LISLE, Ill., March 4, 2020 /PRNewswire/ -- Navistar
International Corporation (NYSE: NAV) today announced a first
quarter 2020 net loss of $36 million,
or $0.36 per diluted share, compared
to first quarter 2019 net income of $11
million, or $0.11 per diluted
share.
Revenues in the quarter were $1.8 billion compared to
$2.4 billion in the first quarter
last year. The decrease was primarily driven by a 39 percent
decrease in the company's Core volumes, which represent its sales
of Class 6-8 trucks and buses in the
United States and Canada.
First quarter 2020 EBITDA was $55 million, compared to
$96 million in first quarter 2019.
Adjusted EBITDA in first quarter 2020 was $59 million versus $173
million a year ago.
Adjusted net income for the quarter was a loss of $33 million compared to a gain of $57 million in the first quarter last year.
Navistar finished first quarter 2020 with $1 billion in consolidated cash and cash
equivalents and $977 million in
manufacturing cash and cash equivalents.
"While revenues are down year-over-year, these results are in
line with the guidance we provided in December as the industry
works through a transition period," said Troy A. Clarke, Chairman, President and CEO.
"Throughout the quarter, we implemented actions to lower costs, yet
the results were impacted by lower volumes."
During the quarter, the company received an unsolicited proposal
from its alliance partner TRATON regarding a potential transaction
to acquire the company. Navistar's Board of Directors is carefully
reviewing and evaluating the proposal to determine the course of
action it believes is in the best interest of the company and its
stakeholders.
Also in the quarter, Navistar received final approval of the
MaxxForce EGR engine legal settlement in the U.S. As a result, the
company funded $85 million in
February, relating to the cash portion of the settlement.
Late last month, the company broke ground on the expansion of
its Huntsville, Ala. engine plant.
The company will be investing $125
million in the manufacturing facility to produce
next-generation, big-bore powertrains being developed with
Navistar's global alliance partner TRATON. The expansion will add
110,000 square feet and 145 skilled manufacturing jobs to its
existing facility.
"As market conditions improve throughout the year, we have
confidence that the company is positioned to build upon its first
quarter performance and take advantage of what we expect to be a
stronger second half," said Clarke.
The company reiterated both its 2020 industry guidance and
full-year financial guidance, pending any change to operations from
the coronavirus.
- Industry retail deliveries of Class 6-8 trucks and buses in
the United States and Canada are forecasted to be in the range of
335,000 to 365,000 units, with Class 8 retail deliveries between
210,000 and 240,000 units.
- Revenues are expected to be in the range of $9.25 billion to $9.75
billion.
- Adjusted EBITDA is expected to be in the range of $700 million to $750
million.
SEGMENT
REVIEW
|
|
Summary of
Financial Results:
|
|
|
(Unaudited)
|
|
Three Months
Ended
January 31,
|
(in millions,
except per share data)
|
2020
|
|
2019
|
Sales and revenues,
net
|
$
|
1,838
|
|
|
$
|
2,433
|
|
Segment
Results:
|
|
|
|
Truck
|
$
|
(58)
|
|
|
$
|
90
|
|
Parts
|
119
|
|
|
144
|
|
Global
Operations
|
—
|
|
|
6
|
|
Financial
Services
|
17
|
|
|
31
|
|
Income (loss) from
continuing operations, net of tax(A)
|
$
|
(36)
|
|
|
$
|
11
|
|
Net income
(loss)(A)
|
(36)
|
|
|
11
|
|
Diluted income (loss)
per share(A)
|
(0.36)
|
|
|
0.11
|
|
|
|
|
|
|
|
|
|
(A)
|
Amounts attributable
to Navistar International Corporation.
|
Truck Segment – In first quarter 2020, the Truck
segment net sales were $1.2 billion.
The year-over-year decrease is primarily due to lower volumes in
the company's Core markets, partially offset by the ramp up of
Class 4/5 units.
The Truck segment incurred a loss of $58
million in first quarter 2020. The year-over-year decline is
primarily due to lower volumes in North
America, and higher used truck losses and warranty expenses.
Additionally, a $54 million gain was
recorded in first quarter 2019 related to the sale of a 70 percent
equity interest in Navistar Defense, which also impacted
year-over-year sales and segment profit comparisons.
Parts Segment – For the first quarter 2020, the Parts
segment net sales decreased to $493
million, and segment profit decreased to $119 million. The results were impacted by weaker
industry conditions in the U.S. and Canada, which drove lower volumes.
Global Operations Segment – In first quarter 2020,
the Global Operations segment net sales decreased to $68 million and maintained breakeven
profitability. The year-over-year decrease was primarily driven by
depreciation of the Brazilian real against the U.S. dollar compared
to the first quarter of 2019, as well as lower volumes in South
American operations. Additionally, a $5
million gain was recorded in first quarter 2019 related to
the sale of a former joint venture in China.
Financial Services Segment – In the first quarter of
2020, the Financial Services segment net revenues decreased to
$57 million, and segment profit
decreased to $17 million. The
year-over-year decrease was primarily driven by lower originations
and average receivable balances.
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, 2019 and our quarterly report on Form
10-Q for the period ended January 31,
2020. 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,
|
(in millions,
except per share data)
|
2020
|
|
2019
|
Sales and
revenues
|
|
|
|
Sales of manufactured
products, net
|
$
|
1,794
|
|
|
$
|
2,386
|
|
Finance
revenues
|
44
|
|
|
47
|
|
Sales and revenues,
net
|
1,838
|
|
|
2,433
|
|
Costs and
expenses
|
|
|
|
Costs of products
sold
|
1,529
|
|
|
1,979
|
|
Restructuring
charges
|
1
|
|
|
—
|
|
Asset impairment
charges
|
—
|
|
|
2
|
|
Selling, general and
administrative expenses
|
182
|
|
|
186
|
|
Engineering and
product development costs
|
86
|
|
|
86
|
|
Interest
expense
|
65
|
|
|
85
|
|
Other income,
net
|
11
|
|
|
97
|
|
Total costs and
expenses
|
1,874
|
|
|
2,435
|
|
Equity in income of
non-consolidated affiliates
|
(1)
|
|
|
—
|
|
Loss before income
taxes
|
(37)
|
|
|
(2)
|
|
Income tax
benefit
|
5
|
|
|
19
|
|
Net income
(loss)
|
(32)
|
|
|
17
|
|
Less: Net income
attributable to non-controlling interests
|
4
|
|
|
6
|
|
Net income (loss)
attributable to Navistar International Corporation
|
$
|
(36)
|
|
|
$
|
11
|
|
|
|
|
|
Income (loss) per
share attributable to Navistar International Corporate
|
|
|
|
Basic:
|
$
|
(0.36)
|
|
|
$
|
0.11
|
|
Diluted:
|
$
|
(0.36)
|
|
|
$
|
0.11
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
Basic
|
99.5
|
|
|
99.1
|
|
Diluted
|
99.5
|
|
|
99.4
|
|
Navistar
International Corporation and Subsidiaries
|
Consolidated
Balance Sheets
|
|
|
January
31,
|
|
October
31,
|
(in millions,
except per share data)
|
2020
|
|
2019
|
ASSETS
|
(Unaudited)
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,000
|
|
|
$
|
1,370
|
|
Restricted cash and
cash equivalents
|
50
|
|
|
133
|
|
Trade and other
receivables, net
|
269
|
|
|
338
|
|
Finance receivables,
net
|
1,615
|
|
|
1,923
|
|
Inventories,
net
|
1,074
|
|
|
911
|
|
Other current
assets
|
279
|
|
|
277
|
|
Total current
assets
|
4,287
|
|
|
4,952
|
|
Restricted
cash
|
87
|
|
|
54
|
|
Trade and other
receivables, net
|
10
|
|
|
10
|
|
Finance receivables,
net
|
268
|
|
|
274
|
|
Investments in
non-consolidated affiliates
|
30
|
|
|
31
|
|
Property and
equipment (net of accumulated depreciation and amortization of
$2,390 and $2,488, respectively)
|
1,283
|
|
|
1,309
|
|
Operating lease right
of use assets
|
107
|
|
|
—
|
|
Goodwill
|
38
|
|
|
38
|
|
Intangible assets
(net of accumulated amortization of $141 and $142,
respectively)
|
23
|
|
|
25
|
|
Deferred taxes,
net
|
127
|
|
|
117
|
|
Other noncurrent
assets
|
103
|
|
|
107
|
|
Total
assets
|
$
|
6,363
|
|
|
$
|
6,917
|
|
LIABILITIES and
STOCKHOLDERS' DEFICIT
|
|
|
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
Notes payable and
current maturities of long-term debt
|
$
|
452
|
|
|
$
|
871
|
|
Accounts
payable
|
1,286
|
|
|
1,341
|
|
Other current
liabilities
|
1,293
|
|
|
1,363
|
|
Total current
liabilities
|
3,031
|
|
|
3,575
|
|
Long-term
debt
|
4,283
|
|
|
4,317
|
|
Postretirement
benefits liabilities
|
2,056
|
|
|
2,103
|
|
Other noncurrent
liabilities
|
732
|
|
|
645
|
|
Total
liabilities
|
10,102
|
|
|
10,640
|
|
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
|
2,730
|
|
|
2,730
|
|
Accumulated
deficit
|
(4,256)
|
|
|
(4,409)
|
|
Accumulated other
comprehensive loss
|
(2,084)
|
|
|
(1,912)
|
|
Common stock held in
treasury, at cost (3.7 and 3.9 shares, respectively)
|
(143)
|
|
|
(147)
|
|
Total stockholders'
deficit attributable to Navistar International
Corporation
|
(3,741)
|
|
|
(3,726)
|
|
Stockholders' equity
attributable to non-controlling interests
|
2
|
|
|
3
|
|
Total
stockholders' deficit
|
(3,739)
|
|
|
(3,723)
|
|
Total liabilities
and stockholders' deficit
|
$
|
6,363
|
|
|
$
|
6,917
|
|
Navistar
International Corporation and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
(in
millions)
|
2020
|
|
2019
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$
|
(32)
|
|
|
$
|
17
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
Depreciation and
amortization
|
35
|
|
|
33
|
|
Depreciation of
equipment leased to others
|
15
|
|
|
15
|
|
Deferred taxes,
including change in valuation allowance
|
(10)
|
|
|
(41)
|
|
Asset impairment
charges
|
—
|
|
|
2
|
|
Gain on sales of
investments and businesses, net
|
—
|
|
|
(59)
|
|
Amortization of debt
issuance costs and discount
|
3
|
|
|
6
|
|
Stock-based
compensation
|
5
|
|
|
—
|
|
Provision for
doubtful accounts
|
4
|
|
|
1
|
|
Equity in income of
non-consolidated affiliates, net of dividends
|
1
|
|
|
—
|
|
Other non-cash
operating activities
|
(2)
|
|
|
(1)
|
|
Changes in other
assets and liabilities, exclusive of the effects of businesses
disposed
|
80
|
|
|
(213)
|
|
Net cash provided
by (used in) operating activities
|
99
|
|
|
(240)
|
|
Cash flows from
investing activities
|
|
|
|
Maturities of
marketable securities
|
—
|
|
|
61
|
|
Capital
expenditures
|
(59)
|
|
|
(44)
|
|
Purchases of
equipment leased to others
|
(7)
|
|
|
(42)
|
|
Proceeds from sales
of property and equipment
|
2
|
|
|
3
|
|
Proceeds from sales
of investments and businesses
|
10
|
|
|
95
|
|
Other investing
activities
|
—
|
|
|
1
|
|
Net cash provided
by (used in) investing activities
|
(54)
|
|
|
74
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
issuance of securitized debt
|
8
|
|
|
—
|
|
Principal payments on
securitized debt
|
(16)
|
|
|
(22)
|
|
Net change in secured
revolving credit facilities
|
(315)
|
|
|
48
|
|
Proceeds from
issuance of non-securitized debt
|
18
|
|
|
27
|
|
Principal payments on
non-securitized debt
|
(65)
|
|
|
(61)
|
|
Net change in notes
and debt outstanding under revolving credit facilities
|
(88)
|
|
|
83
|
|
Debt issuance
costs
|
—
|
|
|
(1)
|
|
Proceeds from
financed lease obligations
|
—
|
|
|
6
|
|
Proceeds from
exercise of stock options
|
2
|
|
|
1
|
|
Dividends paid by
subsidiaries to non-controlling interest
|
(5)
|
|
|
(8)
|
|
Net cash provided
by (used in) financing activities
|
(461)
|
|
|
73
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(4)
|
|
|
(3)
|
|
Decrease in cash,
cash equivalents and restricted cash
|
(420)
|
|
|
(96)
|
|
Cash, cash
equivalents and restricted cash at beginning of the
period
|
1,557
|
|
|
1,445
|
|
Cash, cash
equivalents and restricted cash at end of the period
|
$
|
1,137
|
|
|
$
|
1,349
|
|
Navistar
International Corporation and Subsidiaries
|
Segment
Reporting
|
(Unaudited)
|
|
We define segment
profit (loss) as net income (loss) attributable to Navistar
International Corporation, excluding income tax 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
January 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
External sales and
revenues, net
|
$
|
1,238
|
|
|
$
|
492
|
|
|
$
|
61
|
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
1,838
|
|
Intersegment sales
and revenues
|
4
|
|
|
1
|
|
|
7
|
|
|
11
|
|
|
(23)
|
|
|
—
|
|
Total sales and
revenues, net
|
$
|
1,242
|
|
|
$
|
493
|
|
|
$
|
68
|
|
|
$
|
57
|
|
|
$
|
(22)
|
|
|
$
|
1,838
|
|
Income (loss)
attributable to NIC
|
$
|
(58)
|
|
|
$
|
119
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
(114)
|
|
|
$
|
(36)
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
Segment profit
(loss)
|
$
|
(58)
|
|
|
$
|
119
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
(119)
|
|
|
$
|
(41)
|
|
Depreciation and
amortization
|
$
|
27
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
50
|
|
Interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
46
|
|
|
65
|
|
Equity in income
(loss) of non-consolidated affiliates
|
(1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
Capital
expenditures(B)
|
47
|
|
|
5
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
59
|
|
|
(in
millions)
|
Truck
|
|
Parts
|
|
Global
Operations
|
|
Financial
Services(A)
|
|
Corporate
and Eliminations
|
|
Total
|
Three Months Ended
January 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
External sales and
revenues, net
|
$
|
1,776
|
|
|
$
|
546
|
|
|
$
|
61
|
|
|
$
|
47
|
|
|
$
|
3
|
|
|
$
|
2,433
|
|
Intersegment sales
and revenues
|
21
|
|
|
2
|
|
|
12
|
|
|
27
|
|
|
(62)
|
|
|
—
|
|
Total sales and
revenues, net
|
$
|
1,797
|
|
|
$
|
548
|
|
|
$
|
73
|
|
|
$
|
74
|
|
|
$
|
(59)
|
|
|
$
|
2,433
|
|
Income (loss)
attributable NIC
|
$
|
90
|
|
|
$
|
144
|
|
|
$
|
6
|
|
|
$
|
31
|
|
|
$
|
(260)
|
|
|
$
|
11
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
19
|
|
Segment profit
(loss)
|
$
|
90
|
|
|
$
|
144
|
|
|
$
|
6
|
|
|
$
|
31
|
|
|
$
|
(279)
|
|
|
$
|
(8)
|
|
Depreciation and
amortization
|
$
|
26
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
16
|
|
|
$
|
3
|
|
|
$
|
48
|
|
Interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
56
|
|
|
85
|
|
Equity in income
(loss) of non-consolidated affiliates
|
1
|
|
|
1
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
Capital
expenditures(B)
|
31
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
9
|
|
|
44
|
|
|
(in
millions)
|
Truck
|
|
Parts
|
|
Global
Operations
|
|
Financial Services
|
|
Corporate and Eliminations
|
|
Total
|
Segment assets, as
of:
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
2020
|
$
|
1,844
|
|
|
$
|
705
|
|
|
$
|
274
|
|
|
$
|
2,380
|
|
|
$
|
1,160
|
|
|
$
|
6,363
|
|
October 31,
2019
|
1,705
|
|
|
688
|
|
|
296
|
|
|
2,774
|
|
|
1,454
|
|
|
6,917
|
|
|
|
|
|
|
|
|
|
(A)
|
Total sales and
revenues in the Financial Services segment include interest
revenues of $35 million and $53 million for the three months ended
January 31, 2020 and 2019, respectively.
|
(B)
|
Exclusive of
purchases of equipment leased to others.
|
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, 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
January 31,
|
(in
millions)
|
2020
|
|
2019
|
Income (loss) from
continuing operations attributable to NIC, net of tax
|
$
|
(36)
|
|
|
$
|
11
|
|
Plus:
|
|
|
|
Depreciation and
amortization expense
|
50
|
|
|
48
|
|
Manufacturing
interest expense(A)
|
46
|
|
|
56
|
|
Less:
|
|
|
|
Income tax
benefit
|
5
|
|
|
19
|
|
EBITDA
|
$
|
55
|
|
|
$
|
96
|
|
|
|
|
|
|
|
|
|
(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
January 31,
|
(in
millions)
|
2020
|
|
2019
|
Interest
expense
|
$
|
65
|
|
|
$
|
85
|
|
Less: Financial
services interest expense
|
19
|
|
|
29
|
|
Manufacturing
interest expense
|
$
|
46
|
|
|
$
|
56
|
|
|
|
Adjusted EBITDA
Reconciliation:
|
|
|
Three Months
Ended
January 31,
|
(in
millions)
|
2020
|
|
2019
|
EBITDA
(reconciled above)
|
$
|
55
|
|
|
$
|
96
|
|
Adjusted for
significant items of:
|
|
|
|
Adjustments to
pre-existing warranties(A)
|
4
|
|
|
(7)
|
|
Asset impairment
charges(B)
|
—
|
|
|
2
|
|
Restructuring of
manufacturing operations(C)
|
1
|
|
|
—
|
|
Gain on
sales(D)
|
—
|
|
|
(59)
|
|
Pension
settlement(E)
|
—
|
|
|
142
|
|
Settlement
gain(F)
|
(1)
|
|
|
(1)
|
|
Total
adjustments
|
4
|
|
|
77
|
|
Adjusted
EBITDA
|
$
|
59
|
|
|
$
|
173
|
|
|
|
|
|
|
|
|
|
(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 first quarter
of 2019, we recorded $2 million of asset impairment charges related
to certain assets under operating leases in our Truck
segment.
|
(C)
|
In the first quarter
of 2020, we recorded a restructuring charge of $1 million in our
Truck segment.
|
(D)
|
In the first quarter
of 2019, we recognized a gain of $54 million related to the sale of
a majority interest in the Navistar Defense business in our Truck
segment, and a gain of $5 million related to the sale of our joint
venture in China with JAC in our Global Operations
segment.
|
(E)
|
In the first quarter
of 2019, we purchased group annuity contracts for certain retired
pension plan participants resulting in plan remeasurements. As
a result, we recorded pension settlement accounting charges of $142
million in Other expense, net in Corporate.
|
(F)
|
In both the first
quarter of 2020 and 2019, 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.
|
Manufacturing
segment cash and cash equivalents reconciliation:
|
|
|
As of January 31,
2020
|
(in
millions)
|
Manufacturing
Operations
|
|
Financial
Services
Operations
|
|
Consolidated
Balance Sheet
|
Total cash, cash
equivalents, and marketable securities
|
$
|
977
|
|
|
$
|
23
|
|
|
$
|
1,000
|
|
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SOURCE Navistar International Corporation