Slide 1: Second Quarter 2023 Earnings Conference Call
Second Quarter 2023 Earnings Conference Call July 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 2Q23 Earnings Release Conference Call Note Regarding Forward-Looking Statements Slide 2 Strategic Update Slides 4 - 6 2Q23 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 • Demonstrating the effectiveness of our balanced growth strategy Strategy Update • Transformative changes have increased earnings / return profile and business resilience • Secular trends continue to favor long-term outsourcing decisions • Adjusted ROE (ROE) of 24% Returns Focus • Achie
Slide 5: Transformative Changes Increase Earnings and Return Profile
Transformative Changes Increase Earnings and Return Profile Business is outperforming prior cycles with additional opportunity ahead Note: See Appendix for reconciliations of non-GAAP financial measures, including Comparable EPS and ROE. SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOL
Slide 6: Transformative Business Model Changes (2018 to Today)
Transformative Business Model Changes (2018 to Today) Transformative changes improving returns and positioning business for long-term profitable growth SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2023 Ryder System, Inc. 6 All Rights Reserved
Slide 7: Results Overview
Results Overview OPERATING REVENUE COMPARABLE EPS Second Quarter Second Quarter +1% $4.43 -19% $2.3B $2.3B Primarily driven by SCS and $3.61 Primarily reflecting expected DTS revenue growth partially weaker market conditions in offset by impact from UK exit used vehicle sales and rental 2Q22 2Q23 2Q
Slide 8: 2nd Quarter Results Overview – FMS
2nd Quarter Results Overview – FMS OPERATING REVENUE 4% decrease reflects: $1.3B $1.3B • 4% negative revenue impact from UK exit • North America was unchanged as higher ChoiceLease and SelectCare revenue was offset by 2Q22 2Q23 lower rental demand EARNINGS BEFORE TAX (EBT) Earnings decline primarily
Slide 9: 2nd Quarter Used Vehicle Sales Update – FMS
2nd Quarter Used Vehicle Sales Update – FMS % CHANGE IN PROCEEDS Sequential pricing decline was generally in line with our (15)% (14)% expectations (41)% (34)% vs. 2Q22 vs. 1Q23 USED VEHICLES SOLD USED VEHICLE INVENTORY Sales volumes and inventory reflect higher lease 7,000 replacement and 4,800 5,5
Slide 10: 2nd Quarter Results Overview – SCS
2nd Quarter Results Overview – SCS OPERATING REVENUE $798M $865M 8% increase reflects new business, higher volumes and increased pricing 2Q22 2Q23 EARNINGS BEFORE TAX (EBT) $76M 23% increase reflects $62M • higher operating revenue and lower incentive-based compensation costs as well as prior year c
Slide 11: 2nd Quarter Results Overview – DTS
2nd Quarter Results Overview – DTS OPERATING REVENUE $306M $327M 7% increase reflects inflationary cost recovery and higher volumes 2Q22 2Q23 EARNINGS BEFORE TAX (EBT) $33M $23M 43% increase primarily reflects operating revenue growth and improved labor productivity 2Q22 2Q23 EBT as % of Operating R
Slide 12: Capital Expenditures
Capital Expenditures LEASE RENTAL Year-to-Date Year-to-Date $1.4B $364M $310M $0.8B 2Q22 2Q23 2Q22 2Q23 Reflects higher lease replacement and growth capital and Lower planned rental investments accelerated timing of OEM deliveries Capital FY22 FY23F Expenditures Lease Vehicles $ 1.8 $ 2.6 (billions)
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 $ 2.5 Proceeds from Sales (Primarily Revenue Earning Equipment)* 0.8 0.8 $2.1B $2.2B $
Slide 14: Enhanced Asset Management Playbook Delivering Results
Enhanced Asset Management Playbook Delivering Results Increased redeployment of rental vehicles to lease, dedicated and supply chain contracts – FY23 redeployments expected to be 3-4k - key component of FY lease fleet growth – FY23 rental utilization expected to be in mid- to high-70s target range L
Slide 15: EPS – Continuing Operations
EPS – Continuing Operations (Earnings Per Share) FULL YEAR EPS THIRD QUARTER EPS 2022 2023 Forecast 2022 2023 Forecast GAAP $16.96 $7.95 - $8.45 $4.82 $2.82 - $3.07 Comparable $16.37 $12.20 - $12.70 $4.45 $3.00 - $3.25 • Raising full-year 2023 comparable EPS forecast range from $11.30 - $12.05 to re
Slide 16: Positioned to Increase Shareholder Value
Positioned to Increase Shareholder Value Secular trends, operational expertise, and momentum from multi-year initiatives provide significant opportunity for long-term profitable growth Transformative changes to our business model and continued execution of our balanced growth strategy have positione
Slide 17: Q&A
Q&A SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 17 © 2023 Ryder System, Inc. All Rights Reserved
Slide 18: Appendix
Appendix Financial Targets Residuals Chart Comparable Segment EBITDA Business Segment Detail Central Support Services Balance Sheet Asset Management Non-GAAP Financial Measures & Reconciliations SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2023 Ryder System, Inc. 18 All Rig
Slide 19: Long Term Financial Model
Long Term Financial Model ROE TARGET 2023 FORECAST Long-term average over the cycle High Teens at target Component drivers to achieve ROE target include: Operating Operating Revenue Revenue Growth Growth Total Ryder High Single Digit below target Fleet Management Mid Single Digit below target Supply
Slide 20: Historical Sales Price as % of Original Cost & Current Residual Value Estimates
Historical Sales Price as % of Original Cost & Current Residual Value Estimates Truck Residual Index1 Tractor Residual Index1 Range Residual Estimate for Accounting Residual Estimate for Accounting RESIDUAL VALUE Accounting Residuals: Previously lowered by ~30% to address used vehicle volatility ris
Slide 21: Comparable Segment EBITDA
Comparable Segment EBITDA Second Quarter ($ Millions) 2023 YTD FMS SCS DTS Earnings before income tax $ 362 $ 93 $ 62 Interest expense / (income) 134 4 (1) (1) Depreciation 779 75 1 (1) Used vehicle sales, net (125) — — Comparable Segment EBITDA (2) $ 1,150 $ 172 $ 62 2022 YTD FMS SCS DTS Earnings b
Slide 22: Business Segments
Business Segments Second Quarter ($ Millions) Memo: Operating Revenue (3) 2023 2022 % B/(W) 2023 2022 % B/(W) Total Revenue: Fleet Management Solutions $ 1,459 $ 1,621 (10)% $ 1,254 $ 1,307 (4)% Supply Chain Solutions 1,179 1,174 —% 865 798 8% Dedicated Transportation Solutions 440 450 (2)% 327 306
Slide 23: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) ($ Millions) Second Quarter Revenue 2023 2022 % B/(W) ChoiceLease $ 781 $ 763 2% Commercial rental 301 336 (10)% SelectCare and other 172 153 12% FMS Europe — 55 NM FMS operating revenue (1) 1,254 1,307 (4)% Fuel services revenue 205 314 (35)% FMS total revenue $ 1,4
Slide 24: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) ($ Millions) Trailing Twelve Months Revenue 2023 2022 % B/(W) FMS operating revenue (1) $ 5,140 $ 5,137 —% Fuel services revenue 999 949 5% FMS total revenue $ 6,139 $ 6,086 1% FMS Earnings Before Tax FMS Earnings Before Tax (EBT) $ 884 $ 977 (10)% FMS EBT as a % of
Slide 25: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) Second Quarter ($ Millions) Revenue 2023 2022 % B/(W) Omnichannel retail $ 275 $ 292 (6)% Automotive 262 217 21% Consumer packaged goods 223 198 13% Industrial and other 105 91 15% SCS operating revenue (1) 865 798 8% Subcontracted transportation and fuel 314 376 (16)% S
Slide 26: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) Trailing Twelve Months ($ Millions) Revenue 2023 2022 % B/(W) SCS operating revenue (1) $ 3,462 $ 2,710 28% Subcontracted transportation and fuel 1,375 1,225 12% SCS total revenue $ 4,837 $ 3,935 23% Earnings Before Tax SCS Earnings Before Tax (EBT) $ 207 $ 152 36% SCS E
Slide 27: Dedicated Transportation Solutions (DTS)
Dedicated Transportation Solutions (DTS) Second Quarter ($ Millions) Revenue 2023 2022 % B/(W) (1) DTS Operating Revenue $ 327 $ 306 7% Subcontracted transportation and fuel 113 144 (22)% DTS Total Revenue $ 440 $ 450 (2)% Earnings Before Tax DTS Earnings Before Tax (EBT) $ 33 $ 23 43% 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 $ 1,286 $ 1,164 10% Subcontracted transportation and fuel 519 493 5% DTS Total Revenue $ 1,805 $ 1,657 9% Earnings Before Tax DTS Earnings Before Tax (EBT) $ 122 $ 66 85%
Slide 29: Central Support Services (CSS)
Central Support Services (CSS) ($ Millions) Second Quarter 2023 2022 % B/(W) Allocated CSS Costs $ 84 $ 83 (1)% Unallocated CSS Costs 20 24 17% Total CSS Costs $ 104 $ 107 3% Year-to-Date 2023 2022 % B/(W) Allocated CSS Costs $ 172 $ 164 (5)% Unallocated CSS Costs 35 40 13% Total CSS Costs $ 207 $ 2
Slide 30: Balance Sheet
Balance Sheet ($ Millions) June 30, 2023 December 31, 2022 Cash and cash equivalents $ 218 $ 267 Other current assets 1,899 1,933 Revenue earning equipment, net 8,795 8,190 Operating property and equipment, net 1,132 1,148 Other assets 2,927 2,857 Total assets $ 14,971 $ 14,395 Current liabilities $
Slide 31: © 2023 Ryder System, Inc. All Rights Reserved
SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2023 Ryder System, Inc. 31 All Rights Reserved
Slide 32: 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 33: Reconciliation of Total to Operating Revenue
Reconciliation of Total to Operating Revenue ($ Millions) Second Quarter 2023 2022 Total Revenue $ 2,884 $ 3,034 Subcontracted Transportation and Fuel (558) (727) Operating Revenue (1) $ 2,326 $ 2,307 Note: Amounts may not be additive due to rounding. (1) Non-GAAP financial measure. SUPPLY CHAIN | D
Slide 34: Earnings and EPS from Continuing Operations Reconciliation
Earnings and EPS from Continuing Operations Reconciliation ($ Millions, Except Per Share Amounts) 2Q23 2Q23 2Q22 2Q22 Earnings EPS Earnings EPS Continuing operations (GAAP) $ (18) $ (0.39) $ 240 $ 4.72 Non-operating pension costs, net 8 0.17 1 0.03 FMS U.K. exit (1) (5) (0.11) (32) (0.62) Currency t
Slide 35: Comparable EPS Reconciliation
Comparable EPS Reconciliation Third Quarter 2023 Full Year 2023 Forecast Forecast EPS from continuing operations forecast (GAAP) $2.82 - $3.07 $7.95 - $8.45 Non-operating pension costs, net 0.17 0.67 Currency translation adjustment loss — 3.96 FMS U.K. exit 0.01 (0.38) Comparable EPS from continuing
Slide 36: 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 37: Adjusted Return on Equity Reconciliation
Adjusted Return on Equity Reconciliation (1) Twelve months ended June 30 ($ Millions) 2018 2022 2023 2023 Forecast Net earnings $ 285 $ 734 $ 574 $ 380 Other items impacting comparability, net (5) 22 (18) 96 155 Income taxes (2) 103 272 302 225 Adjusted earnings before income taxes 409 988 972 760 A
Slide 38: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ Millions) Six months ended June 30, 2022 2023 Cash Provided by Operating Activities from Continuing Operations $ 1,103 $ 1,221 Proceeds from Sales (Primarily Revenue Earning Equipment)(1) 636 447 Other, net (1) 7 — Total Cash Generated (2) 1,746 1,668 Purchases of Pr
Slide 39: 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 $ 2,500 Proceeds from Sales (Primarily Revenue Earning Equipment) (1) 518 552 822 1,235 800 Other, net (1) — — 1 7 — Total Cash