NAVISTAR INTERNATIONAL CORP - FORM 10-Q - EX-99.1 - EXHIBIT 99.1 - March 3, 2020

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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 operations and our Financial Services operations on an after-tax equity basis. Our Manufacturing operations, for this purpose, include our Truck segment, Parts segment, Global Operations segment, and Corporate items. The Manufacturing operations financial information represents non-GAAP financial measures. These non-GAAP financial measures should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. The reconciling differences between these non-GAAP financial measures and our U.S. GAAP condensed consolidated financial statements in Item 1, Financial Statements, are our Financial Services operations, which are included on an after-tax equity basis. 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, and stockholders' equity (deficit), the intercompany debt is reflected as accounts payable. The change in the intercompany debt is reflected in Net cash provided by (used in) operating activities in the condensed statements of cash activity.
Condensed Statements of Revenues and Expenses
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Three Months Ended January 31, 2020
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
1,794

 
$
—

 
$
—

 
$
1,794

Finance revenues
—

 
57

 
(13
)
 
44

Sales and revenues, net
1,794

 
57

 
(13
)
 
1,838

Costs of products sold
1,529

 
—

 
—

 
1,529

Restructuring charges
1

 
—

 
—

 
1

Selling, general and administrative expenses
156

 
28

 
(2
)
 
182

Engineering and product development costs
86

 
—

 
—

 
86

Interest expense
46

 
19

 
—

 
65

Other expense (income), net
29

 
(7
)
 
(11
)
 
11

Total costs and expenses
1,847

 
40

 
(13
)
 
1,874

Equity in loss of non-consolidated affiliates
(1
)
 
—

 
—

 
(1
)
Income (loss) before equity income from financial services operations and income taxes
(54
)
 
17

 
—

 
(37
)
Equity income from financial services operations
13

 
—

 
(13
)
 
—

Income (loss) before income tax
(41
)
 
17

 
(13
)
 
(37
)
Income tax benefit (expense)
9

 
(4
)
 
—

 
5

Net income (loss)
(32
)
 
13

 
(13
)
 
(32
)
Less: Net income attributable to non-controlling interests
4

 
—

 
—

 
4

Net income (loss) attributable to Navistar International Corporation
$
(36
)
 
$
13

 
$
(13
)
 
$
(36
)


E-6


Condensed Statements of Revenues and Expenses
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Three Months Ended January 31, 2019
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
2,386

 
$
—

 
$
—

 
$
2,386

Finance revenues
—

 
74

 
(27
)
 
47

Sales and revenues, net
2,386

 
74

 
(27
)
 
2,433

Costs of products sold
1,979

 
—

 
—

 
1,979

Asset impairment charges
2

 
—

 
—

 
2

Selling, general and administrative expenses
163

 
24

 
(1
)
 
186

Engineering and product development costs
86

 
—

 
—

 
86

Interest expense
56

 
29

 
—

 
85

Other expense (income), net
133

 
(10
)
 
(26
)
 
97

Total costs and expenses
2,419

 
43

 
(27
)
 
2,435

Income before equity income from financial services operations and income taxes
(33
)
 
31

 
—

 
(2
)
Equity income from financial services operations
24

 
—

 
(24
)
 
—

Income (loss) before income tax
(9
)
 
31

 
(24
)
 
(2
)
Income tax benefit (expense)
26

 
(7
)
 
—

 
19

Net income
17

 
24

 
(24
)
 
17

Less: Net income attributable to non-controlling interests
6

 
—

 
—

 
6

Net income attributable to Navistar International Corporation
$
11

 
$
24

 
$
(24
)
 
$
11



E-7


Condensed Statements of Assets, Liabilities, and Stockholders' Equity (Deficit)
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)

 
As of January 31, 2020
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
977

 
$
23

 
$
—

 
$
1,000

Restricted cash and cash equivalents
50

 
87

 
—

 
137

Finance and other receivables, net
278

 
2,095

 
(211
)
 
2,162

Inventories
1,065

 
9

 
—

 
1,074

Goodwill
38

 
—

 
—

 
38

Property and equipment, net
933

 
350

 
—

 
1,283

Operating lease right of use assets
106


1


—


107

Investments in and advances to financial services operations
656

 
—

 
(656
)
 
—

Investments in non-consolidated affiliates
30

 
—

 
—

 
30

Deferred taxes, net
125

 
2

 
—

 
127

Other assets
381

 
24

 
—

 
405

Total assets
$
4,639

 
$
2,591

 
$
(867
)
 
$
6,363

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
Accounts payable
$
1,434

 
$
63

 
$
(211
)
 
$
1,286

Debt
2,921

 
1,814

 
—

 
4,735

Postretirement benefits liabilities
2,056

 
—

 
—

 
2,056

Other liabilities
1,967

 
58

 
—

 
2,025

Total liabilities
8,378

 
1,935

 
(211
)
 
10,102

Stockholders' equity attributable to non-controlling interest
2

 
—

 
—

 
2

Stockholders' equity (deficit) attributable to controlling interest
(3,741
)
 
656

 
(656
)
 
(3,741
)
Total liabilities and stockholders' equity (deficit)
$
4,639

 
$
2,591

 
$
(867
)
 
$
6,363


E-8


Condensed Statements of Assets, Liabilities, and Stockholders' Equity (Deficit)
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
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 and cash equivalents
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


E-9


Condensed Statements of Cash Flows
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Three Months Ended January 31, 2020
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
(32
)
 
$
13

 
$
(13
)
 
$
(32
)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
35

 
—

 
—

 
35

Depreciation of equipment leased to others
(2
)
 
17

 
—

 
15

Amortization of debt issuance costs and discount
1

 
2

 
—

 
3

Deferred income taxes
(10
)
 
—

 
—

 
(10
)
Equity in loss of non-consolidated affiliates
1

 
—

 
—

 
1

Equity in income of financial services affiliates
(13
)
 
—

 
13

 
—

Dividends from non-consolidated affiliates
30

 
—

 
(30
)
 
—

Change in intercompany receivables and payables
(34
)
 
34

 
—

 
—

Other, net
(287
)
 
374

 
—

 
87

Net cash provided by (used in) operating activities
(311
)
 
440

 
(30
)
 
99

Cash flows from investing activities
 
 
 
 
 
 
 
Capital expenditures
(59
)
 
—

 
—

 
(59
)
Purchase of equipment leased to others
—

 
(7
)
 
—

 
(7
)
Other investing activities
10

 
2

 
—

 
12

Net cash used in investing activities
(49
)
 
(5
)
 
—

 
(54
)
Net cash provided by (used in) financing activities
12

 
(503
)
 
30

 
(461
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(3
)
 
(1
)
 
—

 
(4
)
Decrease in cash, cash equivalents and restricted cash
(351
)
 
(69
)
 
—

 
(420
)
Cash, cash equivalents and restricted cash at beginning of the period
1,378

 
179

 
—

 
1,557

Cash, cash equivalents and restricted cash at end of the period
$
1,027

 
$
110

 
$
—

 
$
1,137


E-10


Condensed Statements of Cash Flows
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Three Months Ended January 31, 2019
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
17

 
$
24

 
$
(24
)
 
$
17

Adjustments to reconcile net income (loss) to cash used in operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
33

 
—

 
—

 
33

Depreciation of equipment leased to others
(1
)
 
16

 
—

 
15

Amortization of debt issuance costs and discount
4

 
2

 
—

 
6

Deferred income taxes
(41
)
 
—

 
—

 
(41
)
Asset impairment charges
2

 
—

 
—

 
2

Gain on sales of investments and businesses, net
(59
)
 
—

 
—

 
(59
)
Equity in income of financial services affiliates
(24
)
 
—

 
24

 
—

Change in other intercompany receivables and payables
94

 
(94
)
 
—

 
—

Other, net
(290
)
 
77

 
—

 
(213
)
Net cash provided by (used in) operating activities
(265
)
 
25

 
—

 
(240
)
Cash flows from investing activities
 
 
 
 
 
 
 
Maturities of marketable securities
61

 
—

 
—

 
61

Capital expenditures
(43
)
 
(1
)
 
—

 
(44
)
Purchase of equipment leased to others
(6
)
 
(36
)
 
—

 
(42
)
Other investing activities
96

 
3

 
—

 
99

Net cash provided by (used in) investing activities
108

 
(34
)
 
—

 
74

Net cash provided by financing activities
39

 
34

 
—

 
73

Effect of exchange rate changes on cash, cash equivalents and restricted cash
1

 
(4
)
 
—

 
(3
)
Increase (decrease) in cash, cash equivalents and restricted cash
(117
)
 
21

 
—

 
(96
)
Cash, cash equivalents and restricted cash at beginning of the period
1,295

 
150

 
—

 
1,445

Cash, cash equivalents and restricted cash at end of the period
$
1,178

 
$
171

 
$
—

 
$
1,349


E-11

NAVISTAR INTERNATIONAL CORP Reports