Florida Association for Pupil Transportation

61st Annual Summer Conference

Ponte Vedra Beach, FL

Manufacturer’s Update

July 9th, 2008

Presentation Overview

• New Ownership: Cerberus Capital Management• New at Blue Bird• 2008-16 Florida State Bid Information

Henlys reverses into US via Blue Bird takeoverBy Alistair Osborne

HENLYS, the bus builder, became the latest British company to roar into America's school bus market yesterday with a bold $665m (£415m) cash deal to buy Blue Bird Corporation, the biggest school bus manufacturer in North America.As Henlys is valued at £310m and is raising money for the deal, it was classified as a reverse takeover, and the shares suspended at 570p. Henlys is paying $428m cash and repaying Blue Bird's $237m debts.The financing will include Volvo, which holds 10pc of Henlys shares, subscribing for up to $255m (£160m) of convertible loan notes. Volvo can convert them over 10 years and could end up with a 30pc stake in

Thursday 2 September 1999

Blue Bird Announces Financial Restructuring  FORT VALLEY, GA (Oct. 18, 2004) � Blue Bird Corporation announced today the completion of a financial restructuring of its parent company, Henlys Group plc, and its subsidiary companies including Blue Bird Corporation. The restructuring establishes Blue Bird Corporation as the sole operating subsidiary of a newly formed US based holding company principally owned by Volvo Group and members of Henlys banking �syndicate.

The restructuring took the form of a debt for equity swap which effectively reduced the previous Henlys group debt level by approximately US$303 million while transferring 100% ownership of Blue Bird Corporation and responsibility for a term loan and working capital facility to a newly formed holding company named Peach County Holdings Inc. ("Peach”). Following the restructuring, the common of Peach is owned 42.5 percent by Volvo Group and 42.5 percent by members of the Henlys" banking syndicate, with the balance held by Blue Bird management and the trustee of Henlys Group pension scheme. As part of the restructuring, Volvo Bussar AB also acquired 100% ownership of Prevost Car Inc., previously held through a 50/50 joint venture between Henlys and Volvo Bussar AB. Following the restructuring, Peach has sufficient headroom under its new facilities to meet its anticipated working capital requirements.

Blue Bird Agrees to Acquisition

FORT VALLEY, GA (Aug. 25, 2006) - Blue Bird Corporation announced the signing of a definitive agreement to be acquired by an affiliate of Cerberus Capital Management, L.P. Terms of the transaction were not disclosed.

"The acquisition is a significant step forward ensuring Blue Bird will remain one of the world's leading school and commercial bus manufacturers," said Jeffry Bust, Blue Bird's president and CEO. "The acquisition also provides financial stability for our distributors, suppliers and employees." Blue Bird was also preparing to unveil it's latest Vision Type C school bus at the upcoming 32nd Annual NAPT Convention and Trade Show, to be held Nov. 3 through 7 in Kansas City.The proposed transaction was expected to close in late September. Kroll Zolfo Cooper, LLC served as the exclusive financial advisor to Blue Bird in connection with the transaction.

Earlier this year, Blue Bird emerged from a 32-hour bankruptcy, which is considered the fastest company reorganization in U.S. history. Bust attributed the quick turnaround to high sales volumes of its Vision model school bus. Company investors were encouraged by the numbers, which far exceeded original forecasts, and increased the school bus OEM's credit line just months after the bankruptcy proceedings.

• Established in 1992, Cerberus Capital Management, L.P. is one of the world's leading private investment firms

• Cerberus investment portfolio includes interests in the following industries:

- Automotive - Real Estate

- Aerospace & Defense - Retail

- Financial Services - Technology

- Healthcare - Travel and Leisure

Recently invested in other bus manufacturers:

NABI OptimaBlue Bird and sister organizations form a $1B companyCerberus will provide the capital structure Blue Bird needs for continued growth and increased profitability

• One of the Largest Central GA Employers • Builds Chassis & Bodies for:

– Type D All American Forward Engine– Type D All American Rear Engine– Type C Vision – Type A Micro Bird (Body only)

• 869,176 sq. ft of manufacturing space

Blue Bird Fort Valley

• Builds Type C Vision Bodies• 280,000 sq. ft of manufacturing space

Blue Bird North Georgia

Blue Bird North Georgia: IW Best Plants Profile 2007Lean in for a Smooth Ride. "Doing it right the first time" transforms bus maker Blue Bird North Georgia. Tuesday, January 01, 2008By  David Blanchard

Blue Bird North Georgia, Lafayette, Ga.Employees: 406, non-unionTotal Square Footage: 295,000Primary Product/market: conventional school busesStart-up: 1982Achievements: IW 2005, 2006 Best Plants Finalist; ISO 9001-2000 certified in 2007; 82.9% reduction in in-plant defect rates over past three years; 100% on-time delivery rate

In-floor Vehicle Guidance System

• Opened a new Blue Bird Parts Distribution Center in Delaware, OH

• Facility is co-located with the NABI, Inc. Parts Distribution Center

• Leveraging purchase synergy of three companies

• Total: 94,000 Sq. Ft.

The LPI System

• Clean-Low Emission• Simple Design• Cost Effective• Superior Performance• Safe• Supported• Accepted

“LPI Delivers Propane to the Intake Port as a Liquid”

Benefit:• Vaporization occurs at the intake port, cooling the air/fuel charge and

increasing air/fuel density providing power better than the gasoline engine equivalent.

• Vaporization creates a cooling effect reducing valve and upper cylinder temperatures and prolonging engine life.

“LPI control is integrated into the OEM computer”

Benefit:• Proprietary programming optimizes fuel economy, performance and low emissions• Injector spray pattern is optimized as designed by the engine OEM. • OEM developed diagnostics remain intact with the LPI system.• Allows use of GM Tech II tool for diagnostics.

Safe

The LPI Fuel Tank • 60 Gallon capacity• Carbon Steel• 2X the Required Thickness for ASME Certification• 312 PSI Working Pressure• Burst Pressure = 5X Working Pressure• 16 Mounting Points not 4• Located Inside Crash Cage

CMVSS Crash Test

• Angled Side and Rear Impact• 4,000 lbs at 40 mph• 220 PSI Tank Pressure• No leakage or Pressure drop

“LPI”… the Lowest Cost of Entry to Alternative Fuels LPI CNG Hybrid

$10,336 $27,000 $124,000

$35k - $70K $1.5M - $2.0M $100k (Diesel)

• Vehicle Fuel System

• Onsite Fueling

Propane is a safe fuelBuilt in safety propertiesNon-toxicLow flammability rangeClosed systemNo spillage or pooling

EngineLPI 8.1L Propane   Diesel Fuel Savings

Fuel        Miles per Gallon 6.60 8.90         Miles per Year 20,000 20,000         Gallons per Year 3,030 2,247         Price per Gallon $1.70 $4.25  (Propane price inc. $.50 credit)             Annual Fuel Cost $5,152 $9,551 $4,399       7 Year Fuel Cost $36,061 $66,854 $30,793       10 Year Fuel Cost $51,520 $95,510 $43,990

Produced primarily (90%) within the US – reduces dependence on foreign oil

FEDERAL & LOCAL INCENTIVES

· SECTION 1342 OF THE FEDERAL ENERGY BILL PROVIDES CREDIT FOR INSTALLATION OF INFRASTRUCTURE; UP TO $30,000

· FEDERAL SAFE, ACCOUNTABLE, FLEXIBLE AND EFFICIENT TRANSPORTATION ACT OF 2005 PROVIDES A $.50 PER GALLON TAX CREDIT FOR PROPANE.

· NATIONAL CLEAN DIESEL FUNDING ASSISTANCE PROGRAM WWW.EPA.GOV/CLEANDIESEL

· DATABASE FOR STATE INCENTIVES FOR RENEWABLE ENERGY (DSIRE) WWW.DSIREUSA.ORG OTHER RESOURCES:

· SMART GROWTH PROGRAM WWW.EPA.GOV/SMARTGROWTH· CLEAN SCHOOL BUS USA WWW.EPA.GOV/CLEANSCHOOLBUS· LOCAL CLEAN CITIES COALITION WWW.EERE.ENEGRY.GOV/CLEANCITIES

 

Summary: Fit for School Bus Market

Provides a safe, attractive and viable fuel choice amidst rising diesel fuel prices

Lowers operating and maintenance costs

Utilizes a domestically produced fuel

Meets all School Bus FMVSS & CMVSS, including CMVSS 301.1 Fuel System Integrity for Liquefied Petroleum Gas

Meets EPA Emission Requirements for the 2010 production year

Builds off an established propane distribution network of 15,000 public/private retail outlets in the US and Canada for easy infrastructure solutions

Don’t have to sacrifice performance for alternative fuels

2008 Blue Bird Vision School Bus

Sleek New HoodRedesigned DashNew E-Z Adjust Steering ColumnHigh Torque Capabilities with the Allison 2500 PTS

Tilt/Telescoping Steering Wheel

All Fuel Tanks Between Frame Rails

New Driver Dash Area

“Safety View” Vision Panel, with Fresnal Lens, 13 ½ inches by 7 ½ inches

Available in:- AAFE (ISB)- AARE (ISB & ISC)- Vision (ISB)

Available in:- AAFE- AARE- Vision

Available in:- Vision (Propane)

Florida Department of Education School Bus Contract 2008-16

• Blue Bird is the price leader in Type A, C and D buses• 5 Year, Bumper to Bumper warranty is standard• Caterpillar Engines include a 6 Year/200,000 Mile ESC Plus

Warranty• Propane engine offered at an upcharge of $10,366• “Straight Floor” option includes the price of air ride rear suspension.• Bitzer transit compressor available for Type C air conditioning.• Cummins ISB buses include electric fuel pump.• Dash air conditioning available as an add-on or standalone system.• Liquidated damages for warranty reimbursement, minimum labor

rate of $60.00 per hour for warranty performed by the district.

Bus Manufacturer Thomas IC Blue Bird

Base Price $81,579 $82,426 $79,196

2500 PTS Credit -$3,620 -$4,121 -$4,538

Region 3 Delivery $993 $2,100 $1,130

Total $78,952 $80,405 $75,788

BLUE BIRD HAS A 77 PASSENGER TYPE C SCHOOL BUS!!

77 Passenger Type C bus available with a 2500 PTS credit option

Blue Bird saves $3,164 over Thomas! Blue Bird saves $4,617 over IC!

Contact Financial Services today to

take advantage of our Lease

Advantage Program!

Florida Transportation Systems and Blue Bird thank you for your

continued support!