Slide 1: Fourth Quarter 2010 & 2011 Forecast Earnings Conference Call
Fourth Quarter 2010 & 2011 Forecast Earnings Conference Call February 3, 2011
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 2010 Results Overview Asset Management Update 2011 Forecast Q & A
Slide 4: 4th Quarter Results Overview
4th Quarter Results Overview Earnings per diluted share from continuing operations were $0.80 in 4Q10 vs. $0.43 in 4Q09 4Q10 included a $0.15 net benefit related to income taxes, partially offset by restructuring and other items 4Q09 included a $0.02 net benefit related to income tax changes, partia
Slide 5: 4th Quarter Results Overview — FMS
4th Quarter Results Overview — FMS Fleet Management Solutions (FMS) total revenue up 5% (and operating revenue up 4%) vs. prior year Contractual revenue down 2% Full service lease revenue down 2% Contract maintenance revenue decreased 5% Commercial rental revenue up 31% Fuel revenue up 10% due prima
Slide 6: 4th Quarter Results Overview — SCS / DCC
4th Quarter Results Overview SCS / DCC Supply Chain Solutions (SCS) total revenue up 8% (and operating revenue up 4%) vs. prior year due to increased volumes and new business in high-tech and automotive SCS net before tax earnings (NBT) up 5% SCS NBT percent of operating revenue up 10 basis points t
Slide 7: Key Financial Statistics — Fourth Quarter
Key Financial Statistics ($ Millions, Except Per Share Amounts) Fourth Quarter 2010 2009% B/(W) Operating Revenue (1) $1,061.9 $1,019.8 4% Fuel Services and Subcontracted Transportation Revenue 251.5 227.2 11% Total Revenue $1,313.4 $1,247.0 5% Earnings Per Share From Continuing Operations $0.80 $0.
Slide 8: Key Financial Statistics — Full Year
Key Financial Statistics ($ Millions, Except Per Share Amounts) Full Year 2010 2009% B/(W) Operating Revenue (1) $4,158.2 $4,062.5 2% Fuel Services and Subcontracted Transportation Revenue 978.1 824.8 19% Total Revenue $5,136.4 $4,887.3 5% Earnings Per Share From Continuing Operations $2.37 $1.62 46
Slide 9: Business Segments — Fourth Quarter
Business Segments ($ Millions) Fourth Quarter Memo: Total Revenue 2010 2009% B/(W) 2010 2009% B/(W) Operating Revenue: (1) Fleet Management Solutions $726.3 $699.5 4% $948.1 $900.2 5% Supply Chain Solutions 258.3 247.6 4% 325.1 302.1 8% Dedicated Contract Carriage 119.3 113.4 5% 121.8 119.3 2% Elimi
Slide 10: Business Segments — Full Year
Business Segments ($ Millions) Full Year Memo: Total Revenue 2010 2009% B/(W) 2010 2009% B/(W) Operating Revenue: (1) Fleet Management Solutions $2,846.5 $2,817.7 1% $3,712.2 $3,567.8 4% Supply Chain Solutions 1,005.0 955.4 5% 1,252.3 1,139.9 10% Dedicated Contract Carriage 468.5 456.6 3% 482.6 471.
Slide 11: Capital Expenditures from Continuing Operations
Capital Expenditures from Continuing Operations ($ Millions) Full Year 2010 $2010 2009 O/(U) 2009 Full Service Lease $647 $548 $99 Commercial Rental 379 7 371 Operating Property and Equipment 62 56 6 Gross Capital Expenditures 1,088 611 476 Less: Proceeds from Sales (Primarily Revenue Earning Equipm
Slide 12: Cash Flow from Continuing Operations
Cash Flow from Continuing Operations ($ Millions) Full Year 2010 2009 Earnings $125 $90 Depreciation 834 881 Gains on Vehicle Sales, Net (29) (12) Amortization and Other Non-Cash Charges, Net 57 58 Pension Contributions (64) (131) Changes in Working Capital and Deferred Taxes 105 99 Cash Provided by
Slide 13: Debt to Equity Ratio
Debt to Equity Ratio ($ Millions) 300% 275% 275% 234% 225% 250% 201% 203% 183% 200% 168% 157% Total Obligations to 146% 151% Equity(1) 150% 129% 100% Balance Sheet Debt to Equity 50% 0% 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 Long Term Targe
Slide 14: Contents
Contents Fourth Quarter 2010 Results Overview Asset Management Update 2011 Forecast Q & A
Slide 15: Global Asset Management Update
Global Asset Management Update (1) Units held for sale were 5,200 at quarter end; down 25% from 6,900 units held for sale in the prior year Units held for sale were up 11% from 4,700 at the end of the prior quarter The number of used vehicles sold in the fourth quarter were 4,000, down 23% compared
Slide 16: Contents
Contents Fourth Quarter 2010 Results Overview Asset Management Update 2011 Forecast Q & A
Slide 17: 2011 Forecast Assumptions — General and FMS
2011 Forecast Assumptions General Moderately stronger economic and freight environment Stable interest rate environment; average interest rate will decline due to debt rollover Stable foreign exchange rates FMS Improving contractual sales and better renewal rates — resulting in organic fleet growth
Slide 18: 2011 Forecast Assumptions — SCS / DCC
2011 Forecast Assumptions SCS / DCC Revenue and earnings growth due to both organic sales and acquisitions Improved volumes in SCS Rate increases and productivity improvements offset increase in driver and equipment costs in DCC
Slide 19: Key Financial Statistics — 2011 Forecast
Key Financial Statistics ($ Millions, Except Per Share Amounts) 2011 Forecast 2010% B / (W) Revenue: Operating (1) $4,600-4,650 $4,158 11-12% Fuel Services and Subcontracted Transportation 1,100-1,110 978 12-13% Total Revenue $5,700-5,760 $5,136 11-12% Earnings From Continuing Operations: Earnings B
Slide 20: Business Segment Revenue 2011 Forecast
Business Segment Revenue 2011 Forecast Midpoint Change % vs. 2010 Fleet Management Solutions: Gross Revenue (1) 6% Contractual Revenue (2) 2% Commercial Rental Revenue 19% Operating Revenue 5% Supply Chain Solutions: Gross Revenue (3) 25% Operating Revenue 29% Dedicated Contract Carriage: Gross Reve
Slide 21: 2011 Causes of EPS Change
2011 Causes of EPS Change ($ Earnings Per Share) 9 0 $0.63-0.67 $2.80-2.90 8 7 6 5 4 3 $2.22 $0.10 2 1 $0.16 0 $0.11 9 $0.15-0.17 8 7 ($0.28-0.32) $0.06 6 5 ($0.20) ( $0.11) 4 3 2 1 0 9 8 7 6 5 4 3 2 1 0 (1) 2010 EPS FMS Contractual Strategic Compensation Share Acquisitions Pension Plans SCS/DCC Use
Slide 22: Capital Expenditures, Cash Flow & Leverage
Capital Expenditures, Cash Flow & Leverage ($ Millions) Full Year 2011 Forecast 2010 Full Service Lease $1,000-1,120 $647 Commercial Rental 575 379 Operating Property and Equipment 120 62 Gross Capital Expenditures 1,695-1,815 1,088 Less: Proceeds from Sales 280 235 Net Capital Expenditures $1,415-1
Slide 23: EPS Forecast — Continuing Operations
EPS Forecast —Continuing Operations ($ Earnings Per Share) First Quarter Full Year 2011 EPS(1) Forecast $0.40 — 0.44 $2.80 — 2.90 2010 EPS(1) $0.24 $2.22 (1) Non-GAAP financial measure; refer to Appendix — Non-GAAP Financial Measures. 02/03/11 Proprietary and Confidential 23
Slide 24: Summary
Summary Manage through cumulative impacts of prolonged recession on lease, while driving benefits in rental, used vehicle sales and Supply Chain Solutions Improve new sales and retention rates in lease as economy recovers and through sales/marketing initiatives Leverage increased demand for commerci
Slide 25: Q&A
Q&A 02/03/11 Proprietary and Confidential 25
Slide 26: Appendix
Appendix Return on Capital History Business Segment Detail Central Support Services Balance Sheet Asset Management Financial Indicators Forecast Pension Expense Non-GAAP Financial Measures & Reconciliations 02/03/11 Proprietary and Confidential 26
Slide 27: Adjusted Return on Capital History
Adjusted Return on Capital(1)History Adjusted Return on 7.7% 7.8% 7.9% 7.4% 7.3% Capital (ROC) 6.3% 6.3% 5.7% 6.9% 6.8% 6.7% 6.6% Cost of 6.5% 4.8% Capital (COC) 4.1% 5.2% 2004 2005 2006 2007 2008 2009 2010 2011 Forecast ROC O/(U) COC 0.8% 1.0% 1.2% 0.8% 0.8% (2.2)% (1.5)% (0.5)% Return on Equity 15
Slide 28: Fleet Management Solutions (FMS) — Fourth Quarter
Fleet Management Solutions (FMS) ($ Millions) Fourth Quarter 2010 2009% B/(W) Full Service Lease $485.0 $493.4 (2)% Contract Maintenance 39.0 41.1 (5)% Contractual Revenue 524.0 534.6 (2)% Contract-related Maintenance 39.6 37.4 6% Commercial Rental 145.5 111.0 31% Other 17.1 16.5 4% Operating Revenu
Slide 29: Fleet Management Solutions (FMS) — Full Year
Fleet Management Solutions (FMS) ($ Millions) Full Year 2010 2009% B/(W) Full Service Lease $1,934.3 $1,989.7 (3)% Contract Maintenance 158.8 167.2 (5)% Contractual Revenue 2,093.1 2,156.9 (3)% Contract-related Maintenance 160.9 163.3 (1)% Commercial Rental 525.1 431.1 22% Other 67.4 66.5 1% Operati
Slide 30: Supply Chain Solutions (SCS) — Fourth Quarter
Supply Chain Solutions (SCS) ($ Millions) Fourth Quarter 2010 2009% B/(W) Automotive $114.3 $109.3 5% High-Tech 59.3 52.9 12% Retail & CPG 46.0 44.3 4% Industrial & Other 38.7 41.1 (6)% Operating Revenue 258.3 247.6 4% Subcontracted Transportation 66.8 54.5 23% Total Revenue $325.1 $302.1 8% Segment
Slide 31: Supply Chain Solutions (SCS) — Full Year
Supply Chain Solutions (SCS) ($ Millions) Full Year 2010 2009% B/(W) Automotive $449.2 $409.9 10% High-Tech 220.5 209.9 5% Retail & CPG 177.8 167.1 6% Industrial & Other 157.5 168.6 (7)% Operating Revenue 1,005.0 955.4 5% Subcontracted Transportation 247.3 184.5 34% Total Revenue $1,252.3 $1,139.9 1
Slide 32: Supply Chain Solutions (SCS) Global Historical Information 2008-2009
Supply Chain Solutions (SCS) ($ Millions) Global Historical Information Full Year Full Year 2008 1Q09 2Q09 3Q09 4Q09 2009 Automotive $616.5 $95.0 $98.1 $107.5 $109.3 $409.9 High-Tech 229.9 52.2 53.0 51.8 52.9 209.9 Retail & CPG 167.9 40.2 40.4 42.2 44.3 167.1 Industrial & Other 193.3 41.1 42.0 44.4
Slide 33: Supply Chain Solutions (SCS) Global Historical Information 2010
Supply Chain Solutions (SCS) ($ Millions) Global Historical Information Full Year 1Q10 2Q10 3Q10 4Q10 2010 Automotive $106.7 $113.3 $114.8 $114.3 $449.2 High-Tech 51.4 52.8 57.0 59.3 220.5 Retail & CPG 41.8 44.2 45.8 46.0 177.8 Industrial & Other 38.2 39.6 40.9 38.7 157.5 Operating Revenue 238.2 249
Slide 34: Dedicated Contract Carriage (DCC) — Fourth Quarter
Dedicated Contract Carriage (DCC) ($ Millions) Fourth Quarter 2010 2009% B/(W) Operating Revenue $119.3 $113.4 5% Subcontracted Transportation 2.6 5.8 (56)% Total Revenue $121.8 $119.3 2% Segment Net Before Tax Earnings (NBT) $6.5 $6.9 (6)% Segment NBT as % of Total Revenue 5.3% 5.8% Segment NBT as
Slide 35: Dedicated Contract Carriage (DCC) — Full Year
Dedicated Contract Carriage (DCC) ($ Millions) Full Year 2010 2009% B/(W) Operating Revenue $468.5 $456.6 3% Subcontracted Transportation 14.0 14.4 (2)% Total Revenue $482.6 $471.0 2% Segment Net Before Tax Earnings (NBT) $31.0 $37.6 (18)% Segment NBT as % of Total Revenue 6.4% 8.0% Segment NBT as %
Slide 36: Central Support Services (CSS) — Fourth Quarter
Central Support Services (CSS) ($ Millions) Fourth Quarter 2010 2009% B/(W) Allocated CSS Costs $37.2 $34.3 (8)% Unallocated CSS Costs 10.8 11.3 4% Total CSS Costs $48.0 $45.6 (5)% 02/03/11 Proprietary and Confidential 36
Slide 37: Central Support Services (CSS) — Full Year
Central Support Services (CSS) ($ Millions) Full Year 2010 2009% B/(W) Allocated CSS Costs $142.2 $131.7 (8)% Unallocated CSS Costs 41.5 35.8 (16)% Total CSS Costs $183.7 $167.6 (10)% 02/03/11 Proprietary and Confidential 37
Slide 38: Balance Sheet
Balance Sheet ($ Millions) December 31, December 31, 2010 2009 Cash and Cash Equivalents $213 $99 Other Current Assets 810 782 Revenue Earning Equipment, Net 4,201 4,179 Operating Property and Equipment, Net 607 544 Other Assets 821 657 Total Assets $6,652 $6,260 Short-Term Debt / Current Portion Lo
Slide 39: Financial Indicators
Financial Indicators Forecast (1) Total Cash Generated (2) (3) Gross Capital Expenditures (3) ($ Millions) Full Service Lease $1,684 Commercial Rental $1,571 $1,757 $1,755 $1,465 PP&E/Other $1,381 $1,328 $1,252 $1,266 $1,399 $1,179 $1,054 $1,091 $1,289 $1,265 $1,165 $1,182 $1,088 $949 $835 $725 $657
Slide 40: Pension Expense
Pension Expense ($ Millions) 2010 Pension Expense $42 Higher than Assumed Return on Assets in 2010 (7) Benefit of 2010 Voluntary Pension Contributions (4) Benefit of 2010 Plan Freeze (3) Discount Rate 3 Lower Expected Return Assumption 1 Other 1 2011 Estimated Pension Expense $33 02/03/11 Proprietar
Slide 41: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation -GAAP financial measures” as defined by includes “non rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure and an explanation why management believes that presentation of the non-GAAP financial measure
Slide 42: Earnings and EPS from Continuing Operations Reconciliation
Earnings and EPS from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 4Q10 — 4Q10 — 4Q09 — 4Q09 -Earnings EPS Earnings EPS Reported $41.4 $0.80 $23.7 $0.43 Int’l Asset(Gain on Sale)/Impairment (0.9) (0.02) 2.4 0.05 Tax Benefits (10.8) (0.21) — -Tax Law Changes - - — (4.1) (
Slide 43: NBT and Tax Rate from Continuing Operations Reconciliation 2010
NBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 4Q10 — 4Q10 — 4Q10 -NBT Tax Tax Rate Reported $49.6 $8.1 16.4% Gain on Sale of Building (0.9) -Tax Benefits — 10.8 Acquisition Costs 4.1 -Comparable $52.7 $18.9 35.9% FY10 — FY10 — FY10 - -NBT Tax Tax Rat
Slide 44: NBT and Tax Rate from Continuing Operations Reconciliation 2009
NBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 4Q09 — 4Q09 — 4Q09 -NBT Tax Tax Rate Reported $31.8 $8.1 25.6% Int’l Asset Impairment 2.4 - -Tax Law Changes — 4.1 Restructuring Charges 0.3 0.1 Comparable $34.5 $12.3 35.5% FY09 — FY09 - FY09 -NBT Tax Ta
Slide 45: Adjusted Return on Capital Reconciliation 2004-2008
Adjusted Return on Capital Reconciliation ($ Millions) 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 Net Earnings (1) $216 $227 $249 $254 $200 Change in Accounting Principle — 2 — - - -Restructuring and Other Charges, Net and Other Items (24) (2) — 1 70 Income Taxes 115 129 144 152 150 Adjusted Earni
Slide 46: Adjusted Return on Capital Reconciliation 2009-2010
Adjusted Return on Capital Reconciliation ($ Millions) 12/31/09 12/31/10 Net Earnings (1) $62 $118 Restructuring and Other Charges, Net and Other Items 30 6 Income Taxes 54 61 Adjusted Earnings Before Income Taxes 146 185 Adjusted Interest Expense (2) 150 133 Adjusted Income Taxes (3) (122) (124) Ad
Slide 47: Segment Adjusted Return on Capital Reconciliation 2010
Segment Adjusted Return on Capital Reconciliation ($ Millions) 2010 FMS SCS DCC Net Earnings (1) $118 $26 $19 Restructuring and Other Charges, Net and Other Items — 3 -Income Taxes 54 18 12 Adjusted Earnings Before Income Taxes 172 47 31 Adjusted Interest Expense (2) 134 5 2 Adjusted Income Taxes (3
Slide 48: Segment Adjusted Return on Capital Reconciliation 2009
Segment Adjusted Return on Capital Reconciliation ($ Millions) 2009 FMS SCS DCC Net Earnings (1) $88 $14 $23 Restructuring and Other Charges, Net and Other Items 6 8 -Income Taxes 46 14 15 Adjusted Earnings Before Income Taxes 140 36 38 Adjusted Interest Expense (2) 148 6 2 Adjusted Income Taxes (3)
Slide 49: Debt to Equity Reconciliation 2000-2007
Debt to Equity Reconciliation ($ Millions) % to % to % to % to % to % to % to % to 12/31/00 Equity 12/31/01 Equity 12/31/02 Equity 12/31/03 Equity 12/31/04 Equity 12/31/05 Equity 12/31/06 Equity 12/31/07 Equity Balance Sheet Debt $2,017 161% $1,709 139% $1,552 140% $1,816 135% $1,783 118% $2,185 143
Slide 50: Debt to Equity Reconciliation 2008-2010
Debt to Equity Reconciliation ($ Millions) % to % to % to 12/31/08 Equity 12/31/09 Equity 12/31/10 Equity Balance Sheet Debt $2,863 213% $2,498 175% $2,747 196% Receivables Sold — - — PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 163 119 100 Total Ob
Slide 51: Cash Flow Reconciliation 2000-2009
Cash Flow Reconciliation ($ Millions) 12/31/00 (4)12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 Cash Provided by Operating Activities $1,023 $365 $617 $803 $867 $776 $852 $1,097 $1,248 $985 Less: Changes in Bal. of Trade Rec. Sold (270) 235 110 — - — - - - - -Colle
Slide 52: Cash Flow Reconciliation 2010
Cash Flow Reconciliation ($ Millions) 12/31/10 Cash Provided by Operating Activities from Continuing Operations $1,028 Proceeds from Sales (Primarily Revenue Earning Equipment) 235 Collections of Direct Finance Leases 62 Other, Net 3 Total Cash Generated (1) 1,328 Capital Expenditures (2) (1,070) Fr
Slide 53: CAtyder
CAtyder