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

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

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| 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) |

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

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|                                      |  |  |  |
|                                 |   |   | Page |
| PART I—Financial Information   |   |   |
| Item 1.                         | Financial Statements (Unaudited) |   | 4 |
|                                 | Consolidated Statements of Operations for the three and nine months ended July 31, 2012 and 2011 |   | 4 |
|                                 | Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended July 31, 2012 and 2011 |   | 5 |
|                                 | Consolidated Balance Sheets as of July 31, 2012 and October 31, 2011 |   | 6 |
|                                 | Condensed Consolidated Statements of Cash Flows for the nine months ended July 31, 2012 and 2011 |   | 7 |
|                                 | Consolidated Statements of Stockholders' Equity (Deficit) for the nine months ended July 31, 2012 and 2011 |   | 8 |
|                                 | Notes to Condensed Consolidated Financial Statements |   | 9 |
| Item 2.                         | Management's Discussion and Analysis of Financial Condition and Results of Operations |   | 45 |
| Item 3.                         | Quantitative and Qualitative Disclosures about Market Risk |   | 63 |
| Item 4                          | Controls and Procedures |   | 63 |
|                                 |   |   |   |
| PART II—Other Information |   |   |
| Item 1.                         | Legal Proceedings |   | 64 |
| Item 1A.                        | Risk Factors |   | 64 |
| Item 2.                              | Unregistered Sales of Equity Securities and Use of Proceeds |   | 67 |
| Item 3.                         | Defaults upon Senior Securities |   | 67 |
| Item 4.                         | Mine Safety Disclosures |   | 67 |
| Item 5.                              | Other Information |   | 67 |
| Item 6.                              | Exhibits |   | 68 |
|                                 | Signature |   | 69 |

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

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

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

|         |                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------|
| • | the anticipated performance and benefits of our products and technologies, including our advanced clean engine solutions; |

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

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

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

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|---------|---------------------------------------------------------------------------------------------------------------------------|
| • | our expectations relating to the dissolution of our Blue Diamond Truck joint venture with Ford expected in December 2014; |

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

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|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | our expectations relating to our cost reduction initiatives, including our voluntary separation program, involuntary reduction in force, and other reductions to reduce discretionary spending; |

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

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| • | our anticipated costs relating to the development of our emissions solutions products; |

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

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

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

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

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

|         |                                                   |
|---------|---------------------------------------------------|
| • | estimates relating to pension plan contributions; |

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

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

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|                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                          | Three Months Ended July 31, |   | Nine Months Ended     July 31, |
| (in millions, except per share data)                                          | 2012 |   | 2011 |   | 2012 |   | 2011 |
| Sales and revenues                                                            |   |   |   |   |   |   |   |
| Sales of manufactured products, net                                           | $ | 3,277 |  |   | $ | 3,490 |  |   | $ | 9,540 |  |   | $ | 9,481 |  |
| Finance revenues                                                              | 42 |  |   | 47 |  |   | 129 |  |   | 154 |  |
| Sales and revenues, net                                                       | 3,319 |  |   | 3,537 |  |   | 9,669 |  |   | 9,635 |  |
| Costs and expenses                                                            |   |   |   |   |   |   |   |
| Costs of products sold                                                        | 2,876 |  |   | 2,930 |  |   | 8,518 |  |   | 7,830 |  |
| Restructuring charges                                                         | 4 |  |   | 56 |  |   | 24 |  |   | 80 |  |
| Impairment of property and equipment and intangible assets                    | — |  |   | 64 |  |   | 38 |  |   | 64 |  |
| Selling, general and administrative expenses                                  | 328 |  |   | 334 |  |   | 1,068 |  |   | 1,006 |  |
| Engineering and product development costs                                     | 137 |  |   | 141 |  |   | 408 |  |   | 407 |  |
| Interest expense                                                              | 59 |  |   | 62 |  |   | 182 |  |   | 187 |  |
| Other expense (income), net                                                   | 5 |  |   | (18 | ) |   | 26 |  |   | (39 | ) |
| Total costs and expenses                                                      | 3,409 |  |   | 3,569 |  |   | 10,264 |  |   | 9,535 |  |
| Equity in loss of non-consolidated affiliates                                 | (10 | ) |   | (22 | ) |   | (21 | ) |   | (55 | ) |
| Income (loss) before income taxes                                             | (100 | ) |   | (54 | ) |   | (616 | ) |   | 45 |  |
| Income tax benefit                                                            | 196 |  |   | 1,463 |  |   | 410 |  |   | 1,458 |  |
| Net income (loss)                                                             | 96 |  |   | 1,409 |  |   | (206 | ) |   | 1,503 |  |
| Less: Net income attributable to non-controlling interests                    | 12 |  |   | 9 |  |   | 35 |  |   | 35 |  |
| Net income (loss) attributable to Navistar International Corporation          | $ | 84 |  |   | $ | 1,400 |  |   | $ | (241 | ) |   | $ | 1,468 |  |
|                                                                          |   |   |   |   |  |  |   |  |  |
| Earnings (loss) per share attributable to Navistar International Corporation: |   |   |   |   |   |   |   |
| Basic                                                                         | $ | 1.22 |  |   | $ | 19.10 |  |   | $ | (3.49 | ) |   | $ | 20.13 |  |
| Diluted                                                                       | 1.22 |  |   | 18.24 |  |   | (3.49 | ) |   | 19.04 |  |
|                                                                          |   |   |   |   |   |   |   |
| Weighted average shares outstanding:                                          |   |   |   |   |   |   |   |
| Basic                                                                         | 68.7 |  |   | 73.3 |  |   | 69.1 |  |   | 73.0 |  |
| Diluted                                                                       | 68.9 |  |   | 76.8 |  |   | 69.1 |  |   | 77.1 |  |

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|                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                        | Three Months Ended July 31, |   | Nine Months Ended July 31, |
| 2012                                                                                 |   | 2011 |   | 2012 |   | 2011 |
| Net income (loss) attributable to Navistar International Corporation                 | $ | 84 |  |   | $ | 1,400 |  |   | $ | (241 | ) |   | $ | 1,468 |  |
| Other comprehensive income (loss)                                                    |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                              | (61 | ) |   | 4 |  |   | (139 | ) |   | 65 |  |
| Defined benefit plans (net of tax of $13, $31, $36, and $31, respectively)           | 23 |  |   | (14 | ) |   | 63 |  |   | 65 |  |
| Total other comprehensive income (loss)                                              | (38 | ) |   | (10 | ) |   | (76 | ) |   | 130 |  |
| Total comprehensive income (loss) attributable to Navistar International Corporation | $ | 46 |  |   | $ | 1,390 |  |   | $ | (317 | ) |   | $ | 1,598 |  |

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|                                                                                                                        |  |  |  |  |  |  |  |
| (in millions, except per share data)                                                                                   | July 31, 2012 |   | October 31, 2011 |
| ASSETS                                                                                                                 | (Unaudited) |   |   |
| Current assets                                                                                                         |   |   |   |
| Cash and cash equivalents                                                                                              | $ | 547 |  |   | $ | 539 |  |
| Restricted cash                                                                                                        | 125 |  |   | 100 |  |
| Marketable securities                                                                                                  | 159 |  |   | 718 |  |
| Trade and other receivables, net                                                                                       | 822 |  |   | 1,219 |  |
| Finance receivables, net                                                                                               | 1,812 |  |   | 2,198 |  |
| Inventories                                                                                                            | 1,877 |  |   | 1,714 |  |
| Deferred taxes, net                                                                                                    | 480 |  |   | 474 |  |
| Other current assets                                                                                                   | 293 |  |   | 273 |  |
| Total current assets                                                                                                   | 6,115 |  |   | 7,235 |  |
| Restricted cash                                                                                                        | 154 |  |   | 227 |  |
| Trade and other receivables, net                                                                                       | 110 |  |   | 122 |  |
| Finance receivables, net                                                                                               | 523 |  |   | 715 |  |
| Investments in non-consolidated affiliates                                                                             | 46 |  |   | 60 |  |
| Property and equipment (net of accumulated depreciation and amortization of $2,170 and $2,056 at the respective dates) | 1,646 |  |   | 1,570 |  |
| Goodwill                                                                                                               | 280 |  |   | 319 |  |
| Intangible assets (net of accumulated amortization of $100 and $99, at the respective dates)                           | 179 |  |   | 234 |  |
| Deferred taxes, net                                                                                                    | 1,926 |  |   | 1,583 |  |
| Other noncurrent assets                                                                                                | 164 |  |   | 226 |  |
| Total assets                                                                                                           | $ | 11,143 |  |   | $ | 12,291 |  |
| LIABILITIES and STOCKHOLDERS’ EQUITY (DEFICIT)                                                                   |   |   |   |
| Liabilities                                                                                                            |   |   |   |
| Current liabilities                                                                                                    |   |   |   |
| Notes payable and current maturities of long-term debt                                                                 | $ | 1,416 |  |   | $ | 1,379 |  |
| Accounts payable                                                                                                       | 1,816 |  |   | 2,122 |  |
| Other current liabilities                                                                                              | 1,298 |  |   | 1,297 |  |
| Total current liabilities                                                                                              | 4,530 |  |   | 4,798 |  |
| Long-term debt                                                                                                         | 2,996 |  |   | 3,477 |  |
| Postretirement benefits liabilities                                                                                    | 3,057 |  |   | 3,210 |  |
| Deferred taxes, net                                                                                                    | 56 |  |   | 59 |  |
| Other noncurrent liabilities                                                                                           | 862 |  |   | 719 |  |
| Total liabilities                                                                                                      | 11,501 |  |   | 12,263 |  |
| Redeemable equity securities                                                                                           | 5 |  |   | 5 |  |
| Stockholders’ equity (deficit)                                                                                   |   |   |   |
| Series D convertible junior preference stock                                                                      | 3 |  |   | 3 |  |
| Common stock ($0.10 par value per share, 220.0 shares authorized, and 75.4 shares issued, at both dates)               | 8 |  |   | 7 |  |
| Additional paid in capital                                                                                             | 2,274 |  |   | 2,253 |  |
| Accumulated deficit                                                                                                    | (396 | ) |   | (155 | ) |
| Accumulated other comprehensive loss                                                                                   | (2,020 | ) |   | (1,944 | ) |
| Common stock held in treasury, at cost (6.8 and 4.9 shares, at the respective dates)                                   | (276 | ) |   | (191 | ) |
| Total stockholders’ deficit attributable to Navistar International Corporation                                   | (407 | ) |   | (27 | ) |
| Stockholders’ equity attributable to non-controlling interests                                                   | 44 |  |   | 50 |  |
| Total stockholders’ equity (deficit)                                                                             | (363 | ) |   | 23 |  |
| Total liabilities and stockholders’ equity (deficit)                                                             | $ | 11,143 |  |   | $ | 12,291 |  |

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|                                                                                                       |  |  |  |  |  |  |  |
|                                                                                                  | Nine Months Ended July 31, |
| (in millions)                                                                                         | 2012 |   | 2011 |
| Cash flows from operating activities                                                                  |   |   |   |
| Net income (loss)                                                                                     | $ | (206 | ) |   | $ | 1,503 |  |
| Adjustments to reconcile net income (loss) to cash provided by operating activities:                  |   |   |   |
| Depreciation and amortization                                                                         | 209 |  |   | 217 |  |
| Depreciation of equipment leased to others                                                            | 37 |  |   | 28 |  |
| Deferred taxes, including change in valuation allowance                                               | (405 | ) |   | (1,472 | ) |
| Impairment of property and equipment and intangible assets                                            | 38 |  |   | 73 |  |
| Amortization of debt issuance costs and discount                                                      | 31 |  |   | 33 |  |
| Stock-based compensation                                                                              | 16 |  |   | 33 |  |
| Provision for doubtful accounts, net of recoveries                                                    | — |  |   | (5 | ) |
| Equity in loss of non-consolidated affiliates, net of dividends                                       | 27 |  |   | 57 |  |
| Write-off of debt issuance cost and discount                                                          | 8 |  |   | — |  |
| Other non-cash operating activities                                                                   | 5 |  |   | (9 | ) |
| Changes in other assets and liabilities, exclusive of the effects of businesses acquired and disposed | 586 |  |   | 81 |  |
| Net cash provided by operating activities                                                             | 346 |  |   | 539 |  |
| Cash flows from investing activities                                                                  |   |   |   |
| Purchases of marketable securities                                                                    | (672 | ) |   | (1,109 | ) |
| Sales or maturities of marketable securities                                                          | 1,230 |  |   | 1,075 |  |
| Net change in restricted cash and cash equivalents                                                    | 48 |  |   | 21 |  |
| Capital expenditures                                                                                  | (250 | ) |   | (291 | ) |
| Purchase of equipment leased to others                                                                | (49 | ) |   | (35 | ) |
| Proceeds from sales of property and equipment                                                         | 12 |  |   | 27 |  |
| Investments in non-consolidated affiliates                                                            | (18 | ) |   | (48 | ) |
| Proceeds from sales of affiliates                                                                     | 1 |  |   | 6 |  |
| Business acquisitions, net of cash received                                                           | (12 | ) |   | (1 | ) |
| Acquisition of intangibles                                                                            | (14 | ) |   | (15 | ) |
| Net cash provided by (used in) investing activities                                                   | 276 |  |   | (370 | ) |
| Cash flows from financing activities                                                                  |   |   |   |
| Proceeds from issuance of securitized debt                                                            | 1,155 |  |   | 348 |  |
| Principal payments on securitized debt                                                                | (1,532 | ) |   | (560 | ) |
| Proceeds from issuance of non-securitized debt                                                        | 717 |  |   | 158 |  |
| Principal payments on non-securitized debt                                                            | (582 | ) |   | (73 | ) |
| Net decrease in notes and debt outstanding under revolving credit facilities                          | (195 | ) |   | (85 | ) |
| Principal payments under financing arrangements and capital lease obligations                         | (30 | ) |   | (81 | ) |
| Debt issuance costs                                                                                   | (20 | ) |   | (6 | ) |
| Purchase of treasury stock                                                                            | (75 | ) |   | (11 | ) |
| Proceeds from exercise of stock options                                                               | 2 |  |   | 36 |  |
| Dividends paid by subsidiaries to non-controlling interest                                            | (44 | ) |   | (43 | ) |
| Other financing activities                                                                            | (3 | ) |   | — |  |
| Net cash used in financing activities                                                                 | (607 | ) |   | (317 | ) |
| Effect of exchange rate changes on cash and cash equivalents                                          | (7 | ) |   | 7 |  |
| Increase (decrease) in cash and cash equivalents                                                      | 8 |  |   | (141 | ) |
| Cash and cash equivalents at beginning of the period                                                  | 539 |  |   | 585 |  |
| Cash and cash equivalents at end of the period                                                        | $ | 547 |  |   | $ | 444 |  |

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|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                           | Series D ConvertibleJuniorPreference Stock |   | CommonStock |   | Additional Paid-inCapital |   | AccumulatedDeficit |   | AccumulatedOtherComprehensiveLoss |   | CommonStockHeld inTreasury, at cost |   | Stockholders'EquityAttributableto NoncontrollingInterests |   | Total |
| Balance as of October 31, 2011                                                          | $ | 3 |  |   | $ | 7 |  |   | $ | 2,253 |  |   | $ | (155 | ) |   | $ | (1,944 | ) |   | $ | (191 | ) |   | $ | 50 |  |   | $ | 23 |  |
| Net income (loss)                                                                       |   |   |   |   |   |   | (241 | ) |   |   |   |   |   | 35 |  |   | (206 | ) |
| Total other comprehensive loss                                                          |   |   |   |   |   |   |   |   | (76 | ) |   |   |   |   |   | (76 | ) |
| Stock-based compensation                                                                |   |   |   |   | 14 |  |   |   |   |   |   |   |   |   |   | 14 |  |
| Stock ownership programs                                                                |   |   |   |   | (10 | ) |   |   |   |   |   | 11 |  |   |   |   | 1 |  |
| Stock repurchase programs                                                               |   |   |   |   | 20 |  |   |   |   |   |   | (95 | ) |   |   |   | (75 | ) |
| Cash dividends paid to non-controlling interest                                         |   |   |   |   |   |   |   |   |   |   |   |   | (44 | ) |   | (44 | ) |
| Increase in ownership interest acquired from non-controlling interest holder            |   |   |   |   | (3 | ) |   |   |   |   |   |   |   | 3 |  |   | — |  |
| Other                                                                                   |   |   | 1 |  |   |   |   |   |   |  |  |   | (1 | ) |   |   |   | — |  |
| Balance as of July 31, 2012                                                             | $ | 3 |  |   | $ | 8 |  |   | $ | 2,274 |  |   | $ | (396 | ) |   | $ | (2,020 | ) |   | $ | (276 | ) |   | $ | 44 |  |   | $ | (363 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance as of October 31, 2010                                                          | $ | 4 |  |   | $ | 7 |  |   | $ | 2,206 |  |   | $ | (1,878 | ) |   | $ | (1,196 | ) |   | $ | (124 | ) |   | $ | 49 |  |   | $ | (932 | ) |
| Net income                                                                              |   |   |   |   |   |   | 1,468 |  |   |   |   |   |   | 35 |  |   | 1,503 |  |
| Total other comprehensive income                                                        |   |   |   |   |   |   |   |   | 130 |  |   |   |   |   |   | 130 |  |
| Transfer from redeemable equity securities upon exercise or expiration of stock options |   |   |   |   | 3 |  |   |   |   |   |   |   |   |   |   | 3 |  |
| Stock-based compensation                                                                |   |   |   |   | 24 |  |   |   |   |   |   |   |   |   |   | 24 |  |
| Stock ownership programs                                                                |   |   |   |   | 10 |  |   |   |   |   |   | 23 |  |   |   |   | 33 |  |
| Stock repurchase programs                                                               |   |   |   |   |   |   |   |   |   |   | (11 | ) |   |   |   | (11 | ) |
| Cash dividends paid to non-controlling interest                                         |   |   |   |   |   |   |   |   |   |   |   |   | (43 | ) |   | (43 | ) |
| Impact to additional paid-in capital for valuation allowance release                    |   |   |   |   | 45 |  |   |   |   |   |   |   |   |   |   | 45 |  |
| Other                                                                                   | (1 | ) |   |   |   | 1 |  |   |   |   |   |   |   |   |  |  |   | — |  |
| Balance as of July 31, 2011                                                             | $ | 3 |  |   | $ | 7 |  |   | $ | 2,289 |  |   | $ | (410 | ) |   | $ | (1,066 | ) |   | $ | (112 | ) |   | $ | 41 |  |   | $ | 752 |  |

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|                                                                   |  |  |  |  |  |  |  |
|                                                              | Nine Months Ended July 31, |
| (in millions)                                                     | 2012 |   | 2011 |
| Balance, at beginning of period                                   | $ | 598 |  |   | $ | 506 |  |
| Costs accrued and revenues deferred                               | 353 |  |   | 281 |  |
| Adjustments to pre-existing warranties(A)(B)                      | 255 |  |   | 66 |  |
| Payments and revenues recognized                                  | (324 | ) |   | (288 | ) |
| Balance at end of period                                          | 882 |  |   | 565 |  |
| Less: Current portion                                             | 448 |  |   | 254 |  |
| Noncurrent accrued product warranty and deferred warranty revenue | $ | 434 |  |   | $ | 311 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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. In the first quarter of 2012, we recorded adjustments for changes in estimates of $123 million ($75 million, or $1.07 per diluted share, net of tax). In the second quarter of 2012, we recorded adjustments for changes in estimates of $104 million ($63 million, or $0.92 per diluted share, net of tax). The impacts of income taxes on the adjustments reflect the Company's estimated annual effective tax rate as of July 31, 2012. |

|     |                                                                                                                                                                                                                                                                                                                                                                     |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (B) | In the third quarter of 2012, we recognized $10 million of adjustments to pre-existing warranties for a specific warranty issue related to component parts from a supplier. Also during the quarter, we reached agreement for reimbursement from such supplier and recognized a recovery for that amount and recorded a receivable within Other current assets. |

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|                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                | Balance at October 31, 2011 |   | Additions |   | Payments |   | Adjustments |   | Balance at July 31, 2012 |
| Employee termination charges | $ | 31 |  |   | $ | 2 |  |   | $ | (8 | ) |   | $ | (4 | ) |   | $ | 21 |  |
| Employee relocation costs    | — |  |   | 6 |  |   | (6 | ) |   | — |  |   | — |  |
| Lease vacancy                | — |  |   | 19 |  |   | (2 | ) |   | 1 |  |   | 18 |  |
| Other                        | 8 |  |   | 2 |  |   | (7 | ) |   | (1 | ) |   | 2 |  |
| Restructuring liability      | $ | 39 |  |   | $ | 29 |  |   | $ | (23 | ) |   | $ | (4 | ) |   | $ | 41 |  |

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|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                | Balance atOctober 31, 2010 |   | Additions |   | Payments |   | Adjustments |   | Balance at July 31, 2011 |
| Employee termination charges | $ | 5 |  |   | $ | 25 |  |   | $ | (4 | ) |   | $ | — |  |   | $ | 26 |  |
| Employee relocation costs    | — |  |   | 4 |  |   | (4 | ) |   | — |  |   | — |  |
| Other                        | — |  |   | 7 |  |   | — |  |   | — |  |   | 7 |  |
| Restructuring liability      | $ | 5 |  |   | $ | 36 |  |   | $ | (8 | ) |   | $ | — |  |   | $ | 33 |  |

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |
| (in millions)                         | July 31, 2012 |   | October 31, 2011 |
| Retail portfolio                      | $ | 1,188 |  |   | $ | 1,613 |  |
| Wholesale portfolio                   | 1,175 |  |   | 1,334 |  |
| Total finance receivables             | 2,363 |  |   | 2,947 |  |
| Less: Allowance for doubtful accounts | 28 |  |   | 34 |  |
| Total finance receivables, net        | 2,335 |  |   | 2,913 |  |
| Less: Current portion, net(A)         | 1,812 |  |   | 2,198 |  |
| Noncurrent portion, net               | $ | 523 |  |   | $ | 715 |  |

|     |                                                                                                                                                                                                                                                |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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. |

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|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |
| (in millions)                                  | Maturity |   | July 31, 2012 |   | October 31, 2011 |
| Variable funding notes ("VFN")                 | October 2012 |   | $ | 500 |  |   | $ | 500 |  |
| Investor notes                                 | October 2012 |   | 350 |  |   | 350 |  |
| Investor notes                                 | October 2013 |   | 224 |  |   | — |  |
| Investor notes                                 | January 2012 |   | — |  |   | 250 |  |
|    Total wholesale note funding |   |   | $ | 1,074 |  |   | $ | 1,100 |  |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    | Three Months Ended July 31, |   | Nine Months Ended July 31, |
| (in millions)                           | 2012 |   | 2011 |   | 2012 |   | 2011 |
| Retail notes and finance leases revenue | $ | 24 |  |   | $ | 32 |  |   | $ | 76 |  |   | $ | 108 |  |
| Operating lease revenue                 | 10 |  |   | 8 |  |   | 30 |  |   | 23 |  |
| Wholesale notes interest                | 22 |  |   | 25 |  |   | 67 |  |   | 76 |  |
| Retail and wholesale accounts interest  | 8 |  |   | 8 |  |   | 26 |  |   | 20 |  |
| Securitization income                   | — |  |   | — |  |   | — |  |   | 2 |  |
| Gross finance revenues                  | 64 |  |   | 73 |  |   | 199 |  |   | 229 |  |
| Less: Intercompany revenues             | 22 |  |   | 26 |  |   | 70 |  |   | 75 |  |
| Finance revenues                        | $ | 42 |  |   | $ | 47 |  |   | $ | 129 |  |   | $ | 154 |  |

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|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                    | Three Months Ended July 31, 2012 |   | Three Months Ended July 31, 2011 |
| (in millions)                                           | RetailPortfolio |   | WholesalePortfolio |   | Trade andOtherReceivables |   | Total |   | RetailPortfolio |   | WholesalePortfolio |   | Trade andOtherReceivables |   | Total |
| Allowance for doubtful accounts, at beginning of period | $ | 26 |  |   | $ | 2 |  |   | $ | 17 |  |   | $ | 45 |  |   | $ | 40 |  |   | $ | 2 |  |   | $ | 34 |  |   | $ | 76 |  |
| Provision for doubtful accounts, net of recoveries      | 1 |  |   | — |  |   | — |  |   | 1 |  |   | (1 | ) |   | — |  |   | (2 | ) |   | (3 | ) |
| Charge-off of accounts(A)                               | (1 | ) |   | — |  |   | (2 | ) |   | (3 | ) |   | (2 | ) |   | — |  |   | (4 | ) |   | (6 | ) |
| Allowance for doubtful accounts, at end of period       | $ | 26 |  |   | $ | 2 |  |   | $ | 15 |  |   | $ | 43 |  |   | $ | 37 |  |   | $ | 2 |  |   | $ | 28 |  |   | $ | 67 |  |

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                    | Nine Months Ended July 31, 2012 |   | Nine Months Ended July 31, 2011 |
| (in millions)                                           | RetailPortfolio |   | WholesalePortfolio |   | Trade andOtherReceivables |   | Total |   | RetailPortfolio |   | WholesalePortfolio |   | Trade andOtherReceivables |   | Total |
| Allowance for doubtful accounts, at beginning of period | $ | 31 |  |   | $ | 2 |  |   | $ | 17 |  |   | $ | 50 |  |   | $ | 58 |  |   | $ | 2 |  |   | $ | 36 |  |   | $ | 96 |  |
| Provision for doubtful accounts, net of recoveries      | (1 | ) |   | — |  |   | 2 |  |   | 1 |  |   | (1 | ) |   | — |  |   | (4 | ) |   | (5 | ) |
| Charge-off of accounts(A)                               | (4 | ) |   | — |  |   | (4 | ) |   | (8 | ) |   | (20 | ) |   | — |  |   | (4 | ) |   | (24 | ) |
| Allowance for doubtful accounts, at end of period       | $ | 26 |  |   | $ | 2 |  |   | $ | 15 |  |   | $ | 43 |  |   | $ | 37 |  |   | $ | 2 |  |   | $ | 28 |  |   | $ | 67 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | We repossess sold and leased vehicles on defaulted finance receivables and leases, and place them into Inventories. Losses recognized at the time of repossession and charged against the allowance for doubtful accounts were $1 million and $4 million for the three and nine months ended July 31, 2012, respectively, and $2 million and $17 million for the three and nine months ended July 31, 2011, respectively. |

|                                                             |
|-------------------------------------------------------------|
|                                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                        | As of |
|                                                        | July 31, 2012 |   | October 31, 2011 |
| (in millions)                                               | RetailPortfolio |   | WholesalePortfolio |   | Total |   | RetailPortfolio |   | WholesalePortfolio |   | Total |
| Impaired finance receivables with specific loss reserves    | $ | 14 |  |   | $ | — |  |   | $ | 14 |  |   | $ | 15 |  |   | $ | — |  |   | $ | 15 |  |
| Impaired finance receivables without specific loss reserves | 1 |  |   | — |  |   | 1 |  |   | 2 |  |   | — |  |   | 2 |  |
| Specific loss reserves on impaired finance receivables      | 11 |  |   | — |  |   | 11 |  |   | 10 |  |   | — |  |   | 10 |  |
| Finance receivables on non-accrual status                   | 11 |  |   | — |  |   | 11 |  |   | 14 |  |   | — |  |   | 14 |  |

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|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                      | As of |
|                      | July 31, 2012 |   | October 31, 2011 |
| (in millions)             | RetailPortfolio |   | WholesalePortfolio |   | Total |   | RetailPortfolio |   | WholesalePortfolio |   | Total |
| Current                   | $ | 1,116 |  |   | $ | 1,172 |  |   | $ | 2,288 |  |   | $ | 1,515 |  |   | $ | 1,328 |  |   | $ | 2,843 |  |
| 30-90 days past due       | 59 |  |   | 2 |  |   | 61 |  |   | 85 |  |   | 5 |  |   | 90 |  |
| Over 90 days past due     | 13 |  |   | 1 |  |   | 14 |  |   | 13 |  |   | 1 |  |   | 14 |  |
| Total finance receivables | $ | 1,188 |  |   | $ | 1,175 |  |   | $ | 2,363 |  |   | $ | 1,613 |  |   | $ | 1,334 |  |   | $ | 2,947 |  |

|                   |
|-------------------|
|                   |  |  |  |  |  |  |  |
|              | As of |
| (in millions)     | July 31, 2012 |   | October 31, 2011 |
| Finished products | $ | 958 |  |   | $ | 873 |  |
| Work in process   | 203 |  |   | 174 |  |
| Raw materials     | 716 |  |   | 667 |  |
| Total inventories | $ | 1,877 |  |   | $ | 1,714 |  |

|                         |
|-------------------------|
|                         |  |  |  |  |  |  |  |
| (in millions)           | Three Months Ended July 31, 2011 |   | Nine Months Ended July 31, 2011 |
| Net revenue             | $ | 82 |  |   | $ | 161 |  |
| Net expenses            | 105 |  |   | 218 |  |
| Loss before tax expense | (23 | ) |   | (57 | ) |
| Net loss                | (24 | ) |   | (58 | ) |

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|                                                                                                                |
|----------------------------------------------------------------------------------------------------------------|
|                                                                                                                |  |  |  |  |  |  |  |
| (in millions)                                                                                                  | July 31,       2012 |   | October 31, 2011 |
| Manufacturing operations                                                                                       |   |   |   |
| 8.25% Senior Notes, due 2021, net of unamortized discount of $28 and $33, respectively                         | $ | 872 |  |   | $ | 967 |  |
| 3.0% Senior Subordinated Convertible Notes, due 2014, net of unamortized discount of $56 and $73, respectively | 514 |  |   | 497 |  |
| Debt of majority-owned dealerships                                                                             | 75 |  |   | 94 |  |
| Financing arrangements and capital lease obligations                                                           | 146 |  |   | 118 |  |
| Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040                                                      | 225 |  |   | 225 |  |
| Promissory Note                                                                                                | 33 |  |   | 40 |  |
| Asset-Based Credit Facility                                                                                    | 238 |  |   | — |  |
| Other                                                                                                          | 43 |  |   | 39 |  |
| Total manufacturing operations debt                                                                            | 2,146 |  |   | 1,980 |  |
| Less: Current portion                                                                                          | 356 |  |   | 99 |  |
| Net long-term manufacturing operations debt                                                                    | $ | 1,790 |  |   | $ | 1,881 |  |
| Financial Services operations                                                                                  |   |   |   |
| Asset-backed debt issued by consolidated SPEs, at fixed and variable rates, due serially through 2019          | $ | 1,299 |  |   | $ | 1,664 |  |
| Bank revolvers, at fixed and variable rates, due dates from 2013 through 2017                                  | 857 |  |   | 1,072 |  |
| Commercial paper, at variable rates, due serially through 2012                                                 | 53 |  |   | 70 |  |
| Borrowings secured by operating and finance leases, at various rates, due serially through 2017                | 57 |  |   | 70 |  |
| Total financial services operations debt                                                                       | 2,266 |  |   | 2,876 |  |
| Less: Current portion                                                                                          | 1,060 |  |   | 1,280 |  |
| Net long-term financial services operations debt                                                               | $ | 1,206 |  |   | $ | 1,596 |  |

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|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                               | Three Months Ended July 31, |   | Nine Months Ended July 31, |
|                                               | PensionBenefits |   | Health andLife InsuranceBenefits |   | PensionBenefits |   | Health andLife InsuranceBenefits |
| (in millions)                                      | 2012 |   | 2011 |   | 2012 |   | 2011 |   | 2012 |   | 2011 |   | 2012 |   | 2011 |
| Service cost for benefits earned during the period | $ | 5 |  |   | $ | 4 |  |   | $ | 1 |  |   | $ | 2 |  |   | $ | 13 |  |   | $ | 13 |  |   | $ | 5 |  |   | $ | 6 |  |
| Interest on obligation                             | 43 |  |   | 47 |  |   | 20 |  |   | 13 |  |   | 129 |  |   | 141 |  |   | 62 |  |   | 40 |  |
| Amortization of cumulative loss                    | 27 |  |   | 25 |  |   | 10 |  |   | — |  |   | 82 |  |   | 75 |  |   | 30 |  |   | — |  |
| Amortization of prior service benefit              | 1 |  |   | 1 |  |   | (2 | ) |   | (7 | ) |   | 1 |  |   | 1 |  |   | (4 | ) |   | (22 | ) |
| Settlements and curtailments                       | — |  |   | — |  |   | — |  |   | 11 |  |   | — |  |   | 2 |  |   | — |  |   | 11 |  |
| Contractual termination benefits                   | — |  |   | 35 |  |   | — |  |   | 6 |  |   | — |  |   | 38 |  |   | (3 | ) |   | 6 |  |
| Premiums on pension insurance                      | — |  |   | — |  |   | — |  |   | — |  |   | 1 |  |   | 1 |  |   | — |  |   | — |  |
| Expected return on assets                          | (49 | ) |   | (53 | ) |   | (8 | ) |   | (10 | ) |   | (145 | ) |   | (158 | ) |   | (26 | ) |   | (31 | ) |
| Net postretirement benefits expense                | $ | 27 |  |   | $ | 59 |  |   | $ | 21 |  |   | $ | 15 |  |   | $ | 81 |  |   | $ | 113 |  |   | $ | 64 |  |   | $ | 10 |  |

|         |                                                                                              |
|---------|----------------------------------------------------------------------------------------------|
| • | 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. |

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|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                     | As of July 31, 2012 |
| (in millions)                            | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Assets                                   |   |   |   |   |   |   |   |
| Marketable securities:                   |   |   |   |   |   |   |   |
| U.S. Treasury bills                      | $ | 139 |  |   | $ | — |  |   | $ | — |  |   | $ | 139 |  |
| Other U.S. and non-U.S. government bonds | — |  |   | — |  |   | — |  |   | — |  |
| Other                                    | 20 |  |   | — |  |   | — |  |   | 20 |  |
| Derivative financial instruments:        |   |   |   |   |   |   |   |
| Foreign currency contracts               | — |  |   | 1 |  |   | — |  |   | 1 |  |
| Commodity contracts                      | — |  |   | — |  |   | — |  |   | — |  |
| Total assets                             | $ | 159 |  |   | $ | 1 |  |   | $ | — |  |   | $ | 160 |  |
| Liabilities                              |   |   |   |   |   |   |   |
| Derivative financial instruments:        |   |   |   |   |   |   |   |
| Foreign currency contracts               | $ | — |  |   | $ | 2 |  |   | $ | — |  |   | $ | 2 |  |
| Commodity contracts                      | — |  |   | 6 |  |   | — |  |   | 6 |  |
| Guarantees                               | — |  |   | — |  |   | 7 |  |   | 7 |  |
| Total liabilities                        | $ | — |  |   | $ | 8 |  |   | $ | 7 |  |   | $ | 15 |  |

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|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    | As of October 31, 2011 |
| (in millions)                           | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Assets                                  |   |   |   |   |   |   |   |
| Marketable securities:                  |   |   |   |   |   |   |   |
| U.S. Treasury bills                     | $ | 283 |  |   | $ | — |  |   | $ | — |  |   | $ | 283 |  |
| Other U.S and non-U.S. government bonds | 415 |  |   | — |  |   | — |  |   | 415 |  |
| Other                                   | 20 |  |   | — |  |   | — |  |   | 20 |  |
| Derivative financial instruments:       |   |   |   |   |   |   |   |
| Commodity contracts                     | — |  |   | — |  |   | 1 |  |   | 1 |  |
| Foreign currency contracts              | — |  |   | 3 |  |   | — |  |   | 3 |  |
| Total assets                            | $ | 718 |  |   | $ | 3 |  |   | $ | 1 |  |   | $ | 722 |  |
| Liabilities                             |   |   |   |   |   |   |   |
| Derivative financial instruments:       |   |   |   |   |   |   |   |
| Commodity contracts                     | $ | — |  |   | $ | 3 |  |   | $ | 3 |  |   | $ | 6 |  |
| Cross currency swaps                    | — |  |   | 4 |  |   | — |  |   | 4 |  |
| Guarantees                              | — |  |   | — |  |   | 6 |  |   | 6 |  |
| Total liabilities                       | $ | — |  |   | $ | 7 |  |   | $ | 9 |  |   | $ | 16 |  |

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                               | 2012 |   | 2011 |
| (in millions)                                                      | Guarantees |   | Retained interests |   | Commodity contracts |   | Guarantees |   | Retained interests |   | Commodity contracts |
| Three Months Ended July 31                                         |   |   |   |   |   |   |   |   |   |   |   |
| Balance at May 1                                                   | $ | 7 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 6 |  |
| Total losses (realized/unrealized) included in   earnings (A) | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (1 | ) |
| Settlements                                                        | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (3 | ) |
| Balance at July 31                                                 | $ | 7 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 2 |  |
| Change in unrealized gains on assets and liabilities still held    | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 2 |  |

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Nine Months Ended July 31                                                |   |   |   |   |   |   |   |   |   |   |   |
| Balance at November 1                                                    | $ | 6 |  |   | $ | — |  |   | $ | (2 | ) |   | $ | — |  |   | $ | 53 |  |   | $ | 2 |  |
| Total gains (losses) (realized/unrealized) included in earnings (A) | — |  |   | — |  |   | (1 | ) |   | — |  |   | 1 |  |   | 5 |  |
| Transfers into Level 3                                                   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Transfers out of Level 3                                                 | — |  |   | — |  |   | 2 |  |   | — |  |   | — |  |   | — |  |
| Issuances                                                                | 1 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Settlements                                                              | — |  |   | — |  |   | 1 |  |   | — |  |   | (54 | ) |   | (5 | ) |
| Balance at July 31                                                       | $ | 7 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 2 |  |
| Change in unrealized gains on assets and liabilities still held          | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 2 |  |

|     |                                                                                                                                                            |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | For commodity contracts, gains (losses) are included in Costs of products sold. For retained interests, gains recognized are included in Finance revenues. |

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|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |
|                         | Level 2 |
| (in millions)                | July 31, 2012 |   | October 31, 2011 |
| Finance receivables (A) | $ | 4 |  |   | $ | 5 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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. As of July 31, 2012, impaired receivables with a carrying amount of $15 million had specific loss reserves of $11 million and a fair value of $4 million. As of October 31, 2011, impaired receivables with a carrying amount of $15 million had specific loss reserves of $10 million and a fair value of $5 million. Fair values of the underlying collateral are determined by reference to dealer vehicle value publications adjusted for certain market factors. |

|                                                                                                 |
|-------------------------------------------------------------------------------------------------|
|                                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                            | As of July 31, 2012 |
|                                                                                            | Estimated Fair Value |   | Carrying Value |
| (in millions)                                                                                   | Level 1 |   | Level 2 |   | Level 3 |   | Total |   |
| Assets                                                                                          |   |   |   |   |   |   |   |   |   |
| Retail notes                                                                                    | $ | — |  |   | $ | — |  |   | $ | 689 |  |   | $ | 689 |  |   | $ | 687 |  |
| Notes receivable                                                                                | — |  |   | — |  |   | 59 |  |   | 59 |  |   | 61 |  |
| Liabilities                                                                                     |   |   |   |   |   |   |   |   |   |
| Debt:                                                                                           |   |   |   |   |   |   |   |   |   |
| Manufacturing operations                                                                        |   |   |   |   |   |   |   |   |   |
| 8.25% Senior Notes, due 2021                                                                    | 865 |  |   | — |  |   | — |  |   | 865 |  |   | 872 |  |
| 3.0% Senior Subordinated Convertible Notes, due 2014(A)                                    | 517 |  |   | — |  |   | — |  |   | 517 |  |   | 514 |  |
| Debt of majority-owned dealerships                                                              | — |  |   | — |  |   | 74 |  |   | 74 |  |   | 75 |  |
| Financing arrangements                                                                          | — |  |   | — |  |   | 115 |  |   | 115 |  |   | 122 |  |
| Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040                                  | — |  |   | 236 |  |   | — |  |   | 236 |  |   | 225 |  |
| Promissory Note                                                                                 | — |  |   | — |  |   | 33 |  |   | 33 |  |   | 33 |  |
| Asset-Based Credit Facility                                                                     | — |  |   | — |  |   | 238 |  |   | 238 |  |   | 238 |  |
| Other                                                                                           | — |  |   | — |  |   | 42 |  |   | 42 |  |   | 43 |  |
| Financial Services operations                                                                   |   |   |   |   |   |   |   |   |   |
| Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2019      | — |  |   | — |  |   | 1,301 |  |   | 1,301 |  |   | 1,299 |  |
| Bank revolvers, at fixed and variable rates, due dates from 2013 through 2017                   | — |  |   | — |  |   | 818 |  |   | 818 |  |   | 857 |  |
| Commercial paper, at variable rates, due serially through 2012                                  | 53 |  |   | — |  |   | — |  |   | 53 |  |   | 53 |  |
| Borrowings secured by operating and finance leases, at various rates, due serially through 2017 | — |  |   | — |  |   | 56 |  |   | 56 |  |   | 57 |  |

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|                                                                                                 |
|-------------------------------------------------------------------------------------------------|
|                                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                            | As of October 31, 2011 |
|                                                                                            | Estimated Fair Value |   | Carrying Value |
| (in millions)                                                                                   | Level 1 |   | Level 2 |   | Level 3 |   | Total |   |
| Assets                                                                                          |   |   |   |   |   |   |   |   |   |
| Retail notes                                                                                    | $ | — |  |   | $ | — |  |   | $ | 954 |  |   | $ | 954 |  |   | $ | 958 |  |
| Notes receivable                                                                                | — |  |   | — |  |   | 47 |  |   | 47 |  |   | 47 |  |
| Liabilities                                                                                     |   |   |   |   |   |   |   |   |   |
| Debt:                                                                                           |   |   |   |   |   |   |   |   |   |
| Manufacturing operations                                                                        |   |   |   |   |   |   |   |   |   |
| 8.25% Senior Notes, due 2021                                                                    | 1,131 |  |   | — |  |   | — |  |   | 1,131 |  |   | 967 |  |
| 3.0% Senior Subordinated Convertible Notes, due 2014(A)                                    | 633 |  |   | — |  |   | — |  |   | 633 |  |   | 497 |  |
| Debt of majority-owned dealerships                                                              | — |  |   | — |  |   | 88 |  |   | 88 |  |   | 94 |  |
| Financing arrangements                                                                          | — |  |   | — |  |   | 112 |  |   | 112 |  |   | 114 |  |
| Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040                                  | — |  |   | 234 |  |   | — |  |   | 234 |  |   | 225 |  |
| Promissory Note                                                                                 | — |  |   | — |  |   | 39 |  |   | 39 |  |   | 40 |  |
| Asset-Based Credit Facility                                                                     | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Other                                                                                           | — |  |   | — |  |   | 26 |  |   | 26 |  |   | 39 |  |
| Financial Services operations                                                                   |   |   |   |   |   |   |   |   |   |
| Asset-backed debt issued by consolidated SPEs, at various rates, due serially through 2018      | — |  |   | — |  |   | 1,695 |  |   | 1,695 |  |   | 1,664 |  |
| Bank revolvers, at fixed and variable rates, due dates from 2013 through 2017                   | — |  |   | — |  |   | 1,091 |  |   | 1,091 |  |   | 1,072 |  |
| Commercial paper, at variable rates, due serially through 2012                                  | 70 |  |   | — |  |   | — |  |   | 70 |  |   | 70 |  |
| Borrowings secured by operating and finance leases, at various rates, due serially through 2017 | — |  |   | — |  |   | 70 |  |   | 70 |  |   | 70 |  |

|     |                                                                                                                                                                                                                                                  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | The carrying value represents the financial statement amount of the debt after allocation of the conversion feature to equity, while the fair value is based on quoted market prices for the convertible note which includes the equity feature. |

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|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |
|                       | As of July 31, 2012 |
|                       | Asset Derivatives |   | Liability Derivatives |
| (in millions)              | Location inConsolidated Balance Sheets |   | Fair Value |   | Location inConsolidated Balance Sheets |   | Fair Value |
| Foreign currency contracts | Other current assets |   | $ | 1 |  |   | Other current liabilities |   | $ | 2 |  |
| Cross currency swaps       | Other current assets |   | — |  |   | Other current liabilities |   | — |  |
| Commodity contracts        | Other current assets |   | — |  |   | Other current liabilities |   | 3 |  |
| Commodity contracts        | Other noncurrent assets |   | — |  |   | Other noncurrent liabilities |   | 3 |  |
| Total fair value           |   |   | $ | 1 |  |   |   |   | $ | 8 |  |
|                       |   |   |   |   |   |   |   |
|                       | As of October 31, 2011 |
|                       | Asset Derivatives |   | Liability Derivatives |
| (in millions)              | Location inConsolidated Balance Sheets |   | Fair Value |   | Location inConsolidated Balance Sheets |   | Fair Value |
| Foreign currency contracts | Other current assets |   | $ | 3 |  |   | Other current liabilities |   | $ | — |  |
| Cross currency swaps       | Other current assets |   | — |  |   | Other current liabilities |   | 4 |  |
| Commodity contracts        | Other current assets |   | 1 |  |   | Other current liabilities |   | 6 |
| Total fair value           |   |   | $ | 4 |  |   |   |   | $ | 10 |  |

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |
|                                  | Location inConsolidated Statements of Operations |   | Amount of Gain (Loss) Recognized |
| (in millions)                         | Three Months Ended       July 31, 2012 |   | Three Months Ended     July 31, 2011 |
| Cross currency swaps                  | Other expense (income), net |   | $ | — |  |   | $ | — |  |
| Foreign currency contracts            | Other expense (income), net |   | (2 | ) |   | (1 | ) |
| Commodity forward contracts | Costs of products sold |   | (5 | ) |   | (1 | ) |
| Total loss                            |   |   | $ | (7 | ) |   | $ | (2 | ) |

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |
|                                  | Location inConsolidated Statements of Operations |   | Amount of Gain (Loss) Recognized |
| (in millions)                         | Nine Months Ended      July 31, 2012 |   | Nine Months Ended      July 31, 2011 |
| Cross currency swaps                  | Other expense (income), net |   | $ | 1 |  |   | $ | — |  |
| Foreign currency contracts            | Other expense (income), net |   | (5 | ) |   | — |  |
| Commodity forward contracts | Costs of products sold |   | (7 | ) |   | 21 |  |
| Total gain (loss)                     |   |   | $ | (11 | ) |   | $ | 21 |  |

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|         |                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The Company will incur additional costs associated with this change and there is no assurance that we will implement this strategy within the anticipated timelines. |

|         |                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our non-binding MOU with Cummins for the Cummins 15L as well as for the SCR after treatment system is subject to the execution of definitive agreements. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our Truck segment manufactures and distributes a full line of Class 4 through 8 trucks, buses, and military vehicles under the International and IC Bus ("IC") brands. Our Truck segment also produces chassis for motor homes and commercial step-van vehicles under the WCC brand and recreational vehicles. 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 Engine segment designs and manufactures diesel engines for use globally, in Class 3 through 8 vehicles, as well as off-road applications. In North America, these engines primarily go into our Class 6 and 7 medium trucks and buses and Class 8 heavy trucks, and are sold to original equipment manufacturers ("OEMs"). In addition, our Engine segment produces diesel engines in Brazil primarily under the MWM brand for sale to OEMs in South America, as well as contract manufacturing. In all other areas of the world, including North America, engines are sold under the MaxxForce brand name. To control cost and technology, our Engine segment has expanded its operations to include Pure Power Technologies ("PPT"), a components company focused on air, fuel, and aftertreatment systems to meet more stringent Euro and EPA emission standards. Also included in the Engine 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. |

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|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our Parts segment provides customers with proprietary products needed to support the International commercial and military truck, IC Bus, WCC chassis, and MaxxForce engine lines. Our Parts segment also provides a wide selection of other standard truck, trailer, and engine aftermarket parts. At July 31, 2012, this segment operated eleven regional parts distribution centers that provide 24-hour availability and shipment. |

|         |                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | 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. |

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                          | Truck(A) |   | Engine |   | Parts(A) |   | FinancialServices(B) |   | CorporateandEliminations |   | Total |
| Three Months Ended July 31, 2012                       |   |   |   |   |   |   |   |   |   |   |   |
| External sales and revenues, net                       | $ | 2,323 |  |   | $ | 441 |  |   | $ | 513 |  |   | $ | 42 |  |   | $ | — |  |   | $ | 3,319 |  |
| Intersegment sales and revenues                        | 13 |  |   | 399 |  |   | 29 |  |   | 22 |  |   | (463 | ) |   | — |  |
| Total sales and revenues, net                          | $ | 2,336 |  |   | $ | 840 |  |   | $ | 542 |  |   | $ | 64 |  |   | $ | (463 | ) |   | $ | 3,319 |  |
| Net income (loss) attributable to NIC                  | $ | (30 | ) |   | $ | (47 | ) |   | $ | 73 |  |   | $ | 22 |  |   | $ | 66 |  |   | $ | 84 |  |
| Income tax benefit                                     | — |  |   | — |  |   | — |  |   | — |  |   | 196 |  |   | 196 |  |
| Segment profit (loss)                                  | $ | (30 | ) |   | $ | (47 | ) |   | $ | 73 |  |   | $ | 22 |  |   | $ | (130 | ) |   | $ | (112 | ) |
| Depreciation and amortization                          | $ | 41 |  |   | $ | 28 |  |   | $ | 2 |  |   | $ | 9 |  |   | $ | 6 |  |   | $ | 86 |  |
| Interest expense                                       | — |  |   | — |  |   | — |  |   | 20 |  |   | 39 |  |   | 59 |  |
| Equity in income (loss) of non-consolidated affiliates | (12 | ) |   | 1 |  |   | 1 |  |   | — |  |   | — |  |   | (10 | ) |
| Capital expenditures(C)                                | 21 |  |   | 39 |  |   | 6 |  |   | 1 |  |   | 7 |  |   | 74 |  |

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Three Months Ended July 31, 2011                       |   |   |   |   |   |   |   |   |   |   |   |
| External sales and revenues, net                       | $ | 2,457 |  |   | $ | 546 |  |   | $ | 487 |  |   | $ | 47 |  |   | $ | — |  |   | $ | 3,537 |  |
| Intersegment sales and revenues                        | — |  |   | 422 |  |   | 29 |  |   | 26 |  |   | (477 | ) |   | — |  |
| Total sales and revenues, net                          | $ | 2,457 |  |   | $ | 968 |  |   | $ | 516 |  |   | $ | 73 |  |   | $ | (477 | ) |   | $ | 3,537 |  |
| Net income (loss) attributable to NIC                  | $ | (75 | ) |   | $ | 32 |  |   | $ | 70 |  |   | $ | 30 |  |   | $ | 1,343 |  |   | $ | 1,400 |  |
| Income tax benefit                                     | — |  |   | — |  |   | — |  |   | — |  |   | 1,463 |  |   | 1,463 |  |
| Segment profit (loss)                                  | $ | (75 | ) |   | $ | 32 |  |   | $ | 70 |  |   | $ | 30 |  |   | $ | (120 | ) |   | $ | (63 | ) |
| Depreciation and amortization                          | $ | 37 |  |   | $ | 32 |  |   | $ | 2 |  |   | $ | 8 |  |   | $ | 5 |  |   | $ | 84 |  |
| Interest expense                                       | — |  |   | — |  |   | — |  |   | 28 |  |   | 34 |  |   | 62 |  |
| Equity in income (loss) of non-consolidated affiliates | (22 | ) |   | (1 | ) |   | 1 |  |   | — |  |   | — |  |   | (22 | ) |
| Capital expenditures(C)                                | 15 |  |   | 47 |  |   | 7 |  |   | 1 |  |   | 36 |  |   | 106 |  |

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|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Nine Months Ended July 31, 2012                        | Truck(A) |   | Engine |   | Parts(A) |   | FinancialServices(B) |   | CorporateandEliminations |   | Total |
| External sales and revenues, net                       | $ | 6,830 |  |   | $ | 1,301 |  |   | $ | 1,409 |  |   | $ | 129 |  |   | $ | — |  |   | $ | 9,669 |  |
| Intersegment sales and revenues                        | 26 |  |   | 1,292 |  |   | 98 |  |   | 70 |  |   | (1,486 | ) |   | — |  |
| Total sales and revenues, net                          | $ | 6,856 |  |   | $ | 2,593 |  |   | $ | 1,507 |  |   | $ | 199 |  |   | $ | (1,486 | ) |   | $ | 9,669 |  |
| Net income (loss) attributable to NIC                  | $ | (160 | ) |   | $ | (275 | ) |   | $ | 164 |  |   | $ | 75 |  |   | $ | (45 | ) |   | $ | (241 | ) |
| Income tax benefit                                     | — |  |   | — |  |   | — |  |   | — |  |   | 410 |  |   | 410 |  |
| Segment profit (loss)                                  | $ | (160 | ) |   | $ | (275 | ) |   | $ | 164 |  |   | $ | 75 |  |   | $ | (455 | ) |   | $ | (651 | ) |
| Depreciation and amortization                          | $ | 111 |  |   | $ | 87 |  |   | $ | 8 |  |   | $ | 25 |  |   | $ | 15 |  |   | $ | 246 |  |
| Interest expense                                       | — |  |   | — |  |   | — |  |   | 67 |  |   | 115 |  |   | 182 |  |
| Equity in income (loss) of non-consolidated affiliates | (27 | ) |   | 2 |  |   | 4 |  |   | — |  |   | — |  |   | (21 | ) |
| Capital expenditures(C)                                | 53 |  |   | 116 |  |   | 18 |  |   | 2 |  |   | 61 |  |   | 250 |  |

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Nine Months Ended July 31, 2011                        |   |   |   |   |   |   |   |   |   |   |   |
| External sales and revenues, net                       | $ | 6,510 |  |   | $ | 1,526 |  |   | $ | 1,445 |  |   | $ | 154 |  |   | $ | — |  |   | $ | 9,635 |  |
| Intersegment sales and revenues                        | 18 |  |   | 1,180 |  |   | 128 |  |   | 75 |  |   | (1,401 | ) |   | — |  |
| Total sales and revenues, net                          | $ | 6,528 |  |   | $ | 2,706 |  |   | $ | 1,573 |  |   | $ | 229 |  |   | $ | (1,401 | ) |   | $ | 9,635 |  |
| Net income attributable to NIC                         | $ | 49 |  |   | $ | 26 |  |   | $ | 200 |  |   | $ | 102 |  |   | $ | 1,091 |  |   | $ | 1,468 |  |
| Income tax benefit                                     | — |  |   | — |  |   | — |  |   | — |  |   | 1,458 |  |   | 1,458 |  |
| Segment profit (loss)                                  | $ | 49 |  |   | $ | 26 |  |   | $ | 200 |  |   | $ | 102 |  |   | $ | (367 | ) |   | $ | 10 |  |
| Depreciation and amortization                          | $ | 112 |  |   | $ | 91 |  |   | $ | 7 |  |   | $ | 21 |  |   | $ | 14 |  |   | $ | 245 |  |
| Interest expense                                       | — |  |   | — |  |   | — |  |   | 84 |  |   | 103 |  |   | 187 |  |
| Equity in income (loss) of non-consolidated affiliates | (57 | ) |   | (3 | ) |   | 5 |  |   | — |  |   | — |  |   | (55 | ) |
| Capital expenditures(C)                                | 53 |  |   | 131 |  |   | 11 |  |   | 1 |  |   | 95 |  |   | 291 |  |

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| As of July 31, 2012    |   |   |   |   |   |   |   |   |   |   |   |
| Segment assets         | $ | 2,509 |  |   | $ | 1,715 |  |   | $ | 708 |  |   | $ | 2,898 |  |   | $ | 3,313 |  |   | $ | 11,143 |  |
| As of October 31, 2011 |   |   |   |   |   |   |   |   |   |   |   |
| Segment assets         | $ | 2,771 |  |   | $ | 1,849 |  |   | $ | 700 |  |   | $ | 3,580 |  |   | $ | 3,391 |  |   | $ | 12,291 |  |

|     |                                                                     |
|-----|---------------------------------------------------------------------|
| (A) | See Note 2, Restructurings and Impairments, for further discussion. |

|     |                                                                                                                                                                                                                                                                                                         |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (B) | Total sales and revenues in the Financial Services segment include interest revenues of $63 million and $195 million for the three and nine months ended July 31, 2012, respectively, and $72 million and $225 million for the three and nine months ended July 31, 2011, respectively. |

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

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|                                                                                                     |
|-----------------------------------------------------------------------------------------------------|
|                                                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                | Three Months Ended July 31, |   | Nine Months Ended July 31, |
| (in millions, except per share data)                                                                | 2012 |   | 2011 |   | 2012 |   | 2011 |
| Numerator:                                                                                          |   |   |   |   |   |   |   |
| Earnings (loss) attributable to Navistar International Corporation available to common stockholders | $ | 84 |  |   | $ | 1,400 |  |   | $ | (241 | ) |   | $ | 1,468 |  |
| Denominator:                                                                                        |   |   |   |   |   |   |   |
| Weighted average shares outstanding:                                                                |   |   |   |   |   |   |   |
| Basic                                                                                               | 68.7 |  |   | 73.3 |  |   | 69.1 |  |   | 73.0 |  |
| Effect of dilutive securities                                                                       | 0.2 |  |   | 3.5 |  |   | — |  |   | 4.1 |  |
| Diluted                                                                                             | 68.9 |  |   | 76.8 |  |   | 69.1 |  |   | 77.1 |  |
|                                                                                                |   |   |   |   |   |   |   |
| Earnings (loss) per share attributable to Navistar International Corporation:                       |   |   |   |   |   |   |   |
| Basic                                                                                               | $ | 1.22 |  |   | $ | 19.10 |  |   | $ | (3.49 | ) |   | $ | 20.13 |  |
| Diluted                                                                                             | 1.22 |  |   | 18.24 |  |   | (3.49 | ) |   | 19.04 |  |

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|                                                                                          |
|------------------------------------------------------------------------------------------|
|                                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                            | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Operations for the Three Months Ended July 31, 2012 |   |   |   |   |   |   |   |   |   |
| Sales and revenues, net                                                                  | $ | — |  |   | $ | 2,007 |  |   | $ | 2,941 |  |   | $ | (1,629 | ) |   | $ | 3,319 |  |
| Costs of products sold                                                                   | — |  |   | 1,951 |  |   | 2,554 |  |   | (1,629 | ) |   | 2,876 |  |
| Restructuring charges                                                                    | — |  |   | 3 |  |   | 1 |  |   | — |  |   | 4 |  |
| Impairment of property and equipment and intangible assets                               | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| All other operating expenses                                                             | 18 |  |   | 329 |  |   | 206 |  |   | (24 | ) |   | 529 |  |
| Total costs and expenses                                                                 | 18 |  |   | 2,283 |  |   | 2,761 |  |   | (1,653 | ) |   | 3,409 |  |
| Equity in income (loss) of affiliates                                                    | (30 | ) |   | 16 |  |   | (11 | ) |   | 15 |  |   | (10 | ) |
| Income (loss) before income taxes                                                        | (48 | ) |   | (260 | ) |   | 169 |  |   | 39 |  |   | (100 | ) |
| Income tax benefit (expense)                                                             | 132 |  |   | 229 |  |   | (187 | ) |   | 22 |  |   | 196 |  |
| Net income (loss)                                                                        | 84 |  |   | (31 | ) |   | (18 | ) |   | 61 |  |   | 96 |  |
| Less: Net income attributable to non-controlling interests                               | — |  |   | — |  |   | 12 |  |   | — |  |   | 12 |  |
| Net income (loss) attributable to Navistar International Corporation                     | $ | 84 |  |   | $ | (31 | ) |   | $ | (30 | ) |   | $ | 61 |  |   | $ | 84 |  |

|                                                                                                    |
|----------------------------------------------------------------------------------------------------|
|                                                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                                      | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended July 31, 2012 |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to Navistar International Corporation                               | $ | 84 |  |   | $ | (31 | ) |   | $ | (30 | ) |   | $ | 61 |  |   | $ | 84 |  |
| Other comprehensive income (loss):                                                                 |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                            | (61 | ) |   | — |  |   | (60 | ) |   | 60 |  |   | (61 | ) |
| Defined benefit plans (net of tax of $13, $10, $3, $(13), and $13 respectively)                    | 23 |  |   | 21 |  |   | 1 |  |   | (22 | ) |   | 23 |  |
| Total other comprehensive income (loss)                                                            | (38 | ) |   | 21 |  |   | (59 | ) |   | 38 |  |   | (38 | ) |
| Total comprehensive income (loss) attributable to Navistar International Corporation               | $ | 46 |  |   | $ | (10 | ) |   | $ | (89 | ) |   | $ | 99 |  |   | $ | 46 |  |

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|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                           | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Operations for the Nine Months Ended July 31, 2012 |   |   |   |   |   |   |   |   |   |
| Sales and revenues, net                                                                 | $ | — |  |   | $ | 6,141 |  |   | $ | 8,776 |  |   | $ | (5,248 | ) |   | $ | 9,669 |  |
| Costs of products sold                                                                  | — |  |   | 6,151 |  |   | 7,577 |  |   | (5,210 | ) |   | 8,518 |  |
| Restructuring charges                                                                   | — |  |   | 23 |  |   | 1 |  |   | — |  |   | 24 |  |
| Impairment of intangible assets                                                         | — |  |   | — |  |   | 38 |  |   | — |  |   | 38 |  |
| All other operating expenses                                                            | 57 |  |   | 1,020 |  |   | 682 |  |   | (75 | ) |   | 1,684 |  |
| Total costs and expenses                                                                | 57 |  |   | 7,194 |  |   | 8,298 |  |   | (5,285 | ) |   | 10,264 |  |
| Equity in income (loss) of affiliates                                                   | (326 | ) |   | 384 |  |   | (25 | ) |   | (54 | ) |   | (21 | ) |
| Income (loss) before income taxes                                                       | (383 | ) |   | (669 | ) |   | 453 |  |   | (17 | ) |   | (616 | ) |
| Income tax benefit (expense)                                                            | 142 |  |   | 243 |  |   | — |  |   | 25 |  |   | 410 |  |
| Net income (loss)                                                                       | (241 | ) |   | (426 | ) |   | 453 |  |   | 8 |  |   | (206 | ) |
| Less: Net income attributable to non-controlling interests                              | — |  |   | — |  |   | 35 |  |   | — |  |   | 35 |  |
| Net income (loss) attributable to Navistar International Corporation                    | $ | (241 | ) |   | $ | (426 | ) |   | $ | 418 |  |   | $ | 8 |  |   | $ | (241 | ) |

|                                                                                                   |
|---------------------------------------------------------------------------------------------------|
|                                                                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                                     | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended July 31, 2012 |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to Navistar International Corporation                              | $ | (241 | ) |   | $ | (426 | ) |   | $ | 418 |  |   | $ | 8 |  |   | $ | (241 | ) |
| Other comprehensive income (loss):                                                                |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                           | (139 | ) |   | — |  |   | (138 | ) |   | 138 |  |   | (139 | ) |
| Defined benefit plans (net of tax of $36, $33, $4, $(37), and $36 respectively)                   | 63 |  |   | 57 |  |   | 6 |  |   | (63 | ) |   | 63 |  |
| Total other comprehensive income (loss)                                                           | (76 | ) |   | 57 |  |   | (132 | ) |   | 75 |  |   | (76 | ) |
| Total comprehensive income (loss) attributable to Navistar International Corporation              | $ | (317 | ) |   | $ | (369 | ) |   | $ | 286 |  |   | $ | 83 |  |   | $ | (317 | ) |

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|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                           | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Balance Sheet as of July 31, 2012                               |   |   |   |   |   |   |   |   |   |
| Assets                                                                                  |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                               | $ | 252 |  |   | $ | 55 |  |   | $ | 240 |  |   | $ | — |  |   | $ | 547 |  |
| Marketable securities                                                                   | 46 |  |   | — |  |   | 113 |  |   | — |  |   | 159 |  |
| Restricted cash and cash equivalents                                                    | 20 |  |   | 6 |  |   | 253 |  |   | — |  |   | 279 |  |
| Finance and other receivables, net                                                      | 4 |  |   | 156 |  |   | 3,109 |  |   | (2 | ) |   | 3,267 |  |
| Inventories                                                                             | — |  |   | 737 |  |   | 1,172 |  |   | (32 | ) |   | 1,877 |  |
| Investments in non-consolidated affiliates                                              | (2,527 | ) |   | 6,303 |  |   | 38 |  |   | (3,768 | ) |   | 46 |  |
| Property and equipment, net                                                             | — |  |   | 756 |  |   | 892 |  |   | (2 | ) |   | 1,646 |  |
| Goodwill                                                                                | — |  |   | — |  |   | 280 |  |   | — |  |   | 280 |  |
| Deferred taxes, net                                                                     | 230 |  |   | 1,878 |  |   | 301 |  |   | (3 | ) |   | 2,406 |  |
| Other                                                                                   | 108 |  |   | 160 |  |   | 370 |  |   | (2 | ) |   | 636 |  |
| Total assets                                                                            | $ | (1,867 | ) |   | $ | 10,051 |  |   | $ | 6,768 |  |   | $ | (3,809 | ) |   | $ | 11,143 |  |
| Liabilities and stockholders’ equity (deficit)                                    |   |   |   |   |   |   |   |   |   |
| Debt                                                                                    | $ | 1,611 |  |   | $ | 418 |  |   | $ | 2,617 |  |   | $ | (234 | ) |   | $ | 4,412 |  |
| Postretirement benefits liabilities                                                     | — |  |   | 2,855 |  |   | 315 |  |   | — |  |   | 3,170 |  |
| Amounts due to (from) affiliates                                                        | (5,851 | ) |   | 9,940 |  |   | (4,165 | ) |   | 76 |  |   | — |  |
| Other liabilities                                                                       | 2,775 |  |   | (296 | ) |   | 1,604 |  |   | (164 | ) |   | 3,919 |  |
| Total liabilities                                                                       | (1,465 | ) |   | 12,917 |  |   | 371 |  |   | (322 | ) |   | 11,501 |  |
| Redeemable equity securities                                                            | 5 |  |   | — |  |   | — |  |   | — |  |   | 5 |  |
| Stockholders’ equity attributable to non-controlling interests                    | — |  |   | — |  |   | 44 |  |   | — |  |   | 44 |  |
| Stockholders’ equity (deficit) attributable to Navistar International Corporation | (407 | ) |   | (2,866 | ) |   | 6,353 |  |   | (3,487 | ) |   | (407 | ) |
| Total liabilities and stockholders’ equity (deficit)                              | $ | (1,867 | ) |   | $ | 10,051 |  |   | $ | 6,768 |  |   | $ | (3,809 | ) |   | $ | 11,143 |  |

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|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                           | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Cash Flows for the Nine Months Ended July 31, 2012 |   |   |   |   |   |   |   |   |   |
| Net cash provided by (used in) operations                                               | $ | (330 | ) |   | $ | (362 | ) |   | $ | 458 |  |   | $ | 580 |  |   | $ | 346 |  |
| Cash flows from investment activities                                                   |   |   |   |   |   |   |   |   |   |
| Net change in restricted cash and cash equivalents                                      | — |  |   | 3 |  |   | 45 |  |   | — |  |   | 48 |  |
| Net sales of marketable securities                                                      | 383 |  |   | — |  |   | 175 |  |   | — |  |   | 558 |  |
| Capital expenditures and purchase of equipment leased to others                         | — |  |   | (173 | ) |   | (126 | ) |   | — |  |   | (299 | ) |
| Other investing activities                                                              | — |  |   | (117 | ) |   | 86 |  |   | — |  |   | (31 | ) |
| Net cash provided by (used in) investment activities                                    | 383 |  |   | (287 | ) |   | 180 |  |   | — |  |   | 276 |  |
| Cash flows from financing activities                                                    |   |   |   |   |   |   |   |   |   |
| Net borrowings (repayments) of debt                                                     | (47 | ) |   | 691 |  |   | (643 | ) |   | (488 | ) |   | (487 | ) |
| Other financing activities                                                              | 20 |  |   | — |  |   | (48 | ) |   | (92 | ) |   | (120 | ) |
| Net cash provided by (used in) financing activities                                     | (27 | ) |   | 691 |  |   | (691 | ) |   | (580 | ) |   | (607 | ) |
| Effect of exchange rate changes on cash and cash equivalents                            | — |  |   | — |  |   | (7 | ) |   | — |  |   | (7 | ) |
| Increase (decrease) in cash and cash equivalents                                        | 26 |  |   | 42 |  |   | (60 | ) |   | — |  |   | 8 |  |
| Cash and cash equivalents at beginning of the period                                    | 226 |  |   | 13 |  |   | 300 |  |   | — |  |   | 539 |  |
| Cash and cash equivalents at end of the period                                          | $ | 252 |  |   | $ | 55 |  |   | $ | 240 |  |   | $ | — |  |   | $ | 547 |  |

|                                                                                          |
|------------------------------------------------------------------------------------------|
|                                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                            | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Operations for the Three Months Ended July 31, 2011 |   |   |   |   |   |   |   |   |   |
| Sales and revenues, net                                                                  | $ | — |  |   | $ | 2,072 |  |   | $ | 3,260 |  |   | $ | (1,795 | ) |   | $ | 3,537 |  |
| Costs of products sold                                                                   | — |  |   | 1,940 |  |   | 2,774 |  |   | (1,784 | ) |   | 2,930 |  |
| Restructuring charges                                                                    | — |  |   | 4 |  |   | 52 |  |   | — |  |   | 56 |  |
| Impairment of property and equipment and intangible assets                               | — |  |   | — |  |   | 64 |  |   | — |  |   | 64 |  |
| All other operating expenses (income)                                                    | 15 |  |   | 302 |  |   | 230 |  |   | (28 | ) |   | 519 |  |
| Total costs and expenses                                                                 | 15 |  |   | 2,246 |  |   | 3,120 |  |   | (1,812 | ) |   | 3,569 |  |
| Equity in income (loss) of affiliates                                                    | 1,863 |  |   | (52 | ) |   | (9 | ) |   | (1,824 | ) |   | (22 | ) |
| Income (loss) before income taxes                                                        | 1,848 |  |   | (226 | ) |   | 131 |  |   | (1,807 | ) |   | (54 | ) |
| Income tax benefit (expense)                                                             | (448 | ) |   | 1,514 |  |   | (162 | ) |   | 559 |  |   | 1,463 |  |
| Net income (loss)                                                                        | 1,400 |  |   | 1,288 |  |   | (31 | ) |   | (1,248 | ) |   | 1,409 |  |
| Less: Net income attributable to non-controlling interest                                | — |  |   | — |  |   | 9 |  |   | — |  |   | 9 |  |
| Net income (loss) attributable to Navistar International Corporation                     | $ | 1,400 |  |   | $ | 1,288 |  |   | $ | (40 | ) |   | $ | (1,248 | ) |   | $ | 1,400 |  |

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|                                                                                                    |
|----------------------------------------------------------------------------------------------------|
|                                                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                                      | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended July 31, 2011 |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to Navistar International Corporation                               | $ | 1,400 |  |   | $ | 1,288 |  |   | $ | (40 | ) |   | $ | (1,248 | ) |   | $ | 1,400 |  |
| Other comprehensive income (loss):                                                                 |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                            | 4 |  |   | — |  |   | 4 |  |   | (4 | ) |   | 4 |  |
| Defined benefit plans (net of tax of $31, $31, $0 $(31), and $31 respectively)                     | (14 | ) |   | (19 | ) |   | 29 |  |   | (10 | ) |   | (14 | ) |
| Total other comprehensive income (loss)                                                            | (10 | ) |   | (19 | ) |   | 33 |  |   | (14 | ) |   | (10 | ) |
| Total comprehensive income (loss) attributable to Navistar International Corporation               | $ | 1,390 |  |   | $ | 1,269 |  |   | $ | (7 | ) |   | $ | (1,262 | ) |   | $ | 1,390 |  |

|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                           | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Operations for the Nine Months Ended July 31, 2011 |   |   |   |   |   |   |   |   |   |
| Sales and revenues, net                                                                 | $ | — |  |   | $ | 5,903 |  |   | $ | 9,079 |  |   | $ | (5,347 | ) |   | $ | 9,635 |  |
| Costs of products sold                                                                  | — |  |   | 5,493 |  |   | 7,620 |  |   | (5,283 | ) |   | 7,830 |  |
| Restructuring charges                                                                   | — |  |   | 27 |  |   | 53 |  |   | — |  |   | 80 |  |
| Impairment of property and equipment and intangible assets                              | — |  |   | — |  |   | 64 |  |   | — |  |   | 64 |  |
| All other operating expenses (income)                                                   | 56 |  |   | 915 |  |   | 671 |  |   | (81 | ) |   | 1,561 |  |
| Total costs and expenses                                                                | 56 |  |   | 6,435 |  |   | 8,408 |  |   | (5,364 | ) |   | 9,535 |  |
| Equity in income (loss) of affiliates                                                   | 1,983 |  |   | 292 |  |   | (29 | ) |   | (2,301 | ) |   | (55 | ) |
| Income (loss) before income taxes                                                       | 1,927 |  |   | (240 | ) |   | 642 |  |   | (2,284 | ) |   | 45 |  |
| Income tax benefit (expense)                                                            | (459 | ) |   | 1,515 |  |   | (214 | ) |   | 616 |  |   | 1,458 |  |
| Net income (loss)                                                                       | 1,468 |  |   | 1,275 |  |   | 428 |  |   | (1,668 | ) |   | 1,503 |  |
| Less: Net income attributable to non-controlling interest                               | — |  |   | — |  |   | 35 |  |   | — |  |   | 35 |  |
| Net income (loss) attributable to Navistar International Corporation                    | $ | 1,468 |  |   | $ | 1,275 |  |   | $ | 393 |  |   | $ | (1,668 | ) |   | $ | 1,468 |  |

|                                                                                                   |
|---------------------------------------------------------------------------------------------------|
|                                                                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                                     | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended July 31, 2011 |   |   |   |   |   |   |   |   |   |
| Net income attributable to Navistar International Corporation                                     | $ | 1,468 |  |   | $ | 1,275 |  |   | $ | 393 |  |   | $ | (1,668 | ) |   | $ | 1,468 |  |
| Other comprehensive income:                                                                       |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                           | 65 |  |   | — |  |   | 65 |  |   | (65 | ) |   | 65 |  |
| Defined benefit plans (net of tax of $31, $31, $0, $(31), and $31 respectively)                   | 65 |  |   | 51 |  |   | 14 |  |   | (65 | ) |   | 65 |  |
| Total other comprehensive income                                                                  | 130 |  |   | 51 |  |   | 79 |  |   | (130 | ) |   | 130 |  |
| Total comprehensive income attributable to Navistar International Corporation                     | $ | 1,598 |  |   | $ | 1,326 |  |   | $ | 472 |  |   | $ | (1,798 | ) |   | $ | 1,598 |  |

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|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                           | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Balance Sheet as of October 31, 2011                       |   |   |   |   |   |   |   |   |   |
| Assets                                                                                  |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                               | $ | 226 |  |   | $ | 13 |  |   | $ | 300 |  |   | $ | — |  |   | $ | 539 |  |
| Marketable securities                                                                   | 429 |  |   | 1 |  |   | 288 |  |   | — |  |   | 718 |  |
| Restricted cash and cash equivalents                                                    | 20 |  |   | 9 |  |   | 298 |  |   | — |  |   | 327 |  |
| Finance and other receivables, net                                                      | 3 |  |   | 154 |  |   | 4,070 |  |   | 27 |  |   | 4,254 |  |
| Inventories                                                                             | — |  |   | 650 |  |   | 1,113 |  |   | (49 | ) |   | 1,714 |  |
| Investments in non-consolidated affiliates                                              | (2,094 | ) |   | 5,818 |  |   | 54 |  |   | (3,718 | ) |   | 60 |  |
| Property and equipment, net                                                             | — |  |   | 600 |  |   | 972 |  |   | (2 | ) |   | 1,570 |  |
| Goodwill                                                                                | — |  |   | — |  |   | 319 |  |   | — |  |   | 319 |  |
| Deferred taxes, net                                                                     | 31 |  |   | 1,912 |  |   | 114 |  |   | — |  |   | 2,057 |  |
| Other                                                                                   | 168 |  |   | 152 |  |   | 416 |  |   | (3 | ) |   | 733 |  |
| Total assets                                                                            | $ | (1,217 | ) |   | $ | 9,309 |  |   | $ | 7,944 |  |   | $ | (3,745 | ) |   | $ | 12,291 |  |
| Liabilities and stockholders’ equity (deficit)                                    |   |   |   |   |   |   |   |   |   |
| Debt                                                                                    | $ | 1,689 |  |   | $ | 156 |  |   | $ | 3,242 |  |   | $ | (231 | ) |   | $ | 4,856 |  |
| Postretirement benefits liabilities                                                     | — |  |   | 2,981 |  |   | 335 |  |   | — |  |   | 3,316 |  |
| Amounts due to (from) affiliates                                                        | (5,574 | ) |   | 9,055 |  |   | (3,595 | ) |   | 114 |  |   | — |  |
| Other liabilities                                                                       | 2,690 |  |   | (194 | ) |   | 1,717 |  |   | (122 | ) |   | 4,091 |  |
| Total liabilities                                                                       | (1,195 | ) |   | 11,998 |  |   | 1,699 |  |   | (239 | ) |   | 12,263 |  |
| Redeemable equity securities                                                            | 5 |  |   | — |  |   | — |  |   | — |  |   | 5 |  |
| Stockholders’ equity (deficit) attributable to non-controlling interest           | — |  |   | — |  |   | 52 |  |   | (2 | ) |   | 50 |  |
| Stockholders’ equity (deficit) attributable to Navistar International Corporation | (27 | ) |   | (2,689 | ) |   | 6,193 |  |   | (3,504 | ) |   | (27 | ) |
| Total liabilities and stockholders’ equity (deficit)                              | $ | (1,217 | ) |   | $ | 9,309 |  |   | $ | 7,944 |  |   | $ | (3,745 | ) |   | $ | 12,291 |  |

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|                                                                                         |
|-----------------------------------------------------------------------------------------|
|                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                                                           | NIC |   | Navistar,Inc. |   | Non-GuarantorSubsidiaries |   | Eliminationsand Other |   | Consolidated |
| Condensed Consolidating Statement of Cash Flows for the Nine Months Ended July 31, 2011 |   |   |   |   |   |   |   |   |   |
| Net cash provided by (used in) operations                                               | $ | (254 | ) |   | $ | 95 |  |   | $ | 448 |  |   | $ | 250 |  |   | $ | 539 |  |
| Cash flows from investment activities                                                   |   |   |   |   |   |   |   |   |   |
| Net change in restricted cash and cash equivalents                                      | — |  |   | 2 |  |   | 19 |  |   | — |  |   | 21 |  |
| Net sales (purchases) in marketable securities                                          | 81 |  |   | — |  |   | (115 | ) |   | — |  |   | (34 | ) |
| Capital expenditures and purchase of equipment leased to others                         | — |  |   | (168 | ) |   | (158 | ) |   | — |  |   | (326 | ) |
| Other investing activities                                                              | — |  |   | (27 | ) |   | (4 | ) |   | — |  |   | (31 | ) |
| Net cash provided by (used in) investment activities                                    | 81 |  |   | (193 | ) |   | (258 | ) |   | — |  |   | (370 | ) |
| Cash flows from financing activities                                                    |   |   |   |   |   |   |   |   |   |
| Net borrowings (repayments) of debt                                                     | 48 |  |   | 161 |  |   | (258 | ) |   | (250 | ) |   | (299 | ) |
| Other financing activities                                                              | 25 |  |   | — |  |   | (43 | ) |   | — |  |   | (18 | ) |
| Net cash provided by (used in) financing activities                                     | 73 |  |   | 161 |  |   | (301 | ) |   | (250 | ) |   | (317 | ) |
| Effect of exchange rate changes on cash and cash equivalents                            | — |  |   | — |  |   | 7 |  |   | — |  |   | 7 |  |
| Increase (decrease) in cash and cash equivalents                                        | (100 | ) |   | 63 |  |   | (104 | ) |   | — |  |   | (141 | ) |
| Cash and cash equivalents at beginning of the period                                    | 239 |  |   | 22 |  |   | 324 |  |   | — |  |   | 585 |  |
| Cash and cash equivalents at end of the period                                          | $ | 139 |  |   | $ | 85 |  |   | $ | 220 |  |   | $ | — |  |   | $ | 444 |  |

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|         |                                                                                       |
|---------|---------------------------------------------------------------------------------------|
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |

|         |                                                                                                                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In June, we announced our next generation clean engine solution, In-Cylinder Technology Plus ("ICT+") to meet 2010 EPA emissions standards. The ICT+ technology combines Advanced Exhaust Gas Recirculation ("EGR") and urea-based Selective Catalytic Reduction ("SCR"). |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In August, we announced that we had agreed to a non-binding memorandum of understanding with Cummins Inc. ("Cummins") for Cummins Emission Solutions to supply its urea-based after-treatment system. The after-treatment system will be combined with our EGR engines to create ICT+ to meet 2010 EPA emissions standards and is expected to help facilitate meeting future green house gas ("GHG") standards. We are expeditiously developing plans and timelines to begin introducing the ICT+ product offering taking into consideration a number of factors including current and projected emission credit balances, ability to utilize non-conformance penalties ("NCPs"), projected volumes, and customer needs. We are targeting a phased-in product introduction plan commencing with the MaxxForce 13-liter in early 2013 followed by the MaxxForce 11-liter engines and then medium engine offerings. |

|         |                                                                                                                                                                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | As part of our expanded relationship with Cummins, the Company expects to offer the Cummins ISX15 engine in certain models. The Cummins ISX15 engine will be offered as a part of our North American on-highway truck line-up beginning in December 2012. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In August, to help facilitate the Company's adoption of the ICT+ strategy, support the market transition plan for Class 8 engine sales, and improve financial flexibility, the Company signed a definitive credit agreement relating to a senior secured, term loan credit facility in an aggregate principal amount of $1 billion (the "Term Loan Credit Facility") and borrowed an aggregate principal amount of $1 billion under the Term Loan Credit Facility. In conjunction with the Term Loan Credit Facility transaction, all of the borrowings under the Company's Asset-Based Credit Facility were repaid and Navistar, Inc. entered into an amended and restated asset-based credit agreement in an aggregate principal amount of $175 million. |

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|         |                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------|
| • | $123 million and $104 million of charges for adjustments to pre-existing warranties in the first and second quarters of 2012, respectively, |

|         |                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | $16 million and $57 million for costs relating to the Company's engineering integration actions in the third quarter and first nine months of 2012, respectively, |

|         |                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------|
| • | $38 million of charges related to the restructuring of North American manufacturing operations in the second quarter of 2012, and |

|         |                                                                                                                                                                                                      |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | $10 million and $20 million for non-conformance penalties for certain 13L engine sales that did not comply with emission standards in the third quarter and first nine months of 2012, respectively. |

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|                                                                                                               |
|---------------------------------------------------------------------------------------------------------------|
|                                                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                          | Three Months Ended      July 31, |   | Nine Months Ended      July 31, |
| (in millions, except per share data)                                                                          | 2012 |   | 2011 |   | 2012 |   | 2011 |
| Income (loss) attributable to Navistar International Corporation                                              | $ | 84 |  |   | $ | 1,400 |  |   | $ | (241 | ) |   | $ | 1,468 |  |
| Plus:                                                                                                         |   |   |   |   |   |   |   |
| Engineering integration costs, net of tax(A)                                                                  | (5 | ) |   | 5 |  |   | 34 |  |   | 28 |  |
| Restructuring of North American manufacturing operations, net of tax(B)                                       | (14 | ) |   | 102 |  |   | 23 |  |   | 102 |  |
| Adjustments to pre-existing warranties, net of tax(C)                                                         | (81 | ) |   | — |  |   | 138 |  |   | — |  |
| Charges for non-conformance penalties, net of tax(D)                                                          | 2 |  |   | — |  |   | 12 |  |   | — |  |
| Less:                                                                                                         |   |   |   |   |   |   |   |
|  Net impact of income tax valuation allowance release(E)                                                 | — |  |   | 1,476 |  |   | 181 |  |   | 1,476 |  |
| Adjusted net income (loss) attributable to Navistar International Corporation                                 | $ | (14 | ) |   | $ | 31 |  |   | $ | (215 | ) |   | $ | 122 |  |
| Diluted earnings (loss) per share attributable to Navistar International Corporation                          | $ | 1.22 |  |   | $ | 18.24 |  |   | $ | (3.49 | ) |   | $ | 19.04 |  |
| Effect of adjustments on diluted earnings (loss) per share attributable to Navistar International Corporation | (1.42 | ) |   | (17.84 | ) |   | 0.38 |  |   | (17.46 | ) |
| Adjusted diluted earnings (loss) per share attributable to Navistar International Corporation                 | $ | (0.20 | ) |   | $ | 0.40 |  |   | $ | (3.11 | ) |   | $ | 1.58 |  |
| Diluted weighted shares outstanding                                                                           | 68.9 |  |   | 76.8 |  |   | 69.1 |  |   | 77.1 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | Engineering integration costs relate to the consolidation of our truck and engine engineering operations, as well as the relocation of our world headquarters. For the three months ended July 31, 2012, the charges included restructuring charges of $3 million and other related costs of $13 million. The tax impact of the third quarter adjustments was income tax benefit of $21 million. For the nine months ended July 31, 2012, the charges included restructuring charges of $23 million and other related costs of $34 million. The tax impact of the adjustments in the nine months ended July 31, 2012 was income tax benefit of $23 million. For the three and nine months ended July 31, 2011, the charges included restructuring charges of $4 million and $23 million, respectively, and other related costs of $10 million and $17 million, respectively. For the three and nine months ended July 31, 2011, the tax impact of the adjustments was income tax benefits of $9 million and $12 million, respectively. Our manufacturing operations, primarily our Truck segment, recognized charges of $15 million and $34 million relating to these actions in the three and nine months ended July 31, 2012, respectively, compared to $11 million and $32 million in the three and nine months ended July 31, 2011, respectively. For more information, see Note 2, Restructurings and Impairments, to the accompanying consolidated financial statements. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (B) | Restructuring of North American manufacturing operations are charges primarily related to our ongoing restructuring plans related to our plans to close our Chatham, Ontario heavy truck plant and WCC chassis plant in Union City, Indiana, and to significantly scale back operations at our Monaco recreational vehicle headquarters and motor coach manufacturing plant in Coburg, Oregon. In the second quarter of 2012, the Company incurred charges  of $38 million for the impairment of certain intangible assets. For the three and nine months ended July 31, 2012, the associated tax impact of the adjustments was an income tax benefit of $14 million and $15 million, respectively. The Truck and Parts segments recognized charges of $28 million and $10 million, respectively. For the three and nine months ended July 31, 2011, the charges, which primarily impacted the Truck segment, included restructuring charges of $53 million, impairment charges of $64 million related to certain intangible assets and property and equipment, and other charges of $5 million, and the tax impact of these charges was income tax benefit of $20 million. For more information, see Note 2, Restructurings and Impairments, to the accompanying consolidated financial statements. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (C) | During the first and second quarters of 2012, the Company incurred charges of $123 million and $104 million, respectively, for adjustments to pre-existing warranties. For the three and nine months ended July 31, 2012, the associated tax impact of the adjustments was an income tax benefits of $81 million and $89 million, respectively. For more information, see Note 1, Summary of Significant Accounting Policies, to the accompanying consolidated financial statements. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (D) | In the three and nine months ended July 31, 2012, the Company recorded charges totaling $10 million and $20 million, respectively, for NCPs for certain 13L engine sales that did not comply with emission standards, recognized in the Engine segment. The tax impact of the adjustments was income tax benefit of $8 million in both periods of 2012. For more information, see Note 12, Commitments and Contingencies, to the accompanying consolidated financial statements. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (E) | In the nine months ended July 31, 2012, we recognized an income tax benefit of $181 million in the second quarter of 2012 from the release of a significant portion of our income tax valuation allowance on our Canadian deferred tax assets. In the three months ended July 31, 2011, we recognized an income tax benefit of $1.476 billion from the release of a significant portion of our income tax valuation allowance on our domestic deferred tax assets. For more information, see Note 9, Income Taxes, to the accompanying consolidated financial statements. |

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|                                                                      |
|----------------------------------------------------------------------|
|                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                 | Three Months Ended July 31, |   |   |   | % Change |   | Nine Months Ended July 31, |   |   |   | %Change |
| (in millions, except per share data and % change)                    | 2012 |   | 2011 |   | Change |   |   | 2012 |   | 2011 |   | Change |   |
| Sales and revenues, net                                              | $ | 3,319 |  |   | $ | 3,537 |  |   | $ | (218 | ) |   | (6 | )% |   | $ | 9,669 |  |   | $ | 9,635 |  |   | $ | 34 |  |   | — |  % |
| Costs of products sold                                               | 2,876 |  |   | 2,930 |  |   | (54 | ) |   | (2 | )% |   | 8,518 |  |   | 7,830 |  |   | 688 |  |   | 9 |  % |
| Restructuring charges                                                | 4 |  |   | 56 |  |   | (52 | ) |   | (93 | )% |   | 24 |  |   | 80 |  |   | (56 | ) |   | (70 | )% |
| Impairment of property and equipment and intangible assets           | — |  |   | 64 |  |   | (64 | ) |   | (100 | )% |   | 38 |  |   | 64 |  |   | (26 | ) |   | (41 | )% |
| Selling, general and administrative expenses                         | 328 |  |   | 334 |  |   | (6 | ) |   | (2 | )% |   | 1,068 |  |   | 1,006 |  |   | 62 |  |   | 6 |  % |
| Engineering and product development costs                            | 137 |  |   | 141 |  |   | (4 | ) |   | (3 | )% |   | 408 |  |   | 407 |  |   | 1 |  |   | — |  % |
| Interest expense                                                     | 59 |  |   | 62 |  |   | (3 | ) |   | (5 | )% |   | 182 |  |   | 187 |  |   | (5 | ) |   | (3 | )% |
| Other expense (income), net                                          | 5 |  |   | (18 | ) |   | 23 |  |   | N.M. |  |   | 26 |  |   | (39 | ) |   | 65 |  |   | N.M. |  |
| Total costs and expenses                                             | 3,409 |  |   | 3,569 |  |   | (160 | ) |   | (4 | )% |   | 10,264 |  |   | 9,535 |  |   | 729 |  |   | 8 |  % |
| Equity in loss of non-consolidated affiliates                        | (10 | ) |   | (22 | ) |   | 12 |  |   | (55 | )% |   | (21 | ) |   | (55 | ) |   | 34 |  |   | (62 | )% |
| Income (loss) before income taxes                                    | (100 | ) |   | (54 | ) |   | (46 | ) |   | 85 |  % |   | (616 | ) |   | 45 |  |   | (661 | ) |   | N.M. |  |
| Income tax benefit                                                   | 196 |  |   | 1,463 |  |   | (1,267 | ) |   | (87 | )% |   | 410 |  |   | 1,458 |  |   | (1,048 | ) |   | (72 | )% |
| Net income (loss)                                                    | 96 |  |   | 1,409 |  |   | (1,313 | ) |   | (93 | )% |   | (206 | ) |   | 1,503 |  |   | (1,709 | ) |   | N.M. |  |
| Less: Net income attributable to non-controlling interests           | 12 |  |   | 9 |  |   | 3 |  |   | 33 |  % |   | 35 |  |   | 35 |  |   | — |  |   | — |  % |
| Net income (loss) attributable to Navistar International Corporation | $ | 84 |  |   | $ | 1,400 |  |   | $ | (1,316 | ) |   | (94 | )% |   | $ | (241 | ) |   | $ | 1,468 |  |   | $ | (1,709 | ) |   | N.M. |  |
| Diluted earnings per share                                           | $ | 1.22 |  |   | $ | 18.24 |  |   | $ | (17.02 | ) |   | (93 | )% |   | $ | (3.49 | ) |   | $ | 19.04 |  |   | $ | (22.53 | ) |   | N.M. |  |

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

|                                               |
|-----------------------------------------------|
|                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                          | Total |   | U.S. and Canada |   | Rest of World ("ROW") |
|                                          | Three Months Ended July 31, |   |   |   | %Change |   | Three Months Ended July 31, |   |   |   | %Change |   | Three Months Ended July 31, |   |   |   | %Change |
|                                          | 2012 |   | 2011 |   | Change |   |   | 2012 |   | 2011 |   | Change |   |   | 2012 |   | 2011 |   | Change |   |
| (in millions, except % change) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Truck                                         | $ | 2,336 |  |   | $ | 2,457 |  |   | $ | (121 | ) |   | (5 | )% |   | $ | 1,968 |  |   | $ | 2,058 |  |   | $ | (90 | ) |   | (4 | )% |   | $ | 368 |  |   | $ | 399 |  |   | $ | (31 | ) |   | (8 | )% |
| Engine                                        | 840 |  |   | 968 |  |   | (128 | ) |   | (13 | )% |   | 533 |  |   | 541 |  |   | (8 | ) |   | (1 | )% |   | 307 |  |   | 427 |  |   | (120 | ) |   | (28 | )% |
| Parts                                         | 542 |  |   | 516 |  |   | 26 |  |   | 5 |  % |   | 481 |  |   | 453 |  |   | 28 |  |   | 6 |  % |   | 61 |  |   | 63 |  |   | (2 | ) |   | (3 | )% |
| Financial Services                            | 64 |  |   | 73 |  |   | (9 | ) |   | (12 | )% |   | 48 |  |   | 56 |  |   | (8 | ) |   | (14 | )% |   | 16 |  |   | 17 |  |   | (1 | ) |   | (6 | )% |
| Corporate and Eliminations                    | (463 | ) |   | (477 | ) |   | 14 |  |   | (3 | )% |   | (458 | ) |   | (468 | ) |   | 10 |  |   | (2 | )% |   | (5 | ) |   | (9 | ) |   | 4 |  |   | (44 | )% |
| Total                                         | $ | 3,319 |  |   | $ | 3,537 |  |   | $ | (218 | ) |   | (6 | )% |   | $ | 2,572 |  |   | $ | 2,640 |  |   | $ | (68 | ) |   | (3 | )% |   | $ | 747 |  |   | $ | 897 |  |   | $ | (150 | ) |   | (17 | )% |

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|                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                          | Total |   | U.S. and Canada |   | ROW |
|                                          | Nine Months Ended July 31, |   |   |   | %Change |   | Nine Months Ended July 31, |   |   |   | %Change |   | Nine Months Ended July 31, |   |   |   | %Change |
|                                          | 2012 |   | 2011 |   | Change |   | 2012 |   | 2011 |   | Change |   | 2012 |   | 2011 |   | Change |
| (in millions, except % change) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Truck                                         | $ | 6,856 |  |   | $ | 6,528 |  |   | $ | 328 |  |   | 5 |  % |   | $ | 5,810 |  |   | $ | 5,591 |  |   | $ | 219 |  |   | 4 |  % |   | $ | 1,046 |  |   | $ | 937 |  |   | $ | 109 |  |   | 12 |  % |
| Engine                                        | 2,593 |  |   | 2,706 |  |   | (113 | ) |   | (4 | )% |   | 1,687 |  |   | 1,577 |  |   | 110 |  |   | 7 |  % |   | 906 |  |   | 1,129 |  |   | (223 | ) |   | (20 | )% |
| Parts                                         | 1,507 |  |   | 1,573 |  |   | (66 | ) |   | (4 | )% |   | 1,341 |  |   | 1,417 |  |   | (76 | ) |   | (5 | )% |   | 166 |  |   | 156 |  |   | 10 |  |   | 6 |  % |
| Financial Services                            | 199 |  |   | 229 |  |   | (30 | ) |   | (13 | )% |   | 152 |  |   | 181 |  |   | (29 | ) |   | (16 | )% |   | 47 |  |   | 48 |  |   | (1 | ) |   | (2 | )% |
| Corporate and Eliminations                    | (1,486 | ) |   | (1,401 | ) |   | (85 | ) |   | 6 |  % |   | (1,470 | ) |   | (1,370 | ) |   | (100 | ) |   | 7 |  % |   | (16 | ) |   | (31 | ) |   | 15 |  |   | (48 | )% |
| Total                                         | $ | 9,669 |  |   | $ | 9,635 |  |   | $ | 34 |  |   | — |  % |   | $ | 7,520 |  |   | $ | 7,396 |  |   | $ | 124 |  |   | 2 |  % |   | $ | 2,149 |  |   | $ | 2,239 |  |   | $ | (90 | ) |   | (4 | )% |

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|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                  | Three Months Ended July 31, |   |   |   | % Change   |   | Nine Months Ended July 31, |   |   |   | % Change   |
| (in millions, except % change)        | 2012 |   | 2011 |   | Change |   |   | 2012 |   | 2011 |   | Change |   |
| Truck segment sales - U.S. and Canada | $ | 1,968 |  |   | $ | 2,058 |  |   | $ | (90 | ) |   | (4 | )% |   | $ | 5,810 |  |   | $ | 5,591 |  |   | $ | 219 |  |   | 4 | % |
| Truck segment sales - ROW             | 368 |  |   | 399 |  |   | (31 | ) |   | (8 | )% |   | 1,046 |  |   | 937 |  |   | 109 |  |   | 12 | % |
| Total Truck segment sales, net        | $ | 2,336 |  |   | $ | 2,457 |  |   | $ | (121 | ) |   | (5 | )% |   | $ | 6,856 |  |   | $ | 6,528 |  |   | $ | 328 |  |   | 5 | % |
| Truck segment profit (loss)           | $ | (30 | ) |   | $ | (75 | ) |   | $ | 45 |  |   | (60 | )% |   | $ | (160 | ) |   | $ | 49 |  |   | $ | (209 | ) |   | N.M. |  |

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|----------------------------------------|
|                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                   | Three Months Ended July 31, |   |   |   | % Change   |   | Nine Months Ended July 31, |   |   |   | % Change   |
| (in millions, except % change)         | 2012 |   | 2011 |   | Change |   |   | 2012 |   | 2011 |   | Change |   |
| Engine segment sales - U.S. and Canada | $ | 533 |  |   | $ | 541 |  |   | $ | (8 | ) |   | (1 | )% |   | $ | 1,687 |  |   | $ | 1,577 |  |   | $ | 110 |  |   | 7 |  % |
| Engine segment sales - ROW             | 307 |  |   | 427 |  |   | (120 | ) |   | (28 | )% |   | 906 |  |   | 1,129 |  |   | (223 | ) |   | (20 | )% |
| Total Engine segment sales, net        | $ | 840 |  |   | $ | 968 |  |   | $ | (128 | ) |   | (13 | )% |   | $ | 2,593 |  |   | $ | 2,706 |  |   | $ | (113 | ) |   | (4 | )% |
| Engine segment profit (loss)           | $ | (47 | ) |   | $ | 32 |  |   | $ | (79 | ) |   | N.M. |  |   | $ | (275 | ) |   | $ | 26 |  |   | $ | (301 | ) |   | N.M. |  |

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|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                  | Three Months Ended July 31, |   |   |   | % Change |   | Nine Months Ended July 31, |   |   |   | % Change |
| (in millions, except % change)        | 2012 |   | 2011 |   | Change |   |   | 2012 |   | 2011 |   | Change |   |
| Parts segment sales - U.S. and Canada | $ | 481 |  |   | $ | 453 |  |   | $ | 28 |  |   | 6 |  % |   | $ | 1,341 |  |   | $ | 1,417 |  |   | $ | (76 | ) |   | (5 | )% |
| Parts segment sales - ROW             | 61 |  |   | 63 |  |   | (2 | ) |   | (3 | )% |   | 166 |  |   | 156 |  |   | 10 |  |   | 6 |  % |
| Total Parts segment sales, net        | $ | 542 |  |   | $ | 516 |  |   | $ | 26 |  |   | 5 |  % |   | $ | 1,507 |  |   | $ | 1,573 |  |   | $ | (66 | ) |   | (4 | )% |
| Parts segment profit                  | $ | 73 |  |   | $ | 70 |  |   | $ | 3 |  |   | 4 |  % |   | $ | 164 |  |   | $ | 200 |  |   | $ | (36 | ) |   | (18 | )% |

|                                                          |
|----------------------------------------------------------|
|                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                     | Three Months Ended July 31, |   |   |   | % Change |   | Nine Months Ended July 31, |   |   |   | % Change |
| (in millions, except % change)                           | 2012 |   | 2011 |   | Change |   |   | 2012 |   | 2011 |   | Change |   |
| Financial Services segment revenues - U.S. and Canada(A) | $ | 48 |  |   | $ | 56 |  |   | $ | (8 | ) |   | (14 | )% |   | $ | 152 |  |   | $ | 181 |  |   | $ | (29 | ) |   | (16 | )% |
| Financial Services segment revenues - ROW                | 16 |  |   | 17 |  |   | (1 | ) |   | (6 | )% |   | 47 |  |   | 48 |  |   | (1 | ) |   | (2 | )% |
| Total Financial Services segment revenues, net           | $ | 64 |  |   | $ | 73 |  |   | $ | (9 | ) |   | (12 | )% |   | $ | 199 |  |   | $ | 229 |  |   | $ | (30 | ) |   | (13 | )% |
| Financial Services segment profit                        | $ | 22 |  |   | $ | 30 |  |   | $ | (8 | ) |   | (27 | )% |   | $ | 75 |  |   | $ | 102 |  |   | $ | (27 | ) |   | (26 | )% |

|     |                                                                   |
|-----|-------------------------------------------------------------------|
| (A) | The Financial Services segment does not have Canadian operations. |

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|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                     | Three Months Ended July 31, |   |   | % Change   |   | Nine Months Ended July 31, |   |   |   | %     Change   |
| (in units)                               | 2012 |   | 2011(A) |   | Change   |   |   | 2012 |   | 2011(A) | Change   |   |
| "Traditional" Markets (U.S. and Canada)  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| School buses                             | 6,200 |  |   | 4,600 |  |   | 1,600 |  |   | 35 |  % |   | 15,200 |  |   | 13,300 |  |   | 1,900 |  |   | 14 | % |
| Class 6 and 7 medium trucks              | 16,200 |  |   | 16,900 |  |   | (700 | ) |   | (4 | )% |   | 52,100 |  |   | 45,900 |  |   | 6,200 |  |   | 14 | % |
| Class 8 heavy trucks                     | 48,600 |  |   | 37,500 |  |   | 11,100 |  |   | 30 |  % |   | 144,500 |  |   | 96,000 |  |   | 48,500 |  |   | 51 | % |
| Class 8 severe service trucks(B)         | 11,700 |  |   | 10,100 |  |   | 1,600 |  |   | 16 |  % |   | 32,300 |  |   | 27,400 |  |   | 4,900 |  |   | 18 | % |
| Total "traditional" markets              | 82,700 |  |   | 69,100 |  |   | 13,600 |  |   | 20 |  % |   | 244,100 |  |   | 182,600 |  |   | 61,500 |  |   | 34 | % |
| Combined class 8 trucks                  | 60,300 |  |   | 47,600 |  |   | 12,700 |  |   | 27 |  % |   | 176,800 |  |   | 123,400 |  |   | 53,400 |  |   | 43 | % |
| Navistar "traditional" retail deliveries | 19,600 |  |   | 20,100 |  |   | (500 | ) |   | (2 | )% |   | 56,900 |  |   | 49,600 |  |   | 7,300 |  |   | 15 | % |

|     |                                                                                                                                                                                                                                                                                                              |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | Beginning in the fourth quarter of 2011, our competitors began reporting certain RV and commercial bus chassis units consistently with how we report these units. Industry retail deliveries for School buses for the three and nine months ended July 31, 2011 have been recast to conform accordingly. |

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

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    | Three Months Ended |
|                                    | July 31, 2012 |   | April 30, 2012 |   | January 31, 2012 |   | October 31, 2011 |   | July 31, 2011 |
| "Traditional" Markets (U.S. and Canada) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| School buses                            | 47 | % |   |   | 48 | % |   |   | 48 | % |   |   | 53 | % |   |   | 47 | % |   |
| Class 6 and 7 medium trucks             | 36 | % |   |   | 36 | % |   |   | 27 | % |   |   | 44 | % |   |   | 46 | % |   |
| Class 8 heavy trucks                    | 15 | % |   |   | 15 | % |   |   | 17 | % |   |   | 18 | % |   |   | 17 | % |   |
| Class 8 severe service trucks(A)        | 30 | % |   |   | 30 | % |   |   | 31 | % |   |   | 37 | % |   |   | 36 | % |   |
| Total "traditional" markets             | 24 | % |   |   | 24 | % |   |   | 22 | % |   |   | 29 | % |   |   | 29 | % |   |
| Combined class 8 trucks                 | 18 | % |   |   | 18 | % |   |   | 19 | % |   |   | 22 | % |   |   | 21 | % |   |

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

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|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    | Three Months Ended July 31, |   |   | %Change |   | Nine Months Ended July 31, |   |   |   | % Change   |
| (in units)                              | 2012 |   | 2011 |   | Change   |   |   | 2012 |   | 2011 |   | Change   |   |
| "Traditional" Markets (U.S. and Canada) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| School buses                            | 2,500 |  |   | 2,700 |  |   | (200 | ) |   | (7 | )% |   | 7,800 |  |   | 6,300 |  |   | 1,500 |  |   | 24 |  % |
| Class 6 and 7 medium trucks             | 4,000 |  |   | 6,800 |  |   | (2,800 | ) |   | (41 | )% |   | 15,700 |  |   | 21,200 |  |   | (5,500 | ) |   | (26 | )% |
| Class 8 heavy trucks                    | 5,000 |  |   | 6,200 |  |   | (1,200 | ) |   | (19 | )% |   | 18,700 |  |   | 23,200 |  |   | (4,500 | ) |   | (19 | )% |
| Class 8 severe service trucks(A)        | 3,100 |  |   | 3,100 |  |   | — |  |   | — |  % |   | 10,100 |  |   | 10,000 |  |   | 100 |  |   | 1 |  % |
| Total "traditional" markets             | 14,600 |  |   | 18,800 |  |   | (4,200 | ) |   | (22 | )% |   | 52,300 |  |   | 60,700 |  |   | (8,400 | ) |   | (14 | )% |
| Combined class 8 trucks                 | 8,100 |  |   | 9,300 |  |   | (1,200 | ) |   | (13 | )% |   | 28,800 |  |   | 33,200 |  |   | (4,400 | ) |   | (13 | )% |

|     |                                                                                                                  |
|-----|------------------------------------------------------------------------------------------------------------------|
| (A) | Truck segment net orders include CAT-branded units sold to Caterpillar under our North America supply agreement. |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |
|                                    | As of July 31 |   |   |   | % Change   |
| (in units)                              | 2012 |   | 2011(A) |   | Change |   |
| "Traditional" Markets (U.S. and Canada) |   |   |   |   |   |   |   |
| School buses                            | 1,600 |  |   | 1,600 |  |   | — |  |   | — |  % |
| Class 6 and 7 medium trucks             | 4,400 |  |   | 6,800 |  |   | (2,400 | ) |   | (35 | )% |
| Class 8 heavy trucks                    | 7,100 |  |   | 12,300 |  |   | (5,200 | ) |   | (42 | )% |
| Class 8 severe service trucks(B)        | 3,100 |  |   | 3,600 |  |   | (500 | ) |   | (14 | )% |
| Total "traditional" markets             | 16,200 |  |   | 24,300 |  |   | (8,100 | ) |   | (33 | )% |
| Combined class 8 trucks                 | 10,200 |  |   | 15,900 |  |   | (5,700 | ) |   | (36 | )% |

|     |                                                                                                                        |
|-----|------------------------------------------------------------------------------------------------------------------------|
| (A) | Truck segment backlog for School buses as of July 31, 2011 has been recast by 100 units to include military bus units. |

|     |                                                                                                                |
|-----|----------------------------------------------------------------------------------------------------------------|
| (B) | Truck segment backlog includes CAT-branded units sold to Caterpillar under our North America supply agreement. |

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|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    | Three Months Ended July 31, |   |   | %Change |   | Nine Months Ended July 31, |   |   |   | %Change |
| (in units)                              | 2012 |   | 2011 |   | Change   |   |   | 2012 |   | 2011 |   | Change   |   |
| "Traditional" Markets (U.S. and Canada) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| School buses                            | 2,900 |  |   | 2,200 |  |   | 700 |  |   | 32 |  % |   | 7,200 |  |   | 6,300 |  |   | 900 |  |   | 14 |  % |
| Class 6 and 7 medium trucks        | 5,800 |  |   | 7,400 |  |   | (1,600 | ) |   | (22 | )% |   | 17,200 |  |   | 19,200 |  |   | (2,000 | ) |   | (10 | )% |
| Class 8 heavy trucks               | 6,300 |  |   | 6,800 |  |   | (500 | ) |   | (7 | )% |   | 21,500 |  |   | 16,700 |  |   | 4,800 |  |   | 29 |  % |
| Class 8 severe service trucks(A)   | 3,600 |  |   | 3,700 |  |   | (100 | ) |   | (3 | )% |   | 10,500 |  |   | 9,600 |  |   | 900 |  |   | 9 |  % |
| Total "traditional" markets             | 18,600 |  |   | 20,100 |  |   | (1,500 | ) |   | (7 | )% |   | 56,400 |  |   | 51,800 |  |   | 4,600 |  |   | 9 |  % |
| Non "traditional" military(B)           | 500 |  |   | 200 |  |   | 300 |  |   | 150 |  % |   | 1,100 |  |   | 700 |  |   | 400 |  |   | 57 |  % |
| "Expansion" markets(C)                  | 8,000 |  |   | 8,600 |  |   | (600 | ) |   | (7 | )% |   | 22,900 |  |   | 21,500 |  |   | 1,400 |  |   | 7 |  % |
| Total worldwide units(D)                | 27,100 |  |   | 28,900 |  |   | (1,800 | ) |   | (6 | )% |   | 80,400 |  |   | 74,000 |  |   | 6,400 |  |   | 9 |  % |
| Combined class 8 trucks                 | 9,900 |  |   | 10,500 |  |   | (600 | ) |   | (6 | )% |   | 32,000 |  |   | 26,300 |  |   | 5,700 |  |   | 22 |  % |
| Combined military(E)                    | 500 |  |   | 800 |  |   | (300 | ) |   | (38 | )% |   | 1,900 |  |   | 2,100 |  |   | (200 | ) |   | (10 | )% |

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

|     |                                                                                                                                                |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------|
| (B) | Excludes U.S. and Canada militarized commercial units included in "traditional" markets Class 8 severe service trucks and "expansion" markets. |

|     |                                                                                                                                                                                                  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (C) | Includes chargeouts related to BDT of 1,600 units during both the three months ended July 31, 2012 and 2011, and 4,800 during both the nine months ended July 31, 2012 and 2011. |

|     |                                                                                                                                                                                                                                         |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (D) | Excludes chargeouts related to RV towables of 800 units and 700 units during the three months ended July 31, 2012 and 2011, respectively, and 2,200 units during both the nine months ended July 31, 2012 and 2011. |

|     |                                                                                                                                                                  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (E) | Includes military units included within "traditional" markets Class 8 severe service, "expansion" markets, and all units reported as non "traditional" military. |

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                       | Three Months Ended July 31, |   |   | %Change   |   | Nine Months Ended July 31, |   |   |   | %Change   |
| (in units)                 | 2012 |   | 2011 |   | Change   |   |   | 2012 |   | 2011 |   | Change   |   |
| OEM sales-South America(A) | 28,600 |  |   | 38,200 |  |   | (9,600 | ) |   | (25 | )% |   | 78,000 |  |   | 102,500 |  |   | (24,500 | ) |   | (24 | )% |
| Intercompany sales         | 20,600 |  |   | 22,300 |  |   | (1,700 | ) |   | (8 | )% |   | 65,600 |  |   | 63,100 |  |   | 2,500 |  |   | 4 |  % |
| Other OEM sales            | 3,000 |  |   | 3,700 |  |   | (700 | ) |   | (19 | )% |   | 7,200 |  |   | 12,600 |  |   | (5,400 | ) |   | (43 | )% |
| Total sales                | 52,200 |  |   | 64,200 |  |   | (12,000 | ) |   | (19 | )% |   | 150,800 |  |   | 178,200 |  |   | (27,400 | ) |   | (15 | )% |

|     |                                                                                                                                                                                                                                                                 |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A) | Includes shipments related to Ford of 100 units and 7,900 units during the three months ended July 31, 2012 and 2011, respectively, and 5,700 units and 18,800 units during the nine months ended July 31, 2012 and 2011, respectively. |

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|                                                                                    |
|------------------------------------------------------------------------------------|
|                                                                                    |  |  |  |  |  |  |  |  |  |  |  |
|                                                                               | As of |
| (in millions)                                                                      | July 31, 2012 |   | October 31, 2011 |   | July 31, 2011 |
| Consolidated cash and cash equivalents                                             | $ | 547 |  |   | $ | 539 |  |   | $ | 444 |  |
| Consolidated marketable securities                                                 | 159 |  |   | 718 |  |   | 620 |  |
| Consolidated cash, cash equivalents and marketable securities at end of the period | $ | 706 |  |   | $ | 1,257 |  |   | $ | 1,064 |  |

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |
|                                                         | Nine Months Ended July 31, 2012 |
| (in millions)                                                | ManufacturingOperations |   | Financial Services Operations and Adjustments |   | Condensed Consolidated Statement of Cash Flows |
| Net cash provided by (used in) operating activities          | $ | (292 | ) |   | $ | 638 |  |   | $ | 346 |  |
| Net cash provided by (used in) investing activities          | 278 |  |   | (2 | ) |   | 276 |  |
| Net cash provided by (used in) financing activities          | 23 |  |   | (630 | ) |   | (607 | ) |
| Effect of exchange rate changes on cash and cash equivalents | (9 | ) |   | 2 |  |   | (7 | ) |
| Increase in cash and cash equivalents                        | — |  |   | 8 |  |   | 8 |  |
| Cash and cash equivalents at beginning of the period         | 488 |  |   | 51 |  |   | 539 |  |
| Cash and cash equivalents at end of the period               | $ | 488 |  |   | $ | 59 |  |   | $ | 547 |  |

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|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |
|                                                         | Nine Months Ended July 31, 2011 |
| (in millions)                                                | ManufacturingOperations |   | Financial Services Operations and Adjustments |   | Condensed Consolidated Statement of Cash Flows |
| Net cash provided by operating activities                    | $ | 236 |  |   | $ | 303 |  |   | $ | 539 |  |
| Net cash used in investing activities                        | (359 | ) |   | (11 | ) |   | (370 | ) |
| Net cash used in financing activities                        | (5 | ) |   | (312 | ) |   | (317 | ) |
| Effect of exchange rate changes on cash and cash equivalents | 7 |  |   | — |  |   | 7 |  |
| Decrease in cash and cash equivalents                        | (121 | ) |   | (20 | ) |   | (141 | ) |
| Cash and cash equivalents at beginning of the period         | 534 |  |   | 51 |  |   | 585 |  |
| Cash and cash equivalents at end of the period               | $ | 413 |  |   | $ | 31 |  |   | $ | 444 |  |

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Table of Contents

|         |                                           |
|---------|-------------------------------------------|
| • | Pension and Other Postretirement Benefits |

|         |                                 |
|---------|---------------------------------|
| • | Allowance for Doubtful Accounts |

|         |              |
|---------|--------------|
| • | Income Taxes |

|         |                                 |
|---------|---------------------------------|
| • | Impairment of Long-Lived Assets |

|         |          |
|---------|----------|
| • | Goodwill |

|         |                                    |
|---------|------------------------------------|
| • | Indefinite-Lived Intangible Assets |

|         |                      |
|---------|----------------------|
| • | Contingency Accruals |

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|         |                                                            |
|---------|------------------------------------------------------------|
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk |

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Table of Contents

|         |                        |
|---------|------------------------|
| Item 1. |  Legal Proceedings |

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

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|         |                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The Company will incur additional costs associated with this change and there is no assurance that we will implement this strategy within the anticipated timelines. |

|         |                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our non-binding MOU with Cummins for the Cummins 15L as well as for the SCR after treatment system is subject to the execution of definitive agreements. |

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|         |                                                                                   |
|---------|-----------------------------------------------------------------------------------|
| • | 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 significantly higher 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 indebtedness; and |

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

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|               |                                                             |
|---------------|-------------------------------------------------------------|
| Item  2. | Unregistered Sales of Equity Securities and Use of Proceeds |

|              |                                 |
|--------------|---------------------------------|
| Item 3. | Defaults upon Senior Securities |

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

|              |                   |
|--------------|-------------------|
| Item 5. | Other Information |

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|           |
|-----------|
|           |  |  |  |  |
| Exhibit:  |   |    |   | 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 |
| (31.1)    |   | CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |   | E-5 |
| (31.2)    |   | CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |   | E-6 |
| (32.1)    |   | CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |   | E-7 |
| (32.2)    |   | CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |   | E-8 |
| (99.1)    |   | Additional Financial Information (Unaudited) |   | E-9 |
| (101.ING) |   | 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 |

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|        |
|--------|
|        |  |
|   | NAVISTAR INTERNATIONAL CORPORATION |
|   | (Registrant) |
|   |   |
|   | /s/    RICHARD C. TARAPCHAK         |
|   | Richard C. Tarapchak |
|   | Vice President and Controller |
|   | (Principal Accounting Officer) |