Douglas Carty, EVP and CFO |
Bear Stearns Global Transportation Conference May 9, 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 • Unique bus company |
– 55% contractual – 45% consumer• Divested of non-bus company subsidiaries – Paid down debt with proceeds• Realized significant profitability improvement despite fuel costs – Resuming growth focus• Returning cash to shareholders – Purchased $85 mm of stock in ‘05 – Initiated quarterly dividend in ‘05, $0.60 per share annualized – Started $200 mm share buyback in Jan. ‘06 |
Financials (presented on a continuing operations basis) |
Income statement 6 Mos.YTD($ in millions, except EPS)2003 2004 2005 ’05 ’06 |
Revenue $2,987 $3,027 $3,027 $1,577 $1,636 |
(1) EBITDA $ 360 $ 374 $ 414 $ 243 $ 278 |
% rev 12.0% 12.3% 13.7% 15.4% 17.0% EPS (cont.ops) $ 1.14 $ 0.45 $(0.06) $ 0.44 $ 0.96 |
CapEx, net $ 251 $ 169 $ 152 |
Education Service Safely transportingtwo millionchildren to and from school each day. |
Overview |
Operate 40k 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 from F2003 |
Rationalizing underperforming |
contracts |
Using scale and technology to |
lower costs Education Services Revenue / EBITDA millions) 18.4% |
Greyhound A Great American Icon. |
Overview |
Only national network of inter-city bus |
transportation services |
Providing convenient and affordable |
scheduled transportation services Initiatives Underway |
Completed network changes |
– 21% reduction in miles to date – 26% reduction in buses |
Focused on pricing initiatives Grow penetration of current key |
demographic groups |
Refreshing the brand |
Public Transit Service |
Serving nearly50 millionpassengers annually Overview |
Contracts with municipal |
transit authorities for paratransit and fixed route service |
Low capital requirements |
Initiatives Underway |
Focusing on: |
– Contract growth Cost drivers. |
Summary |
Focused transportation company |
–more than 55% of revenue is contractual and renewable |
Clear profitability improvement initiatives at all |
companies |
Very strong balance sheet |
Committed to delivering value to shareholders |
APPendix |
Reconciliation of Non-GAAP Financial Measures ( $ in millions) |
Year 6 Mos. YTD 2003 2004 2005 2005 2006 |
EBITDA360 374 414 243 278 |
Depreciation and amortization (235) (231) (249) (133) (116) |
Interest expense (38) (79) (71) (39) (11) |
Debt restructuring costs (112) |
Other income (expense), net (20) 2 10 5 4 |
Gain on discharge of debt 1,483 |
Fresh start accounting adjustments (548) |
Income tax benefit (expense) 8 (20) 2 (30) (59) |
Cumulative effect of change in accounting principle (637) |
Income (loss) from continuing operations 373 46 (6) 46 96 |
EBITDA is presented solely as a supplemental disclosure with respect to liquidity because the company believes it provides useful information regarding its ability to service or incur debt. EBITDA is not calculated the same way by all companies. We define EBITDA as operating income plus depreciation and amortization. EBITDA is not intended to represent cash flow for the period, is not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles (“GAAP”) and is not indicative of operating income or cash flow from operations as |
determined under GAAP. |