Ryder System, Inc. · NYSE:R

Ryder System — Q4 2011 Earnings Presentation

55 slides from Ryder System's earnings presentation, Feb 2, 2012

  1. Slide 1: Fourth Quarter 2011 & 2012 Forecast Earnings Conference Call

    Fourth Quarter 2011 & 2012 Forecast Earnings Conference Call February 2, 2012

  2. Slide 2: Safe Harbor

    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 uncertain

  3. Slide 3: Contents

    Contents ► Fourth Quarter 2011 Results Overview ► Asset Management Update ► 2012 Forecast ►Q & A 2/2/2012 © 2012 Ryder System, Inc. All rights reserved. 3

  4. Slide 4: 4th Quarter Results Overview

    4th Quarter Results Overview ► Earnings per diluted share from continuing operations were $0.92 in 4Q11 vs. $0.80 in 4Q10 – 4Q11 included a $0.05 charge for acquisition-related restructuring costs – 4Q10 included a $0.15 net benefit related to income taxes, partially offset by restructuring and othe

  5. Slide 5: Key Financial Statistics

    Key Financial Statistics ($ Millions, Except Per Share Amounts) Fourth Quarter 2011 2010 % B/(W) Operating Revenue (1) $ 1,237.0 $ 1,061.9 16% Fuel Services and Subcontracted Transportation Revenue 304.0 251.5 21% Total Revenue $ 1,541.1 $ 1,313.4 17% Earnings Per Share From Continuing Operations $

  6. Slide 6: Key Financial Statistics

    Key Financial Statistics ($ Millions, Except Per Share Amounts) Full Year 2011 2010 % B/(W) Operating Revenue (1) $ 4,814.6 $ 4,158.2 16% Fuel Services and Subcontracted Transportation Revenue 1,236.0 978.1 26% Total Revenue $ 6,050.5 $ 5,136.4 18% Earnings Per Share From Continuing Operations $ 3.3

  7. Slide 7: 4th Quarter Results Overview - FMS

    4th Quarter Results Overview - FMS ► Fleet Management Solutions (FMS) total revenue up 13% (and operating revenue up 12%) vs. prior year – Contractual revenue up 4% – Full service lease revenue up 5% – Contract maintenance revenue decreased 1% – Commercial rental revenue up 38% – Fuel revenue up 18%

  8. Slide 8: 4th Quarter Results Overview – SCS / DCC

    4th Quarter Results Overview – SCS / DCC ► Supply Chain Solutions (SCS) total revenue up 26% (and operating revenue up 26%) vs. prior year due to the TLC acquisition and new business ► SCS earnings before tax (EBT) up 44% – SCS EBT percent of operating revenue up 70 basis points to 5.5% ► SCS earnin

  9. Slide 9: Business Segments

    Business Segments ($ Millions) Fourth Quarter Memo: Total Revenue 2011 2010 % B/(W) 2011 2010 % B/(W) Operating Revenue: (1) Fleet Management Solutions $ 813.3 $ 726.3 12% $ 1,074.7 $ 948.1 13% Supply Chain Solutions 324.7 258.3 26% 408.7 325.1 26% Dedicated Contract Carriage 147.1 119.3 23% 156.6 1

  10. Slide 10: Business Segments

    Business Segments ($ Millions) Full Year Memo: Total Revenue 2011 2010 % B/(W) 2011 2010 % B/(W) Operating Revenue: (1) Fleet Management Solutions $ 3,135.9 $ 2,846.5 10% $ 4,218.3 $ 3,712.2 14% Supply Chain Solutions 1,290.9 1,005.0 28% 1,605.4 1,252.3 28% Dedicated Contract Carriage 566.6 468.5 21

  11. Slide 11: Capital Expenditures

    Capital Expenditures ($ Millions) Full Year 2011 $ 2011 2010 O/(U) 2010 Full Service Lease $ 1,067 $ 647 $ 420 Commercial Rental 622 379 244 Operating Property and Equipment 71 62 8 Gross Capital Expenditures 1,760 1,088 672 Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 300 235 66

  12. Slide 12: Cash Flow from Continuing Operations

    Cash Flow from Continuing Operations ($ Millions) Full Year 2011 2010 Earnings from Continuing Operations $ 171 $ 125 Depreciation 872 834 Gains on Vehicle Sales, Net (63) (29) Amortization and Other Non-Cash Charges, Net 57 57 Pension Contributions (65) (64) Changes in Working Capital and Deferred

  13. Slide 13: Debt to Equity Ratio

    Debt to Equity Ratio ($ Millions) (1) (2) 12/31/11 12/31/10 Balance Sheet Debt $ 3,382 $ 2,747 Change to Total Equity Percent To Equity 257% 196% 2010 Equity $ 1,404 Total Obligations (1) $ 3,446 $ 2,847 Earnings 170 Net Pension Charge (173) Percent To Equity (1) 261% 203% Dividends & Other (83) Tot

  14. Slide 14: Contents

    Contents ► Fourth Quarter 2011 Results Overview ► Asset Management Update ► 2012 Forecast ►Q &A 2/2/2012 © 2012 Ryder System, Inc. All rights reserved. 14

  15. Slide 15: Global Asset Management Update

    (1) Global Asset Management Update ► Units held for sale were 6,300 at quarter end, up 21% from 5,200 units held for sale in the prior year – Used vehicle inventory is at the low end of our target range ► The number of used vehicles sold in the fourth quarter were 4,200, up 5% from the prior year ►

  16. Slide 16: Contents

    Contents ► Fourth Quarter 2011 Results Overview ► Asset Management Update ► 2012 Forecast ►Q & A 2/2/2012 © 2012 Ryder System, Inc. All rights reserved. 16

  17. Slide 17: 2012 Forecast Assumptions: General and FMS

    2012 Forecast Assumptions General ► Moderate economic growth ► Improved new sales in all segments ► Higher pension costs ► Foreign exchange rates assume continued strengthening of the dollar FMS ► Higher contractual sales and better renewal rates resulting in continued organic fleet growth throughou

  18. Slide 18: 2012 Forecast Assumptions: SCS

    2012 Forecast Assumptions SCS ► Revenue growth due to new business and higher volumes ► Margin improvement driven by revenue growth ► Operational initiatives in the dedicated service offering contribute to improved margin 2/2/2012 © 2012 Ryder System, Inc. All rights reserved. 18

  19. Slide 19: Key Financial Statistics

    Key Financial Statistics ($ Millions, Except Per Share Amounts) 2012 Forecast 2011 % B / (W) Revenue: Operating (1) $ 5,100 $ 4,815 6% Fuel Services and Subcontracted Transportation 1,200 1,236 (3)% Total Revenue $ 6,300 $ 6,051 4% Earnings From Continuing Operations: Earnings Before Income Taxes $

  20. Slide 20: Business Segment Revenue

    Business Segment Revenue 2012 Forecast Midpoint Change % vs. 2011 Fleet Management Solutions: (1) Total Revenue 6% (2) Contractual Revenue 5% Commercial Rental Revenue 17% Operating Revenue 8% Supply Chain Solutions: (3) (4) Total Revenue 1% Operating Revenue 2% (1) Includes fuel revenue. (2) Includ

  21. Slide 21: 2012 Causes of EPS Change

    2012 Causes of EPS Change ($ Earnings Per Share) $0.25 - 0.29 $4.00 - 4.10 $4.1 $4.1 $4.1 $4.0 $4.0 $4.0 $4.0 $4.0 $3.9 $3.9 $3.9 $3.9 $3.9 $3.8 $0.13 - 0.17 $3.8 $3.8 $3.8 $3.8 $3.7 $3.7 $3.7 $3.7 $3.7 $0.22 $3.6 $3.6 $3.6 $3.6 $3.6 $3.5 $3.5 $3.49 $3.5 $3.5 $3.5 $3.4 $0.14 $3.4 $3.4 $3.4 $3.4 $3.3

  22. Slide 22: Capital Expenditures, Cash Flow & Leverage

    Capital Expenditures, Cash Flow & Leverage ($ Millions) Full Year 2012 Forecast 2011 Full Service Lease - Replacement $ 1,120 - 1,200 Full Service Lease - Growth 290 - 310 Full Service Lease 1,410 - 1,510 $ 1,067 Commercial Rental - Replacement 450 Commercial Rental - Growth 140 Commercial Rental 59

  23. Slide 23: Adjusted Return on Capital History

    (1) Adjusted Return on Capital History Adjusted 7.7% 7.8% 7.9% 7.3% Return on 7.4% Capital (ROC)(1) 6.3% 6.1% 5.7% 5.9% 6.9% 6.8% 6.7% 6.6% 6.5% Cost of 5.5% 4.8% 5.0% Capital (COC) 4.1% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2012 Forecast Forecast ROC O/(U) COC 0.8% 1.0% 1.2% 0.8% 0.8% (2.2)%

  24. Slide 24: EPS Forecast – Continuing Operations

    EPS Forecast – Continuing Operations ($ Earnings Per Share) First Quarter Full Year 2012 Comparable EPS Forecast(1) $ 0.55 - 0.58 $ 4.00 - 4.10 2011 Comparable EPS (1) $0.51 $3.49 (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. 2012 Comparable EPS Forecast excludes $

  25. Slide 25: Comparable EPS – Excluding Non-Service Pension Costs

    Comparable EPS – Excluding Non-Service Pension Costs ($ Earnings Per Share) Comparable Earnings Per Share Excluding Pension (1) (3) 2012 Forecast Midpoint GAAP EPS $ 2.09 3.27 3.53 3.99 4.19 4.51 1.62 2.37 3.31 4.03 Comparable EPS(1) $ 2.09 3.09 3.41 3.94 4.13 4.68 1.70 2.22 3.49 4.05 Non-Service Pe

  26. Slide 26: Q&A

    Q&A 2/2/2012 © 2012 Ryder System, Inc. All rights reserved. 26

  27. Slide 27: Appendix

    Appendix Business Segment Detail Central Support Services Balance Sheet Asset Management Return on Capital History Financial Indicators Forecast Pension Expense New Income Statement Format Non-GAAP Financial Measures & Reconciliations 2/2/2012 © 2012 Ryder System, Inc. All rights reserved. 27

  28. Slide 28: Fleet Management Solutions (FMS)

    Fleet Management Solutions (FMS) ($ Millions) Fourth Quarter 2011 2010 % B/(W) Full Service Lease $ 508.4 $ 485.0 5% Contract Maintenance 38.8 39.0 (1)% Contractual Revenue 547.2 524.0 4% Contract-related Maintenance 49.1 39.6 24% Commercial Rental 200.3 145.5 38% Other 16.7 17.1 (2)% Operating Reve

  29. Slide 29: Fleet Management Solutions (FMS)

    Fleet Management Solutions (FMS) ($ Millions) Full Year 2011 2010 % B/(W) Full Service Lease $ 1,996.3 $ 1,934.3 3% Contract Maintenance 155.2 158.8 (2)% Contractual Revenue 2,151.5 2,093.1 3% Contract-related Maintenance 192.7 160.9 20% Commercial Rental 722.6 525.1 38% Other 69.1 67.4 2% Operating

  30. Slide 30: Supply Chain Solutions (SCS)

    Supply Chain Solutions (SCS) ($ Millions) Fourth Quarter 2011 2010 % B/(W) Automotive $ 123.3 $ 114.3 8% High-Tech 59.4 59.3 - Retail & CPG 103.2 46.0 124% Industrial & Other 38.8 38.7 - Operating Revenue 324.7 258.3 26% Subcontracted Transportation 84.0 66.8 26% Total Revenue $ 408.7 $ 325.1 26% Se

  31. Slide 31: Supply Chain Solutions (SCS)

    Supply Chain Solutions (SCS) ($ Millions) Full Year 2011 2010 % B/(W) Automotive $ 469.2 $ 449.2 4% High-Tech 236.1 220.5 7% Retail & CPG 420.5 177.8 137% Industrial & Other 165.0 157.5 5% Operating Revenue 1,290.9 1,005.0 28% Subcontracted Transportation 314.5 247.3 27% Total Revenue $ 1,605.4 $ 1,

  32. Slide 32: Dedicated Contract Carriage (DCC)

    Dedicated Contract Carriage (DCC) ($ Millions) Fourth Quarter 2011 2010 % B/(W) Operating Revenue $ 147.1 $ 119.3 23% Subcontracted Transportation 9.5 2.6 269% Total Revenue $ 156.6 $ 121.8 29% Segment Earnings Before Tax (EBT) $ 7.0 $ 6.5 7% Segment EBT as % of Total Revenue 4.5% 5.3% Segment EBT a

  33. Slide 33: Dedicated Contract Carriage (DCC)

    Dedicated Contract Carriage (DCC) ($ Millions) Full Year 2011 2010 % B/(W) Operating Revenue $ 566.6 $ 468.5 21% Subcontracted Transportation 34.0 14.0 142% Total Revenue $ 600.7 $ 482.6 24% Segment Earnings Before Tax Earnings (EBT) $ 32.5 $ 31.0 5% Segment EBT as % of Total Revenue 5.4% 6.4% Segme

  34. Slide 34: Central Support Services (CSS)

    Central Support Services (CSS) ($ Millions) Fourth Quarter 2011 2010 % B/(W) Allocated CSS Costs $ 40.8 $ 37.2 (10)% Unallocated CSS Costs 11.1 10.8 (3)% Total CSS Costs $ 52.0 $ 48.0 (8)% 2/2/2012 © 2012 Ryder System, Inc. All rights reserved. 34

  35. Slide 35: Central Support Services (CSS)

    Central Support Services (CSS) ($ Millions) Full Year 2011 2010 % B/(W) Allocated CSS Costs $ 161.1 $ 142.2 (13)% Unallocated CSS Costs 42.7 41.5 (3)% Total CSS Costs $ 203.8 $ 183.7 (11)% 2/2/2012 © 2012 Ryder System, Inc. All rights reserved. 35

  36. Slide 36: Balance Sheet

    Balance Sheet ($ Millions) December 31, December 31, 2011 2010 Cash and Cash Equivalents $ 105 $ 213 Other Current Assets 984 810 Revenue Earning Equipment, Net 5,050 4,201 Operating Property and Equipment, Net 624 607 Other Assets 856 821 Total Assets $ 7,618 $ 6,652 Short-Term Debt / Current Porti

  37. Slide 37: U.S. Asset Management Update

    (a) U.S. Asset Management Update Number of Units FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 10,000 9,060 Redeployments – vehicles 9,000 coming off-lease with useful life remaining are redeployed 7,784 in the Ryder fleet (Commercial 8,000 7,537 Rental, DCC, SCS, or with another Lease customer). 7,000 Extens

  38. Slide 38: Financial Indicators Forecast

    Financial Indicators Forecast (1) Total Cash Generated (2) (3) Gross Capital Expenditures (3) ($ Millions) Full Service Lease Commercial Rental $2,200 PP&E/Other $1,757 $1,760 $1,399 $1,289 $1,265 $1,165 $1,182 $1,088 $657 $600 $725 $611 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20

  39. Slide 39: Pension Expense

    Pension Expense ($ Millions) 2011 Pension Expense $ 38 Lower than Assumed Return on Assets in 2011 11 Lower Expected Return Assumption 7 Benefit of Pension Contributions (6) Lower Discount Rate 4 2012 Estimated Pension Expense $ 54 2/2/2012 © 2012 Ryder System, Inc. All rights reserved. 39

  40. Slide 40: New Income Statement Format - 2011

    New Income Statement Format - 2011 ($ Millions) 1Q 2011 2Q 2011 3Q 2011 4Q 2011 FY 2011 Lease & Rental Revenues $ 579.4 $ 634.7 $ 675.3 $ 664.5 $ 2,553.9 Services Revenue 632.7 640.5 669.9 666.0 2,609.2 Fuel Services Revenue 213.2 238.1 225.5 210.6 887.5 Total Revenues 1,425.4 1,513.3 1,570.7 1,541.

  41. Slide 41: New Income Statement Format - 2010

    New Income Statement Format - 2010 ($ Millions) 1Q 2010 2Q 2010 3Q 2010 4Q 2010 FY 2010 Lease & Rental Revenues $ 543.6 $ 574.4 $ 597.5 $ 594.4 $ 2,309.8 Services Revenue 504.3 527.3 541.2 536.9 2,109.7 Fuel Services Revenue 172.0 184.4 178.3 182.1 716.9 Total Revenues 1,219.9 1,286.1 1,316.9 1,313.

  42. Slide 42: New Income Statement Format - 2009

    New Income Statement Format - 2009 ($ Millions) 1Q 2009 2Q 2009 3Q 2009 4Q 2009 FY 2009 Lease & Rental Revenues $ 551.0 $ 574.5 $ 573.7 $ 566.6 $ 2,265.9 Services Revenue 481.0 488.1 512.8 513.6 1,995.5 Fuel Services Revenue 142.4 149.4 167.3 166.8 625.9 Total Revenues 1,174.4 1,212.0 1,253.9 1,247.

  43. Slide 43: Non-GAAP Financial Measures

    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. Non-GAAP financial measures should be considered in addition t

  44. Slide 44: Earnings and EPS from Continuing Operations Reconciliation

    Earnings and EPS from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 4Q11 - 4Q11 - 4Q10 - 4Q10 - Earnings EPS Earnings EPS Reported $ 47.7 $ 0.92 $ 41.4 $ 0.80 Int'l Asset Gain on Sale - - (0.9) (0.02) Tax Benefits - - (10.8) (0.21) Acquisition Related Transaction Costs 0.

  45. Slide 45: EBT and Tax Rate from Continuing Operations Reconciliation

    EBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 4Q11 - 4Q11 - 4Q11 - EBT Tax Tax Rate Reported $ 73.1 $ 25.4 34.8% Acquisition Related Transaction Costs 0.4 - Restructuring Charges 2.9 0.9 Comparable $ 76.4 $ 26.3 34.4% FY11 - FY11 - FY11 - EBT Tax Tax

  46. Slide 46: EBT and Tax Rate from Continuing Operations Reconciliation

    EBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 4Q10 - 4Q10 - 4Q10 - EBT Tax Tax Rate Reported $ 49.6 $ 8.1 16.4% Gain on Sale of Building (0.9) - Tax Benefits - 10.8 Acquisition Costs 4.1 - Comparable $ 52.7 $ 18.9 35.9% FY10 - FY10 - FY10 - EBT Tax T

  47. Slide 47: Adjusted Return on Capital Reconciliation

    Adjusted Return on Capital Reconciliation ($ Millions) 2004 2005 2006 2007 2008 2009 (1) Net earnings $ 216 $ 227 $ 249 $ 254 $ 200 $ 62 Cumulative effect of change in accounting principle - 2 - - - - Restructuring and other charges, net and other items (24) (2) - 1 70 30 Income taxes 115 129 144 15

  48. Slide 48: Adjusted Return on Capital Reconciliation

    Adjusted Return on Capital Reconciliation ($ Millions) 2010 2011 Net Earnings (1) $ 118 $ 170 Restructuring and Other Charges, Net and Other Items 6 6 Income Taxes 61 108 Adjusted Earnings Before Income Taxes 185 284 Adjusted Interest Expense (2) 133 135 Adjusted Income Taxes (3) (124) (157) Adjuste

  49. Slide 49: Segment Adjusted Return on Capital Reconciliation

    Segment Adjusted Return on Capital Reconciliation ($ Millions) 2011 FMS SCS DCC Net Earnings (1) $ 152 $ 43 $ 20 Restructuring and Other Charges, Net and Other Items 6 - - Income Taxes 92 26 13 Adjusted Earnings Before Income Taxes 250 69 33 (2) Adjusted Interest Expense 135 5 3 (3) Adjusted Income

  50. Slide 50: Segment Adjusted Return on Capital Reconciliation

    Segment Adjusted Return on Capital Reconciliation ($ Millions) 2010 FMS SCS DCC Net Earnings (1) $ 118 $ 26 $ 19 Restructuring and Other Charges, Net and Other Items - 3 - Income Taxes 54 18 12 Adjusted Earnings Before Income Taxes 172 47 31 (2) Adjusted Interest Expense 134 5 2 (3) Adjusted Income

  51. Slide 51: Debt to Equity Reconciliation

    Debt to Equity Reconciliation ($ Millions) % to % to % to % to % to % to % to % to 12/31/00 Equity 12/31/01 Equity 12/31/02 Equity 12/31/03 Equity 12/31/04 Equity 12/31/05 Equity 12/31/06 Equity 12/31/07 Equity Balance Sheet Debt $2,017 161% $1,709 139% $1,552 140% $1,816 135% $1,783 118% $2,185 143

  52. Slide 52: Debt to Equity Reconciliation

    Debt to Equity Reconciliation ($ Millions) % to % to % to % to 12/31/08 Equity 12/31/09 Equity 12/31/10 Equity 12/31/11 Equity Balance Sheet Debt $2,863 213% $2,498 175% $2,747 196% $3,382 257% Receivables Sold - - - - PV of minimum lease payments and guaranteed residual values under operating lease

  53. Slide 53: Cash Flow Reconciliation

    Cash Flow Reconciliation ($ Millions) 12/31/00 (4) 12/31/01 (4) 12/31/02 (4) 12/31/03 (4) 12/31/04 (4) 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 Cash Provided by Operating Activities $ 1,023 $ 365 $ 617 $ 803 $ 867 $ 776 $ 852 $ 1,097 $ 1,248 $ 985 Less: Changes in Bal. of Trade Rec. Sold (270) 2

  54. Slide 54: Cash Flow Reconciliation

    Cash Flow Reconciliation ($ Millions) 12/31/10 12/31/11 Cash Provided by Operating Activities from Continuing Operations $ 1,028 $ 1,042 Proceeds from Sales (Primarily Revenue Earning Equipment) 235 300 Proceeds from Sale and Leaseback of Assets - 37 Collections of Direct Finance Leases 62 62 Other,

  55. Slide 55: Ryder logo

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