MIAMI--(BUSINESS WIRE)--Ryder System, Inc. (NYSE: R), a leader in supply chain, dedicated transportation, and fleet management solutions, reported results for the three months ended March 31 as follows:
(In millions, except EPS) | Earnings
| Earnings | Diluted
| ||||||||||||
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
| ||||||||||||
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,
| December 31,
| |||
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,
| December 31,
| |||
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
| ||||||
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 | ||||
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(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% | |||||
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(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% | |||||
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(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 | ||||
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(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 | ) | |
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(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 | % | ||
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(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. | ||||
Contacts
Media:
Amy Federman
afederman@ryder.com
Investor Relations:
Calene Candela
ccandela@ryder.com
