Segment reporting

6 Months Ended

Apr. 30, 2012

Segment Reporting [Abstract]

Segment reporting

Segment Reporting

The following is a description of our four reporting segments:

• Our Truck segment manufactures and distributes a full line of Class 4 through 8 trucks, buses, and military vehicles under the International and IC Bus ("IC") brands. Our Truck segment also produces chassis for motor homes and commercial step-van vehicles under the WCC brand and recreational vehicles under the Monaco family of brands. In an effort to strengthen and maintain our dealer network, this segment occasionally acquires and operates dealer locations for the purpose of transitioning ownership.

• Our Engine segment designs and manufactures diesel engines for use globally, in Class 3 through 8 vehicles, as well as off-road applications. In North America, these engines primarily go into our Class 6 and 7 medium trucks and buses and Class 8 heavy trucks, and are sold to original equipment manufacturers ("OEMs"). In addition, our Engine segment produces diesel engines in Brazil primarily under the MWM brand for sale to OEMs in South America, as well as contract manufacturing. In all other areas of the world, including North America, engines are sold under the MaxxForce brand name. To control cost and technology, our Engine segment has expanded its operations to include Pure Power Technologies ("PPT"), a components company focused on air, fuel, and aftertreatment systems to meet more stringent Euro and EPA emission standards. Also included in the Engine segment are the operating results of BDP, which manages the sourcing, merchandising, and distribution of certain service parts for vehicles we and Ford sell in North America.

• Our Parts segment provides customers with proprietary products needed to support the International commercial and military truck, IC Bus, WCC chassis, and MaxxForce engine lines. Our Parts segment also provides a wide selection of other standard truck, trailer, and engine aftermarket parts. At April 30, 2012, this segment operated eleven regional parts distribution centers that provide 24-hour availability and shipment.

• 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.

Corporate contains those items that are not included in our four segments.

Segment Profit (Loss)

We define segment profit (loss) as net income (loss) attributable to Navistar International Corporation excluding income tax benefit (expense). Operating results for interim reporting periods are not necessarily indicative of annual operating results. Selected financial information is as follows:

	Truck(A)			Engine			Parts(A)		Financial Services(B)		Corporate and Eliminations			Total
(in millions)
Three Months Ended April 30, 2012
External sales and revenues, net	$	2,353		$	440		$	462	$	43	$	—		$	3,298
Intersegment sales and revenues	2			454			34		24		(514		)	—
Total sales and revenues, net	$	2,355		$	894		$	496	$	67	$	(514	)	$	3,298
Net income (loss) attributable to NIC	$	(89	)	$	(108	)	$	41	$	26	$	(42	)	$	(172	)
Income tax benefit	—			—			—		—		133			133
Segment profit (loss)	$	(89	)	$	(108	)	$	41	$	26	$	(175	)	$	(305	)
Depreciation and amortization	$	35		$	30		$	4	$	8	$	5		$	82
Interest expense	—			—			—		22		40			62
Equity in income (loss) of non-consolidated affiliates	(6		)	—			2		—		—			(4		)
Capital expenditures(C)	16			36			5		1		15			73

	Truck(A)			Engine			Parts(A)		Financial Services(B)		Corporate and Eliminations			Total
Three Months Ended April 30, 2011
External sales and revenues, net	$	2,262		$	524		$	512	$	57	$	—		$	3,355
Intersegment sales and revenues	9			431			50		26		(516		)	—
Total sales and revenues, net	$	2,271		$	955		$	562	$	83	$	(516	)	$	3,355
Net income (loss) attributable to NIC	$	92		$	2		$	74	$	40	$	(134	)	$	74
Income tax expense	—			—			—		—		(5		)	(5		)
Segment profit (loss)	$	92		$	2		$	74	$	40	$	(129	)	$	79
Depreciation and amortization	$	38		$	30		$	3	$	6	$	4		$	81
Interest expense	—			—			—		26		36			62
Equity in income (loss) of non-consolidated affiliates	(17		)	(2		)	3		—		—			(16		)
Capital expenditures(C)	22			52			3		—		13			90

Six Months Ended April 30, 2012
External sales and revenues	$	4,507		$	860		$	896	$	87	$	—		$	6,350
Intersegment sales and revenues	13			893			69		48		(1,023		)	—
Sales and revenues, net	$	4,520		$	1,753		$	965	$	135	$	(1,023	)	$	6,350
Net income (loss) attributable to NIC	$	(130	)	$	(228	)	$	91	$	53	$	(111	)	$	(325	)
Income tax benefit	—			—			—		—		214			214
Segment profit (loss)	$	(130	)	$	(228	)	$	91	$	53	$	(325	)	$	(539	)
Depreciation and amortization	$	69		$	59		$	6	$	16	$	10		$	160
Interest expense	—			—			—		47		76			123
Equity in income (loss) of non-consolidated affiliates	(15		)	1			3		—		—			(11		)
Capital expenditures(C)	32			76			12		2		54			176

Six Months Ended April 30, 2011
External sales and revenues	$	4,053		$	980		$	958	$	107	$	—		$	6,098
Intersegment sales and revenues	18			758			99		49		(924		)	—
Sales and revenues, net	$	4,071		$	1,738		$	1,057	$	156	$	(924	)	$	6,098
Net income (loss) attributable to NIC	$	124		$	(6	)	$	130	$	72	$	(252	)	$	68
Income tax expense	—			—			—		—		(5		)	(5		)
Segment profit (loss)	$	124		$	(6	)	$	130	$	72	$	(247	)	$	73
Depreciation and amortization	$	75		$	59		$	5	$	13	$	9		$	161
Interest expense	—			—			—		56		69			125
Equity in income (loss) of non-consolidated affiliates	(35		)	(2		)	4		—		—			(33		)
Capital expenditures(C)	38			84			4		—		59			185

As of April 30, 2012
Segment assets	$	2,685	$	1,823	$	698	$	3,043	$	3,135	$	11,384
As of October 31, 2011
Segment assets	2,771		1,849		700		3,580		3,391		12,291

_________________________

(A) See Note 2, Restructurings and Impairments, for further discussion.

(B) Total sales and revenues in the Financial Services segment include interest revenues of $66 million and $133 million for the three and six months ended April 30, 2012, respectively, and $82 million and $153 million for the three and six months ended April 30, 2011, respectively.

(C) Exclusive of purchases of equipment leased to others.

Sales of vehicles and service parts to the U.S. government are reported in our Truck and Parts segments and were 14% and 12% of consolidated sales and revenues for the three and six months ended April 30, 2011. No single customer accounted for more than 10% of consolidated sales and revenues for the