4 Q11 Transportation Monitor

Industry Research Monitor: Truck Transportation 1Subscribe to other Industry Research Monitors | Explore Financing Solutions at www.gecapital.com/americas© 2011 General Electric Capital Corporation. All Rights Reserved.

Truck TransportationThe 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.

Industry Research Monitor

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

• Real GDP increased +2.5% in 3Q11 after increasing +1.3% in 2Q11.

• Industrial Production increased +3.3% YoY in 3Q11 after increasing +3.7% YoY in 2Q11.

• ISM Purchasing Manager’s Index declined -7.9% YoY and -9.5% QoQ to average 51.0 in 3Q11.

• Retail Sales increase +8.0% YoY and +1.1% QoQ in 3Q11. Retail sales increased +7.7% in 2Q11.

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10%

80

85

90

95

100

105

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

YoY

% C

hang

e

Inde

x

Source: Federal Reserve

Index

YoY % Change

30

35

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55

60

65

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

ISM

Pur

chas

ing

Man

ager

s In

dex

Source: Institute for Supply Management

A ccording to the Bureau of Economic Analysis, real gross domestic product (GDP) grew +2.5% in 3Q11 after increasing +1.3% in 2Q11. The increase in personal

consumption expenditures came as a result of declining savings rather than increased disposable personal income.

Industrial Production and ISMA key leading indicator of trucking activity, the Federal Reserve’s Industrial Production 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)

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


Retail SalesAnother 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)

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330

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360

370

380

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1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11Yo

Y %

Cha

nge

Reta

il Sa

les

And

Food

Ser

vice

s

Source: Source: U.S. Census Bureau

Retail & Food Services

YoY % Change

TRUCKING DEMAND HEADLINES

• ATA Truck Tonnage Index increased +5.5% YoY and increased +0.4% QoQ in 3Q11.

• Cass Freight Shipments Index increased +7.5% YoY and increased +2.2% QoQ in 3Q11.

Other IndicatorsAccording 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 services continues to remain positive. Increased volumes and rising freight rates make way for improved company

financials.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 IndexAccording 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

0.8

1.1

1.4

1.7

2.0

2.3

2.6


Inde

x

Source: Cass Information Systems

Expenditures

Shipments

Cass Freight IndexThe 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

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95

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115

120


YoY

% C

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Source: American Trucking Associations

Index

YoY % Change

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.


TRUCK AND TRAILER ORDER HEADLINES

• Heavy-duty net truck orders increased +65.9% YoY in 3Q11. Retail sales of heavy-duty trucks increased +56.1% YoY in the same period.

• Medium-duty net truck orders increased +19.1% YoY in 3Q11 with strength the Class 6-7 markets offset by a slight decline in Class 5 orders. Retail sales of medium-duty trucks increased +43.4% YoY in the same period.

• Trailer orders increased +18.1% YoY in 3Q11.

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Source: ACT Research

Net Orders

YoY % Change

Heavy-Duty Truck OrdersU.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.

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 determine whether it represents a normal, end-of-year cleaning-up of the order book or real cancellations due to a change in economic outlook.

Retail sales increased +56.1% YoY in 3Q11 to 44,000 as very strong order volumes continue to make their way onto the road. Net orders barely outpaced retail sales so backlogs increased +158.0% YoY off very low levels in 3Q10 but are down -3.5% from the prior quarter. The backlog-to-build ratio averaged 5.9 months in the quarter, down from 2Q11. Build rates in August rose to the highest level since January 2007. If the maximum build rate in the last cycle is any indication, it was 30,000 trucks in October 2006.

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

Medium-Duty Truck OrdersNet 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.


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5,000

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1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11Yo

Y %

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ers


Net Orders

YoY % Change

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

Trailer OrdersTrailers 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

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Net Orders

YoY % Change

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.


COST HEADLINES

• Average price of diesel fuel increased +31.6% YoY and declined -3.7% QoQ in 3Q11. The EIA expects diesel to increase +27.1 % to $3.80 per gallon in 2011. Diesel averaged $3.80 per gallon in October 2011.

• Average new heavy-duty truck prices increased +2.9% YoY at Rush Enterprises

• Average new medium-duty truck prices decreased -1.2% YoY at Rush Enterprises

• Average used truck prices increased +6.4% at Rush Enterprises

• In 3Q11, truck transportation employment increased by 35,300 persons or +2.8% YoY.

Costs

Trucking 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 FuelThe 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)

The average price of gasoline (all grades) increased +33.0% YoY in 3Q11 but declined from 2Q11 to an average of $3.69 per gallon. October marks the fifth consecutive month of sequential declines. The EIA expects gasoline to increase +26.6% to $3.52 per gallon in 2011 and decline -2.6% to $3.43 in 2012. Regular gasoline averaged $3.51 per gallon in October 2011.

In our 2011 GE Capital Transportation Survey, 96% of carriers surveyed expected the average price of diesel fuel to increase in 2011. In addition, 67% of carriers cited the rising cost of diesel fuel to be one of the top 3 challenges for their company in 2011.

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Source: U.S. Department of Energy, Energy Information Administration

Price

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Equipment, Parts, Supplies and MaintenanceIn 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.

EmploymentAccording 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)

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%.

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Source: Bureau of Labor Statistics

Employment

YoY % Change


• 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 CommentaryCarriers

• 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

Operating Rate Revenue

Revenue ex Fuel

SurchargeNet

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 AvailableN.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.


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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After-tax equipment cost $487,500

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*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 Tse646-428-7249 [email protected]

Richard Aldrich, CFA646-428-7365 [email protected] & Plastics Metals & MiningAuto & Auto Parts

Scott Cohen646-428-7242 [email protected] & Leisure ProductsMedia, Communications & Entertainment

Jeff Englander646-428-7135 [email protected] Industrial Products & Services

Kimberly Savilonis480-565-6289 [email protected]

Loren Trotta203-229-1877 [email protected], Beverage & Agribusiness Financial Services

Michael Zimm, CFA646-428-7015 [email protected] & Business Services Aerospace & Defense

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Documents

4 Q11 Transportation Monitor