1. Time to pay back the benefits of bonus depreciation... Or maybe not any time soon with some tax planning… September 21, 2011 www.pwc.com

2. PwC What is Bonus Depreciation and why does it matter to my company? Bonus Depreciation is a business targeted stimulus dating back to September 11, 2001 that accelerates tax depreciation. Tax depreciation is the amount of your investment in an asset that you may deduct from your income in a given year. The deductions related to most non-building assets ordinarily must be spread out over 5 or 7 year period for tax purposes. Bonus has been extended multiple times, and temporarily increases the percentage to 100% immediate deductibility of asset purchases for part of 2010, and all of 2011. President Obama’s recent proposal includes an extension of 100% bonus depreciation for 2012. Page 2

3. PwC Bonus Depreciation Impact Page 3 Increases depreciation, reduces asset basis. When you sell an asset, you pay tax on the difference of the final sales price and what you have deducted in total for depreciation purposes. This is tax timing related – This will increase your deductions in early years, reducing your current tax liability, which will have the effect of decreasing your deductions in later years, increasing your tax liability. While accelerating deductions is generally taxpayer favorable, it can be devastating if the later decreased deductions and increased taxes are not factored into cash projections.

4. PwC Bonus Depreciation Impact – the numbers Page 4 Description of Activity With 50% Bonus Depreciation With 100% Bonus Depreciation Tracking Asset Cost acquired in 2011$20,000 A Bonus Depreciation for 2011($10,000)($20,000) B Depreciation taken in 2011($2,000)$0 C Depreciation taken in 2012($1,600)$0 D Federal Tax Basis$6,400$0 E=A-(B+C+D) Sales Price$12,000 F Tax gain realized on sale$5,600$12,000 G Tax gain recognized on sale$5,600$12,000 H=G Less Federal taxes @ 40%($2,240)($4,800) I=H*40% Cash available for reinvestment$9,760$7,200 J=F-I Additional Cash from Depreciation$5,440$8,000 K=(B+C+D)*40% $15,200 L=J+K

5. PwC Like Kind Exchanges Page 5 Enacted in 1924, the Like Kind Exchange provisions under IRC Section 1031 provide companies with an opportunity to defer the recognition of taxable gains on the disposition of business assets if they utilize the proceeds to purchase similar, "like-kind" assets. Tax Recognized becomes tax gain deferred if a vehicle follows the rules of Section 1031 by fully replacing the asset with a like kind vehicle. Without LKE With LKE Asset acquired in 2011$20,000 Sold in 2013 for$12,000 Depreciation allowed, including 100% bonus ($20,000) Tax basis when sold$0 Sales proceeds$12,000 Less tax basis$0 Tax gain realized on sale$12,000 Tax gain recognized on sale $12,000$0 Less taxes due @ 40%($4,800)$0 Cash available for reinvestment $7,200$12,000 Cash flow impact$4,800

6. PwC LKE Example. Scenario 1: A got land for free, $0 tax basis. B just bought her tract and paid $50. $50 tax basis. Scenario 2: Railroad comes in and splits their fields. Page 6 2.1.

7. PwC Scenario 2: If they sell ½ of their land to the other to get to Scenario 3, A will pay tax on $25 in gain, and B will pay $0 in tax. A may not have liquidity to pay that tax. If they swap with LKE, no taxable event. Page 8 3.2.

8. PwC How do you qualify all of your transactions for LKE treatment? PwC builds a program around your existing business processes, following an IRS established template and safe harbors, that allow you to indefinitely defer income tax on gain from the sale of your rental assets for as long as you stay in the same business. Blue Bird Auto Rental Systems have a PwC LKE file export option that allows PwC to connect your data to the same LKE engine that powers the LKE Programs of over 100 clients. Blue Bird users can leverage off of this export to streamline and simplify the technology implementation of a PwC LKE program. The potential gain deferral is the value of the rental fleet multiplied by the blended Federal and State tax rates, typically 40%. Page 8

9. Questions and answers… This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC LLC, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2011 PwC LLC. All rights reserved. In this document, “PwC” refers to PwC LLC which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.