Market Overview

Ryder Reports Fourth Quarter and Full-Year 2017 Results, and Provides 2018 Forecast

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Fourth Quarter 2017

  • Q4 GAAP EPS from Continuing Operations of $12.10, Includes $10.77
    One-Time Net Benefit from Tax Reform
  • Q4 Comparable EPS (non-GAAP) from Continuing Operations Up $0.30
    or 28% to $1.37; Prior Year Results Include $0.24 of Used Vehicle
    Valuation Adjustments
  • Record Q4 Total Revenue Grows 12% to $1.9 Billion; Record Q4
    Operating Revenue (non-GAAP) Up 8% to $1.6 Billion

Full-Year 2017

  • Full-Year GAAP EPS from Continuing Operations of $14.87, Includes
    $10.75 One-Time Net Benefit from Tax Reform
  • Full-Year Comparable EPS (non-GAAP) from Continuing Operations Down
    16% to $4.53
  • Record Full-Year Total Revenue Increases 8% to $7.3 Billion; Record
    Full-Year Operating Revenue (non-GAAP) Up 4%
    to $6.0
    Billion

2018 Forecast

  • 2018 GAAP EPS Forecast of $5.34 to $5.64 vs. $14.87 for 2017; 2017
    Includes $10.75 One-Time Net Benefit from Tax Reform
  • 2018 Comparable EPS (non-GAAP) Forecast of $5.40 to $5.70 vs. $4.53
    for 2017

Ryder System, Inc. (NYSE:R), a leader in commercial fleet
management
, dedicated
transportation
, and supply
chain
solutions, today reported fourth quarter and full-year
earnings and revenue. Results for the three months ended December 31
were as follows:

     
(dollars in millions, except EPS) Earnings Before Taxes Earnings Diluted EPS
2017   2016   Change 2017   2016   Change 2017   2016   Change
GAAP $ 78.8   69.2   14% $ 642.5   49.3   NM $ 12.10   0.92   NM
Non-operating pension costs 6.9 7.9 4.0 4.6 0.07 0.09
Gain on sale of property (24.1 ) (14.8 ) (0.27 )
Restructuring charges and fees 19.7 5.1 12.7 3.5 0.24 0.06
Tax Reform related adjustments, net 23.3           (571.7 )         (10.77 )        
Comparable (non-GAAP) $ 104.5     82.2     27% $ 72.7     57.4     27% $ 1.37     1.07     28%
 

In the fourth quarter, the Company reported record total revenue and
record operating revenue (a non-GAAP measure excluding all fuel and
subcontracted transportation). Total revenue and operating revenue grew
across all three business segments reflecting new business and higher
volumes. Total revenue also grew due to higher fuel costs passed through
to customers. Total and operating revenue for the three months ended
December 31 were as follows:

             
(dollars in millions) Total Revenue Operating Revenue (non-GAAP)
2017   2016   % Change 2017   2016   % Change
Total $ 1,940   1,729   12% $ 1,587   1,467   8%
FMS $ 1,242 1,152 8% $ 1,057 992 7%
DTS $ 284 257 11% $ 198 193 3%
SCS $ 540 430 26% $ 411 353 16%
 

Commenting on the Company's fourth quarter results, Ryder Chairman and
CEO Robert Sanchez said, "We performed in line with our expectations for
the fourth quarter, with outperformance in Dedicated Transportations
Solutions, and benefits from a favorable tax rate (unrelated to tax
reform), offset by Fleet Management Solutions results. Our Dedicated
business performed above expectations, due to favorable development of
prior years' self-insurance claims. Supply Chain Solutions results met
our earnings expectations with strong revenue growth in the quarter. We
delivered growth in our contractual businesses, including the sixth
consecutive year of ChoiceLease fleet growth. We also realized strong
sales across all contractual businesses in the fourth quarter, leading
to a record sales year for the Company.

"With the continuing benefit of secular trends that favor outsourcing,
we grew the ChoiceLease fleet by 4,100 vehicles for the year, above our
prior forecast of 3,500. We continue to tap into non-outsourced markets,
with approximately 40% of our lease fleet growth coming from customers
that are new to outsourcing. We also grew our SelectCare business by
5,400 vehicles year to date.

"Fleet Management Solutions also benefited from stronger than expected
rental demand, resulting in the highest fourth quarter utilization in
the past 10 years. However, FMS results were negatively impacted by used
vehicle sales, additional accelerated depreciation, and higher insurance
costs related to prior years' claims. Used vehicle sales results were
below expectations, primarily due to pricing. Given our near-term
outlook on pricing, the Company also recognized additional accelerated
depreciation in the fourth quarter and extended accelerated depreciation
through mid-2019. We effectively executed our plan to reduce used
inventory to the bottom of our target range, better positioning us for
2018.

"As a result of the Tax Cuts and Jobs Act signed into law in the fourth
quarter, we recognized a significant tax benefit to reduce deferred tax
liabilities that we no longer expect to incur under the new law. We also
expect the new law to improve our earnings going forward due to a
significant reduction in our effective income tax rate, allowing us to
raise our dividend by 13%. Also, related to the passing of this law, we
awarded a one-time bonus, totaling $23 million in the aggregate, to all
U.S.-based non-incentive eligible employees of the Company as of
December 31, 2017. In addition, we believe the new tax law further
enhances Ryder's typical ChoiceLease advantage versus ownership.

"During the quarter, we concluded activity under the 2 million share
anti-dilutive program and purchased an aggregate of 1.6 million shares
under the program. Additionally, in December, the Company announced a
new two-year 1.5 million share anti-dilutive repurchase program.

"In 2017, we made significant progress on our strategic objective to
penetrate non-outsourced markets, with growth in each of the three
segments. We continued to deploy new customer-facing technologies
including innovative safety technologies and our cloud-based shipment
visibility tool, RyderShareTM, to better optimize
transportation costs and service. Additionally, our previously announced
strategic vehicle partnerships with companies in the electric and
advanced vehicle technology sectors, position Ryder to drive additional
long-term growth by providing our customers with cutting-edge vehicle
technology."

Fourth Quarter Business Segment Operating Results

Fleet Management Solutions

In the Fleet Management Solutions (FMS) business segment, total revenue
in the fourth quarter of 2017 was $1.24 billion, up 8% from the
year-earlier period. FMS operating revenue (non-GAAP measure excluding
fuel) was $1.06 billion, up 7% from the year-earlier period. Ryder
ChoiceLeaseTM (lease) revenue increased 6%, reflecting a
larger average fleet size and higher prices on replacement vehicles. The
lease fleet (excluding U.K. trailers) increased by 2,800 vehicles from
the year-earlier period. As previously noted, the Company has had an
elevated number of vehicles being prepared for sale in the prior
quarters. Adjusting for a reduction in these vehicles during the prior
quarter, the lease fleet grew by 4,100 units over the same period, and
grew by 2,100 vehicles sequentially from the third quarter of 2017.
Commercial rental revenue grew 7% due to increased demand and higher
pricing. Fuel services revenue increased 16%, reflecting higher fuel
costs passed through to customers.

FMS earnings before tax were $91.7 million in the fourth quarter of
2017, up 43% compared with $64.3 million in the same period of 2016.
Increased earnings reflect higher commercial rental and lease
performance as well as improved used vehicle sales results. Used vehicle
sales comparisons primarily reflect prior year inventory valuation
adjustments of $21 million. As planned, the Company reduced inventory by
approximately 30% in 2017, ending the year at the low end of the
targeted range. Commercial rental performance improved due to higher
pricing and increased utilization, reflecting stronger demand as well as
the Company's fleet right-sizing actions taken earlier in the year.
Rental power fleet utilization was 81.2% for the fourth quarter, up 390
basis points from the year-earlier period. Lease results benefited from
fleet growth. These items were partially offset by higher
compensation-related costs. Fourth quarter FMS results also included the
impact of accelerated depreciation of $8.8 million in 2017 and $9.6
million in 2016 to reflect a challenging used vehicle market outlook.
FMS earnings before tax as a percentage of FMS total revenue and FMS
operating revenue (a non-GAAP measure) were 7.4% and 8.7%, respectively,
up 180 and 220 basis points from the year-earlier period.

Dedicated Transportation Solutions

In the Dedicated Transportation Solutions (DTS) business segment, fourth
quarter 2017 total revenue was up 11% to $284 million and operating
revenue (a non-GAAP measure excluding fuel and subcontracted
transportation) was $198 million, up 3% compared with the year-earlier
period. DTS total revenue growth reflects higher subcontracted
transportation revenue and operating revenue. DTS operating revenue
growth reflects increased volumes.

DTS earnings before tax of $15.4 million increased 1% in the fourth
quarter of 2017 compared with $15.3 million in 2016. Favorable
development of self-insurance claims from prior years was largely offset
by higher driver costs due to increased turnover and seasonal volumes at
select accounts, as well as elevated maintenance costs on certain older
model year vehicles. DTS earnings before tax as a percentage of DTS
total revenue and operating revenue (a non-GAAP measure) were 5.4% and
7.8%, respectively, down 50 and 10 basis points from the year-earlier
period.

Supply Chain Solutions

In the Supply Chain Solutions (SCS) business segment, total revenue was
$540 million, up 26%, and operating revenue (a non-GAAP measure
excluding fuel and subcontracted transportation) was $411 million, up
16% compared with the year-earlier period. SCS total revenue and
operating revenue growth primarily reflect new business.

SCS earnings before tax of $27.7 million increased 5% in the fourth
quarter of 2017 compared with $26.4 million in 2016, primarily driven by
revenue growth. This increase was partially offset by lower performance
in two customer accounts, although to a lesser extent than in the third
quarter of 2017. Additionally, results were impacted by higher overhead
spending due to planned investments in information technology and sales.
SCS earnings before tax as a percentage of SCS total revenue and
operating revenue (a non-GAAP measure) were 5.1% and 6.8%, respectively,
down 100 and 70 basis points from the year-earlier period.

Corporate Financial Information

Central Support Services

Central Support Services (CSS) are overhead costs incurred to support
all business segments and product lines. Most CSS costs are allocated to
the business segments. In the fourth quarter of 2017, unallocated CSS
costs were $15 million, up from $11 million reported in the year-earlier
period, driven by incentive compensation and professional fees.

Income Taxes

The Company's effective income tax rate for the fourth quarter of 2017
was a benefit of 715.4% compared to an expense of 28.8% in the
year-earlier period and reflects the impact of accounting for the Tax
Cuts and Jobs Act (Tax Reform). The net benefit from Tax Reform totaled
$586 million and reflects the provisional estimates of the change in
future tax rates on deferred tax balances at December 31, 2017, offset
by a one-time tax related to the repatriation of foreign earnings. The
comparable effective income tax rate (a non-GAAP measure) from
continuing operations, which excludes Tax Reform and other items, was
30.4% compared with 30.1% in the year-earlier period.

Additional Items Excluded from Segment and Comparable Earnings

Non-operating components of pension costs are excluded from both segment
earnings before tax and comparable earnings (a non-GAAP measure) to more
accurately reflect the operating performance of the business.
Non-operating pension costs totaled $6.9 million ($4.0 million after
tax) or $0.07 per diluted share in the fourth quarter of 2017, compared
with $7.9 million ($4.6 million after tax) or $0.09 per diluted share in
the year-earlier period.

Fourth quarter 2017 results also reflect a gain on sale of a SCS
property of $24.1 million ($14.8 million after tax) or $(0.27) per
diluted share, restructuring charges and consulting fees of $19.7
million ($12.7 million after tax) or $0.24 per diluted share, including
company-wide workforce reductions of approximately 260 employees. The
Company expects the workforce reduction and other cost savings
initiatives to produce annual savings of $0.50 per diluted share
beginning in early 2018. Fourth quarter 2016 results excluded pre-tax
restructuring and other charges of $5.1 million ($3.5 million after
tax), or $0.06 per diluted share.

Fourth quarter 2017 results reflect a one-time, non-cash benefit from
Tax Reform of $586 million or $11.04 per diluted share to reduce
deferred tax liabilities the Company no longer expects to incur under
the new law. In addition, results reflect a one-time employee bonus in
connection with the benefit of Tax Reform awarded to all U.S.-based
non-incentive eligible employees of the Company, totaling $23 million
($14 million after tax) in the aggregate of $0.27 per diluted share.

Capital Expenditures

Capital expenditures from continuing operations were $1.94 billion for
2017, compared with $1.76 billion in 2016, reflecting higher planned
investments to refresh the rental fleet, partially offset by lower lease
spending due to greater use of redeployed vehicles to fulfill new lease
contracts. Proceeds, primarily from used vehicle sales, of $429 million
increased 2% from $421 million. Net capital expenditures (including
proceeds from the sale of assets) increased to $1.51 billion in 2017,
compared with $1.34 billion in 2016.

Cash Flow and Leverage

Operating cash flow from continuing operations in 2017 was $1.55
billion, down slightly from $1.60 billion in 2016. Total cash generated
from continuing operations (including proceeds from used vehicle sales)
in 2017 was $2.05 billion, down slightly from $2.10 billion in 2016.
Free cash flow from continuing operations in 2017 was $190 million,
compared with $194 million in 2016.

Total debt as of December 31, 2017 was 5.41 billion, substantially
unchanged from year-end 2016. Debt to equity as of December 31, 2017 was
191% compared with 263% at year-end 2016. Adoption of Tax Reform reduced
the Company's debt to equity ratio as of December 31, 2017 by
approximately 50 percentage points. The Company is revising its target
debt to equity ratio to 200% - 250% from 250% to 300%, reflecting the
impact of Tax Reform.

2018 Earnings Forecast

Commenting on the Company's outlook, Mr. Sanchez said, "In 2018, we are
anticipating solid earnings growth across all business segments. Higher
expected earnings are driven by robust contractual revenue growth from
record sales results in 2017 as well as the strength of our sales
pipeline. We forecast a significant increase in ChoiceLease fleet growth
of 6,500 vehicles, driven by a continued trend toward outsourcing, our
ongoing sales and marketing initiatives, and a strengthening freight
environment. We are also anticipating strong rental revenue growth in
this accelerating freight environment. We plan to grow the rental fleet
by 6% as well as increase pricing. In DTS and SCS, we are also expecting
revenue growth and margin expansion due to improved operating
performance. Additionally, we instituted a zero-based budgeting process,
significantly lowering overhead costs. We also anticipate 2018 earnings
to benefit from Tax Reform, primarily due to a lower effective income
tax rate. These expected overhead reductions and tax benefits will
improve earnings and fund 2018 strategic investments in sales and
marketing, new product development, and technology, which are focused on
driving long term revenue and earnings growth.

"These benefits are expected to be partially offset by impacts from the
extended downturn in the used vehicle market as well as higher
maintenance costs on certain older model year vehicles that will largely
exit the fleet over the next 18 months. We anticipate a modestly
improved outlook for used vehicle pricing in 2018 that will benefit year
over year results; however, we still expect used vehicle sales to incur
a loss for the year. We are also reducing our long-term residual value
estimates on vehicles in operation to reflect used vehicle market
trends. Additionally, we are further accelerating depreciation on
vehicles which we expect to make available for sale through mid-2019.

"We are planning significantly higher capital expenditures this year
primarily due to increased investments to grow our lease fleet, and to
refresh and expand our rental fleet. We expect to deliver higher
operating cash flow of $1.8 billion, reflecting the returns from several
years of fleet investment. Free cash flow is forecast at negative $600
million, reflecting increased capital spending to support fleet growth.

"Ryder forecasts full-year 2018 GAAP earnings of $5.34 to $5.64 per
diluted share, compared with $14.87 per diluted share in 2017. Ryder
forecasts full-year 2018 comparable earnings from continuing operations
of $5.40 to $5.70 per diluted share, compared with $4.53 per diluted
share in 2017. Full-year earnings exclude non-operating pension costs of
$0.06 per diluted share in 2018 and exclude the items previously noted
in 2017. Total revenue for the full-year 2018 is forecast to be up 6% to
approximately $8 billion. Operating revenue for the full-year 2018 is
forecast to be up 8% to approximately $7 billion.

"Ryder is establishing a first quarter 2018 GAAP earnings forecast of
$0.82 to $0.89 per diluted share, compared with $0.71 in the first
quarter 2017. The Company is also establishing a first quarter 2018
comparable earnings forecast of $0.83 to $0.90 per diluted share,
compared with $0.82 in the first quarter 2017. First quarter earnings
comparisons exclude pension costs of $0.01 per diluted share in 2018.
The first quarter presents the most challenging quarter for
year-over-year comparison and reflects the timing of FMS overhead
spending, including commissions and investments in sales, marketing, and
technology to fund growth, as well as increased vehicle depreciation. In
addition, prior year results include an unusually strong quarter for
SCS. These headwinds are expected to be partially offset by earnings
growth in rental and lease, as well as the benefit of Tax Reform."

             

Supplemental Company Information

 

Fourth Quarter Net Earnings

 
(dollars in millions, except EPS) Earnings Diluted EPS
2017   2016 2017   2016
Earnings from continuing operations $ 642.5   49.3 $ 12.10   0.92
Discontinued operations 0.5     (1.1 ) 0.01     (0.01 )
Net earnings $ 643.0     48.2   $ 12.11     0.91  
 
 

Full-Year Operating Results

 
(in millions) Twelve months ended December 31
2017   2016   Change
Total revenue $ 7,330 6,787 8 %
Operating revenue (non-GAAP) $ 6,040 5,791 4 %
             
 
Earnings from continuing operations $ 791.0 264.6 199 %
Comparable earnings from continuing operations (non-GAAP) $ 240.8 290.5 (17 )%
Net earnings $ 790.6 262.5 201 %
             
 
Earnings per common share (EPS) - Diluted
Continuing operations $ 14.87 4.94 201 %
Comparable (non-GAAP) $ 4.53 5.42 (16 )%
Net earnings $ 14.87 $ 4.90 203 %
 

Business Description

Ryder System, Inc. is a FORTUNE 500® commercial fleet management,
dedicated transportation, and supply chain 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:

  • 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 commercial 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.
  • Dedicated
    Transportation Solutions
    – Ryder's DTS business segment combines
    the best of Ryder's leasing and maintenance capability with the safest
    and most professional drivers in the industry. With a dedicated
    transportation solution, Ryder helps customers increase their
    competitive position, reduce risk, and integrate their transportation
    needs with their overall supply chain.
  • 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.

Notations

Earnings Before Tax (EBT): Ryder's primary measurement of
business segment financial performance, earnings before tax (EBT),
allocates Central Support Services to each business segment and excludes
restructuring and other items, as well as non-operating pension costs.

Capital Expenditures: In Ryder's business, capital
expenditures are generally used to purchase revenue earning equipment
(trucks, tractors, and trailers) primarily to support the full service
lease product line and secondarily to support the commercial rental
product line within Ryder's FMS business segment. The level of capital
required to support the full service lease product line varies directly
with customer contract signings for replacement vehicles and growth.
These contracts are long-term agreements that result in ongoing revenues
and cash flows to Ryder, typically over a three- to ten-year term. The
commercial rental product line utilizes capital for the purchase of
vehicles to replenish and expand the Company's fleet available for
shorter-term use by contractual or occasional customers.

For more information on Ryder System, Inc., visit http://investors.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 expectations regarding
market trends, earnings performance, revenue in our business segments,
fleet size, performance in our product lines and segments, the strength
of our sales pipeline, demand and pricing trends in commercial rental
and used vehicle sales, residual values, return on capital spread,
operating cash flow, free cash flow, capital expenditures, our ability
to make investments in sales, marketing, IT and new product initiatives,
the impact from tax reform on our earnings and demand for our services,

and the impact and adequacy of steps we have taken to address our
cost structure, including workforce reductions and the implementation of
zero-based budgeting program. Accordingly, these forward-looking
statements should be evaluated with consideration given to 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, among others, our ability to adapt to changing
market conditions, lower than expected lease sales, decreases in
commercial rental demand or poor acceptance of rental pricing, our
ability to return out of service vehicles to the fleet, availability of
rental vehicles to meet demand and availability of labor to maintain our
fleet at normalized levels, worsening of market demand for used vehicles
impacting current pricing and our anticipated proportion of retail
versus wholesale sales, lack of customer demand for our services, higher
than expected maintenance costs due to, among other things, lower than
expected benefits from maintenance initiatives and a newer fleet,
setbacks or uncertainty in the economic market, decreases in freight
demand or volumes, poor operational execution particularly with new
accounts and
product launches, our ability to obtain adequate
profit margins for our services, our inability to maintain current
pricing levels due to soft economic conditions, business interruptions
or expenditures due to severe weather or natural occurrences,
competition from other service providers and new entrants, customer
retention levels, loss of key customers, driver and technician shortages
resulting in higher procurement costs and turnover rates, unexpected bad
debt reserves or write-offs, changes in customers' business environments
that will limit their ability to commit to long-term vehicle leases, a
decrease in credit ratings, increased debt costs, adequacy of accounting
estimates, reserves and accruals particularly with respect to pension,
taxes, depreciation, insurance and revenue, sudden or unusual changes in
fuel prices, unanticipated currency exchange rate fluctuations, our
ability to manage our cost structure, and the risks described in our
filings with the Securities and Exchange Commission. 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,
including:

Comparable Earnings Measures, including comparable earnings
from continuing operations, comparable earnings per share from
continuing operations (as well as forecasts), comparable earnings before
income tax and comparable effective income tax rate. Additionally, our
adjusted return on average capital (ROC) and adjusted return on capital
spread (ROC spread) measures are calculated based on comparable earnings
items.

Operating Revenue Measures, including operating revenue and
operating revenue growth excluding foreign exchange for Ryder and its
business segments, and segment EBT as a percentage of operating revenue.

Cash Flow Measures, including total cash generated and free
cash flow.

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

Conference Call and Webcast Information:

Ryder's earnings conference call and webcast is scheduled for Friday,
February 16, 2018, from 11:00 a.m. to 12:00 noon Eastern Time. Speakers
will be Chairman and Chief Executive Officer Robert Sanchez, and
Executive Vice President and Chief Financial Officer Art Garcia.

  • To join the conference call live:
    Begin 10 minutes prior to the conference by dialing the audio phone
    number 1-877-419-6593 (outside U.S. dial 1-719-325-4754)
    using the Passcode: Ryder and Conference Leader: Bob Brunn.
    Then, access the presentation via the Net Conference website at https://pgi.webcasts.com/starthere.jsp?ei=1176923&tp_key=e269cd0792
  • To access audio replays of the conference and
    view a presentation of Ryder's earnings results:
    Dial 1-888-203-1112
    (outside U.S. dial 1-719-457-0820), then use the replay Passcode:
    1420126
    and view the presentation by visiting the Investors
    area of Ryder's website at http://investors.ryder.com.
    A podcast of the call will also be available online within 24 hours
    after the end of the call at http://investors.ryder.com.
   

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED

Periods ended December 31, 2017 and 2016

(In millions, except per share amounts)

 
  Three Months   Twelve Months
  2017   2016   2017   2016
 
Lease and rental revenues

$

849.9

801.8

$

3,237.7 3,171.0
Services revenue 952.3 806.4 3,571.4 3,152.3
Fuel services revenue   137.5   121.0     520.5   463.7  
Total revenues   1,939.7   1,729.2     7,329.6   6,787.0  
 
Cost of lease and rental 609.3 568.6 2,355.0 2,234.3
Cost of services 793.0 666.3 3,003.3 2,603.0
Cost of fuel services 135.4 117.0 507.4 448.3
Other operating expenses 28.4 27.5 115.5 113.5
Selling, general and administrative expenses 253.6 202.3 872.0 805.1
Non-operating pension costs 6.9 7.9 27.7 37.6
Used vehicle sales, net 5.4 32.0 17.2 (1.0 )
Interest expense 35.8 35.2 140.3 147.8
Miscellaneous income, net (26.6 ) (2.1 ) (44.2 ) (13.1 )
Restructuring charges and fees, net   19.7   5.1     21.4   5.1  
  1,860.9   1,660.0     7,015.8   6,380.6  
 
Earnings from continuing operations before income taxes 78.8 69.2 313.8 406.4
(Benefit from) provision for income taxes   (563.7 ) 19.9     (477.2 ) 141.7  
Earnings from continuing operations 642.5 49.3 791.0 264.6
Earnings (loss) from discontinued operations, net of tax   0.5   (1.1 )   (0.5 ) (2.2 )
Net earnings

$

643.0

  48.2  

$

790.6   262.5  
 
Earnings (loss) per common share - Diluted
Continuing operations

$

12.10

0.92

$

14.87 4.94
Discontinued operations   0.01   (0.01 )   (0.01 )   (0.04 )
Net earnings

$

12.11

  0.91  

$

14.87     4.90  
 
Earnings per share information - Diluted
Earnings from continuing operations

$

642.5

49.3

$

791.0 264.6
Less: Distributed and undistributed earnings allocated to unvested
stock
  (2.3 ) (0.2 )   (2.8 ) (0.8 )
Earnings from continuing operations available to common stockholders

$

640.2

  49.1  

$

788.2   263.8  
 
Weighted-average common shares outstanding - Diluted   53.1   53.4     53.0   53.4  
 
EPS from continuing operations

$

12.10

0.92

$

14.87 4.94
Non-operating pension costs 0.07 0.09 0.31 0.33
Tax reform related adjustments, net (10.77 ) (10.75 )
Restructuring charges and fees, net 0.24 0.06 0.25 0.06
Gain on sale of property (0.27 ) (0.27 )
Pension related adjustments 0.06 0.09
Tax law changes 0.03
Operating tax adjustment         0.03    
Comparable EPS from continuing operations *

$

1.37

  1.07  

$

4.53   5.42  
 
* 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

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(Dollars in millions)

 
December 31,
2017

December 31,
2016

 
Assets:
Cash and cash equivalents $ 78.3 58.8
Other current assets 1,243.9 1,042.8
Revenue earning equipment, net 8,355.3 8,147.7
Operating property and equipment, net 776.7 745.9
Other assets 998.0 907.3
$ 11,452.2 10,902.5
 
Liabilities and shareholders' equity:
Current liabilities $ 1,186.7 952.7
Total debt 5,409.7 5,391.3
Other non-current liabilities (including deferred income taxes) 2,020.9 2,506.2
Shareholders' equity 2,835.0 2,052.3
$ 11,452.2 10,902.5
 
   

SELECTED KEY RATIOS AND METRICS

 

December 31,
2017

December 31,
2016

 
Debt to equity 191 % 263 %
Effective interest rate (average cost of debt) 2.6 % 2.7 %
 
 
Twelve months ended December 31,
2017   2016
 
Cash provided by operating activities from continuing operations $ 1,548.0 1,601.0
Free cash flow * 189.7 193.7
Capital expenditures paid 1,860.4 1,905.2
 
Capital expenditures (accrual basis) $ 1,941.2 1,762.9
Less: Proceeds from sales (primarily revenue earning equipment) (429.0 ) (421.3 )
Net capital expenditures $ 1,512.2   1,341.6  
 
 
Twelve months ended December 31,
2017   2016
 
Return on average shareholders' equity 35.9 % 12.8 %
Return on average assets 7.1 %

2.4

%

Adjusted return on capital * 4.2 % 4.8 %
Weighted average cost of capital 4.4 % 4.3 %
Return on capital spread ** (0.2 )% 0.5 %
 
* 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.
** Non-GAAP financial measure. Adjusted return on capital spread is
calculated as the difference of the adjusted return on capital and
the weighted average cost of capital.
 
Note: Amounts may not be additive due to rounding.
   

RYDER SYSTEM, INC. AND SUBSIDIARIES

BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED

Periods ended December 31, 2017 and 2016

(Dollars in millions)

 
Three Months Twelve Months
2017   2016   B(W) 2017   2016   B(W)
 
Total Revenue:
Fleet Management Solutions:
ChoiceLease $ 696.1 655.2 6% $ 2,688.7 2,573.6 4%
SelectCare 116.1 108.4 7% 464.1 449.7 3%
Commercial rental 224.2 210.3 7% 813.5 846.3 (4)%
Other 20.6 18.4 12% 77.5 78.0 (1)%
Fuel services revenue 184.8   159.5   16% 689.8   608.5   13%
Total Fleet Management Solutions 1,241.7 1,151.7 8% 4,733.6 4,556.2 4%
Dedicated Transportation Solutions 284.4 256.9 11% 1,096.0 1,020.9 7%
Supply Chain Solutions 540.0 430.2 26% 1,969.5 1,637.9 20%
Eliminations (126.5 ) (109.6 ) (15)% (469.5 ) (428.0 ) (10)%
Total revenue $ 1,939.7   1,729.2   12% $ 7,329.6   6,787.0   8%
 
 
Operating Revenue: *
Fleet Management Solutions $ 1,057.0 992.3 7% $ 4,043.8 3,947.7 2%
Dedicated Transportation Solutions 198.2 193.1 3% 789.3 774.3 2%
Supply Chain Solutions 410.6 352.7 16% 1,507.5 1,352.1 11%
Eliminations (79.3 ) (71.2 ) (11)% (300.2 ) (283.2 ) (6)%
Operating revenue $ 1,586.6   1,466.9   8% $ 6,040.4   5,790.9   4%
 
 
Business segment earnings:
Earnings from continuing operations
before income taxes:
Fleet Management Solutions $ 91.7 64.3 43% $ 312.7 370.8 (16)%
Dedicated Transportation Solutions 15.4 15.3 1% 55.3 63.6 (13)%
Supply Chain Solutions 27.7 26.4 5% 103.1 105.5 (2)%
Eliminations (15.2 ) (13.0 ) (17)% (53.3 ) (50.1 ) (6)%
119.7 92.9 29% 417.9 489.8 (15)%
Unallocated Central Support Services (15.2 ) (10.8 ) (41)% (48.1 ) (40.7 ) (18)%
Non-operating pension costs (6.9 ) (7.9 ) 13% (27.7 ) (29.9 ) 7%
Restructuring charges and fees, net (18.9 ) (5.1 ) NM (28.2 ) (12.7 ) NM
Earnings from continuing operations before income taxes 78.8 69.2 14% 313.8 406.4 (23)%
(Benefit from) provision for income taxes (563.7 ) 19.9   NM (477.2 ) 141.7   NM
Earnings from continuing operations $ 642.5   49.3   1,204% $ 791.0   264.6   199%
 
* 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 INFORMATION - UNAUDITED

Periods ended December 31, 2017 and 2016

(Dollars in millions)

 
Three Months Twelve Months
2017   2016   B(W) 2017   2016   B(W)
 
Fleet Management Solutions
 
FMS total revenue $ 1,241.7 1,151.7 8% $ 4,733.6 4,556.2 4%
Fuel services revenue(a) (184.8 ) (159.5 ) 16% (689.8 ) (608.5 ) 13%
FMS operating revenue * $ 1,057.0   992.3   7% $ 4,043.8   3,947.7   2%
 
Segment earnings before income taxes $ 91.7   64.3   43% $ 312.7   370.8   (16)%
 
FMS earnings before income taxes as % of FMS total revenue 7.4 % 5.6 % 6.6 % 8.1 %
 
FMS earnings before income taxes as % of FMS operating revenue * 8.7 % 6.5 % 7.7 % 9.4 %
 
 
Dedicated Transportation Solutions
 
DTS total revenue $ 284.4 256.9 11% $ 1,096.0 1,020.9 7%
Subcontracted transportation (55.3 ) (36.6 ) 51% (192.1 ) (143.5 ) 34%
Fuel (30.9 ) (27.2 ) 14% (114.6 ) (103.1 ) 11%
DTS operating revenue * $ 198.2   193.1   3% $ 789.3   774.3   2%
 
Segment earnings before income taxes $ 15.4   15.3   1% $ 55.3   63.6   (13)%
 
DTS earnings before income taxes as % of DTS total revenue 5.4 % 5.9 % 5.0 % 6.2 %
 
DTS earnings before income taxes as % of DTS operating revenue * 7.8 % 7.9 % 7.0 % 8.2 %
 
 
Supply Chain Solutions
 
SCS total revenue $ 540.0 430.2 26% $ 1,969.5 1,637.9 20%
Subcontracted transportation (107.5 ) (61.3 ) 75% (386.8 ) (224.1 ) 73%
Fuel (21.9 ) (16.2 ) 35% (75.2 ) (61.7 ) 22%
SCS operating revenue * $ 410.6   352.7   16% $ 1,507.5   1,352.1   11%
 
Segment earnings before income taxes $ 27.7   26.4   5% $ 103.1   105.5   (2)%
 
SCS earnings before income taxes as % of SCS total revenue 5.1 % 6.1 % 5.2 % 6.4 %
 
SCS earnings before income taxes as % of SCS operating revenue * 6.8 % 7.5 % 6.8 % 7.8 %
 
* Non-GAAP financial measure. A reconciliation of (1) GAAP total
revenue to operating revenue for each business segment (FMS, DTS and
SCS) and (2) segment earnings before taxes (EBT) as % of segment
total revenue to segment EBT as % of segment operating revenue for
each business segment is set forth in this table.
 
Note: Amounts may not be additive due to rounding.
 
(a) Includes intercompany fuel sales from FMS to DTS and SCS.
     

RYDER SYSTEM, INC. AND SUBSIDIARIES

BUSINESS SEGMENT INFORMATION - UNAUDITED

KEY PERFORMANCE INDICATORS

 

Three months ended
December 31,

Twelve months ended
December 31,

2017/2016
2017   2016 2017   2016

Three
Months

 

Twelve
Months

 
ChoiceLease
Average fleet count 138,000 136,500 137,600 134,400 1% 2%
End of period fleet count 139,100 136,500 139,100 136,500 2% 2%
Miles/unit per day change - % (a) (0.7 )% 1.4 % (0.7 )% 2.2 %
 
 
Commercial rental
Average fleet count 37,700 37,800 37,500 39,200 —% (4)%
End of period fleet count 37,800 37,800 37,800 37,800 —% —%
Rental utilization - power units 81.2 % 77.3 % 75.6 % 74.7 % 390 bps 90 bps
Rental rate change - % (b) 1.9 % 2.8 % 1.2 % 0.5 %
 
 
Customer vehicles under
SelectCare contracts
Average fleet count 54,300 49,200 52,100 49,200 10% 6%
End of period fleet count 54,400 49,000 54,400 49,000 11% 11%
 
 
Customer vehicles under
on-demand maintenance (c)
Fleet serviced during the period 8,100 7,800 24,500 21,000 4% 17%
 
 
DTS
Average fleet count (d) 8,300 8,100 8,200 8,200 2% —%
End of period fleet count(d) 8,300 8,200 8,300 8,200 1% 1%
 
 
SCS
Average fleet count (d) 8,100 7,400 7,900 7,200 9% 10%
End of period fleet count(d) 8,300 7,600 8,300 7,600 9% 9%
 
 
Used vehicle sales (UVS)
Average UVS inventory 6,100 7,500 6,700 8,400 (19)% (20)%
End of period fleet count 6,000 7,500 6,000 7,500 (20)% (20)%
Used vehicles sold 4,000 4,500 17,600 18,300 (11)% (4)%
UVS pricing change - % (e)
Tractors 2 % (17 )% (12 )% (14 )%
Trucks 2 % (12 )% (12 )% (1 )%
 

Notes:

(a)   Represents the percentage change compared to prior year period in
miles driven per vehicle per workday on US lease power units.
(b) Represents percentage change compared to prior year period in
average global rental rate per day on power units using constant
currency.
(c) Comprised of the number of vehicles serviced under on-demand
maintenance agreements. Vehicles included in the end of period count
may have been serviced more than one time during the respective
period.
(d) These vehicle counts are also included within the average fleet
counts for ChoiceLease, commercial rental and SelectCare.
(e) 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 presentation:

   
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

DTS Operating Revenue DTS Total Revenue
SCS Operating Revenue   SCS Total Revenue  

Operating Revenue Growth
Excluding Foreign Exchange

  Total Revenue  

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

DTS EBT as a % of DTS Operating
Revenue

DTS EBT as a % of DTS Total Revenue

SCS EBT as a % of SCS Operating
Revenue

  SCS EBT as a % of SCS 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 and Comparable
EPS Forecast

 

EPS from Continuing Operations

 

EPS Forecast from Continuing Operations

 

Consolidated Statements of Earnings -
Unaudited

 

Appendix - Non-GAAP Financial
Measure Reconciliations
(Forecast)

Adjusted Return on Average Capital
(ROC) and Adjusted ROC
Spread

 

Not Applicable. However, 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 total debt and average
shareholders'
equity to adjusted average
total capital is provided.

 

Appendix - Non-GAAP Financial
Measure Reconciliations

Cash Flow Measures:

       

Total Cash Generated and Free Cash
Flow

  Cash Provided by Operating Activities  

Appendix - Non-GAAP Financial
Measure Reconciliations

 
   

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS -
UNAUDITED

(Dollars in millions)

 

OPERATING REVENUE RECONCILIATION

Three months ended
December 31,

Twelve months ended
December 31,

2017   2016 2017   2016
 
Total revenue $ 1,939.7 1,729.2 $ 7,329.6 6,787.0
Fuel (190.3 ) (164.3 ) (710.3 ) (628.5 )
Subcontracted transportation (162.8 ) (97.9 ) (578.9 ) (367.6 )
Operating revenue * $ 1,586.6   1,466.9   $ 6,040.4   5,790.9  
 

OPERATING REVENUE GROWTH EXCLUDING
FOREIGN EXCHANGE RECONCILIATION

  Fourth Quarter   Year-to-Date

2017 vs 2016
Growth

 

Fx Impact (a)

 

Growth excl
Fx*

 

2017 vs 2016
Growth

  Fx Impact (a)  

Growth excl
Fx*

   
RSI Total Revenue 12 % 1 % 11 % 8 % % 8 %
RSI Operating Revenue* 8 % 1 % 7 % 4 % % 4 %
FMS Total Revenue 8 % 1 % 7 % 4 % % 4 %
FMS Operating Revenue* 7 % 1 % 6 % 2 % % 2 %
SCS Total Revenue 26 % 1 % 25 % 20 % % 20 %
SCS Operating Revenue* 16 % 1 % 15 % 11 % % 11 %
Full Service Lease Revenue 6 % 1 % 5 % 4 % (1 )% 5 %
Commercial Rental Revenue 7 % 1 % 6 % (4 )% % 4 %
 

TOTAL CASH GENERATED/FREE CASH FLOW
RECONCILIATION

  Twelve months ended December 31,
2017   2016
 
Net cash provided by operating activities from continuing operations $ 1,548.0 1,601.0
Proceeds from sales (primarily revenue earning equipment) (b) 429.0 421.3
Collections on direct finance leases and other items (b) 73.2   76.5  
Total cash generated * 2,050.2 2,098.8
Purchases of property and revenue earning equipment (b) (1,860.4 ) (1,905.2 )

Free cash flow **

$ 189.7   193.7  
 
Memo:
Net cash used in financing activities (155.1 ) (185.9 )
Net cash used in investing activities (1,366.3 ) (1,405.8 )
 

Notes:

(a)  

FX impact was calculated by dividing the results for the current
and prior year periods by the exchange rates in effect on
December
31, 2016, which was the last day of the prior year period, rather
than the actual exchange rates in effect as of
December 31,
2017.

(b) Included in cash flows from investing activities.

* Non-GAAP financial measure.

** Non-GAAP financial measure. We refer to the net amount of cash
generated from operating activities and investing activities
(excluding changes in restricted cash and acquisitions) from
continuing operations as "free cash flow". We calculate free cash
flow as the sum of net cash provided by operating activities and net
cash provided by the sale of revenue earning equipment and operating
property and equipment, collections on direct finance leases and
other cash inflows from investing activities, less purchases of
property and revenue earning equipment.
 
Note: Amounts may not be additive due to rounding.
 

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS -
UNAUDITED

(Dollars in millions)

 

ADJUSTED RETURN ON CAPITAL RECONCILIATION

Twelve months ended December 31,
2017   2016
 
Net earnings (12-month rolling period) $ 790.6 262.5
+ Restructuring and other items 28.2 12.6
+ Income taxes (476.7 ) 141.6  
Adjusted earnings before income taxes 342.1 416.7
+ Adjusted interest expense (a) 140.6 148.0
- Adjusted income taxes (b) (166.8 ) (198.2 )
= Adjusted net earnings for ROC (numerator) [A] $ 315.9   366.5  
 
Average total debt $ 5,360.3 5,549.5
Average off-balance sheet debt 1.8 1.5
Average shareholders' equity 2,201.2 2,052.4
Adjustment to equity (c) (69.4 ) 1.7  
Adjusted average total capital (denominator) [B] $ 7,493.8   7,605.0  
 
Adjusted ROC * [A]/[B] 4.2 % 4.8 %
 

Notes:

(a)   Represents reported interest expense plus imputed interest on
off-balance sheet obligations.
(b) Represents provision for income taxes plus income taxes on
restructuring and other items and adjusted interest expense.
(c) Represents the impact to equity of items to arrive at comparable
earnings.
* 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
total debt and average shareholders' equity to adjusted average
total capital is set forth in this table.
 
Note: Amounts may not be additive due to rounding.
 

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS -
UNAUDITED

(In millions, except per share amounts)

 

COMPARABLE EARNINGS/EARNINGS BEFORE
INCOME TAX/TAX RATE RECONCILIATION

   
2017

Consolidated Statements of
Earnings Line Item

Three Months

Twelve
Months

 
Earnings from continuing operations before income taxes $ 78.8 313.8
Non-operating pension costs Non-operating pension costs 6.9 27.7
Tax reform related adjustments, net SG&A 23.3 23.3
Restructuring charges and fees, net

Restructuring charges and
fees, net

19.7 21.4
Pension related adjustments SG&A 5.5
Operating tax adjustment SG&A 2.2
Gain on sale of property Miscellaneous income (24.1 ) (24.1 )
Comparable earnings from continuing operations before income taxes* 104.5   369.7  
 
Provision for income taxes 563.7 477.2
Income tax effects of non-GAAP adjustments** (0.6 ) (11.2 )
Tax reform related adjustments, net (594.9 ) (594.9 )
Comparable provision for income taxes** (31.8 ) (128.9 )
 
Earnings from continuing operations 642.5 791.0
Non-operating pension costs Non-operating pension costs 4.0 16.0
Tax reform related adjustments, net SG&A (571.7 ) (571.7 )
Restructuring charges and fees, net

Restructuring charges and
fees, net

12.7 13.4
Pension related adjustments SG&A 3.3
Operating tax adjustment SG&A 1.7
Tax law changes Provision for income taxes 1.8
Gain on sale of property Miscellaneous income (14.8 ) (14.8 )
Comparable earnings from continuing operations* $ 72.7   240.8  
 
Tax rate on continuing operations (715.4 )% (152.1 )%
Income tax effects of non-GAAP adjustments** 745.8 % 187.0 %
Comparable tax rate on continuing operations** 30.4 % 34.9 %
 
* Non-GAAP financial measure.
** 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
statutory tax rates of the jurisdictions to which the non-GAAP
adjustments relate.
 
Note: Amounts may not be additive due to rounding.
   
2016

Consolidated Statements of
Earnings Line Item

Three Months  

Twelve
Months

 
Earnings from continuing operations before income taxes $ 69.2 406.4
Non-operating pension costs Non-operating pension costs 7.9 29.9
Pension related adjustments SG&A 7.7
Restructuring charges and fees, net

Restructuring charges and
fees, net

5.1   5.1  
Comparable earnings from continuing operations before income taxes* 82.2   449.0  
 
Provision for income taxes (19.9 ) (141.7 )
Income tax effects of non-GAAP adjustments** (4.8 ) (16.8 )
Comparable provision for income taxes** (24.7 ) (158.6 )
 
Earnings from continuing operations 49.3 264.6
Non-operating pension costs Non-operating pension costs 4.6 17.5
Pension related adjustments SG&A 4.8
Restructuring charges and fees, net

Restructuring charges and
fees, net

3.5   3.5  
Comparable earnings from continuing operations* $ 57.4   290.5  
 
Tax rate on continuing operations 28.8 % 34.9 %
Income tax effects of non-GAAP adjustments** 1.3 % 0.4 %
Comparable tax rate on continuing operations** 30.1 % 35.3 %
 
* Non-GAAP financial measure.
** 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
statutory tax rates of the jurisdictions to which the non-GAAP
adjustments relate.
 
Note: Amounts may not be additive due to rounding.
   

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS -
UNAUDITED

 

COMPARABLE EARNINGS PER SHARE FORECAST
RECONCILIATION

 
Comparable earnings per share from continuing operations forecast:*

First Quarter
2018

Full Year
2018

EPS from continuing operations $0.82 to $0.89 $5.34 to $5.64
Non-operating pension costs $0.01 $0.06
Comparable EPS from continuing operations forecast* $0.83 to $0.90 $5.40 to $5.70
 

Note: Amounts may not be additive due to rounding.

 

TOTAL CASH GENERATED/FREE CASH FLOW
FORECAST RECONCILIATION

 
2018 Forecast
Net Cash Provided by Operating Activities from Continuing Operations $ 1,810
Proceeds from sales (primarily revenue earning equipment) (1) 415
Collections of direct finance leases and other (1) 80  
Total cash generated* 2,305
 
Capital expenditures (1) (2,905 )
Free cash flow ** $ (600 )
 
Memo:
Net cash used in financing activities $ 580
Net cash used in investing activities $ 2,410
 

(1) Included in cash flows from investing activities.

 

* Non-GAAP financial measure.

** Non-GAAP financial measure. We refer to the net amount of cash
generated from operating activities and investing activities
(excluding changes in restricted cash and acquisitions) from
continuing operations as "free cash flow". We calculate free cash
flow as the sum of net cash provided by operating activities and net
cash provided by the sale of revenue earning equipment and operating
property and equipment, collections on direct finance leases and
other cash inflows from investing activities, less purchases of
property and revenue earning equipment.

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