Navistar International (NAV) 10-K 2010 FY Annual 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 consolidated financial statements in Item 8 are our financial services operations, which are included on a pre-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’ 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.

We have revised our previously reported condensed statements of assets, liabilities, redeemable equity securities, and stockholders’ deficit as of October 31, 2009 to reflect the correction of errors in those statements and the effect of the adoption of new accounting guidance related to the accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) and the accounting for non-controlling interests. The 2009 and 2008 impact of these errors, totaling $10 million, was recognized in our 2010 condensed statements of revenues and expenses as they were not material to our financial results for 2009 and 2008. The revisions did not impact the condensed statements of cash activities for the years ended October 31, 2009 and 2008. See Note 1,Summary of significant accounting policies, of our 2010 audited financial statements for further discussion.

Condensed Statements of Revenues and Expenses

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

	For the Year Ended October 31, 2010
	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
(in millions)
Sales of manufactured products	$	11,926		$	—		$	—		$	11,926
Finance revenues		—			309			(90	)		219
Sales and revenues, net		11,926			309			(90	)		12,145
Costs of products sold		9,741			—			—			9,741
Restructuring charges		(19	)		4			—			(15	)
Selling, general and administrative expenses		1,293			119			(6	)		1,406
Engineering and product development costs		464			—			—			464
Interest expense		154			113			(14	)		253
Other expense (income), net		48			(22	)		(70	)		(44	)
Total costs and expenses		11,681			214			(90	)		11,805
Equity in loss of non-consolidated affiliates		(50	)		—			—			(50	)
Income before income taxes and equity income from financial services operations		195			95			—			290
Equity income from financial services operations		95			—			(95	)		—
Income before income taxes		290			95			(95	)		290
Income tax expense		23			—			—			23
Net income (loss)		267			95			(95	)		267
Less: Income attributable to non-controlling interests		(44	)		—			—			(44	)
Net income (loss) attributable to Navistar International Corporation	$	223		$	95		$	(95	)	$	223

E-29

	For the Year Ended October 31, 2009
	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Statement of Operations
(in millions)
Sales of manufactured products	$	11,300		$	—	$	—		$	11,300
Finance revenues		—			348		(79	)		269
Sales and revenues, net		11,300			348		(79	)		11,569
Costs of products sold		9,366			—		—			9,366
Restructuring charges		59			—		—			59
Impairment of property and equipment		31			—		—			31
Selling, general and administrative expenses		1,218			130		(4	)		1,344
Engineering and product development costs		433			—		—			433
Interest expense		99			162		(10	)		251
Other expense (income), net		(179	)		16		(65	)		(228	)
Total costs and expenses		11,027			308		(79	)		11,256
Equity in loss of non-consolidated affiliates		46			—		—			46
Income before income taxes, extraordinary gain and equity income from financial services operations		319			40		—			359
Equity income from financial services operations		40			—		(40	)		—
Income before income taxes and extraordinary gain		359			40		(40	)		359
Income tax expense		37			—		—			37
Income (loss) before extraordinary gain		322			40		(40	)		322
Extraordinary gain, net of tax		23			—		—			23
Net income (loss)		345			40		(40	)		345
Less: Income attributable to non-controlling interests		(25	)		—		—			(25	)
Net income (loss) attributable to Navistar International Corporation	$	320		$	40	$	(40	)	$	320

E-30

	For the Year Ended October 31, 2008
	Manufacturing Operations			Financial Services Operations			Adjustments			Consolidated Statement of Operations
(in millions)
Sales of manufactured products	$	14,399		$	—		$	—		$	14,399
Finance revenues		—			405			(80	)		325
Sales and revenues, net		14,399			405			(80	)		14,724
Costs of products sold		11,942			—			—			11,942
Impairment of property and equipment		358			—			—			358
Selling, general and administrative expenses		1,292			149			(4	)		1,437
Engineering and product development costs		384			—			—			384
Interest expense		156			313			—			469
Other (income) expense, net		123			(33	)		(76	)		14
Total costs and expenses		14,255			429			(80	)		14,604
Equity in income of non-consolidated affiliates		71			—			—			71
Income (loss) before income taxes, and equity income from financial services operations		215			(24	)		—			191
Equity income from financial services operations		(24	)		—			24			—
Income (loss) before income taxes		191			(24	)		24			191
Income tax expense		57			—			—			57
Net income (loss)	$	134		$	(24	)	$	24		$	134
Less: Income attributable to non-controlling interests		—			—			—			—
Net income (loss) attributable to Navistar International Corporation	$	134		$	(24	)	$	24		$	134

E-31

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 October 31, 2010
	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Balance Sheet
(in millions)
Assets
Cash and cash equivalents	$	534		$	51	$	—		$	585
Marketable securities		566			20		—			586
Restricted cash and cash equivalents		29			151		—			180
Finance and other receivables, net		1,030			3,084		(168	)		3,946
Inventories		1,556			12		—			1,568
Goodwill		324			—		—			324
Property and equipment, net		1,329			113		—			1,442
Investments in and advances to financial services operations		502					(502	)
Investments in non-consolidated affiliates		103			—		—			103
Deferred taxes, net		109			37		—			146
Other assets		821			29		—			850
Total assets	$	6,903		$	3,497	$	(670	)	$	9,730
Liabilities, redeemable equity securities, and stockholders’ equity (deficit)
Accounts payable	$	1,974		$	21	$	(168	)	$	1,827
Debt		1,985			2,885		—			4,870
Postretirement benefits liabilities		2,066			34		—			2,100
Other liabilities		1,802			55		—			1,857
Total liabilities		7,827			2,995		(168	)		10,654
Redeemable equity securities		8			—		—			8
Stockholders’ equity attributable to non-controlling interests		49			—		—			49
Stockholders’ equity (deficit) attributable to controlling interest		(981	)		502		(502	)		(981	)
Total liabilities, redeemable equity securities, and stockholders’ equity (deficit)	$	6,903		$	3,497	$	(670	)	$	9,730

E-32

	As of October 31, 2009(A)
	Manufacturing Operations			Financial Services Operations		Adjustments			Consolidated Balance Sheet
(in millions)
Assets
Cash and cash equivalents	$	1,152		$	60	$	—		$	1,212
Restricted cash and cash equivalents		30			455		—			485
Finance and other receivables, net		915			3,358		(188	)		4,085
Inventories		1,634			32		—			1,666
Goodwill		318			—		—			318
Property and equipment, net		1,345			122		—			1,467
Investments in financial services operations		423			—		(423	)		—
Investments in non-consolidated affiliates		62			—		—			62
Deferred taxes, net		107			57		—			164
Other assets		517			52		—			569
Total assets	$	6,503		$	4,136	$	(611	)	$	10,028
Liabilities, redeemable equity securities, and stockholders’ equity (deficit)
Accounts Payable	$	1,929		$	131	$	(188	)	$	1,872
Debt		1,861			3,431		—			5,292
Postretirement benefits liabilities		2,660			33		—			2,693
Other liabilities		1,727			118		—			1,845
Total liabilities		8,177			3,713		(188	)		11,702
Redeemable equity securities		13			—		—			13
Stockholders’ equity attributable to non-controlling interests		61			—		—			61
Stockholders’ equity (deficit) attributable to Navistar International Corporation		(1,748	)		423		(423	)		(1,748	)
Total liabilities, redeemable equity securities, and stockholders’ equity (deficit)	$	6,503		$	4,136	$	(611	)	$	10,028

(A) Revised; See Note 1,Summary of significant accounting policies

E-33

Condensed Statements of Cash Activities

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

	For the Year Ended October 31, 2010
	Manufacturing Operations			Financial Services Operations			Adjustments			Condensed Consolidated Statement of Cash Flows
(in millions)
Cash flows from operating activities
Net income	$	267		$	95		$	(95)		$	267
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization		261			4			—			265
Depreciation of equipment leased to others		27			24			—			51
Amortization of debt issuance costs and discount		26			12			—			38
Deferred income taxes		(3	)		20			—			17
Equity in loss of non-consolidated affiliates		50			—			—			50
Equity in income of financial services affiliates		(95	)		—			95			—
Dividends from non-consolidated affiliates		5			—			—			5
Change in intercompany receivables and payables		11			(11	)		—			—
Other, net		(140	)		554			—			414
Net cash provided by (used in) operating activities		409			698			—			1,107
Cash flows from investing activities
Purchases of marketable securities		(1,856	)		(20	)		—			(1,876	)
Sales or maturities of marketable securities		1,290			—			—			1,290
Net change in restricted cash and cash equivalents		1			514			—			515
Capital expenditures		(232	)		(2	)		—			(234	)
Purchase of equipment leased to others		(16	)		(29	)		—			(45	)
Acquisition of intangibles		(15	)		—			—			(15	)
Business acquisitions		(2	)		—			—			(2	)
Other investing activities		(86	)		9			10			(67	)
Net cash provided by (used in) investing activities		(916	)		472			10			(434	)
Net cash used in financing activities		(110	)		(1,180	)		(10	)		(1,300	)
Effect of exchange rate changes on cash and cash equivalents		(1	)		1			—			—
Decrease in cash and cash equivalents		(618	)		(9	)		—			(627	)
Cash and cash equivalents at beginning of the period		1,152			60			—			1,212
Cash and cash equivalents at end of the period	$	534		$	51		$	—		$	585

E-34

	For the Year Ended October 31, 2009
	Manufacturing Operations				Financial Services Operations			Adjustments			Condensed Consolidated Statement of Cash Flows
(in millions)
Cash flows from operating activities
Net income (loss)	$	345			$	40		$	(40	)	$	345
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization		284				4			—			288
Depreciation of equipment leased to others		35				21			—			56
Amortization of debt issuance cost and discount		6				10			—			16
Deferred income taxes		(14	)			(4	)		—			(18	)
Impairment of property and equipment, goodwill and intangibles		41				—			—			41
Extraordinary gain on acquisition of subsidiary		(23	)			—			—			(23	)
Gain on increased equity interest in subsidiary		(23	)			—			—			(23	)
Equity in income of non-consolidated affiliates		(46	)			—			—			(46	)
Equity in income of financial services affiliates		(40	)			—			40			—
Dividends from non-consolidated affiliates		59				—			—			59
Change in intercompany receivables and payables		(82	)			82			—			—
Other, net		(8	)			551			—			543
Net cash provided by operating activities		534				704			—			1,238
Cash flows from investing activities
Purchases of marketable securities		(382	)			—			—			(382	)
Sales or maturities of marketable securities		384				—			—			384
Net change in restricted cash and cash equivalents		(23	)			94			—			71
Capital expenditures		(148	)			(3	)		—			(151	)
Purchase of equipment leased to others		(2	)			(44	)		—			(46	)
Business acquisitions, net of escrow receipt		(60	)	��		—			—			(60	)
Other investment activities		(51	)			3			20			(28	)
Net cash provided by (used in) investing activities		(282	)			50			20			(212	)
Net cash used in financing activities		36				(780	)		(20	)		(764	)
Effect of exchange rate changes on cash and cash equivalents		9				—			—			9
Decrease in cash and cash equivalents		297				(26	)		—			271
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	$	1,152			$	60		$	—		$	1,212

E-35

	For the Year ended October 31, 2008
	Manufacturing Operations			Financial Services Operations			Adjustments			Condensed Consolidated Statement of Cash Flows
(in millions)
Cash flows from operating activities
Net income	$	134		$	(24	)	$	24		$	134
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization		328			1			—			329
Depreciation of equipment leased to others		44			20			—			64
Amortization of debt issuance cost and discount		5			10			—			15
Deferred income taxes		82			(26	)		—			56
Impairment of goodwill and intangibles		372			—			—			372
Equity in income of financial services affiliates		24			—			(24	)		—
Equity in income of non-consolidated affiliates		(71	)		—			—			(71	)
Dividends from financial services operations		25			—			(25	)		—
Dividends from non-consolidated affiliates		85			—			—			85
Change in intercompany receivables and payables		(71	)		71			—			—
Other, net		(528	)		664			—			136
Net cash provided by operating activities		429			716			(25	)		1,120
Cash flows from investing activities
Purchases of marketable securities		(42	)		—			—			(42	)
Sales or maturities of marketable securities		46			—			—			46
Net change in restricted cash and cash equivalents		7			(150	)		—			(143	)
Capital expenditures		(168	)		(8	)		—			(176	)
Purchase of equipment leased to others		—			(39	)		—			(39	)
Business acquisitions, net of escrow receipt		(60	)		—			60			—
Contributions to NFC		—			—			—			—
Other investing activities		1			20			—			21
Net cash provided by (used in) investing activities		(216	)		(177	)		60			(333	)
Net cash used in financing activities		(133	)		(508	)		(35	)		(676	)
Effect of exchange rate changes on cash and cash equivalents		(21	)		(6	)		—			(27	)
Decrease in cash and cash equivalents		59			25			—			84
Cash and cash equivalents at beginning of the period		716			61			—			777
Cash and cash equivalents at end of the period	$	775		$	86		$	—		$	861

E-36