XML 24 R22.htm IDEA: XBRL DOCUMENT

Segment Reporting

12 Months Ended

Oct. 31, 2019

The following is a description of our four reporting segments:


•	Our Truck segment manufactures and distributes Class 4 through 8 trucks and buses under the International and IC Bus ("IC") brands, and produces engines under our proprietary brand name. This segment sells its products in the U.S., Canada, and Mexico markets, as well as through our export truck business.

•

Our Parts segment provides customers with proprietary products needed to support the International commercial truck, IC Bus, proprietary engine lines, and export parts business, as well as our other product lines. Our Parts segment also provides a wide selection of other standard truck, trailer, and engine aftermarket parts. Also included in the 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 primarily consists of Brazil engine operations which produce diesel engines under contract manufacturing arrangements, as well as under the MWM brand, for sale to original equipment manufacturers (OEMs) in South America.


•	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. This segment also facilitates financing relationships in other countries to support our Manufacturing Operations.

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 NIC, excluding income tax benefit (expense). Selected financial information from our Consolidated Statements of Operations and our Consolidated Balance Sheets is as follows:


•	The costs of profit sharing and annual incentive compensation for the Manufacturing operations are included in corporate expenses.


•	Interest expense and interest income for the Manufacturing operations are reported in corporate expenses.

•

The Financial Services segment finances certain sales to our dealers in North America, which include an interest-free period that varies in length that is subsidized by our Truck and Parts segments. Additionally, the Financial Services segment reports intersegment revenues from secured and unsecured loans to the Manufacturing operations. Certain retail sales financed by the Financial Services segment, primarily NFC, require the Manufacturing operations, primarily the Truck segment, to share a portion of any credit losses.


•	We allocate "access fees" to the Parts segment from the Truck segment for certain engineering and product development costs, depreciation expense, and SG&A expenses incurred by the Truck segment based on the relative percentage of certain sales, as adjusted for cyclicality.


•	Other than the items discussed above, the selected financial information presented below is presented in accordance with our policies described in Note 1, Summary of Significant Accounting Policies.

The following tables present selected financial information for our reporting segments:



(in millions)	Truck		Parts		Global Operations			Financial Services^(A)		Corporate and Eliminations			Total
Year Ended October 31, 2019
External sales and revenues, net	$	8,501	$	2,239	$	309		$	193	$	9		$	11,251
Intersegment sales and revenues	84		6		34			104		(228		)	—
Total sales and revenues, net	$	8,585	$	2,245	$	343		$	297	$	(219	)	$	11,251
Income (loss) from continuing operations attributable to NIC, net of tax	$	269	$	598	$	—		$	123	$	(769	)	$	221
Income tax expense	—		—		—			—		(19		)	(19		)
Segment profit (loss)	$	269	$	598	$	—		$	123	$	(750	)	$	240
Depreciation and amortization	$	104	$	5	$	11		$	64	$	9		$	193
Interest expense	—		—		—			105		207			312
Equity in income (loss) of non-consolidated affiliates	2		3		(1		)	—		—			4
Capital expenditures^(B)	101		7		2			2		22			134



(in millions)	Truck		Parts		Global Operations			Financial Services^(A)		Corporate and Eliminations			Total
Year Ended October 31, 2018
External sales and revenues, net	$	7,386	$	2,399	$	305		$	160	$	—		$	10,250
Intersegment sales and revenues	104		8		55			97		(264		)	—
Total sales and revenues, net	$	7,490	$	2,407	$	360		$	257	$	(264	)	$	10,250
Income (loss) from continuing operations attributable to NIC, net of tax	$	397	$	569	$	2		$	88	$	(716	)	$	340
Income tax expense	—		—		—			—		(52		)	(52		)
Segment profit (loss)	$	397	$	569	$	2		$	88	$	(664	)	$	392
Depreciation and amortization	$	130	$	6	$	10		$	55	$	10		$	211
Interest expense	—		—		—			92		235			327
Equity in income (loss) of non-consolidated affiliates	2		3		(5		)	—		—			—
Capital expenditures^(B)	99		2		3			1		8			113



(in millions)	Truck			Parts		Global Operations			Financial Services^(A)		Corporate and Eliminations			Total
Year Ended October 31, 2017
External sales and revenues, net	$	5,770		$	2,369	$	279		$	142	$	10		$	8,570
Intersegment sales and revenues	39			23		30			93		(185		)	—
Total sales and revenues, net	$	5,809		$	2,392	$	309		$	235	$	(175	)	$	8,570
Income (loss) from continuing operations attributable to NIC, net of tax	$	(6	)	$	616	$	(7	)	$	77	$	(651	)	$	29
Income tax expense	—			—		—			—		(10		)	(10		)
Segment profit (loss)	$	(6	)	$	616	$	(7	)	$	77	$	(641	)	$	39
Depreciation and amortization	$	137		$	11	$	13		$	51	$	11		$	223
Interest expense	—			—		—			86		265			351
Equity in income (loss) of non-consolidated affiliates	4			3		(1		)	—		—			6
Capital expenditures^(B)	82			2		5			1		12			102



(in millions)	Truck		Parts		Global Operations		Financial Services		Corporate and Eliminations		Total
Segment assets, as of:
October 31, 2019	$	1,705	$	688	$	296	$	2,774	$	1,454	$	6,917
October 31, 2018	2,085		636		331		2,648		1,530		7,230

_________________________


(A)	Total sales and revenues in the Financial Services segment include interest revenues of $208 million, $182 million, and $165 million for the years ended October 31, 2019, 2018, and 2017, respectively.


(B)	Exclusive of purchases of equipment leased to others and liabilities related to capital expenditures.

No single customer accounted for more than 10% of consolidated sales and revenues for the years ended October 31, 2019, 2018 and 2017.

Sales and revenues to external customers classified by significant products and services were as follows:



	For the Years Ended October 31,
(in millions)	2019		2018		2017
Sales and revenues:
Trucks	$	8,496	$	7,323	$	5,706
Parts	2,021		2,215		2,177
Engine	541		552		545
Financial Services	193		160		142

Information concerning principal geographic areas is presented as follows:



	For the Years Ended October 31,
(in millions)	2019		2018		2017
Sales and revenues:
United States	$	9,097	$	7,223	$	6,375
Canada	918		868		708
Mexico	688		933		708
Brazil	268		263		237
Other	280		963		542



	As of October 31,
(in millions)	2019		2018
Long-lived assets:^(A)
United States	$	1,017	$	1,099
Canada	7		9
Mexico	283		249
Brazil	62		73
Other	3		8

__________________________

(A) Long-lived assets consist of Property and equipment, net, Goodwill, and Intangible assets, net.