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☑
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ANNUAL 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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60532
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Lisle
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Illinois
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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-PD
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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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☐
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Non-accelerated filer
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☐
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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
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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EXHIBIT INDEX:
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•
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estimates we have made in preparing our financial statements;
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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"), and the likelihood and consequences of the previously announced acquisition of the Company by TRATON SE or one of its affiliates;
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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 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 acquisitions, dispositions, strategic alliances, and joint ventures we complete;
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•
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our expectations and estimates relating to restructuring activities, including restructuring charges and timing of cash payments related thereto, and operational flexibility, savings, and efficiencies from such restructurings;
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•
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our expectations relating to debt refinancing activities;
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•
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our expectations relating to the potential effects of anticipated divestitures and closures of businesses;
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•
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our expectations relating to our cost-reduction actions and actions to reduce discretionary spending;
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•
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our expectations relating to our ability to service our long-term debt;
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•
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our expectations relating to our wholesale and retail finance receivables and revenues;
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•
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liabilities resulting from environmental, health and safety laws and regulations;
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•
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our anticipated capital expenditures;
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•
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our expectations relating to payments of taxes;
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•
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our expectations relating to warranty costs;
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•
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our expectations relating to interest expense;
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•
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our expectations relating to impairment of goodwill, other intangible assets and property, plant and equipment;
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•
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our expectations relating to the resolution of, and costs relating to litigation, arbitration 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;
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anticipated trends, expectations, and outlook relating to matters affecting our financial condition or results of operations; and
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our expectations relating to the anticipated impact that the novel strain of the coronavirus ("COVID-19") pandemic has on our business, financial condition, results of operations and cash flows.
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Item 1.
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Business
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•
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Trucks—We manufacture and distribute Class 4 through 8 trucks and buses in the common carrier, private carrier, government, leasing, construction, energy/petroleum, and student and commercial transportation markets under the International® and IC brands. We design and manufacture proprietary diesel engines for our International branded trucks and IC branded buses.
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•
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Parts—We support our International® brand commercial trucks, IC brand buses, and our proprietary engines, as well as our other product lines, by distributing proprietary products together with a wide selection of other standard truck, trailer, and engine service parts.
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•
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Financial Services—We provide and manage retail, wholesale, and lease financing of products sold by the Truck and Parts segments, as well as their dealers, within the U.S., Canada and Mexico.
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1.
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People: Our focus on creating a high-performance organization and culture proved to be one of Navistar 4.0’s strongest pillars this past year in dealing with the COVID-19 pandemic. Our efforts resulted in our organization being able to rapidly adapt to continually changing circumstances in our business, our communities and our employees' own lives. The most notable achievements and changes we were able to implement were:
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•
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We immediately adapted our agile and collaborative visual management-based teaming practices to online tools and practices that were quickly scaled across the organization. Once stay at home orders started, we were able to quickly train and ramp up our organization to operate remotely with minimal disruption to most operations.
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•
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Significant senior leadership changes were made that strengthen Navistar’s focus on those critical areas that will help us achieve our objectives and guide us into the future:
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▪
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Persio V. Lisboa became President and Chief Executive Officer. He is a strong leader with a proven record of driving results. Troy Clarke became Executive Chairman and Chairman of the Board, dedicated to ensuring a smooth leadership transition and to continue to manage discussions with Navistar's strategic partner, TRATON.
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▪
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We integrated sales, marketing and aftersales under one leader to further improve the complete commercial process for customers and dealers.
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▪
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To further drive operating efficiencies, Navistar global operations, including Brazil, Mexico and the Global Export business, have been combined under the same leadership with our current integrated operations of procurement, product development, manufacturing and supply chain.
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•
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Navistar and our employees are also proud of being leaders in our communities in this year of the COVID-19 pandemic, and social unrest. As a company that thrives with diversity, inclusion and social engagement, Navistar leaders, dealers and employees stepped up and demonstrated our values. Some notable examples of this are:
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▪
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International dealers served nearly 10,000 meals to truckers all over the US and Canada.
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▪
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International Truck, Triumph Business Capital and Triumph Pay donated more than 6,500 face masks and 6,000 bottles of hand sanitizer to drivers who came in for service at select International Truck dealerships.
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▪
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Our South American engine subsidiary MWM Motores provided two mobile generators to power a soccer arena in Sao Paulo that had been converted into a temporary hospital with 200 beds.
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▪
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We established the “International Cares” and “IC Bus Cares” programs to provide innovative financing solutions for our customers and to offer free access to services like our fleet management tools International 360 and IC Bus 360.
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▪
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We established a platform for our employees to share concerns, thoughts and ideas on dealing with a multitude of topics going on in our world through a series of online sessions entitled “Shifting Gears.” These sessions connected employees of all backgrounds and experiences across Navistar helping them deal with ongoing events.
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▪
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Navistar also moved quickly at the onset of the COVID-19 pandemic to ensure a safe environment for our employees by aggressively implementing safety protocols at all our facilities.
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2.
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Performance: Continued to create sustainable long-term performance advantage within our products and services by investing in those areas with the greatest impact on revenue growth and performance. During 2020, we balanced the need to preserve financial flexibility with the ability to meet our long-term financial goals under Navistar 4.0. Our notable achievements in 2020 include:
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•
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Took deliberate and concerted actions to preserve liquidity and performance during the COVID-19 pandemic. Those actions included:
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▪
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Enhanced liquidity through completion of a $600 million senior secured notes offering.
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▪
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Maintained production as an “essential business” by working closely with our supply chain.
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▪
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Maintained service at parts distribution centers ("PDCs"), used truck centers and dealers, in part by leveraging e-commerce and data analytics.
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▪
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Implemented IT solutions to maintain critical operations and projects to increase flexibility to work from home.
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▪
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Reduced cash outflows by retiming non-critical capital improvement and IT projects, and targeted deferrals and other permanent cost reduction actions.
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•
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Moved forward with key capital infrastructure projects, including:
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▪
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Broke ground on the new San Antonio, TX plant, a $250M investment that will incorporate the latest manufacturing principles - digital factory, connected machinery, robust lean manufacturing processes and cloud analytics - to enable predictive quality and maintenance, and allow data-driven decisions to be made real time on the shop floor.
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▪
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Broke ground on a $125M Huntsville, AL plant expansion that will support the production of next-generation big-bore powertrains developed with the TRATON Group.
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•
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Signed a new 20-year agreement with the city of Tulsa, OK for our bus plant that will keep the IC Bus school bus manufacturing facility at the Tulsa International Airport.
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•
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Successfully extended our relationship with Cummins Inc. ("Cummins") to supply Cummins engines through the next two greenhouse gas emissions cycles for medium duty ("MD") and heavy duty ("HD") big-bore engines.
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•
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Piloted new dealer sales processes, capturing new customers and launching new training modules, as well as continued to expand our portfolio of Fleetrite® products and the number of our dedicated retail service parts locations.
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•
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Launched the International® HX® Series, the next generation of severe service trucks in late 2020, with increased component commonality that further aligns our full product line with our Project Compass initiative.
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3.
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#1 Choice: Significant progress has been made in identifying and focusing on key markets where we believe we have a differentiated value proposition, defining how we will operate in each of these markets, and how to prove to our customers that we are their #1 choice. Our strategy to communicate our clear value proposition has now expanded to include electric vehicles and self-driving technology, laying the foundation for the transportation infrastructure of the future. Notable achievements in 2020 include:
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•
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Further solidified our on-going relationship with one of the nation’s largest fleet carriers by delivering our 5,000th LT series truck in 3 ½ years.
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•
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Announcement of our first order for 18 Electric CE school buses for the province of British Columbia in Canada. We expect to begin delivery of the units in 2021.
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•
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Formed a partnership with TuSimple, Inc. ("TuSimple"), a global self-driving technology company to co-develop SAE Level 4 self-driving trucks.
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•
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Formed partnerships with 7 leading telematics service providers ("TSP") that we believe covers at least 70% of the TSP market.
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•
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Through our NEXT e-Mobility solutions business unit, we signed a master services agreement with In-Charge Energy to provide charging infrastructure and consulting services to Navistar and our electric vehicle customers.
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•
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Became a member of CharIN E.V. which is a global association that focuses on electric vehicle adoption, to further establish Navistar as a participant in the electric future of the commercial truck industry.
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•
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Launched the industry’s first holistic suite of products designed to minimize Total Cost of Ownership ("TCO") - Intelligent Fleet Care in OnCommand Connection.
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•
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Growth Initiatives
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•
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Commercial Transformation is collaborating with our International dealer network to sustainably grow truck sales.
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•
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Uptime/ Total Cost of Ownership ("TCO") / Connected is supporting our customers on the road better than our competitors, through technology and responsiveness.
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•
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Profitability Initiatives
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•
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Project Compass is reducing unnecessary complexity while meeting customer needs.
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•
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Emerging Technologies is deploying lifecycle innovative solutions leveraging internal competencies and strategic partnerships to address new profit opportunities. This initiative is focused on electric, fuel cell, and autonomous solutions.
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•
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Manufacturing 4.0 is combining our manufacturing and procurement expertise, along with innovative technologies, to improve quality and minimize conversion cost.
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•
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Foundational Initiatives
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•
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People 4.0 is creating a culture of trust, empowerment and accountability to build the best teams.
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•
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Innovation is embedding into our identity the fun, curiosity and energy of problem-solving and breakthrough thinking.
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As of October 31,
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2020
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2019
|
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2018
|
|||
Employees worldwide:
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|
|||
Total active employees
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11,000
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12,300
|
|
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13,100
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Total inactive employees
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1,100
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1,000
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900
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Total employees worldwide
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12,100
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13,300
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14,000
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Total active union employees:
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|
|||
Total UAW
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2,600
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3,000
|
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3,300
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Total other unions
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3,900
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4,500
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5,100
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Name
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Age
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Position with the Company
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Persio V. Lisboa
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55
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President and Chief Executive Officer
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Troy A. Clarke
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65
|
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Executive Chairman and Chairman of the Board
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Walter G. Borst
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|
58
|
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Executive Vice President and Chief Financial Officer
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William V. McMenamin
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61
|
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President, Financial Services and Treasurer
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Samara A. Strycker
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|
48
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Senior Vice President and Corporate Controller
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Curt A. Kramer
|
|
52
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Senior Vice President and General Counsel
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Richard E. Bond
|
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67
|
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Associate General Counsel and Corporate Secretary
|
•
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increasing our vulnerability to general adverse economic and industry conditions;
|
•
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limiting our ability to use operating cash flow in other areas of our business because we must dedicate a portion of these funds to make significant interest payments on our indebtedness;
|
•
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limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
•
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limiting our ability to take advantage of business opportunities as a result of various restrictive covenants in our debt agreements; and
|
•
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placing us at a competitive disadvantage compared to our competitors that have less debt, lower interest rates and/or less restrictive debt covenants.
|
•
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the ability of our Board of Directors to issue so-called "flexible" preferred stock;
|
•
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a provision for any vacancies on our Board of Directors to be filled only by the remaining directors;
|
•
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the inability of stockholders to act by written consent or call special meetings;
|
•
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advance notice procedures for stockholder proposals to be brought before an annual meeting of our stockholders; and
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•
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Section 203 of the Delaware General Corporation Law, which generally restricts us from engaging in certain business combinations with a person who acquires 15% or more of our common stock for a period of three years from the date such person acquired such common stock, unless stockholder or Board approval is obtained prior to the acquisition
|
•
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trade and technology protection measures, export limitations and import and export licensing requirements;
|
•
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tariffs imposed on key raw materials could potentially disrupt our existing supply chains and impose additional costs on our business, including costs with respect to raw materials upon which our business depends;
|
•
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difficulty in staffing and managing international operations and the application of foreign labor regulations;
|
•
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multiple and potentially conflicting laws, regulations, and policies that are subject to change or which may conflict with U.S. laws, regulations and policies;
|
•
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currency exchange rate risk;
|
•
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changes in general economic and political conditions in countries where we operate, particularly in emerging markets; and
|
•
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the occurrence and spread of contagious diseases or illnesses, such as COVID-19.
|
•
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allow our government clients to terminate or not renew our contracts if we come under foreign ownership, control or influence;
|
•
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allow our government clients to terminate existing contracts for the convenience of the government;
|
•
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require us to prevent unauthorized access to classified information; and
|
•
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require us to comply with laws and regulations intended to promote various social or economic goals.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
|
Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
As of October 31,
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
||||||||||||
Navistar International Corporation
|
$
|
100
|
|
|
$
|
181
|
|
|
$
|
344
|
|
|
$
|
272
|
|
|
$
|
254
|
|
|
$
|
350
|
|
S&P 500 Index - Total Returns
|
100
|
|
|
105
|
|
|
129
|
|
|
139
|
|
|
159
|
|
|
174
|
|
||||||
S&P Construction, Farm Machinery, and Heavy Truck Index
|
100
|
|
|
119
|
|
|
184
|
|
|
160
|
|
|
195
|
|
|
228
|
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Item 6.
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Selected Financial Data
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As of and for the Years Ended October 31,
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||||||||||||||||||
(in millions, except per share data)
|
2020
|
|
2019
|
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2018
|
|
2017
|
|
2016
|
||||||||||
RESULTS OF OPERATIONS DATA
|
|
|
|
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|
||||||||||
Sales and revenues, net
|
$
|
7,503
|
|
|
$
|
11,251
|
|
|
$
|
10,250
|
|
|
$
|
8,570
|
|
|
$
|
8,111
|
|
Income (loss) from continuing operations before taxes
|
(388
|
)
|
|
262
|
|
|
420
|
|
|
64
|
|
|
(32
|
)
|
|||||
Income tax benefit (expense)
|
59
|
|
|
(19
|
)
|
|
(52
|
)
|
|
(10
|
)
|
|
(33
|
)
|
|||||
Income (loss) from continuing operations
|
(329
|
)
|
|
243
|
|
|
368
|
|
|
54
|
|
|
(65
|
)
|
|||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Net income (loss)
|
(329
|
)
|
|
243
|
|
|
368
|
|
|
55
|
|
|
(65
|
)
|
|||||
Less: Net income attributable to non-controlling interests
|
18
|
|
|
22
|
|
|
28
|
|
|
25
|
|
|
32
|
|
|||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(347
|
)
|
|
$
|
221
|
|
|
$
|
340
|
|
|
$
|
30
|
|
|
$
|
(97
|
)
|
Amounts attributable to Navistar International Corporation common shareholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations, net of tax
|
$
|
(347
|
)
|
|
$
|
221
|
|
|
$
|
340
|
|
|
$
|
29
|
|
|
$
|
(97
|
)
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(347
|
)
|
|
$
|
221
|
|
|
$
|
340
|
|
|
$
|
30
|
|
|
$
|
(97
|
)
|
Basic earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(3.48
|
)
|
|
$
|
2.23
|
|
|
$
|
3.44
|
|
|
$
|
0.31
|
|
|
$
|
(1.19
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(3.48
|
)
|
|
$
|
2.23
|
|
|
$
|
3.44
|
|
|
$
|
0.32
|
|
|
$
|
(1.19
|
)
|
Diluted earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(3.48
|
)
|
|
$
|
2.22
|
|
|
$
|
3.41
|
|
|
$
|
0.31
|
|
|
$
|
(1.19
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(3.48
|
)
|
|
$
|
2.22
|
|
|
$
|
3.41
|
|
|
$
|
0.32
|
|
|
$
|
(1.19
|
)
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
99.7
|
|
|
99.3
|
|
|
98.9
|
|
|
93.0
|
|
|
81.7
|
|
|||||
Diluted
|
99.7
|
|
|
99.5
|
|
|
99.6
|
|
|
93.5
|
|
|
81.7
|
|
|||||
BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
6,637
|
|
|
$
|
6,917
|
|
|
$
|
7,230
|
|
|
$
|
6,135
|
|
|
$
|
5,653
|
|
Long-term debt:(A)
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
$
|
3,451
|
|
|
$
|
2,900
|
|
|
$
|
2,965
|
|
|
$
|
3,121
|
|
|
$
|
3,025
|
|
Financial services operations
|
1,239
|
|
|
1,417
|
|
|
1,556
|
|
|
768
|
|
|
972
|
|
|||||
Total long-term debt
|
$
|
4,690
|
|
|
$
|
4,317
|
|
|
$
|
4,521
|
|
|
$
|
3,889
|
|
|
$
|
3,997
|
|
•
|
Engine Strategy and Emissions Standards Compliance—We are focused on new product introductions, enhancements of current products, quality improvements and continuous material cost-reductions across our truck and bus product lines. We have shifted our investment focus to develop more driver-centric designs. We are also expanding our powertrain offerings with a mix of proprietary engines and Cummins engines. We have incurred significant research and development and tooling costs to design and produce our product lines to meet the EPA and CARB on-highway HDD emissions standards, including OBD requirements. GHG phase 2 regulations will further increase significant investments in product development by us and our competitors. CARB also continues to advocate for stricter emission standards, OBD requirements and in-use oversight. These emissions standards have and will continue to result in significant increases in the costs of our products.
|
•
|
TRATON Group Alliance—We and TRATON Group have a similar vision for the role of technology, including the importance of driver-focused open architecture solutions. We expect the alliance will be a source of powertrain options and other high-value technologies, including advanced driver assistance systems, connected vehicle solutions and autonomous technologies, electric vehicles, and cab and chassis subsystems. We expect to have a fully integrated proprietary powertrain and launch an electric medium-duty truck and electric school bus based on TRATON Group's technology. In addition, our Procurement JV Framework Agreement with TRATON Group will deliver further material cost savings in the years to come.
|
•
|
Core Truck Market—The Core market in which we compete is cyclical in nature and strongly influenced by macroeconomic factors such as industrial production, consumer sentiment, demand for durable goods, construction spending, business investment, and state and local government spending. During the past year, truck customers in the U.S. and Canada have been significantly impacted by the COVID-19 pandemic as well as fundamental shifts in the economy. Following on the heels of a record market in 2019, 2020 has seen some segments of the core truck market prosper while others have stagnated. Select Private Fleets and For Hire carriers focused on both durable and non-durable goods have continued to perform at a high level while others engaged in select manufacturing areas or service-focused businesses, such as restaurant supply and hospitality have been adversely impacted. The general economy has been rebounding and may not fully recover until at least mid to late 2021. The heavy truck market has seen freight demand and rates remain healthy and is dealing with an increased level of driver retirement and shortages to some extent compounded by the COVID-19 pandemic. The medium truck market declined in 2020 due to a significant decrease in leasing and rental activity and is also expected to begin to rebound in 2021. Solid consumer spending and residential construction have buoyed the medium truck demand. The vocational truck market has been impacted by delayed or canceled government spending but benefited from the increased construction market as well. The school bus market is expected to be impacted by the COVID-19 pandemic as both government and private expenditures have been deferred because of the number of idle buses in many areas of the country.
|
•
|
Used Truck Inventory—Our gross used truck inventory decreased to approximately $135 million at October 31, 2020 from $200 million at October 31, 2019, offset by reserves of $37 million at both periods. During 2020, additions to our used truck inventories were lower than 2019 primarily due to the year over year decline in new truck sales. In response to the changes in the business environment presented by the COVID-19 pandemic, higher reliance was placed on online auctions and wholesale channels to drive used truck sales. In 2020, there was also a focus to sell through the older model year inventories through inventory reduction strategies and "No Haggle" pricing.
|
•
|
Parts—The Parts business remains a significant source of revenue and profit. We are focusing on retail customer segmentation and improving dealer-lead generation. Our private label brands help provide All-Make parts to customers, attract incremental price sensitive customers, and offset the decline in late-in-lifecycle products. We are leveraging technology such as eCommerce to attract and retain new customers, to expand our existing customers’ portfolio of products, and to improve our customers' ease of doing business with us. We have embraced improving uptime via parts availability, dedicated same-day deliveries and expanded hours at our PDCs.
|
•
|
Warranty Costs—Warranty expense continues to reflect our current product portfolio and our commitment to quality and customer uptime. Warranty expense as a percentage of manufacturing revenue increased to 2.3% from 1.4% a year ago. We recognized net charges for adjustments to pre-existing warranties of $40 million and $3 million in 2020 and 2019, respectively. Pre-existing warranties during the period were driven by proactive campaign actions for certain components on units built in prior years and un-favorable warranty experience on trucks and engines sold prior to fiscal year 2020. For more information, see Note 1, Summary of Significant Accounting Policies, to the accompanying consolidated financial statements.
|
•
|
Income Taxes—At October 31, 2020, we had $2.3 billion of U.S. federal net operating loss carryforwards and $167 million of federal tax credit carryforwards. We expect our cash payments of U.S. taxes will be minimal for as long as we are able to offset our U.S. taxable income by these U.S. net operating losses and tax credits, the majority of which have carryforward periods of up to 20 years and some have indefinite carryforward periods. We also have state and foreign net operating losses that are available to reduce cash payments of state and foreign taxes in future periods.
|
•
|
Business Evaluation—We are focused on improving our Truck and Parts businesses in our Core markets. We are working to fix, divest or close under-performing and non-strategic areas and expect to realize incremental benefits from these actions. While we are making investments in our manufacturing footprint to expand our capabilities, we continue to rationalize our manufacturing operations to optimize our cost structure. This effort is ongoing and may lead to additional divestitures of businesses or discontinuing programs that are outside of our Core operations or are not performing to our expectations.
|
•
|
North and Latin American Economy—The COVID-19 pandemic has created unprecedented volatility in the global economy. Through the third quarter of calendar year 2020, the U.S. economy has recouped two-thirds of its output loss experienced in the first half of calendar year 2020. With the assumption of continued loose monetary policy, an additional fiscal stimulus plan, as well as potential wide-spread availability of a COVID-19 vaccine in the first half of 2021, U.S. economic growth is expected to continue recovering supported by consumer spending and industrial improvement in the next year. However, with employment still approximately 10 million individuals below pre-COVID-19 levels, the recovery path critically depends on the improvement of the health situation in our markets. The Canadian economy is expected to grow moderately, with a similar assumption about the health situation as in the U.S. The recovery in Latin America, including Mexico, Brazil, Chile, Colombia, and Peru, is projected to continue after the significant contraction caused by the COVID-19 pandemic, but the recovery trajectory remains challenged by country-specific factors and global headwinds.
|
(in millions, except per share data and % change)
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
Sales and revenues, net
|
$
|
7,503
|
|
|
$
|
11,251
|
|
|
$
|
(3,748
|
)
|
|
(33
|
)%
|
Costs of products sold
|
6,221
|
|
|
9,245
|
|
|
(3,024
|
)
|
|
(33
|
)%
|
|||
Restructuring charges
|
2
|
|
|
12
|
|
|
(10
|
)
|
|
(83
|
)%
|
|||
Asset impairment charges
|
28
|
|
|
7
|
|
|
21
|
|
|
300
|
%
|
|||
Selling, general and administrative expenses
|
1,021
|
|
|
934
|
|
|
87
|
|
|
9
|
%
|
|||
Engineering and product development costs
|
321
|
|
|
319
|
|
|
2
|
|
|
1
|
%
|
|||
Interest expense
|
268
|
|
|
312
|
|
|
(44
|
)
|
|
(14
|
)%
|
|||
Other expense, net
|
32
|
|
|
164
|
|
|
(132
|
)
|
|
(80
|
)%
|
|||
Total costs and expenses
|
7,893
|
|
|
10,993
|
|
|
(3,100
|
)
|
|
(28
|
)%
|
|||
Equity in income of non-consolidated affiliates
|
2
|
|
|
4
|
|
|
(2
|
)
|
|
(50
|
)%
|
|||
Income (loss) before income taxes
|
(388
|
)
|
|
262
|
|
|
(650
|
)
|
|
(248
|
)%
|
|||
Income tax (expense) benefit
|
59
|
|
|
(19
|
)
|
|
78
|
|
|
411
|
%
|
|||
Net income (loss)
|
(329
|
)
|
|
243
|
|
|
(572
|
)
|
|
(235
|
)%
|
|||
Less: Net income attributable to non-controlling interests
|
18
|
|
|
22
|
|
|
(4
|
)
|
|
(18
|
)%
|
|||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(347
|
)
|
|
$
|
221
|
|
|
$
|
(568
|
)
|
|
(257
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Diluted income (loss) per share(A)
|
$
|
(3.48
|
)
|
|
$
|
2.22
|
|
|
$
|
(5.70
|
)
|
|
(257
|
)%
|
Diluted weighted average shares outstanding
|
99.7
|
|
|
99.5
|
|
|
0.2
|
|
|
—
|
%
|
(A)
|
Amounts attributable to NIC.
|
(in millions, except % change)
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
Truck
|
$
|
5,312
|
|
|
$
|
8,585
|
|
|
$
|
(3,273
|
)
|
|
(38
|
)%
|
Parts
|
1,846
|
|
|
2,245
|
|
|
(399
|
)
|
|
(18
|
)%
|
|||
Global Operations
|
253
|
|
|
343
|
|
|
(90
|
)
|
|
(26
|
)%
|
|||
Financial Services
|
217
|
|
|
297
|
|
|
(80
|
)
|
|
(27
|
)%
|
|||
Corporate and Eliminations
|
(125
|
)
|
|
(219
|
)
|
|
94
|
|
|
43
|
%
|
|||
Total
|
$
|
7,503
|
|
|
$
|
11,251
|
|
|
$
|
(3,748
|
)
|
|
(33
|
)%
|
(in millions, except % change)
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
Truck segment sales, net
|
$
|
5,312
|
|
|
$
|
8,585
|
|
|
$
|
(3,273
|
)
|
|
(38
|
)%
|
Truck segment profit (loss)
|
(141
|
)
|
|
269
|
|
|
(410
|
)
|
|
(152
|
)%
|
(in millions, except % change)
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
Parts segment sales, net
|
$
|
1,846
|
|
|
$
|
2,245
|
|
|
$
|
(399
|
)
|
|
(18
|
)%
|
Parts segment profit
|
448
|
|
|
598
|
|
|
(150
|
)
|
|
(25
|
)%
|
(in millions, except % change)
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
Global Operations segment sales, net
|
$
|
253
|
|
|
$
|
343
|
|
|
$
|
(90
|
)
|
|
(26
|
)%
|
Global Operations segment profit (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
N.M.
|
|
N.M.
|
Not meaningful.
|
(in millions, except % change)
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
Financial Services segment revenues, net
|
$
|
217
|
|
|
$
|
297
|
|
|
$
|
(80
|
)
|
|
(27
|
)%
|
Financial Services segment profit
|
65
|
|
|
123
|
|
|
(58
|
)
|
|
(47
|
)%
|
|
For the Years Ended October 31,
|
|
2020 vs 2019
|
|
2019 vs 2018
|
|||||||||||||||
(in units)
|
2020
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
|||||||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
School buses(A)
|
28,400
|
|
|
33,900
|
|
|
33,100
|
|
|
(5,500
|
)
|
|
(16
|
)%
|
|
800
|
|
|
2
|
%
|
Class 6 and 7 medium trucks
|
77,300
|
|
|
112,200
|
|
|
98,800
|
|
|
(34,900
|
)
|
|
(31
|
)%
|
|
13,400
|
|
|
14
|
%
|
Class 8 heavy trucks
|
154,000
|
|
|
235,700
|
|
|
206,400
|
|
|
(81,700
|
)
|
|
(35
|
)%
|
|
29,300
|
|
|
14
|
%
|
Class 8 severe service trucks
|
65,200
|
|
|
79,700
|
|
|
70,300
|
|
|
(14,500
|
)
|
|
(18
|
)%
|
|
9,400
|
|
|
13
|
%
|
Total Core Markets
|
324,900
|
|
|
461,500
|
|
|
408,600
|
|
|
(136,600
|
)
|
|
(30
|
)%
|
|
52,900
|
|
|
13
|
%
|
Combined class 8 trucks
|
219,200
|
|
|
315,400
|
|
|
276,700
|
|
|
(96,200
|
)
|
|
(31
|
)%
|
|
38,700
|
|
|
14
|
%
|
Navistar Core retail deliveries
|
51,900
|
|
|
86,800
|
|
|
71,400
|
|
|
(34,900
|
)
|
|
(40
|
)%
|
|
15,400
|
|
|
22
|
%
|
|
For the Years Ended October 31,
|
|||||||
|
2020
|
|
2019
|
|
2018
|
|||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|||
School buses
|
37.8
|
%
|
|
35.8
|
%
|
|
33.2
|
%
|
Class 6 and 7 medium trucks
|
21.0
|
%
|
|
27.0
|
%
|
|
23.3
|
%
|
Class 8 heavy trucks
|
9.5
|
%
|
|
13.8
|
%
|
|
13.7
|
%
|
Class 8 severe service trucks
|
15.8
|
%
|
|
14.8
|
%
|
|
12.9
|
%
|
Total Core Markets
|
16.0
|
%
|
|
18.8
|
%
|
|
17.5
|
%
|
Combined class 8 trucks
|
11.4
|
%
|
|
14.1
|
%
|
|
13.5
|
%
|
|
For the Years Ended October 31,
|
|
2020 vs 2019
|
|
2019 vs 2018
|
|||||||||||||||
(in units)
|
2020
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
|||||||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
School buses
|
10,000
|
|
|
12,600
|
|
|
12,800
|
|
|
(2,600
|
)
|
|
(21
|
)%
|
|
(200
|
)
|
|
(2
|
)%
|
Class 6 and 7 medium trucks
|
13,400
|
|
|
23,600
|
|
|
34,700
|
|
|
(10,200
|
)
|
|
(43
|
)%
|
|
(11,100
|
)
|
|
(32
|
)%
|
Class 8 heavy trucks
|
13,200
|
|
|
23,300
|
|
|
42,400
|
|
|
(10,100
|
)
|
|
(43
|
)%
|
|
(19,100
|
)
|
|
(45
|
)%
|
Class 8 severe service trucks
|
7,400
|
|
|
10,300
|
|
|
15,000
|
|
|
(2,900
|
)
|
|
(28
|
)%
|
|
(4,700
|
)
|
|
(31
|
)%
|
Total Core Markets
|
44,000
|
|
|
69,800
|
|
|
104,900
|
|
|
(25,800
|
)
|
|
(37
|
)%
|
|
(35,100
|
)
|
|
(33
|
)%
|
Combined class 8 trucks
|
20,600
|
|
|
33,600
|
|
|
57,400
|
|
|
(13,000
|
)
|
|
(39
|
)%
|
|
(23,800
|
)
|
|
(41
|
)%
|
|
For the Years Ended October 31,
|
|
2020 vs 2019
|
|
2019 vs 2018
|
|||||||||||||||
(in units)
|
2020
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
|||||||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
School buses
|
1,200
|
|
|
2,100
|
|
|
2,400
|
|
|
(900
|
)
|
|
(43
|
)%
|
|
(300
|
)
|
|
(13
|
)%
|
Class 6 and 7 medium trucks
|
6,900
|
|
|
8,900
|
|
|
14,500
|
|
|
(2,000
|
)
|
|
(22
|
)%
|
|
(5,600
|
)
|
|
(39
|
)%
|
Class 8 heavy trucks
|
10,100
|
|
|
11,200
|
|
|
20,800
|
|
|
(1,100
|
)
|
|
(10
|
)%
|
|
(9,600
|
)
|
|
(46
|
)%
|
Class 8 severe service trucks
|
3,100
|
|
|
6,100
|
|
|
7,700
|
|
|
(3,000
|
)
|
|
(49
|
)%
|
|
(1,600
|
)
|
|
(21
|
)%
|
Total Core Markets
|
21,300
|
|
|
28,300
|
|
|
45,400
|
|
|
(7,000
|
)
|
|
(25
|
)%
|
|
(17,100
|
)
|
|
(38
|
)%
|
Combined class 8 trucks
|
13,200
|
|
|
17,300
|
|
|
28,500
|
|
|
(4,100
|
)
|
|
(24
|
)%
|
|
(11,200
|
)
|
|
(39
|
)%
|
|
For the Years Ended October 31,
|
|
2020 vs 2019
|
|
2019 vs 2018
|
|||||||||||||||
(in units)
|
2020
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
|||||||
Core Markets (U.S. and Canada)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
School buses
|
11,100
|
|
|
13,000
|
|
|
12,200
|
|
|
(1,900
|
)
|
|
(15
|
)%
|
|
800
|
|
|
7
|
%
|
Class 6 and 7 medium trucks
|
15,400
|
|
|
29,200
|
|
|
24,300
|
|
|
(13,800
|
)
|
|
(47
|
)%
|
|
4,900
|
|
|
20
|
%
|
Class 8 heavy trucks
|
13,700
|
|
|
33,100
|
|
|
27,800
|
|
|
(19,400
|
)
|
|
(59
|
)%
|
|
5,300
|
|
|
19
|
%
|
Class 8 severe service trucks
|
10,200
|
|
|
11,900
|
|
|
9,600
|
|
|
(1,700
|
)
|
|
(14
|
)%
|
|
2,300
|
|
|
24
|
%
|
Total Core Markets
|
50,400
|
|
|
87,200
|
|
|
73,900
|
|
|
(36,800
|
)
|
|
(42
|
)%
|
|
13,300
|
|
|
18
|
%
|
Non "Core" defense
|
—
|
|
|
100
|
|
|
700
|
|
|
(100
|
)
|
|
(100
|
)%
|
|
(600
|
)
|
|
(86
|
)%
|
Other markets(A)
|
15,600
|
|
|
19,200
|
|
|
9,600
|
|
|
(3,600
|
)
|
|
(19
|
)%
|
|
9,600
|
|
|
100
|
%
|
Total worldwide units
|
66,000
|
|
|
106,500
|
|
|
84,200
|
|
|
(40,500
|
)
|
|
(38
|
)%
|
|
22,300
|
|
|
26
|
%
|
Combined class 8 trucks
|
23,900
|
|
|
45,000
|
|
|
37,400
|
|
|
(21,100
|
)
|
|
(47
|
)%
|
|
7,600
|
|
|
20
|
%
|
(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 7,300 and 9,000 GM-branded units sold to GM for the years ended October 31, 2020 and 2019, respectively.
|
|
As of October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Consolidated cash and cash equivalents
|
$
|
1,843
|
|
|
$
|
1,370
|
|
|
$
|
1,320
|
|
Consolidated marketable securities
|
—
|
|
|
—
|
|
|
101
|
|
|||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,843
|
|
|
$
|
1,370
|
|
|
$
|
1,421
|
|
|
As of October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Manufacturing operations
|
$
|
1,749
|
|
|
$
|
1,328
|
|
|
$
|
1,362
|
|
Financial Services operations
|
94
|
|
|
42
|
|
|
59
|
|
|||
Consolidated cash, cash equivalents, and marketable securities
|
$
|
1,843
|
|
|
$
|
1,370
|
|
|
$
|
1,421
|
|
|
Year Ended October 31, 2020
|
||||||||||
(in millions)
|
Manufacturing
Operations(A) |
|
Financial Services Operations and Adjustments(A)
|
|
Consolidated Statement of Cash Flows
|
||||||
Net cash provided by (used in) operating activities
|
$
|
(70
|
)
|
|
$
|
544
|
|
|
$
|
474
|
|
Net cash used in investing activities
|
(132
|
)
|
|
(85
|
)
|
|
(217
|
)
|
|||
Net cash provided by (used in) financing activities
|
637
|
|
|
(456
|
)
|
|
181
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(20
|
)
|
|
(2
|
)
|
|
(22
|
)
|
|||
Increase in cash, cash equivalents and restricted cash
|
415
|
|
|
1
|
|
|
416
|
|
|||
Cash, cash equivalents and restricted cash at beginning of the year
|
1,378
|
|
|
179
|
|
|
1,557
|
|
|||
Cash, cash equivalents and restricted cash at end of the year
|
$
|
1,793
|
|
|
$
|
180
|
|
|
$
|
1,973
|
|
|
Year Ended October 31, 2019
|
||||||||||
(in millions)
|
Manufacturing
Operations(A) |
|
Financial Services Operations and Adjustments(A)
|
|
Consolidated Statement of Cash Flows
|
||||||
Net cash provided by operating activities
|
$
|
395
|
|
|
$
|
55
|
|
|
$
|
450
|
|
Net cash provided by (used in) investing activities
|
70
|
|
|
(138
|
)
|
|
(68
|
)
|
|||
Net cash provided by (used in) financing activities
|
(373
|
)
|
|
115
|
|
|
(258
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(9
|
)
|
|
(3
|
)
|
|
(12
|
)
|
|||
Increase in cash, cash equivalents and restricted cash
|
83
|
|
|
29
|
|
|
112
|
|
|||
Cash, cash equivalents and restricted cash at beginning of the year
|
1,295
|
|
|
150
|
|
|
1,445
|
|
|||
Cash, cash equivalents and restricted cash at end of the year
|
$
|
1,378
|
|
|
$
|
179
|
|
|
$
|
1,557
|
|
|
Year Ended October 31, 2018
|
||||||||||
(in millions)
|
Manufacturing
Operations(A) |
|
Financial Services Operations and Adjustments(A)
|
|
Consolidated Statement of Cash Flows
|
||||||
Net cash provided by (used in) operating activities
|
$
|
417
|
|
|
$
|
(150
|
)
|
|
$
|
267
|
|
Net cash provided by (used in) investing activities
|
66
|
|
|
(132
|
)
|
|
(66
|
)
|
|||
Net cash provided by financing activities
|
137
|
|
|
277
|
|
|
414
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(15
|
)
|
|
5
|
|
|
(10
|
)
|
|||
Increase in cash, cash equivalents and restricted cash
|
605
|
|
|
—
|
|
|
605
|
|
|||
Cash, cash equivalents and restricted cash at beginning of the year
|
690
|
|
|
150
|
|
|
840
|
|
|||
Cash, cash equivalents and restricted cash at end of the year
|
$
|
1,295
|
|
|
$
|
150
|
|
|
$
|
1,445
|
|
(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 8, 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 Consolidated Statements of Cash Flows and may not be consistent with how they would be treated on a stand-alone basis. We have chosen to provide this supplemental information to allow additional analysis, to illustrate the respective cash flows giving effect to the equity basis cash flow shown above, and to provide an additional measure of performance and liquidity.
|
Company
|
|
Instrument Type
|
|
Total
Amount |
|
Purpose of Funding
|
|
Amount
Utilized |
|
Matures or Expires
|
||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|||||
NFSC
|
|
Wholesale note trust
|
|
$
|
950
|
|
|
Eligible wholesale notes
|
|
$
|
610
|
|
|
2021-2022
|
NFC
|
|
Credit agreement(A)
|
|
748
|
|
|
Finance receivables and general corporate purposes
|
|
538
|
|
|
2024
|
||
NFM
|
|
Bank lines
|
|
584
|
|
|
Finance receivables and general corporate purposes
|
|
403
|
|
|
2021-2025
|
||
TRAC
|
|
Revolving retail accounts
|
|
200
|
|
|
Eligible retail accounts
|
|
117
|
|
|
2021
|
(A)
|
NFM can borrow up to $100 million, if not used by NFC.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Net income (loss) attributable to NIC
|
$
|
(347
|
)
|
|
$
|
221
|
|
|
$
|
340
|
|
Plus:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expense
|
199
|
|
|
193
|
|
|
211
|
|
|||
Manufacturing interest expense(A)
|
199
|
|
|
207
|
|
|
235
|
|
|||
Adjusted for:
|
|
|
|
|
|
|
|
||||
Income tax (expense) benefit
|
59
|
|
|
(19
|
)
|
|
(52
|
)
|
|||
EBITDA
|
$
|
(8
|
)
|
|
$
|
640
|
|
|
$
|
838
|
|
(A)
|
Manufacturing interest expense is the net interest expense primarily generated for borrowings that support the manufacturing and corporate operations, adjusted to eliminate intercompany interest expense with our Financial Services segment. The following table reconciles Manufacturing interest expense to the consolidated interest expense.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Interest expense
|
$
|
268
|
|
|
$
|
312
|
|
|
$
|
327
|
|
Less: Financial Services interest expense
|
69
|
|
|
105
|
|
|
92
|
|
|||
Manufacturing interest expense
|
$
|
199
|
|
|
$
|
207
|
|
|
$
|
235
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
EBITDA (reconciled above)
|
$
|
(8
|
)
|
|
$
|
640
|
|
|
$
|
838
|
|
Adjusted for significant items of:
|
|
|
|
|
|
|
|
||||
Adjustments to pre-existing warranties(A)
|
40
|
|
|
3
|
|
|
(9
|
)
|
|||
Asset impairment charges(B)
|
28
|
|
|
7
|
|
|
14
|
|
|||
Restructuring of manufacturing operations(C)
|
2
|
|
|
14
|
|
|
(1
|
)
|
|||
MaxxForce Advanced EGR engine lawsuits(D)
|
—
|
|
|
129
|
|
|
1
|
|
|||
Legal settlement(E)
|
58
|
|
|
—
|
|
|
—
|
|
|||
Shy profit-sharing accrual(F)
|
289
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale(G)
|
—
|
|
|
(56
|
)
|
|
—
|
|
|||
Debt refinancing charges(H)
|
5
|
|
|
6
|
|
|
46
|
|
|||
Pension settlement(I)
|
7
|
|
|
142
|
|
|
9
|
|
|||
Settlement gain(J)
|
(1
|
)
|
|
(3
|
)
|
|
(72
|
)
|
|||
Total adjustments
|
428
|
|
|
242
|
|
|
(12
|
)
|
|||
Adjusted EBITDA
|
$
|
420
|
|
|
$
|
882
|
|
|
$
|
826
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Net income (loss) attributable to NIC
|
$
|
(347
|
)
|
|
$
|
221
|
|
|
$
|
340
|
|
Adjusted for significant items of:
|
|
|
|
|
|
||||||
Adjustments to pre-existing warranties(A)
|
40
|
|
|
3
|
|
|
(9
|
)
|
|||
Asset impairment charges(B)
|
28
|
|
|
7
|
|
|
14
|
|
|||
Restructuring of manufacturing operations(C)
|
2
|
|
|
14
|
|
|
(1
|
)
|
|||
MaxxForce Advanced EGR engine lawsuits(D)
|
—
|
|
|
129
|
|
|
1
|
|
|||
Legal settlement(E)
|
58
|
|
|
—
|
|
|
—
|
|
|||
Shy profit-sharing accrual(F)
|
289
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale(G)
|
—
|
|
|
(56
|
)
|
|
—
|
|
|||
Debt refinancing charges(H)
|
5
|
|
|
6
|
|
|
46
|
|
|||
Pension settlement(I)
|
7
|
|
|
142
|
|
|
9
|
|
|||
Settlement gain(J)
|
(1
|
)
|
|
(3
|
)
|
|
(72
|
)
|
|||
Total adjustments
|
428
|
|
|
242
|
|
|
(12
|
)
|
|||
Tax effect (K)
|
(71
|
)
|
|
(40
|
)
|
|
(1
|
)
|
|||
Adjusted net income (loss) attributable to NIC
|
$
|
10
|
|
|
$
|
423
|
|
|
$
|
327
|
|
(A)
|
Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from historical and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and circumstances related to these factors could materially change our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available.
|
(B)
|
During 2020, we recorded $28 million of asset impairment charges, comprised of $16 million of asset impairment charges related to certain assets under operating leases and certain other long-lived assets in our Truck segment and $12 million of asset impairment charges related to long-lived assets in our Brazil asset group in our Global Operations segment. During 2019, we recorded $7 million of asset impairment charges relating to certain assets under operating leases in our Truck segment. During 2018, we recorded $14 million of impairment charges related to the exit of our railcar business in Cherokee, Alabama, certain long-lived assets and certain assets under operating leases in our Truck and Financial Services segments.
|
(C)
|
During 2020, we recorded net restructuring charges of $2 million due to restructuring activity throughout the organization. During 2019, we recorded charges of $14 million primarily related to cost reduction actions recorded in Costs of product sold and Restructuring charges in our Global Operations segment. During 2018, we recognized a benefit of $1 million related to adjustments for restructuring charges in our Truck, Global Operations and Corporate segments.
|
(D)
|
During 2019, we recognized a net charge of $129 million related to the MaxxForce Advanced EGR engine class action settlement and related litigation in our Truck segment. During 2018, we recognized a charge of $1 million for a jury verdict related to the MaxxForce Advanced EGR engine lawsuits in our Truck segment.
|
(E)
|
During 2020, we recorded a charge of $58 million, including $8 million of legal and other fees, related to a proposed legal settlement with the Department of Justice, related to Navistar Defense.
|
(F)
|
During 2020, we recorded a charge of $289 million related to the Shy profit-sharing accrual.
|
(G)
|
During 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.
|
(H)
|
During 2020 we recorded a charge of $5 million for the write-off of debt issuance costs and discounts associated with the 6.75% Tax Exempt Bonds. During 2019, we recorded a charge of $6 million for the write-off of debt issuance costs and discounts associated with the NFC Term Loan. During 2018, we recorded a charge of $46 million for the write off of debt issuance costs and discounts associated with the repurchase of our 8.25% Senior Notes and the refinancing of our previously existing Term Loan.
|
(I)
|
During 2020, 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 charges of $7 million, $142 million and $9 million, respectively, in Other expense, net in Corporate.
|
(J)
|
During 2020 and 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. During 2018, we settled a business economic loss claim relating to our Alabama engine manufacturing facility from the Deepwater Horizon Settlement Program. As a result, we recorded the net present value of the settlement of $70 million and related interest income of $2 million in Other expense, net.
|
(K)
|
Tax effect is calculated by excluding the tax impact of the non-GAAP adjustments from the tax provision calculations.
|
|
Payments Due by Year Ending October 31,
|
||||||||||||||||||
(in millions)
|
Total(F)
|
|
2021
|
|
2022-2023
|
|
2024-2025
|
|
2026+
|
||||||||||
Type of contractual obligation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt obligations(A)
|
$
|
5,322
|
|
|
$
|
613
|
|
|
$
|
674
|
|
|
$
|
1,234
|
|
|
$
|
2,801
|
|
Interest on long-term debt(B)
|
1,293
|
|
|
258
|
|
|
472
|
|
|
366
|
|
|
197
|
|
|||||
Financing arrangements
|
4
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Finance lease obligations(C)
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations(D)
|
138
|
|
|
35
|
|
|
53
|
|
|
27
|
|
|
23
|
|
|||||
Purchase obligations(E)
|
159
|
|
|
33
|
|
|
86
|
|
|
38
|
|
|
2
|
|
|||||
Total
|
$
|
6,918
|
|
|
$
|
943
|
|
|
$
|
1,287
|
|
|
$
|
1,665
|
|
|
$
|
3,023
|
|
(A)
|
Excludes offsetting discounts and issuance costs of $43 million and Financed Lease Obligations of $45 million. For more information, see Note 11, Debt, to the accompanying consolidated financial statements.
|
(B)
|
Amounts represent estimated contractual interest payments on outstanding debt. Rates in effect as of October 31, 2020 are used for variable rate debt. For more information, see Note 11, Debt, to the accompanying consolidated financial statements.
|
(C)
|
We lease many of our facilities as well as other property and equipment under finance leases in the normal course of business. For more information, see Note 7, Property and Equipment, Net, to the accompanying consolidated financial statements.
|
(D)
|
Lease obligations for facility closures are included in operating leases. For more information, see Note 10, Leases, to the accompanying consolidated financial statements.
|
(E)
|
Purchase obligations include various commitments in the ordinary course of business that would include the purchase of goods or services which are not recognized in our Consolidated Balance Sheets. We also include certain contractual obligations recognized in our Consolidated Balance Sheets for which payments will be made beyond the next year.
|
(F)
|
Note that payments due in less than one year are included in 2021.
|
•
|
the nature of the estimate or assumption is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, or
|
•
|
the impact of the estimate or assumption on financial condition or operating performance is material.
|
•
|
Plant rationalization activities impact the determination of whether a plan curtailment or settlement has occurred. Key considerations include, but are not limited to, expected future service credit, the remaining years of recall rights of the workforce, and the extent to which minimum service requirements (in the case of healthcare benefits) have been met.
|
•
|
The discount rates are obtained by matching the anticipated future benefit payments for the plans to a high quality corporate bond yield curve to establish a weighted average discount rate for each plan.
|
•
|
Health care cost trend rates are developed based upon historical retiree cost trend data, short term health care outlook, and industry benchmarks and surveys. The OPEB liability estimate is impacted by the level of premiums paid to and gainshare received from insurers, rebates from pharmaceutical companies and government subsidies received on prescription drugs. Future levels of subsidies could also be impacted by the outcome of our Retiree Health Care Litigation (as described in Note 15, Commitments and Contingencies, to the accompanying consolidated financial statements), which could be material. The inflation assumptions used are based upon both our specific trends and nationally expected trends.
|
•
|
The expected return on plan assets is derived from historical plan returns, expected long-term performance of asset classes, asset allocations, input from an external pension investment advisor, and risks and other factors adjusted for our specific investment strategy. The focus is on long-term trends and provides for the consideration of recent plan performance.
|
•
|
Retirement rates are based upon actual and projected plan experience.
|
•
|
Mortality rates are developed from actual and projected plan experience for the U.S. postretirement benefit plans. Our actuaries conduct an experience study every five years as part of the process to select a best estimate of mortality. We consider both standard mortality tables and improvement factors as well as the plans’ actual experience when selecting a best estimate.
|
•
|
The rate of compensation increase reflects our long-term actual experience and our projected future increases.
|
|
October 31, 2020
|
|
2021 Expense
|
||||||||||||
|
Obligations
|
|
|
|
|
||||||||||
(in millions)
|
Pension
|
|
OPEB
|
|
Pension
|
|
OPEB
|
||||||||
Discount rate:
|
|
|
|
|
|
|
|
||||||||
Increase of 1.0%
|
$
|
(271
|
)
|
|
$
|
(51
|
)
|
|
$
|
5
|
|
|
$
|
—
|
|
Decrease of 1.0%
|
318
|
|
|
61
|
|
|
(7
|
)
|
|
—
|
|
||||
Expected return on assets:
|
|
|
|
|
|
|
|
||||||||
Increase of 1.0%
|
N/A
|
|
|
N/A
|
|
|
(20
|
)
|
|
(2
|
)
|
||||
Decrease of 1.0%
|
N/A
|
|
|
N/A
|
|
|
20
|
|
|
2
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page
|
Consolidated Statements of Operations for the years ended October 31, 2020, 2019, and 2018
|
|
Consolidated Statements of Cash Flows for the years ended October 31, 2020, 2019, and 2018
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions, except per share data)
|
2020
|
|
2019
|
|
2018
|
||||||
Sales and revenues
|
|
|
|
|
|
||||||
Sales of manufactured products, net
|
$
|
7,335
|
|
|
$
|
11,061
|
|
|
$
|
10,090
|
|
Finance revenues
|
168
|
|
|
190
|
|
|
160
|
|
|||
Sales and revenues, net
|
7,503
|
|
|
11,251
|
|
|
10,250
|
|
|||
Costs and expenses
|
|
|
|
|
|
||||||
Costs of products sold
|
6,221
|
|
|
9,245
|
|
|
8,317
|
|
|||
Restructuring charges
|
2
|
|
|
12
|
|
|
(1
|
)
|
|||
Asset impairment charges
|
28
|
|
|
7
|
|
|
14
|
|
|||
Selling, general and administrative expenses
|
1,021
|
|
|
934
|
|
|
828
|
|
|||
Engineering and product development costs
|
321
|
|
|
319
|
|
|
297
|
|
|||
Interest expense
|
268
|
|
|
312
|
|
|
327
|
|
|||
Other expense, net
|
32
|
|
|
164
|
|
|
48
|
|
|||
Total costs and expenses
|
7,893
|
|
|
10,993
|
|
|
9,830
|
|
|||
Equity in income of non-consolidated affiliates
|
2
|
|
|
4
|
|
|
—
|
|
|||
Income (loss) before income taxes
|
(388
|
)
|
|
262
|
|
|
420
|
|
|||
Income tax (expense) benefit
|
59
|
|
|
(19
|
)
|
|
(52
|
)
|
|||
Net income (loss)
|
(329
|
)
|
|
243
|
|
|
368
|
|
|||
Less: Net income attributable to non-controlling interests
|
18
|
|
|
22
|
|
|
28
|
|
|||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(347
|
)
|
|
$
|
221
|
|
|
$
|
340
|
|
|
|
|
|
|
|
||||||
Income (loss) per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
|||||
Basic
|
$
|
(3.48
|
)
|
|
$
|
2.23
|
|
|
$
|
3.44
|
|
Diluted
|
$
|
(3.48
|
)
|
|
$
|
2.22
|
|
|
$
|
3.41
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
99.7
|
|
|
99.3
|
|
|
98.9
|
|
|||
Diluted
|
99.7
|
|
|
99.5
|
|
|
99.6
|
|
(in millions)
|
For the Years Ended October 31,
|
||||||||||
2020
|
|
2019
|
|
2018
|
|||||||
Net income (loss)
|
$
|
(329
|
)
|
|
$
|
243
|
|
|
$
|
368
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(83
|
)
|
|
(6
|
)
|
|
(32
|
)
|
|||
Defined benefit plans, net of tax
|
322
|
|
|
14
|
|
|
323
|
|
|||
Total other comprehensive income
|
239
|
|
|
8
|
|
|
291
|
|
|||
Comprehensive income (loss)
|
(90
|
)
|
|
251
|
|
|
659
|
|
|||
Less: Net income attributable to non-controlling interests
|
18
|
|
|
22
|
|
|
28
|
|
|||
Total comprehensive income (loss) attributable to Navistar International Corporation
|
$
|
(108
|
)
|
|
$
|
229
|
|
|
$
|
631
|
|
|
As of October 31,
|
||||||
(in millions, except per share data)
|
2020
|
|
2019
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,843
|
|
|
$
|
1,370
|
|
Restricted cash and cash equivalents
|
64
|
|
|
133
|
|
||
Trade and other receivables, net
|
273
|
|
|
338
|
|
||
Finance receivables, net
|
1,371
|
|
|
1,923
|
|
||
Inventories, net
|
763
|
|
|
911
|
|
||
Other current assets
|
263
|
|
|
277
|
|
||
Total current assets
|
4,577
|
|
|
4,952
|
|
||
Restricted cash
|
66
|
|
|
54
|
|
||
Trade and other receivables, net
|
7
|
|
|
10
|
|
||
Finance receivables, net
|
251
|
|
|
274
|
|
||
Investments in non-consolidated affiliates
|
31
|
|
|
31
|
|
||
Property and equipment, net
|
1,298
|
|
|
1,309
|
|
||
Operating lease right of use assets
|
119
|
|
|
—
|
|
||
Goodwill
|
38
|
|
|
38
|
|
||
Intangible assets, net
|
18
|
|
|
25
|
|
||
Deferred taxes, net
|
117
|
|
|
117
|
|
||
Other noncurrent assets
|
115
|
|
|
107
|
|
||
Total assets
|
$
|
6,637
|
|
|
$
|
6,917
|
|
LIABILITIES and STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable and current maturities of long-term debt
|
$
|
640
|
|
|
$
|
871
|
|
Accounts payable
|
1,278
|
|
|
1,341
|
|
||
Other current liabilities
|
1,453
|
|
|
1,363
|
|
||
Total current liabilities
|
3,371
|
|
|
3,575
|
|
||
Long-term debt
|
4,690
|
|
|
4,317
|
|
||
Postretirement benefits liabilities
|
1,705
|
|
|
2,103
|
|
||
Other noncurrent liabilities
|
693
|
|
|
645
|
|
||
Total liabilities
|
10,459
|
|
|
10,640
|
|
||
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
|
2,726
|
|
|
2,730
|
|
||
Accumulated deficit
|
(4,566
|
)
|
|
(4,409
|
)
|
||
Accumulated other comprehensive loss
|
(1,865
|
)
|
|
(1,912
|
)
|
||
Common stock held in treasury, at cost (3.5 and 3.9 shares, respectively)
|
(133
|
)
|
|
(147
|
)
|
||
Total stockholders’ deficit attributable to Navistar International Corporation
|
(3,826
|
)
|
|
(3,726
|
)
|
||
Stockholders’ equity attributable to non-controlling interests
|
4
|
|
|
3
|
|
||
Total stockholders’ deficit
|
(3,822
|
)
|
|
(3,723
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
6,637
|
|
|
$
|
6,917
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(329
|
)
|
|
$
|
243
|
|
|
$
|
368
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
136
|
|
|
132
|
|
|
140
|
|
|||
Depreciation of equipment leased to others
|
63
|
|
|
61
|
|
|
71
|
|
|||
Deferred taxes, including change in valuation allowance
|
(80
|
)
|
|
(31
|
)
|
|
4
|
|
|||
Asset impairment charges
|
28
|
|
|
7
|
|
|
14
|
|
|||
Gain on sales of investments and businesses, net
|
—
|
|
|
(56
|
)
|
|
—
|
|
|||
Amortization of debt issuance costs and discount
|
14
|
|
|
19
|
|
|
31
|
|
|||
Stock-based compensation
|
25
|
|
|
23
|
|
|
32
|
|
|||
Provision for doubtful accounts, net of recoveries
|
16
|
|
|
4
|
|
|
10
|
|
|||
Equity in income of non-consolidated affiliates, net of dividends
|
(2
|
)
|
|
(2
|
)
|
|
5
|
|
|||
Write-off of debt issuance cost and discount
|
5
|
|
|
6
|
|
|
43
|
|
|||
Other non-cash operating activities
|
(5
|
)
|
|
(9
|
)
|
|
(23
|
)
|
|||
Changes in other assets and liabilities, exclusive of the effects of businesses disposed:
|
|
|
|
|
|
||||||
Trade and other receivables
|
36
|
|
|
141
|
|
|
(109
|
)
|
|||
Finance receivables
|
490
|
|
|
(42
|
)
|
|
(405
|
)
|
|||
Inventories
|
136
|
|
|
103
|
|
|
(257
|
)
|
|||
Accounts payable
|
(77
|
)
|
|
(250
|
)
|
|
317
|
|
|||
Other assets and liabilities
|
18
|
|
|
101
|
|
|
26
|
|
|||
Net cash provided by operating activities
|
474
|
|
|
450
|
|
|
267
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of marketable securities
|
—
|
|
|
—
|
|
|
(251
|
)
|
|||
Sales of marketable securities
|
—
|
|
|
—
|
|
|
460
|
|
|||
Maturities of marketable securities
|
—
|
|
|
102
|
|
|
60
|
|
|||
Capital expenditures
|
(148
|
)
|
|
(134
|
)
|
|
(113
|
)
|
|||
Purchases of equipment leased to others
|
(97
|
)
|
|
(152
|
)
|
|
(232
|
)
|
|||
Proceeds from sales of property and equipment
|
13
|
|
|
14
|
|
|
11
|
|
|||
Investments in non-consolidated affiliates
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from (payments for) sales of affiliates
|
19
|
|
|
100
|
|
|
(3
|
)
|
|||
Other investing activities
|
1
|
|
|
2
|
|
|
2
|
|
|||
Net cash used in investing activities
|
(217
|
)
|
|
(68
|
)
|
|
(66
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of securitized debt
|
389
|
|
|
363
|
|
|
339
|
|
|||
Principal payments on securitized debt
|
(352
|
)
|
|
(316
|
)
|
|
(364
|
)
|
|||
Net change in secured revolving credit facilities
|
(255
|
)
|
|
12
|
|
|
135
|
|
|||
Proceeds from issuance of non-securitized debt
|
847
|
|
|
209
|
|
|
3,248
|
|
|||
Principal payments on non-securitized debt
|
(341
|
)
|
|
(1,044
|
)
|
|
(2,920
|
)
|
|||
Net change in notes and debt outstanding under revolving credit facilities
|
(74
|
)
|
|
527
|
|
|
(10
|
)
|
|||
Debt issuance costs
|
(18
|
)
|
|
(9
|
)
|
|
(41
|
)
|
|||
Proceeds from financed lease obligations
|
—
|
|
|
22
|
|
|
63
|
|
|||
Proceeds from exercise of stock options
|
4
|
|
|
4
|
|
|
8
|
|
|||
Dividends paid by subsidiaries to non-controlling interest
|
(17
|
)
|
|
(24
|
)
|
|
(27
|
)
|
|||
Other financing activities
|
(2
|
)
|
|
(2
|
)
|
|
(17
|
)
|
|||
Net cash provided by (used in) financing activities
|
181
|
|
|
(258
|
)
|
|
414
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(22
|
)
|
|
(12
|
)
|
|
(10
|
)
|
|||
Increase in cash, cash equivalents and restricted cash
|
416
|
|
|
112
|
|
|
605
|
|
|||
Cash, cash equivalents and restricted cash at beginning of the year
|
1,557
|
|
|
1,445
|
|
|
840
|
|
|||
Cash, cash equivalents and restricted cash at end of the year
|
$
|
1,973
|
|
|
$
|
1,557
|
|
|
$
|
1,445
|
|
(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, 2017
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,733
|
|
|
$
|
(4,933
|
)
|
|
$
|
(2,211
|
)
|
|
$
|
(179
|
)
|
|
$
|
4
|
|
|
$
|
(4,574
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
340
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
368
|
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
291
|
|
|
—
|
|
|
—
|
|
|
291
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
7
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
(27
|
)
|
||||||||
Stock deferral and issuance - directors
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Balance as of October 31, 2018
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,731
|
|
|
$
|
(4,593
|
)
|
|
$
|
(1,920
|
)
|
|
$
|
(161
|
)
|
|
$
|
5
|
|
|
$
|
(3,926
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
243
|
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||||
ASC-606 modified retrospective adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
2
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
||||||||
Balance as of October 31, 2019
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,730
|
|
|
$
|
(4,409
|
)
|
|
$
|
(1,912
|
)
|
|
$
|
(147
|
)
|
|
$
|
3
|
|
|
$
|
(3,723
|
)
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(347
|
)
|
|
—
|
|
|
—
|
|
|
18
|
|
|
(329
|
)
|
||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
239
|
|
|
—
|
|
|
—
|
|
|
239
|
|
||||||||
Reclassification of stranded tax effects
|
—
|
|
|
—
|
|
|
—
|
|
|
192
|
|
|
(192
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||||
Stock ownership programs
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(2
|
)
|
|
—
|
|
|
14
|
|
|
—
|
|
|
3
|
|
||||||||
Cash dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
(17
|
)
|
||||||||
Balance as of October 31, 2020
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2,726
|
|
|
$
|
(4,566
|
)
|
|
$
|
(1,865
|
)
|
|
$
|
(133
|
)
|
|
$
|
4
|
|
|
$
|
(3,822
|
)
|
•
|
Retail notes—Retail notes primarily consist of fixed rate loans to commercial customers to facilitate their purchase of new and used trucks, and related equipment.
|
•
|
Finance leases—Finance leases consist of direct financing leases to commercial customers for acquisition of new and used trucks, and related equipment.
|
•
|
Wholesale notes—Wholesale notes primarily consist of variable rate loans to our dealers for the purchase of new and used trucks, and related equipment.
|
•
|
Retail accounts—Retail accounts consist of short-term accounts receivable that finance the sale of products to commercial customers.
|
•
|
Wholesale accounts—Wholesale accounts consist of short-term accounts receivable primarily related to the sales of items other than trucks, and related equipment (e.g. service parts) to dealers.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Balance at beginning of period
|
$
|
37
|
|
|
$
|
31
|
|
|
$
|
110
|
|
Additions charged to expense(A)
|
99
|
|
|
69
|
|
|
50
|
|
|||
Deductions/Other adjustments(B)
|
(99
|
)
|
|
(63
|
)
|
|
(129
|
)
|
|||
Balance at end of period
|
$
|
37
|
|
|
$
|
37
|
|
|
$
|
31
|
|
(A)
|
Additions charged to expense reflects the increase of the reserve for inventory on hand.
|
(B)
|
Deductions/Other adjustments include reductions of the reserve related to the sale of units.
|
|
Years
|
Buildings
|
20 - 50
|
Leasehold improvements
|
3 - 20
|
Machinery and equipment
|
3 - 12
|
Furniture, fixtures, and equipment
|
3 - 15
|
Equipment leased to others
|
1 - 10
|
|
Years
|
Customer base and relationships
|
3 - 15
|
Trademarks
|
20
|
Other
|
3 - 18
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Balance at beginning of period
|
$
|
510
|
|
|
$
|
529
|
|
|
$
|
629
|
|
Costs accrued and revenues deferred
|
162
|
|
|
249
|
|
|
211
|
|
|||
Adjustments to pre-existing warranties(A)
|
40
|
|
|
3
|
|
|
(9
|
)
|
|||
Payments and revenues recognized
|
(263
|
)
|
|
(283
|
)
|
|
(303
|
)
|
|||
Other adjustments(B)
|
—
|
|
|
12
|
|
|
1
|
|
|||
Balance at end of period
|
449
|
|
|
510
|
|
|
529
|
|
|||
Less: Current portion
|
209
|
|
|
233
|
|
|
255
|
|
|||
Noncurrent accrued product warranty and deferred warranty revenue
|
$
|
240
|
|
|
$
|
277
|
|
|
$
|
274
|
|
(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.
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Year Ended October 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Truck products and services(A)
|
$
|
4,590
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
4,602
|
|
Truck contract manufacturing
|
356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
356
|
|
||||||
Used trucks
|
189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
189
|
|
||||||
Engines
|
—
|
|
|
198
|
|
|
190
|
|
|
—
|
|
|
—
|
|
|
388
|
|
||||||
Parts
|
3
|
|
|
1,643
|
|
|
52
|
|
|
—
|
|
|
—
|
|
|
1,698
|
|
||||||
Extended warranty contracts
|
102
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102
|
|
||||||
Sales of manufactured products, net
|
5,240
|
|
|
1,841
|
|
|
242
|
|
|
—
|
|
|
12
|
|
|
7,335
|
|
||||||
Retail financing(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|
(9
|
)
|
|
137
|
|
||||||
Wholesale financing(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
||||||
Finance revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
|
(9
|
)
|
|
168
|
|
||||||
Sales and revenues, net
|
$
|
5,240
|
|
|
$
|
1,841
|
|
|
$
|
242
|
|
|
$
|
177
|
|
|
$
|
3
|
|
|
$
|
7,503
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Year Ended October 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Truck products and services(A)(B)
|
$
|
7,727
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
7,739
|
|
Truck contract manufacturing
|
399
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
399
|
|
||||||
Used trucks
|
257
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
257
|
|
||||||
Engines
|
—
|
|
|
309
|
|
|
232
|
|
|
—
|
|
|
—
|
|
|
541
|
|
||||||
Parts
|
5
|
|
|
1,930
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
2,012
|
|
||||||
Extended warranty contracts
|
113
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
113
|
|
||||||
Sales of manufactured products, net
|
8,501
|
|
|
2,239
|
|
|
309
|
|
|
—
|
|
|
12
|
|
|
11,061
|
|
||||||
Retail financing(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
145
|
|
|
(3
|
)
|
|
142
|
|
||||||
Wholesale financing(C)
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
||||||
Finance revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|
(3
|
)
|
|
190
|
|
||||||
Sales and revenues, net
|
$
|
8,501
|
|
|
$
|
2,239
|
|
|
$
|
309
|
|
|
$
|
193
|
|
|
$
|
9
|
|
|
$
|
11,251
|
|
(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 $58 million and $31 million, respectively, for the year ended October 31, 2020, and $56 million and $48 million, respectively, for the year ended October 31, 2019.
|
|
As of October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Retail portfolio
|
$
|
622
|
|
|
$
|
854
|
|
Wholesale portfolio
|
1,025
|
|
|
1,366
|
|
||
Total finance receivables
|
1,647
|
|
|
2,220
|
|
||
Less: Allowance for doubtful accounts
|
25
|
|
|
23
|
|
||
Total finance receivables, net
|
1,622
|
|
|
2,197
|
|
||
Less: Current portion, net(A)
|
1,371
|
|
|
1,923
|
|
||
Noncurrent portion, net
|
$
|
251
|
|
|
$
|
274
|
|
(A)
|
The current portion of finance receivables is computed based on contractual maturities. Actual cash collections typically vary from the contractual cash flows because of prepayments, extensions, delinquencies, credit losses, and renewals.
|
(in millions)
|
Retail Portfolio
|
|
Wholesale Portfolio
|
|
Total
|
||||||
Due in:
|
|
|
|
|
|
||||||
2021
|
$
|
384
|
|
|
$
|
1,025
|
|
|
$
|
1,409
|
|
2022
|
133
|
|
|
—
|
|
|
133
|
|
|||
2023
|
87
|
|
|
—
|
|
|
87
|
|
|||
2024
|
49
|
|
|
—
|
|
|
49
|
|
|||
2025
|
19
|
|
|
—
|
|
|
19
|
|
|||
Thereafter
|
4
|
|
|
—
|
|
|
4
|
|
|||
Gross finance receivables
|
676
|
|
|
1,025
|
|
|
1,701
|
|
|||
Less: Unearned finance income
|
54
|
|
|
—
|
|
|
54
|
|
|||
Total finance receivables
|
$
|
622
|
|
|
$
|
1,025
|
|
|
$
|
1,647
|
|
|
As of October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Retail notes and finance leases revenue
|
$
|
63
|
|
|
$
|
60
|
|
|
$
|
50
|
|
Wholesale notes interest
|
59
|
|
|
118
|
|
|
105
|
|
|||
Operating lease revenue
|
85
|
|
|
86
|
|
|
72
|
|
|||
Retail and wholesale accounts interest
|
10
|
|
|
33
|
|
|
30
|
|
|||
Gross finance revenues
|
217
|
|
|
297
|
|
|
257
|
|
|||
Less: Intercompany revenues
|
40
|
|
|
104
|
|
|
97
|
|
|||
Finance revenues
|
$
|
177
|
|
|
$
|
193
|
|
|
$
|
160
|
|
|
For the Year Ended October 31, 2020
|
||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
20
|
|
|
$
|
3
|
|
|
$
|
21
|
|
|
$
|
44
|
|
Provision for doubtful accounts
|
12
|
|
|
(1
|
)
|
|
5
|
|
|
16
|
|
||||
Charge-offs
|
(9
|
)
|
|
—
|
|
|
(2
|
)
|
|
(11
|
)
|
||||
Recoveries
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Other(A)
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
|
(6
|
)
|
||||
Allowance for doubtful accounts, at end of period
|
$
|
23
|
|
|
$
|
2
|
|
|
$
|
19
|
|
|
$
|
44
|
|
|
For the Year Ended October 31, 2019
|
||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Trade and
Other Receivables |
|
Total
|
||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
50
|
|
Provision for doubtful accounts
|
5
|
|
|
—
|
|
|
(1
|
)
|
|
4
|
|
||||
Charge-offs
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|
(12
|
)
|
||||
Recoveries
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Allowance for doubtful accounts, at end of period
|
$
|
20
|
|
|
$
|
3
|
|
|
$
|
21
|
|
|
$
|
44
|
|
|
For the Year Ended October 31, 2018
|
||||||||||||||
(in millions)
|
Retail Portfolio
|
|
Wholesale Portfolio
|
|
Trade and Other Receivables
|
|
Total
|
||||||||
Allowance for doubtful accounts, at beginning of period
|
$
|
17
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
48
|
|
Provision for doubtful accounts
|
7
|
|
|
—
|
|
|
3
|
|
|
10
|
|
||||
Charge-offs
|
(7
|
)
|
|
—
|
|
|
(1
|
)
|
|
(8
|
)
|
||||
Recoveries
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Other(A)
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
||||
Allowance for doubtful accounts, at end of period
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
50
|
|
(A)
|
Amounts include impact from currency translation.
|
|
October 31, 2020
|
|
October 31, 2019
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Impaired finance receivables with specific loss reserves
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
23
|
|
Impaired finance receivables without specific loss reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Specific loss reserves on impaired finance receivables
|
12
|
|
|
—
|
|
|
12
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||||
Finance receivables on non-accrual status
|
31
|
|
|
—
|
|
|
31
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|
October 31, 2020
|
|
October 31, 2019
|
||||||||||||||||||||
(in millions)
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
|
Retail
Portfolio |
|
Wholesale
Portfolio |
|
Total
|
||||||||||||
Current, and up to 30 days past due
|
$
|
558
|
|
|
$
|
1,024
|
|
|
$
|
1,582
|
|
|
$
|
753
|
|
|
$
|
1,365
|
|
|
$
|
2,118
|
|
30-90 days past due
|
44
|
|
|
1
|
|
|
45
|
|
|
76
|
|
|
1
|
|
|
77
|
|
||||||
Over 90 days past due
|
20
|
|
|
—
|
|
|
20
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||||
Total finance receivables
|
$
|
622
|
|
|
$
|
1,025
|
|
|
$
|
1,647
|
|
|
$
|
854
|
|
|
$
|
1,366
|
|
|
$
|
2,220
|
|
|
As of October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Finished products
|
$
|
516
|
|
|
$
|
640
|
|
Work in process
|
25
|
|
|
21
|
|
||
Raw materials
|
222
|
|
|
250
|
|
||
Total inventories, net
|
$
|
763
|
|
|
$
|
911
|
|
|
As of October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Land
|
$
|
115
|
|
|
$
|
97
|
|
Buildings
|
561
|
|
|
572
|
|
||
Leasehold improvements
|
15
|
|
|
13
|
|
||
Machinery and equipment
|
1,848
|
|
|
2,031
|
|
||
Furniture, fixtures, and equipment
|
414
|
|
|
471
|
|
||
Equipment leased to others
|
561
|
|
|
562
|
|
||
Construction in progress
|
119
|
|
|
51
|
|
||
Total property and equipment, at cost
|
3,633
|
|
|
3,797
|
|
||
Less: Accumulated depreciation and amortization
|
2,335
|
|
|
2,488
|
|
||
Property and equipment, net
|
$
|
1,298
|
|
|
$
|
1,309
|
|
|
As of October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Equipment leased to others
|
$
|
561
|
|
|
$
|
562
|
|
Less: Accumulated depreciation
|
144
|
|
|
126
|
|
||
Equipment leased to others, net
|
$
|
417
|
|
|
$
|
436
|
|
|
|
|
|
||||
Buildings, machinery, and equipment under financing arrangements and finance lease obligations
|
$
|
6
|
|
|
$
|
20
|
|
Less: Accumulated depreciation and amortization
|
4
|
|
|
18
|
|
||
Assets under financing arrangements and finance lease obligations, net
|
$
|
2
|
|
|
$
|
2
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Depreciation expense
|
$
|
135
|
|
|
$
|
129
|
|
|
$
|
133
|
|
Depreciation of equipment leased to others
|
63
|
|
|
61
|
|
|
71
|
|
|||
Amortization expense
|
—
|
|
|
—
|
|
|
2
|
|
|||
Interest capitalized
|
2
|
|
|
1
|
|
|
2
|
|
|
As of October 31, 2020
|
||||||||||
(in millions)
|
Customer
Base and Relationships |
|
Trademarks, Patents and Other
|
|
Total
|
||||||
Gross carrying value
|
$
|
61
|
|
|
$
|
83
|
|
|
$
|
144
|
|
Accumulated amortization
|
(61
|
)
|
|
(77
|
)
|
|
(138
|
)
|
|||
Net of amortization
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
As of October 31, 2019
|
||||||||||
(in millions)
|
Customer
Base and Relationships |
|
Trademarks, Patents and Other
|
|
Total
|
||||||
Gross carrying value
|
$
|
66
|
|
|
$
|
84
|
|
|
$
|
150
|
|
Accumulated amortization
|
(66
|
)
|
|
(76
|
)
|
|
(142
|
)
|
|||
Net of amortization
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
8
|
|
(in millions)
|
Estimated
Amortization |
||
2021
|
$
|
1
|
|
2022
|
1
|
|
|
2023
|
1
|
|
|
2024
|
1
|
|
|
2025
|
—
|
|
|
Thereafter
|
2
|
|
|
(Unaudited)
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Net sales
|
$
|
348
|
|
|
$
|
391
|
|
|
$
|
505
|
|
Costs, expenses, and income tax expense
|
344
|
|
|
385
|
|
|
507
|
|
|||
Net income (loss)
|
$
|
4
|
|
|
$
|
6
|
|
|
$
|
(2
|
)
|
(in millions)
|
2020
|
|
2019
|
||||
Receivables due from affiliates
|
$
|
7
|
|
|
$
|
32
|
|
Payables due to affiliates
|
8
|
|
|
13
|
|
(in millions)
|
As of October 31, 2020
|
||
Operating lease right of use assets
|
$
|
119
|
|
Finance lease right of use assets(A)
|
2
|
|
|
Total right of use assets
|
$
|
121
|
|
Operating lease liabilities
|
|
||
Other current liabilities
|
$
|
30
|
|
Other noncurrent liabilities
|
92
|
|
|
Finance lease liabilities
|
|
||
Notes payable and current maturities of long-term debt
|
1
|
|
|
Long-term debt
|
1
|
|
|
Total lease liabilities
|
$
|
124
|
|
(A)
|
Finance lease right of use assets are included in Property and Equipment, net on our Consolidated Balance Sheets.
|
|
As of October 31, 2020
|
||||||
(in millions)
|
Finance Leases
|
|
Operating Leases
|
||||
2021
|
$
|
1
|
|
|
$
|
35
|
|
2022
|
1
|
|
|
30
|
|
||
2023
|
—
|
|
|
23
|
|
||
2024
|
—
|
|
|
17
|
|
||
2025
|
—
|
|
|
10
|
|
||
Thereafter
|
—
|
|
|
23
|
|
||
Total lease payments
|
2
|
|
|
138
|
|
||
Less: Present value discount
|
—
|
|
|
16
|
|
||
Total lease liabilities
|
$
|
2
|
|
|
$
|
122
|
|
(in millions)
|
For the Year Ended October 31, 2020
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows from operating leases
|
$
|
40
|
|
Right of use assets obtained in exchange for lease liabilities
|
$
|
44
|
|
|
As of October 31, 2020
|
||||
|
Finance Leases
|
|
Operating Leases
|
||
Weighted-average remaining lease term
|
3.4
|
|
|
5.42
|
|
Weighted-average discount rate
|
4.3
|
%
|
|
4.5
|
%
|
|
|
For the Year Ended October 31, 2020
|
||||||
(in millions)
|
|
Finance Leases(A)
|
|
Operating Leases
|
||||
Sales of manufactured products, net
|
|
$
|
—
|
|
|
$
|
22
|
|
Finance revenues
|
|
31
|
|
|
75
|
|
||
Other expense, net
|
|
—
|
|
|
5
|
|
||
Total lease revenue
|
|
$
|
31
|
|
|
$
|
102
|
|
(in millions)
|
October 31, 2020
|
|
October 31, 2019
|
||||
Equipment leased to others, at original cost
|
$
|
561
|
|
|
$
|
562
|
|
Less: Accumulated depreciation
|
144
|
|
|
126
|
|
||
Equipment leased to others, net
|
$
|
417
|
|
|
$
|
436
|
|
(in millions)
|
October 31, 2020
|
||
2021
|
$
|
95
|
|
2022
|
83
|
|
|
2023
|
76
|
|
|
2024
|
53
|
|
|
2025
|
29
|
|
|
Thereafter
|
38
|
|
|
Total
|
$
|
374
|
|
(in millions)
|
October 31, 2020
|
||
2021
|
$
|
83
|
|
2022
|
68
|
|
|
2023
|
44
|
|
|
2024
|
26
|
|
|
2025
|
11
|
|
|
Thereafter
|
2
|
|
|
Total
|
234
|
|
|
Less: Unearned interest income
|
48
|
|
|
Net investment in finance leases
|
$
|
186
|
|
|
As of October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Manufacturing operations
|
|
|
|
||||
Senior Secured Term Loan Credit Agreement, due 2025, net of unamortized discount of $5 and $6, respectively, and unamortized debt issuance costs of $8 and $10, respectively
|
$
|
1,543
|
|
|
$
|
1,556
|
|
9.5% Senior Secured Notes, due 2025, net of unamortized debt issuance costs of $11
|
589
|
|
|
—
|
|
||
6.625% Senior Notes, due 2026, net of unamortized debt issuance costs of $13 and $15, respectively
|
1,087
|
|
|
1,085
|
|
||
Loan Agreement related to 4.75% Tax-Exempt Bonds, due 2040, net of unamortized debt issuance costs of $2
|
223
|
|
|
—
|
|
||
Loan Agreement related to 6.75% Tax-Exempt Bonds, due 2040, net of unamortized debt issuance costs of $5
|
—
|
|
|
220
|
|
||
Financed lease obligations
|
45
|
|
|
60
|
|
||
Other
|
9
|
|
|
11
|
|
||
Total Manufacturing operations debt
|
3,496
|
|
|
2,932
|
|
||
Less: Current portion
|
45
|
|
|
32
|
|
||
Net long-term Manufacturing operations debt
|
$
|
3,451
|
|
|
$
|
2,900
|
|
|
As of October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Financial Services operations
|
|
|
|
||||
Asset-backed debt issued by consolidated SPEs, at fixed and variable rates, due serially through 2022, net of unamortized debt issuance costs of $3 and $4, respectively
|
$
|
724
|
|
|
$
|
991
|
|
Bank credit facilities, at fixed and variable rates, due dates from 2021 through 2025, net of unamortized debt issuance costs of $1 and $1, respectively
|
940
|
|
|
1,059
|
|
||
Commercial paper, at variable rates, program matures in 2022
|
—
|
|
|
84
|
|
||
Borrowings secured by operating and finance leases, at various rates, due serially through 2024
|
170
|
|
|
122
|
|
||
Total Financial Services operations debt
|
1,834
|
|
|
2,256
|
|
||
Less: Current portion
|
595
|
|
|
839
|
|
||
Net long-term Financial Services operations debt
|
$
|
1,239
|
|
|
$
|
1,417
|
|
|
Manufacturing
Operations |
|
Financial
Services Operations |
|
Total
|
||||||
(in millions)
|
|
|
|
|
|
||||||
2021
|
$
|
45
|
|
|
$
|
595
|
|
|
$
|
640
|
|
2022
|
28
|
|
|
432
|
|
|
460
|
|
|||
2023
|
27
|
|
|
211
|
|
|
238
|
|
|||
2024
|
18
|
|
|
597
|
|
|
615
|
|
|||
2025
|
616
|
|
|
3
|
|
|
619
|
|
|||
Thereafter
|
2,801
|
|
|
—
|
|
|
2,801
|
|
|||
Total debt
|
3,535
|
|
|
1,838
|
|
|
5,373
|
|
|||
Less: Unamortized discount and unamortized debt issuance costs
|
39
|
|
|
4
|
|
|
43
|
|
|||
Net debt
|
$
|
3,496
|
|
|
$
|
1,834
|
|
|
$
|
5,330
|
|
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||
(in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Change in benefit obligations
|
|
|
|
|
|
|
|
||||||||
Benefit obligations at beginning of year
|
$
|
3,347
|
|
|
$
|
3,344
|
|
|
$
|
1,087
|
|
|
$
|
1,245
|
|
Service cost
|
8
|
|
|
7
|
|
|
3
|
|
|
3
|
|
||||
Interest on obligations
|
84
|
|
|
121
|
|
|
28
|
|
|
49
|
|
||||
Actuarial loss (gain)
|
64
|
|
|
405
|
|
|
(457
|
)
|
|
(138
|
)
|
||||
Plan amendment
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
(11
|
)
|
|
(263
|
)
|
|
—
|
|
|
—
|
|
||||
Currency translation
|
(1
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Plan participants' contributions
|
—
|
|
|
—
|
|
|
37
|
|
|
35
|
|
||||
Subsidy receipts
|
—
|
|
|
—
|
|
|
37
|
|
|
37
|
|
||||
Benefits paid
|
(249
|
)
|
|
(266
|
)
|
|
(136
|
)
|
|
(144
|
)
|
||||
Benefit obligations at end of year
|
$
|
3,242
|
|
|
$
|
3,347
|
|
|
$
|
599
|
|
|
$
|
1,087
|
|
Change in plan assets
|
|
|
|
|
|
|
|
|
|||||||
Fair value of plan assets at beginning of year
|
$
|
2,013
|
|
|
$
|
2,162
|
|
|
$
|
283
|
|
|
$
|
297
|
|
Actual return on plan assets
|
58
|
|
|
232
|
|
|
7
|
|
|
20
|
|
||||
Settlements
|
(11
|
)
|
|
(263
|
)
|
|
—
|
|
|
—
|
|
||||
Currency translation
|
(1
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Employer contributions(A)
|
35
|
|
|
136
|
|
|
1
|
|
|
1
|
|
||||
Benefits paid
|
(233
|
)
|
|
(249
|
)
|
|
(39
|
)
|
|
(35
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
1,861
|
|
|
$
|
2,013
|
|
|
$
|
252
|
|
|
$
|
283
|
|
Funded status at year end
|
$
|
(1,381
|
)
|
|
$
|
(1,334
|
)
|
|
$
|
(347
|
)
|
|
$
|
(804
|
)
|
(A)
|
Employer contributions as of October 31, 2019 consisted of $140 million, net of a $4 million return of plan assets to the Company.
|
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||
(in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Amounts recognized in our Consolidated Balance Sheets consist of:
|
|
|
|
|
|
|
|
|
|||||||
Noncurrent asset
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liability
|
(18
|
)
|
|
(18
|
)
|
|
(10
|
)
|
|
(20
|
)
|
||||
Noncurrent liability
|
(1,368
|
)
|
|
(1,319
|
)
|
|
(337
|
)
|
|
(784
|
)
|
||||
Net liability recognized
|
$
|
(1,381
|
)
|
|
$
|
(1,334
|
)
|
|
$
|
(347
|
)
|
|
$
|
(804
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in our accumulated other comprehensive loss consist of:
|
|
|
|
|
|
|
|
|
|||||||
Net actuarial loss (gain)
|
$
|
2,133
|
|
|
$
|
2,086
|
|
|
$
|
(478
|
)
|
|
$
|
(33
|
)
|
Net prior service cost
|
3
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Net amount recognized
|
$
|
2,136
|
|
|
$
|
2,090
|
|
|
$
|
(478
|
)
|
|
$
|
(33
|
)
|
|
As of October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Projected benefit obligations
|
$
|
3,234
|
|
|
$
|
3,325
|
|
Accumulated benefit obligations
|
3,217
|
|
|
3,307
|
|
||
Fair value of plan assets
|
1,849
|
|
|
1,991
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Pension expense
|
$
|
63
|
|
|
$
|
232
|
|
|
$
|
72
|
|
Health and life insurance expense
|
11
|
|
|
31
|
|
|
33
|
|
|||
Total postretirement benefits expense
|
$
|
74
|
|
|
$
|
263
|
|
|
$
|
105
|
|
|
For the Years Ended October 31,
|
||||||||||||||||||||||
|
Pension Benefits
|
|
Health and Life
Insurance Benefits |
||||||||||||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
||||||||||||
Service cost for benefits earned during the period
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Interest on obligation
|
84
|
|
|
121
|
|
|
108
|
|
|
28
|
|
|
49
|
|
|
43
|
|
||||||
Amortization of cumulative loss (gain)
|
97
|
|
|
94
|
|
|
106
|
|
|
(1
|
)
|
|
(1
|
)
|
|
9
|
|
||||||
Amortization of prior service cost (benefit)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
7
|
|
|
143
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Premiums on pension insurance
|
11
|
|
|
10
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Expected return on assets
|
(145
|
)
|
|
(143
|
)
|
|
(161
|
)
|
|
(19
|
)
|
|
(20
|
)
|
|
(23
|
)
|
||||||
Net periodic benefit expense
|
$
|
63
|
|
|
$
|
232
|
|
|
$
|
72
|
|
|
$
|
11
|
|
|
$
|
31
|
|
|
$
|
33
|
|
Other Changes in plan assets and benefit obligations recognized in other comprehensive loss (income)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial net loss (gain)
|
$
|
151
|
|
|
$
|
316
|
|
|
$
|
(61
|
)
|
|
$
|
(445
|
)
|
|
$
|
(138
|
)
|
|
$
|
(139
|
)
|
Prior service cost
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of cumulative (loss) gain
|
(97
|
)
|
|
(94
|
)
|
|
(106
|
)
|
|
1
|
|
|
1
|
|
|
(9
|
)
|
||||||
Amortization of prior service benefit (cost)
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
(7
|
)
|
|
(143
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total recognized in other comprehensive income
|
$
|
46
|
|
|
$
|
83
|
|
|
$
|
(176
|
)
|
|
$
|
(444
|
)
|
|
$
|
(137
|
)
|
|
$
|
(148
|
)
|
Total net postretirement benefits (income) expense and other comprehensive loss (income)
|
$
|
109
|
|
|
$
|
315
|
|
|
$
|
(104
|
)
|
|
$
|
(433
|
)
|
|
$
|
(106
|
)
|
|
$
|
(115
|
)
|
(in millions)
|
Pension Benefits
|
|
Health and Life Insurance Benefits
|
||||
Amortization of prior service cost
|
$
|
1
|
|
|
$
|
—
|
|
Amortization of cumulative losses/(gains)
|
107
|
|
|
(40
|
)
|
|
Pension Benefits
|
|
Health and Life Insurance Benefits
|
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Discount rate used to determine present value of benefit obligation at end of year
|
2.6
|
%
|
|
3.1
|
%
|
|
2.5
|
%
|
|
3.1
|
%
|
Expected rate of increase in future compensation levels
|
3.5
|
%
|
|
3.5
|
%
|
|
—
|
|
|
—
|
|
|
Pension Benefits
|
|
Health and Life Insurance Benefits
|
||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
||||||
Discount rate used to determine service cost
|
3.3
|
%
|
|
4.6
|
%
|
|
3.9
|
%
|
|
3.3
|
%
|
|
4.6
|
%
|
|
3.9
|
%
|
Discount rate used to determine interest cost
|
2.6
|
%
|
|
4.0
|
%
|
|
3.0
|
%
|
|
2.7
|
%
|
|
4.1
|
%
|
|
3.1
|
%
|
Expected long-term rate of return on plan assets
|
7.2
|
%
|
|
7.4
|
%
|
|
7.2
|
%
|
|
7.3
|
%
|
|
7.5
|
%
|
|
7.5
|
%
|
Expected rate of increase in future compensation levels
|
3.5
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
(in millions)
|
One-Percentage
Point Increase |
|
One-Percentage
Point Decrease |
||||
Effect on total of service and interest cost components
|
$
|
5
|
|
|
$
|
(4
|
)
|
Effect on postretirement benefit obligation
|
77
|
|
|
(57
|
)
|
•
|
Cash and short-term investments—Valued at cost plus earnings from investments for the period, which approximates fair market value due to the short-term duration. Cash equivalents are valued at net asset value as provided by the administrator of the fund.
|
•
|
U.S. Government and agency securities—Valued at the closing price reported on the active market on which the security is traded or valued by the trustee at year-end using various pricing services of financial institutions, including Interactive Data Corporation, Standard & Poor's and SIX Telekurs.
|
•
|
Corporate debt securities—Valued by the trustee at year-end using various pricing services of financial institutions, including Interactive Data Corporation, Standard & Poor's and SIX Telekurs.
|
•
|
Common and preferred stock—Valued at the closing price reported on the active market on which the security is traded.
|
•
|
Collective trusts, Partnerships/joint venture interests, Real estate and Hedge funds—Valued at the net asset value provided by the administrator of the fund. The net asset value is based on the value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding.
|
•
|
Insurance Linked Securities—Valued at the net asset value provided by the administrator of the fund. The net asset value is based on the value of the underlying assets owned by the fund, minus its liabilities, then divided by the number of units outstanding.
|
•
|
Derivatives—Valued monthly for the trustee using various pricing services of financial institutions, including Interactive Data Corporation, Standard & Poor’s and SIX Telekurs. Valued monthly by the trustee using various providers of derivatives pricing, most notably Numerix, Markit and Super Derivatives.
|
|
As of October 31, 2020
|
|
As of October 31, 2019
|
||||||||||||||||||||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||||||||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68
|
|
Collective Trusts and Other(A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. Equity
|
—
|
|
|
286
|
|
|
—
|
|
|
—
|
|
|
286
|
|
|
281
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
281
|
|
||||||||||
International Equity
|
—
|
|
|
240
|
|
|
—
|
|
|
—
|
|
|
240
|
|
|
283
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
283
|
|
||||||||||
Global Equity
|
—
|
|
|
211
|
|
|
—
|
|
|
—
|
|
|
211
|
|
|
219
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
219
|
|
||||||||||
Fixed Income - Long Duration Credit
|
—
|
|
|
320
|
|
|
—
|
|
|
—
|
|
|
320
|
|
|
—
|
|
|
296
|
|
|
—
|
|
|
—
|
|
|
296
|
|
||||||||||
Fixed Income - Long Duration Government
|
—
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
173
|
|
|
—
|
|
|
—
|
|
|
173
|
|
||||||||||
Fixed Income - Intermediate Duration Government
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
79
|
|
||||||||||
Fixed Income - High Yield
|
—
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
—
|
|
|
154
|
|
||||||||||
Fixed Income - Canadian Bond
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||||||||
Global Real Estate
|
—
|
|
|
157
|
|
|
—
|
|
|
—
|
|
|
157
|
|
|
—
|
|
|
138
|
|
|
—
|
|
|
—
|
|
|
138
|
|
||||||||||
Insurance linked Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
34
|
|
||||||||||
Hedge Fund of Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
181
|
|
|
181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
187
|
|
|
187
|
|
||||||||||
Private Equity
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
||||||||||
Private Credit
|
—
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
||||||||||
Real Estate
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
||||||||||
Total(B)
|
$
|
54
|
|
|
$
|
1,476
|
|
|
$
|
—
|
|
|
$
|
330
|
|
|
$
|
1,860
|
|
|
$
|
851
|
|
|
$
|
860
|
|
|
$
|
—
|
|
|
$
|
300
|
|
|
$
|
2,011
|
|
(A)
|
In the fourth quarter of 2020, we utilized a valuation perspective for the Collective Trust whereby we valued those instruments in their entirety. In prior years we used a "look through" approach to individual components of the trust instrument to determine an aggregate fair value. As result of this change, the Collective Trust components are classified as Level 2 in the current period as compared to Level 1 in prior periods.
|
(B)
|
In addition, the table above includes the fair value of Canadian pension assets translated at the exchange rates as of October 31, 2020 and 2019, respectively, while the change in the plan asset table includes the fair value of Canadian pension assets translated at historical foreign currency rates.
|
|
As of October 31, 2020
|
|
As of October 31, 2019
|
||||||||||||||||||||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||||||||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Fixed Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. Credit Bonds
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
58
|
|
||||||||||
Collective Trusts and Other(A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. Equity
|
—
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
||||||||||
International Equity
|
—
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||||||||
Fixed Income - Multi-Asset Credit
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
9
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||||||||
Real Estate (REITs)
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
26
|
|
||||||||||
Insurance Linked Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
||||||||||
Hedge Fund of Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
37
|
|
||||||||||
Private Equity
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||||||
Total
|
$
|
11
|
|
|
$
|
176
|
|
|
$
|
—
|
|
|
$
|
65
|
|
|
$
|
252
|
|
|
$
|
132
|
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
74
|
|
|
$
|
283
|
|
(A)
|
In the fourth quarter of 2020, we utilized a valuation perspective for the Collective Trust whereby we valued those instruments in their entirety. In prior years we used a "look through" approach to individual components of the trust instrument to determine an aggregate fair value. As result of this change, the Collective Trust components are classified as Level 2 in the current period as compared to Level 1 in prior periods.
|
(in millions)
|
Pension Benefit Payments
|
|
Other Postretirement Benefit Payments(A)
|
||||
2021
|
$
|
249
|
|
|
$
|
31
|
|
2022
|
243
|
|
|
40
|
|
||
2023
|
236
|
|
|
46
|
|
||
2024
|
229
|
|
|
46
|
|
||
2025
|
222
|
|
|
45
|
|
||
2026 through 2030
|
995
|
|
|
199
|
|
(A)
|
Payments are net of expected participant contributions and expected federal subsidy receipts.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Domestic
|
$
|
(476
|
)
|
|
$
|
220
|
|
|
$
|
246
|
|
Foreign
|
88
|
|
|
42
|
|
|
174
|
|
|||
Income (loss) before income taxes
|
$
|
(388
|
)
|
|
$
|
262
|
|
|
$
|
420
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
State and local
|
(1
|
)
|
|
3
|
|
|
1
|
|
|||
Foreign
|
23
|
|
|
46
|
|
|
47
|
|
|||
Total current expense
|
$
|
21
|
|
|
$
|
51
|
|
|
$
|
48
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
(60
|
)
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
State and local
|
(15
|
)
|
|
(5
|
)
|
|
1
|
|
|||
Foreign
|
(5
|
)
|
|
(26
|
)
|
|
5
|
|
|||
Total deferred (benefit) expense
|
$
|
(80
|
)
|
|
$
|
(32
|
)
|
|
$
|
4
|
|
Total income tax (benefit) expense
|
$
|
(59
|
)
|
|
$
|
19
|
|
|
$
|
52
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Federal income tax (benefit) expense(A)
|
$
|
(81
|
)
|
|
$
|
55
|
|
|
$
|
98
|
|
State income taxes, net of federal benefit
|
2
|
|
|
2
|
|
|
3
|
|
|||
Credits and incentives
|
11
|
|
|
16
|
|
|
50
|
|
|||
Adjustments to valuation allowances
|
110
|
|
|
(94
|
)
|
|
(1,120
|
)
|
|||
Foreign operations
|
(4
|
)
|
|
1
|
|
|
2
|
|
|||
Adjustments to uncertain tax positions
|
(2
|
)
|
|
2
|
|
|
1
|
|
|||
Intraperiod tax allocation offset to equity components
|
(75
|
)
|
|
(5
|
)
|
|
—
|
|
|||
Non-controlling interest adjustment
|
(4
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|||
Foreign inclusions
|
(7
|
)
|
|
34
|
|
|
—
|
|
|||
Tax law change
|
(20
|
)
|
|
—
|
|
|
—
|
|
|||
Tax act mandatory repatriation
|
—
|
|
|
—
|
|
|
34
|
|
|||
Tax act US deferred remeasurement
|
—
|
|
|
—
|
|
|
983
|
|
|||
Other
|
11
|
|
|
13
|
|
|
7
|
|
|||
Recorded income tax (benefit) expense
|
$
|
(59
|
)
|
|
$
|
19
|
|
|
$
|
52
|
|
|
As of October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Deferred tax assets attributable to:
|
|
|
|
||||
Employee benefits liabilities
|
$
|
501
|
|
|
$
|
578
|
|
Net operating loss ("NOL") carryforwards
|
801
|
|
|
782
|
|
||
Product liability and warranty accruals
|
151
|
|
|
165
|
|
||
Research and development
|
179
|
|
|
144
|
|
||
Tax credit carryforwards
|
183
|
|
|
196
|
|
||
Other
|
395
|
|
|
279
|
|
||
Gross deferred tax assets
|
2,210
|
|
|
2,144
|
|
||
Less: Valuation allowances
|
2,020
|
|
|
2,011
|
|
||
Net deferred tax assets
|
$
|
190
|
|
|
$
|
133
|
|
Deferred tax liabilities attributable to:
|
|
|
|
||||
Other
|
$
|
(73
|
)
|
|
$
|
(18
|
)
|
Total deferred tax liabilities
|
$
|
(73
|
)
|
|
$
|
(18
|
)
|
|
For the years ended October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Liability for uncertain tax positions at November 1
|
$
|
21
|
|
|
$
|
27
|
|
Additions as a result of positions taken in prior periods
|
1
|
|
|
3
|
|
||
Decrease as a result of positions taken in prior periods
|
(2
|
)
|
|
(2
|
)
|
||
Settlements
|
—
|
|
|
(7
|
)
|
||
Liability for uncertain tax positions at October 31
|
$
|
20
|
|
|
$
|
21
|
|
•
|
Level 1—based upon quoted prices for identical instruments in active markets,
|
•
|
Level 2—based upon quoted prices for similar instruments, prices for identical or similar instruments in markets that are not active, or model-derived valuations, all of whose significant inputs are observable, and
|
•
|
Level 3—based upon one or more significant unobservable inputs.
|
|
As of October 31, 2020
|
|
As of October 31, 2019
|
||||||||||||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts(A)
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts(A)
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Total assets
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity forward contracts(B)
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Foreign currency contracts(B)
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Guarantees
|
—
|
|
|
—
|
|
|
29
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
27
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
29
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
27
|
|
|
$
|
30
|
|
(A)
|
The asset values of commodity forward contracts and foreign currency contracts are included in Other current assets and Other noncurrent assets in the accompanying Consolidated Balance Sheets.
|
(B)
|
The liability values of commodity forward contracts and foreign currency contracts are included in Other current liabilities and Other noncurrent liabilities in the accompanying Consolidated Balance Sheets.
|
(in millions)
|
October 31, 2020
|
|
October 31, 2019
|
||||
Guarantees at beginning of period
|
$
|
(27
|
)
|
|
$
|
(24
|
)
|
Net issuances
|
(8
|
)
|
|
(6
|
)
|
||
Settlements
|
6
|
|
|
3
|
|
||
Guarantees at end of period
|
$
|
(29
|
)
|
|
$
|
(27
|
)
|
(in millions)
|
October 31, 2020
|
|
October 31, 2019
|
||||
Level 2 financial instruments
|
|
|
|
||||
Impaired finance receivables (A)
|
$
|
31
|
|
|
$
|
23
|
|
Specific loss reserve
|
(12
|
)
|
|
(11
|
)
|
||
Fair value
|
$
|
19
|
|
|
$
|
12
|
|
(A)
|
Certain impaired finance receivables are measured at fair value on a nonrecurring basis. An impairment charge is recorded for the amount by which the carrying value of the receivables exceeds the fair value of the underlying collateral, net of remarketing costs. Fair values of the underlying collateral are determined by reference to dealer vehicle value publications adjusted for certain market factors.
|
|
As of October 31, 2020
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
223
|
|
|
$
|
223
|
|
|
$
|
222
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Agreement, due 2025
|
—
|
|
|
—
|
|
|
1,538
|
|
|
1,538
|
|
|
1,543
|
|
|||||
9.5% Senior Secured Notes, due 2025
|
—
|
|
|
665
|
|
|
—
|
|
|
665
|
|
|
589
|
|
|||||
6.625% Senior Notes, due 2026
|
—
|
|
|
1,137
|
|
|
—
|
|
|
1,137
|
|
|
1,087
|
|
|||||
Loan Agreement related to 4.75% Tax-Exempt Bonds, due 2040
|
—
|
|
|
227
|
|
|
—
|
|
|
227
|
|
|
223
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
46
|
|
|
46
|
|
|
45
|
|
|||||
Other(A)
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, due serially through 2022
|
—
|
|
|
—
|
|
|
726
|
|
|
726
|
|
|
724
|
|
|||||
Bank credit facilities, due dates from 2021 through 2025
|
—
|
|
|
—
|
|
|
914
|
|
|
914
|
|
|
940
|
|
|||||
Borrowings secured by operating and finance leases, due serially through 2024
|
—
|
|
|
—
|
|
|
171
|
|
|
171
|
|
|
170
|
|
|
As of October 31, 2019
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
205
|
|
|
$
|
205
|
|
|
$
|
208
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured Term Loan Credit Agreement, due 2025
|
—
|
|
|
—
|
|
|
1,552
|
|
|
1,552
|
|
|
1,556
|
|
|||||
6.625% Senior Notes, due 2026
|
—
|
|
|
1,122
|
|
|
—
|
|
|
1,122
|
|
|
1,085
|
|
|||||
Loan Agreement related to 6.75% Tax-Exempt Bonds, due 2040
|
—
|
|
|
234
|
|
|
—
|
|
|
234
|
|
|
220
|
|
|||||
Financed lease obligations
|
—
|
|
|
—
|
|
|
60
|
|
|
60
|
|
|
60
|
|
|||||
Other (A)
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
9
|
|
|||||
Financial Services operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt issued by consolidated SPEs, due serially through 2022
|
—
|
|
|
—
|
|
|
995
|
|
|
995
|
|
|
991
|
|
|||||
Bank credit facilities, due dates from 2021 through 2025
|
—
|
|
|
—
|
|
|
1,038
|
|
|
1,038
|
|
|
1,059
|
|
|||||
Commercial paper, at variable rates, program matures in 2022
|
84
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|
84
|
|
|||||
Borrowings secured by operating and finance leases, due serially through 2024
|
—
|
|
|
—
|
|
|
122
|
|
|
122
|
|
|
122
|
|
(A)
|
Excludes non-financial instrument debt of $2 million as of both October 31, 2020 and 2019.
|
•
|
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. This segment sells its products in the U.S., Canada, and Mexico markets, as well as through our export truck business.
|
•
|
Our Parts segment provides customers with proprietary products needed to support the International commercial truck, IC Bus, proprietary engine lines, and export parts business, as well as our other product lines. Our Parts segment also provides a wide selection of other standard truck, trailer, and engine aftermarket parts. Also included in the Parts segment are the operating results of BDP, which manages the sourcing, merchandising, and distribution of certain service parts we sell to Ford in North America.
|
•
|
Our Global Operations segment primarily consists of Brazil engine operations which produce diesel engines under contract manufacturing arrangements, as well as under the MWM brand, for sale to OEMs in South America. Global Operations also includes the sale of engine aftermarket parts, primarily in South America.
|
•
|
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.
|
•
|
The costs of profit sharing and annual incentive compensation for the Manufacturing operations are included in corporate expenses.
|
•
|
Interest expense and interest income for the Manufacturing operations are reported in corporate expenses.
|
•
|
The Financial Services segment finances certain sales to our dealers in North America, which include an interest-free period that varies in length that is subsidized by our Truck and Parts segments. Additionally, the Financial Services segment reports intersegment revenues from secured and unsecured loans to the Manufacturing operations. Certain retail sales financed by the Financial Services segment, primarily NFC, require the Manufacturing operations, primarily the Truck segment, to share a portion of any credit losses.
|
•
|
We allocate "access fees" to the Parts segment from the Truck segment for certain engineering and product development costs, depreciation expense, and SG&A expenses incurred by the Truck segment based on the relative percentage of certain sales, as adjusted for cyclicality.
|
•
|
Other than the items discussed above, the selected financial information presented below is presented in accordance with our policies described in Note 1, Summary of Significant Accounting Policies.
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services(A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Year Ended October 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
5,240
|
|
|
$
|
1,841
|
|
|
$
|
242
|
|
|
$
|
177
|
|
|
$
|
3
|
|
|
$
|
7,503
|
|
Intersegment sales and revenues
|
72
|
|
|
5
|
|
|
11
|
|
|
40
|
|
|
(128
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
5,312
|
|
|
$
|
1,846
|
|
|
$
|
253
|
|
|
$
|
217
|
|
|
$
|
(125
|
)
|
|
$
|
7,503
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
(141
|
)
|
|
$
|
448
|
|
|
$
|
—
|
|
|
$
|
65
|
|
|
$
|
(719
|
)
|
|
$
|
(347
|
)
|
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
59
|
|
||||||
Segment profit (loss)
|
$
|
(141
|
)
|
|
$
|
448
|
|
|
$
|
—
|
|
|
$
|
65
|
|
|
$
|
(778
|
)
|
|
$
|
(406
|
)
|
Depreciation and amortization
|
$
|
116
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
65
|
|
|
$
|
6
|
|
|
$
|
199
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
199
|
|
|
268
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Capital expenditures(B)
|
124
|
|
|
8
|
|
|
3
|
|
|
—
|
|
|
13
|
|
|
148
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services(A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Year Ended October 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
8,501
|
|
|
$
|
2,239
|
|
|
$
|
309
|
|
|
$
|
193
|
|
|
$
|
9
|
|
|
$
|
11,251
|
|
Intersegment sales and revenues
|
84
|
|
|
6
|
|
|
34
|
|
|
104
|
|
|
(228
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
8,585
|
|
|
$
|
2,245
|
|
|
$
|
343
|
|
|
$
|
297
|
|
|
$
|
(219
|
)
|
|
$
|
11,251
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
269
|
|
|
$
|
598
|
|
|
$
|
—
|
|
|
$
|
123
|
|
|
$
|
(769
|
)
|
|
$
|
221
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
||||||
Segment profit (loss)
|
$
|
269
|
|
|
$
|
598
|
|
|
$
|
—
|
|
|
$
|
123
|
|
|
$
|
(750
|
)
|
|
$
|
240
|
|
Depreciation and amortization
|
$
|
104
|
|
|
$
|
5
|
|
|
$
|
11
|
|
|
$
|
64
|
|
|
$
|
9
|
|
|
$
|
193
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
207
|
|
|
312
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||
Capital expenditures(B)
|
101
|
|
|
7
|
|
|
2
|
|
|
2
|
|
|
22
|
|
|
134
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services(A) |
|
Corporate
and Eliminations |
|
Total
|
||||||||||||
Year Ended October 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External sales and revenues, net
|
$
|
7,386
|
|
|
$
|
2,399
|
|
|
$
|
305
|
|
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
10,250
|
|
Intersegment sales and revenues
|
104
|
|
|
8
|
|
|
55
|
|
|
97
|
|
|
(264
|
)
|
|
—
|
|
||||||
Total sales and revenues, net
|
$
|
7,490
|
|
|
$
|
2,407
|
|
|
$
|
360
|
|
|
$
|
257
|
|
|
$
|
(264
|
)
|
|
$
|
10,250
|
|
Income (loss) from continuing operations attributable to NIC, net of tax
|
$
|
397
|
|
|
$
|
569
|
|
|
$
|
2
|
|
|
$
|
88
|
|
|
$
|
(716
|
)
|
|
$
|
340
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
(52
|
)
|
||||||
Segment profit (loss)
|
$
|
397
|
|
|
$
|
569
|
|
|
$
|
2
|
|
|
$
|
88
|
|
|
$
|
(664
|
)
|
|
$
|
392
|
|
Depreciation and amortization
|
$
|
130
|
|
|
$
|
6
|
|
|
$
|
10
|
|
|
$
|
55
|
|
|
$
|
10
|
|
|
$
|
211
|
|
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|
235
|
|
|
327
|
|
||||||
Equity in income (loss) of non-consolidated affiliates
|
2
|
|
|
3
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Capital expenditures(B)
|
99
|
|
|
2
|
|
|
3
|
|
|
1
|
|
|
8
|
|
|
113
|
|
(in millions)
|
Truck
|
|
Parts
|
|
Global Operations
|
|
Financial
Services
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||||
Segment assets, as of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
October 31, 2020
|
$
|
1,619
|
|
|
$
|
663
|
|
|
$
|
216
|
|
|
$
|
2,191
|
|
|
$
|
1,948
|
|
|
$
|
6,637
|
|
October 31, 2019
|
1,705
|
|
|
688
|
|
|
296
|
|
|
2,774
|
|
|
1,454
|
|
|
6,917
|
|
(A)
|
Total sales and revenues in the Financial Services segment include interest revenues of $130 million, $208 million, and $182 million for the years ended October 31, 2020, 2019, and 2018, respectively.
|
(B)
|
Exclusive of purchases of equipment leased to others and liabilities related to capital expenditures.
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Sales and revenues:
|
|
|
|
|
|
||||||
Trucks
|
$
|
5,249
|
|
|
$
|
8,496
|
|
|
$
|
7,323
|
|
Parts
|
1,698
|
|
|
2,021
|
|
|
2,215
|
|
|||
Engine
|
388
|
|
|
541
|
|
|
552
|
|
|||
Financial Services
|
168
|
|
|
193
|
|
|
160
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Sales and revenues:
|
|
|
|
|
|
||||||
United States
|
$
|
6,123
|
|
|
$
|
9,097
|
|
|
$
|
7,223
|
|
Canada
|
589
|
|
|
918
|
|
|
868
|
|
|||
Mexico
|
397
|
|
|
688
|
|
|
933
|
|
|||
Brazil
|
215
|
|
|
268
|
|
|
263
|
|
|||
Other
|
179
|
|
|
280
|
|
|
963
|
|
|
As of October 31,
|
||||||
(in millions)
|
2020
|
|
2019
|
||||
Long-lived assets:(A)
|
|
|
|
||||
United States
|
$
|
1,063
|
|
|
$
|
1,017
|
|
Canada
|
6
|
|
|
7
|
|
||
Mexico
|
252
|
|
|
283
|
|
||
Brazil
|
30
|
|
|
62
|
|
||
Other
|
3
|
|
|
3
|
|
(in millions)
|
Common Stock
|
|
Treasury Stock
|
|
Shares Outstanding
|
|||
Balance as of October 31, 2017
|
103.1
|
|
|
4.6
|
|
|
98.5
|
|
Shares issued
|
—
|
|
|
(0.5
|
)
|
|
0.5
|
|
Shares acquired
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
Balance as of October 31, 2018
|
103.1
|
|
|
4.2
|
|
|
98.9
|
|
Shares issued
|
—
|
|
|
(0.5
|
)
|
|
0.5
|
|
Shares acquired
|
—
|
|
|
0.2
|
|
|
(0.2
|
)
|
Balance as of October 31, 2019
|
103.1
|
|
|
3.9
|
|
|
99.2
|
|
Shares issued
|
—
|
|
|
(0.6
|
)
|
|
0.6
|
|
Shares acquired
|
—
|
|
|
0.2
|
|
|
(0.2
|
)
|
Balance as of October 31, 2020
|
103.1
|
|
|
3.5
|
|
|
99.6
|
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||
Balance as of October 31, 2019
|
$
|
(321
|
)
|
|
$
|
(1,591
|
)
|
|
$
|
(1,912
|
)
|
Other comprehensive income (loss) before reclassifications(A)
|
(83
|
)
|
|
220
|
|
|
137
|
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
102
|
|
|
102
|
|
|||
Net current-period other comprehensive income (loss)
|
(83
|
)
|
|
322
|
|
|
239
|
|
|||
Reclassification of stranded tax effects(B)
|
$
|
—
|
|
|
$
|
(192
|
)
|
|
$
|
(192
|
)
|
Balance as of October 31, 2020
|
$
|
(404
|
)
|
|
$
|
(1,461
|
)
|
|
$
|
(1,865
|
)
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||
Balance as of October 31, 2018
|
$
|
(315
|
)
|
|
$
|
(1,605
|
)
|
|
$
|
(1,920
|
)
|
Other comprehensive loss before reclassifications
|
(6
|
)
|
|
(178
|
)
|
|
(184
|
)
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
192
|
|
|
192
|
|
|||
Net current-period other comprehensive income (loss)
|
(6
|
)
|
|
14
|
|
|
8
|
|
|||
Balance as of October 31, 2019
|
$
|
(321
|
)
|
|
$
|
(1,591
|
)
|
|
$
|
(1,912
|
)
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Defined Benefit Plans
|
|
Total
|
||||||
Balance as of October 31, 2017
|
$
|
(283
|
)
|
|
$
|
(1,928
|
)
|
|
$
|
(2,211
|
)
|
Other comprehensive income (loss) before reclassifications
|
(32
|
)
|
|
201
|
|
|
169
|
|
|||
Amounts reclassified out of accumulated other comprehensive loss
|
—
|
|
|
122
|
|
|
122
|
|
|||
Net current-period other comprehensive income (loss)
|
(32
|
)
|
|
323
|
|
|
291
|
|
|||
Balance as of October 31, 2018
|
$
|
(315
|
)
|
|
$
|
(1,605
|
)
|
|
$
|
(1,920
|
)
|
(A)
|
Other Comprehensive income before reclassifications for Defined Benefit Plans includes a $75 million intraperiod tax allocation.
|
(B)
|
During the fiscal year ended October 31, 2020, we reclassified $192 million of stranded tax effects out of Accumulated other comprehensive loss and into Accumulated deficit. The stranded tax effects remained a component of Accumulated other comprehensive loss as a result of the remeasurement of our deferred tax assets related to our U.S. Pension and OPEB Plans through the statement of operations, to the new U.S. federal tax rate of 21% through our Consolidated Statement of Operations. As a result, stranded tax effects within Accumulated other comprehensive loss which would not be realized at the established historical tax rates have now been adjusted through equity.
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions, except per share data)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to Navistar International Corporation common stockholders
|
|
$
|
(347
|
)
|
|
$
|
221
|
|
|
$
|
340
|
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
99.7
|
|
|
99.3
|
|
|
98.9
|
|
|||
Effect of dilutive securities
|
|
—
|
|
|
0.2
|
|
|
0.7
|
|
|||
Diluted
|
|
99.7
|
|
|
99.5
|
|
|
99.6
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings (loss) per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(3.48
|
)
|
|
$
|
2.23
|
|
|
$
|
3.44
|
|
Diluted
|
|
$
|
(3.48
|
)
|
|
$
|
2.22
|
|
|
$
|
3.41
|
|
•
|
Ownership Program—In June 1997, our Board of Directors approved the terms of the Ownership Program. In general, under the Ownership Program in existence through November 2013, all officers and senior managers were required to acquire, by direct purchase or through salary or annual bonus reduction, an ownership interest in the Company by acquiring a designated amount of our common stock based on organizational level. Participants were required to hold such stock for the entire period in which they are employed by the Company. The Ownership Program was amended and restated effective November 1, 2013 on a going forward basis. The new guidelines (i) increased stock ownership guideline multiples to six times salary for the President and CEO and up to three times salary for other senior executives; (ii) modified retention requirements for Company granted equity until ownership requirements are met; (iii) added a holding period for shares acquired through transactions with Company granted equity after the executives satisfy the stock ownership requirement; (iv) eliminated the granting of premium shares as an inducement to executives fulfilling stock ownership guidelines on an accelerated basis; and (v) eliminated the required time frame to fulfill stock ownership guidelines. Under the prior Ownership Program, participants were entitled to defer their cash bonus into deferred share units ("DSUs"), which vested immediately. There were 2,365 DSUs outstanding as of October 31, 2020. Premium share units ("PSUs") were also eligible to be awarded to participants who complete their ownership requirement on an accelerated basis. PSUs vested annually, pro rata over three years. There were 28,500 PSUs outstanding as of October 31, 2020 under the prior Ownership Program. Each vested DSU and PSU will be settled by delivery of one share of common stock within 10 days after a participant's termination of employment or at such later date as required by IRC Section Rule 409A. PSUs and DSUs awarded between February 19, 2013 and October 31, 2013 were issued under the 2013 PIP.
|
•
|
Deferred Fee Plan—Under the Deferred Fee Plan, non-employee directors may elect to defer payment of all or a portion of their annual cash retainer in cash (with interest) or in stock units and may elect to defer all or a portion of their annual equity retainer in deferred stock units. Deferrals in the deferred stock account are valued as if each deferral was vested in NIC common stock as of the deferral date. As of October 31, 2020, 28,833 deferred shares were outstanding under the Deferred Fee Plan. Beginning on September 30, 2013, shares deferred by non-employee directors have been issued out of the 2013 PIP. The Deferred Fee Plan was amended and restated effective February 11, 2015 and then subsequently amended on December 9, 2019.
|
|
For the Years Ended October 31,
|
|||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Options outstanding, at beginning of year
|
1,737
|
|
|
$
|
33.82
|
|
|
1,780
|
|
|
$
|
33.70
|
|
|
2,408
|
|
|
$
|
38.81
|
|
Granted
|
—
|
|
|
—
|
|
|
284
|
|
|
33.83
|
|
|
236
|
|
|
40.44
|
|
|||
Exercised
|
(142
|
)
|
|
28.81
|
|
|
(94
|
)
|
|
23.98
|
|
|
(236
|
)
|
|
32.78
|
|
|||
Forfeited/expired
|
(661
|
)
|
|
33.65
|
|
|
(233
|
)
|
|
36.86
|
|
|
(628
|
)
|
|
56.64
|
|
|||
Options outstanding, at end of year
|
934
|
|
|
34.71
|
|
|
1,737
|
|
|
33.82
|
|
|
1,780
|
|
|
33.70
|
|
|||
Options exercisable, at end of year
|
686
|
|
|
34.35
|
|
|
1,242
|
|
|
33.50
|
|
|
1,396
|
|
|
33.55
|
|
|
Shares
|
|
Weighted Average Remaining Contractual Life
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value
|
||||||
Range of Exercise Prices:
|
(in thousands)
|
|
(in years)
|
|
|
|
(in millions)
|
||||||
$ 10.60 - $ 30.94
|
261
|
|
|
6.3
|
|
|
$
|
26.72
|
|
|
$
|
4.3
|
|
$ 30.95 - $ 39.32
|
410
|
|
|
4.9
|
|
|
35.35
|
|
|
3.2
|
|
||
$ 39.33 - $ 43.86
|
263
|
|
|
5.2
|
|
|
41.61
|
|
|
0.5
|
|
||
Options Outstanding
|
934
|
|
|
|
|
|
|
|
|
Shares
|
|
Weighted Average Remaining Contractual Life
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value
|
||||||
Range of Exercise Prices:
|
(in thousands)
|
|
(in years)
|
|
|
|
(in millions)
|
||||||
$ 10.60 - $ 30.94
|
237
|
|
|
6.1
|
|
|
$
|
26.66
|
|
|
$
|
3.9
|
|
$ 30.95 - $ 39.32
|
249
|
|
|
2.8
|
|
|
35.55
|
|
|
1.9
|
|
||
$ 39.33 - $ 43.86
|
200
|
|
|
4.5
|
|
|
41.93
|
|
|
0.3
|
|
||
Options Exercisable
|
686
|
|
|
|
|
|
|
|
|
For the Years Ended October 31,
|
||||||
|
2020
|
|
2019
|
|
2018
|
||
Risk-free interest rate
|
N/A
|
|
2.5
|
%
|
|
2.5
|
%
|
Expected volatility
|
N/A
|
|
48.8
|
%
|
|
49.1
|
%
|
Expected life (in years)
|
N/A
|
|
5.6
|
|
|
5.3
|
|
|
For the Years Ended October 31,
|
|||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Nonvested, at beginning of year
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
—
|
|
|
—
|
|
|
5
|
|
|
32.30
|
|
|
4
|
|
|
34.97
|
|
|||
Vested
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
32.30
|
|
|
(4
|
)
|
|
34.97
|
|
|||
Nonvested, at end of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Share-Settled RSUs
|
|||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Nonvested, at beginning of year
|
476
|
|
|
$
|
33.82
|
|
|
502
|
|
|
$
|
25.01
|
|
|
619
|
|
|
$
|
15.04
|
|
Granted
|
21
|
|
|
36.36
|
|
|
178
|
|
|
34.93
|
|
|
168
|
|
|
40.05
|
|
|||
Vested
|
(181
|
)
|
|
28.36
|
|
|
(194
|
)
|
|
11.84
|
|
|
(214
|
)
|
|
9.59
|
|
|||
Forfeited
|
(9
|
)
|
|
35.70
|
|
|
(10
|
)
|
|
38.24
|
|
|
(71
|
)
|
|
20.24
|
|
|||
Nonvested, at end of year
|
307
|
|
|
37.16
|
|
|
476
|
|
|
33.82
|
|
|
502
|
|
|
25.01
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Cash-Settled RSUs
|
|||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Nonvested, at beginning of year
|
385
|
|
|
$
|
35.07
|
|
|
428
|
|
|
$
|
28.58
|
|
|
587
|
|
|
$
|
18.02
|
|
Granted
|
—
|
|
|
—
|
|
|
226
|
|
|
34.97
|
|
|
187
|
|
|
40.12
|
|
|||
Vested
|
(188
|
)
|
|
33.69
|
|
|
(230
|
)
|
|
22.89
|
|
|
(319
|
)
|
|
16.42
|
|
|||
Forfeited
|
(21
|
)
|
|
35.68
|
|
|
(39
|
)
|
|
34.99
|
|
|
(27
|
)
|
|
22.76
|
|
|||
Nonvested, at end of year
|
176
|
|
|
36.47
|
|
|
385
|
|
|
35.07
|
|
|
428
|
|
|
28.58
|
|
|
For the Years Ended October 31,
|
|||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Options outstanding, at beginning of year
|
123
|
|
|
$
|
27.67
|
|
|
152
|
|
|
$
|
27.59
|
|
|
599
|
|
|
$
|
27.59
|
|
Exercised
|
(42
|
)
|
|
27.67
|
|
|
(29
|
)
|
|
27.23
|
|
|
(13
|
)
|
|
27.67
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(434
|
)
|
|
27.59
|
|
|||
Options outstanding, at end of year
|
81
|
|
|
27.67
|
|
|
123
|
|
|
27.67
|
|
|
152
|
|
|
27.59
|
|
|||
Options exercisable, at end of year
|
81
|
|
|
27.67
|
|
|
123
|
|
|
27.67
|
|
|
152
|
|
|
27.59
|
|
|
For the Years Ended October 31,
|
|||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Options outstanding, at beginning of year
|
200
|
|
|
$
|
27.24
|
|
|
387
|
|
|
$
|
27.24
|
|
|
431
|
|
|
$
|
27.24
|
|
Exercised
|
(200
|
)
|
|
27.24
|
|
|
(186
|
)
|
|
27.24
|
|
|
(44
|
)
|
|
27.24
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
27.24
|
|
|
—
|
|
|
—
|
|
|||
Options outstanding, at end of year
|
—
|
|
|
—
|
|
|
200
|
|
|
27.24
|
|
|
387
|
|
|
27.24
|
|
|||
Options exercisable, at end of year
|
—
|
|
|
—
|
|
|
200
|
|
|
27.24
|
|
|
387
|
|
|
27.24
|
|
|
Cash-Settled PUs subject to Service and Performance Conditions
|
|||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Nonvested, at beginning of year
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
220
|
|
|
$
|
27.59
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(121
|
)
|
|
27.59
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(99
|
)
|
|
27.59
|
|
|||
Nonvested, at end of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
For the Years Ended October 31,
|
||||||||||
(in millions)
|
2020
|
|
2019
|
|
2018
|
||||||
Equity in income of affiliated companies, net of dividends
|
|
|
|
|
|
||||||
Equity in income of non-consolidated affiliates
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
Dividends from non-consolidated affiliates
|
—
|
|
|
2
|
|
|
5
|
|
|||
Equity in income of non-consolidated affiliates, net of dividends
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
5
|
|
Other non-cash operating activities
|
|
|
|
|
|
||||||
Gain on sale of property and equipment
|
$
|
2
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Loss on sale and impairment of repossessed collateral
|
5
|
|
|
3
|
|
|
1
|
|
|||
Income from non-cash leases
|
(12
|
)
|
|
(11
|
)
|
|
(24
|
)
|
|||
Other non-cash operating activities
|
$
|
(5
|
)
|
|
$
|
(9
|
)
|
|
$
|
(23
|
)
|
Changes in other assets and liabilities
|
|
|
|
|
|
||||||
Other current assets
|
$
|
4
|
|
|
$
|
(38
|
)
|
|
$
|
(7
|
)
|
Other noncurrent assets
|
(22
|
)
|
|
(12
|
)
|
|
(19
|
)
|
|||
Other current liabilities
|
49
|
|
|
115
|
|
|
116
|
|
|||
Postretirement benefits liabilities, net
|
(13
|
)
|
|
54
|
|
|
(131
|
)
|
|||
Other noncurrent liabilities
|
(11
|
)
|
|
(21
|
)
|
|
58
|
|
|||
Other, net
|
11
|
|
|
3
|
|
|
9
|
|
|||
Changes in other assets and liabilities
|
$
|
18
|
|
|
$
|
101
|
|
|
$
|
26
|
|
Cash paid during the year
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
218
|
|
|
$
|
287
|
|
|
$
|
306
|
|
Income taxes, net of refunds
|
27
|
|
|
47
|
|
|
18
|
|
|||
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Transfers to inventories from property and equipment for leases to others
|
(11
|
)
|
|
(15
|
)
|
|
(9
|
)
|
|
First Quarter Ended
January 31,
|
|
Second Quarter Ended
April 30,
|
||||||||||||
(in millions, except for per share data and stock prices)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales and revenues, net
|
$
|
1,838
|
|
|
$
|
2,433
|
|
|
$
|
1,925
|
|
|
$
|
2,996
|
|
Manufacturing gross margin(A)
|
265
|
|
|
407
|
|
|
253
|
|
|
455
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(36
|
)
|
|
$
|
11
|
|
|
$
|
(38
|
)
|
|
$
|
(48
|
)
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic(B)
|
$
|
(0.36
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.38
|
)
|
|
$
|
(0.48
|
)
|
Diluted(B)
|
$
|
(0.36
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.38
|
)
|
|
$
|
(0.48
|
)
|
|
Third Quarter Ended
July 31,
|
|
Fourth Quarter Ended
October 31,
|
||||||||||||
(in millions, except for per share data and stock prices)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales and revenues, net
|
$
|
1,675
|
|
|
$
|
3,042
|
|
|
$
|
2,065
|
|
|
$
|
2,780
|
|
Manufacturing gross margin(A)
|
251
|
|
|
495
|
|
|
345
|
|
|
459
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(37
|
)
|
|
$
|
156
|
|
|
$
|
(236
|
)
|
|
$
|
102
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share attributable to Navistar International Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic(B)
|
$
|
(0.37
|
)
|
|
$
|
1.57
|
|
|
$
|
(2.36
|
)
|
|
$
|
1.03
|
|
Diluted(B)
|
$
|
(0.37
|
)
|
|
$
|
1.56
|
|
|
$
|
(2.36
|
)
|
|
$
|
1.02
|
|
(B)
|
Earnings per share in each quarter is computed using the weighted-average number of shares outstanding during that quarter while earnings per share for the full year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the four quarters earnings per share may not equal the full year earnings per share.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company.
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP and that receipts and expenditures of the Company are being made in accordance with authorization of our management and our Board of Directors.
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers, and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
Exhibit:
|
|
Description
|
|
Page
|
(2.1)
|
|
|
|
N/A
|
(2.2)
|
|
|
|
N/A
|
(2.3)
|
|
|
N/A
|
|
(3)
|
|
|
N/A
|
|
(4)
|
|
|
N/A
|
|
(4.1)
|
|
|
N/A
|
|
(10)
|
|
|
N/A
|
|
(21)
|
|
|
N/A
|
|
(23.1)
|
|
|
N/A
|
|
(24)
|
|
|
N/A
|
|
(31.1)
|
|
|
N/A
|
|
(31.2)
|
|
|
N/A
|
|
(32.1)
|
|
|
N/A
|
|
(32.2)
|
|
|
N/A
|
|
(99.1)
|
|
|
E-17
|
|
(99.2)
|
|
|
N/A
|
|
(99.3)
|
|
|
N/A
|
|
(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
|
(104)
|
|
Cover Page Interactive Data File (embedded within Inline XBRL documents and included in Exhibit 101)
|
|
N/A
|
|
NAVISTAR INTERNATIONAL CORPORATION
|
|
(Registrant)
|
|
/s/ SAMARA A. STRYCKER
|
|
Samara A. Strycker
|
|
Senior Vice President and Corporate Controller
|
|
(Principal Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ PERSIO V. LISBOA
|
|
President,
Chief Executive Officer
(Principal Executive Officer)
|
|
December 17, 2020
|
Persio V. Lisboa
|
|
|
|
|
|
|
|
|
|
/s/ TROY A. CLARKE
|
|
Executive Chairman and
Chairman of the Board
|
|
December 17, 2020
|
Troy A. Clarke
|
|
|
|
|
|
|
|
|
|
/s/ WALTER G. BORST
|
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
December 17, 2020
|
Walter G. Borst
|
|
|
|
|
|
|
|
|
|
/s/ SAMARA A. STRYCKER
|
|
Senior Vice President and
Corporate Controller
(Principal Accounting Officer)
|
|
December 17, 2020
|
Samara A. Strycker
|
|
|
|
|
|
|
|
|
|
/s/ JOSÉ MARIA ALAPONT
|
|
Director
|
|
December 17, 2020
|
José Maria Alapont
|
|
|
|
|
|
|
|
|
|
/s/ STEPHEN R. D'ARCY
|
|
Director
|
|
December 17, 2020
|
Stephen R. D'Arcy
|
|
|
|
|
|
|
|
|
|
/s/ JEFFREY A. DOKHO
|
|
Director
|
|
December 17, 2020
|
Jeffrey A. Dokho
|
|
|
|
|
|
|
|
|
|
/s/ VINCENT J. INTRIERI
|
|
Director
|
|
December 17, 2020
|
Vincent J. Intrieri
|
|
|
|
|
|
|
|
|
|
/s/ MARK H. RACHESKY
|
|
Director
|
|
December 17, 2020
|
Mark H. Rachesky
|
|
|
|
|
|
|
|
|
|
/s/ CHRISTIAN SCHULZ
|
|
Director
|
|
December 17, 2020
|
Christian Schulz
|
|
|
|
|
|
|
|
|
|
/s/ KEVIN M. SHEEHAN
|
|
Director
|
|
December 17, 2020
|
Kevin M. Sheehan
|
|
|
|
|
|
|
|
|
|
/s/ DENNIS A. SUSKIND
|
|
Director
|
|
December 17, 2020
|
Dennis A. Suskind
|
|
|
|
|
|
|
|
|
|
/s/ JANET T. YEUNG
|
|
Director
|
|
December 17, 2020
|
Janet T. Yeung
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
The following documents of Navistar International Corporation, its principal subsidiary, Navistar, Inc., and its indirect subsidiary, Navistar Financial Corporation are incorporated herein by reference.
|
|||
|
|
|
|
10.1
|
|
||
|
|
||
10.2
|
|
||
|
|
||
10.3
|
|
||
|
|
||
10.4
|
|
|
|
|
|
||
10.5
|
|
||
|
|
||
10.6
|
|
||
|
|
||
10.7
|
|
||
|
|
||
10.8
|
|
||
|
|
||
10.9
|
|
||
|
|
10.10
|
|
||
|
|
||
10.11
|
|
||
|
|
||
10.12
|
|
||
|
|
||
10.13
|
|
||
|
|
||
10.14
|
|
||
|
|
||
10.15
|
|
||
|
|
||
10.16
|
|
||
|
|
||
10.17
|
|
|
|
|
|
10.18
|
|
||
|
|
||
10.19
|
|
|
|
|
|
||
10.20
|
|
||
|
|
||
10.21
|
|
||
|
|
||
10.22
|
|
||
|
|
||
10.23
|
|
||
|
|
||
10.24
|
|
||
|
|
||
10.25
|
|
||
|
|
||
10.26
|
|
|
|
|
|
||
10.27
|
|
|
|
|
|
||
10.28
|
|
|
|
|
|
||
10.29
|
|
||
|
|
||
10.30
|
|
||
|
|
||
10.31
|
|
|
|
|
|
||
10.32
|
|
||
|
|
10.33*
|
|
||
|
|
||
10.34*
|
|
||
|
|
||
10.35
|
|
||
|
|
||
10.36
|
|
||
|
|
||
10.37
|
|
||
10.38
|
|
||
|
|
||
10.39
|
|
|
|
|
|
||
10.40
|
|
||
|
|
||
10.41
|
|
||
|
|
||
10.42
|
|
||
|
|
||
10.43
|
|
||
|
|
||
10.44
|
|
||
|
|
||
10.45
|
|
||
|
|
10.46
|
|
||
|
|
||
10.47
|
|
||
|
|
||
10.48
|
|
|
|
|
|
||
10.49
|
|
|
|
|
|
||
10.50
|
|
||
|
|
||
10.51
|
|
||
|
|
||
10.52
|
|
|
|
|
|
||
10.53
|
|
||
|
|
||
10.54*
|
|
||
|
|
||
10.55
|
|
||
|
|
||
10.56
|
|
||
10.57
|
|
|
|
10.57
|
|
||
|
|
||
10.58
|
|
||
|
|
10.59
|
|
||
|
|
||
10.60
|
|
||
|
|
||
10.61
|
|
||
10.62
|
|
||
|
|
||
10.63
|
|
||
|
|
||
10.64
|
|
||
|
|
||
10.65
|
|
||
|
|
||
10.66
|
|
||
|
|
||
10.67*
|
|
|
|
|
|
||
10.68*
|
|
||
|
|
||
10.6*
|
|
||
|
|
||
10.70*
|
|
||
|
|
||
10.71*
|
|
||
|
|
||
10.72*
|
|
||
|
|
||
10.73*
|
|
||
|
|
10.74*
|
|
||
|
|
||
10.75*
|
|
||
|
|
||
10.76*
|
|
||
|
|
||
10.77*
|
|
||
|
|
||
10.78*
|
|
||
|
|
||
10.79*
|
|
||
|
|
||
10.80*
|
|
|
|
|
|
||
10.81*
|
|
|
|
|
|
||
10.82*
|
|
||
|
|
||
10.83*
|
|
||
|
|
||
10.84*
|
|
||
|
|
||
10.85*
|
|
|
|
|
|
||
10.86*
|
|
||
|
|
||
10.87*
|
|
||
|
|
||
10.88*
|
|
|
|
|
|
||
10.89*
|
|
||
|
|
||
10.90*
|
|
|
|
|
|
||
10.91*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAVISTAR INTERNATIONAL CORPORATION
|
|
|
||||||
|
|
|
|
|||||
/s/ CURT A. KRAMER
|
|
|
|
|
|
|
||
By:
|
|
Curt A. Kramer
|
|
|
|
Date: August 28, 2020
|
|
|
Title:
|
|
Senior Vice President and General Counsel
|
|
|
|
|
|
|
|
|
|||||||
NAVISTAR, INC.
|
|
|
||||||
|
|
|
|
|||||
/s/ CURT A. KRAMER
|
|
|
|
|
|
|
||
By:
|
|
Curt A. Kramer
|
|
|
|
Date: August 28, 2020
|
|
|
Title:
|
|
Senior Vice President and General Counsel
|
|
|
|
|
|
|
|
|
|||||||
EXECUTIVE
|
|
|
||||||
|
|
|
|
|||||
/s/ PERSIO V. LISBOA
|
|
|
|
|
|
|
||
Persio V. Lisboa
|
|
|
|
Date: August 28, 2020
|
|
|
|
STATE OR COUNTRY
IN WHICH
SUBSIDIARY ORGANIZED
|
|
|
Subsidiaries that are 100% owned:
|
|
Navistar, Inc.
|
Delaware
|
Navistar Europe GmbH
|
Germany
|
International of Mexico Holding Corporation
|
Delaware
|
Subsidiaries that are less than 100% owned, but considered to be a significant subsidiary:
|
|
Navistar Financial, S.A. de C.V. SOFORM E.R.
|
Mexico
|
Subsidiaries that are 100% owned by Navistar, Inc.:
|
|
OCC Technologies
|
Delaware
|
Navistar San Antonio Manufacturing LLC
|
Delaware
|
IC Bus, LLC
|
Arkansas
|
Navistar Diesel of Alabama, LLC
|
Delaware
|
Navistar Financial Corporation
|
Delaware
|
Subsidiaries that are 100% owned by Navistar Diesel of Alabama, LLC:
|
|
Navistar Big Bore Diesels, LLC
|
Delaware
|
Subsidiaries that are 100% owned by International of Mexico Holding Corporation:
|
|
International Truck and Engine Corporation Cayman Islands Holding Company
|
Cayman Islands
|
Navistar International B.V.
|
Netherlands
|
Subsidiaries that are 100% owned by Navistar Financial Corporation:
|
|
Truck Retail Accounts Corporation
|
Delaware
|
Subsidiaries that are less than 100% owned by International Truck and Engine Corporation Cayman Islands Holding Company, but considered to be a significant subsidiary:
|
|
Blue Diamond Parts, LLC
|
Delaware
|
Subsidiaries that are less than 100% owned by Navistar International B.V., but considered to be a significant subsidiary:
|
|
Navistar Canada ULC
|
Canada
|
Navistar International Truck Mexico, S. de R.L. de C.V.
|
Mexico
|
Subsidiaries that are less than 100% owned by Navistar International Truck Mexico, S. de R.L. de C.V., but considered to be a significant subsidiary:
|
|
Navistar International Mexico, S. de R.L. de C.V.
|
Mexico
|
Subsidiaries that are less than 100% owned by Navistar International Mexico, S. de R.L. de C.V., but considered to be a significant subsidiary:
|
|
Navistar Mexico, S. de R.L. de C.V.
|
Mexico
|
International Parts Distribution, S. de R.L. de C.V.
|
Mexico
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ PERSIO V. LISBOA
|
|
President,
Chief Executive Officer
(Principal Executive Officer)
|
|
December 17, 2020
|
Persio V. Lisboa
|
|
|
|
|
|
|
|
|
|
/s/ TROY A. CLARKE
|
|
Executive Chairman and
Chairman of the Board
|
|
December 17, 2020
|
Troy A. Clarke
|
|
|
|
|
|
|
|
|
|
/s/ WALTER G. BORST
|
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
December 17, 2020
|
Walter G. Borst
|
|
|
|
|
|
|
|
|
|
/s/ SAMARA A. STRYCKER
|
|
Senior Vice President and
Corporate Controller
(Principal Accounting Officer)
|
|
December 17, 2020
|
Samara A. Strycker
|
|
|
|
|
|
|
|
|
|
/s/ JOSÉ MARIA ALAPONT
|
|
Director
|
|
December 17, 2020
|
José Maria Alapont
|
|
|
|
|
|
|
|
|
|
/s/ STEPHEN R. D'ARCY
|
|
Director
|
|
December 17, 2020
|
Stephen R. D'Arcy
|
|
|
|
|
|
|
|
|
|
/s/ JEFFREY A. DOKHO
|
|
Director
|
|
December 17, 2020
|
Jeffrey A. Dokho
|
|
|
|
|
|
|
|
|
|
/s/ VINCENT J. INTRIERI
|
|
Director
|
|
December 17, 2020
|
Vincent J. Intrieri
|
|
|
|
|
|
|
|
|
|
/s/ MARK H. RACHESKY
|
|
Director
|
|
December 17, 2020
|
Mark H. Rachesky
|
|
|
|
|
|
|
|
|
|
/s/ CHRISTIAN SCHULZ
|
|
Director
|
|
December 17, 2020
|
Christian Schulz
|
|
|
|
|
|
|
|
|
|
/s/ KEVIN M. SHEEHAN
|
|
Director
|
|
December 17, 2020
|
Kevin M. Sheehan
|
|
|
|
|
|
|
|
|
|
/s/ DENNIS A. SUSKIND
|
|
Director
|
|
December 17, 2020
|
Dennis A. Suskind
|
|
|
|
|
|
|
|
|
|
/s/ JANET T. YEUNG
|
|
Director
|
|
December 17, 2020
|
Janet T. Yeung
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Navistar International Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Persio V. Lisboa
|
Persio V. Lisboa
President, and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Navistar International Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ 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/ Persio V. Lisboa
|
Persio V. Lisboa
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 Year Ended October 31, 2020
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
7,335
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,335
|
|
Finance revenues
|
—
|
|
|
217
|
|
|
(49
|
)
|
|
168
|
|
||||
Sales and revenues, net
|
7,335
|
|
|
217
|
|
|
(49
|
)
|
|
7,503
|
|
||||
Costs of products sold
|
6,221
|
|
|
—
|
|
|
—
|
|
|
6,221
|
|
||||
Restructuring charges
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Asset impairment charges
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
Selling, general and administrative expenses
|
925
|
|
|
105
|
|
|
(9
|
)
|
|
1,021
|
|
||||
Engineering and product development costs
|
321
|
|
|
—
|
|
|
—
|
|
|
321
|
|
||||
Interest expense
|
205
|
|
|
69
|
|
|
(6
|
)
|
|
268
|
|
||||
Other expense (income), net
|
88
|
|
|
(22
|
)
|
|
(34
|
)
|
|
32
|
|
||||
Total costs and expenses
|
7,790
|
|
|
152
|
|
|
(49
|
)
|
|
7,893
|
|
||||
Equity in income of non-consolidated affiliates
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Income before equity income from financial services operations and income taxes
|
(453
|
)
|
|
65
|
|
|
—
|
|
|
(388
|
)
|
||||
Equity income from financial services operations
|
55
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
||||
Income (loss) before income taxes
|
(398
|
)
|
|
65
|
|
|
(55
|
)
|
|
(388
|
)
|
||||
Income tax benefit (expense)
|
69
|
|
|
(10
|
)
|
|
—
|
|
|
59
|
|
||||
Net income (loss)
|
(329
|
)
|
|
55
|
|
|
(55
|
)
|
|
(329
|
)
|
||||
Less: Net income attributable to non-controlling interests
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||
Net income (loss) attributable to Navistar International Corporation
|
$
|
(347
|
)
|
|
$
|
55
|
|
|
$
|
(55
|
)
|
|
$
|
(347
|
)
|
|
For the Year Ended October 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
11,061
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,061
|
|
Finance revenues
|
—
|
|
|
297
|
|
|
(107
|
)
|
|
190
|
|
||||
Sales and revenues, net
|
11,061
|
|
|
297
|
|
|
(107
|
)
|
|
11,251
|
|
||||
Costs of products sold
|
9,245
|
|
|
—
|
|
|
—
|
|
|
9,245
|
|
||||
Restructuring charges
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Asset impairment charges
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Selling, general and administrative expenses
|
840
|
|
|
100
|
|
|
(6
|
)
|
|
934
|
|
||||
Engineering and product development costs
|
319
|
|
|
—
|
|
|
—
|
|
|
319
|
|
||||
Interest expense
|
207
|
|
|
105
|
|
|
—
|
|
|
312
|
|
||||
Other expense (income), net
|
296
|
|
|
(31
|
)
|
|
(101
|
)
|
|
164
|
|
||||
Total costs and expenses
|
10,926
|
|
|
174
|
|
|
(107
|
)
|
|
10,993
|
|
||||
Equity in income of non-consolidated affiliates
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Income before equity income from financial services operations and income taxes
|
139
|
|
|
123
|
|
|
—
|
|
|
262
|
|
||||
Equity income from financial services operations
|
99
|
|
|
—
|
|
|
(99
|
)
|
|
—
|
|
||||
Income before income taxes
|
238
|
|
|
123
|
|
|
(99
|
)
|
|
262
|
|
||||
Income tax benefit (expense)
|
5
|
|
|
(24
|
)
|
|
—
|
|
|
(19
|
)
|
||||
Net income
|
243
|
|
|
99
|
|
|
(99
|
)
|
|
243
|
|
||||
Less: Net income attributable to non-controlling interests
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
Net income attributable to Navistar International Corporation
|
$
|
221
|
|
|
$
|
99
|
|
|
$
|
(99
|
)
|
|
$
|
221
|
|
|
For the Year Ended October 31, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Sales of manufactured products
|
$
|
10,090
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,090
|
|
Finance revenues
|
—
|
|
|
257
|
|
|
(97
|
)
|
|
160
|
|
||||
Sales and revenues, net
|
10,090
|
|
|
257
|
|
|
(97
|
)
|
|
10,250
|
|
||||
Costs of products sold
|
8,317
|
|
|
—
|
|
|
—
|
|
|
8,317
|
|
||||
Restructuring charges
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Asset impairment charges
|
13
|
|
|
1
|
|
|
—
|
|
|
14
|
|
||||
Selling, general and administrative expenses
|
737
|
|
|
93
|
|
|
(2
|
)
|
|
828
|
|
||||
Engineering and product development costs
|
297
|
|
|
—
|
|
|
—
|
|
|
297
|
|
||||
Interest expense
|
235
|
|
|
92
|
|
|
—
|
|
|
327
|
|
||||
Other expense (income), net
|
160
|
|
|
(17
|
)
|
|
(95
|
)
|
|
48
|
|
||||
Total costs and expenses
|
9,758
|
|
|
169
|
|
|
(97
|
)
|
|
9,830
|
|
||||
Equity in income of non-consolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income before equity income from financial services operations and income taxes
|
332
|
|
|
88
|
|
|
—
|
|
|
420
|
|
||||
Equity income from financial services operations
|
71
|
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
||||
Income before income taxes
|
403
|
|
|
88
|
|
|
(71
|
)
|
|
420
|
|
||||
Income tax expense
|
(35
|
)
|
|
(17
|
)
|
|
—
|
|
|
(52
|
)
|
||||
Net income
|
368
|
|
|
71
|
|
|
(71
|
)
|
|
368
|
|
||||
Less: Net Income attributable to non-controlling interests
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
Net income attributable to Navistar International Corporation
|
$
|
340
|
|
|
$
|
71
|
|
|
$
|
(71
|
)
|
|
$
|
340
|
|
|
As of October 31, 2020
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1,749
|
|
|
$
|
94
|
|
|
$
|
—
|
|
|
$
|
1,843
|
|
Restricted cash
|
44
|
|
|
86
|
|
|
—
|
|
|
130
|
|
||||
Finance and other receivables, net
|
279
|
|
|
1,992
|
|
|
(369
|
)
|
|
1,902
|
|
||||
Inventories
|
761
|
|
|
2
|
|
|
—
|
|
|
763
|
|
||||
Goodwill
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Property and equipment, net
|
940
|
|
|
358
|
|
|
—
|
|
|
1,298
|
|
||||
Operating lease right of use assets
|
117
|
|
|
2
|
|
|
—
|
|
|
119
|
|
||||
Investments in and advances to financial services operations
|
668
|
|
|
—
|
|
|
(668
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||
Deferred taxes, net
|
113
|
|
|
4
|
|
|
—
|
|
|
117
|
|
||||
Other assets
|
374
|
|
|
22
|
|
|
—
|
|
|
396
|
|
||||
Total assets
|
$
|
5,114
|
|
|
$
|
2,560
|
|
|
$
|
(1,037
|
)
|
|
$
|
6,637
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,637
|
|
|
$
|
10
|
|
|
$
|
(369
|
)
|
|
$
|
1,278
|
|
Debt
|
3,496
|
|
|
1,834
|
|
|
—
|
|
|
5,330
|
|
||||
Postretirement benefits liabilities
|
1,705
|
|
|
—
|
|
|
—
|
|
|
1,705
|
|
||||
Other liabilities
|
2,098
|
|
|
48
|
|
|
—
|
|
|
2,146
|
|
||||
Total liabilities
|
8,936
|
|
|
1,892
|
|
|
(369
|
)
|
|
10,459
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(3,826
|
)
|
|
668
|
|
|
(668
|
)
|
|
(3,826
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
5,114
|
|
|
$
|
2,560
|
|
|
$
|
(1,037
|
)
|
|
$
|
6,637
|
|
|
As of October 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Balance Sheet
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1,328
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
1,370
|
|
Restricted cash
|
50
|
|
|
137
|
|
|
—
|
|
|
187
|
|
||||
Finance and other receivables, net
|
348
|
|
|
2,423
|
|
|
(226
|
)
|
|
2,545
|
|
||||
Inventories
|
905
|
|
|
6
|
|
|
—
|
|
|
911
|
|
||||
Goodwill
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Property and equipment, net
|
942
|
|
|
367
|
|
|
—
|
|
|
1,309
|
|
||||
Investments in and advances to financial services operations
|
668
|
|
|
—
|
|
|
(668
|
)
|
|
—
|
|
||||
Investments in non-consolidated affiliates
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||
Deferred taxes, net
|
115
|
|
|
2
|
|
|
—
|
|
|
117
|
|
||||
Other assets
|
386
|
|
|
23
|
|
|
—
|
|
|
409
|
|
||||
Total assets
|
$
|
4,811
|
|
|
$
|
3,000
|
|
|
$
|
(894
|
)
|
|
$
|
6,917
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
1,554
|
|
|
$
|
13
|
|
|
$
|
(226
|
)
|
|
$
|
1,341
|
|
Debt
|
2,932
|
|
|
2,256
|
|
|
—
|
|
|
5,188
|
|
||||
Postretirement benefits liabilities
|
2,103
|
|
|
—
|
|
|
—
|
|
|
2,103
|
|
||||
Other liabilities
|
1,945
|
|
|
63
|
|
|
—
|
|
|
2,008
|
|
||||
Total liabilities
|
8,534
|
|
|
2,332
|
|
|
(226
|
)
|
|
10,640
|
|
||||
Stockholders' equity attributable to non-controlling interest
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Stockholders' equity (deficit) attributable to controlling interest
|
(3,726
|
)
|
|
668
|
|
|
(668
|
)
|
|
(3,726
|
)
|
||||
Total liabilities and stockholders' equity (deficit)
|
$
|
4,811
|
|
|
$
|
3,000
|
|
|
$
|
(894
|
)
|
|
$
|
6,917
|
|
|
For the Year Ended October 31, 2020
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(329
|
)
|
|
$
|
55
|
|
|
$
|
(55
|
)
|
|
$
|
(329
|
)
|
Adjustments to reconcile net income (loss) to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
135
|
|
|
1
|
|
|
—
|
|
|
136
|
|
||||
Depreciation of equipment leased to others
|
(1
|
)
|
|
64
|
|
|
—
|
|
|
63
|
|
||||
Amortization of debt issuance costs and discount
|
6
|
|
|
8
|
|
|
—
|
|
|
14
|
|
||||
Deferred income taxes
|
(76
|
)
|
|
(4
|
)
|
|
—
|
|
|
(80
|
)
|
||||
Asset impairment charges
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
Equity in income of non-consolidated affiliates
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Equity in income of financial services affiliates
|
(55
|
)
|
|
—
|
|
|
55
|
|
|
—
|
|
||||
Dividends from financial services operations
|
30
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
||||
Change in intercompany receivables and payables
|
61
|
|
|
(61
|
)
|
|
—
|
|
|
—
|
|
||||
Other, net
|
133
|
|
|
511
|
|
|
—
|
|
|
644
|
|
||||
Net cash provided by (used in) operating activities
|
(70
|
)
|
|
574
|
|
|
(30
|
)
|
|
474
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
(148
|
)
|
|
—
|
|
|
—
|
|
|
(148
|
)
|
||||
Purchase of equipment leased to others
|
(2
|
)
|
|
(95
|
)
|
|
—
|
|
|
(97
|
)
|
||||
Other investing activities
|
18
|
|
|
10
|
|
|
—
|
|
|
28
|
|
||||
Net cash used in investing activities
|
(132
|
)
|
|
(85
|
)
|
|
—
|
|
|
(217
|
)
|
||||
Net cash provided by (used in) financing activities
|
637
|
|
|
(486
|
)
|
|
30
|
|
|
181
|
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(20
|
)
|
|
(2
|
)
|
|
—
|
|
|
(22
|
)
|
||||
Increase in cash, cash equivalents and restricted cash
|
415
|
|
|
1
|
|
|
—
|
|
|
416
|
|
||||
Cash, cash equivalents and restricted cash at beginning of the year
|
1,378
|
|
|
179
|
|
|
—
|
|
|
1,557
|
|
||||
Cash, cash equivalents and restricted cash at end of the year
|
$
|
1,793
|
|
|
$
|
180
|
|
|
$
|
—
|
|
|
$
|
1,973
|
|
|
For the Year Ended October 31, 2019
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
243
|
|
|
$
|
99
|
|
|
$
|
(99
|
)
|
|
$
|
243
|
|
Adjustments to reconcile net income to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
131
|
|
|
1
|
|
|
—
|
|
|
132
|
|
||||
Depreciation of equipment leased to others
|
(2
|
)
|
|
63
|
|
|
—
|
|
|
61
|
|
||||
Amortization of debt issuance costs and discount
|
11
|
|
|
8
|
|
|
—
|
|
|
19
|
|
||||
Deferred income taxes
|
(32
|
)
|
|
1
|
|
|
—
|
|
|
(31
|
)
|
||||
Asset impairment charges
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
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
|
(99
|
)
|
|
—
|
|
|
99
|
|
|
—
|
|
||||
Dividends from financial services operations
|
20
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Change in intercompany receivables and payables
|
53
|
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
||||
Other, net
|
121
|
|
|
(44
|
)
|
|
—
|
|
|
77
|
|
||||
Net cash provided by operating activities
|
395
|
|
|
75
|
|
|
(20
|
)
|
|
450
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Maturities of marketable securities
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
||||
Capital expenditures
|
(132
|
)
|
|
(2
|
)
|
|
—
|
|
|
(134
|
)
|
||||
Purchase of equipment leased to others
|
(3
|
)
|
|
(149
|
)
|
|
—
|
|
|
(152
|
)
|
||||
Other investing activities
|
103
|
|
|
13
|
|
|
—
|
|
|
116
|
|
||||
Net cash provided by (used in) investing activities
|
70
|
|
|
(138
|
)
|
|
—
|
|
|
(68
|
)
|
||||
Net cash provided by (used in) financing activities
|
(373
|
)
|
|
95
|
|
|
20
|
|
|
(258
|
)
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(9
|
)
|
|
(3
|
)
|
|
—
|
|
|
(12
|
)
|
||||
Increase in cash, cash equivalents and restricted cash
|
83
|
|
|
29
|
|
|
—
|
|
|
112
|
|
||||
Cash, cash equivalents and restricted cash at beginning of the year
|
1,295
|
|
|
150
|
|
|
—
|
|
|
1,445
|
|
||||
Cash, cash equivalents and restricted cash at end of the year
|
$
|
1,378
|
|
|
$
|
179
|
|
|
$
|
—
|
|
|
$
|
1,557
|
|
|
For the Year Ended October 31, 2018
|
||||||||||||||
(in millions)
|
Manufacturing Operations
|
|
Financial Services Operations
|
|
Adjustments
|
|
Consolidated Statement of Operations
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
368
|
|
|
$
|
71
|
|
|
$
|
(71
|
)
|
|
$
|
368
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
139
|
|
|
1
|
|
|
—
|
|
|
140
|
|
||||
Depreciation of equipment leased to others
|
17
|
|
|
54
|
|
|
—
|
|
|
71
|
|
||||
Amortization of debt issuance costs and discount
|
22
|
|
|
9
|
|
|
—
|
|
|
31
|
|
||||
Deferred income taxes
|
6
|
|
|
(2
|
)
|
|
—
|
|
|
4
|
|
||||
Asset impairment charges
|
13
|
|
|
1
|
|
|
—
|
|
|
14
|
|
||||
Equity in income of financial services operations
|
(71
|
)
|
|
—
|
|
|
71
|
|
|
—
|
|
||||
Dividends from non-consolidated affiliates
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Change in intercompany receivables and payables
|
(84
|
)
|
|
84
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
2
|
|
|
(368
|
)
|
|
—
|
|
|
(366
|
)
|
||||
Net cash provided by (used in) operating activities
|
417
|
|
|
(150
|
)
|
|
—
|
|
|
267
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of marketable securities
|
(251
|
)
|
|
—
|
|
|
—
|
|
|
(251
|
)
|
||||
Sales of marketable securities
|
460
|
|
|
—
|
|
|
—
|
|
|
460
|
|
||||
Maturities of marketable securities
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
||||
Capital expenditures
|
(112
|
)
|
|
(1
|
)
|
|
—
|
|
|
(113
|
)
|
||||
Purchase of equipment leased to others
|
(93
|
)
|
|
(139
|
)
|
|
—
|
|
|
(232
|
)
|
||||
Other investing activities
|
2
|
|
|
8
|
|
|
—
|
|
|
10
|
|
||||
Net cash provided by (used in) investing activities
|
66
|
|
|
(132
|
)
|
|
—
|
|
|
(66
|
)
|
||||
Net cash provided by financing activities
|
137
|
|
|
277
|
|
|
—
|
|
|
414
|
|
||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(15
|
)
|
|
5
|
|
|
—
|
|
|
(10
|
)
|
||||
Increase in cash, cash equivalents and restricted cash
|
605
|
|
|
—
|
|
|
—
|
|
|
605
|
|
||||
Cash, cash equivalents and restricted cash at beginning of the year
|
690
|
|
|
150
|
|
|
—
|
|
|
840
|
|
||||
Cash, cash equivalents and restricted cash at end of the year
|
$
|
1,295
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
1,445
|
|