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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 operations and our Financial Services operations on an after-tax equity basis. Our Manufacturing operations, for this purpose, include our Truck segment, Parts segment, Global Operations segment, and Corporate items. The Manufacturing operations financial information represents non-GAAP financial measures. These non-GAAP financial measures should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. The reconciling differences between these non-GAAP financial measures and our U.S. GAAP condensed consolidated financial statements in Item 1, Financial Statements, are our Financial Services operations, which are included on an after-tax equity basis. Certain of our subsidiaries in our Manufacturing operations have debt outstanding with our Financial Services operations (“intercompany debt”). In the condensed statements of assets, liabilities, and stockholders' equity (deficit), the intercompany debt is reflected as accounts payable. The change in the intercompany debt is reflected in Net cash provided by (used in) operating activities in the condensed statements of cash activity.
Condensed Statements of Revenues and Expenses
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Three Months Ended April 30, 2020
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
1,877

 
$
—

 
$
—

 
$
1,877

Finance revenues
—

 
64

 
(16
)
 
48

Sales and revenues, net
1,877

 
64

 
(16
)
 
1,925

Costs of products sold
1,624

 
—

 
—

 
1,624

Asset impairment charges
13

 
—

 
—

 
13

Selling, general and administrative expenses
146

 
27

 
(3
)
 
170

Engineering and product development costs
78

 
—

 
—

 
78

Interest expense
44

 
20

 
(1
)
 
63

Other expense (income), net
21

 
(7
)
 
(12
)
 
2

Total costs and expenses
1,926

 
40

 
(16
)
 
1,950

Equity in loss of non-consolidated affiliates
(1
)
 
—

 
—

 
(1
)
Income (loss) before equity income from financial services operations and income taxes
(50
)
 
24

 
—

 
(26
)
Equity income from financial services operations
19

 
—

 
(19
)
 
—

Income (loss) before income tax
(31
)
 
24

 
(19
)
 
(26
)
Income tax expense
(2
)
 
(5
)
 
—

 
(7
)
Net income (loss)
(33
)
 
19

 
(19
)
 
(33
)
Less: Net income attributable to non-controlling interests
5

 
—

 
—

 
5

Net income (loss) attributable to Navistar International Corporation
$
(38
)
 
$
19

 
$
(19
)
 
$
(38
)


E-6


 
For the Six Months Ended April 30, 2020
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
3,671

 
$
—

 
$
—

 
$
3,671

Finance revenues
—

 
121

 
(29
)
 
92

Sales and revenues, net
3,671

 
121

 
(29
)
 
3,763

Costs of products sold
3,153

 
—

 
—

 
3,153

Restructuring charges
1

 
—

 
—

 
1

Asset impairment charges
13

 
—

 
—

 
13

Selling, general and administrative expenses
302

 
55

 
(5
)
 
352

Engineering and product development costs
164

 
—

 
—

 
164

Interest expense
90

 
39

 
(1
)
 
128

Other expense (income), net
50

 
(14
)
 
(23
)
 
13

Total costs and expenses
3,773

 
80

 
(29
)
 
3,824

Equity in loss of non-consolidated affiliates
(2
)
 
—

 
—

 
(2
)
Income (loss) before equity income from financial services operations and income taxes
(104
)
 
41

 
—

 
(63
)
Equity income from financial services operations
32

24

—

 
(32
)
 
—

Income (loss) before income tax
(72
)
 
41

 
(32
)
 
(63
)
Income tax benefit (expense)
7

 
(9
)
 
—

 
(2
)
Net income (loss)
(65
)
 
32

 
(32
)
 
(65
)
Less: Net income attributable to non-controlling interests
9

 
—

 
—

 
9

Net income (loss) attributable to Navistar International Corporation
$
(74
)
 
$
32

 
$
(32
)
 
$
(74
)


E-7


Condensed Statements of Revenues and Expenses
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Three Months Ended April 30, 2019
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
2,948

 
$
—

 
$
—

 
$
2,948

Finance revenues
—

 
78

 
(30
)
 
48

Sales and revenues, net
2,948

 
78

 
(30
)
 
2,996

Costs of products sold
2,493

 
—

 
—

 
2,493

Restructuring charges
1

 
—

 
—

 
1

Asset impairment charges
1

 
—

 
—

 
1

Selling, general and administrative expenses
346

 
27

 
—

 
373

Engineering and product development costs
75

 
—

 
—

 
75

Interest expense
55

 
27

 
—

 
82

Other expense (income), net
56

 
(8
)
 
(30
)
 
18

Total costs and expenses
3,027

 
46

 
(30
)
 
3,043

Equity in income of non-consolidated affiliates
3

 
—

 
—

 
3

Income (loss) before equity income from financial services operations and income taxes
(76
)
 
32

 
—

 
(44
)
Equity income from financial services operations
24

 
—

 
(24
)
 
—

Income (loss) before income tax
(52
)
 
32

 
(24
)
 
(44
)
Income tax benefit (expense)
9

 
(8
)
 
—

 
1

Net income (loss)
(43
)
 
24

 
(24
)
 
(43
)
Less: Net income attributable to non-controlling interests
5

 
—

 
—

 
5

Net income (loss) attributable to Navistar International Corporation
$
(48
)
 
$
24

 
$
(24
)
 
$
(48
)



E-8


 
For the Six Months Ended April 30, 2019
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Statement of Operations
Sales of manufactured products
$
5,334

 
$
—

 
$
—

 
$
5,334

Finance revenues
—

 
152


(57
)
 
95

Sales and revenues, net
5,334

 
152

 
(57
)
 
5,429

Costs of products sold
4,472

 
—

 
—

 
4,472

Restructuring charges
1

 
—

 
—

 
1

Asset impairment charges
3

 
—


—

 
3

Selling, general and administrative expenses
509

 
51


(1
)
 
559

Engineering and product development costs
161

 
—

 
—

 
161

Interest expense
111

 
56


—

 
167

Other expense (income), net
189

 
(18
)

(56
)
 
115

Total costs and expenses
5,446

 
89

 
(57
)
 
5,478

Equity in income of non-consolidated affiliates
3

 
—

 
—

 
3

Income (loss) before equity income from financial services operations and income taxes
(109
)
 
63

 
—

 
(46
)
Equity income from financial services operations
48

 
—

 
(48
)
 
—

Income (loss) before income tax
(61
)
 
63

 
(48
)
 
(46
)
Income tax benefit (expense)
35

 
(15
)

—

 
20

Net income (loss)
(26
)
 
48

 
(48
)
 
(26
)
Less: Net income attributable to non-controlling interests
11

 
—

 
—

 
11

Net income (loss) attributable to Navistar International Corporation
$
(37
)
 
$
48

 
$
(48
)
 
$
(37
)


E-9


Condensed Statements of Assets, Liabilities, and Stockholders' Equity (Deficit)
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)

 
As of April 30, 2020
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,497

 
$
50

 
$
—

 
$
1,547

Restricted cash and cash equivalents
48

 
83

 
—

 
131

Finance and other receivables, net
233

 
2,105

 
(485
)
 
1,853

Inventories
1,006

 
6

 
—

 
1,012

Goodwill
38

 
—

 
—

 
38

Property and equipment, net
909

 
298

 
—

 
1,207

Operating lease right of use assets
120


1


—


121

Investments in and advances to financial services operations
617

 
—

 
(617
)
 
—

Investments in non-consolidated affiliates
28

 
—

 
—

 
28

Deferred taxes, net
115

 
2

 
—

 
117

Other assets
365

 
21

 
—

 
386

Total assets
$
4,976

 
$
2,566

 
$
(1,102
)
 
$
6,440

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
Accounts payable
$
1,513

 
$
10

 
$
(485
)
 
$
1,038

Debt
3,535

 
1,894

 
—

 
5,429

Postretirement benefits liabilities
2,032

 
—

 
—

 
2,032

Other liabilities
1,752

 
45

 
—

 
1,797

Total liabilities
8,832

 
1,949

 
(485
)
 
10,296

Stockholders' equity attributable to non-controlling interest
2

 
—

 
—

 
2

Stockholders' equity (deficit) attributable to controlling interest
(3,858
)
 
617

 
(617
)
 
(3,858
)
Total liabilities and stockholders' equity (deficit)
$
4,976

 
$
2,566

 
$
(1,102
)
 
$
6,440


E-10


Condensed Statements of Assets, Liabilities, and Stockholders' Equity (Deficit)
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
As of October 31, 2019
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Consolidated Balance Sheet
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,328

 
$
42

 
$
—

 
$
1,370

Restricted cash and cash equivalents
50

 
137

 
—

 
187

Finance and other receivables, net
348

 
2,423

 
(226
)
 
2,545

Inventories
905

 
6

 
—

 
911

Goodwill
38

 
—

 
—

 
38

Property and equipment, net
942

 
367

 
—

 
1,309

Investments in and advances to financial services operations
668

 
—

 
(668
)
 
—

Investments in non-consolidated affiliates
31

 
—

 
—

 
31

Deferred taxes, net
115

 
2

 
—

 
117

Other assets
386

 
23

 
—

 
409

Total assets
$
4,811

 
$
3,000

 
$
(894
)
 
$
6,917

Liabilities and stockholders' equity (deficit)
 
 
 
 
 
 
 
Accounts payable
$
1,554

 
$
13

 
$
(226
)
 
$
1,341

Debt
2,932

 
2,256

 
—

 
5,188

Postretirement benefits liabilities
2,103

 
—

 
—

 
2,103

Other liabilities
1,945

 
63

 
—

 
2,008

Total liabilities
8,534

 
2,332

 
(226
)
 
10,640

Stockholders' equity attributable to non-controlling interest
3

 
—

 
—

 
3

Stockholders' equity (deficit) attributable to controlling interest
(3,726
)
 
668

 
(668
)
 
(3,726
)
Total liabilities and stockholders' equity (deficit)
$
4,811

 
$
3,000

 
$
(894
)
 
$
6,917


E-11


Condensed Statements of Cash Flows
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Six Months Ended April 30, 2020
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
(65
)
 
$
32

 
$
(32
)
 
$
(65
)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
70

 
—

 
—

 
70

Depreciation of equipment leased to others
(3
)
 
32

 
—

 
29

Amortization of debt issuance costs and discount
3

 
4

 
—

 
7

Deferred income taxes
(9
)
 
—

 
—

 
(9
)
Asset impairment charges
13

 
—

 
—

 
13

Equity in loss of non-consolidated affiliates
2

 
—

 
—

 
2

Equity in income of financial services affiliates
(32
)
 
—

 
32

 
—

Dividends from financial services operations
30

 
—

 
(30
)
 
—

Change in intercompany receivables and payables
118

 
(118
)
 
—

 
—

Other, net
(608
)
 
443

 
—

 
(165
)
Net cash provided by (used in) operating activities
(481
)
 
393

 
(30
)
 
(118
)
Cash flows from investing activities
 
 
 
 
 
 
 
Capital expenditures
(90
)
 
—

 
—

 
(90
)
Purchase of equipment leased to others
(5
)
 
(11
)
 
—

 
(16
)
Other investing activities
10

 
7

 
—

 
17

Net cash used in investing activities
(85
)
 
(4
)
 
—

 
(89
)
Net cash provided by (used in) financing activities
745

 
(438
)
 
30

 
337

Effect of exchange rate changes on cash, cash equivalents and restricted cash
(12
)
 
3

 
—

 
(9
)
Increase (decrease) in cash, cash equivalents and restricted cash
167

 
(46
)
 
—

 
121

Cash, cash equivalents and restricted cash at beginning of the period
1,378

 
179

 
—

 
1,557

Cash, cash equivalents and restricted cash at end of the period
$
1,545

 
$
133

 
$
—

 
$
1,678


E-12


Condensed Statements of Cash Flows
Navistar International Corporation
(Manufacturing operations with financial services operations on an after-tax equity basis)
 
For the Six Months Ended April 30, 2019
(in millions)
Manufacturing Operations
 
Financial Services Operations
 
Adjustments
 
Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities
 
 
 
 
 
 
 
Net income (loss)
$
(26
)
 
$
48

 
$
(48
)
 
$
(26
)
Adjustments to reconcile net income (loss) to cash used in operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
66

 
—

 
—

 
66

Depreciation of equipment leased to others
(1
)
 
32

 
—

 
31

Amortization of debt issuance costs and discount
8

 
4

 
—

 
12

Deferred income taxes
(41
)
 
—

 
—

 
(41
)
Asset impairment charges
3

 
—

 
—

 
3

Gain on sales of investments and businesses, net
(59
)
 
—

 
—

 
(59
)
Equity in income of non-consolidated affiliates
(3
)
 
—

 
—

 
(3
)
Equity in income of financial services affiliates
(48
)
 
—

 
48

 
—

Dividends from non-consolidated affiliates
1

 
—

 
—

 
1

Change in other intercompany receivables and payables
48

 
(48
)
 
—

 
—

Other, net
(31
)
 
(143
)
 
—

 
(174
)
Net cash used in operating activities
(83
)
 
(107
)
 
—

 
(190
)
Cash flows from investing activities
 
 
 
 
 
 
 
Maturities of marketable securities
79

 
—

 
—

 
79

Capital expenditures
(64
)
 
(2
)
 
—

 
(66
)
Purchase of equipment leased to others
(13
)
 
(63
)
 
—

 
(76
)
Other investing activities
95

 
5

 


 
100

Net cash provided by (used in) investing activities
97

 
(60
)
 
—

 
37

Net cash provided by (used in) financing activities
(342
)
 
268

 
—

 
(74
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(6
)
 
(4
)
 
—

 
(10
)
Increase (decrease) in cash, cash equivalents and restricted cash
(334
)
 
97

 
—

 
(237
)
Cash, cash equivalents and restricted cash at beginning of the period
1,295

 
150

 
—

 
1,445

Cash, cash equivalents and restricted cash at end of the period
$
961

 
$
247

 
$
—

 
$
1,208


E-13