EX-99.1 10 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 which includes certain eliminations. The manufacturing operations financial information represents non-GAAP financial measures. The reconciling differences between these non-GAAP financial measures and our GAAP condensed consolidated financial statements in Item 1, Condensed Consolidated Financial Statements, are our financial services operations and adjustments required to eliminate certain intercompany transactions between Manufacturing Operations and Financial Services Operations and to adjust for reclasses. 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 a pre-tax equity basis)

 

     Three Months Ended July 31, 2010  
     Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Consolidated
Statement of
Operations
 
(in millions)                         

Sales of manufactured products

   $   3,162      $   —        $   —        $   3,162   

Finance revenues

     —          82        (23     59   
                                

Sales and revenues, net

     3,162        82        (23     3,221   
                                

Costs of products sold

     2,525        —          —          2,525   

Restructuring charges

     (10     1        —          (9

Selling, general and administrative expenses

     331        31        (2     360   

Engineering and product development costs

     113        —          —          113   

Interest expense

     40        24        (6     58   

Other expense (income), net

     15        (7     (15     (7
                                

Total costs and expenses

     3,014        49        (23     3,040   

Equity in loss of non-consolidated affiliates

     (13     —          —          (13
                                

Income before income taxes and equity income from financial services operations

     135        33        —          168   

Equity income from financial services operations

     33        —          (33     —     
                                

Income before income taxes

     168        33        (33     168   

Income tax expense

     (19     —          —          (19
                                

Net income (loss)

     149        33        (33     149   

Less: Income attributable to non-controlling interests

     12        —          —          12   
                                

Net income (loss) attributable to Navistar International Corporation

   $ 137      $ 33      $ (33   $ 137   
                                

 

E-35


Condensed Statements of Revenues and Expenses

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

 

     Nine Months Ended July 31, 2010  
     Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Consolidated
Statement of
Operations
 
(in millions)                         

Sales of manufactured products

   $   8,610      $   —        $   —        $   8,610   

Finance revenues

     —          233        (70     163   
                                

Sales and revenues, net

     8,610        233        (70     8,773   
                                

Costs of products sold

     6,976        —          —          6,976   

Restructuring charges

     (27     4        —          (23

Selling, general and administrative expenses

     975        100        (5     1,070   

Engineering and product development costs

     338        —          —          338   

Interest expense

     116        85        (12     189   

Other expense (income), net

     22        (17     (53     (48
                                

Total costs and expenses

     8,400        172        (70     8,502   

Equity in loss of non-consolidated affiliates

     (32     —          —          (32
                                

Income before income taxes and equity income from financial services operations

     178        61        —          239   

Equity income from financial services operations

     61        —          (61     —     
                                

Income before income taxes

     239        61        (61     239   

Income tax expense

     (17     —          —          (17
                                

Net income (loss)

     222        61        (61     222   

Less: Income attributable to non-controlling interests

     38        —          —          38   
                                

Net income (loss) attributable to Navistar International Corporation

   $ 184      $ 61      $ (61   $ 184   
                                

 

E-36


Condensed Statements of Revenues and Expenses

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

 

     Three Months Ended July 31, 2009  
     Manufacturing
Operations
    Financial
Services
Operations
   Adjustments     Consolidated
Statement of
Operations
 
(in millions)                        

Sales of manufactured products

   $   2,433      $   —      $   —        $   2,433   

Finance revenues

     —          92      (19     73   
                               

Sales and revenues, net

     2,433        92      (19     2,506   
                               

Costs of products sold

     2,119        —        —          2,119   

Restructuring charges

     —          —        —          —     

Selling, general and administrative expenses

     275        34      —          309   

Engineering and product development costs

     101        —        —          101   

Interest expense

     23        33      —          56   

Other expense (income), net

     (42     5      (19     (56
                               

Total costs and expenses

     2,476        72      (19     2,529   

Equity in loss of non-consolidated affiliates

     25        —        —          25   
                               

Income before income taxes, extraordinary gain and equity income from financial services operations

     (18     20      —          2   

Equity income from financial services operations

     20        —        (20     —     
                               

Income before income taxes and extraordinary gain

     2        20      (20     2   

Income tax benefit (expense)

     (30     —        —          (30
                               

Income (loss) before extraordinary gain

     (28     20      (20     (28

Extraordinary gain, net of tax

     23        —        —          23   
                               

Net income (loss)

     (5     20      (20     (5

Less: Income (loss) attributable to non-controlling interests

     7        —        —          7   
                               

Net income (loss) attributable to Navistar International Corporation

   $ (12   $ 20    $ (20   $ (12
                               

 

E-37


Condensed Statements of Revenues and Expenses

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

 

     Nine Months Ended July 31, 2009  
     Manufacturing
Operations
    Financial
Services
Operations
   Adjustments     Consolidated
Statement of
Operations
 
(in millions)                        

Sales of manufactured products

   $   8,069      $   —      $   —        $   8,069   

Finance revenues

     —          273      (58     215   
                               

Sales and revenues, net

     8,069        273      (58     8,284   
                               

Costs of products sold

     6,737        —        —          6,737   

Restructuring charges

     55        —        —          55   

Selling, general and administrative expenses

     886        99      —          985   

Engineering and product development costs

     339        —        —          339   

Interest expense

     77        135      (6     206   

Other expense (income), net

     (182     2      (52     (232
                               

Total costs and expenses

     7,912        236      (58     8,090   

Equity in loss of non-consolidated affiliates

     56        —        —          56   
                               

Income before income taxes, extraordinary gain and equity income from financial services operations

     213        37      —          250   

Equity income from financial services operations

     37        —        (37     —     
                               

Income before income taxes and extraordinary gain

     250        37      (37     250   

Income tax benefit (expense)

     (32     —        —          (32
                               

Income (loss) before extraordinary gain

     218        37      (37     218   

Extraordinary gain, net of tax

     23        —        —          23   
                               

Net income (loss)

     241        37      (37     241   

Less: Income attributable to non-controlling interests

     7        —        —          7   
                               

Net income (loss) attributable to Navistar International Corporation

   $ 234      $ 37    $ (37   $ 234   
                               

 

E-38


Condensed Statements of Assets, Liabilities, Redeemable Equity Securities, and Stockholders’ Deficit

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

 

     As of July 31, 2010  
     Manufacturing
Operations
    Financial
Services
Operations
   Adjustments     Consolidated
Balance Sheet
 
(in millions)                        

Cash and cash equivalents

   $ 476      $ 39    $ —        $ 515   

Marketable securities

     281        20      —          301   

Restricted cash and cash equivalents

     27        327      —          354   

Accounts receivables

     1,036        3,089      (158     3,967   

Inventories

     1,622        15      —          1,637   

Investments in financial services operations

     479        —        (479     —     

Investments in non-consolidated affiliates

     106        —        —          106   

Property and equipment, net

     1,334        119      —          1,453   

Goodwill and intangible assets, net

     583        —        —          583   

Other assets

     314        36      —          350   

Deferred taxes, net

     102        50      —          152   
                               

Total assets

   $ 6,360      $ 3,695    $ (637   $ 9,418   
                               

Accounts payable

   $ 1,641      $ 39    $ —        $ 1,680   

Postretirement benefits liabilities

     2,228        31      —          2,259   

Debt

     1,905        3,039      (158 )     4,786   

Other liabilities

     1,626        107      —          1,733   

Redeemable equity securities

     9        —        —          9   

Stockholders’ equity attributable to non-controlling interest

     56        —        —          56   

Stockholders’ equity (deficit) attributable to controlling interest

     (1,105     479      (479     (1,105
                               

Total liabilities, redeemable equity securities, and stockholders’ equity (deficit)

   $   6,360      $   3,695    $   (637   $   9,418   
                               

 

E-39


Condensed Statements of Assets, Liabilities, Redeemable Equity Securities, and Stockholders’ Deficit

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

 

     As of October 31, 2009  
     Manufacturing
Operations
    Financial
Services
Operations
   Adjustments     Consolidated
Balance Sheet
 
     (Revised)(A)  
(in millions)                        

Cash and cash equivalents

   $ 1,152      $ 60    $ —        $ 1,212   

Restricted cash and cash equivalents

     30        455      —          485   

Accounts receivables

     915        3,358      (188     4,085   

Inventories

     1,634        32      —          1,666   

Investments in financial services operations

     423        —        (423     —     

Investments in non-consolidated affiliates

     62        —        —          62   

Property and equipment, net

     1,345        122      —          1,467   

Goodwill and intangible assets, net

     582        —        —          582   

Deferred taxes, net

     102        57      —          159   

Other assets

     253        52      —          305   
                               

Total assets

   $   6,498      $   4,136    $   (611   $   10,023   
                               

Accounts payable

   $ 1,929      $ 131    $ (188   $ 1,872   

Postretirement benefits liabilities

     2,635        33      —          2,668   

Debt

     1,861        3,431      —          5,292   

Other liabilities

     1,702        118      —          1,820   

Redeemable equity securities

     13        —        —          13   

Stockholders’ equity attributable to non-controlling interests

     61        —        —          61   

Stockholders’ equity (deficit) attributable to Navistar International Corporation

     (1,703     423      (423     (1,703
                               

Total liabilities, redeemable equity securities, and stockholders’ equity (deficit)

   $ 6,498      $ 4,136    $ (611   $ 10,023   
                               

 

(A) Revised; See Note 1, Summary of significant accounting policies, to the accompanying consolidated financial statements.

 

E-40


Condensed Statement of Cash Activities

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

 

     Nine Months Ended July 31, 2010  
     Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Condensed
Consolidated
Statement of
Cash Flows
 
(in millions)                         

Cash flows from operating activities

        

Net income

   $ 222      $ 61      $ (61   $ 222   

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

        

Depreciation and amortization

     194        4        —          198   

Depreciation of equipment leased to others

     21        17        —          38   

Amortization of debt issuance costs and discount

     19        10        —          29   

Deferred income taxes

     3        6        —          9   

Equity in loss of non-consolidated affiliates

     32        —          —          32   

Equity in income of financial services affiliates

     (61     —          61        —     

Dividends from non-consolidated affiliates

     3        —          —          3   

Change in intercompany receivable /payable, net

     32        (32     —          —     

Other, net

     (499     632        —          133   
                                

Net cash provided by (used in) operating activities

     (34     698        —          664   
                                

Cash flows from investing activities

        

Purchases of marketable securities

     (924     (20 )     —          (944

Sales or maturities of marketable securities

     643        —          —          643   

Net change in restricted cash and cash equivalents

     4        337        —          341   

Capital expenditures

     (161     (1     —          (162

Purchase of equipment leased to others

     (1     (26     —          (27

Acquisition of intangibles

     (12     —          —          (12

Business acquisitions

     (2     —          —          (2

Other investing activities

     (83     5        10        (68
                                

Net cash provided by (used in) investing activities

     (536     295        10        (231
                                

Net cash used in financing activities

     (102       (1,015     (10 )       (1,127
                                

Effect of exchange rate changes on cash and cash equivalents

     (4     1        —          (3
                                

Decrease in cash and cash equivalents

     (676     (21     —          (697

Cash and cash equivalents at beginning of the period

       1,152        60        —          1,212   
                                

Cash and cash equivalents at end of the period

   $ 476      $ 39      $   —        $ 515   
                                

 

E-41


Condensed Statement of Cash Activities

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

 

     Nine Months Ended July 31, 2009  
     Manufacturing
Operations
    Financial
Services
Operations
    Adjustments     Condensed
Consolidated
Statement of
Cash Flows
 
(in millions)                         

Cash flows from operating activities

        

Net income (loss)

   $ 241      $ 37      $ (37   $ 241   

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

        

Depreciation and amortization

     210        3        —          213   

Depreciation of equipment leased to others

     26        16        —          42   

Amortization of debt issuance cost

     5        7        —          12   

Deferred income taxes

     4        2        —          6   

Equity in income of non-consolidated affiliates

     (56     —          —          (56

Equity in income of financial services affiliates

     (37     —          37        —     

Dividends from non-consolidated affiliates

     59        —          —          59   

Restructuring charges

     —          —          —          —     

Change in intercompany receivable/payable, net

     (97     97        —          —     

Other, net

       (218       608        —            390   
                                

Net cash provided by operating activities

     137        770        —          907   
                                

Cash flows from investing activities

        

Purchases of marketable securities

     (354     —          —          (354

Sales or maturities of marketable securities

     356        —          —          356   

Net change in restricted cash and cash equivalents

     1        48        —          49   

Capital expenditures

     (118     (2     —          (120

Purchase of equipment leased to others

     (1     (27     —          (28

Business acquisitions, net of escrow receipt

     (42     —          —          (42

Other investment activities

     (32     4        20        (8
                                

Net cash provided by (used in) investing activities

     (190     23        20        (147
                                

Net cash used in financing activities

     (59     (807     (20     (886
                                

Effect of exchange rate changes on cash and cash equivalents

     8        (2     —          6   
                                

Decrease in cash and cash equivalents

     (104     (16     —          (120

Increase in cash and cash equivalents upon consolidation of BDP and BDT

     80        —          —          80   
                                

Cash and cash equivalents at beginning of the period

     775        86        —          861   
                                

Cash and cash equivalents at end of the period

   $ 751      $ 70      $ —        $ 821   
                                

 

E-42