NAVISTAR INTERNATIONAL CORP - FORM 10-Q - EX-99.1 - ADDITIONAL FINANCIAL INFORMATION - June 8, 2010

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EX-10 - MATERIAL CONTRACTS - NAVISTAR INTERNATIONAL CORPdex10.htm
EX-31.1 - CEO CERTIFICATION PURSUANT TO SECTION 302 - NAVISTAR INTERNATIONAL CORPdex311.htm
EX-32.2 - CFO CERTIFICATION PURSUANT TO SECTION 906 - NAVISTAR INTERNATIONAL CORPdex322.htm
EX-31.2 - CFO CERTIFICATION PURSUANT TO SECTION 302 - NAVISTAR INTERNATIONAL CORPdex312.htm
EX-32.1 - CEO CERTIFICATION PURSUANT TO SECTION 906 - NAVISTAR INTERNATIONAL CORPdex321.htm
EX-10.109 - 2004 PERFORMANCE INCENTIVE PLAN - NAVISTAR INTERNATIONAL CORPdex10109.htm
10-Q - FORM 10-Q - NAVISTAR INTERNATIONAL CORPd10q.htm

EXHIBIT 99.1

Additional Financial Information (Unaudited)

The following additional financial information is provided based upon the continuing interest of certain stockholders and creditors to assist them in understanding our core manufacturing business with our financial services operations on a pre-tax equity basis. Our manufacturing operations, for this purpose, include our Truck segment, Engine segment, Parts segment, and Corporate items which includes certain eliminations. The manufacturing operations financial information represents non-GAAP financial measures. The reconciling differences between these non-GAAP financial measures and our GAAP condensed consolidated financial statements in Item 1, Condensed Consolidated Financial Statements, are our financial services operations and adjustments required to eliminate certain intercompany transactions between Manufacturing Operations and Financial Services Operations and to adjust for reclasses. Certain of our subsidiaries in our manufacturing operations have debt outstanding with our financial services operations (“intercompany debt”). In the condensed statements of assets, liabilities, redeemable equity securities, and stockholders’ deficit, the intercompany debt is reflected as accounts payable. The change in the intercompany debt is reflected in the net cash provided by operating activities in the condensed statements of cash activities.

Condensed Statements of Revenues and Expenses

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

 

     Three Months Ended April 30, 2010  
     Manufacturing
Operations		     Financial
Services
Operations		     Adjustments     Consolidated
Statement of
Operations		  
(in millions)                         

Sales of manufactured products

    $   2,690      $   —        $   —        $   2,690   

Finance revenues

      —          76        (23 )      53   
                                

Sales and revenues, net

      2,690        76        (23 )      2,743   
                                

Costs of products sold

      2,189        —          —          2,189   

Restructuring charges

      —          3        —          3   

Selling, general and administrative expenses

      338        35        (1 )      372   

Engineering and product development costs

      116        —          —          116   

Interest expense

      37        29        (2 )      64   

Other expense (income), net

      (20 )      (7 )      (20 )      (47 ) 
                                

Total costs and expenses

      2,660        60        (23 )      2,697   

Equity in loss of non-consolidated affiliates

      (13 )      —          —          (13 ) 
                                

Income before income taxes and equity income from financial services operations

      17        16        —          33   

Equity income from financial services operations

      16        —          (16 )      —     
                                

Income before income taxes

      33        16        (16 )      33   

Income tax benefit

      10        —          —          10   
                                

Net income (loss)

      43        16        (16 )      43   

Income attributable to non-controlling interests

      (13 )      —          —          (13 ) 
                                

Net income (loss) attributable to Navistar International Corporation

    $ 30      $ 16      $ (16 )    $ 30   
                                

 

E-22

Condensed Statements of Revenues and Expenses

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

 

     Six Months Ended April 30, 2010  
     Manufacturing
Operations		     Financial
Services
Operations		     Adjustments     Consolidated
Statement of
Operations		  
(in millions)                         

Sales of manufactured products

    $   5,448      $   —        $   —        $   5,448   

Finance revenues

      —          151        (47 )      104   
                                

Sales and revenues, net

      5,448        151        (47 )      5,552   
                                

Costs of products sold

      4,451        —          —          4,451   

Restructuring charges

      (17 )      3        —          (14 ) 

Selling, general and administrative expenses

      644        69        (3 )      710   

Engineering and product development costs

      225        —          —          225   

Interest expense

      76        61        (6 )      131   

Other expense (income), net

      7        (10 )      (38 )      (41 ) 
                                

Total costs and expenses

      5,386        123        (47 )      5,462   

Equity in loss of non-consolidated affiliates

      (19 )      —          —          (19 ) 
                                

Income before income taxes and equity income from financial services operations

      43        28        —          71   

Equity income from financial services operations

      28        —          (28 )      —     
                                

Income before income taxes

      71        28        (28 )      71   

Income tax benefit

      2        —          —          2   
                                

Net income (loss)

      73        28        (28 )      73   

Income attributable to non-controlling interests

      (26 )      —          —          (26 ) 
                                

Net income (loss) attributable to Navistar International Corporation

    $ 47      $ 28      $ (28 )    $ 47   
                                
     Six Months Ended April 30, 2009  
     Manufacturing
Operations		     Financial
Services
Operations		     Adjustments     Consolidated
Statement of
Operations		  
(in millions)                         

Sales of manufactured products

    $   5,636      $ —        $   —        $   5,636   

Finance revenues

      —          181        (39 )      142   
                                

Sales and revenues, net

    $ 5,636      $   181      $ (39 )    $ 5,778   
                                

Costs of products sold

      4,618        —          —          4,618   

Restructuring charges

      55        —          —          55   

Selling, general and administrative expenses

      611        67        (2 )      676   

Engineering and product development costs

      238        —          —          238   

Interest expense

      54        102        (6 )      150   

Other income, net

      (140 )      (5 )      (31 )      (176 ) 
                                

Total costs and expenses

      5,436        164        (39 )      5,561   

Equity in income of non-consolidated affiliates

      31        —          —          31   
                                

Income (loss) before income taxes and equity income from financial services operations

      231        17        —          248   

Equity income from financial services operations

      17        —          (17 )      —     
                                

Income (loss) before income taxes

      248        17        (17 )      248   

Income tax expense

      2        —          —          2   
                                

Net income (loss)

    $ 246      $ 17      $ (17 )    $ 246   
                                

 

E-23

Condensed Statements of Revenues and Expenses

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

 

     Three Months Ended April 30, 2009  
     Manufacturing
Operations		     Financial
Services
Operations		     Adjustments     Consolidated
Statement of
Operations		  
(in millions)                         

Sales of manufactured products

    $   2,741      $   —        $   —        $   2,741   

Finance revenues

      —          88        (21 )      67   
                                

Sales and revenues, net

    $ 2,741      $ 88      $ (21 )    $ 2,808   
                                

Costs of products sold

      2,295        —          —          2,295   

Restructuring charges

      (3 )      —          —          (3 ) 

Selling, general and administrative expenses

      266        34        —          300   

Engineering and product development costs

      130        —          —          130   

Interest expense

      23        38        (4 )      57   

Other income, net

      41        (2 )      (17 )      22   
                                

Total costs and expenses

      2,752        70        (21 )      2,801   

Equity in income of non-consolidated affiliates

      14        —          —          14   
                                

Income (loss) before income taxes and equity income from financial services operations

      3        18        —          21   

Equity income from financial services operations

      18        —          (18 )      —     
                                

Income (loss) before income taxes

      21        18        (18 )      21   

Income tax benefit (expense)

      (9 )      —          —          (9 ) 
                                

Net income (loss)

    $ 12      $ 18      $ (18 )    $ 12   
                                

 

E-24

Condensed Statements of Assets, Liabilities, Redeemable Equity Securities, and Stockholders’ Deficit

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

 

     As of April 30, 2010  
     Manufacturing
Operations		     Financial
Services
Operations		    Adjustments     Consolidated
Balance Sheet		  
(in millions)                        

Cash and cash equivalents

    $ 455      $ 53    $ —        $ 508   

Marketable securities

      175        —        —          175   

Restricted cash and cash equivalents

      28        256      —          284   

Accounts receivables

      951        2,950      (289 )      3,612   

Inventories

      1,694        25      —          1,719   

Investments in financial services operations

      448        —        (448 )      —     

Investments in non-consolidated affiliates

      97        —        —          97   

Property and equipment, net

      1,312        127      —          1,439   

Goodwill and intangible assets, net

      596        —        —          596   

Other assets

      314        46      —          360   

Deferred taxes, net

      99        51      —          150   
                               

Total assets

    $ 6,169      $ 3,508    $ (737 )    $ 8,940   
                               

Accounts payable

    $ 1,687      $ 202    $ (289 )    $ 1,600   

Postretirement benefits liabilities

      2,273        31      —          2,304   

Debt

      1,840        2,705      —          4,545   

Other liabilities

      1,567        122      —          1,689   

Redeemable equity securities

      11        —        —          11   

Stockholders’ equity attributable to non-controlling interest

      56        —        —          56   

Stockholders’ equity (deficit) attributable to controlling interest

      (1,265 )      448      (448 )      (1,265 ) 
                               

Total liabilities, redeemable equity securities, and stockholders’ equity (deficit)

    $   6,169      $   3,508    $   (737 )    $   8,940   
                               

 

E-25

Condensed Statements of Assets, Liabilities, Redeemable Equity Securities, and Stockholders’ Deficit Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

 

     As of October 31, 2009  
     Manufacturing
Operations		     Financial
Services
Operations		    Adjustments     Consolidated
Balance Sheet		  
     (Revised)(A)  
(in millions)                        

Cash and cash equivalents

    $ 1,152      $ 60    $ —        $ 1,212   

Restricted cash and cash equivalents

      30        455      —          485   

Accounts receivables

      915        3,358      (188 )      4,085   

Inventories

      1,634        32      —          1,666   

Investments in financial services operations

      423        —        (423 )      —     

Investments in non-consolidated affiliates

      62        —        —          62   

Property and equipment, net

      1,345        122      —          1,467   

Goodwill and intangible assets, net

      582        —        —          582   

Deferred taxes, net

      102        57      —          159   

Other assets

      253        52      —          305   
                               

Total assets

    $   6,498      $   4,136    $   (611 )    $   10,023   
                               

Accounts payable

    $ 1,929      $ 131    $ (188 )    $ 1,872   

Postretirement benefits liabilities

      2,635        33      —          2,668   

Debt

      1,861        3,431      —          5,292   

Other liabilities

      1,702        118      —          1,820   

Redeemable equity securities

      13        —        —          13   

Stockholders’ equity attributable to non-controlling interests

      61        —        —          61   

Stockholders’ equity (deficit) attributable to Navistar International Corporation

      (1,703 )      423      (423 )      (1,703 ) 
                               

Total liabilities, redeemable equity securities, and stockholders’ equity (deficit)

    $ 6,498      $ 4,136    $ (611 )    $ 10,023   
                               

 

(A) Revised; See Note 1, Summary of significant accounting policies, to the accompanying consolidated financial statements.

 

E-26

Condensed Statement of Cash Activities

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

 

     Six Months Ended April 30, 2010  
     Manufacturing
Operations		     Financial
Services
Operations		     Adjustments     Condensed
Consolidated
Statement of
Cash Flows		  
(in millions)                         

Cash flows from operating activities

         

Net income

    $ 73      $ 28      $ (28 )    $ 73   

Adjustments to reconcile net loss to cash provided by (used in) operating activities:

         

Depreciation and amortization

      129        3        —          132   

Depreciation of equipment leased to others

      14        12        —          26   

Amortization of debt issuance costs and discount

      13        7        —          20   

Deferred income taxes

      6        5        —          11   

Equity in loss of non-consolidated affiliates

      19        —          —          19   

Equity in income of financial services affiliates

      (28 )      —          28        —     

Dividends from non-consolidated affiliates

      3        —          —          3   

Change in intercompany receivable /payable, net

      (154 )     154        —          —     

Other, net

      (382 )      364        —          (18 ) 
                                

Net cash provided by (used in) operating activities

      (307 )      573        —          266   
                                

Cash flows from investing activities

         

Purchases of marketable securities

      (663 )      —          —          (663 ) 

Sales or maturities of marketable securities

      488        —          —          488   

Net change in restricted cash and cash equivalents

      1        200        —          201   

Capital expenditures

      (77 )      (1 )      —          (78 ) 

Purchase of equipment leased to others

      (2 )     (23 )      —          (25 ) 

Acquisition of intangibles

      (11 )      —          —          (11 ) 

Business acquisitions

      (2 )      —          —          (2 ) 

Other investing activities

      (54 )      4        —          (50 ) 
                                

Net cash provided by (used in) investing activities

      (320 )      180        —          (140 ) 
                                

Net cash used in financing activities

      (66 )        (761 )      —          (827 ) 
                                

Effect of exchange rate changes on cash and cash equivalents

      (4 )      1        —          (3 ) 
                                

Increase (decrease) in cash and cash equivalents

      (697 )      (7 )      —          (704 ) 

Cash and cash equivalents at beginning of the period

        1,152        60          —            1,212   
                                

Cash and cash equivalents at end of the period

    $ 455      $ 53      $ —        $ 508   
                                

 

E-27

Condensed Statement of Cash Activities

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

 

     Six Months Ended April 30, 2009  
     Manufacturing
Operations		     Financial
Services
Operations		     Adjustments     Condensed
Consolidated
Statement of
Cash Flows		  
(in millions)                         

Cash flows from operating activities

         

Net income (loss)

    $ 246      $ 11      $   (11 )    $ 246   

Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:

         

Depreciation and amortization

      138        2        —          140   

Depreciation of equipment leased to others

      17        10        —          27   

Amortization of debt issuance cost

      3        5        —          8   

Deferred income taxes

      (8 )      6        —          (2 ) 

Equity in income of non-consolidated affiliates

      (31 )      —          —          (31 ) 

Equity in income (loss) of financial services affiliates

      (17 )      —          17        —     

Dividends from non-consolidated affiliates

      47        —          —          47   

Restructuring charges

      55        —          —          55   

Change in intercompany receivable/payable, net

      (96 )      96        —          —     

Other, net

      (367 )      370        (6 )      (3 ) 
                                

Net cash provided by (used in) operating activities

      (13 )      500        —          487   
                                

Cash flows from investing activities

         

Purchases of marketable securities

        (354 )      —          —            (354 ) 

Sales or maturities of marketable securities

      356        —          —          356   

Net change in restricted cash and cash equivalents

      —          (96 )      —          (96 ) 

Capital expenditures

      (76 )      (1 )      —          (77 ) 

Purchase of equipment leased to others

      —          (18 )      —          (18 ) 

Other investment activities

      (29 )      2        20        (7 ) 
                                

Net cash provided by (used in) investing activities

      (103 )      (113 )      20        (196 ) 
                                

Net cash (used in) provided by financing activities

      (59 )        (345 )      (20 )      (424 ) 
                                

Effect of exchange rate changes on cash and cash equivalents

      (6 )      (4 )      —          (10 ) 
                                

Increase (decrease) in cash and cash equivalents

      (181 )      38        —          (143 ) 
                                

Cash and cash equivalents at beginning of the period

      775        86        —          861   
                                

Cash and cash equivalents at end of the period

    $ 594      $   124      $ —        $   718   
                                

 

E-28

NAVISTAR INTERNATIONAL CORP Reports