

	1^stQuarter Ended January 31,						2^ndQuarter Ended April 30,
(in millions, except for per share data and stock price)	2012			2011			2012			2011
Sales and revenues, net	$	3,052		$	2,743		$	3,298		$	3,355
Manufacturing gross margin^(A)(B)	310			494			311			597
Net income (loss)^(C)	(140		)	6			(162		)	88
Less: Net income attributable to non-controlling interests	13			12			10			14
Net income (loss) attributable to Navistar International Corporation	(153		)	(6		)	(172		)	74
Earnings (loss) per share attributable to Navistar International Corporation:
Basic	$	(2.19	)	$	(0.08	)	$	(2.50	)	$	1.01
Diluted	(2.19		)	(0.08		)	(2.50		)	0.93
Market price range-common stock:
High	$	45.44		$	66.39		$	48.18		71.49
Low	33.74			48.32			32.68			58.49



	3^rdQuarter Ended July 31,				4^thQuarter Ended October 31,
(in millions, except for per share data and stock price)	2012		2011^(D)		2012			2011^(D)
Sales and revenues, net	$	3,319	$	3,537	$	3,279		$	4,323
Manufacturing gross margin^(A)(B)	401		560		88			845
Net income (loss)^(C)	96		1,409		(2,756		)	275
Less: Net income attributable to non-controlling interests	12		9		13			20
Net income (loss) attributable to Navistar International Corporation	84		1,400		(2,769		)	255
Earnings (loss) per share attributable to Navistar International Corporation:
Basic	$	1.22	$	19.10	$	(40.13	)	$	3.52
Diluted	1.22		18.24		(40.13		)	3.48
Market price range-common stock:
High	$	35.25	$	70.40	$	26.48		$	52.36
Low	20.21		50.05		18.17			30.01

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(A)	Manufacturing gross margin is calculated by subtracting Costs of products sold from Sales of manufactured products, net.


(B)	We record adjustments to our product warranty accrual to 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. In the fourth quarter of 2012, we recorded adjustments for changes in estimates of $149 million.

The warranty estimation for engines sold in 2012 includes a factor for improvements to the design and manufacturing process that was based on historical experience. In the fourth quarter of 2012, we identified a deviation from historic experience and we recorded an adjustment for a change in estimate to increase the costs accrued for warranty of $28 million for products sold in the first three quarters of 2012.

(C)

In the fourth quarter of 2012, we determined that a significant additional valuation allowance on our U.S. deferred tax assets was required, due in part to our current domestic performance, which include continued fourth quarter deterioration and cumulative losses as of October 31, 2012 which included significant fourth quarter warranty charges. As a result we recognized income tax expense of $2 billion for the increase in the valuation allowance. In the fourth quarter of 2012, we also recognized $233 million of income tax expense related to the reversal of income tax benefits recognized in the first, second, and third quarters of 2012.

(D)

In the fourth quarter of 2011, certain out-of-period adjustments were recorded related to the partial release of the Company's income tax valuation allowance. The adjustments of approximately $61 million primarily related to the classification of a deferred tax item and resulted in the Company recognizing an additional income tax benefit. The Company should have recognized the income tax benefit for this amount in the third quarter of 2011 with the release of a portion of the Company's income tax valuation allowance. Correcting the error was not material to any of the related periods.