Segment Reporting

9 Months Ended

Jul. 31, 2020

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

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 the U.S. and 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) 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:

(in millions)	Truck			Parts		Global Operations		Financial Services(A)		Corporate and Eliminations			Total
Three Months Ended July 31, 2020
External sales and revenues, net	$	1,177		$	413	$	46	$	39	$	—		$	1,675
Intersegment sales and revenues	26			1		1		10		(38		)	—
Total sales and revenues, net	$	1,203		$	414	$	47	$	49	$	(38	)	$	1,675
Net income (loss) attributable to NIC	$	(22	)	$	97	$	1	$	10	$	(123	)	$	(37	)
Income tax expense	—			—		—		—		(8		)	(8		)
Segment profit (loss)	$	(22	)	$	97	$	1	$	10	$	(115	)	$	(29	)
Depreciation and amortization	$	27		$	1	$	1	$	16	$	2		$	47
Interest expense	—			—		—		16		55			71
Equity in income of non-consolidated affiliates	2			—		—		—		—			2
Capital expenditures(B)	18			1		1		—		5			25

(in millions)	Truck		Parts		Global Operations		Financial Services(A)		Corporate and Eliminations			Total
Three Months Ended July 31, 2019
External sales and revenues, net	$	2,342	$	569	$	82	$	46	$	3		$	3,042
Intersegment sales and revenues	45		2		8		28		(83		)	—
Total sales and revenues, net	$	2,387	$	571	$	90	$	74	$	(80	)	$	3,042
Net income (loss) attributable to NIC	$	167	$	149	$	1	$	30	$	(191	)	$	156
Income tax expense	—		—		—		—		(29		)	(29		)
Segment profit (loss)	$	167	$	149	$	1	$	30	$	(162	)	$	185
Depreciation and amortization	$	26	$	1	$	3	$	16	$	1		$	47
Interest expense	—		—		—		27		49			76
Equity in income of non-consolidated affiliates	—		1		—		—		—			1
Capital expenditures(B)	17		2		1		—		4			24

(in millions)	Truck			Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Nine Months Ended July 31, 2020
External sales and revenues, net	$	3,800		$	1,347	$	154		$	135	$	2		$	5,438
Intersegment sales and revenues	34			3		12			35		(84		)	—
Total sales and revenues, net	$	3,834		$	1,350	$	166		$	170	$	(82	)	$	5,438
Net income (loss) attributable to NIC	$	(131	)	$	319	$	(12	)	$	51	$	(338	)	$	(111	)
Income tax expense	—			—		—			—		(10		)	(10		)
Segment profit (loss)	$	(131	)	$	319	$	(12	)	$	51	$	(328	)	$	(101	)
Depreciation and amortization	$	83		$	5	$	5		$	48	$	5		$	146
Interest expense	—			—		—			55		144			199
Equity in income (loss) of non-consolidated affiliates	(1		)	1		—			—		—			—
Capital expenditures(B)	93			6		3			—		13			115

(in millions)	Truck		Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Nine Months Ended July 31, 2019
External sales and revenues, net	$	6,405	$	1,693	$	223		$	141	$	9		$	8,471
Intersegment sales and revenues	75		5		27			85		(192		)	—
Total sales and revenues, net	$	6,480	$	1,698	$	250		$	226	$	(183	)	$	8,471
Net income (loss) attributable to NIC	$	183	$	437	$	10		$	93	$	(604	)	$	119
Income tax expense	—		—		—			—		(9		)	(9		)
Segment profit (loss)	$	183	$	437	$	10		$	93	$	(595	)	$	128
Depreciation and amortization	$	78	$	4	$	7		$	48	$	7		$	144
Interest expense	—		—		—			83		160			243
Equity in income (loss) of non-consolidated affiliates	3		2		(1		)	—		—			4
Capital expenditures(B)	69		3		2			2		14			90

_______________________

(A) Total sales and revenues in the Financial Services segment include interest revenues of $29 million and $103 million for the three and nine months ended July 31, 2020, respectively, and $53 million and $161 million for the three and nine months ended July 31, 2019, respectively.

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

(in millions)	Truck		Parts		Global Operations		Financial Services		Corporate and Eliminations		Total
Segment assets, as of:
July 31, 2020	$	1,721	$	641	$	202	$	2,285	$	1,826	$	6,675
October 31, 2019	1,705		688		296		2,774		1,454		6,917