EX-99.1 15 navex99110312015.htm EXHIBIT 99.1 Exhibit


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 the net cash provided by 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 Year Ended October 31, 2015
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
9,995

 
$
—

 
$
—

 
$
9,995

Finance revenues
—

 
241

 
(96
)
 
145

Sales and revenues, net
9,995

 
241

 
(96
)
 
10,140

Costs of products sold
8,670

 
—

 
—

 
8,670

Restructuring charges
75

 
1

 
—

 
76

Asset impairment charges
30

 
—

 
—

 
30

Selling, general and administrative expenses
820

 
91

 
(3
)
 
908

Engineering and product development costs
288

 
—

 
—

 
288

Interest expense
243

 
74

 
(10
)
 
307

Other (income) expense, net
76

 
(23
)
 
(83
)
 
(30
)
Total costs and expenses
10,202

 
143

 
(96
)
 
10,249

Equity in income of non-consolidated affiliates
6

 
—

 
—

 
6

Income (loss) before equity income from financial services operations and income taxes
(201
)
 
98

 
—

 
(103
)
Equity income (loss) from financial services operations
71

 
—

 
(71
)
 
—

Income (loss) from continuing operations before income taxes
(130
)
 
98

 
(71
)
 
(103
)
Income tax expense
(24
)
 
(27
)
 
—

 
(51
)
Income (loss) from continuing operations
(154
)
 
71

 
(71
)
 
(154
)
Income from discontinued operations, net of tax
3

 
—

 
—

 
3

Net income (loss)
(151
)
 
71

 
(71
)
 
(151
)
Less: Income attributable to non-controlling interests
33

 
—

 
—

 
33

Net income (loss) attributable to Navistar International Corporation
$
(184
)
 
$
71

 
$
(71
)
 
$
(184
)


E-30


Condensed Statements of Revenues and Expenses
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Year Ended October 31, 2014
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
10,653

 
$
—

 
$
—

 
$
10,653

Finance revenues
—

 
232

 
(79
)
 
153

Sales and revenues, net
10,653

 
232

 
(79
)
 
10,806

Costs of products sold
9,534

 
—

 
—

 
9,534

Restructuring charges
41

 
1

 
—

 
42

Asset impairment charges
182

 
1

 
—

 
183

Selling, general and administrative expenses
888

 
95

 
(4
)
 
979

Engineering and product development costs
331

 
—

 
—

 
331

Interest expense
245

 
71

 
(2
)
 
314

Other (income) expense, net
94

 
(33
)
 
(73
)
 
(12
)
Total costs and expenses
11,315

 
135

 
(79
)
 
11,371

Equity in income of non-consolidated affiliates
9

 
—

 
—

 
9

Income (loss) before equity income from financial services operations and income taxes
(653
)
 
97

 
—

 
(556
)
Equity income (loss) from financial services operations
63

 
—

 
(63
)
 
—

Income (loss) from continuing operations before income taxes
(590
)
 
97

 
(63
)
 
(556
)
Income tax benefit (expense)
8

 
(34
)
 
—

 
(26
)
Income (loss) from continuing operations
(582
)
 
63

 
(63
)
 
(582
)
Income from discontinued operations, net of tax
3

 
—

 
—

 
3

Net income (loss)
(579
)
 
63

 
(63
)
 
(579
)
Less: Income attributable to non-controlling interests
40

 
—

 
—

 
40

Net income (loss) attributable to Navistar International Corporation
$
(619
)
 
$
63

 
$
(63
)
 
$
(619
)
























E-31


Condensed Statements of Revenues and Expenses
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Year Ended October 31, 2013
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
10,617

 
$
—

 
$
—

 
$
10,617

Finance revenues
—

 
234

 
(76
)
 
158

Sales and revenues, net
10,617

 
234

 
(76
)
 
10,775

Costs of products sold
9,761

 
—

 
—

 
9,761

Restructuring charges
20

 
5

 
—

 
25

Asset impairment charges
96

 
1

 
—

 
97

Selling, general and administrative expenses
1,132

 
87

 
(4
)
 
1,215

Engineering and product development costs
406

 
—

 
—

 
406

Interest expense
253

 
70

 
(2
)
 
321

Other (income) expense, net
15

 
(11
)
 
(69
)
 
(65
)
Total costs and expenses
11,683

 
152

 
(75
)
 
11,760

Equity in income of non-consolidated affiliates
11

 
—

 
—

 
11

Income (loss) before equity income from financial services operations and income taxes
(1,055
)
 
82

 
(1
)
 
(974
)
Equity income (loss) from financial services operations
53

 
—

 
(53
)
 
—

Income (loss) from continuing operations before income taxes
(1,002
)
 
82

 
(54
)
 
(974
)
Income tax benefit (expense)
199

 
(28
)
 
—

 
171

Income (loss) from continuing operations
(803
)
 
54

 
(54
)
 
(803
)
Loss from discontinued operations, net of tax
(41
)
 
—

 
—

 
(41
)
Net income (loss)
(844
)
 
54

 
(54
)
 
(844
)
Less: Income attributable to non-controlling interests
54

 
—

 
—

 
54

Net income (loss) attributable to Navistar International Corporation
$
(898
)
 
$
54

 
$
(54
)
 
$
(898
)


E-32


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, 2015
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
877

 
$
35

 
$
—

 
$
912

Marketable securities
136

 
23

 
—

 
159

Restricted cash
24

 
97

 
—

 
121

Finance and other receivables, net
441

 
2,450

 
(454
)
 
2,437

Inventories
1,125

 
10

 
—

 
1,135

Goodwill
38

 
—

 
—

 
38

Property and equipment, net
1,082

 
263

 
—

 
1,345

Investments in and advances to financial services operations
637

 
—

 
(637
)
 
—

Investments in non-consolidated affiliates
66

 
—

 
—

 
66

Deferred taxes, net
157

 
7

 
—

 
164

Other assets
292

 
23

 
—

 
315

Total assets
$
4,875

 
$
2,908

 
$
(1,091
)
 
$
6,692

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
Accounts payable
$
1,707

 
$
48

 
$
(454
)
 
$
1,301

Debt
3,198

 
2,100

 
—

 
5,298

Postretirement benefits liabilities
3,088

 
—

 
—

 
3,088

Other liabilities
2,042

 
123

 
—

 
2,165

Total liabilities
10,035

 
2,271

 
(454
)
 
11,852

Redeemable equity securities
—

 
—

 
—

 
—

Stockholders' equity attributable to non-controlling interest
7

 
—

 
—

 
7

Stockholders' equity (deficit) attributable to controlling interest
(5,167
)
 
637

 
(637
)
 
(5,167
)
Total liabilities and stockholders' equity (deficit)
$
4,875

 
$
2,908

 
$
(1,091
)
 
$
6,692


E-33


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, 2014
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
440

 
$
57

 
$
—

 
$
497

Marketable securities
578

 
27

 
—

 
605

Restricted cash
22

 
149

 
—

 
171

Finance and other receivables, net (A)
579

 
2,650

 
(613
)
 
2,616

Inventories
1,303

 
16

 
—

 
1,319

Goodwill
38

 
—

 
—

 
38

Property and equipment, net
1,294

 
268

 
—

 
1,562

Investments in and advances to financial services operations (A)
722

 
—

 
(722
)
 
—

Investments in non-consolidated affiliates
73

 
—

 
—

 
73

Deferred taxes, net
199

 
1

 
—

 
200

Other assets
335

 
27

 
—

 
362

Total assets
$
5,583

 
$
3,195

 
$
(1,335
)
 
$
7,443

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
Accounts payable (A)
$
2,144

 
$
33

 
$
(613
)
 
$
1,564

Debt
2,958

 
2,266

 
—

 
5,224

Postretirement benefits liabilities (A)
2,956

 
—

 
—

 
2,956

Other liabilities
2,143

 
174

 
—

 
2,317

Total liabilities
10,201

 
2,473

 
(613
)
 
12,061

Redeemable equity securities
2

 
—

 
—

 
2

Stockholders' equity attributable to non-controlling interest
34

 
—

 
—

 
34

Stockholders' equity (deficit) attributable to controlling interest (A)
(4,654
)
 
722

 
(722
)
 
(4,654
)
Total liabilities and stockholders' equity (deficit)
$
5,583

 
$
3,195

 
$
(1,335
)
 
$
7,443

_________________________
(A)
During the third quarter of 2015, it was determined that multiemployer plan accounting should have been applied in recording postretirement benefits related to our Financial Services segment, which provides that assets and liabilities of a plan are recorded only on the parent company and that periodic contributions to the plan made by the participating subsidiary are charged to expense for the purposes of the subsidiary's financial statements. As a result, we have reclassified $40 million of postretirement benefits, and related other assets and liabilities, between Financial Services Operations and Manufacturing Operations. This reclassification did not impact the consolidated financial position for the year-ended October 31, 2014.



E-34


Condensed Statements of Cash Flows
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Year Ended October 31, 2015
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
(151
)
 
$
71

 
$
(71
)
 
$
(151
)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
203

 
2

 
—

 
205

Depreciation of equipment leased to others
28

 
48

 
—

 
76

Amortization of debt issuance costs and discount
24

 
13

 
—

 
37

Deferred income taxes
(16
)
 
(2
)
 
—

 
(18
)
Asset impairment charges
25

 
5

 
—

 
30

Equity in loss of non-consolidated affiliates
(6
)
 
—

 
—

 
(6
)
Equity in income of financial services affiliates
(71
)
 
—

 
71

 
—

Dividends from financial services operations
125

 
—

 
(125
)
 
—

Dividends from non-consolidated affiliates
12

 
—

 
—

 
12

Change in intercompany receivables and payables
(204
)
 
204

 
—

 
—

Other, net
66

 
(205
)
 
—

 
(139
)
Net cash provided by (used in) operating activities
35

 
136

 
(125
)
 
46

Cash flows from investing activities
 
 
 
 
 
 
 
Purchases of marketable securities
(887
)
 
—

 
—

 
(887
)
Sales of marketable securities
1,244

 
3

 
—

 
1,247

Maturities of marketable securities
86

 
—

 
—

 
86

Net change in restricted cash and cash equivalents
(1
)
 
43

 
—

 
42

Capital expenditures
(111
)
 
(4
)
 
—

 
(115
)
Purchase of equipment leased to others
1

 
(84
)
 
—

 
(83
)
Acquisition of intangibles
(4
)
 
—

 
—

—

(4
)
Other investing activities
18

 
12

 
—

 
30

Net cash provided by (used in) investing activities
346

 
(30
)
 
—

 
316

Net cash provided by (used in) financing activities
126

 
(153
)
 
125

 
98

Effect of exchange rate changes on cash and cash equivalents
(70
)
 
25

 
—

 
(45
)
Increase (decrease) in cash and cash equivalents
437

 
(22
)
 
—

 
415

Cash and cash equivalents at beginning of the year
440

 
57

 
—

 
497

Cash and cash equivalents at end of the year
$
877

 
$
35

 
$
—

 
$
912


E-35


Condensed Statements of Cash Flows
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Year Ended October 31, 2014
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
(579
)
 
$
63

 
$
(63
)
 
$
(579
)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
226

 
1

 
—

 
227

Depreciation of equipment leased to others
61

 
44

 
—

 
105

Amortization of debt issuance costs and discount
37

 
12

 
—

 
49

Deferred income taxes
(25
)
 
10

 
—

 
(15
)
Asset impairment charges
182

 
1

 
—

 
183

Equity in income of non-consolidated affiliates
(9
)
 
—

 
—

 
(9
)
Equity in income of financial services operations
(63
)
 
—

 
63

 
—

Dividends from financial services operations
41

 
—

 
(41
)
 
—

Dividends from non-consolidated affiliates
12

 
—

 
—

 
12

Change in intercompany receivables and payables
224

 
(224
)
 
—

 
—

Other, net
(245
)
 
(64
)
 
—

 
(309
)
Net cash used in operating activities
(138
)
 
(157
)
 
(41
)
 
(336
)
Cash flows from investing activities
 
 
 
 
 
 
 
Purchases of marketable securities
(1,809
)
 
(3
)
 
—

 
(1,812
)
Sales of marketable securities
1,566

 
10

 
—

 
1,576

Maturities of marketable securities
461

 
—

 
—

 
461

Net change in restricted cash and cash equivalents
5

 
(85
)
 
—

 
(80
)
Capital expenditures
(87
)
 
(1
)
 
—

 
(88
)
Purchase of equipment leased to others
(64
)
 
(125
)
 
—

 
(189
)
Other investing activities
40

 
17

 
—

 
57

Net cash provided by (used in) investing activities
112

 
(187
)
 
—

 
(75
)
Net cash provided by (used in) financing activities
(240
)
 
378

 
41

 
179

Effect of exchange rate changes on cash and cash equivalents
(21
)
 
(5
)
 
—

 
(26
)
Increase (decrease) in cash and cash equivalents
(287
)
 
29

 
—

 
(258
)
Cash and cash equivalents at beginning of the year
727

 
28

 
—

 
755

Cash and cash equivalents at end of the year
$
440

 
$
57

 
$
—

 
$
497















E-36


Condensed Statements of Cash Flows
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Year Ended October 31, 2013
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
(844
)
 
$
54

 
$
(54
)
 
$
(844
)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
280

 
2

 
—

 
282

Depreciation of equipment leased to others
97

 
38

 
—

 
135

Amortization of debt issuance costs and discount
45

 
12

 
—

 
57

Deferred income taxes
(226
)
 
—

 
—

 
(226
)
Asset impairment charges
104

 
1

 
—

 
105

Gain on sales of investments and businesses, net
(29
)
 
—

 
—

 
(29
)
Equity in income of non-consolidated affiliates
(11
)
 
—

 
—

 
(11
)
Equity in income of financial services operations
(54
)
 
—

 
54

 
—

Dividends from non-consolidated affiliates
13

 
—

 
—

 
13

Change in intercompany receivables and payables
(16
)
 
16

 
—

 
—

Other, net
403

 
215

 
—

 
618

Net cash provided by (used in) operating activities
(238
)
 
338

 
—

 
100

Cash flows from investing activities
 
 
 
 
 
 
 
Purchases of marketable securities
(1,765
)
 
(14
)
 
—

 
(1,779
)
Sales of marketable securities
1,217

 
—

 
—

 
1,217

Maturities of marketable securities
198

 
—

 
—

 
198

Net change in restricted cash and cash equivalents
5

 
65

 
—

 
70

Capital expenditures
(165
)
 
(2
)
 
—

 
(167
)
Purchase of equipment leased to others
(321
)
 
(111
)
 
—

 
(432
)
Other investing activities
78

 
5

 
—

 
83

Net cash used in investing activities
(753
)
 
(57
)
 
—

 
(810
)
Net cash provided by (used in) financing activities
677

 
(284
)
 
—

 
393

Effect of exchange rate changes on cash and cash equivalents
(18
)
 
3

 
—

 
(15
)
Decrease in cash and cash equivalents
(332
)
 
—

 
—

 
(332
)
Cash and cash equivalents at beginning of the year
1,059

 
28

 
—

 
1,087

Cash and cash equivalents at end of the year
$
727

 
$
28

 
$
—

 
$
755





E-37