distribution of certain service parts we sell to Ford in North America.
|
•
|
Our
Global Operations
segment includes businesses that derive their revenue from outside our core North America markets and primarily consists of the IIAA (formerly MWM) engine and truck operations in Brazil and our export truck and parts businesses. The IIAA engine operations produce diesel engines, primarily under contract manufacturing arrangements, as well as under the MWM brand, for sale to OEMs in South America.
|
•
|
Our
Financial Services
segment provides retail, wholesale, and lease financing of products sold by the North America Truck and North America Parts segments and their dealers within the U.S. and Mexico, as well as financing for wholesale accounts and selected retail accounts receivable.
|
(in millions)
|
North America Truck
|
|
North America Parts
|
|
Global Operations
|
|
Financial
Services
(A)
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||||
Three Months Ended July 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
1,801
|
|
|
$
|
610
|
|
|
$
|
395
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
2,844
|
|
Intersegment sales and revenues
|
113
|
|
|
11
|
|
|
12
|
|
|
22
|
|
|
(158
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
1,914
|
|
|
$
|
621
|
|
|
$
|
407
|
|
|
$
|
60
|
|
|
$
|
(158
|
)
|
|
$
|
2,844
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
(12
|
)
|
|
$
|
127
|
|
|
$
|
(2
|
)
|
|
$
|
24
|
|
|
$
|
(140
|
)
|
|
$
|
(3
|
)
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
||||||
Segment profit (loss)
|
$
|
(12
|
)
|
|
$
|
127
|
|
|
$
|
(2
|
)
|
|
$
|
24
|
|
|
$
|
(126
|
)
|
|
$
|
11
|
|
Depreciation and amortization
|
$
|
41
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
12
|
|
|
$
|
6
|
|
|
$
|
71
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
60
|
|
|
78
|
|
||||||
Equity in income of non-consolidated affiliates
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Capital expenditures
(B)
|
4
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
7
|
|
(in millions)
|
North America Truck
|
|
North America Parts
|
|
Global Operations
|
|
Financial
Services
(A)
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||||
Three Months Ended July 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
1,761
|
|
|
$
|
583
|
|
|
$
|
476
|
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
2,861
|
|
Intersegment sales and revenues
|
135
|
|
|
13
|
|
|
23
|
|
|
20
|
|
|
(191
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
1,896
|
|
|
$
|
596
|
|
|
$
|
499
|
|
|
$
|
61
|
|
|
$
|
(191
|
)
|
|
$
|
2,861
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
(143
|
)
|
|
$
|
98
|
|
|
$
|
(22
|
)
|
|
$
|
23
|
|
|
$
|
(193
|
)
|
|
$
|
(237
|
)
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
||||||
Segment profit (loss)
|
$
|
(143
|
)
|
|
$
|
98
|
|
|
$
|
(22
|
)
|
|
$
|
23
|
|
|
$
|
(177
|
)
|
|
$
|
(221
|
)
|
Depreciation and amortization
|
$
|
59
|
|
|
$
|
5
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
5
|
|
|
$
|
88
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
59
|
|
|
76
|
|
||||||
Equity in income of non-consolidated affiliates
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Capital expenditures
(B)
|
20
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
29
|
|
(in millions)
|
North America Truck
|
|
North America Parts
|
|
Global Operations
|
|
Financial
Services
(A)
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||||
Nine Months Ended July 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
4,758
|
|
|
$
|
1,818
|
|
|
$
|
1,107
|
|
|
$
|
115
|
|
|
$
|
—
|
|
|
$
|
7,798
|
|
Intersegment sales and revenues
|
330
|
|
|
33
|
|
|
26
|
|
|
57
|
|
|
(446
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
5,088
|
|
|
$
|
1,851
|
|
|
$
|
1,133
|
|
|
$
|
172
|
|
|
$
|
(446
|
)
|
|
$
|
7,798
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
(353
|
)
|
|
$
|
357
|
|
|
$
|
(185
|
)
|
|
$
|
71
|
|
|
$
|
(440
|
)
|
|
$
|
(550
|
)
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
(25
|
)
|
||||||
Segment profit (loss)
|
$
|
(353
|
)
|
|
$
|
357
|
|
|
$
|
(185
|
)
|
|
$
|
71
|
|
|
$
|
(415
|
)
|
|
$
|
(525
|
)
|
Depreciation and amortization
|
$
|
168
|
|
|
$
|
12
|
|
|
$
|
24
|
|
|
$
|
33
|
|
|
$
|
19
|
|
|
$
|
256
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
182
|
|
|
234
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
3
|
|
|
3
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||
Capital expenditures
(B)
|
42
|
|
|
5
|
|
|
6
|
|
|
1
|
|
|
3
|
|
|
57
|
|
(in millions)
|
North America Truck
|
|
North America Parts
|
|
Global Operations
|
|
Financial
Services
(A)
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||||
Nine Months Ended July 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
4,694
|
|
|
$
|
1,873
|
|
|
$
|
1,338
|
|
|
$
|
119
|
|
|
$
|
—
|
|
|
$
|
8,024
|
|
Intersegment sales and revenues
|
382
|
|
|
45
|
|
|
60
|
|
|
59
|
|
|
(546
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
5,076
|
|
|
$
|
1,918
|
|
|
$
|
1,398
|
|
|
$
|
178
|
|
|
$
|
(546
|
)
|
|
$
|
8,024
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
(547
|
)
|
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
(550
|
)
|
|
$
|
(704
|
)
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
(53
|
)
|
||||||
Segment profit (loss)
|
$
|
(547
|
)
|
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
(497
|
)
|
|
$
|
(651
|
)
|
Depreciation and amortization
|
$
|
244
|
|
|
$
|
13
|
|
|
$
|
27
|
|
|
$
|
29
|
|
|
$
|
17
|
|
|
$
|
330
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
188
|
|
|
240
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
7
|
|
|
4
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Capital expenditures
(B)
|
113
|
|
|
2
|
|
|
11
|
|
|
1
|
|
|
9
|
|
|
136
|
|
(in millions)
|
North America Truck
|
|
North America Parts
|
|
Global Operations
|
|
Financial
Services
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||||
Segment assets, as of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
July 31, 2014
|
$
|
2,355
|
|
|
$
|
704
|
|
|
$
|
816
|
|
|
$
|
2,504
|
|
|
$
|
1,323
|
|
|
$
|
7,702
|
|
October 31, 2013
|
2,250
|
|
|
716
|
|
|
1,162
|
|
|
2,355
|
|
|
1,832
|
|
|
8,315
|
|
(A)
|
Total sales and revenues in the Financial Services segment include interest revenues of
$44 million
and
$126 million
for the
three and nine months ended July 31, 2014
, respectively and
$47 million
and
$140 million
for the
three and nine months ended July 31, 2013
, respectively.
|
(B)
|
Exclusive of purchases of equipment leased to others.
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plan
|
|
Total
|
||||||
Balance as of April 30, 2014
|
$
|
(89
|
)
|
|
$
|
(1,699
|
)
|
|
$
|
(1,788
|
)
|
Other comprehensive income (loss) before reclassifications
|
(3
|
)
|
|
7
|
|
|
4
|
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
26
|
|
|
26
|
|
|||
Net current-period other comprehensive income (loss)
|
(3
|
)
|
|
33
|
|
|
30
|
|
|||
Balance as of July 31, 2014
|
$
|
(92
|
)
|
|
$
|
(1,666
|
)
|
|
$
|
(1,758
|
)
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plan
|
|
Total
|
||||||
Balance as of October 31, 2013
|
$
|
(75
|
)
|
|
$
|
(1,749
|
)
|
|
$
|
(1,824
|
)
|
Other comprehensive income (loss) before reclassifications
|
(17
|
)
|
|
5
|
|
|
(12
|
)
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
78
|
|
|
78
|
|
|||
Net current-period other comprehensive income (loss)
|
(17
|
)
|
|
83
|
|
|
66
|
|
|||
Balance as of July 31, 2014
|
$
|
(92
|
)
|
|
$
|
(1,666
|
)
|
|
$
|
(1,758
|
)
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions, except per share data)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Amounts attributable to Navistar International Corporation common stockholders:
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations, net of tax
|
$
|
(3
|
)
|
|
$
|
(237
|
)
|
|
$
|
(550
|
)
|
|
$
|
(704
|
)
|
Income (loss) from discontinued operations, net of tax
|
1
|
|
|
(10
|
)
|
|
3
|
|
|
(40
|
)
|
||||
Net loss
|
$
|
(2
|
)
|
|
$
|
(247
|
)
|
|
$
|
(547
|
)
|
|
$
|
(744
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
81.4
|
|
|
80.6
|
|
|
81.3
|
|
|
80.4
|
|
||||
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted
|
81.4
|
|
|
80.6
|
|
|
81.3
|
|
|
80.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(2.94
|
)
|
|
$
|
(6.77
|
)
|
|
$
|
(8.76
|
)
|
Discontinued operations
|
0.02
|
|
|
(0.12
|
)
|
|
0.04
|
|
|
(0.49
|
)
|
||||
Net loss
|
$
|
(0.02
|
)
|
|
$
|
(3.06
|
)
|
|
$
|
(6.73
|
)
|
|
$
|
(9.25
|
)
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(2.94
|
)
|
|
$
|
(6.77
|
)
|
|
$
|
(8.76
|
)
|
Discontinued operations
|
0.02
|
|
|
(0.12
|
)
|
|
0.04
|
|
|
(0.49
|
)
|
||||
Net loss
|
$
|
(0.02
|
)
|
|
$
|
(3.06
|
)
|
|
$
|
(6.73
|
)
|
|
$
|
(9.25
|
)
|
Condensed Consolidating Statement of Operations for the Three Months Ended July 31, 2014
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar,
Inc. |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
and Other |
|
Consolidated
|
||||||||||
Sales and revenues, net
|
$
|
—
|
|
|
$
|
1,962
|
|
|
$
|
2,181
|
|
|
$
|
(1,299
|
)
|
|
$
|
2,844
|
|
Costs of products sold
|
—
|
|
|
1,761
|
|
|
1,938
|
|
|
(1,282
|
)
|
|
2,417
|
|
|||||
Restructuring charges
|
—
|
|
|
(1
|
)
|
|
17
|
|
|
—
|
|
|
16
|
|
|||||
Asset impairment charges
|
—
|
|
|
13
|
|
|
(11
|
)
|
|
2
|
|
|
4
|
|
|||||
All other operating expenses (income)
|
17
|
|
|
246
|
|
|
141
|
|
|
(16
|
)
|
|
388
|
|
|||||
Total costs and expenses
|
17
|
|
|
2,019
|
|
|
2,085
|
|
|
(1,296
|
)
|
|
2,825
|
|
|||||
Equity in income (loss) of affiliates
|
15
|
|
|
17
|
|
|
1
|
|
|
(31
|
)
|
|
2
|
|
|||||
Income (loss) before income taxes
|
(2
|
)
|
|
(40
|
)
|
|
97
|
|
|
(34
|
)
|
|
21
|
|
|||||
Income tax expense
|
—
|
|
|
(2
|
)
|
|
(12
|
)
|
|
—
|
|
|
(14
|
)
|
|||||
Earnings (loss) from continuing operations
|
(2
|
)
|
|
(42
|
)
|
|
85
|
|
|
(34
|
)
|
|
7
|
|
|||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net income (loss)
|
(2
|
)
|
|
(42
|
)
|
|
86
|
|
|
(34
|
)
|
|
8
|
|
|||||
Less: Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(2
|
)
|
|
$
|
(42
|
)
|
|
$
|
76
|
|
|
$
|
(34
|
)
|
|
$
|
(2
|
)
|
Condensed Consolidating Statement of Operations for the Nine Months Ended July 31, 2014
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar,
Inc. |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
and Other |
|
Consolidated
|
||||||||||
Sales and revenues, net
|
$
|
—
|
|
|
$
|
5,279
|
|
|
$
|
5,971
|
|
|
$
|
(3,452
|
)
|
|
$
|
7,798
|
|
Costs of products sold
|
—
|
|
|
4,983
|
|
|
5,331
|
|
|
(3,415
|
)
|
|
6,899
|
|
|||||
Restructuring charges
|
—
|
|
|
9
|
|
|
18
|
|
|
—
|
|
|
27
|
|
|||||
Asset impairment charges
|
—
|
|
|
13
|
|
|
160
|
|
|
—
|
|
|
173
|
|
|||||
All other operating expenses
|
94
|
|
|
760
|
|
|
389
|
|
|
(44
|
)
|
|
1,199
|
|
|||||
Total costs and expenses
|
94
|
|
|
5,765
|
|
|
5,898
|
|
|
(3,459
|
)
|
|
8,298
|
|
|||||
Equity in income (loss) of affiliates
|
(466
|
)
|
|
(135
|
)
|
|
2
|
|
|
604
|
|
|
5
|
|
|||||
Income (loss) before income taxes
|
(560
|
)
|
|
(621
|
)
|
|
75
|
|
|
611
|
|
|
(495
|
)
|
|||||
Income tax benefit (expense)
|
13
|
|
|
(3
|
)
|
|
(35
|
)
|
|
—
|
|
|
(25
|
)
|
|||||
Earnings (loss) from continuing operations
|
(547
|
)
|
|
(624
|
)
|
|
40
|
|
|
611
|
|
|
(520
|
)
|
|||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Net income (loss)
|
(547
|
)
|
|
(624
|
)
|
|
43
|
|
|
611
|
|
|
(517
|
)
|
|||||
Less: Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(547
|
)
|
|
$
|
(624
|
)
|
|
$
|
13
|
|
|
$
|
611
|
|
|
$
|
(547
|
)
|
Condensed Consolidating Balance Sheet as of July 31, 2014
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar,
Inc. |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
and Other |
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
136
|
|
|
$
|
38
|
|
|
$
|
373
|
|
|
$
|
—
|
|
|
$
|
547
|
|
Marketable securities
|
266
|
|
|
—
|
|
|
352
|
|
|
—
|
|
|
618
|
|
|||||
Restricted cash
|
18
|
|
|
3
|
|
|
100
|
|
|
—
|
|
|
121
|
|
|||||
Finance and other receivables, net
|
3
|
|
|
125
|
|
|
2,490
|
|
|
(15
|
)
|
|
2,603
|
|
|||||
Inventories
|
—
|
|
|
815
|
|
|
659
|
|
|
(12
|
)
|
|
1,462
|
|
|||||
Investments in non-consolidated affiliates
|
(6,526
|
)
|
|
6,450
|
|
|
68
|
|
|
80
|
|
|
72
|
|
|||||
Property and equipment, net
|
—
|
|
|
871
|
|
|
783
|
|
|
3
|
|
|
1,657
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
38
|
|
|||||
Deferred taxes, net
|
1
|
|
|
13
|
|
|
178
|
|
|
—
|
|
|
192
|
|
|||||
Other
|
36
|
|
|
148
|
|
|
211
|
|
|
(3
|
)
|
|
392
|
|
|||||
Total assets
|
$
|
(6,066
|
)
|
|
$
|
8,463
|
|
|
$
|
5,252
|
|
|
$
|
53
|
|
|
$
|
7,702
|
|
Liabilities and stockholders’ equity (deficit)
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt
|
$
|
2,119
|
|
|
$
|
948
|
|
|
$
|
2,142
|
|
|
$
|
(5
|
)
|
|
$
|
5,204
|
|
Postretirement benefits liabilities
|
—
|
|
|
2,298
|
|
|
231
|
|
|
—
|
|
|
2,529
|
|
|||||
Amounts due to (from) affiliates
|
(7,472
|
)
|
|
11,620
|
|
|
(4,292
|
)
|
|
144
|
|
|
—
|
|
|||||
Other liabilities
|
3,367
|
|
|
478
|
|
|
248
|
|
|
(78
|
)
|
|
4,015
|
|
|||||
Total liabilities
|
(1,986
|
)
|
|
15,344
|
|
|
(1,671
|
)
|
|
61
|
|
|
11,748
|
|
|||||
Redeemable equity securities
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Stockholders’ equity attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|||||
Stockholders’ equity (deficit) attributable to Navistar International Corporation
|
(4,082
|
)
|
|
(6,881
|
)
|
|
6,889
|
|
|
(8
|
)
|
|
(4,082
|
)
|
|||||
Total liabilities and stockholders’ equity (deficit)
|
$
|
(6,066
|
)
|
|
$
|
8,463
|
|
|
$
|
5,252
|
|
|
$
|
53
|
|
|
$
|
7,702
|
|
Condensed Consolidating Statement of Operations for the Three Months Ended July 31, 2013
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar,
Inc. |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
and Other |
|
Consolidated
|
||||||||||
Sales and revenues, net
|
$
|
—
|
|
|
$
|
1,690
|
|
|
$
|
2,300
|
|
|
$
|
(1,129
|
)
|
|
$
|
2,861
|
|
Costs of products sold
|
—
|
|
|
1,669
|
|
|
1,996
|
|
|
(1,118
|
)
|
|
2,547
|
|
|||||
Restructuring charges
|
—
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
6
|
|
|||||
Asset impairment charges
|
—
|
|
|
14
|
|
|
3
|
|
|
—
|
|
|
17
|
|
|||||
All other operating expenses (income)
|
28
|
|
|
295
|
|
|
203
|
|
|
(21
|
)
|
|
505
|
|
|||||
Total costs and expenses
|
28
|
|
|
1,979
|
|
|
2,207
|
|
|
(1,139
|
)
|
|
3,075
|
|
|||||
Equity in income (loss) of affiliates
|
(219
|
)
|
|
13
|
|
|
3
|
|
|
206
|
|
|
3
|
|
|||||
Income (loss) before income taxes
|
(247
|
)
|
|
(276
|
)
|
|
96
|
|
|
216
|
|
|
(211
|
)
|
|||||
Income tax expense
|
—
|
|
|
(2
|
)
|
|
(14
|
)
|
|
—
|
|
|
(16
|
)
|
|||||
Earnings (loss) from continuing operations
|
(247
|
)
|
|
(278
|
)
|
|
82
|
|
|
216
|
|
|
(227
|
)
|
|||||
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Net income (loss)
|
(247
|
)
|
|
(278
|
)
|
|
72
|
|
|
216
|
|
|
(237
|
)
|
|||||
Less: Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(247
|
)
|
|
$
|
(278
|
)
|
|
$
|
62
|
|
|
$
|
216
|
|
|
$
|
(247
|
)
|
Condensed Consolidating Statement of Comprehensive Income (Loss) for the Nine Months Ended July 31, 2013
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar,
Inc. |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
and Other |
|
Consolidated
|
||||||||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(744
|
)
|
|
$
|
(885
|
)
|
|
$
|
316
|
|
|
$
|
569
|
|
|
$
|
(744
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
|
(71
|
)
|
|
—
|
|
|
(71
|
)
|
|
71
|
|
|
(71
|
)
|
|||||
Defined benefit plans (net of tax of $2, $0, $2, $(2), and, $2, respectively)
|
117
|
|
|
105
|
|
|
12
|
|
|
(117
|
)
|
|
117
|
|
|||||
Total other comprehensive income (loss)
|
46
|
|
|
105
|
|
|
(59
|
)
|
|
(46
|
)
|
|
46
|
|
|||||
Total comprehensive income (loss) attributable to Navistar International Corporation
|
$
|
(698
|
)
|
|
$
|
(780
|
)
|
|
$
|
257
|
|
|
$
|
523
|
|
|
$
|
(698
|
)
|
Condensed Consolidating Statement of Cash Flows for the Nine Months Ended July 31, 2013
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar,
Inc. |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
and Other |
|
Consolidated
|
||||||||||
Net cash provided by (used in) operations
|
$
|
(771
|
)
|
|
$
|
(639
|
)
|
|
$
|
382
|
|
|
$
|
1,062
|
|
|
$
|
34
|
|
Cash flows from investment activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net change in restricted cash and cash equivalents
|
(1
|
)
|
|
2
|
|
|
(10
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Net purchases of marketable securities
|
(147
|
)
|
|
—
|
|
|
(95
|
)
|
|
—
|
|
|
(242
|
)
|
|||||
Capital expenditures and purchase of equipment leased to others
|
—
|
|
|
(347
|
)
|
|
(140
|
)
|
|
—
|
|
|
(487
|
)
|
|||||
Other investing activities
|
—
|
|
|
10
|
|
|
37
|
|
|
—
|
|
|
47
|
|
|||||
Net cash used in investment activities
|
(148
|
)
|
|
(335
|
)
|
|
(208
|
)
|
|
—
|
|
|
(691
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net borrowings (repayments) of debt
|
340
|
|
|
688
|
|
|
(220
|
)
|
|
(1,062
|
)
|
|
(254
|
)
|
|||||
Other financing activities
|
26
|
|
|
277
|
|
|
(35
|
)
|
|
—
|
|
|
268
|
|
|||||
Net cash provided by (used in) financing activities
|
366
|
|
|
965
|
|
|
(255
|
)
|
|
(1,062
|
)
|
|
14
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Decrease in cash and cash equivalents
|
(553
|
)
|
|
(9
|
)
|
|
(100
|
)
|
|
—
|
|
|
(662
|
)
|
|||||
Cash and cash equivalents at beginning of the period
|
702
|
|
|
55
|
|
|
330
|
|
|
—
|
|
|
1,087
|
|
|||||
Cash and cash equivalents at end of the period
|
$
|
149
|
|
|
$
|
46
|
|
|
$
|
230
|
|
|
$
|
—
|
|
|
$
|
425
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Continuing Operating Results
—In the
third
quarter of 2014, our consolidated net sales and revenues were
$2.8 billion
, down
1%
compared to the prior year quarter. The
1%
decrease reflects lower sales in our Global Operations segment, partially offset by increased sales in our North America Truck and North America Parts segments. In the first nine months of
2014
, our consolidated net sales and revenues were
$7.8 billion
, down
3%
compared to the first nine months of 2013. The
3%
decrease reflects lower sales from our Global Operations and North America Parts segments.
|
•
|
Liquidity
—We ended the
third
quarter of 2014 with
$1.17 billion
of consolidated cash, cash equivalents and marketable securities, compared to
$1.59 billion
as of October 31, 2013. The decrease in consolidated cash, cash equivalents and marketable securities was primarily attributable to spending related to warranty claims, debt servicing payments, contributions to our defined benefit pension plans, and capital expenditures.
|
|
Three Months Ended July 31,
|
|
|
|
%
Change |
|
Nine Months Ended July 31,
|
|
|
|
%
Change |
||||||||||||||||||
(in millions, except per share data and % change)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||||||||
Sales and revenues, net
|
$
|
2,844
|
|
|
$
|
2,861
|
|
|
$
|
(17
|
)
|
|
(1
|
)%
|
|
$
|
7,798
|
|
|
$
|
8,024
|
|
|
$
|
(226
|
)
|
|
(3
|
)%
|
Costs of products sold
|
2,417
|
|
|
2,547
|
|
|
(130
|
)
|
|
(5
|
)%
|
|
6,899
|
|
|
7,196
|
|
|
(297
|
)
|
|
(4
|
)%
|
||||||
Restructuring charges
|
16
|
|
|
6
|
|
|
10
|
|
|
167
|
%
|
|
27
|
|
|
14
|
|
|
13
|
|
|
93
|
%
|
||||||
Asset impairment charges
|
4
|
|
|
17
|
|
|
(13
|
)
|
|
(76
|
)%
|
|
173
|
|
|
17
|
|
|
156
|
|
|
918
|
%
|
||||||
Selling, general and administrative expenses
|
241
|
|
|
308
|
|
|
(67
|
)
|
|
(22
|
)%
|
|
717
|
|
|
905
|
|
|
(188
|
)
|
|
(21
|
)%
|
||||||
Engineering and product development costs
|
80
|
|
|
99
|
|
|
(19
|
)
|
|
(19
|
)%
|
|
253
|
|
|
310
|
|
|
(57
|
)
|
|
(18
|
)%
|
||||||
Interest expense
|
78
|
|
|
76
|
|
|
2
|
|
|
3
|
%
|
|
234
|
|
|
240
|
|
|
(6
|
)
|
|
(3
|
)%
|
||||||
Other expense (income), net
|
(11
|
)
|
|
22
|
|
|
(33
|
)
|
|
N.M.
|
|
|
(5
|
)
|
|
(35
|
)
|
|
30
|
|
|
(86
|
)%
|
||||||
Total costs and expenses
|
2,825
|
|
|
3,075
|
|
|
(250
|
)
|
|
(8
|
)%
|
|
8,298
|
|
|
8,647
|
|
|
(349
|
)
|
|
(4
|
)%
|
||||||
Equity in income of non-consolidated affiliates
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
(33
|
)%
|
|
5
|
|
|
6
|
|
|
(1
|
)
|
|
(17
|
)%
|
||||||
Income (loss) from continuing operations before income taxes
|
21
|
|
|
(211
|
)
|
|
232
|
|
|
N.M.
|
|
|
(495
|
)
|
|
(617
|
)
|
|
122
|
|
|
(20
|
)%
|
||||||
Income tax expense
|
(14
|
)
|
|
(16
|
)
|
|
2
|
|
|
(13
|
)%
|
|
(25
|
)
|
|
(53
|
)
|
|
28
|
|
|
(53
|
)%
|
||||||
Income (loss) from continuing operations
|
7
|
|
|
(227
|
)
|
|
234
|
|
|
N.M.
|
|
|
(520
|
)
|
|
(670
|
)
|
|
150
|
|
|
(22
|
)%
|
||||||
Less: Net income attributable to non-controlling interests
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
%
|
|
30
|
|
|
34
|
|
|
(4
|
)
|
|
(12
|
)%
|
||||||
Loss from continuing operations
(A)
|
(3
|
)
|
|
(237
|
)
|
|
234
|
|
|
(99
|
)%
|
|
(550
|
)
|
|
(704
|
)
|
|
154
|
|
|
(22
|
)%
|
||||||
Income (loss) from discontinued operations, net of tax
|
1
|
|
|
(10
|
)
|
|
11
|
|
|
N.M.
|
|
|
3
|
|
|
(40
|
)
|
|
43
|
|
|
N.M.
|
|
||||||
Net loss
(A)
|
$
|
(2
|
)
|
|
$
|
(247
|
)
|
|
$
|
245
|
|
|
(99
|
)%
|
|
$
|
(547
|
)
|
|
$
|
(744
|
)
|
|
$
|
197
|
|
|
(26
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted earnings (loss) per share:
(A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(2.94
|
)
|
|
$
|
2.90
|
|
|
(99
|
)%
|
|
$
|
(6.77
|
)
|
|
$
|
(8.76
|
)
|
|
$
|
1.99
|
|
|
(23
|
)%
|
Discontinued operations
|
0.02
|
|
|
(0.12
|
)
|
|
0.14
|
|
|
N.M.
|
|
|
0.04
|
|
|
(0.49
|
)
|
|
0.53
|
|
|
N.M.
|
|
||||||
|
$
|
(0.02
|
)
|
|
$
|
(3.06
|
)
|
|
$
|
3.04
|
|
|
(99
|
)%
|
|
$
|
(6.73
|
)
|
|
$
|
(9.25
|
)
|
|
$
|
2.52
|
|
|
(27
|
)%
|
Diluted weighted average shares outstanding
|
81.4
|
|
|
80.6
|
|
|
0.8
|
|
|
1
|
%
|
|
81.3
|
|
|
80.4
|
|
|
0.9
|
|
|
1
|
%
|
N.M.
|
Not meaningful.
|
(A)
|
Amounts attributable to Navistar International Corporation.
|
|
Three Months Ended July 31,
|
|
|
|
%
Change |
|
Nine Months Ended July 31,
|
|
|
|
% Change
|
||||||||||||||||||
(in millions, except % change)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||||||||
North America Truck
|
$
|
1,914
|
|
|
$
|
1,896
|
|
|
$
|
18
|
|
|
1
|
%
|
|
$
|
5,088
|
|
|
$
|
5,076
|
|
|
$
|
12
|
|
|
—
|
%
|
North America Parts
|
621
|
|
|
596
|
|
|
25
|
|
|
4
|
%
|
|
1,851
|
|
|
1,918
|
|
|
(67
|
)
|
|
(3
|
)%
|
||||||
Global Operations
|
407
|
|
|
499
|
|
|
(92
|
)
|
|
(18
|
)%
|
|
1,133
|
|
|
1,398
|
|
|
(265
|
)
|
|
(19
|
)%
|
||||||
Financial Services
|
60
|
|
|
61
|
|
|
(1
|
)
|
|
(2
|
)%
|
|
172
|
|
|
178
|
|
|
(6
|
)
|
|
(3
|
)%
|
||||||
Corporate and Eliminations
|
(158
|
)
|
|
(191
|
)
|
|
33
|
|
|
(17
|
)%
|
|
(446
|
)
|
|
(546
|
)
|
|
100
|
|
|
(18
|
)%
|
||||||
Total
|
$
|
2,844
|
|
|
$
|
2,861
|
|
|
$
|
(17
|
)
|
|
(1
|
)%
|
|
$
|
7,798
|
|
|
$
|
8,024
|
|
|
$
|
(226
|
)
|
|
(3
|
)%
|
|
Three Months Ended July 31,
|
|
|
|
%
Change |
|
Nine Months Ended July 31,
|
|
|
|
%
Change |
||||||||||||||||||
(in millions, except % change)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||||||||
North America Truck segment sales, net
|
$
|
1,914
|
|
|
$
|
1,896
|
|
|
$
|
18
|
|
|
1
|
%
|
|
$
|
5,088
|
|
|
$
|
5,076
|
|
|
$
|
12
|
|
|
—
|
%
|
North America Truck segment loss
|
(12
|
)
|
|
(143
|
)
|
|
131
|
|
|
(92
|
)%
|
|
(353
|
)
|
|
(547
|
)
|
|
194
|
|
|
(35
|
)%
|
|
Three Months Ended July 31,
|
|
|
|
%
Change |
|
Nine Months Ended July 31,
|
|
|
|
%
Change |
||||||||||||||||||
(in millions, except % change)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||||||||
North America Parts segment sales, net
|
$
|
621
|
|
|
$
|
596
|
|
|
$
|
25
|
|
|
4
|
%
|
|
$
|
1,851
|
|
|
$
|
1,918
|
|
|
$
|
(67
|
)
|
|
(3
|
)%
|
North America Parts segment profit
|
127
|
|
|
98
|
|
|
29
|
|
|
30
|
%
|
|
357
|
|
|
329
|
|
|
28
|
|
|
9
|
%
|
|
Three Months Ended July 31,
|
|
|
|
%
Change |
|
Nine Months Ended July 31,
|
|
|
|
%
Change |
||||||||||||||||||
(in millions, except % change)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||||||||
Global Operations segment sales, net
|
$
|
407
|
|
|
$
|
499
|
|
|
$
|
(92
|
)
|
|
(18
|
)%
|
|
$
|
1,133
|
|
|
$
|
1,398
|
|
|
$
|
(265
|
)
|
|
(19
|
)%
|
Global Operations segment profit (loss)
|
(2
|
)
|
|
(22
|
)
|
|
20
|
|
|
(91
|
)%
|
|
(185
|
)
|
|
—
|
|
|
(185
|
)
|
|
N.M.
|
|
|
Three Months Ended July 31,
|
|
|
|
%
Change |
|
Nine Months Ended July 31,
|
|
|
|
%
Change |
||||||||||||||||||
(in millions, except % change)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||||||||
Financial Services segment revenues, net
|
$
|
60
|
|
|
$
|
61
|
|
|
$
|
(1
|
)
|
|
(2
|
)%
|
|
$
|
172
|
|
|
$
|
178
|
|
|
$
|
(6
|
)
|
|
(3
|
)%
|
Financial Services segment profit
|
24
|
|
|
23
|
|
|
1
|
|
|
4
|
%
|
|
71
|
|
|
64
|
|
|
7
|
|
|
11
|
%
|
|
Three Months Ended July 31,
|
|
|
|
% Change
|
|
Nine Months Ended July 31,
|
|
|
|
% Change
|
||||||||||||
(in units)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||
Traditional Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
School buses
|
4,800
|
|
|
4,000
|
|
|
800
|
|
|
20
|
%
|
|
13,900
|
|
|
12,800
|
|
|
1,100
|
|
|
9
|
%
|
Class 6 and 7 medium trucks
|
17,900
|
|
|
16,300
|
|
|
1,600
|
|
|
10
|
%
|
|
53,100
|
|
|
47,500
|
|
|
5,600
|
|
|
12
|
%
|
Class 8 heavy trucks
|
48,900
|
|
|
41,700
|
|
|
7,200
|
|
|
17
|
%
|
|
134,100
|
|
|
120,500
|
|
|
13,600
|
|
|
11
|
%
|
Class 8 severe service trucks
|
15,300
|
|
|
12,200
|
|
|
3,100
|
|
|
25
|
%
|
|
39,500
|
|
|
33,700
|
|
|
5,800
|
|
|
17
|
%
|
Total Traditional markets
|
86,900
|
|
|
74,200
|
|
|
12,700
|
|
|
17
|
%
|
|
240,600
|
|
|
214,500
|
|
|
26,100
|
|
|
12
|
%
|
Combined Class 8 trucks
|
64,200
|
|
|
53,900
|
|
|
10,300
|
|
|
19
|
%
|
|
173,600
|
|
|
154,200
|
|
|
19,400
|
|
|
13
|
%
|
Navistar Traditional retail deliveries
|
14,100
|
|
|
12,600
|
|
|
1,500
|
|
|
12
|
%
|
|
40,700
|
|
|
37,700
|
|
|
3,000
|
|
|
8
|
%
|
|
Three Months Ended
|
|||||||||||||
|
July 31, 2014
|
|
April 30, 2014
|
|
January 31, 2014
|
|
October 31, 2013
|
|
July 31, 2013
|
|||||
Traditional Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|||
Class 6 and 7 medium trucks
|
20
|
%
|
|
26
|
%
|
|
17
|
%
|
|
20
|
%
|
|
24
|
%
|
Class 8 heavy trucks
|
14
|
%
|
|
14
|
%
|
|
12
|
%
|
|
14
|
%
|
|
12
|
%
|
Class 8 severe service trucks
|
15
|
%
|
|
17
|
%
|
|
19
|
%
|
|
20
|
%
|
|
18
|
%
|
Combined Class 8 trucks
|
14
|
%
|
|
15
|
%
|
|
14
|
%
|
|
16
|
%
|
|
14
|
%
|
|
Three Months Ended July 31,
|
|
|
|
% Change
|
|
Nine Months Ended July 31,
|
|
|
|
% Change
|
||||||||||||
(in units)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||
Traditional Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
School buses
|
2,100
|
|
|
2,300
|
|
|
(200
|
)
|
|
(9
|
)%
|
|
7,200
|
|
|
6,700
|
|
|
500
|
|
|
7
|
%
|
Class 6 and 7 medium trucks
|
2,700
|
|
|
2,500
|
|
|
200
|
|
|
8
|
%
|
|
12,900
|
|
|
9,600
|
|
|
3,300
|
|
|
34
|
%
|
Class 8 heavy trucks
|
7,600
|
|
|
7,800
|
|
|
(200
|
)
|
|
(3
|
)%
|
|
22,400
|
|
|
17,900
|
|
|
4,500
|
|
|
25
|
%
|
Class 8 severe service trucks
|
2,000
|
|
|
2,600
|
|
|
(600
|
)
|
|
(23
|
)%
|
|
6,600
|
|
|
7,000
|
|
|
(400
|
)
|
|
(6
|
)%
|
Total Traditional markets
|
14,400
|
|
|
15,200
|
|
|
(800
|
)
|
|
(5
|
)%
|
|
49,100
|
|
|
41,200
|
|
|
7,900
|
|
|
19
|
%
|
Combined Class 8 trucks
|
9,600
|
|
|
10,400
|
|
|
(800
|
)
|
|
(8
|
)%
|
|
29,000
|
|
|
24,900
|
|
|
4,100
|
|
|
16
|
%
|
|
As of July 31, 2014
|
|
|
|
|
||||||
(in units)
|
2014
|
|
2013
|
|
Change
|
|
% Change
|
||||
Traditional Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
||||
School buses
|
2,300
|
|
|
1,800
|
|
|
500
|
|
|
28
|
%
|
Class 6 and 7 medium trucks
|
5,300
|
|
|
1,700
|
|
|
3,600
|
|
|
212
|
%
|
Class 8 heavy trucks
|
12,800
|
|
|
8,700
|
|
|
4,100
|
|
|
47
|
%
|
Class 8 severe service trucks
(A)
|
2,100
|
|
|
2,400
|
|
|
(300
|
)
|
|
(13
|
)%
|
Total Traditional markets
|
22,500
|
|
|
14,600
|
|
|
7,900
|
|
|
54
|
%
|
Combined Class 8 trucks
|
14,900
|
|
|
11,100
|
|
|
3,800
|
|
|
34
|
%
|
(A)
|
The units in 2013 have been recast to exclude militarized units.
|
|
Three Months Ended July 31,
|
|
|
|
% Change
|
|
Nine Months Ended July 31,
|
|
|
|
% Change
|
||||||||||||
(in units)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||
Traditional Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
School buses
|
3,100
|
|
|
2,700
|
|
|
400
|
|
|
15
|
%
|
|
7,700
|
|
|
7,200
|
|
|
500
|
|
|
7
|
%
|
Class 6 and 7 medium trucks
|
3,600
|
|
|
3,400
|
|
|
200
|
|
|
6
|
%
|
|
12,200
|
|
|
12,000
|
|
|
200
|
|
|
2
|
%
|
Class 8 heavy trucks
|
7,300
|
|
|
5,900
|
|
|
1,400
|
|
|
24
|
%
|
|
18,600
|
|
|
15,000
|
|
|
3,600
|
|
|
24
|
%
|
Class 8 severe service trucks
|
2,300
|
|
|
2,800
|
|
|
(500
|
)
|
|
(18
|
)%
|
|
6,200
|
|
|
7,200
|
|
|
(1,000
|
)
|
|
(14
|
)%
|
Total Traditional markets
|
16,300
|
|
|
14,800
|
|
|
1,500
|
|
|
10
|
%
|
|
44,700
|
|
|
41,400
|
|
|
3,300
|
|
|
8
|
%
|
Military vehicles
(A)
|
—
|
|
|
100
|
|
|
(100
|
)
|
|
(100
|
)%
|
|
100
|
|
|
800
|
|
|
(700
|
)
|
|
(88
|
)%
|
Expansion markets
(B)
|
7,600
|
|
|
7,900
|
|
|
(300
|
)
|
|
(4
|
)%
|
|
19,800
|
|
|
20,500
|
|
|
(700
|
)
|
|
(3
|
)%
|
Total worldwide units
(C)
|
23,900
|
|
|
22,800
|
|
|
1,100
|
|
|
5
|
%
|
|
64,600
|
|
|
62,700
|
|
|
1,900
|
|
|
3
|
%
|
Combined Class 8 trucks
|
9,600
|
|
|
8,700
|
|
|
900
|
|
|
10
|
%
|
|
24,800
|
|
|
22,200
|
|
|
2,600
|
|
|
12
|
%
|
(A)
|
All periods presented have been recast to include all militarized units.
|
(B)
|
Includes chargeouts related to Blue Diamond Truck ("BDT") of
3,100
units and
2,800
units during the
three months ended July 31, 2014
and
2013
, respectively, and
7,600
and
6,700
units during the
nine months ended July 31, 2014
and
2013
.
|
(C)
|
Excludes: (i) RV towables of
1,500
units during the first nine months ended July 31,
2013
, respectively, which were related to the Bison Coach trailer business sold in October 2013, and (ii)
300
units and
800
units during the three and nine months ended July 31,
2013
, respectively, related to Monaco and WCC, both of which have been classified as discontinued operations.
|
|
Three Months Ended July 31,
|
|
|
|
% Change
|
|
Nine Months Ended July 31,
|
|
|
|
% Change
|
||||||||||||
(in units)
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
||||||||||
OEM sales-South America
|
21,400
|
|
|
31,000
|
|
|
(9,600
|
)
|
|
(31
|
)%
|
|
65,700
|
|
|
87,400
|
|
|
(21,700
|
)
|
|
(25
|
)%
|
Intercompany sales
|
9,800
|
|
|
14,900
|
|
|
(5,100
|
)
|
|
(34
|
)%
|
|
30,400
|
|
|
46,500
|
|
|
(16,100
|
)
|
|
(35
|
)%
|
Other OEM sales
|
2,900
|
|
|
2,600
|
|
|
300
|
|
|
12
|
%
|
|
8,500
|
|
|
6,800
|
|
|
1,700
|
|
|
25
|
%
|
Total sales
|
34,100
|
|
|
48,500
|
|
|
(14,400
|
)
|
|
(30
|
)%
|
|
104,600
|
|
|
140,700
|
|
|
(36,100
|
)
|
|
(26
|
)%
|
|
As of
|
||||||||||
(in millions)
|
July 31, 2014
|
|
October 31, 2013
|
|
July 31, 2013
|
||||||
Consolidated cash and cash equivalents
|
$
|
547
|
|
|
$
|
755
|
|
|
$
|
425
|
|
Consolidated marketable securities
|
618
|
|
|
830
|
|
|
708
|
|
|||
Consolidated cash, cash equivalents and marketable securities
|
$
|
1,165
|
|
|
$
|
1,585
|
|
|
$
|
1,133
|
|
|
Nine Months Ended July 31, 2014
|
||||||||||
(in millions)
|
Manufacturing
Operations |
|
Financial Services Operations and Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||
Net cash used in operating activities
|
$
|
(264
|
)
|
|
$
|
(80
|
)
|
|
$
|
(344
|
)
|
Net cash provided by (used in) investing activities
|
132
|
|
|
(118
|
)
|
|
14
|
|
|||
Net cash provided by (used in) financing activities
|
(71
|
)
|
|
205
|
|
|
134
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(7
|
)
|
|
(5
|
)
|
|
(12
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
(210
|
)
|
|
2
|
|
|
(208
|
)
|
|||
Cash and cash equivalents at beginning of the period
|
727
|
|
|
28
|
|
|
755
|
|
|||
Cash and cash equivalents at end of the period
|
$
|
517
|
|
|
$
|
30
|
|
|
$
|
547
|
|
|
Nine Months Ended July 31, 2013
|
||||||||||
(in millions)
|
Manufacturing
Operations |
|
Financial Services Operations and Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||
Net cash provided by (used in) operating activities
|
$
|
(248
|
)
|
|
$
|
282
|
|
|
$
|
34
|
|
Net cash used in investing activities
|
(585
|
)
|
|
(106
|
)
|
|
(691
|
)
|
|||
Net cash provided by (used in) financing activities
|
208
|
|
|
(194
|
)
|
|
14
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(21
|
)
|
|
2
|
|
|
(19
|
)
|
|||
Decrease in cash and cash equivalents
|
(646
|
)
|
|
(16
|
)
|
|
(662
|
)
|
|||
Cash and cash equivalents at beginning of the period
|
1,059
|
|
|
28
|
|
|
1,087
|
|
|||
Cash and cash equivalents at end of the period
|
$
|
413
|
|
|
$
|
12
|
|
|
$
|
425
|
|
•
|
Pension and Other Postretirement Benefits
|
•
|
Allowance for Doubtful Accounts
|
•
|
Income Taxes
|
•
|
Impairment of Long-Lived Assets
|
•
|
Goodwill
|
•
|
Indefinite-Lived Intangible Assets
|
•
|
Contingency Accruals
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
•
|
We did not have sufficient controls designed to validate the completeness and accuracy of underlying data used in the determination of significant estimates and accounting transactions. Specifically, controls were not designed to identify errors in the underlying data which was used to calculate warranty cost estimates and other significant accounting estimates and the accounting effects of significant transactions.
|
•
|
We are designing, documenting, and testing controls that are intended to validate the completeness and accuracy of the data used for warranty costs estimates and other significant accounting estimates and transactions.
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Exhibit:
|
|
Description
|
|
Page
|
(4)
|
|
|
E-1
|
|
(10)
|
|
|
E-2
|
|
(31.1)
|
|
|
E-3
|
|
(31.2)
|
|
|
E-4
|
|
(32.1)
|
|
|
E-5
|
|
(32.2)
|
|
|
E-6
|
|
(99.1)
|
|
|
E-7
|
|
(101.INS)
|
|
XBRL Instance Document
|
|
N/A
|
(101.SCH)
|
|
XBRL Taxonomy Extension Schema Document
|
|
N/A
|
(101.CAL)
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
N/A
|
(101.LAB)
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
N/A
|
(101.PRE)
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
N/A
|
(101.DEF)
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
N/A
|
|
NAVISTAR INTERNATIONAL CORPORATION
|
|
(Registrant)
|
|
/s/ S
AMARA
A. S
TRYCKER
|
|
Samara A. Strycker
|
|
Senior Vice President and Corporate Controller
|
|
(Principal Accounting Officer)
|
NAVISTAR INTERNATIONAL CORPORATION
as Issuer
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Trustee
_______________________
First Supplemental Indenture
Dated as of May 19, 2014
to
Indenture
Dated as of October 28, 2009
_______________________
3.00% Senior Subordinated Convertible Notes due 2014
|
NAVISTAR INTERNATIONAL CORPORATION
as Issuer
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee
CITIBANK, N.A.
As Note Registrar, Paying Agent, Transfer Agent,
Authenticating Agent and Conversion Agent
_______________________
First Supplemental Indenture
Dated as of May 19, 2014
to
Indenture
Dated as of October 11, 2013
_______________________
4.50% Senior Subordinated Convertible Notes due 2018
|
NAVISTAR INTERNATIONAL CORPORATION
as Issuer
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Trustee
_______________________
First Supplemental Indenture
Dated as of May 19, 2014
to
Indenture
Dated as of March 24, 2014
_______________________
4.75% Senior Subordinated Convertible Notes due 2019
|
The following documents of Navistar International Corporation, its principal subsidiary, Navistar, Inc., and its indirect subsidiary, Navistar Financial Corporation are incorporated herein by reference.
|
||
10.88
|
Side Agreement, dated as of June 23, 2014, by and among the Company and Carl C. Icahn, Icahn Partners Master Fund LP, Icahn Offshore LP, Icahn Partners LP, Icahn Onshore LP, Beckton Corp., Hopper Investments LLC, Barberry Corp., High River Limited Partnership, Icahn Capital LP, IPH GP LLC, Icahn Enterprises Holdings L.P. and Icahn Enterprises G.P. Inc. Filed as Exhibit 10.1 to Form 8-K dated June 23, 2014 and filed on June 24, 2014. Commission File No. 001-09618.
|
|
|
|
|
10.89
|
Side Agreement, dated as of June 23, 2014, by and among the Company and Mark H. Rachesky, M.D., MHR Holdings LLC, MHR Fund Management LLC, MHR Institutional Advisors III LLC, MHR Capital Partners Master Account LP, MHR Capital Partners (100) LP, MHR Advisors LLC, and MHR Institutional Partners III LP. Filed as Exhibit 10.2 to Form 8-K dated June 23, 2014 and filed on June 24, 2014. Commission File No. 001-09618.
|
|
|
|
|
10.90
|
Amendment No. 2 to the Amended and Restated ABL Credit Agreement and the Amended and Restated Security Agreement, dated July 3, 2014, among Navistar, Inc., as Borrower, the financial institutions party thereto, and Bank of America, N.A., as Administrative Agent. Filed as Exhibit 10.1 to Form 8-K dated July 3, 2014 and filed on July 23, 2014. Commission File No. 001-09618.
|
|
|
||
The following documents of Navistar International Corporation, its principal subsidiary, Navistar, Inc., and its indirect subsidiary, Navistar Financial Corporation, are filed herewith:
|
||
*10.91
|
Form of Revised Amended and Restated Executive Severance Agreement with all executive officers other than the CEO dated January 1, 2014.
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Navistar International Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ T
ROY
A. C
LARKE
|
Troy A. Clarke
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Navistar International Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ W
ALTER
G. B
ORST
|
Walter G. Borst
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ T
ROY
A. C
LARKE
|
Troy A. Clarke
President and Chief Executive Officer
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ W
ALTER
G. B
ORST
|
Walter G. Borst
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
For the Three Months Ended July 31, 2014
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
2,806
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,806
|
|
Finance revenues
|
—
|
|
|
60
|
|
|
(22
|
)
|
|
38
|
|
||||
Sales and revenues, net
|
2,806
|
|
|
60
|
|
|
(22
|
)
|
|
2,844
|
|
||||
Costs of products sold
|
2,417
|
|
|
—
|
|
|
—
|
|
|
2,417
|
|
||||
Restructuring charges
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||
Asset impairment charges
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Selling, general and administrative expenses
|
217
|
|
|
25
|
|
|
(1
|
)
|
|
241
|
|
||||
Engineering and product development costs
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||
Interest expense
|
60
|
|
|
18
|
|
|
—
|
|
|
78
|
|
||||
Other expense (income), net
|
17
|
|
|
(7
|
)
|
|
(21
|
)
|
|
(11
|
)
|
||||
Total costs and expenses
|
2,811
|
|
|
36
|
|
|
(22
|
)
|
|
2,825
|
|
||||
Equity in income of non-consolidated affiliates
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(3
|
)
|
|
24
|
|
|
—
|
|
|
21
|
|
||||
Equity income from financial services operations
|
15
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
||||
Income (loss) from continuing operations before income taxes
|
12
|
|
|
24
|
|
|
(15
|
)
|
|
21
|
|
||||
Income tax expense
|
(5
|
)
|
|
(9
|
)
|
|
—
|
|
|
(14
|
)
|
||||
Income (loss) from continuing operations
|
7
|
|
|
15
|
|
|
(15
|
)
|
|
7
|
|
||||
Income from discontinued operations, net of tax
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Net income (loss)
|
8
|
|
|
15
|
|
|
(15
|
)
|
|
8
|
|
||||
Less: Income attributable to non-controlling interests
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(2
|
)
|
|
$
|
15
|
|
|
$
|
(15
|
)
|
|
$
|
(2
|
)
|
|
For the Nine Months Ended July 31, 2014
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
7,683
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,683
|
|
Finance revenues
|
—
|
|
|
172
|
|
|
(57
|
)
|
|
115
|
|
||||
Sales and revenues, net
|
7,683
|
|
|
172
|
|
|
(57
|
)
|
|
7,798
|
|
||||
Costs of products sold
|
6,899
|
|
|
—
|
|
|
—
|
|
|
6,899
|
|
||||
Restructuring charges
|
26
|
|
|
1
|
|
|
—
|
|
|
27
|
|
||||
Asset impairment charges
|
172
|
|
|
1
|
|
|
—
|
|
|
173
|
|
||||
Selling, general and administrative expenses
|
649
|
|
|
71
|
|
|
(3
|
)
|
|
717
|
|
||||
Engineering and product development costs
|
253
|
|
|
—
|
|
|
—
|
|
|
253
|
|
||||
Interest expense
|
182
|
|
|
52
|
|
|
—
|
|
|
234
|
|
||||
Other expense (income), net
|
73
|
|
|
(24
|
)
|
|
(54
|
)
|
|
(5
|
)
|
||||
Total costs and expenses
|
8,254
|
|
|
101
|
|
|
(57
|
)
|
|
8,298
|
|
||||
Equity in income of non-consolidated affiliates
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(566
|
)
|
|
71
|
|
|
—
|
|
|
(495
|
)
|
||||
Equity income from financial services operations
|
45
|
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
||||
Income (loss) from continuing operations before income taxes
|
(521
|
)
|
|
71
|
|
|
(45
|
)
|
|
(495
|
)
|
||||
Income tax benefit (expense)
|
1
|
|
|
(26
|
)
|
|
—
|
|
|
(25
|
)
|
||||
Income (loss) from continuing operations
|
(520
|
)
|
|
45
|
|
|
(45
|
)
|
|
(520
|
)
|
||||
Income from discontinued operations, net of tax
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Net income (loss)
|
(517
|
)
|
|
45
|
|
|
(45
|
)
|
|
(517
|
)
|
||||
Less: Income attributable to non-controlling interests
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(547
|
)
|
|
$
|
45
|
|
|
$
|
(45
|
)
|
|
$
|
(547
|
)
|
|
For the Three Months Ended July 31, 2013
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
2,820
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,820
|
|
Finance revenues
|
—
|
|
|
62
|
|
|
(21
|
)
|
|
41
|
|
||||
Sales and revenues, net
|
2,820
|
|
|
62
|
|
|
(21
|
)
|
|
2,861
|
|
||||
Costs of products sold
|
2,547
|
|
|
—
|
|
|
—
|
|
|
2,547
|
|
||||
Restructuring charges
|
5
|
|
|
1
|
|
|
—
|
|
|
6
|
|
||||
Asset impairment charges
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Selling, general and administrative expenses
|
286
|
|
|
23
|
|
|
(1
|
)
|
|
308
|
|
||||
Engineering and product development costs
|
99
|
|
|
—
|
|
|
—
|
|
|
99
|
|
||||
Interest expense
|
60
|
|
|
17
|
|
|
(1
|
)
|
|
76
|
|
||||
Other expense (income), net
|
43
|
|
|
(2
|
)
|
|
(19
|
)
|
|
22
|
|
||||
Total costs and expenses
|
3,057
|
|
|
39
|
|
|
(21
|
)
|
|
3,075
|
|
||||
Equity in income of non-consolidated affiliates
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(234
|
)
|
|
23
|
|
|
—
|
|
|
(211
|
)
|
||||
Equity income from financial services operations
|
16
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
||||
Income (loss) from continuing operations before income taxes
|
(218
|
)
|
|
23
|
|
|
(16
|
)
|
|
(211
|
)
|
||||
Income tax expense
|
(9
|
)
|
|
(7
|
)
|
|
—
|
|
|
(16
|
)
|
||||
Income (loss) from continuing operations
|
(227
|
)
|
|
16
|
|
|
(16
|
)
|
|
(227
|
)
|
||||
Loss from discontinued operations, net of tax
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||
Net income (loss)
|
(237
|
)
|
|
16
|
|
|
(16
|
)
|
|
(237
|
)
|
||||
Less: Income attributable to non-controlling interests
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(247
|
)
|
|
$
|
16
|
|
|
$
|
(16
|
)
|
|
$
|
(247
|
)
|
|
For the Nine Months Ended July 31, 2013
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
7,905
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,905
|
|
Finance revenues
|
—
|
|
|
178
|
|
|
(59
|
)
|
|
119
|
|
||||
Sales and revenues, net
|
7,905
|
|
|
178
|
|
|
(59
|
)
|
|
8,024
|
|
||||
Costs of products sold
|
7,196
|
|
|
—
|
|
|
—
|
|
|
7,196
|
|
||||
Restructuring charges
|
10
|
|
|
4
|
|
|
—
|
|
|
14
|
|
||||
Asset impairment charges
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Selling, general and administrative expenses
|
842
|
|
|
66
|
|
|
(3
|
)
|
|
905
|
|
||||
Engineering and product development costs
|
310
|
|
|
—
|
|
|
—
|
|
|
310
|
|
||||
Interest expense
|
190
|
|
|
52
|
|
|
(2
|
)
|
|
240
|
|
||||
Other income, net
|
27
|
|
|
(8
|
)
|
|
(54
|
)
|
|
(35
|
)
|
||||
Total costs and expenses
|
8,592
|
|
|
114
|
|
|
(59
|
)
|
|
8,647
|
|
||||
Equity in income of non-consolidated affiliates
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(681
|
)
|
|
64
|
|
|
—
|
|
|
(617
|
)
|
||||
Equity income from financial services operations
|
42
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
||||
Income (loss) from continuing operations before income taxes
|
(639
|
)
|
|
64
|
|
|
(42
|
)
|
|
(617
|
)
|
||||
Income tax expense
|
(31
|
)
|
|
(22
|
)
|
|
—
|
|
|
(53
|
)
|
||||
Income (loss) from continuing operations
|
(670
|
)
|
|
42
|
|
|
(42
|
)
|
|
(670
|
)
|
||||
Loss from discontinued operations, net of tax
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
||||
Net income (loss)
|
(710
|
)
|
|
42
|
|
|
(42
|
)
|
|
(710
|
)
|
||||
Less: Income attributable to non-controlling interests
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(744
|
)
|
|
$
|
42
|
|
|
$
|
(42
|
)
|
|
$
|
(744
|
)
|
|
As of July 31, 2014
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
517
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
547
|
|
Marketable securities
|
581
|
|
|
37
|
|
|
—
|
|
|
618
|
|
||||
Restricted cash
|
21
|
|
|
100
|
|
|
—
|
|
|
121
|
|
||||
Finance and other receivables, net
|
594
|
|
|
2,462
|
|
|
(453
|
)
|
|
2,603
|
|
||||
Inventories
|
1,445
|
|
|
17
|
|
|
—
|
|
|
1,462
|
|
||||
Goodwill
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Property and equipment, net
|
1,399
|
|
|
258
|
|
|
—
|
|
|
1,657
|
|
||||
Investments in and advances to financial services operations
|
700
|
|
|
—
|
|
|
(700
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
72
|
|
|
—
|
|
|
—
|
|
|
72
|
|
||||
Deferred taxes, net
|
165
|
|
|
27
|
|
|
—
|
|
|
192
|
|
||||
Other assets
|
366
|
|
|
26
|
|
|
—
|
|
|
392
|
|
||||
Total assets
|
$
|
5,898
|
|
|
$
|
2,957
|
|
|
$
|
(1,153
|
)
|
|
$
|
7,702
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,979
|
|
|
$
|
46
|
|
|
$
|
(453
|
)
|
|
$
|
1,572
|
|
Debt
|
3,141
|
|
|
2,063
|
|
|
—
|
|
|
5,204
|
|
||||
Postretirement benefits liabilities
|
2,494
|
|
|
35
|
|
|
—
|
|
|
2,529
|
|
||||
Other liabilities
|
2,330
|
|
|
113
|
|
|
—
|
|
|
2,443
|
|
||||
Total liabilities
|
9,944
|
|
|
2,257
|
|
|
(453
|
)
|
|
11,748
|
|
||||
Redeemable equity securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(4,082
|
)
|
|
700
|
|
|
(700
|
)
|
|
(4,082
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
5,898
|
|
|
$
|
2,957
|
|
|
$
|
(1,153
|
)
|
|
$
|
7,702
|
|
|
As of October 31, 2013
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
727
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
755
|
|
Marketable securities
|
796
|
|
|
34
|
|
|
—
|
|
|
830
|
|
||||
Restricted cash
|
26
|
|
|
65
|
|
|
—
|
|
|
91
|
|
||||
Finance and other receivables, net
|
767
|
|
|
2,284
|
|
|
(350
|
)
|
|
2,701
|
|
||||
Inventories
|
1,194
|
|
|
16
|
|
|
—
|
|
|
1,210
|
|
||||
Goodwill
|
184
|
|
|
—
|
|
|
—
|
|
|
184
|
|
||||
Property and equipment, net
|
1,521
|
|
|
220
|
|
|
—
|
|
|
1,741
|
|
||||
Investments in and advances to financial services operations
|
686
|
|
|
—
|
|
|
(686
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
77
|
|
|
—
|
|
|
—
|
|
|
77
|
|
||||
Deferred taxes, net
|
204
|
|
|
27
|
|
|
—
|
|
|
231
|
|
||||
Other assets
|
464
|
|
|
31
|
|
|
—
|
|
|
495
|
|
||||
Total assets
|
$
|
6,646
|
|
|
$
|
2,705
|
|
|
$
|
(1,036
|
)
|
|
$
|
8,315
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,824
|
|
|
$
|
28
|
|
|
$
|
(350
|
)
|
|
$
|
1,502
|
|
Debt
|
3,219
|
|
|
1,866
|
|
|
—
|
|
|
5,085
|
|
||||
Postretirement benefits liabilities
|
2,614
|
|
|
38
|
|
|
—
|
|
|
2,652
|
|
||||
Other liabilities
|
2,590
|
|
|
87
|
|
|
—
|
|
|
2,677
|
|
||||
Total liabilities
|
10,247
|
|
|
2,019
|
|
|
(350
|
)
|
|
11,916
|
|
||||
Redeemable equity securities
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
44
|
|
|
—
|
|
|
—
|
|
|
44
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(3,649
|
)
|
|
686
|
|
|
(686
|
)
|
|
(3,649
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
6,646
|
|
|
$
|
2,705
|
|
|
$
|
(1,036
|
)
|
|
$
|
8,315
|
|
|
For the Nine Months Ended July 31, 2014
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(517
|
)
|
|
$
|
45
|
|
|
$
|
(45
|
)
|
|
$
|
(517
|
)
|
Adjustments to reconcile net income (loss) to cash used in operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
176
|
|
|
1
|
|
|
—
|
|
|
177
|
|
||||
Depreciation of equipment leased to others
|
47
|
|
|
32
|
|
|
—
|
|
|
79
|
|
||||
Amortization of debt issuance costs and discount
|
30
|
|
|
8
|
|
|
—
|
|
|
38
|
|
||||
Deferred income taxes
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Asset impairment charges
|
172
|
|
|
1
|
|
|
—
|
|
|
173
|
|
||||
Equity in loss of non-consolidated affiliates
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Equity in income of financial services affiliates
|
(45
|
)
|
|
—
|
|
|
45
|
|
|
—
|
|
||||
Dividends from financial services operations
|
30
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Change in intercompany receivables and payables
|
73
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
||||
Other, net
|
(230
|
)
|
|
(64
|
)
|
|
—
|
|
|
(294
|
)
|
||||
Net cash used in operating activities
|
(264
|
)
|
|
(50
|
)
|
|
(30
|
)
|
|
(344
|
)
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||||||
Purchases of marketable securities
|
(1,207
|
)
|
|
(3
|
)
|
|
—
|
|
|
(1,210
|
)
|
||||
Sales of marketable securities
|
1,092
|
|
|
—
|
|
|
—
|
|
|
1,092
|
|
||||
Maturities of marketable securities
|
330
|
|
|
—
|
|
|
—
|
|
|
330
|
|
||||
Net change in restricted cash and cash equivalents
|
5
|
|
|
(35
|
)
|
|
—
|
|
|
(30
|
)
|
||||
Capital expenditures
|
(56
|
)
|
|
(1
|
)
|
|
—
|
|
|
(57
|
)
|
||||
Purchase of equipment leased to others
|
(66
|
)
|
|
(91
|
)
|
|
—
|
|
|
(157
|
)
|
||||
Other investing activities
|
34
|
|
|
12
|
|
|
—
|
|
|
46
|
|
||||
Net cash provided by (used in) investing activities
|
132
|
|
|
(118
|
)
|
|
—
|
|
|
14
|
|
||||
Net cash provided by (used in) financing activities
|
(71
|
)
|
|
175
|
|
|
30
|
|
|
134
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(7
|
)
|
|
(5
|
)
|
|
—
|
|
|
(12
|
)
|
||||
Increase (decrease) in cash and cash equivalents
|
(210
|
)
|
|
2
|
|
|
—
|
|
|
(208
|
)
|
||||
Cash and cash equivalents at beginning of the period
|
727
|
|
|
28
|
|
|
—
|
|
|
755
|
|
||||
Cash and cash equivalents at end of the period
|
$
|
517
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
547
|
|
|
For the Nine Months Ended July 31, 2013
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(710
|
)
|
|
$
|
42
|
|
|
$
|
(42
|
)
|
|
$
|
(710
|
)
|
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
224
|
|
|
1
|
|
|
—
|
|
|
225
|
|
||||
Depreciation of equipment leased to others
|
77
|
|
|
28
|
|
|
—
|
|
|
105
|
|
||||
Amortization of debt issuance costs and discount
|
34
|
|
|
9
|
|
|
—
|
|
|
43
|
|
||||
Deferred income taxes
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Asset impairment charges
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
Gain on sales of investments and businesses, net
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||
Equity in loss of non-consolidated affiliates
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||
Equity in income of financial services affiliates
|
(42
|
)
|
|
—
|
|
|
42
|
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Change in intercompany receivables and payables
|
(12
|
)
|
|
12
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
145
|
|
|
190
|
|
|
—
|
|
|
335
|
|
||||
Net cash provided by (used in) operating activities
|
(248
|
)
|
|
282
|
|
|
—
|
|
|
34
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
(1,057
|
)
|
|
(13
|
)
|
|
—
|
|
|
(1,070
|
)
|
||||
Sales of marketable securities
|
664
|
|
|
—
|
|
|
—
|
|
|
664
|
|
||||
Maturities of marketable securities
|
164
|
|
|
—
|
|
|
—
|
|
|
164
|
|
||||
Net change in restricted cash and cash equivalents
|
1
|
|
|
(10
|
)
|
|
—
|
|
|
(9
|
)
|
||||
Capital expenditures
|
(135
|
)
|
|
(1
|
)
|
|
—
|
|
|
(136
|
)
|
||||
Purchase of equipment leased to others
|
(266
|
)
|
|
(85
|
)
|
|
—
|
|
|
(351
|
)
|
||||
Other investing activities
|
44
|
|
|
3
|
|
|
—
|
|
|
47
|
|
||||
Net cash used in investing activities
|
(585
|
)
|
|
(106
|
)
|
|
—
|
|
|
(691
|
)
|
||||
Net cash provided by (used in) financing activities
|
208
|
|
|
(194
|
)
|
|
—
|
|
|
14
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(21
|
)
|
|
2
|
|
|
—
|
|
|
(19
|
)
|
||||
Decrease in cash and cash equivalents
|
(646
|
)
|
|
(16
|
)
|
|
—
|
|
|
(662
|
)
|
||||
Cash and cash equivalents at beginning of the period
|
1,059
|
|
|
28
|
|
|
—
|
|
|
1,087
|
|
||||
Cash and cash equivalents at end of the period
|
$
|
413
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
425
|
|