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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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Title of each class
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Trading Symbol(s)
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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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NAV
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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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NAV-D
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New York Stock Exchange
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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 SE 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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our expectations relating to 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 (including, without limitation, the MaxxForce Advanced EGR engine lawsuits) 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 April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
(in millions, except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and revenues
|
|
|
|
|
|
|
|
||||||||
Sales of manufactured products, net
|
$
|
2,948
|
|
|
$
|
2,382
|
|
|
$
|
5,334
|
|
|
$
|
4,249
|
|
Finance revenues
|
48
|
|
|
40
|
|
|
95
|
|
|
78
|
|
||||
Sales and revenues, net
|
2,996
|
|
|
2,422
|
|
|
5,429
|
|
|
4,327
|
|
||||
Costs and expenses
|
|
|
|
|
|
|
|
||||||||
Costs of products sold
|
2,493
|
|
|
1,987
|
|
|
4,472
|
|
|
3,519
|
|
||||
Restructuring charges
|
1
|
|
|
1
|
|
|
1
|
|
|
(2
|
)
|
||||
Asset impairment charges
|
1
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Selling, general and administrative expenses
|
373
|
|
|
200
|
|
|
559
|
|
|
391
|
|
||||
Engineering and product development costs
|
75
|
|
|
75
|
|
|
161
|
|
|
150
|
|
||||
Interest expense
|
82
|
|
|
79
|
|
|
167
|
|
|
158
|
|
||||
Other expense, net
|
18
|
|
|
11
|
|
|
115
|
|
|
91
|
|
||||
Total costs and expenses
|
3,043
|
|
|
2,354
|
|
|
5,478
|
|
|
4,310
|
|
||||
Equity in income of non-consolidated affiliates
|
3
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|
|
—
|
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3
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|
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—
|
|
||||
Income (loss) before income tax
|
(44
|
)
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68
|
|
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(46
|
)
|
|
17
|
|
||||
Income tax benefit (expense)
|
1
|
|
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(7
|
)
|
|
20
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|
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(22
|
)
|
||||
Net income (loss)
|
(43
|
)
|
|
61
|
|
|
(26
|
)
|
|
(5
|
)
|
||||
Less: Net income attributable to non-controlling interests
|
5
|
|
|
6
|
|
|
11
|
|
|
13
|
|
||||
Net income (loss)
attributable to Navistar International Corporation
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$
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(48
|
)
|
|
$
|
55
|
|
|
$
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(37
|
)
|
|
$
|
(18
|
)
|
|
|
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||||||||
Income (loss) per share attributable to Navistar International Corporation:
|
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||||||||
Basic
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$
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(0.48
|
)
|
|
$
|
0.56
|
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$
|
(0.37
|
)
|
|
$
|
(0.18
|
)
|
Diluted
|
(0.48
|
)
|
|
0.55
|
|
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(0.37
|
)
|
|
(0.18
|
)
|
||||
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|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
99.2
|
|
|
98.8
|
|
|
99.2
|
|
|
98.7
|
|
||||
Diluted
|
99.2
|
|
|
99.5
|
|
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99.2
|
|
|
98.7
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(in millions)
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Net income (loss)
|
$
|
(43
|
)
|
|
$
|
61
|
|
|
$
|
(26
|
)
|
|
$
|
(5
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(18
|
)
|
|
(28
|
)
|
|
(4
|
)
|
|
(6
|
)
|
||||
Defined benefit plans, net of tax
|
23
|
|
|
28
|
|
|
138
|
|
|
63
|
|
||||
Total other comprehensive income
|
5
|
|
|
—
|
|
|
134
|
|
|
57
|
|
||||
Comprehensive income (loss)
|
(38
|
)
|
|
61
|
|
|
108
|
|
|
52
|
|
||||
Less: Net income attributable to non-controlling interests
|
5
|
|
|
6
|
|
|
11
|
|
|
13
|
|
||||
Total comprehensive income (loss) attributable to Navistar International Corporation
|
$
|
(43
|
)
|
|
$
|
55
|
|
|
$
|
97
|
|
|
$
|
39
|
|
|
As of April 30, 2019
|
|
As of October 31, 2018
|
||||
(in millions, except per share data)
|
|
|
|
||||
ASSETS
|
(Unaudited)
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
977
|
|
|
$
|
1,320
|
|
Restricted cash and cash equivalents
|
165
|
|
|
62
|
|
||
Marketable securities
|
23
|
|
|
101
|
|
||
Trade and other receivables, net
|
453
|
|
|
456
|
|
||
Finance receivables, net
|
2,037
|
|
|
1,898
|
|
||
Inventories, net
|
1,164
|
|
|
1,110
|
|
||
Other current assets
|
282
|
|
|
189
|
|
||
Total current assets
|
5,101
|
|
|
5,136
|
|
||
Restricted cash
|
66
|
|
|
63
|
|
||
Trade and other receivables, net
|
30
|
|
|
49
|
|
||
Finance receivables, net
|
279
|
|
|
260
|
|
||
Investments in non-consolidated affiliates
|
32
|
|
|
50
|
|
||
Property and equipment (net of accumulated depreciation and amortization of $2,457 and $2,498, respectively)
|
1,270
|
|
|
1,370
|
|
||
Goodwill
|
38
|
|
|
38
|
|
||
Intangible assets (net of accumulated amortization of $141 and $140, respectively)
|
27
|
|
|
30
|
|
||
Deferred taxes, net
|
121
|
|
|
121
|
|
||
Other noncurrent assets
|
102
|
|
|
113
|
|
||
Total assets
|
$
|
7,066
|
|
|
$
|
7,230
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable and current maturities of long-term debt
|
$
|
769
|
|
|
$
|
946
|
|
Accounts payable
|
1,630
|
|
|
1,606
|
|
||
Other current liabilities
|
1,309
|
|
|
1,255
|
|
||
Total current liabilities
|
3,708
|
|
|
3,807
|
|
||
Long-term debt
|
4,588
|
|
|
4,521
|
|
||
Postretirement benefits liabilities
|
1,950
|
|
|
2,097
|
|
||
Other noncurrent liabilities
|
672
|
|
|
731
|
|
||
Total liabilities
|
10,918
|
|
|
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
|
2,728
|
|
|
2,731
|
|
||
Accumulated deficit
|
(4,657
|
)
|
|
(4,593
|
)
|
||
Accumulated other comprehensive loss
|
(1,786
|
)
|
|
(1,920
|
)
|
||
Common stock held in treasury, at cost (3.9 and 4.2 shares, respectively)
|
(152
|
)
|
|
(161
|
)
|
||
Total stockholders’ deficit attributable to Navistar International Corporation
|
(3,855
|
)
|
|
(3,931
|
)
|
||
Stockholders’ equity attributable to non-controlling interests
|
3
|
|
|
5
|
|
||
Total stockholders’ deficit
|
(3,852
|
)
|
|
(3,926
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
7,066
|
|
|
$
|
7,230
|
|
|
Six Months Ended April 30,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(26
|
)
|
|
$
|
(5
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
66
|
|
|
73
|
|
||
Depreciation of equipment leased to others
|
31
|
|
|
36
|
|
||
Deferred taxes, including change in valuation allowance
|
(41
|
)
|
|
1
|
|
||
Asset impairment charges
|
3
|
|
|
3
|
|
||
Gain on sales of investments and businesses, net
|
(59
|
)
|
|
—
|
|
||
Amortization of debt issuance costs and discount
|
12
|
|
|
15
|
|
||
Stock-based compensation
|
14
|
|
|
21
|
|
||
Provision for doubtful accounts
|
6
|
|
|
3
|
|
||
Equity in income of non-consolidated affiliates, net of dividends
|
(2
|
)
|
|
3
|
|
||
Write-off of debt issuance costs and discount
|
—
|
|
|
43
|
|
||
Other non-cash operating activities
|
(4
|
)
|
|
(13
|
)
|
||
Changes in other assets and liabilities, exclusive of the effects of businesses disposed
|
(190
|
)
|
|
(278
|
)
|
||
Net cash used in operating activities
|
(190
|
)
|
|
(98
|
)
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchases of marketable securities
|
—
|
|
|
(148
|
)
|
||
Sales of marketable securities
|
—
|
|
|
460
|
|
||
Maturities of marketable securities
|
79
|
|
|
18
|
|
||
Capital expenditures
|
(66
|
)
|
|
(53
|
)
|
||
Purchases of equipment leased to others
|
(76
|
)
|
|
(92
|
)
|
||
Proceeds from sales of property and equipment
|
5
|
|
|
5
|
|
||
Proceeds from sales of investments and businesses
|
95
|
|
|
(3
|
)
|
||
Other investing activities
|
—
|
|
|
1
|
|
||
Net cash provided by investing activities
|
37
|
|
|
188
|
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuance of securitized debt
|
—
|
|
|
27
|
|
||
Principal payments on securitized debt
|
(34
|
)
|
|
(34
|
)
|
||
Net change in secured revolving credit facilities
|
275
|
|
|
5
|
|
||
Proceeds from issuance of non-securitized debt
|
73
|
|
|
2,805
|
|
||
Principal payments on non-securitized debt
|
(508
|
)
|
|
(2,589
|
)
|
||
Net change in notes and debt outstanding under revolving credit facilities
|
126
|
|
|
74
|
|
||
Debt issuance costs
|
(2
|
)
|
|
(33
|
)
|
||
Proceeds from financed lease obligations
|
9
|
|
|
38
|
|
||
Proceeds from exercise of stock options
|
2
|
|
|
5
|
|
||
Dividends paid by subsidiaries to non-controlling interest
|
(13
|
)
|
|
(14
|
)
|
||
Other financing activities
|
(2
|
)
|
|
(15
|
)
|
||
Net cash provided by (used in) financing activities
|
(74
|
)
|
|
269
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(10
|
)
|
|
(7
|
)
|
||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(237
|
)
|
|
352
|
|
||
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
|
$
|
1,208
|
|
|
$
|
1,192
|
|
(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 (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
11
|
|
|
(26
|
)
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
—
|
|
|
—
|
|
|
134
|
|
||||||||
ASC-606 modified retrospective adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
||||||||
Balance as of April 30, 2019
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,728
|
|
|
$
|
(4,657
|
)
|
|
$
|
(1,786
|
)
|
|
$
|
(152
|
)
|
|
$
|
3
|
|
|
$
|
(3,852
|
)
|
Balance as of October 31, 2017
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,733
|
|
|
$
|
(4,933
|
)
|
|
$
|
(2,211
|
)
|
|
$
|
(179
|
)
|
|
$
|
4
|
|
|
$
|
(4,574
|
)
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
13
|
|
|
(5
|
)
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
3
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
||||||||
Stock deferral and issuance - directors
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Balance as of April 30, 2018
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,729
|
|
|
$
|
(4,951
|
)
|
|
$
|
(2,154
|
)
|
|
$
|
(166
|
)
|
|
$
|
3
|
|
|
$
|
(4,527
|
)
|
|
Six Months Ended April 30,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
529
|
|
|
$
|
629
|
|
Costs accrued and revenues deferred
|
118
|
|
|
84
|
|
||
Adjustments to pre-existing warranties
(A)
|
2
|
|
|
—
|
|
||
Payments and revenues recognized
|
(138
|
)
|
|
(162
|
)
|
||
Other adjustments
(B)
|
12
|
|
|
—
|
|
||
Balance at end of period
|
523
|
|
|
551
|
|
||
Less: Current portion
|
261
|
|
|
265
|
|
||
Noncurrent accrued product warranty and deferred warranty revenue
|
$
|
262
|
|
|
$
|
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 Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 606), partially offset by a
$2 million
reduction in liability related to the sale of a majority interest in Navistar Defense.
|
(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 April 30, 2019
(A)
|
||||||||||
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
Sales of manufactured products, net
|
|
$
|
2,919
|
|
|
$
|
29
|
|
|
$
|
2,948
|
|
Costs of products sold
|
|
2,475
|
|
|
18
|
|
|
2,493
|
|
|||
Interest expense
|
|
83
|
|
|
(1
|
)
|
|
82
|
|
|||
Income (loss) before income tax
|
|
(56
|
)
|
|
12
|
|
|
(44
|
)
|
|||
Income tax benefit (expense)
|
|
3
|
|
|
(2
|
)
|
|
1
|
|
|||
Net income (loss)
|
|
$
|
(53
|
)
|
|
$
|
10
|
|
|
$
|
(43
|
)
|
|
|
Six months ended April 30, 2019
(A)
|
||||||||||
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
Sales of manufactured products, net
|
|
$
|
5,309
|
|
|
$
|
25
|
|
|
$
|
5,334
|
|
Costs of products sold
|
|
4,461
|
|
|
11
|
|
|
4,472
|
|
|||
Interest expense
|
|
169
|
|
|
(2
|
)
|
|
167
|
|
|||
Income (loss) before income tax
|
|
(62
|
)
|
|
16
|
|
|
(46
|
)
|
|||
Income tax benefit (expense)
|
|
23
|
|
|
(3
|
)
|
|
20
|
|
|||
Net income (loss)
|
|
$
|
(39
|
)
|
|
$
|
13
|
|
|
$
|
(26
|
)
|
|
|
As of April 30, 2019
(A)
|
||||||||||
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets
|
|
|
|
|
|
|
||||||
Trade and other receivables, net
|
|
$
|
463
|
|
|
$
|
(10
|
)
|
|
$
|
453
|
|
Inventories, net
|
|
1,215
|
|
|
(51
|
)
|
|
1,164
|
|
|||
Other current assets
|
|
215
|
|
|
67
|
|
|
282
|
|
|||
Total current assets
|
|
5,095
|
|
|
6
|
|
|
5,101
|
|
|||
Property and equipment, net
|
|
1,443
|
|
|
(173
|
)
|
|
1,270
|
|
|||
Deferred taxes, net
|
|
123
|
|
|
(2
|
)
|
|
121
|
|
|||
Other noncurrent assets
|
|
110
|
|
|
(8
|
)
|
|
102
|
|
|||
Total assets
|
|
$
|
7,243
|
|
|
$
|
(177
|
)
|
|
$
|
7,066
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
||||||
Notes payable and current maturities of long-term debt
|
|
$
|
783
|
|
|
$
|
(14
|
)
|
|
$
|
769
|
|
Other current liabilities
|
|
1,287
|
|
|
22
|
|
|
1,309
|
|
|||
Total current liabilities
|
|
3,700
|
|
|
8
|
|
|
3,708
|
|
|||
Long-term debt
|
|
4,640
|
|
|
(52
|
)
|
|
4,588
|
|
|||
Other noncurrent liabilities
|
|
781
|
|
|
(109
|
)
|
|
672
|
|
|||
Total liabilities
|
|
11,071
|
|
|
(153
|
)
|
|
10,918
|
|
|||
Stockholders’ deficit
|
|
|
|
|
|
|
||||||
Total stockholders’ deficit attributable to Navistar International Corporation
|
|
(3,831
|
)
|
|
(24
|
)
|
|
(3,855
|
)
|
|||
Total liabilities and stockholders’ deficit
|
|
$
|
7,243
|
|
|
$
|
(177
|
)
|
|
$
|
7,066
|
|
(A)
|
Our
Consolidated Balance Sheet
as of April 30, 2019 does not include the impact of Navistar Defense due to the sale of a majority interest in our former 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 April 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Truck products and services
(A)
|
$
|
2,099
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
2,102
|
|
Truck contract manufacturing
|
112
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
||||||
Used trucks
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
||||||
Engines
|
—
|
|
|
78
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
138
|
|
||||||
Parts
|
1
|
|
|
500
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
521
|
|
||||||
Extended warranty contracts
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||||
Sales of manufactured products, net
|
2,287
|
|
|
578
|
|
|
80
|
|
|
—
|
|
|
3
|
|
|
2,948
|
|
||||||
Retail financing
(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
||||||
Wholesale financing
(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Sales and revenues, net
|
$
|
2,287
|
|
|
$
|
578
|
|
|
$
|
80
|
|
|
$
|
48
|
|
|
$
|
3
|
|
|
$
|
2,996
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Six Months Ended April 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Truck products and services
(A)(B)
|
$
|
3,776
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
3,782
|
|
Truck contract manufacturing
|
130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130
|
|
||||||
Used trucks
|
97
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97
|
|
||||||
Engines
|
—
|
|
|
144
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
249
|
|
||||||
Parts
|
2
|
|
|
980
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
1,018
|
|
||||||
Extended warranty contracts
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
||||||
Sales of manufactured products, net
|
4,063
|
|
|
1,124
|
|
|
141
|
|
|
—
|
|
|
6
|
|
|
5,334
|
|
||||||
Retail financing
(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
||||||
Wholesale financing
(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
||||||
Sales and revenues, net
|
$
|
4,063
|
|
|
$
|
1,124
|
|
|
$
|
141
|
|
|
$
|
95
|
|
|
$
|
6
|
|
|
$
|
5,429
|
|
(A)
|
Includes other markets primarily consisting of Bus, Export Truck and Mexico. Also, includes revenue of
$2 million
and
$5 million
for the three and six months ended April 30, 2019, respectively, related to certain third-party financings initially recorded as borrowings, and operating lease revenue of
$1 million
for both periods.
|
(B)
|
Includes military sales of
$62 million
. In December 2018, we completed the 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
$14 million
and
$12 million
for the three months ended April 30, 2019, respectively, and
$27 million
and
$24 million
for the six months ended April 30, 2019, respectively.
|
(in millions)
|
As of April 30, 2019
|
|
As of October 31, 2018
|
||||
Retail portfolio
|
$
|
797
|
|
|
$
|
720
|
|
Wholesale portfolio
|
1,544
|
|
|
1,460
|
|
||
Total finance receivables
|
2,341
|
|
|
2,180
|
|
||
Less: Allowance for doubtful accounts
|
25
|
|
|
22
|
|
||
Total finance receivables, net
|
2,316
|
|
|
2,158
|
|
||
Less: Current portion, net
(A)
|
2,037
|
|
|
1,898
|
|
||
Noncurrent portion, net
|
$
|
279
|
|
|
$
|
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 April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Retail notes and finance leases revenue
|
$
|
15
|
|
|
$
|
13
|
|
|
$
|
29
|
|
|
$
|
24
|
|
Wholesale notes interest
|
31
|
|
|
24
|
|
|
62
|
|
|
49
|
|
||||
Operating lease revenue
|
22
|
|
|
17
|
|
|
43
|
|
|
35
|
|
||||
Retail and wholesale accounts interest
|
10
|
|
|
9
|
|
|
18
|
|
|
14
|
|
||||
Gross finance revenues
|
78
|
|
|
63
|
|
|
152
|
|
|
122
|
|
||||
Less: Intercompany revenues
|
30
|
|
|
23
|
|
|
57
|
|
|
44
|
|
||||
Finance revenues
|
$
|
48
|
|
|
$
|
40
|
|
|
$
|
95
|
|
|
$
|
78
|
|
|
Three Months Ended April 30, 2019
|
|
Three Months Ended April 30, 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
|
$
|
20
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
51
|
|
|
$
|
18
|
|
|
$
|
3
|
|
|
$
|
29
|
|
|
$
|
50
|
|
Provision for doubtful accounts
|
3
|
|
|
—
|
|
|
2
|
|
|
5
|
|
|
3
|
|
|
—
|
|
|
(1
|
)
|
|
2
|
|
||||||||
Charge-off of accounts
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||||
Recoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Other
(A)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
||||||||
Allowance for doubtful accounts, at end of period
|
$
|
22
|
|
|
$
|
3
|
|
|
$
|
29
|
|
|
$
|
54
|
|
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
27
|
|
|
$
|
49
|
|
|
Six Months Ended April 30, 2019
|
|
Six Months Ended April 30, 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
|
4
|
|
|
—
|
|
|
2
|
|
|
6
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||||
Charge-off of accounts
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||||
Recoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||
Other
(A)
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||
Allowance for doubtful accounts, at end of period
|
$
|
22
|
|
|
$
|
3
|
|
|
$
|
29
|
|
|
$
|
54
|
|
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
27
|
|
|
$
|
49
|
|
|
April 30, 2019
|
|
October 31, 2018
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Impaired finance receivables with specific loss reserves
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Impaired finance receivables without specific loss reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Specific loss reserves on impaired finance receivables
|
10
|
|
|
—
|
|
|
10
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
Finance receivables on non-accrual status
|
21
|
|
|
—
|
|
|
21
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|
April 30, 2019
|
|
October 31, 2018
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Current, and up to 30 days past due
|
$
|
720
|
|
|
$
|
1,543
|
|
|
$
|
2,263
|
|
|
$
|
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
|
$
|
797
|
|
|
$
|
1,544
|
|
|
$
|
2,341
|
|
|
$
|
720
|
|
|
$
|
1,460
|
|
|
$
|
2,180
|
|
(in millions)
|
April 30,
2019 |
|
October 31,
2018 |
||||
Finished products
|
$
|
749
|
|
|
$
|
671
|
|
Work in process
|
104
|
|
|
118
|
|
||
Raw materials
|
311
|
|
|
321
|
|
||
Total inventories, net
|
$
|
1,164
|
|
|
$
|
1,110
|
|
(in millions)
|
April 30, 2019
|
|
October 31, 2018
|
||||
Manufacturing operations
|
|
|
|
||||
Senior Secured Term Loan Credit Agreement, due 2025, net of unamortized discount of $6 and $7, respectively, and unamortized debt issuance costs of $11 at both dates
|
$
|
1,563
|
|
|
$
|
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 $5 and unamortized debt issuance costs of $1
|
—
|
|
|
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
|
53
|
|
|
122
|
|
||
Other
|
42
|
|
|
26
|
|
||
Total Manufacturing operations debt
|
2,962
|
|
|
3,426
|
|
||
Less: Current portion
|
60
|
|
|
461
|
|
||
Net long-term Manufacturing operations debt
|
$
|
2,902
|
|
|
$
|
2,965
|
|
(in millions)
|
April 30, 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 $2 and $4, respectively
|
$
|
1,213
|
|
|
$
|
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
|
392
|
|
|
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
|
660
|
|
|
519
|
|
||
Commercial paper, at variable rates, program matures in 2022
|
47
|
|
|
75
|
|
||
Borrowings secured by operating and finance leases, at various rates, due serially through 2024
|
83
|
|
|
105
|
|
||
Total Financial Services operations debt
|
2,395
|
|
|
2,041
|
|
||
Less: Current portion
|
709
|
|
|
485
|
|
||
Net long-term Financial Services operations debt
|
$
|
1,686
|
|
|
$
|
1,556
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||||||||||||||||||
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
Service cost for benefits earned during the period
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest on obligation
|
30
|
|
|
27
|
|
|
12
|
|
|
11
|
|
|
62
|
|
|
54
|
|
|
24
|
|
|
22
|
|
||||||||
Amortization of cumulative loss
|
23
|
|
|
27
|
|
|
—
|
|
|
2
|
|
|
47
|
|
|
53
|
|
|
—
|
|
|
4
|
|
||||||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||||||
Premiums on pension insurance
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||||
Expected return on assets
|
(35
|
)
|
|
(41
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(73
|
)
|
|
(81
|
)
|
|
(11
|
)
|
|
(12
|
)
|
||||||||
Net periodic benefit expense
|
$
|
23
|
|
|
$
|
15
|
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
186
|
|
|
$
|
41
|
|
|
$
|
15
|
|
|
$
|
16
|
|
•
|
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 April 30, 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
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
101
|
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts
(A)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Foreign currency contracts
(A)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Interest rate caps
(B)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Total assets
|
$
|
23
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
101
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
105
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts
(C)
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts
(C)
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Guarantees
|
—
|
|
|
—
|
|
|
22
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
24
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
22
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
24
|
|
(A)
|
The asset value of commodity forward contracts and foreign currency 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 and foreign currency contracts is included in Other current liabilities in the accompanying Consolidated Balance Sheets.
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Guarantees, at beginning of period
|
$
|
(21
|
)
|
|
$
|
(25
|
)
|
|
$
|
(24
|
)
|
|
$
|
(21
|
)
|
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net terminations (issuances)
|
(1
|
)
|
|
(3
|
)
|
|
1
|
|
|
(8
|
)
|
||||
Settlements
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Guarantees, at end of period
|
$
|
(22
|
)
|
|
$
|
(27
|
)
|
|
$
|
(22
|
)
|
|
$
|
(27
|
)
|
|
As of April 30, 2019
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
199
|
|
|
$
|
199
|
|
|
$
|
203
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Agreement, due 2025
|
—
|
|
|
—
|
|
|
1,582
|
|
|
1,582
|
|
|
1,563
|
|
|||||
6.625% Senior Notes, due 2026
|
—
|
|
|
1,127
|
|
|
—
|
|
|
1,127
|
|
|
1,084
|
|
|||||
Loan Agreement related to 6.75% Tax Exempt Bonds, due 2040
|
—
|
|
|
235
|
|
|
—
|
|
|
235
|
|
|
220
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
53
|
|
|
53
|
|
|
53
|
|
|||||
Other
(A)
|
—
|
|
|
—
|
|
|
41
|
|
|
41
|
|
|
41
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, due serially through 2023
|
—
|
|
|
—
|
|
|
1,214
|
|
|
1,214
|
|
|
1,213
|
|
|||||
Senior secured NFC Term Loan, due 2025
|
—
|
|
|
—
|
|
|
399
|
|
|
399
|
|
|
392
|
|
|||||
Bank credit facilities, due dates from 2019 through 2025
|
—
|
|
|
—
|
|
|
635
|
|
|
635
|
|
|
660
|
|
|||||
Commercial paper, program matures in 2022
|
47
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
|||||
Borrowings secured by operating and finance leases, due serially through 2024
|
—
|
|
|
—
|
|
|
83
|
|
|
83
|
|
|
83
|
|
|
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
(B)
|
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)
|
Excludes capital lease obligation debt of
$1 million
as of
April 30, 2019
.
|
(B)
|
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.
|
•
|
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., Ltd ("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 April 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
2,287
|
|
|
$
|
578
|
|
|
$
|
80
|
|
|
$
|
48
|
|
|
$
|
3
|
|
|
$
|
2,996
|
|
Intersegment sales and revenues
|
9
|
|
|
1
|
|
|
7
|
|
|
30
|
|
|
(47
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
2,296
|
|
|
$
|
579
|
|
|
$
|
87
|
|
|
$
|
78
|
|
|
$
|
(44
|
)
|
|
$
|
2,996
|
|
Net income (loss) attributable to NIC
|
$
|
(74
|
)
|
|
$
|
144
|
|
|
$
|
3
|
|
|
$
|
32
|
|
|
$
|
(153
|
)
|
|
$
|
(48
|
)
|
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Segment profit (loss)
|
$
|
(74
|
)
|
|
$
|
144
|
|
|
$
|
3
|
|
|
$
|
32
|
|
|
$
|
(154
|
)
|
|
$
|
(49
|
)
|
Depreciation and amortization
|
$
|
26
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
16
|
|
|
$
|
3
|
|
|
$
|
49
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
55
|
|
|
82
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
3
|
|
||||||
Capital expenditures
(B)
|
21
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
1
|
|
|
22
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services (A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Three Months Ended April 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
1,688
|
|
|
$
|
601
|
|
|
$
|
89
|
|
|
$
|
40
|
|
|
$
|
4
|
|
|
$
|
2,422
|
|
Intersegment sales and revenues
|
16
|
|
|
—
|
|
|
8
|
|
|
23
|
|
|
(47
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
1,704
|
|
|
$
|
601
|
|
|
$
|
97
|
|
|
$
|
63
|
|
|
$
|
(43
|
)
|
|
$
|
2,422
|
|
Net income (loss) attributable to NIC
|
$
|
42
|
|
|
$
|
132
|
|
|
$
|
1
|
|
|
$
|
19
|
|
|
$
|
(139
|
)
|
|
$
|
55
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||||
Segment profit (loss)
|
$
|
42
|
|
|
$
|
132
|
|
|
$
|
1
|
|
|
$
|
19
|
|
|
$
|
(132
|
)
|
|
$
|
62
|
|
Depreciation and amortization
|
$
|
34
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
14
|
|
|
$
|
3
|
|
|
$
|
54
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
58
|
|
|
79
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Capital expenditures
(B)
|
30
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
23
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services (A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Six Months Ended April 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
4,063
|
|
|
$
|
1,124
|
|
|
$
|
141
|
|
|
$
|
95
|
|
|
$
|
6
|
|
|
$
|
5,429
|
|
Intersegment sales and revenues
|
30
|
|
|
3
|
|
|
19
|
|
|
57
|
|
|
(109
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
4,093
|
|
|
$
|
1,127
|
|
|
$
|
160
|
|
|
$
|
152
|
|
|
$
|
(103
|
)
|
|
$
|
5,429
|
|
Net income (loss) attributable to NIC
|
$
|
16
|
|
|
$
|
288
|
|
|
$
|
9
|
|
|
$
|
63
|
|
|
$
|
(413
|
)
|
|
$
|
(37
|
)
|
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
||||||
Segment profit (loss)
|
$
|
16
|
|
|
$
|
288
|
|
|
$
|
9
|
|
|
$
|
63
|
|
|
$
|
(433
|
)
|
|
$
|
(57
|
)
|
Depreciation and amortization
|
$
|
52
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
32
|
|
|
$
|
6
|
|
|
$
|
97
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
111
|
|
|
167
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
3
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Capital expenditures
(B)
|
52
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
10
|
|
|
66
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services (A) |
|
Corporate
and Eliminations |
|
Total
|
|||||||||||||
Six Months Ended April 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
External sales and revenues, net
|
$
|
2,916
|
|
|
$
|
1,165
|
|
|
$
|
161
|
|
|
$
|
78
|
|
|
$
|
7
|
|
|
$
|
4,327
|
|
|
Intersegment sales and revenues
|
39
|
|
|
4
|
|
|
17
|
|
|
44
|
|
|
(104
|
)
|
|
—
|
|
|||||||
Total sales and revenues, net
|
$
|
2,955
|
|
|
$
|
1,169
|
|
|
$
|
178
|
|
|
$
|
122
|
|
|
$
|
(97
|
)
|
|
$
|
4,327
|
|
|
Net income (loss) attributable to NIC
|
$
|
35
|
|
|
$
|
269
|
|
|
$
|
(6
|
)
|
|
$
|
39
|
|
|
$
|
(355
|
)
|
|
$
|
(18
|
)
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
(22
|
)
|
|||||||
Segment profit (loss)
|
$
|
35
|
|
|
$
|
269
|
|
|
$
|
(6
|
)
|
|
$
|
39
|
|
|
$
|
(333
|
)
|
|
$
|
4
|
|
|
Depreciation and amortization
|
$
|
69
|
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
27
|
|
|
$
|
5
|
|
|
$
|
109
|
|
|
Interest expense
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
42
|
|
|
116
|
|
|
158
|
|
||||||
Equity in income of non-consolidated affiliates
|
1
|
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Capital expenditures
(B)
|
55
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
(4
|
)
|
|
53
|
|
(A)
|
Total sales and revenues in the Financial Services segment include interest revenues of
$55 million
and
$108 million
for the
three and six months ended April 30, 2019
, respectively, and
$44 million
and
$85 million
for the
three and six months ended April 30, 2018
, respectively.
|
(B)
|
Exclusive of purchases of equipment leased to others.
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services |
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||||
Segment assets, as of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
April 30, 2019
|
$
|
2,120
|
|
|
$
|
650
|
|
|
$
|
306
|
|
|
$
|
2,930
|
|
|
$
|
1,060
|
|
|
$
|
7,066
|
|
October 31, 2018
|
2,085
|
|
|
636
|
|
|
331
|
|
|
2,648
|
|
|
1,530
|
|
|
7,230
|
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||
Balance as of January 31, 2019
|
$
|
(301
|
)
|
|
$
|
(1,490
|
)
|
|
$
|
(1,791
|
)
|
Other comprehensive loss before reclassifications
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
23
|
|
|
23
|
|
|||
Net current-period other comprehensive income (loss)
|
(18
|
)
|
|
23
|
|
|
5
|
|
|||
Balance as of April 30, 2019
|
$
|
(319
|
)
|
|
$
|
(1,467
|
)
|
|
$
|
(1,786
|
)
|
(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
|
(4
|
)
|
|
(8
|
)
|
|
(12
|
)
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
146
|
|
|
146
|
|
|||
Net current-period other comprehensive income (loss)
|
(4
|
)
|
|
138
|
|
|
134
|
|
|||
Balance as of April 30, 2019
|
$
|
(319
|
)
|
|
$
|
(1,467
|
)
|
|
$
|
(1,786
|
)
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||
Balance as of January 31, 2018
|
$
|
(261
|
)
|
|
$
|
(1,893
|
)
|
|
$
|
(2,154
|
)
|
Other comprehensive loss before reclassifications
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
28
|
|
|
28
|
|
|||
Net current-period other comprehensive income (loss)
|
(28
|
)
|
|
28
|
|
|
—
|
|
|||
Balance as of April 30, 2018
|
$
|
(289
|
)
|
|
$
|
(1,865
|
)
|
|
$
|
(2,154
|
)
|
(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
|
(6
|
)
|
|
(2
|
)
|
|
(8
|
)
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
65
|
|
|
65
|
|
|||
Net current-period other comprehensive income (loss)
|
(6
|
)
|
|
63
|
|
|
57
|
|
|||
Balance as of April 30, 2018
|
$
|
(289
|
)
|
|
$
|
(1,865
|
)
|
|
$
|
(2,154
|
)
|
|
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
(in millions)
|
|
Location in Consolidated
Statements of Operations |
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Defined benefit plans
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of actuarial loss
|
|
Other expense, net
|
|
$
|
23
|
|
|
$
|
29
|
|
|
$
|
47
|
|
|
$
|
57
|
|
Settlements
|
|
Other expense, net
|
|
—
|
|
|
—
|
|
|
142
|
|
|
9
|
|
||||
|
|
Total before tax
|
|
23
|
|
|
29
|
|
|
189
|
|
|
66
|
|
||||
|
|
Income tax benefit
|
|
—
|
|
|
(1
|
)
|
|
(43
|
)
|
|
(1
|
)
|
||||
Total reclassifications for the period, net of tax
|
|
$
|
23
|
|
|
$
|
28
|
|
|
$
|
146
|
|
|
$
|
65
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
(in millions, except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Navistar International Corporation common stockholders
|
$
|
(48
|
)
|
|
$
|
55
|
|
|
$
|
(37
|
)
|
|
$
|
(18
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
99.2
|
|
|
98.8
|
|
|
99.2
|
|
|
98.7
|
|
||||
Effect of dilutive securities
|
—
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
||||
Diluted
|
99.2
|
|
|
99.5
|
|
|
99.2
|
|
|
98.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.48
|
)
|
|
$
|
0.56
|
|
|
$
|
(0.37
|
)
|
|
$
|
(0.18
|
)
|
Diluted
|
(0.48
|
)
|
|
0.55
|
|
|
(0.37
|
)
|
|
(0.18
|
)
|
|
Three Months Ended April 30,
|
|
|
|
|
|
Six Months Ended April 30,
|
|
|
|
|
||||||||||||||||||
(in millions, except per share data and % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Sales and revenues, net
|
$
|
2,996
|
|
|
$
|
2,422
|
|
|
$
|
574
|
|
|
24
|
%
|
|
$
|
5,429
|
|
|
$
|
4,327
|
|
|
$
|
1,102
|
|
|
25
|
%
|
Costs of products sold
|
2,493
|
|
|
1,987
|
|
|
506
|
|
|
25
|
%
|
|
4,472
|
|
|
3,519
|
|
|
953
|
|
|
27
|
%
|
||||||
Restructuring charges
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
%
|
|
1
|
|
|
(2
|
)
|
|
3
|
|
|
150
|
%
|
||||||
Asset impairment charges
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
%
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
%
|
||||||
Selling, general and administrative expenses
|
373
|
|
|
200
|
|
|
173
|
|
|
87
|
%
|
|
559
|
|
|
391
|
|
|
168
|
|
|
43
|
%
|
||||||
Engineering and product development costs
|
75
|
|
|
75
|
|
|
—
|
|
|
—
|
%
|
|
161
|
|
|
150
|
|
|
11
|
|
|
7
|
%
|
||||||
Interest expense
|
82
|
|
|
79
|
|
|
3
|
|
|
4
|
%
|
|
167
|
|
|
158
|
|
|
9
|
|
|
6
|
%
|
||||||
Other expense, net
|
18
|
|
|
11
|
|
|
7
|
|
|
64
|
%
|
|
115
|
|
|
91
|
|
|
24
|
|
|
26
|
%
|
||||||
Total costs and expenses
|
3,043
|
|
|
2,354
|
|
|
689
|
|
|
29
|
%
|
|
5,478
|
|
|
4,310
|
|
|
1,168
|
|
|
27
|
%
|
||||||
Equity in income of non-consolidated affiliates
|
3
|
|
|
—
|
|
|
3
|
|
|
100
|
%
|
|
3
|
|
|
—
|
|
|
3
|
|
|
100
|
%
|
||||||
Income (loss) before income tax
|
(44
|
)
|
|
68
|
|
|
(112
|
)
|
|
(165
|
)%
|
|
(46
|
)
|
|
17
|
|
|
(63
|
)
|
|
(371
|
)%
|
||||||
Income tax benefit (expense)
|
1
|
|
|
(7
|
)
|
|
8
|
|
|
114
|
%
|
|
20
|
|
|
(22
|
)
|
|
42
|
|
|
(191
|
)%
|
||||||
Net income (loss)
|
(43
|
)
|
|
61
|
|
|
(104
|
)
|
|
(170
|
)%
|
|
(26
|
)
|
|
(5
|
)
|
|
(21
|
)
|
|
(420
|
)%
|
||||||
Less: Net income attributable to non-controlling interests
|
5
|
|
|
6
|
|
|
(1
|
)
|
|
(17
|
)%
|
|
11
|
|
|
13
|
|
|
(2
|
)
|
|
(15
|
)%
|
||||||
Net income (loss)
attributable to Navistar International Corporation
|
$
|
(48
|
)
|
|
$
|
55
|
|
|
$
|
(103
|
)
|
|
(187
|
)%
|
|
$
|
(37
|
)
|
|
$
|
(18
|
)
|
|
$
|
(19
|
)
|
|
(106
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted income (loss) per share
(A)
|
$
|
(0.48
|
)
|
|
$
|
0.55
|
|
|
$
|
(1.03
|
)
|
|
(187
|
)%
|
|
$
|
(0.37
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.19
|
)
|
|
(106
|
)%
|
Diluted weighted average shares outstanding
|
99.2
|
|
|
99.5
|
|
|
(0.3
|
)
|
|
—
|
%
|
|
99.2
|
|
|
98.7
|
|
|
0.5
|
|
|
1
|
%
|
(A)
|
Amounts attributable to NIC.
|
|
Three Months Ended April 30,
|
|
|
|
|
|
Six Months Ended April 30,
|
|
|
|
|
||||||||||||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Truck segment sales, net
|
$
|
2,296
|
|
|
$
|
1,704
|
|
|
$
|
592
|
|
|
35
|
%
|
|
$
|
4,093
|
|
|
$
|
2,955
|
|
|
$
|
1,138
|
|
|
39
|
%
|
Truck segment profit (loss)
|
(74
|
)
|
|
42
|
|
|
(116
|
)
|
|
(276
|
)%
|
|
16
|
|
|
35
|
|
|
(19
|
)
|
|
(54
|
)%
|
|
Three Months Ended April 30,
|
|
|
|
|
|
Six Months Ended April 30,
|
|
|
|
|
||||||||||||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Parts segment sales, net
|
$
|
579
|
|
|
$
|
601
|
|
|
$
|
(22
|
)
|
|
(4
|
)%
|
|
$
|
1,127
|
|
|
$
|
1,169
|
|
|
$
|
(42
|
)
|
|
(4
|
)%
|
Parts segment profit
|
144
|
|
|
132
|
|
|
12
|
|
|
9
|
%
|
|
288
|
|
|
269
|
|
|
19
|
|
|
7
|
%
|
|
Three Months Ended April 30,
|
|
|
|
|
|
Six Months Ended April 30,
|
|
|
|
|
||||||||||||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Global Operations segment sales, net
|
$
|
87
|
|
|
$
|
97
|
|
|
$
|
(10
|
)
|
|
(10
|
)%
|
|
$
|
160
|
|
|
$
|
178
|
|
|
$
|
(18
|
)
|
|
(10
|
)%
|
Global Operations segment profit (loss)
|
3
|
|
|
1
|
|
|
2
|
|
|
200
|
%
|
|
9
|
|
|
(6
|
)
|
|
15
|
|
|
250
|
%
|
|
Three Months Ended April 30,
|
|
|
|
|
|
Six Months Ended April 30,
|
|
|
|
|
||||||||||||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Financial Services segment revenues, net
|
$
|
78
|
|
|
$
|
63
|
|
|
$
|
15
|
|
|
24
|
%
|
|
$
|
152
|
|
|
$
|
122
|
|
|
$
|
30
|
|
|
25
|
%
|
Financial Services segment profit
|
32
|
|
|
19
|
|
|
13
|
|
|
68
|
%
|
|
63
|
|
|
39
|
|
|
24
|
|
|
62
|
%
|
|
Three Months Ended April 30,
|
|
|
|
|
|
Six Months Ended April 30,
|
|
|
||||||||||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
School buses
(A)
|
4,800
|
|
|
5,100
|
|
|
(300
|
)
|
|
(6
|
)%
|
|
10,700
|
|
|
11,100
|
|
|
(400
|
)
|
|
(4
|
)%
|
Class 6 and 7 medium trucks
|
28,100
|
|
|
26,000
|
|
|
2,100
|
|
|
8
|
%
|
|
54,800
|
|
|
48,900
|
|
|
5,900
|
|
|
12
|
%
|
Class 8 heavy trucks
|
57,000
|
|
|
45,500
|
|
|
11,500
|
|
|
25
|
%
|
|
114,300
|
|
|
89,500
|
|
|
24,800
|
|
|
28
|
%
|
Class 8 severe service trucks
|
18,300
|
|
|
17,300
|
|
|
1,000
|
|
|
6
|
%
|
|
36,100
|
|
|
34,400
|
|
|
1,700
|
|
|
5
|
%
|
Total Core markets
|
108,200
|
|
|
93,900
|
|
|
14,300
|
|
|
15
|
%
|
|
215,900
|
|
|
183,900
|
|
|
32,000
|
|
|
17
|
%
|
Combined class 8 trucks
|
75,300
|
|
|
62,800
|
|
|
12,500
|
|
|
20
|
%
|
|
150,400
|
|
|
123,900
|
|
|
26,500
|
|
|
21
|
%
|
Navistar Core retail deliveries
|
20,900
|
|
|
16,400
|
|
|
4,500
|
|
|
27
|
%
|
|
38,600
|
|
|
29,600
|
|
|
9,000
|
|
|
30
|
%
|
(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
|
|||||||||||||
|
April 30, 2019
|
|
January 31, 2019
|
|
October 31, 2018
|
|
July 31, 2018
|
|
April 30, 2018
|
|||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|||||
Class 6 and 7 medium trucks
|
29.8
|
%
|
|
25.5
|
%
|
|
24.9
|
%
|
|
21.9
|
%
|
|
26.3
|
%
|
Class 8 heavy trucks
|
15.1
|
%
|
|
12.1
|
%
|
|
16.9
|
%
|
|
12.7
|
%
|
|
13.4
|
%
|
Class 8 severe service trucks
|
12.6
|
%
|
|
11.7
|
%
|
|
16.5
|
%
|
|
11.2
|
%
|
|
11.7
|
%
|
Combined class 8 trucks
|
14.5
|
%
|
|
12.0
|
%
|
|
16.8
|
%
|
|
12.3
|
%
|
|
12.9
|
%
|
|
As of April 30,
|
|
|
|
|
||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
||||
School buses
|
6,100
|
|
|
4,000
|
|
|
2,100
|
|
|
53
|
%
|
Class 6 and 7 medium trucks
|
17,400
|
|
|
9,500
|
|
|
7,900
|
|
|
83
|
%
|
Class 8 heavy trucks
|
23,200
|
|
|
14,300
|
|
|
8,900
|
|
|
62
|
%
|
Class 8 severe service trucks
|
8,900
|
|
|
4,200
|
|
|
4,700
|
|
|
112
|
%
|
Total Core markets
|
55,600
|
|
|
32,000
|
|
|
23,600
|
|
|
74
|
%
|
Combined class 8 trucks
|
32,100
|
|
|
18,500
|
|
|
13,600
|
|
|
74
|
%
|
|
Three Months Ended April 30,
|
|
|
|
Six Months Ended April 30,
|
|
|
||||||||||||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
School buses
|
3,300
|
|
|
2,900
|
|
|
400
|
|
|
14
|
%
|
|
5,800
|
|
|
4,800
|
|
|
1,000
|
|
|
21
|
%
|
Class 6 and 7 medium trucks
|
8,900
|
|
|
6,800
|
|
|
2,100
|
|
|
31
|
%
|
|
15,000
|
|
|
11,200
|
|
|
3,800
|
|
|
34
|
%
|
Class 8 heavy trucks
|
8,600
|
|
|
5,800
|
|
|
2,800
|
|
|
48
|
%
|
|
16,400
|
|
|
10,000
|
|
|
6,400
|
|
|
64
|
%
|
Class 8 severe service trucks
|
2,900
|
|
|
2,000
|
|
|
900
|
|
|
45
|
%
|
|
5,400
|
|
|
4,100
|
|
|
1,300
|
|
|
32
|
%
|
Total Core markets
|
23,700
|
|
|
17,500
|
|
|
6,200
|
|
|
35
|
%
|
|
42,600
|
|
|
30,100
|
|
|
12,500
|
|
|
42
|
%
|
Non "Core" defense
|
—
|
|
|
200
|
|
|
(200
|
)
|
|
(100
|
)%
|
|
100
|
|
|
400
|
|
|
(300
|
)
|
|
(75
|
)%
|
Other markets
(A)
|
5,500
|
|
|
2,300
|
|
|
3,200
|
|
|
139
|
%
|
|
7,200
|
|
|
3,400
|
|
|
3,800
|
|
|
112
|
%
|
Total worldwide units
|
29,200
|
|
|
20,000
|
|
|
9,200
|
|
|
46
|
%
|
|
49,900
|
|
|
33,900
|
|
|
16,000
|
|
|
47
|
%
|
Combined class 8 trucks
|
11,500
|
|
|
7,800
|
|
|
3,700
|
|
|
47
|
%
|
|
21,800
|
|
|
14,100
|
|
|
7,700
|
|
|
55
|
%
|
(A)
|
Other markets primarily consist of Class 4/5 vehicles, Export Truck, Mexico, and post-sale Navistar Defense. Other markets include certain Class 4/5 vehicle chargeouts of 2,500 and 2,700 General Motors ("GM")-branded units sold to GM for the three and six months ended April 30, 2019, respectively.
|
|
As of
|
||||||
(in millions)
|
April 30, 2019
|
|
October 31, 2018
|
||||
Consolidated cash and cash equivalents
|
$
|
977
|
|
|
$
|
1,320
|
|
Consolidated marketable securities
|
23
|
|
|
101
|
|
||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,000
|
|
|
$
|
1,421
|
|
|
As of
|
||||||
(in millions)
|
April 30, 2019
|
|
October 31, 2018
|
||||
Manufacturing operations
|
$
|
950
|
|
|
$
|
1,362
|
|
Financial Services operations
|
50
|
|
|
59
|
|
||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,000
|
|
|
$
|
1,421
|
|
|
Six Months Ended April 30, 2019
|
||||||||||
(in millions)
|
Manufacturing
Operations (A) |
|
Financial Services Operations and Adjustments
(A)
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||
Net cash used in operating activities
|
$
|
(83
|
)
|
|
$
|
(107
|
)
|
|
$
|
(190
|
)
|
Net cash provided by (used in) investing activities
|
97
|
|
|
(60
|
)
|
|
37
|
|
|||
Net cash provided by (used in) financing activities
|
(342
|
)
|
|
268
|
|
|
(74
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(6
|
)
|
|
(4
|
)
|
|
(10
|
)
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(334
|
)
|
|
97
|
|
|
(237
|
)
|
|||
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
|
$
|
961
|
|
|
$
|
247
|
|
|
$
|
1,208
|
|
|
Six Months Ended April 30, 2018
|
||||||||||
(in millions)
|
Manufacturing
Operations (A) |
|
Financial Services Operations and Adjustments
(A)
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||
Net cash used in operating activities
|
$
|
(39
|
)
|
|
$
|
(59
|
)
|
|
$
|
(98
|
)
|
Net cash provided by (used in) investing activities
|
236
|
|
|
(48
|
)
|
|
188
|
|
|||
Net cash provided by financing activities
|
209
|
|
|
60
|
|
|
269
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(6
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
400
|
|
|
(48
|
)
|
|
352
|
|
|||
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
|
$
|
1,090
|
|
|
$
|
102
|
|
|
$
|
1,192
|
|
(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 April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net Income (loss) attributable to NIC
|
$
|
(48
|
)
|
|
$
|
55
|
|
|
$
|
(37
|
)
|
|
$
|
(18
|
)
|
Plus:
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
49
|
|
|
54
|
|
|
97
|
|
|
109
|
|
||||
Manufacturing interest expense
(A)
|
55
|
|
|
58
|
|
|
111
|
|
|
116
|
|
||||
Adjusted for:
|
|
|
|
|
|
|
|
|
|
||||||
Income tax benefit (expense)
|
1
|
|
|
(7
|
)
|
|
20
|
|
|
(22
|
)
|
||||
EBITDA
|
$
|
55
|
|
|
$
|
174
|
|
|
$
|
151
|
|
|
$
|
229
|
|
(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 April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest expense
|
$
|
82
|
|
|
$
|
79
|
|
|
$
|
167
|
|
|
$
|
158
|
|
Less: Financial services interest expense
|
27
|
|
|
21
|
|
|
56
|
|
|
42
|
|
||||
Manufacturing interest expense
|
$
|
55
|
|
|
$
|
58
|
|
|
$
|
111
|
|
|
$
|
116
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
EBITDA
(reconciled above)
|
$
|
55
|
|
|
$
|
174
|
|
|
$
|
151
|
|
|
$
|
229
|
|
Adjusted for significant items of:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to pre-existing warranties
(A)
|
9
|
|
|
6
|
|
|
2
|
|
|
—
|
|
||||
Asset impairment charges
(B)
|
1
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Restructuring of manufacturing operations
(C)
|
1
|
|
|
1
|
|
|
1
|
|
|
(2
|
)
|
||||
MaxxForce Advanced EGR engine lawsuits
(D)
|
159
|
|
|
—
|
|
|
159
|
|
|
1
|
|
||||
Gain on sales
(E)
|
—
|
|
|
—
|
|
|
(59
|
)
|
|
—
|
|
||||
Debt refinancing charges
(F)
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
||||
Pension settlement
(G)
|
—
|
|
|
—
|
|
|
142
|
|
|
9
|
|
||||
Settlement gain
(H)
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Total adjustments
|
169
|
|
|
8
|
|
|
246
|
|
|
57
|
|
||||
Adjusted EBITDA
|
$
|
224
|
|
|
$
|
182
|
|
|
$
|
397
|
|
|
$
|
286
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss) attributable to NIC
|
$
|
(48
|
)
|
|
$
|
55
|
|
|
$
|
(37
|
)
|
|
$
|
(18
|
)
|
Adjusted for significant items of:
|
|
|
|
|
|
|
|
||||||||
Adjustments to pre-existing warranties
(A)
|
9
|
|
|
6
|
|
|
2
|
|
|
—
|
|
||||
Asset impairment charges
(B)
|
1
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Restructuring of manufacturing operations
(C)
|
1
|
|
|
1
|
|
|
1
|
|
|
(2
|
)
|
||||
MaxxForce Advanced EGR engine lawsuits
(D)
|
159
|
|
|
—
|
|
|
159
|
|
|
1
|
|
||||
Gain on sales
(E)
|
—
|
|
|
—
|
|
|
(59
|
)
|
|
—
|
|
||||
Debt refinancing charges
(F)
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
||||
Pension settlement
(G)
|
—
|
|
|
—
|
|
|
142
|
|
|
9
|
|
||||
Settlement gain
(H)
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Total adjustments
|
169
|
|
|
8
|
|
|
246
|
|
|
57
|
|
||||
Tax effect
(I)
|
(16
|
)
|
|
4
|
|
|
(47
|
)
|
|
4
|
|
||||
Adjusted Net income (loss) attributable to NIC
|
$
|
105
|
|
|
$
|
67
|
|
|
$
|
162
|
|
|
$
|
43
|
|
(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 second quarter and first half of 2019
, we recorded
$1 million
and
$3 million
, respectively, of asset impairment charges relating to certain assets under operating leases in our Truck segment. In the second quarter and first half of 2018, we recorded
$1 million
and
$3 million
, respectively, of asset impairment charges related to the sale of our railcar business in Cherokee, Alabama and certain assets under operating leases in our Truck segment.
|
(C)
|
In
the second quarter and first half of 2019
, we recorded a restructuring charge of
$1 million
in our Truck segment. In the second quarter and first half of 2018, we recorded a charge of
$1 million
and a benefit of
$2 million
, respectively, related to adjustments for restructuring in our Truck, Global Operations and Corporate segments.
|
(D)
|
In
the second quarter and first half of 2019
, we recognized a charge of
$159 million
related to MaxxForce Advanced EGR engine class action settlement and related litigation in our Truck segment. In the first half of 2018, we recognized a charge of
$1 million
for a jury verdict related to the MaxxForce Advanced EGR engine lawsuits in our Truck segment.
|
(E)
|
In the first half 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, and 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 half 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 in Corporate.
|
(G)
|
In the first half 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 in Corporate.
|
(H)
|
In
the second quarter and first half of 2019
, we recorded interest income of
$1 million
and
$2 million
, respectively, in Other expense, net derived from the prior year settlement of a business economic loss claim relating to our former Alabama engine manufacturing facility in Corporate.
|
(I)
|
Tax effect is calculated by excluding the impact of the non-GAAP adjustments from the interim period tax provision calculations.
|
•
|
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
|
Item 6.
|
Exhibits
|
Exhibit:
|
|
Description
|
|
Page
|
(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 document of Navistar Financial Dealer Note Master Owner Trust II, an affiliated trust of Navistar International Corporation, is filed herewith:
|
||
10.95
|
||
The following documents of Navistar International Corporation, its principal subsidiary, Navistar, Inc., and its indirect subsidiary, Navistar Financial Corporation, are incorporated herein by reference:
|
||
10.96
|
||
10.97
|
||
10.98
|
||
* Indicates a management contract or compensatory plan or arrangement required to be filed or incorporated by reference as an exhibit to this report.
|
1.
|
Amendments.
The Series 2012-VFN Indenture Supplement (including the Exhibits thereto) is hereby amended by making the additions which appear with computer generated underscoring and making the deletions which appear with computer generated strike-throughs, in each case, in the composite copy of the Series 2012-VFN Indenture Supplement attached hereto as
Exhibit A.
|
2.
|
Miscellaneous.
As amended by this Amendment, the Series 2012-VFN Indenture Supplement is in all respects ratified and confirmed and the Series 2012-VFN Indenture Supplement as so amended by this Amendment shall be read, taken and construed as one and the same instrument. This Amendment may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument. This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York, without reference to the conflict of law provisions thereof or any other jurisdiction, other than Section 5-1401 and Section 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.
|
3.
|
Limitation of Owner Trustee Liability.
Notwithstanding anything to the contrary, this Amendment has been signed by Deutsche Bank Trust Company Delaware, not in its individual capacity but solely in its capacity as Owner Trustee on behalf of the Issuing Entity. Each of the representations, undertakings and agreements herein made on the part of the Issuing Entity is made and intended not as a personal representation, undertaking or agreement by Deutsche Bank Trust Company Delaware, but is made for the purpose of binding only the Issuing Entity. In no event shall Deutsche Bank Trust Company Delaware have any personal liability for the representations, warranties, covenants, agreement or other obligations of the Issuing Entity hereunder or in any Notes, certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuing Entity.
|
4.
|
Rights of the Indenture Trustee
. The Indenture Trustee shall be afforded the same rights, protections, immunities and indemnities as are set forth in the Indenture as if specifically set forth herein. The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Amendment and is not responsible for any statement made herein. The Administrator hereby certifies that all of the conditions precedent for the making of this Amendment have been complied with.
|
NAVISTAR FINANCIAL DEALER NOTE MASTER OWNER TRUST II,
|
||
as Issuing Entity
|
||
By:
|
DEUTSCHE BANK TRUST COMPANY DELAWARE, as Owner Trustee and not in its individual capacity
|
|
|
||
|
||
By:
|
/s/ Elizabeth B. Ferry
|
|
Name:
|
Elizabeth B. Ferry
|
|
Title:
|
Vice President
|
|
|
||
|
||
By:
|
/s/ Chad Jones
|
|
Name:
|
Chad Jones
|
|
Title:
|
Vice President
|
|
|
||
|
||
CITIBANK, N.A., as Indenture Trustee and not in its individual capacity
|
||
|
||
|
||
By:
|
/s/ Jacqueline Suarez
|
|
Name:
|
Jacqueline Suarez
|
|
Title:
|
Vice President
|
BANK OF AMERICA, NATIONAL ASSOCIATION,
|
||
as Administrative Agent
|
||
|
||
|
||
By:
|
/s/ Carl W. Anderson
|
|
Name:
|
Carl W. Anderson
|
|
Title:
|
Managing Director
|
|
|
||
|
||
BANK OF AMERICA, NATIONAL ASSOCIATION,
|
||
as the Managing Agent
|
||
for the Bank of America Purchaser Group
|
||
|
|
|
|
|
|
By:
|
/s/ Carl W. Anderson
|
|
Name:
|
Carl W. Anderson
|
|
Title:
|
Managing Director
|
|
|
||
|
||
BANK OF AMERICA, NATIONAL ASSOCIATION,
|
||
as the Committed Purchaser
|
||
for the Bank of America Purchaser Group
|
||
|
||
|
||
By:
|
/s/ Carl W. Anderson
|
|
Name:
|
Carl W. Anderson
|
|
Title:
|
Managing Director
|
CREDIT SUISSE AG,
NEW YORK BRANCH,
|
|
CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH,
|
as the Managing Agent
for the CS Purchaser Group
|
|
as the Committed Purchaser
for the CS Purchaser Group
|
By:
|
/s/ Patrick Duggan
|
|
By:
|
/s/ Patrick Duggan
|
Name:
|
Patrick Duggan
|
|
Name:
|
Patrick Duggan
|
Title:
|
Associate
|
|
Title:
|
Authorized Signatory
|
By:
|
/s/ Erin McCutcheon
|
|
By:
|
/s/ Erin McCutcheon
|
Name:
|
Erin McCutcheon
|
|
Name:
|
Erin McCutcheon
|
Title:
|
Vice President
|
|
Title:
|
Authorized Signatory
|
|
|
|
|
ALPINE SECURITIZATION LTD.,
as a Conduit Purchaser
for the CS Purchaser Group
|
|
|
|
By:
|
Credit Suisse AG, New York Branch,
as its administrative agent
|
|
|
|
By:
|
/s/ Patrick Duggan
|
|
|
|
Name:
|
Patrick Duggan
|
|
|
|
Title:
|
Associate
|
|
|
|
By:
|
/s/ Erin McCutcheon
|
|
|
|
Name:
|
Erin McCutcheon
|
|
|
|
Title:
|
Vice President
|
NEW YORK LIFE INSURANCE COMPANY,
|
||
as the Managing Agent for the NY Life Purchaser Group
|
||
|
||
|
||
By:
|
/s/ Scott R. Seewald
|
|
Name:
|
Scott R. Seewald
|
|
Title:
|
Vice President
|
|
|
||
|
||
NEW YORK LIFE INSURANCE COMPANY,
|
||
as the Committed Purchaser for the NY Life Purchaser Group
|
||
|
|
|
|
|
|
By:
|
/s/ Scott R. Seewald
|
|
Name:
|
Scott R. Seewald
|
|
Title:
|
Vice President
|
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION,
|
||
as the Managing Agent for the NYLIAC Purchaser Group
|
||
|
||
By: NYL INVESTORS LLC,
|
||
its Investment Manager
|
||
|
||
|
||
By:
|
/s/ Scott R. Seewald
|
|
Name:
|
Scott R. Seewald
|
|
Title:
|
Vice President
|
|
|
||
|
||
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION,
|
||
as the Committed Purchaser for the NYLIAC Purchaser Group
|
||
|
|
|
By: NYL INVESTORS LLC,
|
||
its Investment Manager
|
||
|
|
|
|
|
|
By:
|
/s/ Scott R. Seewald
|
|
Name:
|
Scott R. Seewald
|
|
Title:
|
Vice President
|
NAVISTAR FINANCIAL CORPORATION,
|
||
as Administrator
|
||
|
||
By:
|
/s/ Anthony Aiello
|
|
Name:
|
Anthony Aiello
|
|
Title:
|
Vice President and Treasurer
|
|
|
Page
|
|
|
|
|
|
ARTICLE I Definitions and Other Provisions of General Application
|
1
|
|
|
Section 1.01
|
Definitions
|
1
|
|
|
|
|
|
ARTICLE II The Notes
|
21
|
|
|
Section 2.01
|
Creation, Designation and Delivery.
|
21
|
|
Section 2.02
|
Incremental Fundings
|
21
|
|
Section 2.03
|
Prepayments
|
21
|
|
Section 2.04
|
Reopening
|
22
|
|
Section 2.05
|
Tax Treatment
|
23
|
|
Section 2.06
|
Restrictions on Note Acquisitions
|
23
|
|
|
|
|
|
ARTICLE III Allocations, Deposits and Payments
|
24
|
|
|
Section 3.01
|
Series 2012-VFN Available Interest Amounts
|
24
|
|
Section 3.02
|
Series 2012-VFN Available Principal Amounts
|
26
|
|
Section 3.03
|
Reductions and Reinstatements
|
27
|
|
Section 3.04
|
Payment on the Series 2012-VFN Notes.
|
28
|
|
Section 3.05
|
Reserved
|
29
|
|
Section 3.06
|
Final Payment of the Series 2012-VFN Notes
|
29
|
|
Section 3.07
|
Netting of Deposits and Payments
|
30
|
|
Section 3.08
|
Reserved
|
30
|
|
Section 3.09
|
Computation of Interest
|
30
|
|
Section 3.10
|
Accounts
|
30
|
|
Section 3.11
|
Spread Account.
|
31
|
|
Section 3.12
|
Reserved
|
31
|
|
Section 3.13
|
Reserved
|
31
|
|
Section 3.14
|
Reports and Statements to Series 2012-VFN Noteholders.
|
31
|
|
|
|
|
|
ARTICLE IV MISCELLANEOUS PROVISIONS
|
32
|
|
|
Section 4.01
|
Ratification of Indenture
|
32
|
|
Section 4.02
|
Counterparts
|
32
|
|
Section 4.03
|
Governing Law
|
32
|
|
Section 4.04
|
Limitation of Owner Trustee Liability
|
32
|
|
Section 4.05
|
Amendment
|
32
|
|
Section 4.06
|
No Registration of the Series 2012-VFN Notes under the Securities Act
|
33
|
|
Section 4.07
|
Consent to Amendments
|
37
|
|
Section 4.08
|
Electronic Communications
|
37
|
|
EXHIBITS
|
|
|
|
EXHIBIT A
|
FORM OF VARIABLE FUNDING NOTE
|
|
|
EXHIBIT B
|
FORM OF MONTHLY SERVICER CERTIFICATE
|
(A)
|
failure on the part of the
Transferor
Depositor
or the Servicer (i) to make any payment, distribution or deposit required under
the Series Supplement, or the 1995 Pooling and Servicing Agreement,
the Pooling and Servicing Agreement or the Note Purchase Agreement within five Business Days after the date required or (ii) to observe or perform in any material respect any other material covenants or agreements of the
Transferor
Depositor
or the Servicer therein, which failure has a material adverse effect on the Series 2012-VFN Noteholders and which continues unremedied for a period of 60 days after written notice of such failure shall have been given to the Depositor by the Indenture Trustee or to the Depositor and the Indenture Trustee by any Holder of the Series 2012-VFN Notes;
|
(B)
|
any representation or warranty made by the
Transferor
Depositor
or the Servicer pursuant to
the Series Supplement, or the 1995 Pooling and Servicing Agreement,
the Pooling and Servicing Agreement or the Note Purchase Agreement or any information contained in the schedule of Dealer Notes delivered thereunder shall prove to have been incorrect in any material respect when made or when delivered, which representation, warranty or schedule, or the circumstances or condition that caused such representation, warranty or schedule to be incorrect, continues to be incorrect or uncured in any material respect for a period of 60 days after written notice of such incorrectness shall have been given to the Depositor or the Servicer by the Indenture Trustee or to the Depositor or the Servicer and the Indenture Trustee by any Holder of the Series 2012-VFN Notes and as a result of which the interests of the Series 2012-VFN Noteholders are materially and adversely affected;
provided
,
however
, that an Early Redemption Event shall not be deemed to occur if the
Transferor
Depositor
has repurchased the related Dealer Notes or all such Dealer Notes, if applicable, during such period in accordance with the provisions of the
Applicable
Pooling and Servicing Agreement;
|
(C)
|
any of the
Transferor
Depositor
, Navistar, NIC or NFC shall file a petition commencing a voluntary case under any chapter of the federal bankruptcy laws; or the
Transferor
Depositor
, Navistar, NIC or NFC shall file a petition or answer or consent seeking
|
(D)
|
any order for relief against any of the
Transferor
Depositor
, Navistar, NIC or NFC shall have been entered by a court having jurisdiction in the premises under any chapter of the federal bankruptcy laws, and such order shall have continued undischarged or unstayed for a period of 120 days; or a decree or order by a court having jurisdiction in the premises shall have been entered approving as properly filed a petition seeking reorganization, arrangement, adjustment, or composition of the
Transferor
Depositor
, Navistar, NIC or NFC under any other similar applicable federal law, and such decree or order shall have continued undischarged or unstayed for a period of 120 days; or a decree or order of a court having jurisdiction in the premises for the appointment of a custodian, receiver, liquidator, trustee, assignee, sequestrator or other similar official in bankruptcy or insolvency of the
Transferor
Depositor
, Navistar, NIC or NFC of any substantial part of their property, or for the winding up or liquidation of their affairs, shall have been entered, and such decree or order shall have remained in force undischarged or unstayed for a period of 120 days;
|
(E)
|
the
Transferor
Depositor
shall become legally unable for any reason to transfer Dealer Notes to the
Receivables Trust
Issuing Entity
in accordance with the provisions of the
Applicable
Pooling and Servicing Agreement;
|
(F)
|
on any Transfer Date, after giving effect to allocations to be made on that Transfer Date (including payments to be made on the related Distribution Date), the Series 2012-VFN Target Overcollateralization Amount exceeds the Series 2012-VFN Overcollateralization Amount;
|
(G)
|
any Servicer Termination Event shall occur for which the Servicer has received a notice of termination;
|
(H)
|
on any Determination Date related to a Due Period ending on or prior to the 1995 Trust Termination Date, as of the last day of the preceding Due Period, the percentage of the aggregate principal balance of Dealer Notes owned by the Master Trust that consists of Dealer Notes relating to used vehicles exceeds the Used Vehicle Concentration Limit;
|
(H)
|
[reserved];
|
(I)
|
the average Monthly Payment Rate for any three consecutive Due Periods is less than the Monthly Payment Rate Trigger;
|
(J)
|
the Series 2012-VFN Outstanding Principal Amount is not repaid by the Expected Principal Distribution Date;
|
(K)
|
the Issuing Entity becomes an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and is not exempt from compliance with that Act;
|
(L)
|
the occurrence of an Event of Default under the Indenture;
|
(M)
|
the delivery by the
Transferor
Depositor
to the
Receivables Trust
Issuing Entity
of a notice stating that the
Transferor
Depositor
shall no longer continue to sell Dealer Notes to the
Receivables Trust
Issuing Entity
pursuant to the
Applicable
Pooling and Servicing Agreement commencing on the date specified in such notice;
|
(N)
|
the Average Coverage Differential shall be equal to or less than negative two percent (‑2.00%) on each of three consecutive Determination Dates;
|
(O)
|
on any Determination Date, the quotient of (i) the sum of Dealer Note Losses for each of the related Due Period and the five immediately preceding Due Periods and (ii) the sum of Principal Collections for each of the related Due Period and the five immediately preceding Due Periods, is greater than or equal to one percent (1.00%);
|
(P)
|
at the end of any Due Period, the Seller’s Interest is reduced to an amount less than the Minimum Seller’s Interest and the Depositor has failed to assign additional Dealer Notes to the
Receivables Trust
Issuing Entity
or deposit cash into the Excess Funding Account, the Series 2012-VFN Principal Funding Account or any other principal funding account with respect to any other series of notes issued pursuant to the Indenture
or the 2004 Indenture
in the amount of such deficiency within ten Business Days following the end of such Due Period; provided, however, that if such deficiency was caused by an increase in the Minimum Seller’s Interest as a result of the occurrence of an excess cash collateral event with respect to any series of notes issued under the Indenture
or the 2004 Indenture
, there shall be a six month grace period to increase the Seller’s Interest to the required level;
|
(Q)
|
failure on the part of Navistar to make a deposit in the Interest Deposit Account required by the terms of the Interest Deposit Agreement on or before the date occurring five Business Days after the date such deposit is required by the Interest Deposit Agreement to be made;
|
(R)
|
upon an increase in the Spread Account Required Amount as a result of the average Monthly Payment Rate for any three consecutive Due Periods being less than the Monthly Payment Rate Enhancement Trigger, the amount on deposit in the Series 2012-VFN Spread Account is less than the Spread Account Required Amount for five (5) consecutive Business Days;
|
(S)
|
the United States government or any agency or instrumentality thereof files a notice of a lien under §6323 of the Code or any similar statutory provision (including, but not limited to, §302(f) or §4068 of ERISA) on the assets of NFC or the Depositor which is or may in the future be prior to the lien of the
Master Trust
Indenture
Trustee or the assets of the
Master Trust
Issuing Entity
(including, without limitation, proceeds of the Dealer Notes);
|
(T)
|
the occurrence of a Change in Control;
|
(U)
|
either (A) NFC shall cease to be the “beneficial owner” (as defined in Rule 13d‑3 under the Securities Exchange Act of 1934) of 100% of the outstanding stock of the Depositor or (B) NIC shall cease to be the “beneficial owner” (as defined in Rule 13d‑3 under the Securities Exchange Act of 1934), directly or indirectly, of 100% of the outstanding stock of NFC;
|
(V)
|
any Borrower shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable and such failure shall continue beyond the period of grace, if any, provided in the instrument or agreement under which such Material Indebtedness was created;
|
(W)
|
any event or condition occurs that (A) results in any Material Indebtedness becoming due prior to its scheduled maturity or (B) solely in the case of the US Borrower, enables or permits the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this paragraph (W) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
|
(X)
|
NFC shall fail to observe or perform any condition, covenant or agreement contained in Section 8.01 of the Credit Agreement as in effect on the date hereof; provided that if the Credit Agreement is terminated or Section 8.01 of the Credit Agreement or any defined term or provision that affects any calculation specified in Section 8.01 of the Credit Agreement is terminated, amended, supplemented or modified, then Section 8.01 as used herein may, at the unanimous direction of the Managing Agents, be similarly terminated, amended, supplemented or modified;
|
(Y)
|
either NIC or Navistar shall fail to pay when due, or within any applicable grace period, any principal of or interest on its Indebtedness for Borrowed Money which exceeds $50,000,000 in aggregate principal or face amount;
|
(Z)
|
any Indebtedness for Borrowed Money of either NIC or Navistar which exceeds $50,000,000 in aggregate principal or face amount shall become due prior to its stated maturity, or any event or circumstance shall occur which permits one or more Persons other than NIC or Navistar, as the case may be, to cause such Indebtedness for Borrowed Money to become due prior to its stated maturity;
|
(AA)
|
that portion of the Series 2012-VFN Outstanding Principal Amount allocable to a Purchaser Group shall at any time exceed the Commitment of such Purchaser Group (other than after the Purchase Expiration Date);
|
(BB)
|
the Dealcor Dealer Notes Pool Percentage, as reported on a Servicer Certificate, shall exceed the Dealcor Dealer Notes Pool Percentage Limit and such Dealcor Dealer Notes Pool Percentage shall not have been reduced to the Dealcor Dealer Notes Pool Percentage Limit or lower (as evidenced by an Officer’s Certificate of the Servicer delivered to each Managing Agent or as shown in the next succeeding Servicer Certificate) on any date on or prior to the due date for delivery of the next succeeding Servicer Certificate; and
|
(CC)
|
on the Commitment Step-Down Date (A) the Funded Amount (after giving effect to any paydown on such date) exceeds the Maximum Funded Amount (after giving effect to the Step-Down Commitments on such date) or (B) the portion of the Funded Amount funded by a Purchaser Group (after giving effect to any paydown on such date) exceeds the Funded Amount allocable to such Purchaser Group pro rata in accordance with the Step-Down Commitments on such date.
|
(i)
|
the Series 2012-VFN
Subordinated Seller’s Interest
Allocated Interest Amounts for such Due Period.
|
(i)
|
plus
any net investment earnings for such Due Period on funds in the Series 2012-VFN Interest Funding Account, the Series 2012-VFN Principal Funding Account and the Series 2012-VFN Spread Account;
|
(ii)
|
plus
the Series 2012-VFN Investment Income;
|
(iii)
|
plus
any Excess Available Interest Amounts allocated to Series 2012-VFN on the related Transfer Date pursuant to Section 3.01(b);
|
(iv)
|
plus
any Excess Interest Collections allocated to Series 2012-VFN on the related Transfer Date pursuant to Section 3.01(b);
|
(v)
|
plus
any amount treated as Series 2012-VFN Available Interest Amounts pursuant to Sections 3.01(c)(i) and (ii).
|
(i)
|
the Series 2012-VFN
Subordinated Seller’s Interest
Allocated Principal Amounts for such Business Day;
|
(ii)
|
plus,
if such Business Day is a Transfer Date, any Series 2012-VFN Available Interest Amounts used to fund the Series 2012-VFN Noteholder Allocated Dealer Note Losses for the related Due Period on such Transfer Date pursuant to Section 3.01(a)(iii);
|
(ii)
|
plus
, if such Business Day is a Transfer Date, any Series 2012-VFN Available Interest Amounts used to reinstate any reduction in the Series 2012-VFN
Collateral
Overcollateralization
Amount for the related Due Period on such Transfer Date pursuant to Sections 3.01(a)(v) and 3.03(c).
|
(iii)
|
plus
any Excess Available Principal Amounts allocated to Series 2012-VFN on such Transfer Date pursuant to Section 3.02(b);
|
(v)
|
plus, any Shared Principal Collections allocated to
"Series 012-VFN
on such Transfe Date pursuant to
Section 3.02(b);
|
(vi)
|
the numerator of which is the Series 2012-VFN Collateral Amount as of such date (or the Issuance Date in the case of any Business Day prior to the first Transfer Date) or, if an Early Redemption Period has commenced, as of the day prior to the commencement of the Early Redemption Period; and
|
(vii)
|
the denominator of which is the sum of the Collateral Amounts for all Series of Notes as of the last day of the immediately preceding Due Period (or the issuance date of that Series in the case of any Business Day prior to the first Transfer Date), except that for any Series of Notes that is amortizing, repaying or accumulating principal, the Collateral Amount of that Series shall be fixed as of the last day of the Due Period ending prior to the commencement of such amortization, repayment or accumulation; and
|
(b)
|
with respect to any Business Day after the 1995 Trust Termination Date,
the percentage equivalent of a fraction never greater than 100% or less than 0% equal to:
|
(i)
|
the numerator of which is the Series 2012-VFN Collateral Amount as of such day or, if an Early Redemption Period has commenced, as of the day prior to the commencement of the Early Redemption Period; and
|
(ii)
|
the denominator of which is the greater of (A) the sum of the Collateral Amounts for each Series of Notes used to calculate the applicable fixed allocation percentage of such Series as of such day and (B) the Aggregate Trust Balance as of last day of the preceding Due Period.
|
(i)
|
the Series 2012-VFN Outstanding Principal Amount;
|
(ii)
|
minus
the reductions to the Series 2012-VFN Nominal Liquidation Amount pursuant to
Section 3.03(b)
on or prior to such date of determination;
|
(iii)
|
plus
the reinstatements of the Series 2012-VFN Nominal Liquidation Amount pursuant to
Section 3.03(d)
on or prior to such date of determination;
|
(iv)
|
minus
the amount (other than investment earnings) then on deposit in the Series 2012-VFN Principal Funding Account (after giving effect to any deposits, allocations, reallocations or withdrawals to be made on that day) up to the amount that would reduce the Series 2012-VFN Nominal Liquidation Amount to zero;
|
(i)
|
the Series 2012-VFN Noteholder Allocated Interest Amounts for such Due Period;
|
(ii)
|
plus any net investment earnings for such Due Period on funds in the Series 2012-VFN Interest Funding Account, the Series 2012-VFN Principal Funding Account and the Series 2012-VFN Spread Account;
|
(iii)
|
plus the Series 2012-VFN Investment Income;
|
(v)
|
(b) the quotient of (i)
|
(iv)
|
plus any Excess Available Interest Amounts allocated to Series 2012-VFN on the related Transfer Date pursuant to Section 3.01(b);
|
(v)
|
[reserved];
|
(vi)
|
plus any amount treated as Series 2012-VFN Noteholder Available Interest Amounts pursuant to Sections 3.01(c)(i) and (ii).
|
(i)
|
the Series 2012-VFN Noteholder Allocated Principal Amounts for such Business Day;
|
(ii)
|
plus, if such Business Day is a Transfer Date, any Series 2012-VFN Available Interest Amounts used to fund the Series 2012-VFN Noteholder Allocated Dealer Note Losses for the related Due Period on such Transfer Date pursuant to Section 3.01(a)(iii);
|
(iii)
|
plus, if such Business Day is a Transfer Date, any Series 2012-VFN Available Interest Amounts used to reinstate any reduction in
the Series 2012-VFN Nominal Liquidation Amount
as of
for
the
prceding
related Due Period on such
Transfer Date
pursuant to Sections 3.01(a)(v) and 3.03(c);
|
(vi)
|
plus any Excess Available Principal Amounts allocated to Series 2012-VFN on such Transfer Date pursuant to Section 3.02(b);
|
(v)
|
,divided by
[reserved];
|
(vi)
|
plus, if such Business Day is a Transfer Date and the Series 2012-VFN Notes are in an Early Redemption Period, any Series 2012-VFN Available Interest Amounts treated as Series 2012-VFN Noteholder Available Principal Amounts pursuant to Section 3.01(a)(ix).
|
(a)
|
with respect to the Issuance Date, after giving effect to the Incremental Funding made on such date, $110,364,960.00; and
|
(b)
|
with respect any subsequent date, an amount equal to the Series 2012-VFN Overcolleralization Amount determined as of the immediately preceding Transfer Date (or with respect to the initial Transfer Date, the Series 2012-VFN Overcollateralization Amount as of the Issuance Date);
|
(i)
|
plus
an amount equal to the Incremental Overcollateralization Amount for each Incremental Funding, if any, since such prior Transfer Date;
|
(ii)
|
minus
an amount equal to the Overcollateralization Reduction Amount for each principal payment made to holders of the Series 2012-VFN Notes, if any, since such prior Transfer Date;
provided
,
however
, that if an Early Redemption Period has commenced, this
clause (ii)
shall not be given effect;
|
(iii)
|
plus
an amount equal to the increase, if any, in the Series 2012-VFN Target Overcollateralization Amount as a result of a change in the Series 2012-VFN
Overcollateralization
Subordinated Seller’s Interest
Factor since such prior Transfer Date;
|
(iv)
|
minus
an amount equal to the decrease, if any, in the Series 2012-VFN Target Overcollateralization Amount as a result of a change in the Series 2012-VFN
Overcollateralization
Subordinated Seller’s Interest
Factor since such prior Transfer Date;
|
(v)
|
minus
all reallocations of the Series 2012-VFN Available Principal Amounts used to pay the Series 2012-VFN Monthly Interest on the Series 2012-VFN Notes that have been allocated to the Series 2012-VFN Overcollateralization Amount pursuant to
Section 3.03(b)(i)
since such prior Transfer Date;
|
(vi)
|
minus
all allocations of Series 2012-VFN Noteholder Allocated Dealer Note Losses that have been allocated to the Series 2012-VFN Overcollateralization Amount pursuant to
Section 3.03(b)(i)
since such prior Transfer Date;
|
(vii)
|
(vii)
minus
the amount, if any, deposited into the Series 2012-VFN Spread Account pursuant to
Section 3.02(a)(iii)
that has been allocated to the Series 2012-VFN Overcollateralization Amount pursuant to
Section 3.03(b)(i)
since such prior Transfer Date;
|
(viii)
|
plus
all reinstatements of the Series 2012-VFN Overcollateralization Amount pursuant to
Section 3.03(d)(ii)
since such prior Transfer Date;
|
(i)
|
the numerator of which is the daily average of the Series 2012-VFN Collateral Amount for each day during such Due Period;
|
(ii)
|
the denominator of which is the sum of the amount in clause (i) above and aggregate of the Collateral Amounts for each other series of Notes as of the last day of the immediately preceding Due Period (or the issuance date if none); and
|
(i)
|
the numerator of which is the daily average of the Series 2012-VFN Collateral Amount for each day during such Due Period; and
|
(ii)
|
the denominator of which is the greater of (A) the sum of the daily average Collateral Amounts used to calculate the applicable variable allocation percentage for each Series of Notes for such Due Period and (b) the daily average Aggregate Trust Balance during such Due Period.
|
(i)
|
first, on a pro rata basis (a) to the Servicer, the Series 2012-VFN Servicing Fee due on such Transfer Date (to the extent it has not been deferred by the Servicer for such Transfer Date, and if the Servicer shall defer any Series 2012-VFN Servicing Fee, the Servicer shall give notice of such deferral to the Administrative Agent) and (b) to the Backup Servicer, the Series 2012-VFN Backup Servicing Fee due on such Transfer Date;
|
(ii)
|
second, to the Series 2012-VFN Interest Funding Account, first, in an amount equal to the Series 2012-VFN Monthly Interest for such Distribution Date, second, in an amount equal to the Non‑Use Fees for such Distribution Date, and, third, in an amount equal to the Additional Amounts for such Distribution Date, but, in the case of this clause third, not in excess of 0.40% of the average Series 2012-VFN Collateral Amount during the related Due Period;
|
(iii)
|
third, to the Series 2012-VFN Spread Account, an amount equal to the Spread Account Deposit Amount for such Transfer Date;
|
(iv)
|
fourth, any remaining Series 2012-VFN Available Interest Amounts shall be treated as Series 2012-VFN
Noteholder
Available Principal Amounts to the extent of the amount of Series 2012-VFN Noteholder Allocated Dealer Note Losses for the related Due Period;
|
(v)
|
fifth, any remaining Series 2012-VFN Available Interest Amounts shall be treated as Series 2012-VFN
Noteholder Available Principal Amounts or Series 2012-VFN Additional
Available Principal Amounts for the reinstatement of the Series 2012-VFN
Collateral
Nominal Liquidation
Amount
or Series 2012-VFN Overcollateralization Amount, respectively,
to the extent of the Series 2012-VFN Unreimbursed Amount (the amount being reinstated is referred to as the “
Reinstatement Amount
”);
|
(vi)
|
sixth, to the Servicer, any Series 2012-VFN Servicing Fee which had been previously deferred unless that amount has been deferred again;
|
(vii)
|
seventh, to the Series 2012-VFN Interest Funding Account, an amount equal to any Additional Amounts for the related Distribution Date not paid pursuant to
Section 3.01(a)(ii)
;
|
(viii)
|
eighth, to the Backup Servicer, the Series 2012-VFN Backup Servicing Expenses due on such Transfer Date;
|
(ix)
|
ninth, if the Series 2012-VFN Notes are in an Early Redemption Period, any remaining Series 2012-VFN Available Interest Amounts shall be treated as Series 2012-VFN
Noteholder
Available Principal Amounts to the extent of the Series 2012-VFN Nominal Liquidation Amount (after taking into account any
reductions due to Series 2012-VFN Noteholder Allocated Dealer Note Losses or
|
(x)
|
tenth, any remaining Series 2012-VFN Available Interest Amounts shall be treated as Excess Available Interest Amounts and allocated pursuant to
Section 5.02
of the Indenture.
|
(i)
|
On any Transfer Date, at the written direction of the Servicer and to the extent that Series 2012-VFN Available Interest Amounts (without giving effect to
clause (vi)
of the definition
thereof
of Series 2012-VFN Noteholder Available Interest Amounts)
are insufficient to pay in full the amounts set forth in
Section 3.01(a)(ii)
, the Indenture Trustee shall withdraw funds from the Series 2012-VFN Spread Account in an amount equal to the lesser of (A) the amount of such shortfall and (B) the amount on deposit in the Series 2012-VFN Spread Account (after giving effect to any withdrawals from the Series 2012-VFN Spread Account on such Transfer Date other than a withdrawal pursuant to
Sections 3.01(c)(i)
,
(ii)
and
(iii)
on such date) and treat such funds as “Series 2012-VFN
Noteholder
Available Interest Amounts.”
|
(ii)
|
If the Series 2012-VFN Notes are in an Early Redemption Period, at the written direction of the Servicer and to the extent that Series 2012-VFN Available Interest Amounts (without giving effect to
clause (vi)
of the definition
thereof)
of Series 2012-VFN Noteholder Available Interest Amounts (except for the application of funds on deposit in the Spread Account pursuant to Section 3.01(c)(i)))
are insufficient to pay in full the amount described in
Section 3.01(a)(iv)
, the Indenture Trustee shall withdraw funds from the Series 2012-VFN Spread Account in an amount equal to the lesser of (A) the amount of such shortfall and (B) the amount on deposit in the Series 2012-VFN Spread Account (after giving effect to any withdrawals from the Series 2012-VFN Spread Account on such Transfer Date) and treat such funds as “Series 2012-VFN
Noteholder
Available Interest Amounts.”
|
(iii)
|
On the Series 2012-VFN Termination Date, in addition, after applying funds on deposit in the Spread Account pursuant to
Sections 3.01(c)(i)
and
(ii)
, if the Series 2012-VFN Outstanding Principal Amount remains greater than zero, the Indenture Trustee shall, at the written direction of the Servicer, apply funds from the Spread Account to repay the Series 2012-VFN Outstanding Principal Amount in full, together with any unpaid Non-Use Fees and Additional Amounts.
|
(i)
|
first, if the Series 2012-VFN Available Interest Amounts are insufficient to make the payments on the Series 2012-VFN Notes pursuant to
Section 3.01(a)(ii)
, to the Series 2012-VFN Interest Funding Account, an amount equal to the lesser of (i) the amount of that shortfall and (ii) the Series 2012-VFN Collateral Amount (after taking into account any reinstatements pursuant to
Section 3.03(d)
and reductions due to
Section 3.03(a)(ii)
);
|
(ii)
|
second, on the Expected Principal Distribution Date or, if the Series 2012-VFN Notes are in an Early Redemption Period, on each Distribution Date during the Early Redemption Period, to the Series 2012-VFN Principal Funding Account any remaining Series 2012-VFN Available Principal Amounts to the extent of the Series 2012-VFN Nominal Liquidation Amount (computed before
|
(iii)
|
third, if the Series 2012-VFN Notes are not in an Early Redemption Period, to the extent that the Spread Account Deposit Amount is greater than zero (after giving effect to any other deposits to or withdrawals from the Series 2012-VFN Spread Account on such Transfer Date, reductions to the Series 2012-VFN Nominal Liquidation Amount in accordance with
Sections 3.03(a)(i)
and
(ii)
and reinstatements pursuant to
Section 3.03(d)(i)
), to the Series 2012-VFN Spread Account an amount equal to such Spread Account Deposit Amount (not taking into account any increase in the Spread Account Required Amount as a result of a decrease in the Monthly Payment Rate); and
|
(iv)
|
fourth, any remaining Series 2012-VFN Available Principal Amounts shall be treated as Excess Available Principal Amounts and allocated pursuant to
Section 5.02
of the Indenture.
|
(i)
|
On each Business Day, commencing after the Issuance Date, if Series 2012-VFN Available Principal Amounts are insufficient to make the allocations provided in
Sections 3.02(a)(i)
through
(iii)
above, the Indenture Trustee shall allocate Excess Available Principal Amounts, if any, allocated to Series 2012-VFN pursuant to
Section 5.02
of the Indenture to cover the Series Available Principal Amounts Shortfall.
|
(ii)
|
If, after the application of Excess Available Principal Amounts, any Series Available Principal Amounts Shortfall remains, the Indenture Trustee shall allocate Shared Principal Collections, if any, allocated to Series 2012-VFN pursuant to
Section 5.02
of the Indenture to cover such remaining Series Available Principal Amounts Shortfall.
|
(iii)
|
If any Shared Principal Collections remain after application to any other Series, the Issuing Entity may cause all or any portion of such Shared Principal Collections to be retained and allocated to the Series 2012-VFN Noteholders and deposited in the Series 2012-VFN Principal Funding Account on the related Transfer Date to make any prepayment permitted by
Section 2.03
hereof.
|
(i)
|
the amount, if any, of the Series 2012-VFN Available Principal Amounts used to pay Series 2012-VFN Monthly Interest on the Series 2012-VFN Notes as described in
Section 3.02(a)(i)
;
|
(ii)
|
the amount of Series 2012-VFN Noteholder Allocated Dealer Note Losses for such Due Period to the extent that they are not covered by Series 2012-VFN Available Interest Amounts as described in
Section 3.01(a)(iii)
; and
|
(iii)
|
the amount, if any,
of Series 2012-VFN Available Principal Amounts
deposited into the Series 2012-VFN Spread Account in accordance with
Section 3.02(a)(iii)
.
|
(i)
|
first, the Series 2012-VFN Overcollateralization Amount (computed without giving effect to any reductions due to
Sections 3.03(a)(i)
through
(iii)
on such date) shall be reduced by the amount of such reduction until the Series 2012-VFN Overcollateralization Amount is reduced to zero; and
|
(ii)
|
second, the Series 2012-VFN Nominal Liquidation Amount (computed without giving effect to any reductions due to
Sections 3.03(a)(i)
through
(iii)
on such date) shall be reduced by any remaining amount until the Series 2012-VFN Nominal Liquidation Amount is reduced to zero.
|
(i)
|
first, if the Series 2012-VFN Nominal Liquidation Amount has been reduced as described in
Section 3.03(b)
above and is not fully reinstated, to the Series 2012-VFN Nominal Liquidation Amount until the Series 2012-VFN Nominal Liquidation Amount equals the excess of (A) the Series 2012-VFN Outstanding Principal Amount, over (B) the amount on deposit (other than investment earnings) in the Series 2012-VFN Principal Funding Account on that Transfer Date allocable to the Variable Funding Notes; and
|
(ii)
|
second, to the Series 2012-VFN Overcollateralization Amount until the Series 2012-VFN Overcollateralization Amount equals the Series 2012-VFN Target Overcollateralization Amount.
|
(i)
|
the date on which the Series 2012-VFN Outstanding Principal Amount and all Series 2012-VFN Monthly Interest, Non-Use Fees, Additional Amounts and other amounts on the Series 2012-VFN Notes are paid in full; or
|
(ii)
|
the Series 2012-VFN Termination Date, after giving effect to all deposits, allocations, reallocations, sales of Dealer Notes and payments to be made on that date.
|
No. R‑[__] REGISTERED
|
Commitment of $[____________]
or such other amount as is specified
in the Note Purchase Agreement
|
NAVISTAR FINANCIAL DEALER NOTE MASTER OWNER TRUST II, as Issuing Entity
|
||
|
||
By:
|
DEUTSCHE BANK TRUST COMPANY DELAWARE, not in its individual capacity but solely as Owner Trustee under the Trust Agreement
|
|
|
||
|
||
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
Date: ________, 20__
|
THE BANK OF NEW YORK MELLON,
CITIBANK, N.A.,
not in its individual capacity but solely as Indenture Trustee
|
||
|
||
|
||
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
Date: ________, 20__
|
Initial Series 2012-VFN Outstanding Principal Balance
|
Incremental Funded Amount
|
Repayments of Principal
|
Series 2012-VFN Outstanding Principal Balance
|
Date / Incremental Funding Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
Series 2012-VFN Notes Information
|
0.0
|
5.1
|
Series 2012-VFN Nominal Liquidation Amount as of the Transfer Date (after giving effect to the transactions set forth in Article III of the Series 2012-VFN Indenture Supplement and to payments made on the Distribution Date).
|
0.0
|
|
Cumulative Reductions (Net of Reinstatements) of the Series 2012-VFN Nominal Liquidation Amount, if any, as of the Transfer Date
|
0.0
|
5.2
|
Series 2012-VFN Collateral Amount as of the Transfer Date (after giving effect to the transactions set forth in Article III of the Series 2012-VFN Indenture Supplement and to payments made on the Distribution Date).
|
0.0
|
|
Series 2012-VFN Target Overcollateralization Amount, if any, as of the Transfer Date
|
0.0
|
|
Cumulative Reductions (Net of Reinstatements) of the Series 2012-VFN Overco
llat
nc
e
n
tra
liza
tion Amount Defici
ency
t,
if any, as of the Transfer Date
|
0.0
|
5.4
|
Series 2012-VFN Noteholder Allocated Dealer Note Losses / (Recoveries) for the Due Period
Series 2012-VFN Subordinated Seller’s Interest Allocated Dealer Note Losses / (Recoveries) for the Due Period
Series 2012-VFN Allocated Dealer Note Losses / (Recoveries) for the Due Period
|
0.0
0.0
0.0
|
5.5
|
Series 2012-VFN Noteholder Allocated Interest Amounts for the Due Period
Series 2012-VFN Subordinated Seller’s Interest Allocated Interest Amounts for the Due Period
Series 2012-VFN Allocated Interest Amounts for the Due Period
|
0.0
0.0
0.0
|
5.6
|
Series 2012-VFN Noteholder Allocated Principal Amounts for the Due Period
Series 2012-VFN Subordinated Seller’s Interest Allocated Principal Amounts for the Due Period
Series 2012-VFN Allocated Principal Amounts for the Due Period
|
0.0
0.0
0.0
|
5.7
|
Series 2012-VFN Noteholder Allocated Principal Amounts for the Due Period
[Reserved]
|
0.0
|
5.8
|
Series 2012-VFN Noteholder Available Interest Amounts with respect to the Due Period
Series 2012-VFN Additional Available Interest Amounts with respect to the Due Period
Series 2012-VFN Available Interest Amounts with respect to the Due Period
|
0.0
0.0
0.0
|
5.9
|
Series 2012-VFN Noteholder Available Principal Amounts with respect to the Due Period
Series 2012-VFN Additional Available Principal Amounts with respect to the Due Period
Series 2012-VFN Available Principal Amounts with respect to the Due Period
|
0.0
0.0
0.0
|
5.10
|
Shortfall in Series Available Principal Amounts, if any, for the Due Period
|
0.0
|
5.11
|
Seller’s Interest for the Series 2012-VFN Notes for the Due Period
|
0.0
|
5.12
|
Shortfall in Series Available Interest Amounts, if any, for the Due Period
|
0.0
|
5.13
|
Unreimbursed reductions to the Series 2012-VFN Collateral Amount, if any, for the Due Period
|
0.0
|
5.14
|
Nominal Liquidation Amount plus Accrued and Unpaid Interest as of the Transfer Date
|
0.0
|
5.15
|
Series 2012-VFN Required Seller’s Interest as of the Distribution Date
|
0.0
|
5.16
|
Series Noteholder Variable Allocation Percentage for the Due Period
Series Seller’ Interest Variable Allocation Percentage for the Due Period
Series Variable Allocation Percentage for the Due Period
|
0.0
0.0
0.0
|
5.17
|
Series Noteholder Fixed Allocation Percentage for the Due Period
Series Seller’ Interest Fixed Allocation Percentage for the Due Period
Series Fixed Allocation Percentage for the Due Period
|
0.0
0.0
0.0
|
5.18
|
Total amount to be distributed on the Series 2012-VFN Notes on the Distribution Date
|
0.0
|
5.19
|
Total amount, if any, to be distributed on the Series 2012-VFN Notes on the Distribution Date allocable to the Outstanding Principal Amount
|
0.0
|
5.20
|
Total amount to be distributed on the Series 2012-VFN Notes on the Distribution Date allocable to interest on the Series 2012-VFN Notes
|
0.0
|
5.21.1
|
Series 2012-VFN Servicing Fee to be paid on the Distribution Date
|
0.0
|
5.21.2
|
Series 2012-VFN Backup Servicing Expenses to be paid on the Distribution Date
|
0.0
|
5.21.3
|
Series 2012-VFN Backup Servicing Fee to be paid on the Distribution Date
|
0.0
|
5.22.1
|
Series 2012-VFN Investment Income
|
0.0
|
5.22.2
|
Series 2012-VFN Principal Funding Account investment income
|
0.0
|
5.22.3
|
Series 2012-VFN Interest Funding Account investment income
|
0.0
|
5.22.4
|
Series 2012-VFN Spread Account investment income
|
0.0
|
5.23
|
Series Excess Available Interest Amounts for the Due Period
|
0.0
|
5.24
|
Excess Available Interest Amounts for the Due Period allocated to other Series of Notes
|
0.0
|
5.25
|
Excess Available Interest Amounts for the Due Period allocated to Series of Investor Certificates
|
0.0
|
5.26
|
Excess Available Principal Collections allocated from other series of Notes to Series 2012-VFN for the Due Period
|
0.0
|
5.27
|
Amount of Shared Principal Collections allocated to Series 2012-FN Collateral Certificate for the Due Period
[Reserved]
|
0.0
|
5.28
|
Amount of Excess Available Principal Collections allocated to other Series of Notes for the Due Period
|
0.0
|
5.29
|
Reimbursement Amount for the Series 2012-VFN Notes for the Due Period
|
0.0
|
5.30
|
Certain amounts and calculations referenced in the definition of Early Redemption Event
|
See Exhibit “A”
|
6
|
Account Information
|
0.0
|
6.1
|
Series 2012-VFN Spread Account Balance as of the Distribution Date after giving effect to all withdrawals and deposits made on such Distribution Date
|
0.0
|
|
Series 2012-VFN Spread Account Required Amount, if any, as of the Distribution Date after giving effect to all withdrawals and deposits made on such Distribution Date
|
0.0
|
6.2
|
Series 2012-VFN Principal Funding Account Balance as of the Distribution Date after giving effect to all withdrawals and deposits made on such Distribution Date
|
0.0
|
6.3
|
Series 2012-VFN Interest Funding Account Balance as of the Distribution Date after giving effect to all withdrawals and deposits made on such Distribution Date
|
0.0
|
7
|
Notes Information
|
0.0
|
7.1
|
Outstanding Principal Amount as of the Distribution Date after giving effect to the transactions made on such Distribution Date
|
0.0
|
7.2
|
Nominal Liquidation Amount as of the Distribution Date after giving effect to the transactions made on such Distribution Date
|
0.0
|
7.3
|
Total amount to be distributed on the Notes on the Distribution Date
|
0.0
|
7.4
|
Total amount, if any, to be distributed on the Notes on the Distribution Date allocable to the Outstanding Principal Amount
|
0.0
|
7.5
|
Total amount to be distributed on the Notes on the Distribution Date allocable interest on the Notes
|
0.0
|
7.6
|
Monthly Interest for the Interest Period
|
0.0
|
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 April 30, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
2,948
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,948
|
|
Finance revenues
|
—
|
|
|
78
|
|
|
(30
|
)
|
|
48
|
|
||||
Sales and revenues, net
|
2,948
|
|
|
78
|
|
|
(30
|
)
|
|
2,996
|
|
||||
Costs of products sold
|
2,493
|
|
|
—
|
|
|
—
|
|
|
2,493
|
|
||||
Restructuring charges
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Asset impairment charges
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Selling, general and administrative expenses
|
346
|
|
|
27
|
|
|
—
|
|
|
373
|
|
||||
Engineering and product development costs
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
||||
Interest expense
|
55
|
|
|
27
|
|
|
—
|
|
|
82
|
|
||||
Other expense (income), net
|
56
|
|
|
(8
|
)
|
|
(30
|
)
|
|
18
|
|
||||
Total costs and expenses
|
3,027
|
|
|
46
|
|
|
(30
|
)
|
|
3,043
|
|
||||
Equity in income of non-consolidated affiliates
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(76
|
)
|
|
32
|
|
|
—
|
|
|
(44
|
)
|
||||
Equity income from financial services operations
|
24
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
(52
|
)
|
|
32
|
|
|
(24
|
)
|
|
(44
|
)
|
||||
Income tax benefit (expense)
|
9
|
|
|
(8
|
)
|
|
—
|
|
|
1
|
|
||||
Net income (loss)
|
(43
|
)
|
|
24
|
|
|
(24
|
)
|
|
(43
|
)
|
||||
Less: Net income attributable to non-controlling interests
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(48
|
)
|
|
$
|
24
|
|
|
$
|
(24
|
)
|
|
$
|
(48
|
)
|
|
For the Six Months Ended April 30, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
5,334
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,334
|
|
Finance revenues
|
—
|
|
|
152
|
|
|
(57
|
)
|
|
95
|
|
||||
Sales and revenues, net
|
5,334
|
|
|
152
|
|
|
(57
|
)
|
|
5,429
|
|
||||
Costs of products sold
|
4,472
|
|
|
—
|
|
|
—
|
|
|
4,472
|
|
||||
Restructuring charges
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Asset impairment charges
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Selling, general and administrative expenses
|
509
|
|
|
51
|
|
|
(1
|
)
|
|
559
|
|
||||
Engineering and product development costs
|
161
|
|
|
—
|
|
|
—
|
|
|
161
|
|
||||
Interest expense
|
111
|
|
|
56
|
|
|
—
|
|
|
167
|
|
||||
Other expense (income), net
|
189
|
|
|
(18
|
)
|
|
(56
|
)
|
|
115
|
|
||||
Total costs and expenses
|
5,446
|
|
|
89
|
|
|
(57
|
)
|
|
5,478
|
|
||||
Equity in income of non-consolidated affiliates
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Income before equity income from financial services operations and income taxes
|
(109
|
)
|
|
63
|
|
|
—
|
|
|
(46
|
)
|
||||
Equity income from financial services operations
|
48
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
(61
|
)
|
|
63
|
|
|
(48
|
)
|
|
(46
|
)
|
||||
Income tax expense
|
35
|
|
|
(15
|
)
|
|
—
|
|
|
20
|
|
||||
Net income (loss)
|
(26
|
)
|
|
48
|
|
|
(48
|
)
|
|
(26
|
)
|
||||
Less: Net income attributable to non-controlling interests
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(37
|
)
|
|
$
|
48
|
|
|
$
|
(48
|
)
|
|
$
|
(37
|
)
|
|
For the Three Months Ended April 30, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
2,382
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,382
|
|
Finance revenues
|
—
|
|
|
63
|
|
|
(23
|
)
|
|
40
|
|
||||
Sales and revenues, net
|
2,382
|
|
|
63
|
|
|
(23
|
)
|
|
2,422
|
|
||||
Costs of products sold
|
1,987
|
|
|
—
|
|
|
—
|
|
|
1,987
|
|
||||
Restructuring charges
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Asset impairment charges
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Selling, general and administrative expenses
|
176
|
|
|
25
|
|
|
(1
|
)
|
|
200
|
|
||||
Engineering and product development costs
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
||||
Interest expense
|
58
|
|
|
21
|
|
|
—
|
|
|
79
|
|
||||
Other expense (income), net
|
35
|
|
|
(2
|
)
|
|
(22
|
)
|
|
11
|
|
||||
Total costs and expenses
|
2,333
|
|
|
44
|
|
|
(23
|
)
|
|
2,354
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
49
|
|
|
19
|
|
|
—
|
|
|
68
|
|
||||
Equity income from financial services operations
|
16
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
65
|
|
|
19
|
|
|
(16
|
)
|
|
68
|
|
||||
Income tax expense
|
(4
|
)
|
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Net income (loss)
|
61
|
|
|
16
|
|
|
(16
|
)
|
|
61
|
|
||||
Less: Net income attributable to non-controlling interests
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
55
|
|
|
$
|
16
|
|
|
$
|
(16
|
)
|
|
$
|
55
|
|
|
For the Six Months Ended April 30, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
4,249
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,249
|
|
Finance revenues
|
—
|
|
|
122
|
|
|
(44
|
)
|
|
78
|
|
||||
Sales and revenues, net
|
4,249
|
|
|
122
|
|
|
(44
|
)
|
|
4,327
|
|
||||
Costs of products sold
|
3,519
|
|
|
—
|
|
|
—
|
|
|
3,519
|
|
||||
Restructuring charges
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Asset impairment charges
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Selling, general and administrative expenses
|
347
|
|
|
45
|
|
|
(1
|
)
|
|
391
|
|
||||
Engineering and product development costs
|
150
|
|
|
—
|
|
|
—
|
|
|
150
|
|
||||
Interest expense
|
116
|
|
|
42
|
|
|
—
|
|
|
158
|
|
||||
Other expense (income), net
|
138
|
|
|
(4
|
)
|
|
(43
|
)
|
|
91
|
|
||||
Total costs and expenses
|
4,271
|
|
|
83
|
|
|
(44
|
)
|
|
4,310
|
|
||||
Equity in income of non-consolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income (loss) before equity income from financial services operations and income taxes
|
(22
|
)
|
|
39
|
|
|
—
|
|
|
17
|
|
||||
Equity income from financial services operations
|
32
|
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
10
|
|
|
39
|
|
|
(32
|
)
|
|
17
|
|
||||
Income tax expense
|
(15
|
)
|
|
(7
|
)
|
|
—
|
|
|
(22
|
)
|
||||
Net income (loss)
|
(5
|
)
|
|
32
|
|
|
(32
|
)
|
|
(5
|
)
|
||||
Less: Net income attributable to non-controlling interests
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(18
|
)
|
|
$
|
32
|
|
|
$
|
(32
|
)
|
|
$
|
(18
|
)
|
|
As of April 30, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
927
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
977
|
|
Marketable securities
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Restricted cash and cash equivalents
|
34
|
|
|
197
|
|
|
—
|
|
|
231
|
|
||||
Finance and other receivables, net
|
483
|
|
|
2,531
|
|
|
(215
|
)
|
|
2,799
|
|
||||
Inventories
|
1,157
|
|
|
7
|
|
|
—
|
|
|
1,164
|
|
||||
Goodwill
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Property and equipment, net
|
938
|
|
|
332
|
|
|
—
|
|
|
1,270
|
|
||||
Investments in and advances to financial services operations
|
639
|
|
|
—
|
|
|
(639
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
||||
Deferred taxes, net
|
116
|
|
|
5
|
|
|
—
|
|
|
121
|
|
||||
Other assets
|
388
|
|
|
23
|
|
|
—
|
|
|
411
|
|
||||
Total assets
|
$
|
4,775
|
|
|
$
|
3,145
|
|
|
$
|
(854
|
)
|
|
$
|
7,066
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,821
|
|
|
$
|
24
|
|
|
$
|
(215
|
)
|
|
$
|
1,630
|
|
Debt
|
2,962
|
|
|
2,395
|
|
|
—
|
|
|
5,357
|
|
||||
Postretirement benefits liabilities
|
1,950
|
|
|
—
|
|
|
—
|
|
|
1,950
|
|
||||
Other liabilities
|
1,894
|
|
|
87
|
|
|
—
|
|
|
1,981
|
|
||||
Total liabilities
|
8,627
|
|
|
2,506
|
|
|
(215
|
)
|
|
10,918
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(3,855
|
)
|
|
639
|
|
|
(639
|
)
|
|
(3,855
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
4,775
|
|
|
$
|
3,145
|
|
|
$
|
(854
|
)
|
|
$
|
7,066
|
|
|
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 Six Months Ended April 30, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(26
|
)
|
|
$
|
48
|
|
|
$
|
(48
|
)
|
|
$
|
(26
|
)
|
Adjustments to reconcile net income (loss) to cash used in operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
66
|
|
|
—
|
|
|
—
|
|
|
66
|
|
||||
Depreciation of equipment leased to others
|
(1
|
)
|
|
32
|
|
|
—
|
|
|
31
|
|
||||
Amortization of debt issuance costs and discount
|
8
|
|
|
4
|
|
|
—
|
|
|
12
|
|
||||
Deferred income taxes
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
||||
Asset impairment charges
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Gain on sales of investments and businesses, net
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
||||
Equity in income of non-consolidated affiliates
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Equity in income of financial services affiliates
|
(48
|
)
|
|
—
|
|
|
48
|
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Change in intercompany receivables and payables
|
48
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
||||
Other, net
|
(31
|
)
|
|
(143
|
)
|
|
—
|
|
|
(174
|
)
|
||||
Net cash used in operating activities
|
(83
|
)
|
|
(107
|
)
|
|
—
|
|
|
(190
|
)
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sales of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Maturities of marketable securities
|
79
|
|
|
—
|
|
|
—
|
|
|
79
|
|
||||
Capital expenditures
|
(64
|
)
|
|
(2
|
)
|
|
—
|
|
|
(66
|
)
|
||||
Purchase of equipment leased to others
|
(13
|
)
|
|
(63
|
)
|
|
—
|
|
|
(76
|
)
|
||||
Other investing activities
|
95
|
|
|
5
|
|
|
|
|
|
100
|
|
||||
Net cash provided by (used in) investing activities
|
97
|
|
|
(60
|
)
|
|
—
|
|
|
37
|
|
||||
Net cash provided by (used in) financing activities
|
(342
|
)
|
|
268
|
|
|
—
|
|
|
(74
|
)
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(6
|
)
|
|
(4
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(334
|
)
|
|
97
|
|
|
—
|
|
|
(237
|
)
|
||||
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
|
$
|
961
|
|
|
$
|
247
|
|
|
$
|
—
|
|
|
$
|
1,208
|
|
|
For the Six Months Ended April 30, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(5
|
)
|
|
$
|
32
|
|
|
$
|
(32
|
)
|
|
$
|
(5
|
)
|
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||
Depreciation of equipment leased to others
|
9
|
|
|
27
|
|
|
—
|
|
|
36
|
|
||||
Amortization of debt issuance costs and discount
|
10
|
|
|
5
|
|
|
—
|
|
|
15
|
|
||||
Deferred income taxes
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Asset impairment charges
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Equity in income of financial services affiliates
|
(32
|
)
|
|
—
|
|
|
32
|
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Change in other intercompany receivables and payables
|
29
|
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
||||
Other, net
|
(130
|
)
|
|
(94
|
)
|
|
—
|
|
|
(224
|
)
|
||||
Net cash used in operating activities
|
(39
|
)
|
|
(59
|
)
|
|
—
|
|
|
(98
|
)
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
(148
|
)
|
|
—
|
|
|
—
|
|
|
(148
|
)
|
||||
Sales of marketable securities
|
460
|
|
|
—
|
|
|
—
|
|
|
460
|
|
||||
Maturities of marketable securities
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||
Capital expenditures
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
||||
Purchase of equipment leased to others
|
(39
|
)
|
|
(53
|
)
|
|
—
|
|
|
(92
|
)
|
||||
Other investing activities
|
(2
|
)
|
|
5
|
|
|
—
|
|
|
3
|
|
||||
Net cash provided by (used in) investing activities
|
236
|
|
|
(48
|
)
|
|
—
|
|
|
188
|
|
||||
Net cash provided by financing activities
|
209
|
|
|
60
|
|
|
—
|
|
|
269
|
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(6
|
)
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
400
|
|
|
(48
|
)
|
|
—
|
|
|
352
|
|
||||
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
|
$
|
1,090
|
|
|
$
|
102
|
|
|
$
|
—
|
|
|
$
|
1,192
|
|