Segment Reporting

6 Months Ended

Apr. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The following is a description of our four reporting segments:

• Our North America Truck segment manufactures and distributes Class 4 through 8 trucks, buses, and military vehicles under the International and IC Bus ("IC") brands, along with production of engines under the MaxxForce brand name, in the North America markets that include sales in the U.S., Canada, and Mexico. 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 North America Parts segment provides customers with proprietary products needed to support the International commercial and military truck, IC Bus, MaxxForce engine lines, as well as our other product lines. Our North America Parts segment also provides a wide selection of other standard truck, trailer, and engine aftermarket parts. At April 30, 2014, this segment operated eleven regional parts distribution centers that provide 24-hour availability and shipment. Also included in the North America 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 includes businesses that derive their revenue from outside our core North America markets and primarily consists of the IIAA (formerly MWM) engine and truck operations in Brazil and our export truck and parts businesses. The IIAA engine operations produce diesel engines, primarily under contract manufacturing arrangements, as well as under the MWM brand, for sale to OEMs in South America.

• Our Financial Services segment provides retail, wholesale, and lease financing of products sold by the North America Truck and North America 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) from continuing operations attributable to Navistar International Corporation excluding Income tax benefit (expense). The following tables present selected financial information for our reporting segments:

(in millions)	North America Truck			North America Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Three Months Ended April 30, 2014
External sales and revenues, net	$	1,680		$	611	$	417		$	38	$	—		$	2,746
Intersegment sales and revenues	129			12		6			19		(166		)	—
Total sales and revenues, net	$	1,809		$	623	$	423		$	57	$	(166	)	$	2,746
Income (loss) from continuing operations attributable to NIC, net of tax	$	(134	)	$	126	$	(150	)	$	24	$	(164	)	$	(298	)
Income tax expense	—			—		—			—		(23		)	(23		)
Segment profit (loss)	$	(134	)	$	126	$	(150	)	$	24	$	(141	)	$	(275	)
Depreciation and amortization	$	69		$	4	$	8		$	11	$	7		$	99
Interest expense	—			—		—			17		57			74
Equity in income of non-consolidated affiliates	1			1		1			—		—			3
Capital expenditures(B)	26			1		1			—		1			29

(in millions)	North America Truck			North America Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Three Months Ended April 30, 2013
External sales and revenues, net	$	1,395		$	621	$	471		$	39	$	—		$	2,526
Intersegment sales and revenues	120			14		22			19		(175		)	—
Total sales and revenues, net	$	1,515		$	635	$	493		$	58	$	(175	)	$	2,526
Income (loss) from continuing operations attributable to NIC, net of tax	$	(303	)	$	114	$	32		$	19	$	(215	)	$	(353	)
Income tax expense	—			—		—			—		(22		)	(22		)
Segment profit (loss)	$	(303	)	$	114	$	32		$	19	$	(193	)	$	(331	)
Depreciation and amortization	$	114		$	4	$	9		$	10	$	5		$	142
Interest expense	—			—		—			17		73			90
Equity in income (loss) of non-consolidated affiliates	3			2		(1		)	—		—			4
Capital expenditures(B)	28			—		4			1		2			35

(in millions)	North America Truck			North America Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Six Months Ended April 30, 2014
External sales and revenues, net	$	2,957		$	1,208	$	712		$	77	$	—		$	4,954
Intersegment sales and revenues	217			22		14			35		(288		)	—
Total sales and revenues, net	$	3,174		$	1,230	$	726		$	112	$	(288	)	$	4,954
Income (loss) from continuing operations attributable to NIC, net of tax	$	(341	)	$	230	$	(183	)	$	47	$	(300	)	$	(547	)
Income tax expense	—			—		—			—		(11		)	(11		)
Segment profit (loss)	$	(341	)	$	230	$	(183	)	$	47	$	(289	)	$	(536	)
Depreciation and amortization	$	127		$	8	$	16		$	21	$	13		$	185
Interest expense	—			—		—			34		122			156
Equity in income (loss) of non-consolidated affiliates	2			2		(1		)	—		—			3
Capital expenditures(B)	38			5		4			1		2			50

(in millions)	North America Truck			North America Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Six Months Ended April 30, 2013
External sales and revenues, net	$	2,933		$	1,290	$	862		$	78	$	—		$	5,163
Intersegment sales and revenues	247			32		37			39		(355		)	—
Total sales and revenues, net	$	3,180		$	1,322	$	899		$	117	$	(355	)	$	5,163
Income (loss) from continuing operations attributable to NIC, net of tax	$	(404	)	$	231	$	22		$	41	$	(357	)	$	(467	)
Income tax expense	—			—		—			—		(37		)	(37		)
Segment profit (loss)	$	(404	)	$	231	$	22		$	41	$	(320	)	$	(430	)
Depreciation and amortization	$	185		$	8	$	18		$	19	$	12		$	242
Interest expense	—			—		—			35		129			164
Equity in income (loss) of non-consolidated affiliates	5			3		(5		)	—		—			3
Capital expenditures(B)	93			1		7			1		5			107

(in millions)	North America Truck		North America Parts		Global Operations		Financial Services		Corporate and Eliminations		Total
Segment assets, as of:
April 30, 2014	$	2,306	$	671	$	878	$	2,494	$	1,378	$	7,727
October 31, 2013	2,250		716		1,162		2,355		1,832		8,315

_________________________

(A) Total sales and revenues in the Financial Services segment include interest revenues of $42 million and $82 million for the three and six months ended April 30, 2014, respectively and $46 million and $93 million for the three and six months ended April 30, 2013, respectively.

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