Investor Presentation February 2006 |
Forward-Looking Statement The following presentation may contain forward-looking statements. Although such statements reflect our current reasonable judgment regarding the direction of our business, actual results may differ materially from those projected here. We undertake no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise. You can find information on the risk factors concerning why the actual results might differ from statements made today in our documents filed with the Securities and Exchange Commission. |
Portfolio of Transportation Companies• Simplified holdings – Sold healthcare assets• Used proceeds to recapitalize balance sheet – Net debt $97 mm at FY’05• Enhance operating performance of each segment · Build platforms for growth · Spend capital wisely · Return excess cash to investors – Purchased $85 mm of stock (Feb. ’05) – Initiated quarterly dividend, $0.60 per share annualized (Aug. ’05) – Announced $200 mm share buyback (Jan. ’06) |
Financials (presented on a continuing operations basis) (1) See Appendix for reconciliation of EBITDA to GAAP measures. 2003 EBITDA 2004 2005 $3,027 $360 $414 $374 % rev 12.0% 12.3% 13.7%($ in millions, except EPS) 1Q 0.2xIncome statement Revenue $2,987 $3,027 Net debt/EBITDA 3.1x 2.6xKey leverage ratio CapEx, net $251 $169 (1) $152 ’05 ’04 $814 $847 $127 15.6% $155 |
18.3% $ (0.06) $ 0.24 $ 0.58 EPS (cont.ops) $ 0.45 $ 1.14 |
Education Services Overview |
Operate 41k buses |
–27% market share outsourced –500+k buses in North America |
Revenue is contractual and |
renewable Initiatives Underway |
Targeting margin expansion of |
300 to 400 bps |
Rationalizing underperforming |
contracts |
Using scale to lower costs |
Safely transportingtwo millionchildren to and from school each day. $1,470 $1,495 $1,520 $1,545 2003 2004 2005 $270 $280 $290 $300 Revenue EBITDA |
Education Services Revenue / EBITDA 18.4% 18.7% 19.5% |
Greyhound Overview |
Great American icon Provides scheduled, charter |
and package express services Initiatives Underway |
Significant network changes Refreshing the brand Targeting key demographic |
groups |
Focusing on pricing |
Theonly nationalnetwork of scheduled inter-city bus transportation services. $1,150 $1,175 $1,200 $1,225 $1,250 2003 2004 2005 $60 $70 $80 $90 $100 $110 $120 Revenue EBITDAGreyhound |
Revenue / EBITDA 5.5% 7.0% 8.5% |
Transformed Network U.S. network changes As of 1/06Before After |
Public Transit Services Overview |
Contracts with municipal |
transit authorities for paratransit and fixed route service |
Low capital requirements |
Initiatives Underway |
New management team Focusing on: |
–Contract growth –Cost drivers Serving51 millionpassengers |
annually. $250 $275 $300 $325 2003 2004 2005 $0 $5 $10 $15 $20 $25 Revenue EBITDAPublic Transit Revenue / EBITDA 5.8% 2.7% 5.2% |
Summary |
Focused transportation company |
–more than 50% of revenue is contractual and renewable |
Very strong balance sheet Clear profitability improvement initiatives at all |
companies |
Maintain ROI focus on capex decisions |
Committed to delivering value to shareholders |
AppendixReconciliation of Non-GAAP Financial Measures ( $ in millions) 2003 2004 2005 2004 2005EBITDA360 374 414 127 155 Depreciation and amortization (235) (231) (249) (68) (59) Interest expense (38) (79) (71) (19) (5) Debt restructuring costs (112) Other income (expense), net (20) 2 10 1 2 Gain on discharge of debt 1,483 Fresh start accounting adjustments (548) Income tax benefit (expense) 8 (20) 2 (16) (35) Cumulative effect of change in accounting principle (637) Income (loss) from continuing operations 373 46 (6) 25 58 Year Q1 |