<PAGE 1>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-5236
NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
----------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-1264810
------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611
-------------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 836-2000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of March 6, 1996, the number of shares outstanding of the registrant's
Common Stock was 1,000.
THE REGISTRANT IS A WHOLLY OWNED SUBSIDIARY OF NAVISTAR INTERNATIONAL
CORPORATION AND MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS
H(1) AND (b) OF THE FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH
THE REDUCED DISCLOSURE FORMAT.
<PAGE>
<PAGE 2>
NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
INDEX
------
Page
Reference
---------
Part I. Financial Information:
Item 1. Financial Statements:
Statement of Income --
Three Months Ended January 31, 1996 and 1995 ... 3
Statement of Financial Condition --
January 31, 1996, October 31, 1995
and January 31, 1995 ......................... 4
Statement of Cash Flow --
Three Months Ended January 31, 1996 and 1995 ... 5
Notes to Financial Statements .................. 6
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial Condition 8
Part II. Other Information:
Item 1. Legal Proceedings .............................. 11
Item 6. Exhibits and Reports on Form 8-K ............... 11
Signature ............................................... 12
<PAGE>
<PAGE 3>
PART I - FINANCIAL INFORMATION
------------------------------
<TABLE>
<CAPTION>
ITEM 1. Financial Statements
STATEMENT OF INCOME (Unaudited)
----------------------------------------------------------------------------------------------------------------------
Millions of dollars
----------------------------------------------------------------------------------------------------------------------
Three Months Ended January 31
-----------------------------------------------------------------------------
Navistar International
Transportation Corp. and
Consolidated Subsidiaries Manufacturing* Financial Services*
------------------------- ------------------ ------------------
1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Sales and revenues
Sales of manufactured products ........... $1,362 $1,367 $1,362 $1,367 $ - $ -
Finance and insurance revenue ............ 55 35 - - 67 48
Other income ............................. 10 11 10 8 3 4
------ ------ ------ ------ ------ ------
Total sales and revenues ............... 1,427 1,413 1,372 1,375 70 52
------ ------ ------ ------ ------ ------
Costs and expenses
Cost of products and services sold ....... 1,199 1,198 1,196 1,197 3 1
Postretirement benefits .................. 57 50 57 49 - 1
Engineering and research expense ......... 29 24 29 24 - -
Marketing and administrative expense ..... 73 69 65 62 8 7
Interest expense ......................... 39 42 22 24 20 19
Financing charges on sold receivables .... 9 6 21 19 - -
Insurance claims and underwriting expense. 12 13 - - 12 13
------ ------ ------ ------ ------ ------
Total costs and expenses ............... 1,418 1,402 1,390 1,375 43 41
------ ------ ------ ------ ------ ------
Income (loss) before income taxes
Manufacturing .......................... - - (18) - - -
Financial Services ..................... - - 27 11 - -
------ ------ ------ ------ ------ ------
Income before income taxes ........... 9 11 9 11 27 11
Income tax expense ................... (3) (4) (3) (4) (10) (4)
------ ------ ------ ------ ------ ------
Net income ............................... $ 6 $ 7 $ 6 $ 7 $ 17 $ 7
====== ====== ====== ====== ====== ======
<FN>
See Notes to Financial Statements. * "Manufacturing includes the consolidated
financial results of Transportation's
manufacturing operations with its wholly
owned financial services subsidiaries
included under the equity method of
accounting. "Financial Services" includes
Transportation's wholly owned subsidiary,
Navistar Financial Corporation, and other
wholly owned finance and insurance
subsidiaries. Transactions between
Manufacturing and Financial Services have
been eliminated from the "Navistar
International Transportation Corp. and
Consolidated Subsidiaries" columns.
The basis of consolidation is described
in Note A.
</TABLE>
<PAGE>
<PAGE 4>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL CONDITION (Unaudited)
- ---------------------------------------------------------------------------------------------------------------------------------
Millions of dollars
- ---------------------------------------------------------------------------------------------------------------------------------
Navistar International
Transportation Corp. and
Consolidated Subsidiaries Manufacturing* Financial Services*
-------------------------------- -------------------------------- --------------------------------
January 31 October 31 January 31 January 31 October 31 January 31 January 31 October 31 January 31
1996 1995 1995 1996 1995 1995 1996 1995 1995
------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
- -------------------------------
Cash and cash equivalents ..... $ 132 $ 442 $ 283 $ 108 $ 418 $ 248 $ 24 $ 24 $ 35
Marketable securities ......... 252 226 165 109 86 29 143 140 136
------ ------ ------ ------ ------ ------ ------ ------ ------
384 668 448 217 504 277 167 164 171
Receivables, net .............. 1,497 1,831 1,345 149 251 239 1,371 1,672 1,192
Inventories ................... 498 416 475 498 416 475 - - -
Property, net of accumulated
depreciation and amortization
of $783, $764 and $702 ...... 684 683 583 634 642 547 50 41 36
Equity in Financial Services
subsidiaries ................ - - - 290 282 257 - - -
Investments and other assets .. 167 163 189 130 119 160 37 44 29
Prepaid and intangible
pension assets .............. 320 320 359 319 319 358 1 1 1
------ ------ ------ ------ ------ ------ ------ ------ ------
Total assets .................. $3,550 $4,081 $3,399 $2,237 $2,533 $2,313 $1,626 $1,922 $1,429
====== ====== ====== ====== ====== ====== ====== ====== ======
LIABILITIES AND
SHAREOWNER'S EQUITY
- -------------------------------
Liabilities
Accounts payable .............. $ 821 $ 933 $ 790 $ 758 $ 876 $ 735 $ 77 $ 146 $ 141
Other liabilities ............. 835 949 838 689 795 675 155 157 163
Debt due Parent Company ....... 874 923 923 874 923 923 - - -
Debt .......................... 1,262 1,457 1,025 166 127 164 1,096 1,330 861
Postretirement benefits
liabilities ................. 1,272 1,341 1,313 1,264 1,334 1,306 8 7 7
------ ------ ------ ------ ------ ------ ------ ------ ------
Total liabilities ......... 5,064 5,603 4,889 3,751 4,055 3,803 1,336 1,640 1,172
------ ------ ------ ------ ------ ------ ------ ------ ------
Shareowner's Equity
Capital stock
(1,000 shares issued) ....... 786 786 785 786 786 785 178 178 178
Retained earnings (deficit) ... (2,300) (2,308) (2,275) (2,300) (2,308) (2,275) 112 104 79
------ ------ ------ ------ ------ ------ ------ ------ ------
Total shareowner's equity. (1,514) (1,522) (1,490) (1,514) (1,522) (1,490) 290 282 257
------ ------ ------ ------ ------ ------ ------ ------ ------
Total liabilities
and shareowner's equity ..... $3,550 $4,081 $3,399 $2,237 $2,533 $2,313 $1,626 $1,922 $1,429
====== ====== ====== ====== ====== ====== ====== ====== ======
<FN>
See Notes to Financial Statements. * "Manufacturing" includes the consolidated financial results of
Transportation's manufacturing operations with its wholly owned
financial services subsidiaries included under the equity method
of accounting. "Financial Services" includes Transportation's
wholly owned subsidiary, Navistar Financial Corporation, and other
wholly owned finance and insurance subsidiaries. Transactions
between Manufacturing and Financial Services have been
eliminated from the "Navistar International Transportation
Corp. and Consolidated Subsidiaries" columns. The basis
of consolidation is described in Note A.
</TABLE>
<PAGE>
<PAGE 5>
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOW (Unaudited)
-----------------------------------------------------------------------------------------------------------------------
For the Three Months Ended January 31 (Millions of dollars)
-----------------------------------------------------------------------------------------------------------------------
Navistar International
Transportation Corp. and
Consolidated Subsidiaries Manufacturing* Financial Services*
------------------------- ------------------ ------------------
1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Cash flow from operations
Net income ............................... $ 6 $ 7 $ 6 $ 7 $ 17 $ 7
Adjustments to reconcile net income
to cash provided by operations:
Depreciation and amortization .......... 26 21 24 19 2 2
Equity in earnings of Financial Services,
net of dividends received ............ - - (7) (7) - -
Change in operating assets and liabilities:
Receivables ............................ 78 33 99 21 (1) -
Inventories ............................ (84) (49) (84) (49) - -
Prepaid and other current assets ....... (13) (13) (13) (13) - -
Accounts payable ....................... (107) (40) (114) (38) (69) (15)
Other liabilities ...................... (183) 19 (182) 15 1 6
Other, net ............................... - (3) 10 - (10) (3)
------ ------ ------ ------ ------ ------
Cash used in operations .................. (277) (25) (261) (45) (60) (3)
------ ------ ------ ------ ------ ------
Cash flow from investment programs
Purchase of retail notes and lease
receivables ............................ (265) (216) - - (265) (216)
Collections/sales of retail notes
and lease receivables .................. 521 338 - - 521 338
Acquisitions in excess of cash collections
of wholesale notes and accounts
receivable ............................ - - - - 54 23
Purchase of marketable securities ........ (166) (37) (141) (24) (25) (13)
Sales or maturities of marketable
securities ............................. 143 41 119 26 24 15
Proceeds from property sold under
sale/leaseback ......................... 8 - 8 - - -
Capital expenditures ..................... (23) (17) (23) (17) - -
Advance to Navistar Financial ............ - - - (84) - 84
Other investment programs, net ........... (12) (4) (2) 4 (10) (8)
------ ------ ------ ------ ------ ------
Cash provided by (used in) investment
programs ............................. 206 105 (39) (95) 299 223
------ ------ ------ ------ ------ ------
Cash flow from financing activities
Principal payments on debt ............... (10) (415) (10) (15) - (400)
Net increase (decrease) in notes and
debt outstanding under bank revolving
credit facility and asset-backed and
other commercial paper ................. (229) 164 - 7 (229) 157
Dividends paid ........................... - - - - (10) -
------ ------ ------ ------ ------ ------
Cash used in financing activities ........ (239) (251) (10) (8) (239) (243)
------ ------ ------ ------ ------ ------
Cash and cash equivalents
Decrease during the period ............. (310) (171) (310) (148) - (23)
At beginning of the year ............... 442 454 418 396 24 58
------ ------ ------ ------ ------ ------
Cash and cash equivalents
at end of the period ................... $ 132 $ 283 $ 108 $ 248 $ 24 $ 35
====== ====== ====== ====== ====== ======
<FN>
See Notes to Financial Statements. * "Manufacturing" includes the
consolidated financial results of
Transportation's manufacturing
operations with its wholly owned
financial services subsidiaries
included under the equity method of
accounting. "Financial Services"
includes Transportation's wholly
owned subsidiary, Navistar Financial
Corporation, and other wholly owned
finance and insurance subsidiaries.
Transactions between Manufacturing
and Financial Services have been
eliminated from the "Navistar
International Transportation Corp.
and Consolidated Subsidiaries" columns.
The basis of consolidation is described
in Note A.
</TABLE>
<PAGE>
<PAGE 6>
Navistar International Transportation Corp. and Consolidated Subsidiaries
Notes to Financial Statements (Unaudited)
Note A. Summary of Accounting Policies
Navistar International Transportation Corp., hereafter referred to as
"the Company" and "Transportation" is the wholly owned subsidiary of
Navistar International Corporation, hereafter referred to as "Parent
Company." See Note 1 to the Consolidated Financial Statements in the 1995
Annual Report on Form 10-K.
The accompanying unaudited financial statements have been prepared in
accordance with accounting policies described in the 1995 Annual Report on
Form 10-K and should be read in conjunction with the disclosures therein.
In addition to the consolidated financial statements, Transportation
has elected to provide financial information in a format that presents the
operating results, financial condition and cash flow designated as
"Manufacturing" and "Financial Services." As used herein and in the 1995
Annual Report on Form 10-K, Manufacturing includes the consolidated
financial results of Transportation's manufacturing operations with its
wholly owned financial services subsidiaries included on a one-line basis
under the equity method of accounting. Financial Services includes the
consolidated financial results of Navistar Financial Corporation (Navistar
Financial), its domestic insurance subsidiary and foreign finance and
insurance companies.
In the opinion of management, these interim financial statements
reflect all adjustments, consisting of normal recurring accruals, necessary
to present fairly the financial position, results of operations and cash
flow for the periods presented. Interim results are not necessarily
indicative of results for the full year. Certain 1995 amounts have been
reclassified to conform with the presentation used in the 1996 financial
statements.
Note B. Supplemental Cash Flow Information
On the Statement of Cash Flow, "Acquisitions in excess of cash
collections" relating to Financial Services' wholesale notes and accounts
receivable are included on a consolidated basis as a change in operating
assets and liabilities under cash flow from operations and in Financial
Services as cash flow from investment programs.
Consolidated interest payments during the first three months of 1996
and 1995 were $45 million and $40 million, respectively. Pursuant to a Tax
Allocation Agreement, all U.S. income taxes are paid by the Parent Company
to the federal tax authorities.
Note C. Income Taxes
The Parent Company files a consolidated U.S. federal income tax return
which includes Transportation and its U.S. subsidiaries. Transportation
has a tax allocation agreement (Tax Agreement) with the Parent Company,
which requires Transportation to compute its separate federal income tax
expense based on its adjusted book income. Any resulting tax liability is
paid to the Parent Company. In addition, under the Tax Agreement,
Transportation is required to pay to the Parent Company any tax payments
received from its subsidiaries. The effect of the Tax Agreement is to
allow the Parent Company rather than Transportation to utilize U.S.
operating losses and loss carryforwards (NOLs) generated in earlier years.
<PAGE>
<PAGE 7>
Navistar International Transportation Corp. and Consolidated Subsidiaries
Notes to Financial Statements (Unaudited)
Note D. Inventories
Inventories are as follows:
January 31 October 31 January 31
Millions of dollars 1996 1995 1995
- ---------------------------------------------------------------------
Finished products .............. $ 244 $ 167 $ 202
Work in process ................ 106 91 112
Raw materials and supplies ..... 148 158 161
-------- -------- --------
Total inventories ............ $ 498 $ 416 $ 475
======== ======== ========
Note E. Financial Instruments
Navistar Financial enters into forward interest rate contracts to
manage its exposures to fluctuations in funding costs from the anticipated
securitization and sale of retail notes. Gains or losses incurred with the
closing of these agreements are included as a component of the gain or loss
on the sale of receivables.
During the first quarter of 1996, Navistar Financial did not enter
into any interest rate contracts.
In February 1996, Navistar Financial entered into $200 million of
interest rate lock agreements maturing on May 31, 1996, on a Treasury note
maturing in 1998 related to the anticipated sale of retail receivables in
May or June of 1996.
Note F. Legal Proceedings
In May 1993, a jury issued a verdict in favor of Vernon Klein Truck &
Equipment, Inc. (Klein Truck) and against Transportation in the amount of
$11 million in compensatory damages and $15 million in punitive damages.
Transportation appealed the verdict and in order to do so was required to
post a bond collateralized with $30 million in cash. In November 1994,
the Court of Appeals of the State of Oklahoma reversed the verdict and
entered judgment in favor of Transportation on virtually all aspects of the
case. Klein Truck appealed to the Oklahoma Supreme Court where the case is
now pending. The bond and the related collateral will be released when the
order of the Oklahoma Supreme Court is filed.
Note G. Environmental Matters
In the fourth quarter of 1994, Transportation recorded a charge for
potential clean-up costs related to two formerly owned businesses,
Wisconsin Steel and Solar Turbines, Inc. (Solar), as disclosed in Note 5 to
Transportation's Annual Report on Form 10-K. During the third quarter of
1995, Transportation and Solar Turbines, Inc. (Solar) entered into an
agreement providing for the joint funding of future site studies and
necessary corrective action at the facility. The agreement also provides
for arbitration to resolve a dispute over past remediation costs incurred
by Solar.
There has been no change in Transportation's estimate of the
anticipated clean-up costs of the Wisconsin Steel and Solar sites reported
at October 31, 1995.
<PAGE>
<PAGE 8>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Consolidated
Transportation reported net income of $6 million for the first quarter
ended January 31, 1996, compared with net income of $7 million for the same
period last year.
Consolidated sales and revenues for the first quarter of 1996 totalled
$1,427 million, a slight increase from the $1,413 million reported for the
comparable quarter in 1995.
Manufacturing
Manufacturing, excluding Financial Services, reported a loss before
income taxes of $18 million compared with break-even in the first quarter
of 1995. The change reflects lower production caused by severe winter
weather and a decline in demand for trucks partially offset by higher
demand for mid-range diesel engines and the effect of various cost
improvement initiatives.
Sales and revenues. First quarter 1996 industry retail sales of Class 5
through 8 trucks totalled 80,700 units, a decrease of 10% over 1995. Class
8 heavy truck sales of 48,400 units during the first quarter of 1996 were
11% lower than the 1995 level of 54,400 units. Industry sales of Class 5,
6 and 7 medium trucks, including school buses, declined 8% to 32,200 units.
Industry sales of school buses, which accounted for 21% of the medium truck
market, increased 4%.
Shipments of mid-range diesel engines by the Company to original
equipment manufacturers during the first quarter of 1996 totalled 37,900
units, a 15% increase from the same period of 1995. Higher shipments to a
major automotive manufacturer to meet consumer demand for the light trucks
and vans which use this engine were the primary reason for the increase.
Manufacturing's sales of trucks, diesel engines and service parts for
the first quarter of 1996 totalled $1,362 million compared with $1,367
million reported for the same period in 1995. The Company maintained its
position as sales leader in the combined United States and Canadian Class 5
through 8 truck market with a 25.1% market share for the first quarter of
1996, a decline from the 26.3% market share reported in 1995.
Service parts sales of $177 million in the first quarter of 1996
declined slightly from the prior year's level.
Operating Costs and Expenses. Manufacturing gross margin was 12.2% of
sales for the first quarter of 1996 compared with 12.4% for the same period
in 1995. The decrease in gross margin is primarily the result of weather
related costs and lower sales volumes partially offset by improved
operating efficiency.
Marketing and administrative expense increased to $65 million in 1996
from $62 million in the first quarter of 1995 primarily as a result of the
Company's acquisition of the American Transportation Corporation (AmTran)
in August 1995. Engineering and research expense increased to $29 million
in the first quarter of 1996 from $24 million in 1995 reflecting investment
in the next generation of trucks and diesel engines as well as improvements
to existing products.
<PAGE>
<PAGE 9>
Financial Services
Financial Services' pretax income for the first three months of 1996
was $27 million, an increase from the $11 million reported in 1995.
Navistar Financial was responsible for the change which reflects higher
income on sales of retail notes and an increased volume of wholesale
financing. During the first quarter of 1996, sales of receivables totalled
$525 million with a gain of $12 million compared with $315 million sold a
year ago with a small loss. The improved gains on sales resulted from
higher margins on retail notes reflecting declining market interest rates.
LIQUIDITY AND CAPITAL RESOURCES
Consolidated
Consolidated cash flow is generated from the manufacture, sale and
financing of trucks, diesel engines and service parts. Total cash, cash
equivalents and marketable securities of the Company amounted to $384
million at January 31, 1996, $668 million at October 31, 1995 and $448
million at January 31, 1995.
Manufacturing
Cash used in operations during the first quarter of 1996 totalled $261
million, primarily from a net change in operating assets and liabilities of
$294 million. The net change in operating assets and liabilities includes
a $99 million decrease in receivables offset by a reduction in accounts
payable of $114 million resulting from lower production, higher inventories
and a $182 million decrease in other liabilities. The decline in other
liabilities is the result of the payment to employees as required by the
Company's profit sharing agreements as well as the timing of pension
funding.
Investment programs used $23 million in cash to fund capital
expenditures for truck product improvement, to increase diesel engine
production capacity and to improve cost performance. Financing programs
used $10 million for principal payments on debt.
At January 31, 1996, Transportation had outstanding capital
commitments of $41 million. The commitments include truck and engine
product development and ongoing facility maintenance programs.
Transportation finances capital expenditures principally through internally
generated cash. Capital leasing is used to fund selected projects based on
economic and operating factors.
It is the opinion of management that, in the absence of significant
unanticipated cash demands, current and forecasted cash flow will provide a
basis for financing operating requirements and capital expenditures.
Financial Services
Operations used $60 million in cash in the first quarter of 1996
primarily reflecting a payment to Manufacturing. Investment programs
provided $299 million during this period principally as a result of
collections on, and sales of, retail notes. Financing activities used cash
generated from investment programs to reduce debt by $229 million.
Receivable sales were a significant source of funding in 1996 and
1995. During the first quarter of 1996, Navistar Financial sold $525
million of retail notes, net of unearned finance income, through Navistar
Financial Retail Receivables Corporation (NFRRC), realizing net proceeds
from the sale of $495 million. During the same period in 1995, Navistar
Financial sold $315 million of retail notes receivable with net proceeds of
$295 million. In both years, the net proceeds were used for general
working capital purposes.
On November 14, 1995, NFRRC filed an additional registration statement
with the Securities and Exchange Commission providing for the issuance from
time to time of an additional $2,000 million of asset-backed securities.
At January 31, 1996, the remaining shelf registration available to NFRRC
for issuance of asset-backed securities was $2,905 million.
<PAGE>
<PAGE 10>
At January 31, 1996, available funding under Navistar Financial's
amended and restated credit facility and the asset-backed commercial paper
facility was $384 million, of which $57 million was used to back short-term
debt at January 31, 1996. The remaining $327 million, when combined with
unrestricted cash and cash equivalents made $333 million available to fund the
general business purposes of Navistar Financial at January 31, 1996.
Management believes that collections on the outstanding receivables
portfolios, as well as funds available from various funding sources, will
permit the Financial Services subsidiaries to meet the financing
requirements of the Company's dealers and customers.
Business Environment
Sales of Class 5 through 8 trucks are cyclical, with demand affected
by such economic factors as industrial production, construction, demand for
consumer durable goods, interest rates and the earnings and cash flow of
dealers and customers. As a result of a general slowdown in economic
activity in the United States, the Class 5 through 8 truck market has
experienced a significant decline in the rate of new truck orders. During
the latter half of 1995, this slowdown was responsible for an increase in
the cancellation of some existing orders which were originally placed
during 1994 and early 1995 in anticipation of continued growth in the
economy. The decline in the number of new orders, in combination with high
retail delivery rates throughout 1995, has reduced the Company's backlog of
unfilled truck orders by 52% to 34,400 units at January 31, 1996 from
71,500 units at January 31, 1995. Accordingly, retail deliveries in 1996
will be highly dependent on the rate at which new truck orders are
received. The Company will evaluate order receipts and backlog throughout
the year and will balance production with demand as appropriate.
As a result of a decline in truck orders which reflect a softening of
certain key economic indicators in the truck industry, Transportation
currently projects 1996 United States and Canadian Class 8 heavy truck
demand to be 173,000 units, a 24% decrease from 1995. Class 5, 6 and 7
medium truck demand, including school buses, is forecast at 146,500 units,
a 4% decrease from 1995. Diesel engine shipments by Transportation to
original equipment manufacturers in 1996 are expected to be approximately
157,000 units, unchanged from 1995. Transportation's service parts sales
are expected to grow 5% to $766 million.
<PAGE>
<PAGE 11>
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
Incorporated herein by reference from Item 3 -
"Legal Proceedings" in Transportation's definitive
Form 10-K dated January 26, 1996, Commission File No. 1-5236.
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed for the three months
ended January 31, 1996.
<PAGE>
<PAGE 12>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
- -------------------------------------------
(Registrant)
/s/ J. Steven Keate
- ----------------------------------
J. Steven Keate
Vice President and Controller
March 11, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1996
<CASH> 132
<SECURITIES> 252
<RECEIVABLES> 1,523
<ALLOWANCES> (26)
<INVENTORY> 498
<CURRENT-ASSETS> 0<F1>
<PP&E> 1,467
<DEPRECIATION> (783)
<TOTAL-ASSETS> 3,550
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 2,136
0
0
<COMMON> 786
<OTHER-SE> (2,313)
<TOTAL-LIABILITY-AND-EQUITY> 3,550
<SALES> 1,362
<TOTAL-REVENUES> 1,427
<CGS> 1,199
<TOTAL-COSTS> 1,418
<OTHER-EXPENSES> 57
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> 39
<INCOME-PRETAX> 9
<INCOME-TAX> (16)
<INCOME-CONTINUING> (7)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>The Company has adopted an unclassified presentation in the Statement of
Financial Condition.
</FN>
</TABLE>
