Navistar International 8K Information provided and statements contained in this report that are not purely | NAV 4 Sep 08

Quarter Earnings Presentation

September 4, 2008

Exhibit 99.1

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, 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

Item 1A. Risk

Factors included within our Form 10-Q for the period ended July 31, 2008 and our

Form 10-K for the year ended October 31, 2007, which were filed on

September 3, 2008 and May 29, 2008, respectively. 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.

Other Cautionary Legends

•

The financial information herein contains both audited and

preliminary/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) and other expenses that may not be related

to the core manufacturing business.

Management often uses this

information to assess and measure the performance of our

operating segments.

A reconciliation to the most appropriate

GAAP number is included in the appendix of this presentation.

We expect our strategy will enable us to

deliver our 2009 goals

Leveraging what we have and what others have built

Competitive

Cost

Structure

Profitable

Growth

Great

Products

FY 2009 Goals

•

$15+ Billion Revenue

•

$1.6 Billion Manufacturing Segment

Profit

–

$1.6 Billion at 414,000 industry volumes

•

Improve cost structure while

developing synergistic niche

businesses with richer margins

•

Improve conversion rate of operating

income into net income

•

Reduce impact of cyclicality

–Grow Parts

–Non-Traditional/Expansion Markets

•

Controlling our Destiny

Executing on our strategy

Note: We anticipate school bus market share returning to historic norms by Fiscal Year End.

Navistar share of shipments data

3Q08

3Q07

Bus (School)

48.2%

59.3%

(11.1)

ppt

Medium (Class 6-7)

39.2%

34.4%

4.8

ppt

SSVC

34.4%

26.4%

8.0

ppt

Heavy

18.9%

15.3%

3.6

ppt

Combined Class 8 (Heavy & Severe Service)

24.6%

19.3%

5.3

ppt

Total Navistar

30.3%

27.2%

3.1

ppt

Quarter-over-Quarter

PPT Change

Military business and Severe Service continue to grow

ProStar

and LoneStar

are redefining the market

Navistar’s MWM and GM announce a 420,000 engine supply agreement

We broke ground on our Mahindra joint venture plant; truck development testing underway

Navistar and American LaFrance announce a vocational truck joint

venture

First Big Bore Engine delivered

First Student announces potential $1.2 billion purchase agreement with Navistar, Inc.’s IC Bus

Caterpillar and Navistar to pursue strategic alliance

23,000

23,500

24,000

24,500

25,000

25,500

26,000

26,500

27,000

27,500

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

3Q07

3Q08

-$0.50

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

3Q07

3Q08

$50

$100

$150

$200

$250

$300

$350

$400

$450

3Q07

3Q08

Q3 2008 Financial Information

Consolidated Revenues

($ in billions)

3Q07 $3.0

3Q08 $4.0

Manufacturing Segment Profit ($ in millions)

3Q07 $115

3Q08 $413

Diluted earnings (loss) per share

3Q07 $(.05)

3Q08 $3.68

US & Canada Class 6-8 Retail Industry

FY 2008 –

Q3 impact on Full Year Guidance

Manufacturing Segment Profit

$950

$1,000

$1,050

$1,100

Corporate Items

($430)

($400)

($385)

($375)

Interest Expense

($160)

($140)

($150)

($140)

Financial Services Profit

$20

$50

$10

$25

Sub total - Below the line range:

($570)

($490)

($525)

($490)

Consolidated Income Before Income Tax

$380

$510

$525

$610

Tax Expense

($68)

($92)

($58)

($62)

Net Income

$312

$418

$467

$548

Diluted EPS

$4.26

$5.72

$6.35

$7.45

Memo - Professional fees included above

in corporate items:

($160)

($140)

($160)

($140)

FY 2008

($Millions)

Guidance

FY 2008

($Millions)

Current

Traditional U.S. and Canada Retail Sales

Class 6 –

8 Industry Landscape

Economic uncertainty about 2009

and 2010:

•

2009 no longer the peak and

2010 no longer the trough

Reality:

•

Age of Fleet increasing

•

Fuel coming down

•

Tonnage slightly better

Industry

FY99

FY00

FY01

FY02

FY03

FY04

FY 05

FY06

FY 07

School Bus

33,800

33,900

27,900

27,400

29,200

26,200

26,800

28,200

24,500

20,000

22,000

Class 6-7 - Medium

126,000

129,600

96,000

72,700

74,900

99,200

104,600

110,400

88,500

52,000

55,000

Combined Class 8 (Heavy & Severe Service)

286,000

258,300

163,700

163,300

159,300

219,300

282,900

316,100

206,000

163,000

168,000

Total Industry Demand

445,800

421,800

287,600

263,400

344,700

414,300

454,700

319,000

235,000

245,000

FY 08

Historical Information

United States and Canadian Class 6-8 Truck Industry - Retail Sales Volume

Current

Actual

Guidance

2nd half of 2009 will determine total industry size

Note: Navistar intends to update 2009 Guidance on the 4Q 2008 conference call. Navistar’s fiscal year is 11/1 –

10/31.

Industry Environment Today

AVERAGE AGE:

U.S. Class 8 Active Population

1990 - 2008 Forecast

4.8

5.0

5.2

5.4

5.6

5.8

6.0

6.2

6.4

6.6

6.8

Avg. Age in Years

Source: ACT Research

We expect our strategy will enable us to

deliver our 2009 goals

Leveraging what we have and what others have built

Competitive

Cost

Structure

Profitable

Growth

Great

Products

FY 2009 Goals

•

$15+ Billion Revenue

•

$1.6 Billion Manufacturing Segment

Profit

–

$1.6 Billion at 414,000 industry volumes

•

Improve cost structure while

developing synergistic niche

businesses with richer margins

•

Improve conversion rate of operating

income into net income

•

Reduce impact of cyclicality

–Grow Parts

–Non-Traditional/Expansion Markets

•

Controlling our Destiny

Delivers on its promise

6.9

mpg

Fleet A

7.0

mpg

Fleet B

7.2

mpg

Fleet C

7.2

mpg

Fleet D

7.7

mpg

Fleet E

At 150,000 to

200,000 miles a

year, the

saves $8,750-

11,670 a year in

fuel!

•

The average

line haul costs

$110,000

•

Commodities

have increased

$2,300 per truck

•

Diesel was at $5

a gallon

•

has

7% fuel savings

Combined Class 8

Retail Market Share

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

3Q07

3Q08

Great Products: Class 8 Growth

Outstanding Power Characteristics

Competitor A

Competitor C

Competitor D

Competitor B

Designed for

Payload

Best-in-Class

Fuel Usage @ Idle

0.1

0.2

0.3

0.4

0.5

0.6

MaxxForce 13

Competitor A

Competitive Cost Structure

Key Component of COGS

Strategic initiatives

ProStar

MaxxForce

Big Bore 11L / 13L

Scale

Strategic Partnerships

Mahindra International

South America

CAT

Global Sourcing

Performance on track / Volume /

Dollar Weakness

Overall goal is to continuously

seek the needed quality at the

best price

Greater Flexibility

Eliminated guaranteed

employment

Productivity

Trades

Stewards / Reps

Sourcing non-core jobs

Improved Manufacturing

Cost Structure

Wages frozen

Healthcare contained

New hire package competitive

Wages

Postretirement

Labor Operating Efficiencies

Materials

Engine: Brazil Based Growth

NGD 3.0L

Acteon

15K

Acteon

Former Soviet Union

China

India

50K

100K

40K

Acteon

North

America

Profitable Growth Strategic Alliance MOU

International Branded

Mahindra Based

COE

CAT Branded

COE

CAT Branded

Navistar Based

Severe Service

Conventional

Product Offerings

Controlling Our Destiny via

Leveraging our Assets

LCOE Vocational Truck

6,000 Unit Niche Industry

MOU with San Marino

Integrated Commercial Bus

Profitable Growth –

Navistar Defense

Sustainment / Reset / Remanufacturing

Tactical

7000 MV

AFMTV

Afghan

Taiwan

FMS-Canada

FMS-UK

FMS-Other

Militarized /

supporting vehicles

5000 MV

Armored Line

Haul Tractor

TACOM-other urgent

requirements

MXT

MRAP

U.S. & Foreign

MaxxPro Dash

Smaller MaxxPro

Future Opportunities

FMTV

HET

M915

JLTV

We believe the military business is a $1.5 to $2 Billion

sustainable business

Navistar Defense Group

Military –

Portfolio of Platforms

MEAP Integration

(Delivered April ’08)

MaxxPro

MEAP

MaxxPro

Plus

MaxxPro

Plus w/ EFP

EFP Installation

(Delivered May ’08)

MaxxPro

Evolution –

Flexibility

54’

TURNING RADIUS 20-30% OFF-ROAD CAPABILITY >5000 LBS. LIGHTER

Production–Ready

CARRYOVER

SURVIVABILITY

16”

shorter

height

8”shorter wheelbase

INCREASED MOBILITY

$1.4

$1.5

$1.6

$1.8 to $1.9

$2.3 to $2.5

Parts Segment

Navistar Parts

Part Sales ($ in billions)

Focus on the Customer

•

Superior Customer Experience

•

Pull vs. Push

New Proprietary Products

•

MaxxForce™

11L / 13L

•

Only Source

Leverage Our Strengths

•

Largest Dealer Channel

•

Innovative Customer Solutions

Growth

Increase Truck Share

Military Full Offering

•

Parts

•

Kits and Remanufacturing

•

Services

Expansionary and export opportunities

Strategy to sustain and improve 2010

and beyond –

EGR versus SCR

Why we choose EGR vs. SCR:

We believe SCR is a transitional-stop gap approach

SCR forces the burden of compliance on the customer

EGR builds on technologies we are using today without ongoing customer cost,

complexity, and inconvenience

EGR has minimal, if any, adverse effects on fuel economy

SCR on a Typical Vehicle: Refuse Vocation

Urea Tank & Vertical Exhaust

Note: Yellow High-Light Denotes SCR Part & Component, Size,

and Location Requirements

Refuse application –

potential issues

-Body may move rearward

-Wheel Base growth

-Weight Distribution

-Arm interference with exhaust

-Pivot arm position relative to cab

Routing challenges

-OBD sensors

-UREA heater

-Hoses

Significant WB impacts

-AT module

-UREA tank

-Controls

-Weight Distribution

Adds ~ 400lbs

-Lower payload

-Weight distribution

SCR

EGR

Additional Hardware –

$4,000 to $5,000

Urea infrastructure / hassle

Payload Penalty –

400 –

500 lbs.

Lower Residual Value

Training

Complicated Technology

Launch Quality

TEM Impact

Committed to Non SCR Solution

Class 8 Market Share

Military

MaxxForce

Expansionary Growth

CAT JV

Mahindra JV

American LaFrance

MWM Engine Platforms

Parts Growth

EGR versus SCR

Controlling our Destiny

2009 / 2010+

Note: Navistar intends to update 2009 Guidance on the 4Q 2008 conference call. Navistar’s fiscal year is 11/1 –

10/31.

Commodity Challenges

Control Costs

Recover in marketplace

Provide differentiated value to end customer

2008 Liquidity

2007 / 2008 FY ($ millions)

Unaudited

Mfg. Cash Bal.:

10/31/2007

9 months

ended

July 31, 2008

Forecast

2008

October 31, 2006

$1,214

October 31, 2007

$722

Approx. Cash Flows:

From Operations

($185)

$134

large source

Dividends from NFC

$400

$15

small source

From Investing / (Cap Ex)

($254)

($131)

large use

From Financing / (Debt Paydown)

($453)

($164)

large use

Mfg. Cash Bal.:

October 31, 2007

$722

July 31, 2008

$576

October 31, 2008 Fcst

$750 - $850

NFC’s ability to fund itself largely unaffected

by credit crunch

•

NFC retail activity primarily funded by facilities that do not require refinancing until 2010

•

NFC has continued to obtain access to bank conduit markets to fund retail note acquisitions

•

Over $1 B in retail notes have been financed since the subprime issues began to impact the

asset securitization market

•

We have sufficient credit capacity to absorb refinancing

–

High portfolio credit quality permits continuing access to bank conduits

•

Serviced receivables balances tracking to truck market trough

Retail Notes

Bank Revolver

•

Current Situation

–

$0.9 B DFP receivables

–

$1.0 B Funding Facility

(NFSC)

•

NFSC terms

–

Libor +49 bp

–

Renewal process is

underway ahead of

November maturity

Off-balance sheet

•

$500 million revolving

warehouse (TRIP)

–

Acquired notes sold into TRIP

–

TRIP warehouses, then

securitizes via bank conduits

•

TRIP terms

–

Libor +28 bp

–

Matures 2010

On-balance sheet

•

$1.4 B Facility

–

Initial funding of retail

note acquisitions

–

Also funds

dealer / customer

open accounts

•

Revolver terms

–

Libor +225 bp

–

Matures July 2010

On-balance sheet

Dealer Floor Plan (DFP)

Liquidity Summary

•

Expect truck production to increase slightly in Q4 2008 as dealers

restock inventory, truck market improves, and new products debut

•

Parent company has no need to refinance in near-term

–

Benefiting from lower Libor interest rate

–

Refinancing will be opportunistic to stagger maturities

•

Finance companies will return to public markets shortly

–

Next significant refinance date is November 2008 for facility that funds

dealer-floor plan notes. Refinancing efforts are underway for renewal of this

facility.

•

We have sufficient liquidity / borrowing capacity to execute our

strategies

Controlling our Destiny

Class 8 Market Share

Military

MaxxForce

Expansionary Growth

CAT JV

Mahindra JV

American LaFrance

MWM Engine Platforms

Parts Growth

EGR versus SCR

2009 / 2010+

Note: Navistar intends to update 2009 Guidance on the 4Q 2008 conference call. Navistar’s fiscal year is 11/1 –

10/31.

Summary-Controlling our Destiny

2008 will be a strong year for Navistar despite a weak U.S.

and Canadian industry

Sustainability actions in place for 2009, 2010, and beyond

–

Great Products

Class 8 market share growth

EGR is our technological path

–

Competitive Cost Structure

Global sourcing

Competitive labor contract

Global footprint

–

Profitable Growth

Growth in Export and Military

Cat JV

Mahindra JV

American LaFrance JV

Appendix

4Q Changes from 3Q

Change from 3Q08

($ Millions)

Military

$400 revenue

Medium Production

$100 revenue

Engine –

Ford & Medium Volume Impact

$150 revenue

LoneStar

& ProStar™

Startup / Stock Options Expense

$30 -

additional

expense

2008 Guidance

*Excludes

debt

majority-owned

dealerships

**Represents costs included in both segments and corporate

***However,

general,

are

always

required

evaluate

our

valuation

allowance

position

($ Millions)

2007

2008 Guidance

Capital Expenditures

$312

$250 -

$350

Professional Fees**

$234

$150 -

$170

Manufacturing Debt*

$1,762

~$1,700

Engineering & Product

Development

$382

$400 -

$430

Manufacturing Cash Balance

$722

$700 -

$800

Income tax expense

$47

***No U.S. Federal, however, State and

AMT taxes. Foreign tax rate ~mid 30’s.

Diluted Shares

70.3 million

~73.5 million

Market Share –

US & Canada School Bus

and Class 6-8

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

July YTD

Bus (School)

59.6%

60.3%

59.3%

59.1%

59.6%

57.4%

56.9%

48.2%

54.2%

Medium (Class 6-7)

36.7%

34.2%

34.4%

37.3%

35.7%

33.6%

35.0%

39.2%

35.9%

Heavy (LH & RH)

15.8%

12.2%

15.3%

17.1%

15.0%

15.8%

15.0%

18.9%

16.6%

Severe Service

24.0%

27.8%

26.4%

31.6%

27.1%

35.4%

35.9%

34.4%

35.2%

Combined Class 8

17.9%

16.7%

19.3%

22.4%

18.7%

22.6%

22.8%

24.6%

23.4%

Combined Market Share

24.7%

25.1%

27.2%

30.9%

26.6%

28.7%

29.2%

30.3%

29.4%

Severe Service

22.8%

25.9%

24.3%

28.5%

25.1%

28.2%

25.6%

25.7%

26.5%

Combined Class 8

17.6%

16.0%

18.5%

21.2%

18.0%

19.8%

18.6%

21.3%

19.9%

Combined Market share

24.5%

24.8%

26.7%

30.3%

26.2%

27.1%

26.9%

28.2%

27.4%

2008 Market Share Excluding U.S. Military

2008

2007

2007 Market Share Excluding U.S. Military

Truck Shipments

Note: Information shown below is based on Navistar’s fiscal year-end

Fiscal Year 2006

1Q06

2Q06

3Q06

4Q06

Full Year 2006

BUS

4,100

4,600

5,200

18,500

MEDIUM

7,300

11,500

12,100

14,300

45,200

HEAVY

7,900

9,900

10,200

15,400

43,400

SEVERE

3,900

4,500

4,300

6,300

19,000

TOTAL

23,200

30,500

31,200

41,200

126,100

MILITARY (U.S. & Foreign)

400

500

1,200

800

2,900

EXPANSIONARY

5,700

6,500

7,300

6,900

26,400

WORLD WIDE TRUCK

29,300

37,500

39,700

48,900

155,400

Fiscal Year 2007

1Q07

2Q07

3Q07

4Q07

Full Year 2007

BUS

3,400

4,100

3,200

3,900

14,600

MEDIUM

9,700

6,800

5,600

6,600

28,700

HEAVY

7,000

4,500

2,600

3,300

17,400

SEVERE

3,900

3,300

3,500

3,700

14,400

TOTAL

24,000

18,700

14,900

17,500

75,100

MILITARY (U.S. & Foreign)

600

900

700

1,000

3,200

EXPANSIONARY

9,100

8,700

9,000

8,500

35,300

WORLD WIDE TRUCK

33,700

28,300

24,600

27,000

113,600

Fiscal year 2008

1Q08

2Q08

3Q08

4Q08

July YTD FY08

BUS

3,100

3,300

2,700

9,100

MEDIUM

3,700

6,300

5,800

15,800

HEAVY

2,600

3,900

4,500

11,000

SEVERE

2,400

3,400

3,300

9,100

TOTAL

11,800

16,900

16,300

45,000

MILITARY (U.S. & Foreign)

1,600

2,200

2,300

6,100

EXPANSIONARY

5,900

8,100

8,400

22,400

WORLD WIDE TRUCK

19,300

27,200

27,000

73,500

World Wide Engine Shipments

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

Ford

80,200

92,200

75,200

68,100

315,700

Other OEM's (All Models)

25,300

29,000

26,500

24,100

104,900

Engine Shipments to Truck Group

17,600

24,300

25,100

32,100

99,100

Total Shipments

123,100

145,500

126,800

124,300

519,700

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

Ford

60,000

56,200

65,400

53,500

235,100

Other OEM's (All Models)

21,000

26,400

29,100

27,700

104,200

Engine Shipments to Truck Group

23,100

12,100

13,700

16,500

65,400

Total Shipments

104,100

94,700

108,200

97,700

404,700

Navistar

1st Q

2nd Q

3rd Q

4th Q

July YTD

Ford

47,000

55,300

25,200

127,500

Other OEM's (All Models)

25,900

31,400

35,100

92,400

Engine Shipments to Truck Group

12,900

15,800

19,000

47,700

Total Shipments

85,800

102,500

79,300

267,600

2008

2007

2006

Order Receipts –

U.S. & Canada

Navistar (Order receipt data)

1st Q

2nd Q

3rd Q

4th Q

Full Year

Bus (School)

2,700

2,800

3,400

2,700

11,600

Medium (Class 6-7)

4,300

3,100

6,100

5,300

18,800

Combined Class 8 (Heavy & Severe Service)

5,200

4,600

8,300

5,800

23,900

Total Navistar

12,200

10,500

17,800

13,800

54,300

Industry (Order receipt data)

1st Q

2nd Q

3rd Q

4th Q

Full Year

Bus (School)

4,500

4,100

5,500

5,300

19,400

Medium (Class 6-7)

14,000

10,900

12,200

13,300

50,400

Combined Class 8 (Heavy & Severe Service)

31,000

20,400

28,100

27,900

107,400

Total Industry

49,500

35,400

45,800

46,500

177,200

Navistar (Order receipt data)

1st Q

2nd Q

3rd Q

4th Q

July YTD

Bus (School)

2,400

2,800

3,900

9,100

Medium (Class 6-7)

5,300

5,600

3,800

14,700

Combined Class 8 (Heavy & Severe Service)

11,000

11,300

14,200

36,500

Total Navistar

18,700

19,700

21,900

60,300

Industry (Order receipt data)

1st Q

2nd Q

3rd Q

4th Q

July YTD

Bus (School)

3,900

5,000

6,600

15,500

Medium (Class 6-7)

14,200

16,200

11,300

41,700

Combined Class 8 (Heavy & Severe Service)

44,300

39,800

40,300

124,400

Total Industry

62,400

61,000

58,200

181,600

2008

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

2007

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

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

FY2007

FY2008 Goal

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

FY2007

FY2008 Fcst*

25,000

50,000

75,000

100,000

FY2007

FY2008 Fcst*

2008 Shipment Guidance

Total -

404,700

340K –

350K

38,000

Total -

76,800

65K –

75K

*midpoint of guidance

Navistar Engine Shipments

**includes all military shipments

Navistar U.S. & Canada Shipments

(Class 6-8 Units)

Navistar Expansionary** Shipments

Q4 –

18,100

Q4 –

19,900

July YTD

58,700

July YTD

50,100

Q4 –

97,700

Q4 –

77,000

July YTD

307,000

July YTD

267,600

Q4 –

9,000

Q4 –

9,500

July YTD

29,000

July YTD

28,500

2,000

4,000

6,000

8,000

10,000

12,000

Lowest point in over 5 years

Dealer Stock Inventory

–

Lowest point in over 5 years

Options Outstanding and Exercisable

(Unaudited)

Options Outstanding

Options Exercisable

Range of prices

Number Outstanding Weighted Avg

(in thousands)

Remaining

Contractual Life (in years)

Weighted

Avg

Exercise

Price

Number Exercisable Weighted Avg

(in thousands)

Remaining

Contractual Life (in years)

Weighted Avg

Exercise Price

$21.22 -

$31.81

2,345

5.2

$ 25.70

1,986

4.9

$ 25.61

$32.18 -

$41.53

2,296

3.9

39.74

2,296

3.9

39.74

$42.48 -

$51.75

1,032

5.0

43.08

1,032

5.0

43.08

Total

5,673

4.6

$ 34.55

5,314

4.5

$ 35.11

Note: Information as of July 31, 2008.

Basic average shares outstanding for the nine months ended July 31, 2008 were approximately 70.5 million.

Class 8 Reconciliation

Actual

Forecast

2006

2007

2008

Navistar (Fiscal year)

316,100

206,000

165,500

Wards Data (Calendar year)

322,500

173,500

Not Available

Difference due to CY to FY adjustment

(6,400)

32,500

Not Available

ACT Research (July 2008 Outlook Report)

329,200

182,400

165,420

CY to FY adjustment

(6,400)

32,500

(2,121)

Other misc. Class 8 OEMS/Military

(8,600)

(5,500)

(1,000)

Total (ACT Comparable Class 8 to Navistar)

314,200

209,400

162,299

Reconciliation

to Wards

Reconciliation

to ACT

U.S. and Canada Retail Unit Sales - Class 8 Reconciliation

SEC Regulation G

DEBT

YE 2005

YE 2006

YE 2007

2007 - 3Q

2008 - 3Q

(in millions)

Manufacturing operations

January 2007 Loan Facility (Libor + 325)

1,330

1,445

1,330

Bridge Loan Facility (Libor + 500)

1,500

Financing arrangements and capital lease obligations

408

401

369

376

313

6.25% Senior Notes

400

9.375% Senior Notes

393

7.5% Senior Notes

249

Majority owned dealership debt

245

484

267

326

184

4.75% Subordinated Exchangeable Notes, due 2009

202

2.5% Senior Convertible Notes

190

9.95% Senior Notes

Other

Total manufacturing operations debt

2,124

2,472

2,029

2,219

1,884

Financial services operations

Borrowing secured by asset-backed securities, at variable rates, due serially through 2011

2,779

3,104

2,748

2,899

2,371

Bank revolvers, variable rates, due 2010

838

1,426

1,354

1,224

1,401

Revolving retail warehouse facility, variable rates, due 2010

500

Commercial Paper

117

115

249

Borrowing secured by operating and finance leases

148

116

133

139

127

Total financial services operations debt

4,265

5,174

4,852

4,877

4,648

Cash & Marketable Securities

YE 2005

YE 2006

YE 2007

2007 - 3Q

2008 - 3Q

Manufacturing non-GAAP (Unaudited)

867

1,214

722

607

576

Financial Services non-GAAP (Unaudited)

120

Consolidated US GAAP

920

1,293

783

679

696

(Audited)

(Unaudited)

SEC Regulation G

Based on

414,500

Industry

FY 2006

($ Billions)

FY 2007

($ Billions)

FY 2008

($ Billions)

As Reported

Revenues

$14

$12

$9.1

$10.9

($Millions)

Manufacturing Segment Profit

$838

$426

$1,050

$1,100

$323

$837

Corporate Items

($398)

($431)

($385)

($375)

($423)

($313)

($289)

($265)

Interest Expense

($192)

($196)

($150)

($140)

($177)

($157)

($147)

($114)

Financial Services Profit

$147

$128

$10

$25

$100

$140

$124

($7)

Sub total - Below the line range:

($443)

($499)

($525)

($490)

($500)

($330)

($312)

($386)

Consolidated Income Before Income Tax

$395

($73)

$525

$610

$1,100

$1,270

$11

$451

Taxes Benefit (Expense)

($94)

($47)

($58)

($62)

($28)

($17)

Net Income (Loss)

$301

($120)

$467

$548

($17)

$434

Diluted EPS

$4.12

($1.70)

$6.35

$7.45

($0.24)

$5.92

Memo - Professional fees included above in

corporate items:

($70)

($224)

($160)

($140)

($30)

($20)

($136)

($129)

2008 Full year estimate number of diluted shares 73.5 Million

$1,600

$15+

FY 2009

($ Billions)

($Millions)

SEC Regulation G

FY 2008

($ Billions)

($Millions)

~$15

Full Year

FY 2007

($ Billions)

Guidance

Goal

9 months ended July 31

Frequently Asked Questions

Q1:

What should we assume as the total on capital expenditures for 2008?

For 2008, excluding our NFC and Dealcor acquisition of vehicles for leasing, we expect our capital

expenditures to be within the $250 million to $350 million range. We continue to fund our strategic

programs.

Q2:

What is in your Dealcor debt?

Dealcor debt is comprised of wholesale (floor plan) financing and also retail financing on lease and

rental fleets that is securitized (owned by) third party financing sources.

Q3:

How many Dealcor dealers did you have as of July 31, 2008?

Of our 301 primary NAFTA dealers, 20 were Dealcor dealers as of July 31, 2008. We expect to have

20 Dealcor dealers on October 31, 2008.

Q4:

What percentage of Navistar’s parts revenue is proprietary versus all makes?

Approximately 40% of part’s revenue is proprietary.

Q5:

What do you finance at Navistar Finance Corporation (NFC)?

NFC is a commercial financing organization that provides wholesale, retail and lease financing for

sales of new and used trucks sold by the company. NFC also finances the company’s wholesale

accounts and selected retail accounts receivable. Sales of new truck related equipment (including

trailers) of other manufacturers are also financed.

Frequently Asked Questions

Q6:

Have you seen any year-over-year steel, precious metals and resin cost increases in 2008?

Steel and Other Commodities

—

Commodity price increases, particularly for aluminum, copper,

precious metals, resins, and steel have contributed to substantial cost pressures in the industry as well

from

our

suppliers.

Cost

increases

steel,

precious

metals,

resins,

and

petroleum

products

totaled approximately $184

million, $178

million, $86

million, and $42

million for 2005, 2006, 2007, and

the nine months of 2008, respectively, as compared to the corresponding prior year period. Generally,

we have been able to mitigate the effects of these cost increases via a combination of design changes,

material substitution, resourcing, global sourcing efforts, and pricing performance, although we do not

specifically identify these items on customer invoices. In addition, although the terms of supplier

contracts

and

special

pricing

arrangements

can

vary,

generally

time

lag

exists

between

when

incur increased costs and when we might recoup them through increased pricing. This time lag can

span several quarters or years, depending on the specific situation.

Q7:

What is the status of your hybrid program?

We were the first manufacturer to bring this technology to on line production for Class 6 &7 and

currently

are

producing

our

DuraStar™

hybrid

trucks

well

hybrid

version

our

industry-leading

Bus-brand school bus. To date, we have built and fielded over 200 units covering medium truck, bus,

and package car applications.

We have over 2.0 million miles of validation testing and are in

the

process of training our entire dealer organization on selling and servicing this new

product.

Certification tests are showing improvements of up to 70% in fuel economy and 40% in CO2

emissions.

Frequently Asked Questions

Q8:

The future of diesel transportation is being impacted by environmental and energy issues such as

fuel efficiency, climate change and clean air. How is Navistar responding to these growing

influences?

Navistar and its production units are fully engaged and are offering solutions on multiple fronts to the

commercial truck industry. Aerodynamic efficiency is the single most important issue to address to

improve

the

fuel

economy

on-highway

trucks.

International

ProStar™

the

industry's

most

aerodynamic

and

fuel

efficient

Class

truck.

extensive

development

wind

tunnels

and

work

hard

achieve

industry-leading

aero-efficiency.

And

our

recently

introduced

International®

LoneStar™

the

first ever owner/operator product that is SmartWay

certified, is setting a whole new standard of aero-

efficiency among premium Class 8 trucks. Another significant reduction in both fuel consumption and

emissions can be achieved by reducing idle time of on-highway trucks. Navistar will be the first

manufacturer

offer

fully

integrated

Alternate

Power

Unit

(APU)

when

the

MaxxPower™

APU

launched

later

this

year.

The

MaxxPower™

APU

allows

drivers

operate

the

truck

HVAC

system

and

other "hotel" loads while consuming 80% less fuel than idling the main engine. We also believe hybrid

technology will be a large part of the national response to climate change and fuel use and we are raising

our role as a contributor to energy efficient transportation solutions in the commercial truck, commercial

bus and school bus businesses. We are leveraging the natural fuel efficiency of diesel engines and

vehicles in several key moves.

We are building on our record as the leader in Green Diesel Technology, where Navistar set the pace for

the industry in achieving this year’s historically low emission requirements. We have advanced the

standard

efficiency

with

our

new

ProStar™

truck.

And

are

well

into

the

important

wave

customer

interest in hydraulic and electric hybrids which will have a substantial impact on the reduction in green

house gas emissions.

Navistar was recognized for leadership in the development of hybrid advanced technology in California,

receiving the Blue Sky Award for 2007 from WestStart-CALSTART.

Navistar International (NAV) 8-KInformation provided and statements contained in this report that are not purely