NAVISTAR INTERNATIONAL CORP - FORM 10-Q - EX-99.1 - ADDITIONAL FINANCIAL INFORMATION (UNAUDITED) - September 2, 2015

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EX-31.2 - CFO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - NAVISTAR INTERNATIONAL CORPnavex3127312015.htm
EX-32.1 - CEO CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - NAVISTAR INTERNATIONAL CORPnavex3217312015.htm
EX-31.1 - CEO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - NAVISTAR INTERNATIONAL CORPnavex3117312015.htm
EX-32.2 - CFO CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - NAVISTAR INTERNATIONAL CORPnavex3227312015.htm
10-Q - 10-Q - NAVISTAR INTERNATIONAL CORPnav2015q3.htm
EX-10 - MATERIAL CONTRACTS - NAVISTAR INTERNATIONAL CORPnavex107312015.htm


EXHIBIT 99.1
Additional Financial Information (Unaudited)
The following additional financial information is provided based upon the continuing interest of certain stockholders and creditors to assist them in understanding our core Manufacturing operations and our Financial Services operations on an after-tax equity basis. Our Manufacturing operations, for this purpose, include our Truck segment, Parts segment, Global Operations segment, and Corporate items. The Manufacturing operations financial information represents non-GAAP financial measures. These non-GAAP financial measures should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. The reconciling differences between these non-GAAP financial measures and our U.S. GAAP condensed consolidated financial statements in Item 1, Financial Statements, are our Financial Services operations, which are included on an after-tax equity basis. Certain of our subsidiaries in our Manufacturing operations have debt outstanding with our Financial Services operations (“intercompany debt”). In the condensed statements of assets, liabilities, and stockholders' equity (deficit), the intercompany debt is reflected as accounts payable. The change in the intercompany debt is reflected in the net cash provided by operating activities in the condensed statements of cash activity.
Condensed Statements of Revenues and Expenses
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)

For the Three Months Ended July 31, 2015
(in millions)
Manufacturing Operations

Financial Services Operations

Adjustments

Consolidated Statement of Operations
Sales of manufactured products
$
2,501


$
—


$
—


$
2,501

Finance revenues
—


63


(26
)

37

Sales and revenues, net
2,501


63


(26
)

2,538

Costs of products sold
2,172


—


—


2,172

Restructuring charges
13


—


—


13

Asset impairment charges
7


—


—


7

Selling, general and administrative expenses
196


24


—


220

Engineering and product development costs
71


—


—


71

Interest expense
59


19


(3
)

75

Other (income) expense, net
23


(6
)

(23
)

(6
)
Total costs and expenses
2,541


37


(26
)

2,552

Equity in income of non-consolidated affiliates
3


—


—


3

Income (loss) before equity income from financial services operations and income taxes
(37
)

26


—


(11
)
Equity income (loss) from financial services operations
19


—


(19
)

—

Income (loss) from continuing operations before income taxes
(18
)

26


(19
)

(11
)
Income tax expense
(5
)

(7
)

—


(12
)
Income (loss) from continuing operations
(23
)

19


(19
)

(23
)
Income from discontinued operations, net of tax
2


—


—


2

Net income (loss)
(21
)

19


(19
)

(21
)
Less: Income attributable to non-controlling interests
7


—


—


7

Net income (loss) attributable to Navistar International Corporation
$
(28
)

$
19


$
(19
)

$
(28
)

E-6


 
For the Nine Months Ended July 31, 2015
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
7,544

 
$
—

 
$
—

 
$
7,544

Finance revenues
—

 
183

 
(75
)
 
108

Sales and revenues, net
7,544

 
183

 
(75
)
 
7,652

Costs of products sold
6,577

 
—

 
—

 
6,577

Restructuring charges
22

 
—

 
—

 
22

Asset impairment charges
15

 
—

 
—

 
15

Selling, general and administrative expenses
635

 
71

 
(2
)
 
704

Engineering and product development costs
226

 
—

 
—

 
226

Interest expense
179

 
57

 
(9
)
 
227

Other (income) expense, net
44

 
(17
)
 
(64
)
 
(37
)
Total costs and expenses
7,698

 
111

 
(75
)
 
7,734

Equity in income of non-consolidated affiliates
6

 
—

 
—

 
6

Income (loss) before equity income from financial services operations and income taxes
(148
)
 
72

 
—

 
(76
)
Equity income (loss) from financial services operations
49

 
—

 
(49
)
 
—

Income (loss) from continuing operations before income taxes
(99
)
 
72

 
(49
)
 
(76
)
Income tax expense
(14
)
 
(23
)
 
—

 
(37
)
Income (loss) from continuing operations
(113
)
 
49

 
(49
)
 
(113
)
Income from discontinued operations, net of tax
2

 
—

 
—

 
2

Net income (loss)
(111
)
 
49

 
(49
)
 
(111
)
Less: Income attributable to non-controlling interests
23

 
—

 
—

 
23

Net income (loss) attributable to Navistar International Corporation
$
(134
)
 
$
49

 
$
(49
)
 
$
(134
)


E-7


Condensed Statements of Revenues and Expenses
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)

For the Three Months Ended July 31, 2014
(in millions)
Manufacturing Operations

Financial Services Operations

Adjustments

Consolidated Statement of Operations
Sales of manufactured products
$
2,806


$
—


$
—


$
2,806

Finance revenues
—


60


(22
)

38

Sales and revenues, net
2,806


60


(22
)

2,844

Costs of products sold
2,417


—


—


2,417

Restructuring charges
16


—


—


16

Asset impairment charges
4


—


—


4

Selling, general and administrative expenses
217


25


(1
)

241

Engineering and product development costs
80


—


—


80

Interest expense
60


18


—


78

Other (income) expense, net
17


(7
)

(21
)

(11
)
Total costs and expenses
2,811


36


(22
)

2,825

Equity in income of non-consolidated affiliates
2

 
—

 
—

 
2

Income (loss) before equity income from financial services operations and income taxes
(3
)

24


—


21

Equity income (loss) from financial services operations
15


—


(15
)

—

Income (loss) from continuing operations before income taxes
12


24


(15
)

21

Income tax expense
(5
)

(9
)

—


(14
)
Income (loss) from continuing operations
7


15


(15
)

7

Income from discontinued operations, net of tax
1


—


—


1

Net income (loss)
8


15


(15
)

8

Less: Income attributable to non-controlling interests
10


—


—


10

Net income (loss) attributable to Navistar International Corporation
$
(2
)

$
15


$
(15
)

$
(2
)



E-8


 
For the Nine Months Ended July 31, 2014
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
7,683

 
$
—

 
$
—

 
$
7,683

Finance revenues
—

 
172

 
(57
)
 
115

Sales and revenues, net
7,683

 
172

 
(57
)
 
7,798

Costs of products sold
6,899

 
—

 
—

 
6,899

Restructuring charges
26

 
1

 
—

 
27

Asset impairment charges
172

 
1

 
—

 
173

Selling, general and administrative expenses
649

 
71

 
(3
)
 
717

Engineering and product development costs
253

 
—

 
—

 
253

Interest expense
182

 
52

 
—

 
234

Other (income) expense, net
73

 
(24
)
 
(54
)
 
(5
)
Total costs and expenses
8,254

 
101

 
(57
)
 
8,298

Equity in income of non-consolidated affiliates
5

 
—

 
—

 
5

Income (loss) before equity income from financial services operations and income taxes
(566
)
 
71

 
—

 
(495
)
Equity income (loss) from financial services operations
45

 
—

 
(45
)
 
—

Income (loss) from continuing operations before income taxes
(521
)
 
71

 
(45
)
 
(495
)
Income tax benefit (expense)
1

 
(26
)
 
—

 
(25
)
Income (loss) from continuing operations
(520
)
 
45

 
(45
)
 
(520
)
Income from discontinued operations, net of tax
3

 
—

 
—

 
3

Net income (loss)
(517
)
 
45

 
(45
)
 
(517
)
Less: Income attributable to non-controlling interests
30

 
—

 
—

 
30

Net income (loss) attributable to Navistar International Corporation
$
(547
)
 
$
45

 
$
(45
)
 
$
(547
)



E-9


Condensed Statements of Assets, Liabilities, and Stockholders' Equity (Deficit)
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
As of July 31, 2015
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
507

 
$
40

 
$
—

 
$
547

Marketable securities
268

 
25

 
—

 
293

Restricted cash
21

 
336

 
—

 
357

Finance and other receivables, net
444

 
2,488

 
(538
)
 
2,394

Inventories
1,188

 
11

 
—

 
1,199

Goodwill
38

 
—

 
—

 
38

Property and equipment, net
1,112

 
263

 
—

 
1,375

Investments in and advances to financial services operations
618

 
—

 
(618
)
 
—

Investments in non-consolidated affiliates
71

 
—

 
—

 
71

Deferred taxes, net
156

 
7

 
—

 
163

Other assets
309

 
23

 
—

 
332

Total assets
$
4,732

 
$
3,193

 
$
(1,156
)
 
$
6,769

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
Accounts payable
$
1,822

 
$
42

 
$
(538
)
 
$
1,326

Debt
2,888

 
2,398

 
—

 
5,286

Postretirement benefits liabilities
2,840

 
—

 
—

 
2,840

Other liabilities
1,991

 
135

 
—

 
2,126

Total liabilities
9,541

 
2,575

 
(538
)
 
11,578

Redeemable equity securities
1

 
—

 
—

 
1

Stockholders' equity attributable to non-controlling interest
7

 
—

 
—

 
7

Stockholders' equity (deficit) attributable to controlling interest
(4,817
)
 
618

 
(618
)
 
(4,817
)
Total liabilities and stockholders' equity (deficit)
$
4,732

 
$
3,193

 
$
(1,156
)
 
$
6,769


E-10


Condensed Statements of Assets, Liabilities, and Stockholders' Equity (Deficit)
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
As of October 31, 2014
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
440

 
$
57

 
$
—

 
$
497

Marketable securities
578

 
27

 
—

 
605

Restricted cash
22

 
149

 
—

 
171

Finance and other receivables, net (A)
579

 
2,650

 
(613
)
 
2,616

Inventories
1,303

 
16

 
—

 
1,319

Goodwill
38

 
—

 
—

 
38

Property and equipment, net
1,294

 
268

 
—

 
1,562

Investments in and advances to financial services operations (A)
722

 
—

 
(722
)
 
—

Investments in non-consolidated affiliates
73

 
—

 
—

 
73

Deferred taxes, net
199

 
1

 
—

 
200

Other assets
335

 
27

 
—

 
362

Total assets
$
5,583

 
$
3,195

 
$
(1,335
)
 
$
7,443

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
Accounts payable (A)
$
2,144

 
$
33

 
$
(613
)
 
$
1,564

Debt
2,958

 
2,266

 
—

 
5,224

Postretirement benefits liabilities (A)
2,956

 
—

 
—

 
2,956

Other liabilities
2,143

 
174

 
—

 
2,317

Total liabilities
10,201

 
2,473

 
(613
)
 
12,061

Redeemable equity securities
2

 
—

 
—

 
2

Stockholders' equity attributable to non-controlling interest
34

 
—

 
—

 
34

Stockholders' equity (deficit) attributable to controlling interest (A)
(4,654
)
 
722

 
(722
)
 
(4,654
)
Total liabilities and stockholders' equity (deficit)
$
5,583

 
$
3,195

 
$
(1,335
)
 
$
7,443

_________________________
(A)
During the third quarter of 2015, it was determined that multiemployer plan accounting should have been applied in recording postretirement benefits related to our Financial Services segment, which provides that assets and liabilities of a plan are recorded only on the parent company and that periodic contributions to the plan made by the participating subsidiary are charged to expense for the purposes of the subsidiary's financial statements. As a result, we have reclassified $40 million of postretirement benefits, and related other assets and liabilities, between Financial Services Operations and Manufacturing Operations. This reclassification did not impact the consolidated financial position for the year-ended October 31, 2014.



E-11


Condensed Statements of Cash Flows
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Nine Months Ended July 31, 2015
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
(111
)
 
$
49

 
$
(49
)
 
$
(111
)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
163

 
2

 
—

 
165

Depreciation of equipment leased to others
20

 
36

 
—

 
56

Amortization of debt issuance costs and discount
18

 
10

 
—

 
28

Deferred income taxes
(9
)
 
—

 
—

 
(9
)
Asset impairment charges
11

 
4

 
—

 
15

Equity in loss of non-consolidated affiliates
(6
)
 
—

 
—

 
(6
)
Equity in income of financial services affiliates
(49
)
 
—

 
49

 
—

Dividends from financial services operations
125

 
—

 
(125
)
 
—

Dividends from non-consolidated affiliates
8

 
—

 
—

 
8

Change in intercompany receivables and payables
(120
)
 
120

 
—

 
—

Other, net
(15
)
 
(145
)
 
—

 
(160
)
Net cash provided by (used in) operating activities
35

 
76

 
(125
)
 
(14
)
Cash flows from investing activities
 
 
 
 
 
 
 
Purchases of marketable securities
(515
)
 
—

 
—

 
(515
)
Sales of marketable securities
763

 
1

 
—

 
764

Maturities of marketable securities
63

 
—

 
—

 
63

Net change in restricted cash and cash equivalents
2

 
(194
)
 
—

 
(192
)
Capital expenditures
(70
)
 
(2
)
 
—

 
(72
)
Purchase of equipment leased to others
3

 
(61
)
 
—

 
(58
)
Acquisition of intangibles
(4
)
 
—

 
—

—

(4
)
Other investing activities
15

 
4

 
—

 
19

Net cash provided by (used in) investing activities
257

 
(252
)
 
—

 
5

Net cash provided by (used in) financing activities
(177
)
 
138

 
125

 
86

Effect of exchange rate changes on cash and cash equivalents
(48
)
 
21

 
—

 
(27
)
Increase (decrease) in cash and cash equivalents
67

 
(17
)
 
—

 
50

Cash and cash equivalents at beginning of the period
440

 
57

 
—

 
497

Cash and cash equivalents at end of the period
$
507

 
$
40

 
$
—

 
$
547


E-12


Condensed Statements of Cash Flows
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Nine Months Ended July 31, 2014
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
(517
)
 
$
45

 
$
(45
)
 
$
(517
)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
176

 
1

 
—

 
177

Depreciation of equipment leased to others
47

 
32

 
—

 
79

Amortization of debt issuance costs and discount
30

 
8

 
—

 
38

Deferred income taxes
(4
)
 
—

 
—

 
(4
)
Asset impairment charges
172

 
1

 
—

 
173

Equity in loss of non-consolidated affiliates
(5
)
 
—

 
—

 
(5
)
Equity in income of financial services operations
(45
)
 
—

 
45

 
—

Dividends from financial services operations
30

 
—

 
(30
)
 
—

Dividends from non-consolidated affiliates
9

 
—

 
—

 
9

Change in intercompany receivables and payables
73

 
(73
)
 
—

 
—

Other, net
(230
)
 
(64
)
 
—

 
(294
)
Net cash used in operating activities
(264
)
 
(50
)
 
(30
)
 
(344
)
Cash flows from investing activities
 
 
 
 
 
 
 
Purchases of marketable securities
(1,207
)
 
(3
)
 
—

 
(1,210
)
Sales of marketable securities
1,092

 
—

 
—

 
1,092

Maturities of marketable securities
330

 
—

 
—

 
330

Net change in restricted cash and cash equivalents
5

 
(35
)
 
—

 
(30
)
Capital expenditures
(56
)
 
(1
)
 
—

 
(57
)
Purchase of equipment leased to others
(66
)
 
(91
)
 
—

 
(157
)
Other investing activities
34

 
12

 
—

 
46

Net cash provided by (used in) investing activities
132

 
(118
)
 
—

 
14

Net cash provided by (used in) financing activities
(71
)
 
175

 
30

 
134

Effect of exchange rate changes on cash and cash equivalents
(7
)
 
(5
)
 
—

 
(12
)
Increase (decrease) in cash and cash equivalents
(210
)
 
2

 
—

 
(208
)
Cash and cash equivalents at beginning of the period
727

 
28

 
—

 
755

Cash and cash equivalents at end of the period
$
517

 
$
30

 
$
—

 
$
547




E-13

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