Navistar International (NAV) 8-K Navistar Reports Fourth Quarter Results

Q4 2015 EARNINGS PRESENTATION

DECEMBER 17, 2015

Exhibit 99.2

International

®

is a registered trademark of

, Inc.

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Q4 2015 Earnings –

12/17/2015

Safe Harbor

Statement and Other Cautionary Notes

Information provided and statements contained in this presentation 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, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements only speak as of

the date of this presentation and the Company assumes no obligation to update the information included in this presentation.

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 the risk factors set forth in our

filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended October

31, 2015.

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. All future written and oral forward-looking statements by us or persons acting on

our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except for our

ongoing obligations to disclose material information as required by the federal securities laws, we do not have any obligations

or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future

or to reflect the occurrence of unanticipated events.

The financial information herein contains audited and 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. It also excludes financial services and other items that may not be related

to the core manufacturing business or underlying results. Management often uses this information to assess and measure the

underlying performance of our operating segments.

We have chosen to provide this supplemental information to investors,

analysts, and other interested parties to enable them to perform additional analyses of operating results. The non-GAAP

numbers are reconciled to the most appropriate GAAP number in the appendix of this presentation.

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Q4 2015 Earnings –

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Agenda

Overview

Troy Clarke

Financial Results

Walter Borst

Summary

Troy Clarke

NYSE: NAV

4

TH

QUARTER 2015 RESULTS

Troy Clarke, President & CEO

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Q4 2015 Earnings –

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•

Grew volumes and market share

•

Delivered record parts profitability

•

Generated over $300 million          

in cost savings

•

Achieved 8.4% adjusted      

EBITDA margin in Q4

2015 Summary

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

NYSE: NAV

FINANCIAL RESULTS

Walter Borst, Executive Vice President & CFO

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Q4 2015 Earnings –

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Financial Summary

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

(A)   Includes U.S. and Canada School bus and Class 6-8 truck.

(B)   Amounts attributable to Navistar International Corporation.

$ in millions, except per share and units

Core Chargeouts

(A)

15,800

Sales and Revenues

$2,488

Adjusted EBITDA

$209

Income

(Loss)

from

Continuing

Operations,

Net

of

Tax

(B)

($51)

Diluted

Income

(Loss)

Per

Share

from

Continuing

Operations

(B)

($0.62)

Quarter Ended

October 31, 2015

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Q4 2015 Earnings –

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$86

$209

$40

$54

$15

$14

$-

$50

$100

$150

$200

$250

Q4 2015               Pre-existing warranty

Actual EBITDA

adjustment

Restructuring           

charges

Asset impairment

charges

Debt refinancing

and charges

Q4 2015                

Adjusted EBITDA*

Q4 2015 Adjusted EBITDA Within Guidance

$ in millions

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

* Excludes pre-existing warranty and one-time items.

Q4

Guidance:                    

$175-$225

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Q4 2015 Earnings –

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Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

•

Q4 2015 adjusted

EBITDA margin

doubled year-over-year

•

EBITDA growth driven

by increased product

margins and improved

core business

Adjusted EBITDA Margin

Achieved Adjusted EBITDA Margin Goal

0.2%

3.9%

8.4%

0%

5%

10%

4Q13

4Q14

4Q15

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Q4 2015 Earnings –

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Q4 2015 Segment Results

$ in millions

Beginning in the first quarter of 2015, the Company realigned its reporting

segments. The segment results have been restated to reflect this change.

Truck

($36)

($40)

Parts

$163

$150

Global Operations

($27)

($56)

Financial Services

$26

$26

Segment Profit:

2015

2014

Quarters Ended            

October 31

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Q4 2015 Earnings –

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Delivering on Cost Reduction Actions

0%

1%

2%

3%

2013

2014

2015

Material Costs Savings %                

Manufacturing Revenue

$-

$50

$100

2013

2014

2015

Manufacturing Cost Savings

$ in millions

$1,000

$1,400

$1,800

2013

2014

2015

Structural Costs

$ in millions

2%

5%

8%

2013

2014

2015

Warranty Expense %                      

Manufacturing Revenue

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Q4 2015 Earnings –

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Used Truck Update

•

Q4 ending gross

inventory balance of

$390 million

•

Export sales slowed

Gross Used Truck Inventory

$ in millions

$365

$375

$350

$390

$0

$250

$500

Q1                

2015

Q2                

2015

Q3               

2015

Q4               

2015

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Q4 2015 Earnings –

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Q4 2015 Manufacturing Cash Within Guidance

$ in millions

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

Guidance

(A)

Actual

Q3 2015 Manufacturing

Cash Balance

(B)

$775

$775

Consolidated Adjusted EBITDA

(C)

$175 –

$225

$209

Capex/Cash Interest/Pension & OPEB Funding

($169) –

($159)

($155)

Change in Net

Working Capital/Debt and

Warranty/Other

(D)

$169 –

$209

$184

Q4 2015 Manufacturing Cash Balance

(B)

$950-1,050   

$1,013

(A)

Guidance as provided on 9/2/2015.  

(B)

Cash balance includes marketable securities.

(C)

Excluding one-time items and pre-existing warranty.

(D)

Reflects repayment of $91 million of the NFC intercompany loan.

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Q4 2015 Earnings –

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2016

Revenue Expectations*

Market

Share

Class 6/7 Industry

Class

8 Industry

Global Operations

Blue Diamond Truck/

Foundries

(A)

Consolidated Revenue

$9,500

–

10,000

Stable Revenue Despite Declining Class 8 Industry

*     Arrow denotes comparison to 2015.

(A)  Businesses exited during 2015.

•

Class 6-8 truck and bus

industry of 350,000 to

380,000 units

•

Market share growth

•

Negative economic

conditions expected          

in Brazil

•

Terminated Blue Diamond

Truck JV and exited

foundry operations

$ in millions

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Q4 2015 Earnings –

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Expect Additional Cost Savings in 2016

•

Material cost reductions

•

Manufacturing efficiencies

•

Structural cost improvements

•

Restructure Brazilian

operations

Expect over $200 million

of savings in 2016

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Q4 2015 Earnings –

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Expect EBITDA Growth in 2016

•

~$200 million of annual

EBITDA improvement

over the past 3 years

•

Margin improvements

and product mix driving

EBITDA growth

•

Core North America 

truck and parts   

businesses improve

Adjusted EBITDA

Actual

Forecast

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation. 

$ in millions

($91)

$102

$306

$494

$0

$400

$800

2012

2013

2014

2015

2016

$600–

700

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Q4 2015 Earnings –

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•

Pension cash contributions greater than expense by ~$50 million

•

Capital expenditures of ~$125 million

•

Manufacturing interest expense of ~$240 million

•

Cash taxes of ~$35 million

•

Warranty spend greater than expense by ~$150 million

•

Used truck inventory flat

Expect Positive Manufacturing Free Cash Flow in 2016

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Q4 2015 Earnings –

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2015 Accomplishments:

•

Achieved ~$200 million of annual EBITDA improvement

•

Increased core North America truck and parts sales

•

Delivered over $300 million of cost savings

•

Ended the year with over $1 billion of manufacturing cash

2016:

•

EBITDA improvement

•

Positive free cash flow

Summary

NYSE: NAV

SUMMARY

Troy Clarke, President & CEO

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Q4 2015 Earnings –

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•

Grow volumes and 

market share

•

Launch new products

•

Grow parts profit

•

Drive uptime

improvements

Building on Our Progress

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Q4 2015 Earnings –

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2016 Expectations

•

Continue to reduce costs

•

Invest in key growth areas

•

Return to profitability

•

Generate positive free cash flow

NYSE: NAV

APPENDIX

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Q4 2015 Earnings –

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Navistar Financial Corporation

Highlights

•

Financial Services Segment profit of $98 million for 2015, $26 million for Q4

•

U.S. financing availability of $323

million as of October 31, 2015

•

Financial Services Debt/Equity Leverage of 3.3:1

•

BMO Financial Group completed the purchase of GE Capital’s Transporation

finance business, which includes the Navistar Capital program assets

Retail Notes

Bank Facility

Dealer Floor Plan

•

$747 million facility, matures in

December 2016

–

Funding for retail notes,

wholesale notes, retail accounts,

and dealer open accounts

•

On balance sheet

•

NFSC wholesale trust as of

October 2015

–

$875 million funding facility 

–

Variable portion matures Oct.

2016

–

Term portions mature Oct. 2016

and Jun. 2017

•

On balance sheet

•

Program management retained

•

Broad product offering

•

Ability to support large fleets

•

Access to less expensive capital

C A P I T A L

Funded by BMO Financial Group

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Q4 2015 Earnings –

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Retail Market Share in Commercial Vehicle Segments

Class 6/7

Medium-Duty

Retail Market Share:

Q4 2015: 19%

Q4 2014: 19%

Class 8

Severe Service

Retail Market Share:

Q4 2015: 15%

Q4 2014: 14%

Class 8

Heavy

Retail Market Share:

Q4 2015: 11%

Q4 2014: 15%

Combined Class 8

Retail Market Share:

Q4 2015: 12% / Q4 2014: 15%

2015

2014

2013

Core Markets (U.S. and Canada)

School buses.........................................................................................................

38

%

35

%

37

%

Class 6 and 7 medium trucks...............................................................................

23

%

21

%

24

%

Class 8 heavy trucks.............................................................................................

11

%

14

%

12

%

Class 8 severe service trucks................................................................................

15

%

16

%

22

%

Total Core Markets.....................................................................................

16

%

17

%

18

%

Combined class 8 trucks......................................................................................

12

%

14

%

15

%

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Q4 2015 Earnings –

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Worldwide Truck Chargeouts

We define chargeouts as trucks that have been invoiced to customers. The units held in dealer inventory represent the principal difference between retail

deliveries and chargeouts. This table summarizes our approximate worldwide chargeouts from our continuing operations.

We

define

our

Core

markets

to

include

U.S.

and

Canada

School

bus

and

Class

6

through

8

medium

and

heavy

truck.

Our

Core

markets

include

CAT-

branded units sold to Caterpillar under our North America supply agreement.

(A)

Other

markets

primarily

consist

of

Export

Truck

and

Mexico

and

also

includes

chargeouts

related

to

BDT

of

3,400

units

during

the

three

months

ended

October

31,

2014,

and

6,000

and

11,000

units

during

the

fiscal

years

2015

and

2014.

There

were

no

third

party

chargeouts

related

to

BDT

during the three months ended October 31, 2015.

Three Months Ended

October 31,

%

Change

Years Ended

October 31,

%

Change

(in units)

2015

2014

Change

2015

2014

Change

Core Markets (U.S. and Canada)

School buses .......................................

3,400

3,100

300

10 %

11,900

10,800

1,100

10 %

Class 6 and 7 medium trucks...............

4,300

3,800

500

13 %

18,800

16,000

2,800

18 %

Class 8 heavy trucks ...........................

5,900

7,400

(1,500)

(20)%

25,000

26,000

(1,000)

(4)%

Class 8 severe service trucks ................

2,200

2,500

(300

)

(12)%

9,300

8,700

600

7 %

Total Core Markets...............................

15,800

16,800

(1,000)

(6)%

65,000

61,500

3,500

6 %

Non "core" military ...........................

—

—

—

—

%

100

100

—

—

%

Other markets

(A)

................................

4,100

8,600

(4,500

)

(52)%

19,400

28,400

(9,000)

(32)%

Total worldwide unit.............................

19,900

25,400

(5,500

)

(22)%

84,500

90,000

(5,500)

(6)%

Combined class 8 trucks.....................

8,100

9,900

(1,800

)

(18)%

34,300

34,700

(400)

(1)%

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Q4 2015 Earnings –

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Worldwide Engine Shipments

Three Months Ended

October

31,

%

Change

Years Ended     

October 31,

%

Change

(in units)

2015

2014

Change

2015

2014

Change

OEM sales-South America..................

15,100

23,400

(8,300)

(35)%

53,800

89,100

(35,300)

(40)%

Intercompany sales..............................

11,400

7,500

3,900

52 %

31,600

37,900

(6,300)

(17)%

Other OEM sales.................................

1,900

3,200

(1,300)

(41)%

9,200

11,700

(2,500)

(21)%

Total sales.....................................

28,400

34,100

(5,700)

(17)%

94,600

138,700

(44,100)

(32)%

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Q4 2015 Earnings –

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U.S. and Canada Dealer Stock Inventory*

*Includes U.S. and Canada Class 4-8 and school bus inventory, but does not include U.S. IC Bus.

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

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Q4 2015 Earnings –

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Frequently Asked Questions

Q1:

What is included in Corporate and Eliminations?

A:

The primary drivers of Corporate and Eliminations are Corporate SG&A, pension and OPEB expense (excluding amounts allocated

to the segments), annual incentive, manufacturing interest expense, and the elimination of intercompany sales and profit between

segments.

Q2:

What is included in your equity in loss of non-consolidated affiliates?

A:

Equity in loss of non-consolidated affiliates is derived from our ownership interests in partially-owned affiliates that are not

consolidated.

Q3:

What is your net income attributable to non-controlling interests?

A:

Net income attributable to non-controlling interests is the result of the consolidation of subsidiaries in which we do not own 100%,

and is primarily comprised of Ford's non-controlling interest in our Blue Diamond Parts joint venture.

Q4:

What are your expected 2015 and beyond pension funding requirements?

A:

Future contributions are dependent upon a number of factors, principally the changes in values of plan assets, changes in interest

rates and the impact of any funding relief currently under consideration. We contributed $113 million and $164 million in 2015 and

2014, respectively, to our U.S. and Canadian post-retirement pension plans (the "Plans") to meet regulatory minimum funding

requirements. In 2016, we expect to contribute approximately $100 million to meet the minimum required contributions for all

plans. We currently expect that from 2017 through 2019, the Company will be required to contribute $100 million to $200 million

per year to the Plans, depending on asset performance and discount rates.

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Q4 2015 Earnings –

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Frequently Asked Questions

Q5:

What is your expectation for future cash tax payments?

A:

Our cash tax payments are expected to remain low in 2016 and will gradually increase as we utilize available net operating losses

(NOLs) and tax credits in future years.

Q6:

What is the current balance of net operating losses as compared to other deferred tax assets?

A:

Q7:

How does your FY 2015 and 2016 Class 8 industry outlook compare to ACT Research?

A:

Reconciliation to ACT - Retail Sales

ACT*

CY to FY adjustment

Total (ACT comparable Class 8 to Navistar)

Navistar Industry Retail Deliveries Combined Class 8 Trucks

250,000

280,000

240,000

270,000

Navistar difference from ACT

(36,903)

(6,903)

(13,824)

16,176

*Source: ACT N.A. Commercial Vehicle Outlook - December 2015

-12.9%

-2.4%

-5.4%

6.4%

U.S. and Canadian Class 8 Truck Sales

2016

244,500

9,324

253,824

2015

288,000

(1,097)

286,903

As of October 31, 2015 the Company has deferred tax assets for U.S. federal NOLs valued at $840 million, state NOLs valued at

$145 million, and foreign NOLs valued at $176 million, for a total undiscounted cash value of $1.2 billion. In addition to NOLs,

the Company has deferred tax assets for accumulated tax credits of $266 million and other deferred tax assets of $2.0 billion

resulting in net deferred tax assets before valuation allowances of approximately $3.5 billion. Of this amount, $3.3 billion is subject

to a valuation allowance at the end of FY2015.

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Q4 2015 Earnings –

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Frequently Asked Questions

Q8:

What is your manufacturing interest expense for Fiscal Year 2016?

A:

Annual manufacturing interest for 2016 is forecasted to be ~$240. For reference, interest expense was $233 million and $243

million for FY 2015 and 2014, respectively.

Q9:

What should we assume for capital expenditures in Fiscal Year 2016?

A:

Annual Capital expenditures for 2016 is forecasted to be ~$125. In comparison, capital expenditures were $115 million and $88

million for FY 2015 and 2014, respectively.

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Q4 2015 Earnings –

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Outstanding Debt Balances

October 31,

October 31,

(in millions)

2015

2014

Manufacturing operations

Senior Secured Term Loan Credit Facility, as amended, due 2020, net of unamortized discount of

$17 and $3,

respectively…….…………………………………………..……………………………

$

1,023

$

694

8.25% Senior Notes, due 2021, net of unamortized discount of $18 and $20, respectively…………

1,182

1,180

4.50% Senior Subordinated Convertible Notes, due 2018, net of unamortized discount of $14 and

$19, respectively……………………………………………………………………………………...

186

181

4.75% Senior Subordinated Convertible Notes, due 2019, net of unamortized discount of $32 and

$40, respectively…………………………………………………………………………..………….

379

371

Debt of majority-owned dealerships………………………………………………………………….

28

30

Financing arrangements and capital lease obligations……………………………………………….

49

54

Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040…………………………….………

225

225

Promissory Note……………………………………………………………………………...………

—

10

Financed lease obligations……………………………………………………………………………

111

184

Other…………………….......................……………………………………………………………..

15

29

Total Manufacturing operations debt……………………………………………………………...

3,198

2,958

Less: Current

Portion……………………………………………………………………………........

103

100

Net long-term Manufacturing operations debt………………………………………………….....

$

3,095

$

2,858

October 31,

October 31,

(in millions)

2015

2014

Financial Services operations

Asset-backed debt issued by consolidated SPEs, at fixed and variable rates, due serially through

2018…………………………………………………………………………………………………..

$

870

$

914

Bank revolvers, at fixed and variable rates, due dates from 2016 through 2020…………………….

1,063

1,242

Commercial paper, at variable rates, program matures in 2017……………………………………...

86

74

Borrowings secured by operating and finance leases, at various rates, due serially through 2020….

81

36

Total Financial Services operations debt …………………………………………………………

2,100

2,266

Less: Current portion ………………………………………………………………………………...

1,007

1,195

Net long-term Financial Services operations debt………………………………………………...

$

1,093

$

1,071

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Q4 2015 Earnings –

12/17/2015

SEC Regulation G Non-GAAP Reconciliation

SEC Regulation G Non-GAAP Reconciliation

The financial measures presented below are unaudited and not in accordance with, or an alternative for, financial measures presented in accordance with U.S.

generally accepted accounting principles ("GAAP"). The non-GAAP financial information presented herein should be considered supplemental to, and not as a

substitute

for,

or

superior

to,

financial

measures

calculated

in

accordance

with

GAAP

and

are

reconciled

to

the

most

appropriate

GAAP

number

below

Earnings (loss) Before Interest, Income Taxes, Depreciation, and Amortization (“EBITDA”):

We define EBITDA as our consolidated net income (loss) from continuing operations attributable to Navistar International Corporation, net of tax, plus

manufacturing interest expense, income taxes, and depreciation and amortization. We believe EBITDA provides meaningful information to the performance of our

business

and

therefore

we

use

it

to

supplement

our

GAAP

reporting.

We

have

chosen

to

provide

this

supplemental

information

to

investors,

analysts

and

other

interested parties to enable them to perform additional analyses of operating results..

Adjusted EBITDA:

We believe that adjusted EBITDA, which excludes certain identified items that we do not consider to be part of our ongoing business, improves the comparability of

year to year results, and is representative of our underlying performance. Management uses this information to assess and measure the performance of our

operating segments. We have chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform

additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the below reconciliations, and  to

provide an additional measure of performance.

Adjusted EBITDA margin:

We define Adjusted EBITDA margin as a percentage of the Company's consolidated sales and revenues. We have chosen to provide this supplemental information

to investors, analysts and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving

effect to the non-GAAP adjustments shown in the below reconciliations, and  to provide an additional measure of performance.

Manufacturing Cash, Cash Equivalents, and Marketable Securities:

Manufacturing

cash,

cash

equivalents,

and

marketable

securities

represents

the

Company’s

consolidated

cash,

cash

equivalents,

and

marketable

securities

excluding cash, cash equivalents, and marketable securities of our financial services operations. We include marketable securities with our cash and cash

equivalents

when

assessing

our

liquidity

position

as

our

investments

are

highly

liquid

in

nature.

We

have

chosen

to

provide

this

supplemental

information

to

investors, analysts and other interested parties to enable them to perform additional analyses of our ability to meet our operating requirements, capital

expenditures, equity investments, and financial obligations.

Structural costs consists of Selling, general and administrative expenses and Engineering and product development costs.

Free Cash Flow consists of Net cash from operating activities and Capital Expenditures.

33

NYSE: NAV

Q4 2015 Earnings –

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SEC Regulation G Non-GAAP Reconciliations

Manufacturing segment cash and cash equivalents and marketable securities reconciliation:

(in millions)

Manufacturing Operations:

Cash and cash equivalents………………………………………………………

$

877

$

507

Marketable securities……………………………………………………………

Manufacturing Cash and cash equivalents and Marketable securities………..

$

1,013

$

775

Financial Services Operations:

Cash and cash equivalents………………………………………………………

$

35

$

40

Marketable securities……………………………………………………………

Financial Services Cash and cash equivalents and Marketable securities……

$

58

$

65

Consolidated Balance Sheet:

Cash and cash equivalents………………………………………………………

$

912

$

547

Marketable securities……………………………………………………………

Consolidated Cash and cash equivalents and Marketable securities…………

$

1,071

$

840

23

159

October 31,

2015

136

293

25

268

July 31,

2015

34

NYSE: NAV

Q4 2015 Earnings –

12/17/2015

SEC Regulation G Non-GAAP Reconciliations

Earnings (loss) before interest, taxes, depreciation, and amortization ("EBITDA") reconciliation

______________________

(A)

Manufacturing interest expense is the net interest expense primarily generated for borrowings that support the manufacturing and corporate

operations, adjusted to eliminate intercompany interest expense with our Financial Services segment. The following table reconciles

Manufacturing interest expense to the consolidated interest expense:

______________________

* For more detail on the items noted, please see the footnotes on slide 35.

(in millions)

Loss from continuing operations attributable to NIC, net of tax………

$

(51)

$

(72)

$

(153)

Plus:

Depreciation and amortization expense……………………………

60

76

87

Manufacturing interest expense

(A)

………………………………

63

61

63

Less:

Income tax benefit (expense)………………………………………

(14)

(1)

224

EBITDA

………………………………………………………………

$

86

$

66

$

(227)

2013

Quarters Ended October 31

2015

2014

(in millions)

Interest expense ……………………………………………………

$

80

$

80

$

81

Less:  Financial services interest expense …………………………

17

19

18

Manufacturing interest expense ……………………..……………

$

63

$

61

$

63

2014

2013

Quarters Ended October 31

2015

(in millions)

EBITDA (reconciled above) …......……………………………………

86

$

66

$

(227)

Less significant items of:

Adjustments to pre-existing warranties

(A)

……………………….

40

(10)

152

Cost reduction and other strategic charges

(B)

54

4

—

Asset impairment charges

(C)

………...……………………………

15

—

80

Debt refinancing charges

(D)

14

—

—

Brazil truck business actions

(E)

…….....…………………………

—

29

—

Restructuring of North America manufacturing operations

(F)

…..

—

27

—

Total adjustments………………………………………………………

123

50

232

Adjusted EBITDA

…......………………………………………….....

$

209

$

116

$

5

Adjusted EBITDA Margin …......………………………………….....

8.4%

3.9%

0.2%

2013

Quarters Ended October 31

2015

2014

………...……………………………

35

NYSE: NAV

Q4 2015 Earnings –

12/17/2015

Significant Items Included Within Our Results

Quarter Ended

October 31

(in millions)

Expense (income):

2015

2014

Adjustments to pre-existing

warranties

(A)

…………………………………………………………………….

$

40

(10)

Restructuring charges and other strategic initiatives

(B)

……………………………………………………

54

31

Asset impairment charges

(C)

………………………………………………………………………………….

15

—

Debt refinancing

charges

(D)

………………………………………………………………….

14

—

Accelerated depreciation

……………………………………………………………………………………..

—

2

Brazil truck business actions

(E)

……………………………………………………………………………

—

29

Brazilian tax adjustments

(F)

……………………………………………………………………………….

—

(16)

______________________

(A)

Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when

claims experience deviates from historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of

failures.

Future events and circumstances related to these factors could materially change our estimates and require adjustments

to our liability.

In addition, new

product launches require a greater use of judgment in developing estimates until historical experience becomes available.

(B)

In

the

fourth

quarter

of

2015,

we

incurred

restructuring

charges

of

$54

million

related

to

cost

reduction

actions,

including

the

Company's

offering

of

the

VSP

to

the

majority of our U.S.-based non-represented salaried employees and the impacts of an involuntary reduction-in-force in the U.S. and Brazil. In the fourth quarter of

2014, the Company recorded restructuring charges related to cost reduction actions that included a reduction-in-force in the U.S and

Brazil. In the same period the

Truck

segment

recorded

$27

million

of

charges

related

to

our

anticipated

exit

from

our

Indianapolis,

Indiana

foundry

facility

and

certain

assets

in

our

Waukesha,

Wisconsin

foundry

operations.

The

charges

included

$13

million

of

restructuring

charges,

$7

million

of

fixed

asset

impairment

charges

and

$7

million

of

charges

for

inventory reserves.

(C)

In the fourth quarter of 2015, the Company recognized a total non-cash charge of $7 million for the impairment of certain intangible and long-lived assets in the Brazil

truck asset group.  As a result of the continued operating losses and idled production in the asset group, we tested the indefinite-lived intangible and long-lived assets

for potential impairment.  As a result, we determined that $4 million of intangible assets and $3 million of certain long-lived assets were impaired. Also in the fourth

quarter of 2015, the Company concluded it had a triggering event related to certain long-lived assets in the Truck segment.  As a result, certain long-lived assets were

determined to be impaired, resulting in a charge of $4 million.

(D)

In the fourth quarter of 2015, we recorded $14 million of third party fees and unamortized debt issuance costs associated with the refinancing of our Amended Term

Loan Credit Facility with a new Senior Secured Term Loan Credit Facility in August 2015.

(E)

In the fourth quarter of 2014, the Global Operations segment recorded approximately $29 million in charges, primarily related

to

inventory, to right size the Brazil

Truck business.

(F)

In the fourth quarter of 2014, we recorded an offsetting benefit of $16 million to reflect a tax law change in Brazil that allowed utilization of a portion of the net

operating loss carryforwards to satisfy other taxes.

36

NYSE: NAV

Q4 2015 Earnings –

12/17/2015

SEC Regulation G Non-GAAP Reconciliations

Earnings (loss) before interest, taxes, depreciation, and amortization ("EBITDA") reconciliation

______________________

(A)

Manufacturing interest expense is the net interest expense primarily generated for borrowings that support the manufacturing and corporate

operations, adjusted to eliminate intercompany interest expense with our Financial Services segment. The following table reconciles

Manufacturing interest expense to the consolidated interest expense:

(in millions)

Interest expense ……………………………………………………

$

307

$

314

$

321

$

259

Less:  Financial services interest expense …………………………

74

71

70

88

Manufacturing interest expense ……………………..……………

$

233

$

243

$

251

$

171

2014

2012

Years Ended October 31

2013

2015

(in millions)

Loss from continuing operations attributable to NIC, net of tax…………

$

(187)

$

(622)

$

(857)

$

(2,939)

Plus:

Depreciation and amortization expense………………………………..

281

332

417

323

Manufacturing interest expense

(A)

………………………………….….

233

243

251

171

Less:

Income tax benefit (expense)…………………………………………

(51)

(26)

171

(1,780)

EBITDA

……………………………………………………………………

$

378

$

(21)

$

(360)

$

(665)

2012

Years Ended October 31

2013

2015

2014

(in millions)

EBITDA (reconciled above) …......…………………………………

$

378

$

(21)

$

(360)

$

(665)

Less significant items of:

Debt refinancing charges

(G)

………………………………………..

14

12

13

8

Brazil truck business actions

(D)

…….....…………………………

6

29

—

—

Mahindra Joint Venture divestiture

(I)

…….....……………………..

—

—

(26)

—

Legal settlement

(J)

…….....…………………………………………

—

—

(35)

—

Engineering integration costs

(K)

……....…………………………..

—

—

—

66

Total adjustments ……………………………………………………

116

327

462

574

Adjusted EBITDA

…......…………………………………………….

$

494

$

306

$

102

$

(91)

2012

Years Ended October 31,

2013

2015

2014

Cost reduction and other strategic initiatives

(A)

………………….

72

17

9

73

Restructuring of North American manufacturing operations

(F)

…..

—

41

—

7

Adjustments to pre-existing warranties

(C)

……………………….

4

55

404

404

Brazil reporting unit impairment charges

(B)

…….…………………

10

149

—

—

North America asset

impairment charges

(E)

……………………....

20

24

97

16

Gain on settlement

(H)

…….....………………………………………

(10)

—

—

—

37

NYSE: NAV

Q4 2015 Earnings –

12/17/2015

SEC Regulation G Non-GAAP Reconciliations

Earnings (loss) before interest, taxes, depreciation, and amortization ("EBITDA") reconciliation

(A)

In 2015, we had $72 million of cost reduction and other strategic initiatives primarily consisting of restructuring charges in the third and fourth quarters. In the fourth quarter of 2015, we incurred restructuring

charges of $54 million related to cost reduction actions, including the Company's offering of the VSP to the majority of our U.S.-based non-represented salaried employees and the impacts of an involuntary

reduction-in-force in the U.S. and Brazil. In the third quarter of 2015, we incurred restructuring charges of $13 million related to cost reduction actions, including a reduction-in-force in the U.S. and Brazil. In

2014, the Company recorded restructuring charges related to cost reduction actions that included a reduction-in-force in the U.S and Brazil.  In 2013, the Company leveraged efficiencies identified through

redesigning our organizational structure and implemented new cost-reduction initiatives, including an enterprise-wide reduction-in-force. As a result of these actions, the Company recognized restructuring

charges of $25 million in the year ended October 31, 2013. These charges were partially offset by a gain of $16 million recognized in the Truck segment in the first quarter of 2013, as a result of the divestiture

of Bison. In the fourth quarter of 2012, the Company announced actions to control spending across the Company with targeted reductions of certain costs.  As a result of these actions, the Company recognized

restructuring charges of $73 million in the quarter and year ended October 31, 2012.

(B)

In the fourth quarter of 2015, the Company recognized a total non-cash charge of $7 million for the impairment of certain intangible and long-lived assets in the Brazil truck asset group.  In the third quarter of

2015, we determined that $3 million of trademark asset carrying value was impaired. In the second quarter of 2014, we recognized a non-cash charge of $149 million for the impairment of certain intangible

assets of our Brazilian engine reporting unit, including the entire $142 million balance of goodwill and $7 million of trademark.

(C)

Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from historic and

expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and circumstances related to these factors could materially change

our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available. 

(D)

In the second quarter of 2015 our Global Operations segment recorded $6 million in inventory charges to right size the Brazil Truck business.  In the fourth quarter of 2014, the Global Operations segment

recorded approximately $29 million in charges, primarily related to inventory, to right size the Brazil Truck business.

(E)

During the third and fourth quarters of 2015, certain long-lived assets were determined to be impaired, resulting in a charge of $3 million and $4 million, respectively. In the first quarter of 2015, the Truck

segment recorded $7 million of asset impairment charges relating to certain operating leases. In 2014, the Truck segment recorded impairment charges related to certain amortizing intangible assets and long-

lived assets which were determined to be fully impaired.  In the first quarter of 2014, the Truck segment recognized asset impairment charges of $18 million. In 2013, the Truck segment recognized asset

impairment charges consisting of $77 million related to the impairment of the Truck segment's entire goodwill balance, which was recorded in the fourth quarter of 2013, and $19 million which were primarily

the result of our ongoing evaluation of our portfolio of assets to validate their strategic and financial fit, which led to the discontinuation of certain engineering programs related to products that were determined

to be outside of our core operations or not performing to our expectations. In the first quarter of 2012, the Parts segment recognized asset impairment charges of $10 million that resulted from the decision to

idle the WCC business. 

(F)

In the fourth quarter of 2014 the Truck segment recorded $27 million of charges related to our anticipated exit from our Indianapolis, Indiana foundry facility and certain assets in our Waukesha, Wisconsin

foundry operations. The charges included $13 million of restructuring charges, $7 million of fixed asset impairment charges and $7 million of charges for inventory reserves. In the third quarter of 2014, the

Truck segment recorded $14 million of charges related to the 2011 closure of its Chatham, Ontario plant, based on a ruling received from the Financial Services Tribunal in Ontario Canada. 

(G)

In the fourth quarter of 2015, we recorded $14 million of third party fees and unamortized debt issuance costs associated with the refinancing of our Amended Term Loan Credit Facility with a new Senior

Secured Term Loan Credit Facility.  In the second quarter of 2014, we recorded $12 million of unamortized debt issuance costs and other charges associated with the repurchase of our 2014 Convertible Notes.

In the second quarter of 2013, we recorded $13 million of unamortized debt issuance costs and other charges associated with the sale of additional Senior Notes and the refinancing of the Term Loan.  In 2012,

we recorded $8 million of unamortized debt issuance costs and other charges associated with our Senior Notes and Amended and Restated Asset-Based Credit Facility.

(H)

In the second quarter of 2015, the Global Operations segment recognized a $10 million net gain related to a settlement of a customer dispute. The $10 million net gain for the settlement included restructuring

charges of $4 million.

(I)

In the second quarter of 2013, the Company sold its stake in the Mahindra Joint Ventures to Mahindra and the Global Operations segment recognized a gain of $26 million.

(J)

In the first quarter of 2013, as a result of the legal settlement with Deloitte and Touche LLP, the Company recognized a gain and received cash proceeds of $35 million.

(K)

Engineering integrated costs related to the consolidation of our truck and engine engineering operations, as well as the relocation of our world headquarters.  In 2012, the charges included restructuring charges

of $23 million and other related costs of $43 million, primarily in our Truck segment.

______________________

38

NYSE: NAV

Q4 2015 Earnings –

12/17/2015

Significant Items Included Within Our Results

______________________

(A)

In 2015, we had $72 million of cost reduction and other strategic initiatives primarily consisting of restructuring charges in the third and fourth quarters. In the fourth quarter of

2015, we incurred restructuring charges of $54 million related to cost reduction actions, including the Company's offering of

the VSP to the majority of our U.S.-based non-

represented salaried employees and the impacts of an involuntary reduction-in-force in the U.S. and Brazil. In the third quarter

of 2015, we incurred restructuring charges of $13

million related to cost reduction actions, including a reduction-in-force in the U.S. and Brazil. In 2014, the Company recorded restructuring charges related to cost reduction

actions that included a reduction-in-force in the U.S and Brazil.  In 2013, the Company leveraged efficiencies identified through redesigning our organizational structure and

implemented new cost-reduction initiatives, including an enterprise-wide reduction-in-force. As a result of these actions, the Company recognized restructuring charges of $25

million in the year ended October 31, 2013. These charges were partially offset by a gain of $16 million recognized in the Truck

segment in the first quarter of 2013, as a result of

the divestiture of Bison. In the fourth quarter of 2012, the Company announced actions to control spending across the Company

with targeted reductions of certain costs.  As a

result of these actions, the Company recognized restructuring charges of $73 million in the quarter and year ended October 31, 2012.

(B)

In the fourth quarter of 2015, the Company recognized a total non-cash charge of $7 million for the impairment of certain intangible and long-lived assets in the Brazil truck asset

group.  In the third quarter of 2015, we determined that $3 million of trademark asset carrying value was impaired. In the second quarter of 2014, we recognized a non-cash charge

of $149 million for the impairment of certain intangible assets of our Brazilian engine reporting unit, including the entire $142 million balance of goodwill and $7 million of

trademark.

Notes continue on Slide 39.

Years Ended October 31,

(in millions)

2015

2014

2013

2012

Expense (income):

Cost reduction and other strategic initiatives

(A)

................................

72

17

9

73

Brazil reporting unit impairment charges

(B)

.....................................

7

149

—

—

Adjustments to pre-existing warranties

(C)

........................................

1

55

404

404

Brazil truck business actions

(D)

..........................................................

6

29

—

—

North America asset impairment charges

(E)

......................................

20

24

97

16

Restructuring of North American manufacturing operations

(F)

......

—

41

—

7

Debt restructuring charges

(G)

............................................................

14

12

13

8

Gain on settlement

(H)

........................................................................

(10)

—

—

—

Mahindra Joint Venture divestiture

(I)

............................................

—

—

(26)

—

Legal settlement

(J)

............................................................................

—

—

(35)

—

Accelerated depreciation

(K)

................................................................

25

9

41

—

Brazilian tax adjustments

(L)

................................................................

—

13

—

—

Intraperiod tax allocation

(M)

................................................................

—

—

(220)

—

Engineering integration costs

(N)

..........................................................

—

—

—

66

Net impact of income tax valuation

allowances

(O)

..............................

—

—

—

1,785          

39

NYSE: NAV

Q4 2015 Earnings –

12/17/2015

Significant Items Included Within Our Results

(C)

Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience

deviates from historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and

circumstances related to these factors could materially change our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment

in developing estimates until historical experience becomes available. 

(D)

In the second quarter of 2015 our Global Operations segment recorded $6 million in inventory charges to right size the Brazil Truck business.  In the fourth quarter of 2014, the Global

Operations segment recorded approximately $29 million in charges, primarily related to inventory, to right size the Brazil Truck business.

(E)

During the third and fourth quarters of 2015, certain long-lived assets were determined to be impaired, resulting in a charge of $3 million and $4 million, respectively. In the first quarter

of 2015, the Truck segment recorded $7 million of asset impairment charges relating to certain operating leases. In 2014, the Truck segment recorded impairment charges related to

certain amortizing intangible assets and long-lived assets which were determined to be fully impaired.  In the first quarter of 2014, the Truck segment recognized asset impairment

charges of $18 million. In 2013, the Truck segment recognized asset impairment charges consisting of $77 million related to the impairment of the Truck segment's entire goodwill

balance, which was recorded in the fourth quarter of 2013, and $19 million which were primarily the result of our ongoing evaluation of our portfolio of assets to validate their strategic

and financial fit, which led to the discontinuation of certain engineering programs related to products that were determined to be outside of our core operations or not performing to our

expectations. In the first quarter of 2012, the Parts segment recognized asset impairment charges of $10 million that resulted from the decision to idle the WCC business. 

(F)

In the fourth quarter of 2014 the Truck segment recorded $27 million of charges related to our anticipated exit from our Indianapolis, Indiana foundry facility and certain assets in our

Waukesha, Wisconsin foundry operations. The charges included $13 million of restructuring charges, $7 million of fixed asset impairment charges and $7 million of charges for

inventory reserves. In the third quarter of 2014, the Truck segment recorded $14 million of charges related to the 2011 closure of its Chatham, Ontario plant, based on a ruling received

from the Financial Services Tribunal in Ontario Canada. In the fourth quarter of 2012, the Truck segment recorded $4 million of charges related to the planned closure of the Garland,

Texas plant for personnel costs related to employee terminations and related benefits.

(G)

In the fourth quarter of 2015, we recorded $14 million of third party fees and unamortized debt issuance costs associated with the refinancing of our Amended Term Loan Credit Facility

with a new Senior Secured Term Loan Credit Facility.  In the second quarter of 2014, we recorded $12 million of unamortized debt issuance costs and other charges associated with the

repurchase of our 2014 Convertible Notes. In the second quarter of 2013, we recorded $13 million of unamortized debt issuance costs and other charges associated with the sale of

additional Senior Notes and the refinancing of the Term Loan.  In 2012, we recorded $8 million of unamortized debt issuance costs and other charges associated with our Senior Notes

and Amended and Restated Asset-Based Credit Facility.

(H)

In the second quarter of 2015, the Global Operations segment recognized a $10 million net gain related to a settlement of a customer dispute. The $10 million net gain for the settlement

included restructuring charges of $4 million.

(I)

In the second quarter of 2013, the Company sold its stake in the Mahindra Joint Ventures to Mahindra and the Global Operations segment recognized a gain of $26 million.

(J)

In the first quarter of 2013, as a result of the legal settlement with Deloitte and Touche LLP, the Company recognized a gain and received cash proceeds of $35 million.

(K)

In 2015, the Truck segment recognized charges if $28 million for the acceleration of depreciation of certain assets related to the foundry facilities.  In 2014, the Truck segment

recognized accelerated depreciation related to our Huntsville facility and in 2013 we recognized accelerated depreciation related to the discontinuation of certain engine programs and

the closure of our Garland facility.

(L)

During the second quarter of 2014, we recorded an income tax expense of $29 million to establish the valuation allowance for Brazil deferred tax assets.  In the fourth quarter of 2014,

we recorded an offsetting benefit of $16 million to reflect a tax law change in Brazil that allowed utilization of a portion of the net operating loss carryforwards to satisfy other taxes.

(M)

In the fourth quarter of 2013, the Company met the criteria necessary to apply the exception within the intraperiod tax allocation rules, since it incurred a loss from continuing

operations and income was recognized in both Total other comprehensive income (loss) and Additional paid in capital.  As a result, an income tax benefit of $220 million was recorded

in Income tax benefit (expense) related to continuing operations and an offsetting tax expense of $212 million an $8 million in Total other comprehensive income (loss) and Additional

paid in capital, respectively.

(N)

Engineering integrated costs related to the consolidation of our truck and engine engineering operations, as well as the relocation of our world headquarters.  In 2012, the charges

included restructuring charges of $23 million and other related costs of $43 million, primarily in our Truck segment.

(O)

During the three months ended October 31, 2012, we recognized an income tax benefit of $1.476 billion from the release of a portion of our income tax allocation on our U.S. deferred

tax assets, as well as an income tax expense of $233 million relating to the reversal of income tax benefits recorded during the first nine months of 2012.  For the year ended October 31,

2012, we also recognized an income tax benefit of $189 million from the release of a significant portion of our valuation allowance on our Canadian deferred tax assets in the second

quarter of 2012.