4 Q11 Transportation Monitor

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GE Capital

Industry Research Monitor

Truck
Transportation
The U.S. economy and freight indicators are holding
steady despite economists’ warnings of a double-
dip recession. Even though truck and trailer orders
continue to see year-over-year gains due to aging
equipment and improving carrier operating rates,
rates have slowed as carriers remain cautious
about the future.
CONTENTS
Current Economic Environment ....................... 2
Trucking Demand ................................................. 3
Truck and Trailer Orders ..................................... 4
Costs ......................................................................... 7
Recent Industry News and Developments .... 9
Bonus Depreciation ............................................13

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Current Economic Environment ECONOMIC ENVIRONMENT HEADLINES

A
• Real GDP increased +2.5% in 3Q11 after
ccording to the Bureau of Economic Analysis, real gross increasing +1.3% in 2Q11.
domestic product (GDP) grew +2.5% in 3Q11 after • Industrial Production increased +3.3%
increasing +1.3% in 2Q11. The increase in personal YoY in 3Q11 after increasing +3.7% YoY in
2Q11.
consumption expenditures came as a result of declining savings • ISM Purchasing Manager’s Index declined
rather than increased disposable personal income. -7.9% YoY and -9.5% QoQ to average 51.0
in 3Q11.
Industrial Production and ISM • Retail Sales increase +8.0% YoY and
+1.1% QoQ in 3Q11. Retail sales
A key leading indicator of trucking activity, the Federal Reserve’s Industrial Production increased +7.7% in 2Q11.
Index continues to grow. 3Q11 industrial production increased +3.3% year-over-year (YoY)
after increasing +3.7% YoY in 2Q11. The Index increased +1.3% quarter-over-quarter
(QoQ) in 3Q11 after increasing +0.1% sequentially in 2Q11. Capacity utilization increased
+2.5% YoY and increased +1.0% on a sequential basis in 3Q11.

Industrial Production (Seasonally Adjusted)
105 10%

5%
100

0%
95
YoY % Change
Index

-5%

90
-10%
Index
85 YoY % Change
-15%

Source: Federal Reserve

80 -20%
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

For the second consecutive quarter, the Institute for Supply Management’s (ISM)
Purchasing Manager’s Index (PMI) declined on a YoY basis. PMI declined -7.9% YoY in
3Q11 and -9.5% QoQ to an average of 51.0.
A PMI reading above 50 indicates that the manufacturing economy is generally
expanding; below 50 indicates that it is generally declining. A PMI in excess of 42.5, over
a period of time, indicates that the overall economy or GDP, is generally expanding;
below 42.5, it is generally declining. The distance from 50 or 42.5 is indicative of the
strength of the expansion or decline.

ISM Purchasing Manager’s Index
65

60

55
ISM Purchasing Managers Index

50

45

40

Source: Institute for
35
Supply Management

30
1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11


Retail Sales
Another key indicator of truckload activity is Retail Sales as reported by the U.S. Census
Bureau. Retail trade and food services grew +8.0% YoY in 3Q11 after increasing +7.7%
in 2Q11. Retail sales increased +1.1% QoQ in 3Q11 after increasing +1.2% QoQ in 2Q11.

Retail Sales (Seasonally Adjusted $Bn)
400 15%

390
10%

380
Retail Sales And Food Services

5%

370

YoY % Change
0%
360
Retail & Food Services
-5% YoY % Change
350

-10%
340

330 -15%
Source: Source: U.S. Census Bureau

Other Indicators
According to the Fibre Box Association (FBA), containerboard or corrugated box
shipments increased +0.2% YoY in 3Q11 after declining -0.5% in 2Q11.
According to the National Retail Federation’s Global Port Tracker, import cargo volume
at the nation’s major retail container ports declined -3.0% YoY in 3Q11. They are
forecasting 4Q11 volumes to increase +3.1% YoY while they forecast a slow start to 2012
with January and February declining -3.6% and -3.8% YoY, respectively.

Trucking Demand

D
espite conflicting economic data, demand for trucking TRUCKING DEMAND HEADLINES
services continues to remain positive. Increased volumes • ATA Truck Tonnage Index increased +5.5%
YoY and increased +0.4% QoQ in 3Q11.
and rising freight rates make way for improved company
• Cass Freight Shipments Index increased
financials. +7.5% YoY and increased +2.2% QoQ in
3Q11.
In our 2011 GE Capital Transportation Survey, 71% of trucking carriers we surveyed
expect improved business conditions in 2011. In addition, the vast majority of
respondents anticipate increases in number of shipments/loads, loaded miles, average
revenue per tractor and average revenue per loaded mile.

Truck Tonnage Index
According to the American Trucking Associations (ATA), the trucking tonnage index
increased +5.5% YoY 3Q11 and increased +0.4% over 2Q11 to average seasonally
adjusted rate of 114.8.
In the September ATA Truck Tonnage press release, ATA Chief Economist Bob Costello
states, “I continue to believe the economy will skirt another recession because truck
tonnage isn’t showing signs that we are in a recession,” ATA Chief Economist Bob Costello
said. “Tonnage is suggesting that we are in a weak growth period for the economy, but
not a recession.”


ATA Truck Tonnage Index
120 10%

5%
115

0%

YoY % Change
110
Index

-5%

105
-10%

Index
100
-15% YoY % Change

Source: American Trucking Associations
95 -20%

Cass Freight Index
The Cass Freight Index as reported by Cass Information Systems, Inc. continues to be
positive. The Shipments Index increased +7.5% YoY in 3Q11, slower than the +8.9% YoY
growth seen in 2Q11 and +12.5% growth in 1Q11. The Shipments Index increased +2.2%
QoQ. The Expenditures Index increased +19.9% YoY in 3Q11 but declined modestly on a
sequential basis (-0.4% QoQ) after a +13.7% QoQ increase in 2Q11. This suggests a very
healthy 2Q11 implied rate increase of +11.6% YoY and -2.5% QoQ.

Cass Freight Index
2.6

2.3

2.0
Index

1.7
Expenditures

Shipments
1.4

1.1

Source: Cass Information Systems
0.8

Truck and Trailer Orders

H
igh asset age, increased capacity utilization and
improving used equipment valuations will help truck and
trailer orders through 2011 and 2012.
While 71% of respondents to our 2011 GE Capital Transportation survey expect
improved business conditions, only 51% state they will increase the size of their
company sleeper cab fleets, 26% say they will increase the size of their company
day cab fleets and 55% state they will increase the size of their trailer fleet. This gap
between improving business conditions and revenue metrics vs. truck orders is likely due
to carriers’ sobering views on rising expenses.
For 2012, their outlook is much improved with more carriers expecting to add to their
fleet in every equipment category.


Heavy-Duty Truck Orders
U.S. Class 8 truck net truck orders continued to exhibit strength in 3Q11. Net orders
increased +65.9% YoY to 45,000 compared the year ago quarter. Orders are significantly
improved from the cyclical low of 17,000 orders in 1Q10 but below the high of 107,000 in
1Q06.
TRUCK AND TRAILER ORDER HEADLINES
The cancellation rate has increased from a low of 4.6% in January and February of this
year to 7.8% in June and 11.2% in September. We will keep an eye on this number to • Heavy-duty net truck orders increased
+65.9% YoY in 3Q11. Retail sales of
determine whether it represents a normal, end-of-year cleaning-up of the order book or
heavy-duty trucks increased +56.1% YoY
real cancellations due to a change in economic outlook. in the same period.
Retail sales increased +56.1% YoY in 3Q11 to 44,000 as very strong order volumes • Medium-duty net truck orders increased
continue to make their way onto the road. Net orders barely outpaced retail sales so +19.1% YoY in 3Q11 with strength the
backlogs increased +158.0% YoY off very low levels in 3Q10 but are down -3.5% from Class 6-7 markets offset by a slight
decline in Class 5 orders. Retail sales of
the prior quarter. The backlog-to-build ratio averaged 5.9 months in the quarter, down
medium-duty trucks increased +43.4%
from 2Q11. Build rates in August rose to the highest level since January 2007. If the YoY in the same period.
maximum build rate in the last cycle is any indication, it was 30,000 trucks in October
• Trailer orders increased +18.1% YoY in
2006.
3Q11.
Absolute levels of inventories increased throughout the quarter, increasing +58.2% YoY
in 1Q11 off historic lows in 3Q10. Inventories increased +12.9% QoQ. The inventory-to-
sales ratio continues to decline from an average of 2.32 months in 1Q11 to an average
of 2.09 months in 3Q11 due to improving retail sales volumes.

U.S. Class 8 Net Truck Orders
60,000 300%

55,000 250%

50,000
200%
YoY % Change

45,000
Net Orders

150%
40,000
100%
35,000
50%
30,000 Net Orders

0% YoY % Change
25,000

20,000 -50%
Source: ACT Research
15,000 -100%

Medium-Duty Truck Orders
Net orders of U.S. Class 5-7 trucks increased +19.1% YoY to 21,000 in 3Q11. Medium-
duty net truck orders are significantly improved from the cyclical low of 7,800 orders in
2Q09 but are significantly below the cyclical high of 60,000 orders in 1Q06. Net orders
increased +45.6% YoY for Class 6-7 trucks while net orders of Class 5 trucks declined
-0.3% YoY. Net orders have remained relatively flat over the past 3 quarters perhaps due
to companies seeing mixed results in their business and taking a wait-and-see approach
to capital expenditures and asset purchases.
Retail sales increased +43.4% YoY in 3Q11 to 23,000 after increasing +50.6% YoY in
2Q11. Class 5 retail sales increased +18.1% YoY in 3Q11 while retail sales in the Class 6-7
market increased +67.9% YoY.
This is the first quarter since 2Q10 where net orders have not outpaced retail sales.
Backlogs declined -12.4% QoQ but are +47.0% above a year ago. The backlog-to-build
ratio declined slightly.

Absolute levels of inventory declined -38.9% YoY in 3Q11 but increased +4.3% QoQ. On a
relative basis, the inventory-to-sales ratio continues to increase from 2.5 months in 1Q11
to 3.0 months in 3Q11.

U.S. Class 5-7 Net Truck Orders

40,000 200%

35,000
150%

30,000

100%
25,000

YoY % Change
Net Orders

20,000 50%
Net Orders

15,000 YoY % Change
0%

10,000

-50%
5,000

0 -100%

Trailer Orders
Trailers net orders increased +18.1% YoY to 42,000 in 3Q11. Trailer orders are
significantly improved from cyclical lows of 11,000 orders in 4Q08 but are still below
cyclical highs of 102,000 orders in 1Q06. 3Q11 orders represent a -16.6% decrease over
3Q11.
Orders of liquid and dry tank trailers showed significant YoY growth in 3Q11, nearly
doubling last year’s volumes while orders of refrigerated trailers declined -32.1% YoY
in 3Q11. Dry van orders increased +20.1% YoY but declined -24.2% QoQ, the third
consecutive quarter of declines.

Net Trailer Orders
80,000 200%

70,000
150%

60,000

100%
YoY % Change

50,000
Net Orders

40,000 50%
Net Orders
30,000 YoY % Change
0%

20,000

-50%
10,000

0 -100%

Factory shipments increased +65.7% YoY in 3Q11 to 58,000 after increasing +51.6%
YoY in 2Q11. For the second consecutive quarter since 3Q09, net orders did not exceed
shipments or build rates. Absolute backlogs increased +71.7% YoY in 3Q11 but declined
-15.0% from 2Q11. The backlog-to-build ratio declined from 5.4 months in 2Q11 to 4.4
months in 3Q11 with strong build rates. The 2Q11 build rate is at its highest level since
2Q07.
Absolute levels of inventory in 3Q11 increased +25.2% from a year ago but declined
-5.7% from 2Q11.


Costs

T
rucking fleets are facing higher cost pressures from the
rising cost of diesel fuel and recruiting and retaining
quality drivers to complying with regulatory requirements.
Even though 71% of respondents to our 2011 GE Capital Transportation survey
anticipate improved business conditions, the majority (57%) expect their operating rate
to increase in 2011. 17% expect their operating rate to stay the same and 22% expect
their operating rate to decrease.

Diesel Fuel
The price of on-highway diesel fuel increased +31.6% YoY in 3Q11 but declined -3.7%
QoQ to an average of $3.87 per gallon. October marks the fifth consecutive month in
which diesel has shown month-over-month declines.
In its Short-Term Energy Outlook, the Energy Information Administration (EIA) decreased
its projection of diesel and gasoline prices. The EIA now expects diesel to increase
+27.1% to an average $3.80 per gallon in 2011 and decline -1.8% to $3.73 per gallon in
2012. Diesel averaged $3.80 per gallon in October 2011.

On-Highway Diesel Fuel ($/gallon)
5.00 80%

60%
4.50

40%
4.00
YoY % Change

20%
Price

3.50 Price

0% YoY % Change

3.00 COST HEADLINES
-20%
• Average price of diesel fuel increased
2.50
-40% Source: U.S. Department of Energy, +31.6% YoY and declined -3.7% QoQ in
Energy Information Administration
3Q11. The EIA expects diesel to increase
2.00 -60%
+27.1 % to $3.80 per gallon in 2011.
Diesel averaged $3.80 per gallon in
The average price of gasoline (all grades) increased +33.0% YoY in 3Q11 but declined October 2011.
from 2Q11 to an average of $3.69 per gallon. October marks the fifth consecutive month • Average new heavy-duty truck prices
of sequential declines. The EIA expects gasoline to increase +26.6% to $3.52 per gallon increased +2.9% YoY at Rush Enterprises
in 2011 and decline -2.6% to $3.43 in 2012. Regular gasoline averaged $3.51 per gallon • Average new medium-duty truck prices
in October 2011. decreased -1.2% YoY at Rush Enterprises
• Average used truck prices increased
In our 2011 GE Capital Transportation Survey, 96% of carriers surveyed expected the
+6.4% at Rush Enterprises
average price of diesel fuel to increase in 2011. In addition, 67% of carriers cited the
• In 3Q11, truck transportation employment
rising cost of diesel fuel to be one of the top 3 challenges for their company in 2011.
increased by 35,300 persons or +2.8%
YoY.


Equipment, Parts, Supplies and Maintenance
In their 3Q11 earning release, Rush Enterprises number of new heavy-duty truck sold
increased +92.7% YoY in 3Q11 with an average selling price of $131,300, up 2.9% YoY
and up +3.5% from 2Q10. The number of new medium duty trucks sold increased
+119.5% YoY with and average selling price of $69,587, a -1.2% decrease from a year
ago and -1.8% from 2Q10. The number of used vehicles sold increased +30.1% YoY
in 3Q11 with average selling price of $44,274, up 6.4% from a year ago and +8% from
2Q10.
In their second quarter earnings release, W. M. “Rusty” Rush, President and Chief
Executive Officer for Rush Enterprises, Inc stated, “ In its third quarter earning press
release, Rush Enterprises stated: “The Company expects U.S. Class 8 retail sales will
remain on pace to reach approximately 165,000 to 170,000 units by year end in 2011,
which remains below historical replacement levels. Industry experts currently forecast
Class 8 U.S. retail sales to be 214,000 units for 2012. Medium-duty commercial vehicle
sales continued to be negatively impacted by supply issues faced by several medium-
duty truck manufacturers, but the Company expects medium-duty commercial vehicle
sales to increase before the end of the year as these supply issues are resolved. “
In our 2011 GE Capital Transportation Survey, 62% of carriers expect the cost of
maintenance and service to increase in 2011. 12% anticipate their maintenance and
service costs will stay the same while 26% of carriers expect it to decrease. In addition,
41% of carriers cite rising equipment, parts and maintenance costs as one of the top 3
challenges for their business in 2011.
As a result of an aging fleet and increased maintenance intervals, carriers may
experience increased maintenance costs in 2011. The greatest impact to overall costs
will likely come from the increased frequency of repairs as a direct result of deferred
vehicle replacement. Older fleets will likely experience larger effects. In addition,
there may be spike in unscheduled, higher-cost maintenance which impacts not only
maintenance dollars but also increases driver downtime.

Employment
According to the Bureau of Labor Statistics, the trucking industry employed 35,300 more
people in September 2011 than it did a year ago. On a seasonally adjusted basis, truck
transportation employment increased +2.8% YoY in 3Q11 after increasing +3.1% YoY in
2Q11.
Sequentially, employment increased +0.3% (or 4,300 jobs) on a seasonally adjusted
basis. This marks the sixth consecutive quarter that truck transportation has seen QoQ
seasonally adjusted employment gains.


Truck Transportation Employment (seasonally adjusted)
1,450 4%

2%

1,400
0%

-2%
1,350

YoY % Change
Employment

-4%

1,300 Employment
-6%
YoY % Change

-8%
1,250

-10% Source: Bureau of Labor Statistics

1,200 -12%

In our 2011 GE Capital Transportation Survey, 74% of carriers cite recruiting and hiring
quality drivers to be one of the top 3 challenges for their company in 2011. Additionally,
71% of carriers anticipate increases in salaries, wages and benefit expense.

Recent Industry News and Developments
Recent Industry News
• The U.S. and Mexico formalized a cross-border trucking program that will end more
than $2 billion of tariffs on exported U.S. goods and open up U.S. roadways to approved
Mexican trucks. According to the Dept. of Transportation, the agreement calls for
Mexican trucks to comply with all Federal Motor Vehicle Safety Standards and they
must utilize electronic monitoring systems to track hours-of-service compliance. DOT
will also review driving records and require drug testing of all drivers, to be analyzed by
the Dept. of Health and Human Services at approved U.S. labs. Mexican drivers will also
have to prove “their ability to understand the English language and U.S. traffic signs.”
U.S. carriers will receive reciprocal authority to operate in Mexico.

• C.R. England has made some major changes in senior management following Dan
England’s appointment as chairman of the American Trucking Associations. Effectively
immediately, Dan England, Chairman and President, will assume the title of Chairman
and Dean England, Chief Executive Officer, will assume the title of President. Wayne
Cederholm, Chief Operating Officer, will become Chief Executive Officer and Chad
England, formerly President, England North America, will assume the title of Chief
Operating Officer.

• Navistar is officially closing its Chatham, Ontario truck manufacturing facility. The plant
has been idle since June 2009.

• Congress voted to re-extend the current highway program through March 2012.

• Shareholders of YRC Worldwide voted in favor of is restructuring – an internal
merger agreement to combine YRC Worldwide and its recently created YRC Merger
Sub subsidiary. YRC Worldwide’s banking group will now own about 72.5% of the
Company’s stock, its Teamsters employees about 25% and remaining shareholders
about 2.5%.


• Congress unveiled new fuel efficiency rules from the Environmental Protection Agency
and the National Highway Traffic Safety Administration. Combination tractors
(semi-trucks) will be required to achieve up to approximately 20% reduction in fuel
consumption and greenhouse gas emissions by model year 2018. Heavy-duty pick-
up trucks and vans will be required to achieve up to approximately 15% reduction in
fuel consumption and greenhouse gas emissions by model year 2018 with separate
standards for gasoline and diesel engines. Vocational vehicles (delivery trucks, buses
and refuse trucks) will be required to achieve up to approximately 100% reduction in
fuel consumption and greenhouse gas emissions by model year 2018.

• Secretary of Transportation Ray LaHood will not be seeking a second term at that post.
He said he would step down at the end of President Obama’s current term in 2012. The
former Republican congressman from Illinois also said he would not run for public office
again. He served in Congress for 14 years before joining Obama’s cabinet. He said he
wanted to enter the private sector after leaving the administration and gave no further
reason for his departure.

• Russell Gerdin, the son of a truck driver who founded Heartland Express died October
15. He was 70 years old. Gerdin founded Heartland Express in 1978, shortly before
federal deregulation redrew the map of the trucking industry. Deregulation created the
irregular route, long-haul truckload carrier, and Heartland Express expanded rapidly in
the 1980s, going public as early as 1986. Gerdin took a leave of absence in January due
to poor health. His son Michael Gerdin was named president, CEO and chairman.

(5) Revenue includes truck segment revenue. Net Income includes truck segment operating income.

Selected Commentary
Carriers
• In their fiscal first quarter earnings release, Chairman and CEO Steve Russell
commentedon the results of the September 2011 quarter: “Our average rate per
loaded mile improved to $1.53, up approximately six cents per mile from the September
2010 quarter, or 3.7%. Seated count declined about six percent, related to the more
challenging driver shortage in the industry.” In addition, “On October 11, 2011, we filed
a 13D indicating that Celadon has acquired 6.3% of the stock of USA Truck Inc. In USA
Truck’s September 2011 quarter release, they indicated that their Board of Directors
has unanimously decided to decline a meeting with us. At Celadon’s Board of Directors
meeting earlier this week, we were quite disappointed with their reaction, and we
decided to consider alternative actions.”

• Chairman and Chief Executive Officer, Kevin P. Knight, offered the following comments
in the company’s third quarter earnings press release: “We improved our revenue per
tractor excluding fuel surcharge by 4.6%, as a result of a 2.3% increase in miles per
tractor and a 2.2% increase in revenue per total mile (not including fuel surcharge), as
compared to the third quarter last year.“


• In USA Truck’s third quarter earnings release, Cliff Beckham, President and CEO, made the
following statements: “Our business environment was softer than in the second quarter.
We felt a modest step-down in overall freight demand in our markets, which we attribute
to slower growth in the U.S. economy. In addition, we began phasing out service on two
major accounts, one due to the end of a project and one due to inadequate pricing. In a
softer overall freight market, we had fewer opportunities to replace all of this business
with high-quality freight. Industry-wide, we believe freight demand and trucking capacity
are in relative equilibrium, but the spot market is less robust than during the second
quarter. This contributed to a reduction in overall miles and an increase in our percentage
of non-revenue miles. For the quarter, in our Trucking operations, tractor utilization
decreased 13.2% and our empty mile factor increased approximately 200 basis points,
to 12.4%, compared with the third quarter of 2010. Base Trucking revenue per mile
was a positive, however, rising approximately 7.2% compared with the third quarter
of 2010. From a cost perspective, driver wages, net fuel cost, equipment repairs, and
insurance and claims all increased on a per mile basis. These increases more than offset
our increase in Trucking revenue per mile. In addition, the decrease in tractor utilization
less effectively covered our fixed costs, and increased empty miles percentage hurt fuel
surcharge recovery as well as overall base revenue per mile.”

• In their 3Q11 earnings release, Werner Enterprises stated, “We continue to believe that
generally favorable truckload freight trends are caused to a greater degree by supply
side constraints limiting truckload capacity, as opposed to demand generated by
economic activity. ”

OEM
• In their third quarter interim report, Daimler Trucks showed a +74.4% YoY increase in U.S.
unit sales.

• PACCAR executive vice president, Dan Sobic stated in the company’s third quarter
earnings press release, Class 8 industry retail sales in the U.S. and Canada are expected
to be in the range of 185,000-200,000 vehicles in 2011. Our customers are benefiting
from higher freight tonnage and improved freight rates,” said Dan Sobic, PACCAR
executive vice president. “For the first nine months of 2011, PACCAR achieved a
record Class 8 retail market share in the U.S. and Canada of 27.7 percent as customers
benefited from Kenworth and Peterbilt vehicles’ low operating cost advantage. Estimates
for industry Class 8 retail sales in 2012 are in the range of 205,000-230,000 units, driven
primarily by ongoing replacement of the aging fleet. Annual replacement demand for
the U.S. and Canadian truck market is approximately 225,000 units,” added Sobic.

• At Volvo, net sales in North America increased +29.1% YoY in 3Q11. Replacement
demand continues to be the primary driver of new truck sales, particularly highway
tractors. Activity in the refuse sector has remained steady. Ongoing weakness in
construction has been partially offset by demand for heavy-duty trucks vehicles in
energy-related enterprises. In 2011, the North American market for heavy-duty trucks is
expected to reach a level of about 210,000 trucks, (previous estimate: 230,000-240,000).
For 2012 the total market is expected to grow by about 20%.

• Wabash National’s Dick Giromini, President and Chief Executive Officer, stated, “Never
before has our industry experienced such a rapid recovery in demand as we have seen
over the past 12 to 18 months.” New trailer shipments of 11,400 increased 111% YoY.
“Increases in commodity and component costs coupled with the inherent challenges
associated with the capacity ramp-up to support the increased demand impacted our
gross margin for the quarter.”


3Q11 Earnings Summary YoY % Change
Revenue
Operating ex Fuel Net
Rate Revenue Surcharge Income
TL Carriers
Celadon Group 93.7 0.8% -6.0% 21.5%
Heartland Express (1)
81.0 4.2% N.A. -15.8%
J.B. Hunt 89.9 18.8% 10.8% 31.6%
Knight Transportation 87.8 18.7% 13.2% 0.3%
Landstar System 92.8 9.8% N.A. 40.0%
Patriot Transportation Holding (2)
90.7 13.5% N.A. -8.5%
Quality Distribution (1)
92.3 9.5% 5.1% N.M.
USA Truck (1) 104.5 9.6% 1.9% N.M.
Werner Enterprises 90.2 10.0% 0.7% 22.4%

LTL Carriers
Arkansas Best 95.9 14.7% N.A. N.M.
Old Dominion Freight Line 86.2 24.9% N.A. 58.4%
Saia 96.4 14.3% N.A. 93.5%
YRC Worldwide 101.9 12.3% N.A. N.M.

Engine, Truck & Trailer OEMs Units Sold Revenue Net Income
Cummins 47.3% 36.0% -10.5%
Daimler Trucks 74.4% 18.4% 11.9%
Navistar (3)
40.1% 10.4% N.M.
PACCAR (4)
82.1% 73.3% 134.9%
Volvo (5) 24.1% 15.9% 46.7%
Wabash National 1000% 96.9% N.M.

N.A. = Not Available
N.M. = Not Material
(1) Operating rate and net income excludes net gain on the disposal of revenue equipment
(2) Revenue and operating rate includes transportation segment only.
(3) For the quarter ended April 30. Revenue includes sales of manufactured products and excludes finance revenues.
(4) Revenue includes truck and other revenue and excludes financial services.


New and used equipment investments
can = tax-savings opportunities
Take advantage of 100% bonus For used equipment: Section 179 benefits
depreciation for new equipment When purchasing used equipment, you may be able to
For 2011, the purchaser of new equipment may be utilize the Section 179 expense allowance, which has
able to expense up to 100% of the new capital equip- risen to $500,000. Contact your equipment dealer
ment expenditure. This tax-savings opportunity is for more information.
available throughout the 2011 tax year.
Used equipment investment $750,000

What this means With Section 179
If your business operates as a sole proprietorship, part- Section 179 Allowance* $500,000
nership or corporation, this makes equipment purchases 20% first year depreciation $50,000
more affordable. Now is the time to take advantage of Potential tax deduction $550,000
big tax benefits, acquire the equipment you need and Potential 1st year savings** $192,500
put it to work for your business today.
Without Section 179
New equipment investment $750,000 Section 179 Allowance ---
20% first year depreciation $150,000
100% Bonus Depreciation* $750,000 Potential tax deduction $150,000
Potential tax deduction $750,000 Potential 1st year savings** $52,500
Potential 1st year savings $262,500
Section 179 savings difference $140,000

After-tax equipment cost $487,500

Take advantage with GE Capital
GE Capital has dedicated resources to help you respond quickly and effectively to this remarkable tax-saving
opportunity! Contact your local dealership to get started.
*Section 179: Allows taxpayers to deduct the cost of qualifying equipment up to $500,000, and includes “off the shelf” software purchases, rather than depreciating the cost over a period of several years. For any remaining
amount above the $500,000 allowance, you are entitled to take the first year depreciation. The maximum dollar amount of equipment you can purchase in 2011 is $2,000,000 before the deduction is reduced dollar for
dollar for purchases in excess of $2,000,000. For used property, the 20% First Year Depreciation can be taken after Section 179 deduction in the first year the equipment is placed in service assuming MACRS, 5-year life,
200% declining balance, or half-year convention.
This brochure is provided for general reference only, contains a partial overview of certain sections of the Internal Revenue Code of 1986, as amended (the “Code”), and is not intended to be a detailed discussion of the
depreciation rules or any other provision(s) of the Code. Nothing herein constitutes any tax, accounting or legal advice, and it cannot be used or relied upon to avoid any penalties that may be imposed under U.S. Federal
tax laws. You should consult your own independent tax , accounting and/or legal advisors for advice that is based upon your particular circumstances. Nothing herein constitutes a proposal or commitment for any
particular transaction. Any such transaction would be subject to credit and other relevant approvals at GE and would be subject to the execution of documentation in form and substance satisfactory to GE.

INDUSTRY RESEARCH TEAM
Serena Tse Scott Cohen Jeff Englander Kimberly Savilonis Loren Trotta Michael Zimm, CFA
646-428-7249 646-428-7242 646-428-7135 480-565-6289 203-229-1877 646-428-7015
serena.tse@ge.com scott.cohen@ge.com jeffrey.englander@ge.com kimberly.savilonis@ loren.trotta@ge.com michael.zimm@ge.com
Construction Consumer & Leisure Healthcare ge.com Food, Beverage & Technology & Business
Transportation Products Industrial Products & Agribusiness Services
Media, Communications & Services Financial Services Aerospace & Defense
Richard Aldrich, CFA Entertainment
646-428-7365
richard.aldrich@ge.com
Chemicals & Plastics
Metals & Mining
Auto & Auto Parts

Disclaimer: Although General Electric Capital Corporation (“GE”) believes that the information contained in this newsletter has been obtained from and is based upon sources GE
believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. GE makes no representation or warranties of any kind whatsoever in respect of
such information. GE accepts no liability of any kind for loss arising from the use of the material presented in this newsletter. This newsletter is not to be relied upon in substitution
for the exercise of your independent judgment or legal advice.


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