Slide 1: Fourth Quarter 2004 Earnings Conference Call
Fourth Quarter 2004 Earnings Conference Call February 4, 2005
Slide 2: Safe Harbor
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 uncertain
Slide 3: Contents
Contents Fourth Quarter Results Overview Key Initiatives Update Asset Management Update Earnings Outlook Q & A
Slide 4: 4th Quarter Results Overview
4th Quarter Results Overview Earnings per diluted share were $0.96, up from $0.61 in 4Q03 Includes net tax benefit of $0.14 in 4Q04 1995-1997 federal income tax audit complete 1998-2000 federal income tax audit discussed in 8-K filed 12/17/04 remains open Earnings per diluted share excluding net tax
Slide 5: 4th Quarter Results Overview (cont'd)
4th Quarter Results Overview (cont'd) Fleet Management Solutions earnings positively impacted by acquisitions, improved rental results, vehicle gains and reduced pension expense Supply Chain Solutions total revenue up vs. prior year; operating revenue flat as new business offset the non- renewal of
Slide 6: Earnings Per Share Fourth Quarter
Earnings Per Share Fourth Quarter (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures
Slide 7: Earnings Per Share Full Year
Earnings Per Share Full Year (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures
Slide 8: Business Segment Fourth Quarter
Business Segment Fourth Quarter ($ Millions) (1) 2003 net before tax earnings for FMS, SCS and DCC restated for change in cost allocations. Refer to Appendix - FMS / SCS / DCC Segment NBT Reconciliation. (2) Allocation of Restructuring and Other Charges, Net across business segments was as follows:
Slide 9: Business Segment Full Year
Business Segment Full Year ($ Millions) (1) 2003 net before tax earnings for FMS, SCS and DCC restated for change in cost allocations. Refer to Appendix - FMS / SCS / DCC Segment NBT Reconciliation. (2) Allocation of Restructuring and Other Recoveries/(Charges), Net across business segments was as f
Slide 10: Capital Expenditures Full Year
Capital Expenditures ($ Millions) Full Year
Slide 11: Debt to Equity Ratio
Debt to Equity Ratio Strong balance sheet to support profitable growth ($ Millions) Notes: - Includes impact of accumulated net pension related equity charge of $189 million as of 12/31/04 and $187 million as of 12/31/03. (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measure
Slide 12: Free Cash Flow
Free Cash Flow (1) Includes non-cash restructuring and other recoveries, net and cumulative effect of changes in accounting principles (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment (3) Non-GAAP financial measure; refer to Appe
Slide 13: Contents
Contents Fourth Quarter Results Overview Key Initiatives Update Asset Management Update Earnings Outlook Q & A
Slide 14: 2004 Key Initiatives Update
2004 Key Initiatives Update Focus on cost management and process improvement initiatives continues 2004 new initiatives added an incremental $20 million in pre-tax earnings Maintenance Asset Management Overhead Reduction Insurance and Safety Other 2004 Impact of Implemented Initiatives ($ Millions)
Slide 15: Contents
Contents Fourth Quarter Results Overview Key Initiatives Update Asset Management Update Earnings Outlook Q & A
Slide 16: Asset Management Update
Asset Management Update Note: U.S. only Used tractor retail sales proceeds continue to improve over prior year, up 16% vs. prior year period The overall number of vehicles sold was 4,254; up 13% compared with prior year Vehicles not yet earning revenue are 1,937; up 858 over prior year reflecting hi
Slide 17: Contents
Contents Fourth Quarter Results Overview Key Initiatives Update Asset Management Update Earnings Outlook Q & A
Slide 18: Earnings Outlook
Earnings Outlook Current forecast for EPS is as follows: ($ Earnings Per Share) 2005 EPS Forecast Full Year 3.20 - 3.30 1st Quarter 0.55 - 0.58 Note: EPS projections assume no impact from expensing of stock options.
Slide 19: Q & A
Q & A
Slide 20: Appendix
Appendix Business Segment Detail FMS / SCS / DCC Segment NBT Reconciliation Asset Management Non-GAAP Financial Measures & Reconciliations
Slide 21: Fleet Management Solutions (FMS) Fourth Quarter
Fleet Management Solutions (FMS) ($ Millions) Fourth Quarter (a) The Company uses dry revenue, a non-GAAP financial measure, to evaluate the operating performance of the FMS business segment and as a measure of sales activity. Fuel services revenue, which is directly impacted by fluctuations in mark
Slide 22: Fleet Management Solutions (FMS) Full Year
Fleet Management Solutions (FMS) ($ Millions) Full Year (a) The Company uses dry revenue, a non-GAAP financial measure, to evaluate the operating performance of the FMS business segment and as a measure of sales activity. Fuel services revenue, which is directly impacted by fluctuations in market fu
Slide 23: Supply Chain Solutions (SCS) Fourth Quarter
Supply Chain Solutions (SCS) ($ Millions) Fourth Quarter (a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the SCS business segment and as a measure of sales activity. FUM expense is deducted from total revenue to arrive at operating reven
Slide 24: Supply Chain Solutions (SCS) Full Year
Supply Chain Solutions (SCS) ($ Millions) Full Year (a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the SCS business segment and as a measure of sales activity. FUM expense is deducted from total revenue to arrive at operating revenue as
Slide 25: Dedicated Contract Carriage (DCC) Fourth Quarter
Dedicated Contract Carriage (DCC) ($ Millions) Fourth Quarter (a) The Company uses operating revenue, a non GAAP financial measure, to evaluate the operating performance of the DCC business segment and as a measure of sales activity. FUM expense is deducted from total revenue to arrive at operating
Slide 26: Dedicated Contract Carriage (DCC) Full Year
Dedicated Contract Carriage (DCC) ($ Millions) Full Year (a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the DCC business segment and as a measure of sales activity. FUM expense is deducted from total revenue to arrive at operating reven
Slide 27: Central Support Services (CSS) Fourth Quarter
Central Support Services (CSS) ($ Millions) Fourth Quarter
Slide 28: Central Support Services (CSS) Full Year
Central Support Services (CSS) ($ Millions) Full Year
Slide 29: FMS / SCS / DCC Segment NBT Reconciliation
FMS / SCS / DCC Segment NBT Reconciliation ($ Millions) Note: In 2004, the Company changed its methodology of allocating sales support costs between the FMS and DCC segments and insurance costs between the FMS, SCS and DCC segments. Accordingly, 2003 segment NBT measures for these segments have been
Slide 30: Asset Management Update
Asset Management Update Note: U.S. only Redeployments Extensions Early Terminations Early Replacements FY 99 3367 1765 6523 5729 FY 00 4496 2143 7012 3815 FY 01 5543 2850 7229 1416 FY 02 5706 5329 6455 1094 FY 03 4753 4172 4962 965 FY 04 4596 3043 4802 1516 Focused efforts in the area of asset manag
Slide 31: Non-Revenue Earning Equipment
Non-Revenue Earning Equipment Not Yet Earning - "NYE" No Longer Earning - "NLE" Total 10,727 Dec 2000 Total 12,040 Mar 2001 Total 10,915 June 2001 Total 10,991 Sept 2001 Total 11,072 Dec 2001 Total 10,361 Mar 2002 Total 8,838 Mar 2003 Total 8,691 June 2002 Total 8,433 Sept 2002 Total 8,131 Dec 2002
Slide 32: Non-GAAP Financial Measures
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 t
Slide 33: Net Earnings, EPS and Tax Rate Reconciliation
Net Earnings, EPS and Tax Rate Reconciliation ($ Millions or $ Earnings Per Share)
Slide 34: Return on Capital Reconciliation
Return on Capital Reconciliation ($ Millions) (1) Average shareholders' equity and average debt are calculated quarterly using a weighted average. (2) Shareholders' equity reflects impact of accumulated pension related equity charge of $189 million as of 12/31/04 and $187 million as of 12/31/03. (3)
Slide 35: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation (1) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. (2) The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative operatin
Slide 36: Debt to Equity Reconciliation
Debt to Equity Reconciliation Note: In connection with adopting FIN 46 effective July 1, 2003, the Company consolidated the vehicle securitization trusts previously disclosed as off-balance sheet debt. (1) The Company uses total obligations and total obligations to equity, non-GAAP financial measure
Slide 37: Cityder
Cityder