EX-99.1 9 navex9917312012.htm EXHIBIT NAV EX. 99.1 7.31.2012


EXHIBIT 99.1
Additional Financial Information (Unaudited)
The following additional financial information is provided based upon the continuing interest of certain stockholders and creditors to assist them in understanding our core manufacturing business with our financial services operations on an after-tax equity basis. Our manufacturing operations, for this purpose, include our Truck segment, Engine segment, Parts segment, and Corporate items. The manufacturing operations financial information represents non-GAAP financial measures. The reconciling differences between these non-GAAP financial measures and our 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, redeemable equity securities, and stockholders' deficit, the intercompany debt is reflected as accounts payable. The change in the intercompany debt is reflected in the net cash provided by operating activities in the condensed statements of cash activities.

Condensed Statements of Revenues and Expenses
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
Three Months Ended July 31, 2012
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
(in millions)
 
 
 
 
 
 
 
Sales of manufactured products
$
3,277

 
$

 
$

 
$
3,277

Finance revenues

 
64

 
(22
)
 
42

Sales and revenues, net
3,277

 
64

 
(22
)
 
3,319

Costs of products sold
2,876

 

 

 
2,876

Restructuring benefits
4

 

 

 
4

Impairment of property and equipment and intangible assets

 

 

 

Selling, general and administrative expenses
306

 
24

 
(2
)
 
328

Engineering and product development costs
137

 

 

 
137

Interest expense
40

 
20

 
(1
)
 
59

Other expense (income), net
25

 
(1
)
 
(19
)
 
5

Total costs and expenses
3,388

 
43

 
(22
)
 
3,409

Equity in loss of non-consolidated affiliates
10

 

 

 
10

Income (loss) before income taxes and equity income from financial services operations
(121
)
 
21

 

 
(100
)
Equity income from financial services operations
13

 


 
(13
)
 

Income (loss) before income taxes
(108
)
 
21

 
(13
)
 
(100
)
Income tax benefit (expense)
204

 
(8
)
 

 
196

Net income (loss)
96

 
13

 
(13
)
 
96

Less: Income attributable to non-controlling interests
12

 

 

 
12

Net income (loss) attributable to Navistar International Corporation
$
84

 
$
13

 
$
(13
)
 
$
84


E-9



Condensed Statements of Revenues and Expenses
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
Nine Months Ended July 31, 2012
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
(in millions)
 
 
 
 
 
 
 
Sales of manufactured products
$
9,540

 
$

 
$

 
$
9,540

Finance revenues

 
199

 
(70
)
 
129

Sales and revenues, net
9,540

 
199

 
(70
)
 
9,669

Costs of products sold
8,518

 

 

 
8,518

Restructuring charges
24

 

 

 
24

Impairment of intangible assets
38

 

 

 
38

Selling, general and administrative expenses
1,009

 
63

 
(4
)
 
1,068

Engineering and product development costs
408

 

 

 
408

Interest expense
119

 
67

 
(4
)
 
182

Other expense (income), net
94

 
(6
)
 
(62
)
 
26

Total costs and expenses
10,210

 
124

 
(70
)
 
10,264

Equity in loss of non-consolidated affiliates
21

 

 

 
21

Income (loss) before income taxes and equity income from financial services operations
(691
)
 
75

 

 
(616
)
Equity income from financial services operations
48

 
 
 
(48
)
 

Income (loss) before income taxes
(643
)
 
75

 
(48
)
 
(616
)
Income tax benefit (expense)
437

 
(27
)
 

 
410

Net income (loss)
(206
)
 
48

 
(48
)
 
(206
)
Less: Income attributable to non-controlling interests
35

 

 

 
35

Net income (loss) attributable to Navistar International Corporation
$
(241
)
 
$
48

 
$
(48
)
 
$
(241
)






E-10



Condensed Statement of Revenues and Expenses
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
Three Months Ended July 31, 2011(A)
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
(in millions)
 
 
 
 
 
 
 
Sales of manufactured products
$
3,490

 
$

 
$

 
$
3,490

Finance revenues

 
73

 
(26
)
 
47

Sales and revenues, net
3,490

 
73

 
(26
)
 
3,537

Costs of products sold
2,930

 

 

 
2,930

Restructuring charges
56

 

 

 
56

Impairment of property and equipment and intangible assets
64

 

 

 
64

Selling, general and administrative expenses
315

 
20

 
(1
)
 
334

Engineering and product development costs
141

 

 

 
141

Interest expense
38

 
27

 
(3
)
 
62

Other expense (income), net
8

 
(4
)
 
(22
)
 
(18
)
Total costs and expenses
3,552

 
43

 
(26
)
 
3,569

Equity in loss of non-consolidated affiliates
22

 

 

 
22

Income (loss) before income taxes and equity income from financial services operations
(84
)
 
30

 

 
(54
)
Equity income from financial services operations
20

 

 
(20
)
 

Income (loss) before income taxes
(64
)
 
30

 
(20
)
 
(54
)
Income tax benefit (expense)
1,473

 
(10
)
 

 
1,463

Net income
1,409

 
20

 
(20
)
 
1,409

Less: Income attributable to non-controlling interests
9

 

 

 
9

Net income attributable to Navistar International Corporation
$
1,400

 
$
20

 
$
(20
)
 
$
1,400

_________________
(A)
Effective with the fourth quarter of 2011, the Company presents manufacturing operations with financial services operations on an after-tax equity basis. Previously, the financial services operations were presented on a pre-tax equity basis. The three months ended July 31, 2011 amounts have been reclassified to conform to this presentation.

E-11



Condensed Statement of Revenues and Expenses
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
Nine Months Ended July 31, 2011(A)
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
(in millions)
 
 
 
 
 
 
 
Sales of manufactured products
$
9,481

 
$

 
$

 
$
9,481

Finance revenues

 
229

 
(75
)
 
154

Sales and revenues, net
9,481

 
229

 
(75
)
 
9,635

Costs of products sold
7,830

 

 

 
7,830

Restructuring charges
79

 
1

 

 
80

Impairment of property and equipment and intangible assets
64

 

 

 
64

Selling, general and administrative expenses
951

 
58

 
(3
)
 
1,006

Engineering and product development costs
407

 

 

 
407

Interest expense
112

 
83

 
(8
)
 
187

Other expense (income), net
40

 
(15
)
 
(64
)
 
(39
)
Total costs and expenses
9,483

 
127

 
(75
)
 
9,535

Equity in loss of non-consolidated affiliates
55

 

 

 
55

Income (loss) before income taxes and equity income from financial services operations
(57
)
 
102

 

 
45

Equity income from financial services operations
67

 

 
(67
)
 

Income before income taxes
10

 
102

 
(67
)
 
45

Income tax benefit (expense)
1,493

 
(35
)
 

 
1,458

Net income
1,503

 
67

 
(67
)
 
1,503

Less: Income attributable to non-controlling interests
35

 

 

 
35

Net income attributable to Navistar International Corporation
$
1,468

 
$
67

 
$
(67
)
 
$
1,468

_________________
(A)
Effective with the fourth quarter of 2011, the Company presents manufacturing operations with financial services operations on an after-tax equity basis. Previously, the financial services operations were presented on a pre-tax equity basis. The nine months ended July 31, 2011 amounts have been reclassified to conform to this presentation.





E-12



Condensed Statements of Assets, Liabilities, and Stockholders' Deficit
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
As of July 31, 2012 
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
(in millions)
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
488

 
$
59

 
$

 
$
547

Marketable securities
139

 
20

 

 
159

Restricted cash and cash equivalents
26

 
253

 

 
279

Finance and other receivables, net
932

 
2,463

 
(128
)
 
3,267

Inventories
1,870

 
7

 

 
1,877

Goodwill
280

 

 

 
280

Property and equipment, net
1,483

 
163

 

 
1,646

Investments in and advances to financial services operations
613

 

 
(613
)
 

Investments in non-consolidated affiliates
46

 

 

 
46

Deferred taxes, net
2,381

 
25

 

 
2,406

Other assets
599

 
37

 

 
636

Total assets
$
8,857

 
$
3,027

 
$
(741
)
 
$
11,143

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
Accounts payable
$
1,924

 
$
20

 
$
(128
)
 
$
1,816

Debt
2,146

 
2,266

 

 
4,412

Postretirement benefits liabilities
3,119

 
51

 

 
3,170

Other liabilities
2,026

 
77

 

 
2,103

Total liabilities
9,215

 
2,414

 
(128
)
 
11,501

Redeemable equity securities
5

 

 

 
5

Stockholders' equity attributable to non-controlling interest
44

 

 

 
44

Stockholders' equity (deficit) attributable to controlling interest
(407
)
 
613

 
(613
)
 
(407
)
Total liabilities and stockholders' equity (deficit)
$
8,857

 
$
3,027

 
$
(741
)
 
$
11,143


E-13



Condensed Statements of Assets, Liabilities, and Stockholders' Deficit
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
As of October 31, 2011
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
(in millions)
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
488

 
$
51

 
$

 
$
539

Marketable securities
698

 
20

 

 
718

Restricted cash and cash equivalents
29

 
298

 

 
327

Finance and other receivables, net
1,341

 
3,007

 
(94
)
 
4,254

Inventories
1,704

 
10

 

 
1,714

Goodwill
319

 

 

 
319

Property and equipment, net
1,433

 
137

 

 
1,570

Investments in and advances to financial services operations
564

 

 
(564
)
 

Investments in non-consolidated affiliates
60

 

 

 
60

Deferred taxes, net
2,031

 
26

 

 
2,057

Other assets
705

 
28

 

 
733

Total assets
$
9,372

 
$
3,577

 
$
(658
)
 
$
12,291

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
Accounts payable
$
2,194

 
$
22

 
$
(94
)
 
$
2,122

Debt
1,980

 
2,876

 

 
4,856

Postretirement benefits liabilities
3,262

 
54

 

 
3,316

Other liabilities
1,908

 
61

 

 
1,969

Total liabilities
9,344

 
3,013

 
(94
)
 
12,263

Redeemable equity securities
5

 

 

 
5

Stockholders' equity attributable to non-controlling interest
50

 

 

 
50

Stockholders' equity (deficit) attributable to controlling interest
(27
)
 
564

 
(564
)
 
(27
)
Total liabilities and stockholders' equity (deficit)
$
9,372

 
$
3,577

 
$
(658
)
 
$
12,291




E-14



Condensed Statement of Cash Activity
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
Nine Months Ended July 31, 2012
 
Manufacturing
Operations 
 
Financial
Services
Operations
 
Adjustments  
 
Condensed
Consolidated
Statement of
Cash Flows
(in millions)
 
 
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
(206
)
 
$
48

 
$
(48
)
 
$
(206
)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
207

 
2

 

 
209

Depreciation of equipment leased to others
14

 
23

 

 
37

Amortization of debt issuance costs and discount
22

 
9

 

 
31

Deferred income taxes
(405
)
 

 

 
(405
)
Impairment of intangible assets
38

 

 

 
38

Equity in loss of non-consolidated affiliates
22

 

 

 
22

Equity in income of financial services affiliates
(48
)
 

 
48

 

Dividends from non-consolidated affiliates
5

 

 

 
5

Change in intercompany receivables and payables
34

 
(34
)
 

 

Other, net
25

 
590

 

 
615

Net cash provided by (used in) operating activities
(292
)
 
638

 

 
346

Cash flows from investing activities
 
 
 
 
 
 


Purchases of marketable securities
(672
)
 

 

 
(672
)
Sales or maturities of marketable securities
1,230

 

 

 
1,230

Net change in restricted cash and cash equivalents
3

 
45

 

 
48

Capital expenditures
(248
)
 
(2
)
 

 
(250
)
Purchase of equipment leased to others
(3
)
 
(46
)
 

 
(49
)
Acquisition of intangibles
(14
)
 

 

 
(14
)
Business acquisitions, net of cash received
(12
)
 

 

 
(12
)
Other investing activities
(6
)
 
1

 

 
(5
)
Net cash provided by (used in) investing activities
278

 
(2
)
 

 
276

Net cash provide by (used in) financing activities
23

 
(630
)
 

 
(607
)
Effect of exchange rate changes on cash and cash equivalents
(9
)
 
2

 

 
(7
)
Increase in cash and cash equivalents

 
8

 

 
8

Cash and cash equivalents at beginning of the period
488

 
51

 

 
539

Cash and cash equivalents at end of the period
$
488

 
$
59

 
$

 
$
547



E-15



Condensed Statement of Cash Activity
Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
 
Nine Months Ended July 31, 2011(A)
 
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
(in millions)
 
 
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
 
 
Net income
$
1,503

 
$
67

 
$
(67
)
 
$
1,503

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
214

 
3

 

 
217

Depreciation of equipment leased to others
10

 
18

 

 
28

Amortization of debt issuance costs and discount
21

 
12

 

 
33

Deferred income taxes
(1,472
)
 

 

 
(1,472
)
Impairment of property and equipment and intangible assets
73

 

 

 
73

Equity in loss of non-consolidated affiliates
55

 

 

 
55

Equity in income of financial services affiliates
(67
)
 

 
67

 

Dividends from non-consolidated affiliates
2

 

 

 
2

Change in intercompany receivables and payables
(30
)
 
30

 

 

Other, net
(73
)
 
173

 

 
100

Net cash provided by operating activities
236

 
303

 

 
539

Cash flows from investing activities
 
 
 
 
 
 
 
Purchases of marketable securities
(1,109
)
 

 

 
(1,109
)
Sales or maturities of marketable securities
1,075

 

 

 
1,075

Net change in restricted cash and cash equivalents
2

 
19

 

 
21

Capital expenditures
(290
)
 
(1
)
 

 
(291
)
Purchase of equipment leased to others
1

 
(36
)
 

 
(35
)
Other investing activities
(38
)
 
7

 

 
(31
)
Net cash used in investing activities
(359
)
 
(11
)
 

 
(370
)
Net cash used in financing activities
(5
)
 
(312
)
 

 
(317
)
Effect of exchange rate changes on cash and cash equivalents
7

 

 

 
7

Decrease in cash and cash equivalents
(121
)
 
(20
)
 

 
(141
)
Cash and cash equivalents at beginning of the period
534

 
51

 

 
585

Cash and cash equivalents at end of the period
$
413

 
$
31

 
$

 
$
444

_________________
(A)
Effective with the fourth quarter of 2011, the Company presents manufacturing operations with financial services operations on an after-tax equity basis. Previously, the financial services operations were presented on a pre-tax equity basis. The nine months ended July 31, 2011 amounts have been reclassified to conform to this presentation.

E-16