Navistar International 8K Regulation FD Disclosure | NAV 2 Mar 06

Exhibit 99.1

March 2006

NYSE: NAV

Navistar International
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

•

Manufacturing operations

•

Continue to improve below the line expense

•

Global Sourcing

•

Control our destiny

Competitive
Cost Structure

Great Products

•

Build brand through excitement and value

•

Commitment to Class 8

•

Extend Medium product line

•

2007/2010 emission engines…challenges and
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

•

>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

Growth

E-5

Exhibit 99.1 (continued)

•

North American market share leader in
Class 6-8 trucks and school bus

•

Manufacturing locations in U.S.,
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

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

E-7

Exhibit 99.1 (continued)

possibility of a restatement.

Truck Group
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

Aware_TM

4100 Series

3200 IM Bus

CF Series

possibility of a restatement.

Delivering…
Great New Products

E-9

Exhibit 99.1 (continued)

Tires

Korea

Stampings

India

Castings

India

12%

Gross
savings

25%

Gross
savings

Examples

possibility of a restatement.

23%

Gross
savings

Delivering…
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%

changes to its previously issued financial statements, including the

possibility of a restatement.

Delivering…
World-Class Competitive Costs

E-11

Exhibit 99.1 (continued)

possibility of a restatement.

Delivering New Markets…
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)

possibility of a restatement.

MXT

Delivering New Markets…
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

•

FTTS Development Agreement

International Advantage

•

Existing platforms

•

Scale – Drives Delivery

•

Best Value

E-13

Exhibit 99.1 (continued)

possibility of a restatement.

Delivering New Markets…
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

E-14

Exhibit 99.1 (continued)

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

Great Products

Competitive
Cost Structure

Growth

possibility of a restatement.

What it Means for Truck Group in
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)

•

Integrated product offerings drive
medium and bus market leadership

•

Long-term contract with Ford through
2012

•

Manufacturing locations in U.S. and
Brazil

Engine Group

Navistar – Diesel Engine Group

E-17

Exhibit 99.1 (continued)

Grow Revenues to $4+ Billion

10% ROS

* Including inter-company sales

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

340,000 units

DT 466E (I6)

49% market
share leader in
Class 6-7 Truck
and School Bus

70,000 units

Keys to Success - Great Products:

Performance, Quality and Fun to Drive

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

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.

Great Products

E-19

Exhibit 99.1 (continued)

possibility of a restatement.

6.0L Power Stroke Diesel

•

HD pickup market and
dieselization continues to
grow

•

Ford dieselization rate
above 70%

•

Ford Power Stroke has
maintained 50% market
share

E-20

Exhibit 99.1 (continued)

Medium Duty Truck/School Bus Engine Market Share

International I6 Engine
(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)

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

possibility of a restatement.

International Big Bore Engine

•

Late 2007 launch

•

Cost competitive

–

Leverage scale in development
and procurement

•

Proven world-class performance,
fuel economy and NVH

•

Integrated Truck-Engine design and
development

•

Developed for North American
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

New Standards Are More Frequent and
Stringent

Higher Technology Spending

Capital Investments

Product Cost Increase

World Wide Regulations are Converging

Europe, South America, Asia and U.S.
Off Road

Big Challenge for Small Engine/Vehicle
Manufacturers

Scale and Technical Expertise
Advantage of International

U.S. EPA On-Highway Emissions

NoX (gm/k W-hr)

.01

.10

.02

EPA
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

EURO
IV 2006

EURO III
2002

EURO II

Off road
2010

‘07 vs ‘04
90% PM
50% NoX

possibility of a restatement.

Emissions Impacts

E-24

Exhibit 99.1 (continued)

Engine Group Sales Revenue by Source

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

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.

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

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

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

Worldwide Mid-Range Diesel (2.8-10.0L, 160-350hp)

436

328

228

191

111

SCANIA

RENAULT

DEUTZ

MAN

VOLVO

MITSUBISHI

IVECO

BMW

DEERE

TOYOTA

CAT

DAIMLER CHRYSLER

GM/ISUZU

CUMMINS

INTERNATIONAL

516

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

Growth

A strategy focused on great
products, scale-driven growth and
a competitive cost structure

–

Products lead in all categories;
steady market share; dieselization
growing

–

Scale to provide emissions cost
advantages unmatched by
competition

2009 revenues of $4+ billion with
world class returns of 10%
segment margins

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

•

Wholesale and Retail financing

•

Balance growth with prudent credit
and appropriate leverage

•

Focus on International’s truck dealer
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

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
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

–

Last 10 Yrs Dividends and Tax Payments: $622M

E-30

Exhibit 99.1 (continued)

Great Products

Competitive
Cost Structure

Growth

Finance Corporation Keys to success: Provide support for new
growth and expand value to core business

Finance Corporation

Business model provides value for
International, its dealers and its
customers

–

Provides exceptional service to
customers & dealers

–

Facilitates the sale of International
Trucks

–

Supports International’s cash flow
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 – Parts Group

E-32

Exhibit 99.1 (continued)

Parts Group Value Proposition: Provide unparalleled service to
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

possibility of a restatement.

Parts Group
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

–

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

•

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

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 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

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

•

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

possibility of a restatement.

Additional Growth Opportunities

•

Workhorse / UpTime Parts

–

865 retail locations plus an established
direct parts sales business

E-36

Exhibit 99.1 (continued)

Great Products

Competitive
Cost Structure

Growth

Provide consistent results while delivering steady growth

Parts Group

•

Leverage the advantages of
Scale, Global sourcing and
Product Integration to minimize
cost

•

Non-Cyclical Business with Richer
Margins

•

Opportunities for significant
growth

E-37

Exhibit 99.1 (continued)

Utilize What We Have

Leverage What Others
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.

How are we going to achieve our
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.

Overall Objective: Build Company of
Growth and Significant Returns

•

Grow to $15 Billion and $1.5 Billion Pre-Tax by
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

Deliver On Our
Commitments

E-40

Exhibit 99.1 (continued)

Navistar International (NAV) 8-KRegulation FD Disclosure