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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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36-3359573
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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2701 Navistar Drive, Lisle, Illinois
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60532
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Emerging growth company
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o
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Page
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PART I—Financial Information
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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•
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estimates we have made in preparing our financial statements;
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•
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our expectations and estimates relating to the impact of the federal Tax Cuts and Jobs Act (the “Tax Act”) on our business and financial condition;
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•
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the implementation of, and expected benefits from, our strategic alliance with TRATON AG and certain of its subsidiaries and affiliates ("TRATON Group");
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•
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our development and launch 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 short-term and long-term goals and activities to accomplish such strategies and goals;
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•
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our ability to implement our strategy focused on growing the core business (i.e., the truck and parts markets for the United States and Canada, where we participate primarily in the Class 6 through 8 vehicle market segments (the “Core” business and “Core” markets)), driving operational excellence, pursuing innovative technology solutions, leveraging the TRATON Group strategic alliance, continuing our commitment to a customer-centric approach, enhancing cross functional teamwork and 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 results from acquisitions, dispositions, 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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liabilities resulting from environmental, health and safety laws and regulations;
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•
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our anticipated capital expenditures;
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•
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our expectations relating to payments of taxes;
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•
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our expectations relating to warranty costs;
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•
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our expectations relating to interest expense;
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•
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our expectations relating to impairment of goodwill and other assets;
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•
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our expectations relating to litigation costs and similar matters;
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•
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estimates relating to pension plan contributions and unfunded pension and postretirement benefits;
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•
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our expectations relating to commodity price risk, including the impact of tariff increases or potential new tariffs; 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.
|
Financial Statements
|
|
Three Months Ended January 31,
|
||||||
(in millions, except per share data)
|
2019
|
|
2018
|
||||
Sales and revenues
|
|
|
|
||||
Sales of manufactured products, net
|
$
|
2,386
|
|
|
$
|
1,867
|
|
Finance revenues
|
47
|
|
|
38
|
|
||
Sales and revenues, net
|
2,433
|
|
|
1,905
|
|
||
Costs and expenses
|
|
|
|
||||
Costs of products sold
|
1,979
|
|
|
1,532
|
|
||
Restructuring charges
|
—
|
|
|
(3
|
)
|
||
Asset impairment charges
|
2
|
|
|
2
|
|
||
Selling, general and administrative expenses
|
186
|
|
|
191
|
|
||
Engineering and product development costs
|
86
|
|
|
75
|
|
||
Interest expense
|
85
|
|
|
79
|
|
||
Other expense, net
|
97
|
|
|
80
|
|
||
Total costs and expenses
|
2,435
|
|
|
1,956
|
|
||
Equity in income of non-consolidated affiliates
|
—
|
|
|
—
|
|
||
Loss before income tax
|
(2
|
)
|
|
(51
|
)
|
||
Income tax benefit (expense)
|
19
|
|
|
(15
|
)
|
||
Net income (loss)
|
17
|
|
|
(66
|
)
|
||
Less: Net income attributable to non-controlling interests
|
6
|
|
|
7
|
|
||
Net Income (loss)
attributable to Navistar International Corporation
|
$
|
11
|
|
|
$
|
(73
|
)
|
|
|
|
|
||||
Income (loss) per share attributable to Navistar International Corporation:
|
|
|
|
||||
Basic
|
$
|
0.11
|
|
|
$
|
(0.74
|
)
|
Diluted
|
0.11
|
|
|
(0.74
|
)
|
||
|
|
|
|
||||
Weighted average shares outstanding:
|
|
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|
||||
Basic
|
99.1
|
|
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98.6
|
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Diluted
|
99.4
|
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98.6
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(in millions)
|
Three Months Ended January 31,
|
||||||
2019
|
|
2018
|
|||||
Net income (loss)
|
$
|
17
|
|
|
$
|
(66
|
)
|
Other comprehensive income:
|
|
|
|
||||
Foreign currency translation adjustment
|
14
|
|
|
22
|
|
||
Defined benefit plans, net of tax
|
115
|
|
|
35
|
|
||
Total other comprehensive income
|
129
|
|
|
57
|
|
||
Comprehensive income (loss)
|
146
|
|
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(9
|
)
|
||
Less: Net income attributable to non-controlling interests
|
6
|
|
|
7
|
|
||
Total comprehensive income (loss) attributable to Navistar International Corporation
|
$
|
140
|
|
|
$
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(16
|
)
|
|
January 31,
2019 |
|
October 31,
2018 |
||||
(in millions, except per share data)
|
|
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|
||||
ASSETS
|
(Unaudited)
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,201
|
|
|
$
|
1,320
|
|
Restricted cash and cash equivalents
|
83
|
|
|
62
|
|
||
Marketable securities
|
41
|
|
|
101
|
|
||
Trade and other receivables, net
|
429
|
|
|
456
|
|
||
Finance receivables, net
|
1,818
|
|
|
1,898
|
|
||
Inventories, net
|
1,211
|
|
|
1,110
|
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||
Other current assets
|
291
|
|
|
189
|
|
||
Total current assets
|
5,074
|
|
|
5,136
|
|
||
Restricted cash
|
65
|
|
|
63
|
|
||
Trade and other receivables, net
|
31
|
|
|
49
|
|
||
Finance receivables, net
|
272
|
|
|
260
|
|
||
Investments in non-consolidated affiliates
|
32
|
|
|
50
|
|
||
Property and equipment (net of accumulated depreciation and amortization of $2,452 and $2,498, respectively)
|
1,275
|
|
|
1,370
|
|
||
Goodwill
|
38
|
|
|
38
|
|
||
Intangible assets (net of accumulated amortization of $141 and $140, respectively)
|
29
|
|
|
30
|
|
||
Deferred taxes, net
|
123
|
|
|
121
|
|
||
Other noncurrent assets
|
98
|
|
|
113
|
|
||
Total assets
|
$
|
7,037
|
|
|
$
|
7,230
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable and current maturities of long-term debt
|
$
|
942
|
|
|
$
|
946
|
|
Accounts payable
|
1,484
|
|
|
1,606
|
|
||
Other current liabilities
|
1,225
|
|
|
1,255
|
|
||
Total current liabilities
|
3,651
|
|
|
3,807
|
|
||
Long-term debt
|
4,552
|
|
|
4,521
|
|
||
Postretirement benefits liabilities
|
1,961
|
|
|
2,097
|
|
||
Other noncurrent liabilities
|
686
|
|
|
731
|
|
||
Total liabilities
|
10,850
|
|
|
11,156
|
|
||
Stockholders’ deficit
|
|
|
|
||||
Series D convertible junior preference stock
|
2
|
|
|
2
|
|
||
Common stock, $0.10 par value per share (103.1 shares issued and 220 shares authorized at both dates)
|
10
|
|
|
10
|
|
||
Additional paid-in capital
|
2,732
|
|
|
2,731
|
|
||
Accumulated deficit
|
(4,609
|
)
|
|
(4,593
|
)
|
||
Accumulated other comprehensive loss
|
(1,791
|
)
|
|
(1,920
|
)
|
||
Common stock held in treasury, at cost (4.1 and 4.2 shares, respectively)
|
(160
|
)
|
|
(161
|
)
|
||
Total stockholders’ deficit attributable to Navistar International Corporation
|
(3,816
|
)
|
|
(3,931
|
)
|
||
Stockholders’ equity attributable to non-controlling interests
|
3
|
|
|
5
|
|
||
Total stockholders’ deficit
|
(3,813
|
)
|
|
(3,926
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
7,037
|
|
|
$
|
7,230
|
|
|
Three Months Ended January 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
17
|
|
|
$
|
(66
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
33
|
|
|
37
|
|
||
Depreciation of equipment leased to others
|
15
|
|
|
18
|
|
||
Deferred taxes, including change in valuation allowance
|
(41
|
)
|
|
6
|
|
||
Asset impairment charges
|
2
|
|
|
2
|
|
||
Gain on sales of investments and businesses, net
|
(59
|
)
|
|
—
|
|
||
Amortization of debt issuance costs and discount
|
6
|
|
|
8
|
|
||
Stock-based compensation
|
—
|
|
|
9
|
|
||
Provision for doubtful accounts
|
1
|
|
|
1
|
|
||
Equity in income of non-consolidated affiliates, net of dividends
|
—
|
|
|
3
|
|
||
Write-off of debt issuance costs and discount
|
—
|
|
|
42
|
|
||
Other non-cash operating activities
|
(1
|
)
|
|
(6
|
)
|
||
Changes in other assets and liabilities, exclusive of the effects of businesses disposed
|
(213
|
)
|
|
(130
|
)
|
||
Net cash used in operating activities
|
(240
|
)
|
|
(76
|
)
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchases of marketable securities
|
—
|
|
|
(61
|
)
|
||
Sales of marketable securities
|
—
|
|
|
150
|
|
||
Maturities of marketable securities
|
61
|
|
|
5
|
|
||
Capital expenditures
|
(44
|
)
|
|
(30
|
)
|
||
Purchases of equipment leased to others
|
(42
|
)
|
|
(52
|
)
|
||
Proceeds from sales of property and equipment
|
3
|
|
|
3
|
|
||
Proceeds from sales of affiliates
|
95
|
|
|
—
|
|
||
Other investing activities
|
1
|
|
|
—
|
|
||
Net cash provided by investing activities
|
74
|
|
|
15
|
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuance of securitized debt
|
—
|
|
|
16
|
|
||
Principal payments on securitized debt
|
(22
|
)
|
|
(16
|
)
|
||
Net change in secured revolving credit facilities
|
48
|
|
|
(150
|
)
|
||
Proceeds from issuance of non-securitized debt
|
27
|
|
|
2,747
|
|
||
Principal payments on non-securitized debt
|
(61
|
)
|
|
(2,521
|
)
|
||
Net change in notes and debt outstanding under revolving credit facilities
|
83
|
|
|
(38
|
)
|
||
Debt issuance costs
|
(1
|
)
|
|
(33
|
)
|
||
Proceeds from financed lease obligations
|
6
|
|
|
16
|
|
||
Proceeds from exercise of stock options
|
1
|
|
|
4
|
|
||
Dividends paid by subsidiaries to non-controlling interest
|
(8
|
)
|
|
(7
|
)
|
||
Other financing activities
|
—
|
|
|
(12
|
)
|
||
Net cash provided by financing activities
|
73
|
|
|
6
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(3
|
)
|
|
2
|
|
||
Decrease in cash, cash equivalents and restricted cash
|
(96
|
)
|
|
(53
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of the period
|
1,445
|
|
|
840
|
|
||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
1,349
|
|
|
$
|
787
|
|
(in millions)
|
Series D
Convertible Junior Preference Stock |
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Accumulated
Deficit |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Common
Stock Held in Treasury, at cost |
|
Stockholders'
Equity Attributable to Non-controlling Interests |
|
Total
|
||||||||||||||||
Balance as of October 31, 2018
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,731
|
|
|
$
|
(4,593
|
)
|
|
$
|
(1,920
|
)
|
|
$
|
(161
|
)
|
|
$
|
5
|
|
|
$
|
(3,926
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
17
|
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
—
|
|
|
129
|
|
||||||||
ASC-606 modified retrospective adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
||||||||
Balance as of January 31, 2019
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,732
|
|
|
$
|
(4,609
|
)
|
|
$
|
(1,791
|
)
|
|
$
|
(160
|
)
|
|
$
|
3
|
|
|
$
|
(3,813
|
)
|
Balance as of October 31, 2017
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,733
|
|
|
$
|
(4,933
|
)
|
|
$
|
(2,211
|
)
|
|
$
|
(179
|
)
|
|
$
|
4
|
|
|
$
|
(4,574
|
)
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(66
|
)
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
4
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||||||
Balance as of January 31, 2018
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,735
|
|
|
$
|
(5,006
|
)
|
|
$
|
(2,154
|
)
|
|
$
|
(174
|
)
|
|
$
|
4
|
|
|
$
|
(4,583
|
)
|
|
Three Months Ended January 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
529
|
|
|
$
|
629
|
|
Costs accrued and revenues deferred
|
52
|
|
|
29
|
|
||
Adjustments to pre-existing warranties
(A)
|
(7
|
)
|
|
(6
|
)
|
||
Payments and revenues recognized
|
(68
|
)
|
|
(79
|
)
|
||
Other adjustments
(B)
|
12
|
|
|
—
|
|
||
Balance at end of period
|
518
|
|
|
573
|
|
||
Less: Current portion
|
257
|
|
|
287
|
|
||
Noncurrent accrued product warranty and deferred warranty revenue
|
$
|
261
|
|
|
$
|
286
|
|
(A)
|
Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior fiscal periods. Such adjustments typically occur when claims experience deviates from historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and circumstances related to these factors could materially change our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available.
|
(B)
|
Other adjustments include a
$14 million
increase in revenues deferred in connection with the adoption of the new revenue standard (as defined below regarding ASC 606), partially offset by a
$2 million
reduction in liability related to the sale of a majority interest in our defense business, ND Holdings, LLC (“Navistar Defense”).
|
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
Selling, general and administrative expenses
|
|
$
|
222
|
|
|
$
|
(31
|
)
|
|
$
|
191
|
|
Other expense, net
|
|
49
|
|
|
31
|
|
|
80
|
|
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
||||||
Net change in restricted cash and cash equivalents
|
|
$
|
46
|
|
|
$
|
(46
|
)
|
|
$
|
—
|
|
Net cash provided by investing activities
|
|
61
|
|
|
(46
|
)
|
|
15
|
|
|||
Decrease in cash, cash equivalents and restricted cash
|
|
(7
|
)
|
|
(46
|
)
|
|
(53
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of the period
|
|
706
|
|
|
134
|
|
|
840
|
|
|||
Cash, cash equivalents and restricted cash at end of the period
|
|
699
|
|
|
88
|
|
|
787
|
|
(in millions)
|
|
Balance at October 31, 2018
|
|
Change Due to New Standard
|
|
Balance at November 1, 2018
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets
|
|
|
|
|
|
|
||||||
Trade and other receivables, net
|
|
$
|
456
|
|
|
$
|
(8
|
)
|
|
$
|
448
|
|
Inventories, net
|
|
1,110
|
|
|
(91
|
)
|
|
1,019
|
|
|||
Other current assets
|
|
189
|
|
|
101
|
|
|
290
|
|
|||
Total current assets
|
|
5,136
|
|
|
2
|
|
|
5,138
|
|
|||
Property and equipment, net
|
|
1,370
|
|
|
(109
|
)
|
|
1,261
|
|
|||
Deferred taxes, net
|
|
121
|
|
|
1
|
|
|
122
|
|
|||
Other noncurrent assets
|
|
113
|
|
|
(3
|
)
|
|
110
|
|
|||
Total assets
|
|
$
|
7,230
|
|
|
$
|
(109
|
)
|
|
$
|
7,121
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
||||||
Notes payable and current maturities of long-term debt
|
|
$
|
946
|
|
|
$
|
(15
|
)
|
|
$
|
931
|
|
Other current liabilities
|
|
1,255
|
|
|
13
|
|
|
1,268
|
|
|||
Total current liabilities
|
|
3,807
|
|
|
(2
|
)
|
|
3,805
|
|
|||
Long-term debt
|
|
4,521
|
|
|
(58
|
)
|
|
4,463
|
|
|||
Other noncurrent liabilities
|
|
731
|
|
|
(22
|
)
|
|
709
|
|
|||
Total liabilities
|
|
11,156
|
|
|
(82
|
)
|
|
11,074
|
|
|||
Stockholders’ deficit
|
|
|
|
|
|
|
||||||
Total stockholders’ deficit attributable to Navistar International Corporation
|
|
(3,931
|
)
|
|
(27
|
)
|
|
(3,958
|
)
|
|||
Total liabilities and stockholders’ deficit
|
|
$
|
7,230
|
|
|
$
|
(109
|
)
|
|
$
|
7,121
|
|
|
|
Three months ended January 31, 2019
(A)
|
||||||||||
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
Sales of manufactured products, net
|
|
$
|
2,390
|
|
|
$
|
(4
|
)
|
|
$
|
2,386
|
|
Costs of products sold
|
|
1,986
|
|
|
(7
|
)
|
|
1,979
|
|
|||
Interest expense
|
|
86
|
|
|
(1
|
)
|
|
85
|
|
|||
Income (loss) before income tax
|
|
(6
|
)
|
|
4
|
|
|
(2
|
)
|
|||
Income tax benefit
|
|
20
|
|
|
(1
|
)
|
|
19
|
|
|||
Net income
|
|
$
|
14
|
|
|
$
|
3
|
|
|
$
|
17
|
|
(A)
|
Our
Consolidated Statements of Operations
for the three months ended January 31, 2019 includes two months of the operating activity of Navistar Defense prior to the sale of a majority interest in our defense business. See Note 3
Restructuring, Impairments and Divestitures
for additional information.
|
|
|
As of January 31, 2019
(A)
|
||||||||||
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets
|
|
|
|
|
|
|
||||||
Trade and other receivables, net
|
|
$
|
441
|
|
|
$
|
(12
|
)
|
|
$
|
429
|
|
Inventories, net
|
|
1,260
|
|
|
(49
|
)
|
|
1,211
|
|
|||
Other current assets
|
|
222
|
|
|
69
|
|
|
291
|
|
|||
Total current assets
|
|
5,066
|
|
|
8
|
|
|
5,074
|
|
|||
Property and equipment, net
|
|
1,402
|
|
|
(127
|
)
|
|
1,275
|
|
|||
Other noncurrent assets
|
|
101
|
|
|
(3
|
)
|
|
98
|
|
|||
Total assets
|
|
$
|
7,159
|
|
|
$
|
(122
|
)
|
|
$
|
7,037
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
||||||
Notes payable and current maturities of long-term debt
|
|
$
|
957
|
|
|
$
|
(15
|
)
|
|
$
|
942
|
|
Other current liabilities
|
|
1,195
|
|
|
30
|
|
|
1,225
|
|
|||
Total current liabilities
|
|
3,636
|
|
|
15
|
|
|
3,651
|
|
|||
Long-term debt
|
|
4,607
|
|
|
(55
|
)
|
|
4,552
|
|
|||
Other noncurrent liabilities
|
|
734
|
|
|
(48
|
)
|
|
686
|
|
|||
Total liabilities
|
|
10,938
|
|
|
(88
|
)
|
|
10,850
|
|
|||
Stockholders’ deficit
|
|
|
|
|
|
|
||||||
Total stockholders’ deficit attributable to Navistar International Corporation
|
|
(3,782
|
)
|
|
(34
|
)
|
|
(3,816
|
)
|
|||
Total liabilities and stockholders’ deficit
|
|
$
|
7,159
|
|
|
$
|
(122
|
)
|
|
$
|
7,037
|
|
(A)
|
Our
Consolidated Balance Sheet
as of January 31, 2019 does not include the impact of Navistar Defense due to the sale of a majority interest in our defense business. See Note 3,
Restructuring, Impairments and Divestitures
for additional information.
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Three Months Ended January 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Truck products and services
(A)(B)
|
$
|
1,677
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
1,680
|
|
Truck contract manufacturing
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||||
Used trucks
|
51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
||||||
Engines
|
—
|
|
|
66
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
111
|
|
||||||
Parts
|
1
|
|
|
480
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
497
|
|
||||||
Extended warranty contracts
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||||
Sales of manufactured products, net
|
1,776
|
|
|
546
|
|
|
61
|
|
|
—
|
|
|
3
|
|
|
2,386
|
|
||||||
Retail financing
(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
||||||
Wholesale financing
(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Sales and revenues, net
|
$
|
1,776
|
|
|
$
|
546
|
|
|
$
|
61
|
|
|
$
|
47
|
|
|
$
|
3
|
|
|
$
|
2,433
|
|
(A)
|
Includes other markets primarily consisting of Bus, Export Truck and Mexico. Also includes revenue of
$3 million
related to certain third-party financings initially recorded as borrowings, and operating lease revenue of
$1 million
.
|
(B)
|
Includes military sales of
$62 million
. In December 2018, we completed the previously announced sale of a
70%
equity interest in Navistar Defense. See Note 3,
Restructuring, Impairments and Divestitures
for additional information.
|
(C)
|
Retail financing and Wholesale financing revenues in the Financial Services segment include interest revenue of
$13 million
and
$12 million
, respectively, for the three months ended January 31, 2019.
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Three Months Ended January 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
$
|
1,468
|
|
|
$
|
455
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
3
|
|
|
$
|
1,949
|
|
Canada
|
135
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184
|
|
||||||
Mexico
|
66
|
|
|
25
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
115
|
|
||||||
Brazil
|
—
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||||
Other
|
107
|
|
|
17
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
132
|
|
||||||
Sales and revenues, net
|
$
|
1,776
|
|
|
$
|
546
|
|
|
$
|
61
|
|
|
$
|
47
|
|
|
$
|
3
|
|
|
$
|
2,433
|
|
(in millions)
|
January 31, 2019
|
|
October 31, 2018
|
||||
Retail portfolio
|
$
|
713
|
|
|
$
|
720
|
|
Wholesale portfolio
|
1,400
|
|
|
1,460
|
|
||
Total finance receivables
|
2,113
|
|
|
2,180
|
|
||
Less: Allowance for doubtful accounts
|
23
|
|
|
22
|
|
||
Total finance receivables, net
|
2,090
|
|
|
2,158
|
|
||
Less: Current portion, net
(A)
|
1,818
|
|
|
1,898
|
|
||
Noncurrent portion, net
|
$
|
272
|
|
|
$
|
260
|
|
(A)
|
The current portion of finance receivables is computed based on contractual maturities. Actual cash collections typically vary from the contractual cash flows because of prepayments, extensions, delinquencies, credit losses, and renewals.
|
|
Three Months Ended January 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Retail notes and finance leases revenue
|
$
|
14
|
|
|
$
|
11
|
|
Wholesale notes interest
|
31
|
|
|
25
|
|
||
Operating lease revenue
|
21
|
|
|
18
|
|
||
Retail and wholesale accounts interest
|
8
|
|
|
5
|
|
||
Gross finance revenues
|
74
|
|
|
59
|
|
||
Less: Intercompany revenues
|
27
|
|
|
21
|
|
||
Finance revenues
|
$
|
47
|
|
|
$
|
38
|
|
|
Three Months Ended January 31, 2019
|
|
Three Months Ended January 31, 2018
|
||||||||||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
||||||||||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
50
|
|
|
$
|
17
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
48
|
|
Provision for doubtful accounts
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||||
Charge-off of accounts
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Recoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Other
(A)
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Allowance for doubtful accounts, at end of period
|
$
|
20
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
51
|
|
|
$
|
18
|
|
|
$
|
3
|
|
|
$
|
29
|
|
|
$
|
50
|
|
|
January 31, 2019
|
|
October 31, 2018
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Impaired finance receivables with specific loss reserves
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Impaired finance receivables without specific loss reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Specific loss reserves on impaired finance receivables
|
9
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
Finance receivables on non-accrual status
|
20
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|
January 31, 2019
|
|
October 31, 2018
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Current, and up to 30 days past due
|
$
|
636
|
|
|
$
|
1,399
|
|
|
$
|
2,035
|
|
|
$
|
655
|
|
|
$
|
1,459
|
|
|
$
|
2,114
|
|
30-90 days past due
|
57
|
|
|
1
|
|
|
58
|
|
|
51
|
|
|
1
|
|
|
52
|
|
||||||
Over 90 days past due
|
20
|
|
|
—
|
|
|
20
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||||
Total finance receivables
|
$
|
713
|
|
|
$
|
1,400
|
|
|
$
|
2,113
|
|
|
$
|
720
|
|
|
$
|
1,460
|
|
|
$
|
2,180
|
|
(in millions)
|
January 31,
2019 |
|
October 31,
2018 |
||||
Finished products
|
$
|
739
|
|
|
$
|
671
|
|
Work in process
|
163
|
|
|
118
|
|
||
Raw materials
|
309
|
|
|
321
|
|
||
Total inventories, net
|
$
|
1,211
|
|
|
$
|
1,110
|
|
(in millions)
|
January 31, 2019
|
|
October 31, 2018
|
||||
Manufacturing operations
|
|
|
|
||||
Senior Secured Term Loan Credit Agreement, due 2025, net of unamortized discount of $7 at both dates, and unamortized debt issuance costs of $11 at both dates
|
$
|
1,566
|
|
|
$
|
1,570
|
|
6.625% Senior Notes, due 2026, net of unamortized debt issuance costs of $16 and $17, respectively
|
1,084
|
|
|
1,083
|
|
||
4.75% Senior Subordinated Convertible Notes, due 2019, net of unamortized discount of $2 and $5, respectively, and unamortized debt issuance costs of $1 at both dates
|
408
|
|
|
405
|
|
||
Loan Agreement related to 6.75% Tax Exempt Bonds, due 2040, net of unamortized debt issuance costs of $5 at both dates
|
220
|
|
|
220
|
|
||
Financed lease obligations
|
52
|
|
|
122
|
|
||
Other
|
13
|
|
|
26
|
|
||
Total Manufacturing operations debt
|
3,343
|
|
|
3,426
|
|
||
Less: Current portion
|
437
|
|
|
461
|
|
||
Net long-term Manufacturing operations debt
|
$
|
2,906
|
|
|
$
|
2,965
|
|
(in millions)
|
January 31, 2019
|
|
October 31, 2018
|
||||
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 $4 at both dates
|
$
|
992
|
|
|
$
|
948
|
|
Senior secured NFC Term Loan, due 2025, net of unamortized discount of $2 at both dates, and unamortized debt issuance costs of $4 at both dates
|
393
|
|
|
394
|
|
||
Bank credit facilities, at fixed and variable rates, due dates from 2019 through 2025, net of unamortized debt issuance costs of $1 and $2, respectively
|
616
|
|
|
519
|
|
||
Commercial paper, at variable rates, program matures in 2022
|
62
|
|
|
75
|
|
||
Borrowings secured by operating and finance leases, at various rates, due serially through 2024
|
88
|
|
|
105
|
|
||
Total Financial Services operations debt
|
2,151
|
|
|
2,041
|
|
||
Less: Current portion
|
505
|
|
|
485
|
|
||
Net long-term Financial Services operations debt
|
$
|
1,646
|
|
|
$
|
1,556
|
|
|
Three Months Ended January 31,
|
||||||||||||||
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost for benefits earned during the period
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest on obligation
|
32
|
|
|
27
|
|
|
12
|
|
|
11
|
|
||||
Amortization of cumulative loss
|
24
|
|
|
26
|
|
|
—
|
|
|
2
|
|
||||
Settlements
|
142
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||
Premiums on pension insurance
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Expected return on assets
|
(38
|
)
|
|
(40
|
)
|
|
(5
|
)
|
|
(6
|
)
|
||||
Net periodic benefit expense
|
$
|
163
|
|
|
$
|
26
|
|
|
$
|
8
|
|
|
$
|
8
|
|
•
|
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 January 31, 2019
|
|
As of October 31, 2018
|
||||||||||||||||||||||||||||
(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
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
101
|
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts
(A)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Interest rate caps
(B)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Total assets
|
$
|
41
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
101
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
105
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts
(C)
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Guarantees
|
—
|
|
|
—
|
|
|
21
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
24
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
21
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
24
|
|
(A)
|
The asset value of commodity forward contracts is included in
Other current assets
in the accompanying
Consolidated Balance Sheets
.
|
(B)
|
The asset value of interest rate caps is included in
Other noncurrent assets
in the accompanying
Consolidated Balance Sheets.
|
(C)
|
The liability value of commodity forward contracts is included in
Other current liabilities
in the accompanying
Consolidated Balance Sheets.
|
|
Three Months Ended January 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Guarantees, at beginning of period
|
$
|
(24
|
)
|
|
$
|
(21
|
)
|
Transfers out of Level 3
|
—
|
|
|
—
|
|
||
Net terminations (issuances)
|
2
|
|
|
(5
|
)
|
||
Settlements
|
1
|
|
|
1
|
|
||
Guarantees, at end of period
|
$
|
(21
|
)
|
|
$
|
(25
|
)
|
|
As of January 31, 2019
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
196
|
|
|
$
|
196
|
|
|
$
|
201
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Agreement, due 2025
|
—
|
|
|
—
|
|
|
1,563
|
|
|
1,563
|
|
|
1,566
|
|
|||||
6.625% Senior Notes, due 2026
|
—
|
|
|
1,109
|
|
|
—
|
|
|
1,109
|
|
|
1,084
|
|
|||||
4.75% Senior Subordinated Convertible Notes, due 2019
(A)
|
412
|
|
|
—
|
|
|
—
|
|
|
412
|
|
|
408
|
|
|||||
Loan Agreement related to 6.75% Tax Exempt Bonds, due 2040
|
—
|
|
|
235
|
|
|
—
|
|
|
235
|
|
|
220
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|
52
|
|
|||||
Other
(B)
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
12
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, due serially through 2023
|
—
|
|
|
—
|
|
|
993
|
|
|
993
|
|
|
992
|
|
|||||
Senior secured NFC Term Loan, due 2025
|
—
|
|
|
—
|
|
|
395
|
|
|
395
|
|
|
393
|
|
|||||
Bank credit facilities, due dates from 2019 through 2025
|
—
|
|
|
—
|
|
|
586
|
|
|
586
|
|
|
616
|
|
|||||
Commercial paper, program matures in 2022
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
62
|
|
|||||
Borrowings secured by operating and finance leases, due serially through 2024
|
—
|
|
|
—
|
|
|
87
|
|
|
87
|
|
|
88
|
|
|
As of October 31, 2018
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
180
|
|
|
$
|
180
|
|
|
$
|
183
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Agreement, due 2025
|
—
|
|
|
—
|
|
|
1,597
|
|
|
1,597
|
|
|
1,570
|
|
|||||
6.625% Senior Notes, due 2026
|
—
|
|
|
1,122
|
|
|
—
|
|
|
1,122
|
|
|
1,083
|
|
|||||
4.75% Senior Subordinated Convertible Notes, due 2019
(A)
|
412
|
|
|
—
|
|
|
—
|
|
|
412
|
|
|
405
|
|
|||||
Loan Agreement related to 6.75% Tax Exempt Bonds, due 2040
|
—
|
|
|
235
|
|
|
—
|
|
|
235
|
|
|
220
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
122
|
|
|
122
|
|
|
122
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
25
|
|
|
25
|
|
|
26
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2023
|
—
|
|
|
—
|
|
|
949
|
|
|
949
|
|
|
948
|
|
|||||
Senior secured NFC Term Loan, due 2025
|
—
|
|
|
—
|
|
|
400
|
|
|
400
|
|
|
394
|
|
|||||
Bank credit facilities, due dates from 2019 through 2025
|
—
|
|
|
—
|
|
|
511
|
|
|
511
|
|
|
519
|
|
|||||
Commercial paper, at variable rates, program matures in 2022
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
75
|
|
|||||
Borrowings secured by operating and finance leases, due serially through 2024
|
—
|
|
|
—
|
|
|
104
|
|
|
104
|
|
|
105
|
|
(A)
|
The carrying value represents the consolidated financial statement amount of the debt which excludes the allocation of the conversion feature to equity, while the estimated fair value is derived from quoted prices in active markets which include the equity feature.
|
(B)
|
Excludes capital lease obligation debt of $1 million as of January 31, 2019.
|
•
|
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.
|
•
|
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 original equipment manufacturers (OEMs) in South America. In addition, our Global Operations segment includes the operating results of our former 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.
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services (A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Three Months Ended January 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
1,776
|
|
|
$
|
546
|
|
|
$
|
61
|
|
|
$
|
47
|
|
|
$
|
3
|
|
|
$
|
2,433
|
|
Intersegment sales and revenues
|
21
|
|
|
2
|
|
|
12
|
|
|
27
|
|
|
(62
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
1,797
|
|
|
$
|
548
|
|
|
$
|
73
|
|
|
$
|
74
|
|
|
$
|
(59
|
)
|
|
$
|
2,433
|
|
Net income (loss) attributable to NIC
|
$
|
90
|
|
|
$
|
144
|
|
|
$
|
6
|
|
|
$
|
31
|
|
|
$
|
(260
|
)
|
|
$
|
11
|
|
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
19
|
|
||||||
Segment profit (loss)
|
$
|
90
|
|
|
$
|
144
|
|
|
$
|
6
|
|
|
$
|
31
|
|
|
$
|
(279
|
)
|
|
$
|
(8
|
)
|
Depreciation and amortization
|
$
|
26
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
16
|
|
|
$
|
3
|
|
|
$
|
48
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
56
|
|
|
85
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||||
Capital expenditures
(B)
|
31
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
9
|
|
|
44
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services (A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Three Months Ended January 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
1,228
|
|
|
$
|
564
|
|
|
$
|
72
|
|
|
$
|
38
|
|
|
$
|
3
|
|
|
$
|
1,905
|
|
Intersegment sales and revenues
|
23
|
|
|
4
|
|
|
9
|
|
|
21
|
|
|
(57
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
1,251
|
|
|
$
|
568
|
|
|
$
|
81
|
|
|
$
|
59
|
|
|
$
|
(54
|
)
|
|
$
|
1,905
|
|
Net income (loss) attributable to NIC
|
$
|
(7
|
)
|
|
$
|
137
|
|
|
$
|
(7
|
)
|
|
$
|
20
|
|
|
$
|
(216
|
)
|
|
$
|
(73
|
)
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
||||||
Segment profit (loss)
|
$
|
(7
|
)
|
|
$
|
137
|
|
|
$
|
(7
|
)
|
|
$
|
20
|
|
|
$
|
(201
|
)
|
|
$
|
(58
|
)
|
Depreciation and amortization
|
$
|
35
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
13
|
|
|
$
|
2
|
|
|
$
|
55
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
58
|
|
|
79
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Capital expenditures
(B)
|
25
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
30
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services (A) |
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||||
Segment assets, as of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
January 31, 2019
|
$
|
2,031
|
|
|
$
|
676
|
|
|
$
|
316
|
|
|
$
|
2,618
|
|
|
$
|
1,396
|
|
|
$
|
7,037
|
|
October 31, 2018
|
2,085
|
|
|
636
|
|
|
331
|
|
|
2,648
|
|
|
1,530
|
|
|
7,230
|
|
(A)
|
Total sales and revenues in the Financial Services segment include interest revenues of
$53 million
and
$41 million
for the
three months ended January 31, 2019 and 2018
, respectively.
|
(B)
|
Exclusive of purchases of equipment leased to others.
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||
Balance as of October 31, 2018
|
$
|
(315
|
)
|
|
$
|
(1,605
|
)
|
|
$
|
(1,920
|
)
|
Other comprehensive loss before reclassifications
|
14
|
|
|
(8
|
)
|
|
6
|
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
123
|
|
|
123
|
|
|||
Net current-period other comprehensive income
|
14
|
|
|
115
|
|
|
129
|
|
|||
Balance as of January 31, 2019
|
$
|
(301
|
)
|
|
$
|
(1,490
|
)
|
|
$
|
(1,791
|
)
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||
Balance as of October 31, 2017
|
$
|
(283
|
)
|
|
$
|
(1,928
|
)
|
|
$
|
(2,211
|
)
|
Other comprehensive loss before reclassifications
|
22
|
|
|
(2
|
)
|
|
20
|
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
37
|
|
|
37
|
|
|||
Net current-period other comprehensive income
|
22
|
|
|
35
|
|
|
57
|
|
|||
Balance as of January 31, 2018
|
$
|
(261
|
)
|
|
$
|
(1,893
|
)
|
|
$
|
(2,154
|
)
|
|
Three Months Ended January 31,
|
||||||
(in millions, except per share data)
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
||||
Net income (loss) attributable to Navistar International Corporation common stockholders
|
$
|
11
|
|
|
$
|
(73
|
)
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
99.1
|
|
|
98.6
|
|
||
Effect of dilutive securities
|
0.3
|
|
|
—
|
|
||
Diluted
|
99.4
|
|
|
98.6
|
|
||
|
|
|
|
||||
Earnings (loss) per share attributable to Navistar International Corporation:
|
|
|
|
||||
Basic
|
$
|
0.11
|
|
|
$
|
(0.74
|
)
|
Diluted
|
0.11
|
|
|
(0.74
|
)
|
|
Three Months Ended January 31,
|
|
|
|
|
|||||||||
(in millions, except per share data and % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Sales and revenues, net
|
$
|
2,433
|
|
|
$
|
1,905
|
|
|
$
|
528
|
|
|
28
|
%
|
Costs of products sold
|
1,979
|
|
|
1,532
|
|
|
447
|
|
|
29
|
%
|
|||
Restructuring charges
|
—
|
|
|
(3
|
)
|
|
3
|
|
|
(100
|
)%
|
|||
Asset impairment charges
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
%
|
|||
Selling, general and administrative expenses
|
186
|
|
|
191
|
|
|
(5
|
)
|
|
(3
|
)%
|
|||
Engineering and product development costs
|
86
|
|
|
75
|
|
|
11
|
|
|
15
|
%
|
|||
Interest expense
|
85
|
|
|
79
|
|
|
6
|
|
|
8
|
%
|
|||
Other expense, net
|
97
|
|
|
80
|
|
|
17
|
|
|
21
|
%
|
|||
Total costs and expenses
|
2,435
|
|
|
1,956
|
|
|
479
|
|
|
24
|
%
|
|||
Equity in income of non-consolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Loss before income tax
|
(2
|
)
|
|
(51
|
)
|
|
49
|
|
|
(96
|
)%
|
|||
Income tax benefit (expense)
|
19
|
|
|
(15
|
)
|
|
34
|
|
|
(227
|
)%
|
|||
Net income (loss)
|
17
|
|
|
(66
|
)
|
|
83
|
|
|
(126
|
)%
|
|||
Less: Net income attributable to non-controlling interests
|
6
|
|
|
7
|
|
|
(1
|
)
|
|
(14
|
)%
|
|||
Net income (loss)
attributable to Navistar International Corporation
|
$
|
11
|
|
|
$
|
(73
|
)
|
|
$
|
84
|
|
|
(115
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Diluted income (loss) per share
(A)
|
$
|
0.11
|
|
|
$
|
(0.74
|
)
|
|
$
|
0.85
|
|
|
(115
|
)%
|
Diluted weighted average shares outstanding
|
99.4
|
|
|
98.6
|
|
|
0.8
|
|
|
1
|
%
|
(A)
|
Amounts attributable to NIC.
|
|
Three Months Ended January 31,
|
|
|
|
|
|||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Truck
|
$
|
1,797
|
|
|
$
|
1,251
|
|
|
$
|
546
|
|
|
44
|
%
|
Parts
|
548
|
|
|
568
|
|
|
(20
|
)
|
|
(4
|
)%
|
|||
Global Operations
|
73
|
|
|
81
|
|
|
(8
|
)
|
|
(10
|
)%
|
|||
Financial Services
|
74
|
|
|
59
|
|
|
15
|
|
|
25
|
%
|
|||
Corporate and Eliminations
|
(59
|
)
|
|
(54
|
)
|
|
(5
|
)
|
|
9
|
%
|
|||
Total
|
$
|
2,433
|
|
|
$
|
1,905
|
|
|
$
|
528
|
|
|
28
|
%
|
|
Three Months Ended January 31,
|
|
|
|
|
|||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Truck segment sales, net
|
$
|
1,797
|
|
|
$
|
1,251
|
|
|
$
|
546
|
|
|
44
|
%
|
Truck segment profit (loss)
|
90
|
|
|
(7
|
)
|
|
97
|
|
|
N.M.
|
|
|
Three Months Ended January 31,
|
|
|
|
|
|||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Parts segment sales, net
|
$
|
548
|
|
|
$
|
568
|
|
|
$
|
(20
|
)
|
|
(4
|
)%
|
Parts segment profit
|
144
|
|
|
137
|
|
|
7
|
|
|
5
|
%
|
|
Three Months Ended January 31,
|
|
|
|
|
|||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Global Operations segment sales, net
|
$
|
73
|
|
|
$
|
81
|
|
|
$
|
(8
|
)
|
|
(10
|
)%
|
Global Operations segment profit (loss)
|
6
|
|
|
(7
|
)
|
|
13
|
|
|
186
|
%
|
|
Three Months Ended January 31,
|
|
|
|
|
|||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Financial Services segment revenues, net
|
$
|
74
|
|
|
$
|
59
|
|
|
$
|
15
|
|
|
25
|
%
|
Financial Services segment profit
|
31
|
|
|
20
|
|
|
11
|
|
|
55
|
%
|
|
Three Months Ended January 31,
|
|
|
|
|
||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
||||
School buses
(A)
|
5,900
|
|
|
6,000
|
|
|
(100
|
)
|
|
(2
|
)%
|
Class 6 and 7 medium trucks
|
26,700
|
|
|
22,900
|
|
|
3,800
|
|
|
17
|
%
|
Class 8 heavy trucks
|
57,300
|
|
|
44,000
|
|
|
13,300
|
|
|
30
|
%
|
Class 8 severe service trucks
|
17,800
|
|
|
17,100
|
|
|
700
|
|
|
4
|
%
|
Total Core markets
|
107,700
|
|
|
90,000
|
|
|
17,700
|
|
|
20
|
%
|
Combined class 8 trucks
|
75,100
|
|
|
61,100
|
|
|
14,000
|
|
|
23
|
%
|
Navistar Core retail deliveries
|
17,700
|
|
|
13,200
|
|
|
4,500
|
|
|
34
|
%
|
(A)
|
The School bus retail market deliveries include buses classified as B, C, and D and are being reported on a one-month lag.
|
|
Three Months Ended
|
|||||||||||||
|
January 31, 2019
|
|
October 31, 2018
|
|
July 31, 2018
|
|
April 30, 2018
|
|
January 31, 2018
|
|||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|||||
Class 6 and 7 medium trucks
|
25.5
|
%
|
|
24.9
|
%
|
|
21.9
|
%
|
|
26.3
|
%
|
|
19.6
|
%
|
Class 8 heavy trucks
|
12.1
|
%
|
|
16.9
|
%
|
|
12.7
|
%
|
|
13.4
|
%
|
|
10.8
|
%
|
Class 8 severe service trucks
|
11.7
|
%
|
|
16.5
|
%
|
|
11.2
|
%
|
|
11.7
|
%
|
|
12.2
|
%
|
Combined class 8 trucks
|
12.0
|
%
|
|
16.8
|
%
|
|
12.3
|
%
|
|
12.9
|
%
|
|
11.2
|
%
|
|
Three Months Ended January 31,
|
|
|
||||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
||||
School buses
|
3,300
|
|
|
3,000
|
|
|
300
|
|
|
10
|
%
|
Class 6 and 7 medium trucks
|
11,600
|
|
|
9,000
|
|
|
2,600
|
|
|
29
|
%
|
Class 8 heavy trucks
|
12,100
|
|
|
9,300
|
|
|
2,800
|
|
|
30
|
%
|
Class 8 severe service trucks
|
2,800
|
|
|
2,300
|
|
|
500
|
|
|
22
|
%
|
Total Core markets
|
29,800
|
|
|
23,600
|
|
|
6,200
|
|
|
26
|
%
|
Combined class 8 trucks
|
14,900
|
|
|
11,600
|
|
|
3,300
|
|
|
28
|
%
|
|
As of January 31,
|
|
|
|
|
||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
||||
School buses
|
3,200
|
|
|
2,800
|
|
|
400
|
|
|
14
|
%
|
Class 6 and 7 medium trucks
|
19,100
|
|
|
9,100
|
|
|
10,000
|
|
|
110
|
%
|
Class 8 heavy trucks
|
23,600
|
|
|
11,600
|
|
|
12,000
|
|
|
103
|
%
|
Class 8 severe service trucks
|
7,800
|
|
|
2,600
|
|
|
5,200
|
|
|
200
|
%
|
Total Core markets
|
53,700
|
|
|
26,100
|
|
|
27,600
|
|
|
106
|
%
|
Combined class 8 trucks
|
31,400
|
|
|
14,200
|
|
|
17,200
|
|
|
121
|
%
|
|
Three Months Ended January 31,
|
|
|
||||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
||||
School buses
|
2,500
|
|
|
1,900
|
|
|
600
|
|
|
32
|
%
|
Class 6 and 7 medium trucks
|
6,100
|
|
|
4,400
|
|
|
1,700
|
|
|
39
|
%
|
Class 8 heavy trucks
|
7,800
|
|
|
4,200
|
|
|
3,600
|
|
|
86
|
%
|
Class 8 severe service trucks
|
2,500
|
|
|
2,100
|
|
|
400
|
|
|
19
|
%
|
Total Core markets
|
18,900
|
|
|
12,600
|
|
|
6,300
|
|
|
50
|
%
|
Non "Core" defense
|
100
|
|
|
200
|
|
|
(100
|
)
|
|
(50
|
)%
|
Other markets
(A)
|
1,700
|
|
|
1,100
|
|
|
600
|
|
|
55
|
%
|
Total worldwide units
|
20,700
|
|
|
13,900
|
|
|
6,800
|
|
|
49
|
%
|
Combined class 8 trucks
|
10,300
|
|
|
6,300
|
|
|
4,000
|
|
|
63
|
%
|
(A)
|
Other markets primarily consist of Export Truck and Mexico.
|
|
As of
|
||||||
(in millions)
|
January 31, 2019
|
|
October 31, 2018
|
||||
Consolidated cash and cash equivalents
|
$
|
1,201
|
|
|
$
|
1,320
|
|
Consolidated marketable securities
|
41
|
|
|
101
|
|
||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,242
|
|
|
$
|
1,421
|
|
|
As of
|
||||||
(in millions)
|
January 31, 2019
|
|
October 31, 2018
|
||||
Manufacturing operations
|
$
|
1,192
|
|
|
$
|
1,362
|
|
Financial Services operations
|
50
|
|
|
59
|
|
||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,242
|
|
|
$
|
1,421
|
|
|
Three Months Ended January 31, 2019
|
||||||||||
(in millions)
|
Manufacturing
Operations (A) |
|
Financial Services Operations and Adjustments
(A)
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||
Net cash provided by (used in) operating activities
|
$
|
(265
|
)
|
|
$
|
25
|
|
|
$
|
(240
|
)
|
Net cash provided by (used in) investing activities
|
108
|
|
|
(34
|
)
|
|
74
|
|
|||
Net cash provided by financing activities
|
39
|
|
|
34
|
|
|
73
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
1
|
|
|
(4
|
)
|
|
(3
|
)
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(117
|
)
|
|
21
|
|
|
(96
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of the period
|
1,295
|
|
|
150
|
|
|
1,445
|
|
|||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
1,178
|
|
|
$
|
171
|
|
|
$
|
1,349
|
|
|
Three Months Ended January 31, 2018
|
||||||||||
(in millions)
|
Manufacturing
Operations (A) |
|
Financial Services Operations and Adjustments
(A)
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||
Net cash provided by (used in) operating activities
|
$
|
(237
|
)
|
|
$
|
161
|
|
|
$
|
(76
|
)
|
Net cash provided by (used in) investing activities
|
45
|
|
|
(30
|
)
|
|
15
|
|
|||
Net cash provided by (used in) financing activities
|
198
|
|
|
(192
|
)
|
|
6
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
5
|
|
|
(3
|
)
|
|
2
|
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
11
|
|
|
(64
|
)
|
|
(53
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of the period
|
690
|
|
|
150
|
|
|
840
|
|
|||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
701
|
|
|
$
|
86
|
|
|
$
|
787
|
|
(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, U.S. 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 U.S. GAAP. However, we believe that non-GAAP reporting provides meaningful information and therefore we use it to supplement our U.S. 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 U.S. 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.
|
|
Three Months Ended January 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Net Income (loss) attributable to NIC
|
$
|
11
|
|
|
$
|
(73
|
)
|
Plus:
|
|
|
|
||||
Depreciation and amortization expense
|
48
|
|
|
55
|
|
||
Manufacturing interest expense
(A)
|
56
|
|
|
58
|
|
||
Adjusted for:
|
|
|
|
||||
Income tax benefit (expense)
|
19
|
|
|
(15
|
)
|
||
EBITDA
|
$
|
96
|
|
|
$
|
55
|
|
(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:
|
|
Three Months Ended January 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Interest expense
|
$
|
85
|
|
|
$
|
79
|
|
Less: Financial services interest expense
|
29
|
|
|
21
|
|
||
Manufacturing interest expense
|
$
|
56
|
|
|
$
|
58
|
|
|
Three Months Ended January 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
EBITDA
(reconciled above)
|
$
|
96
|
|
|
$
|
55
|
|
Adjusted for significant items of:
|
|
|
|
|
|
||
Adjustments to pre-existing warranties
(A)
|
(7
|
)
|
|
(6
|
)
|
||
Asset impairment charges
(B)
|
2
|
|
|
2
|
|
||
Restructuring of manufacturing operations
(C)
|
—
|
|
|
(3
|
)
|
||
EGR product litigation
(D)
|
—
|
|
|
1
|
|
||
Gain on sales
(E)
|
(59
|
)
|
|
—
|
|
||
Debt refinancing charges
(F)
|
—
|
|
|
46
|
|
||
Pension settlement
(G)
|
142
|
|
|
9
|
|
||
Settlement gain
(H)
|
(1
|
)
|
|
—
|
|
||
Total adjustments
|
77
|
|
|
49
|
|
||
|
|
|
|
|
|
||
Adjusted EBITDA
|
$
|
173
|
|
|
$
|
104
|
|
(A)
|
Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and circumstances related to these factors could materially change our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available.
|
(B)
|
In the first quarter of 2019, we recorded
$2 million
of asset impairment charges relating to certain assets under operating leases. In the first quarter of 2018, we recorded
$2 million
of impairment charges related to the sale of our railcar business in Cherokee, Alabama.
|
(C)
|
In the first quarter of 2018, we recorded benefits of
$3 million
for restructuring
in our Truck and Global segments.
|
(D)
|
In the first quarter of 2018, we recognized an additional charge of $1 million for a jury verdict related to the MaxxForce engine EGR product litigation in our Truck segment.
|
(E)
|
In the first quarter of 2019, we recognized a gain of $54 million related to the sale of a majority interest in the Navistar Defense business in our Truck segment. In the first quarter of 2019, we also recognized a gain of $5 million related to the sale of our joint venture in China with JAC in our Global Operations segment.
|
(F)
|
In the first quarter of 2018, we recorded a charge of $46 million for the write off of debt issuance costs and discounts associated with the repurchase of our previously existing 8.25% Senior Notes and the refinancing of our previously existing Term Loan.
|
(G)
|
In the first quarter of 2019 and 2018, we purchased group annuity contracts for certain retired pension plan participants resulting in plan remeasurements. As a result, we recorded pension settlement accounting charges of
$142 million
and
$9 million
, respectively, in
Other expense, net.
|
(H)
|
In the first quarter of 2019, we recorded interest income of $1 million in
Other expense, net
derived from the prior year settlement of a business economic loss claim relating to our former Alabama engine manufacturing facility.
|
•
|
Pension and Other Postretirement Benefits
|
•
|
Income Taxes
|
•
|
Impairment of Long-Lived Assets
|
•
|
Product Warranty
|
•
|
Revenue
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Exhibit:
|
|
Description
|
|
Page
|
(2.1)
|
|
|
N/A
|
|
(2.2)
|
|
|
N/A
|
|
(10)
|
|
|
E-1
|
|
(31.1)
|
|
|
E-2
|
|
(31.2)
|
|
|
E-3
|
|
(32.1)
|
|
|
E-4
|
|
(32.2)
|
|
|
E-5
|
|
(99.1)
|
|
|
E-6
|
|
(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)
|
The following documents of Navistar Financial Corporation and Navistar Financial Securities Corporation, indirect subsidiaries of Navistar International Corporation (the “Corporation”), and Navistar Financial Note Master Owner Trust II, an affiliated trust of the Corporation, are incorporated herein by reference:
|
||
10.93
|
Amendment No. 4 to Series 2012-VFN Indenture Supplement, dated as of November 28, 2018, 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 November 30, 2018 and filed on November 30, 2018. Commission File No. 001-09618.
|
|
10.94
|
Amendment No. 11 to the Note Purchase Agreement, dated as of November 28, 2018, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, 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 10.2 to the Current Report on Form 8-K dated November 30, 2018 and filed on November 30, 2018. Commission File No. 001-09618.
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Navistar International Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ T
ROY
A. C
LARKE
|
Troy A. Clarke
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Navistar International Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ W
ALTER
G. B
ORST
|
Walter G. Borst
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ T
ROY
A. C
LARKE
|
Troy A. Clarke
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 Three Months Ended January 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
2,386
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,386
|
|
Finance revenues
|
—
|
|
|
74
|
|
|
(27
|
)
|
|
47
|
|
||||
Sales and revenues, net
|
2,386
|
|
|
74
|
|
|
(27
|
)
|
|
2,433
|
|
||||
Costs of products sold
|
1,979
|
|
|
—
|
|
|
—
|
|
|
1,979
|
|
||||
Restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Asset impairment charges
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Selling, general and administrative expenses
|
163
|
|
|
24
|
|
|
(1
|
)
|
|
186
|
|
||||
Engineering and product development costs
|
86
|
|
|
—
|
|
|
—
|
|
|
86
|
|
||||
Interest expense
|
56
|
|
|
29
|
|
|
—
|
|
|
85
|
|
||||
Other expense (income), net
|
133
|
|
|
(10
|
)
|
|
(26
|
)
|
|
97
|
|
||||
Total costs and expenses
|
2,419
|
|
|
43
|
|
|
(27
|
)
|
|
2,435
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(33
|
)
|
|
31
|
|
|
—
|
|
|
(2
|
)
|
||||
Equity income from financial services operations
|
24
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
(9
|
)
|
|
31
|
|
|
(24
|
)
|
|
(2
|
)
|
||||
Income tax benefit (expense)
|
26
|
|
|
(7
|
)
|
|
—
|
|
|
19
|
|
||||
Net income (loss)
|
17
|
|
|
24
|
|
|
(24
|
)
|
|
17
|
|
||||
Less: Net income attributable to non-controlling interests
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
11
|
|
|
$
|
24
|
|
|
$
|
(24
|
)
|
|
$
|
11
|
|
|
For the Three Months Ended January 31, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
1,867
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,867
|
|
Finance revenues
|
—
|
|
|
59
|
|
|
(21
|
)
|
|
38
|
|
||||
Sales and revenues, net
|
1,867
|
|
|
59
|
|
|
(21
|
)
|
|
1,905
|
|
||||
Costs of products sold
|
1,532
|
|
|
—
|
|
|
—
|
|
|
1,532
|
|
||||
Restructuring charges
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Asset impairment charges
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Selling, general and administrative expenses
|
171
|
|
|
20
|
|
|
—
|
|
|
191
|
|
||||
Engineering and product development costs
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
||||
Interest expense
|
58
|
|
|
21
|
|
|
—
|
|
|
79
|
|
||||
Other expense (income), net
|
103
|
|
|
(2
|
)
|
|
(21
|
)
|
|
80
|
|
||||
Total costs and expenses
|
1,938
|
|
|
39
|
|
|
(21
|
)
|
|
1,956
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(71
|
)
|
|
20
|
|
|
—
|
|
|
(51
|
)
|
||||
Equity income from financial services operations
|
16
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
(55
|
)
|
|
20
|
|
|
(16
|
)
|
|
(51
|
)
|
||||
Income tax expense
|
(11
|
)
|
|
(4
|
)
|
|
—
|
|
|
(15
|
)
|
||||
Net income (loss)
|
(66
|
)
|
|
16
|
|
|
(16
|
)
|
|
(66
|
)
|
||||
Less: Net income attributable to non-controlling interests
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Net income attributable to Navistar International Corporation
|
$
|
(73
|
)
|
|
$
|
16
|
|
|
$
|
(16
|
)
|
|
$
|
(73
|
)
|
|
As of January 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1,151
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
1,201
|
|
Marketable securities
|
41
|
|
|
—
|
|
|
—
|
|
|
41
|
|
||||
Restricted cash and cash equivalents
|
27
|
|
|
121
|
|
|
—
|
|
|
148
|
|
||||
Finance and other receivables, net
|
461
|
|
|
2,343
|
|
|
(254
|
)
|
|
2,550
|
|
||||
Inventories
|
1,206
|
|
|
5
|
|
|
—
|
|
|
1,211
|
|
||||
Goodwill
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Property and equipment, net
|
945
|
|
|
330
|
|
|
—
|
|
|
1,275
|
|
||||
Investments in and advances to financial services operations
|
614
|
|
|
—
|
|
|
(614
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
||||
Deferred taxes, net
|
118
|
|
|
5
|
|
|
—
|
|
|
123
|
|
||||
Other assets
|
400
|
|
|
18
|
|
|
—
|
|
|
418
|
|
||||
Total assets
|
$
|
5,033
|
|
|
$
|
2,872
|
|
|
$
|
(868
|
)
|
|
$
|
7,037
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,719
|
|
|
$
|
19
|
|
|
$
|
(254
|
)
|
|
$
|
1,484
|
|
Debt
|
3,343
|
|
|
2,151
|
|
|
—
|
|
|
5,494
|
|
||||
Postretirement benefits liabilities
|
1,961
|
|
|
—
|
|
|
—
|
|
|
1,961
|
|
||||
Other liabilities
|
1,823
|
|
|
88
|
|
|
—
|
|
|
1,911
|
|
||||
Total liabilities
|
8,846
|
|
|
2,258
|
|
|
(254
|
)
|
|
10,850
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(3,816
|
)
|
|
614
|
|
|
(614
|
)
|
|
(3,816
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
5,033
|
|
|
$
|
2,872
|
|
|
$
|
(868
|
)
|
|
$
|
7,037
|
|
|
As of October 31, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1,261
|
|
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
1,320
|
|
Marketable securities
|
101
|
|
|
—
|
|
|
—
|
|
|
101
|
|
||||
Restricted cash and cash equivalents
|
34
|
|
|
91
|
|
|
—
|
|
|
125
|
|
||||
Finance and other receivables, net
|
505
|
|
|
2,259
|
|
|
(101
|
)
|
|
2,663
|
|
||||
Inventories
|
1,102
|
|
|
8
|
|
|
—
|
|
|
1,110
|
|
||||
Goodwill
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Property and equipment, net
|
1,060
|
|
|
310
|
|
|
—
|
|
|
1,370
|
|
||||
Investments in and advances to financial services operations
|
581
|
|
|
—
|
|
|
(581
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
||||
Deferred taxes, net
|
117
|
|
|
4
|
|
|
—
|
|
|
121
|
|
||||
Other assets
|
314
|
|
|
18
|
|
|
—
|
|
|
332
|
|
||||
Total assets
|
$
|
5,163
|
|
|
$
|
2,749
|
|
|
$
|
(682
|
)
|
|
$
|
7,230
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,664
|
|
|
$
|
43
|
|
|
$
|
(101
|
)
|
|
$
|
1,606
|
|
Debt
|
3,426
|
|
|
2,041
|
|
|
—
|
|
|
5,467
|
|
||||
Postretirement benefits liabilities
|
2,097
|
|
|
—
|
|
|
—
|
|
|
2,097
|
|
||||
Other liabilities
|
1,902
|
|
|
84
|
|
|
—
|
|
|
1,986
|
|
||||
Total liabilities
|
9,089
|
|
|
2,168
|
|
|
(101
|
)
|
|
11,156
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(3,931
|
)
|
|
581
|
|
|
(581
|
)
|
|
(3,931
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
5,163
|
|
|
$
|
2,749
|
|
|
$
|
(682
|
)
|
|
$
|
7,230
|
|
|
For the Three Months Ended January 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
17
|
|
|
$
|
24
|
|
|
$
|
(24
|
)
|
|
$
|
17
|
|
Adjustments to reconcile net income to cash used in operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||
Depreciation of equipment leased to others
|
(1
|
)
|
|
16
|
|
|
—
|
|
|
15
|
|
||||
Amortization of debt issuance costs and discount
|
4
|
|
|
2
|
|
|
—
|
|
|
6
|
|
||||
Deferred income taxes
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
||||
Asset impairment charges
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Gain on sales of investments and businesses, net
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
||||
Equity in income of financial services affiliates
|
(24
|
)
|
|
—
|
|
|
24
|
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Change in intercompany receivables and payables
|
94
|
|
|
(94
|
)
|
|
—
|
|
|
—
|
|
||||
Other, net
|
(290
|
)
|
|
77
|
|
|
—
|
|
|
(213
|
)
|
||||
Net cash provided by (used in) operating activities
|
(265
|
)
|
|
25
|
|
|
—
|
|
|
(240
|
)
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sales of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Maturities of marketable securities
|
61
|
|
|
—
|
|
|
—
|
|
|
61
|
|
||||
Capital expenditures
|
(43
|
)
|
|
(1
|
)
|
|
—
|
|
|
(44
|
)
|
||||
Purchase of equipment leased to others
|
(6
|
)
|
|
(36
|
)
|
|
—
|
|
|
(42
|
)
|
||||
Other investing activities
|
96
|
|
|
3
|
|
|
—
|
|
|
99
|
|
||||
Net cash provided by (used in) investing activities
|
108
|
|
|
(34
|
)
|
|
—
|
|
|
74
|
|
||||
Net cash provided by financing activities
|
39
|
|
|
34
|
|
|
—
|
|
|
73
|
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(117
|
)
|
|
21
|
|
|
—
|
|
|
(96
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of the period
|
1,295
|
|
|
150
|
|
|
—
|
|
|
1,445
|
|
||||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
1,178
|
|
|
$
|
171
|
|
|
$
|
—
|
|
|
$
|
1,349
|
|
|
For the Three Months Ended January 31, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(66
|
)
|
|
$
|
16
|
|
|
$
|
(16
|
)
|
|
$
|
(66
|
)
|
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
||||
Depreciation of equipment leased to others
|
5
|
|
|
13
|
|
|
—
|
|
|
18
|
|
||||
Amortization of debt issuance costs and discount
|
5
|
|
|
3
|
|
|
—
|
|
|
8
|
|
||||
Deferred income taxes
|
7
|
|
|
(1
|
)
|
|
—
|
|
|
6
|
|
||||
Asset impairment charges
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Equity in income of financial services affiliates
|
(16
|
)
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Change in other intercompany receivables and payables
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
(213
|
)
|
|
129
|
|
|
—
|
|
|
(84
|
)
|
||||
Net cash provided by (used in) operating activities
|
(237
|
)
|
|
161
|
|
|
—
|
|
|
(76
|
)
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
(61
|
)
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
||||
Sales of marketable securities
|
150
|
|
|
—
|
|
|
—
|
|
|
150
|
|
||||
Maturities of marketable securities
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Capital expenditures
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
||||
Purchase of equipment leased to others
|
(19
|
)
|
|
(33
|
)
|
|
—
|
|
|
(52
|
)
|
||||
Other investing activities
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Net cash provided by investing activities
|
45
|
|
|
(30
|
)
|
|
—
|
|
|
15
|
|
||||
Net cash provided by (used in) financing activities
|
198
|
|
|
(192
|
)
|
|
—
|
|
|
6
|
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
5
|
|
|
(3
|
)
|
|
—
|
|
|
2
|
|
||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
11
|
|
|
(64
|
)
|
|
—
|
|
|
(53
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of the period
|
690
|
|
|
150
|
|
|
—
|
|
|
840
|
|
||||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
701
|
|
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
787
|
|