Ryder System (R) 8-K Ryder Reports Third Quarter 2011 Results

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)

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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)

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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)

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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)%

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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)

$        

*

*

*

*

*

*

*

********