|        |
|--------|
|        |  |  |  |  |
|   |   |   |   |   |

|        |
|--------|
|        |  |
| þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

|   |
|---|
|   |  |
| o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

|                                                                                                                                                 |
|-------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                 |  |
| Delaware                                                                                                                                        | 36-3359573 |
| (State or other jurisdiction of incorporation or organization)                                                                                  | (I.R.S. Employer Identification No.) |
|                                                                                                                                            |   |
| 2701 Navistar Drive,                                                                                                            Lisle, Illinois | 60532 |
| (Address of principal executive offices)                                                                                                        | (Zip Code) |

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |
| Title of each class                                                        |   | Name of each exchange on which registered |
| Common stock (par value $0.10)                                                  |   | New York Stock Exchange |
| Cumulative convertible junior preference stock, Series D (par value $1.00) |   | New York Stock Exchange |

|                                               |
|-----------------------------------------------|
|                                               |  |  |  |  |  |  |
| Large accelerated filer             |   | o |    | Accelerated filer |   | þ |
| Non-accelerated filer                         |   | o |    | Smaller reporting company |   | o |
| (Do not check if a smaller reporting company) |    |   |   |   |

|        |
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|        |  |  |  |  |
|   |   |   |   |   |

----

|                |
|----------------|
|                |  |  |  |
|           |   |   | Page |
| PART I         |
| Item 1.   | Business |   | 5 |
| Item 1A.       | Risk Factors |   | 15 |
| Item 1B.       | Unresolved Staff Comments |   | 24 |
| Item 2.        | Properties |   | 24 |
| Item 3.        | Legal Proceedings |   | 24 |
| Item 4.        | Mine Safety Disclosures |   | 24 |
|           |   |   |   |
| PART II   |
| Item 5.   | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |   | 25 |
| Item 6.   | Selected Financial Data |   | 27 |
| Item 7.   | Management's Discussion and Analysis of Financial Condition and Results of Operations |   | 28 |
| Item 7A.       | Quantitative and Qualitative Disclosures about Market Risk |   | 60 |
| Item 8.        | Financial Statements and Supplementary Data |   | 61 |
| Item 9.   | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |   | 146 |
| Item 9A.  | Controls and Procedures |   | 146 |
| Item 9B.       | Other Information |   | 147 |
|           |   |   |   |
| PART III  |
| Item 10.       | Directors, Executive Officers, and Corporate Governance |   | 148 |
| Item 11.       | Executive Compensation |   | 148 |
| Item 12.       | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |   | 148 |
| Item 13.       | Certain Relationships and Related Transactions, and Director Independence |   | 148 |
| Item 14.       | Principal Accountant Fees and Services |   | 148 |
|           |   |   |   |
| PART IV   |
| Item 15.       | Exhibits and Financial Statement Schedules |   | 149 |
|           | Signatures |   | 150 |
|           |   |   |   |
| EXHIBIT INDEX: |
|           | Exhibit 3 |   |   |
|           | Exhibit 4 |   |   |
|           | Exhibit 10 |   |   |
|           | Exhibit 12 |   |   |
|           | Exhibit 21 |   |   |
|           | Exhibit 23.1 |   |   |
|           | Exhibit 24 |   |   |
|           | Exhibit 31.1 |   |   |
|           | Exhibit 31.2 |   |   |
|           | Exhibit 32.1 |   |   |
|           | Exhibit 32.2 |   |   |
|           | Exhibit 99.1 |   |   |

----

|         |                                                               |
|---------|---------------------------------------------------------------|
| • | estimates we have made in preparing our financial statements; |

|         |                                                                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the anticipated consummation and implementation of our recently announced strategic alliance with Volkswagen Truck & Bus GmbH ("VW T&B"); |

|         |                                                   |
|---------|---------------------------------------------------|
| • | our development of new products and technologies; |

|         |                                                                                         |
|---------|-----------------------------------------------------------------------------------------|
| • | anticipated sales, volume, demand, markets for our products, and financial performance; |

|         |                                                                        |
|---------|------------------------------------------------------------------------|
| • | anticipated performance and benefits of our products and technologies; |

|         |                                                                                                                                                                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | our business strategies relating to, and our ability to meet, federal and state regulatory heavy-duty diesel emissions standards applicable to certain of our engines, including the timing and costs of compliance and consequences of noncompliance with such standards, as well as our ability to meet other federal, state and foreign regulatory requirements; |

|         |                                                                                                      |
|---------|------------------------------------------------------------------------------------------------------|
| • | our business strategies and long-term goals, and activities to accomplish such strategies and goals; |

|         |                                                                                                                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | our ability to implement our strategy focused on growing the Core business, seeking new sources of revenue, driving operational excellence, leveraging the VW T&B alliance, investing in our people, and improving our financial performance, as well as the results we expect to achieve from the implementation of our strategy; |

|         |                                                   |
|---------|---------------------------------------------------|
| • | our expectations related to new product launches; |

|         |                                                                                      |
|---------|--------------------------------------------------------------------------------------|
| • | anticipated results from the realignment of our leadership and management structure; |

|         |                                                                                              |
|---------|----------------------------------------------------------------------------------------------|
| • | anticipated benefits from acquisitions, strategic alliances, and joint ventures we complete; |

|         |                                                                                                                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | our expectations and estimates relating to restructuring activities, including restructuring charges and timing of cash payments related thereto, and operational flexibility, savings, and efficiencies from such restructurings; |

|         |                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------|
| • | our expectations relating to the potential effects of anticipated divestitures and closures of businesses; |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| • | our expectations relating to our cost-reduction actions and actions to reduce discretionary spending; |

|         |                                                                         |
|---------|-------------------------------------------------------------------------|
| • | our expectations relating to our ability to service our long-term debt; |

|         |                                                                                         |
|---------|-----------------------------------------------------------------------------------------|
| • | our expectations relating to our wholesale and retail finance receivables and revenues; |

|         |                                                                      |
|---------|----------------------------------------------------------------------|
| • | our expectations and estimates relating to our used truck inventory; |

|         |                                                                                   |
|---------|-----------------------------------------------------------------------------------|
| • | liabilities resulting from environmental, health and safety laws and regulations; |

|         |                                       |
|---------|---------------------------------------|
| • | our anticipated capital expenditures; |

|         |                                                 |
|---------|-------------------------------------------------|
| • | our expectations relating to payments of taxes; |

|         |                                              |
|---------|----------------------------------------------|
| • | our expectations relating to warranty costs; |

|         |                                                |
|---------|------------------------------------------------|
| • | our expectations relating to interest expense; |

|         |                                                                       |
|---------|-----------------------------------------------------------------------|
| • | our expectations relating to impairment of goodwill and other assets; |

|         |                                                   |
|---------|---------------------------------------------------|
| • | costs relating to litigation and similar matters; |

|         |                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------|
| • | estimates relating to pension plan contributions and unfunded pension and postretirement benefits; |

|         |                                          |
|---------|------------------------------------------|
| • | trends relating to commodity prices; and |

|         |                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------|
| • | anticipated trends, expectations, and outlook relating to matters affecting our financial condition or results of operations. |

----

----

|              |          |
|--------------|----------|
| Item 1. | Business |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Trucks—We manufacture and distribute Class 4 through 8 trucks and buses in the common carrier, private carrier, government, leasing, construction, energy/petroleum, military vehicle, and student and commercial transportation markets under the International and IC brands. We design and manufacture proprietary diesel engines for our International branded trucks and military vehicles and IC branded buses. |

|         |                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Parts—We support our International brand commercial and military trucks, IC brand buses, our proprietary engines, as well as our other product lines, by distributing proprietary products together with a wide selection of other standard truck, trailer, and engine service parts. |

|         |                                                                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Financial Services—We provide retail, wholesale, and lease financing of products sold by the Truck and Parts segments, as well as their dealers, within the U.S. and Mexico. |

----

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| I. | Announced Volkswagen Truck and Bus Alliance:  On September 5, 2016, we announced an alliance with VW T&B to pursue joint global sourcing opportunities and source technology for powertrains and other advanced technologies.  As part of this alliance, we announced a stock purchase agreement with VW T&B (the "Stock Purchase Agreement"), pursuant to which we will issue and VW T&B will purchase an estimated 19.9% stake (16.6% on a proforma basis) in the Company by way of a capital increase. The closing of the Stock Purchase Agreement is subject to certain regulatory approvals and the finalization of the definitive agreements and contracts, among other customary closing conditions. |

|     |                                                                                                                                                                                                                                                                                                  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| II. | Launched products and product features  - important to key markets: During the turnaround, we remained committed to product investment to increase customer value.  In 2016, we began to realize our plan to release a new or redesigned product, on average, every six months through 2018. |

|         |                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In early 2016, we launched the International® HX™ Series, the first in a series of new product launches.  The HX is a Class 8 premium truck for construction and vocational markets.  |

|         |                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------|
| • | In mid-2016, we introduced our Cummins ISL engine offering in our Medium and Severe Service trucks. |

|         |                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------|
| • | In late 2016, we introduced the International® LT™ with Cummins X15 series to replace our ProStar line of trucks.  |

|         |                                                                   |
|---------|-------------------------------------------------------------------|
| • | In late 2016, we introduced a propane engine in our school buses. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | OnCommand Connection (“OnCommand”), our unique open architecture, all-makes remote diagnostics system, was tailored for the applications of our bus and truck customers, and is now standard on our vehicles, to achieve more efficient repairs and maintenance, better life-cycle value, and an overall lower cost of ownership.  We now have more than 250,000 vehicles subscribed to the OnCommand system. |

|      |                                                                                                         |
|------|---------------------------------------------------------------------------------------------------------|
| III. | Improved quality and uptime: We continued our relentless focus on improving quality and uptime in 2016. |

|         |                                                                                                                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We have reduced dealer dwell time through improvements in the diagnostics and repair procedures.  An increasing number of service locations have achieved Diamond Edge certification, which is a dealer service performance program launched this year that includes rigorous requirements and measured results. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We have made great strides on improving the quality of components manufactured by our supply base. The quality performance of our supply base has improved to the point that we have seen a reduction in excess of 70% in supplier related defects in our manufacturing facility over the last four years. The reduction of internal defects will have a positive impact on the uptime and performance of our vehicles. |

|     |                                                                                                                                                                                                                                                                                                                                                                          |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| IV. | Delivered on our plan to reduce costs: Since 2012, we have reduced our Selling, general and administrative ("SG&A") and Engineering and product development costs (together, "structural costs"). We continued to make progress in 2016, which we expect will pave the way for us to be profitable and free-cash flow positive as the truck market recovers: |

|         |                                                                                         |
|---------|-----------------------------------------------------------------------------------------|
| • | Procurement and engineering design processes remain focused on lowering material costs. |

|         |                                                                                                                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We continued to implement cost saving initiatives, including reductions in discretionary spending and employee headcount reductions, resulting in the lowering of structural costs by $147 million in 2016 compared to 2015. |

|         |                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our focused factory strategy has been implemented across our plants whereby each facility is primarily focused on a specific platform, allowing for higher levels of manufacturing and logistic efficiency. |

|    |                                                                                                                                                                                        |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| V. | Built sales momentum: There are signs that sales momentum is building in 2016.  We quoted more customers in 2016 than a year ago. Our share is increasing with lease/rental customers. |

|     |                                                                                                                                                                                                                                                                                                                                          |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| VI. | Evaluation of non-Core activities: We also continue to evaluate our portfolio of assets to optimize our cost structure. In February 2016, we sold Pure Power Technologies, a components business focused on air and fuel systems. Additionally, in August 2016, we sold our engine and foundry facilities in Indianapolis, Indiana. |

|         |                         |
|---------|-------------------------|
| • | Grow the Core Business; |

|         |                              |
|---------|------------------------------|
| • | Seek New Sources of Revenue; |

|         |                               |
|---------|-------------------------------|
| • | Drive Operational Excellence; |

|         |                                   |
|---------|-----------------------------------|
| • | Leverage the VW T&B alliance; |

|         |                           |
|---------|---------------------------|
| • | Invest in our People; and |

|         |                               |
|---------|-------------------------------|
| • | Improve Financial Performance |

----

|    |                                                                                                                        |
|----|------------------------------------------------------------------------------------------------------------------------|
| I. | Grow the Core Business: We will continue to focus on leveraging our investments and assets to generate revenue growth. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | New Product Launches - Many key product launches are planned through the next several years including a new line of Class 4/5 commercial vehicles in the first half of 2018 that will be distributed separately through General Motors Company ("GM") and our dealer networks.  In 2017, we will also introduce our new MV and RH models with superior fuel economy.  To support Greenhouse Gas ("GHG") emissions requirements, we will continue to introduce features that further improve fuel economy.  We will also relaunch our proprietary 13L engine which is critical to our success in the Heavy and Vocational markets. |

|         |                                                                                                                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Distribution Effectiveness - We will invest in the dealer organization to improve customer reach and sales effectiveness.  Core to this strategy is recruitment and training of salespeople, improved operating practices, and comprehensive internal sales support. |

|         |                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------|
| • | Building Customer Purchase Consideration - We will rebuild brand and customer loyalty across all of our Core markets. |

|     |                                                                                                                |
|-----|----------------------------------------------------------------------------------------------------------------|
| II. | Seek New Sources of Revenue: We plan to leverage our assets and capabilities to pursue new sources of revenue. |

|         |                                                                                                                                                                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Grow Core Services - In 2016, we extended our relationship with GM by signing a long-term agreement to manufacture GM's G Van cutaway models at our Springfield, Ohio assembly plant. Production is to begin in the first calendar quarter of 2017. |

|         |                                                                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Parts - We will pursue continued growth of the successful Fleetrite all makes parts offering and reman businesses.  We will also leverage our connected vehicle platform and use of other technologies to accelerate parts and service growth. |

|         |                                                                                                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------|
| • | OnCommand Connection - We are planning to leverage the value of the data gathered through OnCommand to generate new sources of revenue. |

|      |                                                                                                                                                                                                                                                                                |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| III. | Drive Operational Excellence: We will drive improvement of key performance metrics such as product, manufacturing structural costs, quality, and uptime.  A relentless focus on operational excellence is essential to delivering on our commitment to enhance customer value. |

|     |                                                                                                              |
|-----|--------------------------------------------------------------------------------------------------------------|
| IV. | Leverage the Announced Volkswagen Truck and Bus Alliance: This alliance is valuable to us across many areas. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Products and Technology - VW T&B and Navistar have a similar vision for the role of technology, including the importance of driver-focused open architecture solutions.  The alliance will be a source of powertrain options and other high-value technologies, including advanced driver assistance systems, connected vehicle solutions, platooning and autonomous technologies, electric vehicles, and cab and chassis subsystems. |

|         |                                                                                        |
|---------|----------------------------------------------------------------------------------------|
| • | Market Confidence - Increase consideration as part of a leading global truck alliance. |

|         |                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------|
| • | Parts - Create new parts sales and growth opportunities afforded by vertically integrated systems. |

|         |                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------|
| • | Cost - Leverage global scale to achieve significant cost reduction synergies, and drive more efficient research and development spend. |

|    |                                                                                                                                                                                                                                                                                                                                                                                            |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| V. | Invest in our People: We will align our people strategy with our capabilities to ensure we focus our people efforts where it matters most.  We will focus on recruiting the right people and making sure they are productive as quickly as possible.  Methods to retain, motivate, reward, and recognize will be customized to ensure we build the workforce we need to achieve our goals. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| VI. | Improve Financial Performance: Our financial performance continues to improve due to savings from cost reduction actions and despite the impact of lower revenues from poor industry conditions.  We will continue our efforts to lower our breakeven point and are positioned to benefit when the North American truck industry recovers. Over time, we will reduce the amount of leverage on our balance sheet. |

----

----

----

|                   |
|-------------------|
|                   |  |  |  |  |  |  |
|              | Units |   | Value |
| As of October 31: |   |   | (in billions) |
| 2016              | 14,000 |  |   | $ | 1.1 |  |
| 2015              | 24,000 |  |   | 2.0 |  |

----

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |
|                          | As of October 31,   |
|                          | 2016 |   | 2015 |   | 2014 |
| Employees worldwide:          |   |   |   |   |   |
| Total active employees        | 11,300 |  |   | 13,200 |  |   | 14,600 |  |
| Total inactive employees(A)   | 1,100 |  |   | 1,200 |  |   | 1,200 |  |
| Total employees worldwide     | 12,400 |  |   | 14,400 |  |   | 15,800 |  |
| Total active union employees: |   |   |   |   |   |
| Total UAW                     | 3,100 |  |   | 2,800 |  |   | 2,700 |  |
| Total other unions            | 2,300 |  |   | 2,800 |  |   | 3,500 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | Employees are considered inactive in certain situations including disability leave, leave of absence, layoffs, and work stoppages. Included within inactive employees are approximately 300 employees, 200 employees, and 300 employees as of October 31, 2016, 2015, and 2014, respectively, represented by the National Automobile, Aerospace and Agricultural Implement Workers of Canada ("CAW") at our Chatham, Ontario heavy truck plant, which was closed in 2011 due to an inability to reach a collective bargaining agreement with the CAW. For more information, see Note 2, Restructurings and Impairments, to the accompanying consolidated financial statements. |

----

----

|                      |
|----------------------|
|                      |  |  |  |  |
| Name                 |   | Age |   | Position with the Company |
|                 |   |   |   |   |
| Troy A. Clarke       |   | 61 |   | President and Chief Executive Officer and Director |
| Walter G. Borst      |   | 54 |   | Executive Vice President and Chief Financial Officer |
| William R. Kozek     |   | 54 |   | President, Truck and Parts |
| Persio V. Lisboa     |   | 51 |   | President, Operations |
| William V. McMenamin |   | 57 |   | President, Financial Services and Treasurer |
| Steven K. Covey      |   | 65 |   | Senior Vice President and General Counsel |
| Samara A. Strycker   |   | 44 |   | Senior Vice President and Corporate Controller |
| Curt A. Kramer       |   | 48 |   | Corporate Secretary |

----

----

|               |              |
|---------------|--------------|
| Item 1A. | Risk Factors |

----

|         |                                                                                   |
|---------|-----------------------------------------------------------------------------------|
| • | increasing our vulnerability to general adverse economic and industry conditions; |

|         |                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | limiting our ability to use operating cash flow in other areas of our business because we must dedicate a portion of these funds to make significant interest payments on our indebtedness; |

|         |                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------|
| • | limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |

|         |                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------|
| • | limiting our ability to take advantage of business opportunities as a result of various restrictive covenants in our debt agreements; and |

|         |                                                                                           |
|---------|-------------------------------------------------------------------------------------------|
| • | placing us at a competitive disadvantage compared to our competitors that have less debt. |

----

----

----

----

----

|         |                                                                                      |
|---------|--------------------------------------------------------------------------------------|
| • | the ability of our Board of Directors to issue so-called "flexible" preferred stock; |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| • | a provision for any vacancies on our Board of Directors to be filled only by the remaining directors; |

|         |                                                                                   |
|---------|-----------------------------------------------------------------------------------|
| • | the inability of stockholders to act by written consent or call special meetings; |

|         |                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------|
| • | advance notice procedures for stockholder proposals to be brought before an annual meeting of our stockholders; and |

|         |                                                                                                                                                                                                                                                                                                                                                              |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Section 203 of the Delaware General Corporation Law, which generally restricts us from engaging in certain business combinations with a person who acquires 15% or more of our common stock for a period of three years from the date such person acquired such common stock, unless stockholder or Board approval is obtained prior to the acquisition |

|         |                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------|
| • | allow our government clients to terminate or not renew our contracts if we come under foreign ownership, control or influence; |

|         |                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------|
| • | allow our government clients to terminate existing contracts for the convenience of the government; |

|         |                                                                          |
|---------|--------------------------------------------------------------------------|
| • | require us to prevent unauthorized access to classified information; and |

|         |                                                                                                      |
|---------|------------------------------------------------------------------------------------------------------|
| • | require us to comply with laws and regulations intended to promote various social or economic goals. |

----

----

|         |                                                                        |
|---------|------------------------------------------------------------------------|
| • | trade protection measures and import or export licensing requirements; |

|         |                                                                                                |
|---------|------------------------------------------------------------------------------------------------|
| • | the imposition of foreign withholding taxes on the remittance of foreign earnings to the U.S.; |

|         |                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------|
| • | difficulty in staffing and managing international operations and the application of foreign labor regulations; |

|         |                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------|
| • | multiple and potentially conflicting laws, regulations, and policies that are subject to change; |

|         |                                  |
|---------|----------------------------------|
| • | currency exchange rate risk; and |

|         |                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------|
| • | changes in general economic and political conditions in countries where we operate, particularly in emerging markets. |

----

|               |                                |
|---------------|--------------------------------|
| Item 1B. | Unresolved Staff Comments  |

|         |                 |
|---------|-----------------|
| Item 2. | Properties  |

|         |                        |
|---------|------------------------|
| Item 3. |  Legal Proceedings |

|              |                              |
|--------------|------------------------------|
| Item 4. | Mine Safety Disclosures  |

----

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Securities |

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Year Ended October 31, 2016 |   | High |   | Low |   | Year Ended October 31, 2015 |   | High |   |     Low     |
| 1st Quarter                 |   | $ | 15.21 |  |   | $ | 5.78 |  |   | 1st Quarter |   | $ | 38.05 |  |   | $ | 28.99 |  |
| 2nd Quarter                 |   | 16.39 |  |   | 6.24 |  |   | 2nd Quarter |   | 31.28 |  |   | 27.50 |  |
| 3rd Quarter                 |   | 15.77 |  |   | 10.30 |  |   | 3rd Quarter |   | 30.41 |  |   | 16.32 |  |
| 4th Quarter                 |   | 24.04 |  |   | 11.59 |  |   | 4th Quarter |   | 19.91 |  |   | 11.21 |  |

----

|                                                             |
|-------------------------------------------------------------|
|                                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                        | As of October 31, |
|                                                        | 2011 |   | 2012 |   | 2013 |   | 2014 |   | 2015 |   | 2016 |
| Navistar International Corporation                          | $ | 100 |  |   | $ | 45 |  |   | $ | 86 |  |   | $ | 84 |  |   | $ | 29 |  |   | $ | 53 |  |
| S&P 500 Index - Total Returns                           | 100 |  |   | 115 |  |   | 147 |  |   | 172 |  |   | 181 |  |   | 189 |  |
| S&P Construction, Farm Machinery, and Heavy Truck Index | 100 |  |   | 97 |  |   | 106 |  |   | 125 |  |   | 92 |  |   | 109 |  |

----

|              |                              |
|--------------|------------------------------|
| Item 6. | Selected Financial Data  |

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                            | As of and for the Years Ended October 31, |
| (in millions, except per share data)                                            | 2016 |   | 2015 |   | 2014 |   | 2013 |   | 2012(A) |
| RESULTS OF OPERATIONS DATA                                                      |   |   |   |   |   |   |   |   |   |
| Sales and revenues, net                                                         | $ | 8,111 |  |   | $ | 10,140 |  |   | $ | 10,806 |  |   | $ | 10,775 |  |   | $ | 12,695 |  |
| Loss from continuing operations before taxes                                    | (32 | ) |   | (103 | ) |   | (556 | ) |   | (974 | ) |   | (1,111 | ) |
| Income tax benefit (expense)                                                    | (33 | ) |   | (51 | ) |   | (26 | ) |   | 171 |  |   | (1,780 | ) |
| Loss from continuing operations                                                 | (65 | ) |   | (154 | ) |   | (582 | ) |   | (803 | ) |   | (2,891 | ) |
| Income (loss) from discontinued operations, net of tax                          | — |  |   | 3 |  |   | 3 |  |   | (41 | ) |   | (71 | ) |
| Net loss                                                                        | (65 | ) |   | (151 | ) |   | (579 | ) |   | (844 | ) |   | (2,962 | ) |
| Less: Net income attributable to non-controlling interests                      | 32 |  |   | 33 |  |   | 40 |  |   | 54 |  |   | 48 |  |
| Net loss attributable to Navistar International Corporation                     | $ | (97 | ) |   | $ | (184 | ) |   | $ | (619 | ) |   | $ | (898 | ) |   | $ | (3,010 | ) |
| Amounts attributable to Navistar International Corporation common shareholders: |   |   |   |   |   |   |   |   |   |
| Loss from continuing operations, net of tax                                     | $ | (97 | ) |   | $ | (187 | ) |   | $ | (622 | ) |   | $ | (857 | ) |   | $ | (2,939 | ) |
| Income (loss) from discontinued operations, net of tax                          | — |  |   | 3 |  |   | 3 |  |   | (41 | ) |   | (71 | ) |
| Net loss                                                                        | $ | (97 | ) |   | $ | (184 | ) |   | $ | (619 | ) |   | $ | (898 | ) |   | $ | (3,010 | ) |
| Basic earnings (loss) per share:                                                |   |   |   |   |   |   |   |   |   |
| Continuing operations                                                           | $ | (1.19 | ) |   | $ | (2.29 | ) |   | $ | (7.64 | ) |   | $ | (10.66 | ) |   | $ | (42.53 | ) |
| Discontinued operations                                                         | — |  |   | 0.04 |  |   | 0.04 |  |   | (0.51 | ) |   | (1.03 | ) |
| Net loss                                                                        | $ | (1.19 | ) |   | $ | (2.25 | ) |   | $ | (7.60 | ) |   | $ | (11.17 | ) |   | $ | (43.56 | ) |
| Diluted earnings (loss) per share:                                              |   |   |   |   |   |   |   |   |   |
| Continuing operations                                                           | $ | (1.19 | ) |   | $ | (2.29 | ) |   | $ | (7.64 | ) |   | $ | (10.66 | ) |   | $ | (42.53 | ) |
| Discontinued operations                                                         | — |  |   | 0.04 |  |   | 0.04 |  |   | (0.51 | ) |   | (1.03 | ) |
| Net loss                                                                        | $ | (1.19 | ) |   | $ | (2.25 | ) |   | $ | (7.60 | ) |   | $ | (11.17 | ) |   | $ | (43.56 | ) |
| Weighted average number of shares outstanding:                                  |   |   |   |   |   |   |   |   |   |
| Basic                                                                           | 81.7 |  |   | 81.6 |  |   | 81.4 |  |   | 80.4 |  |   | 69.1 |  |
| Diluted                                                                         | 81.7 |  |   | 81.6 |  |   | 81.4 |  |   | 80.4 |  |   | 69.1 |  |
| BALANCE SHEET DATA                                                              |   |   |   |   |   |   |   |   |   |
| Total assets(C)                                                                 | $ | 5,653 |  |   | $ | 6,649 |  |   | $ | 7,392 |  |   | $ | 8,260 |  |   | $ | 9,040 |  |
| Long-term debt:(B)(C)                                                           |   |   |   |   |   |   |   |   |   |
| Manufacturing operations                                                        | $ | 3,025 |  |   | $ | 3,059 |  |   | $ | 2,814 |  |   | $ | 2,516 |  |   | $ | 2,680 |  |
| Financial services operations                                                   | 972 |  |   | 1,088 |  |   | 1,065 |  |   | 1,351 |  |   | 825 |  |
| Total long-term debt                                                            | $ | 3,997 |  |   | $ | 4,147 |  |   | $ | 3,879 |  |   | $ | 3,867 |  |   | $ | 3,505 |  |
| Redeemable equity securities                                                    | $ | — |  |   | $ | — |  |   | $ | 2 |  |   | $ | 4 |  |   | $ | 5 |  |

----

|         |                                                                                       |
|---------|---------------------------------------------------------------------------------------|
| Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations |

----

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Engine Strategy and Emissions Standards Compliance—We are focused on new product introductions, enhancements of current products, quality improvements and continuous material cost-reductions across Navistar's truck and bus product lines.  We have shifted our investment focus from engine to truck including developing driver-centric designs. We are also expanding our powertrain offerings with a mix of proprietary engines and Cummins engines (ISX, ISL, ISB).  We have incurred significant research and development and tooling costs to design and produce our product lines to meet the EPA and CARB on-highway heavy-duty diesel ("HDD") emissions standards, including OBD requirements. Recently announced GHG phase 2 regulations will further drive up significant investments in product development by us and our competitors. These emissions standards have and will continue to result in significant increases in costs of our products. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | VW T&B Alliance—We believe that the anticipated alliance with VW T&B will be a source of powertrain options and other high-value technologies, including advanced driver assistance systems, connected vehicle solutions, platooning and autonomous technologies, electric vehicles, and cab and chassis subsystems.  If the alliance is consummated, we believe there will be new parts sales and growth opportunities created by vertically integrated systems and that we will be able to leverage global scale, achieve significant cost reduction synergies, and drive more efficient research and development spend. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Core Truck Market—The Core truck markets in which we compete are cyclical in nature and are strongly influenced by macroeconomic factors such as industrial production, demand for durable goods, construction spending, business investment, oil prices, and consumer confidence and spending, among others. Industry volume declined in 2016 and we anticipate industry volumes to slightly decline in 2017.  However, as general economic and industry-specific indicators are positive, we anticipate a relatively smaller decline in 2017 compared to the larger volume declines experienced after prior cycle peaks. In addition, better new truck fuel economy along with rising freight rates and improved trucker profits show the trucking industry remains healthy.  We anticipate that Core markets retail industry deliveries will range between 305,000 units to 335,000 units for 2017. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Used Truck inventory - Our gross used truck inventory increased to approximately $410 million at October 31, 2016 from $390 million at October 31, 2015, offset by reserves of $208 million and $110 million, respectively. During 2016, additions to our used truck reserves were $187 million, compared to $117 million and $52 million in 2015 and 2014, respectively. The increase was primarily due to lower industry prices coupled with additional reserves taken on existing inventory. Throughout 2016, we continued to seek alternative channels to sell our used trucks, including certain export markets which result in a lower price point as compared to our domestic channels. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Military Sales—Our U.S. military sales were $198 million in 2016, compared to $203 million in 2015 and $149 million in 2014. The 2016 military sales primarily consisted of deliveries of MILCOT variants to foreign militaries, refurbishment and upgrades of government owned MaxxPro vehicles to “like new” condition, upgrade kits, spare parts, and technical support service. The 2015 military sales primarily consisted of refurbishment and upgrades of government owned MaxxPro vehicles to “like new” condition, upgrade kits, spare parts, and technical support services. The 2014 military sales primarily consisted of upgrade kits, spare parts and technical support services. In 2017, we expect our U.S. military sales to be consistent with 2016 as our contract backlog consists of a similar mix of products as that of 2016. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Warranty Costs—Emissions regulations in the U.S. and Canada have resulted in rapid product development cycles, driving significant changes from previous engine models. In 2010, we introduced changes to our engine line-up in response to 2010 emissions regulations. Component complexity and other related costs associated with meeting emissions standards have contributed to higher repair costs that exceeded those that we have historically experienced. Historically, warranty claims experience for launch-year engines has been higher compared to the prior model-year engines; however, over time we have been able to refine both the design and manufacturing process to reduce both the volume and the severity of warranty claims. We recognized adjustments to pre-existing warranties of $77 million in 2016 compared to adjustments of $1 million in 2015 and $55 million in 2014.  In future periods, we could experience an increase in warranty spend compared to prior periods that could result in additional charges for adjustments to pre-existing warranties. In addition, as we identify opportunities to improve the design and manufacturing of our engines, we may incur additional charges for product recalls and field campaigns to address identified issues. These charges may have an adverse effect on our financial condition, results of operations and cash flows. For more information, see Note 1, Summary of Significant Accounting Policies, to the accompanying consolidated financial statements. |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Structural Cost Saving Initiatives—Our structural costs decreased by $147 million in 2016, compared to 2015, and by $114 million in 2015, compared to 2014. We continue to evaluate opportunities to restructure our business and rationalize our Manufacturing operations in an effort to optimize our cost structure. We have implemented a number of cost saving initiatives, continued reductions in discretionary spending and employee headcount reductions to improve our SG&A costs. The Engineering and product development costs decrease was primarily driven by our continued efforts to focus spending on our Core markets by launching new and redesigned products while placing less emphasis on engine development. Engineering spend is targeted at programs that will reduce cost, improve uptime for our customers, grow market share and allow us to meet new emissions standards in 2017. Over the next two years, we expect to introduce new vehicles across our entire product line. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Income Taxes—At October 31, 2016, we had $2.9 billion of U.S. federal net operating loss carryforwards and $250 million of federal tax credit carryforwards.  We expect our cash payments of U.S. taxes will be minimal for as long as we are able to offset our U.S. taxable income by these U.S. net operating losses and tax credits, which have carryforward periods of up to 20 years. We also have U.S., state and foreign net operating losses that are available to reduce cash payments of U.S., state and foreign taxes in future periods. We maintain valuation allowances on our U.S. and certain foreign deferred tax assets because it is more likely than not that those deferred tax assets will not be realized.  It is reasonably possible within the next twelve months that an additional valuation allowance may be required on certain foreign deferred tax assets. For more information, see Note 11, Income Taxes, to the accompanying consolidated financial statements. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Core-Business Evaluation—We are focused on improving our Truck and Parts businesses in our Core markets. We are working to fix, divest or close under-performing and non-strategic areas and expect to realize incremental benefits from these actions in the near future. In addition, we are restructuring our business and rationalizing our Manufacturing operations in an effort to optimize our cost structure. This effort is ongoing, and may lead to additional divestitures of businesses or discontinuing engineering programs that are outside of our core operations or are not performing to our expectations. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Global Economy—The global economy is expected to continue to improve slowly driven by a stronger U.S. economy and greater fiscal stimulus worldwide. The outlook for the economies in both the U.S. and Canada remain cautiously optimistic with moderate growth expectations. A projected stabilization in energy and commodity prices should provide a benefit which may contribute to growth for Latin American countries in 2017, though the growth trend continues to be challenged by weak economic indicators. Mexico’s economy moderated in 2016, but is expected to underperform in 2017 as the strong peso devaluation creates economic uncertainty. The economic recession in Brazil has been prolonged, but the volatility appears to be reaching its limit and the Brazilian economy may begin to show signs of recovery next year. Low oil prices continue to provide a powerful stimulus to the global economy by lowering energy costs, boosting consumer income and spending, and improving external accounts of oil importers. However, inactive business investment and global trade as well as weak industrial production still exert a modest limitation on growth and may also have a negative effect on the demand in the truck industry. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Impact of Government Regulation—As a manufacturer of trucks and engines, we continue to face significant governmental regulation of our products, especially in the areas of environmental and safety matters. We are also subject to various noise standards imposed by federal, state, and local regulations. Our facilities may be subject to regulation related to climate change, and climate change itself may also have some impact on our operations. However, these impacts are currently uncertain and we cannot predict the nature and scope of those impacts. For more information, see Impact of Government Regulation in Part I, Item I, Business. |

----

|                                                            |
|------------------------------------------------------------|
|                                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except per share data and % change)          | 2016 |  | 2015 |   | Change |   | % Change |
| Sales and revenues, net                                    | $ | 8,111 |  |   | $ | 10,140 |  |   | $ | (2,029 | ) |   | (20 | )% |
| Costs of products sold                                     | 6,812 |  |   | 8,670 |  |   | (1,858 | ) |   | (21 | )% |
| Restructuring charges                                      | 10 |  |   | 76 |  |   | (66 | ) |   | (87 | )% |
| Asset impairment charges                                   | 27 |  |   | 30 |  |   | (3 | ) |   | (10 | )% |
| Selling, general and administrative expenses               | 802 |  |   | 908 |  |   | (106 | ) |   | (12 | )% |
| Engineering and product development costs                  | 247 |  |   | 288 |  |   | (41 | ) |   | (14 | )% |
| Interest expense                                           | 327 |  |   | 307 |  |   | 20 |  |   | 7 |  % |
| Other income, net                                          | (76 | ) |   | (30 | ) |   | (46 | ) |   | N.M. |  |
| Total costs and expenses                                   | 8,149 |  |   | 10,249 |  |   | (2,100 | ) |   | (20 | )% |
| Equity in income of non-consolidated affiliates            | 6 |  |   | 6 |  |   | — |  |   | — |  % |
| Loss from continuing operations before income taxes        | (32 | ) |   | (103 | ) |   | 71 |  |   | (69 | )% |
| Income tax expense                                         | (33 | ) |   | (51 | ) |   | 18 |  |   | (35 | )% |
| Loss from continuing operations                            | (65 | ) |   | (154 | ) |   | 89 |  |   | (58 | )% |
| Less: Net income attributable to non-controlling interests | 32 |  |   | 33 |  |   | (1 | ) |   | (3 | )% |
| Loss from continuing operations(A)                         | (97 | ) |   | (187 | ) |   | 90 |  |   | (48 | )% |
| Income from discontinued operations, net of tax            | — |  |   | 3 |  |   | (3 | ) |   | (100 | )% |
| Net loss(A)                                                | $ | (97 | ) |   | $ | (184 | ) |   | $ | 87 |  |   | (47 | )% |
|                                                       |   |   |   |   |   |   |   |
| Diluted earnings (loss) per share:(A)                      |   |   |   |   |   |   |   |
| Continuing operations                                      | $ | (1.19 | ) |   | $ | (2.29 | ) |   | $ | 1.10 |  |   | (48 | )% |
| Discontinued operations                                    | — |  |   | 0.04 |  |   | (0.04 | ) |   | (100 | )% |
|                                                       | $ | (1.19 | ) |   | $ | (2.25 | ) |   | $ | 1.06 |  |   | (47 | )% |
| Diluted weighted average shares outstanding                | 81.7 |  |   | 81.6 |  |   | 0.1 |  |   | — |  % |

|      |                 |
|------|-----------------|
| N.M. | Not meaningful. |

|     |                              |
|-----|------------------------------|
| (A) | Amounts attributable to NIC. |

|                                |
|--------------------------------|
|                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change) | 2016 |   | 2015 |   | Change |   | % Change |
| Truck                          | $ | 5,403 |  |   | $ | 7,213 |  |   | $ | (1,810 | ) |   | (25 | )% |
| Parts                          | 2,427 |  |   | 2,513 |  |   | (86 | ) |   | (3 | )% |
| Global Operations              | 341 |  |   | 506 |  |   | (165 | ) |   | (33 | )% |
| Financial Services             | 235 |  |   | 241 |  |   | (6 | ) |   | (2 | )% |
| Corporate and Eliminations     | (295 | ) |   | (333 | ) |   | 38 |  |   | (11 | )% |
| Total                          | $ | 8,111 |  |   | $ | 10,140 |  |   | $ | (2,029 | ) |   | (20 | )% |

----

----

|                                |
|--------------------------------|
|                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change) | 2016 |   | 2015 |   | Change |   | % Change |
| Truck segment sales, net       | $ | 5,403 |  |   | $ | 7,213 |  |   | $ | (1,810 | ) |   | (25 | )% |
| Truck segment loss             | (189 | ) |   | (141 | ) |   | (48 | ) |   | 34 |  % |

----

|                                |
|--------------------------------|
|                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change) | 2016 |   | 2015 |   | Change |   | % Change |
| Parts segment sales, net       | $ | 2,427 |  |   | $ | 2,513 |  |   | $ | (86 | ) |   | (3 | )% |
| Parts segment profit           | 640 |  |   | 592 |  |   | 48 |  |   | 8 |  % |

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change)       | 2016 |  | 2015 |   | Change |   | % Change |
| Global Operations segment sales, net | $ | 341 |  |   | $ | 506 |  |   | $ | (165 | ) |   | (33 | )% |
| Global Operations segment loss       | (21 | ) |   | (67 | ) |   | 46 |  |   | (69 | )% |

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change)           | 2016 |   | 2015 |   | Change |   | % Change |
| Financial Services segment revenues, net | $ | 235 |  |   | $ | 241 |  |   | $ | (6 | ) |   | (2 | )% |
| Financial Services segment profit        | 100 |  |   | 98 |  |   | 2 |  |   | 2 |  % |

----

|                                                            |
|------------------------------------------------------------|
|                                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except per share data and % change)          | 2015 |   | 2014 |   | Change |   | % Change |
| Sales and revenues, net                                    | $ | 10,140 |  |   | $ | 10,806 |  |   | $ | (666 | ) |   | (6 | )% |
| Costs of products sold                                     | 8,670 |  |   | 9,534 |  |   | (864 | ) |   | (9 | )% |
| Restructuring charges                                      | 76 |  |   | 42 |  |   | 34 |  |   | 81 |  % |
| Asset impairment charges                                   | 30 |  |   | 183 |  |   | (153 | ) |   | (84 | )% |
| Selling, general and administrative expenses               | 908 |  |   | 979 |  |   | (71 | ) |   | (7 | )% |
| Engineering and product development costs                  | 288 |  |   | 331 |  |   | (43 | ) |   | (13 | )% |
| Interest expense                                           | 307 |  |   | 314 |  |   | (7 | ) |   | (2 | )% |
| Other income, net                                          | (30 | ) |   | (12 | ) |   | (18 | ) |   | N.M |  |
| Total costs and expenses                                   | 10,249 |  |   | 11,371 |  |   | (1,122 | ) |   | (10 | )% |
| Equity in income of non-consolidated affiliates            | 6 |  |   | 9 |  |   | (3 | ) |   | (33 | )% |
| Loss from continuing operations before income taxes        | (103 | ) |   | (556 | ) |   | 453 |  |   | (81 | )% |
| Income tax expense                                         | (51 | ) |   | (26 | ) |   | (25 | ) |   | 96 |  % |
| Loss from continuing operations                            | (154 | ) |   | (582 | ) |   | 428 |  |   | (74 | )% |
| Less: Net income attributable to non-controlling interests | 33 |  |   | 40 |  |   | (7 | ) |   | (18 | )% |
| Loss from continuing operations(A)                         | (187 | ) |   | (622 | ) |   | 435 |  |   | (70 | )% |
| Income from discontinued operations, net of tax            | 3 |  |   | 3 |  |   | — |  |   | — |  % |
| Net loss(A)                                                | $ | (184 | ) |   | $ | (619 | ) |   | $ | 435 |  |   | (70 | )% |
|                                                       |   |   |   |   |   |   |   |
| Diluted earnings (loss) per share:(A)                      |   |   |   |   |   |   |   |
| Continuing operations                                      | $ | (2.29 | ) |   | $ | (7.64 | ) |   | $ | 5.35 |  |   | (70 | )% |
| Discontinued operations                                    | 0.04 |  |   | 0.04 |  |   | — |  |   | — |  % |
|                                                       | $ | (2.25 | ) |   | $ | (7.60 | ) |   | $ | 5.35 |  |   | (70 | )% |
| Diluted weighted average shares outstanding                | 81.6 |  |   | 81.4 |  |   | 0.2 |  |   | — |  % |

|      |                 |
|------|-----------------|
| N.M. | Not meaningful. |

|     |                                                             |
|-----|-------------------------------------------------------------|
| (A) | Amounts attributable to Navistar International Corporation. |

|                                |
|--------------------------------|
|                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change) | 2015 |   | 2014 |   | Change |   | % Change |
| Truck                          | $ | 7,213 |  |   | $ | 7,473 |  |   | $ | (260 | ) |   | (3 | )% |
| Parts                          | 2,513 |  |   | 2,551 |  |   | (38 | ) |   | (1 | )% |
| Global Operations              | 506 |  |   | 940 |  |   | (434 | ) |   | (46 | )% |
| Financial Services             | 241 |  |   | 232 |  |   | 9 |  |   | 4 |  % |
| Corporate and Eliminations     | (333 | ) |   | (390 | ) |   | 57 |  |   | (15 | )% |
| Total                          | $ | 10,140 |  |   | $ | 10,806 |  |   | $ | (666 | ) |   | (6 | )% |

----

----

----

|                                |
|--------------------------------|
|                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change) | 2015 |   | 2014 |   | Change |   | % Change |
| Truck segment sales, net       | $ | 7,213 |  |   | $ | 7,473 |  |   | $ | (260 | ) |   | (3 | )% |
| Truck segment loss             | (141 | ) |   | (380 | ) |   | 239 |  |   | (63 | )% |

|                                |
|--------------------------------|
|                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change) | 2015 |   | 2014 |   | Change |   | % Change |
| Parts segment sales, net       | $ | 2,513 |  |   | $ | 2,551 |  |   | $ | (38 | ) |   | (1 | )% |
| Parts segment profit           | 592 |  |   | 528 |  |   | 64 |  |   | 12 |  % |

----

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change)       | 2015 |   | 2014 |   | Change |   | % Change |
| Global Operations segment sales, net | $ | 506 |  |   | $ | 940 |  |   | $ | (434 | ) |   | (46 | )% |
| Global Operations segment loss       | (67 | ) |   | (274 | ) |   | 207 |  |   | (76 | )% |

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except % change)           | 2015 |   | 2014 |   | Change |   | % Change |
| Financial Services segment revenues, net | $ | 241 |  |   | $ | 232 |  |   | $ | 9 |  |   | 4 | % |
| Financial Services segment profit        | 98 |  |   | 97 |  |   | 1 |  |   | 1 | % |

----

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                             | For the Years Ended October 31, |   | 2016 vs 2015 |   | 2015 vs 2014 |
| (in units)                       | 2016 |   | 2015 |   | 2014 |   | Change |   | % Change |   | Change |   | % Change |
| Core Markets (U.S. and Canada)   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| School buses(A)                  | 32,800 |  |   | 29,600 |  |   | 28,200 |  |   | 3,200 |  |   | 11 |  % |   | 1,400 |  |   | 5 | % |
| Class 6 and 7 medium trucks      | 86,800 |  |   | 80,000 |  |   | 71,000 |  |   | 6,800 |  |   | 9 |  % |   | 9,000 |  |   | 13 | % |
| Class 8 heavy trucks             | 165,700 |  |   | 218,200 |  |   | 186,700 |  |   | (52,500 | ) |   | (24 | )% |   | 31,500 |  |   | 17 | % |
| Class 8 severe service trucks(B) | 61,100 |  |   | 60,800 |  |   | 56,200 |  |   | 300 |  |   | — |  % |   | 4,600 |  |   | 8 | % |
| Total Core Markets               | 346,400 |  |   | 388,600 |  |   | 342,100 |  |   | (42,200 | ) |   | (11 | )% |   | 46,500 |  |   | 14 | % |
| Combined class 8 trucks          | 226,800 |  |   | 279,000 |  |   | 242,900 |  |   | (52,200 | ) |   | (19 | )% |   | 36,100 |  |   | 15 | % |
| Navistar Core retail deliveries  | 54,700 |  |   | 62,600 |  |   | 59,800 |  |   | (7,900 | ) |   | (13 | )% |   | 2,800 |  |   | 5 | % |

|     |                                                                                                                            |
|-----|----------------------------------------------------------------------------------------------------------------------------|
| (A) | The School bus retail market deliveries include buses classified as B, C, and D and are being reported on a one-month lag. |

|     |                                                                                                                |
|-----|----------------------------------------------------------------------------------------------------------------|
| (B) | Core retail deliveries include CAT-branded units sold to Caterpillar under our North America supply agreement. |

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |
|                             | For the Years Ended October 31, |
|                             | 2016 |   | 2015 |   | 2014 |
| Core Markets (U.S. and Canada)   |   |   |   |   |   |
| School buses(A)             | 34 | % |   | 38 | % |   | 35 | % |
| Class 6 and 7 medium trucks      | 21 | % |   | 23 | % |   | 21 | % |
| Class 8 heavy trucks             | 10 | % |   | 11 | % |   | 14 | % |
| Class 8 severe service trucks(B) | 13 | % |   | 15 | % |   | 16 | % |
| Total Core Markets               | 16 | % |   | 16 | % |   | 17 | % |
| Combined class 8 trucks          | 11 | % |   | 12 | % |   | 14 | % |

|     |                                                                                                                                 |
|-----|---------------------------------------------------------------------------------------------------------------------------------|
| (A) | The School bus retail delivery market share includes buses classified as B, C, and D and are being reported on a one-month lag. |

|     |                                                                                                                       |
|-----|-----------------------------------------------------------------------------------------------------------------------|
| (B) | Retail delivery market share includes CAT-branded units sold to Caterpillar under our North America supply agreement. |

----

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                             | For the Years Ended October 31, |   | 2016 vs 2015 |   | 2015 vs 2014 |
| (in units)                       | 2016 |  | 2015 |   | 2014 |   | Change |   | % Change |   | Change |   | % Change |
| Core Markets (U.S. and Canada)   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| School buses(A)                  | 11,900 |  |   | 11,400 |  |   | 10,300 |  |   | 500 |  |   | 4 |  % |   | 1,100 |  |   | 11 |  % |
| Class 6 and 7 medium trucks      | 16,900 |  |   | 16,700 |  |   | 18,300 |  |   | 200 |  |   | 1 |  % |   | (1,600 | ) |   | (9 | )% |
| Class 8 heavy trucks             | 6,300 |  |   | 26,700 |  |   | 28,900 |  |   | (20,400 | ) |   | (76 | )% |   | (2,200 | ) |   | (8 | )% |
| Class 8 severe service trucks(B) | 7,700 |  |   | 9,100 |  |   | 9,300 |  |   | (1,400 | ) |   | (15 | )% |   | (200 | ) |   | (2 | )% |
| Total Core Markets               | 42,800 |  |   | 63,900 |  |   | 66,800 |  |   | (21,100 | ) |   | (33 | )% |   | (2,900 | ) |   | (4 | )% |
| Combined class 8 trucks          | 14,000 |  |   | 35,800 |  |   | 38,200 |  |   | (21,800 | ) |   | (61 | )% |   | (2,400 | ) |   | (6 | )% |

|     |                                                                                                          |
|-----|----------------------------------------------------------------------------------------------------------|
| (A) | The School bus orders include buses classified as B, C, and D and are being reported on a one-month lag. |

|     |                                                                                                |
|-----|------------------------------------------------------------------------------------------------|
| (B) | Orders include CAT-branded units sold to Caterpillar under our North America supply agreement. |

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                             | For the Years Ended October 31, |   | 2016 vs 2015 |   | 2015 vs 2014 |
| (in units)                       | 2016 |   | 2015 |   | 2014 |   | Change |   | % Change |   | Change |   | % Change |
| Core Markets (U.S. and Canada)   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| School buses(A)                  | 2,100 |  |   | 1,400 |  |   | 2,400 |  |   | 700 |  |   | 50 |  % |   | (1,000 | ) |   | (42 | )% |
| Class 6 and 7 medium trucks      | 4,100 |  |   | 4,800 |  |   | 7,100 |  |   | (700 | ) |   | (15 | )% |   | (2,300 | ) |   | (32 | )% |
| Class 8 heavy trucks             | 4,700 |  |   | 13,900 |  |   | 12,100 |  |   | (9,200 | ) |   | (66 | )% |   | 1,800 |  |   | 15 |  % |
| Class 8 severe service trucks(B) | 2,100 |  |   | 2,100 |  |   | 2,300 |  |   | — |  |   | — |  % |   | (200 | ) |   | (9 | )% |
| Total Core Markets               | 13,000 |  |   | 22,200 |  |   | 23,900 |  |   | (9,200 | ) |   | (41 | )% |   | (1,700 | ) |   | (7 | )% |
| Combined class 8 trucks          | 6,800 |  |   | 16,000 |  |   | 14,400 |  |   | (9,200 | ) |   | (58 | )% |   | 1,600 |  |   | 11 |  % |

|     |                                                                                                            |
|-----|------------------------------------------------------------------------------------------------------------|
| (A) | The School bus backlogs include buses classified as B, C, and D and are being reported on a one-month lag. |

|     |                                                                                                  |
|-----|--------------------------------------------------------------------------------------------------|
| (B) | Backlogs include CAT-branded units sold to Caterpillar under our North America supply agreement. |

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                  | For the Years Ended October 31, |   | 2016 vs 2015 |   | 2015 vs 2014 |
| (in units)                            | 2016 |  | 2015 |   | 2014 |   | Change |   | % Change |   | Change |   | % Change |
| Core Markets (U.S. and Canada)        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| School buses(A)                       | 11,200 |  |   | 11,900 |  |   | 10,800 |  |   | (700 | ) |   | (6 | )% |   | 1,100 |  |   | 10 |  % |
| Class 6 and 7 medium trucks      | 17,800 |  |   | 18,800 |  |   | 16,000 |  |   | (1,000 | ) |   | (5 | )% |   | 2,800 |  |   | 18 |  % |
| Class 8 heavy trucks             | 16,300 |  |   | 25,000 |  |   | 26,000 |  |   | (8,700 | ) |   | (35 | )% |   | (1,000 | ) |   | (4 | )% |
| Class 8 severe service trucks(B) | 7,600 |  |   | 9,300 |  |   | 8,700 |  |   | (1,700 | ) |   | (18 | )% |   | 600 |  |   | 7 |  % |
| Total Core Markets                    | 52,900 |  |   | 65,000 |  |   | 61,500 |  |   | (12,100 | ) |   | (19 | )% |   | 3,500 |  |   | 6 |  % |
| Non "Core" military                   | 500 |  |   | 100 |  |   | 100 |  |   | 400 |  |   | N.M. |  |   | — |  |   | — |  % |
| Other markets(C)                      | 9,900 |  |   | 19,400 |  |   | 28,400 |  |   | (9,500 | ) |   | (49 | )% |   | (9,000 | ) |   | (32 | )% |
| Total worldwide units                 | 63,300 |  |   | 84,500 |  |   | 90,000 |  |   | (21,200 | ) |   | (25 | )% |   | (5,500 | ) |   | (6 | )% |
| Combined class 8 trucks               | 23,900 |  |   | 34,300 |  |   | 34,700 |  |   | (10,400 | ) |   | (30 | )% |   | (400 | ) |   | (1 | )% |

|      |                 |
|------|-----------------|
| N.M. | Not meaningful. |

|     |                                                                                                              |
|-----|--------------------------------------------------------------------------------------------------------------|
| (A) | The School bus chargeouts include buses classified as B, C, and D and are being reported on a one-month lag. |

|     |                                                                                                    |
|-----|----------------------------------------------------------------------------------------------------|
| (B) | Chargeouts include CAT-branded units sold to Caterpillar under our North America supply agreement. |

|     |                                                                                                                                                                                                                                                                                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (C) | Other markets primarily consist of Export Truck and Mexico and also include chargeouts related to BDT of 6,000 units and 11,000 units during 2015 and 2014, respectively. There were no third party chargeouts related to BDT during 2016 as Ford no longer purchases from BDT. |

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |
|                                                           | As of October 31, |
| (in millions)                                                  | 2016 |  | 2015 |  | 2014 |
| Consolidated cash and cash equivalents                         | $ | 804 |  |   | $ | 912 |  |   | $ | 497 |  |
| Consolidated marketable securities                             | 46 |  |   | 159 |  |   | 605 |  |
| Consolidated cash, cash equivalents, and marketable securities | $ | 850 |  |   | $ | 1,071 |  |   | $ | 1,102 |  |

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |
|                                                           | As of October 31, |
| (in millions)                                                  | 2016 |   | 2015 |   | 2014 |
| Manufacturing operations                                       | $ | 800 |  |   | $ | 1,013 |  |   | $ | 1,018 |  |
| Financial Services operations                                  | 50 |  |   | 58 |  |   | 84 |  |
| Consolidated cash, cash equivalents, and marketable securities | $ | 850 |  |   | $ | 1,071 |  |   | $ | 1,102 |  |

----

----

----

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |
|                                                         | Year Ended October 31, 2016 |
| (in millions)                                                | ManufacturingOperations(A) |   | Financial Services Operations and Adjustments(A) |   | Consolidated Statement of Cash Flows |
| Net cash provided by operating activities(B)                 | $ | 56 |  |   | $ | 211 |  |   | $ | 267 |  |
| Net cash provided by (used in) investing activities          | 3 |  |   | (70 | ) |   | (67 | ) |
| Net cash used in financing activities(B)                     | (203 | ) |   | (150 | ) |   | (353 | ) |
| Effect of exchange rate changes on cash and cash equivalents | 28 |  |   | 17 |  |   | 45 |  |
| Increase (decrease) in cash and cash equivalents             | (116 | ) |   | 8 |  |   | (108 | ) |
| Cash and cash equivalents at beginning of the year           | 877 |  |   | 35 |  |   | 912 |  |
| Cash and cash equivalents at end of the year                 | $ | 761 |  |   | $ | 43 |  |   | $ | 804 |  |

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |
|                                                              | Year Ended October 31, 2015 |
| (in millions)                                                | ManufacturingOperations(A) |  | Financial Services Operations and Adjustments(A) |  | Consolidated Statement of Cash Flows |
| Net cash provided by (used in) operating activities(B)       | $ | 98 |  |   | $ | (52 | ) |   | $ | 46 |  |
| Net cash provided by (used in) investing activities          | 346 |  |   | (30 | ) |   | 316 |  |
| Net cash provided by financing activities(B)                 | 63 |  |   | 35 |  |   | 98 |  |
| Effect of exchange rate changes on cash and cash equivalents | (70 | ) |   | 25 |  |   | (45 | ) |
| Increase (decrease) in cash and cash equivalents             | 437 |  |   | (22 | ) |   | 415 |  |
| Cash and cash equivalents at beginning of the year           | 440 |  |   | 57 |  |   | 497 |  |
| Cash and cash equivalents at end of the year                 | $ | 877 |  |   | $ | 35 |  |   | $ | 912 |  |

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |
|                                                         | Year Ended October 31, 2014 |
| (in millions)                                                | ManufacturingOperations(A) |   | Financial Services Operations and Adjustments(A) |   | Consolidated Statement of Cash Flows |
| Net cash used in operating activities(B)                     | $ | (319 | ) |   | $ | (17 | ) |   | $ | (336 | ) |
| Net cash provided by (used in) investing activities          | 112 |  |   | (187 | ) |   | (75 | ) |
| Net cash provided by (used in) financing activities(B)       | (59 | ) |   | 238 |  |   | 179 |  |
| Effect of exchange rate changes on cash and cash equivalents | (21 | ) |   | (5 | ) |   | (26 | ) |
| Increase (decrease) in cash and cash equivalents             | (287 | ) |   | 29 |  |   | (258 | ) |
| Cash and cash equivalents at beginning of the year           | 727 |  |   | 28 |  |   | 755 |  |
| Cash and cash equivalents at end of the year                 | $ | 440 |  |   | $ | 57 |  |   | $ | 497 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | Manufacturing operations cash flows and Financial Services operations cash flows are not presented in accordance with, and should not be viewed as an alternative to, GAAP. This non-GAAP financial information should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. However, we believe that non-GAAP reporting provides meaningful information and therefore we use it to supplement our GAAP reporting by identifying items that may not be related to the core manufacturing business. Management often uses this information to assess and measure the performance and liquidity of our operating segments. Our Manufacturing operations, for this purpose, include our Truck segment, Global Operations segment, Parts segment, and Corporate items which include certain eliminations. The reconciling differences between these non-GAAP financial measures and our GAAP consolidated financial statements in Item 1, Financial Statements and Supplementary Data, are our Financial Services operations and adjustments required to eliminate certain intercompany transactions between Manufacturing operations and Financial Services operations. Our Financial Services operations cash flows are presented consistent with their treatment in our Condensed Consolidated Statements of Cash Flows and may not be consistent with how they would be treated on a stand-alone basis. We have chosen to provide this supplemental information to allow additional analysis, to illustrate the respective cash flows giving effect to the equity basis cash flow shown above, and to provide an additional measure of performance and liquidity. |

|     |                                                                                                                                                                                                                                                                                               |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (B) | Adjustments have been made within Net cash provided by (used in) operating activities and Net cash provided by (used in) financing activities sections to conform to the year ended 2016 presentation. The reclassification did not impact our Consolidated Statements of Cash Flows. |

----

----

|               |
|---------------|
|               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Company  |   | Instrument Type |   | Total  Amount   |   | Purpose of Funding |   | AmountUtilized |   | Matures or        Expires |
| (in millions) |   |   |   |   |   |   |   |   |   |
| NFSC          |   | Revolving wholesale note trust |   | $ | 1,050 |  |   | Eligible wholesale notes |   | $ | 635 |  |   | 2017-2018 |
| NFC           |   | Credit agreement(A) |   | 613 |  |   | Finance receivables and general corporate purposes |   | 452 |  |   | 2018 |
| NFM           |   | Bank lines |   | 477 |  |   | Finance receivables and general corporate purposes |   | 411 |  |   | 2017-2021 |
| TRAC          |   | Revolving retail accounts |   | 100 |  |   | Eligible retail accounts |   | 39 |  |   | 2017 |

|     |                                                        |
|-----|--------------------------------------------------------|
| (A) | NFM can borrow up to $100 million, if not used by NFC. |

----

|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |  |  |  |  |  |  |
|                                                            | For the Years Ended October 31, |
| (in millions)                                                   | 2016 |  | 2015 |   | 2014 |
| Loss from continuing operations attributable to NIC, net of tax | $ | (97 | ) |  | $ | (187 | ) |   | $ | (622 | ) |
| Plus:                                                           |  |  |  |  |  |   |   |
| Depreciation and amortization expense                           | 225 |  |  | 281 |  |   | 332 |  |
| Manufacturing interest expense(A)                               | 247 |  |  | 233 |  |   | 243 |  |
| Less:                                                           |  |  |  |  |  |   |   |
| Income tax expense                                              | (33 | ) |  | (51 | ) |   | (26 | ) |
| EBITDA                                                          | $ | 408 |  |  | $ | 378 |  |   | $ | (21 | ) |

|     |                                                                                                                                                                                                                                                                                                                                                     |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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 the Years Ended October 31, |
| (in millions)                              | 2016 |  | 2015 |   | 2014 |
| Interest expense                           | $ | 327 |  |  | $ | 307 |  |   | $ | 314 |  |
| Less:  Financial services interest expense | 80 |  |  | 74 |  |   | 71 |  |
| Manufacturing interest expense             | $ | 247 |  |  | $ | 233 |  |   | $ | 243 |  |

----

|                                                             |
|-------------------------------------------------------------|
|                                                             |  |  |  |  |  |  |  |  |  |  |  |
|                                                        | For the Years Ended October 31, |
| (in millions)                                               | 2016 |   | 2015 |   | 2014 |
| EBITDA (reconciled above)                                   | $ | 408 |  |  | $ | 378 |  |   | $ | (21 | ) |
| Less significant items of:                                  |  |  |  |  |  |   |   |
| Adjustments to pre-existing warranties(A)                   | 78 |  |  | 4 |  |   | 55 |  |
| North America asset impairment charges(B)                   | 26 |  |  | 20 |  |   | 24 |  |
| Global asset impairment charges(C)                          | 1 |  |  | 10 |  |   | 149 |  |
| Restructuring of North American manufacturing operations(D) | 7 |  |   | — |  |   | 41 |  |
| Cost reduction and other strategic initiatives(E)           | 3 |  |  | 72 |  |   | 17 |  |
| Gain on settlement(F)                                       | — |  |  | (10 | ) |   | — |  |
| Brazil truck business actions(G)                            | — |  |  | 6 |  |   | 29 |  |
| Debt refinancing charges(H)                                 | — |  |   | 14 |  |   | 12 |  |
| One-time fee received(I)                                    | (15 | ) |  | — |  |   | — |  |
| Total adjustments                                           | 100 |  |  | 116 |  |   | 327 |  |
| Adjusted EBITDA                                             | $ | 508 |  |  | $ | 494 |  |   | $ | 306 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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) | The 2016 charges primarily included $17 million related to certain long-lived assets and $8 million related to certain operating leases. During 2015, we recorded $11 million of asset impairment charges related to certain long-lived assets and $9 million related to certain operating leases. In 2014, the impairment charges primarily related to certain amortizing intangible assets and long-lived assets which were determined to be fully impaired. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (C) | During 2016, we determined that $1 million of trademark asset carrying value was impaired. During 2015, we recognized a total non-cash charge of $7 million for the impairment of certain intangible and long-lived assets in the Global Operations segment, and $3 million for the impairment of the carrying value of a trademark asset. In 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. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (D) | During 2016 and 2014, we recorded $7 million and $14 million of charges related to the 2011 closure of our Chatham, Ontario plant, respectively. During 2014, we also 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. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (E) | Cost reduction and other strategic initiatives relates to costs associated with the divestiture of non-strategic facilities and efforts to optimize our cost structure. In 2015, we had $72 million of cost reduction and other strategic initiatives primarily consisting of restructuring charges. In 2015, we offered the majority of our U.S.-based non-represented salaried employees the opportunity to apply for a VSP, which resulted in $37 million of restructuring charges. In addition, we incurred restructuring charges of $23 million related to cost reduction actions, including a reduction-in-force in the U.S. and Brazil. In 2014, we also recorded restructuring charges related to cost reduction actions that included a reduction-in-force in the U.S and Brazil. |

|     |                                                                                                                                                                                                                                       |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (F) | During 2015, we recognized a $10 million net gain related to the settlement of a customer dispute in our Global Operations segment. The $10 million net gain for the settlement included restructuring charges of $4 million. |

|     |                                                                                                                                                                                                                                                                                    |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (G) | During 2015, we recorded $6 million in inventory charges to right size the Brazil Truck business. During 2014, we recorded approximately $29 million in charges, primarily related to inventory, to right size the Brazil Truck business in our Global Operations segment. |

|     |                                                                                                                                                                                                                                                                                                                                                                                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (H) | During 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.  During 2014, we recorded $12 million of unamortized debt issuance costs and other charges associated with the repurchase of our 2014 Convertible Notes. |

|     |                                                                             |
|-----|-----------------------------------------------------------------------------|
| (I) | During 2016, we received a $15 million one-time fee from a third party. |

----

----

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                    | Payments Due by Year Ending October 31,   |
| (in millions)                                           | Total |   | 2017 |   | 2018-2019 |   | 2020-2021 |   | 2022+ |
| Type of contractual obligation:                         |   |   |   |   |   |   |   |   |   |
| Long-term debt obligations(A)                           | $ | 4,963 |  |   | $ | 899 |  |   | $ | 1,604 |  |   | $ | 1,034 |  |   | $ | 1,426 |  |
| Interest on long-term debt(B)                           | 1,308 |  |   | 256 |  |   | 431 |  |   | 294 |  |   | 327 |  |
| Financing arrangements and capital lease obligations(C) | 49 |  |   | 10 |  |   | 19 |  |   | 18 |  |   | 2 |  |
| Operating lease obligations(D)                          | 216 |  |   | 52 |  |   | 81 |  |   | 62 |  |   | 21 |  |
| Purchase obligations(E)                                 | 78 |  |   | 4 |  |   | 47 |  |   | 24 |  |   | 3 |  |
| Total                                                   | $ | 6,614 |  |   | $ | 1,221 |  |   | $ | 2,182 |  |   | $ | 1,432 |  |   | $ | 1,779 |  |

|     |                                                                                                                                                                       |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | Excludes offsetting discounts and issuance costs of $101 million. For more information, see Note 9, Debt, to the accompanying consolidated financial statements. |

|     |                                                                                                                                                                                                                                                            |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (B) | Amounts represent estimated contractual interest payments on outstanding debt. Rates in effect as of October 31, 2016 are used for variable rate debt. For more information, see Note 9, Debt, to the accompanying consolidated financial statements. |

|     |                                                                                                                                                                                                                                                                                                                                        |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (C) | We lease many of our facilities as well as other property and equipment under financing arrangements and capital leases in the normal course of business, including $7 million of interest obligations. For more information, see Note 6, Property and Equipment, Net, to the accompanying consolidated financial statements. |

|     |                                                                                                                                                                                                                                                                                           |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (D) | Lease obligations for facility closures are included in operating leases. Future operating lease obligations are not recognized in our Consolidated Balance Sheets. For more information, see Note 6, Property and Equipment, Net, to the accompanying consolidated financial statements. |

|     |                                                                                                                                                                                                          |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (E) | Purchase obligations include various commitments in the ordinary course of business that would include the purchase of goods or services and they are not recognized in our Consolidated Balance Sheets. |

----

----

|         |                                                                                                                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the nature of the estimate or assumption is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, or |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| • | the impact of the estimate or assumption on financial condition or operating performance is material. |

----

|         |                                                                                                                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Plant rationalization activities impact the determination of whether a plan curtailment or settlement has occurred. Key considerations include, but are not limited to, expected future service credit, the remaining years of recall rights of the workforce, and the extent to which minimum service requirements (in the case of healthcare benefits) have been met. |

|         |                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The discount rates are obtained by matching the anticipated future benefit payments for the plans to a high quality corporate bond yield curve to establish a weighted average discount rate for each plan. |

|         |                                                                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Health care cost trend rates are developed based upon historical retiree cost trend data, short term health care outlook, and industry benchmarks and surveys. The inflation assumptions used are based upon both our specific trends and nationally expected trends. |

|         |                                                                                                                                                                                                                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The expected return on plan assets is derived from historical plan returns, expected long-term performance of asset classes, asset allocations, input from an external pension investment advisor, and risks and other factors adjusted for our specific investment strategy. The focus is on long-term trends and provides for the consideration of recent plan performance. |

|         |                                                                       |
|---------|-----------------------------------------------------------------------|
| • | Retirement rates are based upon actual and projected plan experience. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Mortality rates are developed from actual and projected plan experience for the U.S. postretirement benefit plans. Our actuaries conduct an experience study every five years as part of the process to select a best estimate of mortality. We consider both standard mortality tables and improvement factors as well as the plans’ actual experience when selecting a best estimate. During 2015, we conducted a new experience study as scheduled and, as a result, updated our mortality assumptions. |

|         |                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------|
| • | The rate of compensation increase reflects our long-term actual experience and our projected future increases. |

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                       | October 31, 2016 |   | 2017 Expense |
|                       | Obligations |   |   |   |   |
| (in millions)              | Pension |   | OPEB |   | Pension |   | OPEB |
| Discount rate:             |   |   |   |   |   |   |   |
| Increase of 1.0%           | $ | (346 | ) |   | $ | (170 | ) |   | $ | 3 |  |   | $ | — |  |
| Decrease of 1.0%           | 407 |  |   | 202 |  |   | (5 | ) |   | — |  |
| Expected return on assets: |   |   |   |   |   |   |   |
| Increase of 1.0%           | NA |  |   | NA |  |   | (22 | ) |   | (3 | ) |
| Decrease of 1.0%           | NA |  |   | NA |  |   | 22 |  |   | 3 |  |

----

----

----

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|              |                      |
|--------------|----------------------|
| Item 8. | Financial Statements |

|                                                                                                       |
|-------------------------------------------------------------------------------------------------------|
|                                                                                                       |  |
|                                                                                                  | Page |
| Report of Independent Registered Public Accounting Firm                                               | 62 |
| Consolidated Statements of Operations for the years ended October 31, 2016, 2015, and 2014            | 64 |
| Consolidated Statements of Comprehensive Loss for the years ended October 31, 2016, 2015, and 2014    | 65 |
| Consolidated Balance Sheets as of October 31, 2016 and 2015                                           | 66 |
| Consolidated Statements of Cash Flows for the years ended October 31, 2016, 2015, and 2014            | 67 |
| Consolidated Statements of Stockholders' Deficit for the years ended October 31, 2016, 2015, and 2014 | 68 |

|                                            |
|--------------------------------------------|
|                                            |  |  |
| Notes to Consolidated Financial Statements |   |
| 1                                          | Summary of Significant Accounting Policies | 69 |
| 2                                          | Restructurings and Impairments | 81 |
| 3                                          | Finance Receivables | 83 |
| 4                                          | Allowance for Doubtful Accounts | 85 |
| 5                                          | Inventories | 86 |
| 6                                          | Property and Equipment, Net | 87 |
| 7                                          | Goodwill and Other Intangible Assets, Net | 88 |
| 8                                          | Investments in Non-consolidated Affiliates | 90 |
| 9                                          | Debt | 91 |
| 10                                         | Postretirement Benefits | 99 |
| 11                                         | Income Taxes | 107 |
| 12                                         | Fair Value Measurements | 110 |
| 13                                         | Financial Instruments and Commodity Contracts | 114 |
| 14                                         | Commitments and Contingencies | 116 |
| 15                                         | Segment Reporting | 124 |
| 16                                         | Stockholders' Deficit | 127 |
| 17                                         | Earnings (Loss) Per Share Attributable to Navistar International Corporation | 130 |
| 18                                         | Stock-based Compensation Plans | 131 |
| 19                                         | Supplemental Cash Flow Information | 138 |
| 20                                         | Condensed Consolidating Guarantor and Non-guarantor Financial Information | 139 |
| 21                                         | Selected Quarterly Financial Data (Unaudited) | 145 |

----

----

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |
|                                                                            | For the Years Ended October 31, |
| (in millions, except per share data)                                            | 2016 |  | 2015 |   | 2014 |
| Sales and revenues                                                              |   |   |   |   |   |
| Sales of manufactured products, net                                             | $ | 7,976 |  |   | $ | 9,995 |  |   | $ | 10,653 |  |
| Finance revenues                                                                | 135 |  |   | 145 |  |   | 153 |  |
| Sales and revenues, net                                                         | 8,111 |  |   | 10,140 |  |   | 10,806 |  |
| Costs and expenses                                                              |   |   |   |   |   |
| Costs of products sold                                                          | 6,812 |  |   | 8,670 |  |   | 9,534 |  |
| Restructuring charges                                                           | 10 |  |   | 76 |  |   | 42 |  |
| Asset impairment charges                                                        | 27 |  |   | 30 |  |   | 183 |  |
| Selling, general and administrative expenses                                    | 802 |  |   | 908 |  |   | 979 |  |
| Engineering and product development costs                                       | 247 |  |   | 288 |  |   | 331 |  |
| Interest expense                                                                | 327 |  |   | 307 |  |   | 314 |  |
| Other income, net                                                               | (76 | ) |   | (30 | ) |   | (12 | ) |
| Total costs and expenses                                                        | 8,149 |  |   | 10,249 |  |   | 11,371 |  |
| Equity in income of non-consolidated affiliates                                 | 6 |  |   | 6 |  |   | 9 |  |
| Loss from continuing operations before income taxes                             | (32 | ) |   | (103 | ) |   | (556 | ) |
| Income tax expense                                                              | (33 | ) |   | (51 | ) |   | (26 | ) |
| Loss from continuing operations                                                 | (65 | ) |   | (154 | ) |   | (582 | ) |
| Income from discontinued operations, net of tax                                 | — |  |   | 3 |  |   | 3 |  |
| Net loss                                                                        | (65 | ) |  | (151 | ) |   | (579 | ) |
| Less: Net income attributable to non-controlling interests                      | 32 |  |   | 33 |  |   | 40 |  |
| Net loss attributable to Navistar International Corporation                     | $ | (97 | ) |   | $ | (184 | ) |   | $ | (619 | ) |
|                                                                            |   |   |  |   |   |
| Amounts attributable to Navistar International Corporation common shareholders: |   |   |  |  |   |   |
| Loss from continuing operations, net of tax                                     | $ | (97 | ) |   | $ | (187 | ) |   | $ | (622 | ) |
| Income from discontinued operations, net of tax                                 | — |  |   | 3 |  |   | 3 |  |
| Net loss                                                                        | $ | (97 | ) |   | $ | (184 | ) |   | $ | (619 | ) |
|                                                                            |   |   |   |   |   |
| Earnings (loss) per share:                                                      |   |   |   |   |   |
| Basic:                                                                          |   |   |   |   |   |
| Continuing operations                                                           | $ | (1.19 | ) |   | $ | (2.29 | ) |   | $ | (7.64 | ) |
| Discontinued operations                                                         | — |  |   | 0.04 |  |   | 0.04 |  |
|                                                                            | $ | (1.19 | ) |   | $ | (2.25 | ) |   | $ | (7.60 | ) |
|                                                                            |  |  |   |   |   |   |
| Diluted:                                                                        |  |  |   |   |   |   |
| Continuing operations                                                           | $ | (1.19 | ) |   | $ | (2.29 | ) |   | $ | (7.64 | ) |
| Discontinued operations                                                         | — |  |   | 0.04 |  |   | 0.04 |  |
|                                                                            | $ | (1.19 | ) |   | $ | (2.25 | ) |   | $ | (7.60 | ) |
|                                                                            |   |   |   |   |   |
| Weighted average shares outstanding:                                            |   |   |   |   |   |
| Basic                                                                           | 81.7 |  |   | 81.6 |  |   | 81.4 |  |
| Diluted                                                                         | 81.7 |  |   | 81.6 |  |   | 81.4 |  |

----

|                                                                             |
|-----------------------------------------------------------------------------|
|                                                                             |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                               | For the Years Ended October 31, |
| 2016                                                                        |   | 2015 |   | 2014 |
| Net loss                                                                    | $ | (65 | ) |   | $ | (151 | ) |   | $ | (579 | ) |
| Other comprehensive income (loss):                                          |   |   |   |   |   |
| Foreign currency translation adjustment                                     | 7 |  |   | (160 | ) |   | (52 | ) |
| Unrealized gain on marketable securities                                    | — |  |   | — |  |   | 1 |  |
| Defined benefit plans, net of tax                                           | (46 | ) |   | (178 | ) |   | (388 | ) |
| Total other comprehensive loss                                              | (39 | ) |   | (338 | ) |   | (439 | ) |
| Comprehensive loss                                                          | (104 | ) |   | (489 | ) |   | (1,018 | ) |
| Less: Net income attributable to non-controlling interests                  | 32 |  |   | 33 |  |   | 40 |  |
| Total comprehensive loss attributable to Navistar International Corporation | $ | (136 | ) |   | $ | (522 | ) |   | $ | (1,058 | ) |

----

|                                                                                                      |
|------------------------------------------------------------------------------------------------------|
|                                                                                                      |  |  |  |  |  |  |  |
|                                                                                                 | As of October 31, |
| (in millions, except per share data)                                                                 | 2016 |   | 2015 |
| ASSETS                                                                                               |   |   |   |
| Current assets                                                                                       |   |   |   |
| Cash and cash equivalents                                                                            | $ | 804 |  |   | $ | 912 |  |
| Restricted cash and cash equivalents                                                                 | 64 |  |   | — |  |
| Marketable securities                                                                                | 46 |  |   | 159 |  |
| Trade and other receivables, net                                                                     | 276 |  |   | 429 |  |
| Finance receivables, net                                                                             | 1,457 |  |   | 1,779 |  |
| Inventories, net                                                                                     | 944 |  |   | 1,135 |  |
| Deferred taxes, net                                                                                  | — |  |   | 36 |  |
| Other current assets                                                                                 | 168 |  |   | 170 |  |
| Total current assets                                                                                 | 3,759 |  |   | 4,620 |  |
| Restricted cash                                                                                      | 48 |  |   | 121 |  |
| Trade and other receivables, net                                                                     | 16 |  |   | 13 |  |
| Finance receivables, net                                                                             | 220 |  |   | 216 |  |
| Investments in non-consolidated affiliates                                                           | 53 |  |   | 66 |  |
| Property and equipment, net                                                                          | 1,241 |  |   | 1,345 |  |
| Goodwill                                                                                             | 38 |  |   | 38 |  |
| Intangible assets, net                                                                               | 53 |  |   | 57 |  |
| Deferred taxes, net                                                                                  | 161 |  |   | 128 |  |
| Other noncurrent assets                                                                              | 64 |  |   | 45 |  |
| Total assets                                                                                         | $ | 5,653 |  |   | $ | 6,649 |  |
| LIABILITIES and STOCKHOLDERS’ DEFICIT                                                          |   |   |   |
| Liabilities                                                                                          |   |   |   |
| Current liabilities                                                                                  |   |   |   |
| Notes payable and current maturities of long-term debt                                               | $ | 907 |  |   | $ | 1,108 |  |
| Accounts payable                                                                                     | 1,113 |  |   | 1,301 |  |
| Other current liabilities                                                                            | 1,183 |  |   | 1,377 |  |
| Total current liabilities                                                                            | 3,203 |  |   | 3,786 |  |
| Long-term debt                                                                                       | 3,997 |  |   | 4,147 |  |
| Postretirement benefits liabilities                                                                  | 3,023 |  |   | 2,995 |  |
| Deferred taxes, net                                                                                  | — |  |   | 14 |  |
| Other noncurrent liabilities                                                                         | 723 |  |   | 867 |  |
| Total liabilities                                                                                    | 10,946 |  |   | 11,809 |  |
| Stockholders’ deficit                                                                          |   |   |   |
| Series D convertible junior preference stock                                                    | 2 |  |   | 2 |  |
| Common stock, $0.10 par value per share (86.8 shares issued and 220 shares authorized at both dates) | 9 |  |   | 9 |  |
| Additional paid-in capital                                                                           | 2,499 |  |   | 2,499 |  |
| Accumulated deficit                                                                                  | (4,963 | ) |   | (4,866 | ) |
| Accumulated other comprehensive loss                                                                 | (2,640 | ) |   | (2,601 | ) |
| Common stock held in treasury, at cost (5.2 and 5.3 shares, respectively)                            | (205 | ) |   | (210 | ) |
| Total stockholders’ deficit attributable to Navistar International Corporation                 | (5,298 | ) |   | (5,167 | ) |
| Stockholders’ equity attributable to non-controlling interests                                 | 5 |  |   | 7 |  |
| Total stockholders’ deficit                                                                    | (5,293 | ) |   | (5,160 | ) |
| Total liabilities and stockholders’ deficit                                                    | $ | 5,653 |  |   | $ | 6,649 |  |

----

|                                                                                           |
|-------------------------------------------------------------------------------------------|
|                                                                                           |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                      | For the Years Ended October 31, |
| (in millions)                                                                             | 2016 |   | 2015 |   | 2014 |
| Cash flows from operating activities                                                      |   |   |   |   |   |
| Net loss                                                                                  | $ | (65 | ) |   | $ | (151 | ) |   | $ | (579 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |   |   |   |   |   |
| Depreciation and amortization                                                             | 146 |  |   | 205 |  |   | 227 |  |
| Depreciation of equipment leased to others                                                | 79 |  |   | 76 |  |   | 105 |  |
| Deferred taxes, including change in valuation allowance                                   | (9 | ) |   | (18 | ) |   | (15 | ) |
| Asset impairment charges                                                                  | 27 |  |   | 30 |  |   | 183 |  |
| Loss on sales of investments and businesses, net                                          | 2 |  |   | — |  |   | — |  |
| Amortization of debt issuance costs and discount                                          | 37 |  |   | 37 |  |   | 49 |  |
| Stock-based compensation                                                                  | 16 |  |   | 10 |  |   | 16 |  |
| Provision for doubtful accounts, net of recoveries                                        | 13 |  |   | (9 | ) |   | 20 |  |
| Equity in income of non-consolidated affiliates, net of dividends                         | 6 |  |   | 6 |  |   | 3 |  |
| Write-off of debt issuance cost and discount                                              | — |  |   | 4 |  |   | 1 |  |
| Other non-cash operating activities                                                       | (12 | ) |   | (35 | ) |   | (41 | ) |
| Changes in other assets and liabilities, exclusive of the effects of businesses disposed: |   |   |   |   |   |
| Trade and other receivables                                                               | 134 |  |   | 103 |  |   | 55 |  |
| Finance receivables                                                                       | 251 |  |   | (58 | ) |   | (33 | ) |
| Inventories                                                                               | 205 |  |   | 131 |  |   | (129 | ) |
| Accounts payable                                                                          | (193 | ) |   | (208 | ) |   | 84 |  |
| Other assets and liabilities                                                              | (370 | ) |   | (77 | ) |   | (282 | ) |
| Net cash provided by (used in) operating activities                                       | 267 |  |   | 46 |  |   | (336 | ) |
| Cash flows from investing activities                                                      |   |   |   |   |   |
| Purchases of marketable securities                                                        | (485 | ) |   | (887 | ) |   | (1,812 | ) |
| Sales of marketable securities                                                            | 555 |  |   | 1,247 |  |   | 1,576 |  |
| Maturities of marketable securities                                                       | 43 |  |   | 86 |  |   | 461 |  |
| Net change in restricted cash and cash equivalents                                        | 5 |  |   | 42 |  |   | (80 | ) |
| Capital expenditures                                                                      | (116 | ) |   | (115 | ) |   | (88 | ) |
| Purchases of equipment leased to others                                                   | (132 | ) |   | (83 | ) |   | (189 | ) |
| Proceeds from sales of property and equipment                                             | 24 |  |   | 22 |  |   | 43 |  |
| Investments in non-consolidated affiliates                                                | (2 | ) |   | 1 |  |   | — |  |
| Proceeds from sales of affiliates                                                         | 41 |  |   | 7 |  |   | 14 |  |
| Acquisition of intangibles                                                                | — |  |   | (4 | ) |   | — |  |
| Net cash provided by (used in) investing activities                                       | (67 | ) |   | 316 |  |   | (75 | ) |
| Cash flows from financing activities                                                      |   |   |   |   |   |
| Proceeds from issuance of securitized debt                                                | 413 |  |   | 549 |  |   | 82 |  |
| Principal payments on securitized debt                                                    | (346 | ) |   | (501 | ) |   | (126 | ) |
| Net change in secured revolving credit facilities                                         | (148 | ) |   | (22 | ) |   | 173 |  |
| Proceeds from issuance of non-securitized debt                                            | 222 |  |   | 1,212 |  |   | 663 |  |
| Principal payments on non-securitized debt                                                | (315 | ) |   | (990 | ) |   | (862 | ) |
| Net change in notes and debt outstanding under revolving credit facilities                | (149 | ) |   | (106 | ) |   | 255 |  |
| Principal payments under financing arrangements and capital lease obligations             | (3 | ) |   | (2 | ) |   | (20 | ) |
| Debt issuance costs                                                                       | (16 | ) |   | (25 | ) |   | (15 | ) |
| Proceeds from financed lease obligations                                                  | 22 |  |   | 33 |  |   | 60 |  |
| Proceeds from exercise of stock options                                                   | — |  |   | 1 |  |   | 19 |  |
| Dividends paid by subsidiaries to non-controlling interest                                | (34 | ) |   | (36 | ) |   | (50 | ) |
| Other financing activities                                                                | 1 |  |   | (15 | ) |   | — |  |
| Net cash provided by (used in) financing activities                                       | (353 | ) |   | 98 |  |   | 179 |  |
| Effect of exchange rate changes on cash and cash equivalents                              | 45 |  |   | (45 | ) |   | (26 | ) |
| Increase (decrease) in cash and cash equivalents                                          | (108 | ) |   | 415 |  |   | (258 | ) |
| Cash and cash equivalents at beginning of the year                                        | 912 |  |   | 497 |  |   | 755 |  |
| Cash and cash equivalents at end of the year                                              | $ | 804 |  |   | $ | 912 |  |   | $ | 497 |  |

----

|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                           | Series D ConvertibleJuniorPreference Stock |   | CommonStock |   | Additional Paid-inCapital |   | AccumulatedDeficit |   | AccumulatedOtherComprehensiveLoss |   | CommonStockHeld inTreasury, at cost |   | Stockholders'Equity Attributableto Non-controllingInterests |   | Total |
| Balance as of October 31, 2013                                                          | $ | 3 |  |   | $ | 9 |  |   | $ | 2,477 |  |   | $ | (4,063 | ) |   | $ | (1,824 | ) |   | $ | (251 | ) |   | $ | 44 |  |   | $ | (3,605 | ) |
| Net income (loss)                                                                       | — |  |   | — |  |   | — |  |   | (619 | ) |   | — |  |   | — |  |   | 40 |  |   | (579 | ) |
| Total other comprehensive loss                                                          | — |  |   | — |  |   | — |  |   | — |  |   | (439 | ) |   | — |  |   | — |  |   | (439 | ) |
| Transfer from redeemable equity securities upon exercise or expiration of stock options | — |  |   | — |  |   | 2 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 2 |  |
| Stock-based compensation                                                                | — |  |   | — |  |   | 10 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 10 |  |
| Stock ownership programs                                                                | — |  |   | — |  |   | (12 | ) |   | — |  |   | — |  |   | 30 |  |   | — |  |   | 18 |  |
| Equity component of convertible debt instruments, net of tax expense of $16             | — |  |   | — |  |   | 27 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 27 |  |
| Equity component of repurchased convertible debt instruments, net of tax benefit of $3  | — |  |   | — |  |   | (5 | ) |   | — |  |   | — |  |   | — |  |   | — |  |   | (5 | ) |
| Cash dividends paid to non-controlling interest                                         | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (50 | ) |   | (50 | ) |
| Other                                                                                   | — |  |   | — |  |   | 1 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 1 |  |
| Balance as of October 31, 2014                                                          | $ | 3 |  |   | $ | 9 |  |   | $ | 2,500 |  |   | $ | (4,682 | ) |   | $ | (2,263 | ) |   | $ | (221 | ) |   | $ | 34 |  |   | $ | (4,620 | ) |
| Net income (loss)                                                                       | — |  |   | — |  |   | — |  |   | (184 | ) |   | — |  |   | — |  |   | 33 |  |   | (151 | ) |
| Total other comprehensive loss                                                          | — |  |   | — |  |   | — |  |   | — |  |   | (338 | ) |   | — |  |   | — |  |   | (338 | ) |
| Transfer from redeemable equity securities upon exercise or expiration of stock options | — |  |   | — |  |   | 2 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 2 |  |
| Stock-based compensation                                                                | — |  |   | — |  |   | 11 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 11 |  |
| Stock ownership programs                                                                | — |  |   | — |  |   | (11 | ) |   | — |  |   | — |  |   | 11 |  |   | — |  |   | — |  |
| Cash dividends paid to non-controlling interest                                         | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (36 | ) |   | (36 | ) |
| Series D convertible junior preference stock converted to common stock                  | (1 | ) |   | — |  |   | 1 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Acquisition of remaining ownership interest from non-controlling interest holder        | — |  |   | — |  |   | (4 | ) |   | — |  |   | — |  |   | — |  |   | (23 | ) |   | (27 | ) |
| Other                                                                                   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (1 | ) |   | (1 | ) |
| Balance as of October 31, 2015                                                          | $ | 2 |  |   | $ | 9 |  |   | $ | 2,499 |  |   | $ | (4,866 | ) |   | $ | (2,601 | ) |   | $ | (210 | ) |   | $ | 7 |  |   | $ | (5,160 | ) |
| Net income (loss)                                                                       | — |  |   | — |  |   | — |  |   | (97 | ) |   | — |  |   | — |  |   | 32 |  |   | (65 | ) |
| Total other comprehensive loss                                                          | — |  |   | — |  |   | — |  |   | — |  |   | (39 | ) |   | — |  |   | — |  |   | (39 | ) |
| Stock-based compensation                                                                | — |  |   | — |  |   | 4 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 4 |  |
| Stock ownership programs                                                                | — |  |   | — |  |   | (5 | ) |   | — |  |   | — |  |   | 5 |  |   | — |  |   | — |  |
| Cash dividends paid to non-controlling interest                                         | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (34 | ) |   | (34 | ) |
| Acquisition of remaining ownership interest from non-controlling interest holder        | — |  |   | — |  |   | 1 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 1 |  |
| Balance as of October 31, 2016                                                          | $ | 2 |  |   | $ | 9 |  |   | $ | 2,499 |  |   | $ | (4,963 | ) |   | $ | (2,640 | ) |   | $ | (205 | ) |   | $ | 5 |  |   | $ | (5,293 | ) |

----

----

----

----

|         |                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Retail notes—Retail notes primarily consist of fixed rate loans to commercial customers to facilitate their purchase of new and used trucks, trailers, and related equipment. |

|         |                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Finance leases—Finance leases consist of direct financing leases to commercial customers for acquisition of new and used trucks, trailers, and related equipment. |

|         |                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Wholesale notes—Wholesale notes primarily consist of variable rate loans to our dealers for the purchase of new and used trucks, trailers, and related equipment. |

|         |                                                                                                                                            |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------|
| • | Retail accounts—Retail accounts consist of short-term accounts receivable that finance the sale of products to commercial customers. |

|         |                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Wholesale accounts—Wholesale accounts consist of short-term accounts receivable primarily related to the sales of items other than trucks, trailers, and related equipment (e.g. service parts) to dealers. |

----

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |  |  |  |  |
|                            | For the Years Ended October 31, |
| (in millions)                   | 2016 |   | 2015 |   | 2014 |
| Balance at beginning of period  | $ | 110 |  |   | $ | 43 |  |   | $ | 17 |  |
| Additions charged to expense(A) | 187 |  |   | 117 |  |   | 52 |  |
| Deductions/Other adjustments(B) | (89 | ) |   | (50 | ) |   | (26 | ) |
| Balance at end of period        | $ | 208 |  |   | $ | 110 |  |   | $ | 43 |  |

|     |                                                                                          |
|-----|------------------------------------------------------------------------------------------|
| (A) | Additions charged to expense reflects the increase of the reserve for inventory on hand. |

|     |                                                                                                                                                          |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| (B) | Deductions/Other adjustments include reductions of the reserve related to the sale of units and our Mexican subsidiary currency translation adjustments. |

----

|                                    |
|------------------------------------|
|                                    |  |
|                               | Years |
| Buildings                          | 20 - 50 |
| Leasehold improvements             | 3 - 20 |
| Machinery and equipment            | 3 - 12 |
| Furniture, fixtures, and equipment | 3 - 15 |
| Equipment leased to others         | 1 - 10 |

----

|                                 |
|---------------------------------|
|                                 |  |
|                            | Years |
| Customer base and relationships | 3 - 15 |
| Trademarks                      | 20 |
| Other                           | 3 - 18 |

----

----

----

|                                                                   |
|-------------------------------------------------------------------|
|                                                                   |  |  |  |  |  |  |  |  |  |  |  |
|                                                              | For the Years Ended October 31, |
| (in millions)                                                     | 2016 |   | 2015 |   | 2014 |
| Balance at beginning of period                                    | $ | 994 |  |   | $ | 1,197 |  |   | $ | 1,349 |  |
| Costs accrued and revenues deferred(B)                            | 186 |  |   | 260 |  |   | 354 |  |
| Currency translation adjustment                                   | 3 |  |   | (9 | ) |   | (4 | ) |
| Adjustments to pre-existing warranties(A)                         | 77 |  |   | 1 |  |   | 55 |  |
| Payments and revenues recognized(B)                               | (442 | ) |   | (455 | ) |   | (557 | ) |
| Balance at end of period                                          | 818 |  |   | 994 |  |   | 1,197 |  |
| Less: Current portion                                             | 396 |  |   | 429 |  |   | 535 |  |
| Noncurrent accrued product warranty and deferred warranty revenue | $ | 422 |  |   | $ | 565 |  |   | $ | 662 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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) | During 2016, we identified an error in amounts included in Costs accrued and revenues deferred and Payments and revenues recognized for the year ended October 31, 2015. As a result, the respective amounts were reclassified by $36 million. The reclassification did not impact our Consolidated Statements of Operations or our Consolidated Balance Sheets. |

----

----

----

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                | Balance at October 31, 2015 |   | Additions |   | Payments |   | Adjustments |   | Balance at October 31, 2016 |
| Employee termination charges | $ | 62 |  |   | $ | 4 |  |   | $ | (63 | ) |   | $ | 2 |  |   | $ | 5 |  |
| Lease vacancy                | 5 |  |   | — |  |   | (4 | ) |   | — |  |   | 1 |  |
| Other                        | 1 |  |   | — |  |   | — |  |   | — |  |   | 1 |  |
| Restructuring liability      | $ | 68 |  |   | $ | 4 |  |   | $ | (67 | ) |   | $ | 2 |  |   | $ | 7 |  |

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                | Balance atOctober 31, 2014 |   | Additions |   | Payments |   | Adjustments |   | Balance at October 31, 2015 |
| Employee termination charges | $ | 8 |  |   | $ | 68 |  |   | $ | (11 | ) |   | $ | (3 | ) |   | $ | 62 |  |
| Lease vacancy                | 11 |  |   | 3 |  |   | (8 | ) |   | (1 | ) |   | 5 |  |
| Other                        | 1 |  |   | — |  |   | (1 | ) |   | 1 |  |   | 1 |  |
| Restructuring liability      | $ | 20 |  |   | $ | 71 |  |   | $ | (20 | ) |   | $ | (3 | ) |   | $ | 68 |  |

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                | Balance atOctober 31, 2013 |   | Additions |   | Payments |   | Adjustments |   | Balance at October 31, 2014 |
| Employee termination charges | $ | 15 |  |   | $ | 15 |  |   | $ | (19 | ) |   | $ | (3 | ) |   | $ | 8 |  |
| Employee relocation costs    | — |  |   | 1 |  |   | (1 | ) |   | — |  |   | — |  |
| Lease vacancy                | 18 |  |   | — |  |   | (8 | ) |   | 1 |  |   | 11 |  |
| Other                        | 1 |  |   | 2 |  |   | (2 | ) |   | — |  |   | 1 |  |
| Restructuring liability      | $ | 34 |  |   | $ | 18 |  |   | $ | (30 | ) |   | $ | (2 | ) |   | $ | 20 |  |

----

----

|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |  |  |  |  |  |  |
|                                                            | For the Years Ended October 31, |
| (in millions)                                                   | 2016 |   | 2015 |   | 2014 |
| Goodwill impairment charge(A)                                   | $ | — |  |   | $ | — |  |   | $ | 142 |  |
| Intangible asset impairment charge                              | 1 |  |   | 7 |  |   | 7 |  |
| Other asset impairment charges related to continuing operations | 26 |  |   | 23 |  |   | 34 |  |
| Total asset impairment charges                                  | $ | 27 |  |   | $ | 30 |  |   | $ | 183 |  |

|     |                                                                              |
|-----|------------------------------------------------------------------------------|
| (A) | For more information, see Note 7, Goodwill and Other Intangible Assets, Net. |

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |
|                                  | As of October 31, |
| (in millions)                         | 2016 |   | 2015 |
| Retail portfolio                      | $ | 499 |  |   | $ | 554 |  |
| Wholesale portfolio                   | 1,199 |  |   | 1,467 |  |
| Total finance receivables             | 1,698 |  |   | 2,021 |  |
| Less: Allowance for doubtful accounts | 21 |  |   | 26 |  |
| Total finance receivables, net        | 1,677 |  |   | 1,995 |  |
| Less: Current portion, net(A)         | 1,457 |  |   | 1,779 |  |
| Noncurrent portion, net               | $ | 220 |  |   | $ | 216 |  |

|     |                                                                                                                                                                                                                                                |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | The current portion of finance receivables is computed based on contractual maturities. Actual cash collections typically vary from the contractual cash flows because of prepayments, extensions, delinquencies, credit losses, and renewals. |

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                 | Retail Portfolio |   | Wholesale Portfolio |   | Total |
| Due in:                       |   |   |   |   |   |
| 2017                          | $ | 294 |  |   | $ | 1,199 |  |   | $ | 1,493 |  |
| 2018                          | 106 |  |   | — |  |   | 106 |  |
| 2019                          | 77 |  |   | — |  |   | 77 |  |
| 2020                          | 43 |  |   | — |  |   | 43 |  |
| 2021                          | 14 |  |   | — |  |   | 14 |  |
| Thereafter                    | 3 |  |   | — |  |   | 3 |  |
| Gross finance receivables     | 537 |  |   | 1,199 |  |   | 1,736 |  |
| Less: Unearned finance income | 38 |  |   | — |  |   | 38 |  |
| Total finance receivables     | $ | 499 |  |   | $ | 1,199 |  |   | $ | 1,698 |  |

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |
|                                    | As of October 31, |
| (in millions)                           | 2016 |   | 2015 |   | 2014 |
| Retail notes and finance leases revenue | $ | 38 |  |   | $ | 48 |  |   | $ | 64 |  |
| Wholesale notes interest                | 107 |  |   | 97 |  |   | 80 |  |
| Operating lease revenue                 | 66 |  |   | 63 |  |   | 60 |  |
| Retail and wholesale accounts interest  | 24 |  |   | 33 |  |   | 28 |  |
| Gross finance revenues                  | 235 |  |   | 241 |  |   | 232 |  |
| Less: Intercompany revenues             | 100 |  |   | 96 |  |   | 79 |  |
| Finance revenues                        | $ | 135 |  |   | $ | 145 |  |   | $ | 153 |  |

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                    | For the Year Ended October 31, 2016 |
| (in millions)                                           | RetailPortfolio |   | WholesalePortfolio |   | Trade andOtherReceivables |   | Total |
| Allowance for doubtful accounts, at beginning of period | $ | 22 |  |   | $ | 4 |  |   | $ | 22 |  |   | $ | 48 |  |
| Provision for doubtful accounts, net of recoveries      | 8 |  |   | (2 | ) |   | 6 |  |   | 12 |  |
| Charge-off of accounts                                  | (9 | ) |   | — |  |   | (3 | ) |   | (12 | ) |
| Other(A)                                                | (2 | ) |   | — |  |   | 3 |  |   | 1 |  |
| Allowance for doubtful accounts, at end of period       | $ | 19 |  |   | $ | 2 |  |   | $ | 28 |  |   | $ | 49 |  |

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                    | For the Year Ended October 31, 2015 |
| (in millions)                                           | RetailPortfolio |   | WholesalePortfolio |   | Trade andOtherReceivables |   | Total |
| Allowance for doubtful accounts, at beginning of period | $ | 24 |  |   | $ | 3 |  |   | $ | 38 |  |   | $ | 65 |  |
| Provision for doubtful accounts, net of recoveries      | 6 |  |   | 1 |  |   | — |  |   | 7 |  |
| Charge-off of accounts                                  | (3 | ) |   | — |  |   | (5 | ) |   | (8 | ) |
| Other(A)                                                | (5 | ) |   | — |  |   | (11 | ) |   | (16 | ) |
| Allowance for doubtful accounts, at end of period       | $ | 22 |  |   | $ | 4 |  |   | $ | 22 |  |   | $ | 48 |  |

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                    | For the Year Ended October 31, 2014 |
| (in millions)                                           | Retail Portfolio |   | Wholesale Portfolio |   | Trade and Other Receivables |   | Total |
| Allowance for doubtful accounts, at beginning of period | $ | 21 |  |   | $ | 2 |  |   | $ | 37 |  |   | $ | 60 |  |
| Provision for doubtful accounts, net of recoveries      | 13 |  |   | 1 |  |   | 10 |  |   | 24 |  |
| Charge-off of accounts                                  | (9 | ) |   | — |  |   | (6 | ) |   | (15 | ) |
| Other(A)                                                | (1 | ) |   | — |  |   | (3 | ) |   | (4 | ) |
| Allowance for doubtful accounts, at end of period       | $ | 24 |  |   | $ | 3 |  |   | $ | 38 |  |   | $ | 65 |  |

|     |                                                   |
|-----|---------------------------------------------------|
| (A) | Amounts include impact from currency translation. |

----

|                                                             |
|-------------------------------------------------------------|
|                                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                        | October 31, 2016 |   | October 31, 2015 |
| (in millions)                                               | RetailPortfolio |   | WholesalePortfolio |   | Total |   | RetailPortfolio |   | WholesalePortfolio |   | Total |
| Impaired finance receivables with specific loss reserves    | $ | 15 |  |   | $ | — |  |   | $ | 15 |  |   | $ | 21 |  |   | $ | — |  |   | $ | 21 |  |
| Impaired finance receivables without specific loss reserves | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Specific loss reserves on impaired finance receivables      | 8 |  |   | — |  |   | 8 |  |   | 9 |  |   | — |  |   | 9 |  |
| Finance receivables on non-accrual status                   | 15 |  |   | — |  |   | 15 |  |   | 21 |  |   | — |  |   | 21 |  |

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |  |  |  |  |
|                                | As of October 31, 2016 |
| (in millions)                       | RetailPortfolio |   | WholesalePortfolio |   | Total |
| Current, and up to 30 days past due | $ | 449 |  |   | $ | 1,198 |  |   | $ | 1,647 |  |
| 30-90 days past due                 | 37 |  |   | — |  |   | 37 |  |
| Over 90 days past due               | 13 |  |   | 1 |  |   | 14 |  |
| Total finance receivables           | $ | 499 |  |   | $ | 1,199 |  |   | $ | 1,698 |  |

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |
|                   | As of October 31, |
| (in millions)          | 2016 |   | 2015 |
| Finished products      | $ | 678 |  |   | $ | 837 |  |
| Work in process        | 46 |  |   | 34 |  |
| Raw materials          | 220 |  |   | 264 |  |
| Total inventories, net | $ | 944 |  |   | $ | 1,135 |  |

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |
|                                            | As of October 31, |
| (in millions)                                   | 2016 |   | 2015 |
| Land                                            | $ | 89 |  |   | $ | 87 |  |
| Buildings                                       | 562 |  |   | 493 |  |
| Leasehold improvements                          | 49 |  |   | 56 |  |
| Machinery and equipment                         | 2,013 |  |   | 2,097 |  |
| Furniture, fixtures, and equipment              | 477 |  |   | 478 |  |
| Equipment leased to others                      | 525 |  |   | 613 |  |
| Construction in progress                        | 79 |  |   | 67 |  |
| Total property and equipment, at cost           | 3,794 |  |   | 3,891 |  |
| Less: Accumulated depreciation and amortization | 2,553 |  |   | 2,546 |  |
| Property and equipment, net                     | $ | 1,241 |  |   | $ | 1,345 |  |

|                                                                                                |
|------------------------------------------------------------------------------------------------|
|                                                                                                |  |  |  |  |  |  |  |
|                                                                                           | As of October 31, |
| (in millions)                                                                                  | 2016 |   | 2015 |
| Equipment leased to others                                                                     | $ | 525 |  |   | $ | 613 |  |
| Less: Accumulated depreciation                                                                 | 193 |  |   | 220 |  |
| Equipment leased to others, net                                                                | $ | 332 |  |   | $ | 393 |  |
|                                                                                           |   |   |   |
| Buildings, machinery, and equipment under financing arrangements and capital lease obligations | $ | 61 |  |   | $ | 70 |  |
| Less: Accumulated depreciation and amortization                                                | 38 |  |   | 34 |  |
| Assets under financing arrangements and capital lease obligations, net                         | $ | 23 |  |   | $ | 36 |  |

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |
|                                       | For the Years Ended October 31, |
| (in millions)                              | 2016 |   | 2015 |   | 2014 |
| Depreciation expense                       | $ | 134 |  |   | $ | 190 |  |   | $ | 206 |  |
| Depreciation of equipment leased to others | 79 |  |   | 76 |  |   | 105 |  |
| Amortization expense                       | 5 |  |   | 5 |  |   | 3 |  |
| Interest capitalized                       | 3 |  |   | 1 |  |   | — |  |

----

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)          | FinancingArrangementsand CapitalLease Obligations  |   | OperatingLeases |   | Total |
| 2017                   | $ | 10 |  |   | $ | 52 |  |   | $ | 62 |  |
| 2018                   | 10 |  |   | 45 |  |   | 55 |  |
| 2019                   | 9 |  |   | 36 |  |   | 45 |  |
| 2020                   | 9 |  |   | 33 |  |   | 42 |  |
| 2021                   | 9 |  |   | 29 |  |   | 38 |  |
| Thereafter             | 2 |  |   | 21 |  |   | 23 |  |
|                   | 49 |  |   | $ | 216 |  |   | $ | 265 |  |
| Less: Interest portion | 7 |  |   |   |  |   |   |  |
| Total                  | $ | 42 |  |   |   |   |   |

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                        | Truck |   | Parts |   | Global Operations |   | Total   |
| As of October 31, 2013               | $ | — |  |   | $ | 38 |  |   | $ | 146 |  |   | $ | 184 |  |
| Impairments                          | — |  |   | — |  |   | (142 | ) |   | (142 | ) |
| Currency translation                 | — |  |   | — |  |   | (4 | ) |   | (4 | ) |
| As of October 31, 2014               | $ | — |  |   | $ | 38 |  |   | $ | — |  |   | $ | 38 |  |
| Impairments and currency translation | — |  |   | — |  |   | — |  |   | — |  |
| As of October 31, 2015               | $ | — |  |   | $ | 38 |  |   | $ | — |  |   | $ | 38 |  |
| Impairments and currency translation | — |  |   | — |  |   | — |  |   | — |  |
| As of October 31, 2016               | $ | — |  |   | $ | 38 |  |   | $ | — |  |   | $ | 38 |  |

----

|                          |
|--------------------------|
|                          |  |  |  |  |  |  |  |  |  |  |  |
|                     | As of October 31, 2016 |
| (in millions)            | CustomerBase andRelationships  |   | Trademarks, Patents and Other |   | Total  |
| Gross carrying value     | $ | 73 |  |   | $ | 121 |  |   | $ | 194 |  |
| Accumulated amortization | (65 | ) |   | (97 | ) |   | (162 | ) |
| Net of amortization      | $ | 8 |  |   | $ | 24 |  |   | $ | 32 |  |

|                          |
|--------------------------|
|                          |  |  |  |  |  |  |  |  |  |  |  |
|                     | As of October 31, 2015 |
| (in millions)            | CustomerBase andRelationships  |   | Trademarks, Patents and Other |   | Total  |
| Gross carrying value     | $ | 69 |  |   | $ | 89 |  |   | $ | 158 |  |
| Accumulated amortization | (58 | ) |   | (62 | ) |   | (120 | ) |
| Net of amortization      | $ | 11 |  |   | $ | 27 |  |   | $ | 38 |  |

|               |
|---------------|
|               |  |  |  |
| (in millions) | EstimatedAmortization |
| 2017          | $ | 13 |  |
| 2018          | 8 |  |
| 2019          | 4 |  |
| 2020          | 2 |  |
| 2021          | 1 |  |
| Thereafter    | 4 |  |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |
|                                             | (Unaudited) |
| (in millions)                                    | 2016 |   | 2015 |
| Assets:                                          |   |
| Current assets                                   | $ | 300 |  |   | $ | 240 |  |
| Noncurrent assets                                | 145 |  |   | 154 |  |
| Total assets                                     | $ | 445 |  |   | $ | 394 |  |
| Liabilities and equity:                          |   |   |   |
| Current liabilities                              | $ | 251 |  |   | $ | 195 |  |
| Noncurrent liabilities                           | 44 |  |   | 35 |  |
| Total liabilities                                | 295 |  |   | 230 |  |
| Partners' capital and stockholders' equity:      |   |   |   |
| NIC                                              | 62 |  |   | 68 |  |
| Third parties                                    | 88 |  |   | 96 |  |
| Total partners' capital and stockholders' equity | 150 |  |   | 164 |  |
| Total liabilities and equity                     | $ | 445 |  |   | $ | 394 |  |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |
|                                    | (Unaudited) |
| (in millions)                           | 2016 |   | 2015 |   | 2014 |
| Net sales                               | $ | 584 |  |   | $ | 554 |  |   | $ | 527 |  |
| Costs, expenses, and income tax expense | 571 |  |   | 536 |  |   | 500 |  |
| Net income                              | $ | 13 |  |   | $ | 18 |  |   | $ | 27 |  |

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |
| (in millions)                   | 2016 |   | 2015 |
| Receivables due from affiliates | $ | — |  |   | $ | 1 |  |
| Payables due to affiliates      | 22 |  |   | 30 |  |

----

|                                                                                                                                                                                          |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                          |  |  |  |  |  |  |  |
|                                                                                                                                                                                     | As of October 31, |
| (in millions)                                                                                                                                                                            | 2016 |  | 2015 |
| Manufacturing operations                                                                                                                                                                 |   |   |   |
| Senior Secured Term Loan Credit Facility, as amended, due 2020, net of unamortized discount of $14 and $17, respectively, and unamortized debt issuance costs of $7 and $9, respectively | $ | 1,009 |  |   | $ | 1,014 |  |
| 8.25% Senior Notes, due 2022, net of unamortized discount of $15 and $18, respectively, and unamortized debt issuance costs of $12 and $14, respectively                                 | 1,173 |  |   | 1,168 |  |
| 4.50% Senior Subordinated Convertible Notes, due 2018, net of unamortized discount of $10 and $14, respectively, and unamortized debt issuance costs of $1 and $2, respectively          | 189 |  |   | 184 |  |
| 4.75% Senior Subordinated Convertible Notes, due 2019, net of unamortized discount of $24 and $32, respectively, and unamortized debt issuance costs of $4 and $6, respectively          | 383 |  |   | 373 |  |
| Financing arrangements and capital lease obligations                                                                                                                                     | 42 |  |   | 49 |  |
| Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040, net of unamortized debt issuance costs of $5 at both dates                                                                    | 220 |  |   | 220 |  |
| Financed lease obligations                                                                                                                                                               | 52 |  |   | 111 |  |
| Other                                                                                                                                                                                    | 28 |  |   | 43 |  |
| Total Manufacturing operations debt                                                                                                                                                      | 3,096 |  |   | 3,162 |  |
| Less: Current portion                                                                                                                                                                    | 71 |  |   | 103 |  |
| Net long-term Manufacturing operations debt                                                                                                                                              | $ | 3,025 |  |   | $ | 3,059 |  |

|                                                                                                                                                                   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                   |  |  |  |  |  |  |  |
|                                                                                                                                                              | As of October 31, |
| (in millions)                                                                                                                                                     | 2016 |   | 2015 |
| Financial Services operations                                                                                                                                     |   |   |   |
| Asset-backed debt issued by consolidated SPEs, at fixed and variable rates, due serially through 2022, net of unamortized debt issuance costs of $6 at both dates | $ | 753 |  |   | $ | 864 |  |
| Bank credit facilities, at fixed and variable rates, due dates from 2017 through 2021, net of unamortized debt issuance costs of $3 and $1, respectively          | 861 |  |   | 1,062 |  |
| Commercial paper, at variable rates, program matures in 2017                                                                                                      | 96 |  |   | 86 |  |
| Borrowings secured by operating and finance leases, at various rates, due serially through 2021                                                                   | 98 |  |   | 81 |  |
| Total Financial Services operations debt                                                                                                                          | 1,808 |  |   | 2,093 |  |
| Less: Current portion                                                                                                                                             | 836 |  |   | 1,005 |  |
| Net long-term Financial Services operations debt                                                                                                                  | $ | 972 |  |   | $ | 1,088 |  |

----

----

----

----

----

----

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |
|                                                           | ManufacturingOperations   |   | FinancialServicesOperations |   | Total   |
| (in millions)                                                  |   |   |   |   |   |
| 2017                                                           | $ | 71 |  |   | $ | 836 |  |   | $ | 907 |  |
| 2018                                                           | 242 |  |   | 799 |  |   | 1,041 |  |
| 2019                                                           | 432 |  |   | 148 |  |   | 580 |  |
| 2020                                                           | 1,008 |  |   | 29 |  |   | 1,037 |  |
| 2021                                                           | 9 |  |   | 4 |  |   | 13 |  |
| Thereafter                                                     | 1,426 |  |   | 1 |  |   | 1,427 |  |
| Total debt                                                     | 3,188 |  |   | 1,817 |  |   | 5,005 |  |
| Less: Unamortized discount and unamortized debt issuance costs | 92 |  |   | 9 |  |   | 101 |  |
| Net debt                                                       | $ | 3,096 |  |   | $ | 1,808 |  |   | $ | 4,904 |  |

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           | Pension Benefits |   | Health and LifeInsurance Benefits |
| (in millions)                                  | 2016 |   | 2015 |   | 2016 |   | 2015 |
| Change in benefit obligations                  |   |   |   |   |   |   |   |
| Benefit obligations at beginning of year       | $ | 3,979 |  |   | $ | 4,041 |  |   | $ | 1,887 |  |   | $ | 1,957 |  |
| Service cost                                   | 9 |  |   | 13 |  |   | 5 |  |   | 6 |  |
| Interest on obligations                        | 118 |  |   | 142 |  |   | 58 |  |   | 71 |  |
| Actuarial loss (gain)                          | 225 |  |   | 146 |  |   | (138 | ) |   | (34 | ) |
| Contractual termination benefits               | 3 |  |   | (1 | ) |   | 4 |  |   | (1 | ) |
| Currency translation                           | (7 | ) |   | (53 | ) |   | — |  |   | — |  |
| Plan participants' contributions               | — |  |   | — |  |   | 34 |  |   | 31 |  |
| Subsidy receipts                               | — |  |   | — |  |   | 37 |  |   | 40 |  |
| Benefits paid                                  | (300 | ) |   | (309 | ) |   | (179 | ) |   | (183 | ) |
| Benefit obligations at end of year             | $ | 4,027 |  |   | $ | 3,979 |  |   | $ | 1,708 |  |   | $ | 1,887 |  |
| Change in plan assets                          |   |   |   |  |   |   |   |   |
| Fair value of plan assets at beginning of year | $ | 2,422 |  |   | $ | 2,627 |  |   | $ | 369 |  |   | $ | 415 |  |
| Actual return on plan assets                   | 79 |  |   | 27 |  |   | 3 |  |   | 3 |  |
| Currency translation                           | (6 | ) |   | (51 | ) |   | — |  |   | — |  |
| Employer contributions                         | 100 |  |   | 113 |  |   | 2 |  |   | 2 |  |
| Benefits paid                                  | (285 | ) |   | (294 | ) |   | (41 | ) |   | (51 | ) |
| Fair value of plan assets at end of year       | $ | 2,310 |  |   | $ | 2,422 |  |   | $ | 333 |  |   | $ | 369 |  |
| Funded status at year end                      | $ | (1,717 | ) |   | $ | (1,557 | ) |   | $ | (1,375 | ) |   | $ | (1,518 | ) |

|                                                                            |
|----------------------------------------------------------------------------|
|                                                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                       | Pension Benefits |   | Health and LifeInsurance Benefits |
| (in millions)                                                              | 2016 |   | 2015 |   | 2016 |   | 2015 |
| Amounts recognized in our Consolidated Balance Sheets consist of:          |   |   |   |  |   |   |   |   |
| Noncurrent asset                                                           | $ | 6 |  |   | $ | 13 |  |   | $ | — |  |   | $ | — |  |
| Current liability                                                          | (17 | ) |   | (15 | ) |   | (58 | ) |   | (78 | ) |
| Noncurrent liability                                                       | (1,706 | ) |   | (1,555 | ) |   | (1,317 | ) |   | (1,440 | ) |
| Net liability recognized                                                   | $ | (1,717 | ) |   | $ | (1,557 | ) |   | $ | (1,375 | ) |   | $ | (1,518 | ) |
|                                                                       |   |   |   |   |   |   |   |
| Amounts recognized in our accumulated other comprehensive loss consist of: |   |   |  |   |   |   |   |
| Net actuarial loss                                                         | $ | 2,442 |  |   | $ | 2,234 |  |   | $ | 472 |  |   | $ | 618 |  |
| Net prior service benefit                                                  | — |  |   | — |  |   | — |  |   | (1 | ) |
| Net amount recognized                                                      | $ | 2,442 |  |   | $ | 2,234 |  |   | $ | 472 |  |   | $ | 617 |  |

----

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |
|                            | As of October 31, |
| (in millions)                   | 2016 |   | 2015 |
| Projected benefit obligations   | $ | 3,946 |  |   | $ | 3,631 |  |
| Accumulated benefit obligations | 3,934 |  |   | 3,612 |  |
| Fair value of plan assets       | 2,224 |  |   | 2,061 |  |

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |
|                                  | For the Years Ended October 31, |
| (in millions)                         | 2016 |   | 2015 |   | 2014 |
| Pension expense                       | $ | 82 |  |   | $ | 69 |  |   | $ | 106 |  |
| Health and life insurance expense     | 71 |  |   | 81 |  |   | 54 |  |
| Total postretirement benefits expense | $ | 153 |  |   | $ | 150 |  |   | $ | 160 |  |

----

|                                                                                                      |
|------------------------------------------------------------------------------------------------------|
|                                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                 | Pension Benefits |   | Health and LifeInsurance Benefits |
| (in millions)                                                                                        | 2016 |   | 2015 |   | 2014 |   | 2016 |   | 2015 |   | 2014 |
| Service cost for benefits earned during the period                                                   | $ | 9 |  |   | $ | 13 |  |   | $ | 12 |  |   | $ | 5 |  |   | $ | 6 |  |   | $ | 5 |  |
| Interest on obligation                                                                               | 118 |  |   | 142 |  |   | 158 |  |   | 58 |  |   | 71 |  |   | 68 |  |
| Amortization of cumulative loss                                                                      | 104 |  |   | 97 |  |   | 94 |  |   | 31 |  |   | 39 |  |   | 16 |  |
| Amortization of prior service cost (benefit)                                                         | — |  |   | 1 |  |   | — |  |   | (1 | ) |   | (4 | ) |   | (4 | ) |
| Contractual termination benefits                                                                     | 3 |  |   | (1 | ) |   | 23 |  |   | 4 |  |   | (1 | ) |   | 2 |  |
| Premiums on pension insurance                                                                        | 15 |  |   | 11 |  |   | 12 |  |   | — |  |   | — |  |   | — |  |
| Expected return on assets                                                                            | (167 | ) |   | (194 | ) |   | (193 | ) |   | (26 | ) |   | (30 | ) |   | (33 | ) |
| Net periodic benefit expense                                                                         | $ | 82 |  |   | $ | 69 |  |   | $ | 106 |  |   | $ | 71 |  |   | $ | 81 |  |   | $ | 54 |  |
| Other Changes in plan assets and benefit obligations recognized in other comprehensive loss (income) |   |   |   |   |   |   |   |   |   |   |   |
| Actuarial net loss (gain)                                                                            | $ | 313 |  |   | $ | 312 |  |   | $ | 164 |  |   | $ | (115 | ) |   | $ | (7 | ) |   | $ | 326 |  |
| Amortization of cumulative loss                                                                      | (104 | ) |   | (97 | ) |   | (94 | ) |   | (31 | ) |   | (39 | ) |   | (16 | ) |
| Amortization of prior service benefit (cost)                                                         | — |  |   | (1 | ) |   | — |  |   | 1 |  |   | 4 |  |   | 4 |  |
| Currency translation                                                                                 | (1 | ) |   | — |  |   | 1 |  |   | — |  |   | — |  |   | — |  |
| Total recognized in other comprehensive loss (income)                                                | $ | 208 |  |   | $ | 214 |  |   | $ | 71 |  |   | $ | (145 | ) |   | $ | (42 | ) |   | $ | 314 |  |
| Total net postretirement benefits expense and other comprehensive loss (income)                      | $ | 290 |  |   | $ | 283 |  |   | $ | 177 |  |   | $ | (74 | ) |   | $ | 39 |  |   | $ | 368 |  |

----

|                                              |
|----------------------------------------------|
|                                              |  |  |  |  |  |  |  |
| (in millions)                                | Pension Benefits |   | Health and Life Insurance Benefits |
| Amortization of prior service cost (benefit) | $ | — |  |   | $ | — |  |
| Amortization of cumulative losses            | 117 |  |   | 23 |  |

|                                                                                    |
|------------------------------------------------------------------------------------|
|                                                                                    |  |  |  |  |  |  |  |  |  |  |  |
|                                                                               | Pension Benefits |   | Health and Life Insurance Benefits |
|                                                                               | 2016 |   | 2015 |   | 2016 |   | 2015 |
| Discount rate used to determine present value of benefit obligation at end of year | 3.5 | % |   | 4.0 | % |   | 3.5 | % |   | 4.1 | % |
| Expected rate of increase in future compensation levels                            | 3.5 | % |   | 3.5 | % |   | — |  |   | — |  |

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                    | Pension Benefits |   | Health and Life Insurance Benefits |
|                                                    | 2016 |   | 2015 |   | 2014 |   | 2016 |   | 2015 |   | 2014 |
| Discount rate used to determine service cost            | 4.5 | % |   | 3.7 | % |   | 4.1 | % |   | 4.6 | % |   | 3.7 | % |   | 4.1 | % |
| Discount rate used to determine interest cost           | 3.1 | % |   | 3.7 | % |   | 4.1 | % |   | 3.3 | % |   | 3.7 | % |   | 4.1 | % |
| Expected long-term rate of return on plan assets        | 7.5 | % |   | 7.8 | % |   | 7.8 | % |   | 7.5 | % |   | 7.8 | % |   | 7.8 | % |
| Expected rate of increase in future compensation levels | 3.5 | % |   | 3.5 | % |   | 3.5 | % |   | — |  |   | — |  |   | — |  |

----

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |
| (in millions)                                           | One-PercentagePoint Increase   |   | One-PercentagePoint Decrease   |
| Effect on total of service and interest cost components | $ | 12 |  |   | $ | (10 | ) |
| Effect on postretirement benefit obligation             | 205 |  |   | (159 | ) |

|         |                                                                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Cash and short-term investments—Valued at cost plus earnings from investments for the period, which approximates fair market value due to the short-term duration. Cash equivalents are valued at net asset value as provided by the administrator of the fund. |

|         |                                                                                                                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | U.S. Government and agency securities—Valued at the closing price reported on the active market on which the security is traded or valued by the trustee at year-end using various pricing services of financial institutions, including Interactive Data Corporation, Standard & Poor's and Telekurs. |

|         |                                                                                                                                                                                                              |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Corporate debt securities—Valued by the trustee at year-end using various pricing services of financial institutions, including Interactive Data Corporation, Standard & Poor's and Telekurs. |

|         |                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------|
| • | Common and preferred stock—Valued at the closing price reported on the active market on which the security is traded. |

|         |                                                                                                                                                                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Collective trusts, Partnerships/joint venture interests and Hedge funds—Valued at the net asset value provided by the administrator of the fund. The net asset value is based on the value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. |

|         |                                                                                                                                                                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Derivatives -Valued monthly for the trustee using various pricing services of financial institutions, including Interactive Data Corporation, Standard & Poor’s and Telekurs. Valued monthly by the trustee using various providers of derivatives pricing, most notably Numerix, Markit and Super Derivatives. |

----

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                | As of October 31, 2016 |   | As of October 31, 2015 |
| (in millions)                       | Level 1 |   | Level    2 |   | Level 3 |   | NAV |   | Total |   | Level 1 |   | Level    2 |   | Level 3 |   | NAV |   | Total |
| Asset Category                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents           | $ | 76 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 76 |  |   | $ | 126 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 126 |  |
| Equity                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Large Cap                      | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 209 |  |   | — |  |   | — |  |   | — |  |   | 209 |  |
| U.S. Small-Mid Cap                  | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 253 |  |   | — |  |   | — |  |   | — |  |   | 253 |  |
| Canadian                            | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 30 |  |   | — |  |   | — |  |   | — |  |   | 30 |  |
| International                       | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 216 |  |   | — |  |   | — |  |   | — |  |   | 216 |  |
| Emerging Markets                    | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 77 |  |   | — |  |   | — |  |   | — |  |   | 77 |  |
| Equity derivative                   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Fixed Income                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate and Government Bonds      | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 792 |  |   | — |  |   | — |  |   | 792 |  |
| Asset Backed Securities             | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 7 |  |   | — |  |   | — |  |   | 7 |  |
| Collective Trusts and Other         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Equity                         | 294 |  |   | — |  |   | — |  |   | — |  |   | 294 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Canadian Equity                     | 29 |  |   | — |  |   | — |  |   | — |  |   | 29 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| International Equity                | 291 |  |   | — |  |   | — |  |   | — |  |   | 291 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Global Equity                       | 227 |  |   | — |  |   | — |  |   | — |  |   | 227 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Fixed Income - Long Duration Credit | — |  |   | 530 |  |   | — |  |   | — |  |   | 530 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Fixed Income - High Yield           | — |  |   | 204 |  |   | — |  |   | — |  |   | 204 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Fixed Income - Canadian Bond        | — |  |   | 203 |  |   | — |  |   | — |  |   | 203 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Global Real Estate                  | — |  |   | 141 |  |   | — |  |   | — |  |   | 141 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Global Infrastructure               | — |  |   | — |  |   | — |  |   | 14 |  |   | 14 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Common and Preferred Stock          | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 449 |  |   | — |  |   | — |  |   | 449 |  |
| Commodities                         | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 21 |  |   | — |  |   | — |  |   | 21 |  |
| Hedge Fund of Funds                 | — |  |   | — |  |   | — |  |   | 230 |  |   | 230 |  |   | — |  |   | — |  |   | — |  |   | 109 |  |   | 109 |  |
| Private Equity                      | — |  |   | — |  |   | — |  |   | 57 |  |   | 57 |  |   | — |  |   | — |  |   | — |  |   | 79 |  |   | 79 |  |
| Exchange Traded Funds               | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 6 |  |   | — |  |   | — |  |   | — |  |   | 6 |  |
| Mutual Funds                        | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 29 |  |   | — |  |   | — |  |   | — |  |   | 29 |  |
| Real Estate                         | — |  |   | — |  |   | 1 |  |   | — |  |   | 1 |  |   | — |  |   | — |  |   | 1 |  |   | — |  |   | 1 |  |
| Total(A)                            | $ | 917 |  |   | $ | 1,078 |  |   | $ | 1 |  |   | $ | 301 |  |   | $ | 2,297 |  |   | $ | 946 |  |   | $ | 1,269 |  |   | $ | 1 |  |   | $ | 188 |  |   | $ | 2,404 |  |

|     |                                                                                                                                                                                                                                                                                                              |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | In addition, the table above includes the fair value of Canadian pension assets translated at the exchange rates as of October 31, 2016 and 2015, respectively, while the change in plan asset table includes the fair value of Canadian pension assets translated at historical foreign currency rates. |

----

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                              | As of October 31, 2016 |   | As of October 31, 2015 |
| (in millions)                     | Level 1 |   | Level   2 |   | Level 3 |   | NAV |   | Total |   | Level 1 |   | Level    2 |   | Level 3 |   | NAV |   | Total |
| Asset Category                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents         | $ | 19 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 19 |  |   | $ | 29 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 29 |  |
| Equity                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Large Cap                    | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 25 |  |   | — |  |   | — |  |   | — |  |   | 25 |  |
| U.S. Small-Mid Cap                | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 42 |  |   | — |  |   | — |  |   | — |  |   | 42 |  |
| International                     | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 53 |  |   | — |  |   | — |  |   | — |  |   | 53 |  |
| Emerging Markets                  | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 14 |  |   | — |  |   | — |  |   | — |  |   | 14 |  |
| Fixed Income                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate and Government Bonds    | — |  |   | 80 |  |   | — |  |   | — |  |   | 80 |  |   | — |  |   | 100 |  |   | — |  |   | — |  |   | 100 |  |
| Asset Backed Securities           | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 3 |  |   | — |  |   | — |  |   | 3 |  |
| Collective Trusts and Other       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Equity                       | 66 |  |   | — |  |   | — |  |   | — |  |   | 66 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| International Equity              | 71 |  |   | — |  |   | — |  |   | — |  |   | 71 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Fixed Income - Multi-Asset Credit | — |  |   | 41 |  |   | — |  |   | — |  |   | 41 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Common Stock                      | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 59 |  |   | — |  |   | — |  |   | 59 |  |
| Commodities                       | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 1 |  |   | — |  |   | — |  |   | 1 |  |
| Hedge Fund of Funds               | — |  |   | — |  |   | — |  |   | 42 |  |   | 42 |  |   | — |  |   | — |  |   | — |  |   | 22 |  |   | 22 |  |
| Private Equity                    | — |  |   | — |  |   | — |  |   | 14 |  |   | 14 |  |   | — |  |   | — |  |   | — |  |   | 20 |  |   | 20 |  |
| Total                             | $ | 156 |  |   | $ | 121 |  |   | $ | — |  |   | $ | 56 |  |   | $ | 333 |  |   | $ | 163 |  |   | $ | 163 |  |   | $ | — |  |   | $ | 42 |  |   | $ | 368 |  |

----

|                   |
|-------------------|
|                   |  |  |  |  |  |  |  |
| (in millions)     | Pension Benefit Payments |   | Other Postretirement Benefit Payments(A) |
| 2017              | $ | 306 |  |   | $ | 100 |  |
| 2018              | 293 |  |   | 105 |  |
| 2019              | 287 |  |   | 111 |  |
| 2020              | 281 |  |   | 111 |  |
| 2021              | 273 |  |   | 112 |  |
| 2022 through 2026 | 1,252 |  |   | 532 |  |

|     |                                                                                               |
|-----|-----------------------------------------------------------------------------------------------|
| (A) | Payments are net of expected participant contributions and expected federal subsidy receipts. |

----

|                                                     |
|-----------------------------------------------------|
|                                                     |  |  |  |  |  |  |  |  |  |  |  |
|                                                | For the Years Ended October 31, |
| (in millions)                                       | 2016 |   | 2015 |   | 2014 |
| Domestic                                            | $ | (95 | ) |   | $ | (215 | ) |   | $ | (398 | ) |
| Foreign                                             | 63 |  |   | 112 |  |   | (158 | ) |
| Loss from continuing operations before income taxes | $ | (32 | ) |   | $ | (103 | ) |   | $ | (556 | ) |

|                          |
|--------------------------|
|                          |  |  |  |  |  |  |  |  |  |  |  |
|                     | For the Years Ended October 31, |
| (in millions)            | 2016 |   | 2015 |   | 2014 |
| Current:                 |   |   |   |   |   |
| Federal                  | $ | (1 | ) |   | $ | (2 | ) |   | $ | — |  |
| State and local          | (4 | ) |   | (1 | ) |   | 7 |  |
| Foreign                  | (36 | ) |   | (64 | ) |   | (48 | ) |
| Total current expense    | $ | (41 | ) |   | $ | (67 | ) |   | $ | (41 | ) |
| Deferred:                |   |   |   |   |   |
| Federal                  | 13 |  |   | 2 |  |   | 13 |  |
| State and local          | (1 | ) |   | — |  |   | — |  |
| Foreign                  | (4 | ) |   | 14 |  |   | 2 |  |
| Total deferred benefit   | $ | 8 |  |   | $ | 16 |  |   | $ | 15 |  |
| Total income tax expense | $ | (33 | ) |   | $ | (51 | ) |   | $ | (26 | ) |

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |
|                                                    | For the Years Ended October 31, |
| (in millions)                                           | 2016 |   | 2015 |   | 2014 |
| Federal income tax benefit at the statutory rate of 35% | $ | 11 |  |   | $ | 36 |  |   | $ | 195 |  |
| State income taxes, net of federal benefit              | (3 | ) |   | — |  |   | (4 | ) |
| Credits and incentives                                  | 3 |  |   | 4 |  |   | (5 | ) |
| Adjustments to valuation allowances                     | (132 | ) |   | (41 | ) |   | (234 | ) |
| Foreign operations                                      | 53 |  |   | (48 | ) |   | (31 | ) |
| Unremitted foreign earnings                             | 37 |  |   | (31 | ) |   | (6 | ) |
| Adjustments to uncertain tax positions                  | (10 | ) |   | (1 | ) |   | 15 |  |
| Income tax related to equity components                 | — |  |   | — |  |   | 13 |  |
| Non-controlling interest adjustment                     | 11 |  |   | 11 |  |   | 14 |  |
| Other                                                   | (3 | ) |   | 19 |  |   | 17 |  |
| Recorded income tax expense                             | $ | (33 | ) |   | $ | (51 | ) |   | $ | (26 | ) |

----

----

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |
|                                      | As of October 31, |
| (in millions)                             | 2016 |   | 2015 |
| Deferred tax assets attributable to:      |   |   |   |
| Employee benefits liabilities             | $ | 1,274 |  |   | $ | 1,253 |  |
| Net operating loss ("NOL") carryforwards  | 1,324 |  |   | 1,161 |  |
| Product liability and warranty accruals   | 362 |  |   | 419 |  |
| Research and development                  | 172 |  |   | 135 |  |
| Tax credit carryforwards                  | 262 |  |   | 266 |  |
| Other                                     | 232 |  |   | 239 |  |
| Gross deferred tax assets                 | 3,626 |  |   | 3,473 |  |
| Less: Valuation allowances                | 3,434 |  |   | 3,260 |  |
| Net deferred tax assets                   | $ | 192 |  |   | $ | 213 |  |
| Deferred tax liabilities attributable to: |   |   |   |
| Unremitted foreign earnings               | $ | — |  |   | $ | (37 | ) |
| Other                                     | (31 | ) |   | (26 | ) |
| Total deferred tax liabilities            | $ | (31 | ) |   | $ | (63 | ) |

----

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |
| (in millions)                                                    | For the Year Ended October 31, 2016 |
| Liability for uncertain tax positions at November 1              | $ | 41 |  |
| Increase as a result of positions taken in prior periods         | 9 |  |
| Decrease as a result of foreign currency translation adjustments | — |  |
| Settlements                                                      | — |  |
| Liability for uncertain tax positions at October 31              | $ | 50 |  |

|         |                                                                                              |
|---------|----------------------------------------------------------------------------------------------|
| • | Level 1—based upon quoted prices for identical instruments in active markets, |

|         |                                                                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 2—based upon quoted prices for similar instruments, prices for identical or similar instruments in markets that are not active, or model-derived valuations, all of whose significant inputs are observable, and |

|         |                                                                            |
|---------|----------------------------------------------------------------------------|
| • | Level 3—based upon one or more significant unobservable inputs. |

----

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                              | As of October 31, 2016 |   | As of October 31, 2015 |
| (in millions)                     | Level 1 |   | Level 2 |   | Level 3 |   | Total |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Assets                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Marketable securities:            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury bills               | $ | 6 |  |   | $ | — |  |   | $ | — |  |   | $ | 6 |  |   | $ | 53 |  |   | $ | — |  |   | $ | — |  |   | $ | 53 |  |
| Other                             | 40 |  |   | — |  |   | — |  |   | 40 |  |   | 106 |  |   | — |  |   | — |  |   | 106 |  |
| Derivative financial instruments: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commodity forward contracts(A)    | — |  |   | 2 |  |   | — |  |   | 2 |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Foreign currency contracts(A)     | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 1 |  |   | — |  |   | 1 |  |
| Interest rate caps(B)             | — |  |   | 1 |  |   | — |  |   | 1 |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total assets                      | $ | 46 |  |   | $ | 3 |  |   | $ | — |  |   | $ | 49 |  |   | $ | 159 |  |   | $ | 1 |  |   | $ | — |  |   | $ | 160 |  |
| Liabilities                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative financial instruments: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commodity forward contracts(C)    | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 2 |  |   | $ | — |  |   | $ | 2 |  |
| Foreign currency contracts(C)     | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 2 |  |   | — |  |   | 2 |  |
| Guarantees                        | — |  |   | — |  |   | 23 |  |   | 23 |  |   | — |  |   | — |  |   | 10 |  |   | 10 |  |
| Total liabilities                 | $ | — |  |   | $ | — |  |   | $ | 23 |  |   | $ | 23 |  |   | $ | — |  |   | $ | 4 |  |   | $ | 10 |  |   | $ | 14 |  |

|     |                                                                                                                                                                        |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | The asset value of commodity forward contracts and foreign currency contracts is included in Other current assets in the accompanying Consolidated Balance Sheets. |

|     |                                                                                                                                   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|
| (B) | The asset value of interest rate caps is included in Other noncurrent assets in the accompanying Consolidated Balance Sheets. |

|     |                                                                                                                                                                                 |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (C) | The liability value of commodity forward contracts and foreign currency contracts is included in Other current liabilities in the accompanying Consolidated Balance Sheets. |

----

|                                                               |
|---------------------------------------------------------------|
|                                                               |  |  |  |  |  |  |  |
| (in millions)                                                 | October 31, 2016 |   | October 31, 2015 |
| Guarantees, at beginning of period                            | $ | (10 | ) |   | $ | (8 | ) |
| Transfers out of Level 3                                      | — |  |   | — |  |
| Issuances                                                     | (17 | ) |   | (5 | ) |
| Settlements                                                   | 4 |  |   | 3 |  |
| Guarantees, at end of period                                  | $ | (23 | ) |   | $ | (10 | ) |
| Change in unrealized gains on assets (liabilities) still held | $ | — |  |   | $ | — |  |

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |  |  |
| (in millions)                                      | October 31, 2016 |  | October 31, 2015 |
| Level 2 financial instruments                      |   |   |   |
| Carrying value of impaired finance receivables (A) | $ | 15 |  |   | $ | 21 |  |
| Specific loss reserve                              | (8 | ) |   | (9 | ) |
| Fair value                                         | $ | 7 |  |   | $ | 12 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | Certain impaired finance receivables are measured at fair value on a nonrecurring basis. An impairment charge is recorded for the amount by which the carrying value of the receivables exceeds the fair value of the underlying collateral, net of remarketing costs. Fair values of the underlying collateral are determined by reference to dealer vehicle value publications adjusted for certain market factors. |

----

|                                                                                                 |
|-------------------------------------------------------------------------------------------------|
|                                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                            | As of October 31, 2016 |
|                                                                                            | Estimated Fair Value |   | Carrying Value |
| (in millions)                                                                                   | Level 1 |   | Level 2 |   | Level 3 |   | Total |   |
| Assets                                                                                          |   |   |   |   |   |   |   |   |   |
| Retail notes                                                                                    | $ | — |  |   | $ | — |  |   | $ | 153 |  |   | $ | 153 |  |   | $ | 151 |  |
| Notes receivable                                                                                | — |  |   | — |  |   | 1 |  |   | 1 |  |   | 1 |  |
| Liabilities                                                                                     |   |   |   |   |   |   |   |   |   |
| Debt:                                                                                           |   |   |   |   |   |   |   |   |   |
| Manufacturing operations                                                                        |   |   |   |   |   |   |   |   |   |
| Senior Secured Term Loan Credit Facility, as Amended, due 2020                                  | — |  |   | — |  |   | 1,037 |  |   | 1,037 |  |   | 1,009 |  |
| 8.25% Senior Notes, due 2022                                                                    | 1,180 |  |   | — |  |   | — |  |   | 1,180 |  |   | 1,173 |  |
| 4.50% Senior Subordinated Convertible Notes, due 2018(A)                                   | — |  |   | — |  |   | 189 |  |   | 189 |  |   | 189 |  |
| 4.75% Senior Subordinated Convertible Notes, due 2019(A)                                        | — |  |   | — |  |   | 382 |  |   | 382 |  |   | 383 |  |
| Financing arrangements                                                                          | — |  |   | — |  |   | 17 |  |   | 17 |  |   | 37 |  |
| Loan Agreement related to 6.50% Tax Exempt Bonds, due 2040                                 | — |  |   | 233 |  |   | — |  |   | 233 |  |   | 220 |  |
| Financed lease obligations                                                                      | — |  |   | — |  |   | 52 |  |   | 52 |  |   | 52 |  |
| Other                                                                                           | — |  |   | — |  |   | 26 |  |   | 26 |  |   | 28 |  |
| Financial Services operations                                                                   |   |   |   |   |   |   |   |   |   |
| Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2022      | — |  |   | — |  |   | 754 |  |   | 754 |  |   | 753 |  |
| Bank credit facilities, at fixed and variable rates, due dates from 2017 through 2021           | — |  |   | — |  |   | 851 |  |   | 851 |  |   | 861 |  |
| Commercial paper, at variable rates, program matures in 2017                                    | 96 |  |   | — |  |   | — |  |   | 96 |  |   | 96 |  |
| Borrowings secured by operating and finance leases, at various rates, due serially through 2021 | — |  |   | — |  |   | 98 |  |   | 98 |  |   | 98 |  |

----

|                                                                                                 |
|-------------------------------------------------------------------------------------------------|
|                                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                            | As of October 31, 2015 |
|                                                                                            | Estimated Fair Value |   | Carrying Value |
| (in millions)                                                                                   | Level 1 |   | Level 2 |   | Level 3 |   | Total |   |
| Assets                                                                                          |   |   |   |   |   |   |   |   |   |
| Retail notes                                                                                    | $ | — |  |   | $ | — |  |   | $ | 170 |  |   | $ | 170 |  |   | $ | 166 |  |
| Notes receivable                                                                                | — |  |   | — |  |   | 3 |  |   | 3 |  |   | 3 |  |
| Liabilities                                                                                     |   |   |   |   |   |   |   |   |   |
| Debt:                                                                                           |   |   |   |   |   |   |   |   |   |
| Manufacturing operations                                                                        |   |   |   |   |   |   |   |   |   |
| Senior Secured Term Loan Credit Facility, as Amended, due 2020                                  | — |  |   | — |  |   | 1,014 |  |   | 1,014 |  |   | 1,014 |  |
| 8.25% Senior Notes, due 2022                                                                    | 998 |  |   | — |  |   | — |  |   | 998 |  |   | 1,168 |  |
| 4.50% Senior Subordinated Convertible Notes, due 2018(A)                                        | — |  |   | — |  |   | 148 |  |   | 148 |  |   | 184 |  |
| 4.75% Senior Subordinated Convertible Notes, due 2019(A)                                        | — |  |   | — |  |   | 289 |  |   | 289 |  |   | 373 |  |
| Financing arrangements                                                                          | — |  |   | — |  |   | 17 |  |   | 17 |  |   | 43 |  |
| Loan Agreement related to 6.50% Tax Exempt Bonds, due 2040                                 | — |  |   | 233 |  |   | — |  |   | 233 |  |   | 220 |  |
| Financed lease obligations                                                                      | — |  |   | — |  |   | 111 |  |   | 111 |  |   | 111 |  |
| Other                                                                                           | — |  |   | — |  |   | 45 |  |   | 45 |  |   | 43 |  |
| Financial Services operations                                                                   |   |   |   |   |   |   |   |   |   |
| Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2018      | — |  |   | — |  |   | 865 |  |   | 865 |  |   | 864 |  |
| Bank credit facilities, at fixed and variable rates, due dates from 2016 through 2020           | — |  |   | — |  |   | 1,048 |  |   | 1,048 |  |   | 1,062 |  |
| Commercial paper, at variable rates, program matures in 2017                                    | 86 |  |   | — |  |   | — |  |   | 86 |  |   | 86 |  |
| Borrowings secured by operating and finance leases, at various rates, due serially through 2020 | — |  |   | — |  |   | 80 |  |   | 80 |  |   | 81 |  |

|     |                                                                                                                                                                                                                                                                                                                                           |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | The carrying value represents the consolidated financial statement amount of the debt which excludes the allocation of the conversion feature to equity, while the fair value is based on internally developed valuation techniques such as discounted cash flow modeling for Level 3 convertible notes which include the equity feature. |

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                  |   |   | For the Years Ended October 31, |
| (in millions)                         | Location in Consolidated                                                                                                                                                             Statements of Operations |   | 2016 |   | 2015 |   | 2014 |
| Interest rate caps                    | Interest expense |   | $ | — |  |   | $ | 1 |  |   | $ | 1 |  |
| Cross currency swaps                  | Other income, net |   | — |  |   | 2 |  |   | 3 |  |
| Foreign currency contracts            | Other income, net |   | — |  |   | (9 | ) |   | (1 | ) |
| Commodity forward contracts | Costs of products sold |   | (1 | ) |   | 12 |  |   | 1 |  |
| Total (gain) loss                     |   | $ | (1 | ) |   | $ | 6 |  |   | $ | 4 |  |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |
| (in millions)             | Currency |   | Notional Amount |   | Maturity |
| As of October 31, 2016    |   |   |   |   |   |
| Forward exchange contract | EUR |   | € | 4 |  |   | November 2016 - January 2017(A) |
| Forward exchange contract | MXN |   | ₱ | 1,064 |  |   | November 2016 - January 2017(B) |
| As of October 31, 2015    |   |   |   |   |   |
| Forward exchange contract | EUR |   | € | 30 |  |   | November 2015 - October 2016(C) |
| Forward exchange contract | CAD |   | C$ | 25 |  |   | November 2015 |
| Forward exchange contract | MXN |   | ₱ | 1,270 |  |   | November 2015 |

----

----

----

----

----

----

----

----

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our Truck segment manufactures and distributes Class 4 through 8 trucks, buses, and military vehicles under the International and IC Bus ("IC") brands, and produces engines under our proprietary brand name and parts required to support the military truck lines. This segment sells its products in the U.S., Canada, and Mexico markets, as well as through our export truck business. In an effort to strengthen and maintain our dealer network, this segment occasionally acquires and operates dealer locations for the purpose of transitioning ownership. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our Parts segment provides customers with proprietary products needed to support the International commercial truck, IC Bus, proprietary engine lines, and export parts business, as well as our other product lines. Our Parts segment also provides a wide selection of other standard truck, trailer, and engine aftermarket parts. Also included in the Parts segment are the operating results of BDP, which manages the sourcing, merchandising, and distribution of certain service parts we sell to Ford in North America. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our Global Operations segment primarily consists of the IIAA, formerly MWM International Industria De Motores Da America Do Sul Ltda., engine and truck operations in Brazil. The IIAA engine operations produce diesel engines, primarily under contract manufacturing arrangements, as well as under the MWM brand, for sale to OEMs in South America. In addition, our Global Operations segment includes the operating results of our joint venture in China with Anhui Jianghuai Automobile Co ("JAC"). |

|         |                                                                                                                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our Financial Services segment provides retail, wholesale, and lease financing of products sold by the Truck and Parts segments and their dealers within the U.S. and Mexico, as well as financing for wholesale accounts and selected retail accounts receivable. |

|         |                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------|
| • | The costs of profit sharing and annual incentive compensation for the Manufacturing operations are included in corporate expenses. |

|         |                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------|
| • | Interest expense and interest income for the Manufacturing operations are reported in corporate expenses. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The Financial Services segment finances certain sales to our dealers in North America, which include an interest-free period that varies in length, that are subsidized by our Truck and Parts segments. Additionally, the Financial Services segment reports intersegment revenues from secured loans to the Manufacturing operations. Certain retail sales financed by the Financial Services segment, primarily NFC, require the Manufacturing operations, primarily the Truck segment, to share a portion of any credit losses. |

|         |                                                                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We allocate "access fees" to the Parts segment from the Truck segment for certain engineering and product development costs, depreciation expense, and SG&A expenses incurred by the Truck segment based on the relative percentage of certain sales, as adjusted for cyclicality. |

|         |                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Other than the items discussed above, the selected financial information presented below is presented in accordance with our policies described in Note 1, Summary of Significant Accounting Policies. |

----

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                            | Truck |   | Parts |   | Global Operations |   | FinancialServices(A) |   | CorporateandEliminations |   | Total |
| Year Ended October 31, 2016                                              |   |   |   |   |   |   |   |   |   |   |   |
| External sales and revenues, net                                         | $ | 5,271 |  |   | $ | 2,398 |  |   | $ | 296 |  |   | $ | 135 |  |   | $ | 10 |  |   | $ | 8,110 |  |
| Intersegment sales and revenues                                          | 132 |  |   | 29 |  |   | 45 |  |   | 100 |  |   | (305 | ) |   | 1 |  |
| Total sales and revenues, net                                            | $ | 5,403 |  |   | $ | 2,427 |  |   | $ | 341 |  |   | $ | 235 |  |   | $ | (295 | ) |   | $ | 8,111 |  |
| Income (loss) from continuing operations attributable to NIC, net of tax | $ | (189 | ) |   | $ | 640 |  |   | $ | (21 | ) |   | $ | 100 |  |   | $ | (627 | ) |   | $ | (97 | ) |
| Income tax expense                                                       | — |  |   | — |  |   | — |  |   | — |  |   | (33 | ) |   | (33 | ) |
| Segment profit (loss)                                                    | $ | (189 | ) |   | $ | 640 |  |   | $ | (21 | ) |   | $ | 100 |  |   | $ | (594 | ) |   | $ | (64 | ) |
| Depreciation and amortization                                            | $ | 129 |  |   | $ | 13 |  |   | $ | 18 |  |   | $ | 50 |  |   | $ | 15 |  |   | $ | 225 |  |
| Interest expense                                                         | — |  |   | — |  |   | — |  |   | 80 |  |   | 247 |  |   | 327 |  |
| Equity in income (loss) of non-consolidated affiliates                   | 5 |  |   | 4 |  |   | (3 | ) |   | — |  |   | — |  |   | 6 |  |
| Capital expenditures(B)                                                  | 97 |  |   | 2 |  |   | 4 |  |   | 2 |  |   | 11 |  |   | 116 |  |

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                            | Truck |   | Parts |   | Global Operations |   | FinancialServices(A) |   | CorporateandEliminations |   | Total |
| Year Ended October 31, 2015                                              |   |   |   |   |   |   |   |   |   |   |   |
| External sales and revenues, net                                         | $ | 7,055 |  |   | $ | 2,475 |  |   | $ | 455 |  |   | $ | 145 |  |   | $ | 10 |  |   | $ | 10,140 |  |
| Intersegment sales and revenues                                          | 158 |  |   | 38 |  |   | 51 |  |   | 96 |  |   | (343 | ) |   | — |  |
| Total sales and revenues, net                                            | $ | 7,213 |  |   | $ | 2,513 |  |   | $ | 506 |  |   | $ | 241 |  |   | $ | (333 | ) |   | $ | 10,140 |  |
| Income (loss) from continuing operations attributable to NIC, net of tax | $ | (141 | ) |   | $ | 592 |  |   | $ | (67 | ) |   | $ | 98 |  |   | $ | (669 | ) |   | $ | (187 | ) |
| Income tax expense                                                       | — |  |   | — |  |   | — |  |   | — |  |   | (51 | ) |   | (51 | ) |
| Segment profit (loss)                                                    | $ | (141 | ) |   | $ | 592 |  |   | $ | (67 | ) |   | $ | 98 |  |   | $ | (618 | ) |   | $ | (136 | ) |
| Depreciation and amortization                                            | $ | 173 |  |   | $ | 14 |  |   | $ | 23 |  |   | $ | 51 |  |   | $ | 20 |  |   | $ | 281 |  |
| Interest expense                                                         | — |  |   | — |  |   | — |  |   | 74 |  |   | 233 |  |   | 307 |  |
| Equity in income (loss) of non-consolidated affiliates                   | 5 |  |   | 4 |  |   | (3 | ) |   | — |  |   | — |  |   | 6 |  |
|        Capital expenditures(B)        | 92 |  |   | 3 |  |   | 4 |  |   | 4 |  |   | 12 |  |   | 115 |  |

----

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                            | Truck |   | Parts |   | Global Operations |   | FinancialServices(A) |   | CorporateandEliminations |   | Total |
| Year Ended October 31, 2014                                              |   |   |   |   |   |   |   |   |   |   |   |
| External sales and revenues, net                                         | $ | 7,255 |  |   | $ | 2,493 |  |   | $ | 905 |  |   | $ | 153 |  |   | $ | — |  |   | $ | 10,806 |  |
| Intersegment sales and revenues                                          | 218 |  |   | 58 |  |   | 35 |  |   | 79 |  |   | (390 | ) |   | — |  |
| Total sales and revenues, net                                            | $ | 7,473 |  |   | $ | 2,551 |  |   | $ | 940 |  |   | $ | 232 |  |   | $ | (390 | ) |   | $ | 10,806 |  |
| Income (loss) from continuing operations attributable to NIC, net of tax | $ | (380 | ) |   | $ | 528 |  |   | $ | (274 | ) |   | $ | 97 |  |   | $ | (593 | ) |   | $ | (622 | ) |
| Income tax expense                                                       | — |  |   | — |  |   | — |  |   | — |  |   | (26 | ) |   | (26 | ) |
| Segment profit (loss)                                                    | $ | (380 | ) |   | $ | 528 |  |   | $ | (274 | ) |   | $ | 97 |  |   | $ | (567 | ) |   | $ | (596 | ) |
| Depreciation and amortization                                            | $ | 216 |  |   | $ | 15 |  |   | $ | 28 |  |   | $ | 46 |  |   | $ | 27 |  |   | $ | 332 |  |
| Interest expense                                                         | — |  |   | — |  |   | — |  |   | 71 |  |   | 243 |  |   | 314 |  |
| Equity in income of non-consolidated affiliates                          | 5 |  |   | 4 |  |   | — |  |   | — |  |   | — |  |   | 9 |  |
|        Capital expenditures(B)        | 65 |  |   | 6 |  |   | 8 |  |   | 1 |  |   | 8 |  |   | 88 |  |

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)          | Truck |   | Parts |   | Global Operations |   | FinancialServices |   | CorporateandEliminations |   | Total |
| Segment assets, as of: |   |   |   |   |   |   |   |   |   |   |   |
| October 31, 2016       | $ | 1,520 |  |   | $ | 594 |  |   | $ | 407 |  |   | $ | 2,116 |  |   | $ | 1,016 |  |   | $ | 5,653 |  |
| October 31, 2015       | 1,876 |  |   | 641 |  |   | 409 |  |   | 2,448 |  |   | 1,275 |  |   | 6,649 |  |

|     |                                                                                                                                                                                                              |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | Total sales and revenues in the Financial Services segment include interest revenues of $167 million, $175 million, and $170 million for the years ended October 31, 2016, 2015, and 2014, respectively. |

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

|                     |
|---------------------|
|                     |  |  |  |  |  |  |  |  |  |  |  |
|                | For the Years Ended October 31, |
| (in millions)       | 2016 |   | 2015 |   | 2014 |
| Sales and revenues: |   |   |   |   |   |
| Trucks              | $ | 5,176 |  |   | $ | 6,845 |  |   | $ | 7,137 |  |
| Parts               | 2,216 |  |   | 2,399 |  |   | 2,424 |  |
| Engine              | 583 |  |   | 751 |  |   | 1,092 |  |
| Financial Services  | 136 |  |   | 145 |  |   | 153 |  |

----

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |
|                   | For the Years Ended October 31, |
| (in millions)          | 2016 |   | 2015 |   | 2014 |
| Sales and revenues:(A) |   |   |   |   |   |
| United States          | $ | 6,186 |  |   | $ | 7,699 |  |   | $ | 7,760 |  |
| Canada                 | 604 |  |   | 774 |  |   | 749 |  |
| Mexico                 | 575 |  |   | 653 |  |   | 657 |  |
| Brazil                 | 240 |  |   | 383 |  |   | 833 |  |
| Other                  | 506 |  |   | 631 |  |   | 807 |  |

|                       |
|-----------------------|
|                       |  |  |  |  |  |  |  |
|                  | As of October 31, |
| (in millions)         | 2016 |   | 2015 |
| Long-lived assets:(B) |   |   |   |
| United States         | $ | 999 |  |   | $ | 1,126 |  |
| Canada                | 20 |  |   | 19 |  |
| Mexico                | 202 |  |   | 186 |  |
| Brazil                | 103 |  |   | 98 |  |
| Other                 | 8 |  |   | 11 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | During 2016, we identified certain sales included in Brazil which should have been classified as Other. As a result, for the year ended October 31, 2015 we have reclassified $103 million of sales. Also during 2016, we identified certain parts sales which were included in United States which should have been classified as Other due to a 2015 change in our segment reporting presentation. As a result, for the year ended October 31, 2015 we have reclassified $23 million of sales. These reclassifications did not impact our Consolidated Statements of Operations or our segment sales and revenues. |

|     |                                                                                                 |
|-----|-------------------------------------------------------------------------------------------------|
| (B) | Long-lived assets consist of Property and equipment, net, Goodwill, and Intangible assets, net. |

----

----

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                    | Unrealized Gain on Marketable Securities |   | Foreign Currency Translation Adjustments |   | Defined Benefit Plans |   | Total |
| Balance as of October 31, 2015                                   | $ | 1 |  |   | $ | (287 | ) |   | $ | (2,315 | ) |   | $ | (2,601 | ) |
| Other comprehensive income (loss) before reclassifications       | — |  |   | 7 |  |   | (177 | ) |   | (170 | ) |
| Amounts reclassified out of accumulated other comprehensive loss | — |  |   | — |  |   | 131 |  |   | 131 |  |
| Net current-period other comprehensive income (loss)             | — |  |   | 7 |  |   | (46 | ) |   | (39 | ) |
| Balance as of October 31, 2016                                   | $ | 1 |  |   | $ | (280 | ) |   | $ | (2,361 | ) |   | $ | (2,640 | ) |

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                    | Unrealized Gain on Marketable Securities |   | Foreign Currency Translation Adjustments |   | Defined Benefit Plans |   | Total |
| Balance as of October 31, 2014                                   | $ | 1 |  |   | $ | (127 | ) |   | $ | (2,137 | ) |   | $ | (2,263 | ) |
| Other comprehensive loss before reclassifications                | — |  |   | (160 | ) |   | (309 | ) |   | (469 | ) |
| Amounts reclassified out of accumulated other comprehensive loss | — |  |   | — |  |   | 131 |  |   | 131 |  |
| Net current-period other comprehensive loss                      | — |  |   | (160 | ) |   | (178 | ) |   | (338 | ) |
| Balance as of October 31, 2015                                   | $ | 1 |  |   | $ | (287 | ) |   | $ | (2,315 | ) |   | $ | (2,601 | ) |

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                    | Unrealized Gain on Marketable Securities |   | Foreign Currency Translation Adjustments |   | Defined Benefit Plans |   | Total |
| Balance as of October 31, 2013                                   | $ | — |  |   | $ | (75 | ) |   | $ | (1,749 | ) |   | $ | (1,824 | ) |
| Other comprehensive income (loss) before reclassifications       | 1 |  |   | (52 | ) |   | (491 | ) |   | (542 | ) |
| Amounts reclassified out of accumulated other comprehensive loss | — |  |   | — |  |   | 103 |  |   | 103 |  |
| Net current-period other comprehensive income (loss)             | 1 |  |   | (52 | ) |   | (388 | ) |   | (439 | ) |
| Balance as of October 31, 2014                                   | $ | 1 |  |   | $ | (127 | ) |   | $ | (2,137 | ) |   | $ | (2,263 | ) |

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                               |   |   |   | For the Years Ended October 31, |
|                                               |   | Location in Consolidated Statements of Operations |   | 2016 |   | 2015 |   | 2014 |
| Defined benefit plans                              |   |   |   |   |   |   |   |   |
| Amortization of prior service benefit              |   | Selling, general and administrative expenses |   | $ | (1 | ) |   | $ | (4 | ) |   | $ | (4 | ) |
| Amortization of actuarial loss                     |   | Selling, general and administrative expenses |   | 133 |  |   | 136 |  |   | 109 |  |
|                                               |   | Total before tax |   | 132 |  |   | 132 |  |   | 105 |  |
|                                               |   | Income tax expense |   | (1 | ) |   | (1 | ) |   | (2 | ) |
| Total reclassifications for the period, net of tax |   | $ | 131 |  |   | $ | 131 |  |   | $ | 103 |  |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                            |   | For the Years Ended October 31, |
| (in millions, except per share data)                                            |   | 2016 |   | 2015 |   | 2014 |
| Numerator:                                                                      |   |   |   |   |   |   |
| Amounts attributable to Navistar International Corporation common stockholders: |   |   |   |   |   |   |
| Loss from continuing operations, net of tax                                     |   | $ | (97 | ) |   | $ | (187 | ) |   | $ | (622 | ) |
| Income from discontinued operations, net of tax                                 |   | — |  |   | 3 |  |   | 3 |  |
| Net loss                                                                        |   | $ | (97 | ) |   | $ | (184 | ) |   | $ | (619 | ) |
|                                                                            |   |   |   |   |   |   |
| Denominator:                                                                    |   |   |   |   |   |   |
| Weighted average shares outstanding:                                            |   |   |   |   |   |   |
| Basic                                                                           |   | 81.7 |  |   | 81.6 |  |   | 81.4 |  |
| Effect of dilutive securities                                                   |   | — |  |   | — |  |   | — |  |
| Diluted                                                                         |   | 81.7 |  |   | 81.6 |  |   | 81.4 |  |
|                                                                            |   |   |   |   |   |   |
| Earnings (loss) per share attributable to Navistar International Corporation:   |   |   |   |   |   |   |
| Basic:                                                                          |   |   |   |   |   |   |
| Continuing operations                                                           |   | $ | (1.19 | ) |   | $ | (2.29 | ) |   | $ | (7.64 | ) |
| Discontinued operations                                                         |   | — |  |   | 0.04 |  |   | 0.04 |  |
| Net loss                                                                        |   | $ | (1.19 | ) |   | $ | (2.25 | ) |   | $ | (7.60 | ) |
| Diluted:                                                                        |   |   |   |   |   |   |
| Continuing operations                                                           |   | $ | (1.19 | ) |   | $ | (2.29 | ) |   | $ | (7.64 | ) |
| Discontinued operations                                                         |   | — |  |   | 0.04 |  |   | 0.04 |  |
| Net loss                                                                        |   | $ | (1.19 | ) |   | $ | (2.25 | ) |   | $ | (7.60 | ) |

----

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Ownership Program—In June 1997, our Board of Directors approved the terms of the Ownership Program, as amended from time to time. In general, under the Ownership Program in existence until November 2013, all officers and senior managers were required to acquire, by direct purchase or through salary or annual bonus reduction, an ownership interest in the Company by acquiring a designated amount of our common stock based on organizational level. Participants were required to hold such stock for the entire period in which they are employed by the Company. The Ownership Program was amended and restated effective November 1, 2013 on a going forward basis. The new guidelines (i) increase stock ownership guideline multiples to six times salary for the President and CEO and up to three times salary for other senior executives; (ii) modify retention requirements for Company granted equity until ownership requirements are met; (iii) add a holding period for shares acquired through transactions with Company granted equity after the executives satisfy the stock ownership requirement; (iv) eliminate the granting of premium shares as an inducement to executives fulfilling stock ownership guidelines on an accelerated basis; and (v) eliminate the required time frame to fulfill stock ownership guidelines. Under the prior Ownership Program, participants were entitled to defer their cash bonus into deferred share units ("DSUs"), which vested immediately. There were 2,365 DSUs outstanding as of October 31, 2016. Premium share units ("PSUs") were also eligible to be awarded to participants who complete their ownership requirement on an accelerated basis. PSUs vested annually, pro rata over three years. There were 38,432 PSUs outstanding as of October 31, 2016 under the prior Ownership Program. Each vested DSU and PSU will be settled by delivery of one share of common stock within ten days after a participant's termination of employment or at such later date as required by Internal Revenue Code Section Rule 409A. Beginning in February 2013, PSUs and DSUs awarded under the prior Ownership Program were issued under the 2013 PIP. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Deferred Fee Plan—Under the Deferred Fee Plan, non-employee directors may elect to defer payment of all or a portion of their retainer fees and meeting fees in cash (with interest) or in stock units. Deferrals in the deferred stock account are valued as if each deferral was vested in NIC common stock as of the deferral date. As of October 31, 2016, 60,987 deferred shares were outstanding under the Deferred Fee Plan.  Beginning on September 30, 2013, shares deferred by non-employee directors are issued out of the 2013 PIP. The Deferred Fee Plan was amended and restated effective February 11, 2015 on a going forward basis. |

----

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                      | For the Years Ended October 31, |
|                                      | 2016 |   | 2015 |   | 2014 |
|                                      | Shares |   | Weighted Average Exercise Price |   | Shares |   | Weighted Average Exercise Price |   | Shares |   | Weighted Average Exercise Price |
|                                      | (in thousands) |   |   |   | (in thousands) |   |   |   | (in thousands) |   |   |
| Options outstanding, at beginning of year | 2,886 |  |   | $ | 39.33 |  |   | 3,657 |  |   | $ | 39.46 |  |   | 5,000 |  |   | $ | 37.94 |  |
| Granted                                   | 35 |  |   | 10.60 |  |   | 40 |  |   | 37.03 |  |   | 251 |  |   | 38.51 |  |
| Exercised                                 | — |  |   | — |  |   | (44 | ) |   | 25.68 |  |   | (784 | ) |   | 24.33 |  |
| Forfeited/expired                         | (86 | ) |   | 42.30 |  |   | (767 | ) |   | 40.60 |  |   | (810 | ) |   | 44.41 |  |
| Options outstanding, at end of year       | 2,835 |  |   | 38.89 |  |   | 2,886 |  |   | 39.33 |  |   | 3,657 |  |   | 39.46 |  |
| Options exercisable, at end of year       | 2,695 |  |   | 39.29 |  |   | 2,407 |  |   | 40.27 |  |   | 2,637 |  |   | 41.34 |  |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                      | Shares |   | Weighted Average Remaining Contractual Life |   | Weighted Average Exercise Price   |   | Aggregate Intrinsic Value |
| Range of Exercise Prices: | (in thousands) |   | (in years) |   |   |   | (in millions) |
| $ 10.60 - $ 31.19         | 807 |  |   | 3.2 |  |   | $ | 26.67 |  |   | $ | 0.5 |  |
| $ 31.20 - $ 39.32         | 1,343 |  |   | 2.4 |  |   | 36.85 |  |   | — |  |
| $ 39.33 - $ 68.65         | 685 |  |   | 1.5 |  |   | 57.28 |  |   | — |  |
| Options Outstanding       | 2,835 |  |   |   |   |   |   |   |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                      | Shares |   | Weighted Average Remaining Contractual Life |   | Weighted Average Exercise Price   |   | Aggregate Intrinsic Value |
| Range of Exercise Prices: | (in thousands) |   | (in years) |   |   |   | (in millions) |
| $ 10.60 - $ 31.19         | 772 |  |   | 3.1 |  |   | $ | 27.40 |  |   | $ | 0.1 |  |
| $ 31.20 - $ 39.32         | 1,265 |  |   | 2.2 |  |   | 36.89 |  |   | — |  |
| $ 39.33 - $ 68.65         | 658 |  |   | 1.4 |  |   | 57.83 |  |   | — |  |
| Options Exercisable       | 2,695 |  |   |   |   |   |   |   |

|                          |
|--------------------------|
|                          |  |  |  |  |  |  |  |  |
|                     | For the Years Ended October 31, |
|                     | 2016 |   | 2015 |   | 2014 |
| Risk-free interest rate  | 1.7 | % |   | 1.6 | % |   | 1.6 | % |
| Expected volatility      | 56.8 | % |   | 40.2 | % |   | 45.6 | % |
| Expected life (in years) | 4.8 |  |   | 4.9 |  |   | 4.9 |  |

----

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            | For the Years Ended October 31, |
|                            | 2016 |   | 2015 |   | 2014 |
|                            | Shares |   | Weighted Average Grant Date Fair Value |   | Shares |   | Weighted Average Grant Date Fair Value |   | Shares |   | Weighted Average Grant Date Fair Value |
|                            | (in thousands) |   |   |   | (in thousands) |   |   |   | (in thousands) |   |   |
| Nonvested, at beginning of year | — |  |   | $ | — |  |   | 41 |  |   | $ | 24.13 |  |   | 41 |  |   | $ | 24.13 |  |
| Granted                         | 5 |  |   | 12.52 |  |   | 2 |  |   | 29.50 |  |   | 4 |  |   | 33.70 |  |
| Vested                          | (5 | ) |   | 12.52 |  |   | (43 | ) |   | 24.38 |  |   | (4 | ) |   | 33.70 |  |
| Nonvested, at end of year       | — |  |   | — |  |   | — |  |   | — |  |   | 41 |  |   | 24.13 |  |

----

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            | Share-Settled RSUs |
|                            | 2016 |   | 2015 |   | 2014 |
|                            | Shares |   | Weighted Average Grant Date Fair Value |   | Shares |   | Weighted Average Grant Date Fair Value |   | Shares |   | Weighted Average Grant Date Fair Value |
|                            | (in thousands) |   |   |   | (in thousands) |   |   |   | (in thousands) |   |   |
| Nonvested, at beginning of year | 69 |  |   | $ | 28.60 |  |   | 188 |  |   | $ | 28.75 |  |   | 299 |  |   | $ | 29.54 |  |
| Granted                         | 624 |  |   | 8.76 |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Vested                          | (66 | ) |   | 28.66 |  |   | (114 | ) |   | 28.91 |  |   | (90 | ) |   | 31.74 |  |
| Forfeited                       | (14 | ) |   | 13.07 |  |   | (5 | ) |   | 27.24 |  |   | (21 | ) |   | 27.24 |  |
| Nonvested, at end of year       | 613 |  |   | 8.74 |  |   | 69 |  |   | 28.60 |  |   | 188 |  |   | 28.75 |  |
|                            |   |   |   |   |   |   |   |   |   |   |   |
|                            | Cash-Settled RSUs |
|                            | 2016 |   | 2015 |   | 2014 |
|                            | Shares |   | Weighted Average Grant Date Fair Value |   | Shares |   | Weighted Average Grant Date Fair Value |   | Shares |   | Weighted Average Grant Date Fair Value |
|                            | (in thousands) |   |   |   | (in thousands) |   |   |   | (in thousands) |   |   |
| Nonvested, at beginning of year | 498 |  |   | $ | 29.96 |  |   | 469 |  |   | $ | 33.00 |  |   | 194 |  |   | $ | 43.74 |  |
| Granted                         | 650 |  |   | 7.26 |  |   | 280 |  |   | 27.67 |  |   | 470 |  |   | 32.44 |  |
| Vested                          | (231 | ) |   | 26.06 |  |   | (190 | ) |   | 33.82 |  |   | (124 | ) |   | 47.48 |  |
| Forfeited                       | (100 | ) |   | 22.19 |  |   | (61 | ) |   | 30.75 |  |   | (71 | ) |   | 33.24 |  |
| Nonvested, at end of year       | 817 |  |   | 13.95 |  |   | 498 |  |   | 29.96 |  |   | 469 |  |   | 33.00 |  |

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                      | For the Years Ended October 31, |
|                                      | 2016 |   | 2015 |   | 2014 |
|                                      | Shares |   | Weighted Average Exercise Price |   | Shares |   | Weighted Average Exercise Price |   | Shares |   | Weighted Average Exercise Price |
|                                      | (in thousands) |   |   |   | (in thousands) |   |   |   | (in thousands) |   |   |
| Options outstanding, at beginning of year | 1,409 |  |   | $ | 31.64 |  |   | 941 |  |   | $ | 35.41 |  |   | 299 |  |   | $ | 34.47 |  |
| Granted                                   | — |  |   | — |  |   | 729 |  |   | 27.61 |  |   | 651 |  |   | 35.83 |  |
| Forfeited                                 | (436 | ) |   | 34.22 |  |   | (261 | ) |   | 33.99 |  |   | (9 | ) |   | 35.09 |  |
| Options outstanding, at end of year       | 973 |  |   | 30.47 |  |   | 1,409 |  |   | 31.64 |  |   | 941 |  |   | 35.41 |  |

----

|                          |
|--------------------------|
|                          |  |  |  |  |  |
|                     | For the Years Ended October 31, |
|                     | 2015 |   | 2014 |
| Risk-free interest rate  | 1.4 | % |   | 1.6 | % |
| Expected volatility      | 42.9 | % |   | 45.5 | % |
| Expected life (in years) | 4.7 |  |   | 4.9 |  |

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                      | For the Years Ended October 31, |
|                                      | 2016 |   | 2015 |   | 2014 |
|                                      | Shares |   | Weighted Average Exercise Price |   | Shares |   | Weighted Average Exercise Price |   | Shares |   | Weighted Average Exercise Price |
|                                      | (in thousands) |   |   |   | (in thousands) |   |   |   | (in thousands) |   |   |
| Options outstanding, at beginning of year | 615 |  |   | $ | 27.24 |  |   | 670 |  |   | $ | 27.24 |  |   | 759 |  |   | $ | 27.24 |  |
| Forfeited                                 | (48 | ) |   | 27.24 |  |   | (55 | ) |   | 27.24 |  |   | (89 | ) |   | 27.24 |  |
| Options outstanding, at end of year       | 567 |  |   | 27.24 |  |   | 615 |  |   | 27.24 |  |   | 670 |  |   | 27.24 |  |
| Options exercisable, at end of year       | 567 |  |   | 27.24 |  |   | — |  |   | — |  |   | — |  |   | — |  |

----

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            | Share-Settled PSUs subject to Service and Performance Conditions |
|                            | 2016 |   | 2015 |   | 2014 |
|                            | Shares |   | Weighted Average Grant Date        Fair Value |   | Shares |   | Weighted Average Grant Date      Fair Value |   | Shares |   | Weighted Average Grant Date      Fair Value |
|                            | (in thousands) |   |   |   | (in thousands) |   |   |   | (in thousands) |   |   |
| Nonvested, at beginning of year | 244 |  |   | $ | 28.73 |  |   | 292 |  |   | $ | 28.48 |  |   | 326 |  |   | $ | 28.35 |  |
| Forfeited                       | (244 | ) |   | 28.73 |  |   | (48 | ) |   | 27.24 |  |   | (34 | ) |   | 27.24 |  |
| Nonvested, at end of year       | — |  |   | — |  |   | 244 |  |   | 28.73 |  |   | 292 |  |   | 28.48 |  |

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            | Cash-Settled PSUs subject to Service and Performance Conditions |
|                            | 2016 |   | 2015 |   | 2014 |
|                            | Shares |   | Weighted Average Grant Date        Fair Value |   | Shares |   | Weighted Average Grant Date        Fair Value |   | Shares |   | Weighted Average Grant Date        Fair Value |
|                            | (in thousands) |   |   |   | (in thousands) |   |   |   | (in thousands) |   |   |
| Nonvested, at beginning of year | 434 |  |   | $ | 30.64 |  |   | 221 |  |   | $ | 35.11 |  |   | $ | — |  |   | $ | — |  |
| Granted                         | — |  |   | — |  |   | 277 |  |   | 27.61 |  |   | 225 |  |   | 35.10 |  |
| Forfeited                       | (55 | ) |   | 30.65 |  |   | (64 | ) |   | 32.95 |  |   | (4 | ) |   | 35.09 |  |
| Nonvested, at end of year       | 379 |  |   | 30.63 |  |   | 434 |  |   | 30.64 |  |   | 221 |  |   | 35.11 |  |

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            | Cash Settled PSUs subject to Service and Market Conditions |
|                            | 2016 |   | 2015 |   | 2014 |
|                            | Shares |   | Weighted Average Grant Date Fair Value |   | Shares |   | Weighted Average Grant Date Fair Value |   | Shares |   | Weighted Average Grant Date Fair Value |
|                            | (in thousands) |   |   |   | (in thousands) |   |   |   | (in thousands) |   |   |
| Nonvested, at beginning of year | 172 |  |   | $ | 69.64 |  |   | 172 |  |   | $ | 69.64 |  |   | 172 |  |   | $ | 69.64 |  |
| Forfeited                       | (102 | ) |   | 82.86 |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Nonvested, at end of year       | 70 |  |   | 50.52 |  |   | 172 |  |   | 69.64 |  |   | 172 |  |   | 69.64 |  |

----

|                                                                           |
|---------------------------------------------------------------------------|
|                                                                           |  |  |  |  |  |  |  |  |  |  |  |
|                                                                      | For the Years Ended October 31, |
| (in millions)                                                             | 2016 |   | 2015 |   | 2014 |
| Equity in income of affiliated companies, net of dividends                |   |   |   |   |   |
| Equity in income of non-consolidated affiliates                           | $ | (6 | ) |   | $ | (6 | ) |   | $ | (9 | ) |
| Dividends from non-consolidated affiliates                                | 12 |  |   | 12 |  |   | 12 |  |
| Equity in income of non-consolidated affiliates, net of dividends         | $ | 6 |  |   | $ | 6 |  |   | $ | 3 |  |
| Other non-cash operating activities                                       |   |   |   |   |   |
| Loss (gain) on sale of property and equipment                             | $ | 2 |  |   | $ | (4 | ) |   | $ | (9 | ) |
| Loss on sale and impairment of repossessed collateral                     | 6 |  |   | 2 |  |   | 3 |  |
| Loss on repurchase of debt                                                | — |  |   | — |  |   | 11 |  |
| Income from operating leases                                              | (20 | ) |   | (33 | ) |   | (46 | ) |
| Other non-cash operating activities                                       | $ | (12 | ) |   | $ | (35 | ) |   | $ | (41 | ) |
| Changes in other assets and liabilities                                   |   |   |   |   |   |
| Other current assets                                                      | $ | 8 |  |   | $ | (4 | ) |   | $ | 62 |  |
| Other noncurrent assets                                                   | (11 | ) |   | 12 |  |   | 2 |  |
| Other current liabilities                                                 | (165 | ) |   | 79 |  |   | (206 | ) |
| Postretirement benefits liabilities                                       | (47 | ) |   | (54 | ) |   | (82 | ) |
| Other noncurrent liabilities                                              | (114 | ) |   | (135 | ) |   | (78 | ) |
| Other, net                                                                | (41 | ) |   | 25 |  |   | 20 |  |
| Changes in other assets and liabilities                                   | $ | (370 | ) |   | $ | (77 | ) |   | $ | (282 | ) |
| Cash paid during the year                                                 |   |   |   |   |   |
| Interest, net of amounts capitalized                                      | $ | 291 |  |   | $ | 239 |  |   | $ | 258 |  |
| Income taxes, net of refunds                                              | 44 |  |   | 52 |  |   | 15 |  |
| Non-cash investing and financing activities                               |   |   |   |   |   |
| Property and equipment acquired under capital leases                      | $ | 1 |  |   | $ | 2 |  |   | $ | 3 |  |
| Transfers to inventories from property and equipment for leases to others | (27 | ) |   | (7 | ) |   | (14 | ) |

----

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Statement of Operations for the Year Ended October 31, 2016 |
| (in millions)                                                                       | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Sales and revenues, net                                                             | $ | — |  |   | $ | 5,926 |  |   | $ | 5,432 |  |   | $ | (3,247 | ) |   | $ | 8,111 |  |
| Costs of products sold                                                              | — |  |   | 5,358 |  |   | 4,628 |  |   | (3,174 | ) |   | 6,812 |  |
| Restructuring charges                                                               | — |  |   | 3 |  |   | 7 |  |   | — |  |   | 10 |  |
| Asset impairment charges                                                            | — |  |   | 11 |  |   | 16 |  |   | — |  |   | 27 |  |
| All other operating expenses (income)                                               | 101 |  |   | 862 |  |   | 398 |  |   | (61 | ) |   | 1,300 |  |
| Total costs and expenses                                                            | 101 |  |   | 6,234 |  |   | 5,049 |  |   | (3,235 | ) |   | 8,149 |  |
| Equity in income (loss) of affiliates                                               | 4 |  |   | 181 |  |   | 2 |  |   | (181 | ) |   | 6 |  |
| Income (loss) before income taxes                                                   | (97 | ) |   | (127 | ) |   | 385 |  |   | (193 | ) |   | (32 | ) |
| Income tax benefit (expense)                                                        | — |  |   | 20 |  |   | (55 | ) |   | 2 |  |   | (33 | ) |
| Earnings (loss) from continuing operations                                          | (97 | ) |   | (107 | ) |   | 330 |  |   | (191 | ) |   | (65 | ) |
| Income (loss) from discontinued operations, net of tax                              | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Net income (loss)                                                                   | (97 | ) |   | (107 | ) |   | 330 |  |   | (191 | ) |   | (65 | ) |
| Less: Net income attributable to non-controlling interests                          | — |  |   | — |  |   | 32 |  |   | — |  |   | 32 |  |
| Net income (loss) attributable to Navistar International Corporation                | $ | (97 | ) |   | $ | (107 | ) |   | $ | 298 |  |   | $ | (191 | ) |   | $ | (97 | ) |

----

|                                                                                                      |
|------------------------------------------------------------------------------------------------------|
|                                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Statement of Comprehensive Income (Loss) for the Year Ended October 31, 2016 |
| (in millions)                                                                                        | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Net income (loss)                                                                                    | $ | (97 | ) |   | $ | (107 | ) |   | $ | 330 |  |   | $ | (191 | ) |   | $ | (65 | ) |
| Other comprehensive income (loss):                                                                   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                              | 7 |  |   | — |  |   | 7 |  |   | (7 | ) |   | 7 |  |
| Defined benefit plans, net of tax                                                                    | (46 | ) |   | 1 |  |   | (47 | ) |   | 46 |  |   | (46 | ) |
| Total other comprehensive income (loss)                                                              | (39 | ) |   | 1 |  |   | (40 | ) |   | 39 |  |   | (39 | ) |
| Comprehensive income (loss)                                                                          | (136 | ) |   | (106 | ) |   | 290 |  |   | (152 | ) |   | (104 | ) |
| Less: Net income attributable to non-controlling interests                                           | — |  |   | — |  |   | 32 |  |   | — |  |   | 32 |  |
| Total comprehensive income (loss) attributable to Navistar International Corporation                 | $ | (136 | ) |   | $ | (106 | ) |   | $ | 258 |  |   | $ | (152 | ) |   | $ | (136 | ) |

|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Balance Sheet as of October 31, 2016                            |
| (in millions)                                                                           | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Assets                                                                                  |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                               | $ | 435 |  |   | $ | 117 |  |   | $ | 252 |  |   | $ | — |  |   | $ | 804 |  |
| Marketable securities                                                                   | 27 |  |   | — |  |   | 19 |  |   | — |  |   | 46 |  |
| Restricted cash                                                                         | 16 |  |   | 6 |  |   | 90 |  |   | — |  |   | 112 |  |
| Finance and other receivables, net                                                      | (1 | ) |   | 171 |  |   | 1,883 |  |   | (84 | ) |   | 1,969 |  |
| Inventories                                                                             | — |  |   | 639 |  |   | 313 |  |   | (8 | ) |   | 944 |  |
| Investments in non-consolidated affiliates                                              | (7,714 | ) |   | 6,253 |  |   | 57 |  |   | 1,457 |  |   | 53 |  |
| Property and equipment, net                                                             | — |  |   | 669 |  |   | 580 |  |   | (8 | ) |   | 1,241 |  |
| Goodwill                                                                                | — |  |   | — |  |   | 38 |  |   | — |  |   | 38 |  |
| Deferred taxes, net                                                                     | — |  |   | 10 |  |   | 150 |  |   | 1 |  |   | 161 |  |
| Other                                                                                   | 2 |  |   | 110 |  |   | 175 |  |   | (2 | ) |   | 285 |  |
| Total assets                                                                            | $ | (7,235 | ) |   | $ | 7,975 |  |   | $ | 3,557 |  |   | $ | 1,356 |  |   | $ | 5,653 |  |
| Liabilities and stockholders’ equity (deficit)                                    |   |   |   |   |   |   |   |   |   |
| Debt                                                                                    | $ | 1,965 |  |   | $ | 1,100 |  |   | $ | 1,841 |  |   | $ | (2 | ) |   | $ | 4,904 |  |
| Postretirement benefits liabilities                                                     | — |  |   | 2,865 |  |   | 233 |  |   | — |  |   | 3,098 |  |
| Amounts due to (from) affiliates                                                        | (7,724 | ) |   | 10,709 |  |   | (3,040 | ) |   | 55 |  |   | — |  |
| Other liabilities                                                                       | 3,822 |  |   | (152 | ) |   | (665 | ) |   | (61 | ) |   | 2,944 |  |
| Total liabilities                                                                       | (1,937 | ) |   | 14,522 |  |   | (1,631 | ) |   | (8 | ) |   | 10,946 |  |
| Stockholders’ equity attributable to non-controlling interest                     | — |  |   | — |  |   | 5 |  |   | — |  |   | 5 |  |
| Stockholders’ equity (deficit) attributable to Navistar International Corporation | (5,298 | ) |   | (6,547 | ) |   | 5,183 |  |   | 1,364 |  |   | (5,298 | ) |
| Total liabilities and stockholders’ equity (deficit)                              | $ | (7,235 | ) |   | $ | 7,975 |  |   | $ | 3,557 |  |   | $ | 1,356 |  |   | $ | 5,653 |  |

----

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Statement of Cash Flows for the Year Ended October 31, 2016 |
| (in millions)                                                                       | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Net cash provided by (used in) operating activities                                 | $ | (106 | ) |   | $ | 187 |  |   | $ | 337 |  |   | $ | (151 | ) |   | $ | 267 |  |
| Cash flows from investing activities                                                |   |   |   |   |   |   |   |   |   |
| Net change in restricted cash and cash equivalents                                  | — |  |   | 1 |  |   | 4 |  |   | — |  |   | 5 |  |
| Net sales of marketable securities                                                  | 85 |  |   | — |  |   | 28 |  |   | — |  |   | 113 |  |
| Capital expenditures and purchase of equipment leased to others                     | — |  |   | (94 | ) |   | (154 | ) |   | — |  |   | (248 | ) |
| Other investing activities                                                          | — |  |   | 2 |  |   | 61 |  |   | — |  |   | 63 |  |
| Net cash provided by (used in) investing activities                                 | 85 |  |   | (91 | ) |   | (61 | ) |   | — |  |   | (67 | ) |
| Cash flows from financing activities                                                |   |   |   |   |   |   |   |   |   |
| Net repayments of debt                                                              | — |  |   | (82 | ) |   | (191 | ) |   | (69 | ) |   | (342 | ) |
| Other financing activities                                                          | — |  |   | 22 |  |   | (253 | ) |   | 220 |  |   | (11 | ) |
| Net cash provided by (used in) financing activities                                 | — |  |   | (60 | ) |   | (444 | ) |   | 151 |  |   | (353 | ) |
| Effect of exchange rate changes on cash and cash equivalents                        | — |  |   | — |  |   | 45 |  |   | — |  |   | 45 |  |
| Increase (decrease) in cash and cash equivalents                                    | (21 | ) |   | 36 |  |   | (123 | ) |   | — |  |   | (108 | ) |
| Cash and cash equivalents at beginning of the year                                  | 456 |  |   | 81 |  |   | 375 |  |   | — |  |   | 912 |  |
| Cash and cash equivalents at end of the year                                        | $ | 435 |  |   | $ | 117 |  |   | $ | 252 |  |   | $ | — |  |   | $ | 804 |  |

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Statement of Operations for the Year Ended October 31, 2015 |
| (in millions)                                                                       | NIC |   | Navistar, Inc. |   | Non-Guarantor Subsidiaries |   | Eliminations and Other |   | Consolidated |
| Sales and revenues, net                                                             | $ | — |  |   | $ | 7,267 |  |   | $ | 7,413 |  |   | $ | (4,540 | ) |   | $ | 10,140 |  |
| Costs of products sold                                                              | — |  |   | 6,614 |  |   | 6,510 |  |   | (4,454 | ) |   | 8,670 |  |
| Restructuring charges                                                               | — |  |   | 50 |  |   | 26 |  |   | — |  |   | 76 |  |
| Asset impairment charges                                                            | — |  |   | 13 |  |   | 17 |  |   | — |  |   | 30 |  |
| All other operating expenses (income)                                               | 88 |  |   | 1,054 |  |   | 399 |  |   | (68 | ) |   | 1,473 |  |
| Total costs and expenses                                                            | 88 |  |   | 7,731 |  |   | 6,952 |  |   | (4,522 | ) |   | 10,249 |  |
| Equity in income (loss) of affiliates                                               | (96 | ) |   | 225 |  |   | 2 |  |   | (125 | ) |   | 6 |  |
| Income (loss) before income taxes                                                   | (184 | ) |   | (239 | ) |   | 463 |  |   | (143 | ) |   | (103 | ) |
| Income tax benefit (expense)                                                        | — |  |   | 1 |  |   | (52 | ) |   | — |  |   | (51 | ) |
| Earnings (loss) from continuing operations                                          | (184 | ) |   | (238 | ) |   | 411 |  |   | (143 | ) |   | (154 | ) |
| Income from discontinued operations, net of tax                                     | — |  |   | — |  |   | 3 |  |   | — |  |   | 3 |  |
| Net income (loss)                                                                   | (184 | ) |   | (238 | ) |   | 414 |  |   | (143 | ) |   | (151 | ) |
| Less: Net income attributable to non-controlling interests                          | — |  |   | — |  |   | 33 |  |   | — |  |   | 33 |  |
| Net income (loss) attributable to Navistar International Corporation                | $ | (184 | ) |   | $ | (238 | ) |   | $ | 381 |  |   | $ | (143 | ) |   | $ | (184 | ) |

----

|                                                                                                      |
|------------------------------------------------------------------------------------------------------|
|                                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Statement of Comprehensive Income (Loss) for the Year Ended October 31, 2015 |
| (in millions)                                                                                        | NIC |   | Navistar, Inc. |   | Non-Guarantor Subsidiaries |   | Eliminations and Other |   | Consolidated |
| Net income (loss)                                                                                    | $ | (184 | ) |   | $ | (238 | ) |   | $ | 414 |  |   | $ | (143 | ) |   | $ | (151 | ) |
| Other comprehensive income (loss):                                                                   |  |  |   |  |  |   |  |  |   |  |  |   |  |
| Foreign currency translation adjustment                                                              | (160 | ) |   | — |  |   | (160 | ) |   | 160 |  |   | (160 | ) |
| Defined benefit plans, net of tax                                                                    | (178 | ) |   | (192 | ) |   | 14 |  |   | 178 |  |   | (178 | ) |
| Total other comprehensive income (loss)                                                              | (338 | ) |   | (192 | ) |   | (146 | ) |   | 338 |  |   | (338 | ) |
| Comprehensive income (loss)                                                                          | (522 | ) |   | (430 | ) |   | 268 |  |   | 195 |  |   | (489 | ) |
| Less: Net income attributable to non-controlling interests                                           | — |  |   | — |  |   | 33 |  |   | — |  |   | 33 |  |
| Total comprehensive income (loss) attributable to Navistar International Corporation                 | $ | (522 | ) |   | $ | (430 | ) |   | $ | 235 |  |   | $ | 195 |  |   | $ | (522 | ) |

|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Balance Sheet as of October 31, 2015                            |
| (in millions)                                                                           | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Assets                                                                                  |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                               | $ | 456 |  |   | $ | 81 |  |   | $ | 375 |  |   | $ | — |  |   | $ | 912 |  |
| Marketable securities                                                                   | 112 |  |   | — |  |   | 47 |  |   | — |  |   | 159 |  |
| Restricted cash                                                                         | 16 |  |   | 7 |  |   | 98 |  |   | — |  |   | 121 |  |
| Finance and other receivables, net                                                      | 1 |  |   | 99 |  |   | 2,440 |  |   | (103 | ) |   | 2,437 |  |
| Inventories                                                                             | — |  |   | 809 |  |   | 342 |  |   | (16 | ) |   | 1,135 |  |
| Investments in non-consolidated affiliates                                              | (7,679 | ) |   | 6,204 |  |   | 64 |  |   | 1,477 |  |   | 66 |  |
| Property and equipment, net                                                             | — |  |   | 737 |  |   | 616 |  |   | (8 | ) |   | 1,345 |  |
| Goodwill                                                                                | — |  |   | — |  |   | 38 |  |   | — |  |   | 38 |  |
| Deferred taxes, net                                                                     | 7 |  |   | 20 |  |   | 137 |  |   | — |  |   | 164 |  |
| Other                                                                                   | 6 |  |   | 119 |  |   | 148 |  |   | (1 | ) |   | 272 |  |
| Total assets                                                                            | $ | (7,081 | ) |   | $ | 8,076 |  |   | $ | 4,305 |  |   | $ | 1,349 |  |   | $ | 6,649 |  |
| Liabilities and stockholders’ equity (deficit)                                    |   |   |   |   |   |   |   |   |   |
| Debt                                                                                    | $ | 1,944 |  |   | $ | 1,171 |  |   | $ | 2,144 |  |   | $ | (4 | ) |   | $ | 5,255 |  |
| Postretirement benefits liabilities                                                     | — |  |   | 2,909 |  |   | 179 |  |   | — |  |   | 3,088 |  |
| Amounts due to (from) affiliates                                                        | (7,574 | ) |   | 10,280 |  |   | (2,879 | ) |   | 173 |  |   | — |  |
| Other liabilities                                                                       | 3,716 |  |   | 207 |  |   | (388 | ) |   | (69 | ) |   | 3,466 |  |
| Total liabilities                                                                       | (1,914 | ) |   | 14,567 |  |   | (944 | ) |   | 100 |  |   | 11,809 |  |
| Stockholders’ equity attributable to non-controlling interest                     | — |  |   | — |  |   | 7 |  |   | — |  |   | 7 |  |
| Stockholders’ equity (deficit) attributable to Navistar International Corporation | (5,167 | ) |   | (6,491 | ) |   | 5,242 |  |   | 1,249 |  |   | (5,167 | ) |
| Total liabilities and stockholders’ equity (deficit)                              | $ | (7,081 | ) |   | $ | 8,076 |  |   | $ | 4,305 |  |   | $ | 1,349 |  |   | $ | 6,649 |  |

----

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Statement of Cash Flows for the Year Ended October 31, 2015 |
| (in millions)                                                                       | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Net cash provided by (used in) operating activities                                 | $ | 87 |  |   | $ | 184 |  |   | $ | 168 |  |   | $ | (393 | ) |   | $ | 46 |  |
| Cash flows from investing activities                                                |   |   |   |   |   |   |   |   |   |
| Net change in restricted cash and cash equivalents                                  | 3 |  |   | (4 | ) |   | 43 |  |   | — |  |   | 42 |  |
| Net sales of marketable securities                                                  | 266 |  |   | — |  |   | 180 |  |   | — |  |   | 446 |  |
| Capital expenditures and purchase of equipment leased to others                     | — |  |   | (82 | ) |   | (116 | ) |   | — |  |   | (198 | ) |
| Other investing activities                                                          | — |  |   | 3 |  |   | 23 |  |   | — |  |   | 26 |  |
| Net cash provided by (used in) investing activities                                 | 269 |  |   | (83 | ) |   | 130 |  |   | — |  |   | 316 |  |
| Cash flows from financing activities                                                |   |   |   |   |   |   |   |   |   |
| Net borrowings (repayments) of debt                                                 | (2 | ) |   | (38 | ) |   | (113 | ) |   | 268 |  |   | 115 |  |
| Other financing activities                                                          | 1 |  |   | (35 | ) |   | (108 | ) |   | 125 |  |   | (17 | ) |
| Net cash provided by (used in) financing activities                                 | (1 | ) |   | (73 | ) |   | (221 | ) |   | 393 |  |   | 98 |  |
| Effect of exchange rate changes on cash and cash equivalents                        | — |  |   | — |  |   | (45 | ) |   | — |  |   | (45 | ) |
| Increase in cash and cash equivalents                                               | 355 |  |   | 28 |  |   | 32 |  |   | — |  |   | 415 |  |
| Cash and cash equivalents at beginning of the year                                  | 101 |  |   | 53 |  |   | 343 |  |   | — |  |   | 497 |  |
| Cash and cash equivalents at end of the year                                        | $ | 456 |  |   | $ | 81 |  |   | $ | 375 |  |   | $ | — |  |   | $ | 912 |  |

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Statement of Operations for the Year Ended October 31, 2014 |
| (in millions)                                                                       | NIC |   | Navistar, Inc. |   | Non-Guarantor Subsidiaries |   | Eliminations and Other |   | Consolidated |
| Sales and revenues, net                                                             | $ | — |  |   | $ | 7,269 |  |   | $ | 8,196 |  |   | $ | (4,659 | ) |   | $ | 10,806 |  |
| Costs of products sold                                                              | — |  |   | 6,794 |  |   | 7,337 |  |   | (4,597 | ) |   | 9,534 |  |
| Restructuring charges                                                               | — |  |   | 8 |  |   | 34 |  |   | — |  |   | 42 |  |
| Asset impairment charges                                                            | — |  |   | 16 |  |   | 167 |  |   | — |  |   | 183 |  |
| All other operating expenses (income)                                               | (48 | ) |   | 1,003 |  |   | 541 |  |   | 116 |  |   | 1,612 |  |
| Total costs and expenses                                                            | (48 | ) |   | 7,821 |  |   | 8,079 |  |   | (4,481 | ) |   | 11,371 |  |
| Equity in income (loss) of affiliates                                               | (680 | ) |   | (169 | ) |   | 5 |  |   | 853 |  |   | 9 |  |
| Income (loss) before income taxes                                                   | (632 | ) |   | (721 | ) |   | 122 |  |   | 675 |  |   | (556 | ) |
| Income tax benefit (expense)                                                        | 13 |  |   | 25 |  |   | (64 | ) |   | — |  |   | (26 | ) |
| Earnings (loss) from continuing operations                                          | (619 | ) |   | (696 | ) |   | 58 |  |   | 675 |  |   | (582 | ) |
| Income from discontinued operations, net of tax                                     | — |  |   | — |  |   | 3 |  |   | — |  |   | 3 |  |
| Net income (loss)                                                                   | (619 | ) |   | (696 | ) |   | 61 |  |   | 675 |  |   | (579 | ) |
| Less: Net income attributable to non-controlling interests                          | — |  |   | — |  |   | 40 |  |   | — |  |   | 40 |  |
| Net income (loss) attributable to Navistar International Corporation                | $ | (619 | ) |   | $ | (696 | ) |   | $ | 21 |  |   | $ | 675 |  |   | $ | (619 | ) |

----

|                                                                                                      |
|------------------------------------------------------------------------------------------------------|
|                                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Statement of Comprehensive Income (Loss) for the Year Ended October 31, 2014 |
| (in millions)                                                                                        | NIC |   | Navistar, Inc. |   | Non-Guarantor Subsidiaries |   | Eliminations and Other |   | Consolidated |
| Net income (loss)                                                                                    | $ | (619 | ) |   | $ | (696 | ) |   | $ | 61 |  |   | $ | 675 |  |   | $ | (579 | ) |
| Other comprehensive income (loss):                                                                   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                              | (52 | ) |   | — |  |   | (52 | ) |   | 52 |  |   | (52 | ) |
| Unrealized gain on marketable securities                                                             | 1 |  |   | — |  |   | 1 |  |   | (1 | ) |   | 1 |  |
| Defined benefit plans, net of tax                                                                    | (388 | ) |   | (397 | ) |   | 9 |  |   | 388 |  |   | (388 | ) |
| Total other comprehensive income (loss)                                                              | (439 | ) |   | (397 | ) |   | (42 | ) |   | 439 |  |   | (439 | ) |
| Comprehensive income (loss)                                                                          | (1,058 | ) |   | (1,093 | ) |   | 19 |  |   | 1,114 |  |   | (1,018 | ) |
| Less: Net income attributable to non-controlling interests                                           | — |  |   | — |  |   | 40 |  |   | — |  |   | 40 |  |
| Total comprehensive income (loss) attributable to Navistar International Corporation                 | $ | (1,058 | ) |   | $ | (1,093 | ) |   | $ | (21 | ) |   | $ | 1,114 |  |   | $ | (1,058 | ) |

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Condensed Consolidating Statement of Cash Flows for the Year Ended October 31, 2014 |
| (in millions)                                                                       | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Net cash provided by (used in) operating activities                                 | $ | (285 | ) |   | $ | (1,287 | ) |   | $ | (112 | ) |   | $ | 1,348 |  |   | $ | (336 | ) |
| Cash flows from investing activities                                                |   |   |   |   |   |   |   |   |   |
| Net change in restricted cash and cash equivalents                                  | 5 |  |   | (1 | ) |   | (84 | ) |   | — |  |   | (80 | ) |
| Net sales of marketable securities                                                  | 203 |  |   | — |  |   | 22 |  |   | — |  |   | 225 |  |
| Capital expenditures and purchase of equipment leased to others                     | — |  |   | (114 | ) |   | (163 | ) |   | — |  |   | (277 | ) |
| Other investing activities                                                          | — |  |   | 17 |  |   | 40 |  |   | — |  |   | 57 |  |
| Net cash provided by (used in) investing activities                                 | 208 |  |   | (98 | ) |   | (185 | ) |   | — |  |   | (75 | ) |
| Cash flows from financing activities                                                |   |   |   |   |   |   |   |   |   |
| Net borrowings (repayments) of debt                                                 | (176 | ) |   | 1,306 |  |   | 409 |  |   | (1,389 | ) |   | 150 |  |
| Other financing activities                                                          | 18 |  |   | 60 |  |   | (90 | ) |   | 41 |  |   | 29 |  |
| Net cash provided by (used in) financing activities                                 | (158 | ) |   | 1,366 |  |   | 319 |  |   | (1,348 | ) |   | 179 |  |
| Effect of exchange rate changes on cash and cash equivalents                        | — |  |   | — |  |   | (26 | ) |   | — |  |   | (26 | ) |
| Decrease in cash and cash equivalents                                               | (235 | ) |   | (19 | ) |   | (4 | ) |   | — |  |   | (258 | ) |
| Cash and cash equivalents at beginning of the year                                  | 336 |  |   | 72 |  |   | 347 |  |   | — |  |   | 755 |  |
| Cash and cash equivalents at end of the year                                        | $ | 101 |  |   | $ | 53 |  |   | $ | 343 |  |   | $ | — |  |   | $ | 497 |  |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                            | First Quarter Ended January 31, |   | Second Quarter Ended April 30, |
| (in millions, except for per share data and stock prices)                       | 2016 |   | 2015 |   | 2016 |   | 2015 |
| Sales and revenues, net                                                         | $ | 1,765 |  |   | $ | 2,421 |  |   | $ | 2,197 |  |   | $ | 2,693 |  |
| Manufacturing gross margin(A)                                                   | 264 |  |   | 340 |  |  | 319 |  |   | 298 |  |
| Amounts attributable to Navistar International Corporation common shareholders: |   |   |   |   |   |   |   |
| Income (loss) from continuing operations, net of tax                            | $ | (33 | ) |   | $ | (42 | ) |   | $ | 4 |  |   | $ | (64 | ) |
| Income (loss) from discontinued operations, net of tax                          | — |  |   | — |  |   | — |  |   | — |  |
| Net income (loss)                                                               | $ | (33 | ) |   | $ | (42 | ) |  | $ | 4 |  |   | $ | (64 | ) |
| Earnings (loss) per share attributable to Navistar International Corporation:   |   |   |   |   |   |   |   |
| Basic:                                                                          |   |   |   |   |   |   |   |
| Continuing operations                                                           | $ | (0.40 | ) |   | $ | (0.52 | ) |   | $ | 0.05 |  |   | $ | (0.78 | ) |
| Discontinued operations                                                         | — |  |   | — |  |   | — |  |   | — |  |
|                                                                            | $ | (0.40 | ) |   | $ | (0.52 | ) |  | $ | 0.05 |  |   | $ | (0.78 | ) |
| Diluted:                                                                        |   |   |   |   |   |   |   |
| Continuing operations                                                           | $ | (0.40 | ) |   | $ | (0.52 | ) |   | $ | 0.05 |  |   | $ | (0.78 | ) |
| Discontinued operations                                                         | — |  |   | — |  |   | — |  |   | — |  |
|                                                                            | $ | (0.40 | ) |   | $ | (0.52 | ) |  | $ | 0.05 |  |   | $ | (0.78 | ) |
| Market price range-common stock:                                                |   |   |   |   |   |   |   |
| High                                                                            | $ | 15.21 |  |   | $ | 38.05 |  |   | $ | 16.39 |  |   | $ | 31.28 |  |
| Low                                                                             | 5.78 |  |   | 28.99 |  |   | 6.24 |  |   | 27.50 |  |

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                            | Third Quarter Ended July 31, |   | Fourth Quarter Ended October 31, |
| (in millions, except for per share data and stock prices)                       | 2016 |   | 2015 |   | 2016 |   | 2015 |
| Sales and revenues, net                                                         | $ | 2,086 |  |   | $ | 2,538 |  |   | $ | 2,063 |  |   | $ | 2,488 |  |
| Manufacturing gross margin(A)                                                   | 295 |  |   | 329 |  |   | 286 |  |   | 358 |  |
| Amounts attributable to Navistar International Corporation common shareholders: |   |   |   |   |   |   |   |
| Loss from continuing operations, net of tax                                     | $ | (34 | ) |   | $ | (30 | ) |   | $ | (34 | ) |   | $ | (51 | ) |
| Income from discontinued operations, net of tax                                 | — |  |   | 2 |  |   | — |  |   | 1 |  |
| Net loss                                                                        | $ | (34 | ) |   | $ | (28 | ) |   | $ | (34 | ) |   | $ | (50 | ) |
| Earnings (loss) per share attributable to Navistar International Corporation:   |   |   |   |   |   |   |   |
| Basic:                                                                          |   |   |   |   |   |   |   |
| Continuing operations                                                           | $ | (0.42 | ) |   | $ | (0.37 | ) |   | $ | (0.42 | ) |   | $ | (0.62 | ) |
| Discontinued operations                                                         | — |  |   | 0.03 |  |   | — |  |   | 0.01 |  |
|                                                                            | $ | (0.42 | ) |   | $ | (0.34 | ) |   | $ | (0.42 | ) |   | $ | (0.61 | ) |
| Diluted:                                                                        |   |   |   |   |   |   |   |
| Continuing operations                                                           | $ | (0.42 | ) |   | $ | (0.37 | ) |   | $ | (0.42 | ) |   | $ | (0.62 | ) |
| Discontinued operations                                                         | — |  |   | 0.03 |  |   | — |  |   | 0.01 |  |
|                                                                            | $ | (0.42 | ) |   | $ | (0.34 | ) |   | $ | (0.42 | ) |   | $ | (0.61 | ) |
| Market price range-common stock:                                                |   |   |   |   |   |   |   |
| High                                                                            | $ | 15.77 |  |   | $ | 30.41 |  |   | $ | 24.04 |  |   | $ | 19.91 |  |
| Low                                                                             | 10.30 |  |   | 16.32 |  |   | 11.59 |  |   | 11.21 |  |

----

|              |                                                                                      |
|--------------|--------------------------------------------------------------------------------------|
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |

|         |                                                                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | All elements of a claim were reviewed to identify each data field that is relevant to the estimation processes of our material warranty liabilities.  For each key field, controls were implemented to validate the proper classification of claim data. |

|         |                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------|
| • | System edit check controls were significantly enhanced to facilitate effective validation of warranty codes based on the established policy. |

|         |                                                                                                                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Governance controls were improved to facilitate effective communication of warranty coverage changes to all affected functions within the Company, including communication to the accounting and finance departments who evaluate whether any accounting implications exist. |

----

|         |                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company. |

|         |                                                                                                                                                                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. GAAP and that receipts and expenditures of the Company are being made in accordance with authorization of our management and our Board of Directors. |

|         |                                                                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements. |

|               |                   |
|---------------|-------------------|
| Item 9B. | Other Information |

----

|               |                                                         |
|---------------|---------------------------------------------------------|
| Item 10. | Directors, Executive Officers, and Corporate Governance |

|               |                        |
|---------------|------------------------|
| Item 11. | Executive Compensation |

|               |                                                                                                |
|---------------|------------------------------------------------------------------------------------------------|
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |

|               |                                                                          |
|---------------|--------------------------------------------------------------------------|
| Item 13. | Certain Relationships and Related Transactions and Director Independence |

|               |                                        |
|---------------|----------------------------------------|
| Item 14. | Principal Accounting Fees and Services |

----

|          |                                            |
|----------|--------------------------------------------|
| Item 15. | Exhibits and Financial Statement Schedules |

|           |
|-----------|
|           |  |  |  |  |
| Exhibit:  |   | Description |   | Page |
| (3)       |   | Articles of Incorporation and By-Laws |   | E-1 |
| (4)       |   | Instruments Defining Rights of Security Holders, including Indentures |   | E-2 |
| (10)      |   | Material Contracts |   | E-3 |
| (11)      |   | Computation of Earnings (loss) per Share (incorporated by reference from Note 17. Earnings (Loss) Per Share Attributable to Navistar International Corporation, to the accompanying consolidated financial statements) |   | 130 |
| (12)      |   | Computation of Ratio of Earnings to Fixed Charges |   | E-10 |
| (21)      |   | Subsidiaries of the Registrant |   | E-11 |
| (23.1)    |   | Consent of Independent Registered Public Accounting Firm |   | E-12 |
| (24)      |   | Power of Attorney |   | E-13 |
| (31.1)    |   | CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |   | E-14 |
| (31.2)    |   | CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |   | E-15 |
| (32.1)    |   | CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |   | E-16 |
| (32.2)    |   | CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |   | E-17 |
| (99.1)    |   | Additional Financial Information (Unaudited) |   | E-18 |
| (101.INS) |   | XBRL Instance Document |   | N/A |
| (101.SCH) |   | XBRL Taxonomy Extension Schema Document |   | N/A |
| (101.CAL) |   | XBRL Taxonomy Extension Calculation Linkbase Document |   | N/A |
| (101.LAB) |   | XBRL Taxonomy Extension Label Linkbase Document |   | N/A |
| (101.PRE) |   | XBRL Taxonomy Extension Presentation Linkbase Document |   | N/A |
| (101.DEF) |   | XBRL Taxonomy Extension Definition Linkbase Document |   | N/A |

----

|        |
|--------|
|        |  |
|   | NAVISTAR INTERNATIONAL CORPORATION |
|   | (Registrant) |
|   | /s/    SAMARA A. STRYCKER         |
|   | Samara A. Strycker |
|   | Senior Vice President and Corporate Controller |
|   | (Principal Accounting Officer) |

|                                  |
|----------------------------------|
|                                  |  |  |  |  |
| Signature                        |   | Title |   | Date |
|                             |   |   |   |   |
| /s/   TROY A. CLARKE        |   | President andChief Executive Officer and Director(Principal Executive Officer) |   | December 20, 2016 |
| Troy A. Clarke                   |   |   |   |
|                             |   |   |   |   |
| /s/   WALTER G. BORST       |   | Executive Vice President andChief Financial Officer(Principal Financial Officer) |   | December 20, 2016 |
| Walter G. Borst                  |   |   |   |
|                             |   |   |   |   |
| /s/   SAMARA A. STRYCKER    |   | Senior Vice President and Corporate Controller (Principal Accounting Officer) |   | December 20, 2016 |
| Samara A. Strycker               |   |   |   |
|                             |   |   |   |   |
| /s/   JOSE M. ALAPONT       |   | Director |   | December 20, 2016 |
| Jose M. Alapont                  |   |   |   |   |
|                             |   |   |   |   |
| /s/   STEPHEN R. D'ARCY     |   | Director |   | December 20, 2016 |
| Stephen R. D'Arcy                |   |   |   |   |
|                             |   |   |   |   |
| /s/   MICHAEL N. HAMMES     |   | Director |   | December 20, 2016 |
| Michael N. Hammes                |   |   |   |   |
|                             |   |   |   |   |
| /s/   VINCENT J. INTRIERI   |   | Director |   | December 20, 2016 |
| Vincent J. Intrieri              |   |   |   |   |
|                             |   |   |   |   |
| /s/   JAMES H. KEYES        |   | Director |   | December 20, 2016 |
| James H. Keyes                   |   |   |   |   |
|                             |   |   |   |   |
| /s/   STANLEY A. MCCHRYSTAL |   | Director |   | December 20, 2016 |
| Stanley A. McChrystal            |   |   |   |   |
|                             |   |   |   |   |
| /s/   SAMUEL J. MERKSAMER   |   | Director |   | December 20, 2016 |
| Samuel J. Merksamer              |   |   |   |   |
|                             |   |   |   |   |
| /s/   MARK H. RACHESKY      |   | Director |   | December 20, 2016 |
| Mark H. Rachesky                 |   |   |   |   |
|                             |   |   |   |   |
| /s/   MICHAEL F. SIRIGNANO       |  | Director |  | December 20, 2016 |
| Michael F. Sirignano             |   |   |   |   |
|                             |   |   |   |   |
| /s/   DENNIS A. SUSKIND     |   | Director |   | December 20, 2016 |
| Dennis A. Suskind                |   |   |   |   |
|                             |   |   |   |   |
| /s/   DENNIS D. WILLIAMS    |   | Director |   | December 20, 2016 |
| Dennis D. Williams               |   |   |   |   |