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, our failure to successfully implement
sales growth initiatives in our Fleet Management Solutions business segment, unexpected reserves or
write-offs due to the deterioration of the credit worthiness or bankruptcy of customers, changes in
financial, tax or regulatory requirements or changes in customers’ business environments that will limit
their ability to commit to long-term vehicle leases, changes in economic and market conditions affecting
the commercial rental market or the sale of used vehicles, the effect of severe weather events, labor
strikes or work stoppages affecting our or our customers’ business operations, adequacy of accounting
estimates, reserve and accruals particularly with respect to pension, taxes, insurance and revenue,
changes in general economic conditions, sudden or unusual changes in fuel prices, availability of
qualified drivers, our ability to manage our cost structure, new accounting pronouncements, rules or
interpretations, changes in government regulations including regulations regarding vehicle emissions and
the risks described in our filings with the Securities and Exchange Commission. 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 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 a result of new
information, future events, or otherwise.
2
3. Contents
► Third Quarter 2007 Results Overview
► Asset Management Update
► Earnings Outlook
►Q & A
3
4. 3rd Quarter Results Overview
► Earnings per diluted share were $1.11 versus $1.06 in 3Q06
– 3Q07 included $0.03 net charge for restructuring costs, partially offset by gain on property sale
– 3Q06 included $0.06 related to pension accounting charge
► Comparable earnings per diluted share were $1.14, up 2% from $1.12 in 3Q06
► Total revenue up 2% (and operating revenue up 3%) as a result of contractual revenue growth in
the Supply Chain and Fleet Management Solutions business segments as well as favorable
foreign exchange rate movements
► Fleet Management Solutions (FMS) total revenue down 1% (but operating revenue up 1%) vs.
prior year
– Fuel revenue down 5%
– Foreign exchange impact of 1%
► Contractual revenue increased 7%
• Full service lease revenue up 7% and contract maintenance revenue up 10%
► Commercial rental revenue down 15%
► FMS net before tax earnings (NBT) down 10%
– FMS NBT percent of operating revenue down 150 basis points to 12.3%
► FMS earnings negatively impacted by lower commercial rental, used vehicle sales and fuel
results. Negative impacts partially offset by improved contractual business performance, and
lower expenses for pension, sales/marketing and depreciation policy changes
4
5. 3rd Quarter Results Overview (cont’d)
► Supply Chain Solutions (SCS) total revenue up 8% (and operating revenue up 9%) vs.
prior year, reflecting new/expanded business particularly in international markets,
partially offset by a significant automotive plant closure and lower volumes in U.S. high
tech/telecom
► SCS net before tax earnings (NBT) up 6%
– SCS NBT percent of operating revenue down 20 basis points to 5.3%
► SCS earnings positively impacted by new/expanded business and lower incentive-
based compensation, partially offset by the automotive plant closure
► Dedicated Contract Carriage (DCC) total revenue down 2% (and operating revenue
down 1%) vs. prior year due to decreased subcontracted transportation revenue and
non-renewal of customer contracts
► DCC net before tax earnings (NBT) up 5%
– DCC NBT percent of operating revenue up 50 basis points to 8.8%
► DCC earnings positively impacted by improved operating performance and lower
incentive-based compensation
5
6. Key Financial Statistics
($ Millions, Except Per Share Amounts)
Third Quarter
2007 2006 % B/(W)
(1)(2)
Operating Revenue $ 1,170.7 $ 1,139.6 3%
Fuel Services and Subcontracted Transportation Revenue 477.0 480.9 (1%)
Total Revenue $ 1,647.7 $ 1,620.5 2%
Earnings Per Share $ 1.11 $ 1.06 5%
(1)
Comparable Earnings Per Share $ 1.14 $ 1.12 2%
Memo:
Average Shares (Millions) - Diluted 59.0 61.7
Tax Rate 37.3% 39.2%
(1)
Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable net earnings exclude third quarter restructuring costs and property gain in
2007 and pension charge in 2006.
(2)
The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the business and as a measure of sales activity. Fuel
services revenue net of related intersegment billings, 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. Subcontracted
transportation revenue is excluded from the operating revenue computation as it is largely a pass through to customers and the Company realizes minimal changes in
profitability as a result of fluctuations in subcontracted transportation.
6
7. Key Financial Statistics
($ Millions, Except Per Share Amounts)
Year-to-Date
2007 2006 % B/(W)
(1)(2)
Operating Revenue $ 3,447.0 $ 3,308.2 4%
Fuel Services and Subcontracted Transportation Revenue 1,452.8 1,404.4 3%
Total Revenue $ 4,899.8 $ 4,712.6 4%
Earnings Per Share $ 3.01 $ 2.97 1%
(1)
Comparable Earnings Per Share $ 3.04 $ 2.91 4%
Memo:
Average Shares (Millions) - Diluted 60.4 61.7
Tax Rate 38.1% 37.1%
(1)
Adjusted Return on Capital 7.4% 8.0%
(1)
Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable net earnings exclude third quarter restructuring costs and property gain in
2007 and pension charge in 2006.
(2)
The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the business and as a measure of sales activity. Fuel
services revenue net of related intersegment billings, 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. Subcontracted
transportation revenue is excluded from the operating revenue computation as it is largely a pass through to customers and the Company realizes minimal changes in
profitability as a result of fluctuations in subcontracted transportation.
7
8. Business Segment
($ Millions)
Third Quarter
Mem o: Total Revenue
2007 2006 % B/(W) 2007 2006 % B/(W)
(1)
Operating Revenue :
Fleet Managem ent Solutions $ 758.5 $ 750.1 1% $ 1,051.9 $ 1,060.0 (1)%
Supply Chain Solutions 325.3 299.1 9% 554.0 513.8 8%
Dedicated Contract Carriage 138.9 140.7 (1)% 143.8 146.4 (2)%
Elim inations (52.0) (50.3) (3)% (102.0) (99.7) (2)%
Total $ 1,170.7 $ 1,139.6 3% $ 1,647.7 $ 1,620.5 2%
Segm ent Net Before Tax Earnings:
Fleet Managem ent Solutions $ 93.2 $ 103.7 (10)%
Supply Chain Solutions 17.4 16.4 6%
Dedicated Contract Carriage 12.3 11.7 5%
Elim inations (6.4) (8.6) 25%
116.5 123.2 (5)%
Central Support Services (Unallocated Share) (10.1) (9.8) (2)%
(1)
Earnings Before Restructuring and Incom e Taxes 106.4 113.4 (6)%
(2)
Restructuring and Other (Charges)/Recoveries, Net and Other Item s (1.9) (6.0) NM
Earnings Before Incom e Taxes 104.5 107.4 (3)%
Provision for Incom e Taxes (39.0) (42.1) 8%
Net Earnings $ 65.5 $ 65.3 0%
(1)
Com parable Net Earnings $ 67.2 $ 68.8 (2)%
Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable net earnings exclude third quarter restructuring costs and property gain in
(1)
2007 and pension charge in 2006.
Our primary measure of segment financial performance excludes restructuring and other (charges)/recoveries, net and other items including gain on sale of property in
(2)
2007 and pension accounting charge in 2006; however, the applicable portion of the restructuring and other (charges)/recoveries, net and other items that related to each
segment was as follows: FMS – $5.7, SCS – ($5.6), DCC – ($1.1) and CSS – ($0.9) in 2007; FMS – ($6.0) in 2006.
8
9. Business Segment
($ Millions)
Year-to-Date
Mem o: Total Revenue
2007 2006 % B/(W) 2007 2006 % B/(W)
(1)
Operating Revenue :
Fleet Managem ent Solutions $ 2,214.7 $ 2,179.7 2% $ 3,077.3 $ 3,090.7 0%
Supply Chain Solutions 977.3 862.8 13% 1,704.4 1,485.4 15%
Dedicated Contract Carriage 412.6 413.3 0% 423.4 428.6 (1)%
Elim inations (157.6) (147.6) (7)% (305.3) (292.1) (5)%
Total $ 3,447.0 $ 3,308.2 4% $ 4,899.8 $ 4,712.6 4%
Segm ent Net Before Tax Earnings:
Fleet Managem ent Solutions $ 271.4 $ 273.5 (1)%
Supply Chain Solutions 44.3 45.1 (2)%
Dedicated Contract Carriage 35.2 31.4 12%
Elim inations (23.2) (24.6) 6%
327.7 325.4 1%
Central Support Services (Unallocated Share) (30.4) (28.4) (7)%
(1)
Earnings Before Restructuring and Incom e Taxes 297.3 297.0 0%
(2)
Restructuring and Other (Charges)/Recoveries, Net and Other Item s (3.6) (5.8) NM
Earnings Before Incom e Taxes 293.7 291.2 1%
Provision for Incom e Taxes (111.8) (108.1) (3)%
Net Earnings $ 181.9 $ 183.1 (1)%
(1)
Com parable Net Earnings $ 183.6 $ 179.9 2%
Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. Comparable net earnings exclude third quarter restructuring costs and property gain in 2007 and tax
(1)
changes and pension charge in 2006.
Our primary measure of segment financial performance excludes restructuring and other (charges)/recoveries, net and other items including gain on sale of property in 2007 and
(2)
pension accounting charge in 2006; however, the applicable portion of the restructuring and other (charges)/recoveries, net and other items that related to each segment was as
follows: FMS – $4.2, SCS – ($5.8), DCC – ($1.1) and CSS – ($0.9) in 2007; and FMS – ($5.9) and SCS – $0.1 in 2006.
9
10. Capital Expenditures
($ Millions)
Year-to-Date
2007 $
2007 2006 O/(U) 2006
Full Service Lease $ 725 $ 1,020 $ (295)
Commercial Rental 200 190 10
Operating Property and Equipment 57 53 4
Gross Capital Expenditures 982 1,263 (281)
Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 297 257 40
Less: Proceeds from Sale and Leaseback of Revenue Earning Equipment 150 - 150
Net Capital Expenditures $ 535 $ 1,006 $ (471)
Memo: Acquisitions $ - $ 4 $ (4)
10
11. Cash Flow
($ Millions)
Year-to-Date
2007 2006
Net Earnings $ 182 $ 183
Depreciation 606 550
Gains on Vehicle Sales, Net (37) (39)
Amortization and Other Non-Cash Charges, Net 9 22
Changes in Working Capital and Deferred Taxes 77 (104)
Cash Provided by Operating Activities 837 612
Proceeds from Sales (Primarily Revenue Earning Equipment) 297 257
Sale and Leaseback of Revenue Earning Equipment 150 -
Collections of Direct Finance Leases 47 51
Other, Net 1 2
(1)
Total Cash Generated 1,332 922
(2)
Capital Expenditures (1,093) (1,172)
Acquisitions - (4)
(1)
Free Cash Flow $ 239 $ (254)
(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
11
12. Debt to Equity Ratio
($ Millions)
300% 275%
275%
234%
250% (1)
Total Obligations to Equity
201%
200% 169%
168%
151%
146% Balance Sheet Debt to Equity
129%
150%
100%
50%
0%
12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 9/30/07 Long
Term
Target
(2)
Midpoint
9/30/07 12/31/06 9/30/06
Balance Sheet Debt $ 2,816 $ 2,817 $ 2,632
158% 164% 160%
Percent To Equity
(1)
Total Obligations $ 3,014 $ 2,895 $ 2,724
(1)
169% 168% 166%
Percent To Equity
Total Equity $ 1,786 $ 1,721 $ 1,645
Note: Includes impact of accumulated net pension related equity charge of $182 million as of 9/30/07, $201 million as of 12/31/06, and $221 million as of 9/30/06.
(1) Non-GAAP financial measure. Total obligations include the present value of minimum lease payments and guaranteed residual values under operating leases of
$198 million at 9/30/07, $78 million at 12/31/06 and $92 million at 9/30/06.
(2) Represents long term total obligations to equity target of 250 - 300% while maintaining a strong investment grade rating.
12
13. Contents
► Third Quarter 2007 Results Overview
► Asset Management Update
► Earnings Outlook
►Q & A
13
14. (1)
Asset Management Update
► The number of used vehicles sold in the third quarter was 6,581,
up 38% compared with prior year
► Proceeds per unit for tractors and trucks were down 17% and 10%,
respectively, in the third quarter compared with prior year
– Excluding wholesaling type activity, retail pricing for both tractors and trucks was
down 3% from the prior year
► Units held for sale were 7,607 at quarter end, down 27% from 10,371 units
held for sale at the end of the second quarter
► Vehicles no longer earning revenue were 7,638 at quarter end; down 3,047
from the end of the second quarter
– Vehicles no longer earning revenue were up 1,936 vs. prior year driven primarily by
a higher used truck center inventory
► Average commercial rental fleet was down 12% year-over-year
(1) All information presented on this page only is for the U.S. fleet and excludes Canadian and U.K. operations.
14
15. Contents
► Third Quarter 2007 Results Overview
► Asset Management Update
► Earnings Outlook
►Q & A
15
16. (1)
Comparable EPS Forecast
($ Earnings Per Share)
► Reaffirming full year 2007 comparable earnings forecast of $4.10 to $4.15 per share
► Current forecast for comparable EPS is as follows:
Fourth
Quarter Full Year
2007 Comparable EPS Forecast $ 1.06 - 1.11 $ 4.10 - 4.15
2006 Comparable EPS $ 1.08 $ 3.99
(1) Non-GAAP financial measure. Excludes restructuring charge and gain on property sale in 2007, and tax changes and pension charge in 2006.
16
18. Appendix
Business Segment Detail
Central Support Services
Balance Sheet
Asset Management
Financial Indicators Forecast
Non-GAAP Financial Measures & Reconciliations
18
19. Fleet Management Solutions (FMS)
($ Millions)
Third Quarter
2007 2006 % B/(W)
$ 496.2 $ 464.3 7%
Full Service Lease
40.9 37.3 10%
Contract Maintenance
537.1 501.6 7%
Contractual Revenue
48.1 49.3 (3)%
Contract-related Maintenance
155.0 181.5 (15)%
Commercial Rental
18.3 17.7 3%
Other
(a)
758.5 750.1 1%
Operating Revenue
293.4 309.9 (5)%
Fuel Services Revenue
$ 1,051.9 $ 1,060.0 (1)%
Total Revenue
$ 93.2 $ 103.7 (10)%
Segment Net Before Tax Earnings (NBT)
8.9% 9.8%
Segment NBT as % of Total Revenue
(a)
12.3% 13.8%
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 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.
19
20. Fleet Management Solutions (FMS)
($ Millions)
Year-to-Date
2007 2006 % B/(W)
$ 1,461.4 $ 1,375.8 6%
Full Service Lease
118.1 104.0 14%
Contract Maintenance
1,579.5 1,479.8 7%
Contractual Revenue
150.3 144.4 4%
Contract-related Maintenance
431.3 502.3 (14)%
Commercial Rental
53.6 53.2 1%
Other
(a)
2,214.7 2,179.7 2%
Operating Revenue
862.6 911.0 (5)%
Fuel Services Revenue
$ 3,077.3 $ 3,090.7 0%
Total Revenue
$ 271.4 $ 273.5 (1)%
Segment Net Before Tax Earnings (NBT)
8.8% 8.9%
Segment NBT as % of Total Revenue
(a)
Segment NBT as % of Operating Revenue 12.3% 12.5%
(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 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.
20
21. Supply Chain Solutions (SCS)
($ Millions)
Third Quarter
2007 2006 % B/(W)
U.S. Operating Revenue
$ 135.3 $ 122.8 10%
Automotive & Industrial
70.6 74.6 (5)%
High Tech & Consumer Industries
7.8 7.9 (1)%
Transportation Management
(a)
213.7 205.3 4%
U.S. Operating Revenue
(a)
111.6 93.8 19%
International Operating Revenue
(a)
325.3 299.1 9%
Operating Revenue
228.7 214.7 7%
Subcontracted Transportation
$ 554.0 $ 513.8 8%
Total Revenue
$ 17.4 $ 16.4 6%
Segment Net Before Tax Earnings (NBT)
3.1% 3.2%
Segment NBT as % of Total Revenue
(a)
5.3% 5.5%
Segment NBT as % of Operating Revenue
$ 29.7 $ 26.6 (12)%
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.
21
22. Supply Chain Solutions (SCS)
($ Millions)
Year-to-Date
2007 2006 % B/(W)
U.S. Operating Revenue
$ 410.4 $ 367.9 12%
Automotive & Industrial
219.6 217.8 1%
High Tech & Consumer Industries
24.3 22.5 8%
Transportation Management
(a)
654.3 608.2 8%
U.S. Operating Revenue
(a)
323.0 254.6 27%
International Operating Revenue
(a)
977.3 862.8 13%
Operating Revenue
727.1 622.6 17%
Subcontracted Transportation
$ 1,704.4 $ 1,485.4 15%
Total Revenue
$ 44.3 $ 45.1 (2)%
Segment Net Before Tax Earnings (NBT)
2.6% 3.0%
Segment NBT as % of Total Revenue
(a)
4.5% 5.2%
Segment NBT as % of Operating Revenue
$ 88.9 $ 79.3 (12)%
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. Dedicated Contract Carriage (DCC)
($ Millions)
Third Quarter
2007 2006 % B/(W)
(a)
Operating Revenue $ 138.9 $ 140.7 (1)%
4.9 5.7 (15)%
Subcontracted Transportation
$ 143.8 $ 146.4 (2)%
Total Revenue
$ 12.3 $ 11.7 5%
Segment Net Before Tax Earnings (NBT)
8.5% 8.0%
Segment NBT as % of Total Revenue
(a)
Segment NBT as % of Operating Revenue 8.8% 8.3%
$ 26.7 $ 27.8 4%
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.
23
24. Dedicated Contract Carriage (DCC)
($ Millions)
Year-to-Date
2007 2006 % B/(W)
(a)
Operating Revenue $ 412.6 $ 413.3 0%
10.8 15.3 (30)%
Subcontracted Transportation
$ 423.4 $ 428.6 (1)%
Total Revenue
$ 35.2 $ 31.4 12%
Segment Net Before Tax Earnings (NBT)
8.3% 7.3%
Segment NBT as % of Total Revenue
(a)
Segment NBT as % of Operating Revenue 8.5% 7.6%
$ 77.9 $ 80.4 3%
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. Central Support Services (CSS)
($ Millions)
Third Quarter
2007 2006 % B/(W)
$ 36.6 $ 39.0 6%
Allocated CSS Costs
10.1 9.8 (2)%
Unallocated CSS Costs
$ 46.7 $ 48.8 4%
Total CSS Costs
25
29. (a)
Assets Under Management
($ Millions)
Forecast
Midpoint
(b)
2000 2001 2002 2003 2004 2005 2006 9/30/07 2007
Revenue Earning Equipment $ 4,588 $ 4,148 $ 4,493 $ 5,809 $ 6,352 $ 6,658 $ 7,335 $ 7,247 $ 7,360
Direct Finance Leases 637 640 622 656 649 624 592 584 580
Operating Leases 1,805 2,140 1,511 286 300 252 214 301 301
Assets Under Management $ 7,030 $ 6,928 $ 6,626 $ 6,751 $ 7,301 $ 7,534 $ 8,141 $ 8,132 $ 8,241
(a) Assets under management represent the original cost of all vehicles owned and held under lease by Ryder.
(b) Excludes impact of foreign exchange movements in 2007.
29
30. (1)
Financial Indicators Forecast
($ Millions)
Total Cash Generated (2) Gross Capital Expenditures
$1,760
$1,635 Revenue Earning Equipment
$1,381 PP&E/Other $1,411
$1,255 $1,255
$1,289
$1,183
$1,091 $1,165
$1,054
$949
$835
$725
$657 $600
2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005 2006 2007
Forecast Forecast
Midpoint Midpoint
Memo: Free Cash Flow (2)
(3) (4)
(270) 131 367 260 140 (231) (444) 230
(1)(2)
Total Obligations to Equity Ratio
275% Equity
234% Total Obligations (2)
201%
168% 163%
151%
146%
Significant and predictable cash generation
129%
Invest in growth
Increase assets under management
2000 2001 2002 2003 2004 2005 2006 2007
Forecast Increase financial leverage
Midpoint
Memo: Assets Under Management
7,030 6,928 6,626 6,751 7,301 7,534 8,141 8,241
Free Cash Flow and Obligations to Equity include acquisitions. Gross Capital Expenditures exclude acquisitions.
(1)
Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures.
(2)
Includes $176 million payment to the IRS related to full resolution of 1998 - 2000 tax period matters.
(3)
30
Includes acquisition of Pollock NationaLease which closed in October 2007.
(4)
31. Non-GAAP Financial Measures
► This presentation includes “non-GAAP financial measures” as defined by SEC rules. As required by SEC rules, we
provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure and an
explanation why management believes that presentation of the non-GAAP financial measure provides useful
information to investors. Non-GAAP financial measures should be considered in addition to, but not as a substitute
for or superior to, other measures of financial performance prepared in accordance with GAAP.
► Specifically, the following non-GAAP financial measures are included in this presentation:
Reconciliation & Additional Information
Non-GAAP Financial Measure Comparable GAAP Measure Presented on Slide Titled Page
Operating Revenue Total Revenue Key Financial Statistics 6-7
Comparable Earnings Per Share / Comparable Net Earnings / Net Earnings Per Share EPS and Net Earnings Reconciliation 32
Net Earnings
Earnings Before Restructuring and Income Taxes Net Earnings Business Segment 8-9
Adjusted Return on Capital Net Earnings Adjusted Return on Capital Reconciliation 33
Total Cash Generated / Free Cash Flow Cash Provided by Operating Activities Cash Flow Reconciliation 34 - 36
Total Obligations / Total Obligations to Equity Balance Sheet Debt / Debt to Equity Debt to Equity Ratio 12
Debt to Equity Reconciliation 37 - 38
FMS / SCS / DCC Operating Revenue and Segment FMS / SCS / DCC Total Revenue and Segment NBT Fleet Management Solutions / Supply Chain 19 - 24
NBT as % of Operating Revenue as % of Total Revenue Solutions / Dedicated Contract Carriage
31
32. EPS and Net Earnings Reconciliation
($ Millions or
$ Earnings Per Share)
3Q07 - 3Q07 - YTD07 - YTD07 -
Net Earnings EPS Net Earnings EPS
Net Earnings $ 65.5 $ 1.11 $ 181.9 $ 3.01
3Q07 Restructuring Charge 7.8 0.13 7.8 0.13
Gain on Sale of Property (6.1) (0.10) (6.1) (0.10)
Comparable Net Earnings $ 67.2 $ 1.14 $ 183.6 $ 3.04
Full Year
3Q06 - 3Q06 - YTD06 - YTD06 - 2006
Net Earnings EPS Net Earnings EPS EPS
Net Earnings $ 65.3 $ 1.06 $ 183.1 $ 2.97 $ 4.04
Pension Accounting Charge 3.5 0.06 3.5 0.06 0.06
Tax Changes - - (6.8) (0.11) (0.11)
Comparable Net Earnings $ 68.8 $ 1.12 $ 179.9 $ 2.91 $ 3.99
* Earnings per share amounts are calculated independently for each component and may not be additive due to rounding
32
33. Adjusted Return on Capital Reconciliation
($ Millions)
9/30/07 9/30/06
(1)
Net Earnings $ 248 $ 242
Discontinued Operations - (2)
Cumulative Effect of Changes in Accounting Principles - 2
Income Taxes 147 142
Adjusted Earnings Before Income Taxes 395 385
(2)
166 140
Adjusted Interest Expense
(3)
Adjusted Income Taxes (211) (203)
Adjusted Net Earnings $ 350 $ 323
Average Total Debt $ 2,830 $ 2,350
Average Off-Balance Sheet Debt 124 110
(4)
Average Adjusted Total Shareholders' Equity 1,750 1,577
Adjusted Average Total Capital $ 4,704 $ 4,037
(5)
Adjusted Return on Capital 7.4% 8.0%
Earnings calculated based on a 12-month rolling period.
(1)
Interest expense includes implied interest on off-balance sheet vehicle obligations.
(2)
Income taxes were calculated using the effective income tax rate for the period exclusive of benefits from tax law changes recognized in 2006.
(3)
Represents shareholders’ equity adjusted for discontinued operations, accounting changes and the tax benefits in those periods.
(4)
The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (including off-balance sheet debt)
(5)
and equity should be included in evaluating how effectively capital is utilized across the business.
Note: Prior year has been restated to conform with current year presentation
33
34. 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
Cash Provided by Operating Activities $ 1,023 $ 365 $ 617 $ 803 $ 867 $ 779 $ 854
Less: Changes in Balance of Trade Receivables Sold (270) 235 110 - - - -
Collections of Direct Finance Leases 67 66 66 61 64 70 66
230 173 152 210 331 334 333
Proceeds from Sales (Primarily Revenue Earning Equipment)
Proceeds from Sale and Leaseback of Assets - - - 13 118 - -
Other Investing, Net 4 (4) 4 4 1 - 2
(1)
1,054 835 949 1,091 1,381 1,183 1,255
Total Cash Generated
Capital Expenditures (2) (1,296) (704) (582) (734) (1,092) (1,399) (1,695)
Acquisitions (28) - - (97) (149) (15) (4)
(3)
Free Cash Flow $ (270) $ 131 $ 367 $ 260 $ 140 $ (231) $ (444)
Memo:
Depreciation Expense $ 580 $ 545 $ 552 $ 625 $ 706 $ 740 $ 743
Gains on Vehicle Sales, Net $ 19 $ 12 $ 14 $ 16 $ 35 $ 47 $ 51
The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance.
(1)
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 inflows.
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
(3)
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.
Amounts have not been recasted to give effect for the impact of foreign exchange movements on cash for which the impact is not expected to be significant.
(4)
34
35. Cash Flow Reconciliation
($ Millions)
M idpoint
12/31/07
Cash Provided by Operating Activities $ 1,100
Collections of Direct Finance Leases 64
Proceeds from Sales (Primarily Revenue Earning Equipment) 320
Proceeds from Sale and Leaseback of Revenue Earning Equipment 150
(1)
1,634
Total Cash Generated
(2)
Capital Expenditures (1,330)
(3)
Acquisitions (74)
(4)
Free Cash Flow $ 230
The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of
(1)
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 inflows.
Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment.
(2)
Represents acquisition of Pollock NationaLease which closed in October 2007.
(3)
The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative
(4)
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.
35
36. Cash Flow Reconciliation
($ Millions)
9/30/07 9/30/06
Cash Provided by Operating Activities $ 837 $ 612
Collections of Direct Finance Leases 47 51
Proceeds from Sales (Primarily Revenue Earning Equipment) 297 257
Sale and Leaseback of Revenue Earning Equipment 150 -
Other Investing, net 1 2
(1)
Total Cash Generated 1,332 922
(2)
Capital Expenditures (1,093) (1,172)
Acquisitions - (4)
(3)
Free Cash Flow $ 239 $ (254)
The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of
(1)
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 inflows.
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
(3)
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.
36
37. 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 12/31/05 Equity 12/31/06 Equity
Balance Sheet Debt $2,017 161% $1,709 139% $1,552 140% $1,816 135% $1,783 118% $2,185 143% $2,817 164%
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
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% $2,302 151% $2,895 168%
(1) The Company uses total obligations and total obligations to equity, non-GAAP financial measures, which include certain off-balance sheet
financial obligations relating to revenue earning equipment. Management believes these non-GAAP financial measures are useful to investors
as they are more complete measures of the Company’s existing financial obligations and help investors better assess the Company’s overall
leverage position.
Note: In connection with adopting FIN 46 effective July 1, 2003, the Company consolidated the vehicle securitization trusts previously disclosed as
off-balance sheet debt.
37
38. Debt to Equity Reconciliation
($ Millions)
Forecast
Midpoint % to
12/31/07 Equity
Balance Sheet Debt $ 2,857 154%
PV of minimum lease payments and
guaranteed residual values under
operating leases for vehicles 159
(1)
Total Obligations $ 3,016 163%
(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.
38
