Navistar Reports 2019 Fourth Quarter And Full Year Results
LISLE, Ill., Dec. 17, 2019 /PRNewswire/ -- Navistar International Corporation (NYSE: NAV) today announced fourth quarter 2019 net income of $102 million, or $1.02 per diluted share, compared to fourth quarter 2018 net income of $188 million, or $1.89 per diluted share. Navistar reported net income of $221 million, or $2.22 per diluted share for fiscal year 2019, versus net income of $340 million, or $3.41 per diluted share, for fiscal year 2018.
Adjusted net income for the fourth quarter was $114 million versus $189 million in the same period one year ago. Adjusted net income for fiscal year 2019 increased 29 percent to $423 million versus $327 million in 2018.
Fourth quarter 2019 adjusted EBITDA was $219 million versus $322 million one year ago. Fiscal year 2019 adjusted EBITDA increased seven percent to $882 million, versus $826 million in 2018. This marks the company's seventh consecutive year of annual growth in adjusted EBITDA.
Revenues in the quarter were $2.8 billion, down 16 percent compared to fourth quarter 2018. The revenue decrease was largely driven by very strong fourth quarter 2018 vehicle chargeouts following supplier production constraints in the third quarter of that year, the impact of the sale of Navistar Defense in December 2018, and lower industry demand in the quarter. Revenue for fiscal year 2019 was up 10 percent to $11.25 billion, led by a 26 percent increase in worldwide chargeouts to 106,500 units for the year. During the year, Navistar's Core market share grew by 1.3 points, to 18.8 percent. The company increased its school bus market share to 35.8 percent, where it is once again the industry leader, increased its Class 6-7 medium duty market share to 27 percent, as well as increased its Class 8 market share to 14.1 percent. This marks the company's third consecutive year of Core market share growth.
Navistar finished fourth quarter 2019 with $1.4 billion in consolidated cash, cash equivalents and marketable securities, and with $1.3 billion in manufacturing cash, cash equivalents and marketable securities. For the year, the company generated $263 million of manufacturing free cash flow.
"During 2019, we grew adjusted EBITDA and adjusted net income while growing our Core market share to 19 percent, for a total of three points of share gain in the last three years," said Troy A. Clarke, Navistar chairman, president and CEO. "Our Navistar 4.0 strategy builds on this performance and incorporates major investments in the business that will deliver strong benefits for both customers and shareholders."
Navistar 4.0, the company's five-year improvement strategy which was presented at the company's Investor Day in September, lays out a plan to increase the company's EBITDA margins to 12 percent by the end of 2024. The plan commits to advanced operational approaches, including a unified enterprise platform strategy, advanced modular architecture and the most capable manufacturing network in the industry. The company also announced it plans a capital investment of more than $250 million in a new industry benchmark manufacturing facility in San Antonio, Texas, which will have best-in-class lean processes and will be Industry 4.0 ready. This is in addition to the company's June announcement of investing $125 million in its Huntsville, Alabama manufacturing facilities to produce next-generation, big-bore powertrains being developed with Navistar's global alliance partner TRATON GROUP.
In October, Navistar launched NEXT eMobility Solutions, a business unit that is dedicating a world-class, lean engineering team to develop the best products in the electric vehicle space, using a unique consultative philosophy that embraces the full range of customers' needs. Navistar also unveiled a prototype electric version of the International(®) MV((TM)) Series medium-duty vehicle. Additionally, the company launched International(®) 360, a groundbreaking service communications and fleet management platform that delivers seamless, transparent communications with the International(®) service network.
2020 INDUSTRY AND FINANCIAL GUIDANCE
The company reiterated its 2020 industry guidance and updated the following full-year financial guidance:
-- 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.
"With a proven track record of managing costs and improving operating results, Navistar is in a much better position than in the past to do well even during cyclical downturns," Clarke said. "We are taking actions to adjust our business to current market conditions, including reducing production rates and SG&A expenses while restructuring our global and export operations. Building on the strong gains achieved over the last several years, Navistar has a clear roadmap in place for sustained growth that will set it apart from the industry."
SEGMENT REVIEW
Summary of Financial Results:
(Unaudited)
Quarters Ended
Years Ended
October 31, October 31,
(in millions, except per share data) 2019 2018 2019 2018
---
Sales and revenues, net $
2,780 $
3,317 $
11,251 $
10,250
Segment Results:
Truck $
86 $
197 $
269 $
397
Parts 161 156 598 569
Global Operations (10) 4 2
Financial Services 30 26 123 88
Income from continuing operations, net of tax(A) $
102 $
188 $
221 $
340
Net income(A) 102 188 221 340
Diluted earnings per share(A) 1.02 1.89 2.22 3.41
Amounts
attributable
to Navistar
International
(A) Corporation.
Truck Segment - For the fourth quarter 2019, the Truck segment recorded a profit of $86 million, compared with a year-ago fourth quarter profit of $197 million. The year-over-year decline was primarily due to an 18 percent decline in the company's Core chargeouts, as well as the impact of the sale of a majority interest in the Navistar Defense business.
For the 2019 fiscal year, the Truck segment recorded a profit of $269 million, compared with a fiscal year 2018 profit of $397 million. The decrease was primarily driven by charges related to a legacy engine class action settlement and the impact of the sale of a majority interest in Navistar Defense. These items were partially offset by higher volumes in the company's Core markets.
Parts Segment -- For the fourth quarter 2019, the Parts segment recorded a profit of $161 million, compared with a year-ago fourth quarter profit of $156 million. For the 2019 fiscal year, the Parts segment recorded a profit of $598 million, compared to a fiscal year 2018 profit of $569 million. The results were primarily driven by improved North American operating results, reflecting the company's growing private label business, partially offset by lower Blue Diamond Parts volumes.
Global Operations Segment -- For the fourth quarter 2019, the Global Operations segment recorded a loss of $10 million, compared to a year-ago fourth quarter profit of $4 million. The year-over-year change was driven largely by a $14 million restructuring charge related to cost reduction actions, including ceasing production at the company's MWM Argentina engine plant and restructuring activities in Brazil.
For the 2019 fiscal year, the Global Operations segment operated at breakeven compared to a year-ago fiscal year profit of $2 million. The Global Operations segment results decrease was primarily driven by the impact of product mix and an increase in restructuring charges related to cost reduction actions, partially offset by lower SG&A expenses and the impact of the sale of the company's former joint venture in China with JAC.
Financial Services Segment-- For the fourth quarter 2019, the Financial Services segment recorded a profit of $30 million, up slightly compared with fourth quarter 2018. The results were primarily driven by lower interest expense due to the payoff of the company's $400 million Term Loan in May.
For the 2019 fiscal year, the Financial Services segment recorded a profit of $123 million, compared to a year-ago fiscal year profit of $88 million. The increase is primarily driven by higher revenue, an improved funding strategy to manage borrowing costs, and higher income from an intercompany loan.
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 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 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. 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)
For the Quarters For the Years
Ended October 31, Ended October 31,
(in millions, except per share
data) 2019 2018 2019 2018
---
Sales and revenues
Sales of manufactured
products, net $
2,731 $
3,275 $
11,061 $
10,090
Finance revenues 49 42 190 160
Sales and revenues, net 2,780 3,317 11,251 10,250
Costs and expenses
Costs of products sold 2,272 2,702 9,245 8,317
Restructuring charges 11 12 (1)
Asset impairment charges 1 3 7 14
Selling, general and
administrative expenses 208 215 934 828
Engineering and product
development costs 77 75 319 297
Interest expense 69 87 312 327
Other income, net 24 12 164 48
Total costs and expenses 2,662 3,094 10,993 9,830
Equity in income of non-
consolidated affiliates - 4
Income before income taxes 118 223 262 420
Income tax expense (10) (27) (19) (52)
Net income 108 196 243 368
Less: Net income attributable
to non-controlling interests 6 8 22 28
Net income attributable to
Navistar International
Corporation $
102 $
188 $
221 $
340
Earnings per share attributable to Navistar
International Corporation:
Basic: $
1.03 $
1.90 $
2.23 $
3.44
Diluted: $
1.02 $
1.89 $
2.22 $
3.41
Weighted average shares outstanding:
Basic 99.4 99.1 99.3 98.9
Diluted 99.6 99.7 99.5 99.6
Navistar International Corporation and Subsidiaries
Consolidated Balance Sheets
As of October 31,
(in millions, except per share data) 2019 2018
---
ASSETS
Current assets
Cash and cash equivalents $
1,370 $
1,320
Restricted cash and cash equivalents 133 62
Marketable securities - 101
Trade and other receivables, net 338 456
Finance receivables, net 1,923 1,898
Inventories, net 911 1,110
Other current assets 277 189
Total current assets 4,952 5,136
Restricted cash 54 63
Trade and other receivables, net 10 49
Finance receivables, net 274 260
Investments in non-consolidated affiliates 31 50
Property and equipment, net 1,309 1,370
Goodwill 38 38
Intangible assets, net 25 30
Deferred taxes, net 117 121
Other noncurrent assets 107 113
Total assets $
6,917 $
7,230
LIABILITIES and STOCKHOLDERS' DEFICIT
Liabilities
Current liabilities
Notes payable and current maturities of long-
term debt $
871 $
946
Accounts payable 1,341 1,606
Other current liabilities 1,363 1,255
Total current liabilities 3,575 3,807
Long-term debt 4,317 4,521
Postretirement benefits liabilities 2,103 2,097
Other noncurrent liabilities 645 731
Total liabilities 10,640 11,156
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 2,731
Accumulated deficit (4,409) (4,593)
Accumulated other comprehensive loss (1,912) (1,920)
Common stock held in treasury, at cost (3.9 and
4.2 shares, respectively) (147) (161)
Total stockholders' deficit attributable to
Navistar International Corporation (3,726) (3,931)
Stockholders' equity attributable to non-
controlling interests 3 5
Total stockholders' deficit (3,723) (3,926)
Total liabilities and stockholders' deficit $
6,917 $
7,230
Navistar International Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Years Ended
October 31,
(in millions) 2019 2018
---
Cash flows from operating activities
Net income $
243 $
368
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 132 140
Depreciation of equipment leased to others 61 71
Deferred taxes, including change in valuation
allowance (31) 4
Asset impairment charges 7 14
Gain on sales of investments and businesses, net (56)
Amortization of debt issuance costs and discount 19 31
Stock-based compensation 23 32
Provision for doubtful accounts, net of recoveries 4 10
Equity in income of non-consolidated affiliates,
net of dividends (2) 5
Write-off of debt issuance cost and discount 6 43
Other non-cash operating activities (9) (23)
Changes in other assets and liabilities, exclusive of the effects of
businesses disposed:
Trade and other receivables 141 (109)
Finance receivables (42) (405)
Inventories 103 (257)
Accounts payable (250) 317
Other assets and liabilities 101 26
Net cash provided by operating activities 450 267
Cash flows from investing activities
Purchases of marketable securities - (251)
Sales of marketable securities - 460
Maturities of marketable securities 102 60
Capital expenditures (134) (113)
Purchases of equipment leased to others (152) (232)
Proceeds from sales of property and equipment 14 11
Proceeds from (payments for) sales of affiliates 100 (3)
Other investing activities 2 2
Net cash used in investing activities (68) (66)
Cash flows from financing activities
Proceeds from issuance of securitized debt 363 339
Principal payments on securitized debt (316) (364)
Net change in secured revolving credit facilities 12 135
Proceeds from issuance of non-securitized debt 209 3,248
Principal payments on non-securitized debt (1,044) (2,920)
Net change in notes and debt outstanding under
revolving credit facilities 527 (10)
Debt issuance costs (9) (41)
Proceeds from financed lease obligations 22 63
Proceeds from exercise of stock options 4 8
Dividends paid by subsidiaries to non-controlling
interest (24) (27)
Other financing activities (2) (17)
Net cash provided by (used in) financing activities (258) 414
Effect of exchange rate changes on cash, cash
equivalents and restricted cash (12) (10)
Increase in cash, cash equivalents and restricted
cash 112 605
Cash, cash equivalents and restricted cash at
beginning of the year 1,445 840
Cash, cash equivalents and restricted cash at end of
the year $
1,557 $
1,445
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 Financial Corporate Total
Operations Services(A) and
Eliminations
Three Months Ended October 31, 2019
External sales and revenues,
net $
2,096 $
546 $
86 $
52
$ $
2,780
Intersegment sales and
revenues 9 1 7 19 (36)
Total sales and revenues, net $
2,105 $
547 $
93 $
71 $
(36) $
2,780
Income (loss) from continuing
operations attributable to
NIC, net of tax $
86 $
161 $
(10) $
30 $
(165) $
102
Income tax expense - (10) (10)
Segment profit (loss) $
86 $
161 $
(10) $
30 $
(155) $
112
Depreciation and amortization $
26 $
1 $
4 $
16 $
2 $
49
Interest expense - 22 47 69
Equity in income (loss) of
non-consolidated affiliates (1) 1
Capital expenditures(B) 32 4 8 44
(in millions) Truck Parts Global Financial Corporate Total
Operations Services(A) and
Eliminations
Three Months Ended October 31, 2018
External sales and revenues,
net $
2,576 $
631 $
76 $
42 $
(8) $
3,317
Intersegment sales and
revenues 43 2 17 28 (90)
Total sales and revenues, net $
2,619 $
633 $
93 $
70 $
(98) $
3,317
Income (loss) from continuing
operations attributable to
NIC, net of tax $
197 $
156 $
4 $
26 $
(195) $
188
Income tax expense - (27) (27)
Segment profit (loss) $
197 $
156 $
4 $
26 $
(168) $
215
Depreciation and amortization $
30 $
1 $
2 $
14 $
4 $
51
Interest expense - 28 59 87
Equity in income (loss) of
non-consolidated affiliates - 1 (1)
Capital expenditures(B) 25 1 1 7 34
(in millions) Truck Parts Global Financial Corporate Total
Operations Services(A) and
Eliminations
---
Year Ended October 31, 2019
External sales and revenues,
net $
8,501 $
2,239 $
309 $
193 $
9 $
11,251
Intersegment sales and
revenues 84 6 34 104 (228)
Total sales and revenues, net $
8,585 $
2,245 $
343 $
297 $
(219) $
11,251
Income (loss) from continuing
operations attributable to
NIC, net of tax $
269 $
598
$ $
123 $
(769) $
221
Income tax expense - (19) (19)
Segment profit (loss) $
269 $
598
$ $
123 $
(750) $
240
Depreciation and amortization $
104 $
5 $
11 $
64 $
9 $
193
Interest expense - 105 207 312
Equity in income (loss) of
non-consolidated affiliates 2 3 (1) 4
Capital expenditures(B) 101 7 2 2 22 134
(in millions) Truck Parts Global Financial Corporate Total
Operations Services(A) and
Eliminations
---
Year Ended October 31, 2018
External sales and revenues,
net $
7,386 $
2,399 $
305 $
160
$ $
10,250
Intersegment sales and
revenues 104 8 55 97 (264)
Total sales and revenues, net $
7,490 $
2,407 $
360 $
257 $
(264) $
10,250
Income (loss) from continuing
operations attributable to
NIC, net of tax $
397 $
569 $
2 $
88 $
(716) $
340
Income tax expense - (52) (52)
Segment profit (loss) $
397 $
569 $
2 $
88 $
(664) $
392
Depreciation and amortization $
130 $
6 $
10 $
55 $
10 $
211
Interest expense - 92 235 327
Equity in income (loss) of
non-consolidated affiliates 2 3 (5)
Capital expenditures(B) 99 2 3 1 8 113
(in millions) Truck Parts Global Financial Corporate Total
Operations Services and
Eliminations
---
Segment assets, as of:
October 31, 2019 $
1,705 $
688 $
296 $
2,774 $
1,454 $
6,917
October 31, 2018 2,085 636 331 2,648 1,530 7,230
(A) Total sales and revenues
in the Financial
Services segment include
interest revenues of
$208 million and $182
million for the years
ended October 31, 2019
and 2018, respectively.
(B) Exclusive of purchases of
equipment leased to
others and liabilities
related to capital
expenditures.
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, 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) attributable to NIC:
We believe that adjusted EBITDA and adjusted Net Income (loss) attributable to NIC, 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, Cash Equivalents, and Marketable Securities:
Manufacturing cash, cash equivalents, and marketable securities represent the Company's consolidated cash, cash equivalents, and marketable securities excluding cash, cash equivalents, and marketable securities of our financial services operations. We include marketable securities with our cash and cash equivalents when assessing our liquidity position as our investments are highly liquid in nature. 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.
Manufacturing free cash flow consists of Net cash from operating activities and Capital Expenditures, all from our Manufacturing operations.
EBITDA reconciliation:
(Unaudited)
For the Quarters For the Years Ended
Ended October 31, October 31,
(in millions) 2019 2018 2019 2018
---
Income from continuing
operations attributable to
NIC, net of tax $
102 $
188 $
221 $
340
Plus:
Depreciation and
amortization expense 49 51 193 211
Manufacturing interest
expense(A) 47 59 207 235
Adjusted for:
Income tax expense (10) (27) (19) (52)
EBITDA $
208 $
325 $
640 $
838
(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.
(Unaudited)
For the Quarters For the Years
Ended October 31, Ended October 31,
(in millions) 2019 2018 2019 2018
---
Interest expense $
69 $
87 $
312 $
327
Less: Financial services
interest expense 22 28 105 92
Manufacturing interest
expense $
47 $
59 $
207 $
235
Adjusted EBITDA Reconciliation:
(Unaudited)
For the Quarters For the Years
Ended October 31, Ended October 31,
(in millions) 2019 2018 2019 2018
---
EBITDA (reconciled above) $
208 $
325 $
640 $
838
Adjusted for significant items of:
Adjustments to pre-
existing warranties(A) (4) (5) 3 (9)
Asset impairment
charges(B) 1 3 7 14
Restructuring of
manufacturing
operations(C) 13 14 (1)
MaxxForce Advanced EGR
engine lawsuits(D) 1 129 1
Gain on sale(E) - (56)
Debt refinancing
charges(F) - 6 46
Pension settlement(G) - 142 9
Settlement gain(H) - (1) (3) (72)
Total adjustments 11 (3) 242 (12)
Adjusted EBITDA $
219 $
322 $
882 $
826
Adjusted Net Income attributable to NIC:
(Unaudited)
For the Quarters For the Years
Ended October 31, Ended October 31,
(in millions) 2019 2018 2019 2018
---
Net income from
continuing operations
attributable to NIC $
102 $
188 $
221 $
340
Adjusted for significant items of:
Adjustments to pre-
existing warranties(A) (4) (5) 3 (9)
Asset impairment
charges(B) 1 3 7 14
Restructuring of
manufacturing
operations(C) 13 14 (1)
MaxxForce Advanced EGR
engine lawsuits(D) 1 129 1
Gain on sale(E) - (56)
Debt refinancing
charges(F) - 6 46
Pension settlement(G) - 142 9
Settlement gain(H) - (1) (3) (72)
Total adjustments 11 (3) 242 (12)
Tax effect (I) 1 4 (40) (1)
Adjusted net income
attributable to NIC $
114 $
189 $
423 $
327
(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 historical 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) During 2019, we recorded $7 million of asset
impairment charges relating to certain assets
under operating leases in our Truck segment.
During 2018, we recorded $14 million of
impairment charges related to the exit of our
railcar business in Cherokee, Alabama, certain
long-lived assets and certain assets under
operating leases in our Truck and Financial
Services segments.
(C) During 2019, we recorded charges of $14 million
primarily related to cost reduction actions
recorded in Costs of product sold and
Restructuring charges in our Global Operations
segment. During 2018, we recognized a benefit
of $1 million related to adjustments for
restructuring charges in our Truck, Global
Operations and Corporate segments.
(D) During 2019, we recognized a net charge of $129
million related to the MaxxForce Advanced EGR
engine class action settlement and related
litigation in our Truck segment. During 2018,
we recognized a charge of $1 million for a
jury verdict related to the MaxxForce Advanced
EGR engine lawsuits in our Truck segment.
(E) During 2019, we recognized a gain of $51
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.
(F) During 2019, we recorded a charge of $6 million
for the write-off of debt issuance costs and
discounts associated with the NFC Term Loan.
During 2018, we recorded a charge of $46
million for the write off of debt issuance
costs and discounts associated with the
repurchase of our 8.25% Senior Notes and the
refinancing of our previously existing Term
Loan.
(G) During 2019 and 2018, we purchased group
annuity contracts for certain retired pension
plan participants resulting in plan
remeasurements. As a result, we recorded
pension settlement charges of $142 million and
$9 million respectively, in Other expense, net
in Corporate.
(H) During 2019, we recorded interest income of $3
million in Other expense, net derived from the
prior year settlement of a business economic
loss claim. During 2018, we settled a business
economic loss claim relating to our Alabama
engine manufacturing facility from the
Deepwater Horizon Settlement Program. As a
result, we recorded the net present value of
the settlement of $70 million and related
interest income of $2 million in Other
expense, net.
(I) Tax effect is calculated by excluding the tax
impact of the non-GAAP adjustments from the
tax provision calculations.
Manufacturing segment cash, cash equivalents, and marketable securities reconciliation:
As of October 31, 2019
(in millions) Manufacturing Financial Consolidated
Operations Services Balance Sheet
Operations
---
Assets
Cash and cash
equivalents $
1,328 $
42 $
1,370
Marketable securities -
Total cash, cash
equivalents, and
marketable securities $
1,328 $
42 $
1,370
Manufacturing free cash flow reconciliation:
(in millions) October 31,
2019
Consolidated net cash from operating
activities $
450
Less: Net cash from Financial Services
Operations 55
Net cash from Manufacturing
Operations(A) 395
Less: Manufacturing capital
expenditures 132
Manufacturing free cash flow $
263
(A) Net of adjustments required to
eliminate certain intercompany
transactions between
Manufacturing operations and
Financial Services operations.
View original content to download multimedia:http://www.prnewswire.com/news-releases/navistar-reports-2019-fourth-quarter-and-full-year-results-300975998.html
SOURCE Navistar International Corporation
