Navistar Reports First Quarter 2018 Results

Navistar Reports First Quarter 2018 Results

- Grows revenues by 15 percent to $1.9 billion

- Reports first quarter 2018 net loss of $73 million, or 74-cents per share

- Generates $104 million of adjusted EBITDA in the first quarter, up 89 percent year-over-year

- Company raises 2018 full-year guidance

LISLE, Ill., March 8, 2018 /PRNewswire/ -- Navistar International Corporation (NYSE: NAV) today announced a first quarter 2018 net loss of $73 million, or $0.74 per diluted share, compared to a first quarter 2017 net loss of $62 million, or $0.76 per diluted share. First quarter 2018 results included $46 million of charges as a result of the company's debt refinancing in November 2017.

Revenues in the quarter were $1.9 billion, a 15-percent increase compared to $1.7 billion in the first quarter last year, driven by a 24-percent increase in the company's Core (Class 6-8 trucks and buses in the United States and Canada) volumes.

First quarter 2018 EBITDA was $55 million, compared to first quarter 2017 EBITDA of $63 million. First quarter 2018 includes $49 million in net adjustments, including the debt refinancing and other items. Adjusted EBITDA was $104 million versus $55 million in first quarter 2017.

Navistar finished the first quarter 2018 with $975 million in consolidated cash, cash equivalents and marketable securities and $947 million in manufacturing cash, cash equivalents and marketable securities.

"We are off to a strong start in 2018 thanks to our ability to grow Navistar's position in a strengthening market," said Troy A. Clarke, Chairman, President and CEO. "We grew our Class 8 market share and improved our margins, on the way to delivering our best first quarter on an adjusted EBITDA basis since 2011."

Navistar's first quarter Core chargeouts were up 2,400 units year-over-year led by Class 8 Heavy, which was up 56 percent compared to first quarter last year. The company's Class 8 market share was up 1.2 points versus the same period one year ago. Gross margin for the quarter was 19.6 percent of revenue, up 2 percentage points from first quarter 2017.

"Our improvement this year is due largely to the market's positive reaction to our new products, including the LT Series on highway tractor and the 13-liter A26 engine," Clarke said. "In fact, the strong interest in our A26 engine has us nearly doubling our share of trucks with 13-liter engines in the first quarter of 2018 compared to a year ago."

Continuing its cadence of new product launches, Navistar unveiled its new International MV Series medium-duty vehicle at the NTEA Work Truck Show earlier this week. The launch of the MV Series completes the company's Project Horizon product refresh, and reflects that program's improved cab design, along with the same driver-centric enhancements already launched in Class 8 vehicles.

Additionally, the company's alliance with Volkswagen Truck & Bus is accelerating Navistar's development of future technologies, including electric powertrains, which are already in development for school buses and medium duty trucks. The company is currently testing its first prototype electric school bus, the chargE, which Navistar will be demonstrating for customers and government officials starting later this month.

"As a leader in the medium and school bus segments, we know our customers and the jobs their trucks and buses do, which is why we're convinced these will be the market segments best suited for e-powertrains in the near term," Clarke said. "These vehicles travel shorter distances and typically return to their base overnight, making the charging infrastructure less complex. And, perhaps most significantly, they will provide environmental benefit, especially in urban areas."

Based on stronger industry conditions, the company raised its 2018 full-year guidance:

    --  Retail deliveries of Class 6-8 trucks and buses in the United States and
        Canada are forecast to be in the range of 360,000 units to 390,000
        units, with Class 8 retail deliveries of 235,000 to 265,000 units.
    --  Revenues are expected to be between $9.25 billion and $9.75 billion.
    --  Adjusted EBITDA is expected to be between $700 million and $750 million.
    --  Year-end manufacturing cash is expected to be about $1.1 billion.

"We expect market conditions to remain robust and we are determined to take advantage of opportunities to grow share while delivering strong margin performance," Clarke said. "Given the progress made in Q1, and our positive outlook for the remainder of the year, we are confident that 2018 will be the breakout year for Navistar."


    SEGMENT REVIEW

    Summary of Financial Results:


                                              Three Months Ended
                                                 January 31,

    (in millions, except per share data) 2018                 2017
                                         ----                 ----

    Sales and revenues, net                      $1,905                    $1,663

    Segment Results:

    Truck                                          $(7)                    $(69)

    Parts                                 137                        149

    Global Operations                     (7)                       (4)

    Financial Services                     20                         13

    Net loss(A)                          (73)                      (62)

    Diluted loss per share(A)                   $(0.74)                  $(0.76)

    ________________

    (A)              Amounts attributable to Navistar
                     International Corporation.

Truck Segment - Truck segment first quarter 2018 net sales increased to $1.3 billion, primarily due to higher volumes in the company's Core markets, an increase in military sales, and production of GM-branded units manufactured at Navistar's Springfield, Ohio plant, which launched in the second quarter of 2017. This was partially offset by a decline in the company's Mexico and export truck volumes.

The Truck segment loss was $7 million in the first quarter 2018, versus a loss of $69 million in the same period one year ago. The improvement was primarily driven by the impact of higher volumes in the company's Core markets, a decrease in used truck losses, and an increase in military sales, partially offset by higher structural costs.

Parts Segment - In the first quarter of 2018, the Parts segment net sales were $568 million, slightly lower than the prior year primarily due to the expected runoff in Blue Diamond Parts (BDP) sales, partially offset by higher U.S. and Canada parts sales related to the Fleetrite((TM)) and ReNEWed(®) brands.

The Parts segment profit was $137 million, down eight percent, primarily due to lower BDP margins and higher freight-related expenses.

Global Operations Segment - In the first quarter of 2018, the Global Operations segment net sales increased 62 percent to $81 million, primarily driven by higher engine volumes in the company's South America engine operations due to improvement in the Brazilian economy.

For the first quarter 2018, the Global Operations segment loss was $7 million versus a $4 million loss in the first quarter 2017. Higher engine volumes and a benefit recognized as an adjustment to restructuring charges only partially offset a one-time benefit in the first quarter of 2017 of $9 million related to an adjustment to pre-existing warranties.

Financial Services Segment - In the first quarter of 2018, the Financial Services segment net revenues increased to $59 million primarily due to higher portfolio yields, higher overall finance receivable balances in Mexico and favorable movements in foreign currency exchange rates impacting the company's Mexican portfolio.

The Financial Services segment profit increased to $20 million primarily due to a decrease in the provision for loan losses in Mexico and improved interest margins.

About Navistar
Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries and affiliates produce International(®) brand commercial and military trucks, proprietary diesel engines, and IC Bus((TM)) brand school and commercial buses. An affiliate also provides truck and diesel engine service parts. Another affiliate offers financing services. Additional information is available at www.Navistar.com.

Forward-Looking Statement
Information provided and statements contained in this report that are not purely historical are forward-looking statements within the meaning of the federal securities laws. 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 market share projections, new product launch dates and information concerning our possible or assumed future results of operations, including the results of our alliance with Volkswagen Truck & Bus and 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 fiscal year ended October 31, 2017 and our quarterly report on Form 10-Q for the period ended January 31, 2018. 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.


                               Navistar International Corporation and Subsidiaries

                                      Consolidated Statements of Operations

                                                   (Unaudited)


                                                           Three Months Ended
                                                              January 31,

    (in millions,
     except per share
     data)                                                2018                 2017
                                                          ----                 ----

    Sales and revenues

    Sales of
     manufactured
     products, net                                                $1,867                      $1,629

    Finance revenues                                        38                           34
                                                           ---                          ---

    Sales and
     revenues, net                                       1,905                        1,663
                                                         -----                        -----

    Costs and expenses

    Costs of products
     sold                                                1,532                        1,370

    Restructuring
     charges                                               (3)                           7

    Asset impairment
     charges                                                 2                            2

    Selling, general
     and
     administrative
     expenses                                              222                          200

    Engineering and
     product
     development costs                                      75                           63

    Interest expense                                        79                           82

    Other expense
     (income), net                                          49                          (8)
                                                           ---                          ---

    Total costs and
     expenses                                            1,956                        1,716

    Equity in income
     of non-
     consolidated
     affiliates                                              -                           3
                                                           ---                         ---

    Loss before income
     tax                                                  (51)                        (50)

    Income tax expense                                    (15)                         (4)
                                                           ---                          ---

    Net loss                                              (66)                        (54)

    Less: Net income
     attributable to
     non-controlling
     interests                                               7                            8
                                                           ---                          ---

    Net loss
     attributable to
     Navistar
     International
     Corporation                                                   $(73)                      $(62)
                                                                    ====                        ====


    Loss per share attributable to
     Navistar International
     Corporation:

    Basic                                                        $(0.74)                    $(0.76)

    Diluted                                             (0.74)                      (0.76)


    Weighted average shares
     outstanding:

    Basic                                                 98.6                         81.8

    Diluted                                               98.6                         81.8


                                        Navistar International Corporation and Subsidiaries

                                                    Consolidated Balance Sheets


                                                                        January 31,           October 31,

    (in millions, except per share data)                                       2018                   2017
                                                                               ----                   ----

    ASSETS                                                              (Unaudited)

    Current assets

    Cash and cash equivalents                                                            $699                         $706

    Restricted cash and cash equivalents                                         36                              83

    Marketable securities                                                       276                             370

    Trade and other receivables, net                                            327                             391

    Finance receivables, net                                                  1,434                           1,565

    Inventories, net                                                            998                             857

    Other current assets                                                        188                             188
                                                                                ---                             ---

    Total current assets                                                      3,958                           4,160

    Restricted cash                                                              52                              51

    Trade and other receivables, net                                             13                              13

    Finance receivables, net                                                    239                             220

    Investments in non-consolidated affiliates                                   55                              56

    Property and equipment (net of accumulated
     depreciation and amortization of $2,491 and
     $2,474, respectively)                                                    1,335                           1,326

    Goodwill                                                                     38                              38

    Intangible assets (net of accumulated
     amortization of $138 and $135, respectively)                                38                              40

    Deferred taxes, net                                                         129                             129

    Other noncurrent assets                                                     112                             102
                                                                                ---                             ---

    Total assets                                                                       $5,969                       $6,135
                                                                                       ======                       ======

    LIABILITIES and STOCKHOLDERS' DEFICIT

    Liabilities

    Current liabilities

    Notes payable and current maturities of long-
     term debt                                                                           $953                       $1,169

    Accounts payable                                                          1,140                           1,292

    Other current liabilities                                                 1,160                           1,184
                                                                              -----                           -----

    Total current liabilities                                                 3,253                           3,645

    Long-term debt                                                            4,168                           3,889

    Postretirement benefits liabilities                                       2,467                           2,497

    Other noncurrent liabilities                                                664                             678
                                                                                ---                             ---

    Total liabilities                                                        10,552                          10,709

    Stockholders' deficit

    Series D convertible junior preference stock                                  2                               2

    Common stock, $0.10 par value per share (103.1
     shares issued and 220 shares authorized at both
     dates)                                                                      10                              10

    Additional paid-in capital                                                2,735                           2,733

    Accumulated deficit                                                     (5,006)                        (4,933)

    Accumulated other comprehensive loss                                    (2,154)                        (2,211)

    Common stock held in treasury, at cost (4.5 and
     4.6 shares, respectively)                                                (174)                          (179)
                                                                               ----                            ----

    Total stockholders' deficit attributable to
     Navistar International Corporation                                     (4,587)                        (4,578)

    Stockholders' equity attributable to non-
     controlling interests                                                        4                               4
                                                                                ---                             ---

    Total stockholders' deficit                                             (4,583)                        (4,574)
                                                                             ------                          ------

    Total liabilities and stockholders' deficit                                        $5,969                       $6,135
                                                                                       ======                       ======


                                   Navistar International Corporation and Subsidiaries

                                     Condensed Consolidated Statements of Cash Flows

                                                       (Unaudited)


                                                                    Three Months Ended
                                                                        January 31,

    (in millions)                                                   2018               2017
                                                                    ----               ----

    Cash flows from operating activities

    Net loss                                                                $(66)                  $(54)

    Adjustments to reconcile net loss to
     net cash provided by (used in)
     operating activities:

    Depreciation and
     amortization                                                     37                        37

    Depreciation of
     equipment leased to
     others                                                           18                        22

    Deferred taxes,
     including change in
     valuation allowance                                               6                         -

    Asset impairment
     charges                                                           2                         2

    Amortization of debt
     issuance costs and
     discount                                                          8                        10

    Stock-based
     compensation                                                      9                         7

    Provision for doubtful
     accounts                                                          1                         4

    Equity in loss of non-
     consolidated
     affiliates, net of
     dividends                                                         3                         3

    Write-off of debt
     issuance costs and
     discount                                                         42                         -

    Other non-cash
     operating activities                                            (6)                      (3)

    Changes in other assets
     and liabilities,
     exclusive of the
     effects of businesses
     disposed                                                      (130)                      (6)

    Net cash provided by
     (used in) operating
     activities                                                     (76)                       22
                                                                     ---                       ---

    Cash flows from investing activities

    Purchases of marketable
     securities                                                     (61)                    (212)

    Sales of marketable
     securities                                                      150                        59

    Maturities of
     marketable securities                                             5                         1

    Net change in
     restricted cash and
     cash equivalents                                                 46                        15

    Capital expenditures                                            (30)                     (46)

    Purchases of equipment
     leased to others                                               (52)                     (24)

    Proceeds from sales of
     property and equipment                                            3                         2

    Investments in non-
     consolidated
     affiliates                                                        -                      (2)

    Net cash provided by
     (used in) investing
     activities                                                       61                     (207)
                                                                     ---                      ----

    Cash flows from financing activities

    Proceeds from issuance
     of securitized debt                                              16                         5

    Principal payments on
     securitized debt                                               (16)                     (27)

    Net change in secured
     revolving credit
     facilities                                                    (150)                     (79)

    Proceeds from issuance
     of non-securitized
     debt                                                          2,747                       298

    Principal payments on
     non-securitized debt                                        (2,521)                    (200)

    Net change in notes and
     debt outstanding under
     revolving credit
     facilities                                                     (38)                     (48)

    Debt issuance costs                                             (330                       (5)

    Proceeds from financed
     lease obligations                                                16                         8

    Proceeds from exercise
     of stock options                                                  4                         3

    Dividends paid by
     subsidiaries to non-
     controlling interest                                            (7)                      (8)

    Other financing
     activities                                                     (12)                        -

    Net cash provided by
     (used in) financing
     activities                                                        6                      (53)
                                                                     ---                       ---

    Effect of exchange rate
     changes on cash and
     cash equivalents                                                  2                         7
                                                                     ---                       ---

    Decrease in cash and
     cash equivalents                                                (7)                    (231)

    Cash and cash
     equivalents at
     beginning of the
     period                                                          706                       804
                                                                     ---                       ---

    Cash and cash
     equivalents at end of
     the period                                                              $699                    $573
                                                                             ====                    ====

Navistar International Corporation and Subsidiaries
Segment Reporting
(Unaudited)

We define segment profit (loss) as net income (loss) attributable to Navistar International Corporation, excluding income tax expense. The following tables present selected financial information for our reporting segments:


    (in millions)                    Truck          Parts        Global          Financial      Corporate         Total
                                                               Operations       Services(A)        and
                                                                                              Eliminations


    Three Months Ended January 31,
     2018

    External sales and revenues, net         $1,228                        $564                              $72                    $38                 $3   $1,905

    Intersegment sales and revenues       23                 4                              9                  21           (57)               -
                                         ---               ---                            ---                 ---            ---              ---

    Total sales and revenues, net            $1,251                        $568                              $81                    $59              $(54)  $1,905
                                             ======                        ====                              ===                    ===               ====   ======

    Income (loss) attributable to
     NIC, net of tax                           $(7)                       $137                             $(7)                   $20             $(216)   $(73)

    Income tax expense                     -                -                             -                  -          (15)            (15)
                                         ---              ---                           ---                ---           ---              ---

    Segment profit (loss)                      $(7)                       $137                             $(7)                   $20             $(201)   $(58)
                                                ===                        ====                              ===                    ===              =====     ====

    Depreciation and amortization               $35                          $2                               $3                    $13                 $2      $55

    Interest expense                       -                -                             -                 21             58               79

    Equity in income (loss) of non-
     consolidated affiliates               -                1                            (1)                  -             -               -

    Capital expenditures(B)               25                 -                             1                   -             4               30


    (in millions)                    Truck          Parts        Global          Financial      Corporate         Total
                                                               Operations       Services(A)        and
                                                                                              Eliminations


    Three Months Ended January 31,
     2017

    External sales and revenues, net         $1,017                        $563                              $46                    $34                 $3   $1,663

    Intersegment sales and revenues       10                 7                              4                  20           (41)               -
                                         ---               ---                            ---                 ---            ---              ---

    Total sales and revenues, net            $1,027                        $570                              $50                    $54              $(38)  $1,663
                                             ======                        ====                              ===                    ===               ====   ======

    Income (loss) attributable to
     NIC, net of tax                          $(69)                       $149                             $(4)                   $13             $(151)   $(62)

    Income tax expense                     -                -                             -                  -           (4)             (4)
                                         ---              ---                           ---                ---           ---              ---

    Segment profit (loss)                     $(69)                       $149                             $(4)                   $13             $(147)   $(58)
                                               ====                        ====                              ===                    ===              =====     ====

    Depreciation and amortization               $37                          $3                               $3                    $13                 $3      $59

    Interest expense                       -                -                             -                 20             62               82

    Equity in income of non-
     consolidated affiliates               1                 1                              1                   -             -               3

    Capital expenditures(B)               43                 -                             1                   -             2               46



    (in millions)                    Truck          Parts        Global          Financial      Corporate         Total
                                                               Operations         Services         and
                                                                                              Eliminations
                                                                                              ------------

    Segment assets, as of:

    January 31, 2018                         $1,710                        $647                             $360                 $2,052             $1,200   $5,969

    October 31, 2017                   1,621               632                            378               2,207          1,297            6,135

    _________________________

    (A)              Total sales and revenues in the Financial Services
                     segment include interest revenues of $41 million and $36
                     million for the three months ended January 31, 2018 and
                     2017, respectively.

    (B)             Exclusive of purchases of equipment leased to others.

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) 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.

Manufacturing Cash, Cash Equivalents, and Marketable Securities:
Manufacturing cash, cash equivalents, and marketable securities represent 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 consist of Selling, general and administrative expenses and Engineering and product development costs.

Gross Margin consists of Sales and revenues, net, less Costs of products sold.

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


    EBITDA reconciliation:


                                             Three Months
                                           Ended January 31,

    (in millions)                         2018               2017
                                          ----               ----

    Loss attributable to NIC, net of tax          $(73)                $(62)

    Plus:

    Depreciation and amortization expense   55                      59

    Manufacturing interest expense(A)       58                      62

    Less:

    Income tax expense                    (15)                    (4)
                                           ---                     ---

    EBITDA                                          $55                   $63
                                                    ===                   ===

    ______________________

    (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:


                                               Three Months Ended
                                                  January 31,

    (in millions)                               2018             2017
                                                ----             ----

    Interest expense                                    $79              $82

    Less:  Financial services interest expense    21                  20

    Manufacturing interest expense                      $58              $62
                                                        ===              ===


    Adjusted EBITDA Reconciliation:


                                                    Three Months
                                                 Ended January 31,

    (in millions)                                2018              2017
                                                 ----              ----

    EBITDA (reconciled above)                             $55                 $63
                                                          ---                 ---

    Adjustments for significant items of:

    Adjustments to pre-existing warranties(A)     (6)                   (17)

    Asset impairment charges(B)                     2                       2

    Restructuring of manufacturing operations(C)  (3)                      7

    EGR product litigation(D)                       1                       -

    Debt refinancing charges(E)                    46                       -

    Pension settlement(F)                           9                       -
                                                  ---                     ---

    Total adjustments                              49                     (8)
                                                  ---                     ---

    Adjusted EBITDA                                      $104                 $55
                                                         ====                 ===

    _____________________

    (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 first quarter of 2018, we recorded $2
                     million of impairment charges related to the
                     sale of our railcar business in Cherokee,
                     Alabama. In the first quarter of 2017, we
                     recorded $2 million of asset impairment
                     charges related to certain long-lived assets
                     in our Truck segment.

    (C)              In the first quarter of 2018, we recorded
                     benefits of $3 million related to adjustments
                     for restructuring in our Truck and Global
                     Operations segments. In the first quarter of
                     2017, we recorded $7 million of restructuring
                     charges related to the 2011 closure of our
                     Chatham, Ontario plant.

    (D)              In the first quarter of 2018, we recognized an
                     additional charge of $1 million for a jury
                     verdict related to the Milan Maxxforce engine
                     EGR product litigation in our Truck segment.

    (E)              In the first quarter of 2018, we recorded a
                     charge of $46 million for the write off of
                     debt issuance costs and discounts associated
                     with the repurchase of our 8.25% Senior Notes
                     and the refinancing of our previously existing
                     Term Loan.

    (F)              In the first quarter of 2018, we purchased a
                     group annuity contract for certain retired
                     pension plan participants resulting in a plan
                     remeasurement. As a result, we recorded a
                     pension settlement accounting charge of $9
                     million in SG&A expenses.


    Manufacturing segment cash, cash equivalents, and marketable securities reconciliation:


                                                                                                          As of January 31, 2018

    (in millions)                                                                           Manufacturing            Financial       Consolidated
                                                                                             Operations               Services       Balance Sheet
                                                                                                                     Operations
                                                                                                                     ----------

    Assets

    Cash and cash equivalents                                                                                 $671                                 $28     $699

    Marketable securities                                                                             276                          -                   276
                                                                                                      ---                        ---                   ---

    Total cash, cash equivalents, and marketable securities                                                   $947                                 $28     $975
                                                                                                              ====                                 ===     ====

CONTACT: Media contact: Jim Spangler, Jim.Spangler@Navistar.com, 331-332-5833; or Investor contact: Marty Ketelaar, Marty.Ketelaar@Navistar.com, 331-332-2706, Web site: www.Navistar.com/newsroom

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SOURCE Navistar International Corporation