LISLE, IL – Navistar International Corporation announced a management realignment designed to give further momentum to its strategy of great products, competitive cost and profitable growth, according to the company. The company also released second quarter results and acknowledged that discussions with the U.S. Environmental Protection Agency (EPA) for its EGR-only 0.2 NOx emissions engine certification are ongoing.

Navistar reported a loss of $172 million, or $2.50 per diluted share, for the second quarter ended April 30, 2012. After pre-tax adjustments to exclude net impact of pre-existing warranty charges of $104 million related to 2010 emission standard engines, asset impairment charges of $38 million, engineering integration costs of $29 million, a charge of $10 million for non-conformance penalties, and the release of an $181 million income tax valuation allowance related to Canadian deferred tax assets, Navistar's loss for the second quarter 2012 was $137 million, or a loss of $1.99 per diluted share.

"Certainly, our first half performance was unacceptable. It included a warranty reserve to repair early 2010 and 2011 vehicles," said Daniel C. Ustian, Navistar chairman, president and chief executive officer. "We were also affected by speculation surrounding our engine certification for our Class 8 engine, which is why we are working tirelessly with the U.S. EPA to get resolution."

Based on its second quarter 2012 results, the company updated its guidance for adjusted manufacturing segment profit for fiscal year ending October 31, 2012, to be between $600 million and $750 million. This equates to adjusted net income attributable to Navistar International Corporation to be between breakeven and $140 million, or $0 to $2.00 adjusted diluted earnings per share. This expectation also includes the absorption of approximately $90 million in higher post-retirement health care costs.

"Going forward, we've identified a path for delivering strong profits in the second half of 2012," Ustian said. "Historically, the second half is stronger across our businesses, and we expect to build on this with improved market share in North America, stronger global performance and further cost reductions across all operations. Additionally, we're making management and operational structure changes to align our organization in a more effective manner to drive these results."

The company announced in March it will produce a newly created work truck at its Colbert County plant, which will also produce the truck’s body.

Troy Clarke, currently president of Navistar Asia Pacific, will assume responsibility for all Navistar's operations in the newly-created role of president, truck and engine, under which the truck, engine, parts, product development and purchasing organizations will have the opportunity to integrate and deliver the highest quality products and services. Jack Allen will become president of North America truck and parts, an expansion of his current role, and Engine Group President Eric Tech will expand his role to become president of global truck and engine, responsible for all of our business operations outside of North America. The changes will take effect July 1, following Board approval.