NAVISTAR INTERNATIONAL CORP - 8-K - 20070301 - EXHIBIT_99
Exhibit-99.1
Navistar International
Corporation
OTCBB: NAVZ
March 1, 2007
Forward Looking Information
Information provided and statements contained in the presentation that are not purely historical are forward -looking
statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act, and the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date of the presentation and the company
assumes no obligation to update the information included in the 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 , including the risk of continued delay in the completion of our financial statements and the consequences thereof,
the availability of funds, either through cash on hand or the company's other liquidity sources, to repay any amounts due should
any of the company's debt become accelerated, and decisions by suppliers and other vendors to restrict or eliminate customary
trade and other credit terms for the company's future orders and other services, which would require the company to pay cash
and which could have a material adverse effect on the company's liquidity position and financial condition. 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. For a further description of these factors, see Exhibit 99.1 to our Form 8-K filed on April 6, 2006. In addition, until
the previously announced review by the company of its accounts is concluded, no assurance can be given with respect to the
financial statement adjustments, impacts and period resulting from such review, if any, nor can there be any assurance that
additional adjustments to the financial statements of the company will not be identified.
1943
1918
1942
1936
1924
1950s
1912
1909
Over 100 years of building and shaping history
2007
2001
Corporate Overview
Parts Organization
Distribution business that provides non-cyclical earnings
Double digit growth in revenue and earnings
Most extensive distribution channel in Truck and Mid-range diesel
Wholesale - floor planning for dealers
Retail financing for customers
Finance Corporation
North American market share leader
with RV/Stripped chassis, Class 6-7
trucks, Severe Service and Regional
and long haul Class 8 trucks
Manufacturing locations in U.S.,
Canada and Mexico
Truck Group
World's largest engine manufacturer of
mid-range diesel engines (160-350HP)
Manufacturing locations in U.S. and
Brazil
Engine Group
Parts Distribution Center
Traditional U.S. and Canada Retail
Class 6 - 8 Industry Landscape
Combined Class 8
Class 6 - 8
*Navistar's fiscal year is 11/1-10/31
New Diesel Technology Reduces
Ultrafine Particulate Emissions
Ultrafine particulate emissions lower than ambient levels in major cities
(Study conducted by the Clean Air Task Force 2005)
particles/cc 1 m from tailpipe
500,000
500,000
Our strategy expected to enable us to
deliver our 2009 goal
Competitive
Cost
Structure
Profitable
Growth
Great
Products
Leveraging what we have and what others have built
FY 2009 Goals
$15 Billion Revenue
$1.5 Billion Pre-Tax
>10% Segment Margins in all
businesses
Improve cost structure while
developing synergistic niche
businesses with richer margins
Improve conversion rate of
operating income into net income
Reduce cyclicality
Grow Parts
Non-Traditional
North American Market Share Leader in
Class 6-8 Trucks and School Bus
School districts & local municipalities
Local & regional delivery of
beverage refrigeration, utilities, tow,
municipalities & emergency rescue
Construction, waste
management & other on-off
highway applications
Severe Service - 23.2%
Line-haul, local & regional
delivery
Heavy (LH & RH) - 17.1%
2006 FY Combined Market Share* ~ 27%
School Bus
Class 6-7
Combined Class 8
- 18.7%
Class 8
Medium - 40%
School Bus Chassis - 64%
School Buses Body - 62.2%
*Market Share - Information is compiled using Wards, ACT and POLK data combined with company internal reports. Market share information reflects retails
sales in the United States and Canada for Classes 6-8.
We expect to maintain market share in Bus, Medium, and Severe Service. We expect to grow
market share in Line-Haul Heavy
Great Products: ProStarTM launched
January 2007
Best in Class Uptime
4% better fuel economy
Lowest cost of ownership
Driver satisfaction
Supports the $6,000 cost
reduction goal
Material savings
Warranty savings
Labor savings
Benefits
On April 6, 2006, the company announced that the company's previously issued audited financial statements and the independent auditors' reports thereon for
the years ended October 31, 2002 through 2004, and all quarterly financial statements for periods after November 1, 2002 should no longer be relied upon
because of errors in such financial statements.
I6
~ 49% market
share* leader in
Class 6-7 Truck
and School Bus
V8
~ 50% market
share* in heavy
duty diesel
pickup/vans
Brand new technologies built for power, reliability, durability, and fuel economy
V6
For Class 4-5
I4 / I6
50%+ market
share* in Mid-size
and Full size pick
up trucks
in South America
Complete line of
3 - 7L products
MaxxForce(tm)
Big Bore
11 and 13 Liter
Big Bore
Late 2007 launch
6.4L
4.5L
7.6L
Great Products: Engine
* Market Share - Information is compiled using POLK data combined with company internal reports.
123,280 units
8,981 units
305,996 units
81,405 units
2006 Shipments
Global Strategic Initiatives
Mahindra International
South America
Other Global Sourcing
Scale
Strategic Partnerships
Second Pillar - Competitive Cost Structure
Other
MATERIAL
MANUFACTURING/LABOR
Below the Line Items
Continuous Improvement
Master UAW Contract expires
10/1/2007
Other
Pension/OPEB
Interest Expense
Enablers for
10% segment
margins
Containment and
Improvement
Design for quality and cost
reductions
Material 0.7
Manufacturing 0.2
Other 0.1
Cost Reduction Opportunities by 2009
Competitive Cost Structure - Scale
World Truck Assembly by Manufacturer Classes 4-8
2006 Volume in thousands (000's) for top 15 manufacturer's (Classes 4-8)
Note: Information provided by J.D. Power - LMC;ACT research includes three quarters of actual information and one quarter of forecasted information for all truck manufacturers excluding
International. *International information obtained from internal company reports and includes assembly units for the Blue Diamond joint venture.
Traditional
U.S. and Canada School Bus and Class 6-8
Trucks
Non-Traditional*
Small Bus and Commercial Bus
Workhorse (Commercial Chassis and RV's)
Class 4/5 LCF
Class 5 Conventional
Military
Export (Mexico and all other countries)
Competitive Cost Structure - Scale
World Mid-range Diesel Engine Leader
0
100
200
300
400
500
2006 Volume
600
2006 Volume in thousands (000's)
On April 6, 2006, the company announced that the company's previously issued audited financial statements and the independent auditors' reports thereon for
the years ended October 31, 2002 through 2004, and all quarterly financial statements for periods after November 1, 2002 should no longer be relied upon
because of errors in such financial statements.
Competitive Cost Structure
Increase Manufacturing Efficiency
1996 vs. 2006 Manufacturing
77% increase in production with
a less than 4% increase in
production headcount
Utilized flexible workforce
Overtime flexibility
Past (primarily Master Contract)
Springfield Assembly Plant
Chatham Assembly Plant
Additions
Escobedo Assembly Plant
Garland Assembly Plant
Conway Bus Plant
Tulsa Bus Plant
Truck Manufacturing
*Includes full time and temporary workers directly associated with production process for plants shown above
Growth in non-traditional segments
Non-Traditional
Military
Export (Mexico and all other countries)
Small Bus and Commercial Bus
Workhorse (Commercial Chassis and RV's)
Class 4/5 LCF
Class 5 Conventional
Non-Traditional
Big Bore Engine
New Engine Customers
Non-Traditional
Big Bore Engine Parts
Military and Export Parts
Small Bus and Commercial Bus Parts
Class 4 and 5 Parts
Workhorse Parts
Utilizing what we have and what others have built
Strategic Initiatives Update
Deliver Profitable Growth
Utilizing what we have and what others have built
Improve existing markets via Distribution Channel
Enter niche markets from commercial platforms
Military
Export
Commercial Bus
Expand through strategic acquisitions and partnerships
RV Chassis
South America
Mahindra International
ProStar(tm) Family
Military
Commercial Bus
CF and Conventional Class 4/5
Workhorse Cl 3-7
9400
CE 300
Traditional U.S and Canada Class 6-8 Industry (Last 5 years market ranges from 263K - 455K units)
4400
Increase class 8 heavy
line haul market share
by 1% in FY 2007.
Units delivered:
FY 2005 - ~1,300
FY 2006 - ~2,900
Industry ranges
from
9K - 13K
Industry ranges
from
20K - 30K
Industry ranges
from
45K - 60K
Industry ranges*
from
35K - 45K
New Opportunities - Expanding the markets we play in
*Includes Commercial Chassis and RV units
Great Products: Growth
On April 6, 2006, the company announced that the company's previously issued audited financial statements and the independent auditors'
reports thereon for the years ended October 31, 2002 through 2004, and all quarterly financial statements for periods after November 1, 2002
should no longer be relied upon because of errors in such financial statements.
Great Products: Growth/Cost
Late 2007 launch
Only in Class 8 International Trucks
Cost competitive
Leverage scale in development
and procurement
Proven world-class performance,
fuel economy and NVH
Integrated Truck-Engine design
and development
Developed for North American
applications and emissions
applications and emissions
applications and emissions
applications and emissions
applications and emissions
applications and emissions
applications and emissions
applications and emissions
applications and emissions
applications and emissions
applications and emissions
applications and emissions
International Big Bore
11 to 13 liter range
"MaxxForce"
Customer Choice: A Solid Big Bore
Product Line Up
I6
V8
Great Products: Engine
Value Proposition:
Reliability
Performance
Fuel Economy
Low NVH
Delivering Profitable Growth
Military
Camp Navistar
A major player in Iraq and
Afghanistan
Delivering Profitable Growth
Military
Key Takeaway:
Continue to service
Military parts burn
rate five times
greater
Many trucks not
coming home
Change in
administration has
not affected military
re-orders and
opportunities
Protecting our Soldiers is the
number one priority
155 MM Test
"Equal if not greater than threat levels that
we deal with in Iraq and Afghanistan"
Government Contractor unit
used throughout Iraq
IED/Land Mine Attack
***Contractor Survived***
Delivering Profitable Growth
Military
2005
2006
2007
Delivered
approximately
1,300 units
Over 20 contracts
won to date.
Total mature
value => $1.5 B in
orders from 2007
to 2009
Future Opportunities
Delivered
approximately
2,900 units
5000 MV
Armorezd Line
Haul
Tractor - Logistic
Iraq
7000 MV
Military Support Mission
US -Afghanistan & Iraq
Taiwan
Canada
Future Tactical
Truck Systems (FTTS)
Demonstrator
of Advanced Armor &
Vehicle Capabilities
Mine Resistant
Ambush Protection (MRAP)
Mine & IED Protected
Vehicle for Marines &
Army
Afghanistan & Iraq
Joint Light
Tactical Vehicle (JLTV)
Next Generation
HMMWV
Why Navistar?
Production Capability/Cost - Current trucks required
little investment since they are produced off existing
platforms
Distribution network - Field service and maintenance
Aggressive Delivery - Current trucks delivered less
than six months after contract award
What's next?
Tacom continued support
Foreign Military Sales
MRAP
FTTS
JLTV
FMTV
M915
Delivered in November 2006
Demonstrators to be delivered
by the end of March 2007
Delivering Profitable Growth
Mahindra International
Mahindra Joint Venture Strategy
Component Sourcing
Engineering
Commercial Growth - India & Exports
Mahindra International is currently selling commercial trucks
and buses in Class 3-4 range
Upgraded bus products are being launched now, including
one with a new common rail electronic engine
A full line of new vehicles in Class 4-8 range is currently
under development
Plans are to launch new buses in June 2008, new trucks
beginning in December 2008
By end of 2011, target volume is 60,000 units/year in a
market of 400,000 (Class 3-8)
Organic parts growth
Truck market share
New truck products -
ProStar(tm), Severe Service,
non-traditional truck growth
Export, Military
International Rest of Industry
2.993 13.707
Delivering Profitable Growth
NAFTA 6-8 Parts Industry Landscape
Truck Dealers Rest of Industry
0.43 0.11 0.56
~$17.7 Billion Market - Class 6-8 Industry
~$17.7+ Billion Market Class 6-8 Industry
Dealers expected to maintain and
grow share
Grow with current customers and
reach more customers
National accounts
New products
Enhanced Dealer service capabilities
MaxxForce(tm) Big Bore Engine
2006 North American Share
2009 North American Share
International
11%
Leveraging what we have and what others have built
324 International dealers US, Canada, Mexico
941 dealer locations
Distribution - growing our global network
Growing with our BIC Distribution network
It starts with Great Products!!!
#1 in the J.D. Power and Associates Vocational
2006 Heavy Duty Customer Satisfaction Survey
It sustains itself with scale!!!
Class 3- 5
Military
India/China
Going to the next level
ProStar(tm)/
MaxxForce(tm)
Total NA
Industry ?
What it Means for Navistar in
2007 and beyond
New products and markets will enhance the growth of our business while
our cost structure drives increasing profitability
Total NA Industry
Demand
*On April 6, 2006, the company announced that the company's previously issued audited financial statements and the independent auditors' reports thereon for the
years ended October 31, 2002 through 2004, and all quarterly financial statements for periods after November 1, 2002 should no longer be relied upon because of
errors in such financial statements.
2007
Offset:
Parts ?
Cost Reductions ?
Military ?
Export ?
Workhorse ?
India ?
MWM ?
Reduced Breakeven
Record EPS
>10 % Average Segment
Margins
2009 Goal
Consolidated Sales and
Revenue of $15 Billion
Great Products
Competitive Cost
Structure
Profitable Growth
3 Pronged Strategy
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