Ryder System, Inc. · NYSE:R

Ryder System — Q4 2013 Earnings Presentation

49 slides from Ryder System's earnings presentation, Feb 4, 2014

  1. Slide 1: Fourth Quarter 2013 Earnings & 2014 Forecast Conference Call

    Fourth Quarter 2013 Earnings & 2014 Forecast Conference Call February 4, 2014 1

  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 revenue and earnings growth, lease fleet growth, pe

  3. Slide 3: Contents

    Contents ► Fourth Quarter 2013 Results Overview ► Asset Management Update ► 2014 Forecast ►Q &A © 2014 Ryder System, Inc. All rights reserved. 3

  4. Slide 4: 4th Quarter Results Overview

    4th Quarter Results Overview ► Comparable earnings per share from continuing operations were $1.35 vs. $1.26 in 4Q12 ► Earnings per diluted share from continuing operations were $1.24 in 4Q13 vs. $1.07 in 4Q12 – 4Q13 included a $0.11 charge from non-operating pension costs and other items – 4Q12 inc

  5. Slide 5: Key Financial Statistics

    Key Financial Statistics ($ Millions, Except Per Share Amounts) Fourth Quarter 2013 2012 % B/(W) Operating Revenue $ 1,344.7 $ 1,287.6 4% Fuel Services and Subcontracted Transportation Revenue 273.0 296.0 (8)% Total Revenue $ 1,617.7 $ 1,583.5 2% Earnings Per Share from Continuing Operations $ 1.24

  6. Slide 6: Key Financial Statistics

    Key Financial Statistics ($ Millions, Except Per Share Amounts) Full Year 2013 2012 % B/(W) Operating Revenue $ 5,270.5 $ 5,066.3 4% Fuel Services and Subcontracted Transportation Revenue 1,148.8 1,190.6 (4)% Total Revenue $ 6,419.3 $ 6,257.0 3% Earnings Per Share from Continuing Operations $ 4.63 $

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

    4th Quarter Results Overview – FMS ► Fleet Management Solutions (FMS) operating revenue up 3% and total revenue up 2% vs. prior year – Full service lease revenue up 3% – Contract maintenance revenue down 8% – Contract-related maintenance up 1% – Commercial rental revenue up 6% ► FMS earnings increas

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

    4th Quarter Results Overview – SCS ► Supply Chain Solutions (SCS) operating revenue up 8% and total revenue up 4% vs. prior year due to new business and higher volumes – Dedicated operating revenue increased 7% vs. prior year due to new sales ► SCS earnings were higher reflecting new business and st

  9. Slide 9: Business Segments

    Business Segments ($ Millions) Fourth Quarter Memo: Total Revenue 2013 2012 % B/(W) 2013 2012 % B/(W) Operating Revenue: Fleet Management Solutions $ 875.7 $ 849.5 3% $ 1,135.5 $ 1,117.7 2% Supply Chain Solutions 525.9 489.1 8% 598.7 575.3 4% Eliminations (56.9) (51.0) (12)% (116.4) (109.4) (6)% Tot

  10. Slide 10: Business Segments

    Business Segments ($ Millions) Full Year Memo: Total Revenue 2013 2012 % B/(W) 2013 2012 % B/(W) Operating Revenue: Fleet Management Solutions $ 3,424.5 $ 3,321.2 3% $ 4,494.7 $ 4,405.3 2% Supply Chain Solutions 2,063.9 1,944.5 6% 2,383.1 2,280.6 4% Eliminations (217.8) (199.3) (9)% (458.5) (428.9)

  11. Slide 11: Capital Expenditures

    Capital Expenditures ($ Millions) Full Year 2013 $ 2013 2012 O/(U) 2012 Full Service Lease $ 1,823 $ 1,548 $ 275 Commercial Rental 275 542 (267) Operating Property and Equipment 86 70 16 Gross Capital Expenditures 2,184 2,161 23 Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 452 413

  12. Slide 12: Cash Flow from Continuing Operations

    Cash Flow from Continuing Operations ($ Millions) Full Year 2013 2012 Earnings from Continuing Operations $ 243 $ 201 Depreciation 957 940 Gains on Vehicle Sales, Net (96) (89) Amortization and Other Non-Cash Charges, Net 76 68 Pension Contributions (95) (81) Changes in Working Capital and Deferred

  13. Slide 13: Debt to Equity Ratio

    Debt to Equity Ratio ($ Millions) 275% Total Obligations to Equity Pension Impact (1) 270% 300% 261% 250% 234% 225% 226% 250% 201% 203% 168% 183% 200% 146% 151% 157% 129% 150% 100% 50% 0% 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/3

  14. Slide 14: Contents

    Contents ► Fourth Quarter 2013 Results Overview ► Asset Management Update ► 2014 Forecast ►Q &A © 2014 Ryder System, Inc. All rights reserved. 14

  15. Slide 15: Global Asset Management Update

    (1) Global Asset Management Update ► Units held for sale were 7,900 at quarter end, down from 9,200 units held for sale in the prior year ─ Sequentially from the third quarter, units held for sale decreased by 300 units ► The number of used vehicles sold in the fourth quarter was 5,700, up 6% from t

  16. Slide 16: Contents

    Contents ► Fourth Quarter 2013 Results Overview ► Asset Management Update ► 2014 Forecast ►Q &A © 2014 Ryder System, Inc. All rights reserved. 16

  17. Slide 17: 2014 Forecast Assumptions

    2014 Forecast Assumptions General ► Moderate growth economic environment ► Moderately higher interest rates on new financing; however, Ryder’s average rate declines FMS ► Growth in Full Service Lease fleet resulting from improved new sales ► Reduced lease capital spending due to fewer replacements,

  18. Slide 18: 2014 Forecast Assumptions

    2014 Forecast Assumptions SCS ► Revenue growth due to new business and improved business retention ► Customer volumes projected to modestly increase ► Margin improvement driven by net new business and higher volumes Other ► Restart of anti-dilutive share repurchase plan; EPS still negatively impacte

  19. Slide 19: Key Financial Statistics

    Key Financial Statistics ($ Millions, Except Per Share Amounts) 2014 Forecast 2013 % B / (W) Revenue: Operating Revenue $ 5,570 $ 5,270 6% Fuel Services and Subcontracted Transportation 1,190 1,149 4% Total Revenue $ 6,760 $ 6,419 5% Earnings From Continuing Operations: Earnings Before Income Taxes

  20. Slide 20: Business Segment Revenue

    Business Segment Revenue 2014 Forecast Change % vs. 2013 Fleet Management Solutions: Total Revenue (1) 7% Operating Revenue 6% Full Service Lease Revenue 5% Commercial Rental Revenue 7% Supply Chain Solutions: Total Revenue (2) 3% Operating Revenue 5% (1) Includes fuel revenue. (2) Includes subcontr

  21. Slide 21: 2014 Causes of EPS Change

    2014 Causes of EPS Change ($ Earnings Per Share) $5.30 – 0.29-0.33 $5.45 0.24-0.27 $4.88 0.16-0.18 0.11 - 0.13 0.11 (0.16-0.20) (0.12) (0.09) (0.08) 2013 Strategic Compensation Share Count Tax Rate On-Demand Commercial Residual SCS FMS 2014 Forecast Investments & Other Rental Impact & Used Contractu

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

    Capital Expenditures, Cash Flow & Leverage ($ Millions) Full Year 2014 Forecast 2013 Full Service Lease - Replacement $ 1,120 Full Service Lease - Growth 580 Full Service Lease 1,700 $ 1,823 Commercial Rental 330 275 Operating Property and Equipment 130 86 Gross Capital Expenditures 2,160 2,184 Less

  23. Slide 23: Growth Capital Expenditures

    Growth Capital Expenditures ($ Millions) Growth Capital Expenditures – Lease & Rental Growth Capital Expenditures - Lease 1.0 580 723 733 700 177 120 Higher per Unit 566 430 Investment 0.5 460 184 Rental 229 556 580 180 Lease 382 229 263 180 150 Fleet Count 0 0 Increase 0.0 2007 2007 2008 2008 2009

  24. Slide 24: EPS Forecast – Continuing Operations

    EPS Forecast – Continuing Operations ($ Earnings Per Share) First Quarter Full Year 2014 Comparable EPS Forecast(1) $ 0.83 - 0.88 $ 5.30 - 5.45 2013 Comparable EPS(2) $ 0.81 $ 4.88 (1) 2014 Comparable EPS Forecast, a non-GAAP financial measure, excludes from EPS forecast $0.04 and $0.15 of non-opera

  25. Slide 25: Q&A

    Q&A © 2014 Ryder System, Inc. All rights reserved. 25

  26. Slide 26: Appendix

    Appendix Full Service Lease Vehicle Count Business Segment Detail Central Support Services Balance Sheet Financial Indicators Forecast Adjusted Return on Capital History Asset Management Non-GAAP Financial Measures & Reconciliations © 2014 Ryder System, Inc. All rights reserved. 26

  27. Slide 27: Full Service Lease (FSL) Fleet Count

    Full Service Lease (FSL) Fleet Count 4Q13 O/(U) End of Period 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 FSL Fleet (as reported) 122,400 121,700 120,300 120,800 122,900 500 UK FSL Trailers 6,200 6,000 5,400 5,100 5,000 (1,200) FSL Fleet - excluding UK 116,200 115,700 114,900 115,700 117,900 1,700 1Q13 O/(U) 2Q13

  28. Slide 28: Fleet Management Solutions (FMS)

    Fleet Management Solutions (FMS) ($ Millions) Fourth Quarter 2013 2012 % B/(W) Full Service Lease $ 555.4 $ 536.7 3% Contract Maintenance 43.3 46.9 (8)% Contractual Revenue 598.8 583.7 3% Contract-related Maintenance 50.0 49.3 1% Commercial Rental 209.2 197.4 6% Other 17.8 19.1 (7)% Operating Revenu

  29. Slide 29: Fleet Management Solutions (FMS)

    Fleet Management Solutions (FMS) ($ Millions) Full Year 2013 2012 % B/(W) 4 Full Service Lease $ 2,177.4 $ 2,102.2 4% Contract Maintenance 180.3 187.2 (4)% Contractual Revenue 2,357.7 2,289.4 3% Contract-related Maintenance 205.3 187.0 10% Commercial Rental 789.5 772.8 2% Other 72.0 72.0 - Operating

  30. Slide 30: Supply Chain Solutions (SCS)

    Supply Chain Solutions (SCS) ($ Millions) Fourth Quarter 2013 2012 % B/(W) Automotive $ 139.8 $ 141.7 (1)% High-Tech 87.3 81.7 7% Retail & CPG 189.9 176.7 7% Industrial & Other 108.9 89.0 22% Operating Revenue 525.9 489.1 8% Subcontracted Transportation 72.8 86.1 (15)% Total Revenue $ 598.7 $ 575.3

  31. Slide 31: Supply Chain Solutions (SCS)

    Supply Chain Solutions (SCS) ($ Millions) Full Year 2013 2012 % B/(W) Automotive $ 573.4 $ 563.5 2% High-Tech 332.6 317.5 5% Retail & CPG 737.1 711.2 4% Industrial & Other 420.8 352.4 19% Operating Revenue 2,063.9 1,944.5 6% Subcontracted Transportation 319.2 336.1 (5)% Total Revenue $ 2,383.1 $ 2,2

  32. Slide 32: SCS Earnings Before Tax 2013

    SCS Earnings Before Tax 2013 In the fourth quarter of 2013, we revised the amount of intercompany profit allocated to SCS from FMS. The overall results for the Company were not impacted, however, SCS profitability in the first nine months of 2013 will increase by $2M and be offset by a reduction in

  33. Slide 33: Central Support Services (CSS)

    Central Support Services (CSS) ($ Millions) Fourth Quarter 2013 2012 % B/(W) Allocated CSS Costs $ 42.2 $ 38.2 (10)% Unallocated CSS Costs 13.5 10.5 (29)% Total CSS Costs $ 55.7 $ 48.7 (14)% © 2014 Ryder System, Inc. All rights reserved. 33

  34. Slide 34: Central Support Services (CSS)

    Central Support Services (CSS) ($ Millions) Full Year 2013 2012 % B/(W) Allocated CSS Costs $ 164.8 $ 151.7 (9)% Unallocated CSS Costs 45.5 42.3 (7)% Total CSS Costs $ 210.3 $ 194.0 (8)% © 2014 Ryder System, Inc. All rights reserved. 34

  35. Slide 35: Balance Sheet

    Balance Sheet ($ Millions) December 31, December 31, 2013 2012 Cash and Cash Equivalents $ 62 $ 66 Other Current Assets 1,001 974 Revenue Earning Equipment, Net 6,491 5,755 Operating Property and Equipment, Net 634 625 Other Assets 916 899 Total Assets $ 9,104 $ 8,319 Short-Term Debt / Current Porti

  36. Slide 36: Adjusted Return on Capital History

    Adjusted Return on Capital History 7.8% 7.9% 7.4% 7.3% Adjusted 6.3% 6.1% 5.7% Return on 5.7% 5.6% 5.7% Capital (ROC) 6.8% 6.7% 6.6% 6.5% 5.5% Cost of 4.8% 4.8% 4.7% 4.1% 4.8% Capital (COC) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 Forecast Forecast ROC O/(U) COC 1.0% 1.2% 0.8% 0.8% (2.

  37. Slide 37: Financial Indicators Forecast

    Financial Indicators Forecast (1) Gross Capital Expenditures (2) ($ Millions) $2,161 $2,184 $2,160 Full Service Lease $1,757 $1,760 Commercial Rental PP&E/Other $1,399 $1,289 $1,265 $1,165 $1,182 $1,088 $657 $725 $600 $611 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fo

  38. Slide 38: Asset Management Update

    Redeployments – Vehicles coming off-lease or in Rental with useful life remaining are redeployed in Asset Management Update (a) the Ryder fleet (SCS, or with another Lease customer). Redeployments exclude units transferred into the Rental product line. Number of Units FY 07 FY 08 FY 09 FY 10 FY 11 F

  39. Slide 39: 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

  40. Slide 40: Earnings and EPS from Continuing Operations Reconciliation

    Earnings and EPS from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 4Q13 - 4Q13 - 4Q12 - 4Q12 - Earnings EPS Earnings EPS Reported $ 65.9 $ 1.24 $ 54.9 $ 1.07 Non-Operating pension costs 5.3 0.10 4.8 0.09 Pension settlement charge 1.0 0.01 - - Superstorm Sandy vehicle-rel

  41. Slide 41: EBT and Tax Rate from Continuing Operations Reconciliation

    EBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 4Q13 - 4Q13 - 4Q13 - FY13 - FY13 - FY13 - EBT Tax Tax Rate EBT Tax Tax Rate Reported $ 97.6 $ 31.7 32.5% $ 368.9 $ 125.7 34.1% Non-operating Pension Costs 9.0 3.6 24.3 10.0 Pension settlem ent charge 1.6

  42. Slide 42: 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

  43. Slide 43: Adjusted Return on Capital Reconciliation

    Adjusted Return on Capital Reconciliation ($ Millions) 2010 2011 2012 2013 (1) Net Earnings $ 118 $ 170 $ 210 $ 238 Restructuring and Other Charges, Net and Other Items 6 6 17 - Income Taxes 61 108 91 126 Adjusted Earnings Before Income Taxes 185 284 318 363 (2) Adjusted Interest Expense 133 135 143

  44. Slide 44: Adjusted Return on Capital Reconciliation

    Adjusted Return on Capital Reconciliation ($ Millions) Adjusted Return on Capital Reconciliation 2012 2013 FMS SCS FMS SCS Net Earnings (1) $ 203 $ 70 $ 227 $ 80 Restructuring and Other Charges, Net and Other Items (27) - (19) - Income Taxes 105 45 117 50 Adjusted Earnings Before Income Taxes 281 11

  45. Slide 45: 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

  46. Slide 46: Debt to Equity Reconciliation

    Debt to Equity Reconciliation ($ Millions) % to % to % to % to % to % to 12/31/2008 Equity 12/31/2009 Equity 12/31/2010 Equity 12/31/2011 Equity 12/31/2012 Equity 12/31/2013 Equity Balance Sheet Debt $2,863 213% $2,498 175% $2,747 196% $3,382 257% $3,821 260% $4,189 221% Receivables Sold - - - - - P

  47. Slide 47: Cash Flow Reconciliation

    Cash Flow Reconciliation ($ Millions) 12/31/00 (1) 12/31/01 (1) 12/31/02 (1) 12/31/03 (1) 12/31/04 (1) 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

  48. Slide 48: Cash Flow Reconciliation

    Cash Flow Reconciliation ($ Millions) 12/31/10 12/31/11 12/31/12 12/31/13 Cash Provided by Operating Activities from Continuing Operations $ 1,028 $ 1,042 $ 1,134 $ 1,223 Proceeds from Sales (Primarily Revenue Earning Equipment) 235 300 413 452 Proceeds from Sale and Leaseback of Assets - 37 130 - C

  49. Slide 49: © 2014 Ryder System, Inc. All rights reserved.

    © 2014 Ryder System, Inc. All rights reserved.

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