ryderfinal2q06slides

Second Quarter 2006Earnings Conference Call

July 27, 2006

2

Safe Harbor

Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and 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 FMS 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, 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 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 and accruals particularly with respect to pension, taxes and revenue, changes in general economic conditions, sudden changes in fuel prices, availability of qualified drivers, our ability to manage our cost structure, 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.

3

Contents

► Second Quarter 2006 Results Overview► Asset Management Update► Earnings Outlook► Q & A

4

2nd Quarter Results Overview

► Earnings per diluted share were $1.13, up 15% from $0.98 in 2Q05

– 2Q06 and 2Q05 included $0.11 and $0.12 income tax benefit, respectively

► Comparable earnings per diluted share were $1.02, up 19% from $0.86 in 2Q05

► Total revenue up 15% and operating revenue up 6% reflecting growth in all business segments

► Fleet Management Solutions (FMS) total revenue up 8% and operating revenue up 2% vs. prior year

– Full service lease revenue increased 3%

– Commercial rental revenue down 2%; higher pricing partially offsetting lower fleet count

► FMS net before tax earnings (NBT) up 7%

– FMS NBT percent of operating revenue up 60 basis points to 13.0%

► FMS earnings positively impacted by improved North American lease and rental results, partially offset by higher compensation related costs in North America and lower margins in the U.K. business

5

2nd Quarter Results Overview (cont’d)

► Supply Chain Solutions (SCS) total revenue up 34% (and operating revenue up 17%) vs. prior year, reflecting increased managed subcontracted transportation, higher volumes, and new and expanded business

► SCS net before tax earnings (NBT) up 117%

– SCS NBT percent of operating revenue up 290 basis points to 6.2%

– SCS NBT percent of operating revenue would be 5.3% excluding $2.5 million contract termination benefit

► SCS earnings positively impacted by higher volumes, and new and expanded business

► Dedicated Contract Carriage (DCC) total revenue up 7% (and operating revenue up 7%) vs. prior year; increase due to higher fuel costs passed through to customers as well as expanded and new business

► DCC net before tax earnings (NBT) up 16%

– DCC NBT percent of operating revenue up 60 basis points to 8.0%

► DCC earnings positively impacted by revenue growth from new and expanded business

► Central Support Services costs unchanged from prior year

– 2Q06 included a $1.3 million charge associated with a discontinued operation

6

Key Financial Statistics

2006 2005 % B/(W)Operating Revenue (1)(2) 1,111.1$ 1,048.8$ 6%Fuel Services and Subcontracted Transportation Revenue 484.6 341.0 42%

Total Revenue 1,595.7$ 1,389.8$ 15%

Earnings Per Share 1.13$ 0.98$ 15%Earnings Per Share Excluding Tax Changes (1) 1.02$ 0.86$ 19%

Memo:EPS Impact of Tax Changes 0.11$ 0.12$ Average Shares (Millions) - Diluted 62.0 64.7 Tax Rate 32.8% 30.1%

Second Quarter

(1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (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.

($ Millions, Except Per Share Amounts)

7

Key Financial Statistics

Year-to-Date

(1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (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.

2006 2005 % B/(W)Operating Revenue (1)(2) 2,168.6$ 2,056.4$ 5%Fuel Services and Subcontracted Transportation Revenue 923.4 649.0 42%

Total Revenue 3,092.0$ 2,705.4$ 14%

Earnings Per Share 1.91$ 1.61$ 19%Earnings Per Share Excluding Tax Changes (1) 1.80$ 1.50$ 20%

Memo:

($ Millions, Except Per Share Amounts)

EPS Impact of Tax Changes 0.11$ 0.12$ Average Shares (Millions) - Diluted 61.7 64.9 Tax Rate 35.9% 33.6%

Adjusted Return on Capital (1) 8.0% 7.7%

8

Business Segment

2006 2005 % B/(W) 2006 2005 % B/(W)Operating Revenue (1):

Fleet Management Solutions 730.1$ 719.3$ 2% 1,049.5$ 969.6$ 8%Supply Chain Solutions 291.3 249.2 17% 502.1 374.9 34%Dedicated Contract Carriage 139.1 129.8 7% 143.5 133.8 7%Eliminations (49.4) (49.5) - (99.4) (88.5) (12)% Total 1,111.1$ 1,048.8$ 6% 1,595.7$ 1,389.8$ 15%

Segment Net Before Tax Earnings:Fleet Management Solutions 94.9$ 88.9$ 7%Supply Chain Solutions 18.1 8.3 117%Dedicated Contract Carriage 11.2 9.7 16%Eliminations (8.3) (7.5) (11)%

115.9 99.4 17%Central Support Services (Unallocated Share) (11.3) (9.0) (26)%Earnings Before Restructuring and Income Taxes (1) 104.6 90.4 16%

Restructuring and Other Recoveries, Net - 0.1 NA

Earnings Before Income Taxes 104.6 90.5 15%Provision for Income Taxes (34.3) (27.2) (26)%

Net Earnings 70.3$ 63.3$ 11%

Net Earnings Excluding Tax Changes (1) 63.5$ 55.7$ 14%

Memo: Total Revenue

Second Quarter

(1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures.

($ Millions)

9

Business Segment

Year-to-Date($ Millions)

2006 2005 % B/(W) 2006 2005 % B/(W)Operating Revenue (1):

Fleet Management Solutions 1,429.6$ 1,412.7$ 1% 2,030.6$ 1,894.2$ 7%Supply Chain Solutions 563.6 487.3 16% 971.6 721.7 35%Dedicated Contract Carriage 272.6 254.6 7% 282.2 261.8 8%Eliminations (97.2) (98.2) 1% (192.4) (172.3) (12)% Total 2,168.6$ 2,056.4$ 5% 3,092.0$ 2,705.4$ 14%

Segment Net Before Tax Earnings:Fleet Management Solutions 169.8$ 159.8$ 6%Supply Chain Solutions 28.7 14.8 94%Dedicated Contract Carriage 19.6 15.5 26%Eliminations (16.0) (15.0) (7)%

202.1 175.1 15%Central Support Services (Unallocated Share) (18.5) (17.5) (5)%Earnings Before Restructuring and Income Taxes (1) 183.6 157.6 17%

Restructuring and Other Recoveries, Net 0.2 0.2 NM

Earnings Before Income Taxes 183.8 157.8 16%Provision for Income Taxes (65.9) (53.0) (24)%

Net Earnings 117.9$ 104.8$ 12%

Net Earnings Excluding Tax Changes (1) 111.1$ 97.2$ 14%

Memo: Total Revenue


10

Capital Expenditures

2006 $2006 2005 O/(U) 2005

Full Service Lease 598$ 537$ 61$

Commercial Rental 189 243 (54)

Operating Property and Equipment 28 41 (13)

Gross Capital Expenditures 815 821 (6)

Less: Proceeds from Sales 180 171 9

Net Capital Expenditures 635$ 650$ (15)$

Memo: Acquisitions 4$ 15$ (11)$

Year-to-Date

($ Millions)

11

Free Cash Flow

2006 2005

Net Earnings 117.9$ 104.8$ Depreciation 361.6 368.2

Gains on Vehicle Sales, Net (27.8) (25.9) Amortization and Other Non-Cash Charges, Net 9.6 4.9

Changes in Working Capital and Deferred Taxes (163.0) (287.2) Cash Provided by Operating Activities 298.3 164.8

Capital Expenditures (1) (776.1) (779.4)

Acquisitions (4.1) (14.7) Proceeds from Sales (Primarily Revenue Earning Equipment) 179.6 170.6

Collections of Direct Finance Leases 33.8 33.4

Other Investing, Net 1.6 - Free Cash Flow (2) (266.9)$ (425.3)$

(1) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment(2) Non-GAAP financial measure; refer to Appendix – Non-GAAP Financial Measures

Year-to-Date ($ Millions)

12

0%

50%

100%

150%

200%

250%

300%

12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 6/30/06 LongTerm

TargetMidpoint

Total Obligations to Equity

Balance Sheet Debt to Equity

Debt to Equity Ratio

6/30/06 12/31/05 6/30/05Balance Sheet Debt 2,489.1$ 2,185.4$ 2,223.5$ Percent To Equity 151% 143% 143%

Total Obligations (1) 2,577.9$ 2,302.4$ 2,369.1$ Percent To Equity (1) 156% 151% 152%

Total Equity 1,648.2$ 1,527.5$ 1,557.0$

Note: Includes impact of accumulated net pension related equity charge of $221 million as of 6/30/06 and 12/31/05, and $189 million as of 6/30/05.

(1) Non-GAAP financial measure; refer to Appendix – Non-GAAP Financial Measures.(2) Represents long term total obligations to equity target of 250 - 300% while maintaining a strong investment grade rating.

(1)

(2)

($ Millions)

13

Full Service Lease - Growth 120$ - 205 310$ - 395 Full Service Lease - Replacement 1,110 1,130

Total Full Service Lease 1,230 - 1,315 1,440 - 1,525

Commercial Rental 220 200

Operating Property and Equipment 100 100

Gross Capital Expenditures 1,550 - 1,635 1,740 - 1,825

Less: Proceeds from Sales 380 360 Net Capital Expenditures 1,170$ - 1,255 1,380$ - 1,465

Free Cash Flow (1) (90)$ - (170) (260)$ - (340)

Total Obligations to Equity (1) 139 - 143% 157 - 162%

Prior Forecast Current Forecast

Capital Expenditures Outlook

► Strong new lease sales activity driving higher expected full year 2006 capital spending.

► No material change in replacement lease capital forecast.

► Increased capital spending would largely impact 2007 lease revenue and earnings.– No material change to 2006 lease revenues due to timing of sales activity and vehicle

delivery times.

($ Millions)


14

Ryder Cash & Growth Equation Outlook

Cash Capital Expenditures

Significant and predictable cash generation … Investing in equipment replacement and growth …

Net income, depreciation & used vehicles driving cash Growth Exceeding 2006 Plan

Free CashFlow (d) $140 MM $(221) MM (c) $(300) MM

(a) Used vehicles sales proceeds(b) Includes cash from operations plus collection of direct finance leases(c) Includes $176 million payment to the IRS related to full resolution of 1998 - 2000 tax period matters.(d) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures

$0.3$0.3

$0.4

2004 2005 2006

$B

UVS (a)

Operating Cash Flow (b)

$1.3$1.2

$1.4

$0.1$0.1

$0.1

2004 2005 2006

$1.3 $1.4

$1.8

$B

Property & Equipment

Revenue Earning Equipment

On PlanVariance vs. Plan+ 0.2 B

Variance vs. Plan- 0.2 B

Midpoint

15

2004 2005 2006 2004 2005 2006

Driving growth in Assets Under Management (AUM) …

Driving income growth and a strong balance sheet

Total Obligations/ Equity % (a) 129% 151% 159%

Assets Under Management Earnings Before Income Taxes

8.2%

20.8%

$ B $ MM

Driving GrowthWell Positioned for 2007AUM is Growth Engine

Ryder Cash & Growth Equation Outlook

$7.3

$7.5

$7.9

$331

$357

$400Variance vs. Plan+ 0.2 B

Earnings Forecast

Above Plan

Midpoint

(a) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures

16

Contents


17

Asset Management Update

Note: U.S. only

► The overall number of used vehicles sold in the second quarter was 5,375; down 6% compared with prior year

– Retail vehicles sold were up 1% vs. prior year period

► Retail sales proceeds per unit were up 4% on tractors and down 1% on trucks in the second quarter compared with prior year

► Vehicles no longer earning revenue are 5,758; down 1,717 or 23% vs. prior year driven primarily by a lower UTC inventory

– 3,410 of these units are held for sale at the used truck centers

► Commercial rental fleet down 1,867 units or 5% from prior year as planned

18

Contents


19

Earnings Outlook

3rd Quarter 4th Quarter

2006 EPS Forecast $ 1.05 - 1.10 $ 1.05 - 1.10

($ Earnings Per Share)

► Increasing our full year 2006 earnings forecast which, includingthe $0.11 tax benefit, is now $4.00 to $4.10 per share.

Full Year

Prior EPS Forecast $ 3.82 - 3.97Forecast Increase 0.07 - 0.02

Current EPS Forecast Excluding Tax Benefit 3.89 - 3.99Tax Benefit 0.11 - 0.11

Current EPS Forecast $ 4.00 - 4.10

► Current quarterly forecast for EPS is as follows:

20

Q & A

21

Appendix

Business Segment Detail

Central Support Services

Balance Sheet

Asset Management

Financial Indicators Forecast

Non-GAAP Financial Measures & Reconciliations

22

Fleet Management Solutions (FMS)

2006 2005 % B/(W)

Full Service Lease 460.1$ 445.4$ 3%Contract Maintenance 34.0 34.5 (1)%Contract-related Maintenance 47.8 47.9 -Commercial Rental 170.8 174.9 (2)%Other 17.4 16.6 5%Operating Revenue (a) 730.1 719.3 2%Fuel Services Revenue 319.4 250.3 28%

Total Revenue 1,049.5$ 969.6$ 8%

Segment Net Before Tax Earnings (NBT) 94.9$ 88.9$ 7%Segment NBT as % of Total Revenue 9.0% 9.2%Segment NBT as % of Operating Revenue (a) 13.0% 12.4%

Second Quarter

(a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the FMS business segment and as a measure of sales activity. Fuel services revenue, which is directly impacted by fluctuations in marketfuel 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.

($ Millions)

23

Fleet Management Solutions (FMS)

2006 2005 % B/(W)

Full Service Lease 911.5$ 887.2$ 3%Contract Maintenance 66.8 67.9 (2)%Contract-related Maintenance 95.1 95.9 (1)%Commercial Rental 320.8 327.6 (2)%Other 35.4 34.1 4%Operating Revenue (a) 1,429.6 1,412.7 1%Fuel Services Revenue 601.0 481.5 25%

Total Revenue 2,030.6$ 1,894.2$ 7%


Year-to-Date

(a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the FMS business segment and as a measure of sales activity. Fuel services revenue, which is directly impacted by fluctuations in marketfuel 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.

($ Millions)

24

Supply Chain Solutions (SCS)

2006 2005 % B/(W) U.S. Operating Revenue Automotive & Industrial 125.6$ 112.6$ 12% High Tech & Consumer Industries 74.4 61.1 22% Transportation Management 7.7 6.2 25%U.S. Operating Revenue 207.7 179.9 15%International Operating Revenue 83.6 69.3 21%Operating Revenue (a) 291.3 249.2 17%Subcontracted Transportation 210.8 125.7 68%Total Revenue 502.1$ 374.9$ 34%


Memo: Fuel Costs 27.8$ 22.4$ (24)%

Second Quarter

(a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the SCS business segment and as a measure of sales activity. Subcontracted Transportation is deducted from total revenue to arrive at 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.

($ Millions)

25

Supply Chain Solutions (SCS)

2006 2005 % B/(W) U.S. Operating Revenue Automotive & Industrial 245.1$ 218.4$ 12% High Tech & Consumer Industries 143.2 119.1 20% Transportation Management 14.6 12.3 18%U.S. Operating Revenue 402.9 349.8 15%International Operating Revenue 160.7 137.5 17%Operating Revenue (a) 563.6 487.3 16%Subcontracted Transportation 408.0 234.4 74%Total Revenue 971.6$ 721.7$ 35%


Memo: Fuel Costs 52.7$ 42.7$ (23)%

Year-to-Date

(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.

($ Millions)

26

Dedicated Contract Carriage (DCC)

2006 2005 % B/(W)

Operating Revenue (a) 139.1$ 129.8$ 7% Subcontracted Transportation 4.4 4.0 10%Total Revenue 143.5$ 133.8$ 7%


Memo: Fuel Costs 27.5$ 22.2$ (24)%

Second Quarter

(a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the DCC business segment and as a measure of sales activity. Subcontracted Transportation is deducted from total revenue to 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.

($ Millions)

27

Dedicated Contract Carriage (DCC)

2006 2005 % B/(W)

Operating Revenue (a) 272.6$ 254.6$ 7% Subcontracted Transportation 9.6 7.2 32%Total Revenue 282.2$ 261.8$ 8%


Memo: Fuel Costs 52.5$ 42.8$ (23)%

Year-to-Date

(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.

($ Millions)

28

Central Support Services (CSS)

2006 2005 % B/(W)

Allocated CSS Costs 37.9$ 40.1$ 6%Unallocated CSS Costs 11.3 9.0 (26)%Total CSS Costs 49.2$ 49.1$ -

Second Quarter($ Millions)

29

Central Support Services (CSS)

2006 2005 % B/(W)

Allocated CSS Costs 75.2$ 80.7$ 7%Unallocated CSS Costs 18.5 17.5 (5)%Total CSS Costs 93.7$ 98.2$ 4%

Year-to-Date($ Millions)

30

Balance Sheet

June 30, December 31,2006 2005

Cash and Cash Equivalents 82.6$ 128.7$

Other Current Assets 1,147.8 1,035.1

Revenue Earning Equipment, Net 4,124.7 3,794.4

Operating Property and Equipment, Net 486.8 486.8

Other Assets 579.7 588.3 Total Assets 6,421.6$ 6,033.3$

Short-Term Debt / Current Portion Long-Term Debt 358.2$ 269.4$

Other Current Liabilities 883.1 984.0

Long-Term Debt 2,130.9 1,916.0

Other Non-Current Liabilities 1,401.2 1,336.4

Shareholders' Equity 1,648.2 1,527.5 Total Liabilities and Shareholders' Equity 6,421.6$ 6,033.3$

($ Millions)

31

1,985

903

3,502

1,500

2,323

601

3,284

2,983

3,357

2,444

465

2,684

2,895

1,544

2,977

2,354

577

1,728

1,959

884

2,355

708

1,877

2,037

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Redeployments Extensions Early Terminations Early Replacements

1H01 1H02 1H03 1H04 1H05 1H06

(a) U.S. only(b) Excludes early terminations where customer purchases vehicle.

(b)

Asset Management Update (a)

32

Financial Indicators Forecast (1)

(1) Free Cash Flow and Debt to Equity include acquisitions. Gross Capital Expenditures exclude acquisitions.(2) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures.(3) Includes $176 million payment to the IRS related to full resolution of 1998 - 2000 tax period matters.

(300)(270)

366

260

140

(221)

126

(500)

0

500

0

500

1000

1500

2000

2000 2001 2002 2003 2004 2005 2006ForecastMidpoint

PPEOtherRentalLease

$1,289

$600$725

$1,165

$657

$1,411

0%

50%

100%

150%

200%

250%

300%

2000 2001 2002 2003 2004 2005 2006ForecastMidpoint

Total Obligations to EquityBalance Sheet Debt to Equity

275%

234%

159%146%

129%151%

Debt to Equity Ratio

Free Cash Flow (2) ($ Millions) Gross Capital Expenditures ($ Millions)

(2)

2000 2001 2002 2003 2004 2005 (3) 2006ForecastMidpoint

$1,783

201%

33

Assets Under Management (a)

Forecast 2006 (b) 2005 2004

Revenue Earning Equipment 7,200.0$ 6,657.4$ 6,352.4$

Direct Finance Leases 500.0 624.3 649.1

Operating Leases 200.0 251.8 299.5

Assets Under Management 7,900.0$ 7,533.5$ 7,301.0$

($ Millions)

(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 2006.

34

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:

EPS / Net Earnings Excluding Tax Changes EPS / Net Earnings Appendix - EPS and Net Earnings Reconciliation

35

Operating Revenue Total Revenue Key Financial Statistics 6 - 7

Earnings Before Restructuring and Income Taxes Net Earnings Business Segment 8 - 9

Adjusted Return on Capital Net Earnings Appendix - Adjusted Return on Capital Reconciliation

36

Free Cash Flow Cash Provided by Operating Activities Appendix - Free Cash Flow Reconciliation 37 - 38

Total Obligations / Total Obligations to Equity Balance Sheet Debt / Debt to Equity Appendix - Debt to Equity Reconciliation 39 - 40

FMS / SCS / DCC Operating Revenue and Segment NBT as % of Operating Revenue

FMS / SCS / DCC Total Revenue and Segment NBT as % of Total Revenue

Fleet Management Solutions / Supply Chain Solutions / Dedicated Contract Carriage

22 - 27

35

2Q06 - 2Q06 - YTD06 - YTD06 -Net Earnings EPS Net Earnings EPS

Net Earnings $ 70.3 $ 1.13 $ 117.9 $ 1.91

Less: Tax Changes 6.8 0.11 6.8 0.11

Net Earnings Excluding Tax Changes $ 63.5 $ 1.02 $ 111.1 $ 1.80

EPS and Net Earnings Reconciliation

($ Millions or$ Earnings Per Share)

* Earnings per share amounts are calculated independently for each component and may not be additive due to rounding

2Q05 - 2Q05 - YTD05 - YTD05 -Net Earnings EPS Net Earnings EPS*

Net Earnings $ 63.3 $ 0.98 $ 104.8 $ 1.61

Less: Tax Change 7.6 0.12 7.6 0.12

Net Earnings Excluding Tax Change $ 55.7 $ 0.86 $ 97.2 $ 1.50

36

Adjusted Return on Capital Reconciliation

6/30/06 6/30/05

Net Earnings (1) 240.0$ 221.7$ Discontinued Operations (1.7) - Cumulative Effect of Changes in Accounting Principles 2.4 - Income Taxes 142.4 109.3

Adjusted Earnings Before Income Taxes 383.1 331.0 Restructuring - Gain on Sale of Headquarters - (1.2) Adjusted Interest Expense (2) 135.6 114.5 Adjusted Income Taxes (3) (202.2) (169.3) Adjusted Net Earnings 316.5$ 275.0$

Average Total Debt 2,264.7$ 1,930.1$ Average Off-Balance Sheet Debt 124.2 164.6 Average Adjusted Total Shareholders' Equity (4) 1,562.2 1,487.4 Adjusted Average Total Capital 3,951.1$ 3,582.1$

Adjusted Return on Capital 8.0% 7.7%

(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 using the effective income tax rate for the period exclusive of tax benefits recognized June 2006 and 2005, respectively.(4) Represents shareholders’ equity adjusted for discontinued operations, accounting changes and the tax benefits in those periods.

($ Millions)

37

Free Cash Flow Reconciliation

12/31/00 (3) 12/31/01 (3) 12/31/02 (3) 12/31/03 12/31/04 12/31/05 6/30/05 6/30/06

Cash Provided by Operating Activities 1,023$ 357$ 615$ 803$ 867$ 779$ 165$ 298$

Changes in Balance of Trade Receivables Sold (270) 235 110 - - - - -

Collections of Direct Finance Leases 67 66 66 61 64 70 33 34

Proceeds from Sales of Assets 230 175 153 210 332 334 171 180

Capital Expenditures (1) (1,296) (704) (582) (734) (1,092) (1,399) (779) (776)

Proceeds from Sale and Leaseback of Assets - - - 13 118 - - -

Acquisitions (28) - - (97) (149) (15) (15) (4)

Other Investing, Net 4 (3) 4 4 - 10 - 1

Free Cash Flow (2) (270)$ 126$ 366$ 260$ 140$ (221)$ (425)$ (267)$

Memo:

Depreciation Expense 580$ 545$ 552$ 625$ 706$ 740$ 368$ 362$

Gains on Vehicle Sales, Net 19$ 12$ 14$ 16$ 35$ 47$ 26$ 28$

(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.

(3) 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.

($ Millions)

38

Free Cash Flow Reconciliation

Prior Forecast Current ForecastMidpoint Midpoint12/31/06 12/31/06

Cash Provided by Operating Activities 1,018$ 973$

Collections of Direct Finance Leases 65 65

Proceeds from Sales of Assets 380 360

Capital Expenditures (1) (1,593) (1,694)

Acquisitions - (4)

Free Cash Flow (2) (130)$ (300)$

(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.

($ Millions)

39

Debt to Equity Reconciliation

% to % to % to % to % to % to % to % to12/31/00 Equity 12/31/01 Equity 12/31/02 Equity 12/31/03 Equity 12/31/04 Equity 12/31/05 Equity 6/30/05 Equity 6/30/06 Equity

Balance Sheet Debt $2,017 161% $1,709 139% $1,552 140% $1,816 135% $1,783 118% $2,185 143% $2,223 143% $2,489 151%

Receivables Sold 345 110 - - - - - -

PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 879 625 370 153 161 117 146 89

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% $2,369 152% $2,578 156%

Note: In connection with adopting FIN 46 effective July 1, 2003, the Company consolidated the vehicle securitization trusts previously disclosed as off-balance sheet debt.

(1) The Company uses total obligations and total obligations to equity, non-GAAP financial 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.

($ Millions)

40

Debt to Equity Reconciliation

Prior Forecast Current ForecastMidpoint % to Midpoint % to

12/31/06 Equity 12/31/06 Equity

Balance Sheet Debt 2,360$ 137% 2,608$ 154%

PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 80 80

Total Obligations (1) 2,440$ 141% 2,688$ 159%

(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.

($ Millions)

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