LISLE, Ill., March 9, 2021 /PRNewswire/ -- Navistar
International Corporation (NYSE: NAV) today announced a first
quarter 2021 net loss of $81 million,
or $0.81 per diluted share, compared
to first quarter 2020 net loss of $36
million, or $0.36 per diluted
share. The loss in the first quarter of 2021 included $86 million of tax-effected significant
items.
First quarter 2021 adjusted net income was $5 million compared to a loss of $33
million a year ago.
Revenues in the quarter were $1.8 billion, comparable to
the first quarter last year. Chargeouts in the company's Core
(Class 6-8 trucks and buses in the United
States and Canada) market
were 10,600 units in the first quarter of 2021.
First quarter 2021 adjusted EBITDA doubled year-over-year to
$116 million, or 6.4 percent of
revenue, versus $59 million, or 3.2 percent of
revenue, a year ago.
Navistar finished first quarter 2021 with $1.3
billion in consolidated cash and cash equivalents,
including $1.2 billion in manufacturing cash and cash
equivalents.
"We are starting 2021 on a strong note, as adjusted EBITDA
margin doubled, truck revenue returned to pre-COVID levels, and
retail market share increased in each of our vehicle segments,"
said Persio Lisboa, chief executive
officer.
Throughout the quarter, the company remained focused on its
Navistar 4.0 business strategy and reinforced its position as one
of the advanced technology leaders within the industry. In January,
the company announced a collaboration with General Motors and OneH2
to bring a hydrogen truck ecosystem solution to the trucking
industry. As part of the announcement, Navistar plans to make its
first production model International® RH Series hydrogen
fuel cell vehicle commercially available in model year 2024.
Also in the quarter, the company announced that it acquired a
second property in San Antonio
that will house support functions for its under-construction
900,000-square-foot plant in the area that will produce Class 6-8
vehicles, including new electric-powered trucks. The new property
will also house a state-of-the-art truck validation center to test
and validate components of the company's growing electric truck
business and a truck specialty center to provide post-production
customization of vehicles to support customers' business needs. The
company's total investment in the region will exceed $275 million and create over 650 jobs.
Navistar reported higher market share in each of its product
segments in the first quarter of 2021, reflecting a 1.8 point
increase in its total Class 6-8 trucks year-over-year.
Additionally, the company reported strong first quarter 2021 Class
6-8 orders that drove the company to increase its production
line-rates in both of its truck assembly plants. The company plans
to further increase its production line-rates, contingent on the
supply chain's ability to meet higher demand schedules.
"We expect the roll-out of COVID-19 vaccines and easing of state
restrictions will continue to support strong economic growth and
the need for new trucks," said Lisboa. "Our performance this
quarter, along with the sustained execution of our Navistar 4.0
strategy and future opportunities with TRATON, positions Navistar
to deliver increased value to our customers, dealers, partners and
other stakeholders."
The company announced that progress related to its pending
merger with TRATON remains on track. At Navistar's annual
stockholder meeting on March 2, the
merger proposal was approved. Additionally, the company stated that
it completed filing for regulatory approvals from the required
jurisdictions, and on February 12,
reported that the Hart-Scott-Rodino (HSR) antitrust waiting period
had expired. The company continues to believe the merger will close
in mid-2021.
SEGMENT
REVIEW
|
Summary of
Financial Results:
|
|
|
(Unaudited)
|
|
Three Months
Ended
January 31,
|
(in millions,
except per share data)
|
2021
|
|
2020
|
Sales and revenues,
net
|
$
|
1,812
|
|
|
$
|
1,838
|
|
Segment
Results:
|
|
|
|
Truck
|
$
|
(81)
|
|
|
$
|
(58)
|
|
Parts
|
111
|
|
|
119
|
|
Global
Operations
|
6
|
|
|
—
|
|
Financial
Services
|
12
|
|
|
17
|
|
Loss from continuing
operations, net of tax(A)
|
$
|
(82)
|
|
|
$
|
(36)
|
|
Net
loss(A)
|
(81)
|
|
|
(36)
|
|
Diluted loss per
share from continuing operations(A)
|
$
|
(0.82)
|
|
|
$
|
(0.36)
|
|
Diluted loss per
share(A)
|
$
|
(0.81)
|
|
|
$
|
(0.36)
|
|
________________
|
(A)
|
Amounts attributable
to Navistar International Corporation.
|
Truck Segment – In first quarter 2021, the Truck
segment net sales were $1.2 billion,
flat compared to first quarter last year, despite lower industry
volumes. Lower volumes in its Core markets were offset by higher
total share and volumes in Mexico,
used truck, and export operations.
The Truck segment incurred a net loss of $81 million in first quarter 2021, compared to a
loss of $58 million in first quarter
2020. The loss in the first quarter of 2021 included a $49 million charge related to pre-existing
warranties and $47 million of charges
related to the pending sale of its Melrose Park facility. Excluding these
significant items, the Truck segment would have been profitable in
the period, reflecting favorable product mix and improved
margins.
Parts Segment – For first quarter 2021, the Parts segment
net sales were $467 million, a five
percent decrease from first quarter 2020. The decrease was
primarily driven by lower volumes in the U.S. and Canada due to the continuing impact of the
pandemic on the commercial truck and school bus industries.
The Parts segment saw a first quarter profit of $111 million, lower compared to $119 million in first quarter 2020 in line with
lower sales.
Global Operations Segment – In first quarter 2021,
the Global Operations segment net sales increased 40 percent versus
first quarter 2020 to $95 million.
The increase was primarily driven by higher engine volumes and
parts sales in South American operations.
The Global Operations segment recorded a profit of $6 million in the first quarter of 2021, higher
versus breakeven profitability in first quarter 2020 largely driven
by the higher sales.
Financial Services Segment – In first quarter 2021,
the Financial Services segment reported net revenues of
$51 million, an 11 percent decrease
from first quarter 2020. The decrease was primarily due to lower
interest rates.
The Financial Services segment recorded a profit of $12 million in the quarter, lower compared to
$17 million in first quarter 2020,
largely due to the impact of lower average yields.
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. 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)
|
2021
|
|
2020
|
Sales and
revenues
|
|
|
|
Sales of manufactured
products, net
|
$
|
1,769
|
|
|
$
|
1,794
|
|
Finance
revenues
|
43
|
|
|
44
|
|
Sales and revenues,
net
|
1,812
|
|
|
1,838
|
|
Costs and
expenses
|
|
|
|
Costs of products
sold
|
1,507
|
|
|
1,529
|
|
Restructuring
charges
|
21
|
|
|
1
|
|
Asset impairment
charges
|
31
|
|
|
—
|
|
Selling, general and
administrative expenses
|
205
|
|
|
182
|
|
Engineering and
product development costs
|
84
|
|
|
86
|
|
Interest
expense
|
64
|
|
|
65
|
|
Other (income)
expense, net
|
(5)
|
|
|
11
|
|
Total costs and
expenses
|
1,907
|
|
|
1,874
|
|
Equity in loss of
non-consolidated affiliates
|
(1)
|
|
|
(1)
|
|
Loss before income
taxes
|
(96)
|
|
|
(37)
|
|
Income tax
benefit
|
18
|
|
|
5
|
|
Loss from continuing
operations
|
(78)
|
|
|
(32)
|
|
Income from
discontinued operations, net of tax
|
1
|
|
|
—
|
|
Net loss
|
(77)
|
|
|
(32)
|
|
Less: Net income
attributable to non-controlling interests
|
4
|
|
|
4
|
|
Net loss
attributable to Navistar International Corporation
|
$
|
(81)
|
|
|
$
|
(36)
|
|
|
|
|
|
Amounts
attributable to Navistar International Corporation common
stockholders:
|
|
|
Loss from continuing
operations, net of tax
|
$
|
(82)
|
|
|
$
|
(36)
|
|
Income from
discontinued operations, net of tax
|
1
|
|
|
—
|
|
Net loss attributable
to Navistar International Corporation common
stockholders
|
$
|
(81)
|
|
|
$
|
(36)
|
|
|
|
|
|
Income (loss) per
share attributable to Navistar International Corporation
|
|
|
|
Basic:
|
|
|
|
Continuing
operations
|
$
|
(0.82)
|
|
|
$
|
(0.36)
|
|
Discontinued
operations
|
0.01
|
|
|
—
|
|
Basic
|
$
|
(0.81)
|
|
|
$
|
(0.36)
|
|
Diluted:
|
|
|
|
Continuing
operations
|
$
|
(0.82)
|
|
|
$
|
(0.36)
|
|
Discontinued
operations
|
0.01
|
|
|
—
|
|
Diluted
|
$
|
(0.81)
|
|
|
$
|
(0.36)
|
|
Weighted average
shares outstanding:
|
|
|
|
Basic
|
99.9
|
|
|
99.5
|
|
Diluted
|
99.9
|
|
|
99.5
|
|
Navistar
International Corporation and Subsidiaries
|
Consolidated
Balance Sheets
|
|
|
January
31,
|
|
October
31,
|
(in millions,
except per share data)
|
2021
|
|
2020
|
ASSETS
|
(Unaudited)
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,261
|
|
|
$
|
1,843
|
|
Restricted cash and
cash equivalents
|
135
|
|
|
64
|
|
Trade and other
receivables, net
|
262
|
|
|
273
|
|
Finance receivables,
net
|
1,246
|
|
|
1,371
|
|
Inventories,
net
|
848
|
|
|
763
|
|
Other current
assets
|
333
|
|
|
263
|
|
Total current
assets
|
4,085
|
|
|
4,577
|
|
Restricted
cash
|
68
|
|
|
66
|
|
Trade and other
receivables, net
|
7
|
|
|
7
|
|
Finance receivables,
net
|
254
|
|
|
251
|
|
Investments in
non-consolidated affiliates
|
30
|
|
|
31
|
|
Property and equipment
(net of accumulated depreciation and amortization of $2,321 and
$2,335, respectively)
|
1,216
|
|
|
1,298
|
|
Operating lease right
of use assets
|
115
|
|
|
119
|
|
Goodwill
|
38
|
|
|
38
|
|
Intangible assets (net
of accumulated amortization of $139 and $138,
respectively)
|
18
|
|
|
18
|
|
Deferred taxes,
net
|
157
|
|
|
117
|
|
Other noncurrent
assets
|
130
|
|
|
115
|
|
Total
assets
|
$
|
6,118
|
|
|
$
|
6,637
|
|
LIABILITIES and
STOCKHOLDERS' DEFICIT
|
|
|
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
Notes payable and
current maturities of long-term debt
|
$
|
565
|
|
|
$
|
640
|
|
Accounts
payable
|
1,281
|
|
|
1,278
|
|
Other current
liabilities
|
1,428
|
|
|
1,453
|
|
Total current
liabilities
|
3,274
|
|
|
3,371
|
|
Long-term
debt
|
4,504
|
|
|
4,690
|
|
Postretirement
benefits liabilities
|
1,464
|
|
|
1,705
|
|
Other noncurrent
liabilities
|
701
|
|
|
693
|
|
Total
liabilities
|
9,943
|
|
|
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
|
2,727
|
|
|
2,726
|
|
Accumulated
deficit
|
(4,654)
|
|
|
(4,566)
|
|
Accumulated other
comprehensive loss
|
(1,786)
|
|
|
(1,865)
|
|
Common stock held in
treasury, at cost (3.4 and 3.5 shares, respectively)
|
(132)
|
|
|
(133)
|
|
Total stockholders'
deficit attributable to Navistar International
Corporation
|
(3,833)
|
|
|
(3,826)
|
|
Stockholders' equity
attributable to non-controlling interests
|
8
|
|
|
4
|
|
Total stockholders'
deficit
|
(3,825)
|
|
|
(3,822)
|
|
Total liabilities
and stockholders' deficit
|
$
|
6,118
|
|
|
$
|
6,637
|
|
Navistar
International Corporation and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
(in
millions)
|
2021
|
|
2020
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
|
(77)
|
|
|
$
|
(32)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
34
|
|
|
35
|
|
Depreciation of
equipment leased to others
|
17
|
|
|
15
|
|
Deferred taxes,
including change in valuation allowance
|
(34)
|
|
|
(10)
|
|
Asset impairment
charges
|
31
|
|
|
—
|
|
Amortization of debt
issuance costs and discount
|
3
|
|
|
3
|
|
Stock-based
compensation
|
4
|
|
|
5
|
|
Provision for credit
losses
|
3
|
|
|
4
|
|
Equity in loss of
non-consolidated affiliates, net of dividends
|
1
|
|
|
1
|
|
Other non-cash
operating activities
|
(3)
|
|
|
(2)
|
|
Changes in other
assets and liabilities
|
(109)
|
|
|
80
|
|
Net cash provided
by (used in) operating activities
|
(130)
|
|
|
99
|
|
Cash flows from
investing activities
|
|
|
|
Capital
expenditures
|
(73)
|
|
|
(59)
|
|
Purchases of equipment
leased to others
|
(25)
|
|
|
(7)
|
|
Proceeds from sales of
property and equipment
|
6
|
|
|
2
|
|
Investments in
non-consolidated affiliates
|
(9)
|
|
|
—
|
|
Proceeds from sales of
investments and businesses
|
—
|
|
|
10
|
|
Net cash used in
investing activities
|
(101)
|
|
|
(54)
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from issuance
of securitized debt
|
26
|
|
|
8
|
|
Principal payments on
securitized debt
|
(9)
|
|
|
(16)
|
|
Net change in secured
revolving credit facilities
|
(64)
|
|
|
(315)
|
|
Proceeds from issuance
of non-securitized debt
|
—
|
|
|
18
|
|
Principal payments on
non-securitized debt
|
(5)
|
|
|
(65)
|
|
Net change in notes
and debt outstanding under revolving credit facilities
|
(226)
|
|
|
(88)
|
|
Debt issuance
costs
|
(1)
|
|
|
—
|
|
Proceeds from exercise
of stock options
|
—
|
|
|
2
|
|
Dividends paid by
subsidiaries to non-controlling interest
|
—
|
|
|
(5)
|
|
Net cash used in
financing activities
|
(279)
|
|
|
(461)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
1
|
|
|
(4)
|
|
Decrease in cash,
cash equivalents and restricted cash
|
(509)
|
|
|
(420)
|
|
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
|
$
|
1,464
|
|
|
$
|
1,137
|
|
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
January 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
External sales and
revenues, net
|
$
|
1,213
|
|
|
$
|
465
|
|
|
$
|
89
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
1,812
|
|
Intersegment sales and
revenues
|
24
|
|
|
2
|
|
|
6
|
|
|
6
|
|
|
(38)
|
|
|
—
|
|
Total sales and
revenues, net
|
$
|
1,237
|
|
|
$
|
467
|
|
|
$
|
95
|
|
|
$
|
51
|
|
|
$
|
(38)
|
|
|
$
|
1,812
|
|
Net income (loss) from
continuing operations attributable to NIC, net of tax
|
$
|
(81)
|
|
|
$
|
111
|
|
|
$
|
6
|
|
|
$
|
12
|
|
|
$
|
(130)
|
|
|
$
|
(82)
|
|
Income tax
benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
Segment profit
(loss)
|
$
|
(81)
|
|
|
$
|
111
|
|
|
$
|
6
|
|
|
$
|
12
|
|
|
$
|
(148)
|
|
|
$
|
(100)
|
|
Depreciation and
amortization
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
18
|
|
|
$
|
1
|
|
|
$
|
51
|
|
Interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
51
|
|
|
64
|
|
Equity in loss of
non-consolidated affiliates
|
(1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
Capital
expenditures(B)
|
69
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
73
|
|
(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
|
|
Net income (loss) from
continuing operations attributable to NIC, net of tax
|
$
|
(58)
|
|
|
$
|
119
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
(114)
|
|
|
$
|
(36)
|
|
Income tax
benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
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 loss of
non-consolidated affiliates
|
(1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
Capital
expenditures(B)
|
47
|
|
|
5
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
59
|
|
_________________________
|
(A)
|
Total sales and
revenues in the Financial Services segment include interest
revenues of $27 million and $35 million for the three months ended
January 31, 2021 and 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:
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
2021
|
$
|
1,634
|
|
|
$
|
654
|
|
|
$
|
230
|
|
|
$
|
2,149
|
|
|
$
|
1,451
|
|
|
$
|
6,118
|
|
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
January 31,
|
(in
millions)
|
2021
|
|
2020
|
Net loss attributable
to NIC
|
$
|
(81)
|
|
|
$
|
(36)
|
|
Plus:
|
|
|
|
Depreciation and
amortization expense
|
51
|
|
|
50
|
|
Manufacturing interest
expense(A)
|
51
|
|
|
46
|
|
Less:
|
|
|
|
Income tax
benefit
|
18
|
|
|
5
|
|
EBITDA
|
$
|
3
|
|
|
$
|
55
|
|
______________________
|
(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)
|
2021
|
|
2020
|
Interest
expense
|
$
|
64
|
|
|
$
|
65
|
|
Less: Financial
services interest expense
|
13
|
|
|
19
|
|
Manufacturing
interest expense
|
$
|
51
|
|
|
$
|
46
|
|
Adjusted EBITDA
Reconciliation:
|
|
|
|
Three Months
Ended
January 31,
|
(in
millions)
|
2021
|
|
2020
|
EBITDA
(reconciled above)
|
$
|
3
|
|
|
$
|
55
|
|
Adjusted for
significant items of:
|
|
|
|
Adjustments to
pre-existing warranties(A)
|
49
|
|
|
4
|
|
Asset impairment
charges(B)
|
31
|
|
|
—
|
|
Restructuring of
manufacturing operations(C)
|
21
|
|
|
1
|
|
TRATON merger
costs(D)
|
10
|
|
|
—
|
|
Shy profit-sharing
accrual(E)
|
2
|
|
|
—
|
|
Settlement
gain(F)
|
—
|
|
|
(1)
|
|
Total
adjustments
|
113
|
|
|
4
|
|
Adjusted
EBITDA
|
$
|
116
|
|
|
$
|
59
|
|
Adjusted Net
Income (Loss) attributable to NIC:
|
|
|
|
Three Months
Ended
January 31,
|
(in
millions)
|
2021
|
|
2020
|
Net loss
attributable to NIC
|
$
|
(81)
|
|
|
$
|
(36)
|
|
Adjusted for
significant items of:
|
|
|
|
Adjustments to
pre-existing warranties(A)
|
49
|
|
|
4
|
|
Asset impairment
charges(B)
|
31
|
|
|
—
|
|
Restructuring of
manufacturing operations(C)
|
21
|
|
|
1
|
|
TRATON merger
costs(D)
|
10
|
|
|
—
|
|
Shy profit-sharing
accrual(E)
|
2
|
|
|
—
|
|
Settlement
gain(F)
|
—
|
|
|
(1)
|
|
Total
adjustments
|
113
|
|
|
4
|
|
Tax effect
(G)
|
(27)
|
|
|
(1)
|
|
Adjusted net
income (loss) attributable to NIC
|
$
|
5
|
|
|
$
|
(33)
|
|
_____________________
|
(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
2021, we recorded $31 million of asset impairment charges in our
Truck segment, comprised of $25 million related to the Melrose Park
Facility disposition and $6 million related to certain assets under
operating leases.
|
(C)
|
In the first quarter
of 2021, we recorded restructuring charges of $21 million in our
Truck segment, related to the Melrose Park Facility disposition. In
the first quarter of 2020, we recorded restructuring charges of $1
million in our Truck segment.
|
(D)
|
In the first quarter
of 2021 we incurred $10 million of costs related to the proposed
TRATON merger.
|
(E)
|
In the first quarter
of 2021, we recorded a $2 million charge to the Shy profit-sharing
accrual.
|
(F)
|
In the first quarter
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.
|
(G)
|
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 January 31,
2021
|
(in
millions)
|
Manufacturing
Operations
|
|
Financial
Services
Operations
|
|
Consolidated
Balance Sheet
|
Total cash and
cash equivalents
|
$
|
1,179
|
|
|
$
|
82
|
|
|
$
|
1,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Navistar International Corporation