EX-99.1 7 navex99104302012.htm ADDITIONAL FINANCIAL INFORMATION (UNAUDITED) NAV EX. 99.1 04.30.2012


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 an after-tax equity basis. Our manufacturing operations, for this purpose, include our Truck segment, Engine segment, Parts segment, and Corporate items. 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, 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, 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 an after-tax equity basis)
 
 
Three Months Ended April 30, 2012
 
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
(in millions)
 
 
 
 
 
 
 
 
Sales of manufactured products
 
$
3,255

 
$
—

 
$
—

 
$
3,255

Finance revenues
 
—

 
67

 
(24
)
 
43

Sales and revenues, net
 
3,255

 
67

 
(24
)
 
3,298

Costs of products sold
 
2,944

 
—

 
—

 
2,944

Restructuring benefits
 
20

 
—

 
—

 
20

Impairment of intangible assets
 
38

 
—

 
—

 
38

Selling, general and administrative expenses
 
359

 
20

 
(1
)
 
378

Engineering and product development costs
 
134

 
—

 
—

 
134

Interest expense
 
42

 
22

 
(2
)
 
62

Other expense (income), net
 
37

 
(3
)
 
(21
)
 
13

Total costs and expenses
 
3,574

 
39

 
(24
)
 
3,589

Equity in loss of non-consolidated affiliates
 
4

 
—

 
—

 
4

Income (loss) before income taxes and equity income from financial services operations
 
(323
)
 
28

 
—

 
(295
)
Equity income from financial services operations
 
18

 


 
(18
)
 
—

Income (loss) before income taxes
 
(305
)
 
28

 
(18
)
 
(295
)
Income tax benefit (expense)
 
143

 
(10
)
 
—

 
133

Net income (loss)
 
(162
)
 
18

 
(18
)
 
(162
)
Less: Income attributable to non-controlling interests
 
10

 
—

 
—

 
10

Net income (loss) attributable to Navistar International Corporation
 
$
(172
)
 
$
18

 
$
(18
)
 
$
(172
)

E-6


 
 
Six Months Ended April 30, 2012
 
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
(in millions)
 
 
 
 
 
 
 
 
Sales of manufactured products
 
$
6,263

 
$
—

 
$
—

 
$
6,263

Finance revenues
 
—

 
135

 
(48
)
 
87

Sales and revenues, net
 
6,263

 
135

 
(48
)
 
6,350

Costs of products sold
 
5,642

 
—

 
—

 
5,642

Restructuring charges
 
20

 
—

 
—

 
20

Impairment of intangible assets
 
38

 
—

 
—

 
38

Selling, general and administrative expenses
 
703

 
39

 
(2
)
 
740

Engineering and product development costs
 
271

 
—

 
—

 
271

Interest expense
 
79

 
47

 
(3
)
 
123

Other expense (income), net
 
69

 
(5
)
 
(43
)
 
21

Total costs and expenses
 
6,822

 
81

 
(48
)
 
6,855

Equity in loss of non-consolidated affiliates
 
11

 
—

 
—

 
11

Income (loss) before income taxes and equity income from financial services operations
 
(570
)
 
54

 
—

 
(516
)
Equity income from financial services operations
 
35

 
 
 
(35
)
 
—

Income (loss) before income taxes
 
(535
)
 
54

 
(35
)
 
(516
)
Income tax benefit (expense)
 
233

 
(19
)
 
—

 
214

Net income (loss)
 
(302
)
 
35

 
(35
)
 
(302
)
Less: Income attributable to non-controlling interests
 
23

 
—

 
—

 
23

Net income (loss) attributable to Navistar International Corporation
 
$
(325
)
 
$
35

 
$
(35
)
 
$
(325
)






E-7


Condensed Statement of Revenues and Expenses
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
 
Three Months Ended April 30, 2011(A)
 
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
(in millions)
 
 
 
 
 
 
 
 
Sales of manufactured products
 
$
3,298

 
$
—

 
$
—

 
$
3,298

Finance revenues
 
—

 
83

 
(26
)
 
57

Sales and revenues, net
 
3,298

 
83

 
(26
)
 
3,355

Costs of products sold
 
2,701

 
—

 
—

 
2,701

Restructuring charges
 
2

 
—

 
—

 
2

Selling, general and administrative expenses
 
334

 
21

 
(1
)
 
354

Engineering and product development costs
 
137

 
—

 
—

 
137

Interest expense
 
38

 
26

 
(2
)
 
62

Other expense (income), net
 
17

 
(4
)
 
(23
)
 
(10
)
Total costs and expenses
 
3,229

 
43

 
(26
)
 
3,246

Equity in loss of non-consolidated affiliates
 
16

 
—

 
—

 
16

Income before income taxes and equity income from financial services operations
 
53

 
40

 
—

 
93

Equity income from financial services operations
 
26

 
—

 
(26
)
 
—

Income before income taxes
 
79

 
40

 
(26
)
 
93

Income tax benefit (expense)
 
9

 
(14
)
 
—

 
(5
)
Net income
 
88

 
26

 
(26
)
 
88

Less: Income attributable to non-controlling interests
 
14

 
—

 
—

 
14

Net income attributable to Navistar International Corporation
 
$
74

 
$
26

 
$
(26
)
 
$
74


E-8


_________________
(A)
Effective with the fourth quarter of 2011, the Company presents manufacturing operations with financial services operations on an after-tax equity basis. Previously, financial services was presented on a pre-tax equity basis. The three months ended April 30, 2011 amounts have been reclassified to conform to this presentation.
Condensed Statement of Revenues and Expenses
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
 
Six Months Ended April 30, 2011(A)
 
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
(in millions)
 
 
 
 
 
 
 
 
Sales of manufactured products
 
$
5,991

 
$
—

 
$
—

 
$
5,991

Finance revenues
 
—

 
156

 
(49
)
 
107

Sales and revenues, net
 
5,991

 
156

 
(49
)
 
6,098

Costs of products sold
 
4,900

 
—

 
—

 
4,900

Restructuring charges
 
23

 
1

 
—

 
24

Selling, general and administrative expenses
 
636

 
38

 
(2
)
 
672

Engineering and product development costs
 
266

 
—

 
—

 
266

Interest expense
 
74

 
56

 
(5
)
 
125

Other expense (income), net
 
32

 
(11
)
 
(42
)
 
(21
)
Total costs and expenses
 
5,931

 
84

 
(49
)
 
5,966

Equity in loss of non-consolidated affiliates
 
33

 
—

 
—

 
33

Income before income taxes and equity income from financial services operations
 
27

 
72

 
—

 
99

Equity income from financial services operations
 
47

 
—

 
(47
)
 
—

Income before income taxes
 
74

 
72

 
(47
)
 
99

Income tax benefit (expense)
 
20

 
(25
)
 
—

 
(5
)
Net income
 
94

 
47

 
(47
)
 
94

Less: Income attributable to non-controlling interests
 
26

 
—

 
—

 
26

Net income attributable to Navistar International Corporation
 
$
68

 
$
47

 
$
(47
)
 
$
68

_________________
(A)
Effective with the fourth quarter of 2011, the Company presents manufacturing operations with financial services operations on an after-tax equity basis. Previously, financial services was presented on a pre-tax equity basis. The six months ended April 30, 2011 amounts have been reclassified to conform to this presentation.





E-9


Condensed Statements of Assets, Liabilities, and Stockholders' Deficit
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
 
As of April 30, 2012
 
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
(in millions)
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
364

 
$
36

 
$
—

 
$
400

Marketable securities
 
317

 
20

 
—

 
337

Restricted cash and cash equivalents
 
21

 
124

 
—

 
145

Finance and other receivables, net
 
959

 
2,814

 
(174
)
 
3,599

Inventories
 
1,942

 
6

 
—

 
1,948

Goodwill
 
295

 
—

 
—

 
295

Property and equipment, net
 
1,534

 
156

 
—

 
1,690

Investments in and advances to financial services operations
 
600

 
—

 
(600
)
 
—

Investments in non-consolidated affiliates
 
58

 
—

 
—

 
58

Deferred taxes, net
 
2,213

 
25

 
—

 
2,238

Other assets
 
638

 
36

 
—

 
674

Total assets
 
$
8,941

 
$
3,217

 
$
(774
)
 
$
11,384

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
 
Accounts payable
 
$
2,077

 
$
24

 
$
(174
)
 
$
1,927

Debt
 
2,028

 
2,469

 
—

 
4,497

Postretirement benefits liabilities
 
3,162

 
52

 
—

 
3,214

Other liabilities
 
2,081

 
72

 
—

 
2,153

Total liabilities
 
9,348

 
2,617

 
(174
)
 
11,791

Redeemable equity securities
 
5

 
—

 
—

 
5

Stockholders' equity attributable to non-controlling interest
 
43

 
—

 
—

 
43

Stockholders' equity (deficit) attributable to controlling interest
 
(455
)
 
600

 
(600
)
 
(455
)
Total liabilities and stockholders' equity (deficit)
 
$
8,941

 
$
3,217

 
$
(774
)
 
$
11,384


E-10


Condensed Statements of Assets, Liabilities, and Stockholders' Deficit
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
 
As of October 31, 2011
 
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
(in millions)
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
488

 
$
51

 
$
—

 
$
539

Marketable securities
 
698

 
20

 
—

 
718

Restricted cash and cash equivalents
 
29

 
298

 
—

 
327

Finance and other receivables, net
 
1,341

 
3,007

 
(94
)
 
4,254

Inventories
 
1,704

 
10

 
—

 
1,714

Goodwill
 
319

 
—

 
—

 
319

Property and equipment, net
 
1,433

 
137

 
—

 
1,570

Investments in and advances to financial services operations
 
564

 
—

 
(564
)
 
—

Investments in non-consolidated affiliates
 
60

 
—

 
—

 
60

Deferred taxes, net
 
2,031

 
26

 
—

 
2,057

Other assets
 
705

 
28

 
—

 
733

Total assets
 
$
9,372

 
$
3,577

 
$
(658
)
 
$
12,291

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
 
Accounts payable
 
$
2,194

 
$
22

 
$
(94
)
 
$
2,122

Debt
 
1,980

 
2,876

 
—

 
4,856

Postretirement benefits liabilities
 
3,262

 
54

 
—

 
3,316

Other liabilities
 
1,908

 
61

 
—

 
1,969

Total liabilities
 
9,344

 
3,013

 
(94
)
 
12,263

Redeemable equity securities
 
5

 
—

 
—

 
5

Stockholders' equity attributable to non-controlling interest
 
50

 
—

 
—

 
50

Stockholders' equity (deficit) attributable to controlling interest
 
(27
)
 
564

 
(564
)
 
(27
)
Total liabilities and stockholders' equity (deficit)
 
$
9,372

 
$
3,577

 
$
(658
)
 
$
12,291




E-11


Condensed Statement of Cash Activity
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
 
Six Months Ended April 30, 2012
 
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
(in millions)
 
 
 
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(302
)
 
$
35

 
$
(35
)
 
$
(302
)
Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
135

 
1

 
—

 
136

Depreciation of equipment leased to others
 
9

 
15

 
—

 
24

Amortization of debt issuance costs and discount
 
14

 
5

 
—

 
19

Deferred income taxes
 
(203
)
 
—

 
—

 
(203
)
Impairment of intangible assets
 
38

 
—

 
—

 
38

Equity in loss of non-consolidated affiliates
 
11

 
—

 
—

 
11

Equity in income of financial services affiliates
 
(35
)
 
—

 
35

 
—

Dividends from non-consolidated affiliates
 
4

 
—

 
—

 
4

Change in intercompany receivables and payables
 
80

 
(80
)
 
—

 
—

Other, net
 
35

 
287

 
—

 
322

Net cash provided by (used in) operating activities
 
(214
)
 
263

 
—

 
49

Cash flows from investing activities
 
 
 
 
 
 
 


Purchases of marketable securities
 
(563
)
 
—

 
—

 
(563
)
Sales or maturities of marketable securities
 
944

 
—

 
—

 
944

Net change in restricted cash and cash equivalents
 
8

 
174

 
—

 
182

Capital expenditures
 
(174
)
 
(2
)
 
—

 
(176
)
Purchase of equipment leased to others
 
1

 
(29
)
 
—

 
(28
)
Acquisition of intangibles
 
(14
)
 
—

 
—

 
(14
)
Business acquisitions, net of cash received
 
(10
)
 
—

 
—

 
(10
)
Other investing activities
 
(11
)
 
1

 
—

 
(10
)
Net cash provided by investing activities
 
181

 
144

 
—

 
325

Net cash used in financing activities
 
(87
)
 
(423
)
 
—

 
(510
)
Effect of exchange rate changes on cash and cash equivalents
 
(4
)
 
1

 
—

 
(3
)
Decrease in cash and cash equivalents
 
(124
)
 
(15
)
 
—

 
(139
)
Cash and cash equivalents at beginning of the period
 
488

 
51

 
—

 
539

Cash and cash equivalents at end of the period
 
$
364

 
$
36

 
$
—

 
$
400



E-12


Condensed Statement of Cash Activity
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
 
Six Months Ended April 30, 2011(A)
 
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
(in millions)
 
 
 
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
 
 
 
Net income
 
$
94

 
$
47

 
$
(47
)
 
$
94

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
141

 
2

 
—

 
143

Depreciation of equipment leased to others
 
7

 
11

 
—

 
18

Amortization of debt issuance costs and discount
 
14

 
8

 
—

 
22

Deferred income taxes
 
(4
)
 
(1
)
 
—

 
(5
)
Equity in loss of non-consolidated affiliates
 
33

 
—

 
—

 
33

Equity in income of financial services affiliates
 
(47
)
 
—

 
47

 
—

Dividends from non-consolidated affiliates
 
2

 
—

 
—

 
2

Change in intercompany receivables and payables
 
41

 
(41
)
 
—

 
—

Other, net
 
(109
)
 
28

 
—

 
(81
)
Net cash provided by operating activities
 
172

 
54

 
—

 
226

Cash flows from investing activities
 
 
 
 
 
 
 
 
Purchases of marketable securities
 
(721
)
 
—

 
—

 
(721
)
Sales or maturities of marketable securities
 
569

 
—

 
—

 
569

Net change in restricted cash and cash equivalents
 
—

 
(8
)
 
—

 
(8
)
Capital expenditures
 
(185
)
 
—

 
—

 
(185
)
Purchase of equipment leased to others
 
(1
)
 
(22
)
 
—

 
(23
)
Other investing activities
 
(10
)
 
4

 
—

 
(6
)
Net cash used in investing activities
 
(348
)
 
(26
)
 
—

 
(374
)
Net cash used in financing activities
 
(5
)
 
(53
)
 
—

 
(58
)
Effect of exchange rate changes on cash and cash equivalents
 
8

 
3

 
—

 
11

Decrease in cash and cash equivalents
 
(173
)
 
(22
)
 
—

 
(195
)
Cash and cash equivalents at beginning of the period
 
534

 
51

 
—

 
585

Cash and cash equivalents at end of the period
 
$
361

 
$
29

 
$
—

 
$
390

_________________
(A)
Effective with the fourth quarter of 2011, the Company presents manufacturing operations with financial services operations on an after-tax equity basis. Previously, financial services was presented on a pre-tax equity basis. The six months ended April 30, 2011 amounts have been reclassified to conform to this presentation.

E-13