February 15, 2000

Navistar Reports Record First Quarter Earnings

Margins Rise For 8th Consecutive Quarter; OEM Engine Output Continues To Increase

CHICAGO, Feb. 15 -- Navistar International Corporation (NYSE: NAV), producer of International® brand trucks, school buses and engines, today reported record first quarter earnings with per diluted share earnings up 21 percent over a year ago.

The company said that net income for the quarter ended January 31, 2000 totaled $70 million, or $1.10 per diluted common share, compared with net income of $61 million, or $0.91 per diluted common share in the first quarter a year ago. Per share earnings for the quarter matched the consensus estimate of Wall Street security analysts.

Consolidated sales and revenues from the company's manufacturing and financial services operations for the first quarter totaled $2.2 billion, up 13 percent from the $1.9 billion in the first quarter of 1999. Manufacturing gross margins for the quarter increased 0.1 percentage points to 16.6 percent from 16.5 percent a year ago. The gain marked the eighth consecutive quarter -- and the 12th out of the last 13 quarters -- in which margins have improved over the year-earlier period.

John R. Horne, Navistar chairman, president and chief executive officer, said record first quarter earnings reflected continued gains in OEM engine volume, improved productivity in all areas and stable material costs.

"We were able to report record results because we have made fundamental changes in the way we do business and we look for further productivity improvements in our core businesses," Horne said. "The investments we are making in future growth will enable us to succeed regardless of industry volumes."

Worldwide shipments of medium and heavy trucks and school buses rose to 32,600 units, up from the 29,900 units shipped in the first quarter of 1999. Shipments of diesel engines to other manufacturers continued at a strong pace, rising 23 percent to 71,600 units from 58,100 units in the first quarter of 1999.

Horne said the company's financial goals for 2000 remain unchanged.

"While there has been an industry-wide slowdown in orders for heavy trucks, our other core businesses are doing well and are likely to moderate the impact of the heavy truck cycle on our performance," Horne said. "Significantly, diesel engine shipments to other manufacturers continue at record levels and our joint venture with Maxion International Motores will enable us to increase production by 100 engines per day beginning in March to meet demand."

Navistar Debt Now Rated Investment Grade

Horne said he was pleased that Standard and Poor's cited the company's "increased product diversity and improved cost competitiveness" when it raised the rating on Navistar's unsecured debt to BBB-minus from BB-plus. The S&P rating improvement, announced on February 14, follows similar increases by Moody's Investor Service and Duff and Phelps, and now gives the company's debt an investment grade rating by major credit rating agencies.

"This investment grade rating we have earned from the credit rating agencies is clear recognition of the substantial changes we have made in the way we do business," Horne said. "We are confident that our strategies can be successfully implemented and will add significant growth in sales and income over a period of time."

Navistar International Corporation (NYSE: NAV) is a leading producer of medium trucks, school buses, heavy trucks, severe service vehicles and mid-range diesel engines sold under the International® brand. The company is also a private label designer and manufacturer of diesel engines for the truck, van and SUV markets. With world headquarters in Chicago, Navistar had sales and revenues of $8.6 billion in 1999. Additional information can be found on the company's web site at www.navistar.com

Forward Looking Statements

Statements contained in this news release that are not purely historical are forward -looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including but not limited to general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility, Year 2000 computer issues and other risks detailed from time to time in Navistar's Securities and Exchange Commission filings. Navistar assumes no obligation to update the information included in this release.

(Millions of dollars, except per share data)

                                                    THREE MONTHS ENDED
                                                        JANUARY 31
                                                   2000            1999

    Sales and Revenues
    Sales of manufactured products               $2,086           $1,837
    Finance and insurance revenue                    69               62
    Other income                                     11               25

    Total sales and revenues                      2,166            1,924

    Costs and expenses
    Cost of products and services sold            1,748            1,544
    Postretirement benefits                          48               49
    Engineering and research expense                 71               58
    Sales, general and administrative expense       124              126
    Interest expense                                 35               32
    Other expense                                    27               16

    Total costs and expenses                      2,053            1,825

      Income before income taxes                    113               99
      Income tax expense                             43               38

    Net income                                      $70              $61

    Earnings per share
      Basic                                       $1.12             $.92
      Diluted                                     $1.10             $.91

    Average shares outstanding (millions)
      Basic                                        62.6             66.4
      Diluted                                      63.7             67.1

The Statement of Income includes the consolidated financial results of the

company's manufacturing operations with its wholly owned financial

services operations.

(Millions of dollars)

                                                      AS OF JANUARY 31
                                                   2000            1999
    Cash and cash equivalents                      $461             $477
    Marketable securities                           216              270
                                                    677              747
    Receivables, net                              2,074            2,051
    Inventories                                     703              560
    Property and equipment, net                   1,518            1,134
    Investments and other assets                    327              253
    Prepaid and intangible pension assets           284              199
    Deferred tax asset, net                         800              876

    Total assets                                 $6,383           $5,820

    Accounts payable, principally trade          $1,069           $1,106
    Debt: Manufacturing operations                  492              472
          Financial services operations           1,810            1,520
    Postretirement benefits liability               795              945
    Other liabilities                               900              957
    Total liabilities                             5,066            5,000

    Commitments and contingencies

    Shareowners' equity
    Series D convertible junior preference stock      4                4
    Common stock
      (75.3 million shares issued)                2,139            2,140
    Common stock held in treasury, at cost         (400)            (214)
    Retained earnings (deficit)                    (234)            (770)
    Accumulated other comprehensive loss           (192)            (340)
    Total shareowners' equity                     1,317              820

    Total liabilities and shareowners' equity    $6,383           $5,820

The Statement of Financial Condition includes the consolidated financial results of the company's manufacturing operations with its wholly owned financial services operations

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