Slide 1: Fourth Quarter 2007 & 2008 Forecast Earnings Conference Call
Fourth Quarter 2007 & 2008 Forecast Earnings Conference Call February 1, 2008
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 2007 Results Overview Asset Management Update 2008 Forecast Q & A
Slide 4: 4th Quarter Results Overview
4th Quarter Results Overview Earnings per diluted share were $1.24 versus $1.08 in 4Q06 4Q07 included a $0.06 benefit related primarily to Canada tax law changes Comparable earnings per diluted share were $1.18, up 9% from $1.08 in 4Q06 Total revenue up 5% (and operating revenue up 4%) as a result o
Slide 5: 4th Quarter Results Overview (cont'd)
4th Quarter Results Overview (cont'd) Supply Chain Solutions (SCS) total revenue up 1% (and operating revenue up 5%) vs. prior year, reflecting foreign exchange impact and new/expanded business, partially offset by net reporting of customer business previously presented on a gross basis, a previousl
Slide 6: Key Financial Statistics Fourth Quarter
Key Financial Statistics Fourth Quarter (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable earnings per share exclude restructuring recoveries and tax law changes in 2007. (2) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the o
Slide 7: Key Financial Statistics Full Year
Key Financial Statistics Full Year (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable earnings per share exclude restructuring costs, property gain and fourth quarter tax law changes in 2007 and tax law changes and pension charge in 2006. (2) The Company uses
Slide 8: Business Segment Fourth Quarter
Business Segment Fourth Quarter (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable net earnings exclude restructuring recoveries and fourth quarter tax law changes in 2007. (2) Our primary measure of segment financial performance excludes restructuring and ot
Slide 9: Business Segment Full Year
Business Segment Full Year (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable net earnings exclude restructuring costs, property gain and fourth quarter tax law changes in 2007 and tax law changes and pension charge in 2006. (2) Our primary measure of segment
Slide 10: Capital Expenditures Full Year
Capital Expenditures Full Year ($ Millions)
Slide 11: Cash Flow
Cash Flow (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment (3) Free Cash Flow excludes acquisitions Full Year ($ Millions)
Slide 12: Debt to Equity Ratio
Debt to Equity Ratio Note: Includes impact of accumulated net pension related equity charge of $148 million as of 12/31/07 and $201 million as of 12/31/06. (1) Non-GAAP financial measure. Total obligations include the present value of minimum lease payments and guaranteed residual values under opera
Slide 13: Contents
Contents Fourth Quarter 2007 Results Overview Asset Management Update 2008 Forecast Q & A
Slide 14: Asset Management Update
Asset Management Update (1) (1) All information presented on this page only is for the U.S. fleet and excludes Canadian and U.K. operations. The number of used vehicles sold in the fourth quarter was 5,365, up 17% compared with prior year Proceeds per unit for tractors and trucks were down 12% and 1
Slide 15: Contents
Contents Fourth Quarter 2007 Results Overview Asset Management Update 2008 Forecast Q & A
Slide 16: 2008 Overall Environment
2008 Overall Environment Baseline Assumptions Opportunities (+) / Risks (-) Overall economy soft without further weakening Broader economic decline Stable real interest rates Federal funds rates lowered Strength and currency stability in key foreign markets U.S. dollar strengthening (primarily impac
Slide 17: FMS Assumptions
FMS Assumptions Baseline Assumptions Opportunities (+) / Risks (-) Positive lease / contract maintenance revenue momentum from organic sales and closed acquisitions Retention and sales initiatives Potential for softer freight demand Customer fleet downsizing Softening rental demand Fewer miles drive
Slide 18: SCS / DCC Assumptions
SCS / DCC Assumptions Baseline Assumptions Opportunities (+) / Risks (-) Stable volumes with existing customers Potential for current customer volume declines and plant closures Focus on customer retention and business development Potential for softer freight demand and reduced new business Grow new
Slide 19: Key Financial Statistics
Key Financial Statistics (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable earnings and comparable EPS exclude restructuring costs, property gain, and fourth quarter tax law changes in 2007. (2) The Company uses operating revenue, a non-GAAP financial measur
Slide 20: Business Segment Revenue
Business Segment Revenue (1) Includes fuel revenue. (2) Includes full service lease and contract maintenance. (3) Includes impact of net revenue reporting in 2008 for revenues previously reported on a gross basis. (4) Includes subcontracted transportation revenue.
Slide 21: 2008 Causes of EPS Change
2008 Causes of EPS Change (1) 2007 Comparable EPS is a non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. 2007 Comparable EPS excludes $0.03 impact from restructuring costs, property gains and fourth quarter tax law changes. ($ Earnings Per Share) - - Safety & Insurance Cos
Slide 22: Business Segment Earnings Full Year
Business Segment Earnings Full Year 2001 2002 2003 2004 2005 2006 2007 2008 Forecast Midpoint Segment NBT as % of Operating Revenue 5.9 6.7 6 8.7 9 9 9 9.5 Segment NBT as % of Total Revenue 7.3 8.2 7.5 11.2 12.4 12.6 12.5 13 EBIT Fleet Management Solutions Supply Chain Solutions Dedicated Contract C
Slide 23: Capital Expenditures
Capital Expenditures Full Service Lease: Capital for lease vehicles is committed after contracts are signed with customers 2008 lease capital expenditures include: Replacement spending of $1,015 - $1,045 million Growth spending of $100 - $170 million Growth capital represents an investment which res
Slide 24: Capital Expenditures, Cash Flow & Leverage
Capital Expenditures, Cash Flow & Leverage Full Year (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Free Cash Flow excludes acquisitions. Acquisitions totaled $75 million in full year 2007 and $91 million in 2008 year-to-date. ($ Millions)
Slide 25: EPS Forecast
EPS Forecast (1) Non-GAAP financial measure. 2007 Comparable EPS excludes impact from restructuring costs in the third and fourth quarters, property gain in the third quarter and the fourth quarter tax law changes in totaling a $0.03 benefit. ($ Earnings Per Share)
Slide 26: Summary
Summary Focus on strong customer retention, new business development and sales/marketing initiatives Continue growth in full service lease/contract maintenance, supply chain solutions and dedicated contract carriage product lines Manage through cyclical impacts in commercial rental product line Util
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 ($ Millions) (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 i
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) 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. Subcontracted transportation is deducted from total revenue to arrive at operating revenu
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) 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. Subcontracted transportation is deducted from total revenue to arrive at operating r
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
a CAyder (5 Millions) Balance Sheet December 31, December 31, 2007 2006 Cash and Cash Equivalents $ 60 OS 128 Other Current Assets 4,106 4,133, Revenue Earning Equipment, Net 4,501 4,509 Operating Property and Equipment, Net 519 499 Other Assets 613 559 Total Assets 6,855 6,829 Short-Term Debt / Cur
Slide 38: Asset Management Update
Redeployments Extensions Early Terminations Early Replacements FY02 5650 5313 6253 1094 FY03 4750 4167 4938 967 FY04 4596 3042 5008 1584 FY05 4104 3996 4539 1646 FY06 3572 4360 3839 1890 FY07 4195 4261 4669 1913 Asset Management Update (a) (a) U.S. only (b) Excludes early terminations where customer
Slide 39: Assets Under Management
Assets Under Management (a) (a) Assets under management represent the original cost of all vehicles owned and held under lease by Ryder. (b) Excludes impact of foreign exchange movements in 2008. ($ Millions)
Slide 40: Financial Indicators Forecast
Financial Indicators Forecast (1) (1) Obligations to Equity and Assets Under Management include acquisitions. Free Cash Flow and Gross Capital Expenditures exclude acquisitions. (2) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (3) Includes $176 million payment to the
Slide 41: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes "non-GAAP financial measures" as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure and an explanation why management believes that presentation of t
Slide 42: EPS and Net Earnings Reconciliation
EPS and Net Earnings Reconciliation ($ Millions or $ Earnings Per Share) * Earnings per share amounts are calculated independently for each component and may not be additive due to rounding
Slide 43: Adjusted Return on Capital Reconciliation
Adjusted Return on Capital Reconciliation (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 using the effective income tax rate for the period exclusive of benefits fro
Slide 44: Cash Flow Reconciliation
Cash Flow Reconciliation (1) The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes total cash generated provides investors with an important measure of total cash inflo
Slide 45: Cash Flow Reconciliation
Cash Flow Reconciliation (1) The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes total cash generated provides investors with an important measure of total cash inflo
Slide 46: 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 47: Debt to Equity Reconciliation
Debt to Equity Reconciliation (1) The Company uses total obligations and total obligations to equity, non-GAAP financial measures, which include certain off-balance sheet financial obligations relating to revenue earning equipment. Management believes these non-GAAP financial measures are useful to
Slide 48: CAyder
CAyder