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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
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
For the transition period from to
COMMISSION FILE NUMBER 1-4146-1
NAVISTAR FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2472404
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
(I.R.S. EMPLOYER IDENTIFICATION NO.)
2850 WEST GOLF ROAD 60008
ROLLING MEADOWS, ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 708-734-4275
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ------------------------
7 1/2% Debentures, due 1994 New York Stock Exchange
11.95% Subordinated Debentures, due 1995 New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
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 31, 1993, THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S
COMMON STOCK WAS 1,600,000.
DOCUMENTS INCORPORATED BY REFERENCE
1993 ANNUAL REPORT TO SHAREOWNER (PARTS II AND IV)
THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF NAVISTAR INTERNATIONAL
TRANSPORTATION CORP. AND MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION
J(1) (A) AND (B) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE
REDUCED DISCLOSURE FORMAT.
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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10-K
YEAR ENDED OCTOBER 31, 1993
Navistar Financial Corporation's 1993 Annual Report to Shareowner contains
much of the financial information required in this Form 10-K. Such information
is incorporated in this Form 10-K by reference to applicable pages of the 1993
Annual Report to Shareowner, a complete copy of which is provided herein.
Except for those pages specifically referred to herein as incorporated by
reference, the 1993 Annual Report to Shareowner shall not be deemed to be filed
with the Commission.
INDEX
PAGE
----
PART I Item 1. Business (A).......................................... 1
Item 2. Properties (A)........................................ 1
Item 3. Legal Proceedings..................................... 1
Submission of Matters to a Vote of Security Holders
Item 4. (A).................................................. 1
PART II Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters................................... 2
Item 6. Selected Financial Data (A)........................... 2
Item 7. Management's Discussion and Analysis of Financial
Condition and
Results of Operations (A)............................. 2
Item 8. Financial Statements and Supplementary Data........... 2
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................... 2
Directors and Executive Officers of the Registrant
PART III Item 10. (A).................................................. 2
Item 11. Executive Compensation (A)............................ 2
Security Ownership of Certain Beneficial Owners and
Item 12. Management (A)....................................... 2
Item 13. Certain Relationships and Related Transactions (A).... 2
Exhibits, Financial Statement Schedules and Reports on
PART IV Item 14. Form 8-K............................................. 2
INDEPENDENT AUDITORS' REPORT............................................. 4
SIGNATURES--Principal Accounting Officer................................. 4
--Directors.............................................................. 5
POWER OF ATTORNEY........................................................ 5
SCHEDULES................................................................ S-1
EXHIBITS................................................................. E-1
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(A) Omitted or amended as the registrant is a wholly-owned subsidiary of
Navistar International Transportation Corp. and meets the conditions set
forth in General Instructions J(1) (a) and (b) of Form 10-K and is,
therefore, filing this Form with reduced disclosure format.
i
PART I
ITEM 1. BUSINESS
The registrant, Navistar Financial Corporation ("NFC"), was incorporated in
Delaware in 1949 and is a wholly-owned subsidiary of Navistar International
Transportation Corp. ("Transportation"), which is wholly-owned by Navistar
International Corporation ("Navistar"). As used herein, the "Corporation"
refers to Navistar Financial Corporation and its wholly-owned subsidiaries
unless the context otherwise requires.
The Corporation provides wholesale, retail, and to a lesser extent, lease
financing in the United States for sales of new and used trucks sold by
Transportation and Transportation's dealers. The Corporation 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 truck products. Harco National Insurance
Company, NFC's wholly-owned insurance subsidiary, provides commercial physical
damage and liability insurance coverage to Transportation's dealers and retail
customers, and to the general public through the independent insurance agency
system.
ITEM 2. PROPERTIES
The Corporation uses leased facilities to carry out most of the
administrative and finance sales activities.
ITEM 3. LEGAL PROCEEDINGS
In July 1992, Navistar announced its decision to change its retiree health
care benefit plans, including those of the Corporation. Navistar concurrently
filed a declaratory judgment class action lawsuit to confirm its right to
change these benefits in the U.S. District Court for the Northern District of
Illinois ("Illinois Court"). A countersuit was subsequently filed against
Navistar by its unions in the U.S. District Court for the Southern District of
Ohio. On October 16, 1992, Navistar withdrew its declaratory judgment action in
the Illinois Court and began negotiations with the United Automobile, Aerospace
and Agricultural Implement Workers of America ("UAW") to resolve issues
affecting both retirees and employees. On December 17, 1992, Navistar 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 and the Corporation in the amount of
$10.8 million in compensatory damages and $15 million in punitive damages. The
amount of any potential liability is uncertain and Transportation and the
Corporation believe that there are meritorious arguments for overturning or
diminishing the verdict on appeal.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Intentionally omitted. See the index page of this Report for explanation.
1
PART II
The information required by Items 5, 7 and 8 is incorporated by reference
from the 1993 Annual Report to Shareowner on the pages indicated:
1993 ANNUAL
REPORT PAGE
-----------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS......................................... 16
ITEM 6. SELECTED FINANCIAL DATA
Intentionally omitted. See the index page of this Report for
explanation.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS .................................. 21
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Navistar Financial Corporation and Subsidiaries:
Statement of Consolidated Income and Retained Earnings for the
years ended October 31, 1993, 1992 and 1991..................... 5
Statement of Consolidated Financial Condition as of October 31,
1993 and 1992................................................... 6
Statement of Consolidated Cash Flow for the years ended October
31, 1993, 1992 and 1991......................................... 7
Notes to Consolidated Financial Statements....................... 8
Independent Auditors' Report..................................... 20
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEMS 10, 11, 12 AND 13
Intentionally omitted. See the index page of this Report for explanation.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Financial Statements
See Index to Financial Statements in Item 8.
Financial Statement Schedules
FORM 10-K
PAGE
---------
I--Marketable Securities--Other Investments...................... S-1
IX--Short-Term Borrowings.......................................... S-2
2
All schedules other than Schedules I and IX 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 Shareowner.
EXHIBITS, INCLUDING THOSE INCORPORATED BY REFERENCE
EXHIBIT FORM 10-K
NUMBER DESCRIPTION PAGE
------- ----------- ---------
(3) Articles of Incorporation and By-Laws of the Registrant.. E-1
(4) Instruments Defining the Rights of Security Holders...... E-2
(10) Material Contracts....................................... E-3
Navistar Financial Corporation 1993 Annual Report to
(13) Shareowner............................................... N/A
(24) Power of Attorney........................................ 5
Reports on Form 8-K
No reports on Form 8-K were filed for the three months ended October 31,
1993.
3
INDEPENDENT AUDITORS' REPORT
Navistar Financial Corporation:
We have audited the statement of consolidated financial condition of Navistar
Financial Corporation and its subsidiaries as of October 31, 1993 and 1992 and
the related statements of consolidated income and retained earnings and of
consolidated cash flow for each of the three years in the period ended October
31, 1993, and have issued our report thereon dated December 1, 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 Shareowner and are incorporated herein by reference. Our
audits also included the financial statement schedules of Navistar Financial
Corporation and its subsidiaries, listed in Item 14. These financial statement
schedules are the responsibility of Navistar Financial Corporation'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
Chicago, Illinois
December 1, 1993
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 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 FINANCIAL CORPORATION
(Registrant)
January 27, 1994
/s/ Andrew C. Hill
By: _________________________________
Andrew C. Hill
Vice President and Controller
(Principal Accounting Officer)
4
NAVISTAR FINANCIAL CORPORATION
AND SUBSIDIARIES
EXHIBIT 24
POWER OF ATTORNEY
Each person whose signature appears below does hereby make, constitute and
appoint John J. Bongiorno, Andrew C. Hill and William W. Jones 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 J. Bongiorno January 27, 1994
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John J. Bongiorno President and Chief
Executive Officer; Director
(Principal Executive
Officer)
/s/ R. Wayne Cain January 27, 1994
- ------------------------------------
R. Wayne Cain Vice President and
Treasurer; Director
(Principal Financial
Officer)
/s/ James C. Cotting
- ------------------------------------
James C. Cotting Director January 27, 1994
/s/ Andrew C. Hill January 27, 1994
- ------------------------------------
Andrew C. Hill Vice President and
Controller; Director
(Principal Accounting
Officer)
/s/ Thomas M. Hough
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Thomas M. Hough Director January 27, 1994
/s/ John R. Horne
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John R. Horne Director January 27, 1994
/s/ Robert C. Lannert
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Robert C. Lannert Director January 27, 1994
/s/ Robert I. Morrison
- ------------------------------------
Robert I. Morrison Director January 27, 1994
/s/ Thomas D. Silver
- ------------------------------------
Thomas D. Silver Director January 27, 1994
5
SCHEDULE I
NAVISTAR FINANCIAL CORPORATION
AND SUBSIDIARIES
MARKETABLE SECURITIES--OTHER INVESTMENTS
AS OF OCTOBER 31, 1993
(MILLIONS OF DOLLARS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- --------- ---------- ---------- -----------
NUMBER OF
SHARES OR
UNITS-- MARKET AMOUNT AT
PRINCIPAL VALUE OF WHICH
AMOUNT OF EACH ISSUE CARRIED IN
NAME OF ISSUER AND TITLE OF EACH BONDS AND COST OF AT BALANCE THE BALANCE
ISSUE NOTES EACH ISSUE SHEET DATE SHEET
-------------------------------- --------- ---------- ---------- -----------
MARKETABLE SECURITIES
U.S. Government Obligations........ $74.8 $ 69.6 $ 74.5 $ 70.1
Foreign Government Obligations..... 1.6 1.7 1.6
Corporate Obligations.............. 17.9 18.4 17.8
Asset-backed Obligations........... 12.5 13.0 12.5
Mortgage-backed Obligations........ 23.6 24.4 23.6
------ ------ ------
Total............................ $125.2 $132.0 $125.6
====== ====== ======
S-1
SCHEDULE IX
NAVISTAR FINANCIAL 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 MAXIMUM AVERAGE WEIGHTED
AVERAGE AMOUNT AMOUNT AVERAGE
BALANCE INTEREST RATE OUTSTANDING OUTSTANDING INTEREST RATE
CATEGORY OF AGGREGATE AT END AT END DURING DURING DURING
SHORT-TERM BORROWINGS OF PERIOD OF PERIOD THE PERIOD THE PERIOD(1) THE PERIOD(2)
--------------------- --------- ------------- ----------- ------------- -------------
1993
Borrowings from banks... $ 75.0 6.50% $ 75.0 $ .6 6.50%
Commercial paper
borrowings............. -- -- $ -- -- --
------ ------
Total............... $ 75.0 6.50% $ 75.0 $ .6 6.50%
====== ======
1992
Borrowings from banks... $ -- -- $ 40.0 $ 11.9 5.60%
Commercial paper
borrowings............. -- -- $163.3 44.3 5.47%
------ ------
Total............... $ -- -- $203.3 $ 56.2 5.50%
====== ======
1991
Borrowings from banks... $ 40.0 5.81% $170.0 $ 60.6 7.19%
Commercial paper
borrowings............. 143.8 6.03% $393.2 315.7 7.12%
------ ------
Total............... $183.8 5.98% $563.2 $376.3 7.13%
====== ======
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Notes:
(1)The amount outstanding is calculated based on average daily borrowings
outstanding.
(2)Calculated by dividing the actual interest for the year by the average daily
balance outstanding.
S-2
EXHIBIT 3
NAVISTAR FINANCIAL CORPORATION
AND SUBSIDIARIES
ARTICLES OF INCORPORATION AND BY-LAWS
The following documents of Navistar Financial Corporation are incorporated
herein by reference:
3.1 Restated Certificate of Incorporation of Navistar Financial
Corporation (as amended and in effect on December 15, 1987).
Filed on Form 8-K dated December 17, 1987. Commission File No.
1-4146-1.
3.2 The By-Laws of Navistar Financial Corporation (as amended
February 29, 1988). Filed on Form 10-K dated January 19, 1989.
Commission File No. 1-4146-1.
E-1
EXHIBIT 4
NAVISTAR FINANCIAL CORPORATION
AND SUBSIDIARIES
INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES
The following instruments of Navistar Financial Corporation defining the
rights of security holders, including indentures, are incorporated herein by
reference:
4.1 Indenture, dated as of January 15, 1973, between the Corporation
and Manufacturers Hanover Trust Company, as Trustee, succeeded
by Commerce Union Bank, now known as Sovran Bank/Central South,
as successor Trustee, for 7 1/2% Debentures due 1994 for
$75,000,000. Filed on Registration No. 2-46636.
4.2 Indenture, dated November 1, 1985 between the Corporation and
Continental Bank N. A., as Trustee, succeeded by State Street
Bank and Trust Company, as successor Trustee, for 11.95%
Subordinated Debentures due 1995 for $100,000,000. Filed on
Registration No. 33-1259; 33-1259-01.
4.3 Indenture, dated September 22, 1989 between the Corporation and
The First National Bank of Chicago, as Trustee, succeeded by
Bank One, Columbus, NA, as successor Trustee, for $400,000,000
of debt securities on terms determined at time of sale. Filed on
Registration No. 33-31003.
4.4 Indenture, dated as of November 15, 1993 between the Corporation
and Continental Bank, National Association, as Trustee, for 8
7/8% Senior Subordinated Notes due 1998 for $100,000,000. Filed
on Registration No. 33-50541.
E-2
EXHIBIT 10
NAVISTAR FINANCIAL CORPORATION
AND SUBSIDIARIES
MATERIAL CONTRACTS
The following material contracts of Navistar Financial Corporation and
Navistar International Transportation Corp. are incorporated herein by
reference:
10.1 Pooling and Servicing Agreement dated as of December 1, 1990
between the Corporation, as Servicer, Navistar Financial
Securities Corporation, as Seller, and Manufacturers Hanover
Trust Company, as Trustee. Filed on Registration No.
33-36767.
10.2 Purchase Agreement dated as of December 1, 1990 between the
Corporation and Navistar Financial Securities Corporation, as
Purchaser, with respect to the Dealer Note Trust 1990. Filed
on Registration No. 33-36767.
10.3 Pooling and Servicing Agreement dated as of December 1, 1991
between the Corporation, as Servicer, Navistar Financial
Retail Receivables Corporation, as Seller, and The Bank of
New York, as Trustee, with respect to Navistar Financial
1991-1 Grantor Trust. Commission File No. 1-4146-1.
10.4 Navistar Financial Grantor Trusts Standard Terms and
Conditions of Agreement Effective December 1, 1991 between
the Corporation, as Servicer, and Navistar Financial Retail
Receivables Corporation, as Seller, with respect to Navistar
Financial Grantor Trusts formed on or subsequent to December
1, 1991. Commission File No. 1-4146-1.
10.5 Purchase Agreement dated as of December 16, 1991 between the
Corporation and Navistar Financial Retail Receivables
Corporation, as Purchaser, with respect to Navistar Financial
1991-1 Grantor Trust. Commission File No. 1-4146-1.
10.6 Amended and Restated Credit Agreement dated as of April 26,
1993 among the Corporation, certain banks, and Chemical Bank,
Continental Bank N.A. and Morgan Guaranty Trust Company of
New York, as Co-Agents. Filed on Form 8-K dated April 30,
1993. Commission File No. 1-4146-1.
10.7 Security, Pledge and Trust Agreement between the Corporation
and Bankers Trust Company, Trustee, dated as of April 26,
1993. Filed on Form 8-K dated April 30, 1993. Commission File
No. 1-4146-1.
10.8 Amended and Restated Purchase Agreement among Truck Retail
Instalment Paper Corp., as Seller, the Corporation, certain
purchasers, Chemical Bank and Continental Bank N.A. as Co-
Agents, and J.P. Morgan Delaware as Administrative Agent,
dated as of April 26, 1993. Filed on Form 8-K dated April 30,
1993. Commission File No.
1-4146-1.
10.9 Master Intercompany Agreement dated as of April 26, 1993
between the Corporation and Transportation. Filed on Form 8-K
dated April 30, 1993. Commission File No.
1-4146-1.
10.10 Intercompany Purchase Agreement dated as of April 26, 1993
between the Corporation and Truck Retail Instalment Paper
Corp. Filed on Form 8-K dated April 30, 1993. Commission File
No. 1-4146-1.
10.11 Pooling and Servicing Agreement dated as of November 10, 1993
between the Corporation, as Servicer, and Navistar Financial
Retail Receivables Corporation, as Seller, and Navistar
Financial 1993-A Owner Trust. Filed on Registration No.
33-50291.
E-3
EXHIBIT 10 (CONTINUED)
NAVISTAR FINANCIAL CORPORATION
AND SUBSIDIARIES
MATERIAL CONTRACTS
10.12 Purchase Agreement dated as of November 10, 1993 between the
Corporation and Navistar Financial Retail Receivables
Corporation, as Purchaser, with respect to Navistar Financial
1993-A Owner Trust. Filed on Registration No. 33-50291.
10.13 Administration Agreement dated as of November 10, 1993 between
the Corporation, The Bank of New York, as Indenture Trustee, and
Navistar Financial 1993-A Owner Trust. Filed on Registration No.
33-50291.
E-4