Navistar International (NAV) 10-Q 2009 Q3 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 which includes certain eliminations. 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 certain 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 July 31, 2009
	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Statement of Operations
(in millions)
Sales of manufactured products	$	2,433		$	—	$	—		$	2,433
Finance revenues		—			92		(19	)		73
Sales and revenues, net		2,433			92		(19	)		2,506
Costs of products sold		2,119			—		—			2,119
Selling, general and administrative expenses		275			34		—			309
Engineering and product development costs		101			—		—			101
Interest expense		23			33		—			56
Other (income) expense, net		(42	)		5		(19	)		(56	)
Total costs and expenses		2,476			72		(19	)		2,529
Equity in income of non-consolidated affiliates		25			—		—			25
Income before income taxes, minority interest, extraordinary gain and equity income from financial services operations		(18	)		20		—			2
Equity income from financial services operations		20			—		(20	)		—
Income before income taxes, minority interest, and extraordinary gain		2			20		(20	)		2
Income tax expense		30			—		—			30
Income before minority interest and extraordinary gain		(28	)		20		(20	)		(28	)
Minority interest in net income of subsidiaries, net of tax		(7	)		—		—			(7	)
Income (loss) before extraordinary gain		(35	)		20		(20	)		(35	)
Extraordinary gain, net of tax		23			—		—			23
Net income (loss)	$	(12	)	$	20	$	(20	)	$	(12	)

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Condensed Statements of Revenues and Expenses

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

	Nine Months Ended July 31, 2009
	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Statement of Operations
(in millions)
Sales of manufactured products	$	8,069		$	—	$	—		$	8,069
Finance revenues		—			273		(58	)		215
Sales and revenues, net		8,069			273		(58	)		8,284
Costs of products sold		6,737			—		—			6,737
Restructuring charges		55			—		—			55
Selling, general and administrative expenses		886			99		—			985
Engineering and product development costs		339			—		—			339
Interest expense		77			135		(6	)		206
Other (income) expense, net		(182	)		2		(52	)		(232	)
Total costs and expenses		7,912			236		(58	)		8,090
Equity in income of non-consolidated affiliates		56			—		—			56
Income before income taxes, minority interest, extraordinary gain and equity income from financial services operations		213			37		—			250
Equity income from financial services operations		37			—		(37	)		—
Income before income taxes, minority interest, and extraordinary gain		250			37		(37	)		250
Income tax expense		32			—		—			32
Income before minority interest and extraordinary gain		218			37		(37	)		218
Minority interest in net income of subsidiaries, net of tax		(7	)		—		—			(7	)
Income before extraordinary gain		211			37		(37	)		211
Extraordinary gain, net of tax		23			—		—			23
Net income	$	234		$	37	$	(37	)	$	234

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	Three Months Ended July 31, 2008
	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
(in millions)
Sales of manufactured products	$	3,876		$	—		$	—		$	3,876
Finance revenues		—			95			(20	)		75
Sales and revenues, net		3,876			95			(20	)		3,951
Costs of products sold		3,052			—			—			3,052
Selling, general and administrative expenses		347			39			—			386
Engineering and product development costs		108			—			—			108
Interest expense		32			57			(1	)		88
Other (income) expense, net		13			—			(19	)		(6	)
Total costs and expenses		3,552			96			(20	)		3,628
Equity in income of non-consolidated affiliates		18			—			—			18
Income before income taxes and equity income from financial services operations		342			(1	)		—			341
Equity income from financial services operations		(1	)		—			1			—
Income before income taxes		341			(1	)		1			341
Income tax expense		10			—			—			10
Net income (loss)	$	331		$	(1	)	$	1		$	331

Condensed Statements of Revenues and Expenses

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

	Nine months Ended July 31, 2008
	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
(in millions)
Sales of manufactured products	$	10,589		$	—		$	—		$	10,589
Finance revenues		—			328			(63	)		265
Sales and revenues, net		10,589			328			(63	)		10,854
Costs of products sold		8,715			—			—			8,715
Selling, general and administrative expenses		965			106			—			1,071
Engineering and product development costs		289			—			—			289
Interest expense		115			243			(1	)		357
Other (income) expense, net		65			(14	)		(62	)		(11	)
Total costs and expenses		10,149			335			(63	)		10,421
Equity in income of non-consolidated affiliates		63			—			—			63
Income (loss) before income taxes and equity income from financial services operations		503			(7	)		—			496
Equity income from financial services operations		(7	)		—			7			—
Income (loss) before income taxes		496			(7	)		7			496
Income tax expense		19			—			—			19
Net income (loss)	$	477		$	(7	)	$	7		$	477

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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 July 31, 2009
	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Balance Sheet
(in millions)
Cash and cash equivalents	$	751		$	70	$	—		$	821
Restricted cash and cash equivalents		6			501		—			507
Accounts receivables		723			3,238		(153	)		3,808
Inventories		1,697			34		—			1,731
Investments in and advances to financial services operations		433			—		(433	)		—
Investments in and advances to non-consolidated affiliates		46			—		—			46
Property and equipment, net		1,398			129		—			1,527
Goodwill and intangible assets, net		566			—		—			566
Other assets		203			59		—			262
Deferred taxes, net		65			51		—			116
Total assets	$	5,888		$	4,082	$	(586	)	$	9,384
Accounts payable	$	1,623		$	97	$	(153	)	$	1,567
Postretirement benefits liabilities		2,081			19		—			2,100
Debt		1,805			3,402		—			5,207
Other liabilities		1,660			131		—			1,791
Minority interest		58			—		—			58
Redeemable equity securities		13			—		—			13
Stockholders’ deficit		(1,352	)		433		(433	)		(1,352	)
Total liabilities, redeemable equity securities, and stockholders’ equity(deficit)	$	5,888		$	4,082	$	(586	)	$	9,384

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	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		1,726			18		—			1,744
Debt		1,834			4,240		—			6,074
Other liabilities		1,748			143		—			1,891
Minority interest		6			—		—			6
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)

	Nine months ended July 31, 2009
	Manufacturing Operations			Financial Services Operations			Adjustments			Condensed Consolidated Statement of Cash Flows
(in millions)
Cash flows from operating activities
Net income	$	234		$	23		$	(23)		$	234
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization		215			10			—			225
Depreciation of equipment leased to others		26			16			—			42
Deferred income taxes		4			2			—			6
Impairment of goodwill and intangibles		10			—			—			10
Extraordinary gain on acquisition of subsidiary		(23	)		—			—			(23	)
Gain on increased equity interest in subsidiary		(23	)		—			—			(23	)
Equity in income of non-consolidated affiliates		(56	)		—			—			(56	)
Equity in income of financial services affiliates		(37	)		—			37			—
Dividends from non-consolidated affiliates		59			—			—			59
Other, net		(280	)		719			(14	)		425
Net cash provided by operating activities		129			770			—			899
Cash flows from investing activities
Purchases of marketable securities		(354	)		—			—			(354	)
Sales or maturities of marketable securities		356			—			—			356
Net change in restricted cash and cash equivalents		1			48			—			49
Capital expenditures		(118	)		(2	)		—			(120	)
Purchase of equipment leased to others		(1	)		(27	)		—			(28	)
Business acquisitions, net of escrow receipt		(42	)		—			—			(42	)
Other investing activities		(32	)		4			20			(8	)
Net cash provided by (used in) investing activities		(190	)		23			20			(147	)
Net cash used in financing activities		(51	)		(807	)		(20	)		(878	)
Effect of exchange rate changes on cash and cash equivalents		8			(2	)		—			6
Decrease in cash and cash equivalents		(104	)		(16	)		—			(120	)
Increase in cash and cash equivalents upon consolidation of BDP and BDT		80			—			—			80
Cash and cash equivalents at beginning of the period		775			86			—			861
Cash and cash equivalents at end of the period	$	751		$	70		$	—		$	821

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Condensed Statement of Cash Activities

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

	Nine months Ended July 31, 2008
	Manufacturing Operations			Financial Services Operations			Adjustments			Condensed Consolidated Statement of Cash Flows
(in millions)
Cash flows from operating activities
Net income (loss)	$	477		$	(17	)	$	17		$	477
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization		243			13			—			256
Depreciation of equipment leased to others		29			15			—			44
Deferred income taxes		(10	)		2			—			(8	)
Equity in income of non-consolidated affiliates		(63	)		—			—			(63	)
Equity in loss of financial services affiliates		7			—			(7	)		—
Dividends from financial services operations		25			—			(25	)		—
Dividends from non-consolidated affiliates		54			—			—			54
Other, net		(669	)		597			(10	)		(82	)
Net cash provided by (used in) operating activities		93			610			(25	)		678
Cash flows from investing activities
Purchases of marketable securities		(43	)		—			—			(43	)
Sales or maturities of marketable securities		31			—			—			31
Net change in restricted cash and cash equivalents		8			(276	)		—			(268	)
Capital expenditures		(139	)		(6	)		—			(145	)
Purchase of equipment leased to others		—			(29	)		—			(29	)
Other investing activities		(17	)		45			—			28
Net cash used in investing activities		(160	)		(266	)		—			(426	)
Net cash (used in) provided by financing activities		(94	)		(274	)		25			(343	)
Effect of exchange rate changes on cash and cash equivalents		3			(11	)		—			(8	)
Increase (decrease) in cash and cash equivalents		(158	)		59			—			(99	)
Cash and cash equivalents at beginning of the period		716			61			—			777
Cash and cash equivalents at end of the period	$	558		$	120		$	—		$	678

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