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þ
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ANNUAL 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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Title of each class
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Name of each exchange on which registered
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Common stock (par value $0.10)
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New York Stock Exchange
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Cumulative convertible junior preference stock, Series D (par value $1.00)
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New York Stock Exchange
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Emerging growth company
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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EXHIBIT INDEX:
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Exhibit 3
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Exhibit 4
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Exhibit 10
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Exhibit 12
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Exhibit 21
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Exhibit 23.1
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Exhibit 24
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Exhibit 31.1
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Exhibit 31.2
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Exhibit 32.1
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Exhibit 32.2
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Exhibit 99.1
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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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the implementation of our strategic alliance with Volkswagen Truck & Bus GmbH ("VW T&B");
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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, markets for our products, and financial performance;
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•
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anticipated performance and benefits of our products and technologies;
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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; our ability to implement our strategy focused on growing the Core business, driving operational excellence, pursuing innovative technology solutions, leveraging the VW T&B strategic alliance, enhancing our winning culture, and improving our financial performance, as well as the results we expect to achieve from the implementation of our strategy;
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•
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our expectations related to new product launches;
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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 and estimates relating to restructuring activities, including restructuring 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 debt refinancing activities;
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•
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our expectations relating to the potential effects of anticipated divestitures and closures of businesses;
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•
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our expectations relating to our cost-reduction actions and 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 wholesale and retail finance receivables and revenues;
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•
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our expectations and estimates relating to our used truck inventory;
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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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our expectations relating to impairment of goodwill and other assets;
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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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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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Business
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•
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Trucks—
We manufacture and distribute Class 4 through 8 trucks and buses in the common carrier, private carrier, government, leasing, construction, energy/petroleum, military vehicle, and student and commercial transportation markets under the International
®
and IC brands. We design and manufacture proprietary diesel engines for our International branded trucks and military vehicles and IC branded buses.
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•
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Parts—
We support our International
®
brand commercial and military trucks, IC brand buses, and our proprietary engines, as well as our other product lines, by distributing proprietary products together with a wide selection of other standard truck, trailer, and engine service parts.
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•
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Financial Services—
We provide retail, wholesale, and lease financing of products sold by the Truck and Parts segments, as well as their dealers, within the U.S. and Mexico.
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I.
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Consummated VW T&B Alliance:
In February 2017, we consummated our previously announced strategic alliance with VW T&B pursuant to a Stock Purchase Agreement, dated as of September 5, 2016, by and among us and VW T&B (“the Stock Purchase Agreement”), a License and Supply Framework Agreement and a Procurement JV Framework Agreement. Pursuant to the Stock Purchase Agreement, we issued and VW T&B purchased 16.2 million shares of our common stock for an aggregate purchase price of $256 million at $15.76 per share, equal to a 19.9% stake in the Company (16.6% on a fully-diluted basis).
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II.
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Launched products and product features:
In 2017,
w
e remained committed to focusing on our Core markets and investing in product development to increase customer value. We expect to continue to announce a new or redesigned product, on average, every four to six months through 2018. By the end of 2018, our entire portfolio will consist of newly designed trucks.
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•
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In February 2017, we introduced our new International
®
A26 diesel engine, an all-new 12.4L engine design which we believe offers improved fuel economy and will deliver the uptime that our customers demand. In July 2017, we fulfilled customer shipments of our first on-highway vehicles powered by the International
®
A26 engine.
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•
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In April 2017, we introduced the International
®
RH™ Series, our new Class 8 regional haul tractor powered by the new International
®
A26 engine. The RH Series is designed to deliver further improvements in vehicle uptime and driver productivity.
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•
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In June 2017, we announced an IC Bus
®
gas powertrain offering to provide school bus customers additional powertrain options.
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•
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In July 2017, we made our OnCommand
®
Connection (“OCC”) Telematics solution available for purchase. We also announced OCC Marketplace, a new, open-architecture, cloud-based technology platform; OCC Electronic Driver Log (“EDL”), which automates federal hours of service compliance requirements. During the year, we also introduced electronic Driver Vehicle Inspection Reporting, fuel tax reporting, live-action plans, and over-the-air programming for Cummins engines.
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•
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In September 2017, we introduced the International® HV™ Series, our new Class 8 severe service truck powered by the new International® A26™ diesel engine.
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•
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In September 2017, we announced the launch of an electric medium-duty truck in North America by late 2019 with our partner VW T&B. We also expect to launch an IC electric bus as early as 2019. The IC Electric Bus chargE™ was unveiled in late 2017.
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III.
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Improved quality and uptime:
We continued our relentless focus on improving quality and uptime in 2017.
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•
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We have reduced dealer dwell time through improvements in diagnostics and repair procedures. An increasing number of service locations have achieved certification under the Diamond Edge
SM
Certified Program, which is a dealer service performance program that is based on rigorous adherence to exacting parts and service metrics.
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•
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We have made great strides in improving the quality of components manufactured by our supply base. The quality performance of our supply base has improved to the point that over the last four years, there has been a reduction of more than 70% in supplier-related internal defects observed at our manufacturing facilities. We expect that the continued reduction in supplier-related internal defects will have a positive impact on the uptime and performance of our vehicles.
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•
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Warranty expense continued to decline as a result of our improved product quality and reliability. Excluding pre-existing charges, warranty expense as a percentage of manufacturing revenue was 2.4% in 2017, versus 2.7% in 2016.
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•
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Our new product Command Center has been in place since August 2017 focused on new products dwell time improvement. The goal is a maximum 24 hours dwell time for 80% of the vehicles and 48 hours dwell time for 100% of the vehicles. OCC will support Command Center goals through proactive diagnostics and predictive tools.
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IV.
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Delivered on our plan to reduce costs:
In 2017, we continued cost management practices that are improving
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•
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Procurement and engineering design processes remain focused on lowering material costs.
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•
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We revised our used truck strategy in the second quarter of 2017 which accelerated our sales and drove lower inventories and used truck reserve adjustments in the second half of the year.
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•
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We rationalized 9/10-liter engine production at our plant in Melrose Park, Illinois (the "Melrose Park Facility") and decided to cease production beginning in the third quarter of fiscal 2018.
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•
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The VW T&B alliance is on plan to deliver procurement, technology, and other synergies.
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V.
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Built sales momentum:
Our Class 6-8 retail market share is gaining momentum, growing by over 150 share points over the course of fiscal 2017.
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•
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Customer acceptance of new heavy duty products is growing steadily compared to 2016.
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•
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Our share of the rental and leasing businesses is increasing, boosting our market share in the Medium truck segment.
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•
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At the North American Commercial Vehicle ("NACV") show in September 2017, we launched the new International
®
LoneStar
®
, International
®
HV™, and the International
®
A26 engine in our International
®
HX™ series.
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•
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Our all-makes Fleetrite
®
and remanufactured ReNEWed
®
parts sales grew by double digits compared to 2016.
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VI.
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Sought New Sources of Revenue
: We continue to seek new sources of revenue.
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•
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In March 2017, we announced that Navistar Defense, LLC ("ND"), was awarded two foreign military contracts by the U.S. Army Contracting Command. Under the first contract, ND will produce and support MaxxPro® Dash
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•
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We ramped up contract manufacturing for General Motors Company ("GM") in our Springfield, Ohio plant.
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•
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We announced a strategic relationship with Education Logistics, Inc. (“Edulog”), an industry leader in pupil transportation solutions, which will offer the additional comprehensive telematics solutions to the school bus market using our OCC remote diagnostics and telematics solution for all makes and models.
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VII.
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Evaluated non-Core activities:
We also continue to evaluate our portfolio of assets to optimize our cost structure. In May 2017, we completed the sale of a fuel injector business line that had been included in our Parts segment. During August 2017, we also sold our fabrication business in Conway, Arkansas.
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•
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Grow the Core business;
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•
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Drive operational excellence with enhanced focus on quality and reliability;
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•
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Pursue innovative technology solutions;
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•
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Leverage the VW T&B strategic alliance;
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•
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Enhance our winning culture; and
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•
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Improve our financial performance
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I.
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Grow the Core Business:
We will continue to focus on leveraging our investments and assets to generate revenue growth.
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•
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New Product Launches
- Our product development pipeline is full for 2018. In the first half of 2018, we will launch the International
®
HX
TM
Series with the International
®
A26 engine to complete the HX family. We will also launch the RE bus with the Cummins ISL engine, the International
®
HV
TM
Series vocational truck with the A26 engine; the gasoline-powered CE bus; and an updated International
®
LoneStar
®
truck. In the first half of 2018, we will introduce the International
®
MV
TM
Series, our new medium-duty truck. To support Greenhouse Gas (“GHG”) emissions requirements, we will continue to introduce features that further improve fuel economy. We will also enter the Class 4/5 market in the second half of 2018 with a vehicle that will be distributed separately through GM and our dealer networks.
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•
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Distribution Effectiveness
- We will continue to work with the dealer organization to improve customer reach, sales effectiveness and customer uptime. Recruitment and training of salespeople, improved operating practices, and comprehensive internal sales support are central to this strategy.
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•
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Focus on the Customer
- We will also continue our focus to align around customer needs. We will implement uptime best practices, such as managing repairs in real time to reduce dwell time, and utilizing OCC data and its advanced diagnostic and prognostic capabilities. New initiatives in 2018 are targeted to raise uptime to the next level.
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•
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Parts -
Our growth initiatives focus on strengthening sales and dealer capability and loyalty; expansion of the successful Fleetrite all-makes parts offering; increasing share of late-in-lifecycle products including remanufactured offerings; and leveraging our connected vehicle platform and other technologies to accelerate the growth of parts and services.
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II.
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Drive Operational Excellence:
We will continue to drive improvement of key performance metrics such as product, manufacturing, structural costs, quality, and uptime. We are also continuing our focus to identify and prioritize needed asset sustainment in our manufacturing and engineering facilities. Operational excellence focus is essential to delivering on our commitment to enhance customer value.
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III.
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Pursue Innovative Technology Solutions:
We plan to leverage our assets and capabilities to pursue innovative technology solutions for our customers.
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•
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New Technologies -
We are well positioned to participate in the three emerging technology themes impacting the North American transportation industry. These include Advanced Driver Assistance Systems ("ADAS") autonomous driving, the digital supply chain, and electrification. We have emerging relationships with first movers in all of these areas. We have announced the planned introduction of the series of electric vehicles in the medium duty and school bus classes.
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•
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OnCommand Connection
- The requirement to use Electronic Logging Devices ("ELDs") starting in the first quarter of fiscal 2018 is an opportunity for revenue growth. In addition to remote diagnostics, we have broadened our OCC offering to include cellular telematics, EDLs, and driver behavior. OCC product investments in 2018 will focus on new service solutions and tools that will enhance our current offerings as well as differentiate the International brands. In addition, OCC is a ready-to-go alternative as a digital backbone for autonomous driving systems and supply chain digitization efforts.
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IV.
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Leverage the VW T&B Strategic Alliance:
The alliance is valuable to us across many areas.
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•
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Products and Technology -
We and VW T&B have a similar vision of the role of technology, including the importance of driver-focused, open-architecture solutions. The alliance will be a source of powertrain options and other high-value technologies, including advanced driver assistance systems; connected vehicle solutions, including; platooning and autonomous technologies; electric vehicles; and cab and chassis subsystems. We plan to introduce a medium-duty vehicle electric powertrain in North America by late 2019 with our strategic partner, VW T&B. We also expect to launch the IC Electric Bus chargE™ as early as 2019.
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•
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Digital Brands
- We are also collaborating on fully integrated, next generation diesel big bore powertrains and the convergence of our OCC and VW T&B's RIO digital brands.
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•
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Market Confidence -
The strategic alliance with VW T&B solidifies us as a long-term player in North America.
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•
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Parts -
The alliance creates new parts sales and growth opportunities afforded by vertically integrated systems.
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•
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Costs -
The alliance leverages global scale to achieve significant cost reduction synergies, and drive more efficient research and development spend. To date, the alliance's procurement joint venture is delivering expected synergies.
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V.
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Enhance our Winning Culture:
We will align our people strategy with our capabilities to ensure we have the skill sets, personnel and organizational structure necessary to take our business to the next level. We will advance a team-based organization, enhance collaborative work environments, and utilize visual management tools.
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VI.
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Improve Financial Performance:
Our financial performance continues to improve, due to savings from cost reduction actions and revenue growth. The Class 6-8 truck industry has improved in the second half of 2017, a trend that is expected to continue in 2018. We anticipate that 2018 will be a year of further revenue and earnings growth, combined with prudent investments to build a solid base for the longer-term.
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Units
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Value
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As of October 31:
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(in billions)
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2017
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16,000
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$
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1.4
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2016
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14,000
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1.1
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As of October 31,
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2017
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2016
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2015
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Employees worldwide:
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Total active employees
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11,400
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11,300
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13,200
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Total inactive employees
(A)
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900
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1,100
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1,200
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Total employees worldwide
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12,300
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12,400
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14,400
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Total active union employees:
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Total UAW
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2,900
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3,100
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2,800
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Total other unions
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3,800
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2,300
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2,800
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(A)
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Employees are considered inactive in certain situations including disability leave, leave of absence, layoffs, and work stoppages. Included within inactive employees are approximately
300
employees and
200
employees as of
October 31, 2016
and
2015
, respectively, represented by the National Automobile, Aerospace and Agricultural Implement Workers of Canada ("CAW") at our Chatham, Ontario heavy truck plant, which was closed in 2011 due to an inability to reach a collective bargaining agreement with the CAW. For more information, see Note 2,
Restructurings and Impairments
, to the accompanying consolidated financial statements.
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Name
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Age
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Position with the Company
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Troy A. Clarke
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62
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President and Chief Executive Officer and Director
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Walter G. Borst
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55
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Executive Vice President and Chief Financial Officer
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Persio V. Lisboa
|
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52
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Executive Vice President and Chief Operating Officer
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William V. McMenamin
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58
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President, Financial Services and Treasurer
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Samara A. Strycker
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45
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Senior Vice President and Corporate Controller
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Curt A. Kramer
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49
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Senior Vice President and General Counsel
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Richard E. Bond
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64
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Associate General Counsel and Corporate Secretary
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Item 1A.
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Risk Factors
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•
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increasing our vulnerability to general adverse economic and industry conditions;
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•
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limiting our ability to use operating cash flow in other areas of our business because we must dedicate a portion of these funds to make significant interest payments on our indebtedness;
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•
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limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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•
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limiting our ability to take advantage of business opportunities as a result of various restrictive covenants in our debt agreements; and
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•
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placing us at a competitive disadvantage compared to our competitors that have less debt and/or less restrictive debt covenants.
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•
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the ability of our Board of Directors to issue so-called "flexible" preferred stock;
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•
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a provision for any vacancies on our Board of Directors to be filled only by the remaining directors;
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•
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the inability of stockholders to act by written consent or call special meetings;
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•
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advance notice procedures for stockholder proposals to be brought before an annual meeting of our stockholders; and
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•
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Section 203 of the Delaware General Corporation Law, which generally restricts us from engaging in certain business combinations with a person who acquires 15% or more of our common stock for a period of three years from the date such person acquired such common stock, unless stockholder or Board approval is obtained prior to the acquisition
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•
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allow our government clients to terminate or not renew our contracts if we come under foreign ownership, control or influence;
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•
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allow our government clients to terminate existing contracts for the convenience of the government;
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•
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require us to prevent unauthorized access to classified information; and
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•
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require us to comply with laws and regulations intended to promote various social or economic goals.
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•
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trade protection measures and import or export licensing requirements;
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•
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the imposition of foreign withholding taxes on the remittance of foreign earnings to the U.S.;
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•
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difficulty in staffing and managing international operations and the application of foreign labor regulations;
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•
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multiple and potentially conflicting laws, regulations, and policies that are subject to change;
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•
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currency exchange rate risk; and
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•
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changes in general economic and political conditions in countries where we operate, particularly in emerging markets.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
|
Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Securities
|
Year Ended October 31, 2017
|
|
High
|
|
Low
|
|
Year Ended October 31, 2016
|
|
High
|
|
Low
|
||||||||
1st Quarter
|
|
$
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33.46
|
|
|
$
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22.36
|
|
|
1st Quarter
|
|
$
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15.21
|
|
|
$
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5.78
|
|
2nd Quarter
|
|
29.53
|
|
|
22.89
|
|
|
2nd Quarter
|
|
16.39
|
|
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6.24
|
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||||
3rd Quarter
|
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31.37
|
|
|
24.75
|
|
|
3rd Quarter
|
|
15.77
|
|
|
10.30
|
|
||||
4th Quarter
|
|
45.47
|
|
|
29.53
|
|
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4th Quarter
|
|
24.04
|
|
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11.59
|
|
|
As of October 31,
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||||||||||||||||||||||
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
Navistar International Corporation
|
$
|
100
|
|
|
$
|
193
|
|
|
$
|
189
|
|
|
$
|
66
|
|
|
$
|
119
|
|
|
$
|
226
|
|
S&P 500 Index - Total Returns
|
100
|
|
|
127
|
|
|
149
|
|
|
157
|
|
|
164
|
|
|
203
|
|
||||||
S&P Construction, Farm Machinery, and Heavy Truck Index
|
100
|
|
|
108
|
|
|
128
|
|
|
94
|
|
|
112
|
|
|
173
|
|
Item 6.
|
Selected Financial Data
|
|
As of and for the Years Ended October 31,
|
|||||||||||||||||
(in millions, except per share data)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
2013
|
||||||||||
RESULTS OF OPERATIONS DATA
|
|
|
|
|
|
|
|
|
||||||||||
Sales and revenues, net
|
$
|
8,570
|
|
|
$
|
8,111
|
|
|
$
|
10,140
|
|
|
$
|
10,806
|
|
$
|
10,775
|
|
Income (loss) from continuing operations before taxes
|
64
|
|
|
(32
|
)
|
|
(103
|
)
|
|
(556
|
)
|
(974
|
)
|
|||||
Income tax benefit (expense)
|
(10
|
)
|
|
(33
|
)
|
|
(51
|
)
|
|
(26
|
)
|
171
|
|
|||||
Income (loss) from continuing operations
|
54
|
|
|
(65
|
)
|
|
(154
|
)
|
|
(582
|
)
|
(803
|
)
|
|||||
Income (loss) from discontinued operations, net of tax
|
1
|
|
|
—
|
|
|
3
|
|
|
3
|
|
(41
|
)
|
|||||
Net income (loss)
|
55
|
|
|
(65
|
)
|
|
(151
|
)
|
|
(579
|
)
|
(844
|
)
|
|||||
Less: Net income attributable to non-controlling interests
|
25
|
|
|
32
|
|
|
33
|
|
|
40
|
|
54
|
|
|||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
30
|
|
|
$
|
(97
|
)
|
|
$
|
(184
|
)
|
|
$
|
(619
|
)
|
$
|
(898
|
)
|
Amounts attributable to Navistar International Corporation common shareholders:
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations net of tax
|
$
|
29
|
|
|
$
|
(97
|
)
|
|
$
|
(187
|
)
|
|
$
|
(622
|
)
|
$
|
(857
|
)
|
Income (loss) from discontinued operations, net of tax
|
1
|
|
|
—
|
|
|
3
|
|
|
3
|
|
(41
|
)
|
|||||
Net income (loss)
|
$
|
30
|
|
|
$
|
(97
|
)
|
|
$
|
(184
|
)
|
|
$
|
(619
|
)
|
$
|
(898
|
)
|
Basic earnings (loss) per share
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.31
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.29
|
)
|
|
$
|
(7.64
|
)
|
$
|
(10.66
|
)
|
Discontinued operations
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|
0.04
|
|
(0.51
|
)
|
|||||
Net income (loss)
|
$
|
0.32
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.25
|
)
|
|
$
|
(7.60
|
)
|
$
|
(11.17
|
)
|
Diluted earnings (loss) per share
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.31
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.29
|
)
|
|
$
|
(7.64
|
)
|
$
|
(10.66
|
)
|
Discontinued operations
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|
0.04
|
|
(0.51
|
)
|
|||||
Net income (loss)
|
$
|
0.32
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.25
|
)
|
|
$
|
(7.60
|
)
|
$
|
(11.17
|
)
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
93.0
|
|
|
81.7
|
|
|
81.6
|
|
|
81.4
|
|
80.4
|
|
|||||
Diluted
|
93.5
|
|
|
81.7
|
|
|
81.6
|
|
|
81.4
|
|
80.4
|
|
|||||
BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
6,135
|
|
|
$
|
5,653
|
|
|
$
|
6,649
|
|
|
$
|
7,392
|
|
$
|
8,260
|
|
Long-term debt:
(A)
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
$
|
3,121
|
|
|
$
|
3,025
|
|
|
$
|
3,059
|
|
|
$
|
2,814
|
|
$
|
2,516
|
|
Financial services operations
|
768
|
|
|
972
|
|
|
1,088
|
|
|
1,065
|
|
1,351
|
|
|||||
Total long-term debt
|
$
|
3,889
|
|
|
$
|
3,997
|
|
|
$
|
4,147
|
|
|
$
|
3,879
|
|
$
|
3,867
|
|
Redeemable equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
$
|
4
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Engine Strategy and Emissions Standards Compliance
—We are focused on new product introductions, enhancements of current products, quality improvements and continuous material cost-reductions across our truck and bus product lines. We have shifted our investment focus from engines to trucks including developing driver-centric designs. We are also expanding our powertrain offerings with a mix of proprietary engines and Cummins engines. We have incurred significant research and development and tooling costs to design and produce our product lines to meet the EPA and CARB on-highway HDD emissions standards, including OBD requirements. Recently announced GHG phase 2 regulations will further drive up significant investments in product development by us and our competitors. These emissions standards have and will continue to result in significant increases in costs of our products.
|
•
|
VW T&B Alliance
— We and VW T&B have a similar vision for the role of technology, including the importance of driver-focused open architecture solutions. We expect the alliance will be a source of powertrain options and other high-value technologies, including advanced driver assistance systems, connected vehicle solutions including platooning and autonomous technologies, electric vehicles, and cab and chassis subsystems. We plan to introduce a medium-duty vehicle electric powertrain by late 2019 and launch the IC Electric Bus chargE™ as early as 2019. We are also collaborating on fully integrated, next generation diesel big bore powertrains and the convergence of OnCommand and RIO digital brands.
|
•
|
Core Truck Market
—The Core truck markets, including U.S. and Canada, in which we compete are cyclical in nature and are strongly influenced by macroeconomic factors such as industrial production, demand for durable goods, construction spending, business investment, oil prices, and consumer confidence and spending. Class 8 industry volume declined in 2017 but we anticipate industry volumes to increase in 2018 as general economic and industry-specific indicators are trending well into 2018. In addition, improved new truck fuel economy along with rising freight demand and rates show the trucking industry remains healthy. However, an oversupply of Class 8 used trucks throughout the industry continues to suppress used truck trade-in values, negatively impacting new Class 8 truck sales. The medium truck and school bus markets are expected to maintain the strong demand in 2018. We anticipate that Core markets retail industry deliveries will range between 345,000 units to 375,000 units for 2018.
|
•
|
Used Truck inventory
- Our gross used truck inventory decreased to approximately
$206 million
at
October 31, 2017
from
$410 million
at
October 31, 2016
, offset by reserves of
$110 million
and
$208 million
, respectively. During
2017
, additions to our used truck reserves were
$111 million
, compared to
$187 million
and
$117 million
in 2016 and 2015, respectively. The decline was primarily due to the implementation of a shift in market mix for our used trucks to include an increase in volume to certain export markets, that have a lower price point as compared to sales through our domestic channels, and to lower domestic pricing to enable higher sales velocity. We have decreased our gross used truck inventory balances and inventory reserves as a result of the shift in market mix and change in pricing strategy. We continue to seek alternative channels to sell our used trucks.
|
•
|
Military Sales
- Our U.S. military sales were
$224 million
in 2017, compared to
$198 million
in
2016
and
$203 million
in
2015
. The 2017 U.S. military sales primarily consisted of deliveries of military commercial off the shelf variants ("MILCOTS") and new MaxxPro vehicles to foreign militaries, refurbishment and upgrades of government owned MaxxPro vehicles to “like new” condition, upgrade kits, spare parts, and technical support service. In 2018, we expect our U.S. military sales to increase compared to 2017 due to additional contracts to deliver refurbished and upgraded MaxxPro vehicles and new MaxxPro vehicles to foreign militaries.
|
•
|
Warranty Costs
—Emissions regulations in the U.S. and Canada have resulted in rapid product development cycles, driving significant changes from previous engine models. In 2010, we introduced changes to our engine line-up in response to 2010 emissions regulations. Component complexity and other related costs associated with meeting emissions standards have contributed to higher repair costs that exceeded those that we have historically experienced. Historically, warranty claims experience for launch-year engines has been higher compared to the prior model-year engines; however, over time we have been able to refine both the design and manufacturing process to reduce both the volume and the severity of warranty claims. We recognized a benefit for adjustments to pre-existing warranties of
$1 million
in
2017
compared to charges for adjustments of
$77 million
in
2016
and
$1 million
in
2015
. In future periods, we could experience an increase in warranty spend compared to prior periods that could result in additional charges for adjustments to pre-existing warranties. In addition, as we identify opportunities to improve the design and manufacturing of our engines, we may incur additional charges for product recalls and field campaigns to address identified issues. These charges may have an adverse effect on our financial condition, results of operations and cash flows. For more information, see Note 1,
Summary of Significant Accounting Policies,
to the accompanying consolidated financial statements.
|
•
|
Income Taxes
—At
October 31, 2017
, we had
$3 billion
of U.S. federal net operating loss carryforwards and
$249 million
of federal tax credit carryforwards. We expect our cash payments of U.S. taxes will be minimal for as long as we are able to offset our U.S. taxable income by these U.S. net operating losses and tax credits, which have carryforward periods of up to 20 years. We also have U.S., state and foreign net operating losses that are available to reduce cash payments of U.S., state and foreign taxes in future periods.
|
•
|
Core-Business Evaluation
—We are focused on improving our Truck and Parts businesses in our Core markets. We are working to fix, divest or close under-performing and non-strategic areas and expect to realize incremental benefits from these actions in the near future. In addition, we are restructuring our business and rationalizing our Manufacturing operations in an effort to optimize our cost structure. This effort is ongoing and may lead to additional divestitures of businesses or discontinuing programs that are outside of our core operations or are not performing to our expectations.
|
•
|
Global Economy
—The global economy is expected to continue to improve solidly supported by a synchronized expansion across most regions. The outlook for the economies in both the U.S. and Canada remain cautiously optimistic with moderate growth expectations. A projected stabilization in energy and commodity prices should provide a benefit which may contribute to growth for Latin American countries in 2018, though the growth trend continues to be challenged by weak economic indicators. Mexico’s economy moderated in 2017, and is expected to grow in 2018, benefiting from the expansionary effects of the election year and the reconstruction of infrastructure damaged by earthquakes. Brazil has begun to emerge out of recession in the second half of 2017 and the economy is expected to accelerate in 2018 as key indicators are trending up. Low oil prices continue to provide a powerful stimulus to the global economy by lowering energy costs, boosting consumer income and spending, and improving external accounts of oil importers.
|
•
|
Impact of Government Regulation
—As a manufacturer of trucks and engines, we continue to face significant governmental regulation of our products, especially in the areas of environmental and safety matters. We are also subject to various noise standards imposed by federal, state, and local regulations. Our facilities may be subject to regulation related to climate change, and climate change itself may also have some impact on our operations. However, these impacts are currently uncertain and we cannot predict the nature and scope of those impacts. For more information, see
Impact of Government Regulation
in Part I, Item I,
Business.
|
(in millions, except per share data and % change)
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Sales and revenues, net
|
$
|
8,570
|
|
|
$
|
8,111
|
|
|
$
|
459
|
|
|
6
|
%
|
Costs of products sold
|
7,037
|
|
|
6,812
|
|
|
225
|
|
|
3
|
%
|
|||
Restructuring charges
|
3
|
|
|
10
|
|
|
(7
|
)
|
|
(70
|
)%
|
|||
Asset impairment charges
|
13
|
|
|
27
|
|
|
(14
|
)
|
|
(52
|
)%
|
|||
Selling, general and administrative expenses
|
878
|
|
|
802
|
|
|
76
|
|
|
9
|
%
|
|||
Engineering and product development costs
|
251
|
|
|
247
|
|
|
4
|
|
|
2
|
%
|
|||
Interest expense
|
351
|
|
|
327
|
|
|
24
|
|
|
7
|
%
|
|||
Other income, net
|
(21
|
)
|
|
(76
|
)
|
|
55
|
|
|
(72
|
)%
|
|||
Total costs and expenses
|
8,512
|
|
|
8,149
|
|
|
363
|
|
|
4
|
%
|
|||
Equity in income of non-consolidated affiliates
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
%
|
|||
Income (loss) from continuing operations before inc
ome taxes
|
64
|
|
|
(32
|
)
|
|
96
|
|
|
(300
|
)%
|
|||
Income tax expense
|
(10
|
)
|
|
(33
|
)
|
|
23
|
|
|
(70
|
)%
|
|||
Income (loss) from continuing o
perations
|
54
|
|
|
(65
|
)
|
|
119
|
|
|
(183
|
)%
|
|||
Less: Net income attributable to non-controlling interests
|
25
|
|
|
32
|
|
|
(7
|
)
|
|
(22
|
)%
|
|||
Income (loss) from continuing operations
(A)
|
29
|
|
|
(97
|
)
|
|
126
|
|
|
(130
|
)%
|
|||
Income from discontinued operations, net of tax
|
1
|
|
|
—
|
|
|
1
|
|
|
N.M.
|
|
|||
Net income (loss)
(A)
|
$
|
30
|
|
|
$
|
(97
|
)
|
|
$
|
127
|
|
|
(131
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Diluted earnings (loss) per share:
(A)
|
|
|
|
|
|
|
|
|||||||
Continuing operations
|
$
|
0.31
|
|
|
$
|
(1.19
|
)
|
|
$
|
1.50
|
|
|
(126
|
)%
|
Discontinued operations
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
N.M.
|
|
|||
|
$
|
0.32
|
|
|
$
|
(1.19
|
)
|
|
$
|
1.51
|
|
|
(127
|
)%
|
Diluted weighted average shares outstanding
|
93.5
|
|
|
81.7
|
|
|
11.8
|
|
|
14
|
%
|
N.M.
|
Not meaningful.
|
(A)
|
Amounts attributable to NIC.
|
(in millions, except % change)
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Truck
|
$
|
5,809
|
|
|
$
|
5,403
|
|
|
$
|
406
|
|
|
8
|
%
|
Parts
|
2,392
|
|
|
2,427
|
|
|
(35
|
)
|
|
(1
|
)%
|
|||
Global Operations
|
309
|
|
|
341
|
|
|
(32
|
)
|
|
(9
|
)%
|
|||
Financial Services
|
235
|
|
|
235
|
|
|
—
|
|
|
—
|
%
|
|||
Corporate and Eliminations
|
(175
|
)
|
|
(295
|
)
|
|
120
|
|
|
(41
|
)%
|
|||
Total
|
$
|
8,570
|
|
|
$
|
8,111
|
|
|
$
|
459
|
|
|
6
|
%
|
(in millions, except % change)
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Truck segment sales, net
|
$
|
5,809
|
|
|
$
|
5,403
|
|
|
$
|
406
|
|
|
8
|
%
|
Truck segment loss
|
(6
|
)
|
|
(189
|
)
|
|
183
|
|
|
97
|
%
|
(in millions, except % change)
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Parts segment sales, net
|
$
|
2,392
|
|
|
$
|
2,427
|
|
|
$
|
(35
|
)
|
|
(1
|
)%
|
Parts segment profit
|
616
|
|
|
640
|
|
|
(24
|
)
|
|
(4
|
)%
|
(in millions, except % change)
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Global Operations segment sales, net
|
$
|
309
|
|
|
$
|
341
|
|
|
$
|
(32
|
)
|
|
(9
|
)%
|
Global Operations segment loss
|
(7
|
)
|
|
(21
|
)
|
|
14
|
|
|
67
|
%
|
(in millions, except % change)
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Financial Services segment revenues, net
|
$
|
235
|
|
|
$
|
235
|
|
|
$
|
—
|
|
|
—
|
%
|
Financial Services segment profit
|
77
|
|
|
100
|
|
|
(23
|
)
|
|
(23
|
)%
|
(in millions, except per share data and % change)
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
Sales and revenues, net
|
$
|
8,111
|
|
|
$
|
10,140
|
|
|
$
|
(2,029
|
)
|
|
(20
|
)%
|
Costs of products sold
|
6,812
|
|
|
8,670
|
|
|
(1,858
|
)
|
|
(21
|
)%
|
|||
Restructuring charges
|
10
|
|
|
76
|
|
|
(66
|
)
|
|
(87
|
)%
|
|||
Asset impairment charges
|
27
|
|
|
30
|
|
|
(3
|
)
|
|
(10
|
)%
|
|||
Selling, general and administrative expenses
|
802
|
|
|
908
|
|
|
(106
|
)
|
|
(12
|
)%
|
|||
Engineering and product development costs
|
247
|
|
|
288
|
|
|
(41
|
)
|
|
(14
|
)%
|
|||
Interest expense
|
327
|
|
|
307
|
|
|
20
|
|
|
7
|
%
|
|||
Other income, net
|
(76
|
)
|
|
(30
|
)
|
|
(46
|
)
|
|
153
|
%
|
|||
Total costs and expenses
|
8,149
|
|
|
10,249
|
|
|
(2,100
|
)
|
|
(20
|
)%
|
|||
Equity in income of non-consolidated affiliates
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
%
|
|||
Loss from continuing operations before income taxes
|
(32
|
)
|
|
(103
|
)
|
|
71
|
|
|
(69
|
)%
|
|||
Income tax expense
|
(33
|
)
|
|
(51
|
)
|
|
18
|
|
|
(35
|
)%
|
|||
Loss from continuing operations
|
(65
|
)
|
|
(154
|
)
|
|
89
|
|
|
(58
|
)%
|
|||
Less: Net income attributable to non-controlling interests
|
32
|
|
|
33
|
|
|
(1
|
)
|
|
(3
|
)%
|
|||
Loss from continuing operations
(A)
|
(97
|
)
|
|
(187
|
)
|
|
90
|
|
|
(48
|
)%
|
|||
Income from discontinued operations, net of tax
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(100
|
)%
|
|||
Net loss
(A)
|
$
|
(97
|
)
|
|
$
|
(184
|
)
|
|
$
|
87
|
|
|
(47
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Diluted earnings (loss) per share:
(A)
|
|
|
|
|
|
|
|
|||||||
Continuing operations
|
$
|
(1.19
|
)
|
|
$
|
(2.29
|
)
|
|
$
|
1.10
|
|
|
(48
|
)%
|
Discontinued operations
|
—
|
|
|
0.04
|
|
|
(0.04
|
)
|
|
(100
|
)%
|
|||
|
$
|
(1.19
|
)
|
|
$
|
(2.25
|
)
|
|
$
|
1.06
|
|
|
(47
|
)%
|
Diluted weighted average shares outstanding
|
81.7
|
|
|
81.6
|
|
|
0.1
|
|
|
—
|
%
|
N.M.
|
Not meaningful.
|
(A)
|
Amounts attributable to Navistar International Corporation.
|
(in millions, except % change)
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
Truck
|
$
|
5,403
|
|
|
$
|
7,213
|
|
|
$
|
(1,810
|
)
|
|
(25
|
)%
|
Parts
|
2,427
|
|
|
2,513
|
|
|
(86
|
)
|
|
(3
|
)%
|
|||
Global Operations
|
341
|
|
|
506
|
|
|
(165
|
)
|
|
(33
|
)%
|
|||
Financial Services
|
235
|
|
|
241
|
|
|
(6
|
)
|
|
(2
|
)%
|
|||
Corporate and Eliminations
|
(295
|
)
|
|
(333
|
)
|
|
38
|
|
|
(11
|
)%
|
|||
Total
|
$
|
8,111
|
|
|
$
|
10,140
|
|
|
$
|
(2,029
|
)
|
|
(20
|
)%
|
(in millions, except % change)
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
Truck segment sales, net
|
$
|
5,403
|
|
|
$
|
7,213
|
|
|
$
|
(1,810
|
)
|
|
(25
|
)%
|
Truck segment loss
|
(189
|
)
|
|
(141
|
)
|
|
(48
|
)
|
|
34
|
%
|
(in millions, except % change)
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
Parts segment sales, net
|
$
|
2,427
|
|
|
$
|
2,513
|
|
|
$
|
(86
|
)
|
|
(3
|
)%
|
Parts segment profit
|
640
|
|
|
592
|
|
|
48
|
|
|
8
|
%
|
(in millions, except % change)
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
Global Operations segment sales, net
|
$
|
341
|
|
|
$
|
506
|
|
|
$
|
(165
|
)
|
|
(33
|
)%
|
Global Operations segment loss
|
(21
|
)
|
|
(67
|
)
|
|
46
|
|
|
(69
|
)%
|
(in millions, except % change)
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
Financial Services segment revenues, net
|
$
|
235
|
|
|
$
|
241
|
|
|
$
|
(6
|
)
|
|
(2
|
)%
|
Financial Services segment profit
|
100
|
|
|
98
|
|
|
2
|
|
|
2
|
%
|
|
For the Years Ended October 31,
|
|
2017 vs 2016
|
|
2016 vs 2015
|
|||||||||||||||
(in units)
|
2017
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
|||||||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
School buses
(A)
|
35,100
|
|
|
32,800
|
|
|
29,600
|
|
|
2,300
|
|
|
7
|
%
|
|
3,200
|
|
|
11
|
%
|
Class 6 and 7 medium trucks
|
86,100
|
|
|
86,800
|
|
|
80,000
|
|
|
(700
|
)
|
|
(1
|
)%
|
|
6,800
|
|
|
9
|
%
|
Class 8 heavy trucks
|
146,200
|
|
|
165,700
|
|
|
218,200
|
|
|
(19,500
|
)
|
|
(12
|
)%
|
|
(52,500
|
)
|
|
(24
|
)%
|
Class 8 severe service trucks
(B)
|
60,600
|
|
|
61,100
|
|
|
60,800
|
|
|
(500
|
)
|
|
(1
|
)%
|
|
300
|
|
|
—
|
%
|
Total Core Markets
|
328,000
|
|
|
346,400
|
|
|
388,600
|
|
|
(18,400
|
)
|
|
(5
|
)%
|
|
(42,200
|
)
|
|
(11
|
)%
|
Combined class 8 trucks
|
206,800
|
|
|
226,800
|
|
|
279,000
|
|
|
(20,000
|
)
|
|
(9
|
)%
|
|
(52,200
|
)
|
|
(19
|
)%
|
Navistar Core retail deliveries
|
56,700
|
|
|
54,700
|
|
|
62,600
|
|
|
2,000
|
|
|
4
|
%
|
|
(7,900
|
)
|
|
(13
|
)%
|
(A)
|
The School bus retail market deliveries include buses classified as B, C, and D and are being reported on a one-month lag.
|
(B)
|
Core retail deliveries include CAT-branded units sold to Caterpillar under our North America supply agreement during 2016 and 2015.
|
|
For the Years Ended October 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|||
School buses
(A)
|
32
|
%
|
|
34
|
%
|
|
38
|
%
|
Class 6 and 7 medium trucks
|
25
|
%
|
|
21
|
%
|
|
23
|
%
|
Class 8 heavy trucks
|
11
|
%
|
|
10
|
%
|
|
11
|
%
|
Class 8 severe service trucks
(B)
|
13
|
%
|
|
13
|
%
|
|
15
|
%
|
Total Core Markets
|
17
|
%
|
|
16
|
%
|
|
16
|
%
|
Combined class 8 trucks
|
12
|
%
|
|
11
|
%
|
|
12
|
%
|
(A)
|
The School bus retail delivery market share includes buses classified as B, C, and D and are being reported on a one-month lag.
|
(B)
|
Retail delivery market share includes CAT-branded units sold to Caterpillar under our North America supply agreement during 2016 and 2015.
|
|
For the Years Ended October 31,
|
|
2017 vs 2016
|
|
2016 vs 2015
|
|||||||||||||||
(in units)
|
2017
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
|||||||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
School buses
(A)
|
11,000
|
|
|
11,900
|
|
|
11,400
|
|
|
(900
|
)
|
|
(8
|
)%
|
|
500
|
|
|
4
|
%
|
Class 6 and 7 medium trucks
|
21,200
|
|
|
16,900
|
|
|
16,700
|
|
|
4,300
|
|
|
25
|
%
|
|
200
|
|
|
1
|
%
|
Class 8 heavy trucks
|
18,900
|
|
|
6,300
|
|
|
26,700
|
|
|
12,600
|
|
|
200
|
%
|
|
(20,400
|
)
|
|
(76
|
)%
|
Class 8 severe service trucks
(B)
|
8,800
|
|
|
7,700
|
|
|
9,100
|
|
|
1,100
|
|
|
14
|
%
|
|
(1,400
|
)
|
|
(15
|
)%
|
Total Core Markets
|
59,900
|
|
|
42,800
|
|
|
63,900
|
|
|
17,100
|
|
|
40
|
%
|
|
(21,100
|
)
|
|
(33
|
)%
|
Combined class 8 trucks
|
27,700
|
|
|
14,000
|
|
|
35,800
|
|
|
13,700
|
|
|
98
|
%
|
|
(21,800
|
)
|
|
(61
|
)%
|
(A)
|
The School bus orders include buses classified as B, C, and D and are being reported on a one-month lag.
|
(B)
|
Orders include CAT-branded units sold to Caterpillar under our North America supply agreement during 2016 and 2015.
|
|
For the Years Ended October 31,
|
|
2017 vs 2016
|
|
2016 vs 2015
|
|||||||||||||||
(in units)
|
2017
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
|||||||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
School buses
(A)
|
1,700
|
|
|
2,100
|
|
|
1,400
|
|
|
(400
|
)
|
|
(19
|
)%
|
|
700
|
|
|
50
|
%
|
Class 6 and 7 medium trucks
|
4,600
|
|
|
4,100
|
|
|
4,800
|
|
|
500
|
|
|
12
|
%
|
|
(700
|
)
|
|
(15
|
)%
|
Class 8 heavy trucks
|
6,800
|
|
|
4,700
|
|
|
13,900
|
|
|
2,100
|
|
|
45
|
%
|
|
(9,200
|
)
|
|
(66
|
)%
|
Class 8 severe service trucks
(B)
|
2,500
|
|
|
2,100
|
|
|
2,100
|
|
|
400
|
|
|
19
|
%
|
|
—
|
|
|
—
|
%
|
Total Core Markets
|
15,600
|
|
|
13,000
|
|
|
22,200
|
|
|
2,600
|
|
|
20
|
%
|
|
(9,200
|
)
|
|
(41
|
)%
|
Combined class 8 trucks
|
9,300
|
|
|
6,800
|
|
|
16,000
|
|
|
2,500
|
|
|
37
|
%
|
|
(9,200
|
)
|
|
(58
|
)%
|
(A)
|
The School bus backlogs include buses classified as B, C, and D and are being reported on a one-month lag.
|
(B)
|
Backlogs include CAT-branded units sold to Caterpillar under our North America supply agreement during 2016 and 2015.
|
|
For the Years Ended October 31,
|
|
2017 vs 2016
|
|
2016 vs 2015
|
|||||||||||||||
(in units)
|
2017
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
|||||||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
School buses
(A)
|
11,300
|
|
|
11,200
|
|
|
11,900
|
|
|
100
|
|
|
1
|
%
|
|
(700
|
)
|
|
(6
|
)%
|
Class 6 and 7 medium trucks
|
20,900
|
|
|
17,800
|
|
|
18,800
|
|
|
3,100
|
|
|
17
|
%
|
|
(1,000
|
)
|
|
(5
|
)%
|
Class 8 heavy trucks
|
16,800
|
|
|
16,300
|
|
|
25,000
|
|
|
500
|
|
|
3
|
%
|
|
(8,700
|
)
|
|
(35
|
)%
|
Class 8 severe service trucks
(B)
|
8,300
|
|
|
7,600
|
|
|
9,300
|
|
|
700
|
|
|
9
|
%
|
|
(1,700
|
)
|
|
(18
|
)%
|
Total Core Markets
|
57,300
|
|
|
52,900
|
|
|
65,000
|
|
|
4,400
|
|
|
8
|
%
|
|
(12,100
|
)
|
|
(19
|
)%
|
Non "Core" military
|
800
|
|
|
500
|
|
|
100
|
|
|
300
|
|
|
60
|
%
|
|
400
|
|
|
400
|
%
|
Other markets
(C)
|
10,800
|
|
|
9,900
|
|
|
19,400
|
|
|
900
|
|
|
9
|
%
|
|
(9,500
|
)
|
|
(49
|
)%
|
Total worldwide units
|
68,900
|
|
|
63,300
|
|
|
84,500
|
|
|
5,600
|
|
|
9
|
%
|
|
(21,200
|
)
|
|
(25
|
)%
|
Combined class 8 trucks
|
25,100
|
|
|
23,900
|
|
|
34,300
|
|
|
1,200
|
|
|
5
|
%
|
|
(10,400
|
)
|
|
(30
|
)%
|
N.M.
|
Not meaningful.
|
(A)
|
The School bus chargeouts include buses classified as B, C, and D and are being reported on a one-month lag.
|
(B)
|
Chargeouts include CAT-branded units sold to Caterpillar under our North America supply agreement during 2016 and 2015.
|
(C)
|
Other markets primarily consist of Export Truck and Mexico and also include chargeouts related to BDT of
6,000
units during 2015. There were
no
third party chargeouts related to BDT during 2016 or 2017, as Ford no longer purchases from BDT.
|
|
As of October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Consolidated cash and cash equivalents
|
$
|
706
|
|
|
$
|
804
|
|
|
$
|
912
|
|
Consolidated marketable securities
|
370
|
|
|
46
|
|
|
159
|
|
|||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,076
|
|
|
$
|
850
|
|
|
$
|
1,071
|
|
|
As of October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Manufacturing operations
|
$
|
1,036
|
|
|
$
|
800
|
|
|
$
|
1,013
|
|
Financial Services operations
|
40
|
|
|
50
|
|
|
58
|
|
|||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,076
|
|
|
$
|
850
|
|
|
$
|
1,071
|
|
|
Year Ended October 31, 2017
|
||||||||||
(in millions)
|
Manufacturing
Operations (A) |
|
Financial Services Operations and Adjustments
(A)
|
|
Consolidated Statement of Cash Flows
|
||||||
Net cash provided by operating activities
|
$
|
10
|
|
|
$
|
99
|
|
|
$
|
109
|
|
Net cash used in investing activities
|
(489
|
)
|
|
(53
|
)
|
|
(542
|
)
|
|||
Net cash provided by (used in) financing activities
|
389
|
|
|
(51
|
)
|
|
338
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(5
|
)
|
|
2
|
|
|
(3
|
)
|
|||
Decrease in cash and cash equivalents
|
(95
|
)
|
|
(3
|
)
|
|
(98
|
)
|
|||
Cash and cash equivalents at beginning of the year
|
761
|
|
|
43
|
|
|
804
|
|
|||
Cash and cash equivalents at end of the year
|
$
|
666
|
|
|
$
|
40
|
|
|
$
|
706
|
|
|
Year Ended October 31, 2016
|
||||||||||
(in millions)
|
Manufacturing
Operations (A) |
|
Financial Services Operations and Adjustments
(A)
|
|
Consolidated Statement of Cash Flows
|
||||||
Net cash provided by operating activities
|
$
|
56
|
|
|
$
|
211
|
|
|
$
|
267
|
|
Net cash provided by (used in) investing activities
|
3
|
|
|
(70
|
)
|
|
(67
|
)
|
|||
Net cash used in financing activities
|
(203
|
)
|
|
(150
|
)
|
|
(353
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
28
|
|
|
17
|
|
|
45
|
|
|||
Increase (decrease) in cash and cash equivalents
|
(116
|
)
|
|
8
|
|
|
(108
|
)
|
|||
Cash and cash equivalents at beginning of the year
|
877
|
|
|
35
|
|
|
912
|
|
|||
Cash and cash equivalents at end of the year
|
$
|
761
|
|
|
$
|
43
|
|
|
$
|
804
|
|
|
Year Ended October 31, 2015
|
||||||||||
(in millions)
|
Manufacturing
Operations (A) |
|
Financial Services Operations and Adjustments
(A)
|
|
Consolidated Statement of Cash Flows
|
||||||
Net cash provided by (used in) operating activities
|
$
|
98
|
|
|
$
|
(52
|
)
|
|
$
|
46
|
|
Net cash provided by (used in) investing activities
|
346
|
|
|
(30
|
)
|
|
316
|
|
|||
Net cash provided by financing activities
|
63
|
|
|
35
|
|
|
98
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(70
|
)
|
|
25
|
|
|
(45
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
437
|
|
|
(22
|
)
|
|
415
|
|
|||
Cash and cash equivalents at beginning of the year
|
440
|
|
|
57
|
|
|
497
|
|
|||
Cash and cash equivalents at end of the year
|
$
|
877
|
|
|
$
|
35
|
|
|
$
|
912
|
|
(A)
|
Manufacturing operations cash flows and Financial Services operations cash flows are not presented in accordance with, and should not be viewed as an alternative to, GAAP. This non-GAAP financial information should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. However, we believe that non-GAAP reporting provides meaningful information and therefore we use it to supplement our GAAP reporting by identifying items that may not be related to the core manufacturing business. Management often uses this information to assess and measure the performance and liquidity of our operating segments. Our Manufacturing operations, for this purpose, include our Truck segment, Global Operations segment, Parts segment, and Corporate items which include certain eliminations. The reconciling differences between these non-GAAP financial measures and our GAAP consolidated financial statements in Item 1,
Financial Statements and Supplementary Data
, are our Financial Services operations and adjustments required to eliminate certain intercompany transactions between Manufacturing operations and Financial Services operations. Our Financial Services operations cash flows are presented consistent with their treatment in our
Condensed Consolidated Statements of Cash Flows
and may not be consistent with how they would be treated on a stand-alone basis. We have chosen to provide this supplemental information to allow additional analysis, to illustrate the respective cash flows giving effect to the equity basis cash flow shown above, and to provide an additional measure of performance and liquidity.
|
Company
|
|
Instrument Type
|
|
Total
Amount |
|
Purpose of Funding
|
|
Amount
Utilized |
|
Matures or Expires
|
||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|||||
NFSC
|
|
Revolving wholesale note trust
|
|
$
|
975
|
|
|
Eligible wholesale notes
|
|
$
|
685
|
|
|
2018-2019
|
NFC
|
|
Credit agreement
(A)
|
|
275
|
|
|
Finance receivables and general corporate purposes
|
|
127
|
|
|
2021
|
||
NFM
|
|
Bank lines
|
|
497
|
|
|
Finance receivables and general corporate purposes
|
|
415
|
|
|
2018-2023
|
||
TRAC
|
|
Revolving retail accounts
|
|
100
|
|
|
Eligible retail accounts
|
|
100
|
|
|
2018
|
(A)
|
NFM can borrow up to $81 million, if not used by NFC.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
29
|
|
|
$
|
(97
|
)
|
|
$
|
(187
|
)
|
Plus:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expense
|
223
|
|
|
225
|
|
|
281
|
|
|||
Manufacturing interest expense
(A)
|
265
|
|
|
247
|
|
|
233
|
|
|||
Less:
|
|
|
|
|
|
|
|
||||
Income tax expense
|
(10
|
)
|
|
(33
|
)
|
|
(51
|
)
|
|||
EBITDA
|
$
|
527
|
|
|
$
|
408
|
|
|
$
|
378
|
|
(A)
|
Manufacturing interest expense is the net interest expense primarily generated for borrowings that support the manufacturing and corporate operations, adjusted to eliminate intercompany interest expense with our Financial Services segment. The following table reconciles Manufacturing interest expense to the consolidated interest expense.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Interest expense
|
$
|
351
|
|
|
$
|
327
|
|
|
$
|
307
|
|
Less: Financial Services interest expense
|
86
|
|
|
80
|
|
|
74
|
|
|||
Manufacturing interest expense
|
$
|
265
|
|
|
$
|
247
|
|
|
$
|
233
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
EBITDA
(reconciled above)
|
$
|
527
|
|
|
$
|
408
|
|
|
$
|
378
|
|
Less significant items of:
|
|
|
|
|
|
|
|
||||
Adjustments to pre-existing warranties
(A)
|
(1
|
)
|
|
78
|
|
|
4
|
|
|||
Asset impairment charges
(B)
|
13
|
|
|
27
|
|
|
30
|
|
|||
Restructuring of manufacturing operations
(C)
|
13
|
|
|
10
|
|
|
72
|
|
|||
Gain on settlement
(D)
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Brazil truck business actions
(E)
|
—
|
|
|
—
|
|
|
6
|
|
|||
EGR product litigation
(F)
|
31
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale
(G)
|
(6
|
)
|
|
—
|
|
|
—
|
|
|||
Debt refinancing charges
(H)
|
5
|
|
|
—
|
|
|
14
|
|
|||
One-time fee received
(I)
|
—
|
|
|
(15
|
)
|
|
—
|
|
|||
Total adjustments
|
55
|
|
|
100
|
|
|
116
|
|
|||
Adjusted EBITDA
|
$
|
582
|
|
|
$
|
508
|
|
|
$
|
494
|
|
(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 historical 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)
|
During 2017, we recorded $13 million of asset impairment charges in our Truck segment relating to assets held for sale of our Conway, Arkansas fabrication business and for certain assets under operating leases. During 2016, the charges primarily included
$17 million
related to certain long-lived assets and
$8 million
related to certain operating leases. We also determined that
$1 million
of trademark asset carrying value was impaired. During 2015, we recorded $11 million of asset impairment charges related to certain long-lived assets and $9 million related to certain operating leases. We also recognized a total non-cash charge of
$7 million
for the impairment of certain intangible and long-lived assets in the Global Operations segment, and
$3 million
for the impairment of the carrying value of a trademark asset.
|
(C)
|
During 2017, we recorded a charge of
$13 million
. We recorded $41 million of charges related to our plan to cease production at our Melrose Park Facility, a net benefit of $43 million related to the resolution of the closing agreement for our Chatham, Ontario plant, and the release of $1 million in OPEB liabilities in connection with the sale of our fabrication business in Conway, Arkansas. We recorded $6 million of restructuring charges in Brazil related to cost reduction actions consisting of personnel costs for employee separation and related benefits. During 2016, we recorded
$7 million
of charges related to the 2011 closure of our Chatham, Ontario plant. During 2015, we had $72 million of cost reduction and other strategic initiatives primarily consisting of restructuring charges. In 2015, we offered the majority of our U.S.-based non-represented salaried employees the opportunity to apply for a VSP, which resulted in
$37 million
of restructuring charges. In addition, we incurred restructuring charges of
$23 million
related to cost reduction actions, including a reduction-in-force in the U.S. and Brazil.
|
(D)
|
During 2015, we recognized a
$10 million
net gain related to the settlement of a customer dispute in our Global Operations segment. The
$10 million
net gain for the settlement included restructuring charges of
$4 million
.
|
(E)
|
During 2015, we recorded approximately
$6 million
in charges, primarily related to inventory, to optimize the Brazil Truck business in our Global Operations segment.
|
(F)
|
During 2017, we recognized a charge of $31 million for a jury verdict related to Maxxforce engine EGR product litigation in our Truck segment.
|
(G)
|
During 2017, we recognized a gain of $6 million related to the sale of a business line in our Parts segment.
|
(H)
|
During 2017, we recorded a charge of $5 million related to third party fees and debt issuance costs associated with the repricing of our Term Loan and the refinancing of the revolving portion of the NFC bank credit facility in our Financial Services segment. During 2015, we recorded
$14 million
of third party fees and unamortized debt issuance costs associated with the refinancing of our Amended Term Loan Credit Facility with a new Senior Secured Term Loan Credit Facility.
|
(I)
|
During 2016, we received a
$15 million
one-time fee from a third party.
|
|
Payments Due by Year Ending October 31,
|
||||||||||||||||||
(in millions)
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
2023+
|
||||||||||
Type of contractual obligation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt obligations
(A)
|
$
|
4,972
|
|
|
$
|
1,106
|
|
|
$
|
2,027
|
|
|
$
|
1,614
|
|
|
$
|
225
|
|
Interest on long-term debt
(B)
|
1,172
|
|
|
279
|
|
|
412
|
|
|
218
|
|
|
263
|
|
|||||
Financing arrangements and capital lease obligations
(C)
|
38
|
|
|
10
|
|
|
18
|
|
|
10
|
|
|
—
|
|
|||||
Operating lease obligations
(D)
|
195
|
|
|
45
|
|
|
75
|
|
|
48
|
|
|
27
|
|
|||||
Purchase obligations
(E)
|
60
|
|
|
20
|
|
|
31
|
|
|
6
|
|
|
3
|
|
|||||
Total
|
$
|
6,437
|
|
|
$
|
1,460
|
|
|
$
|
2,563
|
|
|
$
|
1,896
|
|
|
$
|
518
|
|
(A)
|
Excludes offsetting discounts and issuance costs of $78 million, Financed Lease Obligations of $130 million, the retirement of the Senior Notes and Term Loan, the issuance of the 2025 Notes and execution of the Term Loan Credit Agreement, all of which occurred subsequent to October 31, 2017. For more information, see Note 9,
Debt,
to the accompanying consolidated financial statements.
|
(B)
|
Amounts represent estimated contractual interest payments on outstanding debt. Rates in effect as of
October 31, 2017
are used for variable rate debt. Excludes the retirement of the Senior Notes and Term Loan, the issuance of the 2025 Notes and execution of the Term Loan Credit Agreement, all of which occurred subsequent to October 31, 2017. After giving effect to these transactions, Interest on long-term debt would be as follows: 2018 - $255 million; 2019-2020 - $375 million; 2021-2022 - $332 million; 2023 and thereafter - $636 million; in total - $1,598 million. For more information, see Note 9,
Debt,
to the accompanying consolidated financial statements.
|
(C)
|
We lease many of our facilities as well as other property and equipment under financing arrangements and capital leases in the normal course of business, including
$5 million
of interest obligations. Excludes $1 million capital lease which is non-cash. For more information, see Note 6,
Property and Equipment
,
Net,
to the accompanying consolidated financial statements.
|
(D)
|
Lease obligations for facility closures are included in operating leases. Future operating lease obligations are not recognized in our
Consolidated Balance Sheets
. For more information, see Note 6,
Property and Equipment
,
Net,
to the accompanying consolidated financial statements.
|
(E)
|
Purchase obligations include various commitments in the ordinary course of business that would include the purchase of goods or services and they are not recognized in our
Consolidated Balance Sheets
.
|
•
|
the nature of the estimate or assumption is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, or
|
•
|
the impact of the estimate or assumption on financial condition or operating performance is material.
|
•
|
Plant rationalization activities impact the determination of whether a plan curtailment or settlement has occurred. Key considerations include, but are not limited to, expected future service credit, the remaining years of recall rights of the workforce, and the extent to which minimum service requirements (in the case of healthcare benefits) have been met.
|
•
|
The discount rates are obtained by matching the anticipated future benefit payments for the plans to a high quality corporate bond yield curve to establish a weighted average discount rate for each plan.
|
•
|
Health care cost trend rates are developed based upon historical retiree cost trend data, short term health care outlook, and industry benchmarks and surveys. The inflation assumptions used are based upon both our specific trends and nationally expected trends.
|
•
|
The expected return on plan assets is derived from historical plan returns, expected long-term performance of asset classes, asset allocations, input from an external pension investment advisor, and risks and other factors adjusted for our specific investment strategy. The focus is on long-term trends and provides for the consideration of recent plan performance.
|
•
|
Retirement rates are based upon actual and projected plan experience.
|
•
|
Mortality rates are developed from actual and projected plan experience for the U.S. postretirement benefit plans. Our actuaries conduct an experience study every five years as part of the process to select a best estimate of mortality. We consider both standard mortality tables and improvement factors as well as the plans’ actual experience when selecting a best estimate. During 2015, we conducted a new experience study as scheduled and, as a result, updated our mortality assumptions.
|
•
|
The rate of compensation increase reflects our long-term actual experience and our projected future increases.
|
|
October 31, 2017
|
|
2018 Expense
|
||||||||||||
|
Obligations
|
|
|
|
|
||||||||||
(in millions)
|
Pension
|
|
OPEB
|
|
Pension
|
|
OPEB
|
||||||||
Discount rate:
|
|
|
|
|
|
|
|
||||||||
Increase of 1.0%
|
$
|
(327
|
)
|
|
$
|
(139
|
)
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
Decrease of 1.0%
|
385
|
|
|
166
|
|
|
(4
|
)
|
|
—
|
|
||||
Expected return on assets:
|
|
|
|
|
|
|
|
||||||||
Increase of 1.0%
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
(3
|
)
|
||||
Decrease of 1.0%
|
—
|
|
|
—
|
|
|
23
|
|
|
3
|
|
Item 8.
|
Financial Statements
|
|
Page
|
|
For the Years Ended October 31,
|
||||||||||
(in millions, except per share data)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales and revenues
|
|
|
|
|
|
||||||
Sales of manufactured products, net
|
$
|
8,428
|
|
|
$
|
7,976
|
|
|
$
|
9,995
|
|
Finance revenues
|
142
|
|
|
135
|
|
|
145
|
|
|||
Sales and revenues, net
|
8,570
|
|
|
8,111
|
|
|
10,140
|
|
|||
Costs and expenses
|
|
|
|
|
|
||||||
Costs of products sold
|
7,037
|
|
|
6,812
|
|
|
8,670
|
|
|||
Restructuring charges
|
3
|
|
|
10
|
|
|
76
|
|
|||
Asset impairment charges
|
13
|
|
|
27
|
|
|
30
|
|
|||
Selling, general and administrative expenses
|
878
|
|
|
802
|
|
|
908
|
|
|||
Engineering and product development costs
|
251
|
|
|
247
|
|
|
288
|
|
|||
Interest expense
|
351
|
|
|
327
|
|
|
307
|
|
|||
Other income, net
|
(21
|
)
|
|
(76
|
)
|
|
(30
|
)
|
|||
Total costs and expenses
|
8,512
|
|
|
8,149
|
|
|
10,249
|
|
|||
Equity in income of non-consolidated affiliates
|
6
|
|
|
6
|
|
|
6
|
|
|||
Income (loss) from continuing operations before inc
ome taxes
|
64
|
|
|
(32
|
)
|
|
(103
|
)
|
|||
Income tax expense
|
(10
|
)
|
|
(33
|
)
|
|
(51
|
)
|
|||
Income (loss) from continuing o
perations
|
54
|
|
|
(65
|
)
|
|
(154
|
)
|
|||
Income from discontinued operations, net of tax
|
1
|
|
|
—
|
|
|
3
|
|
|||
Net income (loss)
|
55
|
|
|
(65
|
)
|
|
(151
|
)
|
|||
Less: Net income attributable to non-controlling interests
|
25
|
|
|
32
|
|
|
33
|
|
|||
Net income (loss) attributable to Navistar International Corporation
|
$
|
30
|
|
|
$
|
(97
|
)
|
|
$
|
(184
|
)
|
|
|
|
|
|
|
||||||
Amounts attributable to Navistar International Corporation common shareholders:
|
|
|
|
|
|
|
|||||
Income (loss) from continuing operations, net of tax
|
$
|
29
|
|
|
$
|
(97
|
)
|
|
$
|
(187
|
)
|
Income from discontinued operations, net of tax
|
1
|
|
|
—
|
|
|
3
|
|
|||
Net income (loss)
|
$
|
30
|
|
|
$
|
(97
|
)
|
|
$
|
(184
|
)
|
|
|
|
|
|
|
||||||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.31
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.29
|
)
|
Discontinued operations
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|||
|
$
|
0.32
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.25
|
)
|
|
|
|
|
|
|
|
|||||
Diluted:
|
|
|
|
|
|
|
|||||
Continuing operations
|
$
|
0.31
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.29
|
)
|
Discontinued operations
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|||
|
$
|
0.32
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.25
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
93.0
|
|
|
81.7
|
|
|
81.6
|
|
|||
Diluted
|
93.5
|
|
|
81.7
|
|
|
81.6
|
|
(in millions)
|
For the Years Ended October 31,
|
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Net income (loss)
|
$
|
55
|
|
|
$
|
(65
|
)
|
|
$
|
(151
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(3
|
)
|
|
7
|
|
|
(160
|
)
|
|||
Unrealized gain on marketable securities, net of tax
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
Defined benefit plans, net of tax
|
433
|
|
|
(46
|
)
|
|
(178
|
)
|
|||
Total other comprehensive income (loss)
|
429
|
|
|
(39
|
)
|
|
(338
|
)
|
|||
Comprehensive income (loss)
|
484
|
|
|
(104
|
)
|
|
(489
|
)
|
|||
Less: Net income attributable to non-controlling interests
|
25
|
|
|
32
|
|
|
33
|
|
|||
Total comprehensive income (loss) attributable to Navistar International Corporation
|
$
|
459
|
|
|
$
|
(136
|
)
|
|
$
|
(522
|
)
|
|
As of October 31,
|
||||||
(in millions, except per share data)
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
706
|
|
|
$
|
804
|
|
Restricted cash and cash equivalents
|
83
|
|
|
64
|
|
||
Marketable securities
|
370
|
|
|
46
|
|
||
Trade and other receivables, net
|
391
|
|
|
276
|
|
||
Finance receivables, net
|
1,565
|
|
|
1,457
|
|
||
Inventories, net
|
857
|
|
|
944
|
|
||
Other current assets
|
188
|
|
|
168
|
|
||
Total current assets
|
4,160
|
|
|
3,759
|
|
||
Restricted cash
|
51
|
|
|
48
|
|
||
Trade and other receivables, net
|
13
|
|
|
16
|
|
||
Finance receivables, net
|
220
|
|
|
220
|
|
||
Investments in non-consolidated affiliates
|
56
|
|
|
53
|
|
||
Property and equipment, net
|
1,326
|
|
|
1,241
|
|
||
Goodwill
|
38
|
|
|
38
|
|
||
Intangible assets, net
|
40
|
|
|
53
|
|
||
Deferred taxes, net
|
129
|
|
|
161
|
|
||
Other noncurrent assets
|
102
|
|
|
64
|
|
||
Total assets
|
$
|
6,135
|
|
|
$
|
5,653
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable and current maturities of long-term debt
|
$
|
1,169
|
|
|
$
|
907
|
|
Accounts payable
|
1,292
|
|
|
1,113
|
|
||
Other current liabilities
|
1,184
|
|
|
1,183
|
|
||
Total current liabilities
|
3,645
|
|
|
3,203
|
|
||
Long-term debt
|
3,889
|
|
|
3,997
|
|
||
Postretirement benefits liabilities
|
2,497
|
|
|
3,023
|
|
||
Other noncurrent liabilities
|
678
|
|
|
723
|
|
||
Total liabilities
|
10,709
|
|
|
10,946
|
|
||
Stockholders’ deficit
|
|
|
|
||||
Series D convertible junior preference stock
|
2
|
|
|
2
|
|
||
Common stock, $0.10 par value per share (103.1 and 86.8 shares issued, respectively, and 220 shares authorized at both dates)
|
10
|
|
|
9
|
|
||
Additional paid-in capital
|
2,733
|
|
|
2,499
|
|
||
Accumulated deficit
|
(4,933
|
)
|
|
(4,963
|
)
|
||
Accumulated other comprehensive loss
|
(2,211
|
)
|
|
(2,640
|
)
|
||
Common stock held in treasury, at cost (4.6 and 5.2 shares, respectively)
|
(179
|
)
|
|
(205
|
)
|
||
Total stockholders’ deficit attributable to Navistar International Corporation
|
(4,578
|
)
|
|
(5,298
|
)
|
||
Stockholders’ equity attributable to non-controlling interests
|
4
|
|
|
5
|
|
||
Total stockholders’ deficit
|
(4,574
|
)
|
|
(5,293
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
6,135
|
|
|
$
|
5,653
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
55
|
|
|
$
|
(65
|
)
|
|
$
|
(151
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
150
|
|
|
146
|
|
|
205
|
|
|||
Depreciation of equipment leased to others
|
73
|
|
|
79
|
|
|
76
|
|
|||
Deferred taxes, including change in valuation allowance
|
(6
|
)
|
|
(9
|
)
|
|
(18
|
)
|
|||
Asset impairment charges
|
13
|
|
|
27
|
|
|
30
|
|
|||
Loss (gain) on sales of investments and businesses, net
|
(5
|
)
|
|
2
|
|
|
—
|
|
|||
Amortization of debt issuance costs and discount
|
49
|
|
|
37
|
|
|
37
|
|
|||
Stock-based compensation
|
28
|
|
|
16
|
|
|
10
|
|
|||
Provision for doubtful accounts, net of recoveries
|
7
|
|
|
13
|
|
|
(9
|
)
|
|||
Equity in income of non-consolidated affiliates, net of dividends
|
1
|
|
|
6
|
|
|
6
|
|
|||
Write-off of debt issuance cost and discount
|
5
|
|
|
—
|
|
|
4
|
|
|||
Other non-cash operating activities
|
(28
|
)
|
|
(12
|
)
|
|
(35
|
)
|
|||
Changes in other assets and liabilities, exclusive of the effects of businesses disposed:
|
|
|
|
|
|
||||||
Trade and other receivables
|
(125
|
)
|
|
134
|
|
|
103
|
|
|||
Finance receivables
|
(123
|
)
|
|
251
|
|
|
(58
|
)
|
|||
Inventories
|
82
|
|
|
205
|
|
|
131
|
|
|||
Accounts payable
|
159
|
|
|
(193
|
)
|
|
(208
|
)
|
|||
Other assets and liabilities
|
(226
|
)
|
|
(370
|
)
|
|
(77
|
)
|
|||
Net cash provided by operating activities
|
109
|
|
|
267
|
|
|
46
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of marketable securities
|
(1,011
|
)
|
|
(485
|
)
|
|
(887
|
)
|
|||
Sales of marketable securities
|
659
|
|
|
555
|
|
|
1,247
|
|
|||
Maturities of marketable securities
|
28
|
|
|
43
|
|
|
86
|
|
|||
Net change in restricted cash and cash equivalents
|
(22
|
)
|
|
5
|
|
|
42
|
|
|||
Capital expenditures
|
(102
|
)
|
|
(116
|
)
|
|
(115
|
)
|
|||
Purchases of equipment leased to others
|
(137
|
)
|
|
(132
|
)
|
|
(83
|
)
|
|||
Proceeds from sales of property and equipment
|
35
|
|
|
24
|
|
|
22
|
|
|||
Investments in non-consolidated affiliates
|
(1
|
)
|
|
(2
|
)
|
|
1
|
|
|||
Proceeds from sales of affiliates
|
9
|
|
|
41
|
|
|
7
|
|
|||
Acquisition of intangibles
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||
Net cash provided by (used in) investing activities
|
(542
|
)
|
|
(67
|
)
|
|
316
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of securitized debt
|
322
|
|
|
413
|
|
|
549
|
|
|||
Principal payments on securitized debt
|
(336
|
)
|
|
(346
|
)
|
|
(501
|
)
|
|||
Net change in secured revolving credit facilities
|
111
|
|
|
(148
|
)
|
|
(22
|
)
|
|||
Proceeds from issuance of non-securitized debt
|
582
|
|
|
222
|
|
|
1,212
|
|
|||
Principal payments on non-securitized debt
|
(489
|
)
|
|
(315
|
)
|
|
(990
|
)
|
|||
Net change in notes and debt outstanding under revolving credit facilities
|
(112
|
)
|
|
(149
|
)
|
|
(106
|
)
|
|||
Principal payments under financing arrangements and capital lease obligations
|
—
|
|
|
(3
|
)
|
|
(2
|
)
|
|||
Debt issuance costs
|
(29
|
)
|
|
(16
|
)
|
|
(25
|
)
|
|||
Proceeds from financed lease obligations
|
61
|
|
|
22
|
|
|
33
|
|
|||
Issuance of common stock
|
256
|
|
|
—
|
|
|
—
|
|
|||
Stock issuance costs
|
(11
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
12
|
|
|
—
|
|
|
1
|
|
|||
Dividends paid by subsidiaries to non-controlling interest
|
(26
|
)
|
|
(34
|
)
|
|
(36
|
)
|
|||
Other financing activities
|
(3
|
)
|
|
1
|
|
|
(15
|
)
|
|||
Net cash provided by (used in) financing activities
|
338
|
|
|
(353
|
)
|
|
98
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(3
|
)
|
|
45
|
|
|
(45
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
(98
|
)
|
|
(108
|
)
|
|
415
|
|
|||
Cash and cash equivalents at beginning of the year
|
804
|
|
|
912
|
|
|
497
|
|
|||
Cash and cash equivalents at end of the year
|
$
|
706
|
|
|
$
|
804
|
|
|
$
|
912
|
|
(in millions)
|
Series D
Convertible Junior Preference Stock |
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Accumulated
Deficit |
|
Accumulated
Other Comprehensive Loss |
|
Common
Stock Held in Treasury, at cost |
|
Stockholders'
Equity Attributable to Non-controlling Interests |
|
Total
|
||||||||||||||||
Balance as of October 31, 2014
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
2,500
|
|
|
$
|
(4,682
|
)
|
|
$
|
(2,263
|
)
|
|
$
|
(221
|
)
|
|
$
|
34
|
|
|
$
|
(4,620
|
)
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(184
|
)
|
|
—
|
|
|
—
|
|
|
33
|
|
|
(151
|
)
|
||||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(338
|
)
|
|
—
|
|
|
—
|
|
|
(338
|
)
|
||||||||
Transfer from redeemable equity securities upon exercise or expiration of stock options
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
(36
|
)
|
||||||||
Series D convertible junior preference stock converted to common stock
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Acquisition of remaining ownership interest from non-controlling interest holder
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
(27
|
)
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||
Balance as of October 31, 2015
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
2,499
|
|
|
$
|
(4,866
|
)
|
|
$
|
(2,601
|
)
|
|
$
|
(210
|
)
|
|
$
|
7
|
|
|
$
|
(5,160
|
)
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
—
|
|
|
32
|
|
|
(65
|
)
|
||||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
||||||||
Acquisition of remaining ownership interest from non-controlling interest holder
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Balance as of October 31, 2016
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
2,499
|
|
|
$
|
(4,963
|
)
|
|
$
|
(2,640
|
)
|
|
$
|
(205
|
)
|
|
$
|
5
|
|
|
$
|
(5,293
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
55
|
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
429
|
|
|
—
|
|
|
—
|
|
|
429
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
11
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
||||||||
Issuance of common stock
|
—
|
|
|
2
|
|
|
254
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
256
|
|
||||||||
Stock issuance costs
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||||||
Other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Balance as of October 31, 2017
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,733
|
|
|
$
|
(4,933
|
)
|
|
$
|
(2,211
|
)
|
|
$
|
(179
|
)
|
|
$
|
4
|
|
|
$
|
(4,574
|
)
|
•
|
Retail notes
—Retail notes primarily consist of fixed rate loans to commercial customers to facilitate their purchase of new and used trucks, and related equipment.
|
•
|
Finance leases
—Finance leases consist of direct financing leases to commercial customers for acquisition of new and used trucks, and related equipment.
|
•
|
Wholesale notes
—Wholesale notes primarily consist of variable rate loans to our dealers for the purchase of new and used trucks, and related equipment.
|
•
|
Retail accounts
—Retail accounts consist of short-term accounts receivable that finance the sale of products to commercial customers.
|
•
|
Wholesale accounts
—Wholesale accounts consist of short-term accounts receivable primarily related to the sales of items other than trucks, and related equipment (e.g. service parts) to dealers.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
$
|
208
|
|
|
$
|
110
|
|
|
$
|
43
|
|
Additions charged to expense
(A)
|
111
|
|
|
187
|
|
|
117
|
|
|||
Deductions/Other adjustments
(B)
|
(209
|
)
|
|
(89
|
)
|
|
(50
|
)
|
|||
Balance at end of period
|
$
|
110
|
|
|
$
|
208
|
|
|
$
|
110
|
|
(A)
|
Additions charged to expense reflects the increase of the reserve for inventory on hand. During 2017, we implemented a shift in market mix to include an increase in volume to certain export markets, which have a lower price point as compared to sales through our domestic channels, and lower domestic pricing to enable higher sales velocity.
|
(B)
|
Deductions/Other adjustments include reductions of the reserve related to the sale of units and our Mexican subsidiary currency translation adjustments.
|
|
Years
|
Buildings
|
20 - 50
|
Leasehold improvements
|
3 - 20
|
Machinery and equipment
|
3 - 12
|
Furniture, fixtures, and equipment
|
3 - 15
|
Equipment leased to others
|
1 - 10
|
|
Years
|
Customer base and relationships
|
3 - 15
|
Trademarks
|
20
|
Other
|
3 - 18
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
$
|
818
|
|
|
$
|
994
|
|
|
$
|
1,197
|
|
Costs accrued and revenues deferred
|
199
|
|
|
186
|
|
|
260
|
|
|||
Currency translation adjustment
|
(1
|
)
|
|
3
|
|
|
(9
|
)
|
|||
Adjustments to pre-existing warranties
(A)
|
(1
|
)
|
|
77
|
|
|
1
|
|
|||
Payments and revenues recognized
|
(386
|
)
|
|
(442
|
)
|
|
(455
|
)
|
|||
Balance at end of period
|
629
|
|
|
818
|
|
|
994
|
|
|||
Less: Current portion
|
307
|
|
|
396
|
|
|
429
|
|
|||
Noncurrent accrued product warranty and deferred warranty revenue
|
$
|
322
|
|
|
$
|
422
|
|
|
$
|
565
|
|
(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 historical 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.
|
(in millions)
|
Balance at October 31, 2016
|
|
Additions
|
|
Payments
|
|
Adjustments
|
|
Balance at October 31, 2017
|
||||||||||
Employee termination charges
|
$
|
5
|
|
|
$
|
22
|
|
|
$
|
(12
|
)
|
|
$
|
(1
|
)
|
|
$
|
14
|
|
Lease vacancy
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Restructuring liability
|
$
|
7
|
|
|
$
|
22
|
|
|
$
|
(13
|
)
|
|
$
|
(1
|
)
|
|
$
|
15
|
|
(in millions)
|
Balance at
October 31, 2015 |
|
Additions
|
|
Payments
|
|
Adjustments
|
|
Balance at October 31, 2016
|
||||||||||
Employee termination charges
|
$
|
62
|
|
|
$
|
4
|
|
|
$
|
(63
|
)
|
|
$
|
2
|
|
|
$
|
5
|
|
Lease vacancy
|
5
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
1
|
|
|||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Restructuring liability
|
$
|
68
|
|
|
$
|
4
|
|
|
$
|
(67
|
)
|
|
$
|
2
|
|
|
$
|
7
|
|
(in millions)
|
Balance at
October 31, 2014 |
|
Additions
|
|
Payments
|
|
Adjustments
|
|
Balance at
October 31, 2015 |
||||||||||
Employee termination charges
|
$
|
8
|
|
|
$
|
68
|
|
|
$
|
(11
|
)
|
|
$
|
(3
|
)
|
|
$
|
62
|
|
Lease vacancy
|
11
|
|
|
3
|
|
|
(8
|
)
|
|
(1
|
)
|
|
5
|
|
|||||
Other
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
|||||
Restructuring liability
|
$
|
20
|
|
|
$
|
71
|
|
|
$
|
(20
|
)
|
|
$
|
(3
|
)
|
|
$
|
68
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Intangible asset impairment charge
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
7
|
|
Other asset impairment charges related to continuing operations
|
13
|
|
|
26
|
|
|
23
|
|
|||
Total asset impairment charges
|
$
|
13
|
|
|
$
|
27
|
|
|
$
|
30
|
|
|
As of October 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Retail portfolio
|
$
|
559
|
|
|
$
|
499
|
|
Wholesale portfolio
|
1,246
|
|
|
1,199
|
|
||
Total finance receivables
|
1,805
|
|
|
1,698
|
|
||
Less: Allowance for doubtful accounts
|
20
|
|
|
21
|
|
||
Total finance receivables, net
|
1,785
|
|
|
1,677
|
|
||
Less: Current portion, net
(A)
|
1,565
|
|
|
1,457
|
|
||
Noncurrent portion, net
|
$
|
220
|
|
|
$
|
220
|
|
(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.
|
(in millions)
|
Retail Portfolio
|
|
Wholesale Portfolio
|
|
Total
|
||||||
Due in:
|
|
|
|
|
|
||||||
2018
|
$
|
347
|
|
|
$
|
1,246
|
|
|
$
|
1,593
|
|
2019
|
114
|
|
|
—
|
|
|
114
|
|
|||
2020
|
80
|
|
|
—
|
|
|
80
|
|
|||
2021
|
43
|
|
|
—
|
|
|
43
|
|
|||
2022
|
18
|
|
|
—
|
|
|
18
|
|
|||
Thereafter
|
1
|
|
|
—
|
|
|
1
|
|
|||
Gross finance receivables
|
603
|
|
|
1,246
|
|
|
1,849
|
|
|||
Less: Unearned finance income
|
44
|
|
|
—
|
|
|
44
|
|
|||
Total finance receivables
|
$
|
559
|
|
|
$
|
1,246
|
|
|
$
|
1,805
|
|
|
As of October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Retail notes and finance leases revenue
|
$
|
41
|
|
|
$
|
38
|
|
|
$
|
48
|
|
Wholesale notes interest
|
102
|
|
|
107
|
|
|
97
|
|
|||
Operating lease revenue
|
68
|
|
|
66
|
|
|
63
|
|
|||
Retail and wholesale accounts interest
|
24
|
|
|
24
|
|
|
33
|
|
|||
Gross finance revenues
|
235
|
|
|
235
|
|
|
241
|
|
|||
Less: Intercompany revenues
|
93
|
|
|
100
|
|
|
96
|
|
|||
Finance revenues
|
$
|
142
|
|
|
$
|
135
|
|
|
$
|
145
|
|
|
For the Year Ended October 31, 2017
|
||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
19
|
|
|
$
|
2
|
|
|
$
|
28
|
|
|
$
|
49
|
|
Provision for doubtful accounts, net of recoveries
|
5
|
|
|
1
|
|
|
2
|
|
|
8
|
|
||||
Charge-off of accounts
|
(7
|
)
|
|
—
|
|
|
(1
|
)
|
|
(8
|
)
|
||||
Other
(A)
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Allowance for doubtful accounts, at end of period
|
$
|
17
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
48
|
|
|
For the Year Ended October 31, 2016
|
||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
22
|
|
|
$
|
48
|
|
Provision for doubtful accounts, net of recoveries
|
8
|
|
|
(2
|
)
|
|
6
|
|
|
12
|
|
||||
Charge-off of accounts
|
(9
|
)
|
|
—
|
|
|
(3
|
)
|
|
(12
|
)
|
||||
Other
(A)
|
(2
|
)
|
|
—
|
|
|
3
|
|
|
1
|
|
||||
Allowance for doubtful accounts, at end of period
|
$
|
19
|
|
|
$
|
2
|
|
|
$
|
28
|
|
|
$
|
49
|
|
|
For the Year Ended October 31, 2015
|
||||||||||||||
(in millions)
|
Retail Portfolio
|
|
Wholesale Portfolio
|
|
Trade and Other Receivables
|
|
Total
|
||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
24
|
|
|
$
|
3
|
|
|
$
|
38
|
|
|
$
|
65
|
|
Provision for doubtful accounts, net of recoveries
|
6
|
|
|
1
|
|
|
—
|
|
|
7
|
|
||||
Charge-off of accounts
|
(3
|
)
|
|
—
|
|
|
(5
|
)
|
|
(8
|
)
|
||||
Other
(A)
|
(5
|
)
|
|
—
|
|
|
(11
|
)
|
|
(16
|
)
|
||||
Allowance for doubtful accounts, at end of period
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
22
|
|
|
$
|
48
|
|
(A)
|
Amounts include impact from currency translation.
|
|
October 31, 2017
|
|
October 31, 2016
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Impaired finance receivables with specific loss reserves
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Impaired finance receivables without specific loss reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Specific loss reserves on impaired finance receivables
|
7
|
|
|
—
|
|
|
7
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||
Finance receivables on non-accrual status
|
16
|
|
|
—
|
|
|
16
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
As of October 31, 2017
|
||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||
Current, and less than 30 days past due
|
$
|
524
|
|
|
$
|
1,244
|
|
|
$
|
1,768
|
|
30-90 days past due
|
21
|
|
|
1
|
|
|
22
|
|
|||
Over 90 days past due
|
14
|
|
|
1
|
|
|
15
|
|
|||
Total finance receivables
|
$
|
559
|
|
|
$
|
1,246
|
|
|
$
|
1,805
|
|
|
As of October 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Finished products
|
$
|
584
|
|
|
$
|
678
|
|
Work in process
|
33
|
|
|
46
|
|
||
Raw materials
|
240
|
|
|
220
|
|
||
Total inventories, net
|
$
|
857
|
|
|
$
|
944
|
|
|
As of October 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Land
|
$
|
92
|
|
|
$
|
89
|
|
Buildings
|
548
|
|
|
562
|
|
||
Leasehold improvements
|
27
|
|
|
49
|
|
||
Machinery and equipment
|
2,057
|
|
|
2,013
|
|
||
Furniture, fixtures, and equipment
|
426
|
|
|
477
|
|
||
Equipment leased to others
|
586
|
|
|
525
|
|
||
Construction in progress
|
64
|
|
|
79
|
|
||
Total property and equipment, at cost
|
3,800
|
|
|
3,794
|
|
||
Less: Accumulated depreciation and amortization
|
2,474
|
|
|
2,553
|
|
||
Property and equipment, net
|
$
|
1,326
|
|
|
$
|
1,241
|
|
|
As of October 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Equipment leased to others
|
$
|
586
|
|
|
$
|
525
|
|
Less: Accumulated depreciation
|
191
|
|
|
193
|
|
||
Equipment leased to others, net
|
$
|
395
|
|
|
$
|
332
|
|
|
|
|
|
||||
Buildings, machinery, and equipment under financing arrangements and capital lease obligations
|
$
|
61
|
|
|
$
|
61
|
|
Less: Accumulated depreciation and amortization
|
41
|
|
|
38
|
|
||
Assets under financing arrangements and capital lease obligations, net
|
$
|
20
|
|
|
$
|
23
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Depreciation expense
|
$
|
138
|
|
|
$
|
134
|
|
|
$
|
190
|
|
Depreciation of equipment leased to others
|
73
|
|
|
79
|
|
|
76
|
|
|||
Amortization expense
|
3
|
|
|
5
|
|
|
5
|
|
|||
Interest capitalized
|
2
|
|
|
3
|
|
|
1
|
|
(in millions)
|
Financing
Arrangements and Capital Lease Obligations |
|
Operating
Leases |
|
Total
|
||||||
2018
|
$
|
10
|
|
|
$
|
45
|
|
|
$
|
55
|
|
2019
|
9
|
|
|
39
|
|
|
48
|
|
|||
2020
|
9
|
|
|
36
|
|
|
45
|
|
|||
2021
|
9
|
|
|
31
|
|
|
40
|
|
|||
2022
|
2
|
|
|
17
|
|
|
19
|
|
|||
Thereafter
|
—
|
|
|
27
|
|
|
27
|
|
|||
|
39
|
|
|
$
|
195
|
|
|
$
|
234
|
|
|
Less: Interest portion
|
5
|
|
|
|
|
|
|
|
|||
Total
|
$
|
34
|
|
|
|
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Total
|
||||||||
As of October 31, 2014
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
38
|
|
Impairments and currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
As of October 31, 2015
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
38
|
|
Impairments and currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
As of October 31, 2016
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
38
|
|
Impairments and currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
As of October 31, 2017
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
As of October 31, 2017
|
||||||||||
(in millions)
|
Customer
Base and Relationships |
|
Trademarks, Patents and Other
|
|
Total
|
||||||
Gross carrying value
|
$
|
73
|
|
|
$
|
117
|
|
|
$
|
190
|
|
Accumulated amortization
|
(69
|
)
|
|
(102
|
)
|
|
(171
|
)
|
|||
Net of amortization
|
$
|
4
|
|
|
$
|
15
|
|
|
$
|
19
|
|
|
As of October 31, 2016
|
||||||||||
(in millions)
|
Customer
Base and Relationships |
|
Trademarks, Patents and Other
|
|
Total
|
||||||
Gross carrying value
|
$
|
73
|
|
|
$
|
121
|
|
|
$
|
194
|
|
Accumulated amortization
|
(65
|
)
|
|
(97
|
)
|
|
(162
|
)
|
|||
Net of amortization
|
$
|
8
|
|
|
$
|
24
|
|
|
$
|
32
|
|
(in millions)
|
Estimated
Amortization |
||
2018
|
$
|
7
|
|
2019
|
4
|
|
|
2020
|
2
|
|
|
2021
|
1
|
|
|
2022
|
1
|
|
|
Thereafter
|
4
|
|
(in millions)
|
2017
|
|
2016
|
||||
Receivables due from affiliates
|
$
|
1
|
|
|
$
|
—
|
|
Payables due to affiliates
|
19
|
|
|
22
|
|
|
For the Year Ended October 31, 2017
|
||
(in millions)
|
(Unaudited)
|
||
Net revenue
|
$
|
115
|
|
Net expenses
|
107
|
|
|
Income before tax expense
|
8
|
|
|
Net income
|
8
|
|
|
As of October 31, 2017
|
||
(in millions)
|
(Unaudited)
|
||
Current assets
|
$
|
61
|
|
Noncurrent assets
|
58
|
|
|
Total assets
|
$
|
119
|
|
Current liabilities
|
$
|
27
|
|
Noncurrent liabilities
|
—
|
|
|
Total liabilities
|
$
|
27
|
|
|
As of October 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Manufacturing operations
|
|
|
|
||||
Senior Secured Term Loan Credit Facility, as amended, due 2020, net of unamortized discount of $7 and $14, respectively, and unamortized debt issuance costs of $9 and $7, respectively
|
$
|
1,003
|
|
|
$
|
1,009
|
|
8.25% Senior Notes, due 2022, net of unamortized discount of $13 and $15, respectively, and unamortized debt issuance costs of $14 and $12, respectively
|
1,423
|
|
|
1,173
|
|
||
4.50% Senior Subordinated Convertible Notes, due 2018, net of unamortized discount of $5 and $10, respectively, and unamortized debt issuance costs of $1 at both dates
|
194
|
|
|
189
|
|
||
4.75% Senior Subordinated Convertible Notes, due 2019, net of unamortized discount of $14 and $24, respectively, and unamortized debt issuance costs of $3 and $4, respectively
|
394
|
|
|
383
|
|
||
Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040, net of unamortized debt issuance costs of $5 at both dates
|
220
|
|
|
220
|
|
||
Financed lease obligations
|
130
|
|
|
52
|
|
||
Other
|
43
|
|
|
70
|
|
||
Total Manufacturing operations debt
|
3,407
|
|
|
3,096
|
|
||
Less: Current portion
|
286
|
|
|
71
|
|
||
Net long-term Manufacturing operations debt
|
$
|
3,121
|
|
|
$
|
3,025
|
|
|
As of October 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Financial Services operations
|
|
|
|
||||
Asset-backed debt issued by consolidated SPEs, at fixed and variable rates, due serially through 2023
, net of unamortized debt issuance costs of $5 and $6, respectively
|
$
|
849
|
|
|
$
|
753
|
|
Bank credit facilities, at fixed and variable rates, due dates from 2018 through 2023
, net of unamortized debt issuance costs of $2 and $3, respectively
|
616
|
|
|
861
|
|
||
Commercial paper, at variable rates, program matures in 2022
|
92
|
|
|
96
|
|
||
Borrowings secured by operating and finance leases, at various rates, due serially through 2022
|
94
|
|
|
98
|
|
||
Total Financial Services operations debt
|
1,651
|
|
|
1,808
|
|
||
Less: Current portion
|
883
|
|
|
836
|
|
||
Net long-term Financial Services operations debt
|
$
|
768
|
|
|
$
|
972
|
|
|
Manufacturing
Operations (A) |
|
Financial
Services Operations |
|
Total
|
||||||
(in millions)
|
|
|
|
|
|
||||||
2018
|
$
|
292
|
|
|
$
|
886
|
|
|
$
|
1,178
|
|
2019
|
443
|
|
|
546
|
|
|
989
|
|
|||
2020
|
1,017
|
|
|
61
|
|
|
1,078
|
|
|||
2021
|
41
|
|
|
156
|
|
|
197
|
|
|||
2022
|
1,460
|
|
|
9
|
|
|
1,469
|
|
|||
Thereafter
|
225
|
|
|
—
|
|
|
225
|
|
|||
Total debt
|
3,478
|
|
|
1,658
|
|
|
5,136
|
|
|||
Less: Unamortized discount and unamortized debt issuance costs
|
71
|
|
|
7
|
|
|
78
|
|
|||
Net debt
|
$
|
3,407
|
|
|
$
|
1,651
|
|
|
$
|
5,058
|
|
(A)
|
Manufacturing Operations excludes the retirement of the Senior Notes and Term Loan and the issuance of the 2025 Notes and the Term Loan Credit Agreement which occurred subsequent to October 31, 2017. After giving effect to these transactions, maturities of long-term debt would be as follows: 2018 - $294 million; 2019 - $448 million; 2020 - $35 million; 2021 - $57 million; 2022 - $26 million; Thereafter - $2.8 billion; In Total - $3.7 billion.
|
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in benefit obligations
|
|
|
|
|
|
|
|
||||||||
Benefit obligations at beginning of year
|
$
|
4,027
|
|
|
$
|
3,979
|
|
|
$
|
1,708
|
|
|
$
|
1,887
|
|
Service cost
|
7
|
|
|
9
|
|
|
5
|
|
|
5
|
|
||||
Interest on obligations
|
107
|
|
|
118
|
|
|
47
|
|
|
58
|
|
||||
Actuarial loss (gain)
|
(18
|
)
|
|
225
|
|
|
(183
|
)
|
|
(138
|
)
|
||||
Settlements
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Contractual termination benefits
|
10
|
|
|
3
|
|
|
4
|
|
|
4
|
|
||||
Curtailments and other
|
(2
|
)
|
|
—
|
|
|
(58
|
)
|
|
—
|
|
||||
Currency translation
|
17
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
||||
Plan participants' contributions
|
—
|
|
|
—
|
|
|
36
|
|
|
34
|
|
||||
Subsidy receipts
|
—
|
|
|
—
|
|
|
42
|
|
|
37
|
|
||||
Benefits paid
|
(297
|
)
|
|
(300
|
)
|
|
(166
|
)
|
|
(179
|
)
|
||||
Benefit obligations at end of year
|
$
|
3,799
|
|
|
$
|
4,027
|
|
|
$
|
1,435
|
|
|
$
|
1,708
|
|
Change in plan assets
|
|
|
|
|
|
|
|
|
|||||||
Fair value of plan assets at beginning of year
|
$
|
2,310
|
|
|
$
|
2,422
|
|
|
$
|
333
|
|
|
$
|
369
|
|
Actual return on plan assets
|
256
|
|
|
79
|
|
|
38
|
|
|
3
|
|
||||
Settlements
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Currency translation
|
18
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
112
|
|
|
100
|
|
|
2
|
|
|
2
|
|
||||
Benefits paid
|
(281
|
)
|
|
(285
|
)
|
|
(40
|
)
|
|
(41
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
2,363
|
|
|
$
|
2,310
|
|
|
$
|
333
|
|
|
$
|
333
|
|
Funded status at year end
|
$
|
(1,436
|
)
|
|
$
|
(1,717
|
)
|
|
$
|
(1,102
|
)
|
|
$
|
(1,375
|
)
|
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Amounts recognized in our Consolidated Balance Sheets consist of:
|
|
|
|
|
|
|
|
|
|||||||
Noncurrent asset
|
$
|
16
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liability
|
(16
|
)
|
|
(17
|
)
|
|
(41
|
)
|
|
(58
|
)
|
||||
Noncurrent liability
|
(1,436
|
)
|
|
(1,706
|
)
|
|
(1,061
|
)
|
|
(1,317
|
)
|
||||
Net liability recognized
|
$
|
(1,436
|
)
|
|
$
|
(1,717
|
)
|
|
$
|
(1,102
|
)
|
|
$
|
(1,375
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in our accumulated other comprehensive loss consist of:
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss
|
$
|
2,183
|
|
|
$
|
2,442
|
|
|
$
|
252
|
|
|
$
|
472
|
|
Net prior service benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net amount recognized
|
$
|
2,183
|
|
|
$
|
2,442
|
|
|
$
|
252
|
|
|
$
|
472
|
|
|
As of October 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Projected benefit obligations
|
$
|
3,487
|
|
|
$
|
3,946
|
|
Accumulated benefit obligations
|
3,471
|
|
|
3,934
|
|
||
Fair value of plan assets
|
2,035
|
|
|
2,224
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Pension expense
|
$
|
121
|
|
|
$
|
82
|
|
|
$
|
69
|
|
Health and life insurance expense
|
(3
|
)
|
|
71
|
|
|
81
|
|
|||
Total postretirement benefits expense
|
$
|
118
|
|
|
$
|
153
|
|
|
$
|
150
|
|
|
For the Years Ended October 31,
|
||||||||||||||||||||||
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Service cost for benefits earned during the period
|
$
|
7
|
|
|
$
|
9
|
|
|
$
|
13
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
6
|
|
Interest on obligation
|
107
|
|
|
118
|
|
|
142
|
|
|
47
|
|
|
58
|
|
|
71
|
|
||||||
Amortization of cumulative loss
|
116
|
|
|
104
|
|
|
97
|
|
|
22
|
|
|
31
|
|
|
39
|
|
||||||
Amortization of prior service cost (benefit)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
||||||
Settlements
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Contractual termination benefits
|
10
|
|
|
3
|
|
|
(1
|
)
|
|
4
|
|
|
4
|
|
|
(1
|
)
|
||||||
Curtailments and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|
—
|
|
|
—
|
|
||||||
Premiums on pension insurance
|
15
|
|
|
15
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Expected return on assets
|
(157
|
)
|
|
(167
|
)
|
|
(194
|
)
|
|
(23
|
)
|
|
(26
|
)
|
|
(30
|
)
|
||||||
Net periodic benefit expense
|
$
|
121
|
|
|
$
|
82
|
|
|
$
|
69
|
|
|
$
|
(3
|
)
|
|
$
|
71
|
|
|
$
|
81
|
|
Other Changes in plan assets and benefit obligations recognized in other comprehensive loss (income)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial net loss (gain)
|
$
|
(116
|
)
|
|
$
|
313
|
|
|
$
|
312
|
|
|
$
|
(197
|
)
|
|
$
|
(115
|
)
|
|
$
|
(7
|
)
|
Amortization of cumulative loss
|
(116
|
)
|
|
(104
|
)
|
|
(97
|
)
|
|
(22
|
)
|
|
(31
|
)
|
|
(39
|
)
|
||||||
Amortization of prior service benefit (cost)
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
4
|
|
||||||
Settlements
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailments
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Currency translation
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total recognized in other comprehensive loss (income)
|
$
|
(257
|
)
|
|
$
|
208
|
|
|
$
|
214
|
|
|
$
|
(219
|
)
|
|
$
|
(145
|
)
|
|
$
|
(42
|
)
|
Total net postretirement benefits (income) expense and other comprehensive loss (income)
|
$
|
(136
|
)
|
|
$
|
290
|
|
|
$
|
283
|
|
|
$
|
(222
|
)
|
|
$
|
(74
|
)
|
|
$
|
39
|
|
(in millions)
|
Pension Benefits
|
|
Health and Life Insurance Benefits
|
||||
Amortization of prior service cost (benefit)
|
$
|
—
|
|
|
$
|
—
|
|
Amortization of cumulative losses
|
106
|
|
|
9
|
|
|
Pension Benefits
|
|
Health and Life Insurance Benefits
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Discount rate used to determine present value of benefit obligation at end of year
|
3.5
|
%
|
|
3.5
|
%
|
|
3.6
|
%
|
|
3.5
|
%
|
Expected rate of increase in future compensation levels
|
3.5
|
%
|
|
3.5
|
%
|
|
—
|
|
|
—
|
|
|
Pension Benefits
|
|
Health and Life Insurance Benefits
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
Discount rate used to determine service cost
|
3.9
|
%
|
|
4.5
|
%
|
|
3.7
|
%
|
|
4.0
|
%
|
|
4.6
|
%
|
|
3.7
|
%
|
Discount rate used to determine interest cost
|
2.8
|
%
|
|
3.1
|
%
|
|
3.7
|
%
|
|
2.9
|
%
|
|
3.3
|
%
|
|
3.7
|
%
|
Expected long-term rate of return on plan assets
|
7.2
|
%
|
|
7.5
|
%
|
|
7.8
|
%
|
|
7.5
|
%
|
|
7.5
|
%
|
|
7.8
|
%
|
Expected rate of increase in future compensation levels
|
3.5
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
(in millions)
|
One-Percentage
Point Increase |
|
One-Percentage
Point Decrease |
||||
Effect on total of service and interest cost components
|
$
|
8
|
|
|
$
|
(6
|
)
|
Effect on postretirement benefit obligation
|
196
|
|
|
(163
|
)
|
•
|
Cash and short-term investments
—Valued at cost plus earnings from investments for the period, which approximates fair market value due to the short-term duration. Cash equivalents are valued at net asset value as provided by the administrator of the fund.
|
•
|
U.S. Government and agency securities
—Valued at the closing price reported on the active market on which the security is traded or valued by the trustee at year-end using various pricing services of financial institutions, including Interactive Data Corporation, Standard & Poor's and Telekurs.
|
•
|
Corporate debt securities
—Valued by the trustee at year-end using various pricing services of financial institutions, including Interactive Data Corporation, Standard & Poor's and Telekurs.
|
•
|
Common and preferred stock
—Valued at the closing price reported on the active market on which the security is traded.
|
•
|
Collective trusts, Partnerships/joint venture interests and Hedge funds
—Valued at the net asset value provided by the administrator of the fund. The net asset value is based on the value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding.
|
•
|
Derivatives
-Valued monthly for the trustee using various pricing services of financial institutions, including Interactive Data Corporation, Standard & Poor’s and Telekurs. Valued monthly by the trustee using various providers of derivatives pricing, most notably Numerix, Markit and Super Derivatives.
|
|
As of October 31, 2017
|
|
As of October 31, 2016
|
||||||||||||||||||||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||||||||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86
|
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
76
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. Large Cap
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
U.S. Small-Mid Cap
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Canadian
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
International
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Emerging Markets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Equity derivative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Fixed Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate and Government Bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Government Bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||||
Asset Backed Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Collective Trusts and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. Equity
|
316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|
294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
294
|
|
||||||||||
Canadian Equity
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||||||||
International Equity
|
327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
327
|
|
|
291
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
291
|
|
||||||||||
Global Equity
|
235
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235
|
|
|
227
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
227
|
|
||||||||||
Fixed Income - Long Duration Credit
|
—
|
|
|
508
|
|
|
—
|
|
|
—
|
|
|
508
|
|
|
—
|
|
|
530
|
|
|
—
|
|
|
—
|
|
|
530
|
|
||||||||||
Fixed Income - Long Duration Government
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Fixed Income - High Yield
|
—
|
|
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
204
|
|
|
—
|
|
|
—
|
|
|
204
|
|
||||||||||
Fixed Income - Canadian Bond
|
—
|
|
|
213
|
|
|
—
|
|
|
—
|
|
|
213
|
|
|
—
|
|
|
203
|
|
|
—
|
|
|
—
|
|
|
203
|
|
||||||||||
Global Real Estate
|
—
|
|
|
144
|
|
|
—
|
|
|
—
|
|
|
144
|
|
|
—
|
|
|
141
|
|
|
—
|
|
|
—
|
|
|
141
|
|
||||||||||
Global Infrastructure
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
||||||||||
Common and Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Commodities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Hedge Fund of Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
210
|
|
|
210
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|
230
|
|
||||||||||
Private Equity
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
57
|
|
||||||||||
Exchange Traded Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Mutual Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Real Estate
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||||
Total
(A)
|
$
|
983
|
|
|
$
|
1,099
|
|
|
$
|
1
|
|
|
$
|
263
|
|
|
$
|
2,346
|
|
|
$
|
917
|
|
|
$
|
1,078
|
|
|
$
|
1
|
|
|
$
|
301
|
|
|
$
|
2,297
|
|
(A)
|
In addition, the table above includes the fair value of Canadian pension assets translated at the exchange rates as of
October 31, 2017
and
2016
, respectively, while the change in plan asset table includes the fair value of Canadian pension assets translated at historical foreign currency rates.
|
|
As of October 31, 2017
|
|
As of October 31, 2016
|
||||||||||||||||||||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||||||||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. Large Cap
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
U.S. Small-Mid Cap
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
International
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Emerging Markets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Fixed Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate and Government Bonds
|
—
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||||||||
Government Bonds
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Asset Backed Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Collective Trusts and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. Equity
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
||||||||||
International Equity
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
||||||||||
Fixed Income - Multi-Asset Credit
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
41
|
|
||||||||||
Real Estate (REITs)
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Mutual Fund
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Hedge Fund of Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
42
|
|
||||||||||
Private Equity
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
||||||||||
Total
|
$
|
160
|
|
|
$
|
99
|
|
|
$
|
—
|
|
|
$
|
74
|
|
|
$
|
333
|
|
|
$
|
156
|
|
|
$
|
121
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
333
|
|
(in millions)
|
Pension Benefit Payments
|
|
Other Postretirement Benefit Payments
(A)
|
||||
2018
|
$
|
293
|
|
|
$
|
86
|
|
2019
|
286
|
|
|
82
|
|
||
2020
|
281
|
|
|
90
|
|
||
2021
|
273
|
|
|
94
|
|
||
2022
|
266
|
|
|
96
|
|
||
2023 through 2027
|
1,219
|
|
|
481
|
|
(A)
|
Payments are net of expected participant contributions and expected federal subsidy receipts.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic
|
$
|
(74
|
)
|
|
$
|
(95
|
)
|
|
$
|
(215
|
)
|
Foreign
|
138
|
|
|
63
|
|
|
112
|
|
|||
Income (loss) from continuing operations before income taxes
|
$
|
64
|
|
|
$
|
(32
|
)
|
|
$
|
(103
|
)
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
State and local
|
10
|
|
|
(4
|
)
|
|
(1
|
)
|
|||
Foreign
|
(30
|
)
|
|
(36
|
)
|
|
(64
|
)
|
|||
Total current expense
|
$
|
(16
|
)
|
|
$
|
(41
|
)
|
|
$
|
(67
|
)
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
19
|
|
|
13
|
|
|
2
|
|
|||
State and local
|
4
|
|
|
(1
|
)
|
|
—
|
|
|||
Foreign
|
(17
|
)
|
|
(4
|
)
|
|
14
|
|
|||
Total deferred benefit
|
$
|
6
|
|
|
$
|
8
|
|
|
$
|
16
|
|
Total income tax expense
|
$
|
(10
|
)
|
|
$
|
(33
|
)
|
|
$
|
(51
|
)
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Federal income tax benefit at the statutory rate of 35%
|
$
|
(22
|
)
|
|
$
|
11
|
|
|
$
|
36
|
|
State income taxes, net of federal benefit
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Credits and incentives
|
8
|
|
|
3
|
|
|
4
|
|
|||
Adjustments to valuation allowances
|
(57
|
)
|
|
(132
|
)
|
|
(41
|
)
|
|||
Foreign operations
|
4
|
|
|
53
|
|
|
(48
|
)
|
|||
Unremitted foreign earnings
|
—
|
|
|
37
|
|
|
(31
|
)
|
|||
Adjustments to uncertain tax positions
|
15
|
|
|
(10
|
)
|
|
(1
|
)
|
|||
Intraperiod tax allocation offset to equity components
|
28
|
|
|
—
|
|
|
—
|
|
|||
Non-controlling interest adjustment
|
9
|
|
|
11
|
|
|
11
|
|
|||
Other
|
8
|
|
|
(3
|
)
|
|
19
|
|
|||
Recorded income tax expense
|
$
|
(10
|
)
|
|
$
|
(33
|
)
|
|
$
|
(51
|
)
|
|
As of October 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Deferred tax assets attributable to:
|
|
|
|
||||
Employee benefits liabilities
|
$
|
1,073
|
|
|
$
|
1,274
|
|
Net operating loss ("NOL") carryforwards
|
1,383
|
|
|
1,324
|
|
||
Product liability and warranty accruals
|
290
|
|
|
362
|
|
||
Research and development
|
209
|
|
|
172
|
|
||
Tax credit carryforwards
|
262
|
|
|
262
|
|
||
Other
|
277
|
|
|
232
|
|
||
Gross deferred tax assets
|
3,494
|
|
|
3,626
|
|
||
Less: Valuation allowances
|
3,326
|
|
|
3,434
|
|
||
Net deferred tax assets
|
$
|
168
|
|
|
$
|
192
|
|
Deferred tax liabilities attributable to:
|
|
|
|
||||
Other
|
$
|
(39
|
)
|
|
$
|
(31
|
)
|
Total deferred tax liabilities
|
$
|
(39
|
)
|
|
$
|
(31
|
)
|
(in millions)
|
For the Year Ended October 31, 2017
|
||
Liability for uncertain tax positions at November 1
|
$
|
50
|
|
Decrease as a result of positions taken in prior periods
|
(15
|
)
|
|
Settlements
|
(1
|
)
|
|
Liability for uncertain tax positions at October 31
|
$
|
34
|
|
•
|
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.
|
|
As of October 31, 2017
|
|
As of October 31, 2016
|
||||||||||||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government and federal agency securities
(A)
|
$
|
370
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
370
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
Other
(A)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts
(B)
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Foreign currency contracts
(B)
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Interest rate caps
(C)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Total assets
|
$
|
370
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
377
|
|
|
$
|
46
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
49
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts
(D)
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts
(D)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Guarantees
|
—
|
|
|
—
|
|
|
21
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
21
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
23
|
|
(A)
|
Adjustments have been made to reclassify amounts within Other and U.S. government and federal agency securities in order to conform to the 2017 presentation. The reclassification did not impact our
Consolidated Balance Sheets
.
|
(B)
|
The asset value of commodity forward contracts and foreign currency contracts is included in
Other current assets
in the accompanying
Consolidated Balance Sheets
.
|
(C)
|
The asset value of interest rate caps is included in
Other noncurrent assets
in the accompanying
Consolidated Balance Sheets.
|
(D)
|
The liability value of commodity forward contracts and foreign currency contracts is included in
Other current liabilities
in the accompanying
Consolidated Balance Sheets.
|
(in millions)
|
October 31, 2017
|
|
October 31, 2016
|
||||
Guarantees, at beginning of period
|
$
|
(23
|
)
|
|
$
|
(10
|
)
|
Transfers out of Level 3
|
—
|
|
|
—
|
|
||
Issuances
|
(2
|
)
|
|
(17
|
)
|
||
Settlements
|
4
|
|
|
4
|
|
||
Guarantees, at end of period
|
$
|
(21
|
)
|
|
$
|
(23
|
)
|
Change in unrealized gains on assets (liabilities) still held
|
$
|
—
|
|
|
$
|
—
|
|
(in millions)
|
October 31, 2017
|
|
October 31, 2016
|
||||
Level 2 financial instruments
|
|
|
|
||||
Carrying value of impaired finance receivables
(A)
|
$
|
16
|
|
|
$
|
15
|
|
Specific loss reserve
|
(7
|
)
|
|
(8
|
)
|
||
Fair value
|
$
|
9
|
|
|
$
|
7
|
|
(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 October 31, 2017
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
153
|
|
|
$
|
153
|
|
|
$
|
161
|
|
Notes receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Facility, as Amended, due 2020
|
—
|
|
|
—
|
|
|
1,019
|
|
|
1,019
|
|
|
1,003
|
|
|||||
8.25% Senior Notes, due 2022
|
1,450
|
|
|
—
|
|
|
—
|
|
|
1,450
|
|
|
1,423
|
|
|||||
4.50% Senior Subordinated Convertible Notes, due 2018
(A)
|
208
|
|
|
—
|
|
|
—
|
|
|
208
|
|
|
194
|
|
|||||
4.75% Senior Subordinated Convertible Notes, due 2019
(A)
|
446
|
|
|
—
|
|
|
—
|
|
|
446
|
|
|
394
|
|
|||||
Loan Agreement related to 6.50% Tax Exempt Bonds, due 2040
|
—
|
|
|
243
|
|
|
—
|
|
|
243
|
|
|
220
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
130
|
|
|
130
|
|
|
130
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
|
39
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2023
|
—
|
|
|
—
|
|
|
851
|
|
|
851
|
|
|
849
|
|
|||||
Bank credit facilities, at fixed and variable rates, due dates from 2018 through 2023
|
—
|
|
|
—
|
|
|
592
|
|
|
592
|
|
|
616
|
|
|||||
Commercial paper, at variable rates, program matures in 2022
|
92
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|
92
|
|
|||||
Borrowings secured by operating and finance leases, at various rates, due serially through 2022
|
—
|
|
|
—
|
|
|
94
|
|
|
94
|
|
|
94
|
|
|
As of October 31, 2016
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
153
|
|
|
$
|
153
|
|
|
$
|
151
|
|
Notes receivable
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
3
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Facility, as Amended, due 2020
|
—
|
|
|
—
|
|
|
1,037
|
|
|
1,037
|
|
|
1,009
|
|
|||||
8.25% Senior Notes, due 2022
|
1,180
|
|
|
—
|
|
|
—
|
|
|
1,180
|
|
|
1,173
|
|
|||||
4.50% Senior Subordinated Convertible Notes, due 2018
(A)
|
190
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|
189
|
|
|||||
4.75% Senior Subordinated Convertible Notes, due 2019
(A)
|
381
|
|
|
—
|
|
|
—
|
|
|
381
|
|
|
383
|
|
|||||
Loan Agreement related to 6.50% Tax Exempt Bonds, due 2040
|
—
|
|
|
233
|
|
|
—
|
|
|
233
|
|
|
220
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|
52
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
43
|
|
|
43
|
|
|
65
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2023
|
—
|
|
|
—
|
|
|
754
|
|
|
754
|
|
|
753
|
|
|||||
Bank credit facilities, at fixed and variable rates, due dates from 2018 through 2023
|
—
|
|
|
—
|
|
|
851
|
|
|
851
|
|
|
861
|
|
|||||
Commercial paper, at variable rates, program matures in 2022
|
96
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|
96
|
|
|||||
Borrowings secured by operating and finance leases, at various rates, due serially through 2022
|
—
|
|
|
—
|
|
|
98
|
|
|
98
|
|
|
98
|
|
(A)
|
The carrying value represents the consolidated financial statement amount of the debt which excludes the allocation of the conversion feature to equity. As of October 31, 2017 and 2016, the estimated fair value is derived from quoted prices in active markets which include the equity feature. Adjustments have been made to the classification of these instruments for the prior year in order to conform to the 2017 presentation.
|
•
|
Our
Truck
segment manufactures and distributes Class 4 through 8 trucks, buses, and military vehicles under the International and IC Bus ("IC") brands, and produces engines under our proprietary brand name and parts required to support the military truck lines. This segment sells its products in the U.S., Canada, and Mexico markets, as well as through our export truck business. 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
Parts
segment provides customers with proprietary products needed to support the International commercial truck, IC Bus, proprietary engine lines, and export parts business, as well as our other product lines. Our Parts segment also provides a wide selection of other standard truck, trailer, and engine aftermarket parts. Also included in the 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 primarily consists of Brazil engine operations which produce diesel engines under contract manufacturing arrangements, as well as under the MWM brand, for sale to OEMs in South America. In addition, our Global Operations segment includes the operating results of our joint venture in China with Anhui Jianghuai Automobile Co ("JAC").
|
•
|
Our
Financial Services
segment provides retail, wholesale, and lease financing of products sold by the Truck and Parts segments and their dealers within the U.S. and Mexico, as well as financing for wholesale accounts and selected retail accounts receivable. This segment also facilitates financing relationships in other countries to support our Manufacturing Operations.
|
•
|
The costs of profit sharing and annual incentive compensation for the Manufacturing operations are included in corporate expenses.
|
•
|
Interest expense and interest income for the Manufacturing operations are reported in corporate expenses.
|
•
|
The Financial Services segment finances certain sales to our dealers in North America, which include an interest-free period that varies in length that is subsidized by our Truck and Parts segments. Additionally, the Financial Services segment reports intersegment revenues from secured loans to the Manufacturing operations. Certain retail sales financed by the Financial Services segment, primarily NFC, require the Manufacturing operations, primarily the Truck segment, to share a portion of any credit losses.
|
•
|
We allocate "access fees" to the Parts segment from the Truck segment for certain engineering and product development costs, depreciation expense, and SG&A expenses incurred by the Truck segment based on the relative percentage of certain sales, as adjusted for cyclicality.
|
•
|
Other than the items discussed above, the selected financial information presented below is presented in accordance with our policies described in Note 1,
Summary of Significant Accounting Policies.
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services (A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Year Ended October 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
5,770
|
|
|
$
|
2,369
|
|
|
$
|
279
|
|
|
$
|
142
|
|
|
$
|
10
|
|
|
$
|
8,570
|
|
Intersegment sales and revenues
|
39
|
|
|
23
|
|
|
30
|
|
|
93
|
|
|
(185
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
5,809
|
|
|
$
|
2,392
|
|
|
$
|
309
|
|
|
$
|
235
|
|
|
$
|
(175
|
)
|
|
$
|
8,570
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
(6
|
)
|
|
$
|
616
|
|
|
$
|
(7
|
)
|
|
$
|
77
|
|
|
$
|
(651
|
)
|
|
$
|
29
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
||||||
Segment profit (loss)
|
$
|
(6
|
)
|
|
$
|
616
|
|
|
$
|
(7
|
)
|
|
$
|
77
|
|
|
$
|
(641
|
)
|
|
$
|
39
|
|
Depreciation and amortization
|
$
|
137
|
|
|
$
|
11
|
|
|
$
|
13
|
|
|
$
|
51
|
|
|
$
|
11
|
|
|
$
|
223
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
265
|
|
|
351
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
4
|
|
|
3
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Capital expenditures
(B)
|
82
|
|
|
2
|
|
|
5
|
|
|
1
|
|
|
12
|
|
|
102
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services (A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Year Ended October 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
5,271
|
|
|
$
|
2,398
|
|
|
$
|
296
|
|
|
$
|
135
|
|
|
$
|
10
|
|
|
$
|
8,110
|
|
Intersegment sales and revenues
|
132
|
|
|
29
|
|
|
45
|
|
|
100
|
|
|
(305
|
)
|
|
1
|
|
||||||
Total sales and revenues, net
|
$
|
5,403
|
|
|
$
|
2,427
|
|
|
$
|
341
|
|
|
$
|
235
|
|
|
$
|
(295
|
)
|
|
$
|
8,111
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
(189
|
)
|
|
$
|
640
|
|
|
$
|
(21
|
)
|
|
$
|
100
|
|
|
$
|
(627
|
)
|
|
$
|
(97
|
)
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
(33
|
)
|
||||||
Segment profit (loss)
|
$
|
(189
|
)
|
|
$
|
640
|
|
|
$
|
(21
|
)
|
|
$
|
100
|
|
|
$
|
(594
|
)
|
|
$
|
(64
|
)
|
Depreciation and amortization
|
$
|
129
|
|
|
$
|
13
|
|
|
$
|
18
|
|
|
$
|
50
|
|
|
$
|
15
|
|
|
$
|
225
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|
247
|
|
|
327
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
5
|
|
|
4
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Capital expenditures
(B)
|
97
|
|
|
2
|
|
|
4
|
|
|
2
|
|
|
11
|
|
|
116
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services (A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Year Ended October 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
7,055
|
|
|
$
|
2,475
|
|
|
$
|
455
|
|
|
$
|
145
|
|
|
$
|
10
|
|
|
$
|
10,140
|
|
Intersegment sales and revenues
|
158
|
|
|
38
|
|
|
51
|
|
|
96
|
|
|
(343
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
7,213
|
|
|
$
|
2,513
|
|
|
$
|
506
|
|
|
$
|
241
|
|
|
$
|
(333
|
)
|
|
$
|
10,140
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
(141
|
)
|
|
$
|
592
|
|
|
$
|
(67
|
)
|
|
$
|
98
|
|
|
$
|
(669
|
)
|
|
$
|
(187
|
)
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
(51
|
)
|
||||||
Segment profit (loss)
|
$
|
(141
|
)
|
|
$
|
592
|
|
|
$
|
(67
|
)
|
|
$
|
98
|
|
|
$
|
(618
|
)
|
|
$
|
(136
|
)
|
Depreciation and amortization
|
$
|
173
|
|
|
$
|
14
|
|
|
$
|
23
|
|
|
$
|
51
|
|
|
$
|
20
|
|
|
$
|
281
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
233
|
|
|
307
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
5
|
|
|
4
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Capital expenditures
(B)
|
92
|
|
|
3
|
|
|
4
|
|
|
4
|
|
|
12
|
|
|
115
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||||
Segment assets, as of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
October 31, 2017
|
$
|
1,621
|
|
|
$
|
632
|
|
|
$
|
378
|
|
|
$
|
2,207
|
|
|
$
|
1,297
|
|
|
$
|
6,135
|
|
October 31, 2016
|
1,520
|
|
|
594
|
|
|
407
|
|
|
2,116
|
|
|
1,016
|
|
|
5,653
|
|
(A)
|
Total sales and revenues in the Financial Services segment include interest revenues of
$165 million
,
$167 million
, and
$175 million
for the
years ended October 31, 2017
,
2016
, and
2015
, respectively.
|
(B)
|
Exclusive of purchases of equipment leased to others and liabilities related to capital expenditures.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales and revenues:
|
|
|
|
|
|
||||||
Trucks
|
$
|
5,706
|
|
|
$
|
5,176
|
|
|
$
|
6,845
|
|
Parts
|
2,177
|
|
|
2,216
|
|
|
2,399
|
|
|||
Engine
|
545
|
|
|
583
|
|
|
751
|
|
|||
Financial Services
|
142
|
|
|
136
|
|
|
145
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales and revenues:
|
|
|
|
|
|
||||||
United States
|
$
|
6,344
|
|
|
$
|
6,186
|
|
|
$
|
7,699
|
|
Canada
|
708
|
|
|
604
|
|
|
774
|
|
|||
Mexico
|
708
|
|
|
575
|
|
|
653
|
|
|||
Brazil
|
237
|
|
|
240
|
|
|
383
|
|
|||
Other
|
573
|
|
|
506
|
|
|
631
|
|
|
As of October 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Long-lived assets:
(A)
|
|
|
|
||||
United States
|
$
|
1,068
|
|
|
$
|
999
|
|
Canada
|
11
|
|
|
20
|
|
||
Mexico
|
226
|
|
|
202
|
|
||
Brazil
|
90
|
|
|
103
|
|
||
Other
|
9
|
|
|
8
|
|
(A)
|
Long-lived assets consist of
Property and equipment, net
,
Goodwill,
and
Intangible assets, net
.
|
(in millions)
|
Common Stock
|
|
Treasury Stock
|
|
Shares Outstanding
|
|||
Balance as of October 31, 2014
|
86.8
|
|
|
5.4
|
|
|
81.4
|
|
Shares issued
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
Shares acquired
|
—
|
|
|
—
|
|
|
—
|
|
Balance as of October 31, 2015
|
86.8
|
|
|
5.3
|
|
|
81.5
|
|
Shares issued
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
Shares acquired
|
—
|
|
|
—
|
|
|
—
|
|
Balance as of October 31, 2016
|
86.8
|
|
|
5.2
|
|
|
81.6
|
|
Shares issued
|
16.3
|
|
|
(0.7
|
)
|
|
17.0
|
|
Shares acquired
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
Balance as of October 31, 2017
|
103.1
|
|
|
4.6
|
|
|
98.5
|
|
(in millions)
|
Unrealized Gain on Marketable Securities
|
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||||
Balance as of October 31, 2016
|
$
|
1
|
|
|
$
|
(280
|
)
|
|
$
|
(2,361
|
)
|
|
$
|
(2,640
|
)
|
Other comprehensive income (loss) before reclassifications
(A)
|
(1
|
)
|
|
(3
|
)
|
|
279
|
|
|
275
|
|
||||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
154
|
|
|
154
|
|
||||
Net current-period other comprehensive income (loss)
|
(1
|
)
|
|
(3
|
)
|
|
433
|
|
|
429
|
|
||||
Balance as of October 31, 2017
|
$
|
—
|
|
|
$
|
(283
|
)
|
|
$
|
(1,928
|
)
|
|
$
|
(2,211
|
)
|
(A)
|
Other comprehensive income before reclassifications for Defined Benefit Plans includes a $28 million intraperiod tax allocation and $8 million of deferred tax assets.
|
(in millions)
|
Unrealized Gain on Marketable Securities
|
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||||
Balance as of October 31, 2015
|
$
|
1
|
|
|
$
|
(287
|
)
|
|
$
|
(2,315
|
)
|
|
$
|
(2,601
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
7
|
|
|
(177
|
)
|
|
(170
|
)
|
||||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
131
|
|
|
131
|
|
||||
Net current-period other comprehensive income (loss)
|
—
|
|
|
7
|
|
|
(46
|
)
|
|
(39
|
)
|
||||
Balance as of October 31, 2016
|
$
|
1
|
|
|
$
|
(280
|
)
|
|
$
|
(2,361
|
)
|
|
$
|
(2,640
|
)
|
(in millions)
|
Unrealized Gain on Marketable Securities
|
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||||
Balance as of October 31, 2014
|
$
|
1
|
|
|
$
|
(127
|
)
|
|
$
|
(2,137
|
)
|
|
$
|
(2,263
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(160
|
)
|
|
(309
|
)
|
|
(469
|
)
|
||||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
131
|
|
|
131
|
|
||||
Net current-period other comprehensive loss
|
—
|
|
|
(160
|
)
|
|
(178
|
)
|
|
(338
|
)
|
||||
Balance as of October 31, 2015
|
$
|
1
|
|
|
$
|
(287
|
)
|
|
$
|
(2,315
|
)
|
|
$
|
(2,601
|
)
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Amounts attributable to Navistar International Corporation common stockholders:
|
|
|
|
|
|
|
||||||
Income (loss) from continuing operations, net of tax
|
|
$
|
29
|
|
|
$
|
(97
|
)
|
|
$
|
(187
|
)
|
Income from discontinued operations, net of tax
|
|
1
|
|
|
—
|
|
|
3
|
|
|||
Net income (loss)
|
|
$
|
30
|
|
|
$
|
(97
|
)
|
|
$
|
(184
|
)
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
93.0
|
|
|
81.7
|
|
|
81.6
|
|
|||
Effect of dilutive securities
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|||
Diluted
|
|
93.5
|
|
|
81.7
|
|
|
81.6
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings (loss) per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
0.31
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.29
|
)
|
Discontinued operations
|
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|||
Net income (loss)
|
|
$
|
0.32
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.25
|
)
|
Diluted:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
0.31
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.29
|
)
|
Discontinued operations
|
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|||
Net income (loss)
|
|
$
|
0.32
|
|
|
$
|
(1.19
|
)
|
|
$
|
(2.25
|
)
|
•
|
Ownership Program
—In June 1997, our Board of Directors approved the terms of the Ownership Program, as amended from time to time. In general, under the Ownership Program in existence through November 2013, all officers and senior managers were required to acquire, by direct purchase or through salary or annual bonus reduction, an ownership interest in the Company by acquiring a designated amount of our common stock based on organizational level. Participants were required to hold such stock for the entire period in which they are employed by the Company. The Ownership Program was amended and restated effective November 1, 2013 on a going forward basis. The new guidelines (i) increase stock ownership guideline multiples to six times salary for the President and CEO and up to three times salary for other senior executives; (ii) modify retention requirements for Company granted equity until ownership requirements are met; (iii) add a holding period for shares acquired through transactions with Company granted equity after the executives satisfy the stock ownership requirement; (iv) eliminate the granting of premium shares as an inducement to executives fulfilling stock ownership guidelines on an accelerated basis; and (v) eliminate the required time frame to fulfill stock ownership guidelines. Under the prior Ownership Program, participants were entitled to defer their cash bonus into deferred share units ("DSUs"), which vested immediately. There were
2,365
DSUs outstanding as of
October 31, 2017
. Premium share units ("PSUs") were also eligible to be awarded to participants who complete their ownership requirement on an accelerated basis. PSUs vested annually, pro rata over three years. There were
29,712
PSUs outstanding as of
October 31, 2017
under the prior Ownership Program. Each vested DSU and PSU will be settled by delivery of
one
share of common stock within
ten
days after a participant's termination of employment or at such later date as required by Internal Revenue Code Section Rule 409A. PSUs and DSUs awarded between February 19, 2013 and October 31, 2013 were issued under the 2013 PIP.
|
•
|
Deferred Fee Plan
—Under the Deferred Fee Plan, non-employee directors may elect to defer payment of all or a portion of their retainer fees and meeting fees in cash (with interest) or in stock units. Deferrals in the deferred stock account are valued as if each deferral was vested in NIC common stock as of the deferral date. As of
October 31, 2017
,
50,609
deferred shares were outstanding under the Deferred Fee Plan. Beginning on September 30, 2013, shares deferred by non-employee directors are issued out of the 2013 PIP. The Deferred Fee Plan was amended and restated effective February 11, 2015 on a going forward basis.
|
|
For the Years Ended October 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Options outstanding, at beginning of year
|
2,835
|
|
|
$
|
38.89
|
|
|
2,886
|
|
|
$
|
39.33
|
|
|
3,657
|
|
|
$
|
39.46
|
|
Granted
|
301
|
|
|
27.88
|
|
|
35
|
|
|
10.60
|
|
|
40
|
|
|
37.03
|
|
|||
Exercised
|
(325
|
)
|
|
30.25
|
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
25.68
|
|
|||
Forfeited/expired
|
(403
|
)
|
|
38.13
|
|
|
(86
|
)
|
|
42.30
|
|
|
(767
|
)
|
|
40.60
|
|
|||
Options outstanding, at end of year
|
2,408
|
|
|
38.81
|
|
|
2,835
|
|
|
38.89
|
|
|
2,886
|
|
|
39.33
|
|
|||
Options exercisable, at end of year
|
2,073
|
|
|
40.72
|
|
|
2,695
|
|
|
39.29
|
|
|
2,407
|
|
|
40.27
|
|
|
Shares
|
|
Weighted Average Remaining Contractual Life
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value
|
||||||
Range of Exercise Prices:
|
(in thousands)
|
|
(in years)
|
|
|
|
(in millions)
|
||||||
$ 10.60 - $ 31.19
|
927
|
|
|
4.5
|
|
|
$
|
27.70
|
|
|
$
|
13.6
|
|
$ 31.20 - $ 39.32
|
841
|
|
|
1.5
|
|
|
37.09
|
|
|
4.6
|
|
||
$ 39.33 - $ 68.65
|
640
|
|
|
0.5
|
|
|
57.16
|
|
|
—
|
|
||
Options Outstanding
|
2,408
|
|
|
|
|
|
|
|
|
Shares
|
|
Weighted Average Remaining Contractual Life
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value
|
||||||
Range of Exercise Prices:
|
(in thousands)
|
|
(in years)
|
|
|
|
(in millions)
|
||||||
$ 10.60 - $ 31.19
|
603
|
|
|
2.1
|
|
|
$
|
28.27
|
|
|
$
|
8.5
|
|
$ 31.20 - $ 39.32
|
830
|
|
|
1.5
|
|
|
37.09
|
|
|
4.5
|
|
||
$ 39.33 - $ 68.65
|
640
|
|
|
0.5
|
|
|
57.16
|
|
|
—
|
|
||
Options Exercisable
|
2,073
|
|
|
|
|
|
|
|
|
For the Years Ended October 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Risk-free interest rate
|
1.9
|
%
|
|
1.7
|
%
|
|
1.6
|
%
|
Expected volatility
|
55.2
|
%
|
|
56.8
|
%
|
|
40.2
|
%
|
Expected life (in years)
|
5
|
|
|
4.8
|
|
|
4.9
|
|
|
For the Years Ended October 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Nonvested, at beginning of year
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
41
|
|
|
$
|
24.13
|
|
Granted
|
5
|
|
|
24.62
|
|
|
5
|
|
|
12.52
|
|
|
2
|
|
|
29.50
|
|
|||
Vested
|
(5
|
)
|
|
24.62
|
|
|
(5
|
)
|
|
12.52
|
|
|
(43
|
)
|
|
24.38
|
|
|||
Nonvested, at end of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Share-Settled RSUs
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Nonvested, at beginning of year
|
613
|
|
|
$
|
8.74
|
|
|
69
|
|
|
$
|
28.60
|
|
|
188
|
|
|
$
|
28.75
|
|
Granted
|
210
|
|
|
27.28
|
|
|
624
|
|
|
8.76
|
|
|
—
|
|
|
—
|
|
|||
Vested
|
(204
|
)
|
|
8.74
|
|
|
(66
|
)
|
|
28.66
|
|
|
(114
|
)
|
|
28.91
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
13.07
|
|
|
(5
|
)
|
|
27.24
|
|
|||
Nonvested, at end of year
|
619
|
|
|
15.04
|
|
|
613
|
|
|
8.74
|
|
|
69
|
|
|
28.60
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Cash-Settled RSUs
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Nonvested, at beginning of year
|
817
|
|
|
$
|
13.95
|
|
|
498
|
|
|
$
|
29.96
|
|
|
469
|
|
|
$
|
33.00
|
|
Granted
|
258
|
|
|
27.48
|
|
|
650
|
|
|
7.26
|
|
|
280
|
|
|
27.67
|
|
|||
Vested
|
(456
|
)
|
|
15.92
|
|
|
(231
|
)
|
|
26.06
|
|
|
(190
|
)
|
|
33.82
|
|
|||
Forfeited
|
(32
|
)
|
|
20.17
|
|
|
(100
|
)
|
|
22.19
|
|
|
(61
|
)
|
|
30.75
|
|
|||
Nonvested, at end of year
|
587
|
|
|
18.02
|
|
|
817
|
|
|
13.95
|
|
|
498
|
|
|
29.96
|
|
|
For the Years Ended October 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Options outstanding, at beginning of year
|
973
|
|
|
$
|
30.47
|
|
|
1,409
|
|
|
$
|
31.64
|
|
|
941
|
|
|
$
|
35.41
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
729
|
|
|
27.61
|
|
|||
Forfeited
|
(374
|
)
|
|
35.09
|
|
|
(436
|
)
|
|
34.22
|
|
|
(261
|
)
|
|
33.99
|
|
|||
Options outstanding, at end of year
|
599
|
|
|
27.59
|
|
|
973
|
|
|
30.47
|
|
|
1,409
|
|
|
31.64
|
|
|
For the Year Ended October 31,
|
|
|
2015
|
|
Risk-free interest rate
|
1.4
|
%
|
Expected volatility
|
42.9
|
%
|
Expected life (in years)
|
4.7
|
|
|
For the Years Ended October 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Options outstanding, at beginning of year
|
567
|
|
|
$
|
27.24
|
|
|
615
|
|
|
$
|
27.24
|
|
|
670
|
|
|
$
|
27.24
|
|
Exercised
|
(130
|
)
|
|
27.24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
(6
|
)
|
|
27.24
|
|
|
(48
|
)
|
|
27.24
|
|
|
(55
|
)
|
|
27.24
|
|
|||
Options outstanding, at end of year
|
431
|
|
|
27.24
|
|
|
567
|
|
|
27.24
|
|
|
615
|
|
|
27.24
|
|
|||
Options exercisable, at end of year
|
431
|
|
|
27.24
|
|
|
567
|
|
|
27.24
|
|
|
—
|
|
|
—
|
|
|
Share-Settled PUs subject to Service and Performance Conditions
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Nonvested, at beginning of year
|
—
|
|
|
$
|
—
|
|
|
244
|
|
|
$
|
28.73
|
|
|
292
|
|
|
$
|
28.48
|
|
Forfeited
|
—
|
|
|
—
|
|
|
(244
|
)
|
|
28.73
|
|
|
(48
|
)
|
|
27.24
|
|
|||
Nonvested, at end of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
244
|
|
|
28.73
|
|
|
Cash-Settled PUs subject to Service and Performance Conditions
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||
Nonvested, at beginning of year
|
379
|
|
|
$
|
30.63
|
|
|
434
|
|
|
$
|
30.64
|
|
|
$
|
221
|
|
|
$
|
35.11
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
277
|
|
|
27.61
|
|
||||
Forfeited
|
(159
|
)
|
|
34.86
|
|
|
(55
|
)
|
|
30.65
|
|
|
(64
|
)
|
|
32.95
|
|
||||
Nonvested, at end of year
|
220
|
|
|
27.59
|
|
|
379
|
|
|
30.63
|
|
|
434
|
|
|
30.64
|
|
|
Cash Settled PUs subject to Service and Market Conditions
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Nonvested, at beginning of year
|
70
|
|
|
$
|
50.52
|
|
|
172
|
|
|
$
|
69.64
|
|
|
172
|
|
|
$
|
69.64
|
|
Forfeited
|
(70
|
)
|
|
50.52
|
|
|
(102
|
)
|
|
82.86
|
|
|
—
|
|
|
—
|
|
|||
Nonvested, at end of year
|
—
|
|
|
—
|
|
|
70
|
|
|
50.52
|
|
|
172
|
|
|
69.64
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Equity in income of affiliated companies, net of dividends
|
|
|
|
|
|
||||||
Equity in income of non-consolidated affiliates
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
Dividends from non-consolidated affiliates
|
7
|
|
|
12
|
|
|
12
|
|
|||
Equity in income of non-consolidated affiliates, net of dividends
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Other non-cash operating activities
|
|
|
|
|
|
||||||
Loss (gain) on sale of property and equipment
|
$
|
(9
|
)
|
|
$
|
2
|
|
|
$
|
(4
|
)
|
Loss on sale and impairment of repossessed collateral
|
7
|
|
|
6
|
|
|
2
|
|
|||
Income from non-cash leases
|
(26
|
)
|
|
(20
|
)
|
|
(33
|
)
|
|||
Other non-cash operating activities
|
$
|
(28
|
)
|
|
$
|
(12
|
)
|
|
$
|
(35
|
)
|
Changes in other assets and liabilities
|
|
|
|
|
|
||||||
Other current assets
|
$
|
(19
|
)
|
|
$
|
8
|
|
|
$
|
(4
|
)
|
Other noncurrent assets
|
(38
|
)
|
|
(11
|
)
|
|
12
|
|
|||
Other current liabilities
|
(35
|
)
|
|
(165
|
)
|
|
79
|
|
|||
Postretirement benefits liabilities
|
(65
|
)
|
|
(47
|
)
|
|
(54
|
)
|
|||
Other noncurrent liabilities
|
(62
|
)
|
|
(114
|
)
|
|
(135
|
)
|
|||
Other, net
|
(7
|
)
|
|
(41
|
)
|
|
25
|
|
|||
Changes in other assets and liabilities
|
$
|
(226
|
)
|
|
$
|
(370
|
)
|
|
$
|
(77
|
)
|
Cash paid during the year
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
294
|
|
|
$
|
291
|
|
|
$
|
239
|
|
Income taxes, net of refunds
|
19
|
|
|
44
|
|
|
52
|
|
|||
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Property and equipment acquired under capital leases
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Transfers to inventories from property and equipment for leases to others
|
(7
|
)
|
|
(27
|
)
|
|
(7
|
)
|
Condensed Consolidating Statement of Comprehensive Income (Loss) for the Year Ended October 31, 2017
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar,
Inc. |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
and Other |
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
30
|
|
|
$
|
(26
|
)
|
|
$
|
387
|
|
|
$
|
(336
|
)
|
|
$
|
55
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
3
|
|
|
(3
|
)
|
|||||
Unrealized gain on marketable securities, net of tax
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Defined benefit plans, net of tax
|
433
|
|
|
372
|
|
|
61
|
|
|
(433
|
)
|
|
433
|
|
|||||
Total other comprehensive income (loss)
|
429
|
|
|
372
|
|
|
58
|
|
|
(430
|
)
|
|
429
|
|
|||||
Comprehensive income (loss)
|
459
|
|
|
346
|
|
|
445
|
|
|
(766
|
)
|
|
484
|
|
|||||
Less: Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|||||
Total comprehensive income (loss) attributable to Navistar International Corporation
|
$
|
459
|
|
|
$
|
346
|
|
|
$
|
420
|
|
|
$
|
(766
|
)
|
|
$
|
459
|
|
Condensed Consolidating Statement of Cash Flows for the Year Ended October 31, 2017
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar,
Inc. |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
and Other |
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(244
|
)
|
|
$
|
(247
|
)
|
|
$
|
(39
|
)
|
|
$
|
639
|
|
|
$
|
109
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net change in restricted cash and cash equivalents
|
—
|
|
|
(2
|
)
|
|
(20
|
)
|
|
—
|
|
|
(22
|
)
|
|||||
Net purchases of marketable securities
|
(311
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(324
|
)
|
|||||
Capital expenditures and purchase of equipment leased to others
|
—
|
|
|
(156
|
)
|
|
(83
|
)
|
|
—
|
|
|
(239
|
)
|
|||||
Other investing activities
|
(250
|
)
|
|
2
|
|
|
36
|
|
|
255
|
|
|
43
|
|
|||||
Net cash provided by (used in) investing activities
|
(561
|
)
|
|
(156
|
)
|
|
(80
|
)
|
|
255
|
|
|
(542
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net borrowings (repayments) of debt
|
539
|
|
|
320
|
|
|
(168
|
)
|
|
(642
|
)
|
|
49
|
|
|||||
Issuance of common stock, net of issuance costs
|
245
|
|
|
—
|
|
|
255
|
|
|
(255
|
)
|
|
245
|
|
|||||
Other financing activities
|
11
|
|
|
59
|
|
|
(29
|
)
|
|
3
|
|
|
44
|
|
|||||
Net cash provided by (used in) financing activities
|
795
|
|
|
379
|
|
|
58
|
|
|
(894
|
)
|
|
338
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Decrease in cash and cash equivalents
|
(10
|
)
|
|
(24
|
)
|
|
(64
|
)
|
|
—
|
|
|
(98
|
)
|
|||||
Cash and cash equivalents at beginning of the year
|
435
|
|
|
117
|
|
|
252
|
|
|
—
|
|
|
804
|
|
|||||
Cash and cash equivalents at end of the year
|
$
|
425
|
|
|
$
|
93
|
|
|
$
|
188
|
|
|
$
|
—
|
|
|
$
|
706
|
|
Condensed Consolidating Statement of Comprehensive Income (Loss) for the Year Ended October 31, 2016
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar, Inc.
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations and Other
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
(97
|
)
|
|
$
|
(107
|
)
|
|
$
|
330
|
|
|
$
|
(191
|
)
|
|
$
|
(65
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
7
|
|
|
—
|
|
|
7
|
|
|
(7
|
)
|
|
7
|
|
|||||
Defined benefit plans, net of tax
|
(46
|
)
|
|
1
|
|
|
(47
|
)
|
|
46
|
|
|
(46
|
)
|
|||||
Total other comprehensive income (loss)
|
(39
|
)
|
|
1
|
|
|
(40
|
)
|
|
39
|
|
|
(39
|
)
|
|||||
Comprehensive income (loss)
|
(136
|
)
|
|
(106
|
)
|
|
290
|
|
|
(152
|
)
|
|
(104
|
)
|
|||||
Less: Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|||||
Total comprehensive income (loss) attributable to Navistar International Corporation
|
$
|
(136
|
)
|
|
$
|
(106
|
)
|
|
$
|
258
|
|
|
$
|
(152
|
)
|
|
$
|
(136
|
)
|
Condensed Consolidating Statement of Cash Flows for the Year Ended October 31, 2016
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar,
Inc. |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
and Other |
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(106
|
)
|
|
$
|
187
|
|
|
$
|
337
|
|
|
$
|
(151
|
)
|
|
$
|
267
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net change in restricted cash and cash equivalents
|
—
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
5
|
|
|||||
Net sales of marketable securities
|
85
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
113
|
|
|||||
Capital expenditures and purchase of equipment leased to others
|
—
|
|
|
(94
|
)
|
|
(154
|
)
|
|
—
|
|
|
(248
|
)
|
|||||
Other investing activities
|
—
|
|
|
2
|
|
|
61
|
|
|
—
|
|
|
63
|
|
|||||
Net cash provided by (used in) investing activities
|
85
|
|
|
(91
|
)
|
|
(61
|
)
|
|
—
|
|
|
(67
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net repayments of debt
|
—
|
|
|
(82
|
)
|
|
(191
|
)
|
|
(69
|
)
|
|
(342
|
)
|
|||||
Other financing activities
|
—
|
|
|
22
|
|
|
(253
|
)
|
|
220
|
|
|
(11
|
)
|
|||||
Net cash provided by (used in) financing activities
|
—
|
|
|
(60
|
)
|
|
(444
|
)
|
|
151
|
|
|
(353
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
45
|
|
|||||
Increase (decrease) in cash and cash equivalents
|
(21
|
)
|
|
36
|
|
|
(123
|
)
|
|
—
|
|
|
(108
|
)
|
|||||
Cash and cash equivalents at beginning of the year
|
456
|
|
|
81
|
|
|
375
|
|
|
—
|
|
|
912
|
|
|||||
Cash and cash equivalents at end of the year
|
$
|
435
|
|
|
$
|
117
|
|
|
$
|
252
|
|
|
$
|
—
|
|
|
$
|
804
|
|
Condensed Consolidating Statement of Comprehensive Income (Loss) for the Year Ended October 31, 2015
|
|||||||||||||||||||
(in millions)
|
NIC
|
|
Navistar, Inc.
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations and Other
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
(184
|
)
|
|
$
|
(238
|
)
|
|
$
|
414
|
|
|
$
|
(143
|
)
|
|
$
|
(151
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
|
(160
|
)
|
|
—
|
|
|
(160
|
)
|
|
160
|
|
|
(160
|
)
|
|||||
Defined benefit plans, net of tax
|
(178
|
)
|
|
(192
|
)
|
|
14
|
|
|
178
|
|
|
(178
|
)
|
|||||
Total other comprehensive income (loss)
|
(338
|
)
|
|
(192
|
)
|
|
(146
|
)
|
|
338
|
|
|
(338
|
)
|
|||||
Comprehensive income (loss)
|
(522
|
)
|
|
(430
|
)
|
|
268
|
|
|
195
|
|
|
(489
|
)
|
|||||
Less: Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
|||||
Total comprehensive income (loss) attributable to Navistar International Corporation
|
$
|
(522
|
)
|
|
$
|
(430
|
)
|
|
$
|
235
|
|
|
$
|
195
|
|
|
$
|
(522
|
)
|
|
First Quarter Ended
January 31,
|
|
Second Quarter Ended
April 30,
|
||||||||||||
(in millions, except for per share data and stock prices)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sales and revenues, net
|
$
|
1,663
|
|
|
$
|
1,765
|
|
|
$
|
2,096
|
|
|
$
|
2,197
|
|
Manufacturing gross margin
(A)
|
259
|
|
|
264
|
|
|
287
|
|
|
319
|
|
||||
Amounts attributable to Navistar International Corporation common shareholders:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of tax
|
$
|
(62
|
)
|
|
$
|
(33
|
)
|
|
$
|
(80
|
)
|
|
$
|
4
|
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss)
|
$
|
(62
|
)
|
|
$
|
(33
|
)
|
|
$
|
(80
|
)
|
|
$
|
4
|
|
Earnings (loss) per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
(B)
|
$
|
(0.76
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
0.05
|
|
Discontinued operations
(B)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
(0.76
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
0.05
|
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
(B)
|
$
|
(0.76
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
0.05
|
|
Discontinued operations
(B)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
(0.76
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
0.05
|
|
Market price range-common stock:
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
33.46
|
|
|
$
|
15.21
|
|
|
$
|
29.53
|
|
|
$
|
16.39
|
|
Low
|
22.36
|
|
|
5.78
|
|
|
22.89
|
|
|
6.24
|
|
|
Third Quarter Ended
July 31,
|
|
Fourth Quarter Ended
October 31,
|
||||||||||||
(in millions, except for per share data and stock prices)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sales and revenues, net
|
$
|
2,213
|
|
|
$
|
2,086
|
|
|
$
|
2,598
|
|
|
$
|
2,063
|
|
Manufacturing gross margin
(A)
|
375
|
|
|
295
|
|
|
470
|
|
|
286
|
|
||||
Amounts attributable to Navistar International Corporation common shareholders:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of tax
|
$
|
36
|
|
|
$
|
(34
|
)
|
|
$
|
135
|
|
|
$
|
(34
|
)
|
Income from discontinued operations, net of tax
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss)
|
$
|
37
|
|
|
$
|
(34
|
)
|
|
$
|
135
|
|
|
$
|
(34
|
)
|
Earnings (loss) per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
(B)
|
$
|
0.37
|
|
|
$
|
(0.42
|
)
|
|
$
|
1.37
|
|
|
$
|
(0.42
|
)
|
Discontinued operations
(B)
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
0.38
|
|
|
$
|
(0.42
|
)
|
|
$
|
1.37
|
|
|
$
|
(0.42
|
)
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
(B)
|
$
|
0.37
|
|
|
$
|
(0.42
|
)
|
|
$
|
1.36
|
|
|
$
|
(0.42
|
)
|
Discontinued operations
(B)
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
0.38
|
|
|
$
|
(0.42
|
)
|
|
$
|
1.36
|
|
|
$
|
(0.42
|
)
|
Market price range-common stock:
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
31.37
|
|
|
$
|
15.77
|
|
|
$
|
45.47
|
|
|
$
|
24.04
|
|
Low
|
24.75
|
|
|
10.30
|
|
|
29.53
|
|
|
11.59
|
|
(B)
|
Earnings per share in each quarter is computed using the weighted-average number of shares outstanding during that quarter while earnings per share for the full year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the four quarters earnings per share may not equal the full year earnings per share.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company.
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. GAAP and that receipts and expenditures of the Company are being made in accordance with authorization of our management and our Board of Directors.
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers, and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
Exhibit:
|
|
Description
|
|
Page
|
(3)
|
|
|
E-1
|
|
(4)
|
|
|
E-2
|
|
(10)
|
|
|
E-3
|
|
(11)
|
|
|
130
|
|
(12)
|
|
|
E-10
|
|
(21)
|
|
|
E-11
|
|
(23.1)
|
|
|
E-12
|
|
(24)
|
|
|
E-13
|
|
(31.1)
|
|
|
E-14
|
|
(31.2)
|
|
|
E-15
|
|
(32.1)
|
|
|
E-16
|
|
(32.2)
|
|
|
E-17
|
|
(99.1)
|
|
|
E-18
|
|
(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/ SAMARA A. STRYCKER
|
|
Samara A. Strycker
|
|
Senior Vice President and Corporate Controller
|
|
(Principal Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ T
ROY
A. C
LARKE
|
|
Chairman, President,
Chief Executive Officer
(Principal Executive Officer)
|
|
December 19, 2017
|
Troy A. Clarke
|
|
|
|
|
|
|
|
|
|
/s/ W
ALTER
G. B
ORST
|
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
December 19, 2017
|
Walter G. Borst
|
|
|
|
|
|
|
|
|
|
/s/ S
AMARA
A. S
TRYCKER
|
|
Senior Vice President and
Corporate Controller
(Principal Accounting Officer)
|
|
December 19, 2017
|
Samara A. Strycker
|
|
|
|
|
|
|
|
|
|
/s/ J
OSE
M. A
LAPONT
|
|
Director
|
|
December 19, 2017
|
Jose M. Alapont
|
|
|
|
|
|
|
|
|
|
/s/ S
TEPHEN
R. D'A
RCY
|
|
Director
|
|
December 19, 2017
|
Stephen R. D'Arcy
|
|
|
|
|
|
|
|
|
|
/s/ J
EFFREY
A. D
OKHO
|
|
Director
|
|
December 19, 2017
|
Jeffrey A. Dokho
|
|
|
|
|
|
|
|
|
|
/s/ M
ATTIAS
R. G
R
ü
NDLER
|
|
Director
|
|
December 19, 2017
|
Mattias R. Gründler
|
|
|
|
|
|
|
|
|
|
/s/ V
INCENT
J. I
NTRIERI
|
|
Director
|
|
December 19, 2017
|
Vincent J. Intrieri
|
|
|
|
|
|
|
|
|
|
/s/ D
ANIEL
A. N
INIVAGGI
|
|
Director
|
|
December 19, 2017
|
Daniel A. Ninivaggi
|
|
|
|
|
|
|
|
|
|
/s/ S
TANLEY
A. M
C
C
HRYSTAL
|
|
Director
|
|
December 19, 2017
|
Stanley A. McChrystal
|
|
|
|
|
|
|
|
|
|
/s/ M
ARK
H. R
ACHESKY
|
|
Director
|
|
December 19, 2017
|
Mark H. Rachesky
|
|
|
|
|
|
|
|
|
|
/s/ A
NDREAS
R
ENSCHLER
|
|
Director
|
|
December 19, 2017
|
Andreas Renschler
|
|
|
|
|
|
|
|
|
|
/s/ M
ICHAEL
F. S
IRIGNANO
|
|
Director
|
|
December 19, 2017
|
Michael F. Sirignano
|
|
|
|
|
|
|
|
|
|
/s/ D
ENNIS
A. S
USKIND
|
|
Director
|
|
December 19, 2017
|
Dennis A. Suskind
|
|
|
|
|
|
|
|
|
|
3.1
|
Amended and Restated Certificate of Incorporation of Navistar International Corporation, dated February 12, 2015. Filed as Exhibit 3.1 to Current Report on Form 8-K which was dated and filed on February 18, 2015. Commission File No. 001-09618.
|
|
|
|
|
3.2
|
Third Amended and Restated By-Laws of Navistar International Corporation effective October 5, 2012. Filed as Exhibit 3.1 to Current Report on Form 8-K, which was dated and filed on October 10, 2012. Commission File No. 001-09618.
|
|
|
|
4.1
|
Navistar International Corporation Restated Stock Certificate. Filed as Exhibit 4.20 to Quarterly Report on Form 10-Q for the period ended January 31, 2002, which was dated and filed March 11, 2002. Commission File No. 001-09618.
|
|
|
|
|
4.2
|
Indenture, dated as of October 28, 2009, by and among Navistar International Corporation, as Issuer, Navistar, Inc., as Guarantor, and The Bank of New York Mellon Trust Company, as Trustee, for Navistar International Corporation's 8.25% Senior Notes due 2021. Filed as Exhibit 4.1 to Current Report on Form 8-K dated and filed October 28, 2009. Commission File No. 001-09618.
|
|
|
|
|
4.3
|
Form of Indenture for Senior Notes among Navistar International Corporation, Navistar Inc., as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee. Filed as Exhibit 4.14 to Registration Statement on Form S-3 dated and filed October 24, 2012. Registration Statement No.: 333-184565-01.
|
|
|
|
|
4.4
|
Indenture, dated as of October 11, 2013, between Navistar International Corporation, as Issuer, and Wilmington Trust, National Association, as Trustee, for Navistar International Corporation’s 4.50% Senior Subordinated Convertible Notes due 2018. Filed as Exhibit 4.1 to Current Report on Form 8-K dated and filed October 11, 2013. Commission File No. 001-09618.
|
|
|
|
|
4.5
|
Form of 4.50% Senior Subordinated Convertible Note due 2018. Filed as a part of Exhibit 4.1 to Current Report on Form 8-K dated and filed October 11, 2013. Commission File No. 001-09618.
|
|
|
|
|
4.6
|
Indenture, dated as of March 24, 2014, between Navistar International Corporation, as Issuer, and Wilmington Trust, National Association, as Trustee, for Navistar International Corporation’s 4.75% Senior Subordinated Convertible Notes due 2019. Filed as Exhibit 4.1 to Current Report on Form 8-K dated March 18, 2014 and filed March 24, 2014. Commission File No. 001-09618.
|
|
|
|
|
4.7
|
Form of 4.75% Senior Subordinated Convertible Note due 2019. Filed as a part of Exhibit 4.1 to Current Report on Form 8-K dated March 18, 2014 and filed March 24, 2014. Commission File No. 001-09618.
|
|
|
|
|
4.8
|
First Supplemental Indenture, dated May 19, 2014, to Indenture, dated as of October 11, 2013, between Navistar International Corporation and Wilmington Trust, National Association, as Trustee, for Navistar International Corporation’s 4.50% Senior Subordinated Convertible Notes due 2018. Filed as Exhibit 4.17 to Quarterly Report on Form 10-Q dated and filed September 3, 2014. Commission File No. 001-09618.
|
|
|
|
|
4.9
|
First Supplemental Indenture, dated May 19, 2014, to Indenture, dated as of March 24, 2014, between Navistar International Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee, for Navistar International Corporation’s 4.75% Senior Subordinated Convertible Notes due 2019. Filed as Exhibit 4.18 to Quarterly Report on Form 10-Q dated and filed September 3, 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 incorporated herein by reference.
|
||
|
|
|
10.1
|
Pooling and Servicing Agreement, dated November 2, 2011, by and among Navistar Financial Corporation, as Servicer, Navistar Financial Securities Corporation, as Depositor, and Navistar Financial Dealer Note Master Owner Trust II, as Issuing Entity. Filed as Exhibit 10.6 to Current Report on Form 8-K dated and filed on November 7, 2011. Commission File No. 001-09618.
|
|
|
|
|
10.2
|
Amendment No. 1 to the Pooling and Servicing Agreement, dated as of February 13, 2013, among Navistar Financial Securities Corporation, as depositor, Navistar Financial Corporation, as servicer, and Navistar Financial Dealer Note Master Owner Trust II, as issuing entity. Filed as Exhibit 10.1 to Current Report on Form 8-K dated and filed on February 15, 2013. Commission File No. 001-09618.
|
|
|
|
|
10.3
|
Amendment No. 2 to the Pooling and Servicing Agreement, dated as of November 13, 2014, among Navistar Financial Securities Corporation, as depositor, Navistar Financial Corporation, as servicer, and Navistar Financial Dealer Note Master Owner Trust II, as issuing entity. Filed as Exhibit 10.1 to Current Report on Form 8-K dated and filed on November 14, 2014. Commission File No. 001-09618.
|
|
|
|
|
10.4
|
Note Purchase Agreement, dated as of August 29, 2012, among Navistar Financial Services Corporation, Navistar Financial Corporation, Bank of America, National Association, as a Managing Agent, the Administrative Agent and a Committed Purchaser, The Bank of Nova Scotia, as a Managing Agent and a Committed Purchaser, Liberty Street Funding LLC, as a Conduit Purchaser, Credit Suisse AG, New York Branch, as a Managing Agent, Credit Suisse AG, Cayman Islands Branch as a Committed Purchaser, and Alpine Securitization Corp., as a Conduit Purchaser. Filed as Exhibit 10.2 to Current Report 8-K dated and filed on August 30, 2012. Commission File No. 001-09618.
|
|
|
|
|
10.5
|
Amendment No. 1 to the Note Purchase Agreement, dated as of March 18, 2013, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, The Bank of Nova Scotia, as a managing agent and as a committed purchaser, Liberty Street Funding LLC, as a conduit purchaser, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. Filed as Exhibit 10.1 to the Current Report on Form 8-K dated and filed on March 20, 2013. Commission File No. 001-09618.
|
|
|
|
|
10.6
|
Amendment No. 2 to the Note Purchase Agreement, dated as of September 13, 2013, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, The Bank of Nova Scotia, as a managing agent and as a committed purchaser, Liberty Street Funding LLC, as a conduit purchaser, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. Filed as Exhibit 10.2 to the Current Report on Form 8-K dated and filed on September 13, 2013. Commission File No. 001-09618.
|
|
|
|
|
10.7
|
Amendment No. 3 to the Note Purchase Agreement, dated as of March 12, 2014, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, The Bank of Nova Scotia, as a managing agent and as a committed purchaser, Liberty Street Funding LLC, as a conduit purchaser, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. Filed as Exhibit 10.1 to Current Report on Form 8-K dated March 12, 2014 and filed on March 14, 2014. Commission File No. 001-09618.
|
|
|
|
|
10.8
|
Amendment No. 4 to the Note Purchase Agreement, dated as of January 26, 2015, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, The Bank of Nova Scotia, as a managing agent and as a committed purchaser, Liberty Street Funding LLC, as a conduit purchaser, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, Deutsche Bank AG, New York Branch, as a managing agent and as a committed purchaser and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. Filed as Exhibit 10.2 to the Current Report on Form 8-K dated and filed on January 27, 2015. Commission File No. 001-09618.
|
|
|
|
10.9
|
Amendment No. 5 to the Note Purchase Agreement, dated as of October 30, 2015, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, Deutsche Bank AG, New York Branch, as a managing agent and as a committed purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. Filed as Exhibit 10.1 to Current Report on Form 8-K dated and filed on November 4, 2015. Commission File No. 001-09618.
|
|
|
|
|
10.10
|
Amendment No. 6 to the Note Purchase Agreement, dated as of February 24, 2016, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, New York Life Insurance Company, as a managing agent and a committed purchaser, New York Life Insurance and Annuity Corporation, as a managing agent and a committed purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. Filed as Exhibit 10.1 to Current Report on Form 8-K dated February 24, 2016 and filed on February 29, 2016. Commission File No. 001-09618.
|
|
|
|
|
10.11
|
Amendment No. 7 to the Note Purchase Agreement, dated as of May 27, 2016, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, New York Life Insurance Company, as a managing agent and a committed purchaser, New York Life Insurance and Annuity Corporation, as a managing agent and a committed purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. Filed as Exhibit 10.1 to Current Report on Form 8-K dated May 27, 2016 and filed on June 2, 2016. Commission File No. 001-09618.
|
|
|
|
|
10.12
|
Amendment No. 8 to the Note Purchase Agreement, dated as of November 18, 2016, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, New York Life Insurance Company, as a managing agent and a committed purchaser, New York Life Insurance and Annuity Corporation, as a managing agent and a committed purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. Filed as Exhibit 10.1 to Current Report on Form 8-K dated and filed on November 18, 2017. Commission File No. 001-09618.
|
|
|
|
|
10.13
|
Amendment No. 9 to the Note Purchase Agreement, dated as of May 31, 2017, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Ltd., as a conduit purchaser, New York Life Insurance Company, as a managing agent and a committed purchaser, New York Life Insurance and Annuity Corporation, as a managing agent and a committed purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. Filed as Exhibit 10.1 to Form 8-K dated May 31, 2017 and filed on June 1, 2017. Commission File No. 001-09618.
|
|
10.14
|
Trust Agreement, dated November 2, 2011, between Navistar Financial Securities Corporation, as Depositor, and Deutsche Bank Trust Company Delaware, as Owner Trustee. Filed as Exhibit 10.2 to Current Report on Form 8-K dated and filed on November 7, 2011. Commission File No. 001-09618.
|
|
|
|
|
10.15
|
Indenture, dated November 2, 2011, between Navistar Financial Dealer Note Master Owner Trust II, as Issuing Entity, and The Bank of New York Mellon, as Indenture Trustee. Filed as Exhibit 10.3 to Current Report on Form 8-K dated and filed on November 7, 2011. Commission File No. 001-09618.
|
|
|
|
|
10.16
|
Amendment No. 1 to Indenture, dated as of February 13, 2013, between Navistar Financial Dealer Note Master Owner Trust II, as issuing entity, and Citibank, N.A., as indenture trustee. Filed as Exhibit 10.2 to Current Report on Form 8-K dated and filed on February 15, 2013. Commission File No. 001-09618.
|
|
|
|
|
10.17
|
Series 2012-VFN Indenture Supplement, dated as of August 29, 2012, between Navistar Financial Dealer Note Master Owner Trust II, as issuing entity, and The Bank of New York Mellon, as indenture trustee. Filed as Exhibit 10.1 to Current Report on Form 8-K dated and filed on August 30, 2012. Commission File No. 001-09618.
|
|
|
|
|
10.18
|
Amendment No. 1 to Series 2012-VFN Indenture Supplement, dated as of September 13, 2013, between Navistar Financial Dealer Note Master Owner Trust II, as the issuing entity, and Citibank, N.A. (as successor to The Bank of New York Mellon), as indenture trustee. Filed as Exhibit 10.1 to the Current Report on Form 8-K dated and filed on September 13, 2013. Commission File No. 001-09618.
|
|
|
|
|
10.19
|
Amendment No. 2 to Series 2012-VFN Indenture Supplement, dated as of January 26, 2015, between Navistar Financial Dealer Note Master Owner Trust II, as the issuing entity, and Citibank, N.A. (as successor to The Bank of New York Mellon), as indenture trustee. Filed as Exhibit 10.1 to Current Report on Form 8-K dated and filed on January 27, 2015. Commission File No. 001-09618.
|
|
|
|
10.82
|
Term Loan Amendment, dated August 7, 2015, among Navistar, Inc., as Borrower, Navistar International Corporation, the Lenders Party hereto, and J.P. Morgan Chase Bank, N.A., as Administrative Agent and Collateral Agent. Filed as Exhibit 10.1 to Current Report on Form 8-K dated and filed on August 11, 2015. Commission File No. 001-09618.
|
|
|
|
|
10.83
|
Amendment No. 1 to the Credit Agreement, dated February 7, 2017, among Navistar, Inc., as Borrower, Navistar International Corporation, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent. Filed as Exhibit 10.1 to Form 8-K dated February 8, 2017 and filed on February 8, 2017. Commission File No. 001-09618.
|
|
|
|
|
10.84
|
Senior Secured Term Loan Facility Credit Agreement, dated as of November 6, 2017, among Navistar International Corporation, Navistar Inc. and J.P. Morgan Chase Bank, N.A. Filed as Exhibit 10.2 to Current Report on Form 8-K dated and filed on November 8, 2017. Commission File No. 001-9618.
|
|
|
|
|
10.85
|
Stock Purchase Agreement, dated as of September 5, 2016, by and among Navistar International Corporation and Volkswagen Truck & Bus GmbH. Filed as Exhibit 10.1 to Current Report on Form 8-K dated and filed on September 6, 2016. Commission File No. 001-09618.
|
|
|
|
|
10.86
|
Stockholder Agreement, dated as of September 5, 2016, by and among Navistar International Corporation and Volkswagen Truck & Bus GmbH. Filed as Exhibit 10.2 to Current Report on Form 8-K dated and filed on September 6, 2016. Commission File No. 001-09618.
|
|
|
|
|
10.87
|
DGCL 203 Agreement, dated as of September 5, 2016, by and among Navistar International Corporation and Volkswagen Truck & Bus GmbH. Filed as Exhibit 10.3 to Current Report on Form 8-K dated and filed on September 6, 2016. Commission File No. 001-09618.
|
|
|
|
|
10.88
|
Framework Agreement Concerning Technology Licensing and Supply, dated as of September 5, 2016, between Navistar, Inc. and Volkswagen Truck & Bus GmbH. Filed as Exhibit 10.4 to Current Report on Form 8-K/A dated and filed on September 12, 2016. Commission File No. 001-9618.
|
|
|
|
|
10.89
|
Procurement JV Framework Agreement, dated as of September 5, 2016, by and between Navistar Inc. and Volkswagen Truck & Bus GmbH. Filed as Exhibit 10.5 to Current Report on Form 8-K/A dated and filed on September 12, 2016. Commission File No. 001-9618.
|
|
|
|
|
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings (loss) from continuing operations before income taxes
(A)
|
$
|
58
|
|
|
$
|
(38
|
)
|
|
$
|
(109
|
)
|
|
$
|
(565
|
)
|
|
$
|
(985
|
)
|
Less: Net income attributable to non-controlling interests
|
(25
|
)
|
|
(32
|
)
|
|
(33
|
)
|
|
(40
|
)
|
|
(54
|
)
|
|||||
Dividends from non-consolidated affiliates
|
7
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
13
|
|
|||||
Interest expense
(B)
|
302
|
|
|
290
|
|
|
270
|
|
|
265
|
|
|
264
|
|
|||||
Debt amortization expense
|
49
|
|
|
37
|
|
|
37
|
|
|
49
|
|
|
57
|
|
|||||
Interest portion of rent expense
(C)
|
16
|
|
|
17
|
|
|
19
|
|
|
20
|
|
|
24
|
|
|||||
Total earnings (loss)
|
$
|
407
|
|
|
$
|
286
|
|
|
$
|
196
|
|
|
$
|
(259
|
)
|
|
$
|
(681
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Interest expense
(B)
|
318
|
|
|
307
|
|
|
289
|
|
|
285
|
|
|
288
|
|
|||||
Debt amortization expense
|
49
|
|
|
37
|
|
|
37
|
|
|
49
|
|
|
57
|
|
|||||
Total fixed charges
|
$
|
369
|
|
|
$
|
347
|
|
|
$
|
327
|
|
|
$
|
334
|
|
|
$
|
350
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
1.10
|
|
|
0.82
|
|
|
0.60
|
|
|
—
|
|
|
—
|
|
|||||
Earnings shortfall
|
$
|
—
|
|
|
$
|
(61
|
)
|
|
$
|
(131
|
)
|
|
$
|
(593
|
)
|
|
$
|
(1,031
|
)
|
(B)
|
Excludes interest expense on income tax contingencies.
|
(C)
|
Represents an estimated amount of rental expense (33%) that is deemed to be representative of the interest factor.
|
|
STATE OR COUNTRY
IN WHICH
SUBSIDIARY ORGANIZED
|
|
|
Subsidiaries that are 100% owned:
|
|
Navistar, Inc.
|
Delaware
|
International of Mexico Holding Corporation
|
Delaware
|
Navistar Aftermarket Products, Inc.
|
Delaware
|
Subsidiaries that are 100% owned by Navistar, Inc.:
|
|
Navistar Financial Corporation
|
Delaware
|
IC Bus, LLC
|
Arkansas
|
Subsidiaries that are 100% owned by International of Mexico Holding Corporation:
|
|
Navistar International B.V.
|
Netherlands
|
International Truck and Engine Corporation Cayman Islands Holding Company
|
Cayman Islands
|
Navistar Mexico, S. de R.L. de C.V. (f/k/a Camiones y Motores International de Mexico, S.A. de C.V.)
|
Mexico
|
Subsidiaries that are 100% owned by Navistar International B.V.:
|
|
Navistar Canada, Inc.
|
Canada
|
Subsidiaries that are 100% owned by Navistar Canada, Inc.:
|
|
International Industria Automotiva da America do Sul Ltda. (1/1/2011)
|
Brazil
|
Subsidiaries less than 100% owned by Navistar, Inc., but considered to be a significant subsidiary:
|
|
Blue Diamond Parts LLC
|
Delaware
|
Subsidiaries less than 100% owned by Navistar Aftermarket Products, Inc., but considered to be a significant subsidiary:
|
|
Magnum Power Products, LLC
|
Delaware
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ T
ROY
A. C
LARKE
|
|
Chairman, President and
Chief Executive Officer
(Principal Executive Officer)
|
|
December 19, 2017
|
Troy A. Clarke
|
|
|
|
|
|
|
|
|
|
/s/ W
ALTER
G. B
ORST
|
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
December 19, 2017
|
Walter G. Borst
|
|
|
|
|
|
|
|
|
|
/s/ S
AMARA
A. S
TRYCKER
|
|
Senior Vice President and
Corporate Controller
(Principal Accounting Officer)
|
|
December 19, 2017
|
Samara A. Strycker
|
|
|
|
|
|
|
|
|
|
/s/ J
OSE
M. A
LAPONT
|
|
Director
|
|
December 19, 2017
|
Jose M. Alapont
|
|
|
|
|
|
|
|
|
|
/s/ S
TEPHEN
R. D'A
RCY
|
|
Director
|
|
December 19, 2017
|
Stephen R. D'Arcy
|
|
|
|
|
|
|
|
|
|
/s/ J
EFFREY
A. D
OKHO
|
|
Director
|
|
December 19, 2017
|
Jeffrey A. Dokho
|
|
|
|
|
|
|
|
|
|
/s/ M
ATTIAS
G
R
ü
NDLER
|
|
Director
|
|
December 19, 2017
|
Mattias Gründler
|
|
|
|
|
|
|
|
|
|
/s/ V
INCENT
J. I
NTRIERI
|
|
Director
|
|
December 19, 2017
|
Vincent J. Intrieri
|
|
|
|
|
|
|
|
|
|
/s/ D
ANIEL
A. N
INIVAGGI
|
|
Director
|
|
December 19, 2017
|
Daniel A. Ninivaggi
|
|
|
|
|
|
|
|
|
|
/s/ S
TANLEY
A. M
C
C
HRYSTAL
|
|
Director
|
|
December 19, 2017
|
Stanley A. McChrystal
|
|
|
|
|
|
|
|
|
|
/s/ M
ARK
H. R
ACHESKY
|
|
Director
|
|
December 19, 2017
|
Mark H. Rachesky
|
|
|
|
|
|
|
|
|
|
/s/ A
NDREAS
R
ENSCHLER
|
|
Director
|
|
December 19, 2017
|
Andreas Renschler
|
|
|
|
|
|
|
|
|
|
/s/ M
ICHAEL
S
IRIGNANO
|
|
Director
|
|
December 19, 2017
|
Michael Sirignano
|
|
|
|
|
|
|
|
|
|
/s/ D
ENNIS
A. S
USKIND
|
|
Director
|
|
December 19, 2017
|
Dennis A. Suskind
|
|
|
|
|
1.
|
I have reviewed this
annual
report on Form
10-K
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
Chairman, President, and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this
annual
report on Form
10-K
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
Chairman, 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 Year Ended October 31, 2017
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
8,428
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,428
|
|
Finance revenues
|
—
|
|
|
235
|
|
|
(93
|
)
|
|
142
|
|
||||
Sales and revenues, net
|
8,428
|
|
|
235
|
|
|
(93
|
)
|
|
8,570
|
|
||||
Costs of products sold
|
7,037
|
|
|
—
|
|
|
—
|
|
|
7,037
|
|
||||
Restructuring charges
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Asset impairment charges
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Selling, general and administrative expenses
|
797
|
|
|
83
|
|
|
(2
|
)
|
|
878
|
|
||||
Engineering and product development costs
|
251
|
|
|
—
|
|
|
—
|
|
|
251
|
|
||||
Interest expense
|
269
|
|
|
86
|
|
|
(4
|
)
|
|
351
|
|
||||
Other (income) expense, net
|
77
|
|
|
(11
|
)
|
|
(87
|
)
|
|
(21
|
)
|
||||
Total costs and expenses
|
8,447
|
|
|
158
|
|
|
(93
|
)
|
|
8,512
|
|
||||
Equity in income of non-consolidated affiliates
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(13
|
)
|
|
77
|
|
|
—
|
|
|
64
|
|
||||
Equity income from financial services operations
|
62
|
|
|
—
|
|
|
(62
|
)
|
|
—
|
|
||||
Income from continuing operations before income taxes
|
49
|
|
|
77
|
|
|
(62
|
)
|
|
64
|
|
||||
Income tax benefit (expense)
|
5
|
|
|
(15
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Income from continuing operations
|
54
|
|
|
62
|
|
|
(62
|
)
|
|
54
|
|
||||
Income from discontinued operations, net of tax
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Net income
|
55
|
|
|
62
|
|
|
(62
|
)
|
|
55
|
|
||||
Less: Income attributable to non-controlling interests
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
Net income attributable to Navistar International Corporation
|
$
|
30
|
|
|
$
|
62
|
|
|
$
|
(62
|
)
|
|
$
|
30
|
|
|
For the Year Ended October 31, 2016
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
7,976
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,976
|
|
Finance revenues
|
—
|
|
|
235
|
|
|
(100
|
)
|
|
135
|
|
||||
Sales and revenues, net
|
7,976
|
|
|
235
|
|
|
(100
|
)
|
|
8,111
|
|
||||
Costs of products sold
|
6,812
|
|
|
—
|
|
|
—
|
|
|
6,812
|
|
||||
Restructuring charges
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Asset impairment charges
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||
Selling, general and administrative expenses
|
723
|
|
|
81
|
|
|
(2
|
)
|
|
802
|
|
||||
Engineering and product development costs
|
247
|
|
|
—
|
|
|
—
|
|
|
247
|
|
||||
Interest expense
|
256
|
|
|
80
|
|
|
(9
|
)
|
|
327
|
|
||||
Other (income) expense, net
|
39
|
|
|
(26
|
)
|
|
(89
|
)
|
|
(76
|
)
|
||||
Total costs and expenses
|
8,114
|
|
|
135
|
|
|
(100
|
)
|
|
8,149
|
|
||||
Equity in income of non-consolidated affiliates
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(132
|
)
|
|
100
|
|
|
—
|
|
|
(32
|
)
|
||||
Equity income from financial services operations
|
67
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
||||
Income (loss) from continuing operations before income taxes
|
(65
|
)
|
|
100
|
|
|
(67
|
)
|
|
(32
|
)
|
||||
Income tax expense
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
(33
|
)
|
||||
Income (loss) from continuing operations
|
(65
|
)
|
|
67
|
|
|
(67
|
)
|
|
(65
|
)
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss)
|
(65
|
)
|
|
67
|
|
|
(67
|
)
|
|
(65
|
)
|
||||
Less: Income attributable to non-controlling interests
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(97
|
)
|
|
$
|
67
|
|
|
$
|
(67
|
)
|
|
$
|
(97
|
)
|
|
For the Year ended October 31, 2015
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
9,995
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,995
|
|
Finance revenues
|
—
|
|
|
241
|
|
|
(96
|
)
|
|
145
|
|
||||
Sales and revenues, net
|
9,995
|
|
|
241
|
|
|
(96
|
)
|
|
10,140
|
|
||||
Costs of products sold
|
8,670
|
|
|
—
|
|
|
—
|
|
|
8,670
|
|
||||
Restructuring charges
|
75
|
|
|
1
|
|
|
—
|
|
|
76
|
|
||||
Asset impairment charges
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||
Selling, general and administrative expenses
|
820
|
|
|
91
|
|
|
(3
|
)
|
|
908
|
|
||||
Engineering and product development costs
|
288
|
|
|
—
|
|
|
—
|
|
|
288
|
|
||||
Interest expense
|
243
|
|
|
74
|
|
|
(10
|
)
|
|
307
|
|
||||
Other (income) expense, net
|
76
|
|
|
(23
|
)
|
|
(83
|
)
|
|
(30
|
)
|
||||
Total costs and expenses
|
10,202
|
|
|
143
|
|
|
(96
|
)
|
|
10,249
|
|
||||
Equity in income of non-consolidated affiliates
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(201
|
)
|
|
98
|
|
|
—
|
|
|
(103
|
)
|
||||
Equity income from financial services operations
|
71
|
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
||||
Income (loss) from continuing operations before income taxes
|
(130
|
)
|
|
98
|
|
|
(71
|
)
|
|
(103
|
)
|
||||
Income tax expense
|
(24
|
)
|
|
(27
|
)
|
|
—
|
|
|
(51
|
)
|
||||
Income (loss) from continuing operations
|
(154
|
)
|
|
71
|
|
|
(71
|
)
|
|
(154
|
)
|
||||
Income from discontinued operations, net of tax
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Net income (loss)
|
(151
|
)
|
|
71
|
|
|
(71
|
)
|
|
(151
|
)
|
||||
Less: Income attributable to non-controlling interests
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(184
|
)
|
|
$
|
71
|
|
|
$
|
(71
|
)
|
|
$
|
(184
|
)
|
|
As of October 31, 2017
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
666
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
706
|
|
Marketable securities
|
370
|
|
|
—
|
|
|
—
|
|
|
370
|
|
||||
Restricted cash
|
24
|
|
|
110
|
|
|
—
|
|
|
134
|
|
||||
Finance and other receivables, net
|
404
|
|
|
1,854
|
|
|
(69
|
)
|
|
2,189
|
|
||||
Inventories
|
850
|
|
|
7
|
|
|
—
|
|
|
857
|
|
||||
Goodwill
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Property and equipment, net
|
1,083
|
|
|
243
|
|
|
—
|
|
|
1,326
|
|
||||
Investments in and advances to financial services operations
|
517
|
|
|
—
|
|
|
(517
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||
Deferred taxes, net
|
125
|
|
|
4
|
|
|
—
|
|
|
129
|
|
||||
Other assets
|
312
|
|
|
18
|
|
|
—
|
|
|
330
|
|
||||
Total assets
|
$
|
4,445
|
|
|
$
|
2,276
|
|
|
$
|
(586
|
)
|
|
$
|
6,135
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,330
|
|
|
$
|
31
|
|
|
$
|
(69
|
)
|
|
$
|
1,292
|
|
Debt
|
3,407
|
|
|
1,651
|
|
|
—
|
|
|
5,058
|
|
||||
Postretirement benefits liabilities
|
2,556
|
|
|
—
|
|
|
—
|
|
|
2,556
|
|
||||
Other liabilities
|
1,726
|
|
|
77
|
|
|
—
|
|
|
1,803
|
|
||||
Total liabilities
|
9,019
|
|
|
1,759
|
|
|
(69
|
)
|
|
10,709
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(4,578
|
)
|
|
517
|
|
|
(517
|
)
|
|
(4,578
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
4,445
|
|
|
$
|
2,276
|
|
|
$
|
(586
|
)
|
|
$
|
6,135
|
|
|
As of October 31, 2016
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
761
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
804
|
|
Marketable securities
|
39
|
|
|
7
|
|
|
—
|
|
|
46
|
|
||||
Restricted cash
|
22
|
|
|
90
|
|
|
—
|
|
|
112
|
|
||||
Finance and other receivables, net
|
292
|
|
|
1,952
|
|
|
(275
|
)
|
|
1,969
|
|
||||
Inventories
|
930
|
|
|
14
|
|
|
—
|
|
|
944
|
|
||||
Goodwill
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Property and equipment, net
|
980
|
|
|
261
|
|
|
—
|
|
|
1,241
|
|
||||
Investments in and advances to financial services operations
|
466
|
|
|
—
|
|
|
(466
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
53
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||
Deferred taxes, net
|
157
|
|
|
4
|
|
|
—
|
|
|
161
|
|
||||
Other assets
|
265
|
|
|
20
|
|
|
—
|
|
|
285
|
|
||||
Total assets
|
$
|
4,003
|
|
|
$
|
2,391
|
|
|
$
|
(741
|
)
|
|
$
|
5,653
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,345
|
|
|
$
|
43
|
|
|
$
|
(275
|
)
|
|
$
|
1,113
|
|
Debt
|
3,096
|
|
|
1,808
|
|
|
—
|
|
|
4,904
|
|
||||
Postretirement benefits liabilities
|
3,098
|
|
|
—
|
|
|
—
|
|
|
3,098
|
|
||||
Other liabilities
|
1,757
|
|
|
74
|
|
|
—
|
|
|
1,831
|
|
||||
Total liabilities
|
9,296
|
|
|
1,925
|
|
|
(275
|
)
|
|
10,946
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(5,298
|
)
|
|
466
|
|
|
(466
|
)
|
|
(5,298
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
4,003
|
|
|
$
|
2,391
|
|
|
$
|
(741
|
)
|
|
$
|
5,653
|
|
|
For the Year Ended October 31, 2017
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
55
|
|
|
$
|
62
|
|
|
$
|
(62
|
)
|
|
$
|
55
|
|
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
148
|
|
|
2
|
|
|
—
|
|
|
150
|
|
||||
Depreciation of equipment leased to others
|
24
|
|
|
49
|
|
|
—
|
|
|
73
|
|
||||
Amortization of debt issuance costs and discount
|
37
|
|
|
12
|
|
|
—
|
|
|
49
|
|
||||
Deferred income taxes
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
(6
|
)
|
||||
Asset impairment charges
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Gain on sales of investments and businesses, net
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Equity in income of non-consolidated affiliates
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||
Equity in income of financial services affiliates
|
(62
|
)
|
|
—
|
|
|
62
|
|
|
—
|
|
||||
Dividends from financial services operations
|
8
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Change in intercompany receivables and payables
|
(106
|
)
|
|
106
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
(100
|
)
|
|
(121
|
)
|
|
—
|
|
|
(221
|
)
|
||||
Net cash provided by (used in) operating activities
|
10
|
|
|
107
|
|
|
(8
|
)
|
|
109
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
(1,011
|
)
|
|
—
|
|
|
—
|
|
|
(1,011
|
)
|
||||
Sales of marketable securities
|
652
|
|
|
7
|
|
|
—
|
|
|
659
|
|
||||
Maturities of marketable securities
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
Net change in restricted cash and cash equivalents
|
(2
|
)
|
|
(20
|
)
|
|
—
|
|
|
(22
|
)
|
||||
Capital expenditures
|
(101
|
)
|
|
(1
|
)
|
|
—
|
|
|
(102
|
)
|
||||
Purchase of equipment leased to others
|
(84
|
)
|
|
(53
|
)
|
|
—
|
|
|
(137
|
)
|
||||
Other investing activities
|
29
|
|
|
14
|
|
|
—
|
|
|
43
|
|
||||
Net cash used in investing activities
|
(489
|
)
|
|
(53
|
)
|
|
—
|
|
|
(542
|
)
|
||||
Net cash provided by (used in) financing activities
|
389
|
|
|
(59
|
)
|
|
8
|
|
|
338
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(5
|
)
|
|
2
|
|
|
—
|
|
|
(3
|
)
|
||||
Decrease in cash and cash equivalents
|
(95
|
)
|
|
(3
|
)
|
|
—
|
|
|
(98
|
)
|
||||
Cash and cash equivalents at beginning of the year
|
761
|
|
|
43
|
|
|
—
|
|
|
804
|
|
||||
Cash and cash equivalents at end of the year
|
$
|
666
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
706
|
|
|
For the Year Ended October 31, 2016
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(65
|
)
|
|
$
|
67
|
|
|
$
|
(67
|
)
|
|
$
|
(65
|
)
|
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
144
|
|
|
2
|
|
|
—
|
|
|
146
|
|
||||
Depreciation of equipment leased to others
|
31
|
|
|
48
|
|
|
—
|
|
|
79
|
|
||||
Amortization of debt issuance costs and discount
|
24
|
|
|
13
|
|
|
—
|
|
|
37
|
|
||||
Deferred income taxes
|
(13
|
)
|
|
4
|
|
|
—
|
|
|
(9
|
)
|
||||
Asset impairment charges
|
23
|
|
|
4
|
|
|
—
|
|
|
27
|
|
||||
Loss on sales of investments and businesses, net
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Equity in income of non-consolidated affiliates
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||
Equity in income of financial services operations
|
(67
|
)
|
|
—
|
|
|
67
|
|
|
—
|
|
||||
Dividends from financial services operations
|
220
|
|
|
—
|
|
|
(220
|
)
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Change in intercompany receivables and payables
|
(74
|
)
|
|
74
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
(175
|
)
|
|
219
|
|
|
—
|
|
|
44
|
|
||||
Net cash provided by (used in) operating activities
|
56
|
|
|
431
|
|
|
(220
|
)
|
|
267
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
(485
|
)
|
|
—
|
|
|
—
|
|
|
(485
|
)
|
||||
Sales of marketable securities
|
539
|
|
|
16
|
|
|
—
|
|
|
555
|
|
||||
Maturities of marketable securities
|
43
|
|
|
—
|
|
|
—
|
|
|
43
|
|
||||
Net change in restricted cash and cash equivalents
|
1
|
|
|
4
|
|
|
—
|
|
|
5
|
|
||||
Capital expenditures
|
(114
|
)
|
|
(2
|
)
|
|
—
|
|
|
(116
|
)
|
||||
Purchase of equipment leased to others
|
(20
|
)
|
|
(112
|
)
|
|
—
|
|
|
(132
|
)
|
||||
Other investing activities
|
39
|
|
|
24
|
|
|
—
|
|
|
63
|
|
||||
Net cash provided by (used in) investing activities
|
3
|
|
|
(70
|
)
|
|
—
|
|
|
(67
|
)
|
||||
Net cash provided by (used in) financing activities
|
(203
|
)
|
|
(370
|
)
|
|
220
|
|
|
(353
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
28
|
|
|
17
|
|
|
—
|
|
|
45
|
|
||||
Increase (decrease) in cash and cash equivalents
|
(116
|
)
|
|
8
|
|
|
—
|
|
|
(108
|
)
|
||||
Cash and cash equivalents at beginning of the year
|
877
|
|
|
35
|
|
|
—
|
|
|
912
|
|
||||
Cash and cash equivalents at end of the year
|
$
|
761
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
804
|
|
|
For the Year Ended October 31, 2015
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(151
|
)
|
|
$
|
71
|
|
|
$
|
(71
|
)
|
|
$
|
(151
|
)
|
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
203
|
|
|
2
|
|
|
—
|
|
|
205
|
|
||||
Depreciation of equipment leased to others
|
28
|
|
|
48
|
|
|
—
|
|
|
76
|
|
||||
Amortization of debt issuance costs and discount
|
24
|
|
|
13
|
|
|
—
|
|
|
37
|
|
||||
Deferred income taxes
|
(16
|
)
|
|
(2
|
)
|
|
—
|
|
|
(18
|
)
|
||||
Asset impairment charges
|
25
|
|
|
5
|
|
|
—
|
|
|
30
|
|
||||
Equity in income of non-consolidated affiliates
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||
Equity in income of financial services operations
|
(71
|
)
|
|
—
|
|
|
71
|
|
|
—
|
|
||||
Dividends from financial services operations
|
125
|
|
|
—
|
|
|
(125
|
)
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Change in intercompany receivables and payables
|
(16
|
)
|
|
16
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
(59
|
)
|
|
(80
|
)
|
|
—
|
|
|
(139
|
)
|
||||
Net cash provided by (used in) operating activities
|
98
|
|
|
73
|
|
|
(125
|
)
|
|
46
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
(887
|
)
|
|
—
|
|
|
—
|
|
|
(887
|
)
|
||||
Sales of marketable securities
|
1,244
|
|
|
3
|
|
|
—
|
|
|
1,247
|
|
||||
Maturities of marketable securities
|
86
|
|
|
—
|
|
|
—
|
|
|
86
|
|
||||
Net change in restricted cash and cash equivalents
|
(1
|
)
|
|
43
|
|
|
—
|
|
|
42
|
|
||||
Capital expenditures
|
(111
|
)
|
|
(4
|
)
|
|
—
|
|
|
(115
|
)
|
||||
Purchase of equipment leased to others
|
1
|
|
|
(84
|
)
|
|
—
|
|
|
(83
|
)
|
||||
Acquisition of intangibles
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Other investing activities
|
18
|
|
|
12
|
|
|
—
|
|
|
30
|
|
||||
Net cash provided by (used in) investing activities
|
346
|
|
|
(30
|
)
|
|
—
|
|
|
316
|
|
||||
Net cash provided by (used in) financing activities
|
63
|
|
|
(90
|
)
|
|
125
|
|
|
98
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(70
|
)
|
|
25
|
|
|
—
|
|
|
(45
|
)
|
||||
Increase (decrease) in cash and cash equivalents
|
437
|
|
|
(22
|
)
|
|
—
|
|
|
415
|
|
||||
Cash and cash equivalents at beginning of the year
|
440
|
|
|
57
|
|
|
—
|
|
|
497
|
|
||||
Cash and cash equivalents at end of the year
|
$
|
877
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
912
|
|