NAVISTAR INTERNATIONAL CORP - FORM 8-K - EX-99.2

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8-K - FORM 8-K - NAVISTAR INTERNATIONAL CORP	d883322d8k.htm
EX-99.1 - EX-99.1 - NAVISTAR INTERNATIONAL CORP	d883322dex991.htm

International

is a registered trademark of

, Inc.

Q1 2015 EARNINGS PRESENTATION

MARCH 3, 2015

Exhibit 99.2

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Safe Harbor

Statement

Information provided and statements contained in this report that are not purely historical are

forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as

amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private

Securities Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date

of this report and the Company assumes no obligation to update the information included in this

report. Such forward-looking statements include information concerning our possible or assumed

future results of operations, including descriptions of our business strategy. These statements often

include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or similar

expressions. These statements are not guarantees of performance or results and they involve risks,

uncertainties, and assumptions. For a further description of these factors, see 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, 2014. 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.

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Other Cautionary Notes

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.

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Agenda

Overview

Troy Clarke

Financial Results

Walter Borst

Summary

Troy Clarke

QUARTER 2015 RESULTS

Troy Clarke, President & CEO

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Our Mission: Uptime

Finish the

Turnaround

Uptime

Advantage

Leadership

Advantage

Fewer service incidents

Shorten repair times

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Capitalizing on Industry Momentum

U.S.

economy

continues

improve

Favorable

market

conditions

expected

continue

2015

Consumer

spending

growing

Steady

gains

construction

Industry:

NYSE: NAV

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Q1 Performance:

•

$91 million year-over-year

adjusted EBITDA

improvement

Significant Progress on Cost:

•

Reduced warranty spend

and expense

•

Improved material,

manufacturing, and

structural costs

1st Quarter Summary

Positive Sales Momentum:

•

Chargeouts

(A)

up 17%

Class 6-7 Medium up 25%

School Bus up 42%

•

Backlog up 27%

•

Parts up 7%

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

medium and heavy truck.

NYSE: NAV

FINANCIAL RESULTS

Walter Borst, Executive Vice President & CFO

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Q1 2015 Segment Realignment

Changes within our reporting segments:

Current Segments

Prior Segments

Export Truck

Truck

Global Operations

Export Parts

Parts

Global Operations

Military Parts

Truck

North America Parts

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Income Statement Summary

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation.

$ in millions, except per share

Quarters Ended

January 31

2015

2014

Chargeouts

(A)

13,500

11,500

Sales and Revenues

$2,421

$2,208

Income (Loss) from Continuing Operations, Net of Tax

(B)

($42)

($249)

Diluted Loss Per Share from Continuing Operations

(B)

($0.52)

($3.07)

EBITDA

$101

($110)

(A)

Includes U.S. and Canada School bus and Class 6-8 medium

and heavy truck.

(B) Amounts attributable to Navistar International Corporation.

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Q1 2015 EBITDA

$ in millions

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation.

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

$101

$54

$57

($10)

$50

$100

$150

Q1 2015

Actual EBITDA

Pre-existing Warranty

Adjustment

One-time Items

Q1 2015

Adjusted EBITDA

Q1 Guidance:

$0-$50

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Q1 2015 Segment Results

Segment Results:

Truck

($18)

($208)

Parts

$145

$108

Global Operations

($15)

($35)

Financial Services

$24

$23

Quarters Ended

January 31

2015

2014

$ 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.

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

First Quarter Progress

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

and heavy truck.

(B) Excludes amounts related to pre-existing warranties.

10,000

11,000

12,000

13,000

14,000

1Q14

1Q15

Chargeouts

(A)

10%

12%

14%

16%

1Q14

1Q15

Structural Costs % Manufacturing Revenue

1Q14

1Q15

Current Warranty Expense

(B)

Manufacturing Revenue

-2%

1Q14

1Q15

Adjusted EBITDA Margin

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation.

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Operational Cost Status

Gross Material Savings*

% Manufacturing Revenue

*Excludes incremental SCR costs

Manufacturing

Savings

Actual

Forecast

•

Achieved a quarter of our

annual savings in Q1

•

On track to achieve

annual savings

1.2%

1.7%

1.5 –

1.8%

2013

2014

2015

$44

$79

$40 –

$60

$25

$50

$75

$100

2013

2014

2015

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Used Truck Update

•

Q1 ending gross

inventory balance of

$365 million

•

Inventory expected to

peak in 2015 as we

accelerate the trade cycle

Q1 2015 Earnings –

3/3/2015

Q1 2015 Manufacturing Cash Update

$ in millions

*Guidance as provided on 12/16/2014 **Cash balance includes marketable

securities ^ Excluding one-time items and pre-existing warranty ^^Includes

incremental $43 million NFC intercompany loan

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation.

Guidance*

Actual

Q4 2014 Manufacturing Cash Balance**

$1,018

Consolidated Adjusted EBITDA

$0 -

$50

$54

Capex/Cash Interest/Pension & OPEB Funding

($160) -

($170)

($134)

Change in Net Working Capital/Debt and

Warranty/Other ^^

($158) –

($98)

($205)

Q1 2015 Manufacturing Cash Balance**

$700-800

$733

Q1 2015 Earnings –

3/3/2015

Guidance: Q2 2015 Manufacturing Cash

$ in millions

* Cash balance includes marketable securities.

** Excluding one-time items and pre-existing warranty

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation.

Q2 2015

Guidance

Q1 2015 Manufacturing Cash Balance*

$733

Consolidated Adjusted EBITDA**

$100 -

$150

Capex/Cash Interest/Pension & OPEB Funding

($120) -

($110)

Change in Net Working Capital/Debt and Warranty/Other

($13) -

$27

Q2 2015 Manufacturing Cash Balance*

$700 -

$800

Q1 2015 Earnings –

3/3/2015

8-10%

Adjusted EBITDA Margin Improvement

$ in millions

Note:

This slide contains non-GAAP information; please see the

REG G in appendix for a detailed reconciliation.

•

Q1 adjusted EBITDA

margin up 400 basis

points year-over-year

•

Continued progress

towards our 2015 target

2.2%

3-5%

2015 Adjusted EBITDA Margin

2015 Actual

2015 Forecast

10%

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Q1 2015 Accomplishments:

•

Increased chargeouts by 2,000 units year-over-year

•

Continued growth in Parts business

•

Improved quality performance contributing to lower warranty

expense

•

Continued material, manufacturing and structural cost reductions

Adjusted EBITDA goal of 8-10% exiting 2015 is on track

Summing It Up

NYSE: NAV

SUMMARY

Troy Clarke, President & CEO

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Q2:

Full Year 2015:

2015 Expectations

•

Chargeouts up over 20% sequentially

•

Adjusted EBITDA of $100-$150 million

•

Manufacturing cash balance of $700-$800 million

•

Class 6-8 truck and bus industry: 350,000 to 380,000

Class 8 industry: 250,000 to 280,000

•

Additional cost reduction opportunities

•

Exiting adjusted EBITDA goal of 8-10%: On track

NYSE: NAV

APPENDIX

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Navistar Financial Corporation

Highlights

•

Financial Services Segment profit of $24 million for Q1 2015

•

Total U.S. financing availability of $353 million as of January 31, 2015

•

Financial Services Debt/Equity Leverage of 3.8:1

•

Dealer funding facility issued November 2014 for $250 million

Retail Notes

Bank Facility

•

$840 million facility ($500 million

revolver and $340 million term

loan matures in December 2016)

–

Funding for retail notes,

wholesale notes, retail accounts,

and dealer open accounts

•

On balance sheet

•

NFSC wholesale trust as of

January 2015

–

$1 billion funding facility

–

Variable portion matures January

2016

–

Term portions mature September

2015 and October 2016

•

On balance sheet

•

Broader product offering

•

Enhanced ability to support large

fleets

•

Better access to less expensive

capital

Dealer Floor Plan

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Chargeouts

1,000

2,000

3,000

4,000

School Bus

2,000

4,000

6,000

Class 6-7 Medium

2,000

4,000

6,000

8,000

Class 8 Heavy

1,000

2,000

3,000

Class 8 Severe

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Retail Market Share in Commercial Vehicle Segments

Class 6/7

Medium-Duty

Class 8

Severe Service

Class 8

Heavy

Three Months Ended

January 31,

2015

October 31,

2014

July 31,

2014

April 30,

2014

January 31,

2014

Core

Markets (U.S. and Canada)

Class 6 and 7 medium trucks

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

21%

19%

Class 8 heavy trucks

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

10%

15%

Class 8 severe service trucks

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

14%

Combined class 8 trucks

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

11%

15%

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Worldwide Truck Chargeouts

Three Months Ended

(in units)

2015

2014

Change

% Change

Core

Markets (U.S. and Canada)

School buses

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

2,700

1,900

800

Class

6 and 7 medium trucks

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

4,000

3,200

800

Class

8 heavy trucks

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

4,800

4,500

300

Class

8 severe service trucks

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

2,000

1,900

100

Total Core markets

13,500

11,500

2,000

Other

markets

(A)

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

7,000

5,500

1,500

Total worldwide units

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

20,500

17,000

3,500

Combined Class 8 trucks

6,800

6,400

400

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) Includes: chargeouts related to Blue Diamond Truck ("BDT") of 3,400 units and 2,400 units during the three months ended January 31, 2015.

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

January 31,

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

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Worldwide Engine Shipments

Three Months Ended

January 31,

(in units)

2015

2014

Change

% Change

OEM sales-South America

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

17,200

20,400

(3,200)

(16

Intercompany sales

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

10,800

9,500

1,300

Other OEM sales

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

1,400

2,400

(1,000)

(42

Total sales

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

29,400

32,300

(2,900)

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

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

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Frequently Asked Questions

Q1:

What is included in Corporate and Eliminations?

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?

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?

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?

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. For the three months ended January 31, 2015, we contributed $30

million to meet the minimum required contributions for all plans. In August 2014, the Highway and Transportation Funding Act of

2014, which included an extension of the pension funding interest rate relief, was signed into law. As a result, we lowered our funding

expectations. We expect to contribute an additional $117 million to our pension plans during 2015. We currently expect that from

2016 through 2017, the Company will be required to contribute at least $100 million per year to the plans, depending on asset

performance and discount rates.

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Frequently Asked Questions

Q5:

What is your expectation for future cash tax payments?

Our cash tax payments are expect to remain low in 2015 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?

As of October 31, 2014 the Company has deferred tax assets for U.S. federal NOLs valued at $870 million, state NOLs valued at

$144

million,

and

foreign

NOLs

valued

$199

million,

for

total

undiscounted

cash

value

$1.2

billion.

addition

NOLs,

the

Company has deferred tax assets for accumulated tax credits of $256 million and other deferred tax assets of $1.9 billion resulting in

net deferred tax assets before valuation allowances of approximately $3.4 billion. Of this amount, $3.2 billion is subject to a

valuation allowance at the end of FY2014.

Q7:

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

U.S. and Canadian Class 8 Truck Sales

Reconciliation

ACT

Retail

Sales

2015

ACT*

302,000

CY to FY adjustment

(5,393)

Total (ACT comparable Class 8 to Navistar)

296,607

Navistar Industry Retail Deliveries Combined Class 8 Trucks

250,000

280,000

Navistar difference from ACT

46,607

16,607

*Source:

ACT

N.A.

Commercial

Vehicle

Outlook

February

2015

15.7%

5.6%

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Frequently Asked Questions

Q8:

What is your manufacturing interest expense for Fiscal Year 2015?

Manufacturing interest for 2015 is forecasted to be down approximately 5% compared to 2014. For reference, interest expense was

$243 million and $251 million for FY 2014 and 2013, respectively.

Q9:

What should we assume for capital expenditures in Fiscal Year 2015?

Capital expenditures for 2015 is forecasted to be between $150 - 200 million. In comparison, capital expenditures were $88 million

and $167 million for FY 2014 and 2013, respectively.

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Outstanding Debt Balances

(in millions)

January 31,

2015

October 31,

2014

Manufacturing operations

Senior Secured Term Loan Credit Facility, as amended, due 2017, net of unamortized discount

of $3, at both dates...........................................................................................................................

694

8.25% Senior Notes, due 2021, net of unamortized discount of $19 and $20, respectively.............

1,181

1,180

4.50% Senior Subordinated Convertible Notes, due 2018, net of unamortized discount of $18

and $19, respectively..............................................................................................................................

182

181

4.75% Senior Subordinated Convertible Notes, due 2019, net of unamortized discount of $38

and $40, respectively.............................................................................................................................

373

371

Debt of majority-owned dealerships

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

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

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

225

Promissory Note.......................................................................................................................................

Financed lease obligations

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

160

184

Other

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

Total Manufacturing operations debt

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

2,929

2,958

Less: Current portion

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

114

100

Net long-term Manufacturing operations debt

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

2,815

2,858

(in millions)

January 31,

2015

October 31,

2014

Financial Services operations

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

2018......................................................................................................................................................

887

914

Bank

revolvers,

fixed

and

variable

rates,

due

dates

from

2015

through

2020......................

1,169

1,242

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

Borrowings secured by operating and finance leases, at various rates, due serially through 2018....

Total Financial Services operations debt.................................................................................

2,153

2,266

Less: Current portion

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

927

1,195

Net long-term Financial Services operations debt

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

1,226

1,071

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

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.

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

SEC Regulation G Non-GAAP Reconciliations

Manufacturing segment cash and cash equivalents and marketable securities reconciliation:

Jan. 31,

Oct. 31,

(in millions)

2015

2014

Manufacturing Operations:

Cash and cash equivalents

583

440

Marketable securities

150

578

Manufacturing Cash and cash equivalents and Marketable securities

733

1,018

Financial Services Operations:

Cash and cash equivalents

Marketable securities

Financial Services Cash and cash equivalents and Marketable securities

Consolidated Balance Sheet

Cash and cash equivalents

620

497

Marketable Securities

175

605

Consolidated Cash and cash equivalents and Marketable securities

795

1,102

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

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

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

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

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

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

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

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

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

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

SEC Regulation G Non-GAAP Reconciliations

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

______________________

* For more detail on the items noted, please see slide 37 footnotes (A) and (C), respectively.

Quarters Ended

January 31,

(in millions)

2015

2014

Loss from continuing operations attributable to NIC, net of tax

(42)

(249)

Plus:

Depreciation and amortization expense

Manufacturing interest expense

(A)

Less:

Income tax benefit (expense)

(7)

EBITDA

101

(110)

Quarters Ended

January 31,

(in millions)

2015

2014

Interest expense

Less: Financial services interest expense

Manufacturing interest expense

Quarters Ended

January 31,

(in millions)

2015

2014

EBITDA (reconciled above)

101

(110)

Less significant items of:

Adjustments to pre-existing warranties*

(57)

North America asset impairment charges*

Cost reduction and other strategic initiatives

Total adjustments

(47)

Adjusted EBITDA

(37)

Adjusted EBITDA margin

2.2%

(1.7)%

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(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:

NYSE: NAV

Q1 2015 Earnings –

3/3/2015

Significant Items Included Within Our Results

______________________

(A)

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

(B)

In the first quarter of 2015, the Truck segment recognized charges of $13 million for the acceleration of depreciation of certain assets related to the foundry

facilities.

(C)

In the first quarter of 2015, the Company concluded it had a triggering event related to certain operating leases. As a result, the Truck segment recorded $7

million of asset impairment charges. In the first quarter of 2014, the Company concluded it had a triggering event related to potential sales of assets

requiring assessment of impairment for certain intangible and long-lived assets in the Truck segment. As a result, the Truck segment recognized asset

impairment charges of $18 million.

The above items did not have a material impact on taxes due to the valuation allowances on our U.S. and Brazil deferred tax assets.

Quarters Ended

January 31,

(in millions)

Expense (income):

2015

2014

Adjustments to pre-existing warrants

(A)

(57)

Accelerated depreciation

(B)

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

—

North America asset impairment charges

(C)

Other restructuring charges and strategic initiatives

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

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

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

NAVISTAR INTERNATIONAL CORP - FORM 8-K - EX-99.2 - March 3, 2015

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