Balanced Growth Strategy Delivers Strong
Returns in Challenging Freight Environment
Fourth Quarter 2023 Highlights
- GAAP EPS from continuing operations of $2.74 compared to $4.06
in prior year
- Comparable EPS (non-GAAP) from continuing operations of $2.95,
as compared to $3.89 in prior year, reflecting weaker market
conditions in used vehicle sales and rental, partially offset by
improved Supply Chain Solutions (SCS) results
- Total revenue of $3.0 billion compared to $3.1 billion in prior
year
- Operating revenue (non-GAAP) of $2.4 billion, up 2%
Full-Year 2023 Highlights
- GAAP EPS from continuing operations of $8.73, which includes a
non-cash UK exit currency translation charge of $3.93, compared to
$16.96 in prior year
- Comparable EPS (non-GAAP) from continuing operations of $12.95
compared to $16.37 in prior year, reflecting weaker used vehicle
sales and rental market conditions, partially offset by improved
Dedicated Transportation Solutions (DTS) and SCS results
- Adjusted return on equity (ROE) of 19%, compared to 29% in
prior year
- Total revenue of $11.8 billion compared to $12.0 billion in
prior year
- Operating revenue (non-GAAP) of $9.5 billion, up 2%
- Full-year 2023 net cash provided by operating activities from
continuing operations of $2.4 billion and free cash flow (non-GAAP)
of negative $54 million
Full-Year 2024 Outlook
- ROE of 15% - 16.5%
- Comparable EPS (non-GAAP) of $11.50 - $12.50
- Operating revenue (non-GAAP) expected to increase by
approximately 13%, including recent acquisitions
- Net cash provided by operating activities from continuing
operations of $2.4 billion and free cash flow (non-GAAP) of
negative $275 - $375 million
Ryder System, Inc. (NYSE: R), a leader in supply chain,
dedicated transportation, and fleet management solutions, reported
results for the three months ended December 31 as follows:
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Ryder is a leader in supply chain,
dedicated transportation, and fleet management solutions. (Photo:
Business Wire)
(In millions, except EPS)
Earnings Before
Taxes
Earnings
Diluted Earnings
Per Share
2023
2022
2023
2022
2023
2022
Continuing operations (GAAP)
$
160
292
$
124
200
$
2.74
4.06
Comparable (non-GAAP)
$
172
267
$
134
192
$
2.95
3.89
Total and operating revenue for the three months ended December
31 were as follows:
(In millions)
Total Revenue
Operating Revenue
(non-GAAP)
2023
2022
Change
2023
2022
Change
Total
$
3,023
3,088
(2
)%
$
2,447
2,410
2
%
Fleet Management Solutions (FMS)
$
1,481
1,595
(7
)%
$
1,271
1,321
(4
)%
Supply Chain Solutions (SCS)
$
1,301
1,251
4
%
$
972
883
10
%
Dedicated Transportation Solutions
(DTS)
$
443
456
(3
)%
$
324
320
1
%
CEO Comment
"Ryder delivered strong results in the fourth quarter and
throughout 2023 reflecting continued execution of our balanced
growth strategy," says Ryder Chairman and CEO Robert Sanchez.
"While the freight environment remained challenging, the
transformative actions we’ve taken to de-risk the model, enhance
returns, and drive profitable growth have meaningfully improved
business model resilience. Our ability to generate ROE of 19%
against the backdrop of weakening market conditions in used vehicle
sales and rental demonstrates the effectiveness of these
changes.
"As part of our balanced growth strategy, we continue to focus
on growing our contractual lease, dedicated, and supply chain
businesses at targeted returns. We're excited about our acquisition
of Cardinal Logistics earlier this month, which will increase scale
and network density, driving operating efficiencies and enabling us
to provide even greater value to our newly combined customer base.
We are pleased to be a leader in the attractive customized
solutions segment of dedicated transportation and remain confident
in the long-term secular growth trends for this business.
"Our enhanced asset management playbook continued to generate
improved returns in FMS over prior cycles. Throughout 2023, we
maintained rental utilization at target levels by actively
redeploying vehicles into longer-term lease, dedicated, and supply
chain applications. In used vehicle sales, we continued to leverage
our expanded retail sales capacity while also using wholesale
channels in order to optimize sales proceeds and maintain inventory
levels within our target range.
"We've delivered strong returns throughout 2023. These results
and our strong balance sheet provided us with ample capacity for
organic growth, strategic acquisitions, and returning capital to
shareholders through share repurchases and dividends. We are
confident that the transformative changes we've made to the
business will continue to drive outperformance versus prior cycles
while positioning us well for the cycle upturn."
Fourth Quarter 2023 Segment Review
Fleet Management Solutions: Strong Earnings Despite Weaker
Used Vehicle Sales and Rental Market Conditions
(In millions)
4Q23
4Q22
Change
Total Revenue
$
1,481
1,595
(7)%
Operating Revenue (1)
$
1,271
1,321
(4)%
Earnings Before Tax (EBT)
$
134
256
(48)%
EBT as a % of total revenue
9.1%
16.0%
(690) bps
EBT as a % of operating revenue (1)
10.6%
19.4%
(880) bps
Full-year EBT as % of total and operating
revenue
FY23
FY22
Change
EBT as a % of total revenue
11.2%
16.7%
(550) bps
EBT as a % of operating revenue (1)
13.2%
20.3%
(710) bps
(1) Non-GAAP financial measure excluding
fuel service revenue.
- FMS total revenue and operating revenue decreased 7% and
4%, respectively
- Total revenue reflects lower fuel costs passed through to
customers and lower operating revenue
- Operating revenue reflects lower rental demand, partially
offset by higher ChoiceLease revenue
- FMS EBT of $134 million
- Reflects lower used vehicle sales and rental results
- Lower used vehicle gains due to a 33% and 39% decrease in used
truck and tractor pricing, respectively, partially offset by higher
volumes; sequentially from third quarter of 2023, used truck and
tractor pricing decreased 11% and 12%, respectively
- Rental power-fleet utilization was 75%, down from 82% in prior
year on a 11% smaller average power fleet
- FMS EBT as a percentage of FMS operating revenue is
within the company's long-term target of low double digits for the
fourth quarter and at the high end of the target for full-year
2023
Supply Chain Solutions: Higher Earnings Reflect Operating
Revenue Growth In Automotive and Industrial Verticals
(In millions)
4Q23
4Q22
Change
Total Revenue
$
1,301
1,251
4%
Operating Revenue (1)
$
972
883
10%
Earnings Before Tax (EBT)
$
57
42
35%
EBT as a % of total revenue
4.4%
3.4%
100 bps
EBT as a % of operating revenue (1)
5.8%
4.8%
100 bps
Full-year EBT as % of total and operating
revenue
FY23
FY22
Change
EBT as a % of total revenue
4.7%
4.6%
10 bps
EBT as a % of operating revenue (1)
6.4%
6.7%
(30) bps
(1) Non-GAAP financial measure excluding
fuel and subcontracted transportation.
- SCS total revenue and operating revenue increased 4% and
10%, respectively
- Total revenue reflects higher operating revenue, partially
offset by lower subcontracted transportation and fuel costs passed
through to customers
- Increase in operating revenue driven by organic growth from new
business, increased pricing, and higher volumes, as well as the
acquisition of Impact Fulfillment Services, LLC
- SCS EBT grew 35%
- Increase due to higher operating revenue in the automotive and
industrial verticals
- Year-over-year comparisons in the omnichannel retail vertical
benefited from a prior year $20 million asset impairment charge,
which was offset by lower volumes
- SCS EBT as a percentage of SCS operating revenue is
below the company's long-term target of high single digits for the
fourth quarter and full-year 2023
Dedicated Transportation Solutions: Strong Earnings Results
Despite Weak Freight Environment
(In millions)
4Q23
4Q22
Change
Total Revenue
$
443
456
(3)%
Operating Revenue (1)
$
324
320
1%
Earnings Before Tax (EBT)
$
31
31
(1)%
EBT as a % of total revenue
6.9%
6.8%
10 bps
EBT as a % of operating revenue (1)
9.4%
9.7%
(30) bps
Full-year EBT as % of total and operating
revenue
FY23
FY22
Change
EBT as a % of total revenue
6.8%
5.8%
100 bps
EBT as a % of operating revenue (1)
9.3%
8.3%
100 bps
(1) Non-GAAP financial measure excluding
fuel and subcontracted transportation.
- DTS total revenue decreased 3% and operating
revenue grew 1%
- Total revenue reflects lower fuel costs and subcontracted
transportation passed through to customers, partially offset by
higher operating revenue
- Operating revenue increased due to inflationary cost
recovery
- DTS EBT remained strong and generally in line with prior
year
- DTS EBT as a percentage of DTS operating revenue is at
the high end of the company's long-term target of high single
digits for the fourth quarter and full-year 2023
Corporate Financial Information
Unallocated Central Support Services (CSS)
Unallocated CSS costs declined to $17 million from $21 million
in the prior year, primarily due to lower professional fees and
incentive-based compensation costs.
Income Taxes
Our effective income tax rate from continuing operations was
22.5% as compared to 31.4% in the prior year. Our comparable
effective income tax rate (a non-GAAP measure) from continuing
operations was 22.1%, as compared to 28.2% in the prior year. The
decreases in the fourth quarter 2023 effective income tax rates
primarily reflect changes in the geographic mix of earnings from a
tax perspective. The prior year effective income tax rate was
impacted by higher U.S. tax on foreign earnings related to exit
activities of our UK FMS business.
Capital Expenditures, Cash Flow, and Leverage
Full-year capital expenditures increased to $3.3 billion in
2023, compared to $2.7 billion in 2022, reflecting higher
investments in the lease fleet and timing of OEM deliveries,
partially offset by lower investments in commercial rental.
Full-year net cash provided by operating activities from
continuing operations was $2.4 billion, consistent with the prior
year. Free cash flow (non-GAAP) of negative $54 million, compared
to $921 million in 2022, primarily reflects an increase in capital
expenditures and prior-year proceeds of approximately $400 million
from the FMS UK exit.
Debt-to-equity as of December 31, 2023 was 232%, compared to
216% at year-end 2022, and remains below the company's long-term
target of 250% to 300%.
Outlook
"We expect our transformed business model to continue to deliver
strong returns," says Ryder Chief Financial Officer John Diez. "In
2024, we expect to generate ROE in the mid-teens, in line with our
target during trough used vehicle sales and rental market
conditions. Historically the first quarter has been our lowest
earnings quarter, and in 2024 we expect that it will also represent
the most challenging year over year comparison because of where we
are in the cycle. For 2024, our contractual lease, dedicated, and
supply chain businesses are expected to deliver earnings growth
while all our businesses remain well positioned to benefit from the
cycle upturn."
Full
Year 2024
Total Revenue Growth
~13%
Operating Revenue Growth (non-GAAP)
~13%
FY24 GAAP EPS
$10.70 - $11.70
FY24 Comparable EPS (non-GAAP)
$11.50 - $12.50
Adjusted ROE (1)
15% - 16.5%
Net Cash from Operating Activities from
Continuing Operations
~$2.4B
Free Cash Flow (non-GAAP)
$(275) - $(375)M
Capital Expenditures
~$3.3B
Debt-to-Equity
~240%
First
Quarter 2024
1Q24 GAAP EPS
$1.28 - $1.53
1Q24 Comparable EPS (non-GAAP)
$1.55 - $1.80
————————————
(1) The non-GAAP elements of this
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
Reconciliations at the end of this release.
Supplemental Company Information
Fourth Quarter Net Earnings
(In millions, except EPS)
Earnings
Diluted EPS
2023
2022
2023
2022
Earnings from continuing operations
$
124
200
$
2.74
4.06
Discontinued operations
—
6
(0.01
)
0.12
Net earnings
$
124
206
$
2.72
4.18
Full-Year Operating Results
For the year ended December
31,
(In millions, except EPS)
2023
2022
Change
Total revenue
$
11,783
12,011
(2
)%
Operating revenue (non-GAAP)
$
9,497
9,280
2
%
Earnings from continuing operations
$
406
863
(53
)%
Comparable earnings from continuing
operations (non-GAAP)
$
602
833
(28
)%
Net earnings
$
406
867
(53
)%
Earnings per common share (EPS) -
Diluted
Continuing operations
$
8.73
16.96
(49
)%
Comparable (non-GAAP)
$
12.95
16.37
(21
)%
Net earnings
$
8.73
17.04
(49
)%
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 capabilities 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;
our outlook; our expectations regarding market trends and economic
environment, such as rental demand, economic growth, challenging
freight environment, weakening used vehicle sales and rental, and
declining volumes in our omnichannel retail vertical; our
expectations regarding the freight cycle, including timing, and the
impact of the freight cycle on our businesses; our expectations
regarding total and operating revenue, earnings per share,
comparable earnings per share, adjusted ROE, earnings before income
tax, net cash from operating activities from continuing operations,
debt-to-equity, capital expenditures, operating cash flow, free
cash flow, and the causes of change; our ability to execute our
balanced growth strategy; the impact of inflationary pressures,
such as inflationary cost recovery; our expectations regarding
commercial rental demand and utilization and used vehicle sales
volume and pricing; our expectations regarding long-term profitable
growth and secular growth trends; our expectations with respect to
our actions to increase returns and create long-term value; our
expectations regarding used vehicle inventory and fleet size; our
ability to outperform prior cycles; our ability to support organic
growth, including growing our contractual lease, dedicated, and
supply chain businesses at targeted returns; our expectations
regarding strategic investments and acquisitions, including the
acquisitions of Impact Fulfillment Services and Cardinal Logistics;
and our expectations regarding our ability to return capital to
shareholders, including through share repurchases and dividends.
Our forward-looking statements also include our estimates of the
impact of residual value estimates on earnings and depreciation
expense that is based in part 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; the ongoing supply chain and labor challenges and
vehicle production constraints, including original equipment
manufacturer delays; 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, 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,
for example, economic conditions, business interruptions,
expenditures, labor disputes, and severe weather or other 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 supply chain disruptions; higher than expected bad debt
reserves or write-offs; decrease in credit ratings; increased debt
costs; adequacy of accounting estimates; our ability to effectively
and efficiently integrate acquisitions into our business; 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, including our
depreciation policy; unanticipated changes in fuel and alternative
energy prices; unanticipated currency exchange rate fluctuations;
fluctuations 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 most comparable GAAP
measure to the non-GAAP financial measure and the reasons why
management believes the measure is important 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 Form 8-K filed
with the SEC as of the date of this release, which are available at
https://investors.ryder.com.
CONFERENCE CALL AND WEBCAST INFORMATION
Ryder’s earnings conference call and webcast is scheduled for
February 14, 2024 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
CONSOLIDATED STATEMENTS OF
EARNINGS - UNAUDITED
(In millions, except per share
amounts)
Three months ended December
31,
For the year ended December
31,
2023
2022
2023
2022
Lease & related maintenance and rental
revenues
$
996
1,055
$
3,937
4,174
Services revenue
1,898
1,860
7,297
7,118
Fuel services revenue
129
173
549
719
Total revenues
3,023
3,088
11,783
12,011
Cost of lease & related maintenance
and rental
683
696
2,684
2,774
Cost of services
1,628
1,630
6,266
6,153
Cost of fuel services
122
164
534
694
Selling, general and administrative
expenses
368
362
1,421
1,415
Non-operating pension costs, net
10
3
40
11
Used vehicle sales, net
(22
)
(94
)
(196
)
(450
)
Interest expense
84
63
296
228
Miscellaneous income, net
(11
)
(9
)
(47
)
(32
)
Currency translation adjustment loss
—
—
188
—
Restructuring and other items, net
1
(19
)
(21
)
2
2,863
2,796
11,165
10,795
Earnings from continuing operations before
income taxes
160
292
618
1,216
Provision for income taxes
36
92
212
353
Earnings from continuing operations
124
200
406
863
Earnings from discontinued operations, net
of tax
—
6
—
4
Net earnings
$
124
206
$
406
867
Earnings (loss) per common share —
Diluted
Continuing operations
$
2.74
4.06
$
8.73
16.96
Discontinued operations
(0.01
)
0.12
(0.01
)
0.08
Net earnings
$
2.72
4.18
$
8.73
17.04
Weighted average common shares outstanding
— Diluted
45.4
49.3
46.5
50.9
Diluted EPS from continuing operations
$
2.74
4.06
$
8.73
16.96
Non-operating pension costs, net
0.16
0.04
0.68
0.14
FMS U.K. exit
—
(0.49
)
(0.68
)
(1.61
)
Currency translation adjustment loss
—
—
3.93
—
Other, net
0.03
(0.07
)
0.01
(0.02
)
Tax adjustments, net
0.02
0.35
0.28
0.90
Comparable EPS from continuing operations
(1)
$
2.95
3.89
$
12.95
16.37
————————————
(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)
December 31,
2023
December 31, 2022
Assets:
Cash and cash equivalents
$
204
267
Other current assets
2,061
1,933
Revenue earning equipment, net
8,892
8,190
Operating property and equipment, net
1,217
1,148
Other assets
3,404
2,857
$
15,778
14,395
Liabilities and shareholders' equity:
Current liabilities
$
2,066
1,967
Total debt (including current portion)
7,114
6,352
Other non-current liabilities (including
deferred income taxes)
3,529
3,139
Shareholders' equity
3,069
2,937
$
15,778
14,395
SELECTED KEY RATIOS AND
METRICS
December 31,
2023
December 31, 2022
Debt to equity
232%
216%
Three months ended December
31,
For the year ended December
31,
(In millions)
2023
2022
2023
2022
Comparable EBITDA (1)
$
682
691
$
2,665
2,722
Effective interest rate
4.9
%
4.0
%
4.4
%
3.5
%
For the year ended December
31,
(In millions)
2023
2022
Net cash provided by operating activities
from continuing operations
$
2,353
2,310
Free cash flow (1)
(54
)
921
Capital expenditures paid
3,234
2,631
Gross capital expenditures
3,279
2,652
Twelve months ended December
31,
2023
2022
Adjusted ROE (2)
19%
29%
————————————
(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 December
31,
For the year ended December
31,
(In millions)
2023
2022
Change
2023
2022
Change
Total Revenue:
Fleet Management Solutions:
ChoiceLease
$
825
802
3%
$
3,181
3,101
3%
Commercial rental
279
347
(20)%
1,178
1,338
(12)%
SelectCare and other
167
164
2%
694
624
11%
FMS Europe
—
8
(100)%
—
150
(100)%
Fuel services revenue
210
274
(23)%
877
1,114
(21)%
Fleet Management Solutions
1,481
1,595
(7)%
5,930
6,327
(6)%
Supply Chain Solutions
1,301
1,251
4%
4,875
4,720
3%
Dedicated Transportation Solutions
443
456
(3)%
1,785
1,786
—%
Eliminations
(202
)
(214
)
6%
(807
)
(822
)
2%
Total revenue
$
3,023
3,088
(2)%
$
11,783
12,011
(2)%
Operating Revenue: (1)
Fleet Management Solutions
$
1,271
1,321
(4)%
$
5,053
5,213
(3)%
Supply Chain Solutions
972
883
10%
3,625
3,254
11%
Dedicated Transportation Solutions
324
320
1%
1,298
1,239
5%
Eliminations
(120
)
(114
)
(7)%
(479
)
(426
)
(12)%
Operating revenue
$
2,447
2,410
2%
$
9,497
9,280
2%
Business Segment Earnings:
Earnings from continuing operations before
income taxes:
Fleet Management Solutions
$
134
256
(48)%
$
665
1,057
(37)%
Supply Chain Solutions
57
42
35%
231
218
6%
Dedicated Transportation Solutions
31
31
(1)%
121
103
18%
Eliminations
(23
)
(31
)
26%
(95
)
(114
)
17%
199
298
(33)%
922
1,264
(27)%
Unallocated Central Support Services
(17
)
(21
)
(18)%
(72
)
(83
)
(13)%
Intangible amortization expense
(10
)
(10
)
(5)%
(35
)
(37
)
4%
Non-operating pension costs, net
(10
)
(3
)
NM
(40
)
(11
)
NM
Other items impacting comparability,
net
(2
)
28
NM
(157
)
83
NM
Earnings from continuing operations before
income taxes
160
292
(45)%
618
1,216
(49)%
Provision for income taxes
36
92
(61)%
212
353
(40)%
Earnings from continuing operations
$
124
200
(38)%
$
406
863
(53)%
————————————
(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 December
31,
For the year ended December
31,
(In millions)
2023
2022
Change
2023
2022
Change
Fleet Management Solutions
FMS total revenue
$
1,481
1,595
(7)%
$
5,930
6,327
(6)
Fuel services revenue (1)
(210
)
(274
)
(23)%
(877
)
(1,114
)
(21)%
FMS operating revenue (2)
$
1,271
1,321
(4)%
$
5,053
5,213
(3)
Segment earnings before income taxes
$
134
256
(48)%
$
665
1,057
(37)%
FMS earnings before income taxes as % of
FMS total revenue
9.1
%
16.0
%
11.2
%
16.7
%
FMS earnings before income taxes as % of
FMS operating revenue (2)
10.6
%
19.4
%
13.2
%
20.3
%
Three months ended December
31,
For the year ended December
31,
2023
2022
Change
2023
2022
Change
Supply Chain Solutions
SCS total revenue
$
1,301
1,251
4%
$
4,875
4,720
3%
Subcontracted transportation and fuel
(328
)
(368
)
(11)%
(1,250
)
(1,466
)
(15)%
SCS operating revenue (2)
$
972
883
10%
$
3,625
3,254
11%
Segment earnings before income taxes
$
57
42
35%
$
231
218
6%
SCS earnings before income taxes as % of
SCS total revenue
4.4
%
3.4
%
4.7
%
4.6
%
SCS earnings before income taxes as % of
SCS operating revenue (2)
5.8
%
4.8
%
6.4
%
6.7
%
Three months ended December
31,
For the year ended December
31,
2023
2022
Change
2023
2022
Change
Dedicated Transportation
Solutions
DTS total revenue
$
443
456
(3)%
$
1,785
1,786
—%
Subcontracted transportation and fuel
(119
)
(136
)
(13)%
(487
)
(547
)
(11)%
DTS operating revenue (2)
$
324
320
1%
$
1,298
1,239
5%
Segment earnings before income taxes
$
31
31
(1)%
$
121
103
18%
DTS earnings before income taxes as % of
DTS total revenue
6.9
%
6.8
%
6.8
%
5.8
%
DTS earnings before income taxes as % of
DTS operating revenue (2)
9.4
%
9.7
%
9.3
%
8.3
%
————————————
(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 -
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 December
31,
For the year ended December
31,
2023/2022
2023
2022
2023
2022
Three Months
Twelve Months
ChoiceLease
Average fleet count
139,000
134,500
137,800
134,000
3%
3%
End of period fleet count
138,900
134,600
138,900
134,600
3%
3%
Average active fleet count (1)
130,300
128,800
129,800
128,700
1%
1%
End of period active fleet count (1)
129,800
128,400
129,800
128,400
1%
1%
Commercial rental
Average fleet count
37,200
41,800
39,300
40,800
(11)%
(4)%
End of period fleet count
36,400
41,800
36,400
41,800
(13)%
(13)%
Rental utilization - power units (2)
75
%
82
%
75
%
83
%
(700)bps
(800)bps
Rental rate change - % (3)
1
%
6
%
2
%
7
%
Customer vehicles under SelectCare
contracts
Average fleet count
51,800
55,300
52,700
54,800
(6)%
(4)%
End of period fleet count
51,600
54,600
51,600
54,600
(5)%
(5)%
Customer vehicles under SCS
End of period fleet count (4)
13,800
13,100
13,800
13,100
5%
5%
DTS
End of period fleet count (4)
10,900
11,400
10,900
11,400
(4)%
(4)%
Used vehicle sales (UVS)
End of period fleet count
8,000
4,100
8,000
4,100
95%
95%
Used vehicles sold
7,200
4,800
24,200
17,400
50%
39%
UVS pricing change (5)
Tractors
(39
)%
(6
)
(37
)%
43
%
Trucks
(33
)%
4
%
(28
)%
51
%
————————————
(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 use operating revenue 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 non-GAAP 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 and vary from period to period.
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 investors and other interested
parties to measure financial performance and our ability to service
debt and meet our payment obligations. We believe that the
inclusion of comparable EBITDA also provides consistency in
financial reporting and aids investors in performing meaningful
comparisons of past, present and future operating results. Our
presentation of comparable EBITDA may not be comparable to
similarly-titled measures used by other companies.
Comparable EBITDA should not be considered
a substitute for, or superior to, the measures of financial
performance determined in accordance with GAAP.
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 December
31,
For the year ended December
31,
(In millions)
2023
2022
2023
2022
Total revenue
$
3,023
3,088
$
11,783
12,011
Subcontracted transportation and fuel
(576
)
(678
)
(2,286
)
(2,731
)
Operating revenue (1)
$
2,447
2,410
$
9,497
9,280
TOTAL CASH
GENERATED / FREE CASH FLOW RECONCILIATION
For the year ended December
31,
(In millions)
2023
2022
Net cash provided by operating activities
from continuing operations
$
2,353
2,310
Proceeds from sales (primarily revenue
earning equipment) (2)
827
1,235
Other (2)
—
7
Total cash generated (1)
3,180
3,552
Purchases of property and revenue earning
equipment (2)
(3,234
)
(2,631
)
Free cash flow (1)
$
(54
)
921
————————————
(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 December
31,
For the year ended December
31,
(In millions)
2023
2022
2023
2022
Earnings from continuing operations
$
124
200
$
406
863
Non-operating pension costs, net
7
2
31
7
FMS U.K. exit (1)
—
(24
)
(32
)
(82
)
Currency translation adjustment loss
—
—
183
—
Other, net
2
(3
)
1
(1
)
Tax adjustments, net (2)
1
17
13
46
Comparable earnings from continuing
operations (3), (4)
$
134
192
$
602
833
Tax rate on continuing operations
22.5%
31.4%
34.3%
29.1%
Tax adjustments and income tax effects of
non-GAAP adjustments (3)
(0.4)%
(3.2)%
(8.2)%
(1.9)%
Comparable tax rate on continuing
operations (4)
22.1%
28.2%
26.1%
27.2%
————————————
(1) Primarily includes gains on sales of
properties and net commercial claims proceeds.
(2) In 2023 and 2022, adjustments include
the global tax impacts related to the FMS U.K. business exit. In
2022, adjustments also include the tax impact of state rate law
changes.
(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 December
31,
(In millions)
2023
2022
Net earnings
$
406
867
Other items impacting comparability
(1)
157
(83
)
Income taxes (2)
212
353
Adjusted earnings before income taxes
775
1,137
Adjusted income taxes (3)
(204
)
(307
)
Adjusted net earnings
$
571
830
Average shareholders' equity
$
3,041
2,845
Average adjustments to shareholders'
equity (4)
(19
)
(12
)
Adjusted average shareholders' equity
$
3,022
2,833
Adjusted return on equity (5)
19%
29%
————————————
(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 December
31,
(In millions)
2023
2022
FMS U.K. exit
$
(32
)
(82
)
Currency translation adjustment loss
188
—
Other, net
1
(1
)
Other items impacting comparability
$
157
(83
)
————————————
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 December
31,
For the year ended December
31,
(In millions)
2023
2022
2023
2022
Net earnings
$
124
206
$
406
867
(Earnings) loss from discontinued
operations, net of tax
—
(6
)
—
(4
)
Provision for income taxes
36
92
212
353
EBT
160
292
618
1,216
Non-operating pension costs, net
10
3
40
11
FMS U.K. exit (1)
—
(24
)
(32
)
(82
)
Currency translation adjustment loss
(1)
—
—
188
—
Other, net (1)
2
(4
)
1
(1
)
Comparable EBT
172
267
815
1,144
Interest expense
84
63
296
228
Depreciation
438
438
1,712
1,713
Used vehicle sales, net (2)
(22
)
(87
)
(193
)
(400
)
Amortization
10
10
35
37
Comparable EBITDA
$
682
691
$
2,665
2,722
————————————
(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,
2024
2023
Change
Total revenue
$
13,300
11,783
13%
Subcontracted transportation and fuel
(2,600
)
(2,286
)
14%
Operating revenue (1)
$
10,700
9,497
13%
COMPARABLE
EARNINGS PER SHARE FORECAST RECONCILIATION
(In millions, except per share
amounts)
First Quarter 2024
Full Year 2024
EPS from continuing operations
$1.28 - $1.53
$10.70 - $11.70
Non-operating pension costs
0.18
0.74
Restructuring and other, net
0.09
0.06
Comparable EPS from continuing operations
forecast (1)
$1.55 - $1.80
$11.50 - $12.50
TOTAL CASH
GENERATED / FREE CASH FLOW FORECAST RECONCILIATION
(In millions)
2024 Forecast
Net cash provided by operating activities
from continuing operations
$
2,400
Proceeds from sales (primarily revenue
earning equipment) (2)
550
Total cash generated (1)
2,950
Purchases of property and revenue earning
equipment (2)
(3,725
)
Free cash flow (1)
$
(325
)
————————————
(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)
2024 Forecast
Net earnings
$
500
Other items impacting comparability
(1)
5
Income taxes (2)
190
Adjusted earnings before income taxes
695
Adjusted income taxes (3)
(195
)
Adjusted net earnings for ROE (numerator)
(4) [A]
$
500
Average shareholders' equity
$
3,160
Adjustment to equity (5)
—
Adjusted average total equity
(denominator) (4) [B]
$
3,160
Adjusted return on equity (4) [A]/[B]
16%
————————————
(1) Forecasted other items impacting
comparability includes other, net of $5 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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Media: Amy Federman afederman@ryder.com
Investor Relations: Calene Candela ccandela@ryder.com
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