Delivers Solid Q1 Results; Raises Full-Year
2024 Forecast
First Quarter 2024 Highlights
- GAAP EPS from continuing operations of $1.89 compared to $2.95
in prior year
- Comparable EPS (non-GAAP) from continuing operations of $2.14,
as compared to $2.81 in prior year, reflecting weaker market
conditions in used vehicle sales and rental, partially offset by
higher Supply Chain Solutions (SCS) and ChoiceLease results
- Total revenue of $3.1 billion compared to $3.0 billion in prior
year
- Operating revenue (non-GAAP) of $2.5 billion, up 6%, reflecting
recent acquisitions and contractual revenue growth, partially
offset by lower commercial rental revenue in Fleet Management
Solutions (FMS)
Full-Year 2024 Forecast
- ROE of 15.5% - 16.5%
- Comparable EPS (non-GAAP) of $11.75 - $12.50
- Operating revenue (non-GAAP) expected to increase by
approximately 10%
- Net cash provided by operating activities from continuing
operations of $2.4 billion and free cash flow (non-GAAP) of
negative $175 - $275 million
Ryder System, Inc. (NYSE: R), a leader in supply chain,
dedicated transportation, and fleet management solutions, reported
results for the three months ended March 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
2024
2023
2024
2023
2024
2023
Continuing operations (GAAP)
$
114
201
$
85
140
$
1.89
2.95
Comparable (non-GAAP)
$
129
179
$
96
133
$
2.14
2.81
Total and operating revenue for the three months ended March 31
were as follows:
(In millions)
Total Revenue
Operating Revenue
(non-GAAP)
2024
2023
Change
2024
2023
Change
Total
$
3,098
2,952
5%
$
2,495
2,346
6%
Fleet Management Solutions (FMS)
$
1,455
1,503
(3)%
$
1,251
1,262
(1)%
Supply Chain Solutions (SCS)
$
1,302
1,201
8%
$
972
879
11%
Dedicated Transportation Solutions
(DTS)
$
563
454
24%
$
427
322
33%
CEO Comment
"Ryder delivered solid first-quarter results amid a challenging
freight environment by continuing to execute on our balanced growth
strategy," says Ryder Chairman and CEO Robert Sanchez. "The
outperformance in the quarter was driven by better-than-expected
used vehicle results and benefits from our ongoing maintenance cost
savings initiative. The actions we’ve taken to de-risk the model,
enhance returns, and drive profitable growth are delivering
improved results relative to prior cycles. ROE was 17% and in line
with our target, reflecting the transformation of our business
model and increased resiliency.
"We remain focused on profitable growth of our contractual
lease, supply chain, and dedicated businesses as part of our
balanced growth strategy. Higher ChoiceLease results and our
maintenance cost saving initiative benefited FMS results. Strong
automotive performance as well as earnings from recent acquisitions
benefited SCS. In DTS, integration of the Cardinal acquisition is
on track and we expect to achieve planned synergies.
"Our strong balance sheet continues to provide us with capacity
to fund organic growth, share repurchases, and strategic
acquisitions.
"Throughout the current freight cycle downturn, our transformed
business model has consistently outperformed prior cycles. We
remain confident that the changes we've made to the business will
continue to generate higher highs and higher lows while positioning
us to benefit from the cycle upturn."
First Quarter 2024 Segment Review
Fleet Management Solutions: Earnings Reflect Weaker Market
Conditions in Used Vehicle Sales and Rental, Partially Offset by
ChoiceLease Results
(In millions)
1Q24
1Q23
Change
Total Revenue
$
1,455
1,503
(3)%
Operating Revenue (1)
$
1,251
1,262
(1)%
Earnings Before Tax (EBT)
$
100
182
(45)%
EBT as a % of total revenue
6.9%
12.1%
(520) bps
EBT as a % of operating revenue (1)
8.0%
14.4%
(640) bps
(1) Non-GAAP financial measure excluding
fuel service revenue.
- FMS total revenue and operating revenue decreased 3% and
1%, respectively
- Total revenue reflects lower fuel costs passed through to
customers and lower operating revenue
- Operating revenue reflects lower commercial rental revenue,
largely offset by higher ChoiceLease revenue
- FMS EBT of $100 million
- Reflects lower used vehicle pricing compared to elevated levels
in the prior year as well as weaker rental demand, partially offset
by higher ChoiceLease results and maintenance cost savings
initiatives
- Lower used vehicle gains reflect decreases in used truck and
tractor pricing of 30% and 34%, respectively, partially offset by
higher volumes; sequentially from fourth quarter of 2023, used
truck and tractor pricing decreased 3% and 4%, respectively
- Rental power-fleet utilization was 66%, down from 75% in prior
year on a 13% smaller average power fleet
Supply Chain Solutions: Earnings Reflect Better Operating
Performance; Prior Year Impacted by Impairment Charge
(In millions)
1Q24
1Q23
Change
Total Revenue
$
1,302
1,201
8%
Operating Revenue (1)
$
972
879
11%
Earnings Before Tax (EBT)
$
64
17
267%
EBT as a % of total revenue
4.9%
1.4%
350 bps
EBT as a % of operating revenue (1)
6.6%
1.9%
470 bps
(1) Non-GAAP financial measure excluding
fuel and subcontracted transportation.
- SCS total revenue and operating revenue increased 8% and
11%, respectively
- Total revenue reflects increased operating revenue and higher
subcontracted transportation costs passed through to customers
- Increase in operating revenue driven primarily by recent
acquisitions
- SCS EBT grew to $64 million
- Year-over-year comparisons benefited from a prior-year $30
million asset impairment charge
- Results also benefited from stronger automotive performance and
recent acquisitions
Dedicated Transportation Solutions: Earnings Reflect
Acquisition Integration Costs
(In millions)
1Q24
1Q23
Change
Total Revenue
$
563
454
24%
Operating Revenue (1)
$
427
322
33%
Earnings Before Tax (EBT)
$
18
29
(38)%
EBT as a % of total revenue
3.2%
6.4%
(320) bps
EBT as a % of operating revenue (1)
4.2%
9.0%
(480) bps
(1) Non-GAAP financial measure excluding
fuel and subcontracted transportation.
- DTS total revenue increased 24% and operating
revenue grew 33%
- Total and operating revenue increased due to the Cardinal
Logistics acquisition
- DTS EBT of $18 million
- Decrease due to Cardinal Logistics' acquisition integration and
other related costs, as well as higher insurance costs
Corporate Financial Information
Capital Expenditures, Cash Flow, and Leverage
First-quarter capital expenditures decreased to $716 million in
2024, compared to $802 million in 2023, primarily reflecting lower
investments in commercial rental.
First-quarter net cash provided by operating activities from
continuing operations was $526 million compared to $478 million in
2023, primarily reflecting lower working capital needs. Free cash
flow (non-GAAP) of $13 million, compared to $101 million in 2023,
reflects lower proceeds from sales of property and revenue-earning
equipment.
Debt-to-equity as of March 31, 2024 was 246%, compared to 232%
at year-end 2023, and remains below the company's long-term target
of 250% to 300%.
Outlook
"As we look ahead, we are focused on the successful integration
of our recent acquisitions and executing on our asset management
playbook through this challenging freight environment," says Ryder
Chief Financial Officer John Diez. "We are raising the lower end of
our full-year forecast to reflect the outperformance in the
quarter, partially offset by a more modest rental upturn than
initially expected. We are also raising our free cash flow forecast
and reducing our rental capital spending forecast by $100 million
to align with this revised outlook."
Full
Year 2024
Total Revenue Growth
~10%
Operating Revenue Growth (non-GAAP)
~10%
FY24 GAAP EPS
$10.95 - $11.70
FY24 Comparable EPS (non-GAAP)
$11.75 - $12.50
Adjusted ROE (1)
15.5% - 16.5%
Net Cash from Operating Activities from
Continuing Operations
~$2.4B
Free Cash Flow (non-GAAP)
$(175) - $(275)M
Capital Expenditures
~$3.2B
Debt-to-Equity
~240%
Second
Quarter 2024
2Q24 GAAP EPS
$2.58 - $2.78
2Q24 Comparable EPS (non-GAAP)
$2.75 - $2.95
————————————
(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
First Quarter Net Earnings
(In millions, except EPS)
Earnings
Diluted EPS
2024
2023
2024
2023
Earnings from continuing operations
$
85
140
$
1.89
2.95
Discontinued operations
—
(1
)
—
(0.01
)
Net earnings
$
85
139
$
1.89
2.94
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 and 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 Cardinal Logistics and Impact Fulfillment Services;
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
investors.ryder.com.
CONFERENCE CALL AND WEBCAST INFORMATION
Ryder’s earnings conference call and webcast is scheduled for
April 23, 2024 at 11:00 a.m. ET. To join, click here.
LIVE AUDIO VIA PHONE Toll Free Number: 888-394-8218 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
Three months ended March 31,
(In millions, except per share
amounts)
2024
2023
Services revenue
$
2,038
1,821
Lease & related maintenance and rental
revenues
936
979
Fuel services revenue
124
152
Total revenues
3,098
2,952
Cost of services
1,743
1,607
Cost of lease & related maintenance
and rental
669
674
Cost of fuel services
121
149
Selling, general and administrative
expenses
378
363
Non-operating pension costs, net
11
10
Used vehicle sales, net
(20
)
(72
)
Interest expense
92
65
Miscellaneous income, net
(15
)
(20
)
Restructuring and other items, net
5
(25
)
2,984
2,751
Earnings from continuing operations before
income taxes
114
201
Provision for income taxes
29
61
Earnings from continuing operations
85
140
Loss from discontinued operations, net of
tax
—
(1
)
Net earnings
$
85
139
Earnings (loss) per common share —
Diluted
Continuing operations
$
1.89
2.95
Discontinued operations
—
(0.01
)
Net earnings
$
1.89
2.94
Weighted average common shares outstanding
— Diluted
45.0
47.5
Diluted EPS from continuing operations
$
1.89
2.95
Non-operating pension costs, net
0.17
0.17
Acquisition costs
0.09
—
FMS U.K. exit
—
(0.30
)
Other, net
(0.01
)
(0.01
)
Comparable EPS from continuing operations
(1)
$
2.14
2.81
(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)
March 31, 2024
December 31, 2023
Assets:
Cash and cash equivalents
$
234
204
Other current assets
2,172
2,061
Revenue earning equipment, net
8,977
8,892
Operating property and equipment, net
1,232
1,217
Other assets
3,866
3,404
$
16,481
15,778
Liabilities and shareholders' equity:
Current liabilities
$
2,177
2,066
Total debt (including current portion)
7,543
7,114
Other non-current liabilities (including
deferred income taxes)
3,696
3,529
Shareholders' equity
3,065
3,069
$
16,481
15,778
SELECTED KEY RATIOS AND
METRICS
March 31, 2024
December 31, 2023
Debt to equity
246%
232%
Three months ended March 31,
(In millions)
2024
2023
Comparable EBITDA (1)
$
636
628
Effective interest rate
5.0
%
4.1
%
Three months ended March 31,
(In millions)
2024
2023
Net cash provided by operating activities
from continuing operations
$
526
478
Free cash flow (1)
13
101
Capital expenditures paid
686
641
Gross capital expenditures
716
802
Twelve months ended March 31,
2024
2023
Adjusted ROE (2)
17%
27%
————————————
(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 March 31,
(In millions)
2024
2023
Change
Total Revenue:
Fleet Management Solutions:
ChoiceLease
$
842
776
9%
Commercial rental
231
304
(24)%
SelectCare and other
178
182
(2)%
Fuel services revenue
204
241
(15)%
Fleet Management Solutions
1,455
1,503
(3)%
Supply Chain Solutions
1,302
1,201
8%
Dedicated Transportation Solutions
563
454
24%
Eliminations
(222
)
(206
)
(8)%
Total revenue
$
3,098
2,952
5%
Operating Revenue: (1)
Fleet Management Solutions
$
1,251
1,262
(1)%
Supply Chain Solutions
972
879
11%
Dedicated Transportation Solutions
427
322
33%
Eliminations
(155
)
(117
)
(32)%
Operating revenue
$
2,495
2,346
6%
Business Segment Earnings:
Earnings from continuing operations before
income taxes:
Fleet Management Solutions
$
100
182
(45)%
Supply Chain Solutions
64
17
267%
Dedicated Transportation Solutions
18
29
(38)%
Eliminations
(28
)
(25
)
19%
154
203
(24)%
Unallocated Central Support Services
(14
)
(15
)
(12)%
Intangible amortization expense
(11
)
(9
)
(27)%
Non-operating pension costs, net
(11
)
(10
)
2%
Other items impacting comparability,
net
(4
)
32
NM
Earnings from continuing operations before
income taxes
114
201
(43)%
Provision for income taxes
29
61
(52)%
Earnings from continuing operations
$
85
140
(39)%
————————————
(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 March 31,
(In millions)
2024
2023
Change
Fleet Management Solutions
FMS total revenue
$
1,455
1,503
(3)%
Fuel services revenue (1)
(204
)
(241
)
(15)%
FMS operating revenue (2)
$
1,251
1,262
(1)%
Segment earnings before income taxes
$
100
182
(45)%
FMS earnings before income taxes as % of
FMS total revenue
6.9%
12.1%
FMS earnings before income taxes as % of
FMS operating revenue (2)
8.0%
14.4%
Three months ended March 31,
2024
2023
Change
Supply Chain Solutions
SCS total revenue
$
1,302
1,201
8%
Subcontracted transportation and fuel
(330
)
(322
)
3%
SCS operating revenue (2)
$
972
879
11%
Segment earnings before income taxes
$
64
17
267%
SCS earnings before income taxes as % of
SCS total revenue
4.9%
1.4%
SCS earnings before income taxes as % of
SCS operating revenue (2)
6.6%
1.9%
Three months ended March 31,
2024
2023
Change
Dedicated Transportation
Solutions
DTS total revenue
$
563
454
24%
Subcontracted transportation and fuel
(136
)
(132
)
3%
DTS operating revenue (2)
$
427
322
33%
Segment earnings before income taxes
$
18
29
(38)%
DTS earnings before income taxes as % of
DTS total revenue
3.2%
6.4%
DTS earnings before income taxes as % of
DTS operating revenue (2)
4.2%
9.0%
————————————
(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 March 31,
2024/2023
2024
2023
Three Months
ChoiceLease
Average fleet count
143,200
135,300
6%
End of period fleet count
147,100
136,600
8%
Average active fleet count (1)
134,400
128,700
4%
End of period active fleet count (1)
138,500
129,100
7%
Commercial rental
Average fleet count
35,700
41,200
(13)%
End of period fleet count
35,400
41,100
(14)%
Rental utilization - power units (2)
66
%
75
%
(900)bps
Rental rate change - % (3)
(1
)%
3
%
Customer vehicles under SelectCare
contracts
Average fleet count
51,300
54,100
(5)%
End of period fleet count
51,100
52,600
(3)%
Customer vehicles under SCS
contracts
End of period fleet count (4)
14,400
13,500
7%
Customer vehicles under DTS
contracts
End of period fleet count (4)
20,400
11,400
79%
Used vehicle sales (UVS)
End of period fleet count
8,900
5,100
75%
Used vehicles sold
6,500
5,100
27%
UVS pricing change (5)
Tractors
(34
)%
(35
)%
Trucks
(30
)%
(16
)%
————————————
(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 also exclude any significant charges for pension settlements or
curtailments from the calculation of adjusted net earnings. 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 March 31,
(In millions)
2024
2023
Total revenue
$
3,098
2,952
Subcontracted transportation and fuel
(603
)
(606
)
Operating revenue (1)
$
2,495
2,346
TOTAL CASH
GENERATED / FREE CASH FLOW RECONCILIATION
Three months ended March 31,
(In millions)
2024
2023
Net cash provided by operating activities
from continuing operations
$
526
478
Proceeds from sales (primarily revenue
earning equipment) (2)
173
264
Total cash generated (1)
699
742
Purchases of property and revenue earning
equipment (2)
(686
)
(641
)
Free cash flow (1)
$
13
101
————————————
(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 March 31,
(In millions)
2024
2023
Earnings from continuing operations
$
85
140
Non-operating pension costs, net
7
8
Acquisition costs
4
—
FMS U.K. exit (1)
—
(14
)
Other, net
—
(1
)
Comparable earnings from continuing
operations (2), (3)
$
96
133
Tax rate on continuing operations
25.4%
30.5%
Tax adjustments and income tax effects of
non-GAAP adjustments (2)
(0.2)%
(5.0)%
Comparable tax rate on continuing
operations (3)
25.2%
25.5%
————————————
(1) Primarily includes commercial claims
proceeds.
(2) 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.
(3) 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 March 31,
(Dollars in millions)
2024
2023
Net earnings
$
351
832
Other items impacting comparability
193
(121
)
Tax impact (1)
(11
)
59
Adjusted net earnings
$
533
770
Average shareholders' equity
$
3,067
2,887
Average adjustments to shareholders'
equity (2)
(11
)
(15
)
Adjusted average shareholders' equity
$
3,056
2,872
Adjusted return on equity (3)
17%
27%
————————————
(1) Represents income taxes on other items
impacting comparability.
(2) Represents the impact of other items
impacting comparability, net of tax, to equity for the respective
periods.
(3) Adjusted return on equity is
calculated by dividing Adjusted net earnings into Adjusted average
shareholders' equity.
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 March 31,
(In millions)
2024
2023
Net earnings
$
85
139
Loss from discontinued operations, net of
tax
—
1
Provision for income taxes
29
61
EBT
114
201
Non-operating pension costs, net
11
10
Acquisition costs
5
—
FMS U.K. exit (1)
—
(31
)
Other, net
(1
)
(1
)
Comparable EBT (2)
129
179
Interest expense
92
65
Depreciation
424
445
Used vehicle sales, net
(20
)
(70
)
Amortization
11
9
Comparable EBITDA
$
636
628
————————————
(1) Primarily includes 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
$
13,000
11,783
10%
Subcontracted transportation and fuel
(2,600
)
(2,286
)
14%
Operating revenue (1)
$
10,400
9,497
10%
COMPARABLE
EARNINGS PER SHARE FORECAST RECONCILIATION
(In millions, except per share
amounts)
Second Quarter 2024
Full Year 2024
EPS from continuing operations
$2.58 - $2.78
$10.95 - $11.70
Non-operating pension costs
0.19
0.74
Restructuring and other, net
(0.02
)
0.05
Comparable EPS from continuing operations
forecast (1)
$2.75 - $2.95
$11.75 - $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)
600
Total cash generated (1)
3,000
Purchases of property and revenue earning
equipment (2) (3)
(3,225
)
Free cash flow (1)
$
(225
)
————————————
(1) Non-GAAP financial measure.
(2) Included in cash flows from investing
activities.
(3) Amount updated to correct
typographical error.
RYDER SYSTEM, INC. AND
SUBSIDIARIES
APPENDIX - NON-GAAP FINANCIAL
MEASURE RECONCILIATIONS - UNAUDITED
ADJUSTED RETURN
ON EQUITY FORECAST RECONCILIATION
(In millions)
2024 Forecast
Net earnings
$
495
Other items impacting comparability
(1)
5
Tax impact (2)
(5
)
Adjusted net earnings for ROE (numerator)
(3) [A]
$
495
Average shareholders' equity
$
3,100
Adjustment to equity (4)
—
Adjusted average total equity
(denominator) (3) [B]
$
3,100
Adjusted return on equity (3) [A]/[B]
16
%
————————————
(1) Forecasted other items impacting
comparability includes other, net of $5 million.
(2) Represents the tax provision on other
items impacting comparability.
(3) 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.
(4) Represents the impact to equity of
items to arrive at adjusted earnings.
Note: Amounts may not be additive due to
rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240423661437/en/
Media: Amy Federman afederman@ryder.com
Investor Relations: Calene Candela ccandela@ryder.com
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