8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 5, 2009

NAVISTAR INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-9618	36-3359573
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

4201 Winfield Road, P.O. Box 1488, Warrenville, Illinois	60555
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (630) 753-5000

Check the appropriate box below if the Form 8-K 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 (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

In accordance with General Instruction B.2. to Form 8-K, the following information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

The information regarding the results of operations and financial condition of Navistar International Corporation (the “company”) responsive to this Item 2.02, and contained in Exhibit 99.1 filed herewith, is incorporated into this Item 2.02 by reference.

ITEM 7.01 REGULATION FD DISCLOSURE

In accordance with General Instruction B.2. to Form 8-K, the following information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

On January 5, 2009, the company provided guidance on 2009 net income. The company’s press release announcing earnings guidance for 2009 is attached as Exhibit 99.2 to this Current Report and is incorporated by reference herein.

Navistar International Corporation, the nation’s largest combined commercial truck, school bus and mid-range diesel engine producer, previously announced that it will present via live web cast its fiscal 2008 fourth quarter financial results on Monday, January 5^th. A live web cast is scheduled at approximately 10:00 AM EST. Speakers on the web cast will include Daniel C. Ustian, Chairman, President and Chief Executive Officer, Terry Endsley, Executive Vice President and Chief Financial Officer, and other company leaders. Copies of the slides containing financial and operating information to be used as part of the web cast are attached as Exhibit 99.1 to this Current Report and are incorporated by reference herein.

The web cast can be accessed through a link on the investor relations page of Navistar’s web site at http://ir.navistar.com/events.cfm. Investors are advised to log on to the website at least 15 minutes prior to the start of the web cast to allow sufficient time for downloading any necessary software. The web cast will be available for replay at the same address approximately three hours following its conclusion, and will remain available for a period of 10 days.

Navistar International Corporation (NYSE: NAV) is a holding company whose wholly owned subsidiaries produce International^® brand commercial and military trucks, MaxxForce™ brand diesel engines, IC brand school and commercial buses, and Workhorse^® brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Additional information is available at www.navistar.com.

PAGE 2

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit No.	Description	Page
99.1	Slide Presentation for Fourth Quarter Financial Results Web Cast to be held on January 5, 2009
99.2	Press release

Forward Looking Statements

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, Section 21E of the Securities Exchange Act of 1934, as amended, 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 Item 1A. Risk Factors of our Form 10-K for the fiscal year ended October 31, 2008, which was filed on December 30, 2008. 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.

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 hereunto duly authorized.

	NAVISTAR INTERNATIONAL CORPORATION Registrant
Date: January 5, 2009	/s/ Terry M. Endsley
	Terry M. Endsley
	Executive Vice President and Chief Financial Officer

PAGE 3

EX-99.1

4th Quarter Earnings Presentation

January 5, 2009

Exhibit 99.1

2

Safe Harbor

Statement

Information

provided

and

statements

contained

in

this

presentation

that

are

not

purely

historical

are

forward-looking

statements

within

the

meaning

of

Section

27A

of

the

Securities

Act

of

1933,

as

amended,

Section

21E

of

the

Securities

Exchange

Act

of

1934,

as

amended,

and

the

Private

Securities

Litigation

Reform

Act

of

1995.

Such

forward-looking

statements

only

speak

as

of

the

date

of

this

presentation

and

the

Company

assumes

no

obligation

to

update

the

information

included

in

this

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.

For

a

further

description

of

these

factors,

see

Item

1A.

Risk

Factors

of

our

Form

10-K

for

the

fiscal

year

ended

October

31,

2008,

which

was

filed

on

December

30,

2008.

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.

3

Other Cautionary Legends

•

The financial information herein contains audited and unaudited

information and has been prepared by management in good faith

and based on data currently available to the company.  

•

Certain Non-GAAP measures are used in this presentation to

assist the reader in understanding our core manufacturing

business.

We believe this information is useful and relevant to

assess and measure the performance of our core manufacturing

business as it illustrates manufacturing performance without

regard to selected historical legacy costs (i.e. pension and other

postretirement costs). It also excludes financial services and other

expenses that may not be related to the core manufacturing

business.  Management often uses this information to assess and

measure the performance of our operating segments.

A

reconciliation to the most appropriate GAAP number is included in

the appendix of this presentation.

Investor

&

Analyst

Day

–

January

22,

2009

Make Your Reservation

Navistar’s Investor & Analyst Day

Thursday, January 22, 2009

Melrose Park Engine Facility

Melrose Park, IL

11:30 a.m. –

4 p.m. CST

Lunch, Presentation with Q&A

Plant Tour, Lab Demos & Product Displays

Reservation Required

Please

contact

Suzanne

Sorensen

at

Suzanne.Sorensen@Navistar.com

4

Agenda

•

2008 Results

–

Financial Results

–

Operations

•

2009 Outlook

–

Challenges

–

Actions/Plans

–

More to do

•

Summary

•

Q&A

5

FY 2008 Financial Information

Consolidated Revenues

($ in billions)

FY 2007 $12.3

Manufacturing Segment Profit ($ in millions)

Diluted earnings (loss) per share

US & Canada Class 6-8 Retail Industry

6

FY 2008 $14.7

FY 2007

$426

FY 2008

$1,114

FY 2008

$7.23

FY 2007

$(1.70)

FY 2006

$828

FY 2006

$4.12

FY 2006 $14.2

*Excludes

$358

million

of

asset

impairment

charges

and

$37

million

other

costs

related

to

expectations

of

significant

permanent

reductions

related

to

Ford

engine

volume. 

Note:

$134

million

reported

net

income

+

$358

million

asset

impairment

plus

$37

million

other

costs

=$529

million

/73.2

millions

shares

=

$7.23/share.

For

additional

information

see

the

SEC

Reg

G

slide

in

the appendix

7

Controlling Our Destiny

Leveraging

What We Have and What Others Have Built

•

Market share –

Ahead of Plan

•

2008 Capital Spending

<$200M*

•

MaxxForce™

11L/13L Launch

On target:

•

Manufacturing

•

Supplier

•

Commodities

•

Strong Military

•

CAT J.V. Pending

*Exclusive of purchases of equipment leased to others

Medium Truck

Great Products-Total FY2008

Class 6-8 Market Share was 31%*

8

55% Market Share

School Bus

36% Market Share

37% Market Share

Severe Service

Truck*

Heavy Truck

19% Market Share

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

FY07 Retail Share

FY08 Retail Share

FY08 Order Share

#1 In Market Share despite

industry consolidation

First Student announced

potential $1.2 billion  purchase

agreement with Navistar’s IC

Bus

MaxxForce™

EGR

engines

#1 in Market Share

A  leader in Medium Hybrid

MaxxForce™

EGR

engines

#1 in Market Share

3   straight year of increasing

market share

MaxxForce™

EGR

engines

#4 in Market Share

Executing

on strategy

-

ProStar

®

launch in early FY

2007; derivatives launched

in FY 2008

-

LoneStar

®

launched in late

FY 2008

*Includes U.S. Military shipments

rd

9

*Includes U.S. Military shipments

Total FY 2007 Class 6-8 Market Share was 27%*

Total FY 2008 Class 6-8 Market Share was 31%*

Great Products

MaxxForce™

DT Series 9/10

MaxxForce™

7

Ford V8

MaxxForce™

5

South American

Engines

MaxxForce™

Big Bore

11L/13L

6.4L V8

4.5L V6

7.6L/9.3L

Great Products:                        Engine

Complete line of

3L-7L products

I4/I6

Built for power, reliability, durability and fuel economy

36% Market Share

Mid-Range Engines

10

South America Engine

11

12

Competitive Cost Structure

Key Component of COGS

Strategic initiatives

ProStar

®

MaxxForce™

Big Bore 11L/13L

Scale

Strategic partnerships

Mahindra International

South America

CAT

Global sourcing

Performance on track/Volume/

Currency Fluctuations

Overall goal is to continuously

seek the needed quality at the

best price

Greater Flexibility

Eliminated guaranteed

employment

Productivity

Trades

Stewards/Reps

Sourcing non-core jobs

Improved Manufacturing

Cost Structure

Base wages frozen

Healthcare contained

New hire package competitive

Wages

Postretirement

Labor Operating Efficiencies

Materials

13

Competitive Cost Structure

Leveraging Assets

Investment

Facilities

Military parts distribution center

West Point Military Assembly

–

Facility

–

Contract employees

Garland

Escobedo

South America block line

Paint assembly

Military –

Portfolio of Platforms

14

15

Profitable Growth –

Navistar Defense

Sustainment / Reset / Remanufacturing

Tactical

7000 MV

AFMTV

MTV

Taiwan

FMS-UK (TSV)

JLTV

–

Down

selected

OUVS –

Down selected

FMS-Other

Militarized /

supporting vehicles

5000 MV

Armored Line

Haul Tractor

TACOM-other urgent

requirements

MXT

MRAP

U.S.

&

Foreign

MRAP

Variants

(6+)

•

CAT

I

&

II

Base

•

Larger

Vehicle

–

increased

protection

(PLUS)

•

Smaller

Vehicle

(DASH)

•

Ambulance

Future Opportunities

M-ATV

FMTV

MMPV

MILCOTS -

Canada

SMP -

Canada

M915

JLTV

OUVS

HET

STS

We believe the military business (including parts) is sustainable at ~$2 Billion

In FY 2008 we delivered ~ $4 Billion in Revenues

Navistar Defense Group

2009 Outlook

•

Industry still challenged (similar to FY 2008)

•

Economy influences 2009

–

Pricing versus commodities

–

Pension fund losses in 2008 impact 2009 income

statement

–

Finance Business

•

2009 base military business is ~ $2.3 billion

16

*Excludes $358 million of asset impairment charges and $37 million other costs related to expectations of significant permanent reductions related to Ford engine volume. 

2009 Guidance

17

Note:  SEC Reg G reconciliation slide in appendix

Actions to Overcome Industry Volume

•

Market share

•

SG&A and business restructuring cost reductions

•

Presence in other expansion areas

•

Military

•

Emissions strategy

18

Industry Environment Today

19

AVERAGE AGE:

U.S. Class 8 Active Population

1990 - 2008 Forecast

90

92

94

96

98

00

02

04

06

08

4.8

5.0

5.2

5.4

5.6

5.8

6.0

6.2

6.4

6.6

6.8

Avg. Age in Years

Source:  ACT Research

Industry Moving More Into Diesel

20

Exxon boosts diesel output as others scale back 

Exxon Mobil, which had $37 billion in cash at the end of the third quarter, will expand production at its refineries in Baton Rouge,

La., Baytown, Texas, and Antwerp, Belgium. Baytown is the largest U.S. refinery.

The Associated Press

12/16/2008 

HOUSTON — Exxon Mobil Corp., the world's biggest oil refiner, will spend more than $1 billion in the

next couple of years to increase its global production of cleaner-burning diesel by about 10 percent, the

company said Monday. 

The announcement comes as many oil producers and refiners scale back spending because of the sharp

decline in crude prices, dismal expectations for energy demand in 2009 and tight credit markets that have

put many big capital expenditures out of reach. 

When the upgrades are completed in 2010, Irving, Texas-based Exxon Mobil will account for about 8

percent of the world's diesel output, up about 1 percent from current levels, said Sherman Glass, the oil

giant's president of refining and supply. 

Exxon Mobil, which had $37 billion in cash at the end of the third quarter, will expand production at its

refineries in Baton Rouge, La., Baytown, Texas, and Antwerp, Belgium. Baytown is the largest U.S.

refinery. 

While acknowledging the global economic downturn and its significant impact on energy consumption,

Glass said there is growing global demand for ultra-low-sulfur diesel, also known as ULSD. 

"We test our investments against a variety of scenarios, regardless of what the short-term economic

environment is," Glass said. "Our view is these projects will be robust for a long period of time to come." 

ULSD, which helps reduce emissions, was introduced for highway use in 2006 and already is available at

gas stations across the United States. By December 2010, it will be the only highway diesel available at

retail outlets, as mandated by the U.S. Environmental Protection Agency. 

Over the next few years, locomotives and marine vessels also will be required to make the switch to

cleaner-burning diesel to meet new federal emission standards. 

"Virtually all the diesel here in the U.S. will be ... ultra-low sulfur by 2012," said Al Mannato, a fuels

expert at the American Petroleum Institute. 

Demand also is growing overseas. During the past decade, diesel demand in Europe has risen more than

15 percent, while gasoline demand has actually fallen 22 percent, according to statistics on the API Web

site. 

Mannato said fewer European exports coupled with rising diesel consumption at home are two reasons

diesel is nearly $1-a-gallon more costly than gasoline in the United States. 

Some Exxon competitors have recently delayed refining projects because of volatile global markets. 

ConocoPhillips and the state-run Saudi Arabian Oil Co. said last month they'd postponed construction of

a multibillion-dollar refinery in Saudi Arabia. The project was in the construction-bidding process, and

the two partners said they'll rebid it in the second quarter of 2009. 

Marathon Oil Co. also has delayed expansion of a gasoline refinery in Detroit because of market

conditions. 

Sen. James Inhofe (R-Okla.), Ranking

Member of the Environment and Public Works

Committee, joined fellow GOP Senators and

members of the U.S. trucking industry to call

for lower gas prices to help truckers ship

goods, met with Oklahoma business leaders

of NAVISTAR to discuss diesel prices.

"Today I joined with Senate Republicans and

leaders from the trucking industry to once

again emphasize the need for the United

States Senate to act on bringing down the

price of gas at the pump," Senator Inhofe

said. "From transporting goods across the

country, to finding ways to pay for our nation's

infrastructure, high gas prices impact every

aspect of our lives."

21

Traditional U.S. and Canada Retail Sales

Class 6 –

8 Industry Landscape

Economic uncertainty about 2009

and 2010:

•

2009 no longer the peak

•

2010 no longer the trough

Reality:

•

Age of fleet increasing

•

Fuel prices coming down

2nd half of 2009 will determine total industry size

Industry

FY99

FY00

FY01

FY02

FY03

FY04

FY 05

FY06

FY 07

FY08

School Bus

33,800

33,900

27,900

27,400

29,200

26,200

26,800

28,200

24,500

24,400

22,000

24,000

Class 6-7 - Medium

126,000

129,600

96,000

72,700

74,900

99,200

104,600

110,400

88,500

59,600

56,000

64,000

Combined Class 8 (Heavy & Severe Service)

286,000

258,300

163,700

163,300

159,300

219,300

282,900

316,100

206,000

160,100

166,000

168,000

Total Industry Demand

445,800

421,800

287,600

263,400

263,400

344,700

414,300

454,700

319,000

244,100

244,000

256,000

Navistar Order Receipt Share*

NA

NA

NA

NA

NA

23.7%

26.8%

29.8%

30.7%

33.1%

*U.S. and Canada Class 6-8 (includes U.S. military)

Historical Information

FY 09

Guidance

Current

Actual

United States and Canadian Class 6-8 Truck Industry -  Retail Sales Volume

22

Opportunity for 2009 improvement

6.9

mpg

Fleet A

7.0

mpg

Fleet B

7.2

mpg

Fleet C

7.2

mpg

Fleet D

7.7

mpg

Fleet E

At current fuel

prices of $2.50,

driving 150,000

to 200,000 miles

a year, the             

saves

$3,500-4,700 a

year in fuel!

•

The average

line haul costs

$110,000

•

Commodities

have  been

volatile

•

Diesel was at $5

a gallon

•

has

7% fuel savings

®

23

Profitable Growth: Class 8

Combined Class 8

Retail Market

Share

Order Receipt

Share

Outstanding Power Characteristics

24

Competitor A

Competitor C

Competitor D

Competitor B

Designed for

Payload

Best-in-Class

Fuel Usage @ Idle

0

0.1

0.2

0.3

0.4

0.5

0.6

MaxxForce 13

Competitor A

Engine Volume Transition

25

Today

2009 Transition

2010

Big Bore

11L-15L

11L/13L

46%

15L

54%

<425 hp

12%

425-455 hp

64%

475-550 hp

24%

MaxxForce™

11L/13L

330-475 hp @ 1900 rpm

1250-1700 hp lb.–ft.

@ 1000 rpm

Business Restructuring/SGA

•

SG&A / fixed cost actions

–

Suspend management pay raises

–

Reduced 650 contractors and employees

–

Other containment actions

•

Resulting year-over-year cost reductions

–

Professional (filing) fees ~ $100M

–

Other SG&A / fixed costs ~$150M

•

Plant rationalization

–

Ready to act as necessary

26

Military –

Opportunity for 2009

•

2009 military orders:

–

Truck and Parts ~$2.3 B

•

Foreign Military Opportunities Identified in over 20 Countries

–

Netherlands

–

United Kingdom

–

Romania

–

Saudi Arabia

–

Australia

–

Polish Land Force MTV

•

Navistar Defense -

contract manufacturer (FMTV, MRAP reset/recap)

•

Contract

logistic

support

/

integrated

logistic

support

revenue

streams

–

Canada

–

Turkey

–

Mexico

–

Taiwan

–

UAE

27

28

Parts Segment –

Opportunity for 2009

Navistar Parts

$1.4

$1.5

$1.6

Part Sales ($ in billions)

$1.8

$2.3 to $2.5

Focus on the Customer

•

Superior customer experience

•

Pull vs. Push

New Proprietary Products

•

MaxxForce™ 11L/13L

•

Only source

Leverage Our Strengths

•

Largest dealer channel

•

Innovative customer solutions

Growth

Increase truck share

Military full offering

•

Parts

•

Kits and remanufacturing

•

Services

Global

New Product Programs

29

Emissions Strategy

•

Meet emissions by using customer friendly EGR

solution

•

Leverage Assets while investing in technologies

–

Hybrid electric

–

Electric vehicles

•

Why are we doing EGR and others SCR?

–

Because we can!!!

What the rules tell us about 2010:

–

Manufacturers can go to .5 NOx if they clean up the

environment earlier with advanced technology

–

Manufacturers need to be at .2 NOx if they choose

not to introduce advanced technologies earlier.

Navistar’s approach actually reduces NOx levels more

because we started earlier

Engine Credit Banking and Trading Program

30

Extra

Fluid

Additional

Maintenance

Additional

Driver

Training

Extra

Exhaust

Hardware

EGR Takes the Emissions Burden Off

Customers

31

EGR Characteristics are Self-Evident

SCR

EGR

Fuel Economy/Operating Costs

NEUTRAL

Cost

X

Maintenance

X

Driver Training

X

Weight (payload)

X

Packaging (configuration)

X

Green

X

Trade Value

X

Obsolete Technology / Euro Trend

X

Advantage

X

32

X=Advantage

Do not fill into the diesel fuel tank!

Product information

•Store between 23

F (-5

C) and 68

F

(20

C)

•Protect against direct sunlight

•Empty bottle completely into the tank

•Avoid contamination while filling

•Avoid ongoing storage in the vehicle

•Dispose bottle after 2 years from the

production date

•Do not mix with other substances

•Use or store only as directed

•Keep out of the reach of children and

animals

•Avoid contact with skin and eyes

•Avoid inhalation or ingestion of the

solution and any dried residue

33

$19.05

EGR Avoids the Risks

Meet the MaxxForce™

15

34

Mid-America –

March 18-21

35

2009 Guidance

36

*Excludes $358 million of asset impairment charges and $37 million other costs related to expectations of significant permanent reductions related to Ford engine volume. 

Note:  SEC Reg G reconciliation slide in appendix

37

Financial Overview

•

Summary

•

Financial Reporting

•

Liquidity/Capital Structure

38

Summary

•

Yet -

In 2008, Navistar:

1.

Generated $1.1 billion in manufacturing segment margin (pre-impairment)

2.

Generated $429 million in Manufacturing Cash from Operations, more than covering uses from Cap

Ex/Investing thereby allowing Debt Paydown

3.

Increased manufacturing cash balances to $775 million

4.

Maintained approximately $340 million in available committed undrawn borrowing capacity

•

2007

Follow-on low-buy

•

2006

Industry pre-buy

•

2008

Worst N.A. Truck industry

39

Manufacturing Cash Flow

¹Cash

=

Cash

&

Cash

Equivalents

*The

above

unaudited

non-GAAP

manufacturing

cash

and

cash

flow

information

has

been

revised

to

reflect

the

correction

of

certain

errors.

The

corrections

within

the

unaudited

non-GAAP

manufacturing

cash

flow

information,

which

are

not

considered

material,

had

no

effect

on

previously

reported

unaudited

non-GAAP

manufacturing

cash

balances.

$429 of Cash flow

to cover Investing 

activities

Enables Debt

Paydown

$ (millions)

Revised

Manufacturing Cash¹ Balance:

10/31/2007

10/31/2008

October 31, 2006

$1,078

October 31, 2007

$716

Approximate Cash¹ Flows:*

From Operations

($231)

$414

Dividends from NFC

$400

$15

From Investing / (Cap Ex)

($70)

($216)

From Financing / (Debt Paydown)

($480)

($133)

Exchange Rate Effect

$19

($21)

Manufacturing Cash¹ Balance:

October 31, 2007

$716

October 31, 2008

$775

Summary

40

•

Continued

to

strengthen

Financial

Reporting

and

Internal

Controls

1.

Enhanced

through

put

capacity

–

filed

10

major

SEC

filings

in

last

13

months

2.

Sarb-Ox

–

have

reduced

number

of

MW’s

from

15

(March

2008)

to

8

(December

2008)

–

still

unacceptable:

goal

is

zero

for

2009;

progress

by

Q2

3.

Absorbed

the

growth

of

doubling

in

size

4.

Expect

smooth

closings

and

filings

hereafter,

starting

with

January

31,

Q1

2009

5.

Restatement

Impacts

–

Revisions

•

Pension/OPEBs

–

2008

decline

in

market

value

will

affect:

–

Expense

in

2009

–

Cash

funding

in

2010

•

NFC

liquidity

is

strong

•

No

refinancing

necessary

until

late

2009/early

2010

–

Capital

Structure

Opportunities

Restatements/Revisions

41

•

Restatement

Background

–

Issue

was

to

get

costs

into

proper

quarters.

Narrow

focus

–

not

widespread.

Revenue

recognition

for

associated

military

units

was

unchanged.

Rapidly

changing

supply

base

to

meet

customer

requirements

challenged

the

accuracy

of

BOM

and

COGS

process.

(see

appendix)

•

Restatement

Impact:

only

2008

in

Q1,

Q2,

Q3.

No

other

periods

affected.

•

Revisions:

Two

immaterial

errors

were

recorded

as

revisions

–

no

change

to

income

or

cash

balances.

Impact on NI ($millions)

Q1

Q2

Q3

9 mos.

Accum.

Accum.

2008 FY

Higher

(Lower)

($12)

($4)

$59

$43

$0

Pension & OPEB

42

•

2008 FY Retirement plan asset performance was (30%) –

typical

decline in market values

•

Impact will be:

higher expense in 2009 vs. 2008

cash contributions impact in 2010 -

????

•

Y-O-Y Post Retirement Expense will be higher in 2009 vs. 2008

–

Funded status at 10/31/07 resulted in approximately $0 expense in

2008 excluding one-time gains

–

Market sell-off will add $150-$200 million GAAP expense in 2009 vs.

2008

–

Funded status will get back to 2007 levels and expense will return to

$0 by 2011/12 with low-teens asset returns for next several years

•

December 2008 law HR7327 mitigates ERISA contribution

requirements until second half 2010 –

still studying cash impacts

NFC Performance

43

•

Financial Services segment off ~$150 million y-o-y ‘08 vs ’07

–

Lower volumes and margins $80 million

–

Accounting for derivative swaps used to hedge securitizations $50 million

–

Other $20 million

•

Expect profitability to rebound significantly in 2009

–

Volumes and margins will remain depressed for first half

–

Impact of derivative accounting depends on interest rate movement after

October 2008

–

Margins improving –

finance competitors on sidelines/not aggressive

•

Despite P&L losses, NFC has maintained high credit quality receivables

portfolio

–

Enabled NFC to refi all significant funding facilities in 2008 and maintain

access to CP backed private bank conduits

•

In 2009 will primarily use NFC-U.S. and NFC-Mexico as Sales Finance

tools to grow Truck market share

–

Portfolio credit quality can’t be compromised

44

NFC Liquidity Remains Strong

•

NFC has total available undrawn committed funding of approximately $900 million

•

NFC retail activity primarily funded by facilities that do not require refinancing until 2010

•

NFC has continued to obtain access to bank conduit markets to fund retail note acquisitions

•

Over

$1.2

B

in

retail

notes

have

been

sold

and

securitized

since

the

subprime

issues

began

to

impact the asset securitization market

•

Serviced receivables balances tracking to truck market trough

•

Truck Financing is available for quality credits, especially conquest accounts

Retail Notes

Bank Revolver

•

Current situation

–

~$1.0 B funding facility

(NFSC)

–

Available  $345 million

•

NFSC terms

–

Bank conduit portion 

(VFC) renewed October

2008

–

Public portion matures

February 2010

Off-balance sheet

•

$500 million revolving

warehouse (TRIP)

–

Acquired notes sold into TRIP

–

TRIP warehouses, then

securitizes via bank conduits

•

TRIP terms

–

Matures June 2010

On-balance sheet

•

$1.4 B facility

–

Initial funding of retail

note acquisitions

–

Also funds

dealer/customer

open accounts

•

Revolver terms

–

Matures July 2010

On-balance sheet

Dealer Floor Plan (DFP)

45

Capital Structure –

Next Steps

•

Intend to execute at least 1 million share repurchase

•

Anticipated cash flow in excess of CapEx

/ Investments allows consideration of debt

buyback

–

Currently 55 cents to $1 par

–

Debt reduction, gain on extinguishment

•

Recent key financing renewals ensure NFC liquidity for 2009

–

Must

have

NFC-U.S.

revolver

refinanced

by

Q2

2010

-

$1.4B,

relationship

banks

•

Parent

company

has

no

need

to

refinance

in

near-term

–

not

until

late

2011

–

Using combo of Parent company and NFC-U.S. availability to meet Mexican market truck

inventory financing demands on NFC-Mexico

–

$340M unutilized committed credit facilities

–

Benefiting from low Libor interest rate (next reset less than 5%)

–

Debt buyback now could greatly facilitate ease of refinancing later

•

We have sufficient liquidity/borrowing capacity to execute our strategies

Actions in 2009 for 2010 and Beyond

•

Resolve Ford

•

Pension

•

Establish Global Presence

–

Mahindra

–

Cat J.V. Pending

–

Diesel Expansion

–

Commercial Bus

•

EGR Engine Strategy

•

MaxxForce

Big Bore

46

TM

•

Commercial growth

India and exports

–

New full line Class 4-8 in

development

–

New plant for trucks and

engines in 2009

–

2011 target volume 40,000

units/year (market 400,000

Class 3-8)

–

MNAL plans on selling  ~13K

light trucks and buses in

2009

–

MNAL will also begin

production of the new heavy

duty truck  

47

Continued Focus on Global Growth

•

CAT JV Pending

•

Commercial Bus

•

Russia

•

China

•

Australia

•

Grow existing markets

–

Latin America

–

South Africa

–

Middle East

•

Dedicated dealers in all 

key markets

Rest of World-Truck

India

Rest of World-Engine

•

Russia

•

India

•

China

•

Grow existing

markets

–

Latin America

–

South

America

North America Motorcoach

Opportunity

48

Industry Dynamics

–

Growing market

–

U.S. and Canada market:  2000 a year

–

Current manufacturers niche players

–

Prevailing engines all exiting in 2010

Leveraging our Strengths

–

Manufacturing capacity

–

Vertically integrated engine

–

Advanced EGR crucial for highway

operations

–

Extensive distribution network for after

sales parts and service

–

Design for FMVSS safety regulations is a

core competency

Strategic Relationships

–

Grow with few, key customers

–

Leverage Idealease

breakdown service

Motorcoach

Opportunity

Integrated Commercial Bus Opportunity

MOU with San Marino (Neobus)

for integrated commercial bus

body JV assembly plant in Mexico

Industry Dynamics

–

Large market in South America

–

Emerging market in Mexico driven

by government funding

–

Long-term potential for US and

Canada

Leveraging our Strengths

–

Chassis manufacturing capability

–

Distribution network in Mexico

Leveraging the Strengths of

Others

–

New body assembly JV

–

Non-traditional integrated bus

distribution opportunities in other

markets

Midibus

Opportunity

49

50

Summary –

Controlling Our Destiny

2008 was a strong year in spite of difficult environment

2009 will be a strong year for Navistar despite a weak U.S.

and Canadian industry

Sustainability actions in place for 2009, 2010 and beyond

–

Great Products

Class 8 market share growth

EGR is our technological path

–

Competitive Cost Structure

Global sourcing

Competitive labor contract

Global footprint

–

Profitable Growth

Global Growth and military

Cat J.V. Pending

Mahindra J.V.

•

Base Plan Challenged

–

Industry

–

Pension & OPEB -

$250 million

increase

–

Military ~$2.3 billion

with parts

–

Base EPS $1.65 to

$2.20*

51

Summary

•

Increase Market Share

•

Cost Reductions

–

Design

–

SG&A

•

Military

•

Plant Rationalization

•

Target $5.10 to $5.60

2009 with Actions

2009 Base Plan

2010 Actions

Industry

Global Opportunities

Pension

Revenue

EPS

*For additional information please see Reg

G slide in appendix

52

Appendix

53

2009 Guidance

($ Millions (excluding EPS))

Truck Industry Units

244K

to

256K

Revenue

$15,000

to

$16,000

Mfg. Segment Profit*

$1,000

to

$1,050

Below the line items

~$(590)

Profit Before Tax

$410

to

$460

Net Income

$370

to

$410

EPS

$5.10

to

$5.60

# of shares

~73M

Guidance

*For additional information please see Reg G slide in appendix

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

Full Year

Bus (School)

60%

60%

59%

59%

60%

57%

57%

48%

58%

55%

Medium (Class 6-7)

37%

34%

34%

37%

36%

34%

35%

39%

36%

36%

   Heavy (LH & RH)

16%

12%

15%

17%

15%

16%

15%

19%

25%

19%

Severe Service

24%

28%

26%

32%

27%

35%

36%

34%

41%

37%

Combined Class 8

18%

17%

19%

22%

19%

23%

23%

25%

30%

25%

Combined Market Share

25%

25%

27%

31%

27%

29%

29%

30%

35%

31%

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

Full Year

Bus (School)

60%

60%

59%

59%

60%

57%

57%

48%

58%

55%

Medium (Class 6-7)

37%

34%

34%

37%

36%

34%

35%

39%

36%

36%

   Heavy (LH & RH)

16%

12%

15%

17%

15%

16%

15%

19%

25%

19%

Severe Service

23%

26%

24%

28%

25%

28%

26%

26%

29%

27%

Combined Class 8

18%

16%

19%

21%

18%

20%

19%

21%

26%

22%

Combined Market Share

25%

25%

27%

31%

26%

27%

27%

28%

33%

29%

2007

2008

Market Share - US & Canada School Bus and Class 6-8

2007

2008

Market Share –

U.S. & Canada School Bus

and Class 6-8

54

55

Truck Shipments

Note:  Information shown below is based on Navistar’s fiscal year-end

Fiscal Year 2006

1Q06

2Q06

3Q06

4Q06

Full Year 2006

BUS

4,100

4,500

4,300

5,100

18,000

MEDIUM

7,300

11,500

12,100

14,300

45,200

HEAVY

7,900

9,900

10,200

15,400

43,400

SEVERE

3,900

4,500

4,300

6,300

19,000

TOTAL

23,200

30,400

30,900

41,100

125,600

MILITARY (U.S. & Foreign)

400

500

1,200

800

2,900

EXPANSIONARY

5,800

6,600

7,500

7,000

26,900

WORLD WIDE TRUCK

29,400

37,500

39,600

48,900

155,400

Fiscal Year 2007

1Q07

2Q07

3Q07

4Q07

Full Year 2007

BUS

3,400

4,100

3,200

3,900

14,600

MEDIUM

9,700

6,800

5,600

6,600

28,700

HEAVY

7,000

4,500

2,600

3,300

17,400

SEVERE

3,900

3,300

3,500

3,700

14,400

TOTAL

24,000

18,700

14,900

17,500

75,100

MILITARY (U.S. & Foreign)

600

900

700

1,000

3,200

EXPANSIONARY

9,100

8,700

9,000

8,500

35,300

WORLD WIDE TRUCK

33,700

28,300

24,600

27,000

113,600

Fiscal year 2008

1Q08

2Q08

3Q08

4Q08

Full Year 2008

BUS

3,100

3,300

2,700

4,400

13,500

MEDIUM

3,700

6,300

5,800

4,500

20,300

HEAVY

2,600

3,900

4,500

7,800

18,800

SEVERE

2,400

3,400

3,400

3,600

12,800

TOTAL

11,800

16,900

16,400

20,300

65,400

MILITARY (U.S. & Foreign)

1,600

2,200

2,300

2,600

8,700

EXPANSIONARY

6,000

8,100

8,400

5,600

28,100

WORLD WIDE TRUCK

19,400

27,200

27,100

28,500

102,200

56

World Wide Engine Shipments

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

Ford

80,200

92,200

75,200

68,100

315,700

Other OEM's (All Models)

25,300

29,000

26,500

24,100

104,900

Engine Shipments to Truck Group

17,600

24,300

25,100

32,100

99,100

Total Shipments

123,100

145,500

126,800

124,300

519,700

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

Ford

60,000

56,200

65,400

53,500

235,100

Other OEM's (All Models)

21,000

26,400

29,100

27,700

104,200

Engine Shipments to Truck Group

23,100

12,100

13,700

16,500

65,400

Total Shipments

104,100

94,700

108,200

97,700

404,700

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

Ford

47,000

55,300

25,200

24,500

152,000

Other OEM's (All Models)

25,900

31,500

35,100

37,400

129,900

Engine Shipments to Truck Group

12,900

15,700

19,000

16,000

63,600

Total Shipments

85,800

102,500

79,300

77,900

345,500

2008

World Wide Engine Shipments 

2007

2006

57

Order Receipts –

U.S. & Canada

Navistar (Order receipt data)

FY 2007

FY 2008

Bus (School)

9,600

11,900

Medium (Class 6-7)

21,400

19,400

Combined Class 8 (Heavy & Severe Service)

26,200

45,700

Total Navistar

57,200

77,000

Industry (Order receipt data)

FY 2007

FY 2008

Bus (School)

19,400

20,900

Medium (Class 6-7)

50,500

54,600

Combined Class 8 (Heavy & Severe Service)

107,500

157,200

Total Industry

177,400

232,700

Order receipts:  U.S. & Canada (Units)

-

2,000

4,000

6,000

8,000

10,000

12,000

International Dealer Stock Inventory in Units*

U.S. and Canada Dealer Stock Inventory

58

Lowest point in over 5 years; has been decreasing every month since March 2007

*Includes U.S. and Canada Class 4-8 and school bus inventory, but does not  include Workhorse Custom Chassis inventory.

Restatements/Revisions

59

Background

–

As part of this restatement, only very minor service fee Revenue

Recognition errors were identified (less than $4 million).  During our analytical

review during the 4

th

quarter, we discovered that our standard cost based Cost

Accounting System had not updated the BOM for the new supplier base used in

COGS for certain trucks delivered in Q3, resulting in over relieving of inventory and

higher than appropriate COGS for Q3.  Further work revealed an offsetting similar

issue in Q1 and Q2 to a much smaller extent.  All process errors

were fixed and

zeroed out by year-end.  The scope was limited to a particular line of business in the

Truck Segment.

The root cause has been fixed and system improvements are being made.

Restatements/Revisions (continued)

60

•

Financial Statements were also revised due to two immaterial errors:

–

To correct the balance sheet for payout rights granted to certain stock option

holders, a mezzanine equity classification, Redeemable Equity securities, has

been added for 6 quarters: Q3/Q4 2007 and Q1/Q2/Q3/Q4 2008.  No impact

on Income Statement or SOCF.  No change in “Total Shareholder Equity”. 

See EITF D-98.

–

Also corrected the SOCF (and impact on balance sheet) for effect

of

exchange rates on liquid assets of foreign subs.  Affected statements were

2006 FY, all 2007 statements and Q1/Q2/Q3 2008 statements.  Major impact

was to increase Cash Flow from Operating activities by $85 million for 2007

FY.  No change in Manufacturing Cash Balances or Income Statement.

•

Both issues detected by Quality Control monitoring, corrected and

revised within the year detected and were revised as part of 2008

year-end filings.

61

Frequently Asked Questions

Q1:

What should we assume as the total on capital expenditures for 2009?

A:

For 2009, excluding our NFC and Dealcor

acquisition of vehicles for leasing, we expect our capital

expenditures to be within the $250 million to $350 million range. We continue to fund our strategic

programs.

Q2:

What is in your Dealcor

debt?

A:

Dealcor

debt is comprised of wholesale (floor plan) financing and also retail financing on lease and

rental fleets that is securitized (owned by) third-party financing sources.

Q3:

How many Dealcor

dealers did you have as of October 31, 2008?

A:

Of

our

297

primary

NAFTA

dealers,

21

were

Dealcor

dealers

as

of

October

31,

2008.

We

expect

to

have  fewer Dealcor

dealers on October 31, 2009.

Q4:

Have you seen any year-over-year steel, precious metals and resin cost increases in 2008?

A:

Steel

and

Other

Commodities

—

Commodity

price

increases,

particularly

for

aluminum,

copper,

precious

metals,

resins,

and

steel

have

contributed

to

substantial

cost

pressures

in

the

industry

as

well

as

from

our

suppliers.

Cost

increases

related

to

steel,

precious

metals,

resins,

and

petroleum

products

totaled

approximately

$184

million,

$178

million,

$86

million,

and

$97

million

for

2005,

2006,

2007,

and

2008,

respectively,

as

compared

to

the

corresponding

prior

year

period.

Generally,

we

have

been

able

to

mitigate

the

effects

of

these

cost

increases

via

a

combination

of

design

changes,

material

substitution,

resourcing,

global

sourcing

efforts,

and

pricing

performance,

although

we

do

not

specifically

identify

these

items

on

customer

invoices.

In

addition,

although

the

terms

of

supplier

contracts

and

special

pricing

arrangements

can

vary,

generally

a

time

lag

exists

between

when

we

incur

increased

costs

and

when

we

might

recoup

them

through

increased

pricing.

This

time

lag

can

span

several

quarters

or

years,

depending

on

the

specific

situation.

62

Frequently Asked Questions

Q5:

What is the status of your hybrid program?

A:

Navistar

is

currently

in

full

on-line

production

of

DuraStar™

class

6

&

7

hybrid

electric

models

at

our

Springfield Assembly plant.

This hybrid product is demonstrating 30-60% improvement in fuel economy

and has been EPA certified to receive tax credits. We have received 500 orders to date and have raised

our

production

capacity

to

5

units

a

day

to

meet

the

increasing

demand.

In

addition

we

offer

a

plug

in

hybrid IC Bus product.

We recently released a new beverage tractor application at 55,000 pounds

GCWR

and

have

added

a

WorkStar

®

4x4

to

our

product

offerings.

Beyond

our

DuraStar™

and

WorkStar

®

hybrid

electric

products,

we

are

continuing

to

look

at

and

test

other

viable

platforms

such

as

the

delivery

of

7

hybrid

hydraulic

Workhorse

package

car

chassis

to

UPS.

This

system

uses

hydraulic

pressure

in

lieu

of

electricity

to

operate

the

hybrid

system.

They

are

showing

promise of over 50% improvement in fuel economy.

Other

hybrid

platforms

are

in

development

for

Class

8

products

of

the

future.

The

result

of

this

new

hybrid

technology will be to substantially improve fuel efficiency and reduce the carbon footprint of our truck and

bus products of today and in the future.

63

Frequently Asked Questions

Q6:

The future of diesel transportation is being impacted by environmental and energy issues such as

fuel efficiency, climate change and clean air. How is Navistar responding to these growing

influences?

A:

Navistar and its production units are fully engaged and are offering solutions on multiple fronts to the

commercial truck industry. Aerodynamic efficiency is the single most important issue to address to

improve

the

fuel

economy

of

on-highway

trucks.

International

®

ProStar

®

is

the

industry's

most

aerodynamic and fuel efficient Class 8 truck. We do extensive development in wind tunnels and work hard

to

achieve

industry-leading

aero-efficiency.

And

our

recently

introduced

International®

LoneStar

®

,

the

first

ever owner/operator product that is SmartWay

certified, is setting a whole new standard of aero-efficiency

among premium Class 8 trucks. Another significant reduction in both fuel consumption and emissions can

be

achieved

by

reducing

idle

time

of

on-highway

trucks.

Navistar

will

be

the

first

manufacturer

to

offer

a

fully

integrated

Alternate

Power

Unit

(APU)

when

the

MaxxPower™

APU

is

launched

later

this

year.

The

MaxxPower™

APU

allows

drivers

to

operate

the

truck

HVAC

system

and

other

"hotel"

loads

while

consuming 80% less fuel than idling the main engine. We also believe hybrid technology will be a large

part

of

the

national

response

to

climate

change

and

fuel

use

and

we

are

raising

our

role

as

a

contributor

to

energy efficient transportation solutions in the commercial truck, commercial bus and school bus

businesses. We are leveraging the natural fuel efficiency of diesel engines and vehicles in several key

moves. 

We are building on our record as the leader in Green Diesel Technology, where Navistar set the pace for

the industry in achieving this year’s historically low emission requirements. We have advanced the

standard

of

efficiency

with

our

new

ProStar

®

truck.

And

we

are

well

into

the

important

wave

of

customer

interest in hydraulic and electric hybrids which will have a substantial impact on the reduction in green

house gas emissions.

Navistar was recognized for leadership in the development of hybrid advanced technology in California,

receiving the Blue Sky Award for 2007 from WestStart-CALSTART.

Frequently Asked Questions

64

Q7:

What do you finance at Navistar Finance Corporation (NFC)?

A:

NFC is a commercial financing organization that provides wholesale, retail and lease financing for

sales of new and used trucks sold by the company. NFC also finances the company’s wholesale

accounts and selected retail accounts receivable. Sales of new truck related equipment (including

trailers) of other manufacturers are also financed.

Q8:

What percentage of truck purchases do you fund?

A:

We consistently fund about 95% of floor plan inventory for our dealers in the U.S., and approximately

11% of retail purchases. As the company continues to penetrate and sell trucks to larger fleets, we

would expect that percentage to decrease.

Q9:

When is the next refinancing due at NFC?

A:

All financing facilities have been extended, and we do not need to renew any facility until October

2009.

Q10:

What are your retail notes funded by?

A:

The retail notes are primarily funded by a bank revolver and a revolving warehouse facility that we call

TRIP

that

doesn’t

mature

until

2010.

These

notes

are

ultimately

sold

to

either

a

conduit

facility

or

into

a

public securitization.

Q11:

Are there any requirements for NFC leverage?

A:

NFC is compliant with our revolver leverage covenant of 6 to 1. This ratio calculation excludes

securitization debt.

Frequently Asked Questions

65

Q12:

How are your securitization rates determined?

A:

Portfolio

performance,

deal

structure

and

market

conditions

affect

pricing.

Also

asset

class,

Retail

versus

Wholesale

versus

Trade

Receivable

would

affect

pricing

as

may

some

structural

elements.

Q13:

What is your funding strategy?

A:

We

use

three

or

four

primary

funding

sources.

For

our

longer

term

retail

truck

notes

that

finance

the

sale of trucks to end customers, we finance those in the term securitization markets either in public

deals or with the banks. We primarily finance our wholesale portfolio in traditional private or public

securitizations. We also have a combination of revolving type facilities that often warehouse assets

until they can be financed permanently.

Q14:

How is your portfolio performing?

A:

The portfolio is performing as we would expect given the industry downturn and consistent with prior

cycles.  The provision for credit losses increased from approximately $19 million to $32 million.  Our

retail delinquency statistics greater than 60 days also increased slightly from .6% to 1.1%.

Frequently Asked Questions

66

Q15:

How are your repossessions trending?

A:

Repossessions were slowing down.

It is too early to tell if the current turmoil in the markets will

require

increased

repossession

activity

in

the

future.

To

a

great

extent,

fleets

have

already

right

sized and fuel costs have rapidly come down, which is all good news.

Q16:

How are your wholesale balances and dealers doing?

A:

Wholesale

balances

have

actually

come

down

recently.

We

think

our

dealers

--

which

have

always

been

one

of

our

strengths

--

are

well

positioned

in

this

area.

We

have

never

had

any

significant

dealer losses and expect that trend to continue in the future.

Q17:

Are your interest rates going to increase?

A:

Like all lenders, we need to achieve a profitability threshold to ensure our continued access to

capital,

and

that

means

pricing

our

rates

in

line

with

the

marketplace.

So,

yes,

as

the

cost

of

financing increases for all companies, we are going to pass on some of the cost increase to our

dealers and customers.

Q18:

What kind of rates do you charge your dealers and customers?

A:

Generally, our rates vary of course (those with higher credit risk have always had to pay higher

interest rates) and are usually in line with the market.

Q19:

How

do

you

make

your

credit

decisions?

Do

you

require

a

certain

credit

score?

A:

We factor in a variety of  criteria in our credit scoring model such as business model, company

history, down payment, etc.

Frequently Asked Questions

67

Q20:

What is our total amount of capacity at NFC?

A:

Total availability in our funding facilities was approximately $900 million.

Q21:

Why is Navistar asking for a revision to the 2010 emission regulation?

A:

Navistar’s

technology

path

is

ready

for

2010,

and

the

industry

will

be

ready

too.

We’re

asking

that

the

government

take

action

to

allow

truckers

to

have

the

opportunity

to

purchase

the

2007-compliant

technology as well as the 2010-compliant technology. When the new 2010 engines come out, they’re

going to be more expensive and many truckers won’t be able to afford them.

Q22:

What is the current timeline for M-ATV (MRAP Light)?

A:

Proposals are due January 12 and participants must deliver two test vehicles by February 23, 2009.

After two of the vehicles have been evaluated, the government will select five companies by April 10,

2009

to

submit

a

final

proposal

and

deliver

the

three

final

test

vehicles.

Final

award(s)

to

follow

in

May

2009.

Q23:

Is the 2009 budget for tactical vehicles approved?

A:

We understand that there is approximately $3.65 billion available in 2009 for tactical wheeled vehicles. 

Typically, truck funding comes out of supplementals.

Q24:

What is the current JLTV timing?

A:

Companies competing for JLTV are still abiding by a stop order until the military concludes its

investigation into the dispute.

Frequently Asked Questions

68

Q25:

Do

you

have

any

military

parts

orders

for

MaxxPro™

DASH?

A:

We have not received any parts orders for MaxxPro

Dash vehicles.

Q26:

What is the current funding

for MRAP vehicles?

A:

$1.7 billion was provided for MRAP vehicles in June in the FY2008 supplemental. Funding for MRAP

procurement

is

provided

through

emergency

appropriations

bills

as

it

is

considered

high

priority.

The

Department of Defense will present another emergency request to Congress early next year in order to

fund military operations in Iraq and Afghanistan. In addition, the DOD acquisition chief recently

authorized up to an additional $100 million for the initial steps of the new MRAP All-Terrain Vehicle (M-

ATV) program.

69

SEC Regulation G

The

above

non-GAAP

financial

measures

are

unaudited

and

reflect

a

2007

change

in

segment

reporting

methodology.

This

presentation

is

not

in

accordance

with,

or

an

alternative

for,

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.

However,

we

believe

that

non-GAAP

reporting,

giving

effect

to

the

adjustments

shown

in

the

reconciliation

above,

provides

meaningful

information

and

therefore

we

use

it

to

supplement

our

GAAP

reporting

by

identifying

items

that

may

not

be

related

to

the

core

manufacturing

business.

Management

often

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

above

reconciliations

and

to

provide

an

additional

measure

of

performance.

DEBT

YE 2005

YE 2006

YE 2007

YE 2008

(in millions)

Manufacturing operations

January 2007 Loan Facility (Libor + 325 matures January 2012) 

-

$             

-

$             

1,330

$     

1,330

$     

Bridge Loan Facility (Libor + 500)

-

1,500

-

-

Financing arrangements and capital lease obligations 

408

401

369

306

6.25% Senior Notes

400

-

-

-

9.375% Senior Notes

393

-

-

-

7.5% Senior Notes

249

15

15

15

Majority owned dealership debt

245

484

267

157

4.75% Subordinated Exchangeable Notes, due 2009

202

1

1

1

2.5% Senior Convertible Notes

190

-

-

-

9.95% Senior Notes

13

11

8

6

Other

24

60

39

19

Total manufacturing operations debt

2,124

2,472

2,029

1,834

Financial services operations  

Borrowing secured by asset-backed securities, at variable rates, due serially through 2011

2,779

$     

3,104

$     

2,748

$     

2,076

$     

Bank revolvers, variable rates, due 2010

838

1,426

1,354

1,370

Revolving retail warehouse facility, variable rates, due 2010

500

500

500

500

Commercial Paper (Mexican Finance Subsidary)

-

28

117

162

Borrowing secured by operating and finance leases

148

116

133

132

Total financial services operations debt

4,265

$     

5,174

$     

4,852

$     

4,240

$     

Cash & Cash Equivalents

YE 2005

YE 2006

YE 2007

YE 2008

Manufacturing non-GAAP (Unaudited)

776

$        

1,078

$     

716

$        

775

$        

Financial Services non-GAAP (Unaudited)

53

79

61

86

Consolidated US GAAP (Audited)

829

$        

1,157

$     

777

$        

861

$        

(Audited)

70

SEC Regulation G

The

above

non-GAAP

financial

measures

are

unaudited

and

reflect

a

2007

change

in

segment

reporting

methodology.

This

presentation

is

not

in

accordance

with,

or

an

alternative

for,

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.

However,

we

believe

that

non-GAAP

reporting,

giving

effect

to

the

adjustments

shown

in

the

reconciliation

above,

provides

meaningful

information

and

therefore

we

use

it

to

supplement

our

GAAP

reporting

by

identifying

items

that

may

not

be

related

to

the

core

manufacturing

business.

Management

often

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

above

reconciliations

and

to

provide

an

additional

measure

of

performance.

FY 2006

($Billions)

FY 2007

($Billions)

FY 2008

($Billions)

As Reported

As Reported

As Reported

Revenues

$14

$12

$15

$15

$16

($Millions)

($Millions)

($Millions)

Manufacturing Segment Profit

$838

$426

$1,114

$1,000

$1,050

$750

$800

Asset Impairment Charges & Related Costs*

NA

NA

($395)

Manufacturing Segment Profit

$838

$426

$719

$1,000

$1,050

$750

$800

Sub total -

Below the line range:

($443)

($499)

($528)

($500)

($330)

Consolidated Income Before Income Tax

$395

($73)

$191

$410

$460

$1,100

$1,270

$160

$210

Taxes Benefit (Expense)

($94)

($47)

($57)

($40)

($50)

($40)

($50)

Net Income (Loss)

$301

($120)

$134

$370

$410

$120

$160

Diluted EPS

$4.12

($1.70)

$1.82

$5.10

$5.60

$1.65

$2.20

Memo -

Professional fees included above

in

corporate items:

($70)

($224)

($154)

($40)

($30)

($30)

($20)

($40)

($30)

*Related to reductions in Ford engine volumes

Forecast

Original Goal

@

414.5K unit

industry

15+

($590)

Full Year

FY 2009

($Billions)

Goal @ 244K to

256K unit

industry

15+

($Millions)

NA

($Millions)

NA

($590)

($Millions)

NA

$1,600

$1,600

FY 2009

($Billions)

FY 2009

($Billions)

EX-99.2

Exhibit 99.2

Media Contact:	Roy Wiley, 630-753-2627
Investor Contact:	Heather Kos, 630-753-2406
Web site:	www.Navistar.com/newsroom

NAVISTAR PROVIDES GUIDANCE ON 2009 NET INCOME;

EXPECTED TO BE $5.10 TO $5.60 PER DILUTED SHARE

• Fiscal 2009 industry volume forecast at 244,000 to 256,000 units

WARRENVILLE, Ill. (January 5, 2009) - Navistar International Corporation (NYSE:NAV) announced today fiscal 2009 net income guidance prior to its fourth quarter and fiscal 2008 analyst presentation. The company said that based on current market conditions, net income for its fiscal year ending October 31, 2009, should be in the range of $370 million or $5.10 per diluted share to $410 million or $5.60 per diluted share.

“Our ability to continue to execute our business strategy built around customers, products and growth is reflected in our high level of confidence in the earnings guidance announced today,” said Dan Ustian, Navistar chairman, president and chief executive officer. “Our growth in the commercial truck market outside the U.S. and Canada is due in part to our growing military business and expansion into new business opportunities and will factor into our ability to deliver profitability in 2009 despite a weak North American business climate.”

In addition to its earnings guidance for fiscal 2009, the company also gave an estimate of the industry forecast for North America. The company believes the industry forecast for the United States and Canadian retail sales volume for Class 6-8 trucks and school buses for the fiscal year ending October 31, 2009, should total between 244,000 to 256,000 units. Industry volumes totaled 244,100 units in fiscal 2008; volume was among the lowest in more than 30 years.

“Our profitability in 2008 in turbulent economic conditions demonstrates our ability to grow outside our core North American business by growing beyond the cyclicality of our traditional markets into other profitable businesses,” Ustian said.

-More-

Page Two — 2009 Earnings Guidance

GREAT PRODUCTS

• Continued growth in Class 8 market share — Navistar improved its share in the Class 8 market with International^® ProStar^®, the most aerodynamic big-rig in the industry. And the company is positioned for 2009 and beyond with LoneStar^®, the fuel-efficiency leader among premium Class 8 trucks, and MaxxForce^TM big bore engines, which started delivery in the third quarter of fiscal 2008. The company began delivering the LoneStar to customers in November 2008.

• EGR versus SCR strategy — In order to meet the U.S. Environmental Protection Agency’s 2010 emissions standards, Navistar is driving ahead with advancements to its simple, customer-friendly Exhaust Gas Recirculation (EGR) technology, which will be introduced into every MaxxForce^TM engine. Navistar is fully prepared to meet 2010 with its EGR technology, but the company recognizes the need to advocate for its customers in these catastrophic economic times. As the truck industry is impacted by high diesel fuel prices, bankruptcy and price increases, Navistar has led the charge in Washington to advocate engine choice for customers by allowing the purchase of 2007 as well as 2010-compliant technology.

COMPETITIVE COST STRUCTURE

• Truck operations realignment is expected to position company for 2009 and beyond — At the end of 2008, the company restructured its truck operations to maximize efficiencies and improve the cost structure of truck operations in order to capitalize on the momentum and opportunities ahead for Navistar in our core markets and around the world. By integrating and aligning its operations for maximum impact in the marketplace, the company expects to enhance its competitiveness around the world and strengthen its core business in North America.

PROFITABLE GROWTH

• Building a sustainable military business — Navistar Defense, LLC, a part of our Truck segment, continues to develop new offerings that is expected to provide military revenue of approximately $2 billion. The company’s current success and reputation for quality positions it well for the future as the company continues to pursue contracts with the U.S. and allied governments.

-More-

Page Three — 2009 Earnings Guidance

• Growth of Parts business — The company’s focus on responsive customer service and timely parts delivery is reflected in the solid growth of its parts business. This month, Navistar Parts will launch PartSmart^TM, a new value line of parts expected to provide the company additional growth opportunities despite the downturn in its traditional core markets.

• Growing our share of the commercial bus market — Navistar is partnering with other leading manufacturers to develop new vehicles specifically designed for high-growth markets, including a memorandum of understanding with Brazilian bus body maker San Marino Onibus e Implementos LTDA for an integrated commercial bus joint venture. In addition, IC Bus plans to launch a motorcoach that leverages Navistar’s expertise in designing the most fuel-efficient trucks on the road and the performance of the MaxxForce^TM 13-liter engine.

• Expansion of global product lineup and dealer network — Navistar continues to expand its global business. Currently, Navistar is represented by 15 full-service dealerships in 33 locations in the Middle East, including Saudi Arabia and the United Arab Emirates. The company is on track to achieve its long-term goal of deriving 50% of our truck revenues from outside the U.S. and Canada. And the company is also well on the way to its goal of diversifying engine volumes to roughly one-third in North America, one-third in South America and one-third in the rest of the world.

These and other steps to be taken by the company in 2009 is expected to help the company overcome the challenges due to the severe downtown in the North American truck and diesel engine markets and the continued deterioration of the global economic environment.

Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries and affiliates produce International^® brand commercial and military trucks, MaxxForce™ brand diesel engines, IC brand school and commercial buses, and Workhorse^® brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Additional information is available at www.Navistar.com/newsroom.

-More-

Page Four — 2009 Earnings Guidance

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 Item 1A. Risk Factors of our Form 10-K for the fiscal year ended October 31, 2008, which was filed on December 30, 2008. 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.

-30-