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 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, availability of heavy- and
medium duty vehicles, increases in fuel prices, availability of qualified drivers, the Company’s ability to
create operating synergies in connection with its acquisitions, our ability to manage our cost structure and
changes in government regulations, including regulations regarding vehicle emissions, drivers’ hours of
service and security regulations issued by the Department of Homeland Security. 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 the Company’s business. Accordingly, the
Company undertakes no obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
2
4. 1st Quarter Results Overview
► Earnings per diluted share were $0.64, up from $0.53 in 1Q04
– 1Q05 includes $0.02 one-time recovery of prior years’ project costs
from a customer
– 1Q04 included $0.01 gain on sale of a portion of the headquarters
complex
► Fleet Management Solutions total revenue up 10% and operating
revenue up 5% vs. prior year
– Lease revenue up year-over-year due primarily to the acquisition
completed on March 1, 2004
– Commercial rental revenue grew 12% vs. prior year; increases in
activity levels and higher pricing
► Fleet Management Solutions net before tax earnings (NBT) up 28%
– FMS NBT percent of operating revenue up 180 basis points to 10.2%
4
5. 1st Quarter Results Overview (cont’d)
► Fleet Management Solutions earnings positively impacted by vehicle
gains, improved rental results and acquisitions
► Supply Chain Solutions revenue up 8% vs. prior year reflecting impact
of new sales activity and customer expansions
► Supply Chain Solutions earnings down vs. prior year reflecting lower
margins in certain automotive accounts, partially offset by new
business
► Dedicated Contract Carriage operating revenue flat vs. prior year;
impact of higher fuel costs passed through to customers offset by non-
renewal of certain contracts
► Dedicated Contract Carriage earnings down vs. prior year due to
revenue decline from non-renewal of certain contracts and higher
overhead expenses
5
6. Earnings Per Share
First Quarter
2005 2004
Earnings Per Share $ 0.64 $ 0.53
(1)
Earnings Per Share Excluding Headquarters Complex Sale $ 0.64 $ 0.52
Memo:
Average Shares (Millions) - Diluted 65.1 66.1
Tax Rate 38.3% 37.5%
(1) (2)
Return on Capital 7.8% 6.8%
(1)
Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures
(2)
Calculated based on a 12-month rolling period
6
7. Business Segment
($ Millions)
First Quarter
2005 2004 % B/(W)
Revenue:
Fleet Management Solutions $ 924.6 $ 841.5 10%
Supply Chain Solutions 346.8 321.1 8%
Dedicated Contract Carriage 128.0 126.4 1%
Eliminations (83.8) (76.7) (9)%
Total Revenue $ 1,315.6 $ 1,212.3 9%
Segment Net Before Tax Earnings:
Fleet Management Solutions $ 70.9 $ 55.4 28%
Supply Chain Solutions 6.5 7.2 (10)%
Dedicated Contract Carriage 5.9 6.8 (13)%
Eliminations (7.6) (7.3) (3)%
75.7 62.1 22%
Central Support Services (Unallocated Share) (8.6) (7.2) (20)%
Earnings Before Restructuring and Income Taxes 67.1 54.9 22%
(1)
Restructuring and Other Recoveries, Net 0.1 1.1 NM
Earnings Before Incom e Taxes 67.2 56.0 20%
Provision for Incom e Taxes (25.7) (21.0) (22)%
Net Earnings $ 41.5 $ 35.0 18%
(2)
Net Earnings Excluding Headquarters Complex Sale $ 41.5 $ 34.4 20%
(1)
Allocation of Restructuring and Other Charges, Net across business segments was as follows: FMS - $(0.1) in 2005 and
FMS - $(0.1) and CSS - $(1.0) in 2004
(2) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures
7
8. Fleet Management Solutions (FMS)
($ Millions)
First Quarter
2005 2004 % B/(W)
$ 441.7 $ 429.8 3%
Full Service Lease
33.4 33.3 0%
Contract Maintenance
49.0 44.5 10%
Contract-related Maintenance
152.7 135.9 12%
Commercial Rental
16.5 19.6 (16)%
Other
693.3 663.1 5%
Operating Revenue
231.3 178.4 30%
Fuel Revenue
(a)
$ 924.6 $ 841.5 10%
Total Revenue
$ 70.9 $ 55.4 28%
Segment Net Before Tax Earnings (NBT)
7.7% 6.6%
Segment NBT as % of Total Revenue
(b)
Segment NBT as % of Operating Revenue 10.2% 8.4%
(a) Refer to Appendix - FMS Revenue History for additional historical detail.
(b) 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 as a result of fluctuations in fuel services revenue.
8
9. Supply Chain Solutions (SCS)
($ Millions)
First Quarter
2005 2004 % B/(W)
U.S. Operating Revenue
$ 105.7 $ 102.4 3%
Automotive, Aerospace & Industrial
57.9 55.5 4%
High Tech & Consumer Industries
6.2 4.3 46%
Transportation Management
169.8 162.2 5%
U.S. Operating Revenue
67.6 69.2 (2)%
International Operating Revenue
(a)
237.4 231.4 3%
Operating Revenue
109.4 89.7 22%
Freight Under Management (FUM)
$ 346.8 $ 321.1 8%
Total Revenue
$ 6.5 $ 7.2 (10)%
Segment Net Before Tax Earnings (NBT)
1.9% 2.2%
Segment NBT as % of Total Revenue
(a)
Segment NBT as % of Operating Revenue 2.7% 3.1%
(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. FUM expense is deducted from total revenue to arrive at operating revenue as FUM expense is largely a
pass through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in FUM expense.
9
10. Dedicated Contract Carriage (DCC)
($ Millions)
First Quarter
2005 2004 % B/(W)
(a)
$ 124.8 $ 125.0 0%
Operating Revenue
3.2 1.4 129%
Freight Under Management (FUM)
$ 128.0 $ 126.4 1%
Total Revenue
$ 5.9 $ 6.8 (13)%
Segment Net Before Tax Earnings (NBT)
4.6% 5.3%
Segment NBT as % of Total Revenue
(a)
Segment NBT as % of Operating Revenue 4.7% 5.4%
(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. FUM expense is deducted from total revenue to arrive at operating revenue as FUM expense is largely a
pass through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in FUM expense.
10
11. Capital Expenditures
($ Millions)
First Quarter
2005
2005 2004 O/(U) 2004
Full Service Lease $ 272 $ 160 $ 112
Commercial Rental 211 101 110
Property, Plant & Equipment 23 11 12
Gross Capital Expenditures 506 272 234
Less: Proceeds from Sales of Assets 79 65 14
Net Capital Expenditures $ 427 $ 207 $ 220
Memo: Acquisitions $ 15 $ 147 $ (132)
11
12. Debt to Equity Ratio
($ Millions)
300%
(1)
250%
Total Obligations to Equity
200%
150%
Balance Sheet Debt to Equity
100%
50%
0%
2000 2001 2002 2003 2004 2005
3/31/05 12/31/04 3/31/04
Balance Sheet Debt $ 2,165.3 $ 1,783.2 $ 1,845.8
142% 118% 133%
Percent To Equity
Total Obligations (1) $ 2,326.6 $ 1,944.3 $ 1,971.7
(1)
152% 129% 142%
Percent To Equity
Total Equity $ 1,526.2 $ 1,510.2 $ 1,385.2
Note: Includes impact of accumulated net pension related equity charge of $189 million as of 3/31/05 and 12/31/04, and $187 million
as of 3/31/04.
(1) Non-GAAP financial measure; refer to Appendix – Non-GAAP Financial Measures.
Strong balance sheet to support profitable growth
12
13. Free Cash Flow
($ Millions)
First Quarter
2005 2004
(1)
$ 41 $ 35
Net Earnings
181 175
Depreciation
(13) (7)
Gains on Sale
2 -
Amortization and Other Non-Cash (Gains)/Charges (Net)
(2)
(442) (144)
Capital Expenditures
(15) (147)
Acquisitions
79 65
Proceeds from Sales of Assets
- 11
Proceeds from Sale and Leaseback of Assets
(233) (7)
Changes in Working Capital and Deferred Taxes
17 15
Collections of Direct Finance Leases
- 1
Other, Net
(3)
Free Cash Flow $ (383) $ (3)
(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
13
14. Contents
► First Quarter Results Overview
► Asset Management Update
► Earnings Outlook
►Q & A
14
15. Asset Management Update
► The overall number of vehicles sold was 4,965; up 21% compared
with prior year
– Used tractor retail sales proceeds up 16% per unit vs. prior year period
– Used truck retail sales proceeds up 10% per unit vs. prior year period
► Vehicles not yet earning revenue are 2,306; up 922 over prior year
reflecting higher lease sales and replacement activity
► Vehicles no longer earning revenue are 7,925; up 661 or 9% over prior
year driven primarily by a larger used vehicle inventory
– 4,895 of these units are held for sale at the used truck centers
Note: U.S. only
15
16. Contents
► First Quarter Results Overview
► Asset Management Update
► Earnings Outlook
►Q & A
16
17. Earnings Outlook
(Earnings Per Share)
► Increasing full year 2005 earnings forecast by
$0.10 to $3.30- $3.40 per share.
► Current forecast for EPS is as follows:
2nd Quarter Full Year
$0.83 - $0.86 $3.30 - $3.40
2005 EPS Forecast
Note: EPS projections assume no impact from expensing of stock options.
17
20. Central Support Services (CSS)
($ Millions)
First Quarter
2005 2004 % B/(W)
$ 42.3 $ 41.1 3%
Allocated CSS Costs
8.6 7.2 20%
Unallocated CSS Costs
$ 50.9 $ 48.3 5%
Total CSS Costs
20
21. Balance Sheet
($ Millions)
March 31, December 31,
2005 2004
Cash and Cash Equivalents $ 84.2 $ 101.0
Other Current Assets 1,078.7 1,126.7
Revenue Earning Equipment, Net 3,552.1 3,331.7
Operating Property and Equipment, Net 484.8 479.6
Other Assets 597.3 598.9
Total Assets $ 5,797.1 $ 5,637.9
Current Liabilities $ 1,265.8 $ 1,454.8
Long-Term Debt 1,743.0 1,393.7
Other Non-Current Liabilities 1,262.1 1,279.2
Shareholders' Equity 1,526.2 1,510.2
Total Liabilities and Shareholders' Equity $ 5,797.1 $ 5,637.9
21
22. Financial Indicators Forecast (1)
Free Cash Flow (2) ($ Millions) Capital Expenditures ($ Millions)
1,800
500 $1,435
$366
$269 $1,289
PPE
$1,165
$156
1,200
$126
Other
- Rental
$725
$657
$600
Lease
600
($270)
($345)
(500)
Actual Actual Actual Actual Actual Forecast 0
2000 2001 2002 2003 2004 2005
Actual Actual Actual Actual Actual Forecast
2000 2001 2002 2003 2004 2005
Debt to Equity Ratio
300% 275%
234%
2 50 %
Total Obligations to Equity (2)
201%
200%
146% 129% 143%
150 %
Balance Sheet Debt to Equity
10 0 %
50 %
0%
Actual Actual Actual Actual Actual Forecast
2000 2001 2002 2003 2004 2005
Free Cash Flow and Debt to Equity include acquisitions. Capital Expenditures exclude acquisitions.
(1)
Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures.
(2)
22
23. FMS Revenue History
($ 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.
23
24. Asset Management Update
► Redeployments down 35% reflecting a smaller pool of available
redeployable vehicles
► Early terminations down 58% reflecting improved customer
retention levels
1Q01 1Q02 1Q03 1Q04 1Q05
1,903
2,000
1,790 1,672
1,800
1,467
1,356
1,600 1,374
1,322 1,350
1,400
1,131
1,200
948
883
1,000
811
709
800 657 609
600 474
374
343
400
252
215
200
0
Redeployments Extensions Early Terminations Early Replacements
Note: U.S. only
24
25. 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
7,180 7,264
7,040 7,061 7,000
6,652
7,000 6,368
6,066
5,469
5,000
5,215 3,485
Units held for sale (b) 4,274 4,187 4,895
3,000 2,306
1,937
1,698
1,704
1,384
1,253 1,079
1,174 1,091 1,015 924
1,068
855 548
1,000
-1,000
Dec 2002 Jun 2003 Sept 2003
Dec 2001 Mar 2002 June 2002 Sept 2002 Dec 2003
Mar 2003 Mar 2004 Jun 2004 Sept 2004 Dec 2004 Mar 2005
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
(a) U.S. only
(b) Excludes units for which customer deposits have been received.
25
26. 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 Reconciliation
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
26
27. Net Earnings and EPS Reconciliation
($ Millions or
$ Earnings Per Share)
1Q04 - 1Q04 -
Net Earnings EPS
Net Earnings $ 35.0 $ 0.53
Less: Gain on Sale of Headquarters, After Tax 0.6 0.01
Net Earnings Excluding Headquarters Complex Sale $ 34.4 $ 0.52
27
28. Return on Capital Reconciliation
($ Millions)
3/31/05 3/31/04
(1)
Earnings Before Cumulative Effect of Changes in Accounting Principles (GAAP) $ 222.1 $ 149.7
Restructuring (Recoveries), Net (16.6) (1.1)
Income Taxes 120.2 86.2
Earnings Before Net Restructuring (Recoveries), Income Taxes and 325.7 234.8
Cumulative Effect of Changes in Accounting Principles
Interest Expense 102.6 98.6
Implied Interest Expense from Off-Balance Sheet Debt 6.6 16.7
Adjusted Earnings Before Income Taxes 434.9 350.1
Adjusted Income Taxes (164.6) (127.9)
(1)
Adjusted Net Earnings (Non-GAAP) $ 270.3 $ 222.2
Average Total Debt $ 1,847.3 $ 1,691.1
Average Shareholders' Equity 1,450.4 1,255.5
Total Capital (GAAP) 3,297.7 2,946.6
Average Off-Balance Sheet Debt 157.2 318.3
(2) (3)
Adjusted Total Capital (Non-GAAP) $ 3,454.9 $ 3,264.9
Return on Capital (GAAP) 6.7% 5.1%
(3) (4)
) Return on Capital (Non-GAAP) 7.8% 6.8%
Adjusted earnings calculated based on a 12 month rolling period.
(1)
Average shareholders’ equity and average debt are calculated quarterly using a weighted average.
(2)
Shareholders’ equity reflects impact of accumulated pension related equity charge of $189 million as of 3/31/05 and $187 million as of 3/31/04.
(3)
The Company adopted return on capital, a non-GAAP financial measure, to determine how effectively capital is utilized across the business.
(4)
Note: Totals may not foot due to rounding differences.
28
29. Free Cash Flow Reconciliation
($ Millions)
12/31/00 12/31/01 12/31/02 12/31/03 3/31/04 12/31/04 3/31/05
Cash Provided by Operating Activities $ 1,023 $ 357 $ 615 $ 812 $ 196 $ 883 $ (22)
Changes in Balance of Trade Receivables Sold (270) 235 110 - - - -
Collections of Direct Finance Leases 67 66 66 61 15 64 17
Proceeds from Sales of Assets 230 175 153 223 65 352 79
Capital Expenditures (1) (1,296) (704) (582) (734) (144) (1,092) (442)
Proceeds from Sale and Leaseback of Assets - - - - 11 97 -
Acquisitions (28) - - (97) (147) (149) (15)
Other Investing, Net 4 (3) 4 4 1 1 -
(2)
Free Cash Flow $ (270) $ 126 $ 366 $ 269 $ (3) $ 156 $ (383)
(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.
29
30. 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 3/31/04 Equity 12/31/04 Equity 3/31/05 Equity
Balance Sheet Debt $2,017 161% $1,709 139% $1,552 140% $1,816 135% $1,846 133% $1,783 118% $2,165 142%
Receivables Sold 345 110 - - - - -
PV of minimum lease
payments and
guaranteed residual
values under
operating leases for
vehicles 879 625 370 153 126 161 162
PV of contingent
rentals under
securitizations 209 441 311 - - - -
Total Obligations (1) $3,450 275% $2,885 234% $2,233 201% $1,969 146% $1,972 142% $1,944 129% $2,327 152%
(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.
30
