Slide 1: Fourth Quarter 2009 & 2010 Forecast Earnings Conference Call
Fourth Quarter 2009 & 2010 Forecast Earnings Conference Call February 3, 2010
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 2009 Results Overview Asset Management Update 2010 Forecast Q & A
Slide 4: 4th Quarter Results Overview
4th Quarter Results Overview Earnings per diluted share from continuing operations were $0.43 in 4Q09 vs. $0.91 in 4Q08 4Q09 included a $0.02 net benefit related to income tax changes, partially offset by restructuring and other items 4Q08 included a $0.19 net charge related to restructuring and oth
Slide 5: 4th Quarter Results Overview
4th Quarter Results Overview Total revenue declined 7% vs. prior year, reflecting lower operating revenue and lower fuel services revenue, partially offset by favorable foreign exchange rate movements Operating revenue down 6% vs. prior year driven by lower commercial rental revenue, SCS and DCC fue
Slide 6: 4th Quarter Results Overview
4th Quarter Results Overview Supply Chain Solutions (SCS) total revenue down 5% (and operating revenue down 9%) vs. prior year due largely to lower automotive and other freight volumes, partially offset by favorable foreign exchange rate movements SCS net before tax earnings (NBT) down 31% SCS NBT p
Slide 7: Key Financial Statistics Fourth Quarter
Key Financial Statistics Fourth Quarter ($ Millions, Except Per Share Amounts) Note: Amounts throughout presentation may not be additive due to rounding. Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. See pages 47-48 for reconciliation. Includes discontinued operations
Slide 8: Key Financial Statistics Full Year
Key Financial Statistics Full Year ($ Millions, Except Per Share Amounts) Note: Amounts throughout presentation may not be additive due to rounding. Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. See pages 47-49 for reconciliation. Includes discontinued operations and r
Slide 9: Business Segments Fourth Quarter
Business Segments Fourth Quarter Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Our primary measure of segment financial performance excludes restructuring and other charges, net and other items, The applicable portion of the restructuring and other items that related t
Slide 10: Business Segments Full Year
Business Segments Full Year Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Our primary measure of segment financial performance excludes restructuring and other charges, net and other items. The applicable portion of the restructuring and other items that related to eac
Slide 11: Capital Expenditures from Continuing Operations Full Year
Capital Expenditures from Continuing Operations Full Year ($ Millions)
Slide 12: Cash Flow from Continuing Operations Full Year
Cash Flow from Continuing Operations Full Year ($ Millions) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. Free Cash Flow excludes acquisitions and chang
Slide 13: Debt to Equity Ratio
Debt to Equity Ratio Note: Includes impact of accumulated net pension related equity charge of $412 million as of 12/31/09 and $480 million as of 12/31/08. The Company uses total obligations and total obligations to equity, non-GAAP financial measures, which include certain off-balance sheet financi
Slide 14: Contents
Contents Fourth Quarter 2009 Results Overview Asset Management Update 2010 Forecast Q & A
Slide 15: Asset Management Update: Units held for sale and used vehicle sales
Units held for sale were 6,900 (US: 5,600) at quarter end; down 10% from 7,700 (US: 6,300) units held for sale in the prior year Units held for sale were down 12% from 7,800 (US: 6,300) at the end of the prior quarter The number of used vehicles sold in the fourth quarter was 5,200 (US: 4,300), up 4
Slide 16: Contents
Contents Fourth Quarter 2009 Results Overview Asset Management Update 2010 Forecast Q & A
Slide 17: 2010 Forecast Assumptions
2010 Forecast Assumptions General Stable but continued weak economic and freight environment with moderate improvement in second half Interest rates will modestly increase based on yield curve Modestly favorable foreign exchange rates (primarily impacts revenue not earnings) Improving contractual sa
Slide 18: Overall 2010 Forecast Assumptions
SCS / DCC Revenue impacted by account/location rationalization and closures Modestly higher YOY automotive volumes with ongoing operations served Stable non-automotive volumes Increased penetration of non-automotive segments Forecast does not include potential benefits from additional acquisitions o
Slide 19: Key Financial Statistics
Key Financial Statistics Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. See pages 47-48 for 2009 reconciliation. 2009 tax rate includes the impact of non-deductible restructuring charges, tax law changes and the reversal of tax reserves. ($ Millions, Except Per Share Am
Slide 20: Business Segment Revenue
Business Segment Revenue Includes fuel revenue. Includes full service lease and contract maintenance. Includes subcontracted transportation revenue.
Slide 21: 2010 Causes of EPS Change
2010 Causes of EPS Change ($ Earnings Per Share) 2009 Comparable EPS is a non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. See page 47 for reconciliation. (1)
Slide 22: Retirement Plans Expense
Retirement Plans Expense ($ Millions) $ $ $ $
Slide 23: Capital Expenditures, Cash Flow & Leverage Full Year
Capital Expenditures, Cash Flow & Leverage Full Year ($ Millions) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. See pages 51 and 53 for 2009 reconciliation. Free Cash Flow excludes acquisitions. Acquisitions totaled $89 million in full year 2009.
Slide 24: EPS Forecast
EPS Forecast ($ Earnings Per Share) (1) Non-GAAP financial measure. Comparable EPS in Q1 excludes $0.03 restructuring charges for workforce reductions and $0.07 of an international asset impairment charge in Singapore. See page 47 for full year 2009 reconciliation.
Slide 25: Summary
Summary Manage through cumulative negative impact of customer lease fleet downsizing during 2009, while improving new sales and retention rates as economy recovers Leverage actions taken in 2009 to right-size commercial rental and used vehicle fleets for improved returns in 2010 Improve returns in S
Slide 26: Q&A
Q&A
Slide 27: Appendix
Appendix Business Segment Detail Central Support Services Balance Sheet Historical EPS Restatement Asset Management Financial Indicators Forecast Non GAAP Financial Measures & Reconciliations
Slide 28: Business Segments Historical Information
Business Segments Historical Information Note: All segments were impacted by discontinued operations historical restatements. ($ Millions) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Our primary measure of segment financial performance excludes restructuring and othe
Slide 29: Business Segments Historical Information
Business Segments Historical Information Note: All segments were impacted by discontinued operations historical restatements. ($ Millions) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Our primary measure of segment financial performance excludes restructuring and othe
Slide 30: Fleet Management Solutions (FMS) Fourth Quarter
Fleet Management Solutions (FMS) Fourth Quarter ($ Millions)
Slide 31: Fleet Management Solutions (FMS) Full Year
Fleet Management Solutions (FMS) Full Year ($ Millions)
Slide 32: Supply Chain Solutions (SCS) Fourth Quarter
Supply Chain Solutions (SCS) Fourth Quarter ($ Millions)
Slide 33: Supply Chain Solutions (SCS) Full Year
Supply Chain Solutions (SCS) Full Year ($ Millions)
Slide 34: Supply Chain Solutions (SCS) Historical Information
Supply Chain Solutions (SCS) Historical Information ($ Millions)
Slide 35: Supply Chain Solutions (SCS) Historical Information
Supply Chain Solutions (SCS) Historical Information ($ Millions)
Slide 36: Dedicated Contract Carriage (DCC) Fourth Quarter
Dedicated Contract Carriage (DCC) Fourth Quarter ($ Millions)
Slide 37: Dedicated Contract Carriage (DCC) Full Year
Dedicated Contract Carriage (DCC) Full Year ($ Millions)
Slide 38: Central Support Services (CSS) Fourth Quarter
Central Support Services (CSS) Fourth Quarter ($ Millions)
Slide 39: Central Support Services (CSS) Full Year
Central Support Services (CSS) Full Year ($ Millions)
Slide 40: Balance Sheet
Balance Sheet (5 Mittions) December 31, December 31, ——2009___ __2008__ Cash and Cash Equivalents $ 9 6 120 Other Current Assets 782 837 Revenue Earning Equipment, Net 4179 4,565 Operating Property and Equipment, Net 544 547 Other Assets 657 620 Total Assets $ 6260 _$ 6,690 Short-Term Debt/ Current
Slide 41: Historical EPS Restatement
Historical EPS Restatement ($ Earnings Per Share) Effective January 1, 2009, we adopted accounting guidance on earnings per share which provides that unvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and shall be included in the computa
Slide 42: Historical EPS Restatement
Historical EPS Restatement ($ Earnings Per Share) 4Q09 and Full Year 2009 were not previously reported without discontinued operations. However, we have presented it this way for comparative purposes only.
Slide 43: Asset Management Update
2/2/2010 Proprietary and Confidential 43 U.S. Asset Management Update (a) U.S. only Excludes early terminations where customer purchases vehicle Current year statistics may exclude some units due to a lag in reporting (c) Redeployments Extensions Early Terminations Early Replacements FY04 4483 3049
Slide 44: Financial Indicators Forecast
Free Cash Flow 1054 835 949 1091 1381 1179 1252 1685 1571 1282 1305 2000 2001 2002 2003 2004 2005 2006 2007 2008 Financial Indicators Forecast (1) (1) Obligations to Equity include acquisitions. Free Cash Flow and Gross Capital Expenditures exclude acquisitions. (2) Non-GAAP financial measure; refer
Slide 45: Free Cash Flow History
2001 2002 2003 2004 2005 2006 2007 2008 2009 East 131 367 357 289 -208 -439 381 341 630 (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. 2001-2007 cash flows presented on an as reported basis and not adjusted for subsequently discontinued operations. (2) Includes $176
Slide 46: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes "non-GAAP financial measures" as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure and an explanation why management believes that presentation of t
Slide 47: EPS and Earnings from Continuing Operations Reconciliation
EPS and Earnings from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share)
Slide 48: Tax Rate from Continuing Operations Reconciliation
Tax Rate from Continuing Operations Reconciliation Note: NBT represents net before tax earnings.
Slide 49: 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 by excluding taxes related to comparable earnings items and interest expense
Slide 50: 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. ($ Millions)
Slide 51: Debt to Equity Reconciliation
Debt to Equity Reconciliation ($ Millions) Note: Amounts may not recalculate due to rounding.
Slide 52: Capital Expenditures Reconciliation Full Year
Capital Expenditures Reconciliation Full Year ($ Millions)
Slide 53: Cash Flow Reconciliation Full Year
Cash Flow Reconciliation Full Year ($ Millions)
Slide 54: Cash Flow Reconciliation
($ Millions) 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 tot
Slide 55: TAyder
TAyder