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): June 9, 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))

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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 Exhibits 99.1 and 99.2 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 June 9, 2009, the Company filed its Form 10-Q for the period ended April 30, 2009 with the Securities and Exchange Commission. The Company’s press release announcing the filing is attached as Exhibit 99.1 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 2009 second quarter financial results on Tuesday, June 9^th. A live web cast is scheduled at approximately 10:00 AM EDT. Speakers on the web cast will include Daniel C. Ustian, Chairman, President and Chief Executive 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 99.2 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.

PAGE 3

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, the Monaco, Holiday Rambler, Safari, Beaver, McKenzie and R-Vision brand RVs, 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.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit No.	Description	Page
99.1	Press Release
99.2	Slide Presentation for Second Quarter Financial Results Web Cast to be held on June 9, 2009

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, and Item 1A, Risk Factors, included within our Form 10-Q for the period ended April 30, 2009, which was filed on June 9, 2009. 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.

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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: June 9, 2009	/s/ Andrew J. Cederoth
	Andrew J. Cederoth
	Principal Financial Officer

EX-99.1

EXHIBIT 99.1

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

NAVISTAR REPORTS 2Q PROFIT UNDER HISTORICALLY

WEAK MARKET CONDITIONS NOT SEEN SINCE 1962

• Industry retail sales volume for the Class 6-8 U.S. and Canada truck market revised down to between 165,000 and 185,000 units

• Company guidance for fiscal 2009 is $5.20-$5.50 EPS, including Ford settlement effects, and $2.80-$3.10 EPS without Ford impacts, as global recession continues

WARRENVILLE, Ill. (June 9, 2009) – Maintaining course in the face of the global recession, which continues to dampen the U.S. and Canadian truck market, Navistar International Corporation (NYSE: NAV) reported second quarter profits of $12 million, equal to $0.16 per diluted share, on $2.8 billion in net sales and revenues. Although the industry outlook remains challenging, Navistar has taken actions to help mitigate the adverse effects on its profitable growth, sustaining its momentum to deliver another year of expected net income.

The results for the second quarter ended April 30, 2009 were impacted by weak industry sales in every part of Navistar’s commercial business, as compared to the year-ago second quarter. Second quarter earnings were reduced by $31 million, equal to $0.44 per diluted share, from other costs related to the Ford settlement. In addition in the latest period, the company incurred research and development costs, and unanticipated costs related to warranty on products sold in prior periods, partially offset by the benefits from certain out-of-period accounting adjustments. In the second quarter a year ago, Navistar reported net income of $211 million, equal to $2.88 per diluted share, on $3.9 billion in net sales and revenues.

“Although the current growth of our traditional businesses is hamstrung by the global recession, we have nonetheless been able to advance numerous strategic and tactical initiatives that will be key contributors to our future success,” said Daniel C. Ustian, Navistar chairman, president and chief executive officer.

For the first six months of fiscal 2009, Navistar reported net income of $246 million, equal to $3.44 per diluted share, including the positive effect from the settlement with Ford of $155 million, equal to $2.17 per diluted share, compared with $146 million, equal to $2 per diluted share, in the first six months a year ago. First half net sales and revenues amounted to $5.8 billion, compared with $6.9 billion in the year-ago period.

“Continued reductions in our product costs, lower selling, general and administrative expenses and increased market share growth, along with the company’s military business, will enable us to

maintain pace toward a profitable fiscal 2009 despite three consecutive years of dwindling truck volumes,” said Ustian.

The company now projects that total truck industry retail sales volume for Class 6-8 trucks and school buses in the United States and Canada for the fiscal year ending October 31, 2009, will total between 165,000 and 185,000 units, down from the previous forecast of 210,000 to 225,000 units. Industry volumes reached a recent high of 454,700 units in 2006 due to accelerated purchases of trucks (“pre-buy”) in anticipation of higher prices due to stricter emissions standards imposed by the Environmental Protection Agency in 2007. However, the industry is anticipating only a minimal pre-buy in 2009 ahead of 2010 emissions requirements.

Based on second quarter results and company forecasts for the remainder of the year, Navistar reported guidance for net income for its fiscal year ending October 31, 2009, in the range of $200 million, or $2.80 per diluted share, to $225 million, or $3.10 per diluted share, excluding the Ford settlement and related charges. Including results of the Ford settlement, per diluted share earnings should be in the range of $5.20 to $5.50 per diluted share.

“It is now clear that the economic recovery will take longer than had been originally expected. We are addressing this likelihood straight on by maintaining focus on our core product and market initiatives while taking the necessary steps that will allow us to adapt to the rapidly changing marketplace,” said Ustian.

Navistar continues to invest in product leadership and remains focused on key growth initiatives that drive business value. The second quarter of 2009 saw the launch of several new and/or enhanced products from a variety of the company’s business units, including the International^® LoneStar^® Harley-Davidson™ Special Edition, the California Air Resources Board certification of the International^® DuraStar^® Hybrid box van and utility truck and the IC Bus CE Series hybrid bus, the International^® MaxxPro^® Wrecker Mine Resistant Ambush Protected (MRAP) and MaxxPower^TM, a newly branded line of original equipment, factory installed components. The company also recently entered a supply agreement to develop and produce diesel engines for two new Daewoo Bus brand commercial buses for Korea and other global markets.

In addition, the company has made significant reductions to its overall selling, general and administrative expenses to optimize the performance of its business in the most challenging economic conditions in more than 45 years. These overall efforts are expected to yield improvements to the company’s bottom line.

Manufacturing segment profit was $87 million and $494 million, including the impacts of the Ford settlement and other related costs, for the second quarter and first half of 2009, respectively, compared with $316 million and $408 million in the year-ago periods.

Segment Results

Truck—For the second quarter ended April 30, 2009, the truck segment reported a $56 million profit before tax, compared with $209 million profit before tax in the year-ago period. Even though the U.S. and Canadian truck market continued to weaken due to lack of customer demand driven by the downturn in

the economy, Navistar increased its traditional market share during the second quarter and six months ended April 30, 2009. The market share of its Class 8 heavy duty vehicle has been bolstered by an 8 percentage point growth in the second quarter and a 9 percentage point growth in the six months, compared to the same periods in 2008. The increases are primarily driven by market acceptance of the company’s International^® ProStar^®—the most fuel-efficient Class 8 truck on the road, market share gains in severe service and continued U.S. military procurement. Although Navistar continues to make progress on reducing its selling, general and administrative expenses, engineering and product development costs were higher in the second quarter and first half of 2009 due to the investment in new products.

Engine—For the second quarter ended April 30, 2009, the engine segment reported a loss of $84 million before tax, compared with a $51 million profit before tax in the year-ago quarter. The engine segment was near breakeven for the latest quarter excluding the costs of warranty on products sold in prior periods as well as the impacts of costs related to the Ford settlement. Limited demand for heavy duty diesel pickup trucks, coupled with the global economic climate, led to a decline of engine sales worldwide of 38,600 units and 73,500 units in the second quarter and first half of 2009, respectively.

Parts—Bolstered by increased market share as well as revenue growth in military parts business, Parts delivered second-quarter profit before tax of $115 million on sales totaling $577 million, compared with $56 million in profit before tax on sales of $438 million in the prior year second quarter.

Financial Services—Despite very difficult market conditions, the financial services segment (primarily Navistar Financial Corporation (NFC)), delivered an $18 million profit before tax in the second quarter. As a result of this quarter’s strong performance, NFC’s profitability for the six months ended April 30, 2009 continues to show significant improvement over 2008 levels. NFC achieved this performance due to a stable portfolio and improved margin on financing.

During the second quarter, NFC also successfully sold $298 million of asset-backed notes into a bank-sponsored, multi-seller conduit facility. This financing transaction is a natural transition to the efforts to successfully complete, by year end, the company’s targeted refinancing initiatives to ensure NFC’s liquidity.

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, the Monaco, Holiday Rambler, Safari, Beaver, McKenzie and R-Vision brand RVs, 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 and service parts. Another affiliate offers financing services. Additional information is available at www.Navistar.com/newsroom.

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, 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 as modified by Item 1A, Risk Factors of our Form 10-Q for the second quarter ended April 30, 2009, which was filed on June 9, 2009. 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-

Navistar International Corporation and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended April 30,						Six Months Ended April 30,
	2009			2008			2009			2008
(in millions, except per share data)
Sales and revenues
Sales of manufactured products, net	$	2,741		$	3,853		$	5,636		$	6,713
Finance revenues		67			96			142			190
Sales and revenues, net		2,808			3,949			5,778			6,903
Costs and expenses
Costs of products sold		2,295			3,200			4,618			5,663
Restructuring charges		(3	)		—			55			—
Selling, general and administrative expenses		300			364			676			685
Engineering and product development costs		130			99			238			181
Interest expense		57			102			150			269
Other (income) expense, net		22			(4	)		(176	)		(5	)
Total costs and expenses		2,801			3,761			5,561			6,793
Equity in income of non-consolidated affiliates		14			21			31			45
Income before income tax		21			209			248			155
Income tax benefit (expense)		(9	)		2			(2	)		(9	)
Net income	$	12		$	211		$	246		$	146
Basic earnings per share	$	0.16		$	3.00		$	3.45		$	2.08
Diluted earnings per share	$	0.16		$	2.88		$	3.44		$	2.00
Weighted average shares outstanding
Basic		70.8			70.3			71.2			70.3
Diluted		71.3			73.2			71.5			72.9

Navistar International Corporation and Subsidiaries

Consolidated Balance Sheets

	April 30, 2009			October 31, 2008
(in millions, except per share data)	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	718		$	861
Marketable securities		—			2
Trade and other receivables, net		794			1,025
Finance receivables, net		1,655			1,789
Inventories		1,646			1,628
Deferred taxes, net		75			75
Other current assets		161			155
Total current assets		5,049			5,535
Restricted cash and cash equivalents		651			557
Trade and other receivables, net		33			31
Finance receivables, net		1,713			1,948
Investments in and advances to non-consolidated affiliates		154			156
Property and equipment (net of accumulated depreciation and amortization of $1,698 and $1,603, at the respective dates)		1,419			1,501
Goodwill		287			297
Intangible assets (net of accumulated amortization of $84 and $74, at the respective dates)		211			232
Deferred taxes, net		46			41
Other noncurrent assets		94			92
Total assets	$	9,657		$	10,390
LIABILITIES, REDEEMABLE EQUITY SECURITIES, AND STOCKHOLDERS’ DEFICIT
Liabilities
Current liabilities
Notes payable and current maturities of long-term debt	$	579		$	665
Accounts payable		1,525			2,027
Other current liabilities		1,160			1,183
Total current liabilities		3,264			3,875
Long-term debt		5,070			5,409
Postretirement benefits liabilities		1,995			1,646
Deferred taxes, net		97			103
Other noncurrent liabilities		664			709
Total liabilities		11,090			11,742
Redeemable equity securities		14			143
Stockholders’ deficit
Series D convertible junior preference stock		4			4
Common stock ($0.10 par value per share, 110.0 shares authorized, 75.4 shares issued at both dates)		7			7
Additional paid in capital		2,104			1,966
Accumulated deficit		(2,146	)		(2,392	)
Accumulated other comprehensive loss		(1,252	)		(943	)
Common stock held in treasury, at cost (5.1 and 4.1 shares, at the respective dates)		(164	)		(137	)
Total stockholders’ deficit		(1,447	)		(1,495	)
Total liabilities, redeemable equity securities, and stockholders’ deficit	$	9,657		$	10,390

Navistar International Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended April 30,
	2009			2008
(in millions)
Cash flows from operating activities
Net income	$	246		$	146
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		140			156
Depreciation of equipment held for or under lease		27			30
Deferred taxes		(2	)		5
Amortization of debt issuance costs		8			10
Stock-based compensation		11			2
Provision for doubtful accounts		28			18
Impairment of goodwill and intangibles		7			—
Equity in income of non-consolidated affiliates		(31	)		(45	)
Dividends from non-consolidated affiliates		47			29
(Gain) loss on sales of affiliates		1			(4	)
(Gain) loss on sale of property and equipment		3			(2	)
Loss on sale and impairment of repossessed vehicle inventory		15			4
Loss on sale of finance receivables		25			7
Restructuring charges		55			—
Changes in other assets and liabilities		(93	)		(35	)
Net cash provided by operating activities		487			321
Cash flows from investing activities
Purchases of marketable securities		(354	)		(42	)
Sales or maturities of marketable securities		356			11
Net change in restricted cash and cash equivalents		(96	)		(316	)
Capital expenditures		(77	)		(103	)
Purchase of equipment leased to others		(18	)		(14	)
Proceeds from sales of property and equipment		4			19
Investments and advances to non-consolidated affiliates		(14	)		(4	)
Proceeds from sales of affiliates		3			19
Other investing activities		—			(1	)
Net cash used in investing activities		(196	)		(431	)
Cash flows from financing activities
Proceeds from issuance of securitized debt		321			813
Principal payments on securitized debt		(658	)		(980	)
Proceeds from issuance of non-securitized debt		259			74
Principal payments on non-securitized debt		(362	)		(8	)
Net increase in notes and debt outstanding under revolving credit facilities		71			164
Principal payments under financing arrangements and capital lease obligations		(24	)		(51	)
Debt issuance costs		(2	)		(7	)
Stock repurchase		(29	)		—
Net cash provided by (used in) financing activities		(424	)		5
Effect of exchange rate changes on cash and cash equivalents		(10	)		3
Decrease in cash and cash equivalents		(143	)		(102	)
Cash and cash equivalents at beginning of period		861			777
Cash and cash equivalents at end of the period	$	718		$	675

Navistar International Corporation and Subsidiaries

Segment Reporting

(Unaudited)

We define segment profit (loss) as earnings (loss) before income tax. Our results for interim periods are not necessarily indicative of results for a full year. Selected financial information is as follows:

	Truck			Engine			Parts		Financial Services(A)			Corporate and Eliminations			Total
(in millions)
Three Months Ended April 30, 2009
External sales and revenues, net	$	1,773		$	434		$	534	$	67		$	—		$	2,808
Intersegment sales and revenues		—			158			43		21			(222	)		—
Total sales and revenues, net	$	1,773		$	592		$	577	$	88		$	(222	)	$	2,808
Depreciation and amortization	$	45		$	32		$	1	$	6		$	4		$	88
Interest expense		—			—			—		38			19			57
Equity in income (loss) of non-consolidated affiliates		(10	)		22			2		—			—			14
Segment profit (loss)		56			(84	)		115		18			(84	)		21
Capital expenditures(B)		19			14			3		1			2			39
Three Months Ended April 30, 2008
External sales and revenues, net	$	2,717		$	751		$	385	$	96		$	—		$	3,949
Intersegment sales and revenues		—			188			53		21			(262	)		—
Total sales and revenues, net	$	2,717		$	939		$	438	$	117		$	(262	)	$	3,949
Depreciation and amortization	$	45		$	39		$	2	$	5		$	6		$	97
Interest expense		—			—			—		67			35			102
Equity in income (loss) of non-consolidated affiliates		(3	)		23			1		—			—			21
Segment profit (loss)		209			51			56		19			(126	)		209
Capital expenditures(B)		33			28			1		2			2			66
Six Months Ended April 30, 2009
External sales and revenues, net	$	3,834		$	783		$	1,019	$	142		$	—		$	5,778
Intersegment sales and revenues		1			318			98		39			(456	)		—
Total sales and revenues, net	$	3,835		$	1,101		$	1,117	$	181		$	(456	)	$	5,778
Depreciation and amortization	$	85		$	59		$	3	$	12		$	8		$	167
Interest expense		—			—			—		102			48			150
Equity in income (loss) of non-consolidated affiliates		(17	)		44			4		—			—			31
Segment profit (loss)		170			105			219		17			(263	)		248
Capital expenditures(B)		33			34			6		1			3			77
Six Months Ended April 30, 2008
External sales and revenues, net	$	4,600		$	1,385		$	728	$	190		$	—		$	6,903
Intersegment sales and revenues		—			340			111		43			(494	)		—
Total sales and revenues, net	$	4,600		$	1,725		$	839	$	233		$	(494	)	$	6,903
Depreciation and amortization	$	86		$	76		$	4	$	10		$	10		$	186
Interest expense		—			—			—		186			83			269
Equity in income (loss) of non-consolidated affiliates		(3	)		46			2		—			—			45
Segment profit (loss)		218			85			105		(6	)		(247	)		155
Capital expenditures(B)		55			39			2		3			4			103
As of April 30, 2009
Segment assets	$	2,585		$	1,281		$	700	$	4,561		$	530		$	9,657
As of October 31, 2008
Segment assets		2,796			1,374			711		4,879			630			10,390

A. Total sales and revenues in the Financial Services segment include interest revenues of $80 million and $163 million for the three months and six months ended April 30, 2009, respectively, and $108 million and $212 million for the same periods in 2008.

B. Exclusive of purchase of equipment leased to others.

SEC Regulation G

The financial measures presented below are unaudited and non-GAAP. The measures are 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 below, 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 below reconciliations, and to provide an additional measure of performance.

	FY 2009							2Q08	2Q09			FY08 Q2 YTD	FY09 Q2 YTD
	Non GAAP Goal			Estimated	Goal			As Reported	Non GAAP		As Reported	As Reported	Non GAAP		As Reported
	Without Ford Settlement			Ford Settlement Impacts	With Ford Settlement				Without Ford Settlement	Ford Settlement Impacts	With Ford Settlement		Without Ford Settlement	Ford Settlement Impacts	With Ford Settlement
U.S. and Canada industry	165K		185K		165K		185K
		($Billions)				($Billions)		($Billions)	($Billions)		($Billions)	($Billions)	($Billions)		($Billions)
Sales and revenues, net	$11.5		$12.0	NA	$11.5		$12.0	$3.9	$2.8	NA	$2.8	$6.9	$5.8	NA	$5.8
		($Millions)		($Millions)		($Millions)		($Millions)	($Millions)	($Millions)	($Millions)	($Millions)	($Millions)	($Millions)	($Millions)
Manufacturing segment profit
(excludes Ford settlement, & related charges)	$745		$770	NA	$745		$770	$316	$125	NA	$125	$408	$336	NA	$336
Ford settlement & related charges		NA		~$175		~$175		NA	NA	($38)	($38)	NA	NA	$158	$158
Manufacturing segment profit	$745		$770	$175	$920		$945	$316	$125	($38)	$87	$408	$336	$158	$494
Below the line items		~($520)		($0)		~($520)		($107)	($72)	$6	($66)	($253)	($246)	$0	($246)
Income (Loss) before income tax*	$225		$250	$175	$400		$425	$209	$53	($32)	$21	$155	$90	$158	$248
Income tax benefit (expense)		~($25)		($4)		~($29)		$2	($10)	$1	($9)	($9)	$1	($3)	($2)
Net income (loss)	$200		$225	$171	$371		$396	$211	$43	($31)	$12	$146	$91	$155	$246
Diluted earnings (loss) per share
($’s)	$2.80		$3.10	$2.40	$5.20		$5.50	$2.88	$0.60	($0.44)	$0.16	$2.00	$1.27	$2.17	$3.44
Weighted average shares outstanding: diluted		~72M		~72M		~72M		73.2M	71.3M	71.3M	71.3M	72.9M	71.5M	71.5M	71.5M
Memo – professional fees included in below the line items	($40)		($30)		($40)		($30)	($40)	($6)		($6)	($103)	($21)		($21)

EX-99.2

2nd Quarter 2009 Earnings

Presentation

June 9, 2009

Exhibit 99.2

Safe Harbor

Statement

2

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,

included

within

our

Form

10-K

for

the

year

ended

October

31,

2008,

which

was

filed

on

December

30,

2008, and Item 1A, Risk Factors, included within our Form 10-Q for the period ended April 30, 2009,

which

was

filed

on

June

9,

2009.

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.

Other Cautionary Notes

•

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.

3

Summary

•

2009 Q2 Results

•

2009 Outlook

•

2010 and beyond

4

Q2 FY09 Financial Information

5

Consolidated Revenues

($ in millions)

Manufacturing Segment Profit ($ in millions)

Diluted Earnings (loss) per share

U.S. & Canada Class 6-8 Retail Industry

*Excludes

$(38)

million

in

manufacturing

segment

profit

and

$(31)

million

in

net

income

for

Settlement

Effects

(see

page

62

for

additional

detailed

disclosure

on

Ford

settlement

effects)

Note:

This

slide

contains

both

GAAP

and

non-GAAP

information,

please

see

the

Reg

G

in

appendix

for

detailed

reconciliation.

6

•

Navistar quarterly truck shipments down as much as 40% (from same

period last year)

–

FY07 –

28,300

–

FY08 –

27,200

–

FY09 –

16,400

–

Used truck environment

–

Trucks priced to current market

–

Used truck sales increasing/inventory sequentially down

•

Navistar quarterly engine shipments:

–

FY07 –

94,700

–

FY08 –

102,500

–

FY09 –

63,900

•

Parts

–

Traditional parts industry off 14%, but our traditional market

share is up

•

Financial Services

–

Retail acquisitions are down YOY by $112M or 24%

–

Wholesales balances are at the lowest point since 2004

Quarterly Truck Shipments

Profitable at lowest point in the cycle

Q2 FY09 Shipments

Quarterly Engine Shipments

Medium

Truck

2Q09 Class 6-8 Market Share was 35%

60% Market Share

2Q09

School

Bus

39% Market Share

2Q09

36% Market Share

2Q09

Severe

Service

Truck*

Heavy

Truck

23% Market Share

2Q09

•

#3 in YTD April Market Share

•

Executing on strategy

-

New Products

(ProStar

®

,LoneStar

®

)

•

#1 In Market Share despite

industry consolidation

•

MaxxForce

®

EGR

engines

•

#1 in Market Share

•

A leader in Medium Hybrid

•

MaxxForce

®

EGR

engines

•

#1 in Market Share

•

3rd straight year of

increasing market share

•

MaxxForce

®

EGR

engines

FY07

60%

FY08

55%

2Q09

60%

YTD APR

58%

*Note: Excludes U.S. Military shipments. See market share slide in appendix for shipments with and without military shipments

FY07

36%

FY08

36%

2Q09

39%

YTD APR

35%

FY07

25%

FY08

27%

2Q09

36%

YTD APR

34%

FY07

15%

FY08

19%

2Q09

23%

YTD APR

24%

7

Combined Class 6-8 Market Share –

FY07: 26%; FY08: 29%; 2Q09: 35%; YTD APR: 32%

8

Q2 FY09 Financial Information

Q209

EPS**

Reported Earnings

$0.16

Settlement Effects*

$0.44

Total (Excluding Ford Effects)

$0.60

Other Significant Data:

Higher Engine Pre-existing Warranty

$45M

Higher R&D

$31M

*  See Reg G in appendix

**Note:  Actual reported earnings include out-of-period adjustments.  For additional information, see the form 10Q for the quarterly period ended April 30, 2009.

•

Overall quality of our engines continues to improve

•

Our 2008 R/1000 level is best since 1994 even though the post-2007 engines are

much more complex.

•

Cost per repair on 2007 emission engines has increased

R/1000 w/o programming (index)

Warranty Cost Per  Engine

Q2 FY09 Financial Information –

Engine Warranty

Impact of Settlement on 2009

10

Note:  This slide contains non-GAAP information, see the Reg G in appendix for detailed reconciliation

Business Impact of Settlement

•

Loss of automotive customer

•

Less intensive capital/product requirements

•

Restructured business

•

Impact of increased equity stake in BDT & BDP

Settlement and Related Restructuring - 2009 PBT Impact

(in millions)

Q1 Actual

Q2 Actual

Full Year

Guidance

Cash

200

$               

200

$               

Warranty

75

75

Restructuring charges

(58)

3

(65)

+/-

Other related income and expense

(27)

(35)

(35)

+/-

190

$               

(32)

$                

175

$               

+/-

Traditional U.S. and Canada Retail Sales

Class 6 –

8 Industry Landscape

11

Worst truck Class 6-8 Truck industry in

more than 45 years

•

1991 –

225,000

•

1992 –

238,000

•

2003 –

263,000

•

2008 –

244,100

Reality:

•

Age of fleet increasing

•

Fuel prices down vs. 2008

•

Ability to finance

•

Used truck market

•

EGR vs. SCR

Lowest retail industry since 1962

Lowest retail industry since 1962

Note: Industry guidance includes military orders sold to the U.S.

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

21,000

23,000

Class 6-7 -

Medium

126,000

129,600

96,000

72,700

74,900

99,200

104,600

110,400

88,500

59,600

34,000

42,000

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

110,000

120,000

Total Industry Demand

445,800

421,800

287,600

263,400

263,400

344,700

414,300

454,700

319,000

244,100

165,000

185,000

Historical Information

FY 09

Guidance

Revised (6/09/09)

Actual

United

States

and

Canadian

Class

6-8

Truck

Industry

-

Retail

Sales

Volume

FY09 Guidance

12

Navistar Consolidated Revenues ($ in millions)

Navistar Engine Shipments

Truck U.S. & Canada Class 6-8 Retail Industry

•

Truck Class 6-8 truck industry:

–

165K to 185K

•

Navistar Engine shipments:

–

FY09: 255K to 275K

•

Parts

–

Segment revenues will be between $2.2

billion and $2.4 billion

•

Financial Services

–

Profitable

Economic Impact on 2009/2010

13

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

International Dealer Stock Inventory (Units)

*

Lowest point in over 10 years; has been decreasing every month since March 2007

Truck Production 2009

Severe

Service

FY2008

FY2009

Medium

Heavy

Bus

Actual

Expected

14

Commodities 2009

Commodities 2009

•

Reduced volatility & lessened market

impact through:

–

Contract structures

–

Hedging activities

•

2009 costs will decline with a lag to

the market

•

Market consensus: Commodities’

prices will recover starting late 2009

–

Renegotiating contracts

–

Forward locking prices

15

Raw Material Market Pricing

2007

2008

High

May 09

Spot

Sheet steel

$538

$1,125

$395

Scrap steel

$311

$890

$215

Crude oil

$72

$145

$59

Platinum

$1,360

$2,275

$1,106

Aluminum

$1.23

$1.54

$0.71

Copper

$3.28

$4.09

$2.00

Market vs. Navistar Index

Full Year 2009 Guidance

16

Note:

This

slide

contains

non-GAAP

information,

please

see

the

Reg

G

in

appendix

for

detailed

reconciliation

2009 Updated EPS Guidance

3/11/09

6/9/09

Guidance

Guidance

Prior EPS Guidance *

$5.10 to $5.60

$5.10 to $5.60

Key Challenges

Industry Volume Reduction to 210,000 to 225,000

(-

-

-)

(-

-

-)

Industry Volume Reduction to 165,000 to 185,000

(-

-

-)

Warranty

(-

-)

R&D spending

(-)

Offsetting Actions

Lower commodity costs / cost reductions

+

+

Blue Diamond JV operational impact

+

+

Military revenue:  $2.7B to $3.0B

+

+

Market share

+

Parts profitability

+

SG&A

+

Revised EPS Guidance*

$5.10 to $5.60

$2.80 to $3.10

Settlement and Restructuring

$2.45 +/-

$2.40 +/-

Revised EPS Guidance -

Including Settlement & Restructuring*

$7.55 to $8.05

$5.20 to $5.50

* Note:  Excludes settlement and related restructuring as well as potential

additional facility rationalization

Full Year 2009 Guidance

17

Despite the lowest retail industry since 1962,

we expect to deliver EPS of $2.80 to $3.10

while continuing to invest in the future

Mfg. Segment Profit ($M)

Actions in 2009 for 2010 and Beyond

•

Truck strategy

–

U.S. and Canada

–

Environmental strategy

–

Mahindra

–

Cat J.V. pending

–

Monaco

–

Commercial bus

–

Military

•

Engine strategy

–

MaxxForce

®

Big Bore

–

Global expansion

•

Corporate

–

Pension

–

Capital structure

18

0%

5%

10%

15%

20%

25%

30%

35%

FY 2007

Retail Share

FY 2008

Retail Share

Q2009

Retail Share

Q2009

Order Share

Combined Class 8*

Retail Market

Share

Order Receipt

Share

Actions in 2009 for 2010 and Beyond

Profitable Growth: Class 8

*Excludes U.S. Military shipments

19

Actions in 2009 for 2010 and Beyond

Supply Base and Competitor Migration South

•

Competitor:

x

•

Supplier:  

OEM         Mexico

OEM         Exited business

OEM         Consolidated

operations

Supplier 1         Nuevo

Supplier 2         Mexico

Supplier 3         San Luis

Supplier 4         Texas

•

Customer Growth

in Southern

corridor:

Escobedo Plant

x

x

x

Chatham Plant

20

Actions in 2009 for 2010 and Beyond

2010 Emission Strategy

21

How EGR Technology Works

Competitor

“A”

–

announced

its

Environmental

Protection Agency (EPA) 2010 emissions reduction

technology

using

selective

catalytic

reduction

(SCR)

will

carry

a

surcharge

of

$9,600.

Competitor

“B”

–

“anywhere

from

$8,000

to

$10,000

is

a

range

that

everybody

is

aware

of.

There's certainly no secret about that.”

Navistar’s strategy is to price competitively.

Actions in 2009 for 2010 and Beyond

Navistar Environmental Strategy

22

Red

Bull

Purchases

New

International

®

DuraStar

Hybrid

Delivery

Trucks

Trucks save 30%-40% fuel costs while

reducing CO2 emissions

UPS, EPA, Eaton, Navistar Agree: “Hydraulic

Hybrid Vehicles Ready for Prime Time”

Development Strategy:

Provide time for

technology progress

EPA rewards providers for cleaning up

the environment sooner

Advanced EGR provides the Platform to

Continued Emissions Improvement

The best technology will continue to improve…

Electronics and

Control Strategies

Advanced Fuel

Injection Technology

Higher injection pressure

3000 bar

Proprietary Combustion

Bowl Designs

More complete burn

Twin turbochargers

Air-Management Systems

TM

EPA 2010 Strategy

–

Navistar

high

volume

engines

are

better

than

standard

today

–

Good for environment and best 2010 solution for customer

–

Several

competitors

have

used/use/and

will

use

credits

–

Banking

credits

provide

environmental

benefits

that

would

not

be available without the existence of such programs.

23

Actions in 2009 for 2010 and Beyond

Navistar Environmental Strategy

Actions in 2009 for 2010 and Beyond

Mahindra JV

24

Bus -

#1 Leader in School Bus

Overall Commercial Vehicle Industry

Truck 

–

Launch of first new products are expected

to be available late 2009

–

Full range of up to 49 ton tractors and

heavy dump trucks 8X2 or 8X4 more

than 31 tons

–

1

st

half of 2010 launch new

passenger bus

–

$130 to $150 million total revenue

projected for 2010

Note;  Mahindra FY –

April to March

Mahindra/Navistar JV is a 51/49%

Actions in 2009 for 2010 and Beyond

Caterpillar/Navistar Strategic Alliance/Joint Venture

25

•

Strategic

alliance

to

manufacture

a

heavy-duty

Caterpillar vocational truck

•

Manufactured by Navistar at Garland, TX

•

Industry dynamics

-

Market size historically has ranged from 40K

to 80K. 1/3 of the market is Mid-range diesels

(MRD) and 2/3 of the market is Heavy-duty

diesel (HDD)

-

Navistar severe service market share in FY08

was 27%. (MRD was 40% and HDD was

13%)

•

Production expected in early 2011

•

$200 to $300 million revenue projected at full

production

Global Commercial Truck Markets Outside of N.A.

North America Caterpillar Vocational

•

50/50

joint

venture

for

commercial

trucks

outside

of N.A. 

•

Leverages the complementary strengths of both

companies

-

CAT

–

distribution

-

Navistar

–

manufacturing

and

product

development

•

Initial

markets

–

Australia,

Brazil,

China,

Russia,

South Africa and Turkey

•

First products are expected to be available second

half of 2009

•

$150 to $250 million total JV revenue projected for

2010 on volume of 1,500 to 2,500 units*

•

$300 to $400 million total JV revenue projected for

2011 on volume of 3,000 to 4,000 units*

*NOTE: Unit projections are the opinion of Navistar only

Actions in 2009 for 2010 and Beyond Monaco

26

27

Transaction Overview:

•

Acquisition price -

$47 million, closed on

June 4, 2009

•

Expected revenue of $600 million to $1 billion

by end of 2011

•

Five manufacturing facilities

•

All trademarks and intellectual property

•

Acquiring assets at the lowest point in over

30 years

•

Consistent with Navistar strategy of

controlling our destiny

Type:  Class A

Type:  Class C

Type:  Towable

Class A Industry Sales

22

10

14

19

33

42

34

33

41

42

35

29

24

27

32

37

33

37

38

43

49

41

33

40

42

41

37

32

29

16

7

0

5

10

15

20

25

30

35

40

45

50

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

RVIA: University of Michigan Forecast Baird Research

(in thousands)

Actions in 2009 for 2010 and Beyond Monaco

Monaco has a full line product offering and is a leader in the Class A market

Actions in 2009 for 2010 and Beyond

Leveraging

Our

Assets

–

Midibus

and

Motorcoach

Opportunities

28

Industry Dynamics

•

Neobus:  A well known and growing body

manufacturer in Brazil

•

Large market in South America

•

Emerging market in Mexico driven by

government funding

•

Low cost/high quality design capability

•

Long-term potential for U.S. and Canada

North America Motorcoach

Midibus

-

Integrated Commercial

Industry Dynamics

•

Growing market

•

U.S. and Canada market: 2,000 annually

•

Current manufacturers niche players

•

Existing distribution

•

Prevailing engines all exiting in 2010

•

Preliminary discussions with #1 carrier

NOTE:

J.V.

Pending

-

MOU

with

San

Marino

(Neobus)

for

integrated 

commercial bus body J.V. assembly plant in Mexico

Actions in 2009 for 2010 and Beyond

Military –

Leveraging our Assets

29

Enablers for our Success

•

Survivability –

success determined by end

customer

•

Production capability

•

Engineering –

1,200 engineers

-

Rapid response

•

Leverage commercial supply base

•

Sustainment

-

1,100 locations worldwide

Commercial

Military

End Customer

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

Actions in 2009 for 2010 and Beyond

Military –

Full Product Portfolio

30

More than 20K Units

invoiced from 2005

through April 2009

Actions in 2009 for 2010 and Beyond

Military:  Foreign Military Sales Opportunities

31

Delivered in 2009

OUVS (Operational Utility

Vehicle System)

•

Test vehicles to be

delivered in fall 2009

•

2 Categories –

Large and

Small

•

MXT platform

•

2,000 –

4,000 units

SMP (Standard Military

Pattern Vehicles)

•

Final RFP Nov 2009

•

Final Award 1

st

half 2010

•

1,500 units

Other  Opportunities

•

More than 15 countries

identified for COTS and

MRAP opportunities

Future Opportunities

UK

•

Tactical Support Vehicle

(TSV) 

•

262 vehicles

•

Deliveries to begin later

this summer

Canada

•

Medium Support Vehicle

System (MSVS) program

•

1,300 units

•

Deliveries to be

completed in first half of

calendar 2010

Taiwan

•

Delivered ~260 units

YTD09

Actions in 2009 for 2010 and Beyond

Military:  FY09 Major U.S. Solicitation Programs

32

M-ATV

Solicitation Overview

•

M-ATV is a new generation of vehicles with

MRAP survivability

•

Production contract expected June 26, 2009

•

2,080 unit requirement expected to more than

double

•

New volume: Approximately 5,000-10,000

units

Solicitation Overview

•

FMTV is the military’s second largest tactical

wheeled vehicle program

•

Government intends to award contract in July

•

Projected volume between 2010 and 2014

12,400 vehicles and 10,900 trailers

FMTV

Actions in 2009 for 2010 and Beyond

Innovative Solution

33

Proven

Structural Base

from CAT C15

Existing

High-Tech

Components

from MF13

Crankcase & Head

Crank & Camshaft

Connecting Rods

Air Management

Fuel System

Electronic Controls

Actions in 2009 for 2010 and Beyond

Engine

34

•

In the News:

–

Navistar Engine Group to Supply V8 Diesels to Capacity of Texas

–

Navistar Enters Engine Supply Agreement with Developer of Daewoo

Commercial Buses

–

GM South America

•

U.S. and Canada Truck Growth

–

Big Bore Engines

–

EGR Strategy

•

Global Opportunities

–

Mahindra Navistar Automotives Limited J.V.

–

Cat/Nav

Global Products J.V.

•

Niche Customers

–

Military

–

Marine

U.S./Canada Truck Growth

Grow engine business from 346K engines in FY08 to 460K by end of

FY13

Global Opportunities

Niche Customers

460,000 Engines  -

FY13

11/13L

15L

CAT/NAV JV

Military

Marine

Other OEM

North

America

South

America

Financial Summary

•

Manufacturing Cash

–

Liquidity

–

2009 Outlook and Actions

•

Financial Services (NFC)

–

Liquidity

–

Funding actions

35

Manufacturing Operations

36

•

Manufacturing operations cash

Goal

October 2008

April 2009

October 2009

–

Manufacturing Cash

$ 777M

$  594M

$ 600M-

$700M

•

Key drivers

–

Truck cycle/business performance

–

Emissions strategies

–

Working capital

–

Capital spending

–

Pension

•

Capital structure

–

Low Cost committed facility -

2012

Note:  This slide contains both GAAP and non-GAAP information, please see the Reg G in appendix for detailed reconciliation.

Financial Services

37

•

Navistar Financial: $1.1 billion of liquidity

Liquidity

–

Bank revolver: $226M

–

Dealer floor plan: $353M

–

Retail facilities: $504M

Actions

–

Completed retail securitization in Q2

–

Outlook improved for securitization markets

–

Confident in our refinancing strategies/actions

Leveraging

What We Have and What Others Have Built

Despite the lowest retail industry since 1962,

we expect to deliver EPS of $2.80 to $3.10

while continuing to invest in the future

*2009

EPS

goal

including

Settlement

Effects

is

$5.20

to

$5.50.

See appendix for additional detailed disclosure on settlement effects

38

39

Summary

Note:  This

slide

contains

non-GAAP

information,

see

the

Reg

G

in

appendix

for

detailed

reconciliation

2009 Revenue/EPS Goal based on U.S. and Canada Industry of 165K to 185K

$11.5

$12.0

2.80

$      

3.10

$      

Opportunities/Risks:

U.S. and Canada Industry

+

+

+

+

Market share

2010 Emissions Strategy

+

+

+

+

Acquisition of Monoco

+

+

+

+

Blue Diamond Truck and Parts JVs

+

+

+

+

Engine

+

+

+

+

Mahindra JV

CAT JV

?

?

Military

?

?

?

?

Commodities

?

?

Post Retirement

?

?

2010 Revenue/EPS Goal

+

+

+

+

N/A

N/A

Revenue

EPS

FY 2010

neutral

neutral/up

neutral/up

N/A

marginally better

Appendix

40

2009 Guidance without Ford settlement effects*

($ Millions (excluding EPS))

Truck Industry Units

165K

to

185K

Mfg. Segment Profit

$745

to

$770

Below the line items

~$(520)

Profit Before Tax

$225

to

$250

Net Income

$200

to

$225

EPS

$2.80

to

$3.10

# of shares

~72M

41

*This

slide

contains

non-GAAP

information,

please

see

the

Reg

G

in

appendix

for

detailed

reconciliation

Guidance

NFC Liquidity Remains Strong

42

•

NFC

had

total

available

undrawn

committed

funding

of

$1.1

billion

at

4/30/2009

•

NFC

has

continued

to

obtain

access

to

bank

conduit

markets

to

fund

retail

note

acquisitions;

closed

$298

million

conduit

sale

in

April

•

We expect NFC profitability to rebound in 2009

–

Margins improving

–

Portfolio quality stabilizing for several quarters

–

Interest rates stabilizing

•

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

–

Over $1.5B 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

•

$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

•

$1.4B 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)

•

Current situation

–

~$1B funding facility

(NFSC)

–

Available $353.5 million

•

NFSC terms

–

Bank conduit portion 

(VFC) renewed October

2008

–

Public portion matures

February 2010

Off-balance sheet

Blue Diamond Impact –

Opportunity for 2009

•

Navistar’s interest in BDP and BDT will increase to 75%

•

Balance sheet information for BDP is insignificant to our

consolidated balance sheet

•

Accounting impacts yet to be determined

43

2008

2007

2006

(Unaudited)

(Unaudited)

(Unaudited)

Net income  (in millions)

$172

$156

$180

Summarized

statements

of

operations

information

from

BDP’s

financial

statement for the twelve months ended December 31

Market Share –

U.S. & Canada School Bus and Class 6-8

44

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

YTD APR

Bus (School)

60%

60%

59%

59%

60%

57%

57%

48%

58%

55%

56%

60%

NA

NA

58%

Medium (Class 6-7)

37%

34%

34%

37%

36%

34%

35%

39%

36%

36%

30%

39%

NA

NA

35%

   Heavy (LH & RH)

16%

12%

15%

17%

15%

16%

15%

19%

25%

19%

24%

23%

NA

NA

24%

Severe Service

24%

28%

26%

32%

27%

35%

36%

34%

41%

37%

45%

49%

NA

NA

46%

Combined Class 8

18%

17%

19%

22%

19%

23%

23%

25%

30%

25%

31%

33%

NA

NA

31%

Combined Market Share

25%

25%

27%

31%

27%

29%

29%

30%

35%

31%

33%

38%

NA

NA

35%

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

YTD APR

Bus (School)

60%

60%

59%

59%

60%

57%

57%

48%

58%

55%

56%

60%

NA

NA

58%

Medium (Class 6-7)

37%

34%

34%

37%

36%

34%

35%

39%

36%

36%

30%

39%

NA

NA

35%

   Heavy (LH & RH)

16%

12%

15%

17%

15%

16%

15%

19%

25%

19%

24%

23%

NA

NA

24%

Severe Service

23%

26%

24%

28%

25%

28%

26%

26%

29%

27%

32%

36%

NA

NA

34%

Combined Class 8

18%

16%

19%

21%

18%

20%

19%

21%

26%

22%

26%

28%

NA

NA

27%

Combined Market Share

25%

25%

27%

31%

26%

27%

27%

28%

32%

29%

30%

35%

NA

NA

32%

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

2007

2008

2007

2008

2009

2009

Truck Shipments

45

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

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

Fiscal year 2009

1Q09

2Q09

3Q09

4Q09

YTD April

BUS

2,700

3,100

NA

NA

5,800

MEDIUM

3,200

3,400

NA

NA

6,600

HEAVY

6,100

3,200

NA

NA

9,300

SEVERE

2,600

2,600

NA

NA

5,200

TOTAL

14,600

12,300

NA

NA

26,900

MILITARY (U.S. & Foreign)

2,500

2,100

NA

NA

4,600

EXPANSIONARY

2,600

2,000

NA

NA

4,600

WORLD WIDE TRUCK

19,700

16,400

NA

NA

36,100

World Wide Engine Shipments

46

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

Navistar

1st Q

2nd Q

3rd Q

4th Q

YTD April

Ford

14,100

29,000

NA

NA

43,100

Other OEM's (All Models)

22,500

22,200

NA

NA

44,700

Engine Shipments to Truck Group

14,300

12,700

NA

NA

27,000

Total Shipments

50,900

63,900

NA

NA

114,800

2008

World Wide Engine Shipments 

2007

2009

Order Receipts –

U.S. & Canada

47

Percentage

2009

2008

Change

Change

2,800

3,800

(1,000)

(26)

2,500

4,000

(1,500)

(38)

Class 8 heavy trucks

3,700

5,300

(1,600)

(30)

Class 8 severe service trucks*

2,700

1,700

1,000

59

11,700

14,800

(3,100)

(21)

6,400

7,000

(600)

(9)

* Includes 200 and 1,100 units in the three months ended April 30, 2009 and 2008, respectively, related to military contracts

Total Navistar

April 30,

Three Months Ended

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

Combined Class 8 (Heavy and Severe Service)*

"Traditional" Markets

School buses

Class 6 and 7 medium trucks

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

International

Dealer

Stock

Inventory

(Units)

*

U.S. and Canada Dealer Stock Inventory

48

Lowest point in over 10 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.

Frequently Asked Questions

49

Q1:

What should we assume for capital expenditures in 2009?

A:

For 2009, excluding our NFC and Dealcor acquisition of vehicles for leasing, we expect our

capital expenditures to be below our normal $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.

Q3:

How many Dealcor dealers did you have as of April 30, 2009?

A:

Of our 291 primary NAFTA dealers, we have ownership interest in 20 Dealcor dealers as of

April 30, 2009. 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

2009?

A:

Direct material costs have been impacted by industry-wide price increases in commodities,

which affected all of our operations excluding financial services.  Costs related to steel,

precious metals, resins, and petroleum products increased by $15 million and $64 million during

the quarter and six months ended April 30, 2009, respectively, as compared to an increase of

$13 million and $20 million for the same respective periods in 2008 and a total increase of $97

million during the twelve months ended October 31, 2008. 

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.

50

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 expects to be the first manufacturer to

offer

a

fully

integrated

Alternate

Power

Unit

(APU)

when

the

anticipated

launch

of

MaxxPower

TM

APU

occurs later this year. The MaxxPower

TM

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

greenhouse 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.

51

Frequently Asked Questions

52

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 significant facility until

October 2009.

Q10:

How do you fund retail notes?

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 qualified

retail and lease securitization debt.

Frequently Asked Questions

53

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 well as 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 in either public or

private deals. 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 NFC portfolio performing? 

         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 $20 million in FY07 to      

$32 million in FY08.  During our first two quarters of FY09, our provision for credit losses dropped to  

$12.4 million. We saw signs of portfolio improvement toward the end of FY08; it is difficult to say if this

decrease is sustainable in the current environment.

A:

Frequently Asked Questions

54

Q15:

How are your repossessions trending?

A:

Repossessions

were

slowing

down

at

the

end

of

FY08,

and

our

rate

of

repossessions

significantly

declined in the first and second quarter of FY09.

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

will require increased repossession activity in the future.

Q16:

How are your dealers doing?

A:

We think our dealers, which have always been one of our strengths, are well positioned. We traditionally

have

not

had

any

significant

dealer

losses

and

expect

that

trend

to

continue

in

the

future.

Q17:

Are your customer 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

has

increased

for all companies, we have passed 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 (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.

Q20:  What is your total amount of capacity at NFC?

A:    

Total

availability

in

our

funding

facilities

is

more

than

$1.1

billion

as

of

April

30

,

2009.

th

Frequently Asked Questions

55

Q21:

Are you able to take advantage of any TALF or TARP money?

A:

We

are

evaluating

accessing

TALF

funding,

if

appropriate,

when

we

issue

our

next

public

or

private

144A transaction.  We do not maintain a bank holding company structure, which would permit us to

access TARP.

We believe these programs in and of themselves will positively impact the markets we’re in, regardless

of whether we participate in them, and as a result, positively impact our ability to cost effectively raise

capital.

Q22:   How does your derivative expense compare to last year?

A:  

Our derivative expense for the first two quarters of 2009 was $34 million, which compares favorably to

our derivative expense of $39 million in the first two quarters of 2008.  

Q23:   How do your repossession percentages compare to the overall size of your portfolios? 

A:  

Repossessions as a percent of retail balances for were approximately 4.5% and 2.7% for FY08 and the

first two quarters of FY09, respectively.  

Q24:

What is the current JLTV timing?

A:

The protest against the selection of three teams for the 27-month technology development phase was

denied. Navistar and BAE will resume work. Following the technology and development phase, there

will be a system development and demonstration phase.

Frequently Asked Questions

56

Q25:

What

is

the

status

of

the

Department

of

Defense

budget?

What

is

the

current

funding

for

MRAP

vehicles?

A:

Recently, the Department of Defense requested a FY09 supplemental for $84.5 billion. Approximately, $10

billion will be used for tactical wheeled vehicles and sustainment. Included in the $10 billion, is

approximately

$4.4

billion

which

will

be

used

for

up

to

1,800

MRAP

vehicles.

Funding

for

MRAP

procurement is provided through emergency appropriations bills as it is considered high priority.

Q26:

What is the current timeline for the OUVS program? How many vehicles are expected?

A:

The U.K. Operational Utility Vehicle Systems (OUVS) will begin testing vehicles in the fall of 2009 with

contract awards expected in 2011. Current estimates place this opportunity between 2,000 and 4,000 units.

Navistar was selected for both the OUVS Large and OUVS Small categories.

Q27:

Is the Husky Tactical Support Vehicle (TSV) for the United Kingdom the same as Navistar’s

M-ATV unit?

A:

No, the Husky TSV and the M-ATV are two different vehicles. The Husky has been developed according to

U.K. specifications, while the M-ATV has been built to U.S. specifications.

Frequently Asked Questions

57

Q28:

What is the timeline for the FMTV program (Family of Medium Tactical Vehicles)?

A:

Company proposals were due and  submitted to the government on May 27, 2009. A contract award is

expected in July 2009. Projected volume for the five year contract is approximately 23,000 vehicles.

Q29:

Is the Future Combat Systems (FCS) program canceled?

A:

Sec. Robert Gates recommended the cancellation of the vehicle component of the FCS program to re-

evaluate

the

requirements,

technology,

and

approach

–

and

then

re-launch

the

Army’s

vehicle

modernization program, including a competitive bidding process. The vehicle program, which was

developed nine years ago, also did not include a role for the recent investment in MRAP vehicles.

Q30:

What are the 2010 emissions requirements?

A:

The

rules

allow

manufacturers

to

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. 

Q31:

Has the recent tax legislation, The American Recovery and Reinvestment Act of 2009, affected

Navistar?

A:

Two of the business tax incentives have a direct effect on Navistar:

A)  The legislation provides for additional depreciation deductions equal to 50% of the cost of non-real

property fixed assets placed in service during calendar year 2009. 

B)   In lieu of claiming the additional depreciation deductions described in (A) above, the legislation would

allow Navistar to accelerate the realization of tax credits earned in prior years. 

Navistar intends to accelerate the realization of tax credits earned in prior years.  The amount expected to

be realized is immaterial to the Company’s financial statements.

Frequently Asked Questions

58

58

Q32: How will President Obama’s recent tax proposals impact Navistar, if enacted as currently proposed?

A:

The President’s proposals will have far reaching implications for multinational companies, such as Navistar.  While

we have not completed a thorough analysis of the provisions as currently proposed, particularly since many of the

details of the proposal have not yet been released, we would anticipate adverse U.S. tax implications for our

international businesses over the long term, requiring actions to be taken by Navistar to address these implications. 

Certain

material

proposals

impacting

multinational

corporations

include:

Deferral of deductions deemed related to unremitted foreign earnings

Limitations on the use of disregarded entities in foreign jurisdictions

Limitations on foreign tax credits

Q33:

What is your expected 2009 pension and OPEB GAAP expense for 2009?

A:

We anticipate 2009 pension and OPEB GAAP expense of $200-$250 million.

Q34:

What are your expected 2009 and beyond pension funding requirements?

A:

For

the

remainder

of

2009

we

expect

to

contribute

$19

million

to

meet

the

minimum

required

contributions

for our large U.S. pension plans.  Current forecasts indicate that we may need to contribute approximately

$150 million in 2010 and approximately $300 million per year during 2011 and 2012.  These estimated

amounts are subject to change based on market returns and changes in pension funding legislation.

1

1

Manufacturing Cash Flow

59

($ in millions)

Note:

This

slide

contains

non-GAAP

information,

please

see

the

Reg

G

in

appendix

for

detailed

reconciliation

Goal

Beginning Mfg. Cash

Balance

10/31/2007

10/31/2008

10/31/2009

2008

2009

October 31, 2006

$1,214

October 31, 2007

$722

$722

October 31, 2008

$777

$777

Approximate Cash Flows:

From Operations

($231)

$414

++

$65

($13)

Dividends from NFC

$400

$15

n/a

$15

$0

From Investing / (Cap Ex)

($70)

($216)

-

($109)

($103)

Marketable Securities

($130)

($4)

$2

$42

($2)

From Financing / (Debt Paydown)

($480)

($133)

-

($93)

($59)

Exchange Rate Effect

$19

($21)

n/a

($3)

($6)

Ending Mfg. Cash

Balance:

October 31, 2007

$722

October 31, 2008

$777

$639

October 31, 2009

$600 -

$700

$594

1

Cash = Cash, Cash Equivalents and Marketable Securities

Apr. 30

SEC Regulation G

60

(Unaudited)

DEBT

YE 2005

YE 2006

YE 2007

YE 2008

2009 -

2Q

(in millions)

Manufacturing

operations

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

-

$              

-

$              

1,330

$      

1,330

$       

1,330

$           

Bridge Loan Facility (Libor + 500)

-

1,500

-

-

-

Financing arrangements and capital lease obligations 

408

401

369

306

287

6.25% Senior Notes

400

-

-

-

-

9.375% Senior Notes

393

-

-

-

-

7.5% Senior Notes, due 2011

249

15

15

15

15

Majority owned dealership debt

245

484

267

157

145

4.75% Subordinated Exchangeable Notes, due 2009

202

1

1

1

-

2.5% Senior Convertible Notes

190

-

-

-

-

9.95% Senior Notes, due 2011

13

11

8

6

5

Other

24

60

39

19

17

Total manufacturing operations debt

2,124

2,472

2,029

1,834

1,799

Financial

services

operations  

Borrowing secured by asset-backed securities, at variable rates, due serially through 2016

2,779

$      

3,104

$      

2,748

$      

2,076

$       

1,732

$           

Bank

revolvers,

at

fixed

and

variable

rates,

due

dates

from

2009

through

2013

838

1,426

1,354

1,370

1,416

Revolving retail warehouse facility, at variable rates, due 2010

500

500

500

500

500

Commercial Paper, at variable rates, due 2010

-

28

117

162

69

Borrowing secured by operating and finance leases, at various rate, due serially through 2016

148

116

133

132

133

Total financial services operations debt

4,265

$      

5,174

$      

4,852

$      

4,240

$       

3,850

$           

(Unaudited)

Cash

&

Cash

Equivalents

YE 2005

YE 2006

YE 2007

YE 2008

2009 -

2Q

Manufacturing non-GAAP (Unaudited)

776

$         

1,078

$      

716

$         

775

$          

594

$              

Financial Services non-GAAP (Unaudited)

53

79

61

86

124

Consolidated US GAAP (Audited)

829

$         

1,157

$      

777

$         

861

$          

718

$              

Manufacturing Cash & Cash Equivalents non-GAAP (Unaudited)

776

$         

1,078

$      

716

$         

775

$          

594

$              

Manufacturing Marketable Securities non-GAAP (Unaudited)

91

136

6

2

-

Manufacturing Cash, Cash Equivalents & Marketable Securities non-GAAP (Unaudited)

867

$         

1,214

$      

722

$         

777

$          

594

$              

(Audited)

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.

SEC Regulation G

61

This regulation G slide corresponds with the data found in the chart on slide 38

Estimated

Ford

Settlement

Impacts

U.S. and Canada industry

210K

225K

210K

225K

165K

185K

Sales and revenues, net

$13.5

$14.0

$13.5

$14.0

$11.5

$12.0

($Millions)

Manufacturing segment profit

(excludes asset impairment, Ford settlement, & related charges)

$1,000

$1,050

$1,000

$1,050

$350

$450

Asset impairment, Ford settlement, & related charges

$200

Manufacturing segment profit

$1,000

$1,050

$200

$1,200

$1,250

$350

$450

Below the line items

($20)

($500)

($330)

Income (Loss) before income tax

$410

$460

$180

$590

$640

$1,100

$1,270

($170)

($70)

Income tax benefit (expense)

($40)

($50)

($4)

($40)

($50)

Net income (loss)

$370

$410

$176

$550

$590

Diluted earnings (loss) per share ($'s)

$5.10

$5.60

$2.45

$7.55

$8.05

Weighted average shares outstanding: diluted

~73M

Memo - professional fees included in below the line items

($40)

($30)

($40)

($30)

($30)

($20)

($40)

($30)

FY 2009

Guidance on $1.6B Mfg Segment Profit Line

Original Target @ 414.5K

Industry

($Millions)

NA

($Billions)

($Billions)

~($520)

NA

~$200

$1,600

~($590)

~($610)

~73M

~73M

NA

3/11/09 Guidance

Non GAAP

Goal

Goal

Without

Ford

Settlement

With

Ford

Settlement

$15+

($Millions)

($Millions)

$1,600

($Millions)

Target @

Current Industry

414.5K

($Billions)

($Billions)

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.

SEC Regulation G

62

FY 2006

FY 2007

FY 2008

2Q 07

2Q 08

As

Reported

As

Reported

As

Reported

Estimated

As

Reported

As

Reported

Non GAAP

As

Reported

Ford

Settlement

Impacts

Without

Ford

Settlement

Ford

Settlement

Impacts

With

Ford

Settlement

U.S. and Canada industry

165K

185K

165K

185K

($Billions)

($Billions)

($Billions)

($Billions)

($Billions)

($Billions)

($Billions)

Sales and revenues, net

$14.2

$12.3

$14.7

$11.5

$12.0

$11.5

$12.0

$3.0

$3.9

$2.8

$2.8

($Millions)

($Millions)

($Millions)

($Millions)

($Millions)

($Millions)

($Millions)

($Millions)

($Millions)

Manufacturing segment profit

(excludes asset impairment, Ford settlement, & related charges)

$838

$426

$1,114

$745

$770

NA

$745

$770

$94

$316

$125

NA

$125

Asset impairment, Ford settlement, & related charges

NA

NA

($395)

~ $175

NA

NA

NA

($38)

($38)

Manufacturing segment profit

$838

$426

$719

$745

$770

$175

$920

$945

$94

$316

$125

($38)

$87

Below the line items

($443)

($499)

($528)

$0

($113)

($107)

($72)

$6

($66)

Income (Loss) before income tax

$395

($73)

$191

$225

$250

$175

$400

$425

($19)

$209

$53

($32)

$21

Income tax benefit (expense)

($94)

($47)

($57)

($4)

($6)

$2

($10)

$1

($9)

Net income (loss)

$301

($120)

$134

$200

$225

$171

$371

$396

($25)

$211

$43

($31)

$12

Diluted earnings (loss) per share ($'s)

$4.12

($1.70)

$1.82

$2.80

$3.10

$2.40

$5.20

$5.50

($0.36)

$2.88

$0.60

($0.44)

$0.16

Weighted average shares outstanding: diluted

74.5M

70.3M

73.2M

~72M

70.3M

73.2M

71.3M

71.3M

71.3M

Memo -

professional fees included in below the line items

($70)

($224)

($154)

($40)

($30)

($40)

($30)

($41)

($40)

($6)

($6)

FY 2009

2Q 09

Non GAAP

Goal

Goal

Without

Ford

Settlement

With

Ford

Settlement

~($520)

NA

~$175

($Millions)

($Millions)

($Billions)

($Billions)

~72M

~72M

~($520)

~($25)

~($29)

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.