LISLE, Ill., June 8, 2021 /PRNewswire/ -- Navistar
International Corporation (NYSE: NAV) today announced a second
quarter 2021 net income of $163
million, or $1.63 per diluted
share, compared to second quarter 2020 net loss of $38 million, or $0.38 per diluted share. The results in the
second quarter of 2021 included $91
million of tax-effected significant items.
Second quarter 2021 adjusted net income was $72 million compared to a loss of $10
million in second quarter 2020.
Revenues in the quarter were $2.2 billion, compared to
$1.9 billion in the second quarter
last year.
Chargeouts in the company's Core (Class 6-8 trucks and buses in
the United States and Canada) market were 13,900 units in the second
quarter of 2021.
Second quarter 2021 adjusted EBITDA nearly doubled
year-over-year to $198 million, or
9.2% of revenue, versus $88 million, or 4.6% of revenue, a
year ago.
Navistar finished second quarter 2021 with $1.2
billion in consolidated cash and cash equivalents,
including $1.2 billion in manufacturing cash and cash
equivalents.
The company has increased production line rates in all of its
vehicle assembly plants, including adding a second shift to its
truck assembly plant in Escobedo,
Mexico. The pace of the increases has been slower than
planned due to supply chain constraints.
"We delivered strong operating results in our second quarter,"
said Persio Lisboa, chief executive
officer, Navistar. "The strong trucking industry, fueled by robust
economic growth, is supporting higher order activity by our
customers and our team is working hard to overcome the supply chain
challenges to best support their transportation needs."
The company made progress on its Navistar 4.0 business strategy
throughout the quarter. In March, the company launched a new
aftermarket product line to provide high-quality aftermarket parts
for Class 2-5 diesel engines and engine components called Diamond
Advantage Diesel Parts. Diamond Advantage parts will be distributed
through Navistar's parts distribution centers to warehouse
distributors, diesel parts specialists and the International dealer
network. The new product line reflects the company's commitment to
supporting customers on the road through an extensive Class 2-8
product offering.
In the connected space, the company announced the upcoming
availability of Cummins Connected Software Updates and programmable
trim parameters for their X15 engines through Navistar's OnCommand
Connection portal. This integration builds upon the company's
over-the-air capability on the International® A26 engine – making
it the first and only OEM to use a single, factory-installed device
to equip multiple engine models with remote programming. This is
enabled by Navistar's second-generation telematics devices, which
began production in mid-2019.
In electric, the company delivered its first electric school
buses to Canada. The 18 electric
CE Series school buses were delivered by Western Canada Bus to
British Columbia School Districts. The company also announced that
it has over 100 orders for its electric CE Series.
The company is also strengthening its manufacturing footprint.
Its San Antonio, Texas,
manufacturing facility is on schedule to begin production of
vehicles in early 2022 and the expansion of its Huntsville, Alabama, engine facility remains
on track for completion in the first half of 2023.
The company is also making progress related to its pending
merger with TRATON, which remains on track to close in the middle
of 2021. The company has announced a conditional call of the 9.5
percent Senior Secured Notes and its 4.75 percent Tax Exempt Bonds
upon the closing of the merger.
"Guided by our Navistar 4.0 strategy and fueled by the hard work
of our team, Navistar is capitalizing on the strong demand in the
industry today," said Lisboa. "This, together with the many
opportunities available to us when our merger with TRATON is
complete, leads to a very exciting future for our company, our
customers and all of our stakeholders."
SEGMENT REVIEW
|
Summary of
Financial Results:
|
|
|
(Unaudited)
|
|
Three Months
Ended
April 30,
|
|
Six Months
Ended
April 30,
|
|
(in millions,
except per share data)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Sales and revenues,
net
|
$
|
2,162
|
|
|
$
|
1,925
|
|
|
$
|
3,974
|
|
|
$
|
3,763
|
|
|
Segment
Results:
|
|
|
|
|
|
|
|
|
Truck
|
$
|
189
|
|
|
$
|
(51)
|
|
|
$
|
108
|
|
|
$
|
(109)
|
|
|
Parts
|
135
|
|
|
103
|
|
|
246
|
|
|
222
|
|
|
Global
Operations
|
36
|
|
|
(13)
|
|
|
42
|
|
|
(13)
|
|
|
Financial
Services
|
15
|
|
|
24
|
|
|
27
|
|
|
41
|
|
|
Income (loss) from
continuing operations, net of tax(A)
|
$
|
163
|
|
|
$
|
(38)
|
|
|
$
|
81
|
|
|
$
|
(74)
|
|
|
Net income
(loss)(A)
|
163
|
|
|
(38)
|
|
|
82
|
|
|
(74)
|
|
|
Diluted income (loss)
per share from continuing operations(A)
|
$
|
1.63
|
|
|
$
|
(0.38)
|
|
|
$
|
0.81
|
|
|
$
|
(0.74)
|
|
|
Diluted income (loss)
per share(A)
|
$
|
1.63
|
|
|
$
|
(0.38)
|
|
|
$
|
0.82
|
|
|
$
|
(0.74)
|
|
|
|
________________
|
|
(A)
|
Amounts attributable
to Navistar International Corporation.
|
Truck Segment – In second quarter 2021, Truck
segment net sales were $1.5 billion,
a 7 percent increase versus second quarter last year. The increase
was primarily driven by higher used truck volumes, higher sales of
GM branded units and higher Mexico
volumes.
The Truck segment reported a net profit of $189 million in second quarter 2021, compared to
a loss of $51 million in second
quarter 2020. The increase was primarily driven by a gain from an
increase in fair value of the equity security investment in
TuSimple and higher sales, partially offset by a charge for a
tentative legal settlement and higher warranty costs.
Parts Segment – For second quarter 2021, Parts segment
net sales were $524 million, an 18
percent increase from second quarter 2020. The increase was
primarily driven by higher volumes in the U.S. and Canada.
The Parts segment generated a second quarter profit of
$135 million, up 31 percent compared
to the second quarter last year. The increase was primarily driven
by higher sales.
Global Operations Segment – In second quarter 2021,
Global Operations segment net sales increased 171 percent versus
second quarter 2020 to $138 million.
The increase was primarily driven by higher engine and power
generator volumes, the recognition of an estimated benefit related
to Brazilian tax credits, and higher parts sales revenues in South
American operations.
The Global Operations segment recorded a profit of $36 million in the second quarter of 2021,
compared to a loss of $13 million in
second quarter 2020. The increase was primarily due to higher
revenues in 2021 and the recording of asset impairment charges in
second quarter 2020.
Financial Services Segment – In second quarter 2021,
Financial Services segment reported net revenues of $50 million compared to $64 million in second quarter 2020. The decrease
was primarily driven by lower average yields.
The Financial Services segment recorded a profit of $15 million in the quarter, compared to
$24 million in second quarter 2020.
The decrease was primarily driven by lower revenues partially
offset by a decrease in interest expense resulting from lower
borrowing requirements and lower borrowing rates.
About Navistar
Navistar International
Corporation (NYSE: NAV) is a holding company whose
subsidiaries and affiliates produce
International® brand commercial trucks, proprietary
diesel engines, and IC Bus® brand school and
commercial buses. An affiliate also provides truck and diesel
engine service parts. Another affiliate offers financing services.
Additional information is available at www.Navistar.com.
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
("Securities Act"), Section 21E of the Securities Exchange Act
of 1934, as amended ("Exchange Act"), and the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements only
speak as of the date of this report and Navistar International
Corporation 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 the risk factors set forth in our
filings with the Securities and Exchange Commission, including our
annual report on Form 10-K for the fiscal year ended
October 31,2020 and our quarterly report on Form 10-Q for the
period ended April 30, 2021. 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
April 30,
|
|
Six Months
Ended
April 30,
|
|
(in millions,
except per share data)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Sales and
revenues
|
|
|
|
|
|
|
|
|
Sales of manufactured
products, net
|
$
|
2,121
|
|
|
$
|
1,877
|
|
|
$
|
3,890
|
|
|
$
|
3,671
|
|
|
Finance
revenues
|
41
|
|
|
48
|
|
|
84
|
|
|
92
|
|
|
Sales and revenues,
net
|
2,162
|
|
|
1,925
|
|
|
3,974
|
|
|
3,763
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Costs of products
sold
|
1,731
|
|
|
1,624
|
|
|
3,238
|
|
|
3,153
|
|
|
Restructuring
charges
|
2
|
|
|
—
|
|
|
23
|
|
|
1
|
|
|
Asset impairment
charges
|
4
|
|
|
13
|
|
|
35
|
|
|
13
|
|
|
Selling, general and
administrative expenses
|
304
|
|
|
170
|
|
|
509
|
|
|
352
|
|
|
Engineering and
product development costs
|
88
|
|
|
78
|
|
|
172
|
|
|
164
|
|
|
Interest
expense
|
62
|
|
|
63
|
|
|
126
|
|
|
128
|
|
|
Other (income)
expense, net
|
(251)
|
|
|
2
|
|
|
(256)
|
|
|
13
|
|
|
Total costs and
expenses
|
1,940
|
|
|
1,950
|
|
|
3,847
|
|
|
3,824
|
|
|
Equity in loss of
non-consolidated affiliates
|
(3)
|
|
|
(1)
|
|
|
(4)
|
|
|
(2)
|
|
|
Income (loss) before
income taxes
|
219
|
|
|
(26)
|
|
|
123
|
|
|
(63)
|
|
|
Income tax
expense
|
(51)
|
|
|
(7)
|
|
|
(33)
|
|
|
(2)
|
|
|
Income (loss) from
continuing operations
|
168
|
|
|
(33)
|
|
|
90
|
|
|
(65)
|
|
|
Income from
discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
Net income
(loss)
|
168
|
|
|
(33)
|
|
|
91
|
|
|
(65)
|
|
|
Less: Net income
attributable to non-controlling interests
|
5
|
|
|
5
|
|
|
9
|
|
|
9
|
|
|
Net income (loss)
attributable to Navistar International Corporation
|
$
|
163
|
|
|
$
|
(38)
|
|
|
$
|
82
|
|
|
$
|
(74)
|
|
|
|
|
|
|
|
|
|
|
Amounts
attributable to Navistar International Corporation common
stockholders:
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
$
|
163
|
|
|
$
|
(38)
|
|
|
$
|
81
|
|
|
$
|
(74)
|
|
|
Income from
discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
Net income (loss)
attributable to Navistar International Corporation common
stockholders
|
$
|
163
|
|
|
$
|
(38)
|
|
|
$
|
82
|
|
|
$
|
(74)
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per
share attributable to Navistar International
Corporation
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
1.63
|
|
|
$
|
(0.38)
|
|
|
$
|
0.81
|
|
|
$
|
(0.74)
|
|
|
Discontinued
operations
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
Basic
|
$
|
1.63
|
|
|
$
|
(0.38)
|
|
|
$
|
0.82
|
|
|
$
|
(0.74)
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
1.63
|
|
|
$
|
(0.38)
|
|
|
$
|
0.81
|
|
|
$
|
(0.74)
|
|
|
Discontinued
operations
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
Diluted
|
$
|
1.63
|
|
|
$
|
(0.38)
|
|
|
$
|
0.82
|
|
|
$
|
(0.74)
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
99.9
|
|
|
99.7
|
|
|
99.9
|
|
|
99.6
|
|
|
Diluted
|
100.2
|
|
|
99.7
|
|
|
100.2
|
|
|
99.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Navistar
International Corporation and Subsidiaries
Consolidated
Balance Sheets
|
|
|
(in millions,
except per share data)
|
As of April 30,
2021
|
|
As of October 31,
2020
|
|
ASSETS
|
(Unaudited)
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,233
|
|
|
$
|
1,843
|
|
|
Restricted cash and
cash equivalents
|
402
|
|
|
64
|
|
|
Trade and other
receivables, net
|
283
|
|
|
273
|
|
|
Finance receivables,
net
|
1,360
|
|
|
1,371
|
|
|
Inventories,
net
|
1,017
|
|
|
763
|
|
|
Other current
assets
|
356
|
|
|
263
|
|
|
Total current
assets
|
4,651
|
|
|
4,577
|
|
|
Restricted
cash
|
67
|
|
|
66
|
|
|
Trade and other
receivables, net
|
7
|
|
|
7
|
|
|
Finance receivables,
net
|
258
|
|
|
251
|
|
|
Investments in
non-consolidated affiliates
|
26
|
|
|
31
|
|
|
Property and equipment
(net of accumulated depreciation and amortization of $2,317 and
$2,335, respectively)
|
1,263
|
|
|
1,298
|
|
|
Operating lease right
of use assets
|
123
|
|
|
119
|
|
|
Goodwill
|
38
|
|
|
38
|
|
|
Intangible assets (net
of accumulated amortization of $139 and $138,
respectively)
|
18
|
|
|
18
|
|
|
Deferred taxes,
net
|
121
|
|
|
117
|
|
|
Other noncurrent
assets
|
512
|
|
|
115
|
|
|
Total
assets
|
$
|
7,084
|
|
|
$
|
6,637
|
|
|
LIABILITIES and
STOCKHOLDERS' DEFICIT
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Notes payable and
current maturities of long-term debt
|
$
|
843
|
|
|
$
|
640
|
|
|
Accounts
payable
|
1,529
|
|
|
1,278
|
|
|
Other current
liabilities
|
1,517
|
|
|
1,453
|
|
|
Total current
liabilities
|
3,889
|
|
|
3,371
|
|
|
Long-term
debt
|
4,624
|
|
|
4,690
|
|
|
Postretirement
benefits liabilities
|
1,439
|
|
|
1,705
|
|
|
Other noncurrent
liabilities
|
772
|
|
|
693
|
|
|
Total
liabilities
|
10,724
|
|
|
10,459
|
|
|
Stockholders'
deficit
|
|
|
|
|
Series D
convertible junior preference stock
|
2
|
|
|
2
|
|
|
Common stock, $0.10
par value per share (103.1 shares issued and 220 shares authorized
at
both dates)
|
10
|
|
|
10
|
|
|
Additional paid-in
capital
|
2,721
|
|
|
2,726
|
|
|
Accumulated
deficit
|
(4,491)
|
|
|
(4,566)
|
|
|
Accumulated other
comprehensive loss
|
(1,758)
|
|
|
(1,865)
|
|
|
Common stock held in
treasury, at cost (3.3 and 3.5 shares, respectively)
|
(127)
|
|
|
(133)
|
|
|
Total stockholders'
deficit attributable to Navistar International
Corporation
|
(3,643)
|
|
|
(3,826)
|
|
|
Stockholders' equity
attributable to non-controlling interests
|
3
|
|
|
4
|
|
|
Total stockholders'
deficit
|
(3,640)
|
|
|
(3,822)
|
|
|
Total liabilities
and stockholders' deficit
|
$
|
7,084
|
|
|
$
|
6,637
|
|
|
Navistar
International Corporation and Subsidiaries
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
Six Months Ended
April 30,
|
|
(in
millions)
|
2021
|
|
2020
|
|
Cash flows from
operating activities
|
|
|
|
|
Net income
(loss)
|
$
|
91
|
|
|
$
|
(65)
|
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
68
|
|
|
70
|
|
|
Depreciation of
equipment leased to others
|
35
|
|
|
29
|
|
|
Deferred taxes,
including change in valuation allowance
|
7
|
|
|
(9)
|
|
|
Asset impairment
charges
|
35
|
|
|
13
|
|
|
Amortization of debt
issuance costs and discount
|
7
|
|
|
7
|
|
|
Stock-based
compensation
|
12
|
|
|
13
|
|
|
Provision for credit
losses
|
6
|
|
|
9
|
|
|
Equity in loss of
non-consolidated affiliates, net of dividends
|
4
|
|
|
2
|
|
|
Other non-cash
operating activities
|
(7)
|
|
|
(5)
|
|
|
Changes in other
assets and liabilities
|
(290)
|
|
|
(182)
|
|
|
Net cash used in
operating activities
|
(32)
|
|
|
(118)
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Capital
expenditures
|
(137)
|
|
|
(90)
|
|
|
Purchases of equipment
leased to others
|
(76)
|
|
|
(16)
|
|
|
Proceeds from sales of
property and equipment
|
10
|
|
|
7
|
|
|
Purchases of equity
investments
|
(143)
|
|
|
—
|
|
|
Proceeds from sales of
investments and businesses
|
—
|
|
|
10
|
|
|
Net cash used in
investing activities
|
(346)
|
|
|
(89)
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from issuance
of securitized debt
|
26
|
|
|
16
|
|
|
Principal payments on
securitized debt
|
(28)
|
|
|
(30)
|
|
|
Net change in secured
revolving credit facilities
|
241
|
|
|
(167)
|
|
|
Proceeds from issuance
of non-securitized debt
|
15
|
|
|
620
|
|
|
Principal payments on
non-securitized debt
|
(10)
|
|
|
(107)
|
|
|
Net change in notes
and debt outstanding under revolving credit facilities
|
(127)
|
|
|
24
|
|
|
Debt issuance
costs
|
(1)
|
|
|
(10)
|
|
|
Proceeds from exercise
of stock options
|
1
|
|
|
3
|
|
|
Dividends paid by
subsidiaries to non-controlling interest
|
(10)
|
|
|
(10)
|
|
|
Other financing
activities
|
(2)
|
|
|
(2)
|
|
|
Net cash provided
by financing activities
|
105
|
|
|
337
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
2
|
|
|
(9)
|
|
|
Increase
(decrease) in cash, cash equivalents and restricted
cash
|
(271)
|
|
|
121
|
|
|
Cash, cash
equivalents and restricted cash at beginning of the
period
|
1,973
|
|
|
1,557
|
|
|
Cash, cash
equivalents and restricted cash at end of the period
|
$
|
1,702
|
|
|
$
|
1,678
|
|
|
Navistar
International Corporation and Subsidiaries
Segment
Reporting
(Unaudited)
|
|
|
We define segment
profit (loss) as net income (loss) from continuing operations
attributable to Navistar International Corporation, excluding
income tax benefit (expense). The following tables present selected
financial information for our reporting segments:
|
|
|
(in
millions)
|
Truck
|
|
Parts
|
|
Global
Operations
|
|
Financial
Services(A)
|
|
Corporate
and
Eliminations
|
|
Total
|
|
Three Months Ended
April 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales and
revenues, net
|
$
|
1,466
|
|
|
$
|
523
|
|
|
$
|
129
|
|
|
$
|
43
|
|
|
$
|
1
|
|
|
$
|
2,162
|
|
|
Intersegment sales and
revenues
|
19
|
|
|
1
|
|
|
9
|
|
|
7
|
|
|
(36)
|
|
|
—
|
|
|
Total sales and
revenues, net
|
$
|
1,485
|
|
|
$
|
524
|
|
|
$
|
138
|
|
|
$
|
50
|
|
|
$
|
(35)
|
|
|
$
|
2,162
|
|
|
Income (loss) from
continuing operations attributable to NIC, net of tax
|
$
|
189
|
|
|
$
|
135
|
|
|
$
|
36
|
|
|
$
|
15
|
|
|
$
|
(212)
|
|
|
$
|
163
|
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51)
|
|
|
(51)
|
|
|
Segment profit
(loss)
|
$
|
189
|
|
|
$
|
135
|
|
|
$
|
36
|
|
|
$
|
15
|
|
|
$
|
(161)
|
|
|
$
|
214
|
|
|
Depreciation and
amortization
|
$
|
30
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
52
|
|
|
Interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
51
|
|
|
62
|
|
|
Equity in loss of
non-consolidated affiliates
|
(3)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
|
Capital
expenditures(B)
|
60
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
64
|
|
|
|
(in
millions)
|
Truck
|
|
Parts
|
|
Global
Operations
|
|
Financial
Services(A)
|
|
Corporate
and
Eliminations
|
|
Total
|
|
Three Months Ended
April 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales and
revenues, net
|
$
|
1,385
|
|
|
$
|
442
|
|
|
$
|
47
|
|
|
$
|
50
|
|
|
$
|
1
|
|
|
$
|
1,925
|
|
|
Intersegment sales and
revenues
|
4
|
|
|
1
|
|
|
4
|
|
|
14
|
|
|
(23)
|
|
|
—
|
|
|
Total sales and
revenues, net
|
$
|
1,389
|
|
|
$
|
443
|
|
|
$
|
51
|
|
|
$
|
64
|
|
|
$
|
(22)
|
|
|
$
|
1,925
|
|
|
Income (loss) from
continuing operations attributable to NIC, net of tax
|
$
|
(51)
|
|
|
$
|
103
|
|
|
$
|
(13)
|
|
|
$
|
24
|
|
|
$
|
(101)
|
|
|
$
|
(38)
|
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7)
|
|
|
(7)
|
|
|
Segment profit
(loss)
|
$
|
(51)
|
|
|
$
|
103
|
|
|
$
|
(13)
|
|
|
$
|
24
|
|
|
$
|
(94)
|
|
|
$
|
(31)
|
|
|
Depreciation and
amortization
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
49
|
|
|
Interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
43
|
|
|
63
|
|
|
Equity in income
(loss) of non-consolidated affiliates
|
(2)
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
Capital
expenditures(B)
|
28
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
31
|
|
|
|
(in
millions)
|
Truck
|
|
Parts
|
|
Global
Operations
|
|
Financial
Services(A)
|
|
Corporate
and
Eliminations
|
|
Total
|
|
Six Months Ended
April 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales and
revenues, net
|
$
|
2,679
|
|
|
$
|
988
|
|
|
$
|
218
|
|
|
$
|
88
|
|
|
$
|
1
|
|
|
$
|
3,974
|
|
|
Intersegment sales and
revenues
|
43
|
|
|
3
|
|
|
15
|
|
|
13
|
|
|
(74)
|
|
|
—
|
|
|
Total sales and
revenues, net
|
$
|
2,722
|
|
|
$
|
991
|
|
|
$
|
233
|
|
|
$
|
101
|
|
|
$
|
(73)
|
|
|
$
|
3,974
|
|
|
Income (loss) from
continuing operations attributable to NIC, net of tax
|
$
|
108
|
|
|
$
|
246
|
|
|
$
|
42
|
|
|
$
|
27
|
|
|
$
|
(342)
|
|
|
$
|
81
|
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33)
|
|
|
(33)
|
|
|
Segment profit
(loss)
|
$
|
108
|
|
|
$
|
246
|
|
|
$
|
42
|
|
|
$
|
27
|
|
|
$
|
(309)
|
|
|
$
|
114
|
|
|
Depreciation and
amortization
|
$
|
59
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
38
|
|
|
$
|
1
|
|
|
$
|
103
|
|
|
Interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
102
|
|
|
126
|
|
|
Equity in loss of
non-consolidated affiliates
|
(4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4)
|
|
|
Capital
expenditures(B)
|
129
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
4
|
|
|
137
|
|
|
|
(in
millions)
|
Truck
|
|
Parts
|
|
Global
Operations
|
|
Financial
Services(A)
|
|
Corporate
and
Eliminations
|
|
Total
|
|
Six Months Ended
April 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales and
revenues, net
|
$
|
2,623
|
|
|
$
|
934
|
|
|
$
|
108
|
|
|
$
|
96
|
|
|
$
|
2
|
|
|
$
|
3,763
|
|
|
Intersegment sales and
revenues
|
8
|
|
|
2
|
|
|
11
|
|
|
25
|
|
|
(46)
|
|
|
—
|
|
|
Total sales and
revenues, net
|
$
|
2,631
|
|
|
$
|
936
|
|
|
$
|
119
|
|
|
$
|
121
|
|
|
$
|
(44)
|
|
|
$
|
3,763
|
|
|
Income (loss) from
continuing operations attributable to NIC, net of tax
|
$
|
(109)
|
|
|
$
|
222
|
|
|
$
|
(13)
|
|
|
$
|
41
|
|
|
$
|
(215)
|
|
|
$
|
(74)
|
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
(2)
|
|
|
Segment profit
(loss)
|
$
|
(109)
|
|
|
$
|
222
|
|
|
$
|
(13)
|
|
|
$
|
41
|
|
|
$
|
(213)
|
|
|
$
|
(72)
|
|
|
Depreciation and
amortization
|
$
|
56
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
32
|
|
|
$
|
3
|
|
|
$
|
99
|
|
|
Interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
89
|
|
|
128
|
|
|
Equity in income
(loss) of non-consolidated affiliates
|
(3)
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
Capital
expenditures(B)
|
75
|
|
|
5
|
|
|
2
|
|
|
—
|
|
|
8
|
|
|
90
|
|
|
|
_________________________
|
|
(A) Total sales and revenues
in the Financial Services segment include interest revenues of $26
million and $53 million for the three and six months ended
April 30,
2021, respectively, and $40 million and $75 million for the three
and six months ended April 30, 2020, respectively.
|
|
(B) Exclusive of purchases of
equipment leased to others.
|
|
|
(in
millions)
|
Truck
|
|
Parts
|
|
Global
Operations
|
|
Financial
Services
|
|
Corporate
and
Eliminations
|
|
Total
|
|
Segment assets, as
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30,
2021
|
$
|
2,332
|
|
|
$
|
629
|
|
|
$
|
282
|
|
|
$
|
2,493
|
|
|
$
|
1,348
|
|
|
$
|
7,084
|
|
|
October 31,
2020
|
1,619
|
|
|
663
|
|
|
216
|
|
|
2,191
|
|
|
1,948
|
|
|
6,637
|
|
SEC Regulation G Non-GAAP Reconciliation
The financial measures presented below 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 and are reconciled to the most appropriate
GAAP number below.
Earnings (loss) Before Interest, Income Taxes,
Depreciation, and Amortization ("EBITDA"):
We define EBITDA as our consolidated net income (loss)
attributable to Navistar International Corporation, net of tax,
plus manufacturing interest expense, income taxes, and depreciation
and amortization. We believe EBITDA provides meaningful information
to the performance of our business and therefore we use it to
supplement our GAAP reporting. 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.
Adjusted EBITDA and Adjusted Net Income
(loss):
We believe that adjusted EBITDA and Adjusted Net Income
(loss), which excludes certain identified items that we do not
consider 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.
Manufacturing Cash and Cash Equivalents:
Manufacturing cash and cash equivalents represent the
Company's consolidated cash and cash equivalents excluding cash and
cash equivalents of our financial services operations. We have
chosen to provide this supplemental information to investors,
analysts and other interested parties to enable them to perform
additional analyses of our ability to meet our operating
requirements, capital expenditures, equity investments, and
financial obligations.
Structural costs consist of Selling, general
and administrative expenses and Engineering and product development
costs.
|
EBITDA
reconciliation:
|
|
|
Three Months
Ended
April 30,
|
|
Six Months
Ended
April 30,
|
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net income (loss)
attributable to NIC
|
$
|
163
|
|
|
$
|
(38)
|
|
|
$
|
82
|
|
|
$
|
(74)
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
52
|
|
|
49
|
|
|
103
|
|
|
99
|
|
|
Manufacturing interest
expense(A)
|
51
|
|
|
43
|
|
|
102
|
|
|
89
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Income tax
expense
|
(51)
|
|
|
(7)
|
|
|
(33)
|
|
|
(2)
|
|
|
EBITDA
|
$
|
317
|
|
|
$
|
61
|
|
|
$
|
320
|
|
|
$
|
116
|
|
|
|
______________________
|
|
(A)
Manufacturing interest expense is the net interest expense
primarily generated for borrowings that support the
Manufacturing
and Corporate
operations, adjusted to eliminate intercompany interest
expense with our Financial Services segment. The following
table reconciles
Manufacturing interest expense to the consolidated interest
expense:
|
|
|
Three Months
Ended
April 30,
|
|
Six Months
Ended
April 30,
|
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Interest
expense
|
$
|
62
|
|
|
$
|
63
|
|
|
$
|
126
|
|
|
$
|
128
|
|
|
Less: Financial
services interest expense
|
11
|
|
|
20
|
|
|
24
|
|
|
39
|
|
|
Manufacturing
interest expense
|
$
|
51
|
|
|
$
|
43
|
|
|
$
|
102
|
|
|
$
|
89
|
|
|
Adjusted EBITDA
Reconciliation:
|
|
|
Three Months
Ended
April 30,
|
|
Six Months
Ended
April 30,
|
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
EBITDA
(reconciled above)
|
$
|
317
|
|
|
$
|
61
|
|
|
$
|
320
|
|
|
$
|
116
|
|
|
Adjusted for
significant items of:
|
|
|
|
|
|
|
|
|
Adjustments to
pre-existing warranties(A)
|
31
|
|
|
13
|
|
|
80
|
|
|
17
|
|
|
Asset impairment
charges(B)
|
4
|
|
|
13
|
|
|
35
|
|
|
13
|
|
|
Restructuring of
manufacturing operations(C)
|
2
|
|
|
—
|
|
|
23
|
|
|
1
|
|
|
MaxxForce Advanced EGR
engine lawsuits(D)
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
TRATON merger
costs(E)
|
6
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
Shy profit-sharing
accrual(F)
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
TuSimple fair value
adjustment(G)
|
(242)
|
|
|
—
|
|
|
(246)
|
|
|
—
|
|
|
EPA
settlement(H)
|
77
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
Settlement
gain(I)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
Total
adjustments
|
(119)
|
|
|
27
|
|
|
(10)
|
|
|
31
|
|
|
Adjusted
EBITDA
|
$
|
198
|
|
|
$
|
88
|
|
|
$
|
310
|
|
|
$
|
147
|
|
|
Adjusted Net
Income (Loss) attributable to NIC:
|
|
|
Three Months
Ended
April 30,
|
|
Six Months
Ended
April 30,
|
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net income
(loss) attributable to NIC
|
$
|
163
|
|
|
$
|
(38)
|
|
|
$
|
82
|
|
|
$
|
(74)
|
|
|
Adjusted for
significant items of:
|
|
|
|
|
|
|
|
|
Adjustments to
pre-existing warranties(A)
|
31
|
|
|
13
|
|
|
80
|
|
|
17
|
|
|
Asset impairment
charges(B)
|
4
|
|
|
13
|
|
|
35
|
|
|
13
|
|
|
Restructuring of
manufacturing operations(C)
|
2
|
|
|
—
|
|
|
23
|
|
|
1
|
|
|
MaxxForce Advanced EGR
engine lawsuits (D)
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
TRATON merger
costs(E)
|
6
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
Shy profit-sharing
accrual(F)
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
TuSimple fair value
adjustment(G)
|
(242)
|
|
|
—
|
|
|
(246)
|
|
|
—
|
|
|
EPA
settlement(H)
|
77
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
Settlement
gain(I)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
Total
adjustments
|
(119)
|
|
|
27
|
|
|
(10)
|
|
|
31
|
|
|
Tax effect
(J)
|
28
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
Adjusted net
income (loss) attributable to NIC
|
$
|
72
|
|
|
$
|
(10)
|
|
|
$
|
73
|
|
|
$
|
(43)
|
|
|
|
_____________________
|
|
(A)
|
Adjustments to
pre-existing warranties reflect changes in our estimate of warranty
costs for products sold in prior periods. Such adjustments
typically occur when claims experience deviates from historic and
expected trends. Our warranty liability is generally affected by
component failure rates, repair costs, and the timing of
failures. Future events and circumstances related to these
factors could materially change our estimates and require
adjustments to our liability. In addition, new product
launches require a greater use of judgment in developing estimates
until historical experience becomes available.
|
|
(B)
|
In the second quarter
and first half of 2021, we recorded $4 million and $35 million,
respectively, of asset impairment charges in our Truck segment. The
charges for the second quarter of 2021 include $3 million related
to the Melrose Park Facility disposition and $1 million related to
certain assets under operating leases. The charges for the first
half of 2021 include $28 million related to the Melrose Park
Facility disposition and $7 million related to certain assets under
operating leases. In the second quarter and first half of 2020, we
recorded $13 million of asset impairment charges comprised of $12
million of asset impairment charges related to long-lived assets in
our Brazil asset group in our Global Operations segment and $1
million of asset impairment charges related to certain assets under
operating leases in our Truck segment.
|
|
(C)
|
In the second quarter
and first half of 2021, we recorded restructuring charges of $2
million and $23 million, respectively, in our Truck segment,
related to the Melrose Park Facility disposition. In the first half
of 2020, we recorded a restructuring charge of $1 million in our
Truck segment.
|
|
(D)
|
In the second quarter
and first half of 2021 and 2020, we recorded a charge of $1 million
related to the MaxxForce Advanced EGR engine class action
settlement and related litigation in our Truck segment.
|
|
(E)
|
In the second quarter
and first half of 2021, we incurred $6 million and $16 million,
respectively, of costs related to the proposed TRATON
merger.
|
|
(F)
|
In the second quarter
and first half of 2021, we recorded a $2 million and $4 million
charge, respectively, related to the Shy profit-sharing litigation
accrual.
|
|
(G)
|
In the second quarter
and first half of 2021, we recorded a gain of $242 million and $246
million, respectively, related to a gain from an increase in fair
value of our equity security investment in TuSimple.
|
|
(H)
|
In the second quarter
and first half of 2021, we recorded a charge of $77 million related
to a tentative EPA settlement in our Truck segment.
|
|
(I)
|
In the first half of
2020, we recorded interest income of $1 million, in Other
expense, net derived from the prior year settlement of a
business economic loss claim relating to our former Alabama engine
manufacturing facility in Corporate.
|
|
(J)
|
Tax effect is
calculated by excluding the impact of the non-GAAP adjustments from
the interim period tax provision calculations.
|
|
Manufacturing
segment cash and cash equivalents reconciliation:
|
|
|
As of April 30,
2021
|
|
(in
millions)
|
Manufacturing
Operations
|
|
Financial
Services
Operations
|
|
Consolidated
Balance Sheet
|
|
Total cash and
cash equivalents
|
$
|
1,197
|
|
|
$
|
36
|
|
|
$
|
1,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Navistar International Corporation
