Navistar International (NAV) 10-Q 2009 Q1 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 a pre-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. The reconciling differences between these non-GAAP financial measures and our GAAP condensed consolidated financial statements in Item 1,Condensed Consolidated Financial Statements, are our financial services operations and adjustments required to eliminate intercompany transactions between Manufacturing Operations and Financial Services Operations and to adjust for reclasses. 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, redeemable equity securities, and stockholders’ 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 activities.

Condensed Statements of Revenues and Expenses

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

	Three Months Ended January 31, 2009
	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
(in millions)
Sales of manufactured products	$	2,895		$	—		$	—		$	2,895
Finance revenues		—			93			(18	)		75
Sales and revenues, net	$	2,895		$	93		$	(18	)	$	2,970
Costs of products sold		2,323			—			—			2,323
Restructuring charges		58			—			—			58
Selling, general and administrative expenses		346			31			(1	)		376
Engineering and product development costs		108			—			—			108
Interest expense		31			64			(2	)		93
Other income, net		(182	)		(1	)		(15	)		(198	)
Total costs and expenses		2,684			94			(18	)		2,760
Equity in income of non-consolidated affiliates		17			—			—			17
Income (loss) before income taxes and equity income from financial services operations		228			(1	)		—			227
Equity income from financial services operations		(1	)		—			1			—
Income (loss) before income taxes		227			(1	)		1			227
Income tax benefit		7			—			—			7
Net income (loss)	$	234		$	(1	)	$	1		$	234

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	Three Months Ended January 31, 2008
	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
(in millions)
Sales of manufactured products	$	2,860		$	—		$	—		$	2,860
Finance revenues		—			116			(22	)		94
Sales and revenues, net	$	2,860		$	116		$	(22	)	$	2,954
Costs of products sold		2,463			—			—			2,463
Selling, general and administrative expenses		293			28			—			321
Engineering and product development costs		82			—			—			82
Interest expense		48			119			—			167
Other (income) expenses, net		27			(6	)		(22	)		(1	)
Total costs and expenses		2,913			141			(22	)		3,032
Equity in income of non-consolidated affiliates		24			—			—			24
Loss before income taxes and equity from financial services operations		(29	)		(25	)		—			(54	)
Equity loss from financial services operations		(25	)		—			25			—
Loss before income taxes		(54	)		(25	)		25			(54	)
Income tax benefit (expense)		(11	)		10			(10	)		(11	)
Net loss	$	(65	)	$	(15	)	$	15		$	(65	)

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Condensed Statements of Assets, Liabilities, Redeemable Equity Securities, and Stockholders’ Deficit

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

	As of January 31, 2009
	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Balance Sheet
(in millions)
Cash and cash equivalents	$	433		$	64	$	—		$	497
Marketable securities		149			—		—			149
Restricted cash and cash equivalents		8			388		—			396
Accounts receivables		917			3,602		(247	)		4,272
Inventories		1,777			36		—			1,813
Investments in and advances to financial services operations		397			—		(397	)		—
Investments in and advances to non-consolidated affiliates		162			—		—			162
Property and equipment, net		1,338			109		—			1,447
Goodwill and intangible assets, net		499			—		—			499
Other assets		187			83		—			270
Deferred taxes, net		71			47		—			118
Total assets	$	5,938		$	4,329	$	(644	)	$	9,623
Accounts payable	$	1,754		$	173	$	(247	)	$	1,680
Postretirement benefits liabilities		1,980			19		—			1,999
Debt—manufacturing operations		1,829			3,576		—			5,405
Other liabilities		1,844			164		—			2,008
Redeemable equity securities		24			—		—			24
Stockholders’ deficit		(1,493	)		397		(397	)		(1,493	)
Total liabilities, redeemable equity securities, and stockholders’ equity/(deficit)	$	5,938		$	4,329	$	(644	)	$	9,623
	As of October 31, 2008
	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Balance Sheet
(in millions)
Cash and cash equivalents	$	775		$	86	$	—		$	861
Marketable securities		2			—		—			2
Restricted cash and cash equivalents		8			549		—			557
Accounts receivables		1,051			3,968		(226	)		4,793
Inventories		1,584			44		—			1,628
Investments in and advances to financial services operations		387			—		(387	)		—
Investments in and advances to non-consolidated affiliates		156			—		—			156
Property and equipment, net		1,390			111		—			1,501
Goodwill and intangible assets, net		529			—		—			529
Other assets		175			72		—			247
Deferred taxes, net		67			49		—			116
Total assets	$	6,124		$	4,879	$	(613	)	$	10,390
Accounts payable	$	2,162		$	91	$	(226	)	$	2,027
Postretirement benefits liabilities		1,628			18		—			1,646
Debt—manufacturing operations		1,834			4,240		—			6,074
Other liabilities		1,852			143		—			1,995
Redeemable equity securities		143			—		—			143
Stockholders’ deficit		(1,495	)		387		(387	)		(1,495	)
Total liabilities, redeemable equity securities, and stockholders’ equity/(deficit)	$	6,124		$	4,879	$	(613	)	$	10,390

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Condensed Statement of Cash Activities

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

	Three Months Ended January 31, 2009
	Manufacturing Operations			Financial Services Operations			Adjustments			Condensed Consolidated Statement of Cash Flows
(in millions)
Cash flows from operating activities
Net income (loss)	$	234		$	(1	)	$	1		$	234
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization		67			4			—			71
Depreciation of equipment leased to others		7			5			—			12
Deferred income taxes		(5	)		7			—			2
Equity in income of non-consolidated affiliates		(17	)		—			—			(17	)
Equity in income of financial services affiliates		(1	)		—			1			—
Dividends from non-consolidated affiliates		24			—			—			24
Restructuring charges		58			—			—			58
Other, net		(489	)		431			(2	)		(60	)
Net cash provided by (used in) operating activities		(122	)		446			—			324
Cash flows from investing activities
Purchases of marketable securities		(199	)		—			—			(199	)
Sales or maturities of marketable securities		52			—			—			52
Net change in restricted cash and cash equivalents		—			158			—			158
Capital expenditures		(38	)		—			—			(38	)
Purchase of equipment leased to others		(6	)		(10	)		—			(16	)
Other investment activities		(28	)		1			20			(7	)
Net cash provided by (used in) investing activities		(219	)		149			20			(50	)
Net cash (used in) provided by financing activities		1			(612	)		(20	)		(631	)
Effect of exchange rate changes on cash and cash equivalents		(2	)		(5	)		—			(7	)
Decrease in cash and cash equivalents		(342	)		(22	)		—			(364	)
Cash and cash equivalents at beginning of the period		775			86			—			861
Cash and cash equivalents at end of the period	$	433		$	64		$	—		$	497

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Condensed Statement of Cash Activities

Navistar International Corporation (Manufacturing operations with financial services operations on a pre-tax equity basis)

	Three Months Ended January 31, 2008
	Manufacturing Operations			Financial Services Operations			Adjustments			Condensed Consolidated Statement of Cash Flows
(in millions)
Cash flows from operating activities
Net loss	$	(65	)	$	(15	)	$	15		$	(65	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization		77			1			—			78
Depreciation of equipment leased to others		10			5			—			15
Deferred income taxes		11			—			—			11
Equity in income of non-consolidated affiliates		(24	)		—			—			(24	)
Equity in loss of financial services affiliates		25			—			(25	)		—
Dividends from non-consolidated affiliates		12			—			—			12
Dividends from financial services affiliates		15			—			(15	)		—
Other, net		(161	)		115			10			(36	)
Net cash provided by (used in) operating activities		(100	)		106			(15	)		(9	)
Cash flows from investing activities
Purchases of marketable securities		(25	)		—			—			(25	)
Sales or maturities of marketable securities		10			—			—			10
Net change in restricted cash and cash equivalents		2			(447	)		—			(445	)
Capital expenditures		(36	)		(1	)		—			(37	)
Purchase of equipment leased to others		—			(7	)		—			(7	)
Other investment activities		20			10			—			30
Net cash used in investing activities		(29	)		(445	)		—			(474	)
Net cash (used in) provided by financing activities		(77	)		356			15			294
Effect of exchange rate changes on cash and cash equivalents		2			4			—			6
Increase (decrease) in cash and cash equivalents		(204	)		21			—			(183	)
Cash and cash equivalents at beginning of the period		716			61			—			777
Cash and cash equivalents at end of the period	$	512		$	82		$	—		$	594

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