UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported): April 06,
2006
NAVISTAR
INTERNATIONAL CORPORATION
(Exact
name of registrant as specified in its charter)
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Delaware
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1-9618
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36-3359573
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File No.)
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(I.R.S.
Employer
Identification
No.)
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4201
Winfield Road, P.O. Box 1488, Warrenville, Illinois
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60555
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code (630) 753-5000
Check
the
appropriate box below if the Form 8-K/A filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[_]
Written communications pursuant to Rule 425 under the Securities
Act
[_]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[_]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
[_]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
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2
This
Form
8-K/A is being filed for the purpose of amending and restating certain original
disclosures previously made by Navistar International Corporation (the company).
ITEM
4.01. CHANGES
IN REGISTRANT’S CERTIFYING ACCOUNTANT
On
April
12, 2006, the company filed a Form 8-K (the Original Form 8-K). This Form 8-K/A
amends and restates Item 4.01 of the Original Form 8-K in full and speaks as
of
April 12, 2006.
(a)
Dismissal of Current Accountants
On
April
7, 2006, the Audit Committee of the Board of Directors of the company dismissed
the company’s independent registered public accounting firm, Deloitte &
Touche LLP (Deloitte).
The
company has not completed its financial statements or filed its Annual Report
on
Form 10-K for the fiscal year ended October 31, 2005, nor has the company filed
its Quarterly Report on Form 10-Q for the quarter ended January 31, 2006. As
a
result of Deloitte's dismissal as the company’s independent registered public
accounting firm, Deloitte has not completed its audit nor has it issued its
report with respect to the company’s financial statements for the fiscal year
ended October 31, 2005.
The
audit
reports of Deloitte on the financial statements of the company as of and for
the
two fiscal years ended October 31, 2004 and October 31, 2003 neither contained
any adverse opinion or disclaimer of opinion, nor were such reports qualified
or
modified as to uncertainty, audit scope or accounting principles, except as
described in the following sentence. The audit report of Deloitte on the
company’s consolidated financial statements for the year ended October 31, 2004
indicated that, as described in Note 23 to such consolidated financial
statements, the consolidated financial statements for the two fiscal years
ended
October 31, 2003 and October 31, 2002 had been restated. As discussed in Item
4.02 below, the management of the company, with the concurrence of the Audit
Committee, has concluded that the company’s previously issued audited financial
statements and the independent auditors' reports thereon for the years ended
October 31, 2002 through 2004, and all quarterly financial statements for
periods after November 1, 2002, should no longer be relied upon because of
errors in such financial statements.
During
the company’s two most recent fiscal years ended October 31, 2005 and October
31, 2004, and during the subsequent interim period through April 7, 2006, there
was no disagreement between the company and Deloitte on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope
or
procedure that, if not resolved to Deloitte’s satisfaction, would
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3
have
caused Deloitte to make reference to the subject matter of the disagreement
in
connection with its audit report.
There
were no “reportable events” as that term is described in Item 304(a)(1)(v) of
Regulation S-K during the fiscal years ended October 31, 2005 and October 31,
2004, or during the subsequent interim period through April 7, 2006, except
as
described in the following paragraphs.
As
disclosed on February 16, 2006, the Board of Directors of the company reassigned
the company’s former Controller and principal accounting officer. The
reassignment of the former Controller was in response to Deloitte having advised
the Audit Committee that Deloitte was no longer willing to rely on the
representations of the former Controller.
Simultaneously
with the reassignment of the company's former Controller and principal
accounting officer, the company also reassigned the former Treasurer of the
company’s finance subsidiary, Navistar Financial Corporation (NFC), to a
position within the company's treasury department in response to Deloitte’s
request that NFC's former Treasurer no longer serve as an officer of NFC or
of
the company.
As
described in the company’s Quarterly Report on Form 10-Q for the period ended
July 31, 2005, the company concluded, as of that date, that there were material
weaknesses in its disclosure controls and procedures due to the lack of a
sufficient quantity of specialized accounting personnel at NFC. In addition,
Deloitte previously identified the following weaknesses in the company’s
internal controls that existed on October 31, 2004 and that in Deloitte’s
judgment were considered to be material weaknesses: (i) the design of internal
controls to appropriately apply certain generally accepted accounting principles
at NFC, that resulted in a restatement of the financial statements; (ii) the
lack of timely resolution of outstanding reconciling items in NFC’s collection
(suspense) account reconciliations; and (iii) the lack of sufficient controls
to
enable the company to previously identify and reconcile in a timely fashion
accounts payable recorded by its Mexican manufacturing operations.
In
connection with the company's ongoing review of accounting matters in connection
with the preparation of its financial statements for fiscal 2005, Deloitte
identified a number of accounting issues that warranted further examination
and
review, including those matters referred to in Item 4.02 below, many of which
are still being reviewed. The outcome of such examination might or might not
have led Deloitte to expand the scope of its audit had it continued as the
company's independent registered public accounting firm. Deloitte also requested
that the company's Audit Committee initiate an investigation into the propriety
of accounting and auditing confirmation matters relating to vendor rebates
in
fiscal 2005. The results of the investigation might or might not have caused
Deloitte,
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4
had
it
remained the company's independent registered public accounting firm, to expand
the scope of its audit or to conclude that the company’s internal controls have
a material weakness.
The
company has authorized Deloitte to respond fully to the inquires of the
successor independent registered public accounting firm concerning the subject
matter of the foregoing.
The
company has requested that Deloitte furnish it with a letter addressed to the
Securities and Exchange Commission stating whether Deloitte agrees with the
above statements made by the company. The company will amend this Form 8-K
and
attach a copy of such letter as an exhibit promptly after Deloitte furnishes
the
letter to the company.
Deloitte's
response letter to the Original Form 8-K, dated April 25, 2006, was attached
as
Exhibit 16 to the company's Form 8-K/A filed on April 28, 2006.
The
company has requested that Deloitte furnish it with a letter addressed to the
Securities and Exchange Commission stating whether Deloitte agrees with the
above statements made by the company in this Form 8-K/A. The company will amend
this Form 8-K/A and attach a copy of such letter as an exhibit promptly after
Deloitte furnishes the letter to the company.
(b)
Engagement of New Accountants
On
April
6, 2006, the Audit Committee approved the retention of KPMG LLP (KPMG) as the
company’s independent registered public accounting firm with respect to the
audit of the company’s financial statements for its fiscal years ended October
31, 2005 and October 31, 2006, subject to completion of KPMG’s customary client
acceptance procedures.
During
the company’s two most recent fiscal years ended October 31, 2005 and October
31, 2004, and during the subsequent interim period preceding the engagement
of
KPMG, the company did not consult with KPMG regarding either (i) the application
of accounting principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered on the company’s
financial statements, and neither a written report was provided to the company
nor oral advice was provided that KPMG concluded was an important factor
considered by the company in reaching a decision as to any of the accounting,
auditing or financial reporting issues; or (ii) any matter that was either
the
subject of a disagreement, as that term is defined in paragraph 304(a)(1)(iv)
of
Regulation S-K, or a reportable event required to be reported under paragraph
304(a)(1)(v) of Regulation S-K.
In
connection with the potential engagement of KPMG, the company disclosed to
KPMG
the nature of the accounting items currently under review by the company and
the
matters described in Item 4.01(a) above, including the reportable event
disclosed therein.
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ITEM
4.02. NON-RELIANCE
ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS
OR A RELATED AUDIT REPORT OR COMPLETED
INTERIM REVIEW
This
Form
8-K/A sets forth Item 4.02 as it appeared in the Original Form 8-K for ease
of
reference and speaks as of April 12, 2006.
On
April
6, 2006, the management of the company, with the concurrence of the Audit
Committee, concluded that the company’s previously issued audited financial
statements and the independent auditors' reports thereon for the years ended
October 31, 2002 through 2004, and all quarterly financial statements for
periods after November 1, 2002 should no longer be relied upon because of errors
in such financial statements. As previously announced, the company was unable
to
file its Annual Report on Form 10-K for the period ended October 31, 2005 and
its Quarterly Report on Form 10-Q for the period ended January 31, 2006 in
a
timely manner due to the ongoing review of a number of accounting items. Matters
that the company has identified to date as requiring restatement will result
in
certain income and expense items being allocated to different periods and
include accounting for product development programs; accounting for supplier
rebates and warranty recoveries; accounting for truck warranty work to be
provided by the company outside of the terms of contractual arrangements; and
shifting of expense amounts between periods at one of the company’s foundry
operations.
The
company’s review process continues and matters identified at this stage, and any
assessment of the nature, scope or amount of restatements, are preliminary
and
subject to change. The company’s review will likely result in the identification
of additional items requiring correction in the restated results. Among the
items being reviewed are whether certain leases should have been accounted
for
as capital leases; whether certain affiliates should have been consolidated;
the
adequacy of amounts recorded for asbestos liabilities; the timing of revenue
recognition; the accounting for deferred income tax assets; the accounting
for
customer and vendor settlements; application of depreciation method;
intercompany accounts reconciliations; inventory valuations; accounts payable
at
the company's Canadian and Mexican subsidiaries; and the company's presentation
of reportable business segments.
As
a
result of the need to restate the company’s financial statements, management is
evaluating whether the company’s disclosure controls and procedures, including
internal controls over financial reporting, were effective as of the end of
fiscal 2005. The assessment of internal controls over financial reporting may
result in the identification of material weaknesses. The company’s review of
internal controls over financial reporting is ongoing. We do not expect to
provide additional disclosure on these matters until we file our Annual Report
on Form 10-K for the fiscal year ended October 31, 2005.
While
we
have advised Deloitte of these matters, in light of the company’s termination of
Deloitte as its independent registered public accounting firm as described
in
Item 4.01(a) above, the Audit Committee has not discussed with Deloitte the
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company’s
decision to restate as a result of its conclusions on the matters disclosed
in
this Item 4.02.
On
April
7, 2006 the company issued a press release relating to the matters discussed
in
Items 4.01 and 4.02 above, a copy of which was attached as Exhibit 99.2 to
the
Original Form 8-K and incorporated therein by reference.
Forward-looking
information
Information
provided and statements contained in the presentation that are not purely
historical are forward -looking statements within the meaning of Section 27A
of
the Securities Act and Section 21E of the Exchange Act, and the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements only
speak as of the date of the presentation and the company assumes no obligation
to update the information included in the presentation. 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
,
including the risk of continued delay in the completion of our financial
statements and the consequences thereof, the availability of funds, either
through cash on hand or the company’s other liquidity sources, to repay any
amounts due should any of the company’s debt become accelerated, and decisions
by suppliers and other vendors to restrict or eliminate customary trade and
other credit terms for the company’s future orders and other services, which
would require the company to pay cash and which could have a material adverse
effect on the company’s liquidity position and financial condition. 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. For a further
description of these factors, see Exhibit 99.1 to our Form 8-K filed
on April 12, 2006.
SIGNATURES
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 hereunto
duly authorized.
NAVISTAR
INTERNATIONAL CORPORATION
Registrant
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Date:
September 13, 2006
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/s/
William A. Caton
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William
A. Caton
Chief
Financial Officer
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