Slide 1: First Quarter 2023 Earnings Conference Call
First Quarter 2023 Earnings Conference Call April 26, 2023
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; expectations regarding
Slide 3: Contents
Contents 1Q23 Earnings Release Conference Call Note Regarding Forward-Looking Statements Slide 2 Strategic Update Slides 4 - 6 1Q23 Results Slides 7 - 11 Capex, Cash Flow & Capital Allocation Slides 12 - 13 Outlook Slides 14 - 16 Appendix & Non-GAAP Financial Measures SUPPLY CHAIN | DEDICATED TRANSP
Slide 4: Key Updates
Key Updates • Secular trends continue to favor long-term outsourcing decisions • Continued execution on balanced growth strategy benefited results and positions the business Strategy Update to outperform prior cycles • Strategic investments focused on opportunities for long-term profitable growth •
Slide 5: Balanced Growth Strategy Execution
Balanced Growth Strategy Execution Focused on higher return contractual growth while reducing reliance on transactional business to achieve target returns SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2023 Ryder System, Inc. 5 ©All2023 Ryder Rights System, Inc. Reserved All
Slide 6: Spotlight: Increasing Supply Chain Resilience Through Nearshoring
Spotlight: Increasing Supply Chain Resilience Through Nearshoring Market Trends: Increased x-border activity and investment* Ryder Mexico's key differentiators • US-MX truck border crossings up 20%+ annually since COVID • Highly integrated with distribution and transportation operations across North
Slide 7: Results Overview
Results Overview Operating Revenue Comparable EPS First Quarter First Quarter +6% $3.59 -22% Lower FMS results, as expected, $2.2B $2.3B $2.81 and SCS asset impairment; Primarily driven by SCS partially offset by lower share revenue growth count and higher earnings in DTS 1Q22 1Q23 1Q22 1Q23 ROE Fre
Slide 8: 1st Quarter Results Overview – FMS
1st Quarter Results Overview – FMS OPERATING REVENUE 2% decrease reflects: $1.3B $1.3B • a 4% increase in North American revenue due to higher SelectCare and ChoiceLease, more than offset by 6% negative revenue impact from UK exit 1Q22 1Q23 EARNINGS BEFORE TAX (EBT)* $249M $182M Earnings decline pri
Slide 9: 1st Quarter Used Vehicle Sales Update – FMS
1st Quarter Used Vehicle Sales Update – FMS % CHANGE IN PROCEEDS • Used vehicle proceeds remain well above historical averages (10)% (7)% (16)% • Sequential pricing decline better than (35)% anticipated for trucks and in-line with our vs. 1Q22 expectations for tractors vs. 4Q22 USED VEHICLES SOLD US
Slide 10: 1st Quarter Results Overview – SCS
1st Quarter Results Overview – SCS OPERATING REVENUE $879M $738M 19% increase reflects new business, higher volumes and increased pricing • strong revenue growth in all industry verticals 1Q22 1Q23 EARNINGS BEFORE TAX (EBT)* 60% decrease reflects: $43M $17M • $30 million asset impairment related to
Slide 11: 1st Quarter Results Overview – DTS
1st Quarter Results Overview – DTS OPERATING REVENUE $296M $322M 9% increase reflects higher pricing and increased volumes 1Q22 1Q23 EARNINGS BEFORE TAX (EBT)* $29M $20M 45% increase primarily reflects revenue growth and improved conditions for hiring professional drivers 1Q22 1Q23 EBT as % of Opera
Slide 12: Capital Expenditures
Capital Expenditures Lease $579M Rental $422M $180M $177M 1Q22 1Q23 1Q22 1Q23 Reflects higher lease replacement capital; Shifting vehicle mix toward trucks due to stronger, lease returns benefiting from pricing initiatives historically more resilient demand trends than tractors Capital FY22 FY23F Ex
Slide 13: 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 2022 2023F Cash Flow from Operations $ 2.3 $ 2.4 Proceeds from Sales (Primarily Revenue Earning Equipment)* 0.8 0.8 $2.1B $2.2B $
Slide 14: Enhanced Asset Management Playbook in Place
Enhanced Asset Management Playbook in Place Key actions to mitigate impact from weakening demand: • Redeploy rental vehicles to fulfill lease contracts and support strong growth in dedicated and supply chain • Leverage expanded retail used vehicle sales network and digital transformation • Maintain
Slide 15: EPS – Continuing Operations
EPS – Continuing Operations FULL YEAR EPS SECOND QUARTER EPS (Earnings Per Share) 2023 Forecast 2022 2023 Forecast 2022 GAAP $7.21 - $7.96 $16.96 $(1.12) - $(0.87) $4.72 Comparable $11.30 - $12.05 $16.37 $2.80 - $3.05 $4.43 • Raising low end of full-year 2023 comparable EPS forecast range from $11.0
Slide 16: Positioned to Increase Shareholder Value
Positioned to Increase Shareholder Value Secular trends, operational expertise, and momentum from multi-year initiatives provide significant opportunity for long-term profitable growth Structural changes to our business model and continued execution of our balanced growth strategy position us to ach
Slide 17: Q&A
Q&A SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 17 © 2023 Ryder System, Inc. All Rights Reserved
Slide 18: Appendix
Appendix Financial Targets Residuals Chart Comparable Segment EBITDA Business Segment Detail Central Support Services Balance Sheet Asset Management Non-GAAP Financial Measures & Reconciliations SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2023 Ryder System, Inc. 18 All Rig
Slide 19: Long Term Financial Model
Long Term Financial Model ROE TARGET 2023 FORECAST Long-term average over the cycle High Teens at target Component drivers to achieve ROE target include: Operating Operating Revenue Revenue Growth Growth Total Ryder High Single Digit below target Fleet Management Mid Single Digit below target Supply
Slide 20: Historical Sales Price as % of Original Cost & Current Residual Value Estimates
Historical Sales Price as % of Original Cost & Current Residual Value Estimates Truck Residual Index1 Tractor Residual Index1 Range Residual Estimate for Accounting Residual Estimate for Accounting RESIDUAL VALUE Accounting Residuals: Previously lowered by ~30% to address used vehicle volatility ris
Slide 21: Comparable Segment EBITDA
Comparable Segment EBITDA First Quarter ($ Millions) 1Q23 FMS SCS DTS Earnings before income tax $ 182 $ 17 $ 29 Interest expense / (income) 64 2 (1) (1) Depreciation 389 54 1 (1) Used vehicle sales, net (70) — — Comparable Segment EBITDA (2) $ 565 $ 73 $ 29 1Q22 FMS SCS DTS Earnings before income t
Slide 22: Business Segments
Business Segments First Quarter ($ Millions) Memo: Operating Revenue (3) 2023 2022 % B/(W) 2023 2022 % B/(W) Total Revenue: Fleet Management Solutions $ 1,503 $ 1,529 (2)% $ 1,262 $ 1,282 (2)% Supply Chain Solutions 1,201 1,089 10% 879 738 19% Dedicated Transportation Solutions 454 425 7% 322 296 9%
Slide 23: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) ($ Millions) First Quarter Revenue 2023 2022 % B/(W) ChoiceLease $ 776 $ 764 2% Commercial rental 304 306 (1)% SelectCare and other 182 148 23% FMS Europe — 64 NM FMS operating revenue (1) 1,262 1,282 (2)% Fuel services revenue 241 247 (2)% FMS total revenue $ 1,503
Slide 24: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) ($ Millions) Trailing Twelve Months Revenue 2023 2022 % B/(W) FMS operating revenue (1) $ 5,193 $ 5,055 3% Fuel services revenue 1,108 818 35% FMS total revenue $ 6,301 $ 5,873 7% FMS Earnings Before Tax FMS Earnings Before Tax (EBT) (2) $ 990 $ 850 16% FMS EBT as a
Slide 25: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) First Quarter ($ Millions) Revenue 2023 2022 % B/(W) Omnichannel retail $ 311 $ 270 15% Automotive 254 195 30% Consumer packaged goods 218 187 17% Industrial and other 96 86 12% SCS operating revenue (1) 879 738 19% Subcontracted transportation and fuel 322 351 (8)% SCS
Slide 26: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) Trailing Twelve Months ($ Millions) Revenue 2023 2022 % B/(W) SCS operating revenue (1) $ 3,395 $ 2,446 39% Subcontracted transportation and fuel 1,437 1,091 32% SCS total revenue $ 4,832 $ 3,537 37% Earnings Before Tax SCS Earnings Before Tax (EBT) (2) $ 194 $ 132 47% S
Slide 27: Dedicated Transportation Solutions (DTS)
Dedicated Transportation Solutions (DTS) First Quarter ($ Millions) Revenue 2023 2022 % B/(W) (1) DTS Operating Revenue $ 322 $ 296 9% Subcontracted transportation and fuel 132 129 2% DTS Total Revenue $ 454 $ 425 7% Earnings Before Tax DTS Earnings Before Tax (EBT) (2) $ 29 $ 20 45% DTS EBT as a %
Slide 28: Dedicated Transportation Solutions (DTS)
Dedicated Transportation Solutions (DTS) ($ Millions) Trailing Twelve Months Revenue 2023 2022 % B/(W) (1) DTS Operating Revenue $ 1,265 $ 1,115 13% Subcontracted transportation and fuel 550 447 23% DTS Total Revenue $ 1,815 $ 1,562 16% Earnings Before Tax DTS Earnings Before Tax (EBT) (2) $ 111 $ 5
Slide 29: Central Support Services (CSS)
Central Support Services (CSS) First Quarter ($ Millions) 2023 2022 % B/(W) Allocated CSS Costs $ 88 $ 81 (9)% Unallocated CSS Costs 15 16 6% Total CSS Costs $ 103 $ 97 (6)% Note: Amounts may not be additive due to rounding. 29
Slide 30: Supply Chain Solutions (SCS) - 2022 Quarterly
Beginning in the first quarter of 2023, we Supply Chain Solutions (SCS) - 2022 Quarterly introduced the Omnichannel retail industry to provide better visibility to the revenue mix following recent acquisitions and organic growth. ($ Millions) Revenue - New Vertical Presentation 1Q22 2Q22 3Q22 4Q22 O
Slide 31: Supply Chain Solutions (SCS) - Full Year
Beginning in the first quarter of 2023, we Supply Chain Solutions (SCS) - Full Year introduced the Omnichannel retail industry to provide better visibility to the revenue mix following recent acquisitions and organic growth. Revenue - New Vertical Presentation 2022 2021 2020 ($ Millions) Omnichannel
Slide 32: Segment EBT
In the first quarter of 2023, we revised our primary measurement of segment financial performance to exclude intangible amortization expense, as our chief operating decision maker does not consider intangible amortization expense when Segment EBT evaluating the profitability of our segments. We revi
Slide 33: Segment EBT
In the first quarter of 2023, we revised our primary measurement of segment financial performance to exclude intangible amortization expense, as our chief operating decision maker does not consider intangible amortization Segment EBT expense when evaluating the profitability of our segments. We revi
Slide 34: Balance Sheet
Balance Sheet ($ Millions) March 31, 2023 December 31, 2022 Cash and cash equivalents $ 253 $ 267 Other current assets 2,007 1,933 Revenue earning equipment, net 8,253 8,190 Operating property and equipment, net 1,093 1,148 Other assets 2,937 2,857 Total assets $ 14,543 $ 14,395 Current liabilities
Slide 35: © 2023 Ryder System, Inc. All Rights Reserved
SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2023 Ryder System, Inc. 35 All Rights Reserved
Slide 36: 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 37: Reconciliation of Total to Operating Revenue
Reconciliation of Total to Operating Revenue ($ Millions) First Quarter 2023 2022 Total Revenue $ 2,952 $ 2,854 Subcontracted Transportation and Fuel (606) (638) Operating Revenue (1) $ 2,346 $ 2,216 Note: Amounts may not be additive due to rounding. (1) Non-GAAP financial measure. SUPPLY CHAIN | DE
Slide 38: Earnings and EPS from Continuing Operations Reconciliation
Earnings and EPS from Continuing Operations Reconciliation ($ Millions, Except Per Share Amounts) 1Q23 1Q23 1Q22 1Q22 Earnings EPS Earnings EPS Continuing operations (GAAP) $ 140 $ 2.95 $ 176 $ 3.35 Non-operating pension costs, net 8 0.17 2 0.04 FMS U.K. exit (1) (31) (0.66) 1 0.02 Other, net (1) (1
Slide 39: Comparable EPS Reconciliation
Comparable EPS Reconciliation Second Quarter 2023 Full Year 2023 Forecast Forecast EPS from continuing operations forecast (GAAP) $(1.12) - $(0.87) $7.21 - $7.96 Non-operating pension costs, net 0.17 0.66 CTA release from FMS U.K. exit 3.75 3.75 FMS U.K. exit — (0.32) Comparable EPS from continuing
Slide 40: Adjusted Return on Equity Reconciliation
Adjusted Return on Equity Reconciliation (1) Twelve months ended March 31, ($ Millions) 2022 2023 2023 Forecast Net earnings $ 644 $ 832 $ 325 Other items impacting comparability, net (5) (13) (121) 190 Income taxes (2) 228 339 195 Adjusted earnings before income taxes 859 1,050 710 Adjusted income
Slide 41: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ Millions) Three months ended March 31, 2022 2023 Cash Provided by Operating Activities from Continuing Operations $ 466 $ 478 Proceeds from Sales (Primarily Revenue Earning Equipment)(1) 226 264 Total Cash Generated (2) 692 742 Purchases of Property and Revenue Earni
Slide 42: Cash Flow Reconciliation
Cash Flow Reconciliation ($ Millions) 2019 2020 2021 2022 2023 Forecast Net Cash Provided by Operating Activities from Continuing Operations $ 2,141 $ 2,181 $ 2,175 $ 2,310 $ 2,400 Proceeds from Sales (Primarily Revenue Earning Equipment) (1) 518 552 822 1,235 800 Other, net (1) — — 1 7 — Total Cash