Third Quarter 2011 Earnings Conference Call October 25, 2011 Exhibit 99.2 |
10/25/11 Proprietary and Confidential 2 Safe Harbor Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include, among others, a slowdown of the economic recovery and decreases in freight demand, our ability to obtain adequate profit margins for our services, our inability to maintain current pricing levels due to soft economic conditions, uncertainty or decline in economic and market conditions affecting contractual lease demand, decreases in market demand in the commercial rental market and the sale of used vehicles, competition from other service providers, customer retention levels, unexpected volatility or declines in automotive or high-tech volume, loss of key customers in the Supply Chain Solutions (SCS) business segment, unexpected reserves or write-offs due to the deterioration of the credit worthiness or bankruptcy of customers, changes in financial, tax or regulatory requirements or changes in customers’ business environments that will limit their ability to commit to long-term vehicle leases, a decrease in credit ratings, increased debt costs resulting from volatile financial markets, inability to achieve planned synergies and customer retention levels or anticipate costs and liabilities from acquisitions, labor strikes or work stoppages affecting our or our customers’ business operations, driver shortages and increasing driver costs, adequacy of accounting estimates, reserves and accruals particularly with respect to pension, taxes, insurance and revenue, a decline in pension plan returns, changes in obligations relating to multi-employer plans, sudden or unusual changes in fuel prices, our ability to manage our cost structure, new accounting pronouncements, rules or interpretations, changes in government regulations, adverse impacts of recently enacted regulations regarding vehicle emissions, the inability to prevent a data privacy breach, unanticipated outcomes in legal proceedings and the risks described in our filings with the Securities and Exchange Commission. The risks included here are not exhaustive. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. |
Contents Third Quarter 2011 Results Overview Asset Management Update Earnings Outlook Future Financial Reporting Enhancements Q & A 10/25/11 3 Proprietary and Confidential |
10/25/11 Proprietary and Confidential 4 3rd Quarter Results Overview Earnings per diluted share from continuing operations were $1.10 in 3Q11 vs. $0.76 in 3Q10 – 3Q11 included a $0.01 tax benefit from acquisition-related transaction costs Comparable earnings per share from continuing operations were $1.09 in 3Q11 vs. $0.76 in 3Q10 Total revenue increased 19% (and operating revenue increased 17%) vs. prior year reflecting the impact of acquisitions and organic revenue growth |
10/25/11 Proprietary and Confidential 5 Key Financial Statistics Third Quarter ($ Millions, Except Per Share Amounts) |
10/25/11 Proprietary and Confidential 6 Key Financial Statistics Year-To-Date ($ Millions, Except Per Share Amounts) |
10/25/11 Proprietary and Confidential 7 3rd Quarter Results Overview - FMS Fleet Management Solutions (FMS) total revenue up 16% (and operating revenue up 12%) vs. prior year – Contractual revenue up 4% – Full service lease revenue up 5% – Contract maintenance revenue decreased 2% – Commercial rental revenue up 40% – Fuel revenue up 28% due primarily to increase in fuel pass-throughs FMS net before tax earnings (NBT) up 35% – FMS NBT percent of operating revenue up 150 basis points to 9.0% FMS earnings positively impacted by better commercial rental performance, improved used vehicle results and acquisitions – These benefits were partially offset by higher compensation-related expenses and increased maintenance costs on an older lease fleet |
10/25/11 Proprietary and Confidential 8 3rd Quarter Results Overview – SCS / DCC Supply Chain Solutions (SCS) total revenue up 26% (and operating revenue up 26%) vs. prior year due to the TLC acquisition, higher volumes and new business SCS net before tax earnings (NBT) up 47% – SCS NBT percent of operating revenue up 100 basis points to 6.9% SCS earnings increased due to the TLC acquisition, higher volumes and new business, partially offset by higher compensation costs – Earnings also benefited from favorable insurance developments, foreign exchange gains and a facility sale Dedicated Contract Carriage (DCC) total revenue up 31% (and operating revenue up 26%) due to the Scully acquisition and higher fuel pass-throughs DCC net before tax earnings (NBT) down 3% – DCC NBT percent of operating revenue down 170 basis points to 5.6% DCC earnings increased due to the Scully acquisition and better operating performance, but were more than offset by higher compensation-related costs and legal claims |
10/25/11 Proprietary and Confidential 9 Business Segments 2011 2010 % B/(W) 2011 2010 % B/(W) Operating Revenue: (1) Fleet Management Solutions 824.7 $ 733.9 $ 12% 1,099.0 $ 948.9 $ 16% Supply Chain Solutions 326.8 258.5 26% 406.1 322.9 26% Dedicated Contract Carriage 149.5 118.7 26% 158.9 121.4 31% Eliminations (44.4) (39.5) (13)% (93.3) (76.3) (22)% Total 1,256.5 $ 1,071.6 $ 17% 1,570.7 $ 1,316.9 $ 19% Segment Net Before Tax Earnings: Fleet Management Solutions 74.2 $ 54.8 $ 35% Supply Chain Solutions 22.4 15.2 47% Dedicated Contract Carriage 8.4 8.6 (3)% Eliminations (5.7) (4.6) (22)% 99.2 74.0 34% Central Support Services (Unallocated Share) (11.6) (12.0) 3% Earnings Before Restructuring and Income Taxes (1) 87.7 62.0 41% Restructuring and Other Charges, Net and Other Items - - - Earnings Before Income Taxes 87.7 62.0 41% Provision for Income Taxes (30.7) (22.3) (38)% Earnings from Continuing Operations 56.9 $ 39.7 $ 44% Comparable Earnings from Continuing Operations (1) 56.4 $ 39.7 $ 42% Net Earnings 56.5 $ 38.8 $ 46% Memo: Total Revenue Third Quarter ($ Millions) |
10/25/11 Proprietary and Confidential 10 Business Segments 2011 2010 % B/(W) 2011 2010 % B/(W) Operating Revenue: (1) Fleet Management Solutions 2,322.5 $ 2,120.3 $ 10% 3,143.7 $ 2,764.1 $ 14% Supply Chain Solutions 966.2 746.7 29% 1,196.7 927.2 29% Dedicated Contract Carriage 419.5 349.3 20% 444.0 360.8 23% Eliminations (130.7) (119.9) (9)% (275.0) (229.0) (20)% Total 3,577.6 $ 3,096.3 $ 16% 4,509.4 $ 3,823.0 $ 18% Segment Net Before Tax Earnings: Fleet Management Solutions 180.2 $ 122.7 $ 47% Supply Chain Solutions 51.7 34.8 49% Dedicated Contract Carriage 25.5 24.4 4% Eliminations (17.1) (14.5) (18)% 240.3 167.4 44% Central Support Services (Unallocated Share) (31.6) (30.7) (3)% Earnings Before Restructuring and Income Taxes (1) 208.8 136.7 53% Restructuring and Other Charges, Net and Other Items (2) (2.5) - NM Earnings Before Income Taxes 206.3 136.7 51% Provision for Income Taxes (82.6) (53.6) (54)% Earnings from Continuing Operations 123.7 $ 83.1 $ 49% Comparable Earnings from Continuing Operations (1) 130.5 $ 83.1 $ 57% Net Earnings 121.7 $ 81.0 $ 50% Memo: Total Revenue Year-To-Date ($ Millions) |
10/25/11 Proprietary and Confidential 11 Capital Expenditures 2011 $ 2011 2010 O/(U) 2010 Full Service Lease 614 $ 488 $ 127 $ Commercial Rental 580 358 222 Operating Property and Equipment 55 49 6 Gross Capital Expenditures 1,249 895 354 Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 224 162 62 Net Capital Expenditures 1,025 $ 733 $ 292 $ Memo: Acquisitions 362 $ 7 $ 355 $ Year-To-Date ($ Millions) |
10/25/11 Proprietary and Confidential 12 Cash Flow from Continuing Operations Year-To-Date ($ Millions) 2011 2010 Earnings from Continuing Operations 124 $ 83 $ Depreciation 645 628 Gains on Vehicle Sales, Net (46) (18) Amortization and Other Non-Cash Charges, Net 41 40 Pension Contributions (12) (11) Changes in Working Capital and Deferred Taxes 31 83 Cash Provided by Operating Activities 782 804 Proceeds from Sales (Primarily Revenue Earning Equipment) 224 162 Collections of Direct Finance Leases 46 46 Other, Net - 2 Total Cash Generated (1) 1,052 1,014 Capital Expenditures (2) (1,165) (861) Free Cash Flow (1)(3) (113) $ 153 $ |
183% 203% 225% 275% 275% 234% 201% 146% 129% 151% 168% 157% 225% 0% 50% 100% 150% 200% 250% 300% 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 09/30/11 Long Term Target Midpoint Total Obligations to Equity Balance Sheet Debt to Equity 10/25/11 Proprietary and Confidential 13 Debt to Equity Ratio ($ Millions) (1) (2) 9/30/11 12/31/10 9/30/10 Balance Sheet Debt 3,199 $ 2,747 $ 2,530 $ Percent To Equity 220% 196% 180% Total Obligations (1) 3,263 $ 2,847 $ 2,644 $ Percent To Equity (1) 225% 203% 188% Total Equity 1,451 $ 1,404 $ 1,408 $ |
Contents Third Quarter 2011 Results Overview Asset Management Update Earnings Outlook Future Financial Reporting Enhancements Q & A 10/25/11 14 Proprietary and Confidential |
10/25/11 Proprietary and Confidential 15 Units held for sale were 5,100 at quarter end; up 9% from 4,700 units held for sale in the prior year – Used vehicle inventory remains below target levels The number of used vehicles sold in the third quarter were 4,100, down 7% compared with prior year due to lower average inventory levels Proceeds per unit were up 39% for tractors and up 20% for trucks in the third quarter compared with prior year (excluding the impact of exchange rates) – Proceeds per unit were up 6% for tractors and 5% for trucks vs. the prior quarter Vehicles no longer earning revenue were 7,600 at quarter end; up 700 or 10% from the prior year Average third quarter total commercial rental fleet was up 30% year-over-year (12% excluding acquisitions) Global Asset Management Update (1) (1) Units rounded to nearest hundred. |
Contents Third Quarter 2011 Results Overview Asset Management Update Earnings Outlook Future Financial Reporting Enhancements Q & A 10/25/11 16 Proprietary and Confidential |
10/25/11 17 EPS Forecast – Continuing Operations Fourth Quarter Full Year 2011 Comparable EPS Forecast (1) $ 0.92 - 0.97 $ 3.44 - 3.49 2010 Comparable EPS (1) $0.65 $2.22 ($ Earnings Per Share) Proprietary and Confidential (1) Non-GAAP financial measure. (Comparable EPS in FY10 excludes a gain on sale of an international asset of $0.02, tax benefits of $0.21 and acquisition costs of $0.08. Comparable EPS in 4Q11 excludes $0.06 of acquisition-related severance and other restructuring costs. Comparable EPS in FY11 excludes a $0.09 charge related to tax law changes and benefits and $0.08 of acquisition-related severance and other restructuring costs as well as transaction costs.) Increasing full year 2011 EPS forecast from $3.33 – 3.43 to $3.44 – 3.49 Current forecast is as follows: |
Contents Third Quarter 2011 Results Overview Asset Management Update Earnings Outlook Future Financial Reporting Enhancements Q & A 10/25/11 18 Proprietary and Confidential |
Future Financial Reporting Enhancements 10/25/11 19 Proprietary and Confidential Reporting Change Effective Date Merits of Change New income statement presentation 4Q2011 Increased visibility to types of revenue Aligns direct costs with revenues Combined financial reporting for SCS and DCC segments 1Q2012 Industry vertical revenue presentation for SCS and DCC combined Visibility into total DCC operating revenue, including portion traditionally within SCS Exclude non-service pension costs from segment NBT 1Q2012 Provides better transparency to segment operating results Improves visibility into pension plan performance Ryder will make the following changes to the company’s financial statement reporting: Historical information will be provided for comparative purposes |
Future Financial Reporting Enhancements 10/25/11 20 Proprietary and Confidential Revenues: Lease and rentals XXX A Services XXX A Fuel services XXX A Revenue XXX A Total Revenues XXX A Costs and Expenses: Operating expense XXX B Cost of lease and rentals XXX B, C, E, G Salaries and employee related costs XXX C Cost of services XXX B, C, D, E Subcontracted transportation XXX D Cost of fuel services XXX B, C, E Depreciation expense XXX E Other operating expenses XXX B, E Gains on vehicle sales, net XXX F Selling, general and administrative expenses XXX B, C, E Equipment rental XXX G Gains on vehicles sales, net XXX F Interest expense XXX H Interest expense XXX H Miscellaneous (income) expense, net XXX I Miscellaneous (income) expense, net XXX I Restructuring and other charges, net XXX J Restructuring and other charges, net XXX J XXX K Total Costs and Expenses XXX K Earnings from continuing operations before income taxes XXX L Earnings from continuing operations before income taxes XXX L Memo: Depreciation Expense XXX E Equipment Rental XXX G Current Presentation Future Presentation Revised format for the consolidated RSI income statement |
Future Financial Reporting Enhancements 10/25/11 21 Proprietary and Confidential Automotive xxx High-Tech xxx Retail & CPG xxx Industrial & Other xxx Operating Revenue xxx Subcontracted Transportation xxx Total Revenue xxx Segment Net Before Tax Earnings (NBT) xxx Segment NBT as % of Total Revenue xxx Segment NBT as % of Operating Revenue xxx Memo: DCC Operating Revenue xxx Fuel Costs xxx Combined financial reporting for SCS and DCC segments NEW – WILL INCLUDE DCC ACTIVITY PREVIOUSLY REPORTED IN SCS BUSINESS SEGMENT CURRENT DCC SEGMENT REVENUE WILL BE REPORTED IN THEIR RESPECTIVE INDUSTRY VERTICALS |
Future Financial Reporting Enhancements 10/25/11 22 Proprietary and Confidential Exclusion of non-service cost components of pension from segment NBT - Non-service cost components consist primarily of interest cost, expected return on plan assets and recognized net actuarial gains/losses Segment Net Before Tax Earnings: Segment Net Before Tax Earnings: Fleet Management Solutions Fleet Management Solutions Supply Chain Solutions Supply Chain Solutions (incl. Dedicated Contract Carriage) Dedicated Contract Carriage Eliminations Eliminations Central Support Services (Unallocated Share) Central Support Services (Unallocated Share) Earnings Before Restructuring and Income Taxes Non-Service Pension Costs Restructuring and Other Charges, Net and Other Items Restructuring and Other Charges, Net and Other Items Earnings Before Income Taxes Earnings Before Income Taxes Current Presentation Future Presentation NEW RESTATED |
Contents Third Quarter 2011 Results Overview Asset Management Update Earnings Outlook Future Financial Reporting Enhancements Q & A 10/25/11 23 Proprietary and Confidential |
Q&A 10/25/11 24 Proprietary and Confidential |
Appendix Business Segment Detail Central Support Services Balance Sheet Asset Management Financial Indicators Forecast Non-GAAP Financial Measures & Reconciliations 10/25/11 25 Proprietary and Confidential |
10/25/11 Proprietary and Confidential 26 Fleet Management Solutions (FMS) 2011 2010 % B/(W) Full Service Lease 509.9 $ 487.5 $ 5% Contract Maintenance 39.1 40.1 (2)% Contractual Revenue 549.0 527.6 4% Contract-related Maintenance 51.6 41.2 25% Commercial Rental 206.5 147.9 40% Other 17.5 17.2 2% Operating Revenue 824.7 733.9 12% Fuel Services Revenue 274.4 215.1 28% Total Revenue 1,099.0 $ 948.9 $ 16% Segment Net Before Tax Earnings (NBT) 74.2 $ 54.8 $ 35% Segment NBT as % of Total Revenue 6.7% 5.8% Segment NBT as % of Operating Revenue 9.0% 7.5% Third Quarter ($ Millions) |
10/25/11 Proprietary and Confidential 27 Fleet Management Solutions (FMS) 2011 2010 % B/(W) Full Service Lease 1,487.9 $ 1,449.4 $ 3% Contract Maintenance 116.4 119.8 (3)% Contractual Revenue 1,604.3 1,569.1 2% Contract-related Maintenance 143.7 121.2 18% Commercial Rental 522.2 379.5 38% Other 52.4 50.4 4% Operating Revenue 2,322.5 2,120.3 10% Fuel Services Revenue 821.1 643.8 28% Total Revenue 3,143.7 $ 2,764.1 $ 14% Segment Net Before Tax Earnings (NBT) 180.2 $ 122.7 $ 47% Segment NBT as % of Total Revenue 5.7% 4.4% Segment NBT as % of Operating Revenue 7.8% 5.8% Year-To-Date ($ Millions) |
10/25/11 Proprietary and Confidential 28 Supply Chain Solutions (SCS) Third Quarter ($ Millions) 2011 2010 % B/(W) Automotive 115.3 $ 114.7 $ 1% High-Tech 59.2 57.2 4% Retail & CPG 109.6 45.7 140% Industrial & Other 42.6 40.8 4% Operating Revenue 326.8 258.5 26% Subcontracted Transportation 79.3 64.3 23% Total Revenue 406.1 $ 322.9 $ 26% Segment Net Before Tax Earnings (NBT) 22.4 $ 15.2 $ 47% Segment NBT as % of Total Revenue 5.5% 4.7% Segment NBT as % of Operating Revenue 6.9% 5.9% Memo: Fuel Costs 21.5 $ 19.4 $ (11)% |
10/25/11 Proprietary and Confidential 29 Supply Chain Solutions (SCS) Year-To-Date ($ Millions) 2011 2010 % B/(W) Automotive 345.9 $ 334.4 $ 3% High-Tech 176.8 161.8 9% Retail & CPG 317.3 131.7 141% Industrial & Other 126.3 118.7 6% Operating Revenue 966.2 746.7 29% Subcontracted Transportation 230.5 180.5 28% Total Revenue 1,196.7 $ 927.2 $ 29% Segment Net Before Tax Earnings (NBT) 51.7 $ 34.8 $ 49% Segment NBT as % of Total Revenue 4.3% 3.8% Segment NBT as % of Operating Revenue 5.3% 4.7% Memo: Fuel Costs 70.2 $ 57.8 $ (21)% |
10/25/11 Proprietary and Confidential 30 Dedicated Contract Carriage (DCC) 2011 2010 % B/(W) Operating Revenue 149.5 $ 118.7 $ 26% Subcontracted Transportation 9.5 2.7 248% Total Revenue 158.9 $ 121.4 $ 31% Segment Net Before Tax Earnings (NBT) 8.4 $ 8.6 $ (3)% Segment NBT as % of Total Revenue 5.3% 7.1% Segment NBT as % of Operating Revenue 5.6% 7.3% Memo: Fuel Costs 33.4 $ 21.1 $ (58)% Third Quarter ($ Millions) |
10/25/11 Proprietary and Confidential 31 Dedicated Contract Carriage (DCC) 2011 2010 % B/(W) Operating Revenue 419.5 $ 349.3 $ 20% Subcontracted Transportation 24.5 11.5 114% Total Revenue 444.0 $ 360.8 $ 23% Segment Net Before Tax Earnings (NBT) 25.5 $ 24.4 $ 4% Segment NBT as % of Total Revenue 5.7% 6.8% Segment NBT as % of Operating Revenue 6.1% 7.0% Memo: Fuel Costs 93.6 $ 61.6 $ (52)% Year-To-Date ($ Millions) |
10/25/11 Proprietary and Confidential 32 Central Support Services (CSS) 2011 2010 % B/(W) Allocated CSS Costs 43.0 $ 35.8 $ (20)% Unallocated CSS Costs 11.6 12.0 3% Total CSS Costs 54.6 $ 47.7 $ (14)% Third Quarter ($ Millions) |
10/25/11 Proprietary and Confidential 33 Central Support Services (CSS) 2011 2010 % B/(W) Allocated CSS Costs 120.3 $ 105.0 $ (15)% Unallocated CSS Costs 31.6 30.7 (3)% Total CSS Costs 151.9 $ 135.7 $ (12)% Year-To-Date ($ Millions) |
10/25/11 Proprietary and Confidential 34 Balance Sheet September 30, December 31, 2011 2010 Cash and Cash Equivalents 116 $ 213 $ Other Current Assets 983 810 Revenue Earning Equipment, Net 4,828 4,201 Operating Property and Equipment, Net 627 607 Other Assets 892 821 Total Assets 7,446 $ 6,652 $ Short-Term Debt / Current Portion Long-Term Debt 255 $ 420 $ Other Current Liabilities 908 711 Long-Term Debt 2,943 2,327 Other Non-Current Liabilities (including Deferred Income Taxes) 1,888 1,790 Shareholders' Equity 1,451 1,404 Total Liabilities and Shareholders' Equity 7,446 $ 6,652 $ ($ Millions) |
10/25/11 Proprietary and Confidential 35 U.S. Asset Management Update (a) (a) U.S. only (b) Excludes early terminations where customer purchases vehicle (c) Current year statistics may exclude some units due to a lag in reporting (b) Number of Units 2,734 3,052 2,981 3,138 2,910 3,756 3,023 3,959 3,670 3,138 5,255 4,899 4,033 6,752 3,005 3,348 5,119 2,352 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Redeployments Extensions Early Terminations YTD 06 YTD 07 YTD 08 YTD 09 YTD 10 YTD 11 (c) Redeployments – vehicles coming off-lease with useful life remaining are redeployed in the Ryder fleet (Commercial Rental, DCC, SCS, or with another Lease customer). Extensions – Ryder re-prices lease contract and extends maturity date. Early terminations – customer elects to terminate lease prior to maturity. Depending on the remaining useful life, the vehicle may be redeployed in the Ryder fleet (Commercial Rental, DCC, SCS, other Lease customer) or sold by Ryder. |
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Forecast Long Term Target Mispoint 10/25/11 Proprietary and Confidential 36 $1,054 $1,091 $1,381 $1,179 $835 $949 $1,252 $1,266 $1,684 $1,571 $1,328 $1,500 2000 2001 2002 2003 2004 2005 2006 2007 2008 Financial Indicators Forecast (1) Gross Capital Expenditures (3) ($ Millions) Total Cash Generated (2) (3) Total Obligations to Equity Ratio (2) $1,289 $600 $725 $1,165 $657 $1,399 $1,182 2000 2001 2002 2003 2004 2005 Memo: Free Cash Flow (2) (3) $1,757 2006 2007 2008 $1,265 2009 2010 2010 2009 $611 131 367 357 289 (208) (4) 380 (242) (439) 341 614 $1,088 Total Obligations to Equity Balance Sheet Debt to Equity 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 275% 146% 129% 234% 151% 157% 168% 225% 183% 203% 201% Significant and predictable cash generation Invest in growth (organic, acquisitions) Over time appropriately move financial leverage towards long term target of 250-300% Total Obligations to Equity 275% Long Term Target Midpoint 2011 Forecast (215) (5) 2011 Forecast 2011 220% Forecast 258 $1,755 Full Service Lease PP&E/Other Commercial Rental |
Adjusted Return on Capital (1) History Proprietary and Confidential 37 Adjusted Return on Capital (ROC) 6.9% 6.8% 6.7% 6.6% 6.5% 6.3% 6.1% 5.6% 5.5% 7.7% 7.8% 7.9% 7.4% 7.3% 4.1% 4.8% 5.6% 5.7% 2004 2005 2006 2007 2008 2009 2010 Prior 2011 Current 2011 Cost of Capital (COC) Return on Equity 15.3% 14.6% 15.5% 14.2% 11.2% 4.4% 8.4% 11.2% 11.6% Total Capital (2) $3,359 $3,846 $4,184 $4,789 $4,841 $4,244 $4,030 $4,641 $4,579 ROC O/(U) COC 0.8% 1.0% 1.2% 0.8% 0.8% (2.2)% (1.3)% -% 0.2% 10/25/11 Forecast Forecast (3) |
10/25/11 Proprietary and Confidential 38 Non-GAAP Financial Measures This presentation includes “non-GAAP financial measures” as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure and an explanation why management believes that presentation of the non-GAAP financial measure provides useful information to investors. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. Specifically, the following non-GAAP financial measures are included in this presentation: Non-GAAP Financial Measure Comparable GAAP Measure Reconciliation & Additional Information Presented on Slide Titled Page Operating Revenue Total Revenue Key Financial Statistics 5-6 Earnings Before Restructuring and Income Taxes Earnings before Income Taxes from Continuing Operations Business Segments 9-10 Comparable Earnings / EPS from Continuing Operations Earnings / EPS from Continuing Operations Earnings and EPS from Continuing Operations Reconciliation 17 Comparable NBT / Tax Rate NBT / Tax Rate NBT and Tax Rate from Continuing Operations Reconciliation 40 Adjusted Return on Capital Net Earnings Adjusted Return on Capital Reconciliation 41-42 Total Cash Generated / Free Cash Flow Cash Provided by Operating Activities Cash Flow Reconciliation 45-46 Total Obligations / Total Obligations to Equity Balance Sheet Debt / Debt to Equity Debt to Equity Ratio Debt to Equity Reconciliation 13 43-44 FMS / SCS / DCC Operating Revenue and Segment NBT as % of Operating Revenue FMS / SCS / DCC Total Revenue and Segment NBT as % of Total Revenue Fleet Management Solutions / Supply Chain Solutions / Dedicated Contract Carriage 26-31 |
Earnings and EPS from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 3Q11 - 3Q11 - Earnings EPS Reported 56.9 $ 1.10 $ Tax Benefits (0.6) (0.01) Comparable 56.4 $ 1.09 $ Proprietary and Confidential 39 39 10/25/11 YTD 11 - YTD 11 - Earnings EPS Reported 123.7 $ 2.39 $ Tax Law Changes / Benefits 4.8 0.09 Acquisition Related Transaction Costs 1.5 0.03 Restructuring Charges 0.5 0.01 Comparable 130.5 $ 2.52 $ |
Proprietary and Confidential 40 NBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 3Q11 - 3Q11 - 3Q11 - NBT Tax Tax Rate Reported 87.7 $ 30.7 $ 35.0% Tax Benefit - 0.6 Comparable 87.7 $ 31.3 $ 35.7% 10/25/11 40 YTD 11 - YTD 11 - YTD 11 - NBT Tax Tax Rate Reported 206.3 $ 82.6 $ 40.0% Tax Law Changes / Benefits - (4.8) Acquisition Related Transaction Costs 1.7 0.2 Restructuring Charges 0.8 0.3 Comparable 208.8 $ 78.3 $ 37.5% |
10/25/11 Proprietary and Confidential 41 Adjusted Return on Capital Reconciliation 9/30/11 9/30/10 Net Earnings (1) 159 $ 89 $ Restructuring and Other Charges, Net and Other Items 9 16 Income Taxes 90 62 Adjusted Earnings Before Income Taxes 257 167 Adjusted Interest Expense (2) 136 133 Adjusted Income Taxes (3) (148) (118) Adjusted Net Earnings 245 $ 182 $ Average Total Debt 2,916 $ 2,480 $ Average Off-Balance Sheet Debt 86 120 Average Adjusted Total Shareholders' Equity 1,433 1,410 Average Adjustments to Shareholders' Equity (4) 1 7 Adjusted Average Total Capital 4,437 $ 4,017 $ Adjusted Return on Capital (5) 5.5% 4.5% (1) Earnings calculated based on a 12-month rolling period. (2) Interest expense includes implied interest on off-balance sheet vehicle obligations. (3) Income taxes were calculated by excluding taxes related to comparable earnings items and interest expense. (4) Represents comparable earnings items for those periods. (5) The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (including off-balance sheet debt) and equity should be included in evaluating how effectively capital is utilized across the business. ($ Millions) |
10/25/11 Proprietary and Confidential 42 Adjusted Return on Capital Reconciliation ($ Millions) 2004 2005 2006 2007 2008 2009 2010 Net earnings (1) 216 $ 227 $ 249 $ 254 $ 200 $ 62 $ 118 $ Cumulative effect of change in accounting principle - 2 - - - - - Restructuring and other charges, net and other items (24) (2) - 1 70 30 6 Income taxes 115 129 144 152 150 54 61 Adjusted earnings before income taxes 307 357 393 407 420 146 185 Adjusted interest expense (2) 106 127 149 169 165 150 133 Adjusted income taxes (3) (156) (186) (207) (220) (230) (122) (124) Adjusted net earnings 257 $ 298 $ 332 $ 356 $ 355 $ 174 $ 194 $ Average total debt 1,811 $ 2,148 $ 2,480 $ 2,848 $ 2,882 $ 2,692 $ 2,512 $ Average off-balance sheet debt 152 148 99 150 171 142 114 Average adjusted total shareholders' equity 1,412 1,555 1,610 1,791 1,778 1,396 1,402 Average adjustments to shareholders' equity (4) (16) (5) (5) 1 10 16 2 Adjusted average total capital 3,359 $ 3,846 $ 4,184 $ 4,789 $ 4,841 $ 4,245 $ 4,030 $ Adjusted return on capital (5) 7.7% 7.8% 7.9% 7.4% 7.3% 4.1% 4.8% (1) Earnings calculated based on a 12-month rolling period. (2) Interest expense includes interest on off-balance sheet vehicle obligations. (3) Income taxes were calculated by excluding taxes related to comparable earnings items and interest expense. (4) Represents comparable earnings items for those periods. (5) The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (includes off-balance sheet debt) and equity should be included in evaluated how effectively capital is utilized across the business. |
10/25/11 Proprietary and Confidential 43 Debt to Equity Reconciliation % to % to % to % to % to % to % to % to 12/31/00 Equity 12/31/01 Equity 12/31/02 Equity 12/31/03 Equity 12/31/04 Equity 12/31/05 Equity 12/31/06 Equity 12/31/07 Equity Balance Sheet Debt $2,017 161% $1,709 139% $1,552 140% $1,816 135% $1,783 118% $2,185 143% $2,817 164% $2,776 147% Receivables Sold 345 110 - - - - - - PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 879 625 370 153 161 117 78 178 PV of contingent rentals under securitizations 209 441 311 - - - - - Total Obligations $3,450 275% $2,885 234% $2,233 201% $1,969 146% $1,944 129% $2,302 151% $2,895 168% $2,954 157% ($ Millions) |
10/25/11 Proprietary and Confidential 44 Debt to Equity Reconciliation ($ Millions) % to % to % to % to % to 12/31/08 Equity 12/31/09 Equity 12/31/10 Equity 9/30/10 Equity 9/30/11 Equity Balance Sheet Debt $2,863 213% $2,498 175% $2,747 196% $2,530 180% $3,199 220% Receivables Sold - - - - - PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 163 119 100 114 65 Total Obligations $3,026 225% $2,617 183% $2,847 203% $2,644 188% $3,263 225% |
10/25/11 Proprietary and Confidential 45 ($ Millions) Cash Flow Reconciliation 12/31/00 (4) 12/31/01 (4) 12/31/02 (4) 12/31/03 (4) 12/31/04 (4) 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 Cash Provided by Operating Activities 1,023 $ 365 $ 617 $ 803 $ 867 $ 776 $ 852 $ 1,097 $ 1,248 $ 985 $ Less: Changes in Bal. of Trade Rec. Sold (270) 235 110 - - - - - - - Collections of Direct Finance Leases 67 �� 66 66 61 64 69 65 62 61 65 Proceeds from Sale (Prim. Rev. Earn. Equip.) 230 173 152 210 331 333 332 373 262 216 Proceeds from Sale & Leaseback of Assets - - - 13 118 - - 150 - - Other Investing, Net 4 (4) 4 4 1 �� - 2 2 - - Total Cash Generated (1) 1,054 835 949 1,091 1,381 1,179 1,252 1,684 1,571 1,266 Capital Expenditures (2) (1,296) (704) (582) (734) (1,092) (1,387) (1,691) (1,304) (1,230) (652) Free Cash Flow (3)(5) (242) $ 131 $ 367 $ 357 $ 289 $ (208) $ (439) $ 380 $ 341 $ 614 $ Memo: Depreciation Expense 580 $ 545 $ 552 $ 625 $ 706 $ 735 $ 739 $ 811 $ 836 $ 881 $ Gains on Vehicle Sales, Net 19 $ 12 $ 14 $ 16 $ 35 $ 47 $ 51 $ 44 $ 39 $ 12 $ |
10/25/11 Proprietary and Confidential 46 ($ Millions) Cash Flow Reconciliation 12/31/10 9/30/10 9/30/11 Cash Provided by Operating Activities from Continuing Operations 1,028 $ 804 $ 782 $ Proceeds from Sales (Primarily Revenue Earning Equipment) 235 162 224 Collections of Direct Finance Leases 62 46 46 Other, Net 3 2 - Total Cash Generated (1) 1,328 1,014 1,052 Capital Expenditures (2) (1,070) (861) (1,165) Free Cash Flow (3)(4) 258 $ 153 $ (113) $ Memo: Depreciation Expense 834 $ 628 $ 645 $ Gains on Vehicle Sales, Net 29 $ (18) $ (46) $ |
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