Slide 1: Fourth Quarter 2005 Earnings & 2006 Forecast Conference Call
Fourth Quarter 2005 Earnings & 2006 Forecast Conference Call February 3, 2006
Slide 2: Safe Harbor
Safe Harbor Certain statements and information included in this presentation, including all of the 2006 forecast information, are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995. Accordingly, these forward-looking statements should be evaluated with co
Slide 3: Contents
Contents Fourth Quarter 2005 Results 2006 Forecast Financial Objectives Q & A
Slide 4: 4th Quarter Results Overview
4th Quarter Results Overview Reported net earnings per diluted share were $0.92 vs. $0.96 in 4Q04 4Q05 included $0.03 benefit from discontinued operations and $0.04 charge from cumulative effect of accounting change Earnings per diluted share from continuing operations were $0.93, up 13% from a comp
Slide 5: 4th Quarter Results Overview (cont'd)
4th Quarter Results Overview (cont'd) Supply Chain Solutions (SCS) total revenue up 31% (and operating revenue up 12%) vs. prior year, reflecting increased managed subcontracted transportation as well as new and expanded business SCS net before tax earnings (NBT) up 22% SCS NBT percent of operating
Slide 6: Earnings Per Share Fourth Quarter
Earnings Per Share Fourth Quarter (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable EPS from continuing operations excludes net tax benefit in 2004. (2) Calculated based on a 12-month rolling period.
Slide 7: Earnings Per Share Full Year
Earnings Per Share Full Year (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable EPS from continuing operations excludes gain from headquarters complex sale in 2004 and net tax benefits in 2004 and 2005. (2) Calculated based on a 12-month rolling period
Slide 8: Business Segment Fourth Quarter
Business Segment Fourth Quarter (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable earnings from continuing operations excludes net tax benefit in 2004. (2) Allocation of Restructuring and Other Charges, Net across business segments was as follows: FMS - $(3.
Slide 9: Business Segment Full Year
Business Segment (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable earnings from continuing operations excludes gain from headquarters complex sale in 2004 and net tax benefits in 2004 and 2005. (2) Allocation of Restructuring and Other Recoveries/(Charges),
Slide 10: Capital Expenditures Full Year
Capital Expenditures Full Year ($ Millions)
Slide 11: Asset Management Update
Asset Management Update Note: U.S. only The overall number of vehicles sold in the fourth quarter was 5,614; up 32% compared with prior year Increased wholesale activity to dispose of older vehicles Used tractor retail sales proceeds up 8% per unit vs. prior year period; up 4% from third quarter 200
Slide 12: Free Cash Flow
Free Cash Flow (1) Includes non-cash restructuring and other recoveries, net (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment (3) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures Full Year ($ Millions)
Slide 13: Debt to Equity Ratio
Debt to Equity Ratio Strong balance sheet to support profitable growth Note: Includes impact of accumulated net pension related equity charge of $221 million as of 12/31/05 and $189 million as of 12/31/04. (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Represent
Slide 14: Contents
Contents Fourth Quarter 2005 Results 2006 Forecast Financial Objectives Q & A
Slide 15: Key Assumptions / Drivers
Key Assumptions / Drivers We anticipate moderate economic growth conditions during 2006 Diesel price per gallon assumed to decrease 10%; will impact gross revenue growth rate Fleet Management Solutions Improvement in lease/maintenance customer retention and new sales levels due to continuing initiat
Slide 16: Key Assumptions / Drivers
Key Assumptions / Drivers Supply Chain Solutions and Dedicated Contract Carriage Conversion of strong sales pipeline and strong level of customer retention Continue diversification of customer base Management of automotive volume impacts Expand capabilities and volume of transportation management Co
Slide 17: Key Financial Statistics
Key Financial Statistics (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable earnings and comparable EPS exclude net tax benefit in 2005. (2) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the busines
Slide 18: 2006 Causes of EPS Change
2006 Causes of EPS Change (1) Excludes $0.12 benefit from Ohio tax change (2) Includes net impact of share repurchase plan ($ Earnings Per Share) $0.32 - 0.47 or 9 - 14% Improvement (2)
Slide 19: Business Segment Revenue
Business Segment Revenue 2006 Forecast % Growth vs. 2005 Fleet Management Solutions: Gross Revenue 0-2% Operating Revenue 4-5% Supply Chain Solutions: Gross Revenue 8-10% Operating Revenue 6-7% Dedicated Contract Carriage: Gross Revenue 3-4% Operating Revenue 4-5%
Slide 20: Business Segment Earnings
Business Segment Earnings Full Year ($ Millions) (1) Operating revenue excludes fuel services revenue in Fleet Management Solutions and Subcontracted Transportation in Supply Chain Solutions and Dedicated Contract Carriage.
Slide 21: EPS Forecast
EPS Forecast (1) Non-GAAP financial measure. Excludes net tax benefit in 2005. ($ Earnings Per Share) Note: 2006 EPS Forecast includes $0.10 impact of stock option expense starting 1/1/06.
Slide 22: Capital Expenditures, Free Cash Flow & Leverage
Capital Expenditures, Free Cash Flow & Leverage Full Year ($ Millions) (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures.
Slide 23: Capital Expenditures
Capital Expenditures Full Service Lease: Capital for lease vehicles is only committed after contracts are signed with customers 2006 lease capital expenditures include: Replacement spending of $1.1 billion Growth spending of $120 - $205 million Growth capital represents an investment which results i
Slide 24: Summary
Summary Focus on strong customer retention and new business development Accelerate growth in full service lease and contract maintenance product lines Continue growth in supply chain solutions, dedicated contract carriage and commercial rental product lines Continue emphasis on prudent capital alloc
Slide 25: Contents
Contents Fourth Quarter 2005 Results 2006 Forecast Financial Objectives Q & A
Slide 26: Financial Objectives
Financial Objectives (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. 2005 earnings per share growth excludes a net tax benefit. (2) Excludes acquisitions.
Slide 27: Q & A
Q & A
Slide 28: Appendix
Appendix Business Segment Detail Central Support Services Balance Sheet Asset Management Financial Indicators Forecast Non-GAAP Financial Measures & Reconciliations
Slide 29: Fleet Management Solutions (FMS) Fourth Quarter
Fleet Management Solutions (FMS) Fourth Quarter (a) The Company uses operating 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 fuel
Slide 30: Fleet Management Solutions (FMS) Full Year
Fleet Management Solutions (FMS) Full Year (a) The Company uses operating 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 fuel pric
Slide 31: Supply Chain Solutions (SCS) Fourth Quarter
Supply Chain Solutions (SCS) 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. Subcontracted Transportation is deducted from total revenue to arrive at operating r
Slide 32: Supply Chain Solutions (SCS) Full Year
Supply Chain Solutions (SCS) (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. Subcontracted Transportation is deducted from total revenue to arrive at operating revenue as Subco
Slide 33: Dedicated Contract Carriage (DCC) Fourth Quarter
Dedicated Contract Carriage (DCC) 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. Subcontracted Transportation is deducted from total revenue to arrive at operat
Slide 34: Dedicated Contract Carriage (DCC) Full Year
Dedicated Contract Carriage (DCC) (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. Subcontracted Transportation is deducted from total revenue to arrive at operating revenue as
Slide 35: Central Support Services (CSS) Fourth Quarter
Central Support Services (CSS) Fourth Quarter ($ Millions)
Slide 36: Central Support Services (CSS) Full Year
Central Support Services (CSS) Full Year ($ Millions)
Slide 37: Balance Sheet
Balance Sheet ($ Millions) Note: We determined that the portion of the acquisition cost of revenue earning equipment and service vehicles allocated to tires in service should be classified together with the related revenue earning equipment and service vehicles instead of as a current asset on our C
Slide 38: Asset Management Update
Redeployments Extensions Early Terminations Early Replacements FY 00 4496 2143 7012 3815 FY 01 5543 2850 7229 1416 FY 02 5650 5313 6253 1094 FY 03 4750 4167 4938 967 FY 04 4596 3042 5008 1584 FY 05 4095 3980 4170 1589 Asset Management Update (a) (a) U.S. only (b) Excludes early terminations where cu
Slide 39: Non-Revenue Earning Equipment
Non-Revenue Earning Equipment (a) Units Not Yet Earning Revenue - "NYE" Units No Longer Earning Revenue - "NLE" 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 Total 7,985 Jun 2003 (a) U.S. only (b) Excludes units for
Slide 40: Financial Indicators Forecast
Financial Indicators Forecast (1) (1) Free Cash Flow and Debt to Equity include acquisitions. Gross Capital Expenditures exclude acquisitions. (2) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Free Cash Flow -270 126 366 269 147 -210 -130 2000 2001 2002 2003 2004 2005
Slide 41: 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 42: Net Earnings and EPS Reconciliation
Net Earnings and EPS Reconciliation ($ Millions or $ Earnings Per Share) Note: Earnings per share amounts are calculated independently for each component and may not be additive due to rounding
Slide 43: Return on Capital Reconciliation
Return on Capital Reconciliation (1) Adjusted earnings calculated based on a 12-month rolling period. (2) Amounts represent equity adjustments made to conform with the adjustments to the earnings calculation. (3) Average shareholders' equity and average debt are calculated quarterly using a weighted
Slide 44: 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 45: 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 46: Cityder
Cityder