Navistar International (NAV) 10-Q 2013 Q2 Quarterly report

EXHIBIT 99.1

Additional Financial Information (Unaudited)

The following additional financial information is provided based upon the continuing interest of certain stockholders and creditors to assist them in understanding our core manufacturing business with our financial services operations on an after-tax equity basis. Our manufacturing operations, for this purpose, include our Truck segment, Engine segment, Parts segment, and Corporate items. The manufacturing operations financial information represents non-GAAP financial measures.

These non-GAAP financial measures should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. The reconciling differences between these non-GAAP financial measures and our U.S. GAAP condensed consolidated financial statements in Item 1, Financial Statements, are our financial services operations, which are included on an after-tax equity basis. Certain of our subsidiaries in our manufacturing operations have debt outstanding with our financial services operations (“intercompany debt”). In the condensed statements of assets, liabilities, and stockholders' equity (deficit), the intercompany debt is reflected as accounts payable. The change in the intercompany debt is reflected in the net cash provided by operating activities in the condensed statements of cash activity. Beginning in the first quarter of 2013, the Company began reporting the operating results of WCC and certain operating results of Monaco as discontinued operations. The Company's previously issued condensed statements of revenues and expenses have been restated to reflect this change.

Condensed Statements of Revenues and Expenses

Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)

	For the Three Months Ended April 30, 2013
(in millions)	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
Sales of manufactured products	$	2,487		$	—		$	—		$	2,487
Finance revenues	—			58			(19		)	39
Sales and revenues, net	2,487			58			(19		)	2,526
Costs of products sold	2,363			—			—			2,363
Restructuring charges	4			2			—			6
Selling, general and administrative expenses	290			23			(1		)	312
Engineering and product development costs	100			—			—			100
Interest expense	73			17			—			90
Other income, net	2			(3		)	(18		)	(19		)
Total costs and expenses	2,832			39			(19		)	2,852
Equity in income of non-consolidated affiliates	4			—			—			4
Income (loss) before equity income from financial services operations and income taxes	(341		)	19			—			(322		)
Equity income from financial services operations	12			—			(12		)	—
Income (loss) from continuing operations before income taxes	(329		)	19			(12		)	(322		)
Income tax expense	(15		)	(7		)	—			(22		)
Income (loss) from continuing operations	(344		)	12			(12		)	(344		)
Loss from discontinued operations, net of tax	(21		)	—			—			(21		)
Net income (loss)	(365		)	12			(12		)	(365		)
Less: Income attributable to non-controlling interests	9			—			—			9
Net income (loss) attributable to Navistar International Corporation	$	(374	)	$	12		$	(12	)	$	(374	)

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Condensed Statements of Revenues and Expenses

Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)

	For the Six Months Ended April 30, 2013
(in millions)	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
Sales of manufactured products	$	5,085		$	—		$	—		$	5,085
Finance revenues	—			117			(39		)	78
Sales and revenues, net	5,085			117			(39		)	5,163
Costs of products sold	4,649			—			—			4,649
Restructuring charges	5			3			—			8
Selling, general and administrative expenses	556			43			(2		)	597
Engineering and product development costs	211			—			—			211
Interest expense	130			35			(1		)	164
Other income, net	(16		)	(5		)	(36		)	(57		)
Total costs and expenses	5,535			76			(39		)	5,572
Equity in income of non-consolidated affiliates	3			—			—			3
Income (loss) before equity income from financial services operations and income taxes	(447		)	41			—			(406		)
Equity income from financial services operations	26			—			(26		)	—
Income (loss) from continuing operations before income taxes	(421		)	41			(26		)	(406		)
Income tax expense	(22		)	(15		)	—			(37		)
Income (loss) from continuing operations	(443		)	26			(26		)	(443		)
Loss from discontinued operations, net of tax	(30		)	—			—			(30		)
Net income (loss)	(473		)	26			(26		)	(473		)
Less: Income attributable to non-controlling interests	24			—			—			24
Net income (loss) attributable to Navistar International Corporation	$	(497	)	$	26		$	(26	)	$	(497	)

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	For the Three Months Ended April 30, 2012
(in millions)	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
Sales of manufactured products	$	3,218		$	—		$	—		$	3,218
Finance revenues	—			67			(24		)	43
Sales and revenues, net	3,218			67			(24		)	3,261
Costs of products sold	2,900			—			—			2,900
Restructuring charges	19			—			—			19
Impairment of intangible assets	10			—			—			10
Selling, general and administrative expenses	353			20			(1		)	372
Engineering and product development costs	132			—			—			132
Interest expense	42			22			(2		)	62
Other expense (income), net	37			(3		)	(21		)	13
Total costs and expenses	3,493			39			(24		)	3,508
Equity in loss of non-consolidated affiliates	(4		)	—			—			(4		)
Income (loss) before equity income from financial services operations and income taxes	(279		)	28			—			(251		)
Equity income from financial services operations	18			—			(18		)	—
Income (loss) from continuing operations before income taxes	(261		)	28			(18		)	(251		)
Income tax benefit (expense)	133			(10		)	—			123
Income (loss) from continuing operations	(128		)	18			(18		)	(128		)
Loss from discontinued operations, net of tax	(34		)	—			—			(34		)
Net income (loss)	(162		)	18			(18		)	(162		)
Less: Income attributable to non-controlling interests	10			—			—			10
Net income (loss) attributable to Navistar International Corporation	$	(172	)	$	18		$	(18	)	$	(172	)

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	For the Six Months Ended April 30, 2012
(in millions)	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
Sales of manufactured products	$	6,183		$	—		$	—		$	6,183
Finance revenues	—			135			(48		)	87
Sales and revenues, net	6,183			135			(48		)	6,270
Costs of products sold	5,550			—			—			5,550
Restructuring charges	19			—			—			19
Impairment of intangible assets	10			—			—			10
Selling, general and administrative expenses	690			39			(2		)	727
Engineering and product development costs	267			—			—			267
Interest expense	79			47			(3		)	123
Other expense (income), net	69			(5		)	(43		)	21
Total costs and expenses	6,684			81			(48		)	6,717
Equity in loss of non-consolidated affiliates	(11		)	—			—			(11		)
Income (loss) before equity income from financial services operations and income taxes	(512		)	54			—			(458		)
Equity income from financial services operations	35			—			(35		)	—
Income (loss) from continuing operations before income taxes	(477		)	54			(35		)	(458		)
Income tax benefit (expense)	218			(19		)	—			199
Income (loss) from continuing operations	(259		)	35			(35		)	(259		)
Loss from discontinued operations, net of tax	(43		)	—			—			(43		)
Net income (loss)	(302		)	35			(35		)	(302		)
Less: Income attributable to non-controlling interests	23			—			—			23
Net income (loss) attributable to Navistar International Corporation	$	(325	)	$	35		$	(35	)	$	(325	)

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Condensed Statements of Assets, Liabilities, and Stockholders' Equity (Deficit) Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
	As of April 30, 2013
(in millions)	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Statement of Operations
Assets
Cash and cash equivalents	$	465		$	40	$	—		$	505
Marketable securities	699			34		—			733
Restricted cash	32			85		—			117
Finance and other receivables, net	875			2,163		(71		)	2,967
Inventories	1,465			11		—			1,476
Goodwill	275			—		—			275
Property and equipment, net	1,582			194		—			1,776
Investments in and advances to financial services operations	664			—		(664		)	—
Investments in non-consolidated affiliates	52			—		—			52
Deferred taxes, net	224			32		—			256
Other assets	536			30		—			566
Total assets	$	6,869		$	2,589	$	(735	)	$	8,723
Liabilities and stockholders' equity (deficit)
Accounts payable	$	1,644		$	48	$	(71	)	$	1,621
Debt	3,050			1,731		—			4,781
Postretirement benefits liabilities	3,374			50		—			3,424
Other liabilities	2,439			96		—			2,535
Total liabilities	10,507			1,925		(71		)	12,361
Redeemable equity securities	4			—		—			4
Stockholders' equity attributable to non-controlling interest	35			—		—			35
Stockholders' equity (deficit) attributable to controlling interest	(3,677		)	664		(664		)	(3,677		)
Total liabilities and stockholders' equity (deficit)	$	6,869		$	2,589	$	(735	)	$	8,723

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Condensed Statements of Assets, Liabilities, and Stockholders' Equity (Deficit) Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
	As of October 31, 2012
(in millions)	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Statement of Operations
Assets
Cash and cash equivalents	$	1,059		$	28	$	—		$	1,087
Marketable securities	446			20		—			466
Restricted cash	31			130		—			161
Finance and other receivables, net	843			2,247		(98		)	2,992
Inventories	1,528			9		—			1,537
Goodwill	280			—		—			280
Property and equipment, net	1,497			163		—			1,660
Investments in and advances to financial services operations	628			—		(628		)	—
Investments in non-consolidated affiliates	62			—		—			62
Deferred taxes, net	231			32		—			263
Other assets	562			32		—			594
Total assets	$	7,167		$	2,661	$	(726	)	$	9,102
Liabilities and stockholders' equity (deficit)
Accounts payable	$	1,752		$	32	$	(98	)	$	1,686
Debt	2,905			1,866		—			4,771
Postretirement benefits liabilities	3,459			52		—			3,511
Other liabilities	2,311			83		—			2,394
Total liabilities	10,427			2,033		(98		)	12,362
Redeemable equity securities	5			—		—			5
Stockholders' equity attributable to non-controlling interest	45			—		—			45
Stockholders' equity (deficit) attributable to controlling interest	(3,310		)	628		(628		)	(3,310		)
Total liabilities and stockholders' equity (deficit)	$	7,167		$	2,661	$	(726	)	$	9,102

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Condensed Statements of Cash Activity Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
	Six Months Ended April 30, 2013
(in millions)	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
Cash flows from operating activities
Net income (loss)	$	(473	)	$	26		$	(26	)	$	(473	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization	163			1			—			164
Depreciation of equipment leased to others	60			18			—			78
Amortization of debt issuance costs and discount	25			6			—			31
Deferred income taxes	20			—			—			20
Impairment of property and equipment and intangible assets	8			—			—			8
Gain on sales of investments and businesses, net	(13		)	—			—			(13		)
Equity in loss of non-consolidated affiliates	(2		)	—			—			(2		)
Equity in income of financial services affiliates	(26		)	—			26			—
Dividends from non-consolidated affiliates	10			—			—			10
Change in intercompany receivables and payables	(27		)	27			—			—
Other, net	18			116			—			134
Net cash provided by (used in) operating activities	(237		)	194			—			(43		)
Cash flows from investing activities
Purchases of marketable securities	(746		)	(13		)	—			(759		)
Sales or maturities of marketable securities	492			—			—			492
Net change in restricted cash and cash equivalents	(1		)	45			—			44
Capital expenditures	(106		)	(1		)	—			(107		)
Purchase of equipment leased to others	(242		)	(53		)	—			(295		)
Other investing activities	47			2			—			49
Net cash used in investing activities	(556		)	(20		)	—			(576		)
Net cash provided by (used in) financing activities	205			(163		)	—			42
Effect of exchange rate changes on cash and cash equivalents	(6		)	1			—			(5		)
Increase (decrease) in cash and cash equivalents	(594		)	12			—			(582		)
Cash and cash equivalents at beginning of the period	1,059			28			—			1,087
Cash and cash equivalents at end of the period	$	465		$	40		$	—		$	505

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Condensed Statements of Cash Activity Navistar International Corporation (Manufacturing operations with financial services operations on an after-tax equity basis)
	Six Months Ended April 30, 2012
(in millions)	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
Cash flows from operating activities
Net income (loss)	$	(302	)	$	35		$	(35	)	$	(302	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization	135			1			—			136
Depreciation of equipment leased to others	9			15			—			24
Amortization of debt issuance costs and discount	14			5			—			19
Deferred income taxes	(203		)	—			—			(203		)
Impairment of property and equipment and intangible assets	38			—			—			38
Equity in loss of non-consolidated affiliates	11			—			—			11
Equity in income of financial services affiliates	(35		)	—			35			—
Dividends from non-consolidated affiliates	4			—			—			4
Change in intercompany receivables and payables	80			(80		)	—			—
Other, net	35			287			—			322
Net cash provided by (used in) operating activities	(214		)	263			—			49
Cash flows from investing activities
Purchases of marketable securities	(563		)	—			—			(563		)
Sales or maturities of marketable securities	944			—			—			944
Net change in restricted cash and cash equivalents	8			174			—			182
Capital expenditures	(174		)	(2		)	—			(176		)
Purchase of equipment leased to others	1			(29		)	—			(28		)
Acquisition of intangibles	(14		)	—			—			(14		)
Business acquisitions	(10		)	—			—			(10		)
Other investing activities	(11		)	1			—			(10		)
Net cash provided by investing activities	181			144			—			325
Net cash used in financing activities	(87		)	(423		)	—			(510		)
Effect of exchange rate changes on cash and cash equivalents	(4		)	1			—			(3		)
Decrease in cash and cash equivalents	(124		)	(15		)	—			(139		)
Cash and cash equivalents at beginning of the period	488			51			—			539
Cash and cash equivalents at end of the period	$	364		$	36		$	—		$	400

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