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  • 1. Third Quarter 2005 Earnings Conference Call October 26, 2005
  • 2. Safe Harbor Certain statements and information included in this presentation are quot;forward-looking statementsquot; 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 uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward- looking statements. Important factors that could cause such differences include, among others, our ability to obtain adequate profit margins for our services, our inability to maintain current pricing levels due to customer acceptance or competition, 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 or bankruptcy of certain customers in our SCS business segment, the possibility that changes in customers’ business environments will limit their ability to commit to long-term vehicle leases, changes in market conditions affecting the commercial rental market or the sale of used vehicles, increased competition from vehicle manufacturers and large service providers, higher borrowing costs and possible decreases in available funding sources caused by adverse changes in debt ratings, changes in accounting assumptions, adequacy of accounting accruals, changes in general economic conditions, unexpected reserves or losses due to the effects of Hurricanes Katrina and Rita on our operations and the economy, increases in fuel prices, availability of qualified drivers, our ability to manage our cost structure and changes in government regulations including regulations regarding vehicle emissions. The risks included here are not exhaustive. New risks emerge from time to time and it is not possible for management to predict all such risks 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 a result of new information, future events, or otherwise. 2
  • 3. Contents ► Third Quarter Results Overview ► Asset Management Update ► Earnings Outlook ►Q & A 3
  • 4. 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 revenue increased 1% due to foreign exchange impact – Maintenance revenue up 6% due to growth initiatives – Commercial rental revenue grew 4% due to higher pricing ► FMS net before tax earnings (NBT) up 20% – FMS NBT percent of operating revenue up 210 basis points to 14.1% ► FMS earnings positively impacted by improved rental results, strong used vehicle sales performance, improved fuel margins and lower overheads, partially offset by hurricane-related charges 4
  • 5. 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 reflecting new and expanded business as well as lower overhead spending, partially offset by lower volumes in certain automotive accounts and impact of Brazil operations ► Dedicated Contract Carriage (DCC) total revenue up 10% (and operating revenue up 10%) vs. prior year; increase due to new and expanded business as well as higher fuel costs passed through to customers ► DCC earnings up vs. prior year due to revenue growth from new and expanded business as well as lower safety and other operating costs 5
  • 6. Earnings Per Share Third Quarter 2005 2004 Earnings Per Share $ 0.98 $ 0.83 (1) Earnings Per Share Excluding Headquarters Complex Sale $ 0.98 $ 0.82 Memo: EPS Impact of Headquarters Complex Sale $ - $ 0.01 Average Shares (Millions) - Diluted 64.5 65.5 Tax Rate 40.0% 37.9% (1) (2) 7.8% 7.5% Return on Capital (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures (2) Calculated based on a 12-month rolling period 6
  • 7. Earnings Per Share Year-to-Date 2005 2004 Earnings Per Share $ 2.60 $ 2.33 Earnings Per Share Excluding Headquarters Complex Sale $ 2.48 $ 2.09 (1) and Tax Change Memo: EPS Impact of Headquarters Complex Sale $ - $ 0.23 EPS Impact of Ohio Tax Change $ 0.12 $ - EPS Impact of Restructuring and Other (Charges)/Recoveries, Net $ 0.01 $ (0.03) Average Shares (Millions) - Diluted 64.8 65.7 Tax Rate 36.1% 37.6% (1) (2) Return on Capital 7.8% 7.5% (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 7
  • 8. Business Segment Third Quarter ($ Millions) 2005 2004 % B/(W) Revenue: Fleet Managem ent Solutions $ 1,010.8 $ 918.7 10% Supply Chain Solutions 433.4 338.5 28% Dedicated Contract Carriage 139.0 125.9 10% Elim inations (92.6) (77.2) (20)% Total Revenue $ 1,490.6 $ 1,305.9 14% Segm ent Net Before Tax Earnings: Fleet Managem ent Solutions $ 102.6 $ 85.8 20% Supply Chain Solutions 10.6 9.8 9% Dedicated Contract Carriage 9.2 7.5 22% Elim inations (8.2) (8.0) (4)% 114.2 95.1 20% Central Support Services (Unallocated Share) (9.1) (9.0) (2)% (1) Earnings Before Restructuring and Incom e Taxes 105.1 86.1 22% (2) Restructuring and Other Recoveries, Net 0.4 1.3 (66)% Earnings Before Incom e Taxes 105.5 87.4 21% Provision for Incom e Taxes 42.2 33.1 (27)% Net Earnings $ 63.3 $ 54.3 17% (1) Net Earnings Excluding Headquarters Com plex Sale $ 63.3 $ 53.5 18% (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 - $1.3 in 2004 8
  • 9. Business Segment ($ Millions) Year-to-Date 2005 2004 % B/(W) Revenue: Fleet Managem ent Solutions $ 2,905.0 $ 2,652.3 10% Supply Chain Solutions 1,155.1 986.6 17% Dedicated Contract Carriage 400.8 377.7 6% Elim inations (264.8) (229.5) (15)% Total Revenue $ 4,196.1 $ 3,787.1 11% Segm ent Net Before Tax Earnings: Fleet Managem ent Solutions $ 262.4 $ 223.2 18% Supply Chain Solutions 25.4 25.7 (1)% Dedicated Contract Carriage 24.8 22.6 10% Elim inations (23.3) (23.4) 1% 289.3 248.1 17% Central Support Services (Unallocated Share) (26.7) (23.3) (15)% (1) Earnings Before Restructuring and Incom e Taxes 262.6 224.8 17% (2) Restructuring and Other Recoveries, Net 0.6 20.5 (97)% Earnings Before Incom e Taxes 263.2 245.3 7% Provision for Incom e Taxes 95.1 92.3 (3)% Net Earnings $ 168.1 $ 153.0 10% (1) Net Earnings Excluding Headquarters Com plex Sale and Tax Change $ 160.5 $ 137.6 17% (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 - $24.4 in 2004 9
  • 10. Capital Expenditures ($ Millions) Year-to-Date 2005 2005 2004 O/(U) 2004 Full Service Lease $ 843.3 $ 578.7 $ 264.6 Commercial Rental 245.4 225.8 19.6 Operating Property and Equipment 58.6 38.9 19.7 Gross Capital Expenditures 1,147.3 843.4 303.9 Less: Proceeds from Sales of Revenue Earning Equipment 250.8 216.7 34.1 Less: Proceeds from Sales of Operating Property and Equipment 2.7 46.5 (43.8) Net Capital Expenditures $ 893.8 $ 580.2 $ 313.6 Memo: Acquisitions $ 15.1 $ 148.7 $ (133.6) 10
  • 11. Debt to Equity Ratio ($ Millions) 300% (1) Total Obligations to Equity 250% 200% 150% Balance Sheet Debt to Equity 100% 50% 0% 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 9/30/05 Long Term (2) Target 9/30/05 12/31/04 9/30/04 Balance Sheet Debt $ 2,218.3 $ 1,783.2 $ 1,720.0 137% 118% 119% Percent To Equity Total Obligations (1) $ 2,363.7 $ 1,944.3 $ 1,921.7 (1) 146% 129% 133% Percent To Equity Total Equity $ 1,616.9 $ 1,510.2 $ 1,441.2 Note: Includes impact of accumulated net pension related equity charge of $189 million as of 9/30/05 and 12/31/04, and $187 million as of 9/30/04. (1) Non-GAAP financial measure; refer to Appendix – Non-GAAP Financial Measures. (2) Represents long term total obligations to equity target while maintaining a strong investment grade rating. Strong balance sheet to support profitable growth 11
  • 12. Free Cash Flow ($ Millions) Year-to-Date 2005 2004 (1) $ 168.1 $ 153.0 Net Earnings 556.3 528.8 Depreciation (38.1) (25.8) Gains on Sale 6.1 (20.6) Amortization and Other Non-Cash Charges/(Gains), Net (223.3) 21.1 Changes in Working Capital and Deferred Taxes 469.1 656.5 Cash Provided by Operating Activities (2) (1,105.6) (769.7) Capital Expenditures (15.1) (148.7) Acquisitions 250.8 216.7 Proceeds from Sales of Revenue Earning Equipment 2.7 46.5 Proceeds from Sales of Operating Property and Equipment - 114.0 Proceeds from Sale and Leaseback of Assets 49.7 46.6 Collections of Direct Finance Leases - (0.1) Other Investing, Net (3) $ (348.4) $ 161.8 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 12
  • 13. Contents ► Third Quarter Results Overview ► Asset Management Update ► Earnings Outlook ►Q & A 13
  • 14. Asset Management Update ► 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 earning revenue are 2,301; up 603 from prior year due to increased sales activity vs. prior year ► Vehicles no longer earning (NLE) revenue are 7,229; up 1,760 or 32% over prior year driven primarily by a larger used vehicle inventory – NLE vehicles down 246 units or 3% vs. the prior quarter – 4,844 of these units are held for sale at the used truck centers Note: U.S. only 14
  • 15. Contents ► Third Quarter Results Overview ► Asset Management Update ► Earnings Outlook ►Q & A 15
  • 16. 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 1/1/06 • Estimated full year expense of $0.12 in 2005 and $0.08 - $0.10 in 2006 (excluding restricted stock) • Total stock-based compensation including restricted stock is estimated to be $0.15 in 2005 and $0.12 - $0.14 in 2006 – Cumulative charge for conditional asset retirement obligations related primarily to underground fuel storage tanks (FIN47) • Estimated charge of $0.04 - $0.06 upon adoption in fourth quarter 2005 16
  • 17. Earnings Outlook (Earnings Per Share) ► 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: 4th Quarter Full Year $0.89 - $ 0.94 $3.49 - $ 3.54 2005 EPS Forecast 17
  • 18. Q&A 18
  • 19. Appendix Business Segment Detail Central Support Services Balance Sheet Financial Indicators Forecast FMS Revenue History Asset Management Non-GAAP Financial Measures & Reconciliations 19
  • 20. Fleet Management Solutions (FMS) ($ Millions) Third Quarter 2005 2004 % B/(W) $ 447.4 $ 444.0 1% Full Service Lease 34.0 34.5 (2)% Contract Maintenance 48.3 43.1 12% Contract-related Maintenance 183.4 176.7 4% Commercial Rental 15.5 15.3 1% Other (a) 728.6 713.6 2% Operating Revenue 282.2 205.1 38% Fuel Revenue (b) $ 1,010.8 $ 918.7 10% Total Revenue $ 102.6 $ 85.8 20% Segment Net Before Tax Earnings (NBT) 10.1% 9.3% Segment NBT as % of Total Revenue (a) 14.1% 12.0% Segment NBT as % of Operating Revenue (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 prices, is excluded from the operating revenue computation as fuel is largely a pass through to customers for which the Company realizes minimal changes in profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by sudden increases or decreases in market fuel prices during a short period of time as customer pricing for fuel services is established based on market fuel costs. (b) Refer to Appendix - FMS Revenue History for additional historical detail. 20
  • 21. Fleet Management Solutions (FMS) ($ Millions) Year-to-Date 2005 2004 % B/(W) $ 1,334.6 $ 1,319.1 1% Full Service Lease 101.9 102.6 (1)% Contract Maintenance 146.2 131.5 11% Contract-related Maintenance 511.0 475.0 8% Commercial Rental 47.6 53.1 (10)% Other (a) 2,141.3 2,081.3 3% Operating Revenue 763.7 571.0 34% Fuel Revenue (b) $ 2,905.0 $ 2,652.3 10% Total Revenue $ 262.4 $ 223.2 18% Segment Net Before Tax Earnings (NBT) 9.0% 8.4% Segment NBT as % of Total Revenue (a) 12.3% 10.7% Segment NBT as % of Operating Revenue (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 prices, is excluded from the operating revenue computation as fuel is largely a pass through to customers for which the Company realizes minimal changes in profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by sudden increases or decreases in market fuel prices during a short period of time as customer pricing for fuel services is established based on market fuel costs. (b) Refer to Appendix - FMS Revenue History for additional historical detail. 21
  • 22. Supply Chain Solutions (SCS) ($ Millions) Third Quarter 2005 2004 % B/(W) U.S. Operating Revenue $ 114.5 $ 106.5 8% Automotive, Aerospace & Industrial 63.0 58.0 9% High Tech & Consumer Industries 6.3 5.3 18% Transportation Management 183.8 169.8 8% U.S. Operating Revenue 70.5 63.8 10% International Operating Revenue (a) 254.3 233.6 9% Operating Revenue 179.1 104.9 71% Subcontracted Transportation $ 433.4 $ 338.5 28% Total Revenue $ 10.6 $ 9.8 9% Segment Net Before Tax Earnings (NBT) 2.4% 2.9% Segment NBT as % of Total Revenue (a) 4.2% 4.2% Segment NBT as % of Operating Revenue $ 23.8 $ 15.9 (50)% Memo: Fuel Costs (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 revenue as Subcontracted Transportation is largely a pass through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in Subcontracted Transportation. 22
  • 23. Supply Chain Solutions (SCS) ($ Millions) Year-to-Date 2005 2004 % B/(W) U.S. Operating Revenue $ 332.9 $ 315.3 6% Automotive, Aerospace & Industrial 182.1 169.4 8% High Tech & Consumer Industries 18.6 14.5 28% Transportation Management 533.6 499.2 7% U.S. Operating Revenue 208.0 193.6 7% International Operating Revenue (a) 741.6 692.8 7% Operating Revenue 413.5 293.8 41% Subcontracted Transportation $ 1,155.1 $ 986.6 17% Total Revenue $ 25.4 $ 25.7 (1)% Segment Net Before Tax Earnings (NBT) 2.2% 2.6% Segment NBT as % of Total Revenue (a) 3.4% 3.7% Segment NBT as % of Operating Revenue $ 66.5 $ 46.5 (43)% Memo: Fuel Costs (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 revenue as Subcontracted Transportation is largely a pass through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in Subcontracted Transportation. 23
  • 24. Dedicated Contract Carriage (DCC) ($ Millions) Third Quarter 2005 2004 % B/(W) (a) $ 134.6 $ 122.7 10% Operating Revenue 4.4 3.2 40% Subcontracted Transportation $ 139.0 $ 125.9 10% Total Revenue $ 9.2 $ 7.5 22% Segment Net Before Tax Earnings (NBT) 6.6% 6.0% Segment NBT as % of Total Revenue (a) 6.8% 6.1% Segment NBT as % of Operating Revenue $ 24.9 $ 18.2 (37)% Memo: Fuel Costs (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 revenue as Subcontracted Transportation is largely a pass through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in Subcontracted Transportation. 24
  • 25. Dedicated Contract Carriage (DCC) ($ Millions) Year-to-Date 2005 2004 % B/(W) (a) $ 389.2 $ 371.0 5% Operating Revenue 11.6 6.7 74% Subcontracted Transportation $ 400.8 $ 377.7 6% Total Revenue $ 24.8 $ 22.6 10% Segment Net Before Tax Earnings (NBT) 6.2% 6.0% Segment NBT as % of Total Revenue (a) 6.4% 6.1% Segment NBT as % of Operating Revenue $ 67.7 $ 52.3 (29)% Memo: Fuel Costs (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 revenue as Subcontracted Transportation is largely a pass through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in Subcontracted Transportation. 25
  • 26. Central Support Services (CSS) ($ Millions) Third Quarter 2005 2004 % B/(W) $ 42.0 $ 45.8 8% Allocated CSS Costs 9.1 9.0 (2)% Unallocated CSS Costs $ 51.1 $ 54.8 7% Total CSS Costs 26
  • 27. Central Support Services (CSS) ($ Millions) Year-to-Date 2005 2004 % B/(W) $ 127.2 $ 132.7 4% Allocated CSS Costs 26.7 23.3 (15)% Unallocated CSS Costs $ 153.9 $ 156.0 1% Total CSS Costs 27
  • 28. Balance Sheet ($ Millions) September 30, December 31, 2005 2004 Cash and Cash Equivalents $ 140.5 $ 101.0 Other Current Assets 1,201.6 1,126.7 Revenue Earning Equipment, Net 3,633.3 3,331.7 Operating Property and Equipment, Net 485.5 479.6 Other Assets 583.1 598.9 Total Assets $ 6,044.0 $ 5,637.9 Current Liabilities $ 1,278.3 $ 1,454.8 Long-Term Debt 1,888.6 1,393.7 Other Non-Current Liabilities 1,260.2 1,279.2 Shareholders' Equity 1,616.9 1,510.2 Total Liabilities and Shareholders' Equity $ 6,044.0 $ 5,637.9 28
  • 29. Financial Indicators Forecast (1) Capital Expenditures ($ Millions) Free Cash Flow (2) ($ Millions) $1,435 1500 500 PPE 366 $1,289 Other $1,165 269 Rental 156 126 1000 Lease $725 0 $657 $600 500 (270) (345) (500) 0 Actual Actual Actual Actual Actual Forecast Actual Actual Actual Actual Actual Forecast 2000 2001 2002 2003 2004 2005 2000 2001 2002 2003 2004 2005 Debt to Equity Ratio 300% 275% 250% 234% 201% 200% (2) Total Obligations to Equity 146% 143% Balance Sheet Debt to Equity 150% 129% 100% 50% 0% 2000 2001 2002 2003 2004 2005 Plan Free Cash Flow and Debt to Equity include acquisitions. Capital Expenditures exclude acquisitions. Debt to Equity excludes impact of share repurchases. (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) 29
  • 30. FMS Revenue History ($ Millions) Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year 2003 2003 2003 2003 2003 2004 2004 2004 2004 2004 Full Service Lease $ 414.7 $ 418.9 $ 417.4 $ 418.0 $ 1,669.0 $ 429.8 $ 445.3 $ 444.0 $ 447.6 $ 1,766.7 Contract Maintenance 42.3 33.3 33.3 33.6 142.5 33.3 34.8 34.5 33.7 136.3 Contract-related Maintenance 41.5 39.7 40.7 41.0 162.9 44.5 44.0 43.1 46.5 178.1 Commercial Rental 118.5 134.7 144.6 142.9 540.7 135.9 162.4 176.7 174.8 649.8 Other 18.0 19.1 19.3 19.5 75.9 19.6 18.1 15.3 16.7 69.7 Operating Revenue 635.0 645.7 655.3 655.0 2,591.0 663.1 704.6 713.6 719.3 2,800.6 Fuel Revenue 176.0 154.4 154.0 156.3 640.7 178.4 187.5 205.1 231.2 802.2 Total Revenue $ 811.0 $ 800.1 $ 809.3 $ 811.3 $ 3,231.7 $ 841.5 $ 892.1 $ 918.7 $ 950.5 $ 3,602.8 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. 30
  • 31. (a) Asset Management Update YTD-00 YTD-01 YTD-02 YTD-03 YTD-04 YTD-05 6,000 5,409 5,370 4,914 4,412 5,000 3,810 3,875 3,800 3,950 3,890 4,000 3,623 3,478 2,863 3,184 3,349 3,071 2,697 2,180 3,000 2,026 1,671 2,000 1,172 1,071 837 1,075 723 1,000 0 (b) Redeployments Extensions Early Terminations Early Replacements (a) U.S. only (b) Excludes early terminations where customer purchases vehicle. 31
  • 32. Non-Revenue Earning Equipment (a) Units No Longer Earning Revenue - quot;NLEquot; Units Not Yet Earning Revenue - quot;NYEquot; 11,000 9,898 9,506 9,000 7,925 7,823 7,623 7,475 7,264 7,229 7,180 7,040 7,061 7,000 6,652 7,000 6,368 6,066 5,469 5,000 5,215 3,485 4,274 4,187 4,844 Units held for sale (b) 3,000 2,306 2,301 1,937 1,698 1,704 1,384 1,666 1,253 1,079 1,174 1,091 1,015 924 1,068 855 548 1,000 -1,000 Dec 2001 Mar 2002 June 2002 Sept 2002 Dec 2002 Mar 2003 Jun 2003 Sept 2003 Dec 2003 Mar 2004 Jun 2004 Sept 2004 Dec 2004 Mar 2005 June 2005 Sept 2005 Total Total Total Total Total Total Total Total Total Total Total Total Total Total Total Total 11,072 10,361 8,691 8,433 8,131 7,985 7,200 8,838 8,079 8,648 7,770 7,167 8,305 10,231 9,141 9,530 (a) U.S. only (b) Excludes units for which customer deposits have been received. 32
  • 33. 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 Information Non-GAAP Financial Measure Comparable GAAP Measure Presented on Slide Titled EPS / Net Earnings Excluding Headquarters Complex EPS / Net Earnings Appendix - Net Earnings and EPS Sale and Tax Change Reconciliation Earnings Before Restructuring and Income Taxes Net Earnings Business Segment Return on Capital Return on Capital Appendix - Return on Capital Reconciliation Free Cash Flow Cash Provided by Operating Activities Appendix - Free Cash Flow Reconciliation Total Obligations Balance Sheet Debt Appendix - Debt to Equity Reconciliation Total Obligations to Equity Debt to Equity Appendix - Debt to Equity Reconciliation FMS Operating Revenue and Segment NBT as % of FMS Total Revenue and Segment NBT as % of Total Fleet Management Solutions Operating Revenue Revenue SCS Operating Revenue and Segment NBT as % of SCS Gross Revenue and Segment NBT as % of Total Supply Chain Solutions Operating Revenue Revenue DCC Operating Revenue and Segment NBT as % of DCC Gross Revenue and Segment NBT as % of Total Dedicated Contract Carriage Operating Revenue Revenue Tax Rate Excluding State Tax Benefit Tax Rate Appendix - Tax Rate Reconciliation 33
  • 34. Net Earnings and EPS Reconciliation ($ Millions or $ Earnings Per Share) YTD05 - YTD05 - Net Earnings EPS Net Earnings $ 168.1 $ 2.60 Less: Tax Change 7.6 0.12 Net Earnings Excluding Tax Change $ 160.5 $ 2.48 3Q04 - 3Q04 - YTD04 - YTD04 - Net Earnings EPS Net Earnings EPS Net Earnings $ 54.3 $ 0.83 $ 153.0 $ 2.33 Less: Gain on Sale of Headquarters, After Tax 0.7 0.01 15.4 0.23 Net Earnings Excluding Headquarters Complex Sale $ 53.5 $ 0.82 $ 137.6 $ 2.09 Note: Earnings per share amounts are calculated independently for each component and may not be additive due to rounding 34
  • 35. Tax Rate Reconciliation YTD05 - Tax Rate Tax Rate Excluding Net Tax Benefit 39.0% Effect of Net Ohio Tax Change on Tax Rate (2.9)% Tax Rate as Reported 36.1% 35
  • 36. Return on Capital Reconciliation ($ Millions) 9/30/05 9/30/04 (1) (A) Net Earnings $ 230.8 $ 192.4 Restructuring Charges/(Recoveries), Net 2.2 (17.0) Income Taxes 118.3 114.7 Earnings Before Net Restructuring and Income Taxes 351.3 290.1 Interest Expense 113.8 101.2 Implied Interest Expense from Off-Balance Sheet Debt 7.0 9.2 Adjusted Earnings Before Income Taxes 472.1 400.5 Adjusted Income Taxes (182.7) (149.2) (1) Adjusted Net Earnings (Non-GAAP) (B) $ 289.4 $ 251.2 Average Total Debt $ 2,035.3 $ 1,822.6 Average Shareholders' Equity 1,530.6 1,365.3 (C) Total Capital (GAAP) 3,565.9 3,187.9 Average Off-Balance Sheet Debt 160.4 149.3 (2) (3) Adjusted Total Capital (Non-GAAP) (D) $ 3,726.3 $ 3,337.2 (A/C) Return on Capital (GAAP) 6.5% 6.0% (3) (4) (B/D) Return on Capital (Non-GAAP) 7.8% 7.5% (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 charge of $189 million as of 9/30/05 and $187 million as of 9/30/04. (4) The Company adopted return on capital, a non-GAAP financial measure, to determine how effectively capital is utilized across the business. Note: Totals may not foot due to rounding differences. 36
  • 37. Free Cash Flow Reconciliation ($ Millions) 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 9/30/04 9/30/05 Cash Provided by Operating Activities $ 1,023 $ 357 $ 615 $ 812 $ 883 $ 657 $ 469 Changes in Balance of Trade Receivables Sold (270) 235 110 - - - - Collections of Direct Finance Leases 67 66 66 61 64 47 50 Proceeds from Sales of Assets 230 175 153 210 331 263 254 Capital Expenditures (1) (1,296) (704) (582) (734) (1,092) (770) (1,106) Proceeds from Sale and Leaseback of Assets - - - 13 118 114 - Acquisitions (28) - - (97) (149) (149) (15) Other Investing, Net 4 (3) 4 4 1 - - Free Cash Flow (2) $ (270) $ 126 $ 366 $ 269 $ 156 $ 162 $ (348) (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 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. 37
  • 38. Debt to Equity Reconciliation ($ Millions) % 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 9/30/04 Equity 9/30/05 Equity Balance Sheet Debt $2,017 161% $1,709 139% $1,552 140% $1,816 135% $1,783 118% $1,720 119% $2,218 137% Receivables Sold 345 110 - - - - - PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 879 625 370 153 161 202 146 PV of contingent rentals under securitizations 209 441 311 - - - - Total Obligations (1) $3,450 275% $2,885 234% $2,233 201% $1,969 146% $1,944 129% $1,922 133% $2,364 146% (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. 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. 38
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