Slide 1: Third Quarter 2005 Earnings Conference Call
Third Quarter 2005 Earnings Conference Call October 26, 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 Third Quarter Results Overview Asset Management Update Earnings Outlook Q & A
Slide 4: 3rd Quarter Results Overview
3rd Quarter Results Overview Earnings per diluted share were $0.98, up 20% from a comparable $0.82 in 3Q04 3Q04 included $0.01 gain on sale of a portion of former headquarters complex Fleet Management Solutions (FMS) total revenue up 10% and operating revenue up 2% vs. prior year Full service lease
Slide 5: 3rd Quarter Results Overview (cont'd)
3rd Quarter Results Overview (cont'd) Supply Chain Solutions (SCS) total revenue up 28% (and operating revenue up 9%) vs. prior year, reflecting increased subcontracted transportation, new and expanded business, and higher fuel costs passed through to customers SCS earnings increased vs. prior year
Slide 6: Earnings Per Share Third Quarter
Earnings Per Share Third Quarter (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures (2) Calculated based on a 12-month rolling period
Slide 7: Earnings Per Share Year-to-Date
Earnings Per Share Year-to-Date (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures (2) Calculated based on a 12-month rolling period Note: Earnings per share amounts are calculated independently for each component and may not be additive due to rounding
Slide 8: Business Segment Third Quarter
Business Segment Third Quarter ($ Millions) (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures (2) Allocation of Restructuring and Other Recoveries, Net across business segments was as follows: FMS - $0.4 in 2005 and CSS - $1.3 in 2004
Slide 9: Business Segment Year-to-Date
Business Segment ($ Millions) (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures (2) Allocation of Restructuring and Other Recoveries, Net across business segments was as follows: FMS - $0.5 and SCS - $0.1 in 2005 and FMS - $(2.7), SCS - $(0.9), DCC - $(0.3) and CSS - $2
Slide 10: Capital Expenditures Year-to-Date
Capital Expenditures ($ Millions) Year-to-Date
Slide 11: Debt to Equity Ratio
Debt to Equity Ratio Strong balance sheet to support profitable growth ($ Millions) Note: Includes impact of accumulated net pension related equity charge of $189 million as of 9/30/05 and 12/31/04, and $187 million as of 9/30/04. (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financia
Slide 12: Free Cash Flow
Free Cash Flow (1) Includes non-cash restructuring and other recoveries, net (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment (3) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures ($ Millions) Year-to-Da
Slide 13: Contents
Contents Third Quarter Results Overview Asset Management Update Earnings Outlook Q & A
Slide 14: Asset Management Update
Asset Management Update Note: U.S. only The overall number of vehicles sold in the third quarter was 5,156; up 20% compared with prior year Used tractor retail sales proceeds up 7% per unit vs. prior year period Used truck retail sales proceeds down 2% per unit vs. prior year period Vehicles not yet
Slide 15: Contents
Contents Third Quarter Results Overview Asset Management Update Earnings Outlook Q & A
Slide 16: Earnings Outlook
Earnings Outlook No anticipated repatriation of foreign earnings under the American Jobs Creation Act of 2004 2005 earnings forecast excludes any impact of: Recently announced $175M share repurchase program Expensing of stock options and employee stock purchases (FAS123R) Anticipate adoption on 1/1/
Slide 17: Earnings Outlook
Earnings Outlook Raising our full year 2005 earnings forecast range to $3.49-$3.54 per share Forecast includes the previously reported second quarter $0.12 state tax benefit Current forecast for EPS is as follows: (Earnings Per Share)
Slide 18: Q & A
Q & A
Slide 19: Appendix
Appendix Business Segment Detail Central Support Services Balance Sheet Financial Indicators Forecast FMS Revenue History Asset Management Non-GAAP Financial Measures & Reconciliations
Slide 20: Fleet Management Solutions (FMS) Third Quarter
Fleet Management Solutions (FMS) ($ Millions) Third 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
Slide 21: Fleet Management Solutions (FMS) Year-to-Date
Fleet Management Solutions (FMS) ($ Millions) Year-to-Date (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
Slide 22: Supply Chain Solutions (SCS) Third Quarter
Supply Chain Solutions (SCS) ($ Millions) Third 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
Slide 23: Supply Chain Solutions (SCS) Year-to-Date
Supply Chain Solutions (SCS) ($ Millions) (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 rev
Slide 24: Dedicated Contract Carriage (DCC) Third Quarter
Dedicated Contract Carriage (DCC) ($ Millions) Third 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 arri
Slide 25: Dedicated Contract Carriage (DCC) Year-to-Date
Dedicated Contract Carriage (DCC) ($ Millions) (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 operatin
Slide 26: Central Support Services (CSS) Third Quarter
Central Support Services (CSS) ($ Millions) Third Quarter
Slide 27: Central Support Services (CSS) Year-to-Date
Central Support Services (CSS) ($ Millions) Year-to-Date
Slide 28: Balance Sheet
Balance Sheet (3 Mittions) September30, December 31, 2005 2004 Cash and Cash Equivalents $ 1405 $ 101.0 Other Current Assets 1,201.6 1,126.7 Revenue Earning Equipment, Net 3,693.3 3,991.7 Operating Property and Equipment, Net 485.5 479.6 Other Assets 583.1 598.9 Total Assets Current Liabilities $ 12
Slide 29: Financial Indicators Forecast
Financial Indicators Forecast (1) (1) Free Cash Flow and Debt to Equity include acquisitions. Capital Expenditures exclude acquisitions. Debt to Equity excludes impact of share repurchases. (2) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Free Cash Flow -270 126 366 2
Slide 30: FMS Revenue History
FMS Revenue History ($ Millions) Note: FMS revenue presentation revised to: (1) report both Contract Maintenance and Non-contractual Maintenance individually, and (2) to report trailer pool revenue previously included in the Other product line in Full Service Lease and Commercial Rental.
Slide 31: Asset Management Update
Asset Management Update (a) (a) U.S. only (b) Excludes early terminations where customer purchases vehicle. Redeployments Extensions Early Terminations Early Replacements YTD-00 3478 1671 5370 3349 YTD-01 3875 2026 5409 1172 YTD-02 4412 3950 4914 837 YTD-03 3810 3184 3800 723 YTD-04 3890 2180 3623 1
Slide 32: 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 33: 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 34: 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 35: Tax Rate Reconciliation
Tax Rate Reconciliation YTDOS - Tax Rate Tax Rate Excluding Net Tax Benefit 9.0% Effect of Net Ohio Tax Change on Tax Rate (2.9)% Tax Rate as Reported B1% 38
Slide 36: Return on Capital Reconciliation
Return on Capital Reconciliation ($ Millions) (1) Adjusted earnings calculated based on a 12-month rolling period. (2) Average shareholders' equity and average debt are calculated quarterly using a weighted average. (3) Shareholders' equity reflects impact of accumulated net pension related equity c
Slide 37: 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 38: 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 39: Cityder
Cityder