1

2

nd

Quarter 2012 Earnings Presentation

June 7, 2012

Exhibit 99.2

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

2

2

Safe Harbor

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.

These statements are not guarantees of performance or results and they involve risks, uncertainties,

and assumptions. For a further description of these factors, see

the risk factors set forth in our filings

with the Securities and Exchange Commission, including our annual report on Form 10-K for the fiscal

year ended October 31, 2011 and quarterly reports for fiscal 2012.

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.

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

3

3

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

items

that

may

not

be

related

to

the

core

manufacturing

business

or

underlying

results.

Measures

may

also

be

adjusted

to

exclude

certain

adjustments

which

are

not

considered

to

be

part

of

our

ongoing

business

and

are

not

representative

of

our

underlying

performance.

Management

often

uses

this

information

to

assess

and

measure

the

underlying

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.

The

non-GAAP

numbers

are

reconciled

to

the

most

appropriate

GAAP

number

is

in

the

appendix

of

this

presentation.

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

4

4

Agenda

•

2

nd

quarter results

•

Going forward

•

Driving integration

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

NYSE: NAV

2

nd

Quarter Results

Note:

This slide contains non-GAAP information; please see the REG G in

appendix for a detailed reconciliation. 

* Attributable to Navistar International Corporation

2012 Q2

Actual

GAAP

2012 Q2

Actual

Adjusted Non-GAAP

Revenue (Billions)

$3.3

$3.3

Manufacturing Segment

Profit (Loss) (Millions)

$(156)

$7

Profit (Loss) Before Tax

(Millions)

$(295)

$(124)

Net Income (Loss)*

(Millions)

$(172)

$(137)

Diluted Earnings (Loss) Per

Share*

$(2.50)

$(1.99)

5

NYSE: NAV

Q2 Adjusted Manufacturing Segment Profit

Q2 Adj. Mfg Segment Profit

Truck & Parts      ($Millions)

$8

North America

~$43

Global

~($10)

Defense

~($5)

Other

~($20)

Engine & Parts

($1)

Adj. Mfg Segment Profit

$7

Note:

This slide contains non-GAAP information; please see the REG G in appendix for a

detailed reconciliation. 

•

Seasonality

–

South America

–

Bus

–

North America

•

Market adjustments

–

Defense

–

BRIC

•

Investments in the

business

–

Future benefits

•

Affects of emissions

noise ? ?

Historically

stronger 2H

$300M -

$400M

Revenue

$20M margin

improvement

6

Q2 Factors

NYSE: NAV

Q2 Income Statement

($ Millions)

Note:

This slide contains non-GAAP information; please see the REG G in

appendix for a detailed reconciliation. 

(In millions)

Adj manufacturing segment profit

7

$         

Adjustments:

Engineering integration

(11)

$      

Restructuring of NA mfg ops

(38)

$      

Adj to preexisting warranties

(104)

$     

Charges for NCPs

(10)

$      

Mfg segment profit as reported

(156)

$     

NFC

26

$       

Corporate items

(175)

$     

Income before income tax excluding income

attributable to non-controlling interests

(305)

$     

Income tax valuation allowance release

181

$      

Income tax expense

(48)

$      

Net loss

(172)

$     

7

Q2

Additional Warranty Reserves

Adjustments for

Pre-Existing Warranty

EPA10 MF 11/13

Service Contracts

Other routine adjustments

$  11M

Total Warranty

Monthly Spend per Unit in

Warranty by Spend Date

EPA10 MF11/13

Quality Trend by Build Quarter

R/1000

8

NYSE: NAV

64% improvement

Q1 Rate

Q2 Rate

$  72M

$  21M

$104M

9

9

Q2 Manufacturing Cash Update

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

Note:

Capital Expenditures includes ~$16M related to Integrated

Product Development Center.

($ millions)

January 31, 2012 ending manufacturing cash and marketable securities¹

837

$             

Adjusted manufacturing EBITDA

(168)

Change in net working capital²

41

Capital expenditures

(71)

Intercompany and other

42

April 30, 2012 ending manufacturing cash and marketable securities¹

681

$             

Forecasted October 31, 2012 ending manufacturing cash and marketable securities¹

$750 - $900

1

Includes cash from the consolidation of minority interests

2

NWC = A/R, Inventory, Other Current Assets, A/P & Other Current Liabilities

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

NYSE: NAV

Going Forward

Note:

This slide contains non-GAAP information; please see the REG G in

appendix for a detailed reconciliation. 

Q2 Adj. Mfg

Segment Profit

($Millions)

Estimate Second

Half 2012

($Millions)

Truck & Parts

$8

$425 -

$525

North America

~$43

Global

~($10)

Defense

~($5)

Other

~($20)

Engine & Parts

($1)

$150 -

$200

Adj. Mfg Segment Profit

$7

$575 -

$725

10

11

11

Going Forward

Warranty

Emissions

Building the foundation for our

future through integration

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

Monthly Spend

per Unit in Warranty

by Spend Date

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

12

12

2

nd

Quarter 2012 Earnings Call

June 7, 2012

Q2 2011

36%

Q2 2012

36%

2H 2012 Goal

36%-38%

Medium Truck

Going Forward

North America –

Market Share

Combined Class 8 Truck

Q2 2011

45%

Q2 2012

48%

2H 2012 Goal

55%-58%

Q2 2011

19%

Q2 2012

18%

2H 2012 Goal

20%-22%

School Bus

(U.S. & Canada)

Severe Service

Heavy

NYSE: NAV

13

13

Going Forward

North America

•

Economic growth

•

Low interest rates

•

Age of fleet –

maintenance

costs versus new truck price

•

Used truck values to remain

good

Class 6 –

8 U.S. & Canada Industry

•

1

st

half at 323,000; Up 46%

yr/yr

•

2

nd

half at 300,000 –

310,000;

Up 14% -

18% yr/yr

Note:  12 month rolling average

2012 at 300,000 –

310,000

2013 at 325,000 –

345,000

ACT’s

CY2013

Class 8

industry is

265,000

Reconciliation to ACT

2012

ACT*

242,500

CY to FY adjustment

(1,500)

Other misc. specialty vehicles  Included in ACT

(3,500)

Total (ACT comparable Class 8 to Navistar)

237,500

Navistar Industry Retail Deliveries Combined Class 8 Trucks

216,500

Navistar difference from ACT:

21,000

~10%

*Source:  ACT N.A. Commercial Vehicle Outlook - May, 2012

U.S. and Canadian Class 8 Truck Sales

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

NYSE: NAV

Going Forward

North America –

Margin Improvement

•

SG&A

•

Product Development

•

Manufacturing efficiencies

•

Pricing

•

Recover commodities

•

Material cost

•

Design/Content

3%-4%

•

Eliminate start-up related costs

•

Volume growth

•

Material cost

–

2

nd

half $1,000 cost per unit improvement

–

$1,400 Big Bore improvement by year end

Second half

$60M to $100M

run rate

improvement

Truck

Engine

Integration

Volume

14

1H

2H

23%

~27%

Traditional Market Share

15

15

Going Forward

Defense

•

32,000+ vehicles

•

Make MRAP a program of record

•

Reset & FSR activity

•

STS / Post design services

•

FMS –

U.K., Iraq, Afghanistan,

Singapore, Korea, etc.

•

~$425M first half ~40%

•

~$675M second half ~60%

FSR –

Field Service Representative

STS –

System Technical Support

FMS –

Foreign Military Sales

Sustainment

Expanding

Capabilities

Through

Leveraging

FY2012

Goal

-

$1.1B

revenue

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

16

16

Going Forward

BRIC Economy

Source: Moody’s Analytics & CSI Navistar

JAC/NAV

Engine JV

approved by

N.D.R.C.

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

NYSE: NAV

Going Forward

Global

•

BRIC economies recover

•

Unsold inventory corrected

•

Improved

volumes

second

half

of

year

-

66%

improvement

–

1H –

5,600 units

–

2H –

9,300 units

•

Improved margins with increased volume and less

launch costs

•

Material cost maturing

•

$60M improvement in Global Truck

Neobus JV pending

17

18

18

$-

$200

$400

$600

$800

$1,000

$1,200

1H 2011

Actual

2H 2011

Actual

1H 2012

Actual

2H 2012

Goal

Going Forward

Parts

Commercial Parts Revenue

Parts

Segment

Three Months Ended April 30:

($ in millions)

2012

2011

$ change

% change

Commercial

Sales

$465

$445

$20

5%

ProStar+

®

with

MaxxForce

®

15

LoneStar

®

with

MaxxForce

®

13

Components

MaxxForce

®

15

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

NYSE: NAV

Going Forward

Summary

Note:

This slide contains non-GAAP information; please see the REG G in

appendix for a detailed reconciliation. 

Q2 Adj. Mfg

Segment Profit

($Millions)

Estimate

Second Half

2012

($Millions)

Truck & Parts

$8

$425 -

$525

North America

~$43

Global

~($10)

Defense

~($5)

Other

~($20)

Engine & Parts

($1)

$150 -

$200

Adj. Mfg Segment Profit

$7

$575 -

$725

Full Year

Revenue

($Millions)

BRIC Economy

Brazil

~$200

India

~$200*

Diesels -

Brazil

~$200

North America

Parts

~$100

Defense

~$400

Impact of 1

Half North

America

$ ??

*non-consolidated

st

19

NYSE: NAV

Guidance

Note:

This slide contains non-GAAP information; please see the Reg G

disclosure in the appendix for a detailed reconciliation. 

1

st

Half

(adjusted non-GAAP)

2nd Half

(adjusted non-GAAP)

Revised 2012

Guidance

(adjusted non-GAAP)

Revenue (Billions)

$6.4

$7.8

-

$8.4

$14.2

-

$14.8

Adj. Mfg. Segment Profit (Millions)

$27

$575

-

$725

$600

-

$750

Segment Margin %

-

7-8%

~4-5%

Adjusted Income/(Loss) Before Tax

(Millions)

($200)

$235

-

$380

$35

-

$180

Adjusted Net Income/(Loss) (Millions)

($201)

$200

-

$340

$0

-

$140

Adjusted EPS

($2.90)

$2.90

-

$4.90

$0.00

-

$2.00

20

NYSE: NAV

Looking Forward

Note:

This slide contains non-GAAP information; please see the Reg G

disclosure in the appendix for a detailed reconciliation. 

2    Half

(adjusted non-GAAP)

Normalized

Annual Rate

at 300K units

(GAAP)

Revenue (Billions)

$7.8 -

$8.4

$15

-

$16

Adj. Mfg. Segment Profit (Millions)

$575

-

$725

$1.2

-

$1.4

Segment Margin %

7-8%

~8%

Adjusted Income/(Loss) Before Tax

(Millions)

$235

-

$380

$500

-

$700

Adjusted Net Income/(Loss) (Millions)

$200

-

$340

$375

-

$525

Adjusted EPS

$2.90

-

$4.90

$5.35

-

$7.50

21

nd

22

22

2012 Outgoing Run Rate

Note:

This slide contains non-GAAP information; please see the REG G in

appendix for a detailed reconciliation. 

2012 Outgoing

Run Rate

Strategic

Target

Truck –

N.A. w/Parts

8-9%

9-10%

Truck –

Global w/Parts

2-3%

6-8%

Engine –

Worldwide w/Parts

7-8%

8-10%

Total Manufacturing Margin

~8%

~9%

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

23

23

•

Goal of:

$20 billion in Revenue

$1.8 billion in Manufacturing Segment Profit at

average of cycle

Profitable at all points in the cycle

•

Focus is on reducing impact of cyclicality

–

Non-traditional/expansion markets

–

Grow parts

Strategy: Leveraging What We Have and

What Others Have Built

Note:

This slide contains non-GAAP information; please see the Reg G in

appendix for a detailed reconciliation. 

•

Strategy: Control Our Destiny

Global growth

Engine

•

Hard part is over

–

Marketing

–

Product launches

Integration

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

24

24

Adjusted Manufacturing Segment Profit

Note:

This slide contains non-GAAP information; please see the Reg G

disclosure in the appendix for a detailed reconciliation. 

Adjusted Manufacturing Segment Profit (Loss)

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

25

25

Driving Integration -

Leadership

Integration and building

great future leadership

•

Jan Allman

•

Persio Lisboa

•

Bill Osborne

•

Bob Walsh

Integration

Troy Clarke

President of Truck &

Engine

Dan Ustian

Chairman,

President & CEO

A. J. Cederoth

EVP & CFO

Support

Functions

Jack Allen

President

N.A. Truck &

Parts

Archie

Massicotte

President

Defense &

Manufacturing

Ramin

Younessi

Vice President

Product

Development, 

Purchasing &

Quality

Eric Tech

President

Engine, Global

Truck & Parts

Effective July 1, 2012 following board of director approval.

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

26

Appendix

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

Medium

Truck

Great Products –

Market Share

Severe Service

Truck

Heavy

Truck

FY10

59%

FY11

49%

Q2’12

48%

YTD ‘12

48%

FY10

38%

FY11

41%

Q2’12

36%

YTD ‘12

32%

FY10

40%

FY11

35%

Q2’12

30%

YTD ‘12

30%

FY10

24%

FY11

17%

Q2’12

15%

YTD ‘12

16%

Class 8

School

Bus

(U.S. & Canada)

School Bus & Combined Class 6-8 Market Share –

FY10:  34%; FY11:  28%; Q2‘12:  24%; YTD‘12:  23%

18% Market Share

Q2’12

Class 4-5

YTD ’12

Industry

22K

Navistar

1,395

Market Share

~6%

27

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

28

28

Supplemental Information -

Truck

Worldwide Truck Chargeouts

NYSE: NAV

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Actual

Actual

Forecast

Forecast

Q1

Q2

Q3

Q4

Traditional

Expansionary

Towables

We define our “traditional” markets to include U.S. and Canada School bus and Class 6 through 8 medium and heavy truck. We classify militarized commercial

vehicles sold to the U.S. and Canadian militaries as Class 8 severe service within our “traditional” markets. Our “traditional” markets include CAT-branded units

sold to Caterpillar under our North America supply agreement.

29

$507

$170

$2,123

$2,384

$725

$744

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Q2 2011

Q2 2012

Military

U.S. & Canada

ROW

65,000

50,700

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Q2 2011

Q2 2012

25,600

28,400

0

5,000

10,000

15,000

20,000

25,000

30,000

Q2 2011

Q2 2012

$390

$139

$117

$31

$-

$100

$200

$300

$400

$500

$600

Q2 2011

Q2 2012

Truck

Parts

Q2 Operational Results

Consolidated

Revenues

($

in

millions)

Quarterly Truck  Chargeouts

Quarterly Engine Shipments

Charge

outs

increased

11%

Military

Revenues

($

in

millions)

Engine  shipments

decreased 22%

Truck

Revenues

decreased

64%

Parts

Revenues

decreased

74%

$3,355

$3,298

NYSE: NAV

30

30

$1.30

$(1.99)

-$2.50

-$2.00

-$1.50

-$1.00

-$0.50

$0.00

$0.50

$1.00

$1.50

Q2 2011

Q2 2012

Year over Year

Financial Information:

Q2  Adj. Manufacturing Segment Profit (Loss)

($ in millions)

Q2 Adj. Earnings (Loss) Per Share

Q2 Adj. Net Income (Loss)

($ in millions)

Note:

This slide contains non-GAAP information; please see the REG G in

appendix for a detailed reconciliation. 

$198

$7

$0

$50

$100

$150

$200

$250

Q2 2011

Q2 2012

$102

$(137)

-$150.0

-$100.0

-$50.0

$0.0

$50.0

$100.0

$150.0

Q2 2011

Q2 2012

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

31

31

Market Share –

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

We

define

our

“traditional”

markets

to

include

U.S.

and

Canada

School

bus

and

Class

6

through

8

medium

and

heavy

truck.

We

classify

militarized

commercial

vehicles

sold

to

the

U.S.

and

Canadian

militaries

as

Class

8

severe

service

within

our

“traditional”

markets.

Beginning

in

2011,

our

competitors

are

reporting

certain

RV

and

commercial

bus

chassis

units

consistently

with

how

we

report

these

units.

Our

“traditional”

markets

include

CAT-branded

units

sold

to

Caterpillar

under

our

North

America

supply

agreement.

Traditional Market Share

Q1

Q2

Q3

Q4

Full Year

Q1

Q2

Q3

Q4

Full Year

Q1

Q2

Q3

Q4

Full Year

School buses

60%

63%

53%

61%

59%

49%

45%

47%

53%

49%

48%

48%

Class 6 and 7 medium trucks

33%

44%

36%

36%

38%

36%

36%

46%

44%

41%

27%

36%

Class 8 heavy trucks

23%

22%

30%

20%

24%

17%

16%

17%

18%

17%

17%

15%

Class 8 severe service trucks

40%

41%

38%

40%

40%

33%

32%

36%

37%

35%

31%

30%

Combined Class 8

28%

28%

32%

25%

28%

21%

19%

21%

22%

21%

19%

18%

Total Traditional Market Share

33%

35%

35%

32%

34%

27%

26%

29%

29%

28%

22%

24%

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

2010

2011

2012

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

32

32

Worldwide Truck Chargeouts

We define our “traditional”

markets

to include U.S. and Canada School

bus and Class 6 through 8 medium

and heavy truck. We classify

militarized commercial vehicles

sold to the U.S. and Canadian

militaries as Class 8 severe service

within our “traditional”

markets. Our

“traditional”

markets include CAT-

branded units sold to Caterpillar

under our North America supply

agreement.

FISCAL YEAR 2010

Q1

Q2

Q3

Q4

FULL YEAR

BUS

3,100

3,000

2,400

3,900

12,400

MEDIUM

3,900

5,300

3,900

5,400

18,500

HEAVY

5,200

4,600

6,400

5,400

21,600

SEVERE

3,900

3,800

2,200

4,100

14,000

TOTAL

16,100

16,700

14,900

18,800

66,500

NON-TRADITIONAL MILITARY

100

200

1,000

100

1,400

EXPANSIONARY

3,900

4,500

4,700

6,000

19,100

WORLDWIDE TRUCK

20,100

21,400

20,600

24,900

87,000

FISCAL YEAR 2011

Q1

Q2

Q3

Q4

FULL YEAR

BUS

2,100

2,000

2,200

2,900

9,200

MEDIUM

4,600

7,200

7,400

7,900

27,100

HEAVY

4,700

5,200

6,800

9,000

25,700

SEVERE

2,700

3,200

3,700

3,700

13,300

TOTAL

14,100

17,600

20,100

23,500

75,300

NON-TRADITIONAL MILITARY

100

400

200

700

1,400

EXPANSIONARY

5,300

7,600

8,600

10,200

31,700

WORLDWIDE TRUCK

19,500

25,600

28,900

34,400

108,400

FISCAL YEAR 2012

Q1

Q2

Q3

Q4

FULL YEAR

BUS

1,700

2,600

4,300

MEDIUM

4,300

7,100

11,400

HEAVY

8,000

7,200

15,200

SEVERE

3,300

3,600

6,900

TOTAL

17,300

20,500

37,800

NON-TRADITIONAL MILITARY

200

400

600

EXPANSIONARY

7,400

7,500

14,900

WORLDWIDE TRUCK

24,900

28,400

53,300

Worldwide Truck Chargeouts 

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

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33

Worldwide Engine Shipments

Navistar

Q1

Q2

Q3

Q4

Full Year

OEM sales - South America

30,700

34,600

33,600

33,900

132,800

Ford sales - U.S. and Canada

24,700

200

-

-

24,900

Other OEM sales

2,000

3,600

3,700

4,900

14,200

Intercompany sales

16,400

17,700

15,600

18,800

68,500

Total Shipments

73,800

56,100

52,900

57,600

240,400

Navistar

Q1

Q2

Q3

Q4

Full Year

OEM sales - South America

27,200

37,100

38,200

36,100

138,600

Other OEM sales

4,500

4,400

3,700

3,600

16,200

Intercompany sales

17,300

23,500

22,300

25,700

88,800

Total Shipments

49,000

65,000

64,200

65,400

243,600

Navistar

Q1

Q2

Q3

Q4

Full Year

OEM sales - South America

24,100

25,300

49,400

Other OEM sales

2,200

2,000

4,200

Intercompany sales

21,600

23,400

45,000

Total Shipments

47,900

50,700

-

-

98,600

2011

2010

Worldwide Engine Shipments 

2012

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

34

34

Order Receipts –

U.S. & Canada

We

define

our

“traditional”

markets

to

include

U.S.

and

Canada

School

bus

and

Class

6

through

8

medium

and

heavy

truck.

We

classify

militarized

commercial

vehicles

sold

to

the

U.S.

and

Canadian

militaries

as

Class

8

severe

service

within

our

“traditional”

markets.

Our

“traditional”

markets

include

CAT-branded

units

sold

to

Caterpillar

under

our

North

America

supply

agreement.

2012

2011

Change

3,200

2,100

1,100

6,300

6,800

(500)

Class 8 heavy trucks

5,600

9,300

(3,700)

Class 8 severe service trucks

3,000

3,600

(600)

18,100

21,800

(3,700)

8,600

12,900

(4,300)

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

Three Months Ended

April 30,

Total "Traditional" Markets

Combined Class 8 (Heavy and Severe Service)

"Traditional" Markets

School buses

Class 6 and 7 medium trucks

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

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35

Navistar Financial Corporation

Note:  profitability relates to total financial services

•

Profitability strong in 2012:  $26M in Q2,  $53M YTD

Expected to decline as U.S. retail loan portfolio runs off due to G.E. Capital alliance

•

Long-term liquidity in place with better terms

$466M U.S. availability

Consolidating retail securitizations

•

Service leverage of 4.1 to 1 and declining as GE Capital alliance sources retail originations

$1.5B since inception

Retail Notes

Bank Facility

•

$840M  facility refinanced in

December 2011, maturity

extended from 2012 to 2016

•

Funding for retail notes,

wholesale notes, retail

accounts, and dealer open

accounts

•

On balance sheet

•

Situation as of Apr 30, 2012

•

$1.1B funding facility (NFSC)

•

$320M available

•

NFSC wholesale trust

•

Variable portion matures July

2012

•

Public portions mature

October 2012 and October

2013

•

On balance sheet

•

Broader product offering

•

Enhanced ability to support

large fleets

•

Better access to less

expensive capital

Leveraging Assets & Controlling Our Destiny

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

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36

U.S. and Canada Dealer Stock Inventory*

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

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

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37

Frequently Asked Questions

Q1:

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 for company owned

dealers.

Q2:

How many Dealcor dealers did you have as of April 30, 2012?

A:

Of our 272 primary NAFTA dealers, we have ownership interest in seven DealCor dealers as of April 30, 2012.

Q3:

How are your dealers doing?

A:

Our industry leading dealer network continues to improve in nearly all operational and financial aspects of their

business.

Considerable investments continue in facility upgrades, hours of service, technician training, tooling and inventory as a direct

result of our proprietary engine line-up and expansion of our customer base. Additional fixed operations and facility preparedness,

concentrated on the increasing focus on CNG and LNG, continues at a rapid pace for many of our domestic and Canadian dealers.

Q4:

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.

Q5:

How do you fund your wholesale business?

A:

We

primarily

finance

our

wholesale

portfolio

through

NFC,

funded

with

traditional

private

or

public

securitizations,

and

through

NFC’s

bank facility.

Q6:

How is your NFC portfolio performing?

A:

NFC‘s wholesale portfolio performed exceptionally well in 2011 and is continuing to do well in 2012. NFC’s retail notes portfolio in

the U.S. is in run-off mode now that Navistar Capital, the new GE Capital retail program, is financing retail customers.

Q7:

What is your total amount of capacity at NFC?

A:

As of April 30, 2012, total availability in our U.S. funding facilities is $466 million.

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

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38

Frequently Asked Questions

Q8:

What

is

the

status

of

the

retail

financing

alliance

with

GE

Capital

in

the

United

States?

A:

Navistar

Capital

–

the

alliance

we

formed

with

GE

Capital

in

the

United

States

to

support

the

sale

of

Navistar

products

–

is

progressing

consistent

with

expectations.

Since

its

inception

in

2010,

the

alliance

has

funded

more

than

$1.5

billion

in

retail

financings.

Q9:

What

is

included

in

Corporate

and

Eliminations?

A:

The

primary

drivers

of

Corporate

and

Eliminations

are

Corporate

SG&A,

pension

and

OPEB

expense

(excluding

amounts

allocated

to

the

segments),

annual

incentive,

manufacturing

interest

expense,

and

the

elimination

of

intercompany

sales

and

profit

between

segments.

Q10:

What

is

the

current

Joint

Light

Tactical

Vehicle

(JLTV)

program

status?

A:

A

decision

for

the

Engineering,

Manufacturing

and

Development

(EMD)

phase

is

expected

by

the

end

of

the

summer.

Q11:

How

will

the

changing

Department

of

Defense

(DoD)

budget

affect

Navistar

in

FY

2012?

A:

The

coming

year

will

present

challenges,

but

Navistar’s

commercial

expertise

may

be

an

advantage

when

the

DoD

is

asked

to

“do

more

with

less”.

In

addition,

the

Company

continues

to

pursue

a

number

of

foreign

military

opportunities,

especially

in

the

Middle

East,

where

defense

spending

is

growing.

Finally,

the

Company

has

a

fleet

of

more

than

32,000

vehicles

in

operation

in

approximately

26

countries,

including

more

than

9,000

vehicles

operating

with

Afghan

Security

Forces.

These

vehicles

will

require

parts

and

sustainment

support

throughout

their

lifecycles.

NYSE: NAV

2

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Quarter 2012 Earnings Call

June 7, 2012

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39

Frequently Asked Questions

Q12:

How does your FY 2012 Class 8 industry compare to ACT Research?

A:

Q13:

What

were

the

2010

emissions

requirements?

A:

Through

the

use

of

credits

manufacturers

can

go

to

a

maximum

of

0.50g

NOx

if

they

reduced

emissions

earlier

with

advanced

technology;

manufacturers

need

to

be

at

0.20g

NOx

if

they

chose

not

to

introduce

advanced

technologies

to

reduce

their

emissions

earlier.

For

many

years

Navistar

introduced

cleaner

emission

engines

than

EPA

requirements,

and

we

were

able

to

generate

some

credit

before

we

needed

to

reach

the

0.20g

NOx

standard.

Q14:

What

is

included

in

your

equity

in

loss

of

your

non-consolidated

affiliates?

A:

Equity

in

loss

of

non-consolidated

affiliates

is

derived

from

our

ownership

interests

in

partially-owned

affiliates

that

are

not

consolidated,

and

is

primarily

comprised

of

continued

investment

and

start-up

losses

associated

with

our

Mahindra

joint

ventures.

Q15:

What

is

your

net

income

attributable

to

non-controlling

interests?

A:

Net

income

attributable

to

non-controlling

interests

is

the

result

of

the

consolidation

of

subsidiaries

in

which

we

do

not

own

100%,

and

is

primarily

comprised

of

Ford's

non-controlling

interest

in

our

Blue

Diamond

Parts

joint

venture.

Reconciliation to ACT

2012

ACT*

242,500

CY to FY adjustment

(1,500)

Other misc. specialty vehicles  Included in ACT

(3,500)

Total (ACT comparable Class 8 to Navistar)

237,500

Navistar Industry Retail Deliveries Combined Class 8 Trucks

216,500

Navistar difference from ACT:

21,000

~10%

*Source:  ACT N.A. Commercial Vehicle Outlook - May, 2012

U.S. and Canadian Class 8 Truck Sales

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

40

40

Frequently Asked Questions

Q16:

What

is

your

estimate

of

future

effective

tax

rates?

A:

We

would

estimate

future

effective

tax

rates

to

fall

in

the

upper

20%

to

low

30%

range.

For

FY

2012,

we

expect

our

annual

ETR

to

be

significantly

lower

than

expectations

based

on

the

geographical

mix

of

the

jurisdictions

recognizing

earnings

or

losses,

before

the

impact

of

the

valuation

allowances

release

during

this

quarter.

Q17:

What

is

your

expectation

for

future

cash

tax

payments?

A:

Our

cash

tax

payments

will

remain

low

in

FY

2012

and

will

gradually

increase

as

we

exhaust

available

NOLs

and

tax

credits

over

the next few years.

Q18:

What is the current balance of net operating losses as compared to other deferred tax assets?

A:

As

of

October

31,

2011

the

Company

has

U.S.

federal

net

operating

losses

(NOLs)

valued

at

$126

million,

state

NOLs

valued

at

$79

million

and

foreign

NOLs

valued

at

$102

million,

for

a

total

undiscounted

cash

value

of

$307

million.

In

addition

to

NOLs,

the

Company

has

accumulated

tax

credits

of

$208

million

and

other

deferred

tax

assets

of

$1.5

billion

resulting

in

net

deferred

tax

assets

of

approximately

$2

billion.

Q19:

When

do

you

expect

to

release

the

remaining

balance

of

valuation

allowances?

A:

We

released

an

additional

$181

million

during

the

quarter

related

to

our

Canadian

deferred

tax

assets.

The

Company

continues

to

evaluate

various

business

strategies

which

would

allow

us

to

realize

the

value

of

deferred

tax

assets

that

are

currently

subject

to

a

valuation

allowance.

To

the

extent

these

strategies

enable

us

to

demonstrate,

on

a

more-likely-than

not

basis,

that

we

will

be

able

to

realize

these

deferred

tax

assets

in

the

future,

we

will

then

release

the

associated

valuation

allowances.

Q20:

How

will

$2

billion

of

deferred

tax

assets

be

used

to

offset

future

taxable

income?

A:

Simply

put,

deferred

tax

assets

represent

the

value

of

future

tax

deductions

attributable

to

items

that

have

already

been

expensed

or

deducted

for

book

purposes.

The

most

commonly

understood

component

of

deferred

tax

assets

is

the

value

of

our

net

operating

losses,

which

will

serve

to

immediately

reduce

taxable

income

in

the

future.

In

addition,

we

have

several

other

major

components

of

deferred

taxes

which

will

reduce

taxable

income

in

the

future.

For

example,

the

Company

has

accrued

significant

OPEB,

pension

and

other

employee

benefit

expenses

during

prior

years

based

on

expected

payments

to

be

made

in

the

future.

As

these

payments

are

made,

the

Company

will

realize

tax

deductions

to

offset

future

taxable

income.

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

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41

Frequently Asked Questions

Q21:

How

would

future

tax

proposals

to

reduce

U.S.

tax

rates

impact

Navistar?

A:

While

lower

tax

rates

would

favorably

impact

future

tax

expense,

because

of

the

Company’s

large

balance

of

deferred

tax

assets

we

would

incur

a

one-time

adverse

impact

to

our

P&L

to

reset/reduce

our

deferred

tax

balances

to

the

lower

statutory

rates.

We

estimate

that

for

every

1%

reduction

in

tax

rates,

we

would

incur

an

immediate,

one-time

tax

increase

of

$50

million.

Q22:

What

are

your

expected

2012

and

beyond

pension

funding

requirements?

A:

Current

forecasts

indicate

that

we

may

need

to

contribute

approximately

$189

million

in

2012

to

our

U.S.

and

Canadian

pension

plans.

Future

contributions

are

dependent

upon

a

number

of

factors,

principally

the

changes

in

values

of

plan

assets,

changes

in

interest

rates

and

the

impact

of

any

funding

relief

currently

under

consideration.

We

currently

expect

that

from

2013

through

2015,

the

Company

will

be

required

to

contribute

at

least

$210

million

per

year

to

the

plans,

depending

on

asset

performance

and

discount rates.

Q23:

What

causes

the

variance

between

manufacturing

cash

interest

payments

and

GAAP

interest

expense?

A:

The

main

variance

between

cash

and

GAAP

interest

results

from

our

manufacturing

segment’s

$1

billion

of

senior

unsecured

high

yield

notes

and

$570

million

of

senior

subordinated

convertible

notes.

As

a

result

of

this

issuance,

manufacturing

interest

expense

is

higher

than

cash

interest

payments

due

to

the

amortization

of

debt

issuance

costs

which

are

amortized

over

the

life

of

each

note, 

amortization

of

the

original

issue

discount

of

the

high

yield

notes

and

amortization

of

the

embedded

call

option

in

the

convertible

notes.

The

timing

of

interest

payments

also

impacts

the

overall

variance

on

a

quarterly

basis,

but

not

on

a

fiscal

year

basis.

Q24:

What

should

we

assume

for

capital

expenditures

in

fiscal

2012?

A:

We

plan

to

continue

capital

spending

within

the

traditionally

guided

range

of

$250

million

to

$350

million

for

products

and

development.

Capital

spending

related

to

Engineering

Integration

is

funded

through

the

RZFBs

and

is

not

included

in

that

range.

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

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42

Frequently Asked Questions

Q25:

What are the $225 million of RZFBs Series 2010 due October 15, 2040 being used for?

A:

We

are

using

the

proceeds

to

invest

in

our

product

development

strategy

and

our

headquarter

consolidation.

Great

products

are

a

key

pillar

of

our

three

pronged

strategy.

Streamlining

and

improving

our

product

development

processes

will

continue

to

provide

competitive

advantages

for

us

in

the

marketplace.

The

funding

from

the

RZFBs

allowed

us

to

consolidate

many

facilities

into

a

new

facility

and

make

necessary

renovations

to

that

facility.

Additionally

we

are

investing

in

an

existing

facility,

which

includes

investments

in

equipment

and

technology

that

will

help

us

create

and

improve

our

product

development

process

and

thus

shareholder

value.

Q26:

Why did you use RZFB financing?

A:

The

RZFBs

are

a

cost

effective,

long-term

form

of

capital

that

is

complementary

to

our

capital

structure.

The

bonds

have

a

30

year

maturity

and

a

fixed

rate

coupon

of

6.50%

per

annum.

They

are

callable

at

par

any

time

after

10

years

(October

15,

2020).

Issuing

bonds

in

the

tax-exempt

market

gave

us

exposure

to

a

new

source

of

investors

that

we

wouldn’t

otherwise

have

access

to

if

not

for

the

RZFB

program.

Q27:

What

are

the

differences

between

the

accounting

vs.

economic

dilution

on

your

convertible

debt?

A:

Please

see

the

presentation

on

the

IR

website

(http://ir.navistar.com/dilution.cfm)

entitled

Dilution

overview

resulting

from

the

Convertible

Notes

issued

on

October

2009.

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

43

43

Frequently Asked Questions

Q28:

Why are the convertible debt holders no longer able to convert their notes?

A:

The

indenture

in

our

convertible

notes

contains

a

provision

that

allows

the

note

holders

to

convert

anytime

during

the

following

fiscal

quarter

should

the

price

of

Navistar’s

common

stock

close

130%

above

the

conversion

price

for

any

20

day

period

(consecutive

or

non-consecutive)

out

of

the

last

30

consecutive

day

trading

period

of

each

fiscal

quarter.

The

conversion

price

of

the

notes

is

$50.274

per

share

of

Navistar’s

common

stock

and

130%

of

the

conversion

price

equals

$65.356

per

share

of

Navistar’s

common

stock.

Since

Navistar’s

common

stock

closed

above

$65.356

per

share

for

more

than

20

trading

days

during

the

30

consecutive

trading

day

period

ending

on

April

30,

2011,

the

note

holders

had

the

right

to

convert

their

notes

any

time

from

May

2,

2011

through

July

31,

2011.

A

very

small

minority

of

note

holders

chose

to

convert

their

notes

during

the

conversion

period.

Navistar

opted

to

settle

the

conversion

in

cash

instead

of

shares,

therefore

there

was

a

40

trading

day

observation

period

to

determine

the

value

that

was

remitted

in

cash,

so

the

note

holders

did

not

receive

the

cash

for

almost

two

months

after

their

respective

conversion

notices

were

received.

Navistar’s

common

stock

did

not

close

above

$65.356

per

share

for

20

trading

days

(consecutive

or

non-consecutive)

during

the

30

day

consecutive

trading

day

period

ending

April

30,

2012,

therefore

the

note

holders

do

not

have

the

right

to

convert

their

notes,

however

that

threshold

could

be

triggered

once

again

in

the

future.

Q29:

Are

you

ready

for

the

2013

Greenhouse

Gas

(GHG)

regulation?

A:

Yes,

Navistar

is

ready

to

meet

the

standards

when

they

go

into

effect

January

2014.

As

a

leader

in

fuel

efficiency

and

in

delivering

innovative

technologies,

such

as

aerodynamics,

lighter

weight

vehicles,

fuel

efficient

engines,

hybrids,

plug-in

hybrids

and

electric

vehicles,

our

current

approach

is

to

consistently

deliver

the

most

practical

advance

technology

and

fuel-efficient

vehicles

to

our

customers.

Our

customer-focused

approach

aligns

Navistar

with

the

intent

of

the

new

proposed

GHG

rule,

and

provides

us

with

a

strong

basis

for

meeting

the

new

standards.

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

44

44

Frequently Asked Questions

Q30:

How are you addressing the 2014 and future GHG regulations?

A:

Navistar

has

invested

in

the

development

of

fuel

efficient

engines,

powertrain

optimization,

and

unmatched

vehicle

level

aerodynamics

as

well

as

other

vehicle

level

attributes

that

result

in

the

lowering

fuel

consumption

or

the

CO2

of

the

entire

vehicle.

Further,

our

non-SCR

engines

have

an

advantage

where

we

do

not

release

any

N2O

in

the

environment,

which

is

one

of

the

GHG

elements

and

more

potent

than

CO2.

We

are

planning

on

meeting

the

GHG

standard

through

2016

with

no

changes

to

the

vehicle.

We

are

now

working

on

2017

GHG

standards

and

we

believe

that

we

will

meet

these

standards

with

minimum

changes.

Q31:

For

the

manufacturing

debt

currently

outstanding

in

your

most

recent

financial

statement

filings,

what

are

the

respective

maturity

dates

and

principal

amounts

outstanding?

A:

The

amounts

and

maturity

dates

are

as

follows

(the

values

shown

below

are

the

amounts

due

and

exclude

the

accounting

impact

of

any

OID

or

bifurcation):

8.25% Senior Notes due November 1, 2021

$900 million

3.0% Senior Subordinated Convertible Notes due October 15, 2014

$570 million

Debt of majority owned dealerships (various maturity dates)

$84 million

Financing arrangements and capital lease obligations (various maturity dates)

$137 million

Loan Agreement related to the 6.5% Tax Exempt Bonds due October 1, 2040

$225 million

Asset-Based Revolving Credit Facility due November 1, 2016

$100 million

Promissory Note due September 30, 2015

$36 million

Other (various maturity dates)

$49 million

Total

$2,101 million

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

NYSE: NAV

Manufacturing Cash Flow

Beginning Mfg. Cash

1

Balance

Fiscal 2010

Fiscal 2011

Q1 -

2012

Q2 -

2012

October 31, 2009

$1,152

October 31, 2010

$1,100

October 31, 2011

$1,186

January 31, 2012

$837

Approximate Cash Flows:

From Operations

$409

$680

($142)

($72)

From Investing / (Cap Ex)

($350)

($485)

($125)

($75)

From Financing / (Debt Pay Down)

($110)

($106)

($85)

($2)

Exchange Rate Effect

($1)

($3)

$3

($7)

Net Cash Flow

($52)

$86

($349)

($156)

Ending Mfg. Cash

1

Balance:

October 31, 2010

$1,100

October 31, 2011

$1,186

January 31, 2012

$837

April 30, 2012

$681

1

Cash = Cash, Cash Equivalents & Marketable Securities

2

Includes cash from the consolidation of minority interests

45

NYSE: NAV

Outstanding Debt Balances

April 30, 

2012

October 31,

2011

(in millions)

Manufacturing operations

8.25% Senior Notes, due 2021, net of unamortized discount of $29 and $33, respectively ..............

$

871

$

967

3.0% Senior Subordinated Convertible Notes, due 2014, net of unamortized discount of $62 and

$73, respectively ..............................................................................................................................

508

497

Debt of majority-owned dealerships .................................................................................................

84

94

Financing arrangements and capital lease obligations ....................................................................

155

118

Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040 .....................................................

225

225

Promissory Note ..............................................................................................................................

36

40

Asset-Based Credit Facility ..............................................................................................................

100

—

Other ................................................................................................................................................

49

39

Total manufacturing operations debt.........................................................................................

2,028

1,980

Less: Current portion........................................................................................................................

230

99

Net long-term manufacturing operations debt ...........................................................................

$

1,798

$

1,881

Financial Services operations

Asset-backed debt issued by consolidated SPEs, at variable rates, due serially through 2018 .......

$

1,284

$

1,664

Bank revolvers, at fixed and variable rates, due dates from 2013 through 2017

..............................

1,060

1,072

Commercial paper, at variable rates, due serially through 2012 ......................................................

59

70

Borrowings secured by operating and finance leases, at various rates, due serially through 2017 .

66

70

Total financial services operations debt ....................................................................................

2,469

2,876

Less: Current portion........................................................................................................................

1,279

1,280

Net long-term financial services operations debt ......................................................................

$

1,190

$

1,596

46

SEC Regulation G Non-GAAP Reconciliation

The

financial

measures

presented

below

are

unaudited

and

not

in

accordance

with,

or

an

alternative

for,

financial

measures

presented

in

accordance

with

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.

Manufacturing

Segment

Results:

We

believe

manufacturing

segment

results,

which

includes

the

segment

results

of

our

Truck,

Engine,

and

Parts

reporting

segments,

provide

meaningful

information

of

our

core

manufacturing

business

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

reconciliation,

and

to

provide

an

additional

measure

of

performance.

Adjusted

Net

Income

and

Diluted

Earnings

Per

Share

Attributable

To

Navistar

International

Corporation

and

Adjusted

Manufacturing

Segment

Profit:

We

believe

that

adjusted

net

income,

diluted

earnings

per

share

attributable

to

Navistar

International

Corporation,

and

adjusted

manufacturing

segment

profit

excluding

certain

adjustments

which

are

not

considered

to

be

part

of

our

ongoing

business,

improve

the

comparability

of

year

to

year

results

and

are

representative

of

our

underlying

performance.

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.

Adjusted

Manufacturing

Earnings

Before

Interest,

Income

Taxes,

Depreciation,

and

Amortization

(“EBITDA”):

Adjusted

manufacturing

segment

EBITDA

is

defined

as

our

consolidated

net

income

(loss)

from

continuing

operations

minus

the

net

income

(loss)

from

our

financial

services

operations

plus

interest

expense,

income

taxes,

and

depreciation

and

amortization,

adjusted

to

exclude

certain

items

that

may

not

be

related

to

the

core

manufacturing

business.

EBITDA

is

a

measure

commonly

used

and

is

presented

to

aid

in

developing

an

understanding

of

the

ability

of

our

operations

to

generate

cash

for

debt

service

and

taxes,

as

well

as

cash

for

investments

in

working

capital,

capital

expenditures,

and

other

liquidity

needs.

This

information

is

presented

as

a

supplement

to

the

other

data

provided

because

it

provides

information

which

we

believe

is

useful

to

investors

for

additional

analysis.

EBITDA

should

not

be

considered

in

isolation

or

as

a

substitute

for

net

income,

cash

flows

from

operating

activities

or

other

consolidated

operations,

or

cash

flow

statement

data

prepared

in

accordance

with

GAAP,

or

as

a

measure

of

our

profitability

or

liquidity

as

determined

in

accordance

with

GAAP.

Manufacturing

Cash

Flow

and

Manufacturing

Cash,

Cash

Equivalents,

and

Marketable

Securities:

Manufacturing

cash

flow

is

used

and

is

presented

to

aid

in

developing

an

understanding

of

the

ability

of

our

operations

to

generate

cash

for

debt

service

and

taxes,

as

well

as

cash

for

investments

in

working

capital,

capital

expenditures

and

other

liquidity

needs.

This

information

is

presented

as

a

supplement

to

the

other

data

provided

because

it

provides

information

which

we

believe

is

useful

to

investors

for

additional

analysis.

Our

manufacturing

cash

flow

is

prepared

with

marketable

securities

being

treated

as

a

cash

equivalent.

Manufacturing

cash,

cash

equivalents,

and

marketable

securities

represents

the

Company’s

consolidated

cash,

cash

equivalents,

and

marketable

securities

excluding

cash,

cash

equivalents,

and

marketable

securities

of

our

financial

services

operations.

We

include

marketable

securities

with

our

cash

and

cash

equivalents

when

assessing

our

liquidity

position

as

our

investments

are

highly

liquid

in

nature.

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

reconciliation,

and

to

provide

an

additional

measure

of

performance.

47

48

48

SEC Regulation G –

Adjusted Manufacturing EBITDA

Three Months Ended April 30, 2012

($ millions)

Net loss attributable to NIC

(172)

$        

Less income tax benefit

(143)

Add back impairment and restructuring of N.A. MFG Operations

49

Loss before income tax benefit

(266)

$        

Less equity income from financial service operations

(18)

Loss before income tax benefit and equity income from financial service operations

(284)

$        

Add back manufacturing interest expense

42

Manufacturing EBIT

(242)

$        

Add back manufacturing depreciation and amortization¹

74

Adjusted manufacturing EBITDA

(168)

$        

1

Includes depreciation of equipment leased to others and excludes debt issuance cost/discount amortization

Navistar International Corporation (Manufacturing operations with

financial services operations on a pre-tax equity basis)

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

49

49

SEC Regulation G –

Manufacturing Cash Fiscal Year Comparison

Manufacturing cash, cash equivalents, and marketable securities reconciliation:

(Dollars in Millions)

April 30,

2012

October 31,

2011

October 31,

2010

October 31,

2009

Manufacturing segment cash and cash equivalents

364

$         

488

$         

534

$         

1,152

$      

Financial services segment cash and cash equivalents

36

51

51

60

Consolidated cash and cash equivalents

400

$         

539

$         

585

$         

1,212

$      

Manufacturing marketable securities

317

$         

698

$         

566

$         

-

$          

Financial services segment marketable securities

20

20

20

-

Consolidated marketable securities

337

$         

718

$         

586

$         

-

$          

Manufacturing segment cash and cash equivalents

364

$         

488

$         

534

$         

1,152

$      

Manufacturing marketable securities

317

698

566

-

Manufacturing segment cash, cash equivalents and marketable securities

681

$         

1,186

$      

1,100

$      

1,152

$      

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

50

50

SEC Regulation G –

Manufacturing Cash

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

Manufacturing

Operations

Financial

Services

Operations

Adjustments

Condensed

Consolidated

Cash Flows

($ in Millions)

For the year ended October 31, 2011

Cash flows from operations

680

200

-

880

Cash flows from investing / capital expenditures:

(485)

(206)

(132)

(823)

Cash flows from financing / debt pay down

(106)

6

-

(100)

Effect of exchange rate changes

(3)

-

-

(3)

Net cash flows

86

-

(132)

(46)

Beginning cash, cash equivalents and marketable

securities balance

1,100

71

(586)

585

Ending cash, cash equivalents and marketable securities

balance

1,186

71

(718)

539

Manufacturing segment cash flow reconciliation:

Manufacturing

Operations

Financial

Services

Operations

Adjustments

Condensed

Consolidated

Cash Flows

($ in Millions)

For the year ended October 31, 2010

Cash flows from operations

409

698

-

1,107

Cash flows from investing / capital expenditures:

(350)

492

(576)

(434)

Cash flows from financing / debt pay down

(110)

(1,180)

(10)

(1,300)

Effect of exchange rate changes

(1)

1

-

-

Net cash flows

(52)

11

(586)

(627)

Beginning cash, cash equivalents and marketable

securities balance

1,152

60

-

1,212

Ending cash, cash equivalents and marketable securities

balance

1,100

71

(586)

585

Manufacturing segment cash flow reconciliation:

51

51

SEC Regulation G –

Manufacturing Cash

NYSE: NAV

2

nd

Quarter 2012 Earnings Call

June 7, 2012

Manufacturing

Operations

Financial

Services

Operations

Adjustments

Condensed

Consolidated

Cash Flows

($ in Millions)

For the six months ended April 30, 2012

Cash flows from operations

(214)

263

-

49

Cash flows from investing / capital expenditures:

(200)

144

381

325

Cash flows from financing / debt pay down

(87)

(423)

-

(510)

Effect of exchange rate changes

(4)

1

-

(3)

Net cash flows

(505)

(15)

381

(139)

Beginning cash, cash equivalents and marketable

securities balance

1,186

71

(718)

539

Ending cash, cash equivalents and marketable securities

balance

681

56

(337)

400

Manufacturing segment cash flow reconciliation:

Manufacturing

Operations

Financial

Services

Operations

Adjustments

Condensed

Consolidated

Cash Flows

($ in Millions)

For the three months ended April 30, 2012

Cash flows from operations

(72)

2

-

(70)

Cash flows from investing / capital expenditures:

(75)

(3)

102

24

Cash flows from financing / debt pay down

(2)

(30)

(32)

Effect of exchange rate changes

(7)

(3)

-

(10)

Net cash flows

(156)

(34)

102

(88)

Beginning cash, cash equivalents and marketable

securities balance

837

90

(439)

488

Ending cash, cash equivalents and marketable securities

balance

681

56

(337)

400

Manufacturing segment cash flow reconciliation:

NYSE: NAV

SEC Regulation G –

Adjusted Net Income, Diluted EPS and Manufacturing Segment Profit –

Three and Six Months Ended April 30, 2012 and 2011

52

Adjusted net income (loss) attributable to Navistar International Corporation reconciliation:

2012

2011

2012

2011

($ in millions, except per share data)

Net loss attributable to Navistar International Corporation

$     (172)

$      74

$ (325)

$      68

Plus:

Engineering integration costs, net of tax

(A)

31

4

39

23

Restructuring of North American manufacturing operations, net of

tax

(B)

37

-

37

-

Adjustments to pre-existing warranties, net of tax

(C)

138

24

219

32

Charges for non-conformance penalties, net of tax

(D)

10

-

10

-

Less:

Net impact of valuation allowance release

(E)

181

-

181

-

Adjusted net income (loss) attributable to Navistar International Corporation

$     (137)

$    102

$ (201)

$    123

Diluted loss per share attributable to Navistar International Corporation

$    (2.50)

$   0.93

$(4.69)

$   0.87

Effect of adjustments on diluted loss per share attributable to Navistar International Corporation

0.51

0.37

1.79

0.72

Adjusted diluted earnings (loss) per share attributable to Navistar International Corporation

$    (1.99)

$   1.30

$(2.90)

$   1.59

Diluted weighted shares outstanding

68.7

78.6

69.3

77.3

Manufacturing segment profit (loss) and adjusted manufacturing segment profit (loss) reconciliation:

2012

2011

2012

2011

($ in millions)

Net loss attributable to Navistar International Corporation

$     (172)

$      74

$ (325)

$      68

Less:

Financial services segment profit

26

40

53

72

Corporate and eliminations

(175)

(129)

(325)

(247)

Income tax benefit (expense)

133

(5)

214

(5)

Manufacturing

segment 

profit

(loss) 

(156)

168

(267)

248

Plus:

Engineering integration costs

(A)

11

3

19

21

Restructuring of North American manufacturing operations

(B)

38

-

38

-

Adjustments to pre-existing warranties

(C)

104

27

227

36

Charges for non-conformance penalties

(D)

10

-

10

-

Adjusted

manufacturing

segment

profit

(loss)

$           7

$    198

$     27

$    305

Three Months Ended

April 30,

Three Months Ended

April 30,

Six Months Ended

April 30,

Six Months Ended

April 30,

See notes at slide #57.

NYSE: NAV

SEC Regulation G –

Adjusted Profit Before Tax –

Three and Six Months Ended April 30, 2012

Profit (loss) before tax and adjusted profit (loss) before tax reconciliation:

($ in millions)

Profit (loss) before tax

Plus tax adjustments for:

Engineering integration costs

(A)

Restructuring of North American manufacturing operations

(B)

Adjustments to pre-existing warranties

(C)

Charges for non-conformance penalties

(D)

Adjusted profit (loss) before tax

$                                       (114)

$                                       (295)

                                              29

                                              38

                                            104

                                              10

Three Months Ended       

April 30,2012

53

See notes at slide #57.

NYSE: NAV

SEC Regulation G –

Q2 Adjusted Manufacturing Segment Profit and

Second Half of 2012 Manufacturing Segment Profit

Second Half 2012 Manufacturing Segment Profit:

Lower

Truck

Engine

Parts

Total

Truck w/ Parts

300

$         

125

$         

425

$         

Engine w/ Parts

100

$         

50

150

Manufacturing Segment Profit

300

$         

100

$         

175

$         

575

$         

Upper

Truck

Engine

Parts

Total

Truck w/ Parts

375

$         

150

$         

525

$         

Engine w/ Parts

150

$         

50

200

Manufacturing Segment Profit

375

$         

150

$         

200

$         

725

$         

54

2012 Q2 Adjusted Manufacturing Segment Profit:

Truck

Engine

Parts

Total

Q2 Manufacturing Segment Profit

(89)

$    

(108)

$  

41

$     

(156)

$  

Plus:

Engineering integration costs

(A)

9

2

11

Restructuring of North American manufacturing operations

(B)

28

10

38

Adjustments to pre-existing warranties

(C)

26

78

104

Charges for non-conformance penalties

(D)

10

10

Q2 Adjusted Manufacturing Segment Profit

(26)

$    

(18)

$    

51

$     

7

$      

Truck w/ Parts

(26)

$    

34

$     

8

$      

Engine w/ Parts

(18)

$    

17

(1)

Q2 Adjusted Manufacturing Segment Profit

(26)

$    

(18)

$    

51

$     

7

$      

See notes at slide #57.

SEC Regulation G –

Second Half of 2012 Guidance

55

Adjusted net income and diluted earnings per share attributable to Navistar International Corporation reconciliation:

Lower

Upper

($ in millions, except per share data)

Net income attributable to Navistar International Corporation

$          125

$           265

Plus:

Engineering integration costs, net of tax

(A)

47

47

Charges for non-conformance penalties, net of tax

(D)

29

29

Adjusted net income attributable to Navistar International Corporation

$          200

$           340

Diluted earnings per share attributable to Navistar International Corporation

$         1.80

$          3.85

Effect

of

adjustments

on

diluted

earnings

per

share

attributable

to

Navistar

International

Corporation

1.10

1.05

Adjusted

diluted

earnings

per

share

attributable

to

Navistar

International

Corporation

$         2.90

$          4.90

Approximate diluted average weighted shares outstanding

68.7

68.7

Manufacturing segment profit and adjusted manufacturing segment profit reconciliation:

Lower

Upper

($ in millions)

Net income attributable to Navistar International Corporation

$          125

$           265

Less: Financial services segment profit, Corporate and eliminations, and income taxes

(375)

(385)

Manufacturing segment profit

500

650

Plus:

Engineering integration costs

(A)

45

45

Charges for non-conformance penalties

(D)

30

30

Adjusted manufacturing segment profit

$          575

$           725

Income (loss) before tax and adjusted income (loss) before tax reconciliation:

Lower

Upper

($ in millions)

Income (loss) before tax

$          155

$           300

Plus:

Engineering integration costs

(A)

50

50

Charges for non-conformance penalties

(D)

30

30

Adjusted income (loss) before tax

$          235

$           380

Second Half 2012 Guidance

Second Half 2012 Guidance

Revised 2012 Guidance

NYSE: NAV

See notes at slide #57.

NYSE: NAV

2nd

Quarter 2012 Earnings Call

June 7, 2012

SEC Regulation G –

Revised 2012 Guidance

See notes at slide 57.

56

Adjusted net income and diluted earnings per share attributable to Navistar International Corporation reconciliation:

Lower

Upper

($ in millions, except per share data)

Net income attributable to Navistar International Corporation

(200)

(60)

Plus:

Engineering

integration

costs,

net

of

tax

(A)

87

87

Restructuring

of

North

American

manufacturing

operations,

net

of

tax

(B)

37

37

Adjustments

to

pre-existing

warranties,

net

of

tax

(C)

219

219

Charges

for

non-conformance

penalties,

net

of

tax

(D)

39

39

Less:

Net

impact

of

valuation

allowance

release

(E)

181

181

Adjusted net income attributable to Navistar International Corporation

-

140

Diluted earnings per share attributable to Navistar International Corporation

(2.85)

(0.85)

Effect

of

adjustments

on

diluted

earnings

per

share

attributable

to

Navistar

International Corporation

2.85

2.85

Adjusted diluted earnings per share attributable to Navistar International Corporation

-

2.00

Approximate diluted average weighted shares outstanding

69.8

69.8

Manufacturing segment profit and adjusted manufacturing segment profit reconciliation:

Lower

Upper

($ in millions)

Net income attributable to Navistar International Corporation

(200)

(60)

Less: Financial services segment profit, Corporate and eliminations, and income taxes

(430)

(440)

Manufacturing segment profit

230

380

Plus:

Engineering

integration

costs

(A)

65

65

Restructuring

of

North

American

manufacturing

operations

(B)

38

38

Adjustments

to

pre-existing

warranties

(C)

227

227

Charges

for

non-conformance

penalties

(D)

40

40

Adjusted manufacturing segment profit

600

750

Income (loss) before tax and adjusted income (loss) before tax reconciliation:

Lower

Upper

($ in millions)

Income (loss) before tax

(361)

(216)

Plus:

Engineering

integration

costs

(A)

91

91

Restructuring

of

North

American

manufacturing

operations

(B)

38

38

Adjustments

to

pre-existing

warranties

(C)

227

227

Charges

for

non-conformance

penalties

(D)

40

40

Adjusted income (loss) before tax

35

180

Revised 2012 Guidance

Revised 2012 Guidance

Revised 2012 Guidance

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

NYSE: NAV

SEC Regulation G –

Notes

57

(A) 

Engineering integration costs relate to the consolidation of our truck and engine engineering operations, as well as the relocation of our

world headquarters. For the three months ended April 30, 2012, the charges included restructuring charges of $20 million and other related

costs of $9 million. The tax impact of the second quarter adjustments was income tax expense of $2 million. For the six months ended April

30, 2012, the charges included restructuring charges of $20 million and other related costs of $21 million. The tax impact of the first half

adjustments was income tax benefit of $2 million. For the three and six months ended April 30, 2011, the charges included restructuring

charges of $1 million and $19 million, respectively, and other related costs of $5 million and $7 million, respectively. For the three and six

months ended April 30, 2011, the tax impact of the adjustments was income tax benefits of $2 million and $3 million, respectively. Our

manufacturing operations, primarily our Truck segment, recognized charges of $11 million and $19 million relating to these actions in the

three and six months ended April 30, 2012, respectively, compared to $3 million and $21 million in the three and six months ended April 30,

2011, respectively.

(B)

Restructuring of North American manufacturing operations are charges primarily related to our ongoing restructuring plans related to our

plans to close our Chatham, Ontario heavy truck plant and WCC chassis plant in Union City, Indiana, and to significantly scale back

operations at our Monaco recreational vehicle headquarters and motor coach manufacturing plant in Coburg, Oregon. In the three and six

months ended April 30, 2012, the charges included impairments of certain intangible assets of $38 million. The tax impact of the

adjustments was an income tax benefit of $1 million. The Truck and Parts segments recognized charges of $28 million and $10 million,

respectively. During the three and six months ended April 30, 2012, the Company incurred charges of $104 million and $227 million,

respectively, for adjustments to pre-existing warranties. 

(C)

During the three and six months ended April 30, 2012, the Company incurred charges of $104 million and $227 million, respectively, for

adjustments to pre-existing warranties. For the three and six months ended April 30, 2012, the tax impact of the adjustments was income tax

expense of $34 million and income tax benefit of $8 million, respectively. During the three and six months ended April 30, 2011, the

Company incurred charges of $27 million and $36 million, respectively. For the three and six months ended April 30, 2011, the tax impact of

the adjustments was income tax benefits of $3 million and $4 million, respectively.

(D)

In the three months ended April 30, 2012, the Company recorded charges totaling $10 million for NCPs for certain 13L engine sales that did

not comply with emission standards, recognized in the Engine segment. The adjustment did not have a material impact on income taxes.

(E)

In the three months ended April 30, 2012, we recognized an income tax benefit of $181 million from the release of a significant portion of our

income tax valuation allowance on our Canadian deferred tax assets.

The above charges, A through D, have been adjusted to reflect the impact of income taxes which are calculated based on the respective period's

estimated annual effective tax rate. The income tax impact of the second quarter adjustments reflects the impact of a change in the quarter to the

Company's estimated annual effective tax rate. The change is the result of updates to the forecasted earnings and the jurisdictional mix. The tax

impact of the adjustments may be adjusted for future changes in the estimated annual effective tax rate.

NYSE: NAV

SEC Regulation G –

Normalized Annual Rate at 300K Units

58

Manufacturing segment profit and adjusted manufacturing segment profit reconciliation:

Lower

Upper

(in millions)

Net income (loss) attributable to Navistar International Corporation

$     375

$     525

Less: Financial services segment profit, Corporate and eliminations, and income taxes

(825)

(875)

Manufacturing segment profit

$  1,200

$  1,400

Normalized Annual Rate at 300K Units

NYSE: NAV

59

SEC Regulation G –

Adjusted Manufacturing Segment Profit –

2003-2011

2011

2010

2009

2008

2007

2006

2005

2004

2003

(in millions)

Net income (loss) attributable to Navistar International Corporation

$   1,723

$      223

$      320

$      134

$    (120)

$      301

$      139

$      (44)

$    (333)

Less:

Financial services segment profit (loss)

129

95

40

(24)

127

147

136

132

87

Corporate and eliminations

(571)

(590)

(519)

(478)

(662)

(590)

(412)

(178)

(310)

Income tax benefit (expense)

1,458

(23)

(37)

(57)

(47)

(94)

(6)

(9)

(17)

Manufacturing segment profit

$      707

$      741

$      836

$      693

$      462

$      838

$      421

$        11

$      (93)

Plus:

Ford settlement, restructuring and related charges (benefits)

(A)

-

-

(160)

37

-

-

-

-

-

Impairment of property, plant, and equipment

(B)

-

-

31

358

-

-

-

-

-

Engineering integration costs

(C)

51

-

-

-

-

-

-

-

-

Restructuring of North American manufacturing operations

(D)

124

-

-

-

-

-

-

-

-

Adjusted manufacturing segment profit

$      882

$      741

$      707

$   1,088

$      462

$      838

$      421

$        11

$      (93)

(B)  Impairment of property, plant, and equipment in 2008 are related to impairments to the asset groups in the Engine segment’s VEE Business Unit. The 2009 impairments relate to

charges recognized by the Truck segment for impairments related to asset groups at our Chatham and Conway facilities.

(C)  Engineering integration costs relate to the consolidation of our truck and engine engineering operations, as well as the move of our world headquarters. These costs include

restructuring charges for activities at our Fort Wayne facility and other related costs, including $51 million of engineering integration costs recognized by our manufacturing segment.

(D)  Restructuring of North American manufacturing operations are charges primarily related to our plans to close our Chatham, Ontario heavy truck plant and Workhorse chassis plant

in Union City, Indiana, and to significantly scale back operations at our Monaco recreational vehicle headquarters and motor coach manufacturing plant in Coburg, Oregon.  These costs

include restructuring charges, as well as impairment charges related to certain intangible assets and property plant and equipment primarily related to these facilities, recognized by our

Truck segment.

Manufacturing segment profit and adjusted manufacturing segment profit reconciliation:

(A)  Ford settlement, restructuring and related charges (benefits) include the impact of our settlement with Ford in 2009 as well as charges and benefits recognized related to

restructuring activity at our Indianapolis Casting Corporation and Indianapolis Engine Plant. The charges and benefits were recognized in our Engine segment.

NYSE: NAV

60

SEC Regulation G –

Margin Expansion

Approx.

Truck

Engine

Parts

Total

Truck

Engine

Parts

Total

Range

Truck - N.A. w/Parts

11,500

$   

1,450

$  

12,950

$   

865

$     

250

$  

1,115

$  

8-9%

Truck - Global w/Parts

1,400

150

1,550

15

30

45

2-3%

Engine - Worldwide w/Parts

3,000

$  

850

3,850

150

$    

150

300

7-8%

Total Consolidated

12,900

$   

3,000

$  

2,450

$  

18,350

$   

880

$     

150

$    

430

$  

1,460

$  

~8%

Approx.

Truck

Engine

Parts

Total

Truck

Engine

Parts

Total

Range

Truck - N.A. w/Parts

12,225

$   

1,450

$  

13,675

$   

1,060

$  

265

$  

1,325

$  

9-10%

Truck - Global w/Parts

1,800

160

1,960

85

30

115

6-8%

Engine - Worldwide w/Parts

3,475

$  

880

4,355

200

$    

160

360

8-10%

Total Consolidated

14,025

$   

3,475

$  

2,490

$  

19,990

$   

1,145

$  

200

$    

455

$  

1,800

$  

~9%

2012 Annualized Outgoing Run Rate

Sales

Segment Profit

Strategic Target

Sales

Segment Profit