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☑
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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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
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Lisle
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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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☐
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Emerging growth company
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☐
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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.
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Financial Statements
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Three Months Ended July 31,
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Nine Months Ended July 31,
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||||||||||||
(in millions, except per share data)
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2019
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2018
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2019
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2018
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||||||||
Sales and revenues
|
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||||||||
Sales of manufactured products, net
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$
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2,996
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$
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2,566
|
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$
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8,330
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$
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6,815
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Finance revenues
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46
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40
|
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141
|
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118
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||||
Sales and revenues, net
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3,042
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2,606
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8,471
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6,933
|
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Costs and expenses
|
|
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||||||||
Costs of products sold
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2,501
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2,096
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6,973
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5,615
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|
||||
Restructuring charges
|
—
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1
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1
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(1
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)
|
||||
Asset impairment charges
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3
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8
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6
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11
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Selling, general and administrative expenses
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167
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222
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726
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613
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||||
Engineering and product development costs
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81
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72
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242
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|
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222
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|
||||
Interest expense
|
76
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|
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82
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|
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243
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|
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240
|
|
||||
Other expense (income), net
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25
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(55
|
)
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140
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36
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||||
Total costs and expenses
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2,853
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2,426
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8,331
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6,736
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|
||||
Equity in income of non-consolidated affiliates
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1
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—
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4
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—
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||||
Income before income tax
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190
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180
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|
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144
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197
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|
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Income tax expense
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(29
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)
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(3
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)
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(9
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)
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(25
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)
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||||
Net income
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161
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|
|
177
|
|
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135
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172
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Less: Net income attributable to non-controlling interests
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5
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7
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16
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20
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Net income attributable to Navistar International Corporation
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$
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156
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$
|
170
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$
|
119
|
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$
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152
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Income per share attributable to Navistar International Corporation:
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Basic
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$
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1.57
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$
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1.72
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$
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1.20
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$
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1.54
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Diluted
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1.56
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1.71
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1.20
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1.53
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||||
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||||||||
Weighted average shares outstanding:
|
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|
||||||||
Basic
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99.4
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99.0
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99.2
|
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98.8
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|
||||
Diluted
|
99.7
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99.7
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99.5
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99.6
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(in millions)
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Three Months Ended July 31,
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Nine Months Ended July 31,
|
||||||||||||
2019
|
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2018
|
|
2019
|
|
2018
|
|||||||||
Net income
|
$
|
161
|
|
|
$
|
177
|
|
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$
|
135
|
|
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$
|
172
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
9
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|
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(13
|
)
|
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5
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(19
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)
|
||||
Defined benefit plans, net of tax
|
23
|
|
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29
|
|
|
161
|
|
|
92
|
|
||||
Total other comprehensive income
|
32
|
|
|
16
|
|
|
166
|
|
|
73
|
|
||||
Comprehensive income
|
193
|
|
|
193
|
|
|
301
|
|
|
245
|
|
||||
Less: Net income attributable to non-controlling interests
|
5
|
|
|
7
|
|
|
16
|
|
|
20
|
|
||||
Total comprehensive income attributable to Navistar International Corporation
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$
|
188
|
|
|
$
|
186
|
|
|
$
|
285
|
|
|
$
|
225
|
|
|
As of July 31, 2019
|
|
As of October 31, 2018
|
||||
(in millions, except per share data)
|
|
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|
||||
ASSETS
|
(Unaudited)
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,160
|
|
|
$
|
1,320
|
|
Restricted cash and cash equivalents
|
79
|
|
|
62
|
|
||
Marketable securities
|
3
|
|
|
101
|
|
||
Trade and other receivables, net
|
429
|
|
|
456
|
|
||
Finance receivables, net
|
2,187
|
|
|
1,898
|
|
||
Inventories, net
|
1,195
|
|
|
1,110
|
|
||
Other current assets
|
273
|
|
|
189
|
|
||
Total current assets
|
5,326
|
|
|
5,136
|
|
||
Restricted cash
|
57
|
|
|
63
|
|
||
Trade and other receivables, net
|
12
|
|
|
49
|
|
||
Finance receivables, net
|
275
|
|
|
260
|
|
||
Investments in non-consolidated affiliates
|
33
|
|
|
50
|
|
||
Property and equipment (net of accumulated depreciation and amortization of $2,463 and $2,498, respectively)
|
1,290
|
|
|
1,370
|
|
||
Goodwill
|
38
|
|
|
38
|
|
||
Intangible assets (net of accumulated amortization of $142 and $140, respectively)
|
27
|
|
|
30
|
|
||
Deferred taxes, net
|
124
|
|
|
121
|
|
||
Other noncurrent assets
|
112
|
|
|
113
|
|
||
Total assets
|
$
|
7,294
|
|
|
$
|
7,230
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable and current maturities of long-term debt
|
$
|
676
|
|
|
$
|
946
|
|
Accounts payable
|
1,806
|
|
|
1,606
|
|
||
Other current liabilities
|
1,323
|
|
|
1,255
|
|
||
Total current liabilities
|
3,805
|
|
|
3,807
|
|
||
Long-term debt
|
4,528
|
|
|
4,521
|
|
||
Postretirement benefits liabilities
|
1,929
|
|
|
2,097
|
|
||
Other noncurrent liabilities
|
692
|
|
|
731
|
|
||
Total liabilities
|
10,954
|
|
|
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
|
2,730
|
|
|
2,731
|
|
||
Accumulated deficit
|
(4,501
|
)
|
|
(4,593
|
)
|
||
Accumulated other comprehensive loss
|
(1,754
|
)
|
|
(1,920
|
)
|
||
Common stock held in treasury, at cost (3.9 and 4.2 shares, respectively)
|
(150
|
)
|
|
(161
|
)
|
||
Total stockholders’ deficit attributable to Navistar International Corporation
|
(3,663
|
)
|
|
(3,931
|
)
|
||
Stockholders’ equity attributable to non-controlling interests
|
3
|
|
|
5
|
|
||
Total stockholders’ deficit
|
(3,660
|
)
|
|
(3,926
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
7,294
|
|
|
$
|
7,230
|
|
|
Nine Months Ended July 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
135
|
|
|
$
|
172
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
99
|
|
|
107
|
|
||
Depreciation of equipment leased to others
|
45
|
|
|
53
|
|
||
Deferred taxes, including change in valuation allowance
|
(41
|
)
|
|
(3
|
)
|
||
Asset impairment charges
|
6
|
|
|
11
|
|
||
Gain on sales of investments and businesses, net
|
(56
|
)
|
|
—
|
|
||
Amortization of debt issuance costs and discount
|
15
|
|
|
23
|
|
||
Stock-based compensation
|
20
|
|
|
27
|
|
||
Provision for doubtful accounts
|
8
|
|
|
6
|
|
||
Equity in income of non-consolidated affiliates, net of dividends
|
(3
|
)
|
|
4
|
|
||
Write-off of debt issuance costs and discount
|
6
|
|
|
43
|
|
||
Other non-cash operating activities
|
(6
|
)
|
|
(17
|
)
|
||
Changes in other assets and liabilities, exclusive of the effects of businesses disposed
|
(124
|
)
|
|
(606
|
)
|
||
Net cash provided by (used in) operating activities
|
104
|
|
|
(180
|
)
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchases of marketable securities
|
—
|
|
|
(214
|
)
|
||
Sales of marketable securities
|
—
|
|
|
460
|
|
||
Maturities of marketable securities
|
98
|
|
|
29
|
|
||
Capital expenditures
|
(90
|
)
|
|
(79
|
)
|
||
Purchases of equipment leased to others
|
(130
|
)
|
|
(142
|
)
|
||
Proceeds from sales of property and equipment
|
12
|
|
|
9
|
|
||
Proceeds from sales of investments and businesses
|
100
|
|
|
(3
|
)
|
||
Other investing activities
|
1
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
(9
|
)
|
|
60
|
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuance of securitized debt
|
331
|
|
|
32
|
|
||
Principal payments on securitized debt
|
(300
|
)
|
|
(50
|
)
|
||
Net change in secured revolving credit facilities
|
120
|
|
|
64
|
|
||
Proceeds from issuance of non-securitized debt
|
144
|
|
|
3,210
|
|
||
Principal payments on non-securitized debt
|
(988
|
)
|
|
(2,669
|
)
|
||
Net change in notes and debt outstanding under revolving credit facilities
|
469
|
|
|
(52
|
)
|
||
Debt issuance costs
|
(9
|
)
|
|
(36
|
)
|
||
Proceeds from financed lease obligations
|
13
|
|
|
48
|
|
||
Proceeds from exercise of stock options
|
3
|
|
|
7
|
|
||
Dividends paid by subsidiaries to non-controlling interest
|
(18
|
)
|
|
(19
|
)
|
||
Other financing activities
|
(2
|
)
|
|
(17
|
)
|
||
Net cash provided by (used in) financing activities
|
(237
|
)
|
|
518
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(7
|
)
|
|
(16
|
)
|
||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(149
|
)
|
|
382
|
|
||
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
|
$
|
1,296
|
|
|
$
|
1,222
|
|
(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
|
—
|
|
|
—
|
|
|
—
|
|
|
119
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
135
|
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
—
|
|
|
166
|
|
||||||||
ASC-606 modified retrospective adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
1
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
||||||||
Balance as of July 31, 2019
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,730
|
|
|
$
|
(4,501
|
)
|
|
$
|
(1,754
|
)
|
|
$
|
(150
|
)
|
|
$
|
3
|
|
|
$
|
(3,660
|
)
|
Balance as of October 31, 2017
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,733
|
|
|
$
|
(4,933
|
)
|
|
$
|
(2,211
|
)
|
|
$
|
(179
|
)
|
|
$
|
4
|
|
|
$
|
(4,574
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
152
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
172
|
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
6
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
||||||||
Stock deferral and issuance - directors
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Balance as of July 31, 2018
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,731
|
|
|
$
|
(4,781
|
)
|
|
$
|
(2,138
|
)
|
|
$
|
(163
|
)
|
|
$
|
5
|
|
|
$
|
(4,334
|
)
|
|
Nine Months Ended July 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
529
|
|
|
$
|
629
|
|
Costs accrued and revenues deferred
|
182
|
|
|
139
|
|
||
Adjustments to pre-existing warranties(A)
|
7
|
|
|
(4
|
)
|
||
Payments and revenues recognized
|
(208
|
)
|
|
(233
|
)
|
||
Other adjustments(B)
|
12
|
|
|
—
|
|
||
Balance at end of period
|
522
|
|
|
531
|
|
||
Less: Current portion
|
247
|
|
|
254
|
|
||
Noncurrent accrued product warranty and deferred warranty revenue
|
$
|
275
|
|
|
$
|
277
|
|
(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 our defense business, ND Holdings, LLC ("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 July 31, 2019(A)
|
||||||||||
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
Sales of manufactured products, net
|
|
$
|
2,998
|
|
|
$
|
(2
|
)
|
|
$
|
2,996
|
|
Costs of products sold
|
|
2,504
|
|
|
(3
|
)
|
|
2,501
|
|
|||
Interest expense
|
|
77
|
|
|
(1
|
)
|
|
76
|
|
|||
Income before income tax
|
|
188
|
|
|
2
|
|
|
190
|
|
|||
Income tax expense
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|||
Net income
|
|
$
|
159
|
|
|
$
|
2
|
|
|
$
|
161
|
|
|
|
Nine months ended July 31, 2019(A)
|
||||||||||
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
Sales of manufactured products, net
|
|
$
|
8,307
|
|
|
$
|
23
|
|
|
$
|
8,330
|
|
Costs of products sold
|
|
6,965
|
|
|
8
|
|
|
6,973
|
|
|||
Interest expense
|
|
246
|
|
|
(3
|
)
|
|
243
|
|
|||
Income before income tax
|
|
126
|
|
|
18
|
|
|
144
|
|
|||
Income tax expense
|
|
(6
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|||
Net income
|
|
$
|
120
|
|
|
$
|
15
|
|
|
$
|
135
|
|
|
|
As of July 31, 2019(A)
|
||||||||||
(in millions)
|
|
Under Prior Standard
|
|
Effects of New Standard
|
|
As Reported
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets
|
|
|
|
|
|
|
||||||
Trade and other receivables, net
|
|
$
|
432
|
|
|
$
|
(3
|
)
|
|
$
|
429
|
|
Inventories, net
|
|
1,248
|
|
|
(53
|
)
|
|
1,195
|
|
|||
Other current assets
|
|
210
|
|
|
63
|
|
|
273
|
|
|||
Total current assets
|
|
5,319
|
|
|
7
|
|
|
5,326
|
|
|||
Property and equipment, net
|
|
1,485
|
|
|
(195
|
)
|
|
1,290
|
|
|||
Deferred taxes, net
|
|
126
|
|
|
(2
|
)
|
|
124
|
|
|||
Other noncurrent assets
|
|
120
|
|
|
(8
|
)
|
|
112
|
|
|||
Total assets
|
|
$
|
7,492
|
|
|
$
|
(198
|
)
|
|
$
|
7,294
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
||||||
Notes payable and current maturities of long-term debt
|
|
$
|
689
|
|
|
$
|
(13
|
)
|
|
$
|
676
|
|
Other current liabilities
|
|
1,305
|
|
|
18
|
|
|
1,323
|
|
|||
Total current liabilities
|
|
3,800
|
|
|
5
|
|
|
3,805
|
|
|||
Long-term debt
|
|
4,577
|
|
|
(49
|
)
|
|
4,528
|
|
|||
Other noncurrent liabilities
|
|
824
|
|
|
(132
|
)
|
|
692
|
|
|||
Total liabilities
|
|
11,130
|
|
|
(176
|
)
|
|
10,954
|
|
|||
Stockholders’ deficit
|
|
|
|
|
|
|
||||||
Total stockholders’ deficit attributable to Navistar International Corporation
|
|
(3,641
|
)
|
|
(22
|
)
|
|
(3,663
|
)
|
|||
Total liabilities and stockholders’ deficit
|
|
$
|
7,492
|
|
|
$
|
(198
|
)
|
|
$
|
7,294
|
|
(A)
|
Our Consolidated Balance Sheet as of July 31, 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 July 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Truck products and services(A)
|
$
|
2,115
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
2,118
|
|
Truck contract manufacturing
|
144
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144
|
|
||||||
Used trucks
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
||||||
Engines
|
—
|
|
|
73
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
136
|
|
||||||
Parts
|
2
|
|
|
496
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
517
|
|
||||||
Extended warranty contracts
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||||
Sales of manufactured products, net
|
2,342
|
|
|
569
|
|
|
82
|
|
|
—
|
|
|
3
|
|
|
2,996
|
|
||||||
Retail financing(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
||||||
Wholesale financing(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||||
Sales and revenues, net
|
$
|
2,342
|
|
|
$
|
569
|
|
|
$
|
82
|
|
|
$
|
46
|
|
|
$
|
3
|
|
|
$
|
3,042
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Nine Months Ended July 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Truck products and services(A)(B)
|
$
|
5,891
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
5,900
|
|
Truck contract manufacturing
|
274
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
274
|
|
||||||
Used trucks
|
151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
151
|
|
||||||
Engines
|
—
|
|
|
217
|
|
|
168
|
|
|
—
|
|
|
—
|
|
|
385
|
|
||||||
Parts
|
4
|
|
|
1,476
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
1,535
|
|
||||||
Extended warranty contracts
|
85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
||||||
Sales of manufactured products, net
|
6,405
|
|
|
1,693
|
|
|
223
|
|
|
—
|
|
|
9
|
|
|
8,330
|
|
||||||
Retail financing(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
106
|
|
|
—
|
|
|
106
|
|
||||||
Wholesale financing(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
||||||
Sales and revenues, net
|
$
|
6,405
|
|
|
$
|
1,693
|
|
|
$
|
223
|
|
|
$
|
141
|
|
|
$
|
9
|
|
|
$
|
8,471
|
|
(A)
|
Includes other markets primarily consisting of Bus, Export Truck and Mexico.
|
(C)
|
Retail financing and Wholesale financing revenues in the Financial Services segment include interest revenue of $15 million and $11 million for the three months ended July 31, 2019, respectively, and $42 million and $35 million for the nine months ended July 31, 2019, respectively.
|
(in millions)
|
As of July 31, 2019
|
|
As of October 31, 2018
|
||||
Retail portfolio
|
$
|
851
|
|
|
$
|
720
|
|
Wholesale portfolio
|
1,635
|
|
|
1,460
|
|
||
Total finance receivables
|
2,486
|
|
|
2,180
|
|
||
Less: Allowance for doubtful accounts
|
24
|
|
|
22
|
|
||
Total finance receivables, net
|
2,462
|
|
|
2,158
|
|
||
Less: Current portion, net(A)
|
2,187
|
|
|
1,898
|
|
||
Noncurrent portion, net
|
$
|
275
|
|
|
$
|
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 July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Retail notes and finance leases revenue
|
$
|
16
|
|
|
$
|
12
|
|
|
$
|
45
|
|
|
$
|
36
|
|
Wholesale notes interest
|
31
|
|
|
26
|
|
|
93
|
|
|
75
|
|
||||
Operating lease revenue
|
19
|
|
|
19
|
|
|
62
|
|
|
54
|
|
||||
Retail and wholesale accounts interest
|
8
|
|
|
8
|
|
|
26
|
|
|
22
|
|
||||
Gross finance revenues
|
74
|
|
|
65
|
|
|
226
|
|
|
187
|
|
||||
Less: Intercompany revenues
|
28
|
|
|
25
|
|
|
85
|
|
|
69
|
|
||||
Finance revenues
|
$
|
46
|
|
|
$
|
40
|
|
|
$
|
141
|
|
|
$
|
118
|
|
|
Three Months Ended July 31, 2019
|
|
Three Months Ended July 31, 2018
|
||||||||||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
||||||||||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
22
|
|
|
$
|
3
|
|
|
$
|
29
|
|
|
$
|
54
|
|
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
27
|
|
|
$
|
49
|
|
Provision for doubtful accounts
|
1
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
3
|
|
||||||||
Charge-off of accounts
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Recoveries
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Other(A)
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||||
Allowance for doubtful accounts, at end of period
|
$
|
21
|
|
|
$
|
3
|
|
|
$
|
32
|
|
|
$
|
56
|
|
|
$
|
21
|
|
|
$
|
3
|
|
|
$
|
26
|
|
|
$
|
50
|
|
|
Nine Months Ended July 31, 2019
|
|
Nine Months Ended July 31, 2018
|
||||||||||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
||||||||||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
50
|
|
|
$
|
17
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
48
|
|
Provision for doubtful accounts
|
5
|
|
|
—
|
|
|
3
|
|
|
8
|
|
|
5
|
|
|
—
|
|
|
1
|
|
|
6
|
|
||||||||
Charge-off of accounts
|
(4
|
)
|
|
—
|
|
|
(1
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||||
Recoveries
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||||
Other(A)
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||||
Allowance for doubtful accounts, at end of period
|
$
|
21
|
|
|
$
|
3
|
|
|
$
|
32
|
|
|
$
|
56
|
|
|
$
|
21
|
|
|
$
|
3
|
|
|
$
|
26
|
|
|
$
|
50
|
|
|
July 31, 2019
|
|
October 31, 2018
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Impaired finance receivables with specific loss reserves
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Impaired finance receivables without specific loss reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Specific loss reserves on impaired finance receivables
|
11
|
|
|
—
|
|
|
11
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
Finance receivables on non-accrual status
|
22
|
|
|
—
|
|
|
22
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|
July 31, 2019
|
|
October 31, 2018
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Current, and up to 30 days past due
|
$
|
771
|
|
|
$
|
1,634
|
|
|
$
|
2,405
|
|
|
$
|
655
|
|
|
$
|
1,459
|
|
|
$
|
2,114
|
|
30-90 days past due
|
59
|
|
|
1
|
|
|
60
|
|
|
51
|
|
|
1
|
|
|
52
|
|
||||||
Over 90 days past due
|
21
|
|
|
—
|
|
|
21
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||||
Total finance receivables
|
$
|
851
|
|
|
$
|
1,635
|
|
|
$
|
2,486
|
|
|
$
|
720
|
|
|
$
|
1,460
|
|
|
$
|
2,180
|
|
(in millions)
|
July 31,
2019 |
|
October 31,
2018 |
||||
Finished products
|
$
|
779
|
|
|
$
|
671
|
|
Work in process
|
104
|
|
|
118
|
|
||
Raw materials
|
312
|
|
|
321
|
|
||
Total inventories, net
|
$
|
1,195
|
|
|
$
|
1,110
|
|
(in millions)
|
July 31, 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 $10 and $11, respectively
|
$
|
1,560
|
|
|
$
|
1,570
|
|
6.625% Senior Notes, due 2026, net of unamortized debt issuance costs of $15 and $17, respectively
|
1,085
|
|
|
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
|
54
|
|
|
122
|
|
||
Other
|
10
|
|
|
26
|
|
||
Total Manufacturing operations debt
|
2,929
|
|
|
3,426
|
|
||
Less: Current portion
|
30
|
|
|
461
|
|
||
Net long-term Manufacturing operations debt
|
$
|
2,899
|
|
|
$
|
2,965
|
|
(in millions)
|
July 31, 2019
|
|
October 31, 2018
|
||||
Financial Services operations
|
|
|
|
||||
Asset-backed debt issued by consolidated SPEs, at fixed and variable rates, due serially through 2023, net of unamortized debt issuance costs of $5 and $4, respectively
|
$
|
1,102
|
|
|
$
|
948
|
|
Senior secured NFC Term Loan, due 2025, net of unamortized discount of $2 and unamortized debt issuance costs of $4
|
—
|
|
|
394
|
|
||
Bank credit facilities, at fixed and variable rates, due dates from 2019 through 2025, net of unamortized debt issuance costs of zero and $2, respectively
|
1,000
|
|
|
519
|
|
||
Commercial paper, at variable rates, program matures in 2022
|
71
|
|
|
75
|
|
||
Borrowings secured by operating and finance leases, at various rates, due serially through 2024
|
102
|
|
|
105
|
|
||
Total Financial Services operations debt
|
2,275
|
|
|
2,041
|
|
||
Less: Current portion
|
646
|
|
|
485
|
|
||
Net long-term Financial Services operations debt
|
$
|
1,629
|
|
|
$
|
1,556
|
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||||||||||||||||||
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
Service cost for benefits earned during the period
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest on obligation
|
30
|
|
|
27
|
|
|
12
|
|
|
10
|
|
|
92
|
|
|
81
|
|
|
36
|
|
|
32
|
|
||||||||
Amortization of cumulative loss
|
23
|
|
|
26
|
|
|
—
|
|
|
3
|
|
|
70
|
|
|
79
|
|
|
—
|
|
|
7
|
|
||||||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||||||
Premiums on pension insurance
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||||
Expected return on assets
|
(35
|
)
|
|
(40
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
(108
|
)
|
|
(121
|
)
|
|
(16
|
)
|
|
(17
|
)
|
||||||||
Net periodic benefit expense
|
$
|
22
|
|
|
$
|
15
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
$
|
208
|
|
|
$
|
56
|
|
|
$
|
23
|
|
|
$
|
25
|
|
•
|
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 July 31, 2019
|
|
As of October 31, 2018
|
||||||||||||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government and federal agency securities
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
101
|
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts(A)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Foreign currency contracts(A)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Interest rate caps(B)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Total assets
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
101
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
105
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts(C)
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts(C)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Guarantees
|
—
|
|
|
—
|
|
|
26
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
24
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
26
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
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 July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Guarantees, at beginning of period
|
$
|
(22
|
)
|
|
$
|
(27
|
)
|
|
$
|
(24
|
)
|
|
$
|
(21
|
)
|
Net (issuances) terminations
|
(4
|
)
|
|
7
|
|
|
(3
|
)
|
|
(1
|
)
|
||||
Settlements
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||||
Guarantees, at end of period
|
$
|
(26
|
)
|
|
$
|
(20
|
)
|
|
$
|
(26
|
)
|
|
$
|
(20
|
)
|
|
As of July 31, 2019
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
198
|
|
|
$
|
198
|
|
|
$
|
204
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Agreement, due 2025
|
—
|
|
|
—
|
|
|
1,578
|
|
|
1,578
|
|
|
1,560
|
|
|||||
6.625% Senior Notes, due 2026
|
—
|
|
|
1,130
|
|
|
—
|
|
|
1,130
|
|
|
1,085
|
|
|||||
Loan Agreement related to 6.75% Tax Exempt Bonds, due 2040
|
—
|
|
|
235
|
|
|
—
|
|
|
235
|
|
|
220
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
54
|
|
|
54
|
|
|
54
|
|
|||||
Other(A)
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
9
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, due serially through 2023
|
—
|
|
|
—
|
|
|
1,106
|
|
|
1,106
|
|
|
1,102
|
|
|||||
Bank credit facilities, due dates from 2019 through 2025
|
—
|
|
|
—
|
|
|
975
|
|
|
975
|
|
|
1,000
|
|
|||||
Commercial paper, program matures in 2022
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
71
|
|
|||||
Borrowings secured by operating and finance leases, due serially through 2024
|
—
|
|
|
—
|
|
|
101
|
|
|
101
|
|
|
102
|
|
|
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 July 31, 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 and buses under the International and IC Bus ("IC") brands, and produces engines under our proprietary brand name.
|
•
|
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 the U.S. and other countries to support our Manufacturing Operations.
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services(A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Three Months Ended July 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
2,342
|
|
|
$
|
569
|
|
|
$
|
82
|
|
|
$
|
46
|
|
|
$
|
3
|
|
|
$
|
3,042
|
|
Intersegment sales and revenues
|
45
|
|
|
2
|
|
|
8
|
|
|
28
|
|
|
(83
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
2,387
|
|
|
$
|
571
|
|
|
$
|
90
|
|
|
$
|
74
|
|
|
$
|
(80
|
)
|
|
$
|
3,042
|
|
Net income (loss) attributable to NIC
|
$
|
167
|
|
|
$
|
149
|
|
|
$
|
1
|
|
|
$
|
30
|
|
|
$
|
(191
|
)
|
|
$
|
156
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(29
|
)
|
||||||
Segment profit (loss)
|
$
|
167
|
|
|
$
|
149
|
|
|
$
|
1
|
|
|
$
|
30
|
|
|
$
|
(162
|
)
|
|
$
|
185
|
|
Depreciation and amortization
|
$
|
26
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
16
|
|
|
$
|
1
|
|
|
$
|
47
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
49
|
|
|
76
|
|
||||||
Equity in income of non-consolidated affiliates
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Capital expenditures(B)
|
17
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
24
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services(A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Three Months Ended July 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
1,894
|
|
|
$
|
603
|
|
|
$
|
68
|
|
|
$
|
40
|
|
|
$
|
1
|
|
|
$
|
2,606
|
|
Intersegment sales and revenues
|
22
|
|
|
2
|
|
|
21
|
|
|
25
|
|
|
(70
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
1,916
|
|
|
$
|
605
|
|
|
$
|
89
|
|
|
$
|
65
|
|
|
$
|
(69
|
)
|
|
$
|
2,606
|
|
Net income (loss) attributable to NIC
|
$
|
165
|
|
|
$
|
144
|
|
|
$
|
4
|
|
|
$
|
23
|
|
|
$
|
(166
|
)
|
|
$
|
170
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||
Segment profit (loss)
|
$
|
165
|
|
|
$
|
144
|
|
|
$
|
4
|
|
|
$
|
23
|
|
|
$
|
(163
|
)
|
|
$
|
173
|
|
Depreciation and amortization
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
14
|
|
|
$
|
1
|
|
|
$
|
51
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
60
|
|
|
82
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
1
|
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Capital expenditures(B)
|
19
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
5
|
|
|
26
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services(A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Nine Months Ended July 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
6,405
|
|
|
$
|
1,693
|
|
|
$
|
223
|
|
|
$
|
141
|
|
|
$
|
9
|
|
|
$
|
8,471
|
|
Intersegment sales and revenues
|
75
|
|
|
5
|
|
|
27
|
|
|
85
|
|
|
(192
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
6,480
|
|
|
$
|
1,698
|
|
|
$
|
250
|
|
|
$
|
226
|
|
|
$
|
(183
|
)
|
|
$
|
8,471
|
|
Net income (loss) attributable to NIC
|
$
|
183
|
|
|
$
|
437
|
|
|
$
|
10
|
|
|
$
|
93
|
|
|
$
|
(604
|
)
|
|
$
|
119
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||||
Segment profit (loss)
|
$
|
183
|
|
|
$
|
437
|
|
|
$
|
10
|
|
|
$
|
93
|
|
|
$
|
(595
|
)
|
|
$
|
128
|
|
Depreciation and amortization
|
$
|
78
|
|
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
48
|
|
|
$
|
7
|
|
|
$
|
144
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|
160
|
|
|
243
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
3
|
|
|
2
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||
Capital expenditures(B)
|
69
|
|
|
3
|
|
|
2
|
|
|
2
|
|
|
14
|
|
|
90
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services(A) |
|
Corporate
and Eliminations |
|
Total
|
|||||||||||||
Nine Months Ended July 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
External sales and revenues, net
|
$
|
4,810
|
|
|
$
|
1,768
|
|
|
$
|
229
|
|
|
$
|
118
|
|
|
$
|
8
|
|
|
$
|
6,933
|
|
|
Intersegment sales and revenues
|
61
|
|
|
6
|
|
|
38
|
|
|
69
|
|
|
(174
|
)
|
|
—
|
|
|||||||
Total sales and revenues, net
|
$
|
4,871
|
|
|
$
|
1,774
|
|
|
$
|
267
|
|
|
$
|
187
|
|
|
$
|
(166
|
)
|
|
$
|
6,933
|
|
|
Net income (loss) attributable to NIC
|
$
|
200
|
|
|
$
|
413
|
|
|
$
|
(2
|
)
|
|
$
|
62
|
|
|
$
|
(521
|
)
|
|
$
|
152
|
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
(25
|
)
|
|||||||
Segment profit (loss)
|
$
|
200
|
|
|
$
|
413
|
|
|
$
|
(2
|
)
|
|
$
|
62
|
|
|
$
|
(496
|
)
|
|
$
|
177
|
|
|
Depreciation and amortization
|
$
|
100
|
|
|
$
|
5
|
|
|
$
|
8
|
|
|
$
|
41
|
|
|
$
|
6
|
|
|
$
|
160
|
|
|
Interest expense
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
64
|
|
|
176
|
|
|
240
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
2
|
|
|
2
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Capital expenditures(B)
|
74
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
79
|
|
(A)
|
Total sales and revenues in the Financial Services segment include interest revenues of $53 million and $161 million for the three and nine months ended July 31, 2019, respectively, and $46 million and $131 million for the three and nine months ended July 31, 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:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
July 31, 2019
|
$
|
1,942
|
|
|
$
|
686
|
|
|
$
|
322
|
|
|
$
|
3,010
|
|
|
$
|
1,334
|
|
|
$
|
7,294
|
|
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 April 30, 2019
|
$
|
(319
|
)
|
|
$
|
(1,467
|
)
|
|
$
|
(1,786
|
)
|
Other comprehensive income before reclassifications
|
9
|
|
|
—
|
|
|
9
|
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
23
|
|
|
23
|
|
|||
Net current-period other comprehensive income
|
9
|
|
|
23
|
|
|
32
|
|
|||
Balance as of July 31, 2019
|
$
|
(310
|
)
|
|
$
|
(1,444
|
)
|
|
$
|
(1,754
|
)
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||
Balance as of October 31, 2018
|
$
|
(315
|
)
|
|
$
|
(1,605
|
)
|
|
$
|
(1,920
|
)
|
Other comprehensive income (loss) before reclassifications
|
5
|
|
|
(8
|
)
|
|
(3
|
)
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
169
|
|
|
169
|
|
|||
Net current-period other comprehensive income
|
5
|
|
|
161
|
|
|
166
|
|
|||
Balance as of July 31, 2019
|
$
|
(310
|
)
|
|
$
|
(1,444
|
)
|
|
$
|
(1,754
|
)
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||
Balance as of April 30, 2018
|
$
|
(289
|
)
|
|
$
|
(1,865
|
)
|
|
$
|
(2,154
|
)
|
Other comprehensive loss before reclassifications
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
29
|
|
|
29
|
|
|||
Net current-period other comprehensive income (loss)
|
(13
|
)
|
|
29
|
|
|
16
|
|
|||
Balance as of July 31, 2018
|
$
|
(302
|
)
|
|
$
|
(1,836
|
)
|
|
$
|
(2,138
|
)
|
(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
|
(19
|
)
|
|
(2
|
)
|
|
(21
|
)
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
94
|
|
|
94
|
|
|||
Net current-period other comprehensive income (loss)
|
(19
|
)
|
|
92
|
|
|
73
|
|
|||
Balance as of July 31, 2018
|
$
|
(302
|
)
|
|
$
|
(1,836
|
)
|
|
$
|
(2,138
|
)
|
|
|
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
|
Location in Consolidated
Statements of Operations |
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Defined benefit plans
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of actuarial loss
|
|
Other expense, net
|
|
$
|
23
|
|
|
$
|
29
|
|
|
$
|
70
|
|
|
$
|
86
|
|
Settlements
|
|
Other expense, net
|
|
—
|
|
|
—
|
|
|
142
|
|
|
9
|
|
||||
|
|
Total before tax
|
|
23
|
|
|
29
|
|
|
212
|
|
|
95
|
|
||||
|
|
Income tax expense
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
(1
|
)
|
||||
Total reclassifications for the period, net of tax
|
|
$
|
23
|
|
|
$
|
29
|
|
|
$
|
169
|
|
|
$
|
94
|
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions, except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Navistar International Corporation common stockholders
|
$
|
156
|
|
|
$
|
170
|
|
|
$
|
119
|
|
|
$
|
152
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
99.4
|
|
|
99.0
|
|
|
99.2
|
|
|
98.8
|
|
||||
Effect of dilutive securities
|
0.3
|
|
|
0.7
|
|
|
0.3
|
|
|
0.8
|
|
||||
Diluted
|
99.7
|
|
|
99.7
|
|
|
99.5
|
|
|
99.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.57
|
|
|
$
|
1.72
|
|
|
$
|
1.20
|
|
|
$
|
1.54
|
|
Diluted
|
1.56
|
|
|
1.71
|
|
|
1.20
|
|
|
1.53
|
|
|
Three Months Ended July 31,
|
|
|
|
|
|
Nine Months Ended July 31,
|
|
|
|
|
||||||||||||||||||
(in millions, except per share data and % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Sales and revenues, net
|
$
|
3,042
|
|
|
$
|
2,606
|
|
|
$
|
436
|
|
|
17
|
%
|
|
$
|
8,471
|
|
|
$
|
6,933
|
|
|
$
|
1,538
|
|
|
22
|
%
|
Costs of products sold
|
2,501
|
|
|
2,096
|
|
|
405
|
|
|
19
|
%
|
|
6,973
|
|
|
5,615
|
|
|
1,358
|
|
|
24
|
%
|
||||||
Restructuring charges
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
(100
|
)%
|
|
1
|
|
|
(1
|
)
|
|
2
|
|
|
200
|
%
|
||||||
Asset impairment charges
|
3
|
|
|
8
|
|
|
(5
|
)
|
|
(63
|
)%
|
|
6
|
|
|
11
|
|
|
(5
|
)
|
|
(45
|
)%
|
||||||
Selling, general and administrative expenses
|
167
|
|
|
222
|
|
|
(55
|
)
|
|
(25
|
)%
|
|
726
|
|
|
613
|
|
|
113
|
|
|
18
|
%
|
||||||
Engineering and product development costs
|
81
|
|
|
72
|
|
|
9
|
|
|
13
|
%
|
|
242
|
|
|
222
|
|
|
20
|
|
|
9
|
%
|
||||||
Interest expense
|
76
|
|
|
82
|
|
|
(6
|
)
|
|
(7
|
)%
|
|
243
|
|
|
240
|
|
|
3
|
|
|
1
|
%
|
||||||
Other expense (income), net
|
25
|
|
|
(55
|
)
|
|
80
|
|
|
145
|
%
|
|
140
|
|
|
36
|
|
|
104
|
|
|
289
|
%
|
||||||
Total costs and expenses
|
2,853
|
|
|
2,426
|
|
|
427
|
|
|
18
|
%
|
|
8,331
|
|
|
6,736
|
|
|
1,595
|
|
|
24
|
%
|
||||||
Equity in income of non-consolidated affiliates
|
1
|
|
|
—
|
|
|
1
|
|
|
100
|
%
|
|
4
|
|
|
—
|
|
|
4
|
|
|
100
|
%
|
||||||
Income before income tax
|
190
|
|
|
180
|
|
|
10
|
|
|
6
|
%
|
|
144
|
|
|
197
|
|
|
(53
|
)
|
|
(27
|
)%
|
||||||
Income tax expense
|
(29
|
)
|
|
(3
|
)
|
|
(26
|
)
|
|
(867
|
)%
|
|
(9
|
)
|
|
(25
|
)
|
|
16
|
|
|
(64
|
)%
|
||||||
Net income
|
161
|
|
|
177
|
|
|
(16
|
)
|
|
(9
|
)%
|
|
135
|
|
|
172
|
|
|
(37
|
)
|
|
22
|
%
|
||||||
Less: Net income attributable to non-controlling interests
|
5
|
|
|
7
|
|
|
(2
|
)
|
|
(29
|
)%
|
|
16
|
|
|
20
|
|
|
(4
|
)
|
|
(20
|
)%
|
||||||
Net income attributable to Navistar International Corporation
|
$
|
156
|
|
|
$
|
170
|
|
|
$
|
(14
|
)
|
|
(8
|
)%
|
|
$
|
119
|
|
|
$
|
152
|
|
|
$
|
(33
|
)
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted income per share(A)
|
$
|
1.56
|
|
|
$
|
1.71
|
|
|
$
|
(0.15
|
)
|
|
(9
|
)%
|
|
$
|
1.20
|
|
|
$
|
1.53
|
|
|
$
|
(0.33
|
)
|
|
22
|
%
|
Diluted weighted average shares outstanding
|
99.7
|
|
|
99.7
|
|
|
—
|
|
|
—
|
%
|
|
99.5
|
|
|
99.6
|
|
|
(0.1
|
)
|
|
—
|
%
|
(A)
|
Amounts attributable to NIC.
|
|
Three Months Ended July 31,
|
|
|
|
|
|
Nine Months Ended July 31,
|
|
|
|
|
||||||||||||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Truck segment sales, net
|
$
|
2,387
|
|
|
$
|
1,916
|
|
|
$
|
471
|
|
|
25
|
%
|
|
$
|
6,480
|
|
|
$
|
4,871
|
|
|
$
|
1,609
|
|
|
33
|
%
|
Truck segment profit
|
167
|
|
|
165
|
|
|
2
|
|
|
1
|
%
|
|
183
|
|
|
200
|
|
|
(17
|
)
|
|
(9
|
)%
|
|
Three Months Ended July 31,
|
|
|
|
|
|
Nine Months Ended July 31,
|
|
|
|
|
||||||||||||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Parts segment sales, net
|
$
|
571
|
|
|
$
|
605
|
|
|
$
|
(34
|
)
|
|
(6
|
)%
|
|
$
|
1,698
|
|
|
$
|
1,774
|
|
|
$
|
(76
|
)
|
|
(4
|
)%
|
Parts segment profit
|
149
|
|
|
144
|
|
|
5
|
|
|
3
|
%
|
|
437
|
|
|
413
|
|
|
24
|
|
|
6
|
%
|
|
Three Months Ended July 31,
|
|
|
|
|
|
Nine Months Ended July 31,
|
|
|
|
|
||||||||||||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Global Operations segment sales, net
|
$
|
90
|
|
|
$
|
89
|
|
|
$
|
1
|
|
|
1
|
%
|
|
$
|
250
|
|
|
$
|
267
|
|
|
$
|
(17
|
)
|
|
(6
|
)%
|
Global Operations segment profit (loss)
|
1
|
|
|
4
|
|
|
(3
|
)
|
|
(75
|
)%
|
|
10
|
|
|
(2
|
)
|
|
12
|
|
|
600
|
%
|
|
Three Months Ended July 31,
|
|
|
|
|
|
Nine Months Ended July 31,
|
|
|
|
|
||||||||||||||||||
(in millions, except % change)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||||||||
Financial Services segment revenues, net
|
$
|
74
|
|
|
$
|
65
|
|
|
$
|
9
|
|
|
14
|
%
|
|
$
|
226
|
|
|
$
|
187
|
|
|
$
|
39
|
|
|
21
|
%
|
Financial Services segment profit
|
30
|
|
|
23
|
|
|
7
|
|
|
30
|
%
|
|
93
|
|
|
62
|
|
|
31
|
|
|
50
|
%
|
|
Three Months Ended July 31,
|
|
|
|
|
|
Nine Months Ended July 31,
|
|
|
||||||||||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
School buses(A)
|
6,200
|
|
|
6,500
|
|
|
(300
|
)
|
|
(5
|
)%
|
|
16,900
|
|
|
17,400
|
|
|
(500
|
)
|
|
(3
|
)%
|
Class 6 and 7 medium trucks
|
28,600
|
|
|
24,600
|
|
|
4,000
|
|
|
16
|
%
|
|
83,400
|
|
|
73,500
|
|
|
9,900
|
|
|
13
|
%
|
Class 8 heavy trucks
|
60,900
|
|
|
52,800
|
|
|
8,100
|
|
|
15
|
%
|
|
175,200
|
|
|
142,300
|
|
|
32,900
|
|
|
23
|
%
|
Class 8 severe service trucks
|
21,300
|
|
|
18,300
|
|
|
3,000
|
|
|
16
|
%
|
|
57,400
|
|
|
52,700
|
|
|
4,700
|
|
|
9
|
%
|
Total Core markets
|
117,000
|
|
|
102,200
|
|
|
14,800
|
|
|
14
|
%
|
|
332,900
|
|
|
285,900
|
|
|
47,000
|
|
|
16
|
%
|
Combined class 8 trucks
|
82,200
|
|
|
71,100
|
|
|
11,100
|
|
|
16
|
%
|
|
232,600
|
|
|
195,000
|
|
|
37,600
|
|
|
19
|
%
|
Navistar Core retail deliveries
|
21,300
|
|
|
15,900
|
|
|
5,400
|
|
|
34
|
%
|
|
59,900
|
|
|
45,500
|
|
|
14,400
|
|
|
32
|
%
|
(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
|
|||||||||||||
|
July 31, 2019
|
|
April 30, 2019
|
|
January 31, 2019
|
|
October 31, 2018
|
|
July 31, 2018
|
|||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|||||
Class 6 and 7 medium trucks
|
26.8
|
%
|
|
29.8
|
%
|
|
25.5
|
%
|
|
24.9
|
%
|
|
21.9
|
%
|
Class 8 heavy trucks
|
13.8
|
%
|
|
15.1
|
%
|
|
12.1
|
%
|
|
16.9
|
%
|
|
12.7
|
%
|
Class 8 severe service trucks
|
14.1
|
%
|
|
12.6
|
%
|
|
11.7
|
%
|
|
16.5
|
%
|
|
11.2
|
%
|
Combined class 8 trucks
|
13.9
|
%
|
|
14.5
|
%
|
|
12.0
|
%
|
|
16.8
|
%
|
|
12.3
|
%
|
|
As of July 31,
|
|
|
|
|
||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
||||
School buses
|
3,900
|
|
|
3,900
|
|
|
—
|
|
|
—
|
%
|
Class 6 and 7 medium trucks
|
11,800
|
|
|
10,700
|
|
|
1,100
|
|
|
10
|
%
|
Class 8 heavy trucks
|
15,700
|
|
|
18,700
|
|
|
(3,000
|
)
|
|
(16
|
)%
|
Class 8 severe service trucks
|
8,400
|
|
|
5,700
|
|
|
2,700
|
|
|
47
|
%
|
Total Core markets
|
39,800
|
|
|
39,000
|
|
|
800
|
|
|
2
|
%
|
Combined class 8 trucks
|
24,100
|
|
|
24,400
|
|
|
(300
|
)
|
|
(1
|
)%
|
|
Three Months Ended July 31,
|
|
|
|
Nine Months Ended July 31,
|
|
|
||||||||||||||||
(in units)
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
||||||||
Core markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
School buses
|
3,900
|
|
|
3,700
|
|
|
200
|
|
|
5
|
%
|
|
9,700
|
|
|
8,500
|
|
|
1,200
|
|
|
14
|
%
|
Class 6 and 7 medium trucks
|
8,400
|
|
|
6,300
|
|
|
2,100
|
|
|
33
|
%
|
|
23,400
|
|
|
17,500
|
|
|
5,900
|
|
|
34
|
%
|
Class 8 heavy trucks
|
9,400
|
|
|
7,200
|
|
|
2,200
|
|
|
31
|
%
|
|
25,800
|
|
|
17,200
|
|
|
8,600
|
|
|
50
|
%
|
Class 8 severe service trucks
|
2,700
|
|
|
1,900
|
|
|
800
|
|
|
42
|
%
|
|
8,100
|
|
|
6,000
|
|
|
2,100
|
|
|
35
|
%
|
Total Core markets
|
24,400
|
|
|
19,100
|
|
|
5,300
|
|
|
28
|
%
|
|
67,000
|
|
|
49,200
|
|
|
17,800
|
|
|
36
|
%
|
Non "Core" defense
|
—
|
|
|
100
|
|
|
(100
|
)
|
|
(100
|
)%
|
|
100
|
|
|
500
|
|
|
(400
|
)
|
|
(80
|
)%
|
Other markets(A)
|
7,000
|
|
|
2,500
|
|
|
4,500
|
|
|
180
|
%
|
|
14,200
|
|
|
5,900
|
|
|
8,300
|
|
|
141
|
%
|
Total worldwide units
|
31,400
|
|
|
21,700
|
|
|
9,700
|
|
|
45
|
%
|
|
81,300
|
|
|
55,600
|
|
|
25,700
|
|
|
46
|
%
|
Combined class 8 trucks
|
12,100
|
|
|
9,100
|
|
|
3,000
|
|
|
33
|
%
|
|
33,900
|
|
|
23,200
|
|
|
10,700
|
|
|
46
|
%
|
(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 3,300 and 6,000 General Motors ("GM")-branded units sold to GM three and nine months ended July 31, 2019, respectively.
|
|
As of
|
||||||
(in millions)
|
July 31, 2019
|
|
October 31, 2018
|
||||
Consolidated cash and cash equivalents
|
$
|
1,160
|
|
|
$
|
1,320
|
|
Consolidated marketable securities
|
3
|
|
|
101
|
|
||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,163
|
|
|
$
|
1,421
|
|
|
As of
|
||||||
(in millions)
|
July 31, 2019
|
|
October 31, 2018
|
||||
Manufacturing operations
|
$
|
1,115
|
|
|
$
|
1,362
|
|
Financial Services operations
|
48
|
|
|
59
|
|
||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,163
|
|
|
$
|
1,421
|
|
|
Nine Months Ended July 31, 2019
|
||||||||||
(in millions)
|
Manufacturing
Operations(A) |
|
Financial Services Operations and Adjustments(A)
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||
Net cash provided by (used in) operating activities
|
$
|
191
|
|
|
$
|
(87
|
)
|
|
$
|
104
|
|
Net cash provided by (used in) investing activities
|
109
|
|
|
(118
|
)
|
|
(9
|
)
|
|||
Net cash provided by (used in) financing activities
|
(447
|
)
|
|
210
|
|
|
(237
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(2
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|||
Decrease in cash, cash equivalents and restricted cash
|
(149
|
)
|
|
—
|
|
|
(149
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of the period
|
1,295
|
|
|
150
|
|
|
1,445
|
|
|||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
1,146
|
|
|
$
|
150
|
|
|
$
|
1,296
|
|
|
Nine Months Ended July 31, 2018
|
||||||||||
(in millions)
|
Manufacturing
Operations(A) |
|
Financial Services Operations and Adjustments(A)
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||
Net cash used in operating activities
|
$
|
(154
|
)
|
|
$
|
(26
|
)
|
|
$
|
(180
|
)
|
Net cash provided by (used in) investing activities
|
133
|
|
|
(73
|
)
|
|
60
|
|
|||
Net cash provided by financing activities
|
363
|
|
|
155
|
|
|
518
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(15
|
)
|
|
(1
|
)
|
|
(16
|
)
|
|||
Increase in cash, cash equivalents and restricted cash
|
327
|
|
|
55
|
|
|
382
|
|
|||
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
|
$
|
1,017
|
|
|
$
|
205
|
|
|
$
|
1,222
|
|
(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 July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income attributable to NIC
|
$
|
156
|
|
|
$
|
170
|
|
|
$
|
119
|
|
|
$
|
152
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
47
|
|
|
51
|
|
|
144
|
|
|
160
|
|
||||
Manufacturing interest expense(A)
|
49
|
|
|
60
|
|
|
160
|
|
|
176
|
|
||||
Adjusted for:
|
|
|
|
|
|
|
|
|
|
||||||
Income tax expense
|
(29
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|
(25
|
)
|
||||
EBITDA
|
$
|
281
|
|
|
$
|
284
|
|
|
$
|
432
|
|
|
$
|
513
|
|
(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 July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest expense
|
$
|
76
|
|
|
$
|
82
|
|
|
$
|
243
|
|
|
$
|
240
|
|
Less: Financial services interest expense
|
27
|
|
|
22
|
|
|
83
|
|
|
64
|
|
||||
Manufacturing interest expense
|
$
|
49
|
|
|
$
|
60
|
|
|
$
|
160
|
|
|
$
|
176
|
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
EBITDA (reconciled above)
|
$
|
281
|
|
|
$
|
284
|
|
|
$
|
432
|
|
|
$
|
513
|
|
Adjusted for significant items of:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to pre-existing warranties(A)
|
5
|
|
|
(4
|
)
|
|
7
|
|
|
(4
|
)
|
||||
Asset impairment charges(B)
|
3
|
|
|
8
|
|
|
6
|
|
|
11
|
|
||||
Restructuring of manufacturing operations(C)
|
—
|
|
|
1
|
|
|
1
|
|
|
(1
|
)
|
||||
MaxxForce Advanced EGR engine lawsuits(D)
|
(31
|
)
|
|
—
|
|
|
128
|
|
|
1
|
|
||||
Gain on sales(E)
|
3
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
||||
Debt refinancing charges(F)
|
6
|
|
|
—
|
|
|
6
|
|
|
46
|
|
||||
Pension settlement(G)
|
—
|
|
|
—
|
|
|
142
|
|
|
9
|
|
||||
Settlement gain(H)
|
(1
|
)
|
|
(71
|
)
|
|
(3
|
)
|
|
(71
|
)
|
||||
Total adjustments
|
(15
|
)
|
|
(66
|
)
|
|
231
|
|
|
(9
|
)
|
||||
Adjusted EBITDA
|
$
|
266
|
|
|
$
|
218
|
|
|
$
|
663
|
|
|
$
|
504
|
|
|
Three Months Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income attributable to NIC
|
$
|
156
|
|
|
$
|
170
|
|
|
$
|
119
|
|
|
$
|
152
|
|
Adjusted for significant items of:
|
|
|
|
|
|
|
|
||||||||
Adjustments to pre-existing warranties(A)
|
5
|
|
|
(4
|
)
|
|
7
|
|
|
(4
|
)
|
||||
Asset impairment charges(B)
|
3
|
|
|
8
|
|
|
6
|
|
|
11
|
|
||||
Restructuring of manufacturing operations(C)
|
—
|
|
|
1
|
|
|
1
|
|
|
(1
|
)
|
||||
MaxxForce Advanced EGR engine lawsuits(D)
|
(31
|
)
|
|
—
|
|
|
128
|
|
|
1
|
|
||||
Gain on sales(E)
|
3
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
||||
Debt refinancing charges(F)
|
6
|
|
|
—
|
|
|
6
|
|
|
46
|
|
||||
Pension settlement(G)
|
—
|
|
|
—
|
|
|
142
|
|
|
9
|
|
||||
Settlement gain(H)
|
(1
|
)
|
|
(71
|
)
|
|
(3
|
)
|
|
(71
|
)
|
||||
Total adjustments
|
(15
|
)
|
|
(66
|
)
|
|
231
|
|
|
(9
|
)
|
||||
Tax effect (I)
|
6
|
|
|
(9
|
)
|
|
(41
|
)
|
|
(5
|
)
|
||||
Adjusted net income attributable to NIC
|
$
|
147
|
|
|
$
|
95
|
|
|
$
|
309
|
|
|
$
|
138
|
|
(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 third quarter and first nine months of 2019, we recorded $3 million and $6 million, respectively, of asset impairment charges relating to certain assets under operating leases in our Truck segment. In the third quarter and first nine months of 2018, we recorded $8 million and $11 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 third quarter and first nine months of 2019, we recorded a restructuring charge of zero and $1 million, respectively, in our Truck segment. In the third quarter and first nine months of 2018, we recorded a charge of $1 million and a benefit of $1 million, respectively, related to adjustments for restructuring in our Truck, Global Operations and Corporate segments.
|
(D)
|
In the third quarter and first nine months of 2019, we recognized a net benefit of $31 million primarily related to the MaxxForce engine EGR product litigation recorded during the third quarter of 2017 and a charge of $128 million related to MaxxForce Advanced EGR engine class action settlement and related litigation in our Truck segment. In the nine months ended July 31, 2018, we recognized a charge of $1 million for a jury verdict related to one of the MaxxForce Advanced EGR engine lawsuits in our Truck segment.
|
(E)
|
In three months ended July 31, 2019, we recognized a charge of $3 million in our Truck segment for adjustments to the purchase price of the sale of a majority interest in the Navistar Defense business. In the first nine months of 2019, we recognized a gain of $51 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 third quarter and first nine months of 2019, we recorded a charge of $6 million for the write off of debt issuance costs and discounts associated with NFC Term Loan. In the first nine months 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 nine months 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 third quarter and first nine months of 2019, we recorded interest income of $1 million and $3 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 International Corporation ("the Corporation") and its principal subsidiary, Navistar, Inc., is filed herewith:
|
||
10.99
|
|
|
The following documents of Navistar Financial Corporation, Navistar Financial, S.A. de C.V. and Sociedad Financiera De Objeto Multiple, Entidad Regulada, indirect subsidiaries of Navistar International Corporation, and Navistar Financial Dealer Note Master Owner Trust II, an affiliated trust of the Corporation, are incorporated herein by reference:
|
||
10.100
|
|
|
10.101
|
|
IN RE NAVISTAR MAXXFORCE ENGINES
MARKETING, SALES PRACTICES AND
PRODUCTS LIABILITY LITIGATION
|
2.
|
That the claimant purchased or leased the Class Vehicle for which a claim is being made in the United States.
|
Class Vehicle Model Year
|
Amount
|
2011
|
$106.36/month
|
2012
|
$116.28/month
|
2013
|
$133.32/month
|
2014
|
$156.24/month
|
A.
|
Establishment And Administration Of The Cash Fund As A Qualified Settlement Fund
|
2.
|
Content Of And Support For Claims
|
•
|
A finding that the Court will likely be able to approve the Settlement under Fed. R. Civ. P. 23(e)(2);
|
•
|
A finding that the Court will likely be able to certify the Class for settlement purposes;
|
•
|
Approval of the Class Notice substantially in the same form as Exhibits A-2, A-3, and A-4 for distribution to the Class;
|
•
|
A direction that the Settlement Administrator, through data aggregators or otherwise, is authorized to request and receive contact and vehicle information from the Department of Motor Vehicles for all fifty (50) States, the District of Columbia, Puerto Rico, and all other United States territories and/or possessions for all VINs for Class Vehicles.
|
•
|
A direction that each potential member of the Class who wishes to be excluded from the Settlement Class must respond to the Class Notice in writing in accordance with the instructions set forth in the Class Notice and that their responses must be received by the date set forth in the Preliminary Approval Order;
|
•
|
A finding that the Class Notice constitutes the best practicable notice under the circumstances, including individual notice to all Class Members who can be identified with reasonable effort, and constitutes valid, due, and sufficient notice to Class Members in full compliance with the requirements of applicable law, including the Due Process Clause of the United States Constitution;
|
•
|
A direction that, pending final determination of the application for approval of this Settlement Agreement, all proceedings in the Litigation other than settlement approval proceedings shall be stayed and all Class Members who do not validly request exclusion from the Class shall be enjoined from commencing or prosecuting any Released Claim in any court or before any tribunal;
|
•
|
A direction that any Class Member who does not properly and timely request exclusion from the Class will be bound by the Final Order and Judgment;
|
•
|
The scheduling of a Fairness Hearing;
|
•
|
A direction that the Settlement Administrator shall provide the Opt Out List to the Court and to Defendants’ Counsel and Co-Lead Class Counsel no less than twenty-one (21) days before the Fairness Hearing. If further requests for exclusion be received after that date, the Settlement
|
•
|
A direction that Co-Lead Class Counsel shall file a motion for Attorneys’ Fees and Costs and Named Plaintiffs’ Service Awards at least thirty (30) days prior to the date set forth in the Preliminary Approval Order as the deadline for the objections, and any supplemental brief in support of final approval of the Settlement Agreement no later than seven (7) days prior to the Fairness Hearing;
|
•
|
A direction that any member of the Settlement Class who wishes to object to the proposed Settlement, the proposed Final Order and Judgment, the motion for Attorneys’ Fees and Costs and/or Named Plaintiffs’ Service Awards must file and serve such objections no later than the date set forth in the Preliminary Approval Order, which shall be approximately twenty-four (24) days before the Fairness Hearing, together with copies of all papers in support of his or her position as provided in Section VI.B.1 of the Settlement Agreement.
|
•
|
The objecting member of the Settlement Class’s full name, address, and telephone number;
|
•
|
The model, model year, and VIN of the objecting member of the Settlement Class’s Class Vehicle(s), along with Proof of Membership in the Class;
|
•
|
A written statement of all grounds for the objection, accompanied by any legal support for the objection;
|
•
|
Copies of any papers, briefs, or other documents upon which the objection is based;
|
•
|
A list of all cases in which the member of the Settlement Class and/or member of the Settlement Class’s counsel filed or in any way participated-financially or otherwise-the filing of an objection to a class settlement during the preceding five years;
|
•
|
The name, address, email address, and telephone number of every attorney representing or assisting the objector; and
|
•
|
A statement indicating whether the objector and/or his or her counsel intends to appear at the Fairness Hearing and, if so, a list of all persons, if any, who will be called to testify in support of the objection.
|
•
|
Include the Class Member’s full name, address, and telephone number;
|
•
|
Identify the model, model year, and VIN of the Class Member’s Class Vehicle(s);
|
•
|
Explicitly and unambiguously state his, her, or its desire to be excluded from the Settlement Class in In re Navistar MaxxForce Engines Marketing, Sales Practices and Products Liability Litigation; and
|
•
|
Be individually and personally signed by the Class Member. If the Class Member is an entity and not an individual, the objection must be signed by an officer or director of the entity and include an affidavit that attests to that person’s ability to act on behalf of that entity.
|
•
|
Certifying the Class;
|
•
|
Approving the Settlement as fair, reasonable, and adequate as it applies to the Class;
|
•
|
Declaring the Settlement to be binding on the Settling Parties and Settlement Class;
|
•
|
Dismissing on the merits and with prejudice all cases underlying the multidistrict litigation In re Navistar MaxxForce Engines Marketing, Sales Practices and Products Liability Litigation other than those in which named or individual plaintiffs have Opted Out;
|
•
|
Forever discharging the Released Parties from all Released Claims;
|
•
|
Indicating the amount of the Service Award for the Named Plaintiffs;
|
•
|
Indicating the amount of Attorneys’ Fees and Costs to be awarded to Co-Lead Class Counsel; and
|
•
|
Providing that all Class Members who did not Opt Out be permanently enjoined from commencing or prosecuting any action, suit, proceeding, claim, or cause of action asserting the Released Claims in any court or before any tribunal.
|
Jonathan D. Selbin
|
Adam J. Levitt
|
Kenneth S. Byrd
|
John E. Tangren
|
Jason L. Lichtman
|
Amy E. Keller
|
Andrew R. Kaufman
|
Adam Prom
|
Avery S. Halfon
|
|
LIEFF CABRASER HEIMANN & BERNSTEIN, LLP
|
DICELLO LEVITT GUTZLER LLC
|
250 Hudson Street, 8th Floor
|
Ten North Dearborn Street, Eleventh Floor
|
New York, New York 10013
|
Chicago, Illinois 60602
|
Telephone: (212) 355-9500
|
Telephone: (312) 214-7900
|
Email: jselbin@lchb.com
|
Email: alevitt@dicellolevitt.com
|
kbyrd@lchb.com
|
jtangren@dicellolevitt.com
|
jlichtman@lchb.com
|
akeller@dicellolevitt.com
|
akaufman@lchb.com
|
aprom@dicellolevitt.com
|
ahalfon@lchb.com
|
Co-Lead Class Counsel
|
Co-Lead Class Counsel
|
|
William M. Audet
|
Laurel G. Bellows
|
Steven Weinmann
|
|
AUDET & PARTNERS LLP
|
THE BELLOWS LAW GROUP, P.C.
|
711 Van Ness Avenue, Suite 500
|
209 South LaSalle Street, #800
|
San Francisco, California 94102
|
Chicago, Illinois 60604
|
Telephone: (415) 568-2555
|
Telephone: (312) 332-3340
|
Email: waudet@audetlaw.com
|
Email: lbellows@bellowslaw.com
|
sweinmann@audetlaw.com
|
Liaison Counsel
|
Co-Lead Class Counsel
|
|
By:
|
/s/ Mark S. Mester
|
|
Name:
|
Mark S Mester
|
|
Date:
|
May 28, 2019
|
By:
|
/s/ Jonathan D. Selbin
|
|
Name:
|
Jonathan D. Selbin
|
|
Date:
|
May 28, 2019
|
|
|
|
|
By:
|
/s/ Adam J. Levitt
|
|
Name:
|
Adam J. Levitt
|
|
Date:
|
May 28, 2019
|
|
|
|
|
By:
|
/s/ Avery Halfon for William M Audet
|
|
Name:
|
William M Audet
|
|
Date:
|
May 28, 2019
|
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/ TROY A. CLARKE
|
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/ WALTER G. BORST
|
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/ TROY A. CLARKE
|
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/ WALTER G. BORST
|
Walter G. Borst
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
For the Three Months Ended July 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
2,996
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,996
|
|
Finance revenues
|
—
|
|
|
74
|
|
|
(28
|
)
|
|
46
|
|
||||
Sales and revenues, net
|
2,996
|
|
|
74
|
|
|
(28
|
)
|
|
3,042
|
|
||||
Costs of products sold
|
2,501
|
|
|
—
|
|
|
—
|
|
|
2,501
|
|
||||
Restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Asset impairment charges
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Selling, general and administrative expenses
|
145
|
|
|
22
|
|
|
|
|
|
167
|
|
||||
Engineering and product development costs
|
81
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||||
Interest expense
|
49
|
|
|
27
|
|
|
—
|
|
|
76
|
|
||||
Other expense (income), net
|
58
|
|
|
(5
|
)
|
|
(28
|
)
|
|
25
|
|
||||
Total costs and expenses
|
2,837
|
|
|
44
|
|
|
(28
|
)
|
|
2,853
|
|
||||
Equity in income of non-consolidated affiliates
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Income before equity income from financial services operations and income taxes
|
160
|
|
|
30
|
|
|
—
|
|
|
190
|
|
||||
Equity income from financial services operations
|
26
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
186
|
|
|
30
|
|
|
(26
|
)
|
|
190
|
|
||||
Income tax benefit (expense)
|
(25
|
)
|
|
(4
|
)
|
|
—
|
|
|
(29
|
)
|
||||
Net income (loss)
|
161
|
|
|
26
|
|
|
(26
|
)
|
|
161
|
|
||||
Less: Net income attributable to non-controlling interests
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
156
|
|
|
$
|
26
|
|
|
$
|
(26
|
)
|
|
$
|
156
|
|
|
For the Nine Months Ended July 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
8,330
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,330
|
|
Finance revenues
|
—
|
|
|
226
|
|
|
(85
|
)
|
|
141
|
|
||||
Sales and revenues, net
|
8,330
|
|
|
226
|
|
|
(85
|
)
|
|
8,471
|
|
||||
Costs of products sold
|
6,973
|
|
|
—
|
|
|
—
|
|
|
6,973
|
|
||||
Restructuring charges
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Asset impairment charges
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Selling, general and administrative expenses
|
654
|
|
|
73
|
|
|
(1
|
)
|
|
726
|
|
||||
Engineering and product development costs
|
242
|
|
|
—
|
|
|
—
|
|
|
242
|
|
||||
Interest expense
|
160
|
|
|
83
|
|
|
—
|
|
|
243
|
|
||||
Other expense (income), net
|
247
|
|
|
(23
|
)
|
|
(84
|
)
|
|
140
|
|
||||
Total costs and expenses
|
8,283
|
|
|
133
|
|
|
(85
|
)
|
|
8,331
|
|
||||
Equity in income of non-consolidated affiliates
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Income before equity income from financial services operations and income taxes
|
51
|
|
|
93
|
|
|
—
|
|
|
144
|
|
||||
Equity income from financial services operations
|
74
|
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
125
|
|
|
93
|
|
|
(74
|
)
|
|
144
|
|
||||
Income tax benefit (expense)
|
10
|
|
|
(19
|
)
|
|
—
|
|
|
(9
|
)
|
||||
Net income (loss)
|
135
|
|
|
74
|
|
|
(74
|
)
|
|
135
|
|
||||
Less: Net income attributable to non-controlling interests
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
119
|
|
|
$
|
74
|
|
|
$
|
(74
|
)
|
|
$
|
119
|
|
|
For the Three Months Ended July 31, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
2,566
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,566
|
|
Finance revenues
|
—
|
|
|
65
|
|
|
(25
|
)
|
|
40
|
|
||||
Sales and revenues, net
|
2,566
|
|
|
65
|
|
|
(25
|
)
|
|
2,606
|
|
||||
Costs of products sold
|
2,096
|
|
|
—
|
|
|
—
|
|
|
2,096
|
|
||||
Restructuring charges
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Asset impairment charges
|
7
|
|
|
1
|
|
|
—
|
|
|
8
|
|
||||
Selling, general and administrative expenses
|
199
|
|
|
23
|
|
|
—
|
|
|
222
|
|
||||
Engineering and product development costs
|
72
|
|
|
—
|
|
|
—
|
|
|
72
|
|
||||
Interest expense
|
60
|
|
|
22
|
|
|
—
|
|
|
82
|
|
||||
Other expense (income), net
|
(26
|
)
|
|
(4
|
)
|
|
(25
|
)
|
|
(55
|
)
|
||||
Total costs and expenses
|
2,409
|
|
|
42
|
|
|
(25
|
)
|
|
2,426
|
|
||||
Income before equity income from financial services operations and income taxes
|
157
|
|
|
23
|
|
|
—
|
|
|
180
|
|
||||
Equity income from financial services operations
|
17
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
174
|
|
|
23
|
|
|
(17
|
)
|
|
180
|
|
||||
Income tax benefit (expense)
|
3
|
|
|
(6
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Net income (loss)
|
177
|
|
|
17
|
|
|
(17
|
)
|
|
177
|
|
||||
Less: Net income attributable to non-controlling interests
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
170
|
|
|
$
|
17
|
|
|
$
|
(17
|
)
|
|
$
|
170
|
|
|
For the Nine Months Ended July 31, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
6,815
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,815
|
|
Finance revenues
|
—
|
|
|
187
|
|
|
(69
|
)
|
|
118
|
|
||||
Sales and revenues, net
|
6,815
|
|
|
187
|
|
|
(69
|
)
|
|
6,933
|
|
||||
Costs of products sold
|
5,615
|
|
|
—
|
|
|
—
|
|
|
5,615
|
|
||||
Restructuring charges
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Asset impairment charges
|
10
|
|
|
1
|
|
|
—
|
|
|
11
|
|
||||
Selling, general and administrative expenses
|
546
|
|
|
68
|
|
|
(1
|
)
|
|
613
|
|
||||
Engineering and product development costs
|
222
|
|
|
—
|
|
|
—
|
|
|
222
|
|
||||
Interest expense
|
176
|
|
|
64
|
|
|
—
|
|
|
240
|
|
||||
Other expense (income), net
|
112
|
|
|
(8
|
)
|
|
(68
|
)
|
|
36
|
|
||||
Total costs and expenses
|
6,680
|
|
|
125
|
|
|
(69
|
)
|
|
6,736
|
|
||||
Income before equity income from financial services operations and income taxes
|
135
|
|
|
62
|
|
|
—
|
|
|
197
|
|
||||
Equity income from financial services operations
|
49
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
||||
Income (loss) before income tax
|
184
|
|
|
62
|
|
|
(49
|
)
|
|
197
|
|
||||
Income tax benefit (expense)
|
(12
|
)
|
|
(13
|
)
|
|
—
|
|
|
(25
|
)
|
||||
Net income (loss)
|
172
|
|
|
49
|
|
|
(49
|
)
|
|
172
|
|
||||
Less: Net income attributable to non-controlling interests
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
152
|
|
|
$
|
49
|
|
|
$
|
(49
|
)
|
|
$
|
152
|
|
|
As of July 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1,112
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
1,160
|
|
Marketable securities
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Restricted cash and cash equivalents
|
34
|
|
|
102
|
|
|
—
|
|
|
136
|
|
||||
Finance and other receivables, net
|
441
|
|
|
2,518
|
|
|
(56
|
)
|
|
2,903
|
|
||||
Inventories
|
1,187
|
|
|
8
|
|
|
—
|
|
|
1,195
|
|
||||
Goodwill
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Property and equipment, net
|
924
|
|
|
366
|
|
|
—
|
|
|
1,290
|
|
||||
Investments in and advances to financial services operations
|
663
|
|
|
—
|
|
|
(663
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||
Deferred taxes, net
|
123
|
|
|
1
|
|
|
—
|
|
|
124
|
|
||||
Other assets
|
388
|
|
|
24
|
|
|
—
|
|
|
412
|
|
||||
Total assets
|
$
|
4,946
|
|
|
$
|
3,067
|
|
|
$
|
(719
|
)
|
|
$
|
7,294
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,793
|
|
|
$
|
69
|
|
|
$
|
(56
|
)
|
|
$
|
1,806
|
|
Debt
|
2,929
|
|
|
2,275
|
|
|
—
|
|
|
5,204
|
|
||||
Postretirement benefits liabilities
|
1,929
|
|
|
—
|
|
|
—
|
|
|
1,929
|
|
||||
Other liabilities
|
1,955
|
|
|
60
|
|
|
—
|
|
|
2,015
|
|
||||
Total liabilities
|
8,606
|
|
|
2,404
|
|
|
(56
|
)
|
|
10,954
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(3,663
|
)
|
|
663
|
|
|
(663
|
)
|
|
(3,663
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
4,946
|
|
|
$
|
3,067
|
|
|
$
|
(719
|
)
|
|
$
|
7,294
|
|
|
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 Nine Months Ended July 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
135
|
|
|
$
|
74
|
|
|
$
|
(74
|
)
|
|
$
|
135
|
|
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
98
|
|
|
1
|
|
|
—
|
|
|
99
|
|
||||
Depreciation of equipment leased to others
|
(2
|
)
|
|
47
|
|
|
—
|
|
|
45
|
|
||||
Amortization of debt issuance costs and discount
|
9
|
|
|
6
|
|
|
—
|
|
|
15
|
|
||||
Deferred income taxes
|
(46
|
)
|
|
5
|
|
|
—
|
|
|
(41
|
)
|
||||
Asset impairment charges
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Gain on sales of investments and businesses, net
|
(56
|
)
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
||||
Equity in income of non-consolidated affiliates
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Equity in income of financial services affiliates
|
(74
|
)
|
|
—
|
|
|
74
|
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Change in intercompany receivables and payables
|
(43
|
)
|
|
43
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
167
|
|
|
(263
|
)
|
|
—
|
|
|
(96
|
)
|
||||
Net cash provided by (used in) operating activities
|
191
|
|
|
(87
|
)
|
|
—
|
|
|
104
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sales of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Maturities of marketable securities
|
98
|
|
|
—
|
|
|
—
|
|
|
98
|
|
||||
Capital expenditures
|
(88
|
)
|
|
(2
|
)
|
|
—
|
|
|
(90
|
)
|
||||
Purchase of equipment leased to others
|
(3
|
)
|
|
(127
|
)
|
|
—
|
|
|
(130
|
)
|
||||
Other investing activities
|
102
|
|
|
11
|
|
|
—
|
|
|
113
|
|
||||
Net cash provided by (used in) investing activities
|
109
|
|
|
(118
|
)
|
|
—
|
|
|
(9
|
)
|
||||
Net cash provided by (used in) financing activities
|
(447
|
)
|
|
210
|
|
|
—
|
|
|
(237
|
)
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(2
|
)
|
|
(5
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Decrease in cash, cash equivalents and restricted cash
|
(149
|
)
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of the period
|
1,295
|
|
|
150
|
|
|
—
|
|
|
1,445
|
|
||||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
1,146
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
1,296
|
|
|
For the Nine Months Ended July 31, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
172
|
|
|
$
|
49
|
|
|
$
|
(49
|
)
|
|
$
|
172
|
|
Adjustments to reconcile net income (loss) to cash used in operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
106
|
|
|
1
|
|
|
—
|
|
|
107
|
|
||||
Depreciation of equipment leased to others
|
13
|
|
|
40
|
|
|
—
|
|
|
53
|
|
||||
Amortization of debt issuance costs and discount
|
16
|
|
|
7
|
|
|
—
|
|
|
23
|
|
||||
Deferred income taxes
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Asset impairment charges
|
10
|
|
|
1
|
|
|
—
|
|
|
11
|
|
||||
Equity in income of financial services affiliates
|
(49
|
)
|
|
—
|
|
|
49
|
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Change in other intercompany receivables and payables
|
49
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
||||
Other, net
|
(472
|
)
|
|
(75
|
)
|
|
—
|
|
|
(547
|
)
|
||||
Net cash used in operating activities
|
(154
|
)
|
|
(26
|
)
|
|
—
|
|
|
(180
|
)
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
(214
|
)
|
|
—
|
|
|
—
|
|
|
(214
|
)
|
||||
Sales of marketable securities
|
460
|
|
|
—
|
|
|
—
|
|
|
460
|
|
||||
Maturities of marketable securities
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||
Capital expenditures
|
(78
|
)
|
|
(1
|
)
|
|
—
|
|
|
(79
|
)
|
||||
Purchase of equipment leased to others
|
(62
|
)
|
|
(80
|
)
|
|
—
|
|
|
(142
|
)
|
||||
Other investing activities
|
(2
|
)
|
|
8
|
|
|
—
|
|
|
6
|
|
||||
Net cash provided by (used in) investing activities
|
133
|
|
|
(73
|
)
|
|
—
|
|
|
60
|
|
||||
Net cash provided by financing activities
|
363
|
|
|
155
|
|
|
—
|
|
|
518
|
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(15
|
)
|
|
(1
|
)
|
|
—
|
|
|
(16
|
)
|
||||
Increase in cash, cash equivalents and restricted cash
|
327
|
|
|
55
|
|
|
—
|
|
|
382
|
|
||||
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
|
$
|
1,017
|
|
|
$
|
205
|
|
|
$
|
—
|
|
|
$
|
1,222
|
|