Slide 1: Third Quarter 2023 Earnings Conference Call
Third Quarter 2023 Earnings Conference Call October 25, 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; our expectations regar
Slide 3: Contents
Contents 3Q23 Earnings Release Conference Call Note Regarding Forward-Looking Statements Slide 2 Strategic Update Slides 4 - 6 3Q23 Results Slides 7 - 11 Capex, Cash Flow & Capital Allocation Slides 12 - 13 Outlook Slides 14 - 17 Appendix & Non-GAAP Financial Measures SUPPLY CHAIN | DEDICATED TRANSP
Slide 4: Key Updates
Key Updates • Balanced growth strategy drives strong operating performance through freight recession Strategy Update • Transformative changes have increased earnings and return profile of business vs prior cycles • Set to acquire Impact Fulfillment Services - adds co-packaging and co-manufacturing c
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 Adjusted ROE. SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAG
Slide 6: Positioned for Long-Term Value Creation
Positioned for Long-Term Value Creation Resilient business model with growth momentum 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 Third Quarter Third Quarter +1% $4.45 -20% $2.3B $2.4B Primarily reflecting $3.58 Primarily reflecting weaker contractual revenue growth market conditions in used in all segments partially vehicle sales (UVS) and rental offset by lower rental partial
Slide 8: 3rd Quarter Results Overview – FMS
3rd Quarter Results Overview – FMS OPERATING REVENUE 3% decrease reflects: $1.30B $1.27B • lower rental demand and 2% negative revenue impact from UK exit • partially offset by higher ChoiceLease and SelectCare revenue 3Q22 3Q23 EARNINGS BEFORE TAX (EBT) Earnings decline primarily reflects: $266M $1
Slide 9: 3rd Quarter Used Vehicle Sales Update – FMS
3rd Quarter Used Vehicle Sales Update – FMS % CHANGE IN PROCEEDS Sequential pricing decline was better (8)% (6)% than our expectations (31)% (30)% vs. 3Q22 vs. 2Q23 USED VEHICLES SOLD USED VEHICLE INVENTORY Sales volumes and inventory reflect higher lease replacement and 7,800 rental de-fleeting 6,5
Slide 10: 3rd Quarter Results Overview – SCS
3rd Quarter Results Overview – SCS OPERATING REVENUE $835M $909M 9% increase reflects new business and increased pricing 3Q22 3Q23 EARNINGS BEFORE TAX (EBT) 14% increase reflects $71M $81M • higher operating revenue and lower incentive-based compensation costs • partially offset by lower volumes in
Slide 11: 3rd Quarter Results Overview – DTS
3rd Quarter Results Overview – DTS OPERATING REVENUE $317M $325M 3% increase primarily reflects inflationary cost recovery 3Q22 3Q23 EARNINGS BEFORE TAX (EBT) $28M $28M EBT is generally in line with prior year 3Q22 3Q23 EBT as % of Operating Revenue 8.9% 8.5% Trailing 12-month DTS EBT as a % of Oper
Slide 12: Capital Expenditures
Capital Expenditures LEASE RENTAL Year-to-Date $2.0B $492M Year-to-Date $388M $1.3B 3Q22 3Q23 3Q22 3Q23 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, a key component of FY lease fleet growth – FY23 rental power-fleet utilization expected to be in mid- to high-70s
Slide 15: Favorably Positioned for Cycle Upturn
Favorably Positioned for Cycle Upturn Opportunities to benefit from cycle upturn in all segments SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2023 Ryder System, Inc. 15 All Rights Reserved
Slide 16: EPS – Continuing Operations
EPS – Continuing Operations (Earnings Per Share) FULL YEAR EPS FOURTH QUARTER EPS 2022 2023 Forecast 2022 2023 Forecast GAAP $16.96 $8.44 - $8.69 $4.06 $2.45 - $2.70 Comparable $16.37 $12.60 - $12.85 $3.89 $2.60 - $2.85 • Raising full-year 2023 comparable EPS forecast range from $12.60 - $12.85 – re
Slide 17: Positioned to Increase Shareholder Value
Positioned to Increase Shareholder Value Secular trends, operational expertise, and momentum from multi-year initiatives provide significant opportunity for long-term profitable growth Transformative changes to our business model and continued execution of our balanced growth strategy have enabled u
Slide 18: Q&A
Q&A SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 18 © 2023 Ryder System, Inc. All Rights Reserved
Slide 19: Appendix
Appendix Financial Targets Residuals Chart Comparable Segment EBITDA Business Segment Detail Central Support Services Balance Sheet Asset Management Non-GAAP Financial Measures & Reconciliations SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2023 Ryder System, Inc. 19 All Rig
Slide 20: Long Term Financial Model
Long Term Financial Model ROE TARGET 2023 FORECAST Long-term average over the cycle High Teens at target Component drivers to achieve ROE target include: Operating Operating Revenue Revenue Growth Growth Total Ryder High Single Digit below target Fleet Management Mid Single Digit below target Supply
Slide 21: Historical Sales Price as % of Original Cost & Current Residual Value Estimates
Historical Sales Price as % of Original Cost & Current Residual Value Estimates Truck Residual Index1 Tractor Residual Index1 Range Residual Estimate for Accounting Residual Estimate for Accounting RESIDUAL VALUE Accounting Residuals: Previously lowered by ~30% to address used vehicle volatility ris
Slide 22: Comparable Segment EBITDA
Comparable Segment EBITDA Third Quarter ($ Millions) 2023 YTD FMS SCS DTS Earnings before income tax $ 531 $ 174 $ 90 Interest expense / (income) 210 5 (2) (1) Depreciation 1,173 97 2 (1) Used vehicle sales, net (172) — — Comparable Segment EBITDA (2) $ 1,742 $ 276 $ 90 2022 YTD FMS SCS DTS Earnings
Slide 23: Business Segments
Business Segments Third Quarter ($ Millions) Memo: Operating Revenue (3) 2023 2022 % B/(W) 2023 2022 % B/(W) Total Revenue: Fleet Management Solutions $ 1,487 $ 1,582 (6)% $ 1,266 $ 1,303 (3)% Supply Chain Solutions 1,194 1,206 (1)% 909 835 9% Dedicated Transportation Solutions 448 455 (1)% 325 317
Slide 24: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) ($ Millions) Third Quarter Revenue 2023 2022 % B/(W) ChoiceLease $ 799 $ 772 3% Commercial rental 293 349 (16)% SelectCare and other 174 159 9% FMS Europe — 23 (100)% FMS operating revenue (1) 1,266 1,303 (3)% Fuel services revenue 221 279 (21)% FMS total revenue $ 1
Slide 25: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) ($ Millions) Trailing Twelve Months Revenue 2023 2022 % B/(W) FMS operating revenue (1) $ 5,103 $ 5,192 (2)% Fuel services revenue 941 1,039 (9)% FMS total revenue $ 6,044 $ 6,231 (3)% FMS Earnings Before Tax FMS Earnings Before Tax (EBT) $ 787 $ 1,057 (26)% FMS EBT
Slide 26: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) Third Quarter ($ Millions) Revenue 2023 2022 % B/(W) Omnichannel retail $ 291 $ 309 (6)% Automotive 274 226 21% Consumer packaged goods 228 208 10% Industrial and other 116 92 25% SCS operating revenue (1) 909 835 9% Subcontracted transportation and fuel 285 371 (23)% SC
Slide 27: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) Trailing Twelve Months ($ Millions) Revenue 2023 2022 % B/(W) SCS operating revenue (1) $ 3,536 $ 2,985 18% Subcontracted transportation and fuel 1,289 1,354 (5)% SCS total revenue $ 4,825 $ 4,339 11% Earnings Before Tax SCS Earnings Before Tax (EBT) $ 217 $ 200 9% SCS E
Slide 28: Dedicated Transportation Solutions (DTS)
Dedicated Transportation Solutions (DTS) Third Quarter ($ Millions) Revenue 2023 2022 % B/(W) (1) DTS Operating Revenue $ 325 $ 317 3% Subcontracted transportation and fuel 123 138 (11)% DTS Total Revenue $ 448 $ 455 (1)% Earnings Before Tax DTS Earnings Before Tax (EBT) $ 28 $ 28 (2)% DTS EBT as a
Slide 29: Dedicated Transportation Solutions (DTS)
Dedicated Transportation Solutions (DTS) ($ Millions) Trailing Twelve Months Revenue 2023 2022 % B/(W) (1) DTS Operating Revenue $ 1,294 $ 1,210 7% Subcontracted transportation and fuel 504 521 (3)% DTS Total Revenue $ 1,798 $ 1,731 4% Earnings Before Tax DTS Earnings Before Tax (EBT) $ 121 $ 84 44%
Slide 30: Central Support Services (CSS)
Central Support Services (CSS) ($ Millions) Third Quarter 2023 2022 % B/(W) Allocated CSS Costs $ 86 $ 88 2% Unallocated CSS Costs 20 21 5% Total CSS Costs $ 106 $ 109 3% Year-to-Date 2023 2022 % B/(W) Allocated CSS Costs $ 258 $ 252 (2)% Unallocated CSS Costs 54 61 11% Total CSS Costs $ 312 $ 313 —
Slide 31: Balance Sheet
Balance Sheet ($ Millions) September 30, 2023 December 31, 2022 Cash and cash equivalents $ 159 $ 267 Other current assets 1,953 1,933 Revenue earning equipment, net 8,875 8,190 Operating property and equipment, net 1,164 1,148 Other assets 3,179 2,857 Total assets $ 15,330 $ 14,395 Current liabilit
Slide 32: © 2023 Ryder System, Inc. All Rights Reserved
SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2023 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: Total Revenue to Operating Revenue Reconciliation
Total Revenue to Operating Revenue Reconciliation ($ Millions) Third Quarter 2023 2022 Total Revenue $ 2,924 $ 3,035 Subcontracted Transportation and Fuel (545) (688) Operating Revenue (1) $ 2,379 $ 2,347 Note: Amounts may not be additive due to rounding. (1) Non-GAAP financial measure. SUPPLY CHAIN
Slide 35: Earnings and EPS from Continuing Operations Reconciliation
Earnings and EPS from Continuing Operations Reconciliation ($ Millions, Except Per Share Amounts) 3Q23 3Q23 3Q22 3Q22 Earnings EPS Earnings EPS Continuing operations (GAAP) $ 160 $ 3.44 $ 247 $ 4.82 Non-operating pension costs, net 8 0.17 2 0.03 FMS U.K. exit (1) 4 0.09 (27) (0.53) Other, net — — (3
Slide 36: Comparable EPS Reconciliation
Comparable EPS Reconciliation Fourth Quarter 2023 Full Year 2023 Forecast Forecast EPS from continuing operations forecast (GAAP) $2.45 - $2.70 $8.44 - $8.69 Non-operating pension costs, net 0.17 0.67 Currency translation adjustment loss — 3.96 FMS U.K. exit (0.02) (0.47) Comparable EPS from continu
Slide 37: 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 38: Adjusted Return on Equity Reconciliation
Adjusted Return on Equity Reconciliation (1) Twelve months ended September 30, ($ Millions) 2018 2022 2023 2023 Forecast Net earnings $ 285 $ 842 $ 488 $ 400 Other items impacting comparability, net (5) 22 (46) 128 155 Income taxes (2) 103 316 268 210 Adjusted earnings before income taxes 409 1,112
Slide 39: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ Millions) Nine months ended September 30, 2022 2023 Cash Provided by Operating Activities from Continuing Operations $ 1,786 $ 1,842 Proceeds from Sales (Primarily Revenue Earning Equipment)(1) 976 647 Other, net (1) 42 — Total Cash Generated (2) 2,804 2,489 Purchase
Slide 40: 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