8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 3, 2014

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.)

2701 Navistar Drive Lisle, Illinois	60532
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (331) 332-5000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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

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

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

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

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

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

ITEM 7.01 REGULATION FD DISCLOSURE

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

On September 3, 2014, the Company filed its Quarterly Report on Form 10-Q for the period ended July 31, 2014 with the Securities and Exchange Commission. The Company’s press release announcing the filing is attached as Exhibit 99.1 to this Current Report and is incorporated by reference herein.

The Company, which is one of the largest combined commercial truck, school bus and mid-range diesel engine producers, will present via live web cast its fiscal 2014 third quarter financial results on Wednesday, September 3rd. A live web cast is scheduled at approximately 9:00 AM Eastern. Speakers on the web cast will include: Troy Clarke, President and Chief Executive Officer; Jack Allen, Executive Vice President and Chief Operating Officer; Walter Borst, Executive Vice President and Chief Financial Officer; and other company leaders. A copy of the slides containing financial and operating information to be used as part of the web cast are attached as Exhibit 99.2 to this Current Report and are incorporated by reference herein.

The web cast can be accessed through a link on the investor relations page of Company’s web site at http://www.navistar.com/navistar/investors/webcasts. Investors are advised to log on to the website at least 15 minutes prior to the start of the web cast to allow sufficient time for downloading any necessary software. The web cast will be available for replay at the same address approximately three hours following its conclusion, and will remain available for a period of at least 12 months.

Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries and affiliates produce International^® brand commercial and military trucks, MaxxForce^® brand diesel engines, and IC Bus^™ brand school and commercial buses. The Company also provides truck and diesel engine service parts. Another affiliate offers financing services. Additional information is available at www.Navistar.com.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

The following documents are filed herewith:

Exhibit No.	Description
99.1	Press Release.
99.2	Slide Presentation for Third Quarter 2014 Financial Results Web Cast to be held on September 3, 2014.

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 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, 2013 and our quarterly report on Form 10-Q for the quarter ended July 31, 2014. Although we believe that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. All future written and oral forward-looking statements by us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except for our ongoing obligations to disclose material information as required by the federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

NAVISTAR INTERNATIONAL CORPORATION
(Registrant)
By:	/s/ WALTER G. BORST
Name: Title:	Walter G. Borst Executive Vice President and Chief Financial Officer

Dated: September 3, 2014

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release.
99.2	Slide Presentation for Third Quarter 2014 Financial Results Web Cast to be held on September 3, 2014.

EX-99.1

Exhibit 99.1

Navistar International Corporation 2701 Navistar Dr. Lisle, IL 60532 USA P: 331-332-5000 W: navistar.com

Media contact:	Steve Schrier, 331-332-2264
Investor contact:	Heather Kos, 331-332-2406
Web site:	www.Navistar.com/newsroom

NAVISTAR REPORTS THIRD QUARTER RESULTS

• Reports net loss of $2 million, or 2-cents per share, on revenues of $2.8 billion

• Achieves quarterly income from continuing operations before income taxes for first time since 2011

• Exceeds EBITDA guidance, excluding one-time items and pre-existing warranty expense

• Increases chargeouts for Class 6-8 trucks and buses in U.S. and Canada by 10 percent year-over-year

• Finishes quarter with 54 percent increase in order backlog year-over-year

• Reduces structural costs by additional $86 million

• Ends quarter with $1.1 billion in manufacturing cash

LISLE, Ill. (September 3, 2014) – Navistar International Corporation (NYSE: NAV) today announced a third quarter 2014 net loss of $2 million, or $0.02 per diluted share, compared to a third quarter 2013 net loss of $247 million, or $3.06 per diluted share. Revenues in the quarter were $2.8 billion, essentially flat versus the third quarter of 2013.

“Our third quarter results reflect a number of positive trends including increased production, improvements in warranty charges, cost reductions that further lowered our breakeven point and our continued efforts to manage cash,” said Troy A. Clarke, Navistar president and chief executive officer. “While we have work ahead of us to grow the business, improve our market share and further reduce our cost of doing business, we do take some satisfaction in achieving positive income from continuing operations before taxes—an important financial milestone we’ve not realized in our quarterly performance since 2011.”

The company reported $21 million in income from continuing operations before income taxes in the third quarter of 2014 compared to a $211 million loss from continuing operations before income taxes for the same period one year ago. Third quarter 2014 EBITDA was $142 million versus an EBITDA loss of $74 million in the same period one year ago. This year’s third quarter included a $29 million benefit in pre-existing warranty adjustments, partially offset by $20 million in restructuring and impairment charges. As a result, adjusted third quarter 2014 EBITDA was $133 million, which exceeded the company’s third quarter guidance of between $75 million and $125 million, excluding pre-existing warranty and one-time items.

Navistar finished the third quarter 2014 with $1.1 billion in manufacturing cash, cash equivalents and marketable securities. Excluding a $90 million intercompany loan from NFC, Navistar’s captive finance company, manufacturing cash ended the quarter at $1.01 billion, at the midpoint of the guidance range, as the loan was not included in the guidance.

The company reduced its year-over-year structural costs in the third quarter by an additional $86 million, including $67 million in savings from selling, general, and administrative (SG&A) expense and $19 million in reduced engineering costs. Year-to-date, Navistar has reduced structural costs by $245 million.

Navistar’s warranty spend improved in the third quarter, down 22 percent year-over-year. These results were driven by significant quality performance improvements, lower repair costs and a reduced population of trucks still in the warranty periods.

Third quarter highlights included a 10 percent year-over-year increase in chargeouts for Class 6-8 trucks and buses in the United States and Canada, as well as ending the quarter with a 54 percent increase in order backlog year-over-year. Also, in July, Navistar launched its line of severe service trucks powered by the company’s 9/10 SCR engines.

“Regaining market share remains a top priority and while we still have work to do, we are excited by the favorable feedback we receive from those customers who have bought and experienced our new trucks,” Clarke added. “With additional offerings for medium-duty and severe service applications, we’re very encouraged with our future prospects.”

The company provided the following guidance updates:

• Raised Class 8 industry forecast for FY2014 (U.S./Canada) to 235,000-240,000;

• Expects to finish FY2014 with $300 million in structural cost savings;

• Projects Q4 EBITDA of $115 million to $165 million, excluding pre-existing warranty and one-time items; and

• Projects between $1.0 billion and $1.1 billion in manufacturing cash, cash equivalents and marketable securities at the end of Q4 after repaying the remaining $166 million of the company’s 3% senior subordinated convertible notes maturing in October.

Summary of Financial Results:

	Third Quarter						First Nine Months
(in millions, except per share data)	2014			2013			2014			2013
Sales and revenues, net	$	2,844		$	2,861		$	7,798		$	8,024
Segment Results:
North America Truck	$	(12	)	$	(143	)	$	(353	)	$	(547	)
North America Parts		127			98			357			329
Global Operations		(2	)		(22	)		(185	)		—
Financial Services		24			23			71			64
Loss from continuing operations, net of tax(A)	$	(3	)	$	(237	)	$	(550	)	$	(704	)
Net loss(A)		(2	)		(247	)		(547	)		(744	)
Diluted loss per share from continuing operations(A)	$	(0.04	)	$	(2.94	)	$	(6.77	)	$	(8.76	)
Diluted loss per share(A)		(0.02	)		(3.06	)		(6.73	)		(9.25	)

(A) Amounts attributable to Navistar International Corporation.

North America Truck — For the third quarter 2014, the North America Truck segment recorded a loss of $12 million, compared with a year-ago third quarter loss of $143 million. The year-over-year improvement was primarily driven by lower charges for adjustments related to pre-existing warranties and additional structural cost savings. Chargeouts for traditional markets were up 10 percent, reflecting a 24 percent increase of Class 8 heavy-duty trucks and a 6 percent increase in Class 6/7 medium-duty trucks, partially offset by an 18 percent decrease in Class 8 severe service trucks.

North America Parts — For the third quarter 2014, the North America Parts segment recorded a profit of $127 million, compared to a year-ago third quarter profit of $98 million. Parts revenues in the quarter improved by 4 percent due to improvements in commercial markets, partially offset by lower military sales. Profit improved by 30 percent year-over-year driven by stronger performance in commercial markets.

Global Operations — For the third quarter 2014, global operations recorded a loss of $2 million compared to a year-ago third quarter loss of $22 million. The year-over-year improvement was primarily driven by geographic mix from its export truck operations, lower foreign exchange losses and lower SG&A expenses resulting from the company’s cost-reduction initiatives, partially offset by a decline in South America engine volumes.

Financial Services — For the third quarter 2014, the financial services segment recorded a profit of $24 million compared to third quarter 2013 profit of $23 million. Financial results improved due to lower structural costs and interest income from an intercompany loan, which more than offset the effects of lower overall retail balances.

About Navistar

Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries and affiliates produce International^® brand commercial and military trucks, MaxxForce^® brand diesel engines, and IC Bus™ brand school and commercial buses. An affiliate also provides truck and diesel engine service parts. Another affiliate offers financing services. The International^® ProStar^® with Cummins ISX15 and International^® TerraStar^® 4x4 were named 2014 heavy-duty and medium-duty commercial truck of the year, respectively, by the American Truck Dealers (ATD) association. Additional information is available at www.Navistar.com.

Forward-Looking Statement

Information provided and statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date of this report and the company assumes no obligation to update the information included in this report. Such forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or similar expressions. These statements are not guarantees of performance or results and they involve risks, uncertainties, and assumptions. For a further description of these factors, see 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, 2013 and our quarterly report on Form 10-Q for the quarter ended July 31, 2014. 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.

Navistar International Corporation and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended July 31,						Nine Months Ended July 31,
(in millions, except per share data)	2014			2013			2014			2013
Sales and revenues
Sales of manufactured products, net	$	2,806		$	2,820		$	7,683		$	7,905
Finance revenues		38			41			115			119
Sales and revenues, net		2,844			2,861			7,798			8,024
Costs and expenses
Costs of products sold		2,417			2,547			6,899			7,196
Restructuring charges		16			6			27			14
Asset impairment charges		4			17			173			17
Selling, general and administrative expenses		241			308			717			905
Engineering and product development costs		80			99			253			310
Interest expense		78			76			234			240
Other expense (income), net		(11	)		22			(5	)		(35	)
Total costs and expenses		2,825			3,075			8,298			8,647
Equity in income of non-consolidated affiliates		2			3			5			6
Income (loss) from continuing operations before income taxes		21			(211	)		(495	)		(617	)
Income tax expense		(14	)		(16	)		(25	)		(53	)
Income (loss) from continuing operations		7			(227	)		(520	)		(670	)
Income (loss) from discontinued operations, net of tax		1			(10	)		3			(40	)
Net Income (loss)		8			(237	)		(517	)		(710	)
Less: Net income attributable to non-controlling interests		10			10			30			34
Net loss attributable to Navistar International Corporation	$	(2	)	$	(247	)	$	(547	)	$	(744	)
Amounts attributable to Navistar International Corporation common shareholders:
Loss from continuing operations, net of tax	$	(3	)	$	(237	)	$	(550	)	$	(704	)
Income (loss) from discontinued operations, net of tax		1			(10	)		3			(40	)
Net loss	$	(2	)	$	(247	)	$	(547	)	$	(744	)
Earnings (loss) per share:
Basic:
Continuing operations	$	(0.04	)	$	(2.94	)	$	(6.77	)	$	(8.76	)
Discontinued operations		0.02			(0.12	)		0.04			(0.49	)
	$	(0.02	)	$	(3.06	)	$	(6.73	)	$	(9.25	)
Diluted:
Continuing operations	$	(0.04	)	$	(2.94	)	$	(6.77	)	$	(8.76	)
Discontinued operations		0.02			(0.12	)		0.04			(0.49	)
	$	(0.02	)	$	(3.06	)	$	(6.73	)	$	(9.25	)
Weighted average shares outstanding:
Basic		81.4			80.6			81.3			80.4
Diluted		81.4			80.6			81.3			80.4

Navistar International Corporation and Subsidiaries

Consolidated Balance Sheets

	July 31,			October 31,
(in millions)	2014			2013
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	547		$	755
Marketable securities		618			830
Trade and other receivables, net		568			737
Finance receivables, net		1,707			1,597
Inventories		1,462			1,210
Deferred taxes, net		39			72
Other current assets		202			258
Total current assets		5,143			5,459
Restricted cash		121			91
Trade and other receivables, net		26			29
Finance receivables, net		302			338
Investments in non-consolidated affiliates		72			77
Property and equipment (net of accumulated depreciation and amortization of $2,533 and $2,440, respectively)		1,657			1,741
Goodwill		38			184
Intangible assets (net of accumulated amortization of $106 and $97, respectively)		98			138
Deferred taxes, net		153			159
Other noncurrent assets		92			99
Total assets	$	7,702		$	8,315
LIABILITIES and STOCKHOLDERS’ DEFICIT
Liabilities
Current liabilities
Notes payable and current maturities of long-term debt	$	1,020		$	1,163
Accounts payable		1,572			1,502
Other current liabilities		1,425			1,596
Total current liabilities		4,017			4,261
Long-term debt		4,184			3,922
Postretirement benefits liabilities		2,450			2,564
Deferred taxes, net		14			33
Other noncurrent liabilities		1,083			1,136
Total liabilities		11,748			11,916
Redeemable equity securities		2			4
Stockholders’ deficit
Series D convertible junior preference stock		3			3
Common stock (86.8 shares issued, $0.10 par value per share and 220 shares authorized, all at both dates)		9			9
Additional paid-in capital		2,499			2,477
Accumulated deficit		(4,610	)		(4,063	)
Accumulated other comprehensive loss		(1,758	)		(1,824	)
Common stock held in treasury, at cost (5.5 and 6.3 shares, respectively)		(225	)		(251	)
Total stockholders’ deficit attributable to Navistar International Corporation		(4,082	)		(3,649	)
Stockholders’ equity attributable to non-controlling interests		34			44
Total stockholders’ deficit		(4,048	)		(3,605	)
Total liabilities and stockholders’ deficit	$	7,702		$	8,315

Navistar International Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended July 31,
(in millions)	2014			2013
Cash flows from operating activities
Net loss	$	(517	)	$	(710	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		177			225
Depreciation of equipment leased to others		79			105
Deferred taxes, including change in valuation allowance		(4	)		19
Asset impairment charges		173			25
Gain on sales of investments and businesses, net		—			(13	)
Amortization of debt issuance costs and discount		38			43
Stock-based compensation		12			19
Provision for doubtful accounts, net of recoveries		12			16
Equity in income of non-consolidated affiliates, net of dividends		4			5
Write-off of debt issuance cost and discount		1			6
Other non-cash operating activities		(27	)		(60	)
Changes in other assets and liabilities, exclusive of the effects of businesses disposed		(292	)		354
Net cash provided by (used in) operating activities		(344	)		34
Cash flows from investing activities
Purchases of marketable securities		(1,210	)		(1,070	)
Sales of marketable securities		1,092			664
Maturities of marketable securities		330			164
Net change in restricted cash and cash equivalents		(30	)		(9	)
Capital expenditures		(57	)		(136	)
Purchases of equipment leased to others		(157	)		(351	)
Proceeds from sales of property and equipment		40			22
Investments in non-consolidated affiliates		—			(25	)
Proceeds from sales of affiliates		6			50
Net cash provided by (used in) investing activities		14			(691	)
Cash flows from financing activities
Proceeds from issuance of securitized debt		105			279
Principal payments on securitized debt		(32	)		(501	)
Proceeds from issuance of non-securitized debt		603			390
Principal payments on non-securitized debt		(617	)		(438	)
Net increase in notes and debt outstanding under revolving credit facilities		87			87
Principal payments under financing arrangements and capital lease obligations		(20	)		(55	)
Debt issuance costs		(14	)		(16	)
Proceeds from financed lease obligations		44			276
Issuance of common stock		—			14
Proceeds from exercise of stock options		18			9
Dividends paid by subsidiaries to non-controlling interest		(40	)		(35	)
Other financing activities		—			4
Net cash provided by financing activities		134			14
Effect of exchange rate changes on cash and cash equivalents		(12	)		(19	)
Decrease in cash and cash equivalents		(208	)		(662	)
Cash and cash equivalents at beginning of the period		755			1,087
Cash and cash equivalents at end of the period	$	547		$	425

Navistar International Corporation and Subsidiaries

Segment Reporting

(Unaudited)

We define segment profit (loss) as net income (loss) from continuing operations attributable to Navistar International Corporation excluding income tax expense. The following tables present selected financial information for our reporting segments:

(in millions)	North America Truck			North America Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Three Months Ended July 31, 2014
External sales and revenues, net	$	1,801		$	610	$	395		$	38	$	—		$	2,844
Intersegment sales and revenues		113			11		12			22		(158	)		—
Total sales and revenues, net	$	1,914		$	621	$	407		$	60	$	(158	)	$	2,844
Income (loss) from continuing operations attributable to NIC, net of tax	$	(12	)	$	127	$	(2	)	$	24	$	(140	)	$	(3	)
Income tax expense		—			—		—			—		(14	)		(14	)
Segment profit (loss)	$	(12	)	$	127	$	(2	)	$	24	$	(126	)	$	11
Depreciation and amortization	$	41		$	4	$	8		$	12	$	6		$	71
Interest expense		—			—		—			18		60			78
Equity in income of non-consolidated affiliates		1			1		—			—		—			2
Capital expenditures(B)		4			—		2			—		1			7

(in millions)	North America Truck			North America Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Three Months Ended July 31, 2013
External sales and revenues, net	$	1,761		$	583	$	476		$	41	$	—		$	2,861
Intersegment sales and revenues		135			13		23			20		(191	)		—
Total sales and revenues, net	$	1,896		$	596	$	499		$	61	$	(191	)	$	2,861
Income (loss) from continuing operations attributable to NIC, net of tax	$	(143	)	$	98	$	(22	)	$	23	$	(193	)	$	(237	)
Income tax expense		—			—		—			—		(16	)		(16	)
Segment profit (loss)	$	(143	)	$	98	$	(22	)	$	23	$	(177	)	$	(221	)
Depreciation and amortization	$	59		$	5	$	9		$	10	$	5		$	88
Interest expense		—			—		—			17		59			76
Equity in income of non-consolidated affiliates		2			1		—			—		—			3
Capital expenditures(B)		20			1		4			—		4			29

(in millions)	North America Truck			North America Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Nine Months Ended July 31, 2014
External sales and revenues, net	$	4,758		$	1,818	$	1,107		$	115	$	—		$	7,798
Intersegment sales and revenues		330			33		26			57		(446	)		—
Total sales and revenues, net	$	5,088		$	1,851	$	1,133		$	172	$	(446	)	$	7,798
Income (loss) from continuing operations attributable to NIC, net of tax	$	(353	)	$	357	$	(185	)	$	71	$	(440	)	$	(550	)
Income tax expense		—			—		—			—		(25	)		(25	)
Segment profit (loss)	$	(353	)	$	357	$	(185	)	$	71	$	(415	)	$	(525	)
Depreciation and amortization	$	168		$	12	$	24		$	33	$	19		$	256
Interest expense		—			—		—			52		182			234
Equity in income (loss) of non-consolidated affiliates		3			3		(1	)		—		—			5
Capital expenditures(B)		42			5		6			1		3			57

(in millions)	North America Truck			North America Parts		Global Operations			Financial Services(A)		Corporate and Eliminations			Total
Nine Months Ended July 31, 2013
External sales and revenues, net	$	4,694		$	1,873	$	1,338		$	119	$	—		$	8,024
Intersegment sales and revenues		382			45		60			59		(546	)		—
Total sales and revenues, net	$	5,076		$	1,918	$	1,398		$	178	$	(546	)	$	8,024
Income (loss) from continuing operations attributable to NIC, net of tax	$	(547	)	$	329	$	—		$	64	$	(550	)	$	(704	)
Income tax expense		—			—		—			—		(53	)		(53	)
Segment profit (loss)	$	(547	)	$	329	$	—		$	64	$	(497	)	$	(651	)
Depreciation and amortization	$	244		$	13	$	27		$	29	$	17		$	330
Interest expense		—			—		—			52		188			240
Equity in income (loss) of non-consolidated affiliates		7			4		(5	)		—		—			6
Capital expenditures(B)		113			2		11			1		9			136

(in millions)	North America Truck		North America Parts		Global Operations		Financial Services		Corporate and Eliminations		Total
Segment assets, as of:
July 31, 2014	$	2,355	$	704	$	816	$	2,504	$	1,323	$	7,702
October 31, 2013		2,250		716		1,162		2,355		1,832		8,315

(A) Total sales and revenues in the Financial Services segment include interest revenues of $44 million and $126 million for the three and nine months ended July 31, 2014, respectively and $47 million and $140 million for the three and nine months ended July 31, 2013, respectively.

(B) Exclusive of purchases of equipment leased to others.

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 and are reconciled to the most appropriate GAAP number below.

Earnings (loss) Before Interest, Income Taxes, Depreciation, and Amortization (“EBITDA”):

We define EBITDA as our consolidated net income (loss) from continuing operations attributable to Navistar International Corporation, net of tax, plus manufacturing interest expense, income taxes, and depreciation and amortization. We believe EBITDA provides meaningful information to the performance of our business and therefore we use it to supplement our GAAP reporting. 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.

Adjusted EBITDA:

We believe that adjusted EBITDA, which excludes certain identified items that we do not consider to be part of our ongoing business, improves the comparability of year to year results, and is representative of our underlying performance. Management uses this information to assess and measure the performance of our operating segments. We have chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the below reconciliations, and to provide an additional measure of performance.

Manufacturing Cash, Cash Equivalents, and Marketable Securities:

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 our ability to meet our operating requirements, capital expenditures, equity investments, and financial obligations.

Structural costs consists of Selling, general and administrative expenses and Engineering and product development costs.

EBITDA reconciliation:

(in millions)	Three Months Ended July 31, 2014
Loss from continuing operations attributable to NIC, net of tax		(3	)
Plus:
Depreciation and amortization expense		71
Manufacturing interest expense(A)		60
Less:
Income tax benefit (expense)		(14	)
EBITDA	$	142

(A) Manufacturing interest expense is the net interest expense primarily generated from borrowings that support the manufacturing and corporate operations, adjusted to eliminate intercompany interest expense with our Financial Services segment. The following table reconciles Manufacturing interest expense to the consolidated interest expense:

(in millions)	Three Months Ended July 31, 2014
Interest expense	$	78
Less: Financial services interest expense		18
Manufacturing interest expense	$	60

Adjusted EBITDA reconciliation:

(in millions)	Three Months Ended July 31, 2014
EBITDA (reconciled above)	$	142
Less significant items of:
Asset impairments charges		4
Adjustments to pre-existing warranties(A)		(29	)
Restructuring charges(B)		16
		(9	)
Adjusted EBITDA	$	133

(A) Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and circumstances related to these factors could materially change our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available. The adjustments primarily impacted the North America Truck segment. In the third quarter of 2014, we recognized a benefit for adjustments to pre-existing warranties of $(29) million, or (0.36) per diluted share. The benefit is comprised of a benefit for changes in estimates of $(59) million, partially offset by a $30 million correction of prior-period errors primarily related to pre-existing warranties.

(B) In the third quarter of 2014, the Company incurred restructuring charges of $16 million, primarily related to the closure 2011 closure of Chatham, Ontario plant, based on a ruling received from the Financial Services Tribunal in Ontario, Canada.

The above items did not have a material impact on taxes due to the valuation allowances on our U.S. deferred tax assets, which was established in the fourth quarter of 2012.

Manufacturing segment cash and cash equivalents and marketable securities reconciliation:

	As of July 31, 2014
(in millions)	Manufacturing Operations		Financial Services Operations		Consolidated Balance Sheet
Assets
Cash and cash equivalents	$	517	$	30	$	547
Marketable securities		581		37		618
Total Cash and cash equivalents and Marketable securities	$	1,098	$	67	$	1,165

(in millions)	July 31, 2014
Manufacturing Cash and cash equivalents and Marketable securities (reconciled above)	$	1,098
Less: NFC intercompany loan		90
Adjusted Manufacturing Cash and cash equivalents and Marketable securities	$	1,008

# # #

EX-99.2

Q3 EARNINGS PRESENTATION

September 03, 2014

Exhibit 99.2

2

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

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. 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, 2013 and our quarterly report on Form 10-Q for the

quarter ended July 31, 2014. Although we believe that these forward-looking statements are based on

reasonable assumptions, there are many factors that could affect our actual financial results or results

of operations and could cause actual results to differ materially from those in the forward-looking

statements. All future written and oral forward-looking statements by us or persons acting on our

behalf are expressly qualified in their entirety by the cautionary statements contained or referred to

above. Except for our ongoing obligations to disclose material information as required by the federal

securities laws, we do not have any obligations or intention to release publicly any revisions to any

forward-looking statements to reflect events or circumstances in the future or to reflect the

occurrence of unanticipated events.

3

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

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. 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 in the appendix of this presentation.

3     QUARTER 2014 RESULTS

Troy Clarke, President & CEO

RD

NYSE: NAV

5

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Agenda

Q3 Overview

Troy Clarke

Financial Results

Walter Borst

Drive to Deliver Update

Jack Allen

Summary

Troy Clarke

6

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Transformation:

Drive to Deliver: Guiding Principles & Priorities            

2013

2014

•

Leading Vehicle Uptime

•

Driving a Lean Enterprise

•

EBITDA Margin Expansion

•

Profitable Market Share

•

Quality

•

Cost

•

Sense of

Urgency

•

Great Products

•

Customer

Satisfaction

•

People

Turnaround:

•

Improve Quality

•

Hit our Launches

•

Deliver 2013 Plans

•

Sales Momentum

7

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

•

Reported

income

from

continuing

operations

before

taxes

for

the

first

time

since

2011

•

Exceeded Q3 adjusted EBITDA guidance

•

Hit our cash guidance

•

Revising Class 6-8 and Bus industry forecast upwards

•

Increased backlog, production, and chargeout levels year-over-year

•

Raising structural cost savings target

•

Challenging economy in Brazil

•

Making progress towards exiting 2015 at our 8-10% adjusted EBITDA margin goal

3rd Quarter Summary

FINANCIAL RESULTS

Walter Borst, Executive Vice President & CFO

9

Q3 2014 Earnings –

9/03/2014

NYSE: NAV

Income Statement Summary

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

(A)   Amounts attributable to Navistar International Corporation.

$ in millions, except per share

Quarters Ended

July 31,

2014

2013

Traditional Chargeouts

16,300

14,800

Sales and Revenues

$2,844

$2,861

EBITDA

$142

($74)

Income (Loss) from Continuing Operations Before Income Taxes

$21

($211)

Income (Loss) from Continuing Operations, Net of Tax

(A)

($3)

($237)

Diluted Loss Per Share from Continuing Operations

(A)

($0.04)

($2.94)

10

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Q3 2014 EBITDA

$ in millions

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

* Excluding pre-existing warranty and one-time items.

*

$142

$133

$29

($20)

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

Q3 2014

Actual EBITDA

Pre-

existing Warranty

Adjustment

One-

time Items

Q3 2014

Adjusted EBITDA

Q3 Guidance $75-$125M

Q3 2014 Segment Results

Segment Results:

North America Truck

($12)

($143)

North America Parts

$127

$98

Global Operations

($2)

($22)

Financial Services

$24

$23

Quarters Ended  

July 31,

2014

2013

$ in millions

11

Q3 2014 Earnings –

9/03/2014

NYSE: NAV

12

Q3 2014 Earnings –

9/03/2014

Q3 2014 Manufacturing Cash Update

$ in millions

*

Cash

balance

includes

marketable

securities.

**Guidance

as

provided

on

6/5/2014

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

Guidance**

Actual

Q2 2014 Manufacturing Cash Balance*

$1,060

$1,060

Consolidated Adjusted EBITDA

$75 -

$125

$133

Capex/Cash Interest/Pension & OPEB Funding

($125) -

($175)

($124)

Change in Net Working Capital/Debt

Payments/Other

($60) -

$40

$29

Q3 2014 Manufacturing Cash Balance*

$1,098

Memo:

Adjusted Q3 2014 Manufacturing Cash Balance*

(Amount excludes $90 million NFC intercompany loan)

$950 -

$1,050

$1,008

13

Guidance: Q4 2014 Manufacturing Cash

$ in millions

* Cash balance includes marketable securities.

** Excluding one-time items and pre-existing warranty

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

Guidance

Q3 2014 Manufacturing Cash Balance*

$1,098

Consolidated Adjusted EBITDA**

$115 -

$165

Capex/Cash Interest/Pension & OPEB Funding

($170) -

($185)

Change in Net Working Capital/Debt Payments/Other

($43) -

$22

Q4 2014 Manufacturing Cash Balance*

$1,000 -

$1,100

Q4 Manufacturing Cash Balances*

$777

$1,152

$1,100

$1,186

$1,505

$1,523

$1,000

-

$1,100

$0

$250

$500

$750

$1,000

$1,250

$1,500

$1,750

2008

2009

2010

2011

2012

2013

Q4 2014

Guidance

Q3 2014 Earnings –

9/03/2014

14

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Drive to Deliver Metrics

(millions)

0%

2%

4%

6%

8%

10%

12%

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

Warranty Expense % Manufacturing Revenue

-

2%

-

1%

0%

1%

2%

3%

4%

5%

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

Adjusted EBITDA Margin

10%

11%

12%

13%

14%

15%

16%

17%

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

Structural Costs % Manufacturing Revenue 

$2,100

$2,200

$2,300

$2,400

$2,500

$2,600

$2,700

$2,800

$2,900

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

Manufacturing Revenue

15

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Long-term EBITDA Goals

4 Pronged Action Plan to Improve EBITDA

Volume

Material

Structural

Warranty

increase

cost savings

cost  savings

cost reductions

2013 Actual

Initial 2014

Guidance*

2015 Exiting &

Long-term*

Class 6 -

8 & Bus industry

301,300

300 –

335,000

325 -

350,000

Class 6 -

8 & Bus combined market share

18%

21%

22 -

24%

Material cost

Decrease

5% decrease

Structural cost savings

$330 million

Additional

$175 million

< 10% of sales

Warranty expense

Decrease

4 ppt decrease

Adjusted EBITDA Margin

8 –

10 %

* As shown in the fourth  quarter earnings presentation  on 12/20/13

G

G

G

G

R

16

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

•

Q3 Actuals

–

Income from continuing operations before tax

–

Adjusted EBITDA beat guidance

•

Q4 Projections

–

Adjusted EBITDA and cash guidance builds upon Q3 results

•

Long-term adjusted EBITDA goals on track

Summing It Up

DRIVE TO DELIVER

Jack Allen, Executive Vice President & COO

NYSE: NAV

Warranty spend and expense

continue to come down

•

•

•

Warranty

Estimated

*EGR Engines built from 2010 through 2012.

Lower cost per repair

Better quality of newer

engines

Fewer 2010-12 EGR

engines in their warranty

period

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Nov-10

Nov-11

Nov-12

Nov-13

Nov-14

Nov-15

Nov-16

Navistar EGR Engines*

Big Bore HD

BB HD Extended

MD I-6

LD V8

0

20,000

40,000

$130

$140

$150

$160

$170

$180

$190

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Actual Warranty Spend

(millions)

18

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Estimated

•

Material

•

Manufacturing

•

SG&A

•

Engineering

•

Warranty Expense

Cost Improvements

19

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

LOWER

BREAKEVEN

U.S. and Canada Class 6-8 Retail Market Share

Launched

ProStar with

Cummins ISX

Launched

ProStar with

MaxxForce

13L with SCR

Launched

WorkStar with

MaxxForce 9/10

SCR

Launched

DuraStar with

MaxxForce

9/10 SCR

Launched

DuraStar with

Cummins ISB

0%

5%

10%

15%

20%

25%

30%

35%

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Severe Service Class 8

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Heavy Truck Class 8

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Class 8 Combined

0%

5%

10%

15%

20%

25%

30%

40%

35%

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Medium Truck Class 6/7

20

Parts Business and Used Truck Update

Used Trucks

Parts Business

Providing Used Truck Customers

with a New Truck Experience

Strong Year-over-Year

N.A. Parts Sales

4%

Q3 ‘13

Q3 ‘14

21

OnCommand Connection

OnCommand Connection is the industry’s first and only remote diagnostics

system that works with all existing Telematics devices.

Improves Uptime by …

Reduces en-route events by proactively identifying

issues

Turns Unscheduled Failures into Planned Repairs &

Maintenance

Improves Routing Efficiency to the Nearby Service

Providers

Enables more efficient Diagnostics & Repairs

1.

2.

3.

4.

22

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Drive to Deliver Progress in Q3 2014

DRIVE

TO DELIVER

23

SUMMARY

Troy Clarke, President & CEO

NYSE: NAV

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

•

Q4:

–

Chargeouts: Up year-over-year

–

Manufacturing cash balance: $1.0 to $1.1 billion

–

Adjusted EBITDA guidance: $115 to $165 million

•

Full Year 2014:

–

Class 8 industry: Revised to 235,000 to 240,000

–

Market share: Improving

–

Structural cost savings: Increased to $300 million

–

Manufacturing cost savings: $50 to $60 million

•

2015:

–

Additional $1,400 cost takeout on 13-liter SCR entering 2015

–

Exiting 2015 at our 8-10% adjusted EBITDA margin goal

2014 Milestones and Expectations

25

NYSE: NAV

APPENDIX

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Navistar Financial Corporation

Highlights

•

Financial Services Segment profit of $24 million for Q3, $71 million YTD

•

Total U.S. financing availability of $464 million as of July 31,

2014

•

Financial Services Debt/Equity Leverage of 2.9:1

•

Retail accounts funding facility of $100 million re-established in May 2014

Retail Notes

Bank Facility

•

$840 million facility ($500 million

revolver and $340 million term

loan matures in December 2016)

–

Funding for retail notes,

wholesale notes, retail accounts,

and dealer open accounts

•

On balance sheet

•

NFSC wholesale trust as of July

2014

–

$950 million funding facility 

–

Variable portion matures March

2015

–

Term portions mature January

2015 and September 2015

•

On balance sheet

•

Broader product offering

•

Enhanced ability to support large

fleets

•

Better access to less expensive

capital

Dealer Floor Plan

27

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

A Leader in Several Commercial Vehicle Segments

Class 6/7

Medium-Duty

Retail Market Share:

Retail Market Share -

U.S. and Canada Class 6-8:

Class 8

Severe Service

Retail Market Share:

Class 8

Heavy

Retail Market Share:

Combined Class 8

Retail Market Share:

Q3 2014:

20%

Q2 2014:

26%

Q3 2014:

15%

Q2 2014:

17%

Q3 2014:

14%

Q2 2014:

14%

Q3 2014:

14%

Q2 2014:

15%

28

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Worldwide Truck Chargeouts

We

define

chargeouts

as

trucks

that

have

been

invoiced

to

customers.

The

units

held

in

dealer

inventory

represent

the

principal

difference

between

retail

deliveries

and

chargeouts.

This

table

summarizes

our

approximate

worldwide

chargeouts

from

our

continuing

operations.

We

define

our

“traditional”

markets

to

include

U.S.

and

Canada

School

bus

and

Class

6

through

8

medium

and

heavy

truck.

Our

“traditional”

markets

include

CAT-branded

units

sold

to

Caterpillar

under

our

North

America

supply

agreement.

(A)

All periods presented have been recast to include all militarized units.

(B)

Includes

chargeouts

related

to

Blue

Diamond

Truck

("BDT")

of

3,100

units

and

2,800

units

during

the

three

months

ended

July

31,

2014

and

2013, 

respectively,

and

7,600

and

6,700

units

during

the

nine

months

ended

July

31,

2014

and

2013.

(C)

Excludes:

(i)

RV

towables

of

1,500

units

during

the

first

nine

months

ended

July

31,

2013,

which

were

related

to

the

Bison

Coach

trailer

business

sold

in

October

2013,

and

(ii)

300

units

and

800

units

during

the

three

and

nine

months

ended

July

31,

2013,

respectively,

related

to

Monaco

and

WCC,

both

of

which

have

been

classified

as

discontinued

operations.

29

30

Worldwide Engine Shipments

Engine Shipments

Q3 2014 Earnings –

9/03/2014

30

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.

Excludes the US portion of IC Bus

31

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Frequently Asked Questions

Q1:

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.

Q2:

What is included in your equity in loss of 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.

Q3:

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.

Q4:

What are your expected 2014 and beyond pension funding requirements?

A:

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. For the nine months ended July 31, 2014, we contributed

$98 million to meet the minimum required contributions for all plans. In August 2014, the Highway and Transportation Funding Act

of

2014,

which

included

an

extension

of

the

pension

funding

interest

rate

relief,

was

signed

into

law.

As

a

result,

we

lowered

our

funding expectations. We now expect to contribute an additional $66 million during the remainder of 2014. We currently expect that

from 2015 through 2017, the Company will be required to contribute at least $100 million per year to the plans, depending on asset

performance and discount rates.

32

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Frequently Asked Questions

Q5:

What is your expectation for future cash tax payments?

A:

Our

cash

tax

payments

will

remain

low

in

2014

and

will

gradually

increase

as

we

utilize

available

net

operating

losses

(NOLs)

and tax credits in future years.

Q6:

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

A:

As of October 31, 2013 the Company has deferred tax assets for U.S. federal NOLs valued at $546 million, state NOLs valued at

$117 million, and foreign NOLs valued at $177 million, for a total undiscounted cash value of $840 million.  In addition to NOLs,

the Company has deferred tax assets for accumulated tax credits of $259 million and other deferred tax assets of $1.8 billion

resulting

in

net

deferred

tax

assets

before

valuation

allowances

of

approximately

$2.9

billion.

Of

this

amount,

$2.7

billion

is

subject to a valuation allowance at the end of FY2013.

Q7:

How does your FY 2014 Class 8 industry outlook compare to ACT Research?

A:

Reconciliation to ACT - Retail Sales

ACT*

CY to FY adjustment

Total (ACT comparable Class 8 to Navistar)

Navistar Industry Retail Deliveries Combined Class 8 Trucks

235,000

240,000

Navistar difference from ACT

13,497

8,497

*Source:  ACT N.A. Commercial Vehicle Outlook - August 2014

5.7%

3.5%

Reconciliation to ACT - Retail Sales

ACT*

CY to FY adjustment

Total (ACT comparable Class 8 to Navistar)

(10,303)

U.S. and Canadian Class 8 Truck Sales

2014

258,800

272,753

248,497

2015

272,000

753

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Q3 2014 Earnings –

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Frequently Asked Questions

Q8:

What is your manufacturing interest expense for Fiscal Year 2014?

A:

Manufacturing

interest

for

2014

is

forecasted

to

be

less

than

$250

million.

In

comparison,

interest

expense

was

$251

million

for

FY 2013.

Q9:

What should we assume for capital expenditures in Fiscal Year 2014?

A:

In

the

beginning

of

FY

2014

we

expected

capital

expenditures

to

be

less

than

$150

million.

Through

the

first

nine

months

of

2014,

capital expenditures were $57 million. In comparison, capital expenditures were $167 million for FY 2013.

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NYSE: NAV

Q3 2014 Earnings –

9/03/2014

Outstanding Debt Balances

35

NYSE: NAV

Q3 2014 Earnings –

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SEC Regulation G Non-GAAP Reconciliation

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 and are reconciled to the most appropriate GAAP number below.

Earnings (loss) Before Interest, Income Taxes, Depreciation, and

Amortization (“EBITDA”):

We define EBITDA as our consolidated net income (loss) from continuing operations attributable to Navistar International

Corporation, net of tax, plus manufacturing interest expense, income taxes, and depreciation and amortization. We believe EBITDA

provides meaningful information to the performance of our business and therefore we use it to supplement our GAAP reporting. 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.

Adjusted EBITDA:

We believe that adjusted EBITDA, which excludes certain identified items that we do not consider to be part of our ongoing business,

improves the comparability of year to year results, and is representative of our underlying performance. Management uses this

information to assess and measure the performance of our operating segments. We have chosen to provide this supplemental

information to investors, analysts and other interested parties to enable them to perform additional analyses of operating results, to

illustrate the results of operations giving effect to the non-GAAP adjustments shown in the below reconciliations, and  to provide an

additional measure of performance.

Manufacturing Cash, Cash Equivalents, and Marketable Securities:

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 our ability to meet our operating

requirements, capital expenditures, equity investments, and financial

obligations.

Structural costs

consists of Selling, general and administrative expenses and Engineering and product development costs.

36

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

SEC Regulation G Non-GAAP Reconciliations

Manufacturing segment cash and cash equivalents and marketable securities reconciliation:

37

NYSE: NAV

Q3 2014 Earnings –

9/03/2014

SEC Regulation G Non-GAAP Reconciliations

Earnings (loss) before interest, taxes, depreciation, and amortization ("EBITDA") reconciliation

Adjusted EBITDA reconciliation:

(A)

Manufacturing

interest

expense

is

the

net

interest

expense

primarily

generated

for

borrowings

that

support

the

manufacturing

and

corporate

operations,

adjusted

to

eliminate

intercompany

interest

expense

with

our

Financial

Services

segment.

The

following

table

reconciles

Manufacturing

interest

expense

to

the

consolidated

interest

expense:

(A)

Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from

historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and circumstances related to these factors could

materially change our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes

available.

In

the

third

quarter

of

2014,

we

recognized

a

benefit

for

adjustments

to

pre-existing

warranties

of

$(29)

million,

or

(0.36)

per

diluted

share.

The

benefit

is

comprised

of

a

benefit

for

changes

in

estimates

of

$(59)

million,

partially

offset

by

a

$30

million

correction

of

prior-period errors primarily related to pre-existing warranties.

(B)

In the third quarter of 2014, we incurred restructuring charges of $16 million.  The Company recognized charges of $14 million related to the 2011 closure of its Chatham, Ontario plant, based on a

ruling

received

from

the

Financial

Services

Tribunal

in

Ontario,

Canada.

In

addition,

in

the

first

nine

months

of

2014,

the

Company

incurred

restructuring

charges

related

to

cost

reduction

actions

that

included a reduction-in-force in the U.S.

The above items did not have a material impact on taxes due to the valuation allowances on our U.S. deferred tax assets, which was established in the fourth quarter of 2012.

38

Significant Items Included Within Our Results

(A)

In

the

first

nine

months

of

2014,

the

company

recorded

asset

impairment

charges

of

$173

million.

During

the

second

quarter

of

2014

we

recognized

a

non-

cash charge of $149 million  for the impairment of certain intangible assets of our Brazilian engine reporting unit. Due to slower than expected growth in the

Brazilian economy causing declines in actual and forecasted results, we tested the goodwill of our Brazilian engine reporting unit and trademark for potential

impairment. As a result, we determined that the entire $142 million balance of goodwill and $7 million of trademark were impaired.

In the first and second quarter of 2014, the Company concluded it had a triggering event related to potential sales of assets requiring assessment of

impairment for certain intangible and long-lived assets in the North America Truck segment. As a result, certain amortizing intangible assets and long-lived

assets were determined to be fully impaired, resulting in an impairment charge of $19 million that was recognized in the nine months ended July 31, 2014.

(B)

Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur

when claims experience deviates from historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and

the timing of failures. Future events and circumstances related to these factors could materially change our estimates and require adjustments to our liability.

In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available.  In the third

quarter of 2014, we recognized a benefit for adjustments to pre-existing warranties of $(29) million, or (0.36) per diluted share.  The benefit is comprised of a

benefit for changes in estimates of $(59) million, partially offset by a $30 million correction of prior-period errors primarily related to pre-existing

warranties.

39

48

NYSE: NAV

Q3 2014 Earnings –

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Significant Items Included Within Our Results

(C) During the second quarter of 2014, our evaluation of the realizability of our Brazilian deferred tax assets resulted in a determination that a valuation allowance

was

required,

due

to

a

deterioration

of

operating

performance

in

Brazil

and

an

increase

in

net

operating

loss

carryforwards.

As

a

result,

we

recorded

an

income

tax expense of $29 million, reflecting the establishment of the valuation allowance, and the tax impact of the impairment of certain intangible assets.

(D)

In the third quarter and first nine months of 2014, we incurred restructuring charges of $16 million and $27 million.  In the third quarter of 2014, the Company

recognized

charges

of

$14

million

related

to

the

2011

closure

of

its

Chatham,

Ontario

plant,

based

on

a

ruling

received

from

the

Financial

Services

Tribunal

in

Ontario Canada.  In addition, in the third quarter and first nine months of 2014, the Company incurred restructuring charges related  to cost reduction actions

that included a reduction-in-force in the U.S.

(E)

In May 2013, we divested substantially all of our interest in these operations of Monaco for approximately $19 million of cash. As a result of the divestiture, in

the second quarter of 2013, we recorded charges of $25 million relating to the impairment of certain assets and the expected loss from the divestiture, which is

included in the Loss from discontinued operations.

(F)

The North America Truck segment recorded charges for non-conformance penalties, primarily for certain 13L engine sales.

(G)

In the third quarter and first nine months of 2013, the company recorded charges for accelerated depreciation of $4 million and $39 million, respectively. Of

these amounts $20 million related to certain assets related to the closure of our Garland Facility and $19 million, of which $4 million was recognized in the

third quarter of 2013, primarily related to certain assets affected by the discontinuation of certain engine programs, particularly the MaxxForce 15L.  All

charges were recognized by the North American Truck segment

(H)

In

the

second

quarter

of

2013,

the

Company

sold

its

stake

in

the

Mahindra

Joint

Ventures

to

Mahindra

for

$33

million

and

recognized

a

gain

of

$28

million,

all

of which impacted the Global Operations segment.

(I)

As

a

result

of

the

legal

settlement

with

Deloitte

and

Touche

LLP

in

December

2012,

the

Company

received

cash

proceeds

of

$35

million

in

the

first

quarter

of

2013.

The above items, except for the Brazilian tax adjustments, did not have a material impact on taxes due to the valuation allowances on our U.S. deferred tax assets,

which was established in the fourth quarter of 2012.

40