Ryder Reports Second Quarter 2022 Results

Jul 27th, 2022 11:55 EST

MIAMI--(BUSINESS WIRE)--Ryder System, Inc. (NYSE: R), a leader in supply chain, dedicated transportation, and fleet management solutions, reported results for the three months ended June 30 as follows:

(In millions, except EPS)

 

Earnings

Before Taxes

 

Earnings

 

Diluted Earnings

Per Share

 

 

 

2022

 

2021

 

 

2022

 

2021

 

 

2022

 

2021

Continuing operations (GAAP)

 

$

338.4

 

203.6

 

$

240.3

 

149.6

 

$

4.72

 

2.78

Comparable (non-GAAP)

 

$

308.2

 

175.6

 

$

225.5

 

129.1

 

$

4.43

 

2.40

Total and operating revenue for the three months ended June 30 were as follows:

(In millions)

 

Total Revenue

 

Operating Revenue

(non-GAAP)

 

 

 

2022

 

2021

 

Change

 

 

2022

 

2021

 

Change

Total

 

$

3,034

 

2,382

 

27

%

 

$

2,307

 

1,923

 

20

%

Fleet Management Solutions (FMS)

 

$

1,621

 

1,408

 

15

%

 

$

1,307

 

1,225

 

7

%

Supply Chain Solutions (SCS)

 

$

1,174

 

776

 

51

%

 

$

798

 

535

 

49

%

Dedicated Transportation Solutions (DTS)

 

$

450

 

355

 

27

%

 

$

306

 

256

 

19

%

CEO Comment

Commenting on the company's results and outlook, Ryder Chairman and CEO Robert Sanchez says, "Record performance in the second quarter reflects earnings growth in all three business segments. Earnings were higher than our most recent forecast due primarily to better than expected results in rental and SCS. We generated record ROE of 28% reflecting ongoing truck capacity constraints in the market as well as continued benefits from initiatives to increase returns and drive higher core earnings. We also realized record new contractual sales year-to-date which positions us well for future revenue growth.

"We continue to execute on our strategy to create long-term shareholder value by accelerating growth in SCS and DTS while improving returns through the cycle in FMS. The accretion from our recent SCS acquisitions in fast-growing e-commerce fulfillment and multi-client warehousing was above our expectations in the quarter. SCS and DTS results improved sequentially reflecting higher prices to address unusually high labor cost increases as well as the impact from profitable new business. As we have largely completed implementing these rate increases, we are confident that SCS and DTS earnings will be at their high single-digit targets in the second half of the year, with DTS already achieving that level in the second quarter.

"Pricing initiatives in our contractual supply chain, dedicated, and lease businesses are contributing to higher core earnings which positions Ryder to deliver on our long-term targets over the cycle. In FMS, earnings continued to benefit from our multi-year lease pricing initiative as expected and we anticipate incremental earnings from this initiative as the remaining half of our lease portfolio is renewed at higher returns.

"Used vehicle market conditions remain strong despite a modest decline in sequential tractor pricing, consistent with our expectations. We continue to anticipate that the historically strong used vehicle sales and rental market environment will moderate in the second half of the year, with slower freight growth partially offset by ongoing tight market capacity. Residual value estimates are at historically low levels, which we expect to significantly reduce the likelihood of incurring losses on used vehicle sales or the need for additional depreciation.

"Looking ahead, we've increased our 2022 ROE and comparable EPS forecasts to reflect improved rental and SCS performance. Due to OEM delivery delays, we expect to defer approximately $200 million of planned lease capital to 2023. As such, we have increased our free cash flow forecast to $750 - $850 million and now expect our ending lease fleet in North America to be up approximately 2,000 vehicles.

"Our strong balance sheet enables us to pursue targeted acquisitions and investments, and return capital to shareholders. We expect to complete our $300 million accelerated share repurchase program no later than October and have existing authorization for an additional 2-million-share discretionary program and a 2.5-million-share anti-dilutive program. In addition, our board recently approved a 7% increase to our quarterly dividend, which has been paid without interruption for more than 46 years."

Outlook Updates

 

Full Year 2022

Total Revenue Growth

~22%

Operating Revenue Growth (non-GAAP)

~16%

FY22 GAAP EPS

$14.45 - $14.95

FY22 Comparable EPS (non-GAAP)

$14.30 - $14.80

 

 

ROE(1)

25% - 26%

Net Cash from Operating Activities from Continuing Operations

~$2.3B

Free Cash Flow (non-GAAP)

$750M - 850M

 

 

 

Third Quarter 2022

3Q22 GAAP EPS

$3.41 - $3.66

3Q22 Comparable EPS (non-GAAP)

$3.40 - $3.65

————————————

(1)

 

The non-GAAP elements of the calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average shareholders' equity to ROE is provided in the Appendix - Non-GAAP Financial Measures at the end of this release.

Second Quarter Business Segment Operating Results

Fleet Management Solutions: Higher Earnings Driven by Used Vehicle Sales and Rental Results

(In millions)

 

2Q22

 

2Q21

 

Change

Total Revenue

 

$

1,621

 

 

1,408

 

 

15

%

Operating Revenue(1)

 

$

1,307

 

 

1,225

 

 

7

%

 

 

 

 

 

 

 

Earnings Before Tax (EBT)

 

$

285

 

 

158

 

 

80

%

FMS EBT as a % of FMS total revenue

 

 

17.6

%

 

11.3

%

 

630 bps

FMS EBT as a % of FMS operating revenue(1)

 

 

21.8

%

 

12.9

%

 

890 bps

 

 

 

 

 

 

 

Rolling 12-months EBT as % of total and operating revenue

 

2Q22

 

2Q21

 

Change

FMS EBT as a % of FMS total revenue

 

 

16.0

%

 

5.5

%

 

1,050 bps

FMS EBT as a % of FMS operating revenue(1)

 

 

19.0

%

 

6.3

%

 

1,270 bps

(1)

Non-GAAP financial measure excluding fuel and lease liability insurance revenue.

Fleet Management Solutions (FMS) total and operating revenue increased due to higher rental revenue driven by strong demand and higher pricing. Total revenue also increased from higher fuel prices passed through to customers.

FMS EBT increased by $127 million primarily from higher used vehicle sales and rental results reflecting benefits from tight truck capacity and initiatives to improve returns in these areas. Lease pricing and maintenance costs initiatives also contributed to higher results. Increased gains on used vehicles sold and a declining impact of depreciation expense from prior vehicle residual value estimate changes contributed $84 million in higher year-over-year earnings. Used vehicle pricing increased significantly from the prior year for both trucks and tractors. Sequentially from the first quarter of 2022, used truck pricing increased 9%; however, used tractor pricing declined 5%. Used vehicle inventory levels increased sequentially to 4,200 vehicles and remains below the company's long-term target range of 7,000 - 9,000 vehicles. Rental results benefited from record second quarter power-fleet utilization of 85% (up from 80% in the prior year) and a 6% increase in power-fleet pricing. FMS EBT as a percentage of FMS operating revenue is well above the company's long-term target of low double-digits for the second quarter and for the trailing 12-month period.

Supply Chain Solutions: Higher Earnings Reflect Revenue Growth Partially Offset by One-Time Charges

(In millions)

 

2Q22

 

2Q21

 

Change

Total Revenue

 

$

1,174

 

 

776

 

 

51

%

Operating Revenue(1)

 

$

798

 

 

535

 

 

49

%

 

 

 

 

 

 

 

Earnings Before Tax (EBT)

 

$

53

 

 

41

 

 

28

%

EBT as a % of total revenue

 

 

4.5

%

 

5.3

%

 

(80) bps

EBT as a % of operating revenue(1)

 

 

6.6

%

 

7.7

%

 

(110) bps

 

 

 

 

 

 

 

Rolling 12-months EBT as % of total and operating revenue

 

2Q22

 

2Q21

 

Change

EBT as a % of total revenue

 

 

3.3

%

 

5.8

%

 

(250) bps

EBT as a % of operating revenue(1)

 

 

4.8

%

 

8.2

%

 

(340) bps

(1)

Non-GAAP financial measure excluding fuel and subcontracted transportation.

Supply Chain Solutions (SCS) total and operating revenue increased due to acquisitions and double-digit revenue growth in all industry verticals from new business, higher volumes, and increased pricing. Operating revenue grew 23% organically year-over-year.

SCS EBT increased primarily due to revenue growth from new business, higher pricing, and acquisitions. This increase was partially offset by customer accommodation charges, bad debt, and incentive-based compensation costs. SCS EBT as a percentage of SCS operating revenue is below the company's long-term target of high single-digits for the second quarter 2022 and the trailing 12-month period.

Dedicated Transportation Solutions: Higher Earnings Driven by Increased Pricing and New Business

(In millions)

 

2Q22

 

2Q21

 

Change

Total Revenue

 

$

450

 

 

355

 

 

27

%

Operating Revenue(1)

 

$

306

 

 

256

 

 

19

%

 

 

 

 

 

 

 

Earnings Before Tax (EBT)

 

$

23

 

 

13

 

 

76

%

EBT as a % of total revenue

 

 

5.1

%

 

3.7

%

 

140 bps

EBT as a % of operating revenue(1)

 

 

7.6

%

 

5.1

%

 

250 bps

 

 

 

 

 

 

 

Rolling 12-months EBT as % of total and operating revenue

 

2Q22

 

2Q21

 

Change

EBT as a % of total revenue

 

 

4.0

%

 

5.2

%

 

(120) bps

EBT as a % of operating revenue(1)

 

 

5.7

%

 

6.9

%

 

(120) bps

(1)

Non-GAAP financial measure excluding fuel and subcontracted transportation.

Dedicated Transportation Solutions (DTS) total and operating revenue increased due to new business, pricing, and volumes.

DTS EBT increased primarily due to pricing, new business, and gains on sales of used vehicles, partially offset by strategic investments. DTS EBT as a percentage of DTS operating revenue is in line with the company's long-term target of high single-digits for the second quarter 2022 but below target for the trailing 12-month period.

Corporate Financial Information

Unallocated Central Support Services (CSS)

Unallocated CSS costs were $24 million as compared to $18 million in the prior year, primarily reflecting increased professional fees and incentive-based compensation costs.

Income Taxes

Our effective income tax rate from continuing operations was 29.0% as compared to 26.5% in the prior year due to incremental U.S. tax on higher foreign earnings related to the exit of our UK FMS business. Our comparable effective income tax rate (a non-GAAP measure) from continuing operations was 26.8% as compared to 26.5% in the prior year.

Capital Expenditures, Cash Flow, and Leverage

Year-to-date capital expenditures increased to $1.3 billion in 2022 compared to $963 million in 2021 due to higher planned investments in the lease fleet.

Year-to-date net cash provided by operating activities from continuing operations was consistent with the prior year at $1.1 billion, reflecting higher earnings partially offset by higher working capital needs. Free cash flow (a non-GAAP measure) was $551 million, down from $602 million in 2021 primarily due to an increase in capital expenditures, partially offset by higher proceeds from the sale of revenue-earning equipment, including the sale of UK vehicles related to our exit plan. The free cash flow forecast for 2022 was increased to a range of $750 million - $850 million from $550 million - $650 million, reflecting deferred capital expenditures related to OEM vehicle delivery delays.

Debt-to-equity as of June 30, 2022 decreased to 233% from 235% at year-end 2021 and is below the company's long-term target of 250% - 300%.

Share Repurchases and Dividends

Ryder expects to complete its $300 million accelerated share repurchase program no later than October 2022. Board authorization exists for a 2-million-share discretionary program and a 2.5-million-share anti-dilutive program.

In July 2022, the board declared a regular quarterly cash dividend of $0.62 per common share, an increase of 7% compared to the cash dividend Ryder had been paying since July 2021. This represents Ryder's 184th consecutive quarterly cash dividend.

Fleet Management Solutions UK Business Update

The company has made significant progress in exiting the lower-return UK business and remains on track to complete the process by mid-2023. Since the beginning of 2022, Ryder has sold approximately half of the UK vehicles and properties, generating proceeds of $205 million.

Supplemental Company Information

Second Quarter Net Earnings

(In millions, except EPS)

 

Earnings

 

Diluted EPS

 

 

2022

 

2021

 

2022

 

2021

Earnings from continuing operations

 

$

240.3

 

 

149.6

 

 

$

4.72

 

 

2.78

 

Discontinued operations

 

 

(0.9

)

 

(0.5

)

 

 

(0.02

)

 

(0.01

)

Net earnings

 

$

239.4

 

 

149.1

 

 

$

4.70

 

 

2.77

 

 

 

 

 

 

 

Year-to-Date Operating Results

 

 

 

 

 

 

 

 

 

 

 

(In millions, except EPS)

Six months ended June 30,

 

2022

 

2021

 

Change

Total revenue

$

5,887.5

 

4,603.9

 

28

%

Operating revenue (non-GAAP)

$

4,522.7

 

3,740.2

 

21

%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

$

416.2

 

201.2

 

107

%

Comparable earnings from continuing operations (non-GAAP)

$

413.8

 

187.3

 

121

%

Net earnings

$

415.0

 

199.9

 

108

%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (EPS) - Diluted

 

 

 

 

 

Continuing operations

$

8.05

 

3.75

 

115

%

Comparable (non-GAAP)

$

8.00

 

3.49

 

129

%

Net earnings

$

8.03

 

3.73

 

115

%

Business Description

Ryder System, Inc. is a leading supply chain, dedicated transportation, and fleet management solutions company. Ryder’s stock (NYSE: R) is a component of the Dow Jones Transportation Average and the S&P MidCap 400® index. The company’s financial performance is reported in the following three, inter-related business segments:

  • Supply Chain Solutions – Ryder’s SCS business segment optimizes logistics networks to make them more responsive and able to be leveraged as a competitive advantage. Globally-recognized brands in the automotive, consumer goods, food and beverage, healthcare, industrial, oil and gas, technology, and retail industries rely on Ryder’s leading-edge technologies and world-class logistics engineers to help them deliver the goods that consumers use every day.
  • Dedicated Transportation Solutions – Ryder’s DTS business segment combines the best of Ryder’s leasing and maintenance capability with the safest and most professional drivers in the industry. With a dedicated transportation solution, Ryder helps customers increase their competitive position, reduce risk, and integrate their transportation needs with their overall supply chain.
  • Fleet Management Solutions – Ryder’s FMS business segment provides a broad range of services to help businesses of all sizes, across virtually every industry, deliver for their customers. From leasing, maintenance, and fueling, to rental and used vehicle sales, customers rely on Ryder’s expertise to help them lower their costs, redirect capital to other parts of their business, and focus on what they do best – so they can grow.

For more information on Ryder System, Inc., visit investors.ryder.com and ryder.com.

###

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 market trends and economic environment; impact of supply chain and labor shortage challenges and vehicle production constraints on our business, market conditions, e-commerce trends, freight environment, expected earnings, depreciation, commercial rental demand and utilization, and used vehicle sales volume and pricing; expectations related to our strategic investments and initiatives, including our recent supply chain acquisitions and initiatives related to maintenance costs savings and improving returns; expected benefits of lease pricing initiatives and our ability to renew leases; our expectations regarding benefits from our accelerated share repurchase program; our expectations related to timeline and cash proceeds from our exit of the FMS U.K. market; our ability to execute our strategy of accelerating growth in certain business segments; performance, including sales and revenue growth, in our product lines and segments, for example e-commerce and multi-client warehousing; residual values and depreciation expense; used vehicle inventory; earnings; free cash flow; tax rate; operating cash flow; capital expenditures; fleet growth; and expected benefits from new contracts and pricing initiatives in our supply chain and dedicated business divisions. Our forward-looking statements also include our estimates of the impact of our changes to residual value estimates on earnings and depreciation expense. The expected impact of the change in residual value estimates is based on our current assessment of the residual values and useful lives of revenue-earning equipment based on multi-year trends and our outlook for the expected near- and long-term used vehicle market. A variety of factors, many of which are outside of our control, could cause residual value estimates to differ from actual used vehicle sales pricing, such as changes in supply and demand of used vehicles; volatility in market conditions; changes in vehicle technology; competitor pricing; regulatory requirements; driver shortages; customer requirements and preferences; and changes in underlying assumption factors.

All of our forward-looking statements should be evaluated by considering the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include, the effect of the COVID-19 pandemic and future variants, including ongoing supply chain and labor challenges and vehicle production constraints; the effect of geopolitical events, including the impact of the conflict between Russia and Ukraine; our ability to adapt to changing market conditions, including lower than expected contractual sales, decreases in commercial rental demand or utilization, poor acceptance of rental pricing, and declining market demand for or excess supply of used vehicles impacting current or estimated pricing and our anticipated proportion of retail versus wholesale sales; declining customer demand for our services; higher than expected maintenance costs; lower than expected benefits from our cost-savings initiatives; our ability to effectively and efficiently integrate acquisitions into our business; lower than expected benefits from our sales, marketing and new product initiatives; setbacks in the economic market or in our ability to retain profitable customer accounts; impact of changing laws and regulations; difficulty in obtaining adequate profit margins for our services; inability to maintain current pricing levels due to soft economic conditions, business interruptions or expenditures due to labor disputes, severe weather or natural occurrences; competition from other service providers, changes in technology and new entrants; driver and technician shortages resulting in higher procurement costs and turnover rates; impact of worldwide semiconductor shortage; higher than expected bad debt reserves or write-offs; decrease in credit ratings; increased debt costs; adequacy of accounting estimates; higher than expected reserves and accruals particularly with respect to pension, taxes, insurance and revenue; impact of changes in our residual value estimates and accounting policies; unanticipated changes in fuel prices; unanticipated currency exchange rate fluctuations; increases in inflation or interest rates; our ability to manage our cost structure; and the risks described in our filings with the Securities and Exchange Commission (SEC). The risks included here are not exhaustive. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Note: Regarding Non-GAAP Financial Measures

This news release includes certain non-GAAP financial measures as defined under SEC rules. Refer to Appendix - Non-GAAP Financial Measure Reconciliations at the end of the tables following this press release for reconciliations of the non-GAAP financial measures contained in this release to the nearest GAAP measure and why management believes that presentation of each measure provides useful information to investors. Additional information regarding non-GAAP financial measures as required by Regulation G and Item 10(e) of Regulation S-K can be found in our most recent Form 10-K, Form 10-Q and our Form 8-K filed as of the date of this release with the SEC, which are available at http://investors.ryder.com.

CONFERENCE CALL AND WEBCAST INFORMATION

Ryder’s earnings conference call and webcast is scheduled for July 27, 2022 at 11:00 a.m. ET. To join, click here.

LIVE AUDIO VIA PHONE

Toll Free Number:

888-352-6803

USA Toll Number:

323-701-0225

Audio Passcode:

Ryder

Conference Leader:

Bob Brunn

AUDIO REPLAY VIA PHONE

An audio replay of the call will be available one hour after call ends for 30 days.

Toll Free Number:

888-203-1112

USA Toll Number:

719-457-0820

Replay Passcode:

1420126

AUDIO REPLAY VIA MP3 DOWNLOAD A podcast will be available within 24 hours after the end of the call. Click here then select Financials/Quarterly Reports and the date.

AUDIO & SLIDE REPLAY VIA INTERNET

An audio replay including the slide presentation will be available within two hours following the call. Click here then select Financials/Quarterly Reports and the date.

AUDIO & SLIDE REPLAY VIA INTERNET

An audio replay including the slide presentation will be available within two hours following the call. Click here then select Financials/Quarterly Reports and the date.

Financial = ryder-financial USA = ryder-usa

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED

 

(In millions, except per share amounts)

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2022

 

2021

 

2022

 

2021

Lease & related maintenance and rental revenues

 

$

1,049.6

 

 

986.7

 

 

$

2,074.6

 

 

1,927.1

 

Services revenue

 

 

1,777.6

 

 

1,276.1

 

 

 

3,447.1

 

 

2,441.6

 

Fuel services revenue

 

 

206.5

 

 

119.4

 

 

 

365.8

 

 

235.1

 

Total revenues

 

 

3,033.7

 

 

2,382.2

 

 

 

5,887.5

 

 

4,603.9

 

 

 

 

 

 

 

 

 

 

Cost of lease & related maintenance and rental

 

 

687.9

 

 

702.4

 

 

 

1,386.7

 

 

1,432.6

 

Cost of services

 

 

1,520.1

 

 

1,090.0

 

 

 

2,966.8

 

 

2,089.8

 

Cost of fuel services

 

 

202.5

 

 

117.5

 

 

 

360.2

 

 

232.2

 

Selling, general and administrative expenses

 

 

360.7

 

 

302.7

 

 

 

702.7

 

 

578.4

 

Non-operating pension costs, net

 

 

2.6

 

 

(0.4

)

 

 

5.4

 

 

(0.4

)

Used vehicle sales, net

 

 

(129.6

)

 

(51.6

)

 

 

(242.6

)

 

(80.5

)

Interest expense

 

 

55.3

 

 

54.2

 

 

 

107.7

 

 

108.9

 

Miscellaneous income, net

 

 

(14.6

)

 

(43.8

)

 

 

(14.2

)

 

(49.2

)

Restructuring and other items, net

 

 

10.3

 

 

7.7

 

 

 

24.6

 

 

18.3

 

 

 

 

2,695.3

 

 

2,178.7

 

 

 

5,297.3

 

 

4,330.0

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations before income taxes

 

 

338.4

 

 

203.6

 

 

 

590.2

 

 

273.8

 

Provision for income taxes

 

 

98.0

 

 

54.0

 

 

 

174.1

 

 

72.7

 

Earnings from continuing operations

 

 

240.3

 

 

149.6

 

 

 

416.2

 

 

201.2

 

Loss from discontinued operations, net of tax

 

 

(0.9

)

 

(0.5

)

 

 

(1.2

)

 

(1.2

)

Net earnings

 

$

239.4

 

 

149.1

 

 

$

415.0

 

 

199.9

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share — Diluted

 

 

 

 

 

 

 

 

Continuing operations

 

$

4.72

 

 

2.78

 

 

$

8.05

 

 

3.75

 

Discontinued operations

 

 

(0.02

)

 

(0.01

)

 

 

(0.02

)

 

(0.02

)

Net earnings

 

$

4.70

 

 

2.77

 

 

$

8.03

 

 

3.73

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — Diluted

 

 

50.9

 

 

53.6

 

 

 

51.7

 

 

53.4

 

 

 

 

 

 

 

 

 

 

EPS from continuing operations

 

$

4.72

 

 

2.78

 

 

$

8.05

 

 

3.75

 

Non-operating pension costs, net

 

 

0.03

 

 

(0.02

)

 

 

0.07

 

 

(0.03

)

Restructuring and other, net

 

 

0.21

 

 

0.06

 

 

 

0.48

 

 

0.10

 

ERP implementation costs

 

 

 

 

0.07

 

 

 

 

 

0.18

 

Gain on sale of U.K. revenue earning equipment

 

 

(0.39

)

 

 

 

 

(0.55

)

 

 

Gains on sale of properties

 

 

(0.45

)

 

(0.50

)

 

 

(0.46

)

 

(0.52

)

Tax adjustments, net

 

 

0.31

 

 

0.01

 

 

 

0.41

 

 

0.01

 

Comparable EPS from continuing operations(1)

 

$

4.43

 

 

2.40

 

 

$

8.00

 

 

3.49

 

 

 

 

 

 

 

 

 

 

(1)

Non-GAAP financial measure. A reconciliation of GAAP EPS from continuing operations to comparable EPS from continuing operations is set forth in this table.

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In millions)

 

 

 

June 30, 2022

 

December 31, 2021

Assets:

 

 

 

 

Cash and cash equivalents

 

$

447.7

 

234.0

Other current assets

 

 

1,969.6

 

2,226.7

Revenue earning equipment, net

 

 

8,319.1

 

8,323.0

Operating property and equipment, net

 

 

1,070.0

 

985.0

Other assets

 

 

2,669.4

 

2,065.7

 

 

$

14,475.9

 

13,834.3

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

Current liabilities

 

$

2,173.1

 

1,867.5

Total debt (including current portion)

 

 

6,593.2

 

6,579.7

Other non-current liabilities (including deferred income taxes)

 

 

2,877.0

 

2,589.2

Shareholders' equity

 

 

2,832.6

 

2,797.9

 

 

$

14,475.9

 

13,834.3

SELECTED KEY RATIOS AND METRICS

 

 

 

June 30, 2022

 

December 31, 2021

Debt to equity

 

233 %

 

235 %

 

 

Three months ended June 30,

Six months ended June 30,

 

 

2022

 

2021

2022

 

2021

Comparable EBITDA(1)

 

$

688.1

 

 

624.1

 

$

1,335.2

 

 

1,191.5

 

Effective interest rate (average cost of debt)

 

 

3.4

%

 

3.4

%

 

3.3

%

 

3.4

%

 

 

Six months ended June 30,

 

 

2022

 

2021

Net cash provided by operating activities from continuing operations

 

$

1,102.8

 

1,131.2

Free cash flow(1)

 

 

551.3

 

602.2

Capital expenditures paid

 

 

1,195.0

 

904.4

Gross capital expenditures

 

 

1,306.9

 

963.0

 

 

Twelve months ended June 30,

 

 

2022

 

2021

ROE(2)

 

28.0 %

 

12.2 %

————————————

(1)

Non-GAAP financial measure. See reconciliation of the non-GAAP elements of this calculation reconciled to the corresponding GAAP measures included in the Appendix - Non-GAAP Financial Measures section at the end of this release.

(2)

The non-GAAP elements of the calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average shareholders' equity to adjusted average equity is provided in the Appendix - Non-GAAP Financial Measures section at the end of this release.

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED

(In millions)

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2022

 

2021

 

B(W)

 

2022

 

2021

 

B(W)

Total Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Fleet Management Solutions:

 

 

 

 

 

 

 

 

 

 

 

 

ChoiceLease

 

$

802.6

 

 

802.8

 

 

%

 

$

1,604.9

 

 

1,599.9

 

 

%

Commercial rental

 

 

340.7

 

 

267.0

 

 

28

%

 

 

653.8

 

 

490.0

 

 

33

%

SelectCare and other

 

 

163.7

 

 

154.9

 

 

6

%

 

 

330.4

 

 

302.9

 

 

9

%

Fuel services and ChoiceLease liability insurance revenue

 

 

314.1

 

 

183.6

 

 

71

%

 

 

561.2

 

 

350.9

 

 

60

%

Total Fleet Management Solutions

 

 

1,621.1

 

 

1,408.2

 

 

15

%

 

 

3,150.3

 

 

2,743.7

 

 

15

%

Supply Chain Solutions

 

 

1,174.0

 

 

775.6

 

 

51

%

 

 

2,262.5

 

 

1,482.3

 

 

53

%

Dedicated Transportation Solutions

 

 

450.2

 

 

354.7

 

 

27

%

 

 

875.2

 

 

675.2

 

 

30

%

Eliminations

 

 

(211.6

)

 

(156.3

)

 

(35

) %

 

 

(400.5

)

 

(297.4

)

 

(35

) %

Total revenue

 

$

3,033.7

 

 

2,382.2

 

 

27

%

 

$

5,887.5

 

 

4,603.9

 

 

28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue:(1)

 

 

 

 

 

 

 

 

 

 

 

 

Fleet Management Solutions

 

$

1,307.0

 

 

1,224.7

 

 

7

%

 

$

2,589.1

 

 

2,392.8

 

 

8

%

Supply Chain Solutions

 

 

798.4

 

 

534.6

 

 

49

%

 

 

1,536.5

 

 

1,037.2

 

 

48

%

Dedicated Transportation Solutions

 

 

305.6

 

 

255.8

 

 

19

%

 

 

602.0

 

 

492.7

 

 

22

%

Eliminations

 

 

(103.8

)

 

(92.3

)

 

(13

) %

 

 

(205.0

)

 

(182.4

)

 

(12

) %

Operating revenue

 

$

2,307.1

 

 

1,922.8

 

 

20

%

 

$

4,522.7

 

 

3,740.2

 

 

21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Segment Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Fleet Management Solutions

 

$

285.3

 

 

158.5

 

 

80

%

 

$

533.5

 

 

221.9

 

 

140

%

Supply Chain Solutions

 

 

52.6

 

 

41.0

 

 

28

%

 

 

86.9

 

 

74.0

 

 

17

%

Dedicated Transportation Solutions

 

 

23.2

 

 

13.2

 

 

76

%

 

 

43.4

 

 

26.1

 

 

66

%

Eliminations

 

 

(29.2

)

 

(19.2

)

 

52

%

 

 

(55.8

)

 

(31.5

)

 

77

%

 

 

 

331.9

 

 

193.5

 

 

72

%

 

 

608.0

 

 

290.5

 

 

109

%

Unallocated Central Support Services

 

 

(23.8

)

 

(17.9

)

 

33

%

 

 

(39.8

)

 

(36.3

)

 

10

%

Non-operating pension costs, net

 

 

(2.6

)

 

0.4

 

 

NM

 

 

 

(5.4

)

 

0.4

 

 

NM

 

Other items impacting comparability, net

 

 

32.8

 

 

27.6

 

 

19

%

 

 

27.4

 

 

19.2

 

 

43

%

Earnings from continuing operations

before income taxes

 

 

338.4

 

 

203.6

 

 

66

%

 

 

590.2

 

 

273.8

 

 

116

%

Provision for income taxes

 

 

98.0

 

 

54.0

 

 

82

%

 

 

174.1

 

 

72.7

 

 

139

%

Earnings from continuing operations

 

$

240.3

 

 

149.6

 

 

61

%

 

$

416.2

 

 

201.2

 

 

107

%

————————————

(1)

Non-GAAP financial measure. See reconciliation of GAAP total revenue to operating revenue in the Appendix - Non-GAAP Financial Measures section at the end of this release.

 
Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED

(In millions)

 

 

 

Three months ended June 30,

 

Six months ended June 30,

(In millions)

 

2022

 

2021

 

B(W)

 

2022

 

2021

 

B(W)

Fleet Management Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FMS total revenue

 

$

1,621.1

 

 

1,408.2

 

 

15

%

 

$

3,150.3

 

 

2,743.7

 

 

15

%

Fuel services and ChoiceLease liability insurance(1)

 

 

(314.1

)

 

(183.6

)

 

71

%

 

 

(561.2

)

 

(350.9

)

 

60

%

FMS operating revenue(2)

 

$

1,307.0

 

 

1,224.7

 

 

7

%

 

$

2,589.1

 

 

2,392.8

 

 

8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

285.3

 

 

158.5

 

 

80

%

 

$

533.5

 

 

221.9

 

 

140

%

 

 

 

 

 

 

 

 

 

 

 

 

 

FMS earnings before income taxes as % of FMS total revenue

 

 

17.6

%

 

11.3

%

 

 

 

 

16.9

%

 

8.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FMS earnings before income taxes as % of FMS operating revenue(2)

 

 

21.8

%

 

12.9

%

 

 

 

 

20.6

%

 

9.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

B(W)

 

 

2022

 

 

2021

 

 

B(W)

Supply Chain Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCS total revenue

 

$

1,174.0

 

 

775.6

 

 

51

%

 

$

2,262.5

 

 

1,482.3

 

 

53

%

Subcontracted transportation and fuel

 

 

(375.5

)

 

(241.1

)

 

56

%

 

 

(726.0

)

 

(445.2

)

 

63

%

SCS operating revenue(2)

 

$

798.4

 

 

534.6

 

 

49

%

 

$

1,536.5

 

 

1,037.2

 

 

48

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

52.6

 

 

41.0

 

 

28

%

 

$

86.9

 

 

74.0

 

 

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

SCS earnings before income taxes as % of SCS total revenue

 

 

4.5

%

 

5.3

%

 

 

 

 

3.8

%

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCS earnings before income taxes as % of SCS operating revenue(2)

 

 

6.6

%

 

7.7

%

 

 

 

 

5.7

%

 

7.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

B(W)

 

 

2022

 

 

2021

 

 

B(W)

Dedicated Transportation Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DTS total revenue

 

$

450.2

 

 

354.7

 

 

27

%

 

$

875.2

 

 

675.2

 

 

30

%

Subcontracted transportation and fuel

 

 

(144.7

)

 

(98.9

)

 

46

%

 

 

(273.2

)

 

(182.5

)

 

50

%

DTS operating revenue(2)

 

$

305.6

 

 

255.8

 

 

19

%

 

$

602.0

 

 

492.7

 

 

22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

23.2

 

 

13.2

 

 

76

%

 

$

43.4

 

 

26.1

 

 

66

%

 

 

 

 

 

 

 

 

 

 

 

 

 

DTS earnings before income taxes as % of DTS total revenue

 

 

5.1

%

 

3.7

%

 

 

 

 

5.0

%

 

3.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DTS earnings before income taxes as % of DTS operating revenue(2)

 

 

7.6

%

 

5.1

%

 

 

 

 

7.2

%

 

5.3

%

 

 

————————————

(1)

Includes intercompany fuel sales from FMS to SCS and DTS.

(2)

Non-GAAP financial measure. A reconciliation of (1) GAAP total revenue to operating revenue for each business segment (FMS, SCS and DTS) and (2) segment earnings before taxes (EBT) as % of segment total revenue to segment EBT as % of segment operating revenue for each business segment is set forth in this table.

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

BUSINESS SEGMENT INFORMATION - ROLLING TWELVE MONTHS ENDED - UNAUDITED

(In millions)

 

 

 

Twelve months ended June 30,

 

 

2022

 

2021

 

B(W)

Fleet Management Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

FMS total revenue

 

$

6,085.5

 

 

5,375.8

 

 

13

%

Fuel services and ChoiceLease liability insurance(a)

 

 

(948.7

)

 

(636.5

)

 

49

%

FMS operating revenue*

 

$

5,136.9

 

 

4,739.3

 

 

8

%

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

974.8

 

 

298.2

 

 

227

%

 

 

 

 

 

 

 

FMS earnings before income taxes as % of FMS total revenue

 

 

16.0

%

 

5.5

%

 

 

 

 

 

 

 

 

 

FMS earnings before income taxes as % of FMS operating revenue*

 

 

19.0

%

 

6.3

%

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended June 30,

 

 

2022

 

2021

 

B(W)

Supply Chain Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

SCS total revenue

 

$

3,935.0

 

 

2,879.0

 

 

37

%

Subcontracted transportation and fuel

 

$

(1,225.1

)

 

(843.8

)

 

45

%

SCS operating revenue*

 

$

2,709.9

 

 

2,035.2

 

 

33

%

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

130.2

 

 

166.0

 

 

(22

) %

 

 

 

 

 

 

 

SCS earnings before income taxes as % of SCS total revenue

 

 

3.3

%

 

5.8

%

 

 

 

 

 

 

 

 

 

SCS earnings before income taxes as % of SCS operating revenue*

 

 

4.8

%

 

8.2

%

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended June 30,

 

 

2022

 

2021

 

B(W)

Dedicated Transportation Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

DTS total revenue

 

$

1,657.1

 

 

1,275.8

 

 

30

%

Subcontracted transportation and fuel

 

 

(492.9

)

 

(318.4

)

 

55

%

DTS operating revenue *

 

$

1,164.3

 

 

957.3

 

 

22

%

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

66.3

 

 

66.2

 

 

%

 

 

 

 

 

 

 

DTS earnings before income taxes as % of DTS total revenue

 

 

4.0

%

 

5.2

%

 

 

 

 

 

 

 

 

 

DTS earnings before income taxes as % of DTS operating revenue*

 

 

5.7

%

 

6.9

%

 

 

————————————

* Non GAAP financial measure. A reconciliation of (1) GAAP total revenue to operating revenue for each business segment (FMS, SCS and DTS) and (2) segment earnings before taxes (EBT) as % of segment total revenue to segment EBT as % of segment operating revenue for each business segment is set forth in this table.

Note: Amounts may not be additive due to rounding.
(a) Includes intercompany fuel sales from FMS to SCS and DTS.

RYDER SYSTEM, INC. AND SUBSIDIARIES

BUSINESS SEGMENT INFORMATION - UNAUDITED

KEY PERFORMANCE INDICATORS

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

2022/2021

 

 

2022

 

2021

 

2022

 

2021

 

Three Months

 

Six Months

ChoiceLease

 

 

 

 

 

 

 

 

 

 

 

 

Average fleet count

 

142,900

 

 

146,900

 

 

143,400

 

 

147,800

 

 

(3

) %

 

(3

) %

End of period fleet count

 

138,500

 

 

146,200

 

 

138,500

 

 

146,200

 

 

(5

) %

 

(5

) %

North America (N.A.) end of period fleet count

 

133,400

 

 

135,100

 

 

133,400

 

 

135,100

 

 

(1

) %

 

(1

) %

 

 

 

 

 

 

 

 

 

 

 

 

 

N.A. average active ChoiceLease vehicles(1)

 

128,500

 

 

130,300

 

 

128,700

 

 

130,600

 

 

(1

) %

 

(1

) %

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial rental

 

 

 

 

 

 

 

 

 

 

 

 

Average fleet count

 

41,900

 

 

36,700

 

 

41,500

 

 

35,800

 

 

14

%

 

16

%

End of period fleet count

 

41,500

 

 

38,000

 

 

41,500

 

 

38,000

 

 

9

%

 

9

%

Rental utilization - power units(2)

 

84.5

%

 

79.6

%

 

83.1

%

 

76.4

%

 

490 bps

 

670 bps

Rental rate change - %(3)

 

6

%

 

13

%

 

7

%

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer vehicles under

 

 

 

 

 

 

 

 

 

 

 

 

SelectCare contracts

 

 

 

 

 

 

 

 

 

 

 

 

Average fleet count

 

55,900

 

 

53,200

 

 

55,400

 

 

52,200

 

 

5

%

 

6

%

End of period fleet count

 

55,200

 

 

52,900

 

 

55,200

 

 

52,900

 

 

4

%

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer vehicles under

 

 

 

 

 

 

 

 

 

 

 

 

SCS

 

 

 

 

 

 

 

 

 

 

 

 

End of period fleet count(4)

 

11,700

 

 

10,000

 

 

11,700

 

 

10,000

 

 

17

%

 

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

DTS

 

 

 

 

 

 

 

 

 

 

 

 

End of period fleet count(4)

 

11,600

 

 

10,400

 

 

11,600

 

 

10,400

 

 

12

%

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Used vehicle sales (UVS)

 

 

 

 

 

 

 

 

 

 

 

 

End of period fleet count

 

4,200

 

 

4,300

 

 

4,200

 

 

4,300

 

 

(2

) %

 

(2

) %

Used vehicles sold(5)

 

10,500

 

 

6,000

 

 

14,800

 

 

12,600

 

 

75

%

 

17

%

N.A. UVS pricing change(6)

 

 

 

 

 

 

 

 

 

 

 

 

Tractors

 

91

%

 

73

%

 

117

%

 

47

%

 

 

 

 

Trucks

 

81

%

 

72

%

 

94

%

 

54

%

 

 

 

 

————————————

(1)

Active ChoiceLease vehicles are calculated as those units currently earning revenue and not classified as not yet earning or no longer earning units.

(2)

Rental utilization is calculated using the number of days units are rented divided by the number of days units available to rent based on the days in a calendar year (excluding trailers).

(3)

Represents percentage change compared to prior year period in average global rental rate per day on power units using constant currency.

(4)

These vehicle counts are also included within the fleet counts for ChoiceLease, Commercial rental and SelectCare.

(5)

For the three and six months ended June 30, 2022, includes 6,500 vehicles sold as part of the exit of the UK business

(6)

Represents percentage change in North America compared to prior year period in average sales proceeds on used vehicle sales using constant currency.

RYDER SYSTEM, INC. AND SUBSIDIARIES APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

This press release and accompanying tables include “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, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP.

Specifically, the following non-GAAP financial measures are included in this press release:

Non-GAAP Financial Measure

Comparable GAAP Measure

Reconciliation in Section Entitled

Operating Revenue Measures:

Operating Revenue

Total Revenue

Appendix - Non-GAAP Financial Measure Reconciliations

FMS Operating Revenue

FMS Total Revenue

Business Segment Information - Unaudited

SCS Operating Revenue

SCS Total Revenue

DTS Operating Revenue

DTS Total Revenue

Operating Revenue Growth

Total Revenue Growth

Appendix - Non-GAAP Financial Measure Reconciliations

FMS EBT as a % of FMS Operating Revenue

FMS EBT as a % of FMS Total Revenue

Business Segment Information - Unaudited

SCS EBT as a % of SCS Operating Revenue

SCS EBT as a % of SCS Total Revenue

DTS EBT as a % of DTS Operating Revenue

DTS EBT as a % of DTS Total Revenue

Comparable Earnings Measures:

Comparable Earnings Before Income Tax and Comparable Tax Rate

Earnings Before Income Tax and Effective Tax Rate from Continuing Operations

Appendix - Non-GAAP Financial Measure Reconciliations

Comparable Earnings

Earnings from Continuing Operations

Appendix - Non-GAAP Financial Measure Reconciliations

Comparable EPS

EPS from Continuing Operations

Condensed Consolidated Statements of Earnings - Unaudited

 

Appendix - Non-GAAP Financial Measure Reconciliations

Adjusted Return on Equity (ROE)

Not Applicable. However, the non-GAAP elements of the calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average shareholders' equity to adjusted average equity is provided in the following reconciliations.

Appendix - Non-GAAP Financial Measure Reconciliations

Comparable Earnings Before Interest, Taxes, Depreciation and Amortization

Net Earnings

Appendix - Non-GAAP Financial Measure Reconciliations

Cash Flow Measures:

Total Cash Generated and Free Cash Flow

Cash Provided by Operating Activities from Continuing Operations

Appendix - Non-GAAP Financial Measure Reconciliations

RYDER SYSTEM, INC. AND SUBSIDIARIES APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

Set forth in the table below is an overview of each non-GAAP financial measure and why management believes that presentation of each non-GAAP financial measure provides useful information to investors. See reconciliations for each of these measures following this table.

Operating Revenue Measures:

Operating Revenue

 

FMS Operating Revenue

 

SCS Operating Revenue

 

DTS Operating Revenue

 

Operating Revenue Growth

 

FMS EBT as a % of FMS Operating Revenue

 

SCS EBT as a % of SCS Operating Revenue

 

DTS EBT as a % of DTS Operating Revenue

 

Operating revenue is defined as total revenue for Ryder System, Inc. or each business segment (FMS, SCS and DTS) excluding any (1) fuel and (2) subcontracted transportation, as well as (3) revenue from our ChoiceLease liability insurance program which was discontinued in early 2020. We believe operating revenue provides useful information to investors as we use it to evaluate the operating performance of our core businesses and as a measure of sales activity at the consolidated level for Ryder System, Inc., as well as for each of our business segments. We also use segment EBT as a percentage of segment operating revenue for each business segment for the same reason. Note: FMS EBT, SCS EBT and DTS EBT, our primary measures of segment performance, are not non-GAAP measures.

 

Fuel: We exclude FMS, SCS and DTS fuel from the calculation of our operating revenue measures, as fuel is an ancillary service that we provide our customers. Fuel revenue is impacted by fluctuations in market fuel prices and the costs are largely a pass-through to our customers, resulting in minimal changes in our profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by rapid changes in market fuel prices during a short period of time, as customer pricing for fuel services is established based on current market fuel costs.

 

Subcontracted transportation: We exclude subcontracted transportation from the calculation of our operating revenue measures, as these services are also typically a pass-through to our customers and, therefore, fluctuations result in minimal changes to our profitability. While our SCS and DTS business segments subcontract certain transportation services to third party providers, our FMS business segment does not engage in subcontracted transportation and, therefore, this item is not applicable to FMS.

 

ChoiceLease liability insurance: We exclude ChoiceLease liability insurance as we announced our plan in the first quarter of 2020 to exit the extension of our liability insurance coverage for ChoiceLease customers. The exit of this program was completed in the first quarter of 2021. We are excluding the revenues associated with this program for better comparability of our on-going operations.

Comparable Earnings Measures:

Comparable Earnings before Income Taxes (EBT)

 

Comparable Earnings

 

Comparable Earnings per Diluted Common Share (EPS)

 

Comparable Tax Rate

 

Adjusted Return on Equity (ROE)

 

Comparable EBT, comparable earnings and comparable EPS are defined, respectively, as GAAP EBT, earnings and EPS, all from continuing operations, excluding (1) non-operating pension costs, net and (2) any other significant items that are not representative of our business operations. We believe these comparable earnings measures provide useful information to investors and allow for better year-over-year comparison of operating performance.

 

Non-operating pension costs, net: Our comparable earnings measures exclude non-operating pension costs, which include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments if recognized. We exclude non-operating pension costs, net because we consider these to be impacted by financial market performance and outside the operational performance of our business.

 

Other Items Impacting Comparability: Our comparable and adjusted earnings measures also exclude other significant items that are not representative of our business operations as detailed in the reconciliation table below. These other significant items vary from period to period and, in some periods, there may be no such significant items.

 

Comparable tax rate is computed using the same methodology as the GAAP provision for income taxes. Income tax effects of non-GAAP adjustments are calculated based on the marginal tax rates to which the non-GAAP adjustments are related.

 

Adjusted ROE is defined as adjusted net earnings divided by adjusted average shareholders' equity and represents the rate of return on shareholders' investment. Other items impacting comparability described above are excluded, as applicable, from the calculation of net earnings and average shareholders' equity. We use adjusted ROE as an internal measure of how effectively we use the owned capital invested in our operations.

Comparable Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

Comparable EBITDA is defined as net earnings, first adjusted to exclude discontinued operations and the following items, all from continuing operations: (1) non-operating pension costs, net and (2) any other items that are not representative of our business operations (these items are the same items that are excluded from comparable earnings measures for the relevant periods as described immediately above) and then adjusted further for (1) interest expense, (2) income taxes, (3) depreciation, (4) used vehicle sales results and (5) amortization.

 

We believe comparable EBITDA provides investors with useful information, as it is a standard measure commonly reported and widely used by analysts, investors and other interested parties to measure financial performance and our ability to service debt and meet our payment obligations. In addition, we believe that the inclusion of comparable EBITDA provides consistency in financial reporting and enables analysts and investors to perform meaningful comparisons of past, present and future operating results. Other companies may calculate comparable EBITDA differently; therefore, our presentation of comparable EBITDA may not be comparable to similarly-titled measures used by other companies.

 

Comparable EBITDA should not be considered as an alternative to net earnings, earnings from continuing operations before income taxes or earnings from continuing operations determined in accordance with GAAP, as an indicator of the Company’s operating performance, as an alternative to cash flows from operating activities (determined in accordance with GAAP), as an indicator of cash flows, or as a measure of liquidity.

Cash Flow Measures:

Total Cash Generated

 

Free Cash Flow

 

We consider total cash generated and free cash flow to be important measures of comparative operating performance, as our principal sources of operating liquidity are cash from operations and proceeds from the sale of revenue earning equipment.

 

Total Cash Generated is defined as the sum of (1) net cash provided by operating activities, (2) net cash provided by the sale of revenue earning equipment, (3) net cash provided by the sale of operating property and equipment and (4) other cash inflows from investing activities. We believe total cash generated is an important measure of total cash flows generated from our ongoing business activities.

 

Free Cash Flow is defined as the net amount of cash generated from operating activities and investing activities (excluding acquisitions) from continuing operations. We calculate free cash flow as the sum of (1) net cash provided by operating activities, (2) net cash provided by the sale of revenue earning equipment and operating property and equipment, and (3) other cash inflows from investing activities, less (4) purchases of property and revenue earning equipment. We believe free cash flow provides investors with an important perspective on the cash available for debt service and for shareholders, after making capital investments required to support ongoing business operations. Our calculation of free cash flow may be different from the calculation used by other companies and, therefore, comparability may be limited.

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

(In millions)

 

OPERATING REVENUE RECONCILIATION

 

 

 

 

 

 

 

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2022

 

2021

 

2022

 

2021

Total revenue

 

$

3,033.7

 

 

2,382.2

 

 

$

5,887.5

 

 

4,603.9

 

Subcontracted transportation and fuel

 

 

(726.6

)

 

(459.4

)

 

 

(1,364.8

)

 

(862.9

)

ChoiceLease liability insurance revenue

 

 

 

 

 

 

 

 

 

(0.8

)

Operating revenue(1)

 

$

2,307.1

 

 

1,922.8

 

 

$

4,522.7

 

 

3,740.2

 

TOTAL CASH GENERATED / FREE CASH FLOW RECONCILIATION

 

 

 

 

 

 

Six months ended June 30,

 

 

2022

 

2021

Net cash provided by operating activities from continuing operations

 

$

1,102.8

 

 

1,131.2

 

Proceeds from sales (primarily revenue earning equipment)(2)

 

 

636.2

 

 

374.7

 

Other(2)

 

 

7.3

 

 

0.7

 

Total cash generated(1)

 

 

1,746.3

 

 

1,506.6

 

Purchases of property and revenue earning equipment(2)

 

 

(1,195.0

)

 

(904.4

)

Free cash flow(1)

 

$

551.3

 

 

602.2

 

————————————

(1)

Non-GAAP financial measure.

(2)

Included in cash flows from investing activities.

 

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

(In millions)

 

ADJUSTED RETURN ON EQUITY RECONCILIATION

 

 

 

 

 

 

Twelve months ended June 30,

 

 

2022

 

2021

Net earnings

 

$

734.3

 

 

$

261.4

 

Other items impacting comparability(1)

 

 

(18.6

)

 

 

19.8

 

Income taxes(2)

 

 

272.4

 

 

 

79.9

 

Adjusted earnings before income taxes

 

 

988.1

 

 

 

361.1

 

Adjusted income taxes(3)

 

 

(251.1

)

 

 

(80.1

)

Adjusted net earnings

 

$

737.0

 

 

 

281.0

 

 

 

 

 

 

Average shareholders' equity

 

$

2,642.1

 

 

 

2,252.6

 

Average adjustments to shareholders' equity(4)

 

 

(6.8

)

 

 

45.0

 

Adjusted average shareholders' equity

 

$

2,635.4

 

 

 

2,297.6

 

 

 

 

 

 

Adjusted return on equity(5)

 

 

28.0

%

 

 

12.2

%

————————————

(1)

Refer to the table below for a composition of Other items impacting comparability, net for the 12-month rolling period.

(2)

Includes income taxes on discontinued operations.

(3)

Represents the provision for income taxes plus income taxes on other items impacting comparability.

(4)

Represents the impact of other items impacting comparability, net of tax, to equity for the respective periods.

(5)

Adjusted return on equity is calculated by dividing Adjusted net earnings into Adjusted average shareholders' equity

 

 

Twelve months ended June 30,

 

 

2022

 

2021

Restructuring and other, net

 

$

38.6

 

 

35.2

 

ERP implementation costs

 

 

 

 

25.6

 

Gains on sale of U.K. revenue earning equipment

 

 

(28.4

)

 

 

Gains on sale of properties

 

 

(28.8

)

 

(42.2

)

Early redemption of medium-term notes

 

 

 

 

9.0

 

ChoiceLease liability insurance revenue

 

 

 

 

(7.8

)

Other items impacting comparability

 

$

(18.6

)

 

19.8

 

————————————

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

(In millions)

 

COMPARABLE EARNINGS BEFORE INCOME TAXES / COMPARABLE EARNINGS BEFORE INTEREST, TAXES,

DEPRECIATION AND AMORTIZATION RECONCILIATION

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2022

 

2021

 

2022

 

2021

Net earnings

 

$

239.4

 

 

149.1

 

 

$

415.0

 

 

199.9

 

Loss from discontinued operations, net of tax

 

 

0.9

 

 

0.5

 

 

 

1.2

 

 

1.2

 

Provision for income taxes

 

 

98.0

 

 

54.0

 

 

 

174.1

 

 

72.7

 

Earnings before income taxes from continuing operations

 

 

338.4

 

 

203.6

 

 

 

590.2

 

 

273.8

 

Non-operating pension costs, net

 

 

2.6

 

 

(0.4

)

 

 

5.4

 

 

(0.4

)

Restructuring and other, net

 

 

10.3

 

 

2.6

 

 

 

24.6

 

 

5.6

 

ERP implementation costs

 

 

 

 

5.1

 

 

 

 

 

12.7

 

Gains on sale of U.K. revenue earning equipment

 

 

(20.1

)

 

 

 

 

(28.4

)

 

 

Gains on sale of properties

 

 

(23.0

)

 

(35.3

)

 

 

(23.6

)

 

(36.8

)

ChoiceLease liability insurance revenue

 

 

 

 

 

 

 

 

 

(0.8

)

Comparable earnings before income taxes(1)

 

 

308.2

 

 

175.6

 

 

 

568.2

 

 

254.2

 

Interest expense

 

 

55.3

 

 

54.2

 

 

 

107.7

 

 

108.9

 

Depreciation

 

 

424.9

 

 

444.3

 

 

 

854.2

 

 

905.4

 

Used vehicle sales, net

 

 

(109.5

)

 

(51.6

)

 

 

(214.2

)

 

(80.5

)

Amortization

 

 

9.2

 

 

1.7

 

 

 

19.2

 

 

3.4

 

Comparable EBITDA(1)

 

$

688.1

 

 

624.1

 

 

$

1,335.2

 

 

1,191.5

 

————————————

(1)

Non-GAAP financial measure. Non-GAAP elements of the calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of earnings before income taxes from continuing operations to comparable earnings before income taxes from continuing operations is set forth in this table.

 
Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

(In millions)

COMPARABLE EARNINGS RECONCILIATION

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2022

 

2021

 

2022

 

2021

Earnings from continuing operations

 

$

240.3

 

 

149.6

 

 

$

416.2

 

 

201.2

 

Non-operating pension costs, net

 

 

1.6

 

 

(1.0

)

 

 

3.4

 

 

(1.8

)

Restructuring and other, net

 

 

10.7

 

 

3.2

 

 

 

25.0

 

 

5.8

 

ERP implementation costs

 

 

 

 

3.8

 

 

 

 

 

9.4

 

Gains on sale of U.K. revenue earning equipment

 

 

(20.1

)

 

 

 

 

(28.4

)

 

 

Gains on sale of properties

 

 

(23.0

)

 

(26.8

)

 

 

(23.6

)

 

(28.0

)

Tax adjustments, net (1)

 

 

16.0

 

 

0.4

 

 

 

21.3

 

 

0.7

 

Comparable earnings from continuing operations(2)

 

$

225.5

 

 

129.1

 

 

$

413.8

 

 

187.3

 

 

 

 

 

 

 

 

 

 

Tax rate on continuing operations

 

 

29.0

%

 

26.5

%

 

 

29.5

%

 

26.5

%

Tax adjustments and income tax effects of non-GAAP adjustments(3)

 

 

(2.2

) %

 

%

 

 

(2.3

) %

 

(0.2

) %

Comparable tax rate on continuing operations(3)

 

 

26.8

%

 

26.5

%

 

 

27.2

%

 

26.3

%

————————————

(1)

Adjustments include the global tax impact related to gains on sales of U.K. revenue earning equipment and properties in the three and six months ended June 30, 2022, and expiring state net operating losses in the six months ended June 30, 2021.

(2)

Non-GAAP financial measure.

(3)

The comparable provision for income taxes is computed using the same methodology as the GAAP provision for income taxes. Income tax effects of non-GAAP adjustments are calculated based on the marginal tax rates to which the non-GAAP adjustments are related.

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

(In millions, except per share amounts)

 

OPERATING REVENUE GROWTH FORECAST RECONCILIATION

 

 

 

 

 

 

Twelve months ended December 31,

 

 

 

 

2022

 

2021

 

B(W)

Total revenue

 

$

11,800

 

 

9,663

 

 

22

%

Subcontracted transportation and fuel

 

 

(2,700

)

 

(1,834

)

 

47

%

ChoiceLease liability insurance revenue

 

 

 

 

(1

)

 

NM

 

Operating revenue(1)

 

$

9,100

 

 

7,828

 

 

16

%

COMPARABLE EARNINGS PER SHARE FORECAST RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter 2022

 

Full Year 2022

EPS from continuing operations

 

$3.41 - $3.66

 

 

$14.45 - $14.95

 

Non-operating pension costs, net

 

0.03

 

 

0.13

 

Restructuring and other, net

 

(0.04

)

 

(0.28

)

Comparable EPS from continuing operations forecast(1)

 

$3.40 - $3.65

 

 

$14.30 - $14.80

 

TOTAL CASH GENERATED / FREE CASH FLOW FORECAST RECONCILIATION

 

 

 

 

2022 Forecast

Net cash provided by operating activities from continuing operations

 

$

2,300

Proceeds from sales (primarily revenue earning equipment)(2)

 

 

1,100

Total cash generated(1)

 

 

3,400

 

 

 

Purchases of property and revenue earning equipment(2)

 

(2,650 - 2,550)

Free cash flow(1)

 

$750M - 850M

————————————

(1)

Non-GAAP financial measure.

(2)

Included in cash flows from investing activities.

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

(In millions)

 

ADJUSTED RETURN ON EQUITY FORECAST RECONCILIATION

 

 

 

 

2022 Forecast

Net earnings

 

$

740

 

Other items impacting comparability(1)

 

 

(50

)

Income taxes(2)

 

 

300

 

Adjusted earnings before income taxes

 

 

990

 

Adjusted income taxes(3)

 

 

(265

)

Adjusted net earnings for ROE (numerator)(4) [A]

 

$

725

 

 

 

 

Average shareholders' equity

 

$

2,850

 

Adjustment to equity(5)

 

 

(10

)

Adjusted average total equity (denominator)(4) [B]

 

$

2,840

 

 

 

 

Adjusted return on equity(4) [A]/[B]

 

 

25.5

%

————————————

(1)

 

Forecasted other items impacting comparability includes restructuring and other, net of $45 million, gains on sale of U.K. revenue earning equipment of $(50) million, and gains on sale of properties of $(45) million.

(2)

 

Includes income taxes on discontinued operations.

(3)

 

Represents the tax provision on adjusted earnings before income taxes.

(4)

 

Non-GAAP financial measure. Non-GAAP elements of the calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average shareholders' equity to adjusted average total equity set forth in this table.

(5)

 

Represents the impact to equity of items to arrive at adjusted earnings.

Note: Amounts may not be additive due to rounding.

 

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