Ryder System, Inc. · NYSE:R

Ryder System — Q3 2012 Earnings Presentation

43 slides from Ryder System's earnings presentation, Oct 23, 2012

  1. Slide 1: Third Quarter 2012 Earnings Conference Call

    Third Quarter 2012 Earnings Conference Call October 23, 2012

  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 for future earnings and other financial performance. Accordingl

  3. Slide 3: Contents

    Contents ► Third Quarter 2012 Results Overview ► Asset Management Update ► Earnings Outlook ► Future Financial Reporting Enhancement ►Q & A 10/23/2012 © 2012 Ryder System, Inc. All rights reserved. 3

  4. Slide 4: 3rd Quarter Results Overview

    3rd Quarter Results Overview ► Earnings per diluted share from continuing operations were $1.26 in 3Q12 vs. $1.10 in 3Q11 – 3Q12 included a $0.02 charge from a tax law change – 3Q11 included a $0.01 tax benefit from acquisition-related transaction costs ► Comparable earnings per share from continuin

  5. Slide 5: Key Financial Statistics

    Key Financial Statistics ($ Millions, Except Per Share Amounts) Third Quarter 2012 2011 % B/(W) Operating Revenue $ 1,283.2 $ 1,256.5 2% Fuel Services and Subcontracted Transportation Revenue 290.1 314.2 (8)% Total Revenue $ 1,573.3 $ 1,570.7 -% Earnings Per Share From Continuing Operations $ 1.26 $

  6. Slide 6: Key Financial Statistics (Year-to-Date)

    Key Financial Statistics ($ Millions, Except Per Share Amounts) Year-to-Date 2012 2011 % B/(W) Operating Revenue $ 3,778.8 $ 3,577.6 6% Fuel Services and Subcontracted Transportation Revenue 894.7 931.9 (4)% Total Revenue $ 4,673.4 $ 4,509.4 4% Earnings Per Share From Continuing Operations $ 2.84 $

  7. Slide 7: 3rd Quarter Results Overview - FMS

    3rd Quarter Results Overview - FMS ► Fleet Management Solutions (FMS) total revenue up 1% (and operating revenue up 3%) vs. prior year – Contractual revenue up 4% – Full service lease revenue up 5% – Contract maintenance revenue up 1% – Commercial rental revenue down 1% – Fuel revenue down 3% ► FMS

  8. Slide 8: 3rd Quarter Results Overview – SCS

    3rd Quarter Results Overview – SCS ► Supply Chain Solutions (SCS) total revenue was unchanged vs. prior year due to higher operating revenue offset by lower subcontracted transportation ─ Operating revenue was up 2% vs. prior year due to higher fuel cost pass-throughs and both higher freight volumes

  9. Slide 9: Business Segments

    Business Segments ($ Millions) Third Quarter Memo: Total Revenue 2012 2011 % B/(W) 2012 2011 % B/(W) Operating Revenue: Fleet Management Solutions $ 848.1 $ 824.7 3% $ 1,115.4 $ 1,099.0 1% Supply Chain Solutions 485.1 476.3 2% 563.2 565.0 -% Eliminations (49.9) (44.4) (12)% (105.2) (93.3) (13)% Tota

  10. Slide 10: Business Segments (Year-to-Date)

    Business Segments Year-To-Date ($ Millions) Memo: Total Revenue 2012 2011 % B/(W) 2012 2011 % B/(W) Operating Revenue: Fleet Management Solutions $ 2,471.7 $ 2,322.5 6% $ 3,287.6 $ 3,143.7 5% Supply Chain Solutions 1,455.4 1,385.7 5% 1,705.3 1,640.7 4% Eliminations (148.3) (130.7) (13)% (319.5) (275

  11. Slide 11: Capital Expenditures

    Capital Expenditures ($ Millions) Year-To-Date 2012 $ 2012 2011 O/(U) 2011 Full Service Lease $ 1,144 $ 614 $ 530 Commercial Rental 526 580 (53) Operating Property and Equipment 47 55 (9) Gross Capital Expenditures 1,717 1,249 468 Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 310 2

  12. Slide 12: Cash Flow from Continuing Operations

    Cash Flow from Continuing Operations ($ Millions) Year-To-Date 2012 2011 Earnings from Continuing Operations $ 146 $ 124 Depreciation 699 645 Gains on Vehicle Sales, Net (68) (46) Amortization and Other Non-Cash Charges, Net 51 41 Pension Contributions (77) (12) Changes in Working Capital and Deferr

  13. Slide 13: Debt to Equity Ratio

    Debt to Equity Ratio ($ Millions) Balance Sheet Debt to Equity Total Obligations to Equity 300% 275% 261% 274% 275% 250% 234% 225% 201% 203% 200% 168% 183% 146% 151% 157% 150% 129% 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

  14. Slide 14: Contents

    Contents ► Third Quarter 2012 Results Overview ► Asset Management Update ► Earnings Outlook ► Future Financial Reporting Enhancement ►Q &A 10/23/2012 © 2012 Ryder System, Inc. All rights reserved. 14

  15. Slide 15: Global Asset Management Update

    (1) Global Asset Management Update ► Units held for sale were 9,100 at quarter end, up from 5,100 units held for sale in the prior year ─ Sequentially from the second quarter, units held for sale decreased by 100 units ► The number of used vehicles sold in the third quarter was 6,200, up 35% from th

  16. Slide 16: Contents

    Contents ► Third Quarter 2012 Results Overview ► Asset Management Update ► Earnings Forecast ► Future Financial Reporting Enhancement ►Q & A 10/23/2012 © 2012 Ryder System, Inc. All rights reserved. 16

  17. Slide 17: EPS Forecast – Continuing Operations

    EPS Forecast – Continuing Operations ($ Earnings Per Share) ► Increasing full year EPS forecast from $3.75 - $3.90 to $3.93 - $3.98 ► Current forecast is as follows: Fourth Quarter Full Year 2012 Comparable EPS Forecast(1) $ 1.06 - 1.11 $ 3.93 - 3.98 2011 Comparable EPS (1) $0.97 $3.49 (1) Full year

  18. Slide 18: Contents

    Contents ► Third Quarter 2012 Results Overview ► Asset Management Update ► Earnings Forecast ► Future Financial Reporting Enhancement ►Q & A 10/23/2012 © 2012 Ryder System, Inc. All rights reserved. 18

  19. Slide 19: Future Financial Reporting Enhancement

    Future Financial Reporting Enhancement ► Beginning in 2013, comparable earnings and comparable EPS will exclude non-operating pension costs ─ Non-operating pension costs consist primarily of interest cost, expected return on plan assets and recognized net actuarial gains/losses ─ Provides better tra

  20. Slide 20: Future Financial Reporting Enhancement

    Future Financial Reporting Enhancement ► Comparable EPS will reflect the following under the new methodology: ($ Earnings Per Share) $4.43 $4.34 Comparable Earnings Per Share $3.71 $2.20 $2.53 2008 2009 2010 2011 2012 Forecast 2012 Midpoint Forecast Midpoint 2008 2009 2010 2011 2012 Forecast Compara

  21. Slide 21: Q&A

    Q&A 10/23/2012 © 2012 Ryder System, Inc. All rights reserved. 21

  22. Slide 22: Appendix

    Appendix Business Segment Detail Central Support Services Balance Sheet Financial Indicators Forecast Asset Management Adjusted Return on Capital History Non-GAAP Financial Measures & Reconciliations 10/23/2012 © 2012 Ryder System, Inc. All rights reserved. 22

  23. Slide 23: Fleet Management Solutions (FMS)

    Fleet Management Solutions (FMS) ($ Millions) Third Quarter 2012 2011 % B/(W) Full Service Lease $ 533.4 $ 509.9 5% Contract Maintenance 47.1 46.8 1% Contractual Revenue 580.5 556.6 4% Contract-related Maintenance 44.4 44.0 1% Commercial Rental 205.4 206.5 (1)% Other 17.8 17.5 2% Operating Revenue 8

  24. Slide 24: Fleet Management Solutions (FMS)

    Fleet Management Solutions (FMS) ($ Millions) Year-To-Date 2012 2011 % B/(W) Full Service Lease $ 1,565.5 $ 1,487.9 5% Contract Maintenance 140.6 136.2 3% Contractual Revenue 1,706.1 1,624.1 5% Contract-related Maintenance 137.4 123.8 11% Commercial Rental 575.4 522.2 10% Other 52.9 52.4 1% Operatin

  25. Slide 25: Supply Chain Solutions (SCS)

    Supply Chain Solutions (SCS) ($ Millions) Third Quarter 2012 2011 % B/(W) Automotive $ 140.2 $ 115.4 21% High-Tech 77.5 84.0 (8)% Retail & CPG 178.2 187.6 (5)% Industrial & Other 89.3 89.3 -% Operating Revenue 485.1 476.3 2% Subcontracted Transportation 78.1 88.7 (12)% Total Revenue $ 563.2 $ 565.0

  26. Slide 26: Supply Chain Solutions (SCS)

    Supply Chain Solutions (SCS) ($ Millions) Year-To-Date 2012 2011 % B/(W) Automotive $ 421.8 $ 345.9 22% High-Tech 235.8 249.8 (6)% Retail & CPG 534.5 530.7 1% Industrial & Other 263.3 259.3 2% Operating Revenue 1,455.4 1,385.7 5% Subcontracted Transportation 249.9 255.0 (2)% Total Revenue $ 1,705.3

  27. Slide 27: Central Support Services (CSS)

    Central Support Services (CSS) ($ Millions) Third Quarter 2012 2011 % B/(W) Allocated CSS Costs $ 37.3 $ 42.7 13% Unallocated CSS Costs 11.1 11.5 3% Total CSS Costs $ 48.4 $ 54.3 11% 10/23/2012 © 2012 Ryder System, Inc. All rights reserved. 27

  28. Slide 28: Central Support Services (CSS)

    Central Support Services (CSS) ($ Millions) Year-To-Date 2012 2011 % B/(W) Allocated CSS Costs $ 113.5 $ 119.6 5% Unallocated CSS Costs 31.8 31.4 (1)% Total CSS Costs $ 145.3 $ 151.0 4% 10/23/2012 © 2012 Ryder System, Inc. All rights reserved. 28

  29. Slide 29: Balance Sheet

    Balance Sheet ($ Millions) Sept 30, December 31, 2012 2011 Cash and Cash Equivalents $ 96 $ 105 Other Current Assets 983 984 Revenue Earning Equipment, Net 5,669 5,050 Operating Property and Equipment, Net 621 624 Other Assets 890 856 Total Assets $ 8,260 $ 7,618 Short-Term Debt / Current Portion Lo

  30. Slide 30: Financial Indicators Forecast

    Financial Indicators Forecast (1) Total Cash Generated (2) Gross Capital Expenditures (2) ($ Millions) Full Service Lease $1,684 $1,820 $2,150 Commercial Rental $1,571 $1,442 PP&E/Other $1,757 $1,381 $1,760 $1,252 $1,266 $1,328 $1,091 $1,179 $1,399 $1,054 $949 $1,289 $1,182 $1,265 $835 $1,165 $1,088

  31. Slide 31: U.S. Asset Management Update

    (a) U.S. Asset Management Update Number of Units YTD 07 YTD 08 YTD 09 YTD 10 YTD 11 YTD 12 8,000 Redeployments – Vehicles coming off-lease with useful 7,000 life remaining are redeployed 6,752 in the Ryder fleet (Commercial Rental, SCS, or with another 6,000 Lease customer). 5,557 5,255 Extensions –

  32. Slide 32: Adjusted Return on Capital History

    Adjusted Return on Capital History Adjusted 7.7% 7.8% 7.9% 7.3% Return on 7.4% Capital (ROC) 6.3% 6.1% 5.7% 5.6% 6.9% 6.8% 6.7% 6.6% 6.5% Cost of 5.5% Capital (COC) 4.8% 4.8% 4.1% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2012 Forecast Forecast ROC O/(U) COC 0.8% 1.0% 1.2% 0.8% 0.8% (2.2)% (1.3)%

  33. 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 t

  34. Slide 34: Earnings and EPS from Continuing Operations Reconciliation

    Earnings and EPS from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 3Q12 - 3Q12 - 3Q11 - 3Q11 - Earnings EPS Earnings EPS Reported $ 64.3 $ 1.26 $ 56.9 $ 1.10 Tax Law Changes (Benefits) 0.9 0.02 (0.6) (0.01) Restructuring Charges 0.1 - - - Acquisition Related Transaction

  35. Slide 35: EBT and Tax Rate from Continuing Operations Reconciliation

    EBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 3Q12 - 3Q12 - 3Q12 - EBT Tax Tax Rate Reported $ 99.8 $ 35.5 35.6% Tax Law Change - (0.9) Restructuring Charges 0.1 - Acquisition Related Transaction Costs 0.4 0.1 Comparable (1) $ 100.3 $ 34.7 34.7% YTD1

  36. Slide 36: EBT and Tax Rate from Continuing Operations Reconciliation

    EBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 3Q11 - 3Q11 - 3Q11 - EBT Tax Tax Rate Reported $ 87.7 $ 30.7 35.0% Tax Benefit - 0.6 Comparable (1) $ 87.7 $ 31.3 35.7% YTD11 - YTD11 - YTD11 - EBT Tax Tax Rate Reported $ 206.3 $ 82.6 40.0% Tax Law Chang

  37. Slide 37: Adjusted Return on Capital Reconciliation

    Adjusted Return on Capital Reconciliation ($ Millions) 9/30/12 9/30/11 Net Earnings (1) $ 204 $ 159 Restructuring and Other Charges, Net and Other Items 12 9 Income Taxes 90 90 Adjusted Earnings Before Income Taxes 306 257 Adjusted Interest Expense (2) 141 136 Adjusted Income Taxes (3) (162) (148) A

  38. Slide 38: 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

  39. Slide 39: Debt to Equity Reconciliation

    Debt to Equity Reconciliation ($ Millions) % to % to % to % to % to % to 12/31/08 Equity 12/31/09 Equity 12/31/10 Equity 12/31/11 Equity 9/30/12 Equity 9/30/11 Equity Balance Sheet Debt $2,863 213% $2,498 175% $2,747 196% $3,382 257% $3,888 263% $3,199 220% Receivables Sold - - - - - - PV of minimum

  40. Slide 40: 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

  41. Slide 41: Cash Flow Reconciliation

    Cash Flow Reconciliation ($ Millions) 12/31/10 12/31/11 9/30/12 9/30/11 Cash Provided by Operating Activities from Continuing Operations $ 1,028 $ 1,042 $ 768 $ 782 Proceeds from Sales (Primarily Revenue Earning Equipment) 235 300 310 224 Proceeds from Sale and Leaseback of Assets - 37 130 - Collect

  42. Slide 42: Comparable EPS – Excluding Non-Operating Pension Costs

    Comparable EPS – Excluding Non-Operating Pension Costs ($ Earnings Per Share) 2012 2008 2009 2010 2011 Forecast (1) GAAP EPS $ 4.51 1.62 2.37 3.31 3.91 - 3.96 Acquisition Related Transaction Costs - - 0.08 0.04 Asset Impairment/Gain on Sale of Property 0.03 0.12 (0.02) - Restructuring Charges 0.31 0

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