Company on Track to Achieve FY11 Net Income at High End of
Guidance; Order Receipts Support Market Recovery, Stronger Volumes
WARRENVILLE, Ill.--(BUSINESS WIRE)--
Navistar International Corporation (NYSE:NAV) today reported adjusted
net income attributable to Navistar International Corporation for the
first quarter ended Jan. 31, 2011, totaled $12 million, equal to $0.16
diluted earnings per share, excluding the impact of costs to integrate
its truck and engine engineering operation. Including the engineering
integration costs, the net loss attributable to Navistar International
Corporation for the 2011 first quarter was $6 million, equal to $0.08
diluted loss per share.
Earnings from operations were in line with full year expectations.
Bolstered by the beginning of a solid recovery in its traditional North
American markets, the company reaffirmed its guidance with a bias toward
the higher end.
"We have significantly raised truck production schedules by up 40
percent on various models to reflect increasing order activity. And,
overall, we remain confident that we can deliver upon our commitments
while still investing in our global business," said Daniel C. Ustian,
Navistar chairman, president and chief executive officer. "We see
positive signs across all of our businesses. We believe industry volumes
should be at the higher end of our range, military revenue will approach
$2 billion, global volumes are expanding and so far we have contained
challenges in commodity costs. Such that, we believe we can deliver
results toward the higher side of our guidance."
Navistar earned $2 million, equal to $0.03 diluted earnings per share in
the year-ago first quarter, adjusted to exclude the impact of benefits
from the Ford restructuring and related activity. Including the
restructuring benefit, first quarter 2010 earnings were $19 million,
equal to $0.26 diluted earnings per share. Sales and revenues for the
2011 first quarter were $2.7 billion, compared with $2.8 billion in the
year-ago first quarter.
As previously indicated, Navistar forecasted its net income attributable
to Navistar International Corporation for fiscal year ending Oct. 31,
2011, is expected to be between $388 million and $465 million, equal to
$5 to $6 diluted earnings per share, excluding transition costs
associated with the integration of the truck and engine engineering
operation.
The company anticipates that total truck industry retail sales volume
for Class 6-8 trucks and school buses in the United States and Canada
for the year ending Oct. 31, 2011, will be 260,000 units. Truck industry
volume in fiscal 2010 was 191,300 units.
The company also said its military business is on target to achieve
revenue of $2 billion for the year as Navistar Defense continues to win
orders and fill its order backlog.
The company's global strategy is unfolding as planned and the company,
through its NC2 and Mahindra joint ventures, is currently
producing and selling commercial truck products in India, Brazil, South
Africa and Australia. Navistar has invested $27 million in global
expansion with NC2 and Mahindra in the first quarter ended
Jan. 31, 2011.
|
Summary Financial Results:
|
|
|
|
First Quarter
|
|
|
|
2011
|
|
2010
|
|
(Dollars in Millions, except per share data)
|
|
|
|
|
|
Sales & revenues, net
|
|
$2,743
|
|
$2,809
|
|
Segment Results:
|
|
|
|
Truck
|
|
32
|
|
35
|
|
Engine
|
|
(8)
|
|
54
|
|
Parts
|
|
56
|
|
79
|
|
Manufacturing segment profit(A) |
|
$80
|
|
$168
|
|
Income before tax expense
|
|
$6
|
|
$40
|
|
Net income (loss) attributable to Navistar International Corporation
|
|
(6)
|
|
19
|
|
Diluted earnings (loss) per share attributable to Navistar
International Corporation
|
|
(0.08)
|
|
0.26
|
|
Adjusted net income attributable to Navistar International
Corporation(A) |
|
12
|
|
2
|
|
Adjusted diluted earnings per share attributable to Navistar
International Corporation(A) |
|
0.16
|
|
0.03
|
|
(A) Non-GAAP measure, see SEC Regulation G Non-GAAP Reconciliation
for additional information.
|
|
|
Segment Results
Truck — For the first quarter ended Jan. 31, 2011, the truck
segment realized a profit of $32 million, compared with a year-ago first
quarter profit of $35 million. The first-quarter profit was aided by
improvements in commercial revenue due to improved pricing across all
the company's traditional classes partially driven by the use of 2010
emissions-compliant engine, but offset by $18 million of engineering
integration costs related to restructuring activities at the company's
Fort Wayne, Ind., engineering facility. Additionally there were $4
million in postretirement and contract termination benefits costs at its
Springfield, Ohio, truck facility, impacting the truck segment in the
first quarter.
Commercial units sold by the company's traditional United States and
Canada Class 6-8 truck and school bus businesses decreased by 11 percent
for the first quarter of fiscal 2011, compared with the prior year.
First quarter military units also were down by more than 300 units.
During the first quarter, Navistar achieved a number of milestones,
which comprise key building blocks for the future growth of the
business. The company launched the International® MaxxPro®
Recovery vehicle, its fully integrated Type A school bus, the IC Bus™
AE Series, and the International® ProStar®+
(Plus) with a MaxxForce® 15.
Engine — The engine segment reported a loss for the 2011 first
quarter of $8 million as it completed its launch of a full lineup of
2010 compliant engines which required low-volume costs that will decline
in the second half of fiscal 2011. In addition, South American diesel
volumes were low in the first quarter because of holidays in Brazil, but
volumes will increase substantially in the last nine month of fiscal
2011. Engine will also see the growth of it North American OEM business
and it Pure Power Technologies components business in the second half of
2011 and engine segment results for fiscal 2011 are expected to exceed
$100 million. Prior-year results included the impacts of the Ford North
America contract which expired at the end of calendar year 2009.
After the close of the first quarter, Navistar submitted its MaxxForce
13 at 0.2 grams NOx to the U.S. Environmental Protection Agency for
certification and launched the new line of MaxxForce® P brand
power-generation diesel open-power units to serve global markets.
Parts — The parts segment continues to deliver solid profits. The
commercial sector, in particular, grew 20 percent versus the year-ago
first quarter. Military parts profits declined as a result of an
inventory correction by the customer. Navistar expects this adjustment
to be completed during the second quarter ending April 30, 2011, and the
parts segment should return to the normalized annual rate of $400
million to $500 million at that time.
Financial Services — The 2011 first quarter results for the
financial services segment have more than doubled to $32 million as the
result of significant improvement in portfolio performance. This
compares to a segment profit of $12 million in the year-ago first
quarter. Provision for loan losses decreased $14 million relative to the
prior year as the quality of our retail portfolio improved
significantly. Earnings from the company's finance segment are expected
to decline as its U.S. retail portfolio runs off as the company
implements its strategic alliance with GE.
About Navistar
Navistar International Corporation (NYSE: NAV) is a holding company
whose subsidiaries and affiliates produce International®
brand commercial and military trucks, MaxxForce® brand diesel
engines, IC Bus™ brand school and commercial buses, Monaco®
RVbrands of recreational vehicles, and Workhorse®
brand chassis for motor homes and step vans. It also is a private-label
designer and manufacturer of diesel engines for the pickup truck, van
and SUV markets. The company also provides truck and diesel engine
service parts. Another affiliate offers financing services. Additional
information is available at www.Navistar.com/newsroom.
Forward-Looking Statement
Information provided and statements contained in this report that are
not purely historical are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, Section 21E of
the Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements only speak as of the date of this report and the company
assumes no obligation to update the information included in this report.
Such forward-looking statements include information concerning our
possible or assumed future results of operations, including descriptions
of our business strategy. These statements often include words such as
"believe," "expect," "anticipate," "intend," "plan," "estimate," or
similar expressions. These statements are not guarantees of performance
or results and they involve risks, uncertainties, and assumptions. For a
further description of these factors, see Item 1A, Risk Factors of our
Form 10-K for the fiscal year ended October 31, 2010, which was filed on
December 21, 2010. Although we believe that these forward-looking
statements are based on reasonable assumptions, there are many factors
that could affect our actual financial results or results of operations
and could cause actual results to differ materially from those in the
forward-looking statements. All future written and oral forward-looking
statements by us or persons acting on our behalf are expressly qualified
in their entirety by the cautionary statements contained or referred to
above. Except for our ongoing obligations to disclose material
information as required by the federal securities laws, we do not have
any obligations or intention to release publicly any revisions to any
forward-looking statements to reflect events or circumstances in the
future or to reflect the occurrence of unanticipated events.
|
Navistar International Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
|
|
2011
|
|
2010
|
|
(in millions, except per share data)
|
|
|
|
(Revised)(A) |
|
Sales and revenues
|
|
|
|
|
|
Sales of manufactured products, net
|
|
$
|
2,693
|
|
|
$
|
2,758
|
|
|
Finance revenues
|
|
|
50
|
|
|
|
51
|
|
|
Sales and revenues, net
|
|
|
2,743
|
|
|
|
2,809
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
Costs of products sold
|
|
|
2,199
|
|
|
|
2,262
|
|
|
Restructuring charges (benefit)
|
|
|
22
|
|
|
|
(17
|
)
|
|
Selling, general and administrative expenses
|
|
|
318
|
|
|
|
336
|
|
|
Engineering and product development costs
|
|
|
129
|
|
|
|
109
|
|
|
Interest expense
|
|
|
63
|
|
|
|
67
|
|
|
Other expense (income), net
|
|
|
(11
|
)
|
|
|
6
|
|
|
Total costs and expenses
|
|
|
2,720
|
|
|
|
2,763
|
|
|
Equity in loss of non-consolidated affiliates
|
|
|
17
|
|
|
|
6
|
|
|
Income before income tax expense
|
|
|
6
|
|
|
|
40
|
|
|
Income tax expense
|
|
|
—
|
|
|
|
8
|
|
|
Net income
|
|
|
6
|
|
|
|
32
|
|
|
Less: Net income attributable to non-controlling interests
|
|
|
12
|
|
|
|
13
|
|
|
Net income (loss) attributable to Navistar International
Corporation
|
|
$
|
(6
|
)
|
|
$
|
19
|
|
|
Earnings (loss) per share attributable to Navistar International
Corporation:
|
|
|
|
|
|
Basic
|
|
$
|
(0.08
|
)
|
|
$
|
0.27
|
|
|
Diluted
|
|
|
(0.08
|
)
|
|
|
0.26
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
Basic
|
|
|
72.5
|
|
|
|
71.2
|
|
|
Diluted
|
|
|
72.5
|
|
|
|
72.1
|
|
|
(A)
|
During the first quarter of 2011, the company changed its method
of accruing for certain incentive compensation for interim
reporting purposes from a ratable method to a performance-based
method. The company believes that the performance-based method is
preferable because it links the accrual of incentive compensation
with the achievement of performance. We have revised our
previously reported Consolidated Statement of Operations,
Consolidated Statement of Stockholders' Deficit, and Condensed
Consolidated Statement of Cash Flows for the three months ended
January 31, 2010 on a retrospective basis to reflect this change
in principle based on information that would have been available
as of our previous filing. The change will have no impact on our
annual financial results. See Note 1, Summary of significant
accounting policies of our Form 10Q for additional
information.
|
|
|
|
|
Navistar International Corporation and Subsidiaries
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
January 31,
2011
|
|
October 31,
2010
|
|
(in millions, except per share data)
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
399
|
|
|
$
|
585
|
|
|
Marketable securities
|
|
|
410
|
|
|
|
586
|
|
|
Trade and other receivables, net
|
|
|
840
|
|
|
|
987
|
|
|
Finance receivables, net
|
|
|
1,770
|
|
|
|
1,770
|
|
|
Inventories
|
|
|
1,649
|
|
|
|
1,568
|
|
|
Deferred taxes, net
|
|
|
90
|
|
|
|
83
|
|
|
Other current assets
|
|
|
299
|
|
|
|
256
|
|
|
Total current assets
|
|
|
5,457
|
|
|
|
5,835
|
|
|
Restricted cash and cash equivalents
|
|
|
171
|
|
|
|
180
|
|
|
Trade and other receivables, net
|
|
|
94
|
|
|
|
44
|
|
|
Finance receivables, net
|
|
|
1,001
|
|
|
|
1,145
|
|
|
Investments in non-consolidated affiliates
|
|
|
117
|
|
|
|
103
|
|
|
Property and equipment (net of accumulated depreciation and
amortization of $1,944 and $1,928, at the respective dates)
|
|
|
1,470
|
|
|
|
1,442
|
|
|
Goodwill
|
|
|
326
|
|
|
|
324
|
|
|
Intangible assets (net of accumulated amortization of $132 and $124,
at the respective dates)
|
|
|
286
|
|
|
|
262
|
|
|
Deferred taxes, net
|
|
|
67
|
|
|
|
63
|
|
|
Other noncurrent assets
|
|
|
290
|
|
|
|
332
|
|
|
Total assets
|
|
$
|
9,279
|
|
|
$
|
9,730
|
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE EQUITY SECURITIES AND STOCKHOLDERS'
DEFICIT
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Notes payable and current maturities of long-term debt
|
|
$
|
748
|
|
|
$
|
632
|
|
|
Accounts payable
|
|
|
1,627
|
|
|
|
1,827
|
|
|
Other current liabilities
|
|
|
1,080
|
|
|
|
1,130
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
3,455
|
|
|
|
3,589
|
|
|
Long-term debt
|
|
|
3,866
|
|
|
|
4,238
|
|
|
Postretirement benefits liabilities
|
|
|
2,009
|
|
|
|
2,097
|
|
|
Deferred taxes, net
|
|
|
142
|
|
|
|
142
|
|
|
Other noncurrent liabilities
|
|
|
639
|
|
|
|
588
|
|
|
Total liabilities
|
|
|
10,111
|
|
|
|
10,654
|
|
|
Redeemable equity securities
|
|
|
7
|
|
|
|
8
|
|
|
Stockholders' deficit
|
|
|
|
|
|
Series D convertible junior preference stock
|
|
|
3
|
|
|
|
4
|
|
|
Common stock ($0.10 par value per share, 110.0 shares authorized,
75.4 shares issued at both dates)
|
|
|
7
|
|
|
|
7
|
|
|
Additional paid in capital
|
|
|
2,224
|
|
|
|
2,206
|
|
|
Accumulated deficit
|
|
|
(1,884
|
)
|
|
|
(1,878
|
)
|
|
Accumulated other comprehensive loss
|
|
|
(1,118
|
)
|
|
|
(1,196
|
)
|
|
Common stock held in treasury, at cost (3.1 and 3.6 shares, at the
respective dates)
|
|
|
(113
|
)
|
|
|
(124
|
)
|
|
Total stockholders' deficit attributable to Navistar International
Corporation
|
|
|
(881
|
)
|
|
|
(981
|
)
|
|
Stockholders' equity attributable to non-controlling interests
|
|
|
42
|
|
|
|
49
|
|
|
Total stockholders' deficit
|
|
|
(839
|
)
|
|
|
(932
|
)
|
|
Total liabilities, redeemable equity securities, and
stockholders' deficit
|
|
$
|
9,279
|
|
|
$
|
9,730
|
|
|
|
|
|
|
|
|
|
|
|
|
Navistar International Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
|
|
2011
|
|
2010
|
|
(in millions)
|
|
|
|
(Revised)(A) |
|
Cash flows from operating activities
|
|
|
|
|
|
Net income
|
|
$
|
6
|
|
|
$
|
32
|
|
|
Adjustments to reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
71
|
|
|
|
66
|
|
|
Depreciation of equipment leased to others
|
|
|
9
|
|
|
|
13
|
|
|
Deferred taxes
|
|
|
—
|
|
|
|
27
|
|
|
Amortization of debt issuance costs and discount
|
|
|
12
|
|
|
|
11
|
|
|
Stock-based compensation
|
|
|
20
|
|
|
|
10
|
|
|
Provision for doubtful accounts, net of recoveries
|
|
|
1
|
|
|
|
14
|
|
|
Equity in loss of non-consolidated affiliates, net of dividends
|
|
|
18
|
|
|
|
7
|
|
|
Other non-cash operating activities
|
|
|
7
|
|
|
|
17
|
|
|
Changes in other assets and liabilities, exclusive of the effects of
businesses acquired and disposed
|
|
|
(139
|
)
|
|
|
(72
|
)
|
|
Net cash provided by operating activities
|
|
|
5
|
|
|
|
125
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
Purchases of marketable securities
|
|
|
(140
|
)
|
|
|
(378
|
)
|
|
Sales or maturities of marketable securities
|
|
|
316
|
|
|
|
328
|
|
|
Net change in restricted cash and cash equivalents
|
|
|
9
|
|
|
|
63
|
|
|
Capital expenditures
|
|
|
(95
|
)
|
|
|
(40
|
)
|
|
Purchase of equipment leased to others
|
|
|
(14
|
)
|
|
|
(21
|
)
|
|
Proceeds from sales of property and equipment
|
|
|
14
|
|
|
|
4
|
|
|
Investments in non-consolidated affiliates
|
|
|
(27
|
)
|
|
|
(30
|
)
|
|
Acquisition of intangibles
|
|
|
—
|
|
|
|
(11
|
)
|
|
Business acquisitions, net of cash received
|
|
|
—
|
|
|
|
(2
|
)
|
|
Net cash provided by (used in) investing activities
|
|
|
63
|
|
|
|
(87
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
Proceeds from issuance of securitized debt
|
|
|
45
|
|
|
|
239
|
|
|
Principal payments on securitized debt
|
|
|
(176
|
)
|
|
|
(276
|
)
|
|
Proceeds from issuance of non-securitized debt
|
|
|
22
|
|
|
|
471
|
|
|
Principal payments on non-securitized debt
|
|
|
(48
|
)
|
|
|
(43
|
)
|
|
Net decrease in notes and debt outstanding under revolving credit
facilities
|
|
|
(50
|
)
|
|
|
(885
|
)
|
|
Principal payments under financing arrangements and capital lease
obligations
|
|
|
(43
|
)
|
|
|
(22
|
)
|
|
Debt issuance costs
|
|
|
(3
|
)
|
|
|
(21
|
)
|
|
Proceeds from exercise of stock options
|
|
|
15
|
|
|
|
2
|
|
|
Dividends paid by subsidiaries to non-controlling interest
|
|
|
(19
|
)
|
|
|
(19
|
)
|
|
Net cash used in financing activities
|
|
|
(257
|
)
|
|
|
(554
|
)
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
3
|
|
|
|
(6
|
)
|
|
Decrease in cash and cash equivalents
|
|
|
(186
|
)
|
|
|
(522
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
585
|
|
|
|
1,212
|
|
|
Cash and cash equivalents at end of the period
|
|
$
|
399
|
|
|
$
|
690
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
During the first quarter of 2011, the company changed its method of
accruing for certain incentive compensation for interim reporting
purposes from a ratable method to a performance-based method. The
company believes that the performance-based method is preferable
because it links the accrual of incentive compensation with the
achievement of performance. We have revised our previously reported
Consolidated Statement of Operations, Consolidated Statement of
Stockholders' Deficit, and Condensed Consolidated Statement of Cash
Flows for the three months ended January 31, 2010 on a retrospective
basis to reflect this change in principle based on information that
would have been available as of our previous filing. The change will
have no impact on our annual financial results. See Note 1, Summary
of significant accounting policies, of our Form 10Q for additional
information.
|
|
|
|
|
Navistar International Corporation and Subsidiaries
Segment Reporting
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We define segment profit (loss) as net income (loss) attributable
to Navistar International Corporation excluding income taxes. Our
results for interim periods are not necessarily indicative of full
year results. Selected financial information is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truck
|
|
Engine
|
|
Parts
|
|
Financial
Services(A) |
|
Corporate
and
Eliminations
|
|
Total
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended January 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales and revenues, net
|
|
$
|
1,800
|
|
|
$
|
481
|
|
|
$
|
412
|
|
$
|
50
|
|
$
|
—
|
|
|
$
|
2,743
|
|
|
Intersegment sales and revenues
|
|
|
—
|
|
|
|
302
|
|
|
|
83
|
|
|
23
|
|
|
(408
|
)
|
|
|
—
|
|
|
Total sales and revenues, net
|
|
$
|
1,800
|
|
|
$
|
783
|
|
|
$
|
495
|
|
$
|
73
|
|
$
|
(408
|
)
|
|
$
|
2,743
|
|
|
Net income (loss) attributable to NIC
|
|
$
|
32
|
|
|
$
|
(8
|
)
|
|
$
|
56
|
|
$
|
32
|
|
$
|
(118
|
)
|
|
$
|
(6
|
)
|
|
Income tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
Segment profit (loss) (B) |
|
$
|
32
|
|
|
$
|
(8
|
)
|
|
$
|
56
|
|
$
|
32
|
|
$
|
(118
|
)
|
|
$
|
(6
|
)
|
|
Depreciation and amortization
|
|
$
|
37
|
|
|
$
|
29
|
|
|
$
|
2
|
|
$
|
7
|
|
$
|
5
|
|
|
$
|
80
|
|
|
Interest expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
30
|
|
|
33
|
|
|
|
63
|
|
|
Equity in income (loss) of non-consolidated affiliates
|
|
|
(18
|
)
|
|
|
—
|
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
|
(17
|
)
|
|
Capital expenditures(C) |
|
|
16
|
|
|
|
32
|
|
|
|
1
|
|
|
—
|
|
|
46
|
|
|
|
95
|
|
|
Three Months Ended January 31, 2010 (Revised)(D) |
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales and revenues, net
|
|
$
|
1,716
|
|
|
$
|
625
|
|
|
$
|
417
|
|
$
|
51
|
|
$
|
—
|
|
|
$
|
2,809
|
|
|
Intersegment sales and revenues
|
|
|
1
|
|
|
|
196
|
|
|
|
50
|
|
|
24
|
|
|
(271
|
)
|
|
|
—
|
|
|
Total sales and revenues, net
|
|
$
|
1,717
|
|
|
$
|
821
|
|
|
$
|
467
|
|
$
|
75
|
|
$
|
(271
|
)
|
|
$
|
2,809
|
|
|
Net income attributable to NIC
|
|
$
|
35
|
|
|
$
|
54
|
|
|
$
|
79
|
|
$
|
12
|
|
$
|
(161
|
)
|
|
$
|
19
|
|
|
Income tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
|
8
|
|
|
Segment profit (loss) (B) |
|
$
|
35
|
|
|
$
|
54
|
|
|
$
|
79
|
|
$
|
12
|
|
$
|
(153
|
)
|
|
$
|
27
|
|
|
Depreciation and amortization
|
|
$
|
41
|
|
|
$
|
26
|
|
|
$
|
2
|
|
$
|
7
|
|
$
|
3
|
|
|
$
|
79
|
|
|
Interest expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
32
|
|
|
35
|
|
|
|
67
|
|
|
Equity in income (loss) of non-consolidated affiliates
|
|
|
(7
|
)
|
|
|
—
|
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
|
(6
|
)
|
|
Capital expenditures(C) |
|
|
14
|
|
|
|
22
|
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
|
40
|
|
|
As of January 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
$
|
2,434
|
|
|
$
|
1,724
|
|
|
$
|
779
|
|
$
|
3,286
|
|
$
|
1,056
|
|
|
$
|
9,279
|
|
|
As of October 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
|
2,457
|
|
|
|
1,715
|
|
|
|
811
|
|
|
3,497
|
|
|
1,250
|
|
|
|
9,730
|
|
|
(A)
|
Total sales and revenues in the Financial Services segment include
interest revenues of $71 million and $70 million for the three
months ended January 31, 2011 and 2010, respectively.
|
|
(B)
|
In the first quarter of 2011, we began allocating the gains and
losses on commodities derivatives to the segment to which the
underlying commodities relate. Previously, the impacts of
commodities derivatives were not material and were recorded within
Corporate.
|
|
(C)
|
Exclusive of purchase of equipment leased to others.
|
|
(D)
|
Certain amounts have been revised to reflect a retrospective
change in accounting principle. See Note 1, Summary of
significant accounting policies, of our Form 10Q for additional
information.
|
|
|
|
SEC Regulation G Non-GAAP Reconciliation
The financial measures presented below of adjusted net income and
diluted earnings per share attributable to Navistar International
Corporation, manufacturing segment profit, and adjusted manufacturing
segment profit are unaudited and not in accordance with, or an
alternative for, financial measures presented in accordance with U.S.
generally accepted accounting principles (GAAP). The non-GAAP financial
information presented herein should be considered supplemental to, and
not as a substitute for, or superior to, financial measures calculated
in accordance with GAAP.
We believe manufacturing segment profit, which includes the segment
profits of our Truck, Engine, and Parts reporting segments, provides
meaningful information of our core manufacturing business and therefore
we use it to supplement our GAAP reporting by identifying items that may
not be related to the core manufacturing business. Management often uses
this information to assess and measure the performance of our operating
segments. We have chosen to provide this supplemental information to
investors, analysts and other interested parties to enable them to
perform additional analyses of operating results, to illustrate the
results of operations giving effect to the non-GAAP adjustments shown in
the below reconciliation, and to provide an additional measure of
performance.
In addition, we believe that adjusted net income and diluted earnings
per share attributable to Navistar International Corporation and
manufacturing segment profit excluding engineering integration costs and
certain restructuring costs, which are not considered to be part of our
ongoing business, improves the comparability of year to year results and
is representative of our underlying performance. Management uses this
information to assess and measure the performance of our operating
segments. We have chosen to provide this supplemental information to
investors, analysts and other interested parties to enable them to
perform additional analyses of operating results, to illustrate the
results of operations giving effect to the non-GAAP adjustments shown in
the below reconciliations, and to provide an additional measure
of performance.
|
|
|
Adjusted net income and diluted earnings per share attributable
to Navistar International Corporation reconciliation:
|
|
|
|
Three Months Ended January 31,
|
|
|
|
2011
|
|
2010
|
|
(Dollars in Millions, except per share data)
|
|
|
|
|
|
Net income (loss) attributable to Navistar International Corporation
|
|
$
|
(6
|
)
|
|
$
|
19
|
|
|
Plus:
|
|
|
|
|
|
Engineering integration costs(A) |
|
|
18
|
|
|
|
—
|
|
|
Ford restructuring and related charges (benefits)(B) |
|
|
—
|
|
|
|
(17
|
)
|
|
Adjusted net income attributable to Navistar International
Corporation
|
|
$
|
12
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share attributable to Navistar
International Corporation
|
|
$
|
(0.08
|
)
|
|
$
|
0.26
|
|
|
Effect of adjustments on diluted earnings per share attributable to
Navistar International Corporations
|
|
|
0.24
|
|
|
|
(0.23
|
)
|
|
Adjusted diluted earnings per share attributable to Navistar
International Corporation
|
|
$
|
0.16
|
|
|
$
|
0.03
|
|
|
Diluted weighted shares outstanding(C) |
|
|
75.9
|
|
|
|
72.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing segment profit and adjusted manufacturing segment
profit reconciliation:
|
|
|
|
Three Months Ended January 31,
|
|
|
|
2011
|
|
2010
|
|
(Dollars in Millions)
|
|
|
|
|
|
Net income (loss) attributable to Navistar International Corporation
|
|
$
|
(6
|
)
|
|
$
|
19
|
|
|
Less:
|
|
|
|
|
|
Financial services segment profit
|
|
|
32
|
|
|
|
12
|
|
|
Corporate and eliminations
|
|
|
(118
|
)
|
|
|
(153
|
)
|
|
Income taxes
|
|
|
—
|
|
|
|
(8
|
)
|
|
Manufacturing segment profit
|
|
|
80
|
|
|
|
168
|
|
|
Plus:
|
|
|
|
|
|
Engineering integration costs(A) |
|
|
18
|
|
|
|
—
|
|
|
Ford restructuring and related charges (benefits)(B) |
|
|
—
|
|
|
|
(17
|
)
|
|
Adjusted manufacturing segment profit
|
|
$
|
98
|
|
|
$
|
151
|
|
|
|
|
|
|
|
|
(A)
|
Engineering integration costs relate to the consolidation of our
truck and engine engineering operations. The $18 million of charges
relates to restructuring activities at our Fort Wayne facility. The
charges were included in restructuring charges in our Truck segment.
The restructuring charges recorded are based on restructuring plans
that have been committed to by management and are, in part, based
upon management's best estimates of future events. Changes to the
estimates may require future adjustments to the restructuring
liabilities. We continue to develop plans for efficient transitions
related to these activities and evaluate other options to continue
the optimization of our operations and management structure.
|
|
(B)
|
Ford restructuring and related charges (benefits) are charges and
benefits recognized in 2010 related to restructuring activity at our
Indianapolis Casting Corporation and Indianapolis Engine Plant. In
the first quarter of 2010, the company recognized $17 million of
restructuring benefits related to restructuring activity at these
locations. The restructuring benefit primarily related to the
settlement of a portion of our other contractual costs for $16
million within the restructuring liability. The charges were
included in restructuring charges in our Engine segment.
|
|
(C)
|
For the three months ended January 31, 2011, on a GAAP basis, no
dilutive securities were included in the computation of diluted loss
per share because they were anti-dilutive since there was a net loss
attributable to Navistar International Corporation. The diluted
weighted shares outstanding for the computation of adjusted diluted
income per share have been adjusted for the impact of dilutive
securities.
|
|
|
|
|
|
|
Fiscal 2011 guidance: adjusted net income and diluted earnings
per share attributable to Navistar International Corporation
reconciliation:
|
|
|
|
Lower
|
|
Upper
|
|
(Dollars in Millions, except per share data)
|
|
|
|
|
|
Net income attributable to Navistar International Corporation
|
|
$
|
311
|
|
$
|
388
|
|
Plus: Engineering integration costs(A) |
|
|
77
|
|
|
77
|
|
Adjusted net income attributable to Navistar International
Corporation
|
|
$
|
388
|
|
$
|
465
|
|
|
|
|
|
|
|
Dilutive earnings per share attributable to Navistar International
Corporation
|
|
$
|
4.00
|
|
$
|
5.00
|
|
Effect of adjustments on diluted earnings per share attributable to
Navistar International Corporations
|
|
|
1.00
|
|
|
1.00
|
|
Adjusted diluted earnings per share attributable to Navistar
International Corporation
|
|
$
|
5.00
|
|
$
|
6.00
|
|
|
|
|
|
|
|
Approximate diluted weighted shares outstanding(B) |
|
|
77.6
|
|
|
77.6
|
|
|
|
|
|
|
|
|
|
Fiscal 2011 guidance: manufacturing segment profit and adjusted
manufacturing segment profit reconciliation:
|
|
|
|
Lower
|
|
Upper
|
|
(Dollars in Millions)
|
|
|
|
|
|
Net income (loss) attributable to Navistar International Corporation
|
|
$
|
311
|
|
|
$
|
388
|
|
|
Less: Financial services segment profit, Corporate and eliminations,
and income taxes
|
|
|
(584
|
)
|
|
|
(615
|
)
|
|
Manufacturing segment profit
|
|
|
895
|
|
|
|
1,003
|
|
|
Plus: Engineering integration costs(A) |
|
|
67
|
|
|
|
67
|
|
|
Adjusted manufacturing segment profit
|
|
$
|
962
|
|
|
$
|
1,070
|
|
|
|
|
|
|
|
|
(A)
|
Engineering integration costs relate to the consolidation of our
truck and engine engineering operations. We continue to develop
plans for efficient transitions related to these activities and
evaluate other options to continue the optimization of our
operations and management structure. We expect to incur
approximately $77 million of engineering integration costs in fiscal
2011 with approximately $67 million of the costs to be recognized by
our manufacturing segment and approximately $10 million of corporate
charges.
|
|
(B)
|
Approximate diluted weighted shares outstanding based on assumed
average share price of $65 per share during the period.
|
Navistar International Corporation
Media contact: Roy Wiley,
630-753-2627
Investor contact: Heather Kos, 630-753-2406
www.Navistar.com/newsroom
Source: Navistar International Corporation
News Provided by Acquire Media