Slide 1: Investor Day May 19, 2016
Investor Day May 19, 2016 Exhibit 99.2
Slide 2: Safe Harbor and Non-GAAP Financial Measures
Investor Day 2016 2 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 strategies for future growth, expectations regarding mar
Slide 3: Welcome and Opening Remarks
Bob Brunn Vice President, Corporate Strategy & Investor Relations Welcome and Opening Remarks
Slide 4: Agenda
Investor Day 2016 8:30 am Bob Brunn, VP – Strategy & IR Opening Comments Robert Sanchez, CEO Company Overview and Strategy Dennis Cooke, President Fleet Management Solutions John Diez, President Dedicated Transportation Solutions All Q&A 10:15 am Break 10:25 am Steve Sensing, President Supply Chain
Slide 5: Investor Day Solutions Showcase
Investor Day 2016 Learn more about the products and capabilities that are driving Ryder’s growth Collaborate. Innovate. Execute. Grow. Investor Day Solutions Showcase Flexible Maintenance Solutions Rental & Maintenance Customer Experience Advanced Fuels & Emerging Vehicle Technology Warehousing & Di
Slide 6: Company Overview and Strategy
Robert Sanchez Chairman & Chief Executive Officer Company Overview and Strategy
Slide 7: What you'll hear today
Investor Day 2016 You’ll hear our strategy to penetrate the non-outsourced transportation and logistics markets and increase shareholder value What you’ll hear today… • Clear strategy to penetrate the large, non-outsourced market • Secular trends favor outsourcing • Initiatives to drive higher level
Slide 8: Leading provider of outsourced solutions
Investor Day 2016 1. These amounts result from continuing operations. 2. Net Earnings from Continuing Operations are $306 million. 63% 14% 23% Fleet Management Solutions (FMS) Dedicated Transportation Solutions (DTS) Supply Chain Solutions (SCS) 6% 6% 2% 85% U.S. Canada UK Mexico < 1% Singapore $6.6
Slide 9: A day in the life of Ryder
Investor Day 2016 A day in the life of Ryder 7:00 am W AKE UP 8:00 am BREAKFAST 12:00 pm LUNCH 5:00 pm 6:00 pm DINNER 8:00 pm EVENING 9:00 am AT THE OFFICE DAY BEGINS 8:30 am DRIVE TO WORK DRIVE HOME DAY ENDS 9
Slide 10: Providing integrated transportation and logistics solutions
Investor Day 2016 FMS DTS Salesforce equipped to sell appropriate solution to each customer SCS Solutions comprising two or more services: Drivers, Routing, Scheduling & Administration Vehicle Maintenance, Financing & Support Services Distribution Management Transportation Management Network Design
Slide 11: Large U.S. markets with significant growth potential
Investor Day 2016 Large U.S. markets with significant growth potential U.S. Power Vehicles US $ US $ Total Market Truck leasing, maintenance and rental (FMS) Warehouse and truck- based transportation management (SCS) Dedicated transportation (DTS) $800B $1T 8M Power Vehicles Highly Addressable Marke
Slide 12: Secular trends support the shift to outsourcing
Investor Day 2016 Increasing Costs • New engine technology: purchase costs up 40-50%1 • Maintenance complexity: cost up 55-65%1 More Stringent Regulations • New EPA Emissions Standards: Issued thru 2027 • Lower capacity / productivity due to Compliance, Safety & Accountability (CSA), Hours of Servic
Slide 13: Strategy focused on driving higher outsourcing rates
Investor Day 2016 Operational Excellence Innovation Customer Focus EPS ROC Spread Operating Revenue Talent & Culture Information Technology Strategy focused on driving higher outsourcing rates Grow fleet management and supply chain outsourcing services by targeting private fleets (FMS) and key verti
Slide 14: Key examples of progress made on our strategy
Investor Day 2016 Key examples of progress made on our strategy Operational Excellence Innovation Customer Focus Talent & Culture 1 2 4 3 IT 5 Initiative Result LEAN roll out in SCS All major accounts On-Demand Maintenance Launched August 2015 • Upsell FMS to DTS • TCO Sales Tool • 2/3 of new DTS sa
Slide 15: Solid results from initiatives
Investor Day 2016 Comparable EPS Growth 2012 – 2015 CAGR 1,200 1,700 3,200 6,800 2012 2013 2014 2015 + 50 bps Expansion of ROC Spread 2012 – 2015 Ryder 5% FMS 10% DTS 4% SCS Solid results from initiatives to drive higher outsourcing levels and profitable growth Operating revenue growth 2012 – 2015 C
Slide 16: Strategic initiatives for 2016 and beyond: Operational Excellence
Investor Day 2016 • Continue to refine maintenance expertise − Increase vehicle uptime and reduce maintenance / overhead costs • Leverage centralized asset management − Adjust rental fleet size / redeploy assets to maximize utilization and return • Build on driver recruiting and retention competenci
Slide 17: Strategic initiatives for 2016 and beyond: Customer Focus
Investor Day 2016 • Expand full service lease customer relationships to higher value dedicated solutions − 2/3 of new sales in DTS from collaborative upselling from FMS and expanding to SCS • Build marketing competency to tell Ryder story to customers and prospects − Creating brand thought leadershi
Slide 18: Strategic initiatives for 2016 and beyond: Innovation
Investor Day 2016 • Accelerate growth of asset-light maintenance solutions − On-Demand Maintenance (launched in 2015), Preventive, and Comprehensive • New lease products with flexible maintenance − FSL “Lite” to be launched next week • New supply chain industry verticals − Healthcare / Medical Devic
Slide 19: 2016 playbook for softer economic/freight environment
Investor Day 2016 Uncertain macro environment in forecast assumes: REDUCE RENTAL FLEET 2 WEAKER RENTAL DEMAND LOWER USED VEHICLE PRICING LEASE SALES HEADWIND CONTROL COSTS 4 MAXIMIZE USED VEHICLE PROCEEDS & MANAGE INVENTORY 3 GROW PROFITABLE CONTRACTUAL BUSINESS 1 Four Focus Areas 2016 playbook for
Slide 20: Performance goals align with creating shareholder value
Investor Day 2016 Performance Measures Focus on Top- and Bottom-line Growth, Capital Management and Shareholder Value Short-Term Incentive Plan Measures: • EPS • Operating Revenue Long-Term Incentive Plan Measures: • Relative TSR 1 • ROC • Over 70% of senior executives’ compensation is at risk and s
Slide 21: Looking ahead to our future state
Investor Day 2016 Looking ahead to our future state 150 – 200 bps 10 – 15% 7 – 8% Operating Revenue Growth ROC Spread EPS Growth • Industry leader in innovative solutions • Growth primarily from DIY market • Technology – competitive advantage • Asset management – earnings stability 21
Slide 22: Fleet Management Solutions Overview
Dennis Cooke President, Global Fleet Management Solutions Fleet Management Solutions Overview
Slide 23: What you'll hear today
Investor Day 2016 • Large, non-outsourced addressable market • Secular trends driving higher outsourcing rates • Expanding product portfolio focused on full service lease and asset-light solutions • Ryder sales and marketing initiatives driving growth • Margin expansion driven by operational excelle
Slide 24: FMS overview
Investor Day 2016 FMS overview: provides transportation services with a well established business model and unmatched shop network Operating Statistics 2015 Performance Geographies Operating Revenue Mix U.S. 81% Canada 8% U.K. 11% Full Service Lease 63% Rental 24% Other 2% Asset-light Maintenance Pr
Slide 25: Diversified customer base and broad geographic shop network
Investor Day 2016 U.S. $3,220M 84% • 39K commercial rental • 15K full service lease / contract maintenance 90+% privately held − Uptime is critical − Need broad maintenance coverage footprint (large customers) − Do not want to tie up capital in trucks FSL/Contract Maintenance (Fleet Size) Customer M
Slide 26: Significant market opportunity enabling growth
Investor Day 2016 Additional addressable market exists for U.S. trailers, and vehicles in UK and Canada • Vehicle complexity − Increased costs (e.g., maintenance) − Vehicle uptime challenges • Maintenance technician shortage • Increased technician training requirements • Expanded and more stringent
Slide 27: FMS has a differentiated business model
Investor Day 2016 Why We Win • Scale-enabled buying power • Maintenance delivery; 800+ shops, mobile and on customer’s site • Vehicle uptime • High resale price; 60+ used retail truck centers • Competitive financing • Fleet support services (e.g., Insurance, Fuel, Reporting) 10-20% Cost Savings on A
Slide 28: Products and go-to-market strategy
Investor Day 2016 Channels & Tools “How” Marketing Lead Generation Online Inside Sales Local / National Sales Sales Specialists Key Sales Tools Total Cost of Ownership Fleet Buy-Out Customer Segments “Who” Selection Criteria Prioritize Uptime Business Focus Not Transportation Lack of Scale Examples
Slide 29: Growth initiatives
Investor Day 2016 Well positioned to profitably grow through product innovation and sales/marketing growth initiatives Growth Initiatives • Continue Full Service Lease (FSL) fleet count growth − Launch new lease product (“FSL Lite”) with flexible maintenance • Accelerate growth of asset-light mainte
Slide 30: Total Cost of Ownership Sales Tool
Investor Day 2016 • Proprietary, PC-based analytical tool integrated into our sales process • 14,000 completed with customers since Jan 2014 • Identifies total cost of owning a vehicle, then compares that cost to Ryder solution • Demonstrates 10-20% average outsourcing savings Increases conversion r
Slide 31: Customer testimonial – Sacramento Laundry
Investor Day 2016 Customer testimonial – Sacramento Laundry 31
Slide 32: Strong top-line growth with operating leverage
Investor Day 2016 $3.1 $3.8 2011 2015 EBT 8.5% Drivers of growth were FSL and Rental Drivers of growth: FSL, Rental and Used Vehicle Sales; UVS and Rental are headwinds in 2016 +350 bps Strong top-line growth over last 5 years with significant operating leverage +$700M 5% CAGR $266 $462 2011 2015 +$
Slide 33: Well positioned to continue margin expansion
Investor Day 2016 Well positioned to continue margin expansion Growth Initiatives • Continue leveraging shop network …~30% capacity available • Increase vehicle uptime • Reduce maintenance and overhead costs • Continue to increase asset utilization • Focus on higher-return lease opportunities Margin
Slide 34: Operational excellence: vehicle uptime and maintenance cost
Investor Day 2016 Operational excellence initiatives are focused on vehicle uptime and maintenance cost Increase Vehicle Uptime • New Advance Planning & Scheduling system enables uptime measurement • Key drivers of uptime − Industry-leading technician training − Preventive maintenance program − Emer
Slide 35: Rental and Used Vehicle Sales initiatives
Investor Day 2016 Rental and Used Vehicle Sales operational excellence initiatives Rental • Enhanced customer experience − Web tools and apps − Rental counter redesign − Net Promotor Score: 90 • Customer loyalty program - RedZone™ • High uptime leads to increased availability, utilization • Rapid fl
Slide 36: FMS key takeaways
Investor Day 2016 Significant growth opportunities ‒ Favorable secular trends ‒ New product development and sales and marketing initiatives Operational excellence initiatives and operating leverage from fleet growth drive margin expansion Focus on growth for recurring revenue streams (i.e., co
Slide 37: Dedicated Transportation Solutions Overview
John Diez President, Dedicated Transportation Solutions Dedicated Transportation Solutions Overview
Slide 38: What you'll hear today
Investor Day 2016 • Dedicated Transportation Solutions (DTS) leverages and enhances Ryder value • Industry leader uniquely positioned to capture share; differentiated business model • Significant non-outsourced opportunity further supported by upsell potential • Secular trends favorable to outsourci
Slide 39: DTS overview: turnkey transportation solution
Investor Day 2016 DTS overview: turnkey transportation solution Dedicated Transportation Solutions DEDICATED TRANSPORTATION (DTS) Full Service Lease Vehicles Professional Drivers Routing, Scheduling, Supervision & Administrative Support + + = Dedicated Transportation Solution Operating Statistics 20
Slide 40: Secular trends favor Ryder outsourcing growth
Investor Day 2016 Driver shortage Driver shortage estimated to reach 150K by 20201 Expertise in recruiting qualified drivers Safety regulations • Electronic logging devices • Hours of service • FMCSA – Compliance, Safety, Accountability Electronic logging devices required beginning Dec 2017 ELD tech
Slide 41: Dedicated represents ~3% of private fleet market
Investor Day 2016 Dedicated represents ~ 3% of private fleet market 1 Continue to grow faster than the industry $533 $714 2012 2015 10% CAGR DTS outpacing industry CAGR of 6% 2 (2012 – 2015) +$181M Dedicated Market DTS Operating Revenue ($M) 1. Internal Ryder estimates 2. Armstrong and Associates To
Slide 42: Why we win
Investor Day 2016 Best-in-class engineering • Optimized routing & scheduling • Reliable & flexible designs • Powered by leading technologies • 100+ logistics engineers • 10-20% overall savings Operational expertise • Recognized safety programs • Exceptional on-time delivery performance • Deep indust
Slide 43: Targeted investments in technology
Investor Day 2016 Targeted investments in technology that strengthen our value • Removal of inefficiencies • Reduction of empty miles Continuous optimization • Real-time decision making • Instant visibility to drivers and equipment End-to-end visibility • Real-time Hours of Service reporting • Visib
Slide 44: Strong customer retention and expansion
Investor Day 2016 Strong customer retention and expansion…significant FMS upsell opportunity • 60% of customers have been with Ryder for 5 years; 40% have been with Ryder for 10 years • Two-thirds of new customers come from FMS collaboration since 2013 Celebrating 70 years – Ryder’s first Dedicated
Slide 45: Key drivers enable faster growth
Investor Day 2016 Key drivers enable faster growth and expanding margins Growth Initiatives • Leverage large FMS customer base to upsell higher value-added services • Target industries that require specialized, high levels of service • Meet growing customer demand for increased volume flexibility wi
Slide 46: Upselling FMS customers
Investor Day 2016 Growth drivers 2012 2015 Increases revenue and earnings potential from the same vehicle • Introduce targeted FMS customers to a dedicated solution • Increase customer retention • Leverage secular outsourcing trends • Communicate value using Total Cost of Ownership sales tool • Leve
Slide 47: Targeting new industries
Investor Day 2016 Growth drivers 2012 2015 • Focusing on specialized, high service transportation segments − More private fleet conversion opportunities − Safety performance is a differentiator • Delivering value and safety in industrial segments • Gaining leadership position in energy and metals se
Slide 48: Margin initiatives
Investor Day 2016 Key drivers enable faster growth and expanding margins Growth Initiatives • Driving operating leverage of existing organization • Centralizing administrative functions into regional shared services • Increasing labor productivity – driver recruitment and retention investments • Mig
Slide 49: DTS key takeaways
Investor Day 2016 An industry leader in dedicated transportation solutions, outpacing industry growth Capturing a larger share of the non- outsourced market by addressing secular trends favorable to outsourcing and upselling FMS customers Accelerating growth by targeting specialized industries
Slide 50: Q & A Session
Q & A Session
Slide 51: Supply Chain Solutions Overview
Steve Sensing President, Supply Chain Solutions Supply Chain Solutions Overview
Slide 52: What you'll hear today
Investor Day 2016 • Leading provider of integrated logistics solutions across North America • Serve a large and growing market; predominantly insourced but with long-term secular outsourcing drivers • Differentiated approach based on deep understanding of key industry verticals • LEAN execution driv
Slide 53: SCS overview
Investor Day 2016 Distribution Management Transportation Management Dedicated Services Professional Services SCS overview: provides integrated logistics services in North America Supply Chain Solutions Operating Statistics 2015 Performance Distribution Footprint 40MSF Freight Under Management1 $4.3B
Slide 54: Growing logistics market with significant outsourcing potential
Investor Day 2016 14% 7% 8% 11% 14% 22% 24% Other Healthcare Industrial Auto CPG Tech Retail Outsourced Warehousing & Transportation Management ($B) 0 10 20 30 40 2012 2013 2014 2015 4% CAGR Fortune 1000 Growing logistics market…significant outsourcing potential…focused on largest industry verticals
Slide 55: Secular trends favor Ryder outsourcing growth
Investor Day 2016 e-Commerce Shifting consumer behavior; want goods when and where they need them Increased complexity requiring dynamic integrated solutions Flexible cross dock network integrated with over 2K+ carriers Nearshoring / Onshoring Manufacturing moving closer to consumers (e.g., China →
Slide 56: Differentiated approach based on key industry verticals
Investor Day 2016 Distr. Mgmt. 45% Dedicated Svcs. 38% Trans. Mgmt. 10% Prof. Svcs. 7% Visibility / IT Engineering Leveraged Capabilities / Expertise Differentiated approach based on deep understanding of key industry verticals North America Presence • Seamless customer service across North American
Slide 57: Our focus is on North America
Investor Day 2016 • Possess the expertise to manage simple to complex deliveries door-to-door • Focusing resources on how customers make outsourcing decisions • Nearshoring and onshoring trends persist − Auto assembly in Mexico • Our cross-border capabilities significantly reduce transit time Global
Slide 58: Why we win
Investor Day 2016 Why we win…differentiated execution and proactive innovation based on deep industry expertise Lead logistics provider Aftermarket parts Network optimization Auto / Industrial Tech / Health CPG Retail Laptop configuration Retail display builds Automated fulfillment Foo
Slide 59: Integrated solutions targeting key industries
Investor Day 2016 We provide integrated solutions targeting key industries Automotive Technology & Healthcare Design and manage networks of for-hire carriers Design, manage and operate networks of warehouses and cross-docks, perform value-added services such as packaging and postponement Design, man
Slide 60: Growth initiatives
Investor Day 2016 Key drivers enable faster growth Growth Initiatives • Grow sales through existing and new customers − Focused sales roles: “Hunter”, “Farmer” and large deal − Increase sales of integrated solutions to new prospects − Complete selective acquisitions to complement existing capabiliti
Slide 61: Margin initiatives
Investor Day 2016 Well positioned to continue margin expansion Growth Initiatives • New LEAN tools enable continuous improvement in real-time (vs. end of shift, end of week) • Overhead cost efficiencies • Standardized operating metrics and analytics from proven best practices • Focused on higher-ret
Slide 62: LEAN continuous improvement
Investor Day 2016 Our Journey Continues • Initial rollout to all locations complete • Continue to refine methods and standards • Invest in tools to increase real-time performance visibility Continuous operational improvements from LEAN drive margin expansion Map processes and eliminate non-value add
Slide 63: Customer examples driving value
Investor Day 2016 • 17-year relationship • 17 locations • 600 Ryder employees • Services: full suite of supply chain and transportation solutions Specialized capabilities, deep vertical expertise, and LEAN practices drive sustainable value to customers • $4.7M in annual savings • $6.1M in savings (2
Slide 64: SCS key takeaways
Investor Day 2016 A leading provider of integrated logistics solutions focused on North America Serving a large and growing market that is predominantly insourced but has long-term secular outsourcing drivers Providing differentiation based on capabilities within key verticals and Ryder divisi
Slide 65: Marketing Overview
Marketing Overview 65 Karen Jones Executive Vice President & Chief Marketing Officer
Slide 66: What you'll hear today
Investor Day 2016 • Marketing journey is underway and we are gaining traction • Key areas of focus for 2016 ‒ Understanding the B2B sales environment ‒ Digital transformation ‒ Lead generation / optimization ‒ Key new product positioning ‒ Continued brand thought leadership • Early success from mark
Slide 67: Marketing evolution: major initiatives timeline
Investor Day 2016 New CMO Hired Sept 2013 Advertising Investment 13 Wall Street Journal | Print Ad July - Oct 2014 Business Media Capabilities Message Ryder Re-Brand Launch July 2014 Proactive PR & Forums 2015 2015 Listen More Directly To Customers Launched ODM 1st In A Decade Evolved Cross/Up-Sell
Slide 68: The mission is clear
Investor Day 2016 Target non-outsourced market “do-it-yourselfers” = 1.2M Companies1 The mission is clear 1. Polk Registration Data 2015 & Ryder Estimates 68
Slide 69: B2B purchase decision dynamics
Investor Day 2016 • People the sales team meets • People formally involved in the decision but who never meet the sales team • Influencers not part of the decision making but can sway results ~20+ influencers & decision makers in a large B2B purchase decision 1 67% of today’s decision making is done
Slide 70: Our strategic approach to marketing
Investor Day 2016 Build Brand Thought Leadership Support Growth Initiatives Develop Talent & Synergies Measure Retain and Grow Customers Focused approach to drive growth Our strategic approach to marketing 70
Slide 71: Ryder.com mobile
Investor Day 2016 Going mobile (device-agnostic) and user friendly – driving sales & transactions Mobilizing Ryder.com & Enhancing Experience • Consistent user experience across all devices • Reorganizing Ryder solutions • Highlight the benefits to outsourcing • Increasing lead generation opportunit
Slide 72: Lead generation
Investor Day 2016 Email Paid & Organic Search Mobile Social Ads Shows & Events Ryder.com Direct Mail 1-800# Rental Counters In Annualized Revenue 2015 $30M+ Support growth initiatives…lead generation Began optimization of lead channels in 2015 Early days… leads are adding solid pipeline & revenue co
Slide 73: Customer centric approach to new product offerings
Investor Day 2016 Choose Your: Choose Your: Ryder ChoiceLease Ryder SelectCare Maintenance Maintenance level Equipment Financing Term Service delivery option Value added services Maintenance level Rate structure Term Service delivery option Value added services Support growth i
Slide 74: Brand thought leadership via moving billboards
Investor Day 2016 Build brand thought leadership via “moving billboards” Simplified identity & message…showcasing all of our core products Fleet Leasing & Maintenance Dedicated Transportation Supply Chain Solutions 74
Slide 75: Early success from marketing investments
Investor Day 2016 Early success from marketing investments Ryder.com Mobile in online leads UP 50% Lead Generation $30M + Brand & Services Awareness 300 bps unaided 600 bps aided HOS Proactive PR Reach OBC increase earned media coverage from 2014 - 2015 customer vs. prospect campaigns Cross / Upsell
Slide 76: Marketing key takeaways
Investor Day 2016 The marketing organization is a new and energized team at Ryder! Our focus is on three key areas: ‒ Building brand thought leadership ‒ Supporting our key growth initiatives ‒ Retaining and growing customers’ share of wallet Evolving our digital and lead generation capabiliti
Slide 77: Financial Overview
Art Garcia Executive Vice President & Chief Financial Officer Financial Overview
Slide 78: What you'll hear today
Investor Day 2016 • Leverage the power of our contractual business model to achieve profitable growth, strong operating leverage and ROC expansion • Investment in contractual vehicles drives higher earnings and cash flow over time • Maintain strong balance sheet to support growth (via organic and ac
Slide 79: 2012–2015: solid growth in key performance metrics
Investor Day 2016 2012 – 2015: solid growth in key performance metrics $4.8 $5.6 2012 2015 Operating Revenue ($B) $4.40 $6.13 2012 2015 Comparable EPS 0.9% 1.4% 2012 2015 ROC – COC Spread $1.2 $1.4 2012 2015 Operating Cash Flow ($B) 5% CAGR Up 50 bps 12% CAGR 8% CAGR 79
Slide 80: Reaffirming 2016 guidance
Investor Day 2016 $5.6 $5.8 2015 2016F Operating Revenue ($B) 1.4% 1.0% - 1.1% 2012 2016F ROC – COC Spread $6.13 $6.10 - $6.30 2015 2016F Comparable EPS $1.4 $1.6 2015 2016F Operating Cash Flow ($B) Reaffirming 2016 guidance…contractual growth offsetting weaker transactional environment Up 5% Down 3
Slide 81: Balanced capital allocation philosophy
Investor Day 2016 Balanced capital allocation philosophy Capital Expenditures Organic growth: Primarily vehicle capex for contractual lease fleet Dividend Growth Growth reflects long-term earnings growth…10% CAGR since 2005 Acquisitions FMS: Tuck-ins drive operating leverage SCS/DTS: Expand capabili
Slide 82: Timing of revenue and cash flow for full service lease
Investor Day 2016 Lease Signed Term Begins ~90-120 Days Illustrative cash flows for a full service lease unit: Financial Impact Cash Flow Capital Expenditure (avg. $90K) Negative Positive Sales Proceeds (25 –35%) Positive Fixed Revenue: ~85% based on fixed rate per month Variable Revenue: Remainder
Slide 83: Significant fleet investment during past 5 years
Investor Day 2016 • Vehicle investment generates profitable, contractual revenue stream • Fleet growth drives operating leverage in business model…~30% network capacity available • Significantly higher per vehicle investment (due to engine technology changes) contributes to revenue and earnings grow
Slide 84: Contractual business improves stability and visibility
Investor Day 2016 10% 5% • Lease capital spending locks in future revenue and cash flow streams over 6-year contract life • Lease growth capital in recent years has increased future revenue and cash flow streams Contractual business improves stability and visibility to future earnings and operating
Slide 85: Focused on drivers of higher ROC spread
Investor Day 2016 -2.2% -1.3% 0.2% 0.9% 1.0% 1.1% 1.4% 1.1% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 2009 2010 2011 2012 2013 2014 2015 2016F ROC - COC 1.5% 2.0% Long-Term Target Focused on drivers of higher ROC spread Key Drivers Of Higher ROC Spread: • Leveraging FMS maintenance facility network ~ 30% cap
Slide 86: Steady dividend growth
Investor Day 2016 $0.10 $0.30 $0.50 $0.70 $0.90 $1.10 $1.30 $1.50 $1.70 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0.16 0.18 0.21 0.23 0.25 0.27 0.29 0.34 0.31 0.37 QUARTERLY DIVIDEND 0.41 • Dividend unchanged at $0.15 per quarter from 1989 through 2004 • Eleven increases in quarterly di
Slide 87: Acquisitions supplement organic growth strategy
Investor Day 2016 ~$350M in contractual revenue since 2008; no deals in market since 2012 • Focus: Tuck-ins; immediately accretive due to facility operating leverage and overhead cost takeout • Active Pipeline: 50 full-service leasing companies with fleets of 250 - 3,000 vehicles – Largely privately
Slide 88: Targeted capital structure for each product line
Investor Day 2016 Product line leverage weighted by revenue mix to calculate overall target range • Full service lease supported by 5- to 7-year customer contract…the most highly levered product at ~4x • Rental is a transactional business, levered at ~1x • SCS and DTS are asset-light businesses, lev
Slide 89: Appropriate leverage and optimal cost of capital
Investor Day 2016 2011 2012 2013 2014 2015 2016F 0.00 0.50 1.00 1.50 2.00 2.50 3.00 Pension Impact 275% 225% Fitch Moody’s S&P ST Rating F2 P2 A2 LT Rating A- Baa1 BBB Outlook Stable Stable Positive …Debt Is Match Funded And Laddered To Contractual Lease Maturities …Weighted Average Borrowing Rate i
Slide 90: Significant liquidity available; laddered debt maturities
Investor Day 2016 Debt maturities consistent with profile of vehicle holding periods $1,200 January 2020 175 October 2016 1,375 Utilized as of 3/31/16 (712) Availability $663 Total Global Credit Facility Receivable-Securitization Facility Total Committed Facilities $1.2B Primary Credit Facility Expi
Slide 91: Growth scenario assumptions
Investor Day 2016 10% Macroeconomic Environment • ~2% GDP • Neutral impact from pension and FX FMS • Three scenarios for lease fleet growth • Rental fleet grows proportionally with lease fleet • Asset-light products will grow at 8-12% ‒ Contract maintenance will grow at ~8% ‒ On-Demand Maintenance a
Slide 92: Base case growth scenario
Investor Day 2016 10% 5% Annual Lease Fleet Growth Scenarios: 2019 Base Case 3,500 Vehicles Operating Revenue 7% CAGR Comparable EPS 10% CAGR FCF (annual) $100-160M Leverage (2019) 170% ROC Spread (2019) 120 bps At 225% leverage: Comparable EPS 13% CAGR ROC Spread (2019) 160 bps Base case growth sce
Slide 93: Upside growth scenario
Investor Day 2016 10% 5% Annual Lease Fleet Growth Scenarios: 2019 Base Case 3,500 Vehicles Upside 5,000 Vehicles Operating Revenue 7% CAGR 8% CAGR Comparable EPS 10% CAGR 14% CAGR FCF (annual) $100-150M $0-90M Leverage (2019) 170% 175% ROC Spread (2019) 120 bps 150 bps At 225% leverage: Comparable
Slide 94: No growth scenario
Investor Day 2016 10% 5% Annual Lease Fleet Growth Scenarios: 2019 Base Case 3,500 Vehicles Upside 5,000 Vehicles No Growth Operating Revenue 7% CAGR 8% CAGR 5% CAGR Comparable EPS 10% CAGR 14% CAGR 2% CAGR FCF (annual) $100-150M $0-90M $330-380M Leverage (2019) 170% 175% 160% ROC Spread (2019) 120
Slide 95: Growth scenario key takeaways
Investor Day 2016 10% 5% • Operating revenue growth rate in mid-to-high single digits • Comparable EPS CAGR is 10-14% under growth scenarios; declines to ~2% for no growth scenario • Annual free cash flow estimates are between flat to $150 million for growth scenarios; increasing to $330-380 million
Slide 96: Three-year financial targets
Investor Day 2016 2015 Actual Target Operating Revenue Growth Fleet Management 6% (8% ex-Fx) 6-7% Dedicated Transportation 8% 9-10% Supply Chain 5% (8% ex-Fx) 7-8% Segment EBT as % Op Rev Fleet Management 12.0% 12 – 13% Dedicated Transportation 6.4% 8 – 9% Supply Chain 7.5% 8-9% ROC Spread 140 bps 1
Slide 97: Financial key takeaways
Investor Day 2016 Organic growth well above GDP Investment in contractual vehicle fleet drives higher earnings and cash flow over time Operating leverage drives double-digit earnings growth on single-digit revenue growth Focused on appropriate balance sheet leverage for business model ‒ Oper
Slide 98: Q & A Session
Q & A Session
Slide 99: Solutions Showcase
CAyder: Ever better.” Solutions Showcase
Slide 100: Investor Day Solutions Showcase
Investor Day 2016 Learn more about the products and capabilities that are driving Ryder’s growth Investor Day Solutions Showcase Flexible Maintenance Solutions Rental & Maintenance Customer Experience Advanced Fuels & Emerging Vehicle Technology Warehousing & Distribution Management Virtual Tour 100
Slide 101: Investor Day Solutions Showcase
Investor Day 2016 Learn more about the products and capabilities that are driving Ryder’s growth Collaborate. Innovate. Execute. Grow. Investor Day Solutions Showcase Supply Chain Visibility Tools Mexico Operations Dedicated Solutions Total Cost of Ownership Sales Tool 101 Gary Allen – VP Supply Cha
Slide 102: Presenter Bios
CAyder: Ever better.” Presenter Bios
Slide 103: Ryder Presenter Bios – Robert Sanchez
Investor Day 2016 Ryder Presenter Bios 103 Robert Sanchez Chair of the Board and Chief Executive Officer Mr. Sanchez was named Chief Executive Officer in January 2013 and Chairman of the Board in May 2013. Over the course of two decades at Ryder, Mr. Sanchez has held many senior executive leadership
Slide 104: Ryder Presenter Bios – Art Garcia
Investor Day 2016 Ryder Presenter Bios 104 Art Garcia Executive Vice President and Chief Financial Officer Mr. Garcia is responsible for Ryder’s financial management functions, including the finance and audit, strategic sourcing, corporate strategy, and investor relations functions. Prior to this po
Slide 105: Presenter Bios – John Diez
Investor Day 2016 John Diez President, Dedicated Transportation Solutions (DTS) In this role, Mr. Diez is responsible for setting the strategic direction of DTS, which combines vehicles, drivers, and administrative services with additional value-added services, all dedicated to a specific customer.
Slide 106: Ryder Presenter Bios – Karen Jones
Investor Day 2016 Ryder Presenter Bios 106 Karen Jones Executive Vice President and Chief Marketing Officer In this role, Ms. Jones is responsible for leading the company’s Fleet Management Solutions (FMS), Dedicated Transportation Solutions (DTS), and Supply Chain Solutions (SCS) marketing efforts,
Slide 107: Investor Relations Contact Information
Investor Relations Contact Information Bob Brunn VP – Corporate Strategy & Investor Relations 305-500-4210 bbrunn@ryder.com Calene Candela Group Director – Investor Relations 305-500-4764 ccandela@ryder.com
Slide 108: Appendix
CAyder: Ever better.” Appendix
Slide 109: Total Revenue to Operating Revenue Reconciliation
Investor Day 2016 Appendix: Non-GAAP Financial Measures ($ Millions) 2016 Forecast 2015 2012 Operating Revenue 5,815$ 5,561$ 4,770$ Fuel and Subcontracted Transportation 1,155 1,011 1,487 Total Revenue 6,970$ 6,572$ 6,257$ Note: Amounts throughout presentation may not be additive due to rounding. To
Slide 110: Foreign Exchange Impact on Operating Revenue Growth Reconciliation
Investor Day 2016 Appendix: Non-GAAP Financial Measures 2015 YOY Growth Fx Impact (1) YOY Growth excl Fx Operating Revenue 6% 2% 8% FMS Operating Revenue 6% 2% 8% SCS Operating Revenue 5% 3% 8% (1) Foreign exchange impact was calculated by dividing the results for the current and prior year periods
Slide 111: FMS Total Revenue to Operating Revenue Reconciliation
Investor Day 2016 Appendix: Non-GAAP Financial Measures Revenue 2015 2012 2011 Full Service Lease 2,407$ 2,102$ 1,996$ Contract Maintenance 193 187 182 Contractual Revenue 2,599 2,289 2,179 Commercial Rental 940 773 723 Contract-related Maintenance 229 187 166 Other 78 72 69 Operating Revenue 3,846
Slide 112: DTS Total Revenue to Operating Revenue Reconciliation
Investor Day 2016 Appendix: Non-GAAP Financial Measures ($ Millions) Revenue 2015 2012 Operating Revenue 714$ 533$ Subcontracted Transportation 61 60 Fuel 120 153 Total Revenue 896$ 745$ DTS Total Revenue to Operating Revenue Reconciliation Note: Amounts throughout presentation may not be additive d
Slide 113: SCS Total Revenue to Operating Revenue Reconciliation
Investor Day 2016 Appendix: Non-GAAP Financial Measures ($ Millions) Revenue 2015 2012 Automotive 469$ 445$ Technology & Healthcare 251 205 CPG & Retail 432 377 Industrial & Other 104 89 Operating Revenue 1,256 1,116 Subcontracted Transportation 227 314 Fuel 65 106 Total Revenue 1,548$ 1,535$ SCS To
Slide 114: Comparable Earnings and Comparable EPS Reconciliation
Investor Day 2016 Appendix: Non-GAAP Financial Measures Earnings and EPS from Continuing Operations to Comparable Earnings and Comparable EPS Reconciliation 2015 2015 2012 Earnings EPS EPS Reported 306$ 5.73$ 3.90$ Non-operating pension costs 11 0.21 0.37 Pension settlement charges (0) (0.01) - Rest
Slide 115: Net Earnings to Adjusted Return on Capital Reconciliation
Investor Day 2016 Appendix: Non-GAAP Financial Measures ($ Millions) (1) Earnings calculated based on a 12-month rolling period. (2) Interest expense includes interest for on and off-balance sheet vehicle obligations. (3) Income taxes were calculated by excluding taxes related to comparable earnings
Slide 116: Net Earnings to Adjusted Return on Capital by Segment
Investor Day 2016 Appendix: Non-GAAP Financial Measures ($ Millions) (1) Earnings calculated based on a 12-month rolling period. (2) Interest expense includes interest for on and off-balance sheet vehicle obligations. (3) Income taxes were calculated by excluding taxes related to comparable earnings
Slide 117: Free Cash Flow Reconciliation
Investor Day 2016 Appendix: Non-GAAP Financial Measures (1) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. (2) Free Cash Flow excludes acquisitions and changes in restricted cash. Cash Provided by Operating Activities to Total Cas
Slide 118: Investor Day 2016
Investor Day 2016