8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

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

Date of Report (Date of earliest event reported): 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))

EXPLANATORY NOTE

This Current Report on Form 8-K/A is filed as Amendment No. 1 to the Current Report on Form 8-K dated June 9, 2009 and filed by Navistar International Corporation under Items 2.01 and 9.01 on June 15, 2009. Amendment No. 1 is being filed to include the required financial information under Item 9.01 as further described below.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements of Businesses Acquired

1) The audited financial statements of Blue Diamond Parts, LLC for the year ended December 31, 2008, including the report of the independent registered public accounting firm, are filed as Exhibit 99.1 to this Amendment No.1.

2) The unaudited financial statements of Blue Diamond Parts, LLC for the six months ended April 30, 2009 and 2008 are filed as Exhibit 99.2 to this Amendment No.1.

(b) Pro Forma Financial Information

1) The required pro forma financial information for the year ended October 31, 2008 and the six months ended April 30, 2009 is filed as Exhibit 99.3 to this Amendment No.1.

(d) Exhibits

Exhibit No.	Description
23.1	Consent of Independent Registered Public Accounting Firm
99.1	Audited financial statements of Blue Diamond Parts, LLC as of and for the year ended December 31, 2008
99.2	Unaudited financial statements of Blue Diamond Parts, LLC as of and for the six months ended April 30, 2009
99.3	Unaudited pro forma condensed combined financial statements as of and for the six months ended April 30, 2009 and for the year ended October 31, 2008

PAGE 2

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 8, 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.

PAGE 3

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: August 21, 2009	/s/ Andrew J. Cederoth
	Andrew J. Cederoth
	Principal Financial Officer

PAGE 4

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

The Members

Blue Diamond Parts, LLC:

We consent to the inclusion in the Form 8-K/A of Navistar International Corporation of our report dated March 26, 2009, with respect to the balance sheets of Blue Diamond Parts, LLC as of December 31, 2008 and 2007, and the related statements of operations, Members’ equity, and cash flows for each of the years in the three-year period ended December 31, 2008, which report appears in the Form 8-K/A of Navistar International Corporation dated August 21, 2009.

Our report dated March 26, 2009 contains an explanatory paragraph that states that the Company is a joint venture between its members, and, as disclosed in the accompanying notes to financial statements, has extensive transactions and relationships with the members. Because of these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties.

/s/KPMG, LLP

Chicago, Illinois

August 18, 2009

E-1

EX-99.1

EXHIBIT 99.1

Blue Diamond Parts, LLC

Index to Financial Statements

December 31, 2008, 2007, and 2006

	Page
Report of Independent Registered Public Accounting Firm	E-3
Balance Sheets	E-4
Statements of Operations	E-5
Statements of Cash Flows	E-6
Statements of Members’ Equity	E-7
Notes to Financial Statements	E-8

E-2

Report of Independent Registered Public Accounting Firm

To the Members of Blue Diamond Parts, LLC:

We have audited the accompanying balance sheets Blue Diamond Parts, LLC (the Company) as of December 31, 2008 and 2007, and the related statements of operations, members’ equity, and cash flows for each of the years in the three-year period ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Blue Diamond Parts, LLC as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.

The Company is a joint venture between its members, and, as disclosed in the accompanying notes to financial statements, has extensive transactions and relationships with the members. Because of these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties.

/s/ KPMG LLP

Chicago, Illinois

March 26, 2009

E-3

Blue Diamond Parts, LLC

Balance Sheets

December 31, 2008 and 2007

	2008		2007
Assets
Cash and cash equivalents	$	7,422,490	$	11,814,397
Accounts receivable from Ford		40,251,320		48,869,476
Accounts receivable from Navistar		835,657		2,907,825
Prepaid assets		305,613		25,000
Property and equipment, net		—		40,375
Total assets	$	48,815,080	$	63,657,073
Liabilities
Accounts payable to Navistar	$	22,432,010	$	39,875,043
Accounts payable to Ford		249,237		1,547,843
Accrued income taxes		931,994		437,080
Accrued liabilities		3,444,665		4,148,317
Total liabilities		27,057,906		46,008,283
Members’ equity
Retained earnings		19,792,757		15,684,373
Member contributions		1,964,417		1,964,417
Total Members’ equity		21,757,174		17,648,790
Total liabilities and Members’ equity	$	48,815,080	$	63,657,073

See accompanying notes to financial statements.

E-4

Blue Diamond Parts, LLC

Statements of Operations

Years Ended December 31, 2008, 2007, and 2006

	2008		2007		2006
Revenues:
Net service revenue	$	198,912,706	$	186,668,044	$	211,686,954
Other income		1,439,508		1,718,960		1,211,127
		200,352,214		188,387,004		212,898,081
Expenses:
Hired services		7,261,043		6,524,492		6,764,103
Salary and employee benefits		4,517,735		3,974,471		4,197,812
Distribution costs		5,054,782		5,384,243		4,785,694
Marketing and promotional expenses		2,764,035		3,485,187		2,532,796
Finance charges		5,503,709		10,307,496		11,208,688
Systems expense		340,571		317,127		430,466
Depreciation expense		40,375		96,900		111,313
Other costs		2,438,121		1,703,678		1,478,144
Total expenses		27,920,371		31,793,594		31,509,016
Income before income taxes		172,431,843		156,593,410		181,389,065
Income tax expense		85,688		885,741		1,869,502
Net income	$	172,346,155	$	155,707,669	$	179,519,563

See accompanying notes to financial statements.

E-5

Blue Diamond Parts, LLC

Statements of Cash Flows

Years Ended December 31, 2008, 2007, and 2006

	2008			2007			2006
Beginning cash and cash equivalents	$	11,814,397		$	9,090,374		$	3,038,027
Cash flows provided by operating activities:
Net income		172,346,155			155,707,669			179,519,563
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		40,375			96,900			111,313
Changes in assets and liabilities:
Accounts receivable		10,690,324			(18,344,677	)		19,703,197
Prepaid assets		(280,613	)		(16,667	)		(8,333	)
Accounts payable		(18,741,639	)		24,583,335			(24,362,350	)
Accrued income taxes		494,914			(5,449,359	)		1,869,501
Accrued liabilities		(703,652	)		1,159,362			550,245
Net cash provided by operating activities		163,845,864			157,736,563			177,383,136
Cash flows used in financing activities:
Cash distributions to members		(168,237,771	)		(155,012,540	)		(171,330,789	)
Net cash used in financing activities		(168,237,771	)		(155,012,540	)		(171,330,789	)
Net (decrease) increase in cash and cash equivalents		(4,391,907	)		2,724,023			6,052,347
Ending cash and cash equivalents	$	7,422,490		$	11,814,397		$	9,090,374

See accompanying notes to financial statements.

E-6

Blue Diamond Parts, LLC

Statements of Members’ Equity

Years Ended December 31, 2008, 2007, and 2006

	Member Contributions		Retained Earnings			Total
Balance at December 31, 2005	$	1,964,417	$	6,800,470		$	8,764,887
Net income		—		179,519,563			179,519,563
Dividends declared		—		(171,330,789	)		(171,330,789	)
Balance at December 31, 2006		1,964,417		14,989,244			16,953,661
Net income		—		155,707,669			155,707,669
Dividends declared		—		(155,012,540	)		(155,012,540	)
Balance at December 31, 2007		1,964,417		15,684,373			17,648,790
Net income		—		172,346,155			172,346,155
Dividends declared		—		(168,237,771	)		(168,237,771	)
Balance at December 31, 2008	$	1,964,417	$	19,792,757		$	21,757,174

See accompanying notes to financial statements.

E-7

Blue Diamond Parts, LLC

Notes to Financial Statements

December 31, 2008, 2007, and 2006

(1) Summary of Significant Accounting Policies

Nature of Operations

Blue Diamond Parts, LLC (Blue Diamond or the Company) was formed on August 7, 2001 pursuant to the applicable laws of the state of Delaware, as a joint venture (JV) between Ford Motor Company (Ford) and Navistar International Corporation (Navistar) (collectively, the Members), with Ford owning 51% and Navistar owning 49%. The joint venture manages the sourcing, merchandising, and distribution of various spare parts for vehicles the Members sell in North America. These spare parts are primarily for Navistar diesel engines in Ford trucks, commercial truck parts, and certain parts for F650/750 and LCF trucks produced for Ford by Blue Diamond Truck, S.de R.L. de C.V., which is a separate joint venture between Ford and Navistar. Substantially all of the Company’s transactions are between the Company and its Members.

In accordance with the joint venture agreement between the Members, between 2002 and 2005 Navistar contributed an estimated $2.0 million to pay for information systems improvements to provide interface capabilities for the Members’ data systems.

The financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied, on a material basis, in the preparation of the financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. At December 31, 2008 and 2007, cash equivalents consisted primarily of deposits in money market funds.

Revenue Recognition

Blue Diamond recognizes revenue at the time products are shipped, which is the point at which risks and rewards of ownership are transferred to the customer.

Pursuant to the guidance in Emerging Issues Task Force Issue (EITF) Issue No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an Agent, the net service revenue in the Company’s statements of operations represents the net results of certain of its activities based upon an analysis of various factors, including the risks and rewards assumed by the Company related to the selling and distribution of parts.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on accounts receivable are included in net cash provided by operating activities in the statements of cash flows.

No allowance for uncollectible accounts has been provided because management believes that all balances in accounts receivable are collectible.

Property and equipment

Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. These assets were depreciated over estimated useful lives ranging from three to five years.

Core Charges

Certain remanufactured parts purchased by the Company for resale require a refundable deposit known as a core charge. A core component is the basic forging or casting, such as an engine block, that can be remanufactured by a certified remanufacturing supplier. Navistar charges Blue Diamond for this core charge, including a mark up, and Blue Diamond passes this charge (including the mark up) on to Ford. Blue Diamond acts only as a conduit for passing these charges between Ford and Navistar, and these charges have no impact on the Company’s statements of operations.

E-8

Retained Earnings

Net income of the JV is distributed to the Members monthly, unless otherwise determined by the Executive Board, provided, however, that the tax distributions would be made in accordance with the JV operating agreement.

Warranty

Each Member provides its customary service parts warranty with respect to parts distributed by the JV.

Description of Various Expenses

The JV’s expenses are initially incurred by the Members and are passed on to Blue Diamond. These expenses are allocated by the Members to the JV based on actual costs incurred. Management believes that this method is reasonable and approximates what the expenses would have been on a stand-alone basis.

Hired services include the costs associated with the outside field sales organization, including personnel costs, travel, administrative, and other expenses. Hired services also include salary-related costs for other non marketing contract personnel.

Salaries and employee benefits include the costs associated with Member personnel assigned to Blue Diamond.

Distribution costs include expenses related to the movement of parts from source to customer, primarily including labor and overhead, freight, and packaging.

Marketing and promotional expenses cover the expenses for various sales and marketing programs and materials including promotional events, brochures and other printed literature, and branded merchandise giveaways.

Finance charges represent the time value of money the Members have invested in working capital and inventory to support Blue Diamond.

Systems expense includes costs incurred to develop or modify IT systems in support of Blue Diamond.

Income Taxes

The Company is a limited liability company that has elected to be taxed as a partnership for U.S. tax purposes. The taxes included in the Company’s statements of operations relate to estimated state taxes payable at the LLC level. The Company’s operating results for federal income tax purposes are included in the tax returns of the Members.

(2) Supplemental Cash Flow Information

Supplemental disclosure of cash flow information is as follows for the years ended December 31, 2008, 2007 and 2006:

	2008		2007		2006
Cash paid during the year for:
Interest	$	9.4 million	$	12.4 million	$	14.2 million
Income taxes		.5 million		6.3 million		—

(3) Related-Party Transactions

The Company and its Members have entered into several agreements that govern transactions between the parties.

The Company earns revenues based upon distribution of parts to the Members for ultimate sale to third parties. These revenues are at prices negotiated between the Company and the respective Member. All parts distributed pursuant to these transactions are purchased from the Members at prices negotiated by the Company and the respective Member, generally at cost. The net service revenue included in the accompanying statements of operations primarily represents the difference between the negotiated selling prices to the Members, net of certain costs incurred by the Members, and the negotiated costs of parts purchased from the Members.

In addition, each Member provides administrative and other support services for which the Company is billed directly by the Members. These services include personnel, accounting and treasury, planning and support, insurance, internal auditing, governmental relations, procurement and distribution support, and other services. The Company is invoiced each month for the services provided and pays an amount equal to the Members’ fully accounted and allocated costs, such fee to be calculated without markup except to the extent required to be paid by applicable law. For the years ended December 31, 2008, 2007 and 2006, $27.9 million, $31.8 million and $31.5 million, respectively, were charged for the services purchased from the Members.

(4) Subsequent Events

In January 2009, Ford and Navistar reached agreement to restructure their ongoing business relationship and settle all existing litigation between the companies. As part of that agreement, Navistar will increase its equity ownership of Blue Diamond to 75% (from 49%) and Ford will reduce its equity ownership to 25% (from 51%).

E-9

EX-99.2

EXHIBIT 99.2

Blue Diamond Parts, LLC

Index to Financial Statements

April 30, 2009

	Page
Balance Sheet as of April 30, 2009	E-11
Statements of Operations for the six months ended April 30, 2009 and 2008	E-12
Statements of Cash Flows for the six months ended April 30, 2009 and 2008	E-13
Statement of Members’ Equity for the six months ended April 30, 2009	E-14
Notes to Financial Statements	E-15

E-10

Blue Diamond Parts, LLC

Balance Sheet

(Unaudited)

	April 30, 2009
Assets
Cash and cash equivalents	$	2,378,365
Accounts receivable from Ford		61,568,598
Accounts receivable from Navistar		950,785
Prepaid assets		121,125
Total assets	$	65,018,873
Liabilities
Accounts payable to Navistar	$	42,522,651
Accrued income taxes		2,601,198
Accrued liabilities		2,544,727
Total liabilities		47,668,576
Members’ equity
Retained earnings		15,385,880
Member contributions		1,964,417
Total Members’ equity		17,350,297
Total liabilities and Members’ equity	$	65,018,873

See accompanying notes to financial statements.

E-11

Blue Diamond Parts, LLC

Statements of Operations

(Unaudited)

	Six Months Ended April 30,
	2009			2008
Revenues:
Net service revenue	$	104,619,206		$	107,603,694
Other income		405,522			970,352
		105,024,728			108,574,046
Expenses:
Hired services		3,465,347			3,538,855
Salary and employee benefits		2,075,017			2,249,551
Distribution costs		2,349,861			2,866,003
Marketing and promotional expenses		3,151,952			1,776,611
Finance charges		1,983,231			5,046,163
Systems expense		138,709			162,236
Depreciation expense		—			48,450
Other costs		845,706			673,449
Total expenses		14,009,823			16,361,318
Income before income taxes		91,014,905			92,212,728
Income tax expense (benefit)		(728,482	)		939,570
Net income	$	91,743,387		$	91,273,158

See accompanying notes to financial statements.

E-12

Blue Diamond Parts, LLC

Statements of Cash Flows

(Unaudited)

	Six Months Ended April 30,
	2009			2008
Beginning cash and cash equivalents	$	5,869,876		$	12,545,067
Cash flows provided by operating activities:
Net income		91,743,387			91,273,158
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		—			48,450
Changes in assets and liabilities:
Accounts receivable		(4,621,236	)		21,129,528
Prepaid assets		51,156			14,939
Accounts payable		1,433,215			(27,079,356	)
Accrued income taxes		325,577			(5,832,630	)
Accrued liabilities		(1,334,232	)		(917,169	)
Net cash provided by operating activities		87,597,867			78,636,920
Cash flows used in financing activities:
Cash distributions to members		(91,089,378	)		(53,232,338	)
Net cash used in financing activities		(91,089,378	)		(53,232,338	)
Net (decrease) increase in cash and cash equivalents		(3,491,511	)		25,404,582
Ending cash and cash equivalents	$	2,378,365		$	37,949,649

See accompanying notes to financial statements.

E-13

Blue Diamond Parts, LLC

Statement of Members’ Equity

(Unaudited)

	Member Contributions		Retained Earnings			Total
Balance at October 31, 2008	$	1,964,417	$	14,731,871		$	16,696,288
Net income		—		91,743,387			91,743,387
Dividends declared		—		(91,089,378	)		(91,089,378	)
Balance at April 30, 2009	$	1,964,417	$	15,385,880		$	17,350,297

See accompanying notes to financial statements.

E-14

Blue Diamond Parts, LLC

Notes to Financial Statements

April 30, 2009

(Unaudited)

(1) Summary of Significant Accounting Policies

Nature of Operations

Blue Diamond Parts, LLC (Blue Diamond or the Company) was formed on August 7, 2001 pursuant to the applicable laws of the State of Delaware, as a joint venture (JV) between Ford Motor Company (Ford) and Navistar International Corporation (Navistar) (collectively, the Members). The joint venture manages the sourcing, merchandising, and distribution of various spare parts for vehicles the Members sell in North America. These spare parts are primarily for Navistar diesel engines in Ford trucks, commercial truck parts, and certain parts for F650/750 and LCF trucks produced for Ford by Blue Diamond Truck, S.de R.L. de C.V., which is a separate joint venture between Ford and Navistar. Substantially all of the Company’s transactions are between the Company and its Members.

Effective June 1, 2009, the Company changed its fiscal year from December 31 to October 31. This change in fiscal year has been reflected on a retrospective basis and, accordingly, the Company’s interim financial statements are presented as of April 30, 2009 and for the six months ended April 30, 2009 and 2008. The change in fiscal year is in conjunction with Navistar’s increased equity interest in Blue Diamond. For further discussion, see Note 3, Subsequent Events.

In accordance with the joint venture agreement between the Members, Navistar committed to contribute an estimated $2.0 million to pay for information systems improvements to provide interface capabilities for the Members’ data systems. These improvements are performed by the Members or third parties and then recorded as system expenses on Blue Diamond’s financial statements as incurred. As of April 30, 2009, Navistar had contributed approximately $1.9 million for such systems improvements (including $.5 million of improvements made by Ford and reimbursed from the contributed funds).

The financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied, on a material basis, in the preparation of the financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. At April 30 2009, cash equivalents consisted primarily of deposits in money market funds.

Revenue Recognition

Blue Diamond recognizes revenue at the time products are shipped, which is the point at which risks and rewards of ownership are transferred to the customer.

Pursuant to the guidance in Emerging Issues Task Force Issue (EITF) 99-19, Reporting Revenue Gross as a Principal Versus Net as an Agent, the net service revenue in the Company’s statements of operations represents the net results of certain of its activities based upon an analysis of various factors, including the risks and rewards assumed by the Company related to the selling and distribution of parts.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on accounts receivable are included in net cash provided by operating activities in the statements of cash flows.

No allowance for uncollectible accounts has been provided because management believes that all balances in accounts receivable are collectible.

E-15

Property and equipment

Property and equipment are recorded at cost (or at fair value at the date of the contribution for contributed assets) and depreciated over their estimated useful lives using the straight-line method. These assets are being depreciated over estimated useful lives ranging from three to five years.

Core Charges

Certain remanufactured parts purchased by the Company for resale require a refundable core charge. Navistar charges Blue Diamond for this core charge, including a mark up, and Blue Diamond passes this charge (including the mark up) on to Ford. Blue Diamond acts only as a pass-through entity and these charges are not included in the Company’s statements of operations.

Retained Earnings

Net income of the JV is distributed to the Members monthly, unless otherwise determined by the Executive Board, provided, however, that the tax distributions would be made in accordance with the JV operating agreement.

Warranty

Each Member provides its customary service parts warranty with respect to parts distributed by the JV.

Description of Various Expenses

The JV’s expenses are initially incurred by the Members and are passed on to Blue Diamond. These expenses are allocated by the Members to the JV based on actual costs incurred. Management believes that this method is reasonable and approximates what the expenses would have been on a stand-alone basis.

Hired services include the costs associated with the outside field sales organization, including personnel costs, travel, administrative, and other expenses. Hired services also include salary-related costs for other non marketing contract personnel.

Salaries and employee benefits include the costs associated with Member personnel assigned to Blue Diamond.

Distribution costs include expenses related to the movement of parts from source to customer, primarily including labor and overhead, freight, and packaging.

Marketing and promotional expenses cover the expenses for various sales and marketing programs and materials including promotional events, brochures and other printed literature, and branded merchandise giveaways.

Finance charges represent the time value of money the Members have invested in working capital and inventory to support Blue Diamond.

Systems expense includes costs incurred to develop or modify IT systems in support of Blue Diamond.

Income Taxes

The Company is a limited liability company that has elected to be taxed as a partnership for U.S. tax purposes. The taxes included in the Company’s statements of operations relate to estimated state taxes payable at the LLC level. The Company’s operating results for federal income tax purposes are included in the tax returns of the Members.

(2) Related-Party Transactions

The Company and its Members have entered into several agreements that govern transactions between the parties.

The Company earns revenues based upon distribution of parts to the Members for ultimate sale to third parties. These revenues are at prices negotiated between the Company and the respective Member. All parts distributed pursuant to these transactions are purchased from the Members at prices negotiated by the Company and the respective Member, generally at cost. The net service revenue included in the accompanying statements of operations primarily represents the difference between the negotiated selling prices to the Members, net of certain costs incurred by the Members, and the negotiated costs of parts purchased from the Members.

In addition, each of the Members provides administrative and other support services for which the Company is billed directly by the Members. These services include personnel, accounting and treasury, planning and support, insurance, internal auditing, governmental relations, procurement and distribution support, and other services. The Company is invoiced each month for the services provided and pays an amount equal to the Members’ fully accounted and allocated costs, such fee to be calculated

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without markup except to the extent required to be paid by applicable law. For the months ending April 30, 2009, $8.2 million was charged for the services purchased from the members.

(3) Subsequent Events

In January 2009, Ford and Navistar agreed to restructure their ongoing business relationship and settle all existing litigation between the companies. As part of that agreement, Navistar will increase its equity interest in Blue Diamond to 75% (from 49%) and Ford will reduce its equity interest to 25% (from 51%). The effective date of the equity interest transfer is June 1, 2009.

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EX-99.3

EXHIBIT 99.3

Navistar International Corporation and Subsidiaries

Unaudited Pro Forma Condensed Combined Financial Statements

On January 13, 2009, Navistar International Corporation (“Navistar” or the “Company”) announced that Navistar and Ford Motor Company (“Ford”) reached an agreement (“settlement agreement”) to restructure their ongoing business relationship and settle all existing litigation between the companies. On June 9, 2009, pursuant to the provisions of the settlement agreement, Navistar entered into the Fifth Amendment to the Blue Diamond Joint Venture Agreement with Ford to increase the Company’s equity interest in Blue Diamond Parts (“BDP”) from 49% to 75%, effective June 1, 2009. The receipt of additional equity interest from Ford was among the various components of the settlement agreement, and no additional consideration was paid to Ford in connection with the increase in equity interest in BDP. The following unaudited pro forma condensed combined financial statements are based on the historical financial statements of Navistar and BDP after giving effect to the assumptions, reclassifications, and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements. The Company engaged a third-party valuation firm to assist in determining the fair value of the increased equity interest in BDP and corresponding gain for this component of the settlement agreement. The fair value was based on a discounted cash flow model utilizing BDP’s estimated future cash flows developed by management. The preliminary fair value of the increased interest was $23 million and the Company expects to recognize a gain of this amount in Other income, net for the settlement, which will be reflected in Navistar’s consolidated statement of operations for the period ended July 31, 2009. These allocations reflect various preliminary estimates that are available at the time of the preparation of this Current Report on Form 8-K/A, and are subject to change during the purchase price allocation period as valuations are finalized.

At the time of the agreement, Navistar and BDP had different fiscal year ends. In conjunction with the agreement, BDP adopted the Company’s fiscal year end of October 31. The unaudited pro forma condensed combined balance sheet as of April 30, 2009 is presented as if the Company’s increased equity interest in BDP had occurred on April 30, 2009 and is based on the Company’s and BDP’s historical unaudited consolidated balance sheets as of April 30, 2009. The unaudited pro forma combined statements of operations for the six months ended April 30, 2009 and the year ended October 31, 2008 are presented as if the Company’s increased equity interest in BDP had occurred on November 1, 2007 and was carried forward through each of the aforementioned respective periods. For the six months ended April 30, 2009, the unaudited pro forma combined statement of operations is based on the Company’s and BDP’s historical unaudited consolidated statements of operations for the six months ended April 30, 2009. For the year ended October 31, 2008, the unaudited pro forma combined statement of operations is based on the Company’s historical audited consolidated statement of operations for the year ended October 31, 2008 and BDP’s historical audited consolidated statement of operations for the year ended December 31, 2008. The historical consolidated financial statements of BDP have been adjusted to reflect certain reclassifications to conform to the Company’s financial statement presentation.

The unaudited pro forma condensed combined financial statements should be read in conjunction with the historical financial statements and accompanying notes of BDP included in Exhibit 99.1 and Exhibit 99.2 of this Current Report on Form 8-K/A and the historical financial statements and accompanying notes of Navistar included in our Form 10-K for the year ended October 31, 2008 and our Form 10-Q for the period ended April 30, 2009.

These unaudited pro forma condensed combined financial statements are prepared by management for informational purposes only in accordance with Article 11 of Regulation S-X and are not necessarily indicative of future results or of actual results that would have been achieved had the increased equity interest been consummated as of the dates presented, and should not be taken as representative of future consolidated results or operations of financial position of the Company.

E-18

Navistar International Corporation and Subsidiaries

Unaudited Pro Forma Condensed Combined Balance Sheet

As of April 30, 2009

	Historical
	Navistar International Corporation			Blue Diamond Parts, LLC		Pro Forma Adjustments			Notes		Pro Forma Consolidated
(in millions)
Assets
Current assets
Cash and cash equivalents	$	718		$	2	$	—				$	720
Finance and other receivables, net		2,449			63		(42	)	(A	)		2,470
Inventories		1,646			—		—					1,646
Other current assets		236			—		—					236
Total current assets		5,049			65		(42	)				5,072
Restricted cash and cash equivalents		651			—		—					651
Finance and other receivables, net		1,746			—		—					1,746
Property and equipment, net		1,419			—		—					1,419
Goodwill		287			—		—					287
Intangible assets, net		211			—		45		(B	)		256
Other noncurrent assets		294			—		(9	)	(C	)		285
Total assets	$	9,657		$	65	$	(6	)			$	9,716
Liabilities, Redeemable Equity Securities, and Stockholders’ Equity (Deficit)
Current liabilities
Notes payable and current maturities of long-term debt	$	579		$	—	$	—				$	579
Accounts payable		1,525			42		(42	)	(A	)		1,525
Other current liabilities		1,160			6		—					1,166
Total current liabilities		3,264			48		(42	)				3,270
Long-term debt		5,070			—		—					5,070
Postretirement benefits liabilities		1,995			—		—					1,995
Other noncurrent liabilities		761			—		29		(D	)		790
Total liabilities		11,090			48		(13	)				11,125
Redeemable equity securities		14			—		—					14
Stockholders’ equity (deficit)
Convertible junior preference stock		4			—		—					4
Common stock and additional paid in capital		2,111			2		(2	)				2,111
Accumulated income (deficit)		(2,146	)		15		9		(E	)		(2,122	)
Accumulated other comprehensive loss		(1,252	)		—		—					(1,252	)
Common stock held in treasury, at cost		(164	)		—		—					(164	)
Total stockholders’ equity (deficit)		(1,447	)		17		7					(1,423	)
Total liabilities, redeemable equity securities, and stockholders’ equity (deficit)	$	9,657		$	65	$	(6	)			$	9,716

See accompanying notes to the unaudited pro forma condensed combined balance sheet.

E-19

Navistar International Corporation and Subsidiaries

Notes to Unaudited Pro Forma Condensed Combined Balance Sheet

As of April 30, 2009

(A) Reflects the elimination of $42 million of Intercompany transactions between Navistar and BDP.

(B) Represents the recognition of $45 million of intangible assets related to customer relationships.

(C) Represents the elimination of the Company’s equity method investment in BDP.

(D) Reflects minority interest for Ford’s 25% equity interest in BDP.

(E) Reflects the following adjustments to stockholders’ equity (deficit):

(in millions)
BDP historical accumulated income	$	15
Recognition of intangible assets		45
Minority interest		(29	)
Subtotal		31
Fair value of increased equity interest		(24	)
Total	$	7

The pro forma purchase accounting adjustments to stockholders’ equity (deficit) include a nonrecurring gain of $24 million related to the fair value of the increased equity interest, which is not included in the unaudited pro forma combined statements of operations for the year ended October 31, 2008 and the six months ended April 30, 2009. Navistar expects to record a gain in connection with the receipt of additional equity interest from Ford of approximately $23 million, which will be reflected in the consolidated statement of operations for the period ended July 31, 2009.

E-20

Navistar International Corporation and Subsidiaries

Unaudited Pro Forma Combined Statement of Operations

For the Year Ended October 31, 2008

	Historical
	Navistar International Corporation		Blue Diamond Parts, LLC(F)		Pro Forma Adjustments			Notes		Pro Forma Consolidated
(in millions, except per share data)
Sales and revenues
Sales of manufactured products, net	$	14,399	$	200	$	33		(E	)	$	14,632
Finance revenues		325		—		—					325
Sales and revenues, net		14,724		200		33					14,957
Costs and expenses
Costs of products sold		11,930		—		33		(E	)		11,963
Impairment of property and equipment		358		—		—					358
Selling, general and administrative expenses		1,453		22		5		(C	)		1,480
Engineering and product development costs		380		—		—					380
Interest expense		469		6		—					475
Other expenses, net		14		—		—					14
Total costs and expenses		14,604		28		38					14,670
Equity in income (loss) of non-consolidated affiliates		71		—		(85	)	(B	)		(14	)
Income before income tax and minority interest		191		172		(90	)				273
Income tax expense		57		—		3		(D	)		60
Income before minority interest		134		172		(93	)				213
Minority interest in net income of subsidiaries		—		—		43		(A	)		43
Net income	$	134	$	172	$	(136	)			$	170
Basic earnings per share	$	1.89								$	2.40
Diluted earnings per share	$	1.82								$	2.32
Weighted average shares outstanding
Basic		70.7									70.7
Diluted		73.2									73.2

See accompanying notes to the unaudited pro forma combined statement of operations.

E-21

Navistar International Corporation and Subsidiaries

Notes to Unaudited Pro Forma Combined Statement of Operations

For the Year Ended October 31, 2008

(A) Reflects Ford’s 25% minority interest in the earnings of BDP.

(B) Reflects the elimination of the income in equity-method investment related to BDP.

(C) Represents the amortization of intangible assets related to customer relationships with a useful life of nine years.

(D) For the year-ended October 31, 2008, Navistar recorded tax expense with respect to current taxes payable for federal alternative minimum taxes and state income taxes. The tax adjustment is attributable to Navistar’s additional taxable income arising from its increased ownership in BDP.

(E) Reflects core charges previously netted against net service revenues.

(F) Effective June 1, 2009, BDP changed its fiscal year from December 31 to October 31. The unaudited pro forma combined statement of operations for the year ended October 31, 2008, as presented above, is based on the historical audited consolidated statement of operations of BDP for the year ended December 31, 2008. The unaudited pro forma combined statement of operations for the six months ended April 30, 2009 reflects the change in fiscal year and is based on the historical unaudited consolidated statement of operations of BDP for the six months ended April 30, 2009. As such, the months of November and December 2008 are included in both the annual and interim unaudited pro forma combined statements of operations. For the period of overlap, sales of manufactured products, net and net income of BDP were $38 million and $33 million, respectively.

E-22

Navistar International Corporation and Subsidiaries

Unaudited Pro Forma Combined Statement of Operations

For the Six Months Ended April 30, 2009

	Historical
	Navistar International Corporation			Blue Diamond Parts, LLC(F)			Adjustments for Acquisition			Notes		Pro Forma Consolidated
(in millions, except per share data)
Sales and revenues
Sales of manufactured products, net	$	5,636		$	105		$	13		(E	)	$	5,754
Finance revenues		142			—			—					142
Sales and revenues, net		5,778			105			13					5,896
Costs and expenses
Costs of products sold		4,618			—			13		(E	)		4,631
Restructuring charges		55			—			—					55
Selling, general and administrative expenses		676			12			3		(C	)		691
Engineering and product development costs		238			—			—					238
Interest expense		150			2			—					152
Other income, net		(176	)		—			—					(176	)
Total costs and expenses		5,561			14			16					5,591
Equity in income (loss) of non-consolidated affiliates		31			—			(45	)	(B	)		(14	)
Income before income tax and minority interest		248			91			(48	)				291
Income tax expense (benefit)		2			(1	)		3		(D	)		4
Income before minority interest		246			92			(51	)				287
Minority interest in net income of subsidiaries		—			—			23		(A	)		23
Net income	$	246		$	92		$	(74	)			$	264
Basic earnings per share	$	3.45										$	3.71
Diluted earnings per share	$	3.44										$	3.69
Weighted average shares outstanding
Basic		71.2											71.2
Diluted		71.5											71.5

See accompanying notes to the unaudited pro forma combined statement of operations.

E-23

Navistar International Corporation and Subsidiaries

Notes to Unaudited Pro Forma Combined Statement of Operations

For the Six Months Ended April 30, 2009

(A) Reflects Ford’s 25% minority interest in the earnings of BDP.

(B) Reflects the elimination of the income in equity-method investment related to BDP.

(C) Represents the amortization of intangible assets related to customer relationships with a useful life of nine years.

(D) For the six months ended April 30, 2009, Navistar recorded tax expense with respect to current taxes payable for federal alternative minimum taxes and state income taxes. The tax adjustment is attributable to Navistar’s additional taxable income arising from its increased ownership in BDP.

(E) Reflects core charges previously netted against net service revenues.

(F) Effective June 1, 2009, BDP changed its fiscal year from December 31 to October 31. The unaudited pro forma combined statement of operations for the six months ended April 30, 2009, as presented above, reflects the change in fiscal year and is based on the historical unaudited consolidated statement of operations of BDP for the six months ended April 30, 2009. The unaudited pro forma combined statement of operations for the year ended October 31, 2008 is based on the historical audited consolidated statement of operations of BDP for the year ended December 31, 2008. As such, the months of November and December 2008 are included in both the annual and interim unaudited pro forma combined statements of operations. For the period of overlap, sales of manufactured products, net and net income of BDP were $38 million and $33 million, respectively.

E-24