Slide 1: First Quarter 2020 Earnings Conference Call
First Quarter 2020 Earnings Conference Call April 29, 2020 Proprietary and Confidential
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 presentation are “forward-looking statements” under the Federal Private Securities Litigation Reform Act of 1995, including our forecast, outlook, expectations r
Slide 3: Contents
Contents • First Quarter 2020 Results Overview • Outlook & Action Plans • Q&A @ 2019 Ryder System, Inc. 3 All Rights Reserved
Slide 4: 1st Quarter Results Overview
1st Quarter Results Overview • Total revenue decreased 1% and operating revenue increased 1% vs. prior year • Earnings (loss) per diluted share from continuing operations was $(2.09) vs. $0.87 in 1Q19 • Comparable earnings (loss) per share from continuing operations was $(1.38) vs. $1.11 in 1Q19 — R
Slide 5: Key Financial Statistics
Key Financial Statistics First Quarter ($Millions, Except Per Share Amounts) 2020 2019 %B/(W) Total Revenue $ 2,161 $ 2,180 (1)% Fuel and Subcontracted Transportation (381) (421) (10)% ChoiceLease Liability Insurance Revenue (1) (9) (9) 10 % Operating Revenue $ 1,771 $ 1,750 1% Earnings (Loss) Per S
Slide 6: 1st Quarter Results Overview – FMS
1st Quarter Results Overview – FMS • Fleet Management Solutions (FMS) total revenue down 1% and FMS operating revenue up 2% – Higher ChoiceLease revenue (up 7%) was partially offset by lower Commercial Rental revenue (down 13%) • FMS earnings declined to a loss of $(115)M from a profit of $61M in th
Slide 7: 1st Quarter Used Vehicle Sales Update - FMS
1st Quarter Used Vehicle Sales Update - FMS • Sold 5,500 used vehicles during the first quarter, up 12% from the prior year and down (8)% sequentially • Used vehicles inventory was 11,600 at quarter end, up from 7,600 in the prior year – Increased by 2,200 vehicles sequentially due to higher lease r
Slide 8: 1st Quarter Results Overview – SCS
1st Quarter Results Overview – SCS • Supply Chain Solutions (SCS) total revenue down 1% and operating revenue down 2% – SCS total and operating revenue decreased reflecting previously announced lost business and lower automotive volumes due to COVID-19, partially offset by higher pricing and non-aut
Slide 9: 1st Quarter Results Overview – DTS
1st Quarter Results Overview – DTS • Dedicated Transportation Solutions (DTS) total revenue down 4% and DTS operating revenue increased slightly – DTS total revenue reflects lower subcontracted revenue and lower fuel costs passed through to customers – DTS operating revenue reflects higher volumes a
Slide 10: Capital Expenditures
Capital Expenditures ($ Millions) First Quarter Expected range for FY20 gross capital expenditures is $1.0 - 1.4B, lower than the forecast prior to COVID-19 of $2.1B and below prior year of $3.6B, resulting in record free cash flow in 2020 @ 2020 Ryder System, Inc. 10 All Rights Reserved
Slide 11: Cash Flow and Leverage
Cash Flow and Leverage ($ Millions) Year-to-Date 2020 2019 Earnings from Continuing Operations $ (109) $ 46 Depreciation 523 377 Used Vehicle Sales, Net 21 8 Amortization and Other Non-Cash Charges, Net 67 64 Pension Contributions (1) (8) Collections from Sales-type Leases 27 34 Changes in Working C
Slide 12: Contents
Contents • First Quarter 2020 Results • Outlook & Action Plans • Q&A @ 2019 Ryder System, Inc. 12 All Rights Reserved
Slide 13: Outlook - Impacts from COVID-19 Crisis
Outlook - Impacts from COVID-19 Crisis • Given the uncertainty relating to the magnitude and duration of COVID-19, the company is not providing financial guidance at this time ◦ Substantial liquidity available following recent financing transactions, including$1B in cash, $565M in available revolver
Slide 14: Financial Model
Financial Model Our primary financial target relates to Return on Equity Adjusted Return on Equity Interim target 11% Long-term target over the cycle 15% Component drivers to achieve ROE target include: Operating Revenue Growth Fleet Management Mid Single Digit Supply Chain & Dedicated High Single D
Slide 15: Progress on Actions to Increase Returns
Progress on Actions to Increase Returns • Continue to implement meaningful ChoiceLease price increase ◦ Revenue per unit on new lease business is up mid-single digits compared to new lease vehicles in the prior year due to 2019 price increases ◦ Additional mid-single digit price increase on new Choi
Slide 16: Contents
Contents • First Quarter 2020 Results • Outlook & Action Plans • Q&A @ 2019 Ryder System, Inc. 16 All Rights Reserved
Slide 17: Q&A
Q&A @ 2019 Ryder System, Inc. 17 All Rights Reserved
Slide 18: Appendix
Appendix Segment Comparable EBITDA ChoiceLease Fleet Count - Active Fleet Key Financial Statistics Business Segment Detail Central Support Services Balance Sheet Adjusted Return on Equity Adjusted Return on Capital Growth Capital Expenditures Financial Indicators Asset Management Non-GAAP Financial
Slide 19: Comparable Segment EBITDA
Comparable Segment EBITDA First Quarter ($ Millions) 1Q20 FMS SCS DTS CSS/ELIMS Net segment earnings $ (108) $ 26 $ 10 $ (37) Income taxes (7) 5 2 (6) Non-operating pension costs (1) — — — 1 Other items impacting comparability (1) — — — 23 EBT (115) 31 12 (19) Interest expense / (income) 63 — (1) —
Slide 20: Comparable Segment EBITDA History
Comparable Segment EBITDA History ($ Millions) FY 19 FMS SCS DTS CSS/ELIMS Net segment earnings $ (34) $ 109 $ 66 $ (165) Income taxes (36) 36 15 (33) Non-operating pension costs (1) — — — 60 Other items impacting comparability (1) — — — 38 EBT (70) 145 81 (100) Interest expense / (income) 243 1 (3)
Slide 21: Comparable Segment EBITDA History
Comparable Segment EBITDA History ($ Millions) FY 17 FMS SCS DTS CSS/ELIMS Net segment earnings $ 709 $ 71 $ 51 $ (110) Income taxes (413) 28 4 (44) Non-operating pension costs (1) — — — 28 Other items impacting comparability (1) — — — 24 EBT 296 99 55 (102) Interest expense / (income) 145 (2) (2) 1
Slide 22: ChoiceLease Fleet Count - Active Fleet
ChoiceLease Fleet Count - Active Fleet Change March 31, March 31, ChoiceLease 2020 2019 2020 / 2019 Average Active Vehicles (1) 148,200 141,100 5% Revenue per Average Active Vehicle (2) $ 5,350 $ 5,240 2% End of Period Active Vehicles 148,400 142,800 4% (1) Active ChoiceLease vehicles are those unit
Slide 23: Business Segments
Business Segments ($ Millions) First Quarter Memo: Operating Revenue 2020 2019 % B/(W) 2020 2019 % B/(W) Total Revenue: Fleet Management Solutions $ 1,340.2 $ 1,351.6 (1)% $ 1,157.5 $ 1,135.2 2% Supply Chain Solutions 628.4 635.7 (1)% 467.3 477.1 (2)% Dedicated Transportation Solutions 334.9 349.6 (
Slide 24: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) ($ Millions) First Quarter Revenue 2020 2019 % B/(W) ChoiceLease $ 792.2 $ 740.1 7% SelectCare 136.1 135.8 —% Commercial Rental 205.8 236.1 (13)% Other 23.4 23.2 1% FMS Operating Revenue 1,157.5 1,135.2 2% Fuel Services Revenue 173.3 207.9 (17)% Lease Liability Insur
Slide 25: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) ($ Millions) First Quarter Revenue 2020 2019 % B/(W) Automotive $ 171.7 $ 176.5 (3)% Technology & Healthcare 57.7 78.8 (27)% CPG & Retail 188.0 178.5 5% Industrial & Other 49.9 43.3 15 % SCS Operating Revenue 467.3 477.1 (2)% Subcontracted Transportation 135.7 128.0 6% F
Slide 26: Dedicated Transportation Solutions (DTS)
Dedicated Transportation Solutions (DTS) ($ Millions) First Quarter Revenue 2020 2019 % B/(W) DTS Operating Revenue $ 236.7 $ 235.6 —% Subcontracted Transportation 66.2 76.8 (14)% Fuel 32.0 37.2 (14)% DTS Total Revenue $ 334.9 $ 349.6 (4)% Earnings Before Tax DTS Earnings Before Tax (EBT) $ 12.2 $ 1
Slide 27: Central Support Services (CSS)
Central Support Services (CSS) ($ Millions) First Quarter 2020 2019 % B/(W) Allocated CSS Costs $ 59.3 $ 55.2 (7)% Unallocated CSS Costs 9.4 12.5 25 % Total CSS Costs $ 68.7 $ 67.8 (1)% Note: Amounts may not be additive due to rounding. @ 2019 Ryder System, Inc. 27 All Rights Reserved
Slide 28: Balance Sheet
Balance Sheet ($ Millions) March 31, 2020 December 31, 2019 Current Assets $ 1,857 $ 1,562 Revenue Earning Equipment, Net 10,034 10,428 Operating Property and Equipment, Net 907 918 Other Assets 1,567 1,568 Total Assets $ 14,364 $ 14,475 Current Liabilities $ 1,343 $ 1,471 Total Debt 8,174 7,925 Oth
Slide 29: Adjusted Return on Equity
Adjusted Return on Equity (1,2) 20%20 16.5% 14.4% 14.8% 14.9% 12.4% 13.2% 12.7% 11.1% 10%10 0.3% 0% 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 Adj ROE (1) Non-GAAP elements of this calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to
Slide 30: Adjusted Return on Capital
(1) Adjusted Return on Capital 5.7% 5.7% 5.8% 5.8% 5.8% 5.2% 4.8% 5.5% 4.2% 4.8% 4.8% 4.7% 4.8% 4.8% 4.4% 4.3% 4.1% 1.9% (2) (2) 2011 2012 2013 2014 2015 2016 2017 2018 2019 Cost of Capital (COC) Adjusted Return on Capital (ROC) Adj ROC O/(U) COC 0.2 % 0.9 % 1.0 % 1.1 % 1.4 % 0.5 % 0.1 % 0.4 % (2.9)
Slide 31: Financial Indicators
(1) Financial Indicators ($ Millions) $3,165 $3,621 Gross Capital Expenditures $2,701 $2,161 $2,184 $2,298 $1,760 $1,763 $1,941 2011 2012 2013 2014 2015 2016 2017 2018 2019 Lease Commercial Rental PP&E/Other Free Cash (4) (4) Flow (257) (488) (340) (315) (728) 194 197 (936) (1,077) Debt to Equity /
Slide 32: Asset Management (US Only)
Asset Management (US Only) (a)(b)(c) @ 2019 Ryder System, Inc. 32 All Rights Reserved
Slide 33: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes “non-GAAP financial measures” as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure. Non-GAAP financial measures should be considered in addition to,
Slide 34: Earnings (Loss) and EPS from Continuing Operations Reconciliation
(1) Earnings (Loss) and EPS from Continuing Operations Reconciliation ($ Millions, except Per Share Data) 1Q20 1Q20 1Q19 1Q19 Earnings EPS Earnings EPS GAAP $ (109.1) $ (2.09) $ 45.9 $ 0.87 Non-operating pension costs 0.1 — 4.6 0.09 ERP implementation costs 7.7 0.15 2.7 0.05 Restructuring and other,
Slide 35: Earnings (Loss) Before Income Tax and Tax Rate Reconciliation
Earnings (Loss) Before Income Tax and Tax Rate from Continuing Operations Reconciliation ($ Millions) 1Q20 1Q20 1Q20 EBT Tax Tax Rate (1) GAAP $ (113.6) ($4.5) (4.0 )% Non-operating pension costs 1.2 1.1 ERP implementation costs 10.3 2.7 Restructuring and other, net 11.3 2.4 Tax adjustments — (20.4)
Slide 36: Adjusted Return on Equity Reconciliation
(1) Adjusted Return on Equity Reconciliation ($ Millions) 2011 2012 2013 2014 2015 2016 (2) Net earnings $ 170 $ 210 $ 238 $ 218 $ 305 $ 263 (7) Other items impacting comparability 6 17 — 115 18 13 Income taxes (3) 108 91 126 118 164 142 Adjusted earnings before income taxes 284 317 363 451 486 418
Slide 37: Adjusted Return on Equity Reconciliation
(1) Adjusted Return on Equity Reconciliation ($ Millions) 2017 2018 2019 1Q19 1Q20 Net earnings (2) $ 720 $ 285 $ (24) $ 293 $ (179) Other items impacting comparability (7) 24 22 38 13 53 Income taxes (3) (423) 103 (19) 110 (46) Adjusted earnings before income taxes 321 409 (5) 416 (172) (4) Adjuste
Slide 38: Adjusted Return on Capital Reconciliation
(1) Adjusted Return on Capital Reconciliation ($ Millions) 2011 2012 2013 2014 2015 2016 Net earnings (2) $ 170 $ 210 $ 238 $ 218 $ 305 $ 263 Other items impacting comparability (9) 6 17 — 115 18 13 Income taxes (3) 108 91 126 118 164 142 Adjusted earnings before income taxes 284 317 363 451 486 418
Slide 39: Adjusted Return on Capital Reconciliation
(1) Adjusted Return on Capital Reconciliation ($ Millions) (9) (9) 2017 2018 2019 1Q19 1Q20 (2) Net earnings $ 720 $ 285 $ (24) $ 293 $ (179) Other items impacting comparability (10) 24 22 38 13 53 Income taxes (3) (423) 103 (19) 110 (46) Adjusted earnings before income taxes 321 409 (5) 416 (172) A
Slide 40: Comparable EBITDA Reconciliation
(1) Comparable EBITDA Reconciliation ($ Millions) 2011 2012 2013 Earnings from continuing operations $ 171.4 $ 200.7 $ 243.3 Provision for income taxes 108.0 102.1 125.7 Earnings before income taxes from continuing operations 279.4 302.8 369.0 Non-operating pension costs 18.7 31.4 22.2 Restructuring
Slide 41: Comparable EBITDA Reconciliation
(1) Comparable EBITDA Reconciliation ($ Millions) 2014 2015 2016 2017 (2) Earnings from continuing operations $ 220.2 $ 306.0 $ 265.2 $ 720.1 Provision for income taxes 118.1 163.2 142.0 (423.7) Earnings before income taxes from continuing operations 338.3 469.2 407.3 296.4 Non-operating pension cos
Slide 42: Comparable EBITDA Reconciliation
(1) Comparable EBITDA Reconciliation ($ Millions) Twelve month ended December Three months ended March 31, 31, 2020 2019 2019 2018 (2) Earnings (loss) from continuing operations $ (109.1) $ 45.9 $ (23.3) $ 286.9 Provision for income taxes (4.5) 22.3 (19.0) 102.5 Earnings (loss) before income taxes f
Slide 43: Cash Flow Reconciliation
Cash Flow Reconciliation ($ Millions) 2011 2012 2013 2014 2015 Cash Provided by Operating Activities from Continuing Operations $ 1,042 $ 1,160 $ 1,252 $ 1,383 $ 1,442 Proceeds from Sales (Primarily Revenue Earning Equipment) (1) 337 413 452 497 427 Collections of Direct Finance Leases (1) 62 72 71
Slide 44: Cash Flow Reconciliation
Cash Flow Reconciliation ($ Millions) Three months ended March 31, 2016 2017 (5) 2018 (5) 2019 2019 2020 Cash Provided by Operating Activities from Continuing Operations $1,601 $1,628 $1,718 $2,141 $485 $439 Proceeds from Sales (Primarily Revenue Earning Equipment)(1) 421 429 396 518 103 103 Collect
Slide 45: Debt to Equity Reconciliation
Debt to Equity Reconciliation (1) ($ Millions) % to 2011 Equity Debt $ 3,382 257 % PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 64 Total Obligations (2) $ 3,446 261 % (1) The debt to equity metric was not revised in years prior to 2012 to reflect th
Slide 46: @ 2019 Ryder System, Inc. All Rights Reserved
@ 2019 Ryder System, Inc. 46 All Rights Reserved