Exhibit 99.1
March 2006
NYSE: NAV
Navistar International
Corporation
Corporation
Investor Presentation
E-1
Exhibit 99.1 (continued)
Forward Looking Information
E-2
Exhibit 99.1 (continued)
Parts Group
•
Parts revenue and earnings provide stability and growth in cyclical truck Industry
•
Largest OEM product offering through most extensive distribution channel
•
2004 revenue of $1.2 billion
•
2004 3 year CAGR of 11.9%
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
Corporate Overview
E-3
Exhibit 99.1 (continued)
Executing our Corporate Strategy
•
$6,000/unit incremental cost reduction in Truck and
$600/unit in Engine by 2009
$600/unit in Engine by 2009
•
Manufacturing operations
•
Continue to improve below the line expense
•
Global Sourcing
•
Control our destiny
Competitive
Cost Structure
Cost Structure
Great Products
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
•
Build brand through excitement and value
•
Commitment to Class 8
•
Extend Medium product line
•
2007/2010 emission engines…challenges and
opportunities
opportunities
•
Culture of Quality
•
Quick to market with derivative products
E-4
Exhibit 99.1 (continued)
Executing our Corporate Strategy
•
Distribution strategy/organic growth
•
Parts – continue accelerated growth
•
New Markets
•
Scale to leverage investment
•
>$15 Billion in revenue with growth in all segments
by 2009
by 2009
•
>10% Segment Margins in all businesses by 2009
•
$1 billion net income by 2009
•
Utilize existing resources to achieve objectives
•
Deliver today while investing for the future
Deliver On Our
Commitments
Commitments
Growth
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
E-5
Exhibit 99.1 (continued)
•
North American market share leader in
Class 6-8 trucks and school bus
Class 6-8 trucks and school bus
•
Manufacturing locations in U.S.,
Canada and Mexico
Canada and Mexico
•
Trucks sold under the International® brand
•
Buses sold under the IC® brand
Truck Group
Navistar - Truck Group
E-6
Exhibit 99.1 (continued)
Construction, waste management &
other on-off highway applications
fleets and owner operators
other on-off highway applications
fleets and owner operators
Severe Service – 23.8%
2005 Combined Market Share – 27%
School Bus
Class 6-7
Combined Class 8 – 18.8%
Class 8
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
possibility of a restatement.
North American Market Share Leader
in Class 6-8 Trucks and School Bus
in Class 6-8 Trucks and School Bus
E-7
Exhibit 99.1 (continued)
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
Truck Group
Who We Are and What We Do
Who We Are and What We Do
Our core business
•
International® brand trucks
•
IC® brand buses
•
Market leader in Class 6-8, bus
•
Strong distribution network
Now, we also have…
•
Class 4-5 trucks
•
RV chassis, Workhorse® brand
•
Military vehicles
•
Aware™ telematics products
•
Presence in Asia
•
Greater focus on exports
E-8
Exhibit 99.1 (continued)
7700 Series
XT Series
AwareTM
4100 Series
3200 IM Bus
CF Series
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
Delivering…
Great New Products
Great New Products
E-9
Exhibit 99.1 (continued)
Tires
Korea
Stampings
India
Castings
India
12%
Gross
savings
savings
25%
Gross
savings
savings
Examples
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
23%
Gross
savings
savings
Delivering…
World-Class Competitive Costs
World-Class Competitive Costs
Global Sourcing
Buying more materials from lower-cost countries, $200M by end of 2006
E-10
Exhibit 99.1 (continued)
Manufacturing Labor Improvements
Year-Over-Year Improvements in Average Annual Cost Per Unit
25.6%
10.4%
20.0%
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in
changes to its previously issued financial statements, including the
possibility of a restatement.
Delivering…
World-Class Competitive Costs
World-Class Competitive Costs
E-11
Exhibit 99.1 (continued)
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
Delivering New Markets…
Mahindra International
Mahindra International
Mahindra Joint Venture Strategy
•
Sourcing – $200M buy in 2006
•
Engineering – 100 engineers now & up to 300 by end of 2006
•
Manufacturing / Growth – India & Exports
E-12
Exhibit 99.1 (continued)
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
MXT
Delivering New Markets…
Military Business
Military Business
14 contracts won to date
•
Total potential value = > $1B
•
1,300 units delivered in 2005
•
Potential for 10,000 more units over
next 5 years
next 5 years
•
FTTS Development Agreement
International Advantage
•
Existing platforms
•
Scale – Drives Delivery
•
Best Value
E-13
Exhibit 99.1 (continued)
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
Delivering New Markets…
Workhorse Custom Chassis
Workhorse Custom Chassis
Workhorse Acquisition
•
RV chassis, step vans
•
16,000-20,000 units per year
•
Less cyclical
•
34.6% share in 2005
•
Potential to grow through market
expansion and dieselization
expansion and dieselization
E-14
Exhibit 99.1 (continued)
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
Combined Class 8
Class 6-8
Retail Class 6-8 Industry Landscape
E-15
Exhibit 99.1 (continued)
New products and markets will enhance the growth of our business while our
cost structure drives increasing profitability
cost structure drives increasing profitability
Great Products
Competitive
Cost Structure
Cost Structure
Growth
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
What it Means for Truck Group in
2007 and beyond
2007 and beyond
Growth Challenges:
•
N.A. Industry Volume
Offset by:
•
Military
•
Export
•
India
•
Workhorse
•
Cost Reductions
•
Truck Parts
E-16
Exhibit 99.1 (continued)
•
World’s largest engine manufacture of
mid-range diesel engines (165-325HP)
mid-range diesel engines (165-325HP)
•
Integrated product offerings drive
medium and bus market leadership
medium and bus market leadership
•
Long-term contract with Ford through
2012
2012
•
Manufacturing locations in U.S. and
Brazil
Brazil
Engine Group
Navistar – Diesel Engine Group
E-17
Exhibit 99.1 (continued)
Grow Revenues to $4+ Billion
10% ROS
* Including inter-company sales
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
Engine Group Strategy
•
World’s leading mid range diesel engine producer
•
Market leader in commercial vehicles, personal trucks and SUVs
•
Diversified customer base
•
Broad product line
•
Brand image: High Performance, Quality, Fun to Drive
•
Focused, motivated, high performance culture
E-18
Exhibit 99.1 (continued)
6.0L Power Stroke
Approximately 50%
market share in
heavy duty diesel
pickup/vans
market share in
heavy duty diesel
pickup/vans
340,000 units
DT 466E (I6)
49% market
share leader in
Class 6-7 Truck
and School Bus
share leader in
Class 6-7 Truck
and School Bus
70,000 units
Keys to Success - Great Products:
Performance, Quality and Fun to Drive
V6
For LCF
Class 4-5
10,000 units
I4 / I6
50,000 units – IESA
90,000 units - MWM
South America
Complete line of
3 - 7L products
3 - 7L products
Navistar International. Dated March 2, 2006. Slide contains forward-looking
information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
Great Products
E-19
Exhibit 99.1 (continued)
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
6.0L Power Stroke Diesel
•
HD pickup market and
dieselization continues to
grow
dieselization continues to
grow
•
Ford dieselization rate
above 70%
above 70%
•
Ford Power Stroke has
maintained 50% market
share
maintained 50% market
share
E-20
Exhibit 99.1 (continued)
Medium Duty Truck/School Bus Engine Market Share
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
possibility of a restatement.
International I6 Engine
(North America)
(North America)
•
Continues to lead medium duty, school bus and severe service
•
Built 70,000 units in 2005
•
Integrated truck/engine design
E-21
Exhibit 99.1 (continued)
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
South American Operations
•
International Engines South America
–
50,000 annual units
–
Concentrated Customer Base (Ford / AGCO)
•
MWM Acquisition
–
90,000 annual units
–
Diversified customer base (GM, Volvo, VW, Others)
•
Euro Emissions Compliant Engines
–
South America, Mexico
–
Emerging Markets – China, India
E-22
Exhibit 99.1 (continued)
International Big Bore
11 to 13 liter range
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
International Big Bore Engine
•
Late 2007 launch
•
Cost competitive
–
Leverage scale in development
and procurement
and procurement
•
Proven world-class performance,
fuel economy and NVH
fuel economy and NVH
•
Integrated Truck-Engine design and
development
development
•
Developed for North American
applications and emissions
applications and emissions
E-23
Exhibit 99.1 (continued)
Turning emissions requirements for 2007 into opportunities
•
Improved Performance in HP/Torque
•
Minimal impact to fuel economy and maintenance intervals
n
New Standards Are More Frequent and
Stringent
Stringent
w
Higher Technology Spending
w
Capital Investments
w
Product Cost Increase
n
World Wide Regulations are Converging
w
Europe, South America, Asia and U.S.
Off Road
Off Road
w
Big Challenge for Small Engine/Vehicle
Manufacturers
Manufacturers
w
Scale and Technical Expertise
Advantage of International
Advantage of International
U.S. EPA On-Highway Emissions
NoX (gm/k W-hr)
.01
.10
.02
EPA
2010
2010
2.4
4.0
1.1
EPA 2007
EPA 2004
EPA 2000
EURO + Off-Highway Emissions
NoX (gm/k W-hr)
.01
.10
.02
2.4
4.0
1.1
.15
5.0
EURO
V 2009
V 2009
EURO
IV 2006
IV 2006
EURO III
2002
2002
EURO II
Off road
2010
2010
‘07 vs ‘04
90% PM
50% NoX
90% PM
50% NoX
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
Emissions Impacts
E-24
Exhibit 99.1 (continued)
Engine Group Sales Revenue by Source
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2003
2005 Estimate
2008
2010
Ford
International
Other - N.A.
South America
Increased customer diversification will lead to a greater
balance in sales
balance in sales
Navistar International. Dated March 2, 2006. Slide contains forward-looking
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
possibility of a restatement.
Increased Customer Diversification
E-25
Exhibit 99.1 (continued)
Navistar International. Dated March 2, 2006. Slide contains forward-looking
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
possibility of a restatement.
Growth Provides Profit and Scale
Keys to Success - Growth:
•
Base Business Growth
•
MWM Acquisition in South America
•
Expanded Product Line/Scale
•
New Customers
E-26
Exhibit 99.1 (continued)
World Mid-range Diesel Leader
0
100
200
300
400
500
2004 Volume in thousands (000’s)
600
The acquisition of MWM has further cemented engine
group leadership in Mid-range diesel engine production
group leadership in Mid-range diesel engine production
Worldwide Mid-Range Diesel (2.8-10.0L, 160-350hp)
436
328
228
191
111
80
75
64
60
47
35
23
20
18
13
80
SCANIA
RENAULT
DEUTZ
MAN
VOLVO
MITSUBISHI
IVECO
BMW
DEERE
TOYOTA
CAT
DAIMLER CHRYSLER
GM/ISUZU
CUMMINS
INTERNATIONAL
516
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the
possibility of a restatement.
E-27
Exhibit 99.1 (continued)
Engine Group Keys to success:
Investment in the future leads to growth and revenue
Great Products
Competitive
Cost Structure
Cost Structure
Growth
A strategy focused on great
products, scale-driven growth and
a competitive cost structure
products, scale-driven growth and
a competitive cost structure
–
Products lead in all categories;
steady market share; dieselization
growing
steady market share; dieselization
growing
–
Scale to provide emissions cost
advantages unmatched by
competition
advantages unmatched by
competition
2009 revenues of $4+ billion with
world class returns of 10%
segment margins
world class returns of 10%
segment margins
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
Engine Group: A Winning Business
E-28
Exhibit 99.1 (continued)
•
Support the Navistar strategy by
providing funding and liquidity to
International, its Dealers, and
Customers
providing funding and liquidity to
International, its Dealers, and
Customers
•
Wholesale and Retail financing
•
Balance growth with prudent credit
and appropriate leverage
and appropriate leverage
•
Focus on International’s truck dealer
and customer needs
and customer needs
Finance Corporation
Navistar – Finance Corporation
E-29
Exhibit 99.1 (continued)
Provides consistency of income and liquidity of receivables
now and into the future
now and into the future
Navistar International. Dated March 2, 2006. Slide contains forward-looking
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
possibility of a restatement.
Finance Corporation
Who We Are and What We Do
Who We Are and What We Do
•
Provide Consistent Income Over the Cycle
–
Last 10 Yrs: Min PBT $75M, Max PBT $124M
–
Next 10 Yrs: Expect to deliver Min PBT $100M consistently
•
Facilitate wholesale ($1.5B Portfolio) and retail ($3.7B Portfolio) Truck Sales
–
Finance 95% of U.S. International dealers’ wholesale floorplan
–
Provide retail financing to International customers
•
Total FMS Goal: Grow from 15% to 20%
•
85% commercial, fleet
•
Support International’s Cash Flow Requirements
–
International has almost zero A/R; International’s investment is focused in the
Manufacturing Business
Manufacturing Business
–
Last 10 Yrs Dividends and Tax Payments: $622M
E-30
Exhibit 99.1 (continued)
Great Products
Competitive
Cost Structure
Cost Structure
Growth
Finance Corporation Keys to success: Provide support for new
growth and expand value to core business
growth and expand value to core business
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
Finance Corporation
Business model provides value for
International, its dealers and its
customers
International, its dealers and its
customers
–
Provides exceptional service to
customers & dealers
customers & dealers
–
Facilitates the sale of International
Trucks
Trucks
–
Supports International’s cash flow
requirements
requirements
E-31
Exhibit 99.1 (continued)
•
Parts revenue and earnings provide stability and growth in cyclical truck industry
•
Largest OEM product offering through extensive distribution channel
•
2004 Revenue of $1.2 billion
•
2004-3 year revenue CAGR of 11.9%
Parts Group
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
Navistar – Parts Group
E-32
Exhibit 99.1 (continued)
Parts Group Value Proposition: Provide unparalleled service to
our customers while delivering consistent results
our customers while delivering consistent results
Navistar International. Dated March 2, 2006. Slide contains forward-looking
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
possibility of a restatement.
Parts Group
Who we are and what we do
Who we are and what we do
•
Through unparalleled service to our customers, the Parts business:
–
Provides our dealer and customer base with a world-class parts distribution
network
network
–
Plays an integral role in the value proposition in support of selling trucks
–
Plays a primary role in maintaining customer perceptions of International’s
quality
quality
•
Non-Cyclical Business with Richer Margins
E-33
Exhibit 99.1 (continued)
Leverage the advantages of Scale, Global Sourcing and Product
Integration to minimize cost
Integration to minimize cost
Navistar International. Dated March 2, 2006. Slide contains forward-looking
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
possibility of a restatement.
Parts Group Cost Advantage
•
Leverage Truck and Engine capabilities
–
Integrated product engineering
–
Purchasing scale
•
Largest dealer distribution network
•
Increase global supplier footprint
–
Mahindra & Mahindra
•
Scale – Leverage capabilities as we grow
E-34
Exhibit 99.1 (continued)
Provide consistent results while delivering steady growth
Navistar International. Dated March 2, 2006. Slide contains forward-looking
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
possibility of a restatement.
Parts Delivers Non-Cyclical Results
E-35
Exhibit 99.1 (continued)
Examples of opportunities for significant growth
•
Military
–
29,000+ Units through 2009
–
Part usage 4 - 5 x more per truck
due to rugged environment
due to rugged environment
•
International Big Bore Engine
Navistar International. Dated March 2, 2006. Slide contains forward-looking
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
information. As communicated in our February 21, 2006 news release the
company’s review of accounting matters may result in changes to its
previously issued financial statements, including the
possibility of a restatement.
Additional Growth Opportunities
•
Workhorse / UpTime Parts
–
865 retail locations plus an established
direct parts sales business
direct parts sales business
E-36
Exhibit 99.1 (continued)
Great Products
Competitive
Cost Structure
Cost Structure
Growth
Provide consistent results while delivering steady growth
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As communicated in our February 21, 2006 news release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
Parts Group
•
Leverage the advantages of
Scale, Global sourcing and
Product Integration to minimize
cost
Scale, Global sourcing and
Product Integration to minimize
cost
•
Non-Cyclical Business with Richer
Margins
Margins
•
Opportunities for significant
growth
growth
E-37
Exhibit 99.1 (continued)
Utilize What We Have
Leverage What Others
Have Built
Have Built
•
Global Sourcing
–
Mahindra
–
MWM
•
Big Bore Strategy (MAN)
•
Workhorse
•
Major Component Partnerships
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As
communicated in our February 21, 2006 news
release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
communicated in our February 21, 2006 news
release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
How are we going to achieve our
goals…Maximize resource utilization
goals…Maximize resource utilization
•
Operational
–
Facilities
–
People
•
Strategic Growth
–
Military
–
Distribution Strategy
–
Blue Diamond
–
Xtreme Series
E-38
Exhibit 99.1 (continued)
Navistar International. Dated March 2, 2006. Slide contains forward-looking information. As
communicated in our February 21, 2006 news
release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
communicated in our February 21, 2006 news
release the company’s review of accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement.
Overall Objective: Build Company of
Growth and Significant Returns
Growth and Significant Returns
•
Grow to $15 Billion and $1.5 Billion Pre-Tax by
2009
2009
•
Improve Margins while building for the future
•
Manage cyclicality
AND…
Do it sooner than 2009!
E-39
Exhibit 99.1 (continued)
Great Products
Growth
Competitive
Cost Structure
Cost Structure
Deliver On Our
Commitments
Commitments
E-40
Exhibit 99.1 (continued)