EX-99.1 21 dex991.htm ADDITIONAL FINANCIAL INFORMATION (UNAUDITED) Additional Financial Information (Unaudited)

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 a pre-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 GAAP consolidated financial statements in Item 8 are our financial services operations, which are included on a pre-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’ 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.

We revised our previously reported condensed statements of assets, liabilities, redeemable equity securities, and stockholders’ deficit as of October 31, 2007 to give effects to recording stock options as redeemable equity securities, which have been classified as mezzanine equity. The redeemable equity securities were previously included in Stockholders’ deficit. In June 2007 we amended the terms of then-outstanding stock option awards to allow for cash settlement in the event of a change in control and when certain other conditions exist. In accordance with EITF Topic No. D-98, Classification and Measurement of Redeemable Securities, the amended stock options’ intrinsic values should have been re-measured at the modification date and should have been recorded as Redeemable equity securities, which are classified as mezzanine equity on the consolidated statements of assets, liabilities, redeemable equity securities, and stockholders’ deficit. To record the amount reported as mezzanine equity, we recorded a corresponding reduction of Stockholders’ deficit in the amount of $139 million. The corrections had no effect on our previously reported condensed statements of operations and condensed statements of cash activities and are not considered material to any previously reported consolidated financial statements.

We have revised our previously reported condensed statements of cash activities for the years ended October 31, 2007 and 2006 to reflect the correction of errors identified in those statements. The errors were primarily related to the incorrect allocation of the effect of exchange rates on cash and cash equivalents where amounts previously reported in the Effect of exchange rates on cash and cash equivalents are now reported in Other, net in Net cash provided by (used in) operating activities and reclassifications from Net cash provided by operating activities to Net cash used in investing activities. The corrections had no effect on our previously reported condensed statements of assets, liabilities and stockholders’ deficit or condensed statements of revenues and expenses, and are not considered material to any previously reported condensed statements of cash activities.

Condensed Statements of Revenues and Expenses

Navistar International Corporation (with financial services operations on a pre-tax equity basis)

 

     For the years ended October 31  
     2008     2007     2006  
(in millions)                   

Sales of manufactured products, net

   $ 14,399     $ 11,910     $ 13,878  
                        

Costs of products sold

     11,930       10,131       11,703  

Asset impairment

     358       —         —    

Selling, general and administrative expenses

     1,309       1,352       1,234  

Engineering and product development costs

     380       382       453  

Other expenses, net

     209       246       240  
                        

Total costs and expenses

     14,186       12,111       13,630  
                        

Income (loss) before income taxes—Manufacturing operations

     213       (201 )     248  

—Financial services operations

     (22 )     128       147  
                        

Income (loss) before income taxes

     191       (73 )     395  

Income tax expense

     (57 )     (47 )     (94 )
                        

Net income (loss)

   $ 134     $ (120 )   $ 301  
                        

 

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Condensed Statements of Assets, Liabilities, and Stockholders’ Deficit

Navistar International Corporation (with financial services operations on a pre-tax equity basis)

 

     As of October 31  
     2008     2007  
(in millions)          (Revised)  

Cash and cash equivalents

   $ 775     $ 716  

Accounts receivable

     1,069       788  

Inventories

     1,566       1,380  

Investments in and advances to financial services operations

     387       397  

Investments in and advances to non-consolidated affiliates

     156       154  

Property and equipment, net

     1,390       1,980  

Goodwill and intangible assets, net

     529       639  

Other assets

     185       331  

Deferred taxes, net

     67       123  
                

Total assets

   $ 6,124     $ 6,508  
                

Accounts payable

   $ 2,162     $ 1,888  

Postretirement benefits liabilities

     1,628       1,310  

Debt—manufacturing operations

     1,834       2,028  

Other liabilities

     1,852       2,016  

Redeemable equity securities

     143       140  

Stockholders’ deficit

     (1,495 )     (874 )
                

Total liabilities and stockholders’ deficit

   $ 6,124     $ 6,508  
                

 

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Condensed Statements of Cash Activities

Navistar International Corporation (with financial services operations on a pre-tax equity basis)

 

     For the years ended October 31  
     2008     2007     2006  
(in millions)          (Revised)     (Revised)  

Cash flow from operating activities:

      

Net income (loss)

   $ 134     $ (120 )   $ 301  

Adjustments to reconcile net income (loss) to cash provided by operating activities:

      

Depreciation and amortization

     333       312       317  

Depreciation of equipment leased to others

     44       40       34  

Deferred taxes

     82       39       (3 )

Impairment of property and equipment

     372       —         —    

Equity in loss (income) of financial services operations

     22       (128 )     (147 )

Equity in income of non-consolidated affiliates

     (71 )     (74 )     (99 )

Dividends from financial services operations

     25       400       —    

Dividends from non-consolidated affiliates

     85       111       83  

Other, net

     (597 )     (411 )     10  
                        

Net cash provided by operating activities

     429       169       496  
                        

Cash flow from investing activities:

      

Purchases of marketable securities

     (42 )     (221 )     (179 )

Sales or maturities of marketable securities

     46       351       134  

Net change in restricted cash and cash equivalents

     7       24       1  

Capital expenditures

     (168 )     (309 )     (228 )

Acquisitions, net of cash acquired

     —         (7 )     (54 )

Contributions to NFC

     (60 )     —         —    

Other investment activities

     1       92       (25 )
                        

Net cash used in investing activities

     (216 )     (70 )     (351 )
                        

Net cash provided by (used in) financing activities

     (133 )     (480 )     140  

Effect of exchange rate changes on cash and cash equivalents

     (21 )     19       17  
                        

Increase (decrease) in cash and cash equivalents

     59       (362 )     302  

Cash and cash equivalents at beginning of the year

     716       1,078       776  
                        

Cash and cash equivalents at end of the year

   $ 775     $ 716     $ 1,078  
                        

 

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