Slide 1: Second Quarter 2014 Earnings Conference Call
Proprietary and Confidential | July 23, 2014 Second Quarter 2014 Earnings Conference Call 1 Exhibit 99.2
Slide 2: Safe Harbor and Non-GAAP Financial Measures
Proprietary and Confidential | Safe Harbor and Non-GAAP Financial Measures Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995, including our expectations regarding earnings growth, lease
Slide 3: Contents
Proprietary and Confidential | Contents ► Second Quarter 2014 Results Overview ►Asset Management Update ► Earnings Forecast ► Q & A 3
Slide 4: 2nd Quarter Results Overview
Proprietary and Confidential | 2nd Quarter Results Overview ► Comparable earnings per share from continuing operations were $1.44 vs. $1.25 in 2Q13 ► Earnings per diluted share from continuing operations were $1.42 in 2Q14 vs. $1.19 in 2Q13 – 2Q14 included non-operating pension costs of $0.02 – 2Q13
Slide 5: Key Financial Statistics Second Quarter
Proprietary and Confidential | Key Financial Statistics 5 Second Quarter ($ Millions, Except Per Share Amounts) Operating Revenue Fuel Services and Subcontracted Transportation Revenue Total Revenue Earnings Per Share from Continuing Operations Comparable Earnings Per Share from Continuing Operation
Slide 6: Key Financial Statistics Year-To-Date
Proprietary and Confidential | Key Financial Statistics 6 Year-To-Date ($ Millions, Except Per Share Amounts) 2014 2013 % B/(W) Operating Revenue 2,715.5$ 2,580.9$ 5% Fuel Services and Subcontracted Transportation Revenue 579.8 586.1 (1)% Total Revenue 3,295.3$ 3,167.0$ 4% Earnings Per Share from Co
Slide 7: 2nd Quarter Results Overview – FMS
Proprietary and Confidential | 2nd Quarter Results Overview – FMS ► Fleet Management Solutions (FMS) operating revenue up 6% and total revenue up 5% vs. prior year – Full service lease revenue up 5% – Contract maintenance revenue up 2% – Commercial rental revenue up 13% – Contract-related maintenanc
Slide 8: 2nd Quarter Results Overview – SCS
Proprietary and Confidential | 2nd Quarter Results Overview – SCS 8 ► Supply Chain Solutions (SCS) operating revenue up 6% and total revenue up 5% vs. prior year due to new business and higher volumes – Dedicated operating revenue increased 7% vs. prior year due to new sales ► SCS earnings were lowe
Slide 9: Business Segments (Second Quarter)
Proprietary and Confidential | Business Segments 9 2014 2013 % B/(W) 2014 2013 % B/(W) Operating Revenue: Fleet Management Solutions 907.9$ 852.5$ 6% 1,181.2$ 1,121.3$ 5% Supply Chain Solutions 545.4 514.8 6% 627.6 597.2 5% Eliminations (60.3) (54.0) (12)% (124.2) (114.4) (9)% Total 1,393.0$ 1,313.3
Slide 10: Business Segments (Year-To-Date)
Proprietary and Confidential | Business Segments 10 2014 2013 % B/(W) 2014 2013 % B/(W) Operating Revenue: Fleet Management Solutions 1,767.8$ 1,676.5$ 5% 2,316.3$ 2,221.0$ 4% Supply Chain Solutions 1,065.9 1,009.6 6% 1,224.9 1,173.7 4% Eliminations (118.2) (105.3) (12)% (245.9) (227.6) (8)% Total 2
Slide 11: Capital Expenditures
Proprietary and Confidential | Capital Expenditures 11 2014 $ 2014 2013 O/(U) 2013 Full Service Lease 818$ 778$ 41$ Commercial Rental 344 171 172 Operating Property and Equipment 95 40 55 Gross Capital Expenditures 1,257 989 268 Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 277 229
Slide 12: Cash Flow from Continuing Operations
Proprietary and Confidential | Cash Flow from Continuing Operations 2014 2013 Earnings from Continuing Operations 125$ 103$ Depreciation 506 466 Gains on Vehicle Sales, Net (63) (46) Amortization and Other Non-Cash Charges, Net 36 37 Pension Contributions (65) (24) Changes in Working Capital and Def
Slide 13: Debt to Equity Ratio
Proprietary and Confidential | Debt to Equity Ratio 13 6/30/2014 12/31/2013 6/30/2013 Balance Sheet Debt 4,717$ 4,189$ 3,914$ Percent To Equity 240% 221% 253% Total Obligations 4,805$ 4,284$ 4,056$ Percent To Equity 245% 226% 262% Total Equity (3) 1,965$ 1,897$ 1,547$ Balance 213% 175% 196% 257% 260
Slide 14: Contents
Proprietary and Confidential | Contents ► Second Quarter 2014 Results Overview ►Asset Management Update ► Earnings Forecast ► Q & A 14
Slide 15: Global Asset Management Update
Proprietary and Confidential | ► Units held for sale were 6,300 at quarter end, down from 9,600 units held for sale in the prior year ─ Sequentially from the first quarter, units held for sale decreased by 900 units ► The number of used vehicles sold in the second quarter was 5,500, down 9% from the
Slide 16: Contents
Proprietary and Confidential | Contents ► Second Quarter 2014 Results Overview ►Asset Management Update ► Earnings Forecast ► Q & A 16
Slide 17: EPS Forecast – Continuing Operations
Proprietary and Confidential | EPS Forecast – Continuing Operations 17 2014 Comparable EPS Forecast(1) $ 1.58 - 1.63 $ 5.50 - 5.60 2013 Comparable EPS(2) $ 1.46 $ 4.88 Third Quarter Full Year ($ Earnings Per Share) (1) 2014 Comparable EPS Forecast, a non-GAAP financial measure, for the third quarter
Slide 18: Q&A
Proprietary and Confidential | Q&A 18
Slide 19: Appendix
Proprietary and Confidential | Appendix 19 Full Service Lease Vehicle Count Business Segment Detail Central Support Services Balance Sheet Adjusted Return on Capital History Capital Expenditures Forecast Growth Capital Asset Management Non-GAAP Financial Measures & Reconciliations
Slide 20: Full Service Lease (FSL) Fleet Count
Proprietary and Confidential | End of Period 2Q13 3Q13 4Q13 1Q14 2Q14 FSL Fleet (as reported) 120,300 120,800 122,900 123,300 123,000 2,700 UK FSL Trailers 5,400 5,100 5,000 4,800 4,600 (800) FSL Fleet - excluding UK 114,900 115,700 117,900 118,500 118,400 3,500 Sequential Change 3Q13 O/(U) 2Q13 4Q1
Slide 21: Fleet Management Solutions (FMS) Second Quarter
Proprietary and Confidential | Fleet Management Solutions (FMS) 21 2014 2013 % B/(W) Full Service Lease 566.1$ 540.4$ 5% Contract Maintenance 46.3 45.3 2% Contractual Revenue 612.4 585.7 5% Commercial Rental 221.7 196.5 13% Contract-related Maintenance 56.5 52.1 9% Other 17.3 18.3 (5)% Operating Rev
Slide 22: Fleet Management Solutions (FMS) Year-To-Date
Proprietary and Confidential | Fleet Management Solutions (FMS) 22 2014 2013 % B/(W) Full Service Lease 1,118.3$ 1,073.6$ 4% Contract Maintenance 89.9 91.4 (2)% Contractual Revenue 1,208.3 1,165.0 4% Commercial Rental 411.9 369.6 11% Contract-related Maintenance 112.6 105.4 7% Other 35.1 36.5 (4)% O
Slide 23: Supply Chain Solutions (SCS) Second Quarter
Proprietary and Confidential | Supply Chain Solutions (SCS) 2014 2013 % B/(W) Automotive 145.3$ 144.8$ - High-Tech 88.0 82.0 7% Retail & CPG 193.4 180.3 7% Industrial & Other 118.7 107.7 10% Operating Revenue 545.4 514.8 6% Subcontracted Transportation 82.1 82.4 - Total Revenue 627.6$ 597.2$ 5% Segm
Slide 24: Supply Chain Solutions (SCS) Year-To-Date
Proprietary and Confidential | Supply Chain Solutions (SCS) 2014 2013 % B/(W) Automotive 289.9$ 293.4$ (1)% High-Tech 169.5 159.8 6% Retail & CPG 376.7 356.1 6% Industrial & Other 229.8 200.3 15% Operating Revenue 1,065.9 1,009.6 6% Subcontracted Transportation 159.0 164.0 (3)% Total Revenue 1,224.9
Slide 25: Central Support Services (CSS) Second Quarter
Proprietary and Confidential | Central Support Services (CSS) 25 2014 2013 % B/(W) Allocated CSS Costs (1) 46.0$ 45.8$ - Unallocated CSS Costs 12.1 10.6 (15)% Total CSS Costs (1) 58.1$ 56.4$ (3) Second Quarter ($ Millions) (1) Includes the reclassification of $4.2 million in 2013 to CSS in order to
Slide 26: Central Support Services (CSS) Year-To-Date
Proprietary and Confidential | Central Support Services (CSS) 26 2014 2013 % B/(W) Allocated CSS Costs (1) 93.9$ 89.0$ (6)% Unallocated CSS Costs 23.0 22.0 (5)% Total CSS Costs (1) 116.8$ 110.9$ (5)% Year-To-Date ($ Millions) (1) Includes the reclassification of $7.5 million in 2013 to CSS in order
Slide 27: Balance Sheet
Proprietary and Confidential | Balance Sheet 27 June 30, December 31, 2014 2013 Cash and Cash Equivalents 87$ 62$ Other Current Assets 1,051 1,001 Revenue Earning Equipment, Net 6,930 6,491 Operating Property and Equipment, Net 688 634 Other Assets 932 916 Total Assets 9,688$ 9,104$ Short-Term Debt
Slide 28: Adjusted Return on Capital History
Proprietary and Confidential | Adjusted Return on Capital History 28 Adjusted Return on Capital (ROC) 6.8% 6.7% 6.6% 6.5% 6.3% 6.1% 5.5% 4.8% 4.7% 4.8% 7.8% 7.9% 7.4% 7.3% 4.1% 4.8% 5.7% 5.6% 5.7% 5.8% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Forecast Cost of Capital (COC) Return on Equity
Slide 29: Capital Expenditure Forecast
Proprietary and Confidential | Capital Expenditure Forecast 29 Full Service Lease - Replacement Full Service Lease - Growth Full Service Lease 2014 Forecast $ 1,120 630 1,750 2013 1,823$ Commercial Rental Operating Property and Equipment Gross Capital Expenditures Less: Proceeds from Sales Net Capit
Slide 30: Growth Capital Expenditures and Free Cash Flow
Proprietary and Confidential | Growth Capital Expenditures 30 Free Cash Flow 380 341 614 258 (257) (384) (386) (300) ($ Millions) 2014 229 263 382 556 630 180 460 184 177 220 0.0 0.5 1.0 2007 2008 2009 2010 2011 2012 2013 2014 Forecast 2007 2008 2009 2010 2011 2012 2014 Forecast 20 0 229 0 180 723 5
Slide 31: Lease Redeployments, Extensions and Early Terminations
Proprietary and Confidential | 2,180 2,782 2,488 2,022 3,319 3,494 2,948 4,381 2,291 2,317 3,689 1,687 2,242 3,880 1,219 2,098 3,096 1,584 1,869 3,295 1,411 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Redeployments Extensions Early Terminations N u m b e r o f U n i t s 2Q08 YTD 2Q09
Slide 32: Non-GAAP Financial Measures
Proprietary and Confidential | Non-GAAP Financial Measures 32 ► 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. Non-GAAP financial measures
Slide 33: Earnings and EPS from Continuing Operations Reconciliation
Proprietary and Confidential | Earnings and EPS from Continuing Operations Reconciliation 2Q14 - 2Q14 - 2Q13 - 2Q13 - Earnings EPS Earnings EPS Reported 75.7$ 1.42$ 62.6$ 1.19$ Non-Operating Pension Costs 0.8 0.02 2.9 0.06 Comparable (1) 76.5$ 1.44$ 65.5$ 1.25$ YTD14 - YTD14 - YTD13 - YTD13 - Earnin
Slide 34: EBT and Tax Rate from Continuing Operations Reconciliation
Proprietary and Confidential | 2Q14 - 2Q14 - 2Q14 - YTD14 - YTD14 - YTD14 - EBT Tax Tax Rate EBT Tax Tax Rate Reported 120.0$ 44.4$ 36.9% 195.0$ 70.3$ 36.0% Non-operating Pension Costs 1.5 0.7 4.9 2.2 Benefit from tax law change - - - 1.8 Comparable (1) 121.6$ 45.1$ 37.1% 199.9$ 74.2$ 37.1% 2Q13 - 2
Slide 35: Adjusted Return on Capital Reconciliation
Proprietary and Confidential | Adjusted Return on Capital Reconciliation 2004 2005 2006 2007 2008 2009 Net earnings (1) 216$ 227$ 249$ 254$ 200$ 62$ Cumulative effect of change in accounting principle - 2 - - - - Restructuring and other charges, net and other items (24) (2) - 1 70 30 Income taxes 11
Slide 36: Adjusted Return on Capital Reconciliation
Proprietary and Confidential | Adjusted Return on Capital Reconciliation 36 2010 2011 2012 2013 2Q13 2Q14 Net Earnings (1) 118$ 170$ 210$ 238$ 231$ 259$ Restructuring and Other Charges, Net and Other Items 6 6 17 - 7 2 Income Taxes 61 108 91 126 108 139 Adjusted Earnings Before Income Taxes 185 284
Slide 37: Debt to Equity Reconciliation
Proprietary and Confidential | Debt to Equity Reconciliation 37 ($ Millions) Note: Amounts may not recalculate due to rounding. % to % to % to % to % to % to % to % to 12/31/2008 Equity 12/31/2009 Equity 12/31/2010 Equity 12/31/2011 Equity 12/31/2012 Equity 12/31/2013 Equity 6/30/2014 Equity 6/30/20
Slide 38: Cash Flow Reconciliation
Proprietary and Confidential | Cash Flow Reconciliation 38 ($ Millions) (1) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. (2) Free Cash Flow excludes acquisitions and changes in restricted cash. 12/31/08 12/31/09 12/31/10 12/31/1
Slide 39: Proprietary and Confidential |
Proprietary and Confidential |