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PAGE 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended October 31, 1993
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number 1-9618
N A V I S T A R I N T E R N A T I O N A L C O R P O R A T I O N
---------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3359573
---------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611
-------------------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 836-2000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
- --------------------------------------- -----------------------
Common stock, par value $0.10 per share New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Series A warrants New York Stock Exchange
Pacific Stock Exchange
$6.00 cumulative convertible preferred stock,
Series G (with $1.00 par value) New York Stock Exchange
Cumulative convertible junior preference stock,
Series D (with $1.00 par value) New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months and (2) has been
subject to such filing requirements for the past 90 days: Yes X No
--- ---
As of January 20, 1994, the aggregate market value of Common Stock
(excluding Class B Common Stock) held by non-affiliates of the registrant
was $1,312,845,561.
As of January 20, 1994, the number of shares outstanding of the
registrant's Common Stock was 49,776,135 and the Class B Common was
25,240,305.
Documents Incorporated by Reference
-----------------------------------
1993 Annual Report to Shareowners (Parts I, II and IV)
1993 Proxy Statement (Parts I and III)
Navistar Financial Corporation 1993 Annual Report on Form 10-K (Part IV)
PAGE 2
NAVISTAR INTERNATIONAL CORPORATION
FORM 10-K
Year Ended October 31, 1993
INDEX
10-K Page
---------
PART I
Item 1. Business ....................................... 3
Item 2. Properties ..................................... 12
Item 3. Legal Proceedings .............................. 13
Executive Officers of the Registrant ........... 15
Item 4. Submission of Matters to a Vote of
Security Holders ............................. 16
PART II
Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters .............. 16
Item 6. Selected Financial Data ........................ 16
Item 7. Management's Discussion and Analysis
of Results of Operations and
Financial Condition .......................... 16
Item 8. Financial Statements and Supplementary Data .... 16
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure ....... 16
PART III
Item 10. Directors and Executive Officers
of the Registrant ........................... 16
Item 11. Executive Compensation ........................ 16
Item 12. Security Ownership of Certain Beneficial
Owners and Management ....................... 16
Item 13. Certain Relationships
and Related Transactions .................... 16
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K ..................... 17
SIGNATURES
Principal Accounting Officer ............................ 19
Directors ............................................... 20
POWER OF ATTORNEY ......................................... 20
INDEPENDENT AUDITORS' REPORT .............................. 22
INDEPENDENT AUDITORS' CONSENT ............................. 22
SCHEDULES ................................................. F-1
EXHIBITS .................................................. E-1
PAGE 3
PART I
Item 1. BUSINESS
Navistar International Corporation is a holding company and its
principal operating subsidiary is Navistar International Transportation
Corp. referred to as "Transportation". As used hereafter, "Navistar" or
"Company" refers to Navistar International Corporation and its subsidiaries
and "Parent Company" refers to Navistar International Corporation alone.
Navistar, through its wholly-owned subsidiary Transportation, operates
in one principal business segment, the manufacture and marketing of medium
and heavy diesel trucks, including school bus chassis, mid-range diesel
engines and service parts in North America and in selected export markets.
Transportation is the industry market share leader in the North American
combined medium and heavy truck market, offering a full line of diesel-
powered products in the common carrier, private carrier,
government/service, leasing, construction, energy/petroleum and student
transportation markets. Transportation also produces mid-range diesel
engines for use in its medium trucks and for sale to original equipment
manufacturers. Transportation markets its products through an extensive
distribution network which includes 950 North American dealer and
distribution outlets. Service and customer support are also supplied at
these outlets. As a further extension of its business, Transportation
provides financing and insurance for its dealers, distributors and retail
customers through its wholly-owned subsidiary, Navistar Financial
Corporation, referred to as "Navistar Financial". See "Important
Supporting Operations".
THE MEDIUM AND HEAVY TRUCK INDUSTRY
Navistar competes in the North American market for medium and heavy
trucks, including school bus chassis, which spans weight classes 5 and
above (16,000 lbs. and over). This market is subject to considerable
volatility as it moves in response to cycles in the overall business
environment and is particularly sensitive to the industrial sector which
generates a significant portion of the freight tonnage hauled. Government
regulation has impacted and will continue to impact trucking operations and
efficiency and the specifications of equipment.
The following table shows retail deliveries in the combined United
States and Canadian markets for the five years ended October 31, 1993, in
thousands of units.
YEARS ENDED OCTOBER 31,
-----------------------
1993 1992 1991 1990 1989
----- ----- ----- ----- -----
Medium trucks
and school bus chassis .. 122.5 118.3 120.1 149.8 162.8
Heavy trucks .............. 166.4 125.2 109.0 139.0 172.2
----- ----- ----- ----- -----
Total ..................... 288.9 243.5 229.1 288.8 335.0
===== ===== ===== ===== =====
Source: Based upon monthly data by the American Automobile
Manufacturers Associations (AAMA) in the United States and Canada and other
sources.
PAGE 4
The North American truck market is highly competitive. Major domestic
competitors include PACCAR, Ford and General Motors, as well as foreign-
controlled manufacturers, such as Freightliner, Mack and Volvo GM. In
addition, manufacturers from Japan (Hino, Isuzu, Nissan, Mitsubishi) are
attempting to increase their North American sales levels. The intensity of
this competitiveness, which is expected to continue, results in price
discounting and margin pressures throughout the industry. In addition to
the influence of price, market position is driven by product quality,
engineering, styling and utility and a comprehensive distribution system.
TRANSPORTATION MARKET SHARE
Transportation delivered 79,800 medium and heavy trucks in North
America in fiscal 1993, compared to a total of 69,300 for fiscal 1992, an
increase of 15.1% in overall units. Navistar's combined share of the
medium and heavy truck market in 1993 was 27.6%. Transportation has been
the leader in combined market share for medium and heavy trucks, including
school bus chassis, in North America in each of its last 13 fiscal years.
PRODUCTS AND SERVICES
The following table illustrates the percentage of Transportation's
sales by class of product by dollar amount:
YEARS ENDED OCTOBER 31,
--------------------------
PRODUCT CLASS 1993 1992 1991
- ------------- ---- ---- ----
Medium trucks
and school bus chassis ........ 35% 40% 44%
Heavy trucks .................... 40 34 31
Service parts ................... 14 16 16
Engines ......................... 11 10 9
--- --- ---
Total ......................... 100% 100% 100%
=== === ===
Transportation offers a full line of medium and heavy trucks, with the
objective of serving the customer better and more effectively by addressing
requirements for increased performance and value. Transportation has made
continuing improvements in its heavy truck image and performance and has
responded to drivers' desires for increased amenities with the introduction
of new sleeper compartments, interiors and aerodynamic chassis skirts for
premium conventional models. New interiors were also introduced for
cabover and severe service trucks. In addition, new mid-range DT 408 and
DT 466 diesel engines were introduced into the medium model trucks which
meet 1994 emission control standards without the need for catalytic
converters. These engines will further enhance medium truck operating
performance and life.
In 1993, Transportation introduced new products including the 9200
model premium conventional tractor as well as other enhancements to its
products to improve operating performance and durability. In addition,
Transportation has launched special "NavTrucks" programs to meet the needs
of customers in targeted regional vocations. Each NavTruck program tailors
existing medium, heavy and severe service truck models to an individual
regional vocation by packaging appropriate vehicle specifications and
marketing programs.
PAGE 5
According to a recent survey conducted by J. D. Power and Associates
on 1993 Medium-Duty Truck Customer Satisfaction, Navistar ranked number one
in customer satisfaction in product and service for medium conventional
trucks.
For over two decades, Transportation has been the leading supplier of
school bus chassis in the United States. Chassis have traditionally been
sold to body companies, which complete the buses and deliver them to the
ultimate customer. Transportation manufactures chassis for conventional
and transit-style school buses, as well as chassis for use in small
capacity buses designed to meet the needs of disabled students. In
addition to its traditional chassis business, Transportation has invested
in American Transportation Corporation (AmTran), a manufacturer of school
bus bodies. Through its relationship with AmTran, Transportation
participates in the trend toward the integrated design and manufacture of
school buses, which offers the potential for improved production and
marketing efficiencies and a reduction in the school bus order cycle.
Transportation offers only diesel-powered trucks and buses because of
their improved fuel economy, ease of serviceability and greater durability
over gasoline-powered vehicles. Transportation's heavy trucks use diesel
engines purchased from outside suppliers, while its medium trucks are
powered by diesel engines manufactured by Transportation. In 1993,
Transportation launched its all new world class series of in-line six
cylinder diesel engines for bus, medium and heavy models. Transportation is
the leading supplier of mid-range diesel engines in the 150-300 horsepower
range according to data supplied by a private research firm, Power Systems
Research of Minneapolis, Minnesota. Based upon information published by
R.L. Polk & Company, diesel-powered medium truck shipments represented 81%
of all medium truck shipments for fiscal year 1993 in North America.
Transportation's North American truck manufacturing operations consist
principally of the assembly of components manufactured by its suppliers,
although Transportation produces its own medium range truck engines, sheet
metal components (including cabs) and miscellaneous other parts.
The following is a summary of Transportation's truck manufacturing
capacity utilization for the five years ended October 31, 1993.
YEARS ENDED OCTOBER 31,
-------------------------------------------
1993 1992 1991 1990 1989
------- ------- ------- ------- -------
Production units .......... 88,274 73,901 70,502 80,737 90,897
Total production
capacity ................ 106,032 106,088 106,762 114,402 119,325
Capacity utilization ...... 83.3% 69.7% 66.0% 70.6% 76.2%
Total production capacity varies as a result of changes in the number
of days of production during a year as well as changes in production
constraints.
PAGE 6
ENGINE & FOUNDRY
Transportation builds diesel engines for use in its medium trucks and
for sale to original equipment manufacturers. Production in 1993 totalled
175,500 units, an increase of 18% from the 149,000 units produced in 1992.
In 1993, Transportation produced the DTA 466 (195-270 horsepower), DTA 360
(170-190 horsepower) and 7.3 liter (155-190 horsepower) mid-range diesel
engines. In September 1993, the DT 408 (175-230 horsepower) was introduced
which replaced the DTA 360 while the DT 466 (195-275 horsepower) replaced
the DTA 466. Transportation believes that its family of mid-range diesel
engines, each designed to provide superior performance in customer
applications, offers both the lowest cost of ownership and excellent
durability to users.
Based on U.S. registrations published by R.L. Polk & Company, the 7.3
liter diesel engine is the leading engine of its class. In addition to its
strong contribution to the market position of Transportation's medium
trucks, the 7.3 liter engine and the predecessor 6.9 liter engine have had
significant external sales.
Engine sales to original equipment manufacturers are primarily made to
a major automotive company, which currently accounts for approximately 91%
of sales, and to DINA Camiones, S.A. (DINA), a major truck manufacturer in
Mexico. The automotive company uses the engine in all of its diesel-
powered light trucks and vans having a gross vehicle weight between 8,500
pounds and 14,000 pounds. Shipments to original equipment manufacturers
totalled a record 118,200 units in 1993, an increase of 21% from the 97,400
units shipped in 1992.
In addition to the use of foundry castings in its products,
Transportation sells castings to other original equipment manufacturers.
Sales of rough grey iron engine blocks and cylinder heads to Consolidated
Diesel Corporation (CDC) for its B and C engines were 24,700 tons in 1993
and represented 26% of total foundry capacity. 1993 was the fifth year of
a five year agreement with CDC.
The following is a summary of Transportation's engine capacity
utilization for the five years ended October 31, 1993.
YEARS ENDED OCTOBER 31,
-------------------------------------------
1993 1992 1991 1990 1989
------- ------- ------- ------- -------
Engine production units ... 175,464 148,991 126,103 160,434 169,797
Total production capacity . 166,260 166,260 166,720 166,720 167,242
Capacity utilization ...... 105.5% 89.6% 75.6% 96.2% 101.5%
Total production capacity varies as a result of changes in product
mix.
Transportation recently completed a major capital improvement program
in its engine facilities to manufacture a new generation of mid-range
diesel engines in both the in-line six cylinder and V-8 configurations to
be used in trucks and school bus chassis manufactured by the Company and
also sold to other original equipment manufacturers. This new generation
of engines is designed to respond to customer demands for engines that have
more power, improved fuel economy, longer life, and meet current emission
requirements through 1997. The engines also will be offered in a wider
horsepower range, which will give Transportation an opportunity to expand
the number of applications for its engines and broaden its customer base.
PAGE 7
In September 1993, Transportation introduced three new in-line six
cylinder engines that replaced its current DT family of engines in
International medium trucks. These new engines, which offer displacements
of 408, 466 and 530 cubic inches and encompass a horsepower range from 175
to 300, feature 20 percent longer life as a result of larger main and rod
bearings, stronger crankshafts, gear driven accessories and, in 1994,
electronically controlled fuel systems will be introduced. With their
expanded horsepower range and larger displacement, Transportation will also
be able to offer the new engines as a lighter-weight, more cost-effective
product, which meet emission standards, to customers who currently buy
heavier engines from other suppliers.
The 7.3 Liter V-8 diesel engine product will also be replaced in
February 1994, when Transportation begins production of an entirely new
product, with electronically controlled fuel injection. This new diesel
engine will offer significant customer advantages, with a 10 to 15 percent
improvement in fuel economy, 30 to 40 percent enhancement in durability,
and improved power and torque, when compared to Transportation's existing
V-8 product. The new V-8 also will meet the 1994 emissions requirements
cost-effectively and will allow such options as cruise control,
electronically controlled power take-off and diagnostics capabilities.
Transportation has entered into an agreement to supply the new 7.3 Liter
engine to a major automotive company through the year 2000 for use in all
of its diesel-powered light trucks and vans.
Transportation is exploring the development of alternative fuel
engines, including engines powered by compressed natural gas.
Transportation has entered into an agreement with Detroit Diesel
Corporation to develop a natural gas engine based upon one of
Transportation's existing engines and Detroit Diesel's electronic
alternative fuel technology.
SERVICE PARTS
The service parts business is a significant contributor to
Transportation's sales and gross margin and to the maintenance of its
medium and heavy truck customer base. In North America, Transportation
operates seven regional parts distribution centers, which allows it to
offer 24-hour availability and same day shipment of the parts most
frequently requested by customers. Transportation is undertaking
initiatives to increase parts sales outside of North America. As customers
have explored ways to reduce their costs and improve efficiency,
Transportation and its dealers have established programs to help them
manage the parts and maintenance aspects of their businesses more
efficiently. Transportation also offers a "Fleet Charge" program, which
allows participating customers to purchase parts on credit at all of its
dealer locations at consistent and competitive prices. In 1993, service
parts sales increased as a result of higher net selling prices, export
business expansion and growth in dealer and national accounts.
PAGE 8
MARKETING AND DISTRIBUTION
North American Operations. Transportation's truck products are
distributed in virtually all key markets in North America through the
largest retail organization specializing in medium and heavy trucks. As
part of its continuing program to adapt to changing market conditions,
Transportation has been assisting dealers to expand their operations to
better serve their customer base. Transportation's truck distribution and
service network in North America was composed of 950, 952 and 919 dealers
and retail outlets at October 31, 1993, 1992 and 1991, respectively.
Included in these totals were 467, 460 and 415 secondary and associate
locations at October 31, 1993, 1992 and 1991, respectively.
Retail dealer activity is supported by 5 regional operations in the
United States and a Canadian general office. Transportation has a national
account sales group responsible for its 175 major national account
customers.
Transportation's 10 retail and 6 wholesale North American used truck
centers provide sales and trade-in benefits to its dealers and retail
customers.
International Operations. International Operations exports trucks,
components and service parts, both wholesale and retail, to more than 70
countries around the world and is active in procurement of United States
Government business worldwide. Transportation exported 5,300 trucks in
1993 and 4,900 trucks in 1992 and cumulatively, from 1986 through 1992, was
the leading North American exporter of Class 6-8 trucks from the United
States and Canada, according to data provided by the AAMA.
In Mexico, Transportation has an agreement with DINA to supply product
technology, components and technical services for assembly of DINA trucks
and buses. In 1993, Transportation exported almost 7,000 engines to DINA,
bringing the total engines shipped to approximately 20,000 over the past
three years. Transportation also has initiated sales of the in-line six
cylinder family of mid-range diesel engines to Perkins Group, Ltd., of
Peterborough, England, for worldwide distribution and to Detroit Diesel
Corporation, the North American distributor of Perkins.
NAVISTAR FINANCIAL CORPORATION
Navistar Financial is engaged in the wholesale, retail and to a lesser
extent lease financing of new and used trucks sold by Transportation and
its dealers in the United States. Navistar Financial also finances
wholesale accounts and selected retail accounts receivable of
Transportation. To a minor extent, sales of new products (including
trailers) of other manufacturers are also financed regardless of whether
designed or customarily sold for use with Transportation's truck products.
During fiscal 1993 and 1992, Navistar Financial provided wholesale
financing for 90% and 89%, respectively, of the new truck units sold by
Transportation to its dealers and distributors, and retail financing for
approximately 15% and 14%, respectively, of the new truck units sold by
Transportation and its dealers and distributors in the United States.
Navistar Financial's wholly-owned insurance subsidiary, Harco National
Insurance Company, provides commercial physical damage and liability
insurance coverage to Transportation's dealers and retail customers and to
the general public through an independent insurance agency system.
PAGE 9
IMPORTANT SUPPORTING OPERATIONS
Third Party Sales Financing Agreements. In the United States,
Transportation has an agreement with Associates Commercial Corporation
(Associates) to provide wholesale financing to certain of its truck dealers
and retail financing to their customers. During fiscal 1993 and 1992,
Associates provided 10% and 11%, respectively, of the wholesale financing
utilized by Transportation's dealers and distributors.
Navistar International Corporation Canada has an agreement with a
subsidiary of General Electric Canadian Holdings Limited to provide
financing for Canadian dealers and customers.
Foreign Insurance Subsidiaries. Harbour Assurance Company of Bermuda
Limited offers a variety of programs to the Company, including general
liability insurance, ocean cargo coverage for shipments to and from foreign
distributors and reinsurance coverage for various Transportation policies.
The company also writes minimal third party coverage and provides a variety
of insurance programs to Transportation, its dealers, distributors and
customers.
CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT
Transportation designs and manufactures its trucks and diesel engines
to meet or exceed specific industry requirements. New models are
introduced and improvements of current models are made, from time to time,
in accordance with operating plans and market requirements and not on a
predetermined cycle.
During 1993, capital expenditures totalled $110 million. Major
product program expenditures included continued investment in machinery and
equipment at the Melrose Park, Illinois and Indianapolis, Indiana engine
facilities to manufacture a new generation of mid-range diesel engines to
be used in trucks and school bus chassis manufactured by the Company and
also sold to other original equipment manufacturers. The Company began
introducing these engines in the fall of 1993. Other expenditures were
made for truck product improvements, modernization of facilities and
compliance with environmental regulations.
Capital expenditures totalled $55 million in 1992. Major product
program expenditures included machinery and equipment to manufacture the
new series of mid-range diesel engines at the Melrose Park, Illinois and
Indianapolis, Indiana engine facilities. Other expenditures were made for
truck product improvements, modernization of facilities and compliance with
environmental regulations. In 1991, capital expenditures were $77 million.
Product development is an ongoing process at Transportation. Research
and development activities are directed toward the introduction of new
products and improvement of existing products and processes used in their
manufacture. Spending for company-sponsored activities totalled $95
million, $90 million and $87 million for 1993, 1992 and 1991, respectively.
PAGE 10
BACKLOG
The backlog of unfilled truck orders (subject to cancellation or
return in certain events) was as follows:
AT OCTOBER 31 MILLIONS OF DOLLARS UNITS
------------- ------------------- -------
1993 ........ $ 1,353 23,939
1992 ........ $ 1,124 20,456
1991 ........ $ 613 13,534
Although the backlog of unfilled orders is one of many indicators of
market demand, many factors may affect point-in-time comparisons such as
changes in production rates, available capacity, new product introductions
and competitive pricing actions.
EMPLOYEES
The following table summarizes employment levels as of the end of
fiscal years 1991 through 1993:
TOTAL
AT OCTOBER 31 EMPLOYMENT
------------- ----------
1993 ........................... 13,612
1992 ........................... 13,945
1991 ........................... 13,472
LABOR RELATIONS
At October 31, 1993, the United Automobile, Aerospace and Agricultural
Implement Workers of America (UAW) represented approximately 7,144 of the
Company's active employees in the U.S., and the Canadian Auto Workers (CAW)
represented approximately 1,393 of the Company's active employees in
Canada. Other unions represented approximately 1,342 of the Company's
active employees in North America. The Company entered into collective
bargaining agreements with the UAW and CAW in 1993 which expire on October
1, 1995 and October 24, 1996, respectively. These agreements permit
greater productivity and efficiency, manufacturing flexibility and customer
responsiveness, which will contribute to a reduction in costs and the
Company's goal of improving profitability.
PATENTS AND TRADEMARKS
Transportation continuously obtains patents on its inventions and thus
owns a significant patent portfolio. Additionally, many of the components
which Transportation purchases for its products are protected by patents
that are owned or controlled by the component manufacturer. Transportation
has licenses under third party patents relating to its products and their
manufacture, and Transportation grants licenses under its patents. The
royalties paid or received under these licenses are not significant. No
PAGE 11
particular patent or group of patents is considered by Transportation to be
essential to its business as a whole.
Like all businesses which offer well-known products or services,
Transportation's primary trademarks symbolize the Company's goodwill and
provide instant identification of its products and services in the
marketplace and thus, are an important part of its worldwide sales and
marketing efforts. To support these efforts, Transportation maintains, or
has pending, registrations of its primary trademarks in those countries in
which it does business or expects to do business.
RAW MATERIALS AND ENERGY SUPPLIES
Transportation purchases raw materials, parts and components from
numerous outside suppliers but relies upon some suppliers for a substantial
number of components for its truck products. Transportation's purchasing
strategies have been designed to improve access to the lowest cost, highest
quality sources of raw materials, parts and components, and to reduce
inventory carrying requirements. A portion of Transportation's
requirements for raw materials and supplies is filled by single source
suppliers.
The impact of an interruption in supply will vary by commodity. Some
parts are generic to the industry while others are of a proprietary design
requiring unique tooling which would require time to recreate. However,
the Company's exposure to a disruption in production as a result of an
interruption of raw materials and supplies is no greater than the industry
as a whole. In order to remedy any losses resulting from an interruption
in supply, the Company maintains contingent business interruption
insurance. Transportation does not currently foresee critical shortages of
raw materials and supplies.
IMPACT OF GOVERNMENT REGULATION
Truck and engine manufacturers have faced continually increasing
governmental regulation of their products especially in the environmental
and safety areas. In particular, diesel engine manufacturers will be
required to achieve lower emission levels in terms of unburned
hydrocarbons, particulates and oxides of nitrogen. These regulations have
and will impose significant research, design and tooling costs on diesel
engine manufacturers. They may also result in the use of after-treatment
equipment, such as particulate traps and catalytic converters, which will
add to the cost of the vehicle emission control system.
The Company's engines are subject to extensive regulatory
requirements. Specific emissions standards for diesel engines are imposed
by the U.S. Environmental Protection Agency (the U.S. EPA) and by other
regulatory agencies such as the California Air Resources Board (CARB). The
Company believes that its diesel engine products comply with all applicable
emissions requirements currently in effect. The Company's ability to
comply with emissions requirements which may be imposed in the future is an
important element in maintaining and improving the Company's position in
the diesel engine marketplace. Capital and operating expenditures will
continue to be required to comply with these emissions requirements.
PAGE 12
The 1990 Clean Air Act amendments established the U.S. emissions
standards for on-highway diesel engines produced through 2001. Insofar as
light and medium heavy duty diesel engines are concerned, the CARB
standards are similar to those adopted by the U.S. EPA. The Company's
products meet the U.S. EPA and CARB standards for on-highway diesel engines
produced through 1993. The Company expects that its engines will satisfy
all U.S. EPA and CARB on-highway emissions control requirements applicable
through 1997.
In North America, both Canada and Mexico are expected to adopt U.S.
emissions standards. Various diesel engine manufacturers, including the
Company, have voluntarily signed a memorandum of understanding with the
Canadian government, pursuant to which these manufacturers have agreed to
sell only U.S. certified engines in Canada beginning in 1995. In June
1993, Mexico proposed a regulatory program that incorporates U.S. standards
and test procedures. This program is expected to be in place in 1994.
Truck manufacturers are subject to various noise standards imposed by
federal, state and local regulations. The engine is one of a truck's
primary noise sources, and the Company therefore works closely with
original equipment manufacturers to develop strategies to reduce engine
noise. The Company is also subject to the National Traffic and Motor
Vehicle Safety Act (Safety Act) and Federal Motor Vehicle Safety Standards
(Safety Standards) promulgated by the National Highway Traffic Safety
Administration. The Company believes it is in compliance with the Safety
Act and the Safety Standards.
Expenditures to comply with various environmental regulations relating
to the control of air, water and land pollution at production facilities
and to control noise levels and emissions from Transportation's products
have not been material. Investigations into the nature and extent of
cleanup activities under the Superfund law are being conducted at two sites
formerly owned by the Company. The eventual scope, timing and cost of such
activities as well as the availability of defenses to any such claims, and
possible claims against third parties and insurance companies are not known
and cannot be reasonably estimated; however, substantial claims could be
asserted against the Company. See "Management's Discussion and Analysis in
the 1993 Annual Report to Shareowners-Environmental Matters."
ITEM 2. PROPERTIES
Transportation has 7 manufacturing and assembly plants in the United
States and 1 in Canada. All plants are owned by Transportation. The
aggregate floor space of these 8 plants is approximately 8 million square
feet.
Transportation also owns or leases other significant properties in the
United States and Canada, including a paint facility, a small component
fabrication plant, vehicle and parts distribution centers, sales offices,
engineering centers and its headquarters in Chicago.
PAGE 13
ITEM 3. LEGAL PROCEEDINGS
ENVIRONMENTAL MATTERS
Beginning in March 1984, Transportation received several enforcement
notices from the U.S. EPA, all of which relate to Transportation's painting
activities at its Springfield, Ohio assembly and body plants. The notices
alleged that these painting activities violated the Federal Clean Air Act
because the paint contained volatile organic compounds (VOC) in greater
quantities than permitted under applicable Ohio regulations (the VOC
Regulations).
In an administrative action instituted under Section 120 of the Clean
Air Act, begun in September 1984, U.S. EPA seeks to recover a noncompliance
penalty, measured as the costs allegedly saved by Transportation by not
complying with the VOC Regulations at the assembly plant. Transportation
has calculated that it did not save any costs. The case went to a hearing
before an administrative law judge who ruled in early 1987 that
Transportation was liable for a noncompliance penalty in an amount to be
determined in a subsequent hearing. All Transportation appeals of this
ruling were denied. No hearing to determine the amount of the
noncompliance penalty has yet been scheduled.
In a court action instituted under Section 113(b) of the Clean Air
Act, the United States filed civil complaints pertaining to the assembly
plant (filed on April 30, 1985) and the body plant (filed on November 3,
1986) in the U.S. District Court in the Southern District of Ohio. These
complaints ask the judge to impose fines of up to $25,000 per violation of
the VOC Regulations per day since December 31, 1982, and also ask the judge
to issue an injunction prohibiting Transportation from continuing the
alleged violations. In March 1993, the judge granted the United States'
motion for partial summary judgment, ruling that Transportation violated
the VOC Regulations at the assembly plant during the period from December
31, 1982 to April 30, 1985. The judge has not yet made any determination
as to fines for the violation.
Transportation built a new paint facility adjacent to the assembly
plant which replaced some of the painting activities formerly performed at
the assembly plant and the body plant. New technology at the paint
facility reduces or destroys VOCs emitted in the painting operations.
These reductions enabled Transportation to apply for a bubble variance, an
administrative exemption which permits Transportation to comply with the
VOC Regulations by averaging VOC emissions from the assembly and body
plants with VOC emissions from the paint facility. Ohio EPA issued the
bubble variance to Transportation in February 1989. U.S. EPA approved the
bubble variance in December 1990, effective January 1991.
In November 1993, Transportation received a settlement offer from U.S.
EPA to settle all allegations contained in both the administrative action
and the court action in exchange for a payment of $2.7 million.
Transportation is pursuing settlement discussions to resolve these cases.
PAGE 14
OTHER MATTERS
In July 1992, the Company announced its decision to change its retiree
health care benefit plans and concurrently filed a declaratory judgment
class action lawsuit in the U.S. District Court for the Northern District
of Illinois (Illinois Court) to confirm its right to change these benefits.
A countersuit was filed against the Company by its unions in the U.S.
District Court for the Southern District of Ohio (Ohio Court). On October
16, 1992, the Company withdrew its declaratory judgment action in the
Illinois Court and began negotiations with the UAW to resolve issues
affecting both retirees and employees. On December 17, 1992, the Company
announced that a tentative agreement had been reached with the UAW on
restructuring retiree health care and life insurance benefits (the
Settlement Agreement). During the third quarter of 1993, all court,
regulatory agency and shareowner approvals required to implement the
Settlement Agreement concerning retiree health care benefit plans were
obtained. The Settlement Agreement became effective and the restructured
retiree health care and life insurance plan was implemented on July 1,
1993.
In May 1993, a jury issued a verdict in favor of Vernon Klein Truck &
Equipment, Inc. and against Transportation in the amount of $10.8 million
in compensatory damages and $15 million in punitive damages. In order to
appeal the verdict in the case, the Company was required to post a bond
collateralized with $30 million in cash. This amount has been recorded as
restricted cash on the Statement of Financial Condition. The amount of any
potential liability is uncertain and Transportation believes that there are
meritorious arguments for overturning or diminishing the verdict.
The Company and its subsidiaries are subject to various other claims
arising in the ordinary course of business, and are parties to various
legal proceedings which constitute ordinary routine litigation incidental
to the business of the Company and its subsidiaries. In the opinion of the
Company's management, none of these proceedings or claims are material to
the business or the financial condition of the Company.
PAGE 15
EXECUTIVE OFFICERS
The following selected information for each of the Company's current
executive officers was prepared as of November 5, 1993.
OFFICERS AND POSITIONS WITH
NAME AGE NAVISTAR AND OTHER INFORMATION
---- --- ------------------------------
James C. Cotting ... 60 Chairman and Chief Executive Officer since 1987
and a Director since 1983. Mr. Cotting also
is Chairman and Chief Executive Officer of
Transportation since 1990 and a Director
since 1987. Prior to this, Mr. Cotting
served as Vice Chairman and Chief Financial
Officer, 1983-1987.
John R. Horne ...... 55 President and Chief Operating Officer and a
Director since 1990. Mr. Horne also is
President and Chief Operating Officer of
Transportation since 1990 and a Director
since 1987. Prior to this, Mr. Horne served
as Group Vice President and General Manager,
Engine and Foundry, 1990 and Vice President
and General Manager, Engine and Foundry,
1983-1990.
Robert C. Lannert .. 53 Executive Vice President and Chief Financial
Officer and a Director since 1990.
Mr. Lannert also is Executive Vice President
and Chief Financial Officer of Transportation
since 1990 and a Director since 1987. Prior
to this, Mr. Lannert served as Vice President
and Treasurer, 1987-1990 and Vice President
and Treasurer of Transportation, 1979-1990.
Robert A. Boardman . 46 Senior Vice President and General Counsel
since 1990. Mr. Boardman also is Senior
Vice President and General Counsel of
Transportation since 1990. Prior to this,
Mr. Boardman served as Vice President of
Manville Corporation, 1988-1990 and Corporate
Secretary, 1983-1990.
Thomas M. Hough ... 48 Vice President and Treasurer since 1992.
Mr. Hough also is Vice President and
Treasurer of Transportation since 1992.
Prior to this, Mr. Hough served as
Assistant Treasurer 1987-1992, and
Assistant Treasurer of Transportation,
1987-1992. Mr. Hough also served as
Assistant Controller, Accounting and
Financial Systems, 1987 and Controller of
Navistar Financial Corporation, 1982-1987.
Robert I. Morrison . 55 Vice President and Controller since 1987.
Mr. Morrison also is a Vice President and
Controller of Transportation since 1985.
Prior to this, Mr. Morrison served as
Assistant Treasurer and Vice President,
Finance and Planning, International Group,
1983-1985.
Steven K. Covey ... 42 Corporate Secretary since 1990. Mr. Covey is
Associate General Counsel of Transportation
since November 1992. Prior to this,
Mr. Covey served as General Attorney,
Finance and Securities of Transportation,
1989-1992, Senior Counsel, Finance and
Securities, 1986-1989 and Senior Attorney,
Corporate Operations 1984-1986.
PAGE 16
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
PART II
The information required by Items 5-8 is incorporated herein by
reference from the 1993 Annual Report to Shareowners, filed as Exhibit 13
to this Form 10-K as follows:
1993
Annual
Report
Page
--------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS .............. 62
ITEM 6. SELECTED FINANCIAL DATA ...................... 60
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION .......................... 3
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .. 17
With the exception of the aforementioned information (Part II; Items 5-
8) and the information specified under Items 1 and 14 of this report, the
1993 Annual Report to Shareowners is not to be deemed filed as part of this
report.
----------------------------------------------------------
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEMS 10, 11, 12 AND 13
Information required by Part III (Items 10, 11, 12 and 13) of this Form
is incorporated herein by reference from Navistar's definitive Proxy
Statement for the March 16, 1994 Annual Meeting of Shareowners.
PAGE 17
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Information required by Part IV (Item 14) of this form is incorporated
herein by reference from Navistar International Corporation's 1993 Annual
Report to Shareowners, filed as Exhibit 13 to this Form 10-K as follows:
1993
Annual
Report
Page
------
Financial Statements
- --------------------
Statement of Income (Loss) for the years ended
October 31, 1993, 1992 and 1991 ...................... 17
Statement of Financial Condition as of
October 31, 1993 and 1992 ............................ 19
Statement of Cash Flow for the years ended
October 31, 1993, 1992 and 1991 ...................... 21
Statement of Non-Redeemable Preferred, Preference
and Common Shareowners' Equity for the years
ended October 31, 1993, 1992 and 1991 ................ 23
Notes to Financial Statements .......................... 25
Form
10-K
Schedules Page
- --------- ----
VII - Guarantees of Securities of Other Issuers ..... F-1
VIII - Valuation and Qualifying Accounts and Reserves. F-2
IX - Short-Term Borrowings ......................... F-4
X - Supplementary Income Statement Information .... F-5
All schedules other than those indicated above are omitted because of
the absence of the conditions under which they are required or because
information called for is shown in the financial statements and notes
thereto in the 1993 Annual Report to Shareowners.
Finance and Insurance Subsidiaries:
The financial statements of Navistar Financial Corporation for the
years ended October 31, 1993, 1992 and 1991 appearing on pages 5 through 7
in Annual Report on Form 10-K for Navistar Financial Corporation for the
fiscal year ended October 31, 1993, Commission No. 1-4146-1, are
incorporated herein by reference and filed as Exhibit 28 to this Form 10-K.
Financial information regarding all Navistar subsidiaries engaged in
finance and insurance operations, including Navistar Financial Corporation,
appears as supplemental information to the Financial Statements in the
Navistar 1993 Annual Report to Shareowners and is incorporated herein by
reference.
PAGE 18
Exhibits, Including those Incorporated by Reference Form 10-K Page
- --------------------------------------------------- --------------
(3) Articles of Incorporation and By-Laws ......... E-1
(4) Instruments Defining the Rights
of Security Holders, including Indentures ... E-2
(10) Material Contracts ............................ E-4
(11) Computation of Net Income (Loss)
Per Common Share ............................ E-5
(13) Navistar International Corporation
1993 Annual Report to Shareowners ........... N/A
(22) Subsidiaries of the Registrant ................ E-6
(24) Independent Auditors' Consent ................. 20
(25) Power of Attorney ............................. 18
(28) Navistar Financial Corporation Annual Report
on Form 10-K for the fiscal year ended
October 31, 1993 ............................ N/A
All exhibits other than those indicated above are omitted because of
the absence of the conditions under which they are required or because the
information called for is shown in the financial statements and notes
thereto in the 1993 Annual Report to Shareowners.
Reports on Form 8-K
- -------------------
A report on Form 8-K dated December 9, 1992, was filed by the Company
to describe developments in negotiations with the United Automobile,
Aerospace and Agricultural Implement Workers of America.
A report on Form 8-K dated December 9, 1992, was filed by the Company
to disclose a change in credit rating.
A report on Form 8-K dated December 14, 1992, was filed by the Company
to disclose a change in credit rating.
A report on Form 8-K dated December 18, 1992, was filed by the Company
to announce a tentative agreement on restructuring retiree health care and
life insurance benefits.
A report on Form 8-K, dated May 14, 1993, was filed by the Company
indicating Navistar Financial Corporation granted security interests in
substantially all of its assets pursuant to an Amended and Restated Credit
Agreement and amended and restated an existing revolving credit facility
and a retail notes receivable purchase facility.
A report on Form 8-K, dated May 28, 1993, was filed by the Company
announcing court approval of a retiree health care and life insurance
benefit settlement.
A report on Form 8-K, dated July 1, 1993, was filed by the Company
describing shareowner approval of the postretirement health care and life
insurance benefit settlement as well as a one-for-ten reverse split of the
Common stock and Class B Common stock.
A report on Form 8-K, dated July 9, 1993, was filed by the Company
announcing the merger of Navistar International Corporation with and into
its wholly-owned subsidiary, Navistar Holding, Inc.
PAGE 19
SIGNATURE
NAVISTAR INTERNATIONAL CORPORATION
AND SUBSIDIARIES
----------------------------------
SIGNATURE
Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
NAVISTAR INTERNATIONAL CORPORATION
- ----------------------------------
(Registrant)
/s/ Robert I. Morrison
- -------------------------------------
Robert I. Morrison January 27, 1994
Vice President and Controller
(Principal Accounting Officer)
PAGE 20 EXHIBIT 25
SIGNATURE
NAVISTAR INTERNATIONAL CORPORATION
AND SUBSIDIARIES
---------------------------------
POWER OF ATTORNEY
Each person whose signature appears below does hereby make, constitute
and appoint James C. Cotting and Robert I. Morrison and each of them acting
individually, true and lawful attorneys-in-fact and agents with power to
act without the other and with full power of substitution, to execute,
deliver and file, for and on such person's behalf, and in such person's
name and capacity or capacities as stated below, any amendment, exhibit or
supplement to the Form 10-K Report making such changes in the report as
such attorney-in-fact deems appropriate.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signature Title Date
- ------------------------ -------------------------- ----------------
/s/ James C. Cotting
- ------------------------
James C. Cotting Chairman of the Board, January 27, 1994
and Chief Executive Officer
and Director
(Principal Executive Officer)
/s/ Robert I. Morrison
- -------------------------
Robert I. Morrison Vice President and Controller January 27, 1994
(Principal Accounting Officer)
/s/ Jack R. Anderson
- -------------------------
Jack R. Anderson Director January 27, 1994
/s/ William F. Andrews
- -------------------------
William F. Andrews Director January 27, 1994
/s/ Wallace W. Booth
- -------------------------
Wallace W. Booth Director January 27, 1994
/s/ Andrew F. Brimmer
- -------------------------
Andrew F. Brimmer Director January 27, 1994
/s/ Bill Casstevens
- -------------------------
Bill Casstevens Director January 27, 1994
PAGE 21 EXHIBIT 25 (CONTINUED)
SIGNATURE
NAVISTAR INTERNATIONAL CORPORATION
AND SUBSIDIARIES
---------------------------------
SIGNATURES (Continued)
/s/ Richard F. Celeste
- -------------------------
Richard F. Celeste Director January 27, 1994
/s/ William Craig
- -------------------------
William Craig Director January 27, 1994
/s/ Jerry E. Dempsey
- -------------------------
Jerry E. Dempsey Director January 27, 1994
/s/ Mary Garst
- -------------------------
Mary Garst Director January 27, 1994
/s/ Arthur G. Hansen
- -------------------------
Arthur G. Hansen Director January 27, 1994
/s/ John R. Horne
- -------------------------
John R. Horne Director January 27, 1994
/s/ Robert C. Lannert
- -------------------------
Robert C. Lannert Director January 27, 1994
/s/ Donald D. Lennox
- -------------------------
Donald D. Lennox Director January 27, 1994
/s/ Elmo R. Zumwalt, Jr.
- -------------------------
Elmo R. Zumwalt, Jr. Director January 27, 1994
PAGE 22
SIGNATURE
NAVISTAR INTERNATIONAL CORPORATION
AND SUBSIDIARIES
----------------------------------
INDEPENDENT AUDITORS' REPORT
Navistar International Corporation:
We have audited the Statement of Financial Condition of Navistar
International Corporation and Consolidated Subsidiaries as of October 31,
1993 and 1992, and the related Statement of Income (Loss), of Cash Flow,
and of Non-Redeemable Preferred, Preference and Common Shareowners' Equity
for each of the three years in the period ended October 31, 1993, and have
issued our report thereon dated December 15, 1993 (which includes an
explanatory paragraph relating to the change in methods of accounting for
postretirement benefits other than pensions and for income taxes as
required by Statements of Financial Accounting Standards No. 106 and No.
109); such consolidated financial statements and report are included in
your 1993 Annual Report to Shareowners and are incorporated herein by
reference. Our audits also included the financial statement schedules of
Navistar International Corporation and Consolidated Subsidiaries, listed in
Item 14. These financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial statements taken
as a whole, present fairly in all material respects the information set
forth therein.
Deloitte & Touche
December 15, 1993
Chicago, Illinois
----------------------------------
EXHIBIT 24
INDEPENDENT AUDITORS' CONSENT
Navistar International Corporation:
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 to Registration No. 2-70979 on Form S-8 and in Post-
Effective Amendment No. 6 to Registration No. 2-55544 on Form S-8 and in
Post-Effective Amendment No. 1 to Registration No. 2-9604 on Form S-8 of
our report dated December 15, 1993 (which includes an explanatory paragraph
relating to the change in methods of accounting for postretirement benefits
other than pensions and for income taxes as required by Statements of
Financial Accounting Standards No. 106 and 109); appearing in the Annual
Report on Form 10-K of Navistar International Corporation for the year
ended October 31, 1993.
Deloitte & Touche
January 27, 1994
Chicago, Illinois
PAGE 23
SCHEDULE VII
NAVISTAR INTERNATIONAL CORPORATION
AND SUBSIDIARIES
===========
GUARANTEES OF SECURITIES OF OTHER ISSUERS
OCTOBER 31, 1993
(MILLIONS OF DOLLARS)
COLUMN A COLUMN B COLUMN C COLUMN F
-------- -------- -------- --------
NAME OF ISSUER OF
SECURITIES TOTAL
GUARANTEED BY TITLE OF ISSUE OF AMOUNT
PERSON FOR EACH CLASS GUARANTEED
WHICH STATEMENT IS OF SECURITIES AND NATURE OF
FILED GUARANTEED OUTSTANDING GUARANTEE
------------------ ----------------- ----------- ---------
Guarantees by
Navistar
International
Transportation
Corp.:
Iowa Industrial
Hydraulics Industrial revenue
bonds ............ $ 2 Principal
=====
NOTE: Columns D, E, and G are omitted as the answer would be "None".
F-1
PAGE 24
SCHEDULE VIII
NAVISTAR INTERNATIONAL CORPORATION
AND SUBSIDIARIES
============
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED OCTOBER 31, 1993, 1992 AND 1991
(MILLIONS OF DOLLARS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
----------- -------- -------- -------- --------
DESCRIPTION BALANCE ADDITIONS DEDUCTIONS FROM
DESCRIPTION AT CHARGED RESERVES BALANCE
OF DEDUCTED BEGINNING TO AT END
RESERVES FROM OF YEAR INCOME DESCRIPTION AMOUNT OF YEAR
----------- -------- -------- --------- ----------- ------ -------
Reserves deducted
from assets to
which they apply:
1993
----
Uncollectible
notes and
Allowance for Notes and accounts
losses on accounts written off,
receivables .. receivable .. $ 34 $ 6 less recoveries. $ 3 $ 37
===== ===== ===== =====
1992
----
Uncollectible
notes and
Allowance for Notes and accounts
losses on accounts written off,
receivables .. receivable .. $ 27 $ 21 less recoveries. $ 14 $ 34
===== ===== ===== =====
1991
----
Uncollectible
notes and
Allowance for Notes and accounts
losses on accounts written off,
receivables .... receivable .. $ 24 $ 26 less recoveries. $ 23 $ 27
===== ===== ===== =====
F-2
PAGE 25
SCHEDULE VIII (CONTINUED)
NAVISTAR INTERNATIONAL CORPORATION
AND SUBSIDIARIES
============
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED OCTOBER 31, 1993, 1992 AND 1991
(MILLIONS OF DOLLARS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
BALANCE DEDUCTIONS FROM
AT RESERVES BALANCE
DESCRIPTION BEGINNING ADDITIONS CHARGED AT END
OF RESERVES OF YEAR TO INCOME AMOUNT OF YEAR
----------- --------- ----------------- ------ -------
Reserve for costs
relating to plant
closings or
disposal of
business
segment (a):
1993 $ 19 $ - $ 10 $ 9
====== ====== ====== ======
1992 $ 22 $ - $ 3 $ 19
====== ====== ====== ======
1991 $ 24 $ - $ 2 $ 22
====== ====== ====== ======
(a) Includes current and non-current portion.
F-3
PAGE 26
SCHEDULE IX
NAVISTAR INTERNATIONAL CORPORATION
AND SUBSIDIARIES
===========
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED OCTOBER 31, 1993, 1992 AND 1991
(MILLIONS OF DOLLARS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- -------- -------- -------- -------- --------
WEIGHTED WEIGHTED
CATEGORY OF AVERAGE MAXIMUM AVERAGE
AGGREGATE BALANCE INTEREST AMOUNT AVERAGE INTEREST
SHORT-TERM AT END RATE AT MONTH AMOUNT RATE
BORROWINGS OF PERIOD OCTOBER 31 END BALANCE OUTSTANDING (a) DURING YEAR (b)
- ---------- --------- ---------- ----------- ----------- -----------
1993
- ----
Borrowings
from banks . $ 75 6.50% $ 75 $ 1 6.50%
-------- ======== --------
Total ... $ 75 6.50% $ 75 $ 1 6.50%
======== ======== ========
1992
- ----
Borrowings
from banks . $ - - $ 40 $ 12 5.60%
========
Commercial
paper
borrowings . - - $ 163 44 5.47%
-------- ======== --------
Total ... $ - - $ 203 $ 56 5.50%
======== ======== ========
1991
- ----
Borrowings
from banks . $ 40 5.81% $ 175 $ 60 7.19%
========
Commercial
paper
borrowings . 144 6.03% $ 512 316 7.12%
-------- ======== --------
Total ..... $ 184 5.98% $ 687 $ 376 7.13%
======== ======== ========
(a) The amount outstanding is calculated based on average daily borrowings outstanding.
(b) Calculated by dividing the actual interest for the year by the average daily balance
outstanding.
F-4
PAGE 27
SCHEDULE X
NAVISTAR INTERNATIONAL CORPORATION
AND SUBSIDIARIES
===========
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED OCTOBER 31, 1993, 1992 AND 1991
(MILLIONS OF DOLLARS)
COLUMN A COLUMN B
-------- --------
CHARGED TO COSTS AND EXPENSES
---------------------------------------------
ITEM 1993 1992 1991
-------------- -------- -------- --------
Maintenance and repairs ....... $ 64 $ 57 $ 61
Taxes, other than taxes on income:
Social security, unemployment
and other social insurance $ 50 $ 44 $ 44
Real estate, personal
property, etc. .............. $ 12 $ 17 $ 14
F-5