Ryder System, Inc. · NYSE:R

Ryder System — Q2 2015 Earnings Presentation

40 slides from Ryder System's earnings presentation, Jul 23, 2015

  1. Slide 1: Second Quarter 2015 Earnings Conference Call

    Second Quarter 2015 Earnings Conference Call July 23, 2015

  2. Slide 2: Safe Harbor and Non-GAAP Financial Measures

    Safe Harbor and Non-GAAP Financial Measures Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995, including our expectations regarding earnings performance, operating revenue growth in our

  3. Slide 3: Contents

    Contents ► Second Quarter 2015 Results Overview ► Asset Management Update ► Earnings Forecast ►Q &A © 2015 Ryder System, Inc. 3 All Rights Reserved.

  4. Slide 4: 2nd Quarter Results Overview

    2nd Quarter Results Overview ► Comparable earnings per share from continuing operations were $1.65 vs. $1.44 in 2Q14 ► Earnings per diluted share from continuing operations were $1.61 in 2Q15 vs. $1.42 in 2Q14 – 2Q15 included non-operating pension costs of $0.05 and professional fees of $0.02, which

  5. Slide 5: Key Financial Statistics

    Key Financial Statistics ($ Millions, Except Per Share Amounts) Second Quarter 2015 2014 % B/(W) Operating Revenue $ 1,392.6 $ 1,315.6 6% Fuel and Subcontracted Transportation 270.3 368.9 (27)% Total Revenue $ 1,662.9 $ 1,684.6 (1)% Comparable Earnings Per Share from Continuing Operations $ 1.65 $ 1

  6. Slide 6: Key Financial Statistics

    Key Financial Statistics ($ Millions, Except Per Share Amounts) Year-To-Date 2015 2014 % B/(W) Operating Revenue $ 2,692.9 $ 2,558.4 5% Fuel and Subcontracted Transportation 537.2 736.9 (27)% Total Revenue $ 3,230.1 $ 3,295.3 (2)% Comparable Earnings Per Share from Continuing Operations $ 2.73 $ 2.3

  7. Slide 7: 2nd Quarter Results Overview – FMS

    2nd Quarter Results Overview – FMS ► Fleet Management Solutions (FMS) operating revenue up 6% (up 8% excluding foreign exchange) and total revenue down 3% vs. prior year – Full service lease revenue up 5% (up 7% excluding foreign exchange) – Contract maintenance revenue up 6% – Commercial rental rev

  8. Slide 8: 2nd Quarter Results Overview – DTS

    2nd Quarter Results Overview – DTS ► Dedicated Transportation Solutions (DTS) operating revenue up 6% and total revenue down 4% vs. prior year – Operating revenue increased due to new business as well as higher volumes and pricing – Total revenue down due to lower fuel costs passed through to custom

  9. Slide 9: 2nd Quarter Results Overview – SCS

    2nd Quarter Results Overview – SCS ► Supply Chain Solutions (SCS) operating revenue up 6% (up 9% excluding foreign exchange) and total revenue up 1% vs. prior year – Operating revenue increased due to higher volumes and new business, primarily in the consumer packaged goods and technology sectors, a

  10. Slide 10: Business Segments

    Business Segments ($ Millions) Second Quarter Memo: Total Revenue 2015 2014 % B/(W) 2015 2014 % B/(W) Operating Revenue: Fleet Management Solutions $ 959.1 $ 907.9 6% $ 1,149.3 $ 1,181.2 (3)% Dedicated Transportation Solutions 176.8 166.9 6% 223.5 234.0 (4)% Supply Chain Solutions 320.1 301.1 6% 396

  11. Slide 11: Business Segments

    Business Segments ($ Millions) Year-To-Date Memo: Total Revenue 2015 2014 % B/(W) 2015 2014 % B/(W) Operating Revenue: Fleet Management Solutions $ 1,858.2 $ 1,767.8 5% $ 2,236.5 $ 2,316.3 (3)% Dedicated Transportation Solutions 342.6 323.2 6% 436.2 450.0 (3)% Supply Chain Solutions 615.5 585.6 5% 7

  12. Slide 12: Capital Expenditures

    Capital Expenditures ($ Millions) Year-To-Date 2015 $ 2015 2014 O/(U) 2014 Full Service Lease $ 947 $ 818 $ 129 Commercial Rental 453 344 109 Operating Property and Equipment 54 95 (41) Gross Capital Expenditures 1,454 1,257 197 Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 212 277

  13. Slide 13: Cash Flow from Continuing Operations

    Cash Flow from Continuing Operations ($ Millions) Year-To-Date 2015 2014 Earnings from Continuing Operations $ 140 $ 125 Depreciation 531 506 Gains on Vehicle Sales, Net (63) (63) Amortization and Other Non-Cash Charges, Net 39 36 Pension Contributions Settlement Loss (8) (65) Changes in Working Cap

  14. Slide 14: Debt to Equity Ratio

    Debt to Equity Ratio ($ Millions) 300% 270% 270% 261% 259% 250% 250% 226% Pension 200% Impact(1) 150% Total Obligations 100% to Equity 50% 0% 12/31/11 12/31/12 12/31/13 12/31/14 6/30/15 Long Term Target Midpoint (2) Balance 257% 260% 221% 248% 254% Sheet Debt to Equity 6/30/2015 12/31/2014 6/30/2014

  15. Slide 15: Contents

    Contents ► Second Quarter 2015 Results Overview ► Asset Management Update ► Earnings Forecast ►Q &A © 2015 Ryder System, Inc. 15 All Rights Reserved.

  16. Slide 16: Global Asset Management Update

    Global Asset Management Update ► Units held for sale were 5,900 at quarter end, down from 6,300 units held for sale in the prior year ─ Sequentially from the first quarter, units held for sale increased by 100 units ► The number of used vehicles sold in the second quarter was 4,700, down 14% from th

  17. Slide 17: Contents

    Contents ► Second Quarter 2015 Results Overview ► Asset Management Update ► Earnings Forecast ►Q &A © 2015 Ryder System, Inc. 17 All Rights Reserved.

  18. Slide 18: EPS Forecast – Continuing Operations

    EPS Forecast – Continuing Operations ($ Earnings Per Share) ► Full year Comparable EPS forecast is $6.45 - $6.55 from $6.40 - $6.55 ► Current forecast is as follows: Third Quarter Full Year 2015 Comparable EPS Forecast(1) $ 1.82 - 1.87 $ 6.45 - 6.55 2014 Comparable EPS (2) $ 1.63 $ 5.58 (1) 3Q15 Com

  19. Slide 19: Q&A

    Q&A © 2015 Ryder System, Inc. 19 All Rights Reserved.

  20. Slide 20: Appendix

    Appendix Full Service Lease Vehicle Count Business Segment Detail Central Support Services Balance Sheet Adjusted Return on Capital History Asset Management Non-GAAP Financial Measures & Reconciliations © 2015 Ryder System, Inc. 20 All Rights Reserved.

  21. Slide 21: Full Service Lease (FSL) Fleet Count

    Full Service Lease (FSL) Fleet Count 2Q15 O/(U) End of Period 2Q14 3Q14 4Q14 1Q15 2Q15 2Q14 FSL Fleet (as reported) 123,000 123,200 125,500 127,500 128,700 5,700 UK FSL Trailers 4,600 4,300 4,400 4,400 4,300 (300) FSL Fleet - excluding UK 118,400 118,900 121,100 123,100 124,400 6,000 3Q14 O/(U) 4Q14

  22. Slide 22: Fleet Management Solutions (FMS)

    Fleet Management Solutions (FMS) ($ Millions) Second Quarter Revenue 2015 2014 % B/(W) Full Service Lease $ 595.7 $ 566.1 5% Contract Maintenance 49.0 46.3 6% Contractual Revenue 644.7 612.4 5% Commercial Rental 239.1 221.7 8% Contract-related Maintenance 56.5 56.5 - Other 18.8 17.3 8% Operating Rev

  23. Slide 23: Fleet Management Solutions (FMS)

    Fleet Management Solutions (FMS) ($ Millions) Year-To-Date Revenue 2015 2014 % B/(W) Full Service Lease $ 1,172.8 $ 1,118.3 5% Contract Maintenance 94.9 89.9 6% Contractual Revenue 1,267.7 1,208.3 5% Commercial Rental 444.1 411.9 8% Contract-related Maintenance 109.7 112.6 (3)% Other 36.7 35.1 5% Op

  24. Slide 24: Dedicated Transportation Solutions (DTS)

    Dedicated Transportation Solutions (DTS) ($ Millions) Second Quarter Revenue 2015 2014 % B/(W) Operating Revenue $ 176.8 $ 166.9 6% Subcontracted Transportation 14.5 23.2 (37)% Fuel Costs 32.2 43.9 (27)% Total Revenue $ 223.5 $ 234.0 (4)% Earnings Before Tax Segment Earnings Before Tax (EBT) $ 12.4

  25. Slide 25: Dedicated Transportation Solutions (DTS)

    Dedicated Transportation Solutions (DTS) ($ Millions) Year-To-Date Revenue 2015 2014 % B/(W) Operating Revenue $ 342.6 $ 323.2 6% Subcontracted Transportation 29.2 39.4 (26)% Fuel Costs 64.4 87.4 (26)% Total Revenue $ 436.2 $ 450.0 (3)% Earnings Before Tax Segment Earnings Before Tax (EBT) $ 21.4 $

  26. Slide 26: Supply Chain Solutions (SCS)

    Supply Chain Solutions (SCS) ($ Millions) Second Quarter Revenue 2015 2014 % B/(W) Automotive $ 119.3 $ 117.8 1% Technology & Healthcare 64.0 56.4 13% CPG & Retail 110.7 99.9 11% Industrial & Other 26.0 27.0 (4)% Operating Revenue 320.1 301.1 6% Subcontracted Transportation 59.8 66.6 (10)% Fuel Cost

  27. Slide 27: Supply Chain Solutions (SCS)

    Supply Chain Solutions (SCS) ($ Millions) Year-To-Date Revenue 2015 2014 % B/(W) Automotive $ 228.5 $ 232.1 (2)% Technology & Healthcare 123.3 107.4 15% CPG & Retail 213.4 193.5 10% Industrial & Other 50.3 52.6 (4)% Operating Revenue 615.5 585.6 5% Subcontracted Transportation 118.0 136.6 (14)% Fuel

  28. Slide 28: Central Support Services (CSS)

    Central Support Services (CSS) ($ Millions) Second Quarter 2015 2014 % B/(W) Allocated CSS Costs $ 51.7 $ 46.3 (12)% Unallocated CSS Costs 10.9 12.1 10% Total CSS Costs $ 62.6 $ 58.4 (7)% © 2015 Ryder System, Inc. 28 All Rights Reserved.

  29. Slide 29: Central Support Services (CSS)

    Central Support Services (CSS) ($ Millions) Year-To-Date 2015 2014 % B/(W) Allocated CSS Costs $ 100.5 $ 94.5 (6)% Unallocated CSS Costs 22.9 23.0 0% Total CSS Costs $ 123.3 $ 117.5 (5)% © 2015 Ryder System, Inc. 29 All Rights Reserved.

  30. Slide 30: Balance Sheet

    Balance Sheet ($ Millions) June 30, December 31, 2015 2014 Current Assets $ 1,136 $ 1,076 Revenue Earning Equipment, Net 7,508 6,994 Operating Property and Equipment, Net 708 700 Other Assets 940 906 Total Assets $ 10,292 $ 9,676 Current Liabilities 1,181 1,081 Total Debt 4,855 4,512 Other Non-Curre

  31. Slide 31: Adjusted Return on Capital History

    Adjusted Return on Capital History Adjusted 7.8% 7.9% Return on 7.4% 7.3% Capital 6.3% 6.1% 6.1% (ROC) 5.7% 5.6% 5.7% 5.8% 150 bp 6.8% 6.7% 6.6% 6.5% Spread Cost of 5.5% Targeted Capital 4.7% 4.6% 4.1% 4.8% 4.8% 4.7% (COC) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 Forecast Forecast

  32. Slide 32: Asset Management Update (US Only)

    Asset Management Update (US Only) Redeployments – Vehicles coming off-lease or in Rental with 2Q09 YTD 2Q10 YTD 2Q11 YTD 2Q12 YTD 2Q13 YTD 2Q14 YTD 2Q15 YTD useful life remaining are redeployed in the Ryder fleet (SCS, or with another Lease customer). Redeployments exclude units 5,000 transferred in

  33. Slide 33: 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

  34. Slide 34: Foreign Exchange Impact on Operating Revenue Growth

    Foreign Exchange Impact on Operating Revenue Growth Second Quarter Year-To-Date YOY YOY YOY Growth YOY Growth (1) Growth Fx Impact excl Fx Growth Fx Impact (1) excl Fx Operating Revenue 6% (2)% 8% 5% (2)% 7% FMS Operating Revenue 6% (2)% 8% 5% (2)% 7% Full Service Lease Revenue 5% (2)% 7% 5% (2)% 7%

  35. Slide 35: Earnings and EPS from Continuing Operations Reconciliation

    Earnings and EPS from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 2Q15 2Q15 2Q14 2Q14 Earnings EPS Earnings EPS Reported $ 86.2 $ 1.61 $ 75.7 $ 1.42 Non-operating pension costs 2.7 0.05 0.8 0.02 Professional fees 1.2 0.02 - - Tax law change Professional fees (1.9) (0.03

  36. Slide 36: EBT and Tax Rate from Continuing Operations Reconciliation

    EBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 2Q15 2Q15 2Q15 YTD15 YTD15 YTD15 EBT Tax Tax Rate EBT Tax Tax Rate Reported $ 133.8 $ 47.7 35.6% $ 218.2 $ 78.6 36.0% Non-operating pension costs 4.7 2.0 9.6 4.1 Professional fees 1.9 0.7 3.8 1.4 Tax law

  37. Slide 37: 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

  38. Slide 38: Adjusted Return on Capital Reconciliation

    Adjusted Return on Capital Reconciliation ($ Millions) 2010 2011 2012 2013 2014 2Q14 2Q15 (1) Net Earnings $ 118 $ 170 $ 210 $ 238 $ 219 $ 259 $ 233 Restructuring and Other Charges, Net and Other Items 6 6 17 - 115 2 119 Income Taxes 61 108 91 126 118 139 127 Adjusted Earnings Before Income Taxes 18

  39. Slide 39: Debt to Equity Reconciliation

    Debt to Equity Reconciliation ($ Millions) % to % to % to % to % to % to 12/31/2011 Equity 12/31/2012 Equity 12/31/2013 Equity 12/31/2014 Equity 6/30/2015 Equity 6/30/2014 Equity Balance Sheet Debt $3,382 257% $3,821 260% $4,189 221% $4,512 248% $4,855 254% $4,717 240% Receivables Sold - - PV of min

  40. Slide 40: © 2015 Ryder System, Inc. All Rights Reserved.

    © 2015 Ryder System, Inc. All Rights Reserved.

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