EX-99.1 18 dex991.htm ADDITIONAL FINANCIAL INFORMATION (UNAUDITED) Additional Financial Information (Unaudited)

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 business with our financial services operations on a pre-tax equity basis. Our manufacturing operations, for this purpose, include our Truck segment, Engine segment, Parts segment, and Corporate items. The manufacturing operations financial information represents non-GAAP financial measures. The reconciling differences between these non-GAAP financial measures and our GAAP consolidated financial statements in Item 8 are our financial services operations, which are included on a pre-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’ 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 activities.

We have revised our previously reported condensed statements of assets, liabilities, redeemable equity securities, and stockholders’ deficit as of October 31, 2009 to reflect the correction of errors in those statements and the effect of the adoption of new accounting guidance related to the accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) and the accounting for non-controlling interests. The 2009 and 2008 impact of these errors, totaling $10 million, was recognized in our 2010 condensed statements of revenues and expenses as they were not material to our financial results for 2009 and 2008. The revisions did not impact the condensed statements of cash activities for the years ended October 31, 2009 and 2008. See Note 1, Summary of significant accounting policies, of our 2010 audited financial statements for further discussion.

Condensed Statements of Revenues and Expenses

Navistar International Corporation (with financial services operations on a pre-tax equity basis)

 

    For the Year Ended October 31, 2010  
    Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Consolidated
Statement of
Operations
 
(in millions)                        

Sales of manufactured products

  $     11,926      $     —        $     —        $     11,926   

Finance revenues

    —          309        (90     219   
                               

Sales and revenues, net

    11,926        309        (90     12,145   
                               

Costs of products sold

    9,741        —          —          9,741   

Restructuring charges

    (19     4        —          (15

Selling, general and administrative expenses

    1,293        119        (6     1,406   

Engineering and product development costs

    464        —          —          464   

Interest expense

    154        113        (14     253   

Other expense (income), net

    48        (22     (70     (44
                               

Total costs and expenses

    11,681        214        (90     11,805   

Equity in loss of non-consolidated affiliates

    (50     —          —          (50
                               

Income before income taxes and equity income from financial services operations

    195        95        —          290   

Equity income from financial services operations

    95        —          (95     —     
                               

Income before income taxes

    290        95        (95     290   

Income tax expense

    23        —          —          23   
                               

Net income (loss)

    267        95        (95     267   

Less: Income attributable to non-controlling interests

    (44     —          —          (44
                               

Net income (loss) attributable to Navistar International Corporation

  $ 223      $ 95      $ (95   $ 223   
                               

 

E-29


 

    For the Year Ended October 31, 2009  
    Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Consolidated
Statement of
Operations
 
(in millions)                        

Sales of manufactured products

  $     11,300      $     —        $     —        $     11,300   

Finance revenues

    —          348        (79     269   
                               

Sales and revenues, net

    11,300        348        (79     11,569   
                               

Costs of products sold

    9,366        —          —          9,366   

Restructuring charges

    59        —          —          59   

Impairment of property and equipment

    31        —          —          31   

Selling, general and administrative expenses

    1,218        130        (4     1,344   

Engineering and product development costs

    433        —          —          433   

Interest expense

    99        162        (10     251   

Other expense (income), net

    (179     16        (65     (228
                               

Total costs and expenses

    11,027        308        (79     11,256   

Equity in loss of non-consolidated affiliates

    46        —          —          46   
                               

Income before income taxes, extraordinary gain and equity income from financial services operations

    319        40        —          359   

Equity income from financial services operations

    40        —          (40     —     
                               

Income before income taxes and extraordinary gain

    359        40        (40     359   

Income tax expense

    37        —          —          37   
                               

Income (loss) before extraordinary gain

    322        40        (40     322   

Extraordinary gain, net of tax

    23        —          —          23   
                               

Net income (loss)

    345        40        (40     345   

Less: Income attributable to non-controlling interests

    (25     —          —          (25
                               

Net income (loss) attributable to Navistar International Corporation

  $ 320      $ 40      $ (40   $ 320   
                               

 

E-30


    For the Year Ended October 31, 2008  
    Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Consolidated
Statement of
Operations
 
(in millions)                        

Sales of manufactured products

  $     14,399      $     —        $     —        $     14,399   

Finance revenues

    —          405        (80     325   
                               

Sales and revenues, net

    14,399        405        (80     14,724   
                               

Costs of products sold

    11,942        —          —          11,942   

Impairment of property and equipment

    358        —          —          358   

Selling, general and administrative expenses

    1,292        149        (4     1,437   

Engineering and product development costs

    384        —          —          384   

Interest expense

    156        313        —          469   

Other (income) expense, net

    123        (33     (76     14   
                               

Total costs and expenses

    14,255        429        (80     14,604   

Equity in income of non-consolidated affiliates

    71        —          —          71   
                               

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

    215        (24     —          191   

Equity income from financial services operations

    (24     —          24        —     
                               

Income (loss) before income taxes

    191        (24     24        191   

Income tax expense

    57        —          —          57   
                               

Net income (loss)

  $ 134      $ (24   $ 24      $ 134   

Less: Income attributable to non-controlling interests

    —          —          —          —     
                               

Net income (loss) attributable to Navistar International Corporation

  $ 134      $ (24   $ 24      $ 134   
                               

 

E-31


Condensed Statements of Assets, Liabilities, Redeemable Equity Securities, and Stockholders’ Deficit

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

 

     As of October 31, 2010  
     Manufacturing
Operations
    Financial
Services
Operations
     Adjustments     Consolidated
Balance Sheet
 
(in millions)                          

Assets

         

Cash and cash equivalents

   $ 534      $ 51       $ —        $ 585   

Marketable securities

     566        20         —          586   

Restricted cash and cash equivalents

     29        151         —          180   

Finance and other receivables, net

     1,030        3,084         (168     3,946   

Inventories

     1,556        12         —          1,568   

Goodwill

     324        —           —          324   

Property and equipment, net

     1,329        113         —          1,442   

Investments in and advances to financial services operations

     502           (502  

Investments in non-consolidated affiliates

     103        —           —          103   

Deferred taxes, net

     109        37         —          146   

Other assets

     821        29         —          850   
                                 

Total assets

   $     6,903      $     3,497       $     (670   $     9,730   
                                 

Liabilities, redeemable equity securities, and stockholders’ equity (deficit)

         

Accounts payable

   $ 1,974      $ 21       $ (168   $ 1,827   

Debt

     1,985        2,885         —          4,870   

Postretirement benefits liabilities

     2,066        34         —          2,100   

Other liabilities

     1,802        55         —          1,857   
                                 

Total liabilities

     7,827        2,995         (168     10,654   

Redeemable equity securities

     8        —           —          8   

Stockholders’ equity attributable to non-controlling interests

     49        —           —          49   

Stockholders’ equity (deficit) attributable to controlling interest

     (981     502         (502     (981
                                 

Total liabilities, redeemable equity securities, and stockholders’ equity (deficit)

   $ 6,903      $ 3,497       $ (670   $ 9,730   
                                 

 

E-32


 

     As of October 31, 2009(A)  
     Manufacturing
Operations
    Financial
Services
Operations
     Adjustments     Consolidated
Balance Sheet
 
(in millions)                          

Assets

         

Cash and cash equivalents

   $ 1,152      $ 60       $ —        $ 1,212   

Restricted cash and cash equivalents

     30        455         —          485   

Finance and other receivables, net

     915        3,358         (188     4,085   

Inventories

     1,634        32         —          1,666   

Goodwill

     318        —           —          318   

Property and equipment, net

     1,345        122        —          1,467   

Investments in financial services operations

     423        —           (423     —     

Investments in non-consolidated affiliates

     62        —           —          62   

Deferred taxes, net

     107        57         —          164   

Other assets

     517        52         —          569   
                                 

Total assets

   $     6,503      $     4,136       $     (611   $     10,028   
                                 

Liabilities, redeemable equity securities, and stockholders’ equity (deficit)

         

Accounts Payable

   $ 1,929      $ 131       $ (188   $ 1,872   

Debt

     1,861        3,431         —          5,292   

Postretirement benefits liabilities

     2,660        33         —          2,693   

Other liabilities

     1,727        118         —          1,845   
                                 

Total liabilities

     8,177        3,713         (188     11,702   

Redeemable equity securities

     13        —           —          13   

Stockholders’ equity attributable to non-controlling interests

     61        —           —          61   

Stockholders’ equity (deficit) attributable to Navistar International Corporation

     (1,748     423         (423     (1,748
                                 

Total liabilities, redeemable equity securities, and stockholders’ equity (deficit)

   $ 6,503      $ 4,136       $ (611   $ 10,028   
                                 

 

(A) Revised; See Note 1, Summary of significant accounting policies

 

E-33


Condensed Statements of Cash Activities

Navistar International Corporation (with financial services operations on a pre-tax equity basis)

 

     For the Year Ended October 31, 2010  
     Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Condensed
Consolidated
Statement of
Cash Flows
 
(in millions)                         

Cash flows from operating activities

        

Net income

   $     267      $     95      $     (95)      $     267   

Adjustments to reconcile net loss to cash provided by (used in) operating activities:

        

Depreciation and amortization

     261        4        —          265   

Depreciation of equipment leased to others

     27        24        —          51   

Amortization of debt issuance costs and discount

     26        12        —          38   

Deferred income taxes

     (3     20        —          17   

Equity in loss of non-consolidated affiliates

     50        —          —          50   

Equity in income of financial services affiliates

     (95     —          95        —     

Dividends from non-consolidated affiliates

     5        —          —          5   

Change in intercompany receivables and payables

     11        (11     —          —     

Other, net

     (140     554        —          414   
                                

Net cash provided by (used in) operating activities

     409        698        —          1,107   
                                

Cash flows from investing activities

        

Purchases of marketable securities

     (1,856     (20     —          (1,876

Sales or maturities of marketable securities

     1,290        —          —          1,290   

Net change in restricted cash and cash equivalents

     1        514        —          515   

Capital expenditures

     (232     (2     —          (234

Purchase of equipment leased to others

     (16     (29     —          (45

Acquisition of intangibles

     (15     —          —          (15

Business acquisitions

     (2     —          —          (2

Other investing activities

     (86     9        10        (67
                                

Net cash provided by (used in) investing activities

     (916     472        10        (434
                                

Net cash used in financing activities

     (110     (1,180     (10     (1,300
                                

Effect of exchange rate changes on cash and cash equivalents

     (1     1        —          —     
                                

Decrease in cash and cash equivalents

     (618     (9     —          (627

Cash and cash equivalents at beginning of the period

     1,152        60        —          1,212   
                                

Cash and cash equivalents at end of the period

   $ 534      $ 51      $ —        $ 585   
                                

 

E-34


 

     For the Year Ended October 31, 2009  
     Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Condensed
Consolidated
Statement of
Cash Flows
 
(in millions)                         

Cash flows from operating activities

        

Net income (loss)

   $ 345      $ 40      $ (40   $ 345   

Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:

        

Depreciation and amortization

     284        4        —          288   

Depreciation of equipment leased to others

     35        21        —          56   

Amortization of debt issuance cost and discount

     6        10        —          16   

Deferred income taxes

     (14     (4     —          (18

Impairment of property and equipment, goodwill and intangibles

     41        —          —          41   

Extraordinary gain on acquisition of subsidiary

     (23     —          —          (23

Gain on increased equity interest in subsidiary

     (23     —          —          (23

Equity in income of non-consolidated affiliates

     (46     —          —          (46

Equity in income of financial services affiliates

     (40     —          40        —     

Dividends from non-consolidated affiliates

     59        —          —          59   

Change in intercompany receivables and payables

     (82     82        —          —     

Other, net

     (8     551        —          543   
                                

Net cash provided by operating activities

     534        704        —          1,238   
                                

Cash flows from investing activities

        

Purchases of marketable securities

     (382     —          —          (382

Sales or maturities of marketable securities

     384        —          —          384   

Net change in restricted cash and cash equivalents

     (23     94        —          71   

Capital expenditures

     (148     (3     —          (151

Purchase of equipment leased to others

     (2     (44     —          (46

Business acquisitions, net of escrow receipt

     (60     —          —          (60

Other investment activities

     (51     3        20        (28
                                

Net cash provided by (used in) investing activities

     (282     50        20        (212
                                

Net cash used in financing activities

     36        (780     (20     (764
                                

Effect of exchange rate changes on cash and cash equivalents

     9        —          —          9   
                                

Decrease in cash and cash equivalents

     297        (26     —          271   

Increase in cash and cash equivalents upon consolidation of BDP and BDT

     80        —          —          80   
                                

Cash and cash equivalents at beginning of the period

     775        86        —          861   
                                

Cash and cash equivalents at end of the period

   $     1,152      $     60      $     —        $     1,212   
                                

 

E-35


 

     For the Year ended October 31, 2008  
     Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Condensed
Consolidated
Statement of
Cash Flows
 
(in millions)                         

Cash flows from operating activities

        

Net income

   $ 134      $ (24   $ 24      $ 134   

Adjustments to reconcile net loss to cash provided by (used in) operating activities:

        

Depreciation and amortization

     328        1        —          329   

Depreciation of equipment leased to others

     44        20        —          64   

Amortization of debt issuance cost and discount

     5        10        —          15   

Deferred income taxes

     82        (26     —          56   

Impairment of goodwill and intangibles

     372        —          —          372   

Equity in income of financial services affiliates

     24        —          (24     —     

Equity in income of non-consolidated affiliates

     (71     —          —          (71

Dividends from financial services operations

     25        —          (25     —     

Dividends from non-consolidated affiliates

     85        —          —          85   

Change in intercompany receivables and payables

     (71     71        —          —     

Other, net

     (528     664        —          136   
                                

Net cash provided by operating activities

     429        716        (25     1,120   
                                

Cash flows from investing activities

        

Purchases of marketable securities

     (42     —          —          (42

Sales or maturities of marketable securities

     46        —          —          46   

Net change in restricted cash and cash equivalents

     7        (150     —          (143

Capital expenditures

     (168     (8     —          (176

Purchase of equipment leased to others

     —          (39     —          (39

Business acquisitions, net of escrow receipt

     (60     —          60        —     

Contributions to NFC

     —          —          —          —     

Other investing activities

     1        20        —          21   
                                

Net cash provided by (used in) investing activities

     (216     (177     60       (333
                                

Net cash used in financing activities

     (133     (508     (35     (676
                                

Effect of exchange rate changes on cash and cash equivalents

     (21     (6     —          (27
                                

Decrease in cash and cash equivalents

     59        25        —          84   

Cash and cash equivalents at beginning of the period

     716        61        —          777   
                                

Cash and cash equivalents at end of the period

   $ 775      $ 86      $ —        $ 861   
                                

 

E-36