Slide 1: Fourth Quarter 2023 Earnings Conference Call
Fourth Quarter 2023 Earnings Conference Call February 14, 2024
Slide 2: Safe Harbor and Non-GAAP Financial Measures
Safe Harbor and Non-GAAP Financial Measures Note Regarding Forward-Looking Statements: Certain statements and information included in this news release are “forward-looking statements” under the Federal Private Securities Litigation Reform Act of 1995, including: our forecast; our outlook; our expec
Slide 3: Contents
Contents 4Q23 Earnings Release Conference Call Note Regarding Forward-Looking Statements Slide 2 2023 Highlights & Strategic Update Slides 4 - 8 4Q23 Results Slides 9 - 13 Capex, Cash Flow & Capital Allocation Slides 14 - 15 Outlook Slides 16 - 21 Investor Day Slide 22 Appendix & Non-GAAP Financial
Slide 4: Delivered strong 2023 results amid freight downturn
Delivered strong 2023 results amid freight downturn • ROE of 19% in line with high-teens target over the cycle • Comparable EPS of $12.95 reflects market conditions and strategy execution ◦ Above initial forecast midpoint of $11.55 ◦ Significantly above comparable EPS of $5.95 in 2018 (prior freight
Slide 5: Key Updates
Key Updates • Execution of balanced growth strategy has increased the return profile of business vs prior cycles Strategy Update • Completed IFS acquisition - adding co-packaging and co-manufacturing capabilities • Acquired Cardinal Logistics (in 1Q24) - adding scale and density to dedicated busines
Slide 6: Higher Earnings and Return Profile Reflects Transformative Changes
Higher Earnings and Return Profile Reflects Transformative Changes Business is outperforming prior cycles and well positioned for long-term growth Note: See Appendix for reconciliations of non-GAAP financial measures, including Comparable EPS and ROE. SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET
Slide 7: Cardinal Logistics Acquisition Solidifies Ryder as a Leading Provider
Cardinal Logistics Acquisition Solidifies Ryder as a Leading Provider in the Attractive Customized Solution Segment of Dedicated Transportation SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2024 Ryder System, Inc. 7 All Rights Reserved
Slide 8: Cardinal Business Integration & Operating Highlights
Cardinal Business Integration & Operating Highlights Expected to add ~$1B in annualized total revenue and ~$800M in annualized operating revenue* DTS ~85% of Cardinal's operating revenue • Increases scale and network density • Drives operating leverage and synergies SCS ~15% of Cardinal's operating
Slide 9: Results Overview
Results Overview OPERATING REVENUE COMPARABLE EPS Fourth Quarter Fourth Quarter +2% $2.4B -24% $2.4B $3.89 Primarily reflecting weaker Primarily reflecting $2.95 contractual growth, partially market conditions in used offset by lower rental vehicle sales (UVS) and rental, partially offset by improve
Slide 10: 4th Quarter Results Overview – FMS
4th Quarter Results Overview – FMS OPERATING REVENUE 4% decrease reflects lower rental demand, partially offset $1.32B $1.27B by higher ChoiceLease revenue 4Q22 4Q23 EARNINGS BEFORE TAX (EBT) Earnings decline primarily reflects: $256M • lower gains in UVS due to lower pricing $134M partially offset
Slide 11: 4th Quarter Used Vehicle Sales Update – FMS
4th Quarter Used Vehicle Sales Update – FMS % CHANGE IN PROCEEDS Sequential pricing decline was (12)% (11)% generally in line with our expectations (39)% (33)% vs. 4Q22 vs. 3Q23 USED VEHICLES SOLD USED VEHICLE INVENTORY Sales volumes and inventory reflect higher lease replacement and 6,500 7,200 7,8
Slide 12: 4th Quarter Results Overview – SCS
4th Quarter Results Overview – SCS OPERATING REVENUE $883M $972M 10% increase driven by: • organic growth from new business, increased pricing, and higher volumes • acquisition of Impact Fulfillment Services (IFS) 4Q22 4Q23 EARNINGS BEFORE TAX (EBT) 35% increase primarily reflects: $57M • higher ope
Slide 13: 4th Quarter Results Overview – DTS
4th Quarter Results Overview – DTS OPERATING REVENUE $320M $324M 1% increase reflects inflationary cost recovery 4Q22 4Q23 EARNINGS BEFORE TAX (EBT) $31M $31M EBT remained strong and generally in line with prior year 4Q22 4Q23 EBT as % of Operating Revenue 9.7% 9.4% DTS full year 2023 EBT as a % of
Slide 14: Capital Expenditures
Capital Expenditures LEASE RENTAL $2.6B 2023 reflects $0.6B $2.5B $0.5B 2024 forecast $1.8B $0.1B normalized timing for $0.4B $0.4B $0.2B $0.3B reflects higher $2.5B $2.1B OEM tractor deliveries; 2024 $0.3B $0.4B $0.3B rental growth; forecast reflects fleet remains FY22 FY23 FY 24F FY22 FY23 FY 24F
Slide 15: Cash Flow and Capital Allocation Priorities
Cash Flow and Capital Allocation Priorities OPERATING CASH FLOW AND FREE CASH FLOW HISTORY FREE CASH FLOW SUMMARY (billions) (billions) Operating Cash Flow Free Cash Flow 2023 2024F Cash Flow from Operations $ 2.4 $ 2.4 $2.1B $2.2B $2.2B $2.3B $2.4B $2.4B Proceeds from Sales (Primarily Revenue Earni
Slide 16: Introducing 2024 Outlook
Introducing 2024 Outlook 2023 RESULTS 2024 FORECAST MARKET ASSUMPTIONS Operating Revenue Muted macroeconomic growth 2% ~13% Growth Weak freight conditions expected to continue, with gradual improvement in 2H24 $12.95 $11.50 - $12.50 Comparable EPS Down 21% YoY Down 3% - 11% YoY Secular trends contin
Slide 17: 2024 Outlook Highlights
2024 Outlook Highlights Operating revenue growth at target from organic fleet growth and acquisition, partially offset by rental FMS EBT% at target reflecting benefits from fleet growth and multi-year initiatives, partially offset by trough conditions in UVS and rental Operating revenue growth at ta
Slide 18: 2024 Causes of Comparable EPS Change
2024 Causes of Comparable EPS(1) Change ($ Earnings Per Share) (2) (1) Represents Comparable EPS (Non-GAAP Metric) (2) Represents high end of $11.50 - $12.50 Comparable EPS forecast range Note: See Appendix for reconciliations of non-GAAP financial measures, including Comparable EPS. 18 © 2024 Ryder
Slide 19: EPS – Continuing Operations
EPS – Continuing Operations FULL YEAR EPS FIRST QUARTER EPS (Earnings Per Share) 2023 2024 Forecast 2023 2024 Forecast GAAP $8.73 $10.70 - $11.70 $2.95 $1.28 - $1.53 Comparable $12.95 $11.50 - $12.50 $2.81 $1.55 - $1.80 Note: See Appendix for reconciliations of non-GAAP financial measures, including
Slide 20: Favorably Positioned for Cycle Upturn
Favorably Positioned for Cycle Upturn Opportunities to benefit from cycle upturn in all segments SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2024 Ryder System, Inc. 20 All Rights Reserved
Slide 21: Delivering Shareholder Value
Delivering Shareholder Value Transformative changes to our business model and continued execution of our balanced growth strategy have enabled us to achieve long-term targets, increase business model resiliency, and outperform prior cycles Secular trends, operational expertise, and momentum from mul
Slide 22: Save the Date: Ryder Investor Day June 13, 2024
Save the Date Ryder Investor Day June 13, 2024 The Westin New York at Times Square SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 22 © 2024 Ryder System, Inc. All Rights Reserved
Slide 23: Q&A
Q&A SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 23 © 2024 Ryder System, Inc. All Rights Reserved
Slide 24: Appendix
Appendix Financial Targets Residuals Chart Comparable Segment EBITDA Business Segment Detail Central Support Services Balance Sheet Asset Management Non-GAAP Financial Measures & Reconciliations SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2024 Ryder System, Inc. 24 All Rig
Slide 25: Long Term Financial Model
Long Term Financial Model ROE TARGET 2024 FORECAST Long-term average over the cycle High Teens at targetwithin stated range of mid- teens (trough) to low 20's Component drivers to achieve ROE target include: (upcycle) Operating Operating Revenue Revenue Growth Growth Total Ryder High Single Digit at
Slide 26: Historical Sales Price as % of Original Cost & Residual Value Estimates
Historical Sales Price as % of Original Cost & Current Residual Value Estimates Truck Residual Index1 Tractor Residual Index1 Range Residual Estimate for Accounting Residual Estimate for Accounting RESIDUAL VALUE Accounting Residuals: Previously lowered by ~30% to address used vehicle volatility ris
Slide 27: Comparable Segment EBITDA
Comparable Segment EBITDA Fourth Quarter ($ Millions) 2023 YTD FMS SCS DTS Earnings before income tax $ 665 $ 231 $ 121 Interest expense / (income) 292 8 (3) (1) Depreciation 1,571 136 3 (1) Used vehicle sales, net (193) — — Comparable Segment EBITDA (2) $ 2,335 $ 375 $ 121 2022 YTD FMS SCS DTS Earn
Slide 28: Business Segments – Fourth Quarter
Business Segments Fourth Quarter ($ Millions) Memo: Operating Revenue (3) 2023 2022 % B/(W) 2023 2022 % B/(W) Total Revenue: Fleet Management Solutions $ 1,481 $ 1,595 (7)% $ 1,271 $ 1,321 (4)% Supply Chain Solutions 1,301 1,251 4% 972 883 10% Dedicated Transportation Solutions 443 456 (3)% 324 320
Slide 29: Business Segments – Full Year
Business Segments Full Year Memo: Operating Revenue (3) ($ Millions) 2023 2022 % B/(W) 2023 2022 % B/(W) Total Revenue: Fleet Management Solutions $ 5,930 $ 6,327 (6)% $ 5,053 $ 5,213 (3)% Supply Chain Solutions 4,875 4,720 3% 3,625 3,254 11% Dedicated Transportation Services 1,785 1,786 —% 1,298 1,
Slide 30: Fleet Management Solutions (FMS) – Fourth Quarter
Fleet Management Solutions (FMS) ($ Millions) Fourth Quarter Revenue 2023 2022 % B/(W) ChoiceLease $ 825 $ 802 3% Commercial rental 279 347 (20)% SelectCare and other 167 164 2% FMS Europe — 8 (100)% FMS operating revenue (1) 1,271 1,321 (4)% Fuel services revenue (2) 210 274 (23)% FMS total revenue
Slide 31: Fleet Management Solutions (FMS) – Full Year
Fleet Management Solutions (FMS) Full Year ($ Millions) Revenue 2023 2022 % B/(W) ChoiceLease $ 3,181 $ 3,101 3% Commercial Rental 1,178 1,338 (12)% SelectCare and other 694 624 11% FMS Europe — 150 FMS Operating Revenue (1) 5,053 5,213 (3)% (2) Fuel Services Revenue 877 1,114 (21)% FMS Total Revenu
Slide 32: Supply Chain Solutions (SCS) – Fourth Quarter
Supply Chain Solutions (SCS) Fourth Quarter ($ Millions) Revenue 2023 2022 % B/(W) Omnichannel retail $ 330 $ 344 (4)% Automotive 271 232 17% Consumer packaged goods 257 213 21% Industrial and other 115 94 24% SCS operating revenue (1) 972 883 10% Subcontracted transportation and fuel 328 368 (11)%
Slide 33: Supply Chain Solutions (SCS) – Full Year
Supply Chain Solutions (SCS) Full Year ($ Millions) Revenue 2023 2022 % B/(W) Omnichannel retail $ 1,207 $ 1,215 (1)% Automotive 1,061 870 22% Consumer packaged goods 926 806 15% Industrial and other 431 363 19% SCS Operating Revenue (1) 3,625 3,254 11% Subcontracted Transportation and Fuel 1,250 1,
Slide 34: Dedicated Transportation Solutions (DTS) – Fourth Quarter
Dedicated Transportation Solutions (DTS) Fourth Quarter ($ Millions) Revenue 2023 2022 % B/(W) (1) DTS Operating Revenue $ 324 $ 320 1% Subcontracted transportation and fuel 119 136 (13)% DTS Total Revenue $ 443 $ 456 (3)% Earnings Before Tax DTS Earnings Before Tax (EBT) $ 31 $ 31 (1)% DTS EBT as a
Slide 35: Dedicated Transportation Solutions (DTS) – Full Year
Dedicated Transportation Solutions (DTS) Full Year ($ Millions) Revenue 2023 2022 % B/(W) (1) DTS Operating Revenue $ 1,298 $ 1,239 5% Subcontracted Transportation and Fuel 487 547 (11)% DTS Total Revenue $ 1,785 $ 1,786 —% Earnings Before Tax DTS Earnings Before Tax (EBT) $ 121 $ 103 18% DTS EBT as
Slide 36: Central Support Services (CSS)
Central Support Services (CSS) ($ Millions) Fourth Quarter 2023 2022 % B/(W) Allocated CSS Costs $ 90 $ 84 (7)% Unallocated CSS Costs 17 21 19% Total CSS Costs $ 107 $ 105 (2)% Full Year 2023 2022 % B/(W) Allocated CSS Costs $ 347 $ 336 (3)% Unallocated CSS Costs 72 83 13% Total CSS Costs $ 419 $ 41
Slide 37: Balance Sheet
Balance Sheet ($ Millions) December 31, 2023 December 31, 2022 Cash and cash equivalents $ 204 $ 267 Other current assets 2,061 1,933 Revenue earning equipment, net 8,892 8,190 Operating property and equipment, net 1,217 1,148 Other assets 3,404 2,857 Total assets $ 15,778 $ 14,395 Current liabiliti
Slide 38: Selected Segment Balance Sheet Items
Selected Segment Balance Sheet Items ($ Millions) December 31, 2023 (1) FMS SCS DTS Total Assets Excluding Goodwill & Intangibles $ 11,420 $ 2,681 $ 341 $ 14,442 Goodwill and Intangibles 257 1,036 43 1,336 Total Assets 11,677 3,717 384 15,778 Debt (2) 6,497 616 1 7,114 Equity (3) $ 1,558 $ 1,336 $ 1
Slide 39: © 2024 Ryder System, Inc. All Rights Reserved
SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2024 Ryder System, Inc. 39 All Rights Reserved
Slide 40: 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 to,
Slide 41: Total Revenue to Operating Revenue Reconciliation
Total Revenue to Operating Revenue Reconciliation ($ Millions) Fourth Quarter 2023 2022 Total Revenue $ 3,023 $ 3,088 Subcontracted Transportation and Fuel (576) (678) Operating Revenue (1) $ 2,447 $ 2,410 Full Year 2023 2022 Total Revenue $ 11,783 $ 12,011 Subcontracted Transportation and Fuel (2,2
Slide 42: Earnings and EPS from Continuing Operations Reconciliation
Earnings and EPS from Continuing Operations Reconciliation ($ Millions, Except Per Share Amounts) 4Q23 4Q23 4Q22 4Q22 Earnings EPS Earnings EPS Continuing operations (GAAP) $ 124 $ 2.74 $ 200 $ 4.06 Non-operating pension costs, net 7 0.16 2 0.04 FMS U.K. exit (1) — — (24) (0.49) Other, net 2 0.03 (3
Slide 43: Comparable EPS Reconciliation
Comparable EPS Reconciliation First Quarter 2024 Full Year 2024 Forecast Forecast EPS from continuing operations forecast (GAAP) $1.28 - $1.53 $10.70 - $11.70 Non-operating pension costs, net 0.18 0.74 Restructuring and other, net 0.09 0.06 Comparable EPS from continuing operations forecast (non-GAA
Slide 44: Comparable EPS Reconciliation
Comparable EPS Reconciliation Full Year 2018 EPS from continuing operations (GAAP) $ 5.43 Non-operating pension costs, net 0.09 Restrcuturing and other, net 0.08 ERP implementation costs 0.01 Goodwill Impairment 0.29 Tax adjustments, net 0.05 Comparable EPS from continuing operations (non-GAAP) $ 5.
Slide 45: Adjusted Return on Equity Reconciliation
Adjusted Return on Equity Reconciliation (1) Twelve months ended December 31, ($ Millions) 2018 2022 2023 2024 Forecast Net earnings $ 285 $ 867 $ 406 $ 500 Other items impacting comparability, net (5) 22 (83) 157 5 Income taxes (2) 103 353 212 190 Adjusted earnings before income taxes 409 1,137 775
Slide 46: Cash Flow Reconciliation
Cash Flow Reconciliation ($ Millions) 2019 2020 2021 2022 2023 2024 Forecast Net Cash Provided by Operating Activities from Continuing Operations $ 2,141 $ 2,181 $ 2,175 $ 2,310 $ 2,353 $ 2,400 Proceeds from Sales (Primarily Revenue Earning Equipment) (1) 518 552 822 1,235 827 550 Other, net (1) — —