Ryder System, Inc. · NYSE:R
Ryder System — Q2 2011 Earnings Presentation
41 slides from Ryder System's earnings presentation, Jul 27, 2011
Slide 1: Second Quarter 2011 Earnings Conference Call
Second Quarter 2011 Earnings Conference Call July 27, 2011
Slide 2: Safe Harbor
Safe Harbor Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertain
Slide 3: Contents
Contents ► Second Quarter 2011 Results Overview ► Asset Management Update ► Earnings Outlook ►Q & A 07/27/11 Proprietary and Confidential 3
Slide 4: 2nd Quarter Results Overview
2nd Quarter Results Overview ► Earnings per diluted share from continuing operations were $0.79 in 2Q11 vs. $0.58 in 2Q10 – 2Q11 included a $0.10 charge from a tax law change and $0.03 charge from acquisition- related transaction costs ► Comparable earnings per share from continuing operations were
Slide 5: 2nd Quarter Results Overview - FMS
2nd Quarter Results Overview - FMS ► Fleet Management Solutions (FMS) total revenue up 14% (and operating revenue up 10%) vs. prior year – Contractual revenue up 2% – Full service lease revenue up 3% – Contract maintenance revenue decreased 2% – Commercial rental revenue up 38% – Fuel revenue up 29%
Slide 6: 2nd Quarter Results Overview – SCS / DCC
2nd Quarter Results Overview – SCS / DCC ► Supply Chain Solutions (SCS) total revenue up 26% (and operating revenue up 26%) vs. prior year due to the TLC acquisition, higher volumes and new business ► SCS net before tax earnings (NBT) up 37% – SCS NBT percent of operating revenue up 50 basis points
Slide 7: Key Financial Statistics
Key Financial Statistics ($ Millions, Except Per Share Amounts) Second Quarter 2011 2010 % B/(W) Operating Revenue (1) $ 1,192.0 $ 1,037.1 15% Fuel Services and Subcontracted Transportation Revenue 321.3 249.0 29% Total Revenue $ 1,513.3 $ 1,286.1 18% Earnings Per Share From Continuing Operations $
Slide 8: Key Financial Statistics
Key Financial Statistics ($ Millions, Except Per Share Amounts) Year-To-Date 2011 2010 % B/(W) Operating Revenue (1) $ 2,321.1 $ 2,024.7 15% Fuel Services and Subcontracted Transportation Revenue 617.6 481.4 28% Total Revenue $ 2,938.7 $ 2,506.1 17% Earnings Per Share From Continuing Operations $ 1.
Slide 9: Business Segments
Business Segments ($ Millions) Second Quarter Memo: Total Revenue 2011 2010 % B/(W) 2011 2010 % B/(W) (1) Operating Revenue: Fleet Management Solutions $ 778.9 $ 709.0 10% $ 1,064.5 $ 931.2 14% Supply Chain Solutions 315.1 249.9 26% 389.6 310.1 26% Dedicated Contract Carriage 141.7 118.6 19% 150.4 1
Slide 10: Business Segments
Business Segments ($ Millions) Year-To-Date Memo: Total Revenue 2011 2010 % B/(W) 2011 2010 % B/(W) (1) Operating Revenue: Fleet Management Solutions $ 1,497.9 $ 1,386.4 8% $ 2,044.6 $ 1,815.2 13% Supply Chain Solutions 639.4 488.1 31% 790.6 604.3 31% Dedicated Contract Carriage 270.0 230.6 17% 285.
Slide 11: Capital Expenditures
Capital Expenditures ($ Millions) Year-To-Date 2011 $ 2011 2010 O/(U) 2010 Full Service Lease $ 327 $ 302 $ 25 Commercial Rental 518 294 224 Operating Property and Equipment 35 34 1 Gross Capital Expenditures 880 630 250 Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 143 103 39 Net
Slide 12: Cash Flow from Continuing Operations
Cash Flow from Continuing Operations ($ Millions) Year-To-Date 2011 2010 Earnings from Continuing Operations $ 67 $ 43 Depreciation 421 418 Gains on Vehicle Sales, Net (28) (11) Amortization and Other Non-Cash Charges, Net 27 28 Pension Contributions (7) (6) Changes in Working Capital and Deferred T
Slide 13: Debt to Equity Ratio
Debt to Equity Ratio ($ Millions) 300% 275% 275% 234% 225% 250% 228% 201% 183% 203% 200% 168% Total Obligations to 146% 151% 157% Equity(1) 150% 129% 100% Balance Sheet Debt to Equity 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 06/30/11 L
Slide 14: Contents
Contents ► Second Quarter 2011 Results Overview ► Asset Management Update ► Earnings Outlook ►Q &A 07/27/11 Proprietary and Confidential 14
Slide 15: Global Asset Management Update
(1) Global Asset Management Update ► Units held for sale were 5,000 at quarter end; down 15% from 5,900 units held for sale in the prior year – Units held for sale remained unchanged from the end of the prior quarter ► The number of used vehicles sold in the second quarter were 4,400, down 6% compar
Slide 16: Contents
Contents ► Second Quarter 2011 Results Overview ► Asset Management Update ► Earnings Outlook ►Q & A 07/27/11 Proprietary and Confidential 16
Slide 17: EPS Forecast – Continuing Operations
EPS Forecast – Continuing Operations ($ Earnings Per Share) ► Increasing full year 2011 EPS forecast by $0.43 from $2.90 – 3.00 to $3.33 – 3.43 ► Increased forecast reflects the Hill Hire acquisition ($0.12 - $0.17), a lower expected impact from Japan disasters ($0.06 - $0.10), and improved commerci
Slide 18: Q&A
Q&A
Slide 19: Appendix
Appendix Business Segment Detail Central Support Services Balance Sheet Asset Management Financial Indicators Forecast Non-GAAP Financial Measures & Reconciliations 07/27/11 Proprietary and Confidential 19
Slide 20: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) ($ Millions) Second Quarter 2011 2010 % B/(W) Full Service Lease $ 494.7 $ 482.5 3% Contract Maintenance 39.2 39.9 (2)% Contractual Revenue 533.9 522.4 2% Contract-related Maintenance 47.3 39.9 19% Commercial Rental 180.0 130.1 38% Other 17.6 16.7 5% Operating Revenu
Slide 21: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) ($ Millions) Year-To-Date 2011 2010 % B/(W) Full Service Lease $ 978.0 $ 961.9 2% Contract Maintenance 77.3 79.7 (3)% Contractual Revenue 1,055.3 1,041.5 1% Contract-related Maintenance 92.0 80.1 15% Commercial Rental 315.7 231.6 36% Other 34.9 33.2 5% Operating Reve
Slide 22: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) ($ Millions) Second Quarter 2011 2010 % B/(W) Automotive $ 107.8 $ 113.1 (5)% High-Tech 60.6 53.0 15% Retail & CPG 103.7 44.2 135% Industrial & Other 43.0 39.7 8% Operating Revenue 315.1 249.9 26% Subcontracted Transportation 74.5 60.2 24% Total Revenue $ 389.6 $ 310.1 2
Slide 23: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) ($ Millions) Year-To-Date 2011 2010 % B/(W) Automotive $ 230.5 $ 219.7 5% High-Tech 117.5 104.6 12% Retail & CPG 207.8 86.0 142% Industrial & Other 83.7 77.9 7% Operating Revenue 639.4 488.1 31% Subcontracted Transportation 151.2 116.2 30% Total Revenue $ 790.6 $ 604.3 3
Slide 24: Dedicated Contract Carriage (DCC)
Dedicated Contract Carriage (DCC) ($ Millions) Second Quarter 2011 2010 % B/(W) Operating Revenue $ 141.7 $ 118.6 19% Subcontracted Transportation 8.7 4.4 98% Total Revenue $ 150.4 $ 123.0 22% Segment Net Before Tax Earnings (NBT) $ 9.8 $ 8.4 16% Segment NBT as % of Total Revenue 6.5% 6.9% Segment N
Slide 25: Dedicated Contract Carriage (DCC)
Dedicated Contract Carriage (DCC) ($ Millions) Year-To-Date 2011 2010 % B/(W) Operating Revenue $ 270.0 $ 230.6 17% Subcontracted Transportation 15.1 8.7 72% Total Revenue $ 285.1 $ 239.4 19% Segment Net Before Tax Earnings (NBT) $ 17.2 $ 15.8 8% Segment NBT as % of Total Revenue 6.0% 6.6% Segment N
Slide 26: Central Support Services (CSS)
Central Support Services (CSS) ($ Millions) Second Quarter 2011 2010 % B/(W) Allocated CSS Costs $ 40.6 $ 35.8 (13)% Unallocated CSS Costs 11.2 9.9 (14)% Total CSS Costs $ 51.8 $ 45.6 (13)% 07/27/11 Proprietary and Confidential 26
Slide 27: Central Support Services (CSS)
Central Support Services (CSS) ($ Millions) Year-To-Date 2011 2010 % B/(W) Allocated CSS Costs $ 77.3 $ 69.3 (12)% Unallocated CSS Costs 20.0 18.7 (7)% Total CSS Costs $ 97.3 $ 88.0 (11)% 07/27/11 Proprietary and Confidential 27
Slide 28: Balance Sheet
Balance Sheet ($ Millions) June 30, December 31, 2011 2010 Cash and Cash Equivalents $ 130 $ 213 Other Current Assets 975 810 Revenue Earning Equipment, Net 4,818 4,201 Operating Property and Equipment, Net 633 607 Other Assets 888 821 Total Assets $ 7,444 $ 6,652 Short-Term Debt / Current Portion L
Slide 29: U.S. Asset Management Update
U.S. Asset Management Update (a) Number of Units YTD 06 YTD 07 YTD 08 YTD 09 YTD 10 YTD 11 5,000 4,381 4,500 4,000 3,689 3,494 3,500 3,319 2,948 3,000 2,782 2,488 2,500 2,317 2,256 2,291 2,180 2,022 1,934 2,023 1,975 1,924 2,000 1,788 1,687 1,500 1,340 1,000 713 658 562 581 396 500 0 (c) Redeploymen
Slide 30: Financial Indicators Forecast
Financial Indicators Forecast (1) Total Cash Generated (2) (3) Gross Capital Expenditures (3) ($ Millions) Full Service Lease $1,684 Commercial Rental $1,571 $1,500 $1,757 $1,755 $1,381 PP&E/Other $1,328 $1,252 $1,266 $1,399 $1,179 $1,091 $1,289 $1,054 $949 $1,165 $1,182 $1,265 $1,088 $835 $657 $725
Slide 31: Adjusted Return on Capital History
(1) Adjusted Return on Capital History Adjusted Return on 7.7% 7.8% 7.9% 7.4% 7.3% Capital (ROC) 6.3% 6.1% 5.7% 5.6% 6.9% 6.8% 6.7% 6.6% 6.5% Cost of 4.8% 4.1% Capital (COC) 5.2% 5.6% 2004 2005 2006 2007 2008 2009 2010 Original Current 2011 2011 Forecast(3) Forecast ROC O/(U) COC 0.8% 1.0% 1.2% 0.8%
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures ► This presentation includes “non-GAAP financial measures” as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure and an explanation why management believes that presentation of
Slide 33: Earnings and EPS from Continuing Operations Reconciliation
Earnings and EPS from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 2Q11 - 2Q11 - Earnings EPS Reported $ 40.9 $ 0.79 Tax Law Changes 5.4 0.10 Acquisition Transaction Costs 1.5 0.03 Comparable $ 47.8 $ 0.92 YTD 11 - YTD 11 - Earnings EPS Reported $ 66.8 $ 1.29 Tax Law Cha
Slide 34: NBT and Tax Rate from Continuing Operations Reconciliation
NBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 2Q11 - 2Q11 - 2Q11 - NBT Tax Tax Rate Reported $ 75.0 $ 34.1 45.5% Tax Law Changes - (5.4) Acquisition Transaction Costs 1.7 0.2 Comparable $ 76.7 $ 28.9 37.7% YTD 11 - YTD 11 - YTD 11 - NBT Tax Tax Rate
Slide 35: Adjusted Return on Capital Reconciliation
Adjusted Return on Capital Reconciliation ($ Millions) 6/30/11 6/30/10 (1) Net Earnings $ 141 $ 75 Restructuring and Other Charges, Net and Other Items 9 21 Income Taxes 81 55 Adjusted Earnings Before Income Taxes 231 151 Adjusted Interest Expense (2) 136 137 Adjusted Income Taxes (3) (139) (117) Ad
Slide 36: Adjusted Return on Capital Reconciliation
Adjusted Return on Capital Reconciliation ($ Millions) 2004 2005 2006 2007 2008 2009 2010 (1) Net earnings $ 216 $ 227 $ 249 $ 254 $ 200 $ 62 $ 118 Cumulative effect of change in accounting principle - 2 - - - - - Restructuring and other charges, net and other items (24) (2) - 1 70 30 6 Income taxes
Slide 37: 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% $2,185 143
Slide 38: Debt to Equity Reconciliation
Debt to Equity Reconciliation ($ Millions) % to % to % to % to % to 12/31/08 Equity 12/31/09 Equity 12/31/10 Equity 6/30/11 Equity 6/30/10 Equity Balance Sheet Debt $2,863 213% $2,498 175% $2,747 196% $3,242 222% $2,472 180% Receivables Sold - - - - - PV of minimum lease payments and guaranteed resi
Slide 39: Cash Flow Reconciliation
Cash Flow Reconciliation ($ Millions) 12/31/00 (4) 12/31/01 (4) 12/31/02 (4) 12/31/03 (4) 12/31/04 (4) 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
Slide 40: Cash Flow Reconciliation
Cash Flow Reconciliation ($ Millions) 12/31/10 6/30/11 6/30/10 Cash Provided by Operating Activities from Continuing Operations $ 1,028 $ 473 $ 531 Proceeds from Sales (Primarily Revenue Earning Equipment) 235 143 103 Collections of Direct Finance Leases 62 30 31 Other, Net 3 - 2 Total Cash Generate
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