Your SlideShare is downloading. ×
0
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Q1 2011 Ryder System, Inc. Earnings Report
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Q1 2011 Ryder System, Inc. Earnings Report

599

Published on

First Quarter 2011 Ryder System, Inc. Earnings Report

First Quarter 2011 Ryder System, Inc. Earnings Report

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
599
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. First Quarter 2011Earnings Conference CallApril 26, 2011
  • 2. Safe HarborCertain statements and information included in this presentation are "forward-looking statements" under the FederalPrivate Securities Litigation Reform Act of 1995. Accordingly, these forward-looking statements should be evaluatedwith consideration given to the many risks and uncertainties inherent in our business that could cause actual resultsand events to differ materially from those in the forward-looking statements. Important factors that could cause suchdifferences include, among others, a slowdown of the economic recovery and decreases in freight demand, our abilityto obtain adequate profit margins for our services, our inability to maintain current pricing levels due to soft economicconditions, uncertainty or decline in economic and market conditions affecting contractual lease demand, decreases inmarket demand in the commercial rental market and the sale of used vehicles, competition from other serviceproviders, customer retention levels, unexpected volume declines, loss of key customers in the Supply Chain Solutions(SCS) business segment, unexpected reserves or write-offs due to the deterioration of the credit worthiness orbankruptcy of customers, changes in financial, tax or regulatory requirements or changes in customers’ businessenvironments that will limit their ability to commit to long-term vehicle leases, a decrease in credit ratings, increaseddebt costs resulting from volatile financial markets, inability to achieve planned synergies and customer retention levelsfrom acquisitions, labor strikes or work stoppages affecting our or our customers’ business operations, driver shortagesand increasing driver costs, adequacy of accounting estimates, reserves and accruals particularly with respect topension, taxes, insurance and revenue, a decline in pension plan returns, changes in obligations relating to multi-employer plans, sudden or unusual changes in fuel prices, our ability to manage our cost structure, new accountingpronouncements, rules or interpretations, changes in government regulations, adverse impacts of recently enactedregulations regarding vehicle emissions, any unanticipated or unrealized effects of the recent Japan earthquake andtsunami on our operations, customers and vehicle suppliers and the risks described in our filings with the Securities andExchange Commission. The risks included here are not exhaustive. New risks emerge from time to time and it is notpossible for management to predict all such risk factors or to assess the impact of such risks on our business.Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as aresult of new information, future events, or otherwise. 04/26/11 Proprietary and Confidential 2
  • 3. Contents ► First Quarter 2011 Results Overview ► Asset Management Update ► Earnings Outlook ►Q & A 04/26/11 Proprietary and Confidential 3
  • 4. 1st Quarter Results Overview ► Earnings per diluted share from continuing operations were $0.50 in 1Q11 vs. $0.24 in 1Q10 – 1Q11 included a $0.01 charge for acquisition-related items ► Comparable earnings per share from continuing operations were $0.51 in 1Q11 vs. $0.24 in 1Q10 ► Total revenue increased 17% vs. prior year reflecting the impact of acquisitions, higher fuel services revenue and organic revenue growth ► Operating revenue increased 14% vs. prior year due to acquisitions as well as higher commercial rental activity and Supply Chain Solutions volumes 04/26/11 Proprietary and Confidential 4
  • 5. 1st Quarter Results Overview - FMS ► Fleet Management Solutions (FMS) total revenue up 11% (and operating revenue up 6%) vs. prior year – Contractual revenue unchanged – Full service lease revenue up 1% – Contract maintenance revenue decreased 4% – Commercial rental revenue up 34% – Fuel revenue up 26% due primarily to increase in fuel cost pass-throughs ► FMS net before tax earnings (NBT) up 78% – FMS NBT percent of operating revenue up 220 basis points to 5.4% ► FMS earnings positively impacted by better commercial rental performance and improved used vehicle results – These benefits were partially offset by lower full service lease performance (due to higher maintenance costs on an older fleet), higher compensation expense and investments in sales and technology initiatives 04/26/11 Proprietary and Confidential 5
  • 6. 1st Quarter Results Overview – SCS / DCC ► Supply Chain Solutions (SCS) total revenue up 36% (and operating revenue up 36%) vs. prior year due to the TLC acquisition and increased freight volumes ► SCS net before tax earnings (NBT) up 72% – SCS NBT percent of operating revenue up 80 basis points to 3.7% ► SCS earnings increased due to the TLC acquisition, improved operating performance and higher volumes ► Dedicated Contract Carriage (DCC) total revenue up 16% (and operating revenue up 15%) due to the Scully acquisition and higher fuel cost pass-throughs ► DCC net before tax earnings (NBT) were unchanged as benefits from the Scully acquisition were offset by lower operating performance due to costs incurred to close customer locations and higher driver costs – DCC NBT percent of operating revenue down 80 basis points to 5.8% 04/26/11 Proprietary and Confidential 6
  • 7. Key Financial Statistics ($ Millions, Except Per Share Amounts) First Quarter 2011 2010 % B/(W)Operating Revenue (1) $ 1,129.1 $ 987.6 14%Fuel Services and Subcontracted Transportation Revenue 296.2 232.3 28% Total Revenue $ 1,425.4 $ 1,219.9 17%Earnings Per Share From Continuing Operations $ 0.50 $ 0.24 108%Comparable Earnings Per Share From Continuing Operations(1) $ 0.51 $ 0.24 113%Earnings Per Share (2) $ 0.48 $ 0.23 109%Memo: Average Shares (Millions ) - Diluted 51.0 52.7 Tax Rate From Continuing Operations 40.7% 42.8% Adjusted Return on Capital (Trailing 12 month )(1) 5.1% 4.1%Note: Amounts throughout presentation may not be additive due to rounding.(1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures.(2) Includes discontinued operations and restructuring charges. 04/26/11 Proprietary and Confidential 7
  • 8. Business Segments ($ Millions) First Quarter Memo: Total Revenue 2011 2010 % B/(W) 2011 2010 % B/(W) (1)Operating Revenue: Fleet Management Solutions $ 719.0 $ 677.4 6% $ 980.1 $ 884.0 11% Supply Chain Solutions 324.3 238.2 36% 401.0 294.2 36% Dedicated Contract Carriage 128.4 112.0 15% 134.7 116.3 16% Eliminations (42.6) (40.0) (6)% (90.5) (74.6) (21)% Total $ 1,129.1 $ 987.6 14% $ 1,425.4 $ 1,219.9 17%Segment Net Before Tax Earnings: Fleet Management Solutions $ 38.6 $ 21.7 78% Supply Chain Solutions 12.1 7.0 72% Dedicated Contract Carriage 7.4 7.4 - Eliminations (4.9) (4.7) (4)% 53.1 31.4 69%Central Support Services (Unallocated Share) (8.7) (8.9) 2% (1)Earnings Before Restructuring and Income Taxes 44.4 22.5 97%Restructuring and Other Charges, Net and Other Items (2) (0.8) - NMEarnings Before Income Taxes 43.6 22.5 94%Provision for Income Taxes (17.8) (9.6) 85%Earnings from Continuing Operations $ 25.9 $ 12.9 101% (1)Comparable Earnings from Continuing Operations $ 26.3 $ 12.9 104%Net Earnings $ 25.1 $ 12.4 103% (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Our primary measure of segment financial performance excludes restructuring and other charges, net and other items. The restructuring and other items of ($0.8) million in 2011 related entirely to the FMS segment. 04/26/11 Proprietary and Confidential 8
  • 9. Capital Expenditures from Continuing Operations ($ Millions) First Quarter 2011 $ 2011 2010 O/(U) 2010Full Service Lease $ 112 $ 121 $ (9)Commercial Rental 317 142 175Operating Property and Equipment 18 13 6 Gross Capital Expenditures 448 276 172Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 71 49 22 Net Capital Expenditures $ 377 $ 227 $ 149Memo: Acquisitions $ 84 $ 2 $ 82Note: Amounts may not recalculate due to rounding. 04/26/11 Proprietary and Confidential 9
  • 10. Cash Flow from Continuing Operations ($ Millions) First Quarter 2011 2010 Earnings $ 26 $ 13 Depreciation 206 211 Gains on Vehicle Sales, Net (12) (5) Amortization and Other Non-Cash Charges, Net 12 14 Pension Contributions (4) (4) Changes in Working Capital and Deferred Taxes (10) 42 Cash Provided by Operating Activities 218 271 Proceeds from Sales (Primarily Revenue Earning Equipment) 71 49 Collections of Direct Finance Leases 15 16 (1) Total Cash Generated 304 336 Capital Expenditures (2) (313) (200) (1)(3) Free Cash Flow $ (10) $ 136(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 and changes in restricted cash. 04/26/11 Proprietary and Confidential 10
  • 11. Debt to Equity Ratio ($ Millions)300% 275% 275% 234% 225%250% 202% 201% 183% 203%200% 168% 157% Total Obligations 146% 151% to 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 3/31/11 Long Term Target (2) Midpoint 3/31/11 12/31/10 3/31/10 Balance Sheet Debt $ 2,809 $ 2,747 $ 2,424 Percent To Equity 195% 196% 172% Total Obligations (1) $ 2,908 $ 2,847 $ 2,545 Percent To Equity (1) 202% 203% 181% Total Equity $ 1,440 $ 1,404 $ 1,408Note: Includes impact of accumulated net pension related equity charge of $420 million as of 3/31/11, $423 million as of 12/31/10 and $409 million as of 3/31/10.(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 investors as they are more complete measures of the Company’s existing financial obligations and help investors better assess the Company’s overall leverage position. Total obligations include the present value of minimum lease payments and guaranteed residual values under operating leases of $99 million as of 3/31/11, $100 million as of 12/31/10 and $121 million as of 3/31/10.(2) Represents long term total obligations to equity target of 250 - 300% while maintaining a strong investment grade rating. 04/26/11 Proprietary and Confidential 11
  • 12. Contents ► First Quarter 2011 Results Overview ► Asset Management Update ► Earnings Outlook ►Q &A 04/26/11 Proprietary and Confidential 12
  • 13. (1)Global Asset Management Update ► Units held for sale were 5,000 at quarter end; down 26% from 6,800 units held for sale in the prior year – Units held for sale were down 4% from 5,200 at the end of the prior quarter ► The number of used vehicles sold in the first quarter were 4,100, down 13% compared with prior year due to lower inventory level – Number of used vehicles sold were up 3% or 100 units vs. the prior quarter ► Proceeds per unit were up 42% for tractors and up 44% for trucks in the first quarter compared with prior year (excluding the impact of exchange rates) – Proceeds per unit were up 9% for tractors and 7% for trucks vs. the prior quarter ► Vehicles no longer earning revenue were 7,400 at quarter end; down 2,400 or 24% from the prior year – Vehicles no longer earning revenue were up 3% vs. the prior quarter ► Average first quarter total commercial rental fleet was up 11% year-over-year (1) Units rounded to nearest hundred. 04/26/11 Proprietary and Confidential 13
  • 14. Contents ► First Quarter 2011 Results Overview ► Asset Management Update ► Earnings Outlook ►Q & A 04/26/11 Proprietary and Confidential 14
  • 15. EPS Forecast – Continuing Operations ($ Earnings Per Share) ► Increasing full year 2011 EPS forecast from $2.80 – 2.90 to $2.90 – 3.00 ► Current forecast is as follows: Second Quarter Full Year 2011 Comparable EPS Forecast (1) $ 0.72 - 0.77 $ 2.90 - 3.00 2010 Comparable EPS(1) $0.58 $2.22 (1) Non-GAAP financial measure. (Comparable EPS in FY10 excludes a gain on sale of an international asset of $0.02, tax benefits of $0.21 and acquisition costs of $0.08.) 04/26/11 Proprietary and Confidential 15
  • 16. Q&A
  • 17. Appendix Business Segment Detail Central Support Services Balance Sheet Asset Management Financial Indicators Forecast Non-GAAP Financial Measures & Reconciliations 04/26/11 Proprietary and Confidential 17
  • 18. Fleet Management Solutions (FMS) ($ Millions) First Quarter 2011 2010 % B/(W) Full Service Lease $ 483.3 $ 479.4 1% Contract Maintenance 38.1 39.8 (4)% Contractual Revenue 521.4 519.2 - Contract-related Maintenance 44.7 40.2 11% Commercial Rental 135.7 101.6 34% Other 17.3 16.4 5% Operating Revenue 719.0 677.4 6% Fuel Services Revenue 261.1 206.6 26% Total Revenue $ 980.1 $ 884.0 11% Segment Net Before Tax Earnings (NBT) $ 38.6 $ 21.7 78% Segment NBT as % of Total Revenue 3.9% 2.5% Segment NBT as % of Operating Revenue 5.4% 3.2% 04/26/11 Proprietary and Confidential 18
  • 19. Supply Chain Solutions (SCS) ($ Millions) First Quarter 2011 2010 % B/(W) Automotive $ 122.7 $ 106.6 15% High-Tech 56.9 51.6 10% Retail & CPG 104.1 41.8 149% Industrial & Other 40.6 38.2 6% Operating Revenue 324.3 238.2 36% Subcontracted Transportation 76.7 56.0 37% Total Revenue $ 401.0 $ 294.2 36% Segment Net Before Tax Earnings (NBT) $ 12.1 $ 7.0 72% Segment NBT as % of Total Revenue 3.0% 2.4% Segment NBT as % of Operating Revenue 3.7% 2.9% Memo: Fuel Costs $ 26.5 $ 18.5 (43)% 04/26/11 Proprietary and Confidential 19
  • 20. Dedicated Contract Carriage (DCC) ($ Millions) First Quarter 2011 2010 % B/(W) Operating Revenue $ 128.4 $ 112.0 15% Subcontracted Transportation 6.3 4.3 47% Total Revenue $ 134.7 $ 116.3 16% Segment Net Before Tax Earnings (NBT) $ 7.4 $ 7.4 - Segment NBT as % of Total Revenue 5.5% 6.3% Segment NBT as % of Operating Revenue 5.8% 6.6% Memo: Fuel Costs $ 27.3 $ 19.4 (41)% 04/26/11 Proprietary and Confidential 20
  • 21. Central Support Services (CSS) ($ Millions) First Quarter 2011 2010 % B/(W) Allocated CSS Costs $ 36.8 $ 33.5 (10)% Unallocated CSS Costs 8.7 8.9 2% Total CSS Costs $ 45.5 $ 42.4 (7)% 04/26/11 Proprietary and Confidential 21
  • 22. Balance Sheet ($ Millions) March 31, December 31, 2011 2010Cash and Cash Equivalents $ 156 $ 213Other Current Assets 889 810Revenue Earning Equipment, Net 4,458 4,201Operating Property and Equipment, Net 616 607Other Assets 864 821 Total Assets $ 6,982 $ 6,652Short-Term Debt / Current Portion Long-Term Debt $ 468 $ 420Other Current Liabilities 912 711Long-Term Debt 2,341 2,327Other Non-Current Liabilities (including Deferred Income Taxes) 1,820 1,790Shareholders Equity 1,440 1,404 Total Liabilities and Shareholders Equity $ 6,982 $ 6,652 04/26/11 Proprietary and Confidential 22
  • 23. U.S. Asset Management Update (a)Number of Units (b) (c) (c) (a) U.S. only (b) Excludes early terminations where customer purchases vehicle (c) Current year statistics may exclude some units due to a lag in reporting 04/26/11 Proprietary and Confidential 23
  • 24. 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 $1,091 $1,289 $1,054 $949 $1,165 $1,182 $1,265 $1,088 $835 $657 $725 $600 $611 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Forecast Forecast Memo: Free Cash Flow (2) (3) (4) (242) 131 367 357 289 (208) (439) 380 341 614 258 (265)Total Obligations to Equity Ratio (2) Total Obligations to Equity Balance Sheet Debt to Equity  Significant and predictable cash generation 275% 275% 234% 225% 201% 183% 203% 207% 146% 129% 151% 168% 157%  Invest in growth (organic, acquisitions)  Over time appropriately move financial 2000 2000 2001 2001 2002 2002 2003 2004 2003 2004 2005 2005 2006 2006 2007 2008 2009 20102011 Forecast Target Mi Long Term 2007 2008 2009 2010 2011 Long leverage towards long term target of Forecast Term Target 250-300% Total Obligations to Equity Midpoint(1) Obligations to Equity include acquisitions. Free Cash Flow and Gross Capital Expenditures exclude acquisitions.(2) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures.(3) 2000-2004 not restated for discontinued operations.(4) Includes $176 million payment to the IRS related to full resolution of 1998 - 2000 tax period matters. 04/26/11 Proprietary and Confidential 24
  • 25. 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 the non-GAAP financial measure provides useful information to investors. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP.► Specifically, the following non-GAAP financial measures are included in this presentation: Reconciliation & Additional InformationNon-GAAP Financial Measure Comparable GAAP Measure Presented on Slide Titled PageOperating Revenue Total Revenue Key Financial Statistics 7Earnings Before Restructuring and Income Taxes Earnings before Income Taxes from Continuing Business Segments 8 OperationsComparable Earnings / EPS from Continuing Earnings / EPS from Continuing Operations Earnings and EPS from Continuing Operations 26Operations ReconciliationComparable NBT / Tax Rate NBT / Tax Rate NBT and Tax Rate from Continuing Operations 27 ReconciliationAdjusted Return on Capital Net Earnings Adjusted Return on Capital Reconciliation 28 Segment Adjusted Return on Capital 29 ReconciliationTotal Cash Generated / Free Cash Flow Cash Provided by Operating Activities Cash Flow Reconciliation 32-33Total Obligations / Total Obligations to Equity Balance Sheet Debt / Debt to Equity Debt to Equity Ratio 11 Debt to Equity Reconciliation 30-31FMS / SCS / DCC Operating Revenue and Segment FMS / SCS / DCC Total Revenue and Segment Fleet Management Solutions / Supply Chain 18-20NBT as % of Operating Revenue NBT as % of Total Revenue Solutions / Dedicated Contract Carriage 04/26/11 Proprietary and Confidential 25
  • 26. Earnings and EPS from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 1Q11 - 1Q11 - Earnings EPS Reported $ 25.9 $ 0.50 Restructuring Charges 0.5 0.01 Comparable $ 26.3 $ 0.51 04/26/11 Proprietary and Confidential 26
  • 27. NBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 1Q11 - 1Q11 - 1Q11 - NBT Tax Tax Rate Reported $ 43.6 $ 17.8 40.7% Restructuring Charges 0.8 0.3 Comparable $ 44.4 $ 18.1 40.7% 04/26/11 Proprietary and Confidential 27
  • 28. Adjusted Return on Capital Reconciliation ($ Millions) 3/31/11 3/31/10 (1) Net Earnings $ 131 $ 68 Restructuring and Other Charges, Net and Other Items 7 22 Income Taxes 69 52 Adjusted Earnings Before Income Taxes 207 142 (2) Adjusted Interest Expense 134 144 Adjusted Income Taxes (3) (132) (117) Adjusted Net Earnings $ 209 $ 169 Average Total Debt $ 2,591 $ 2,593 Average Off-Balance Sheet Debt 109 133 Average Adjusted Total Shareholders Equity 1,403 1,416 Average Adjustments to Shareholders Equity (4) (1) 11 Adjusted Average Total Capital $ 4,102 $ 4,152 Adjusted Return on Capital (5) 5.1% 4.1%(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.(4) Represents comparable earnings items for those periods.(5) The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (including off-balance sheet debt) and equity should be included in evaluating how effectively capital is utilized across the business. 04/26/11 Proprietary and Confidential 28
  • 29. Segment Adjusted Return on Capital Reconciliation ($ Millions) 2010 FMS SCS(6) DCC(6)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 (2) Adjusted Interest Expense 134 5 2 (3) Adjusted Income Taxes (103) (20) (14)Adjusted Net Earnings $ 203 $ 32 $ 19 Average Total Debt $ 2,565 $ (6) $ (41) Average Off-Balance Sheet Debt 111 81 116 Average Adjusted Total Shareholders Equity 1,283 115 30 Average Adjustments to Shareholders Equity (4) - 2 - Adjusted Average Total Capital $ 3,959 $ 191 $ 75Adjusted Return on Capital (5) 5.1% 16.9% 18.2%(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.(4) Represents comparable earnings items for those periods.(5) The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (including off-balance sheet debt) and equity should be included in evaluating how effectively capital is utilized across the business.(6) Segment return on capital revised. 04/26/11 Proprietary and Confidential 29
  • 30. 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 EquityBalance Sheet Debt $2,017 161% $1,709 139% $1,552 140% $1,816 135% $1,783 118% $2,185 143% $2,817 164% $2,776 147% Receivables Sold 345 110 - - - - - - PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 879 625 370 153 161 117 78 178 PV of contingent rentals under securitizations 209 441 311 - - - - -Total Obligations $3,450 275% $2,885 234% $2,233 201% $1,969 146% $1,944 129% $2,302 151% $2,895 168% $2,954 157% Note: In connection with adopting FIN 46 effective July 1, 2003, the Company consolidated the vehicle securitization trusts previously disclosed as off-balance sheet debt. 04/26/11 Proprietary and Confidential 30
  • 31. Debt to Equity Reconciliation ($ Millions) % to % to % to % to % to 12/31/08 Equity 12/31/09 Equity 12/31/10 Equity 3/31/11 Equity 3/31/10 EquityBalance Sheet Debt $2,863 213% $2,498 175% $2,747 196% $2,809 195% $2,424 172% Receivables Sold - - - - - PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 163 119 100 99 121Total Obligations $3,026 225% $2,617 183% $2,847 203% $2,908 202% $2,545 181% Note: Amounts may not recalculate due to rounding. 04/26/11 Proprietary and Confidential 31
  • 32. Cash Flow Reconciliation ($ Millions) (4) (4) (4) (4) (4) 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 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 - - - - - - - Collections of Direct Finance Leases 67 66 66 61 64 69 65 62 61 65 Proceeds from Sale (Prim. Rev. Earn. Equip.) 230 173 152 210 331 333 332 373 262 216 Proceeds from Sale & Leaseback of Assets - - - 13 118 - - 150 - - Other Investing, Net 4 (4) 4 4 1 - 2 2 - - (1) Total Cash Generated 1,054 835 949 1,091 1,381 1,179 1,252 1,684 1,571 1,266 (2) Capital Expenditures (1,296) (704) (582) (734) (1,092) (1,387) (1,691) (1,304) (1,230) (652) (3)(5) Free Cash Flow $ (242) $ 131 $ 367 $ 357 $ 289 $ (208) $ (439) $ 380 $ 341 $ 614 Memo: Depreciation Expense $ 580 $ 545 $ 552 $ 625 $ 706 $ 735 $ 739 $ 811 $ 836 $ 881 Gains on Vehicle Sales, Net $ 19 $ 12 $ 14 $ 16 $ 35 $ 47 $ 51 $ 44 $ 39 $ 12(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 inflows generated from our on-going business activities which include sales of revenue earning equipment, sales of operating property and equipment, sale and leaseback of revenue earning equipment, collections on direct finance leases and other cash flows.(2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment.(3) The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes free cash flow provides investors with an important perspective on the cash available for debt service and shareholders after making capital investments required to support ongoing business operations. The calculation of free cash flow may be different from the calculation used by other companies and therefore comparability may be limited.(4) Amounts have not been recasted for operations discontinued in 2009.(5) Free Cash Flow excludes acquisitions and changes in restricted cash. 04/26/11 Proprietary and Confidential 32
  • 33. Cash Flow Reconciliation ($ Millions) 12/31/10 3/31/11 3/31/10 Cash Provided by Operating Activities from Continuing Operations $ 1,028 $ 218 $ 271 Proceeds from Sales (Primarily Revenue Earning Equipment) 235 71 49 Collections of Direct Finance Leases 62 15 16 Other, Net 3 - - (1) Total Cash Generated 1,328 304 336 Capital Expenditures (2) (1,070) (313) (200) (3)(4) Free Cash Flow $ 258 $ (10) $ 136 Memo: Depreciation Expense $ 834 $ 206 $ 211 Gains on Vehicle Sales, Net $ 29 $ 12 $ 5(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 inflows generated from our on-going business activities which include sales of revenue earning equipment, sales of operating property and equipment, sale and leaseback of revenue earning equipment, collections on direct finance leases and other cash flows.(2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment.(3) The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes free cash flow provides investors with an important perspective on the cash available for debt service and shareholders after making capital investments required to support ongoing business operations. The calculation of free cash flow may be different from the calculation used by other companies and therefore comparability may be limited.(4) Free Cash Flow excludes acquisitions and changes in restricted cash. 04/26/11 Proprietary and Confidential 33

×