Exhibit 12.1
Navistar International Corporation
Computation of Ratio of Earnings to Fixed Charges
The computation of Ratio of Earnings to Fixed Charges as shown on this Exhibit 12 is provided pursuant to Items 503(d) and 601(12) of Regulation S-K. The Ratio of Earnings to Fixed Charges is not calculated consistently with the fixed charge coverage ratios that may be required under certain covenants of the Company’s debt agreements.
| Nine Months Ended July 31, | Fiscal Year Ended October 31, | |||||||||||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||
Income (loss) before income tax benefit (expense) (A) | $ | (17 | ) | $ | (109 | ) | $ | (565 | ) | $ | (985 | ) | $ | (1,082 | ) | $ | 506 | |||||||
Less: Net income attributable to non-controlling interests | (24 | ) | (33 | ) | (40 | ) | (54 | ) | (48 | ) | (55 | ) | ||||||||||||
Dividends from non-consolidated affiliates | 8 | 12 | 12 | 13 | 7 | 4 | ||||||||||||||||||
Interest expense (B) | 219 | 270 | 265 | 264 | 213 | 203 | ||||||||||||||||||
Debt amortization expense | 27 | 37 | 49 | 57 | 46 | 44 | ||||||||||||||||||
Interest portion of rent expense (C) | 14 | 19 | 20 | 24 | 21 | 18 | ||||||||||||||||||
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Total earnings (loss) | $ | 227 | $ | 196 | $ | (259 | ) | $ | (681 | ) | $ | (843 | ) | $ | 720 | |||||||||
Capitalized interest | $ | 2 | $ | 1 | $ | — | $ | 5 | $ | 9 | $ | 18 | ||||||||||||
Interest expense (B) | 233 | 289 | 285 | 288 | 234 | 221 | ||||||||||||||||||
Debt amortization expense | 27 | 37 | 49 | 57 | 46 | 44 | ||||||||||||||||||
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Total fixed charges | $ | 262 | $ | 327 | $ | 334 | $ | 350 | $ | 289 | $ | 283 | ||||||||||||
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Ratio of earnings to fixed charges | 0.87 | 0.60 | — | — | — | 2.54 | ||||||||||||||||||
Earnings shortfall | $ | (35 | ) | $ | (131 | ) | $ | (593 | ) | $ | (1,031 | ) | $ | (1,132 | ) | $ | — | |||||||
| (A) | Excludes equity in (loss) income of non-consolidated affiliates. |
| (B) | Excludes interest expense on income tax contingencies. |
| (C) | Represents an estimated amount of rental expense (33%) that is deemed to be representative of the interest factor. |