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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, 1997
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
$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 December 15, 1997 the aggregate market value of Common Stock
(excluding Class B Common Stock) held by non-affiliates of the
registrant was $1,126,267,804.
As of December 15, 1997 the number of shares outstanding of the
registrant's Common Stock was 49,235,751 and the Class B Common Stock
was 23,090,905.
Documents Incorporated by Reference
-----------------------------------
1997 Annual Report to Shareowners (Parts I, II and IV)
1997 Proxy Statement (Parts I and III)
Navistar Financial Corporation 1997 Annual Report on Form 10-K (Part IV)
NAVISTAR INTERNATIONAL CORPORATION
FORM 10-K
Year Ended October 31, 1997
INDEX
10-K Page
---------
PART I
Item 1. Business ......................................... 3
Item 2. Properties ....................................... 8
Item 3. Legal Proceedings ................................ 9
Executive Officers of the Registrant ............. 10
Item 4. Submission of Matters
to a Vote of Security Holders .................. 12
PART II
Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters ................ 12
Item 6. Selected Financial Data .......................... 12
Item 7. Management's Discussion and Analysis of
Results of Operations and Financial Condition. 12
Item 8. Financial Statements and Supplementary Data ...... 12
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure ......... 12
PART III
Item 10. Directors and Executive Officers
of the Registrant .............................. 13
Item 11. Executive Compensation ........................... 13
Item 12. Security Ownership of Certain Beneficial
Owners and Management .......................... 13
Item 13. Certain Relationships and Related Transactions ... 13
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K ........................ 13
SIGNATURES
Principal Accounting Officer .............................. 15
Directors ................................................. 16
POWER OF ATTORNEY ......................................... 16
INDEPENDENT AUDITORS' REPORT .............................. 18
INDEPENDENT AUDITORS' CONSENT ............................. 18
SCHEDULE .................................................. F-1
EXHIBITS .................................................. E-1
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.
Navistar, through its wholly owned subsidiary Transportation,
operates in two principal industry segments: manufacturing and
financial services. Manufacturing operations are responsible for the
manufacture and marketing of medium and heavy trucks, including school
buses, mid-range diesel engines and service parts primarily in the
United States and Canada as well as in selected export markets. Based
on assets and revenues, manufacturing operations represent the majority
of the company's business activities. The financial services operations
consist of Navistar Financial Corporation (NFC), its domestic insurance
subsidiary and the company's foreign finance and insurance subsidiaries.
NFC's primary business is the retail and wholesale financing of products
sold by the manufacturing operations and its dealers within the United
States and the providing of commercial physical damage and liability
insurance to the manufacturing operations' dealers and retail customers
and to the general public through an independent insurance agency
system. Industry segment data for 1997, 1996, and 1995 is summarized in
Note 14 to the Financial Statements, which is incorporated herein by
reference.
THE MEDIUM AND HEAVY TRUCK INDUSTRY
The market in which Navistar competes 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 industry retail deliveries in the
combined United States and Canadian markets for the five years ended
October 31, in thousands of units:
YEARS ENDED OCTOBER 31,
---------------------------
1997 1996 1995 1994 1993
----- ----- ----- ----- -----
Class 5, 6 and 7 medium trucks and
school buses ................... 150.6 145.8 151.8 134.2 122.5
Class 8 heavy trucks ............. 196.8 195.4 228.8 205.4 166.4
----- ----- ----- ----- -----
Total .......................... 347.4 341.2 380.6 339.6 288.9
===== ===== ====== ===== =====
Source: Monthly data provided by the American Automobile
Manufacturers Associations (AAMA) in the United States and Canada, and
other sources.
The Class 5 through 8 truck market in the United States and Canada
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 and Mitsubishi) are competing in the United States
and Canadian markets. The intensity of this competition 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, utility and distribution.
TRANSPORTATION MARKET SHARE
Transportation delivered 99,500 Class 5 through 8 trucks, including
school buses, in the United States and Canada in fiscal 1997, a 6%
increase from the 94,000 units delivered in 1996. Navistar's combined
share of the Class 5 through 8 truck market was 28.6% in 1997 and 27.5%
in 1996. Transportation has been the leader in combined market share
for Class 5 through 8 trucks, including school buses, in the United
States and Canada in each of its last 17 fiscal years based on data
obtained from the American Automobile Manufacturers Association, the
United States Motor Vehicle Manufacturers Association and R.L. Polk &
Company.
PRODUCTS
The following table illustrates the percentage of the company's
manufacturing sales by class of product based on dollar amount:
YEARS ENDED OCTOBER 31,
---------------------------
PRODUCT CLASS 1997 1996 1995
- ------------- ----- ----- -----
Class 5, 6 and 7 medium trucks and
school buses ................... 34% 35% 32%
Class 8 heavy trucks ............. 37 35 42
Service parts .................... 13 14 12
Engines .......................... 16 16 14
--- --- ---
Total .......................... 100% 100% 100%
=== === ===
Transportation manufactures a full line of products in the common
carrier, private carrier, government/service, leasing, construction,
energy/petroleum and student transportation markets. Transportation
offers diesel-powered trucks and buses because of their improved fuel
economy, ease of serviceability and greater durability over gasoline-
powered vehicles. Transportation's Class 8 heavy trucks generally use
diesel engines purchased from outside suppliers while Class 5, 6 and 7
medium trucks are powered by a proprietary line of mid-range diesel
engines manufactured by Transportation. Based upon information published
by R.L. Polk & Company, diesel-powered Class 5, 6 and 7 medium truck
shipments represented 87% of all medium truck shipments for fiscal year
1997 in the United States and Canada.
Transportation's truck and bus manufacturing operations in the
United States and Canada consist principally of the assembly of
components manufactured by its suppliers, although Transportation
produces its own mid-range diesel truck engines, sheet metal components
(including cabs) and miscellaneous other parts. During 1997, the
company announced plans for approximately $350 million in capital
spending and $300 million in development expense over the next six years
for development of the next generation truck.
ENGINE AND FOUNDRY
Transportation builds diesel engines for use in its Class 5, 6 and
7 medium trucks, school buses, selected Class 8 heavy truck models and
for sale to original equipment manufacturers in the United States and
Canada. Transportation also sells engines for industrial, agricultural
and marine applications. Transportation is the leading supplier of mid-
range diesel engines in the 160-300 horsepower range according to data
supplied by Power Systems Research of Minneapolis, Minnesota.
Transportation has an agreement to supply its 7.3 liter (7.3L)
electronically controlled diesel engine to Ford Motor Company (Ford)
through the year 2002 for use in all of its diesel-powered light trucks
and vans. Sales of this engine to Ford currently account for
approximately 87% of Transportation's 7.3L sales. Shipments of engines
to all original equipment manufacturers totaled a record 184,000 units
in 1997, an increase of 13% from the 163,200 units shipped in 1996.
During 1997, Transportation entered into a ten-year agreement, effective
with model year 2003, to supply Ford with a 7.3L replacement product for
use in its diesel-powered light trucks and vans.
SERVICE PARTS
In the United States and Canada, Transportation operates 7 regional
parts distribution centers, which allows it to offer 24-hour
availability and same day shipment of the parts most frequently
requested by customers. The company also operates a parts distribution
center in Mexico.
Transportation's service parts program is vital to the maintenance
of the relationship with its customers and dealers. The sale of
replacement parts does not represent a separate and distinct business of
Transportation. Transportation's truck group makes decisions about the
pricing of trucks and replacement parts based upon a variety of factors
which integrally link the pricing and sale of replacement parts with the
sale of medium and heavy trucks, including school buses. The acceptable
price for dealers and fleet truck sales is determined by not only
looking at the market price of the individual trucks themselves, but
also by analyzing the amount of future replacements parts that will be
purchased from Transportation over the truck's life cycle and the total
expected profit contribution, including future replacement parts,
expected to be realized on each sale. Accordingly, the pricing of
trucks and replacement parts is not independently determined.
MARKETING AND DISTRIBUTION
Transportation's truck products are distributed in virtually all
key markets in the United States and Canada. Transportation's truck
distribution and service network in these countries was composed of
954, 957 and 958 dealers and retail outlets at October 31, 1997, 1996
and 1995, respectively. Included in these totals were 514, 504 and 490
secondary and associate locations at October 31, 1997, 1996 and 1995,
respectively. The company also has a dealer network in Mexico composed
of 38 and 23 dealer locations at October 31, 1997 and 1996,
respectively.
Retail dealer activity is supported by 5 regional operations in the
United States and general offices in Canada and Mexico. Transportation
has a national account sales group, responsible for 99 major national
account customers. Transportation's network of 16 Used Truck Centers
in the United States provides trade-in support to the company's dealers
and national accounts group, and markets all makes and models of
reconditioned used trucks to owner-operators and fleet buyers. Trucks,
components and service parts are exported for wholesale and retail sale
to more than 70 countries around the world.
FINANCIAL SERVICES
NFC is a financial services organization that provides wholesale,
retail and lease financing of new and used trucks sold by
Transportation and its dealers in the United States. NFC also finances
wholesale accounts and selected retail accounts receivable of
Transportation. 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
1997 and 1996, NFC provided wholesale financing for 94% of the new truck
units sold by Transportation to its dealers and distributors in the
United States and retail and lease financing for 13% and 16%,
respectively, of all new truck units sold or leased by Transportation to
retail customers.
NFC's wholly owned domestic 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.
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.
IMPORTANT SUPPORTING OPERATIONS
In the United States, Transportation has a third party sales
financing agreement with Associates Commercial Corporation to provide
wholesale financing to certain of its truck dealers and retail financing
to their customers. Navistar International Corporation Canada also has
an agreement with a subsidiary of General Electric Capital Canada, Inc.
to provide financing for Canadian dealers and customers.
RESEARCH AND DEVELOPMENT
Research and development activities, which are directed toward the
introduction of new products and improvements of existing products and
processes used in their manufacture, totaled $92 million, $101 million,
and $91 million for 1997, 1996 and 1995, respectively.
BACKLOG
The backlog of unfilled truck orders (subject to cancellation or
return in certain events) at October 31, 1997, 1996 and 1995 was $2,360
million, $1,254 million and $2,581 million, respectively.
Although the backlog of unfilled orders is one of many indicators
of market demand, other factors such as changes in production rates,
available capacity, new product introductions and competitive pricing
actions may affect point-in-time comparisons.
EMPLOYEES
The company employed 16,168, 14,187 and 16,079 individuals at
October 31, 1997, 1996 and 1995, respectively.
LABOR RELATIONS
At October 31, 1997, the United Automobile, Aerospace and
Agricultural Implement Workers of America (UAW) represented 8,079 of the
company's active employees in the United States, and the Canadian Auto
Workers (CAW) represented 2,142 of the company's active employees in
Canada. Other unions represented 955 of the company's active employees
in the United States and Canada. The company entered into a collective
bargaining agreement with the UAW in 1995, which would have expired on
October 1, 1998. During August 1997, the company's collective
bargaining agreement with the UAW was extended through October 1, 2002.
This contract allows the company to focus its assembly plants, simplify
current product lines, invest in new product development, and achieve
more competitive wage, benefit and productivity levels. In addition,
the company entered into a collective bargaining agreement with the CAW
in 1996, which expires on October 24, 1999.
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 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 are an important part of its
worldwide sales and marketing efforts, and provide instant
identification of its products and services in the marketplace. 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 and engine products. A
majority 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 for storms, fire and water damage.
While the company believes that it has adequate assurances of
continued supply, the inability of a supplier to deliver could have an
adverse effect on production at certain of the company's manufacturing
locations.
IMPACT OF GOVERNMENT REGULATION
Truck and engine manufacturers continue to face increasing
governmental regulation of their products, especially in the areas of
environment and safety. The company believes its products comply with
all applicable environmental and safety regulations.
As a diesel engine manufacturer, the company has incurred research
and tooling costs to redesign its engine product lines to meet the
United States Environmental Protection Agency (U.S. EPA) and California
Air Resources Board (CARB) emission standards effective for the 1998
model year. In addition to the 1998 standards, the company, along with
other engine manufacturers, has signed a voluntary agreement (Statement
of Principles) with U.S. EPA and CARB to achieve new reductions in
ozone-causing exhaust emissions by 2004. In October 1997, as a result
of the Statement of Principles, the U.S. EPA issued a final rule
defining heavy-duty emission requirements for the 2004 model year. The
company will also provide engines that satisfy 1998 Clean Fuel Fleet
Vehicle requirements and must also satisfy California's emission
standards in 2002 for engines used in medium-size vehicles (which
includes vehicles up to 14,000 lbs. Gross Vehicle Weight Rating). The
company expects that its diesel engines will be able to meet all of
these standards within the required time frame.
Effective with the 1998 model year, Canada's emission standards
mirror those of the U.S. EPA and require the sale of low-sulfur diesel
fuel effective October 1, 1997. Mexico has adopted the U.S. heavy
diesel engine emission standards as of the 1994 model year but has
conditioned compliance on the availability of low-sulfur diesel fuel.
Truck manufacturers are also 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 except for two sites
formerly owned by the company, Wisconsin Steel in Chicago, Illinois, and
Solar Turbine in San Diego, California. In 1994, Transportation
recorded a $20 million after-tax charge as a loss of discontinued
operations for environmental liabilities and cleanup cost at these two
sites. It is not expected that the costs of compliance with foreseeable
environmental requirements will have a material effect on the company's
financial position or operating results.
ITEM 2. PROPERTIES
In the United States and Canada, Transportation owns and operates
eight manufacturing and assembly operations, which contain approximately
nine million square feet of floor space. Four facilities manufacture
and assemble trucks, two plants manufacture diesel engines and two
locations produce gray iron castings. The company also manufactures
trucks at a facility owned and operated through a joint venture in the
U.S. and is constructing a truck assembly facility in Mexico. In
addition, Transportation owns or leases other significant properties in
the United States and Canada including vehicle and parts distribution
centers, sales offices, an engineering center and its headquarters in
Chicago.
Transportation's principal research and engineering facilities are
located in Fort Wayne, Indiana, and Melrose Park, Illinois. In
addition, certain research is conducted at its manufacturing plants.
All of Transportation's plants are being utilized and have been
maintained adequately, are in good operating condition and are suitable
for its current needs through productive utilization of the facilities.
These facilities, together with planned capital expenditures, are
expected to meet Transportation's manufacturing needs in the foreseeable
future.
A majority of the activity of the financial services operations is
conducted from its leased headquarters in Rolling Meadows, Illinois.
The financial services operations also lease six other office locations
in the United States.
ITEM 3. LEGAL PROCEEDINGS
The company and its subsidiaries are subject to various 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.
EXECUTIVE OFFICERS
The following selected information for each of the company's
current executive officers was prepared as of December 16, 1997.
OFFICERS AND POSITIONS WITH
NAME AGE NAVISTAR AND OTHER INFORMATION
- ---- --- ------------------------------
John R. Horne 59 Chairman, President and Chief
Executive Officer since 1996
and a Director since 1990.
Mr. Horne also is Chairman,
President and Chief Executive
Officer of Transportation
since 1995 and a Director
since 1987. Prior to this,
Mr. Horne served as President
and Chief Executive Officer,
1995-1996, President and Chief
Operating Officer, 1990-1995,
Group Vice President and General
Manager, Engine and Foundry,
1990, and Vice President and
General Manager, Engine and
Foundry, 1983-1990.
Donald DeFosset, Jr. 49 Executive Vice President and
President, Truck Group since
1996. Mr. DeFosset also is
Executive Vice President
and President, Truck Group of
Transportation since 1996.
Prior to this, Mr. DeFosset
served as President,
Allied Signal Safety Restraints
Systems of Allied Signal Inc.,
1993 - 1996, Group Executive
and General Manager, Allied
Signal Turbocharging and
Truck Brake Systems, 1992 - 1993,
and Vice President, Planning and
Business Development in 1992
and served as Executive Vice
President, Operations for
Mack Trucks, 1989 - 1992.
Robert C. Lannert 57 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 50 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.
EXECUTIVE OFFICERS (continued)
OFFICERS AND POSITIONS WITH
NAME AGE NAVISTAR AND OTHER INFORMATION
- ---- --- ------------------------------
Thomas M. Hough 52 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.
J. Steven Keate 41 Vice President and Controller since
1995. Mr. Keate also is Vice
President and Controller of
Transportation since 1995.
Prior to this, Mr. Keate served
as Vice President and Controller
of General Dynamics Corporation,
1991-1995, and Corporate Manager,
Financial Planning and Analysis,
1989-1991.
Steven K. Covey 46 Corporate Secretary since 1990.
Mr. Covey also is Associate
General Counsel of Transportation
since 1992. Prior to this,
Mr. Covey served as General
Attorney, Finance and Securities
of Transportation, 1989-1992,
Senior Counsel, Finance and
Securities of Transportation,
1986-1989, and Senior Attorney,
Corporate Operations 1984-1986.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Navistar International Corporation Common Stock is listed on the
New York, Chicago and Pacific Stock Exchanges under the abbreviated
stock symbol "NAV." Information regarding high and low market price per
share of Common Stock for each quarter of 1997 and 1996 is incorporated
by reference from the 1997 Annual Report to Shareowners, page 41, filed
as Exhibit 13 to this Form 10-K. There were approximately 57,949 owners
of Common Stock at October 31, 1997.
All shares of Common Stock and Class B Common Stock share equally
in dividends except that stock dividends are payable in shares of Common
Stock to holders of that class and in Class B Common Stock to holders of
that class. Upon liquidation, all shares of Common Stock and Class B
Common Stock are entitled to share equally in the assets of the company
available for distribution to the holders of such shares. Dividends may
be paid out of surplus as defined under Delaware corporation law.
ITEMS 6, 7 AND 8
The information required by Items 6-8 is incorporated herein by
reference from the 1997 Annual Report to Shareowners, filed as Exhibit
13 to this Form 10-K as follows:
1997
Annual
Report
Page
------
ITEM 6. SELECTED FINANCIAL DATA .................... 44
ITEM 7. MANAGEMENT'S DISCUSSION
AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION ...... 3
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. 14
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 1997 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 AND 12.
Information required by Items 10, 11 and 12 of this Form is
incorporated herein by reference from Navistar's definitive Proxy
Statement for the March 24, 1998 Annual Meeting of Shareowners.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
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 1997 Annual Report to Shareowners, filed as Exhibit 13 to
this Form 10-K as follows:
1997
Annual
Report
Page
------
Financial Statements
- --------------------
Independent Auditors' Report ........................ 13
Statement of Income
for the years ended October 31, 1997, 1996 and 1995 14
Statement of Financial Condition
as of October 31, 1997 and 1996 ................... 15
Statement of Cash Flow
for the years ended October 31, 1997, 1996 and 1995 16
Notes to Financial Statements ....................... 17
Form
10-K
Schedule Page
- -------- ----
II - Valuation and Qualifying Accounts and Reserves F-1
All other schedules 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 1997
Annual Report to Shareowners.
Finance and Insurance Subsidiaries:
The financial statements of Navistar Financial Corporation for the
years ended October 31, 1997, 1996 and 1995 appearing on pages 8 through
34 in the Annual Report on Form 10-K for Navistar Financial Corporation
for the fiscal year ended October 31, 1997, Commission File No. 1-4146-
1, are incorporated herein by reference and filed as Exhibit 28 to this
Form 10-K.
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-3
(11) Computation of Net Income Per Common Share .... E-9
(13) Navistar International Corporation
1997 Annual Report to Shareowners ........... N/A
(21) Subsidiaries of the Registrant ................ E-10
(23) Independent Auditors' Consent ................. 18
(24) Power of Attorney ............................. 16
(27) Financial Data Schedule ....................... N/A
(28) Navistar Financial Corporation Annual Report
on Form 10-K for the fiscal year ended
October 31, 1997 ............................ 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 1997 Annual Report to Shareowners.
Reports on Form 8-K
- -------------------
No reports on Form 8-K were filed for the three months ended
October 31, 1997.
SIGNATURE
NAVISTAR INTERNATIONAL CORPORATION
AND CONSOLIDATED 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/ J. Steven Keate
- ----------------------------------
J. Steven Keate December 22, 1997
Vice President and Controller
(Principal Accounting Officer)
EXHIBIT 24
SIGNATURE
NAVISTAR INTERNATIONAL CORPORATION
AND CONSOLIDATED SUBSIDIARIES
----------------------------------
POWER OF ATTORNEY
Each person whose signature appears below does hereby make,
constitute and appoint John R. Horne and J. Steven Keate 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/ John R. Horne
- ----------------------
John R. Horne Chairman of the Board, December 22, 1997
President and
Chief Executive Officer,
and Director
(Principal Executive Officer)
/s/ Robert C. Lannert
- ----------------------
Robert C. Lannert Executive Vice President December 22, 1997
and Chief Financial Officer
and Director
(Principal Financial Officer)
/s/ J. Steven Keate
- ----------------------
J. Steven Keate Vice President and Controller December 22, 1997
(Principal Accounting
Officer)
/s/ William F. Andrews
- -----------------------
William F. Andrews Director December 22, 1997
EXHIBIT 24 (CONTINUED)
SIGNATURE
NAVISTAR INTERNATIONAL CORPORATION
AND CONSOLIDATED SUBSIDIARIES
----------------------------------
SIGNATURES (Continued)
/s/ Andrew F. Brimmer
- ----------------------
Andrew F. Brimmer Director December 22, 1997
/s/ John D. Correnti
- ----------------------
John D. Correnti Director December 22, 1997
/s/ William C. Craig
- -----------------------
William C. Craig Director December 22, 1997
/s/ Jerry E. Dempsey
- -----------------------
Jerry E. Dempsey Director December 22, 1997
/s/ John F. Fiedler
- -----------------------
John F. Fiedler Director December 22, 1997
/s/ Mary Garst
- -----------------------
Mary Garst Director December 22, 1997
/s/ Michael N. Hammes
- -----------------------
Michael N. Hammes Director December 22, 1997
/s/ Allen J. Krowe
- -----------------------
Allen J. Krowe Director December 22, 1997
/s/ Walter J. Laskowski
- ------------------------
Walter J. Laskowski Director December 22, 1997
/s/ William F. Patient
- ------------------------
William F. Patient Director December 22, 1997
SIGNATURE
NAVISTAR INTERNATIONAL CORPORATION
AND CONSOLIDATED 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, 1997 and 1996, and the related Statements of Income and Cash Flow
for each of the three years in the period ended October 31, 1997, and
have issued our report thereon, dated December 15, 1997; such
consolidated financial statements and report are included in your 1997
Annual Report to Shareowners and are incorporated herein by reference.
Our audits also included the financial statement schedule of Navistar
International Corporation and Consolidated Subsidiaries, listed in Item
14. This financial statement schedule is the responsibility of the
company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly in all material respects the
information set forth therein.
Deloitte & Touche LLP
December 15, 1997
Chicago, Illinois
----------------------------------
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
Navistar International Corporation:
We consent to the incorporation by reference in the Registration
Statements, including post-effective amendments, No. 2-70979, No. 33-
26847, No. 333-25783, No. 333-29735, No. 333-29739 and No.333-29301
of Navistar International Corporation all on Form S-8 of our reports on
Navistar International Corporation and Navistar Financial Corporation,
dated December 15, 1997, appearing and incorporated by reference in this
Annual Report on Form 10-K of Navistar International Corporation for the
year ended October 31, 1997.
Deloitte & Touche LLP
December 22, 1997
Chicago, Illinois
SCHEDULE II
NAVISTAR INTERNATIONAL CORPORATION
AND CONSOLIDATED SUBSIDIARIES
============
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995
(MILLIONS OF DOLLARS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
BALANCE DEDUCTIONS FROM
DESCRIPTION AT RESERVES BALANCE
DESCRIPTION BEGINNING ADDITIONS CHARGED AT END
OF RESERVES DEDUCTED FROM OF YEAR TO INCOME DESCRIPTION AMOUNT OF YEAR
----------- ------------- --------- ----------------- ----------- ------ -------
Reserves deducted from
assets to which they
apply:
1997
----
Uncollectible notes
and accounts
Allowance for written off and
losses on Notes and accounts reserve adjustment,
receivables .... receivable .... $ 31 $ 14 less recoveries ... $ 14 $ 31
===== ===== ===== =====
1996
----
Uncollectible notes
and accounts
Allowance for written off and
losses on Notes and accounts reserve adjustment,
receivables .... receivable .... $ 28 $ 21 less recoveries ... $ 18 $ 31
===== ===== ===== =====
1995
----
Uncollectible notes
and accounts
Allowance for written off and
losses on Notes and accounts reserve adjustment,
receivables .... receivable .... $ 25 $ 4 less recoveries ... $ 1 $ 28
===== ===== ===== =====
F-1