Ryder Reports Second Quarter 2023 Results

Delivers Strong Results in Weak Freight Environment, Raises Full-Year Guidance 

Second-Quarter 2023 Highlights

  • GAAP EPS from continuing operations of $(0.39) due to a non-cash UK exit charge, compared to $4.72 in prior year
  • Comparable EPS (non-GAAP) from continuing operations of $3.61, as compared to a record $4.43 in prior year, largely reflecting weaker market conditions in used vehicle sales and rental
  • Strong performance in all segments benefited EBT
  • Total revenue of $2.9 billion compared to $3.0 billion in prior year
  • Operating revenue (non-GAAP) of $2.3 billion, up 1%, reflecting Supply Chain Solutions (SCS) and Dedicated Transportation Solutions (DTS) revenue growth partially offset by impact from UK exit

Full-Year 2023 Forecast

  • Increased comparable EPS (non-GAAP) forecast to $12.20 - $12.70 from prior forecast of $11.30 - $12.05
  • Adjusted ROE (ROE) forecast increased to 17% - 19% from 16% - 18%
  • Operating revenue (non-GAAP) growth forecast of 2%, down from prior forecast of 4%, reflecting lower rental demand and volumes in the omnichannel retail vertical
  • Net cash provided by operating activities from continuing operations forecast of $2.5 billion, up from $2.4 billion; free cash flow (non-GAAP) forecast of ~$100 million, down from ~$200 million, reflecting accelerated timing of OEM deliveries

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:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230726329357/en/

Ryder is a leader in supply chain, dedicated transportation, and fleet management solutions.

Ryder is a leader in supply chain, dedicated transportation, and fleet management solutions.

(In millions, except EPS)

 

Earnings

Before Taxes

 

Earnings (Loss)

 

Diluted

Earnings (Loss)

Per Share

 

 

2023

 

2022

 

2023

 

2022

 

2023

 

2022

Continuing operations (GAAP) (1)

 

$

44

 

338

 

$

(18

)

 

240

 

$

(0.39

)

 

4.72

Comparable (non-GAAP)

 

$

237

 

308

 

$

170

 

 

226

 

$

3.61

 

 

4.43

(1) Includes $(3.90) impact from one-time, non-cash cumulative currency translation adjustment charge from the UK exit.

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

(In millions)

 

Total Revenue

 

Operating Revenue

(non-GAAP)

 

 

2023

 

2022

 

Change

 

2023

 

2022

 

Change

Total

 

$

2,884

 

3,034

 

(5)%

 

$

2,326

 

2,307

 

1%

Fleet Management Solutions (FMS)

 

$

1,459

 

1,621

 

(10)%

 

$

1,254

 

1,307

 

(4)%

Supply Chain Solutions (SCS)

 

$

1,179

 

1,174

 

—%

 

$

865

 

798

 

8%

Dedicated Transportation Solutions (DTS)

 

$

440

 

450

 

(2)%

 

$

327

 

306

 

7%

CEO Comment

"Our strong second-quarter results and increased full-year earnings guidance demonstrate the progress made on our balanced growth strategy to de-risk the business model, enhance returns and drive profitable growth," says Ryder Chairman and CEO Robert Sanchez. "All three business units met or exceeded their pre-tax earnings targets, and ROE of 24% remained above our high-teens target.

"Achieving these results against a backdrop of weakening freight conditions and declining used vehicle prices highlights the effectiveness of our transformative changes. Ryder’s operations are more diversified with expanded capabilities across three scaled businesses, which has enabled us to deliver outstanding service to our customers, outperform prior cycles, and create long-term value for our shareholders.

"Our strong balance sheet continues to provide us with ample capacity to support organic growth, pursue strategic acquisitions, and return capital to shareholders through share repurchase programs and dividends. The recently announced 15% increase to our quarterly dividend is also supported by our confidence in the long-term earnings generation of our model."

Second Quarter 2023 Segment Review

Fleet Management Solutions: Strong Earnings Despite Weaker Used Vehicle Sales and Rental Market Conditions

(In millions)

 

2Q23

 

2Q22

 

Change

Total Revenue

 

$

1,459

 

 

1,621

 

 

(10)%

Operating Revenue (1)

 

$

1,254

 

 

1,307

 

 

(4)%

 

 

 

 

 

 

 

Earnings Before Tax (EBT)

 

$

180

 

 

286

 

 

(37)%

EBT as a % of total revenue

 

12.3%

 

17.6%

 

(530) bps

EBT as a % of operating revenue (1)

 

14.4%

 

21.9%

 

(750) bps

 

 

 

 

 

 

 

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

 

2Q23

 

2Q22

 

Change

EBT as a % of total revenue

 

14.4%

 

16.1%

 

(170) bps

EBT as a % of operating revenue (1)

 

17.2%

 

19.0%

 

(180) bps

 

 

 

 

 

 

 

(1) Non-GAAP financial measure excluding fuel service revenue.

  • FMS total revenue and operating revenue decreased 10% and 4%, respectively
    • Total revenue reflects lower fuel revenue passed through to customers and lower operating revenue
    • Operating revenue reflects a 4% negative impact from UK exit; North America remained unchanged as higher ChoiceLease and SelectCare revenue was offset by lower rental demand
  • FMS EBT decreased to $180 million
    • Reflects lower used vehicle sales and rental results
    • Lower used vehicle gains due to a 34% and 41% decrease in used truck and tractor pricing, respectively, partially offset by higher volumes; sequentially from first quarter of 2023, used truck and tractor pricing decreased 14% and 15%, respectively
    • Rental power-fleet utilization was 75%, down from record level of 85% in prior year, on a 1% smaller average power fleet
    • Rental results benefited from a 2% increase in power-fleet pricing
  • FMS EBT as a percentage of FMS operating revenue is above company's long-term target of low double digits for the second quarter and trailing 12-month period

Supply Chain Solutions: Strong Earnings Reflect Operating Revenue Growth

(In millions)

 

2Q23

 

2Q22

 

Change

Total Revenue

 

$

1,179

 

 

1,174

 

 

—%

Operating Revenue (1)

 

$

865

 

 

798

 

 

8%

 

 

 

 

 

 

 

Earnings Before Tax (EBT)

 

$

76

 

 

62

 

 

23%

EBT as a % of total revenue

 

6.4%

 

5.3%

 

110 bps

EBT as a % of operating revenue (1)

 

8.7%

 

7.8%

 

90 bps

 

 

 

 

 

 

 

Trailing 12-month EBT as % of total and operating revenue

 

2Q23

 

2Q22

 

Change

EBT as a % of total revenue

 

4.3%

 

3.9%

 

40 bps

EBT as a % of operating revenue (1)

 

6.0%

 

5.6%

 

40 bps

 

 

 

 

 

 

 

(1) Non-GAAP financial measure excluding fuel and subcontracted transportation.

  • SCS total revenue was unchanged and operating revenue grew 8%
    • Increase in operating revenue primarily driven by new business, higher volumes, and increased pricing
  • SCS EBT grew 23%
    • Increase primarily due to higher operating revenue and lower incentive-based compensation costs, as well as higher prior-year customer accommodation charges
    • Partially offset by lower volumes in the omnichannel retail vertical
  • SCS EBT as a percentage of SCS operating revenue is in line with company's long-term target of high single digits for the second quarter but below target for the trailing 12-month period

Dedicated Transportation Solutions: Strong Earnings Driven by Growth and Improved Labor Productivity

(In millions)

 

2Q23

 

2Q22

 

Change

Total Revenue

 

$

440

 

 

450

 

 

(2)%

Operating Revenue (1)

 

$

327

 

 

306

 

 

7%

 

 

 

 

 

 

 

Earnings Before Tax (EBT)

 

$

33

 

 

23

 

 

43%

EBT as a % of total revenue

 

7.6%

 

5.1%

 

250 bps

EBT as a % of operating revenue (1)

 

10.3%

 

7.5%

 

280 bps

 

 

 

 

 

 

 

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

 

2Q23

 

2Q22

 

Change

EBT as a % of total revenue

 

6.8%

 

4.0%

 

280 bps

EBT as a % of operating revenue (1)

 

9.5%

 

5.7%

 

380 bps

 

 

 

 

 

 

 

(1) Non-GAAP financial measure excluding fuel and subcontracted transportation.

  • DTS total revenue decreased 2% and operating revenue grew 7%
    • Total revenue reflects lower fuel revenue passed through to customers
    • Operating revenue increased due to inflationary cost recovery and higher volumes
  • DTS EBT grew 43%
    • Increase primarily due to operating revenue growth and improved labor productivity
  • DTS EBT as a percentage of DTS operating revenue is above the company's long-term target of high single digits for the second quarter and at the high-end for the trailing 12-month period

Corporate Financial Information

Unallocated Central Support Services (CSS)

Unallocated CSS costs declined to $20 million from $24 million in the prior year, primarily due to lower professional fees and incentive-based compensation costs.

Tax Rate

Our effective income tax rate from continuing operations was 140.8%, as compared to 29.0% in the prior year, due to a one-time, nondeductible cumulative currency translation adjustment loss from the exit of the UK in the second quarter of 2023. Our comparable effective income tax rate (a non-GAAP measure) from continuing operations was 28.6% as compared to 26.8% in the prior year.

Capital Expenditures, Cash Flow, and Leverage

Year-to-date capital expenditures increased to $1.8 billion in 2023, compared to $1.3 billion in 2022, reflecting higher investments in the lease fleet partially offset by lower investments in commercial rental.

Year-to-date net cash provided by operating activities from continuing operations increased to $1.2 billion, as compared to $1.1 billion in the prior year, driven by higher cash earnings and lower working capital needs. Free cash flow (non-GAAP) of $16 million, compared to $551 million in 2022, primarily reflecting an increase in capital expenditures and lower proceeds from used vehicle sales.

Debt-to-equity as of June 30, 2023 was 211%, compared to 216% at year-end 2022, and remains below the company's long-term target of 250% to 300%.

UK and Currency Translation Adjustment Charge

We completed the exit from the UK business as of June 30, 2023. As a result, we recorded a $183 million cumulative currency translation adjustment in our net earnings as a one-time, non-cash charge during the second quarter of 2023. The cumulative currency translation adjustment charge had no impact on our consolidated financial position or cash flows.

Outlook

"We continue to execute in a challenging market as reflected in our increased earnings and ROE guidance," says Ryder Chief Financial Officer John Diez. "Accelerated timing of OEM deliveries is expected to increase our ChoiceLease fleet growth and related capital expenditures, which should reduce free cash flow in 2023. Our ability to perform in various market conditions reflects the fundamental changes we've made to enhance returns and drive profitable growth."

 

Full Year 2023

Total Revenue Growth

~(2%)

Operating Revenue Growth (non-GAAP)

~2%

FY23 GAAP EPS (includes ~$3.96 cumulative currency translation charge for UK exit)

$7.95 - $8.45

FY23 Comparable EPS (non-GAAP)

$12.20 - $12.70

 

 

ROE (1)

17% - 19%

Net Cash from Operating Activities from Continuing Operations

~$2.5B

Free Cash Flow (non-GAAP)

~100M

Capital Expenditures

~$3.2B

Debt-to-Equity

~200%

 

 

 

Third Quarter 2023

3Q23 GAAP EPS

$2.82 - $3.07

3Q23 Comparable EPS (non-GAAP)

$3.00 - $3.25

————————————

(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 adjusted average equity is provided in the Appendix - Non-GAAP Financial Measures at the end of this release.

Supplemental Company Information

Second Quarter Net Earnings

(In millions, except EPS)

 

Earnings

 

Diluted EPS

 

 

2023

 

2022

 

2023

 

2022

Earnings (loss) from continuing operations

 

$

(18

)

 

240

 

 

$

(0.39

)

 

4.72

 

Discontinued operations

 

 

 

 

(1

)

 

 

(0.01

)

 

(0.02

)

Net earnings (loss)

 

$

(18

)

 

239

 

 

$

(0.40

)

 

4.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Year-to-Date Operating Results

Six months ended June 30,

(In millions, except EPS)

2023

 

2022

 

Change

Total revenue

$

5,836

 

5,888

 

(1)%

Operating revenue (non-GAAP)

$

4,672

 

4,523

 

3%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

$

122

 

416

 

(71)%

Comparable earnings from continuing operations (non-GAAP)

$

303

 

414

 

(27)%

Net earnings

$

121

 

415

 

(71)%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (EPS) - Diluted

 

 

 

 

 

Continuing operations

$

2.60

 

8.05

 

(68)%

Comparable (non-GAAP)

$

6.42

 

8.00

 

(20)%

Net earnings

$

2.57

 

8.03

 

(68)%

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 such as decreasing rental demand, weakening freight conditions, declining used vehicle sales and declining volumes in our omnichannel retail vertical; expectations regarding total and operating revenue, earnings per share, comparable earnings per share, adjusted ROE, net cash provided by operating activities from continuing operations, debt-to-equity, capital expenditures and free cash flow; our ability to execute our balanced growth strategy; our expectations with respect to ChoiceLease growth, including our expectations with respect to the timing of OEM deliveries; our expectations with respect to the effect of our actions to increase returns and long-term earnings generation; our ability to outperform prior cycles; and our ability to support organic growth, make strategic investments and acquisitions, and return capital to shareholders. 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 changes in general economic and financial conditions in the U.S. and worldwide; ongoing supply chain and labor challenges and vehicle production constraints; the effect of geopolitical events; 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; professional 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 and alternative energy 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 26, 2023 at 11:00 a.m. ET. To join, click here.

LIVE AUDIO VIA PHONE

Toll Free Number:

888-204-4368

USA Toll Number:

323-994-2093

Audio Passcode:

Ryder

Conference Leader:

Calene Candela

WEBCAST REPLAY

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

ryder-financial

 

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,

 

 

2023

 

2022

 

2023

 

2022

Lease & related maintenance and rental revenues

 

$

976

 

 

1,050

 

 

$

1,955

 

 

2,075

 

Services revenue

 

 

1,778

 

 

1,777

 

 

 

3,599

 

 

3,447

 

Fuel services revenue

 

 

130

 

 

207

 

 

 

282

 

 

366

 

Total revenues

 

 

2,884

 

 

3,034

 

 

 

5,836

 

 

5,888

 

 

 

 

 

 

 

 

 

 

Cost of lease & related maintenance and rental

 

 

661

 

 

688

 

 

 

1,335

 

 

1,387

 

Cost of services

 

 

1,507

 

 

1,523

 

 

 

3,114

 

 

2,973

 

Cost of fuel services

 

 

126

 

 

199

 

 

 

275

 

 

354

 

Selling, general and administrative expenses

 

 

343

 

 

361

 

 

 

706

 

 

703

 

Non-operating pension costs, net

 

 

10

 

 

2

 

 

 

20

 

 

5

 

Used vehicle sales, net

 

 

(55

)

 

(130

)

 

 

(127

)

 

(243

)

Interest expense

 

 

72

 

 

56

 

 

 

137

 

 

108

 

Miscellaneous income, net

 

 

(11

)

 

(14

)

 

 

(31

)

 

(14

)

Currency translation adjustment loss

 

 

188

 

 

 

 

 

188

 

 

 

Restructuring and other items, net

 

 

(1

)

 

11

 

 

 

(26

)

 

25

 

 

 

 

2,840

 

 

2,696

 

 

 

5,591

 

 

5,298

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations before income taxes

 

 

44

 

 

338

 

 

 

245

 

 

590

 

Provision for income taxes

 

 

62

 

 

98

 

 

 

123

 

 

174

 

Earnings (loss) from continuing operations

 

 

(18

)

 

240

 

 

 

122

 

 

416

 

Loss from discontinued operations, net of tax

 

 

 

 

(1

)

 

 

(1

)

 

(1

)

Net earnings (loss)

 

$

(18

)

 

239

 

 

$

121

 

 

415

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share — Diluted

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.39

)

 

4.72

 

 

$

2.60

 

 

8.05

 

Discontinued operations

 

 

(0.01

)

 

(0.02

)

 

 

(0.02

)

 

(0.02

)

Net earnings (loss)

 

$

(0.40

)

 

4.70

 

 

$

2.57

 

 

8.03

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — Diluted

 

 

46.0

 

 

50.9

 

 

 

47.2

 

 

51.7

 

 

 

 

 

 

 

 

 

 

Diluted EPS from continuing operations

 

$

(0.39

)

 

4.72

 

 

$

2.60

 

 

8.05

 

Non-operating pension costs, net

 

 

0.17

 

 

0.03

 

 

 

0.34

 

 

0.07

 

FMS U.K. exit

 

 

(0.11

)

 

(0.62

)

 

 

(0.77

)

 

(0.60

)

Currency translation adjustment loss

 

 

3.90

 

 

 

 

 

3.87

 

 

 

Other, net

 

 

0.02

 

 

(0.01

)

 

 

 

 

0.07

 

Tax adjustments, net

 

 

0.02

 

 

0.31

 

 

 

0.38

 

 

0.41

 

Comparable EPS from continuing operations (1)

 

$

3.61

 

 

4.43

 

 

$

6.42

 

 

8.00

 

____________________

 

 

 

 

 

 

 

 

(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,

2023

 

December 31,

2022

Assets:

 

 

 

 

Cash and cash equivalents

 

$

218

 

267

Other current assets

 

 

1,899

 

1,933

Revenue earning equipment, net

 

 

8,795

 

8,190

Operating property and equipment, net

 

 

1,132

 

1,148

Other assets

 

 

2,927

 

2,857

 

 

$

14,971

 

14,395

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

Current liabilities

 

$

2,081

 

1,967

Total debt (including current portion)

 

 

6,525

 

6,352

Other non-current liabilities (including deferred income taxes)

 

 

3,269

 

3,139

Shareholders' equity

 

 

3,096

 

2,937

 

 

$

14,971

 

14,395

 

SELECTED KEY RATIOS AND METRICS

 

 

 

June 30,

2023

December 31,

2022

Debt to equity

211%

216%

 

 

Three months ended June 30,

Six months ended June 30,

(In millions)

2023

2022

2023

2022

Comparable EBITDA (1)

$

674

 

688

 

$

1,302

 

1,335

Effective interest rate (average cost of debt)

 

4.5

%

3.4

%

 

4.3

%

3.3

%

 

 

 

Six months ended June 30,

(In millions)

 

2023

2022

Net cash provided by operating activities from continuing operations

 

$

1,221

 

1,103

Free cash flow (1)

 

16

 

551

Capital expenditures paid

 

 

1,652

 

1,195

Gross capital expenditures

 

 

1,813

 

1,307

 

 

 

Twelve months ended June 30,

 

 

2023

2022

Adjusted ROE (2)

 

24%

28%

___________________

(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

 

 

 

Three months ended June 30,

 

Six months ended June 30,

(In millions)

 

2023

 

2022

 

Change

 

2023

 

2022

 

Change

Total Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Fleet Management Solutions:

 

 

 

 

 

 

 

 

 

 

 

 

ChoiceLease

 

$

781

 

 

763

 

 

2%

 

$

1,557

 

 

1,527

 

 

2%

Commercial rental

 

 

301

 

 

336

 

 

(10)%

 

 

605

 

 

642

 

 

(6)%

SelectCare and other

 

 

172

 

 

153

 

 

12%

 

 

354

 

 

301

 

 

18%

FMS Europe

 

 

 

 

55

 

 

NM

 

 

 

 

119

 

 

NM

Fuel services revenue

 

 

205

 

 

314

 

 

(35)%

 

 

446

 

 

561

 

 

(20)%

Fleet Management Solutions

 

 

1,459

 

 

1,621

 

 

(10)%

 

 

2,962

 

 

3,150

 

 

(6)%

Supply Chain Solutions

 

 

1,179

 

 

1,174

 

 

—%

 

 

2,380

 

 

2,263

 

 

5%

Dedicated Transportation Solutions

 

 

440

 

 

450

 

 

(2)%

 

 

894

 

 

875

 

 

2%

Eliminations

 

 

(194

)

 

(211

)

 

8%

 

 

(400

)

 

(400

)

 

—%

Total revenue

 

$

2,884

 

 

3,034

 

 

(5)%

 

$

5,836

 

 

5,888

 

 

(1)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue: (1)

 

 

 

 

 

 

 

 

 

 

 

 

Fleet Management Solutions

 

$

1,254

 

 

1,307

 

 

(4)%

 

$

2,516

 

 

2,589

 

 

(3)%

Supply Chain Solutions

 

 

865

 

 

798

 

 

8%

 

 

1,744

 

 

1,536

 

 

14%

Dedicated Transportation Solutions

 

 

327

 

 

306

 

 

7%

 

 

649

 

 

602

 

 

8%

Eliminations

 

 

(120

)

 

(104

)

 

(15)%

 

 

(237

)

 

(204

)

 

(16)%

Operating revenue

 

$

2,326

 

 

2,307

 

 

1%

 

$

4,672

 

 

4,523

 

 

3%

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Segment Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Fleet Management Solutions

 

$

180

 

 

286

 

 

(37)%

 

$

362

 

 

535

 

 

(32)%

Supply Chain Solutions

 

 

76

 

 

62

 

 

23%

 

 

93

 

 

105

 

 

(11)%

Dedicated Transportation Solutions

 

 

33

 

 

23

 

 

43%

 

 

62

 

 

43

 

 

44%

Eliminations

 

 

(24

)

 

(30

)

 

20%

 

 

(49

)

 

(56

)

 

13%

 

 

 

265

 

 

341

 

 

(22)%

 

 

468

 

 

627

 

 

(25)%

Unallocated Central Support Services

 

 

(20

)

 

(24

)

 

(17)%

 

 

(35

)

 

(40

)

 

(13)%

Intangible amortization expense

 

 

(8

)

 

(9

)

 

(11)%

 

 

(17

)

 

(19

)

 

(11)%

Non-operating pension costs, net

 

 

(10

)

 

(2

)

 

NM

 

 

(20

)

 

(5

)

 

NM

Other items impacting comparability, net

 

 

(183

)

 

32

 

 

NM

 

 

(151

)

 

27

 

 

NM

Earnings from continuing operations before income taxes

 

 

44

 

 

338

 

 

(87)%

 

 

245

 

 

590

 

 

(58)%

Provision for income taxes

 

 

62

 

 

98

 

 

(37)%

 

 

123

 

 

174

 

 

(29)%

Earnings (loss) from continuing operations

 

$

(18

)

 

240

 

 

(108)%

 

$

122

 

 

416

 

 

(71)%

____________________

(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

 

 

 

Three months ended June 30,

 

Six months ended June 30,

(In millions)

 

2023

 

2022

 

Change

 

2023

 

2022

 

Change

Fleet Management Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FMS total revenue

 

$

1,459

 

 

1,621

 

 

(10)%

 

$

2,962

 

 

3,150

 

 

(6)%

Fuel services revenue (1)

 

 

(205

)

 

(314

)

 

(35)%

 

 

(446

)

 

(561

)

 

(20)%

FMS operating revenue (2)

 

$

1,254

 

 

1,307

 

 

(4)%

 

$

2,516

 

 

2,589

 

 

(3)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

180

 

 

286

 

 

(37)%

 

$

362

 

 

535

 

 

(32)%

 

 

 

 

 

 

 

 

 

 

 

 

 

FMS earnings before income taxes as % of FMS total revenue

 

12.3%

 

17.6%

 

 

 

12.2%

 

17.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

14.4%

 

21.9%

 

 

 

14.4%

 

20.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2023

 

2022

 

Change

 

2023

 

2022

 

Change

Supply Chain Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCS total revenue

 

$

1,179

 

 

1,174

 

 

—%

 

$

2,380

 

 

2,263

 

 

5%

Subcontracted transportation and fuel

 

 

(314

)

 

(376

)

 

(16)%

 

 

(636

)

 

(727

)

 

(13)%

SCS operating revenue (2)

 

$

865

 

 

798

 

 

8%

 

$

1,744

 

 

1,536

 

 

14%

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

76

 

 

62

 

 

23%

 

$

93

 

 

105

 

 

(11)%

 

 

 

 

 

 

 

 

 

 

 

 

 

SCS earnings before income taxes as % of SCS total revenue

 

6.4%

 

5.3%

 

 

 

3.9%

 

4.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

8.7%

 

7.8%

 

 

 

5.3%

 

6.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2023

 

2022

 

Change

 

2023

 

2022

 

Change

Dedicated Transportation Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DTS total revenue

 

$

440

 

 

450

 

 

(2)%

 

$

894

 

 

875

 

 

2%

Subcontracted transportation and fuel

 

 

(113

)

 

(144

)

 

(22)%

 

 

(245

)

 

(273

)

 

(10)%

DTS operating revenue (2)

 

$

327

 

 

306

 

 

7%

 

$

649

 

 

602

 

 

8%

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

33

 

 

23

 

 

43%

 

$

62

 

 

43

 

 

44%

 

 

 

 

 

 

 

 

 

 

 

 

 

DTS earnings before income taxes as % of DTS total revenue

 

7.6%

 

5.1%

 

 

 

7.0%

 

4.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

10.3%

 

7.5%

 

 

 

9.6%

 

7.1%

 

 

____________________

 

 

(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 - TRAILING TWELVE MONTHS ENDED - UNAUDITED

 

 

 

Twelve months ended June 30,

(In millions)

 

2023

 

2022

Fleet Management Solutions

 

 

 

 

 

 

 

 

 

 

 

FMS total revenue

 

$

6,139

 

 

6,086

 

 

Fuel services revenue (1)

 

 

(999

)

 

(949

)

 

FMS operating revenue (2)

 

$

5,140

 

 

5,137

 

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

884

 

 

977

 

 

 

 

 

 

 

 

FMS earnings before income taxes as % of FMS total revenue

 

14.4%

 

16.1%

 

 

 

 

 

 

 

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

 

17.2%

 

19.0%

 

 

 

 

 

 

 

 

 

Twelve months ended June 30,

 

 

2023

 

2022

Supply Chain Solutions

 

 

 

 

 

 

 

 

 

 

 

SCS total revenue

 

$

4,837

 

 

3,935

 

 

Subcontracted transportation and fuel

 

(1,375

)

 

(1,225

)

 

SCS operating revenue (2)

 

$

3,462

 

 

2,710

 

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

207

 

 

152

 

 

 

 

 

 

 

 

SCS earnings before income taxes as % of SCS total revenue

 

4.3%

 

3.9%

 

 

 

 

 

 

 

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

 

6.0%

 

5.6%

 

 

 

 

 

 

 

 

 

Twelve months ended June 30,

 

 

2023

 

2022

Dedicated Transportation Solutions

 

 

 

 

 

 

 

 

 

 

 

DTS total revenue

 

$

1,805

 

 

1,657

 

 

Subcontracted transportation and fuel

 

 

(519

)

 

(493

)

 

DTS operating revenue (2)

 

$

1,286

 

 

1,164

 

 

 

 

 

 

 

 

Segment earnings before income taxes

 

$

122

 

 

66

 

 

 

 

 

 

 

 

DTS earnings before income taxes as % of DTS total revenue

 

6.8%

 

4.0%

 

 

 

 

 

 

 

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

 

9.5%

 

5.7%

 

____________________

(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 - UNAUDITED

KEY PERFORMANCE INDICATORS

 

Our North America fleet of owned and leased revenue earning equipment and SelectCare vehicles, including vehicles under on-demand maintenance and used vehicles sold, is summarized as follows (number of units rounded to the nearest hundred):

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

2023/2022

 

 

2023

 

2022

 

2023

 

2022

 

Three

Months

 

Six

Months

ChoiceLease

 

 

 

 

 

 

 

 

 

 

 

 

Average fleet count

 

137,800

 

133,600

 

136,600

 

133,700

 

3%

 

2%

End of period fleet count

 

139,000

 

133,400

 

139,000

 

133,400

 

4%

 

4%

Average active fleet count (1)

 

129,700

 

128,500

 

129,200

 

128,700

 

1%

 

—%

End of period active fleet count (1)

 

130,500

 

128,900

 

130,500

 

128,900

 

1%

 

1%

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial rental

 

 

 

 

 

 

 

 

 

 

 

 

Average fleet count

 

40,200

 

40,500

 

40,700

 

39,900

 

(1)%

 

2%

End of period fleet count

 

39,200

 

41,100

 

39,200

 

41,100

 

(5)%

 

(5)%

Rental utilization - power units (2)

 

75%

 

85%

 

75%

 

83%

 

(1,000)bps

 

(800)bps

Rental rate change - % (3)

 

2%

 

6%

 

3%

 

7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer vehicles under SelectCare contracts

 

 

 

 

 

 

 

 

 

 

 

 

Average fleet count

 

52,600

 

55,000

 

53,300

 

54,400

 

(4)%

 

(2)%

End of period fleet count

 

51,700

 

55,200

 

51,700

 

55,200

 

(6)%

 

(6)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer vehicles under SCS

 

 

 

 

 

 

 

 

 

 

 

 

End of period fleet count (4)

 

13,600

 

11,700

 

13,600

 

11,700

 

16%

 

16%

 

 

 

 

 

 

 

 

 

 

 

 

 

DTS

 

 

 

 

 

 

 

 

 

 

 

 

End of period fleet count (4)

 

11,300

 

11,600

 

11,300

 

11,600

 

(3)%

 

(3)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Used vehicle sales (UVS)

 

 

 

 

 

 

 

 

 

 

 

 

End of period fleet count

 

7,000

 

3,900

 

7,000

 

3,900

 

79%

 

79%

Used vehicles sold

 

5,500

 

4,000

 

10,600

 

7,600

 

38%

 

39%

UVS pricing change (5)

 

 

 

 

 

 

 

 

 

 

 

 

Tractors

 

(41)%

 

91%

 

(38)%

 

117%

 

 

 

 

Trucks

 

(34)%

 

81%

 

(26)%

 

94%

 

 

 

 

____________________

(1) Active fleet count is 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 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) Represents percentage change 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 or each business segment (FMS, SCS and DTS) excluding any (1) fuel and (2) subcontracted transportation. 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.

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) other items impacting comparability (as further described below). 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, net, 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 adjusted net earnings and adjusted 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 our 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

 

OPERATING REVENUE RECONCILIATION

 

 

Three months ended June 30,

 

Six months ended June 30,

(In millions)

 

2023

 

2022

 

2023

 

2022

Total revenue

 

$

2,884

 

 

3,034

 

 

$

5,836

 

 

5,888

 

Subcontracted transportation and fuel

 

 

(558

)

 

(727

)

 

 

(1,164

)

 

(1,365

)

Operating revenue (1)

 

$

2,326

 

 

2,307

 

 

$

4,672

 

 

4,523

 

TOTAL CASH GENERATED / FREE CASH FLOW RECONCILIATION

 

 

Six months ended June 30,

(In millions)

 

2023

 

2022

Net cash provided by operating activities from continuing operations

 

$

1,221

 

 

1,103

 

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

 

 

447

 

 

636

 

Other (2)

 

 

 

 

7

 

Total cash generated (1)

 

 

1,668

 

 

1,746

 

Purchases of property and revenue earning equipment (2)

 

 

(1,652

)

 

(1,195

)

Free cash flow (1)

 

$

16

 

 

551

 

____________________

(1) Non-GAAP financial measure.

(2) Included in cash flows from investing activities

Note: Amounts may not be additive due to rounding.

COMPARABLE EARNINGS RECONCILIATION

 

 

Three months ended June 30,

 

Six months ended June 30,

(In millions)

 

2023

 

2022

 

2023

 

2022

Earnings (loss) from continuing operations

 

$

(18

)

 

240

 

 

$

122

 

 

416

 

Non-operating pension costs, net

 

 

8

 

 

1

 

 

 

16

 

 

3

 

FMS U.K. exit (1)

 

 

(5

)

 

(32

)

 

 

(36

)

 

(31

)

Currency translation adjustment loss

 

 

183

 

 

 

 

 

183

 

 

 

Other, net

 

 

1

 

 

1

 

 

 

 

 

5

 

Tax adjustments, net (2)

 

 

1

 

 

16

 

 

 

18

 

 

21

 

Comparable earnings from continuing operations (3), (4)

 

$

170

 

 

226

 

 

$

303

 

 

414

 

 

 

 

 

 

 

 

 

 

Tax rate on continuing operations

 

140.8%

 

29.0%

 

50.0%

 

29.5%

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

 

(112.2)%

 

(2.2)%

 

(22.7)%

 

(2.3)%

Comparable tax rate on continuing operations (4)

 

28.6%

 

26.8%

 

27.3%

 

27.2%

____________________

(1) Primarily includes gains on sales of properties and net commercial claims proceeds.

(2) Adjustments include the global tax impacts related to the FMS U.K. exit in 2023 and 2022.

(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.

(4) Non-GAAP financial measure.

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

 

ADJUSTED RETURN ON EQUITY RECONCILIATION

 

 

Twelve months ended June 30,

(In millions)

 

2023

 

2022

Net earnings

 

$

574

 

 

734

 

Other items impacting comparability (1)

 

 

96

 

 

(18

)

Income taxes (2)

 

 

302

 

 

272

 

Adjusted earnings before income taxes

 

 

972

 

 

988

 

Adjusted income taxes (3)

 

 

(264

)

 

(251

)

Adjusted net earnings

 

$

708

 

 

737

 

 

 

 

 

 

Average shareholders' equity

 

$

2,976

 

 

2,642

 

Average adjustments to shareholders' equity (4)

 

 

(19

)

 

(7

)

Adjusted average shareholders' equity

 

$

2,957

 

 

2,635

 

 

 

 

 

 

Adjusted return on equity (5)

 

24%

 

28%

____________________

(1) Refer to the table below for a composition of other items impacting comparability, net for the 12-month trailing 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,

(In millions)

 

2023

 

2022

FMS U.K. exit

 

$

(87

)

 

(31

)

Currency translation adjustment loss

 

 

188

 

 

 

Other, net

 

 

(5

)

 

13

 

Other items impacting comparability

 

$

96

 

 

(18

)

____________________

 

 

 

 

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

 

COMPARABLE EARNINGS BEFORE INCOME TAXES / COMPARABLE EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION RECONCILIATION

 

 

 

Three months ended June 30,

 

Six months ended June 30,

(In millions)

 

2023

 

2022

 

2023

 

2022

Net earnings (loss)

 

$

(18

)

 

239

 

 

$

121

 

 

415

 

Loss from discontinued operations, net of tax

 

 

 

 

1

 

 

 

1

 

 

1

 

Provision for income taxes

 

 

62

 

 

98

 

 

 

123

 

 

174

 

Earnings before income taxes from continuing operations

 

 

44

 

 

338

 

 

 

245

 

 

590

 

Non-operating pension costs, net

 

 

10

 

 

2

 

 

 

20

 

 

5

 

FMS UK exit (1)

 

 

(5

)

 

(32

)

 

 

(36

)

 

(31

)

Currency translation adjustment loss

 

 

188

 

 

 

 

 

188

 

 

 

Other, net

 

 

 

 

 

 

 

(1

)

 

4

 

Comparable earnings before income taxes (2)

 

 

237

 

 

308

 

 

 

416

 

 

568

 

Interest expense

 

 

72

 

 

56

 

 

 

137

 

 

108

 

Depreciation

 

 

412

 

 

424

 

 

 

857

 

 

854

 

Used vehicle sales, net

 

 

(55

)

 

(109

)

 

 

(125

)

 

(214

)

Amortization

 

 

8

 

 

9

 

 

 

17

 

 

19

 

Comparable EBITDA (2)

 

$

674

 

 

688

 

 

$

1,302

 

 

1,335

____________________

(1) Primarily includes gains on sales of properties and net commercial claims proceeds.

(2) 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

 

OPERATING REVENUE GROWTH FORECAST RECONCILIATION

(In millions)

 

Twelve months ended December 31,

 

 

2023

 

2022

 

Change

Total revenue

 

$

11,800

 

 

12,011

 

 

(2)%

Subcontracted transportation and fuel

 

 

(2,300

)

 

(2,731

)

 

(16)%

Operating revenue (1)

 

$

9,500

 

 

9,280

 

 

2%

COMPARABLE EARNINGS PER SHARE FORECAST RECONCILIATION

 

 

 

 

 

(In millions, except per share amounts)

 

Third Quarter 2023

 

Full Year 2023

EPS from continuing operations

 

$2.82 - $3.07

 

$7.95 - $8.45

Non-operating pension costs

 

0.17

 

 

0.67

FMS U.K. exit, net of tax

 

0.01

 

 

(0.38)

Currency translation adjustment loss

 

 

 

3.96

Comparable EPS from continuing operations forecast (1)

 

$3.00 - $3.25

 

$12.20 - $12.70

 

TOTAL CASH GENERATED / FREE CASH FLOW FORECAST RECONCILIATION

(In millions)

 

2023 Forecast

Net cash provided by operating activities from continuing operations

 

$

2,500

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

 

 

800

Total cash generated (1)

 

 

3,300

 

 

 

Purchases of property and revenue earning equipment (2)

 

 

(3,200)

Free cash flow (1)

 

$

100

____________________

(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

 

ADJUSTED RETURN ON EQUITY FORECAST RECONCILIATION

(In millions)

 

2023 Forecast

Net earnings

 

$

380

Other items impacting comparability (1)

 

 

155

Income taxes (2)

 

 

225

Adjusted earnings before income taxes

 

 

760

Adjusted income taxes (3)

 

 

(210)

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

 

$

550

 

 

 

Average shareholders' equity

 

$

3,065

Adjustment to equity (5)

 

 

(20)

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

 

$

3,045

 

 

 

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

 

18%

____________________

(1) Forecasted other items impacting comparability includes FMS U.K. exit of $(33) million and CTA release from the FMS U.K. exit of $188 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.

 

Contacts

Media:

Amy Federman

(305) 500-4989

Investor Relations:

Calene Candela

(305) 500-4053

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