17
2015 Goldman Sachs Industrial Conference Robert Sanchez Chairman & CEO November 3, 2015
2015 Goldman Sachs
Industrial Conference
Robert Sanchez
Chairman & CEO
November 3, 2015
© 2015 Ryder System, Inc. All Rights Reserved.
Safe Harbor and Non-GAAP Financial Measures
2
Note Regarding Forward Looking Statements: Certain statements and information included in this presentation are "forward-looking statements" under the Federal
Private Securities Litigation Reform Act of 1995, including our expectations regarding earnings performance, revenue growth in our business segments, fleet growth,
performance in our product lines, expansion of on-demand maintenance, demand and pricing trends in commercial rental and used vehicle sales, return on capital
spread and anticipated resumption of our share repurchase 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, 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 in the fourth quarter, availability of rental vehicles to meet demand and availability of
labor to maintain our fleet at normalized levels, fluctuations in market demand for used vehicles impacting current pricing and our anticipated proportion of retail versus
wholesale sales, lack of customer demand for on-demand maintenance, higher than expected maintenance costs from new engine technology or due to lower than
expected benefits from maintenance initiatives and a newer fleet, setbacks in the economic recovery, decreases in freight demand or volumes, poor operational
execution particularly with start-ups and new product launches, our ability to obtain adequate profit margins for our services, our inability to maintain current pricing
levels due to soft economic conditions, slower than expected economic recovery in the U.K., 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.
Unless otherwise noted, forecast information throughout this presentation was issued October 22, 2015 and has not subsequently been confirmed or revised.
Note Regarding Non-GAAP Financial Measures: This presentation includes certain non-GAAP financial measures as defined under SEC rules, including operating
revenue, operating revenue growth excluding foreign exchange, comparable earnings and earnings per share, comparable earnings per share forecast, comparable
earnings before income tax, comparable tax rate, adjusted return on capital (and return on capital spread), total cash generated, free cash flow, total obligations, and
the ratios based on these financial measures. Refer to Appendix – Non-GAAP Financial Measures for more information about the non-GAAP financial measures
contained in this presentation. Additional information as required by Regulation G regarding non-GAAP financial measures 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 presentation with the SEC, which are available at http://investors.ryder.com.
Beginning in 2015, in addition to excluding Fleet Management Solutions (FMS) fuel services revenue and subcontracted transportation from the calculation of operating
revenue, we also exclude Supply Chain Solutions (SCS) and Dedicated Transportation Solutions (DTS) fuel costs billed to our customers.
Revision of Prior Period Financial Statements: All financial information for the years 2012 through 2015 in this presentation for affected periods has been revised to
reflect a change in accounting treatment of certain sale-leaseback transactions. Free cash flow has been revised for the years 2010 through 2015. All other financial
information for years prior to 2012 have not been revised. For a discussion on the change in treatment, refer to Note A “General,” in the Notes to the Consolidated
Condensed Financial Statements to the Form 10-Q for the quarter ended June 30, 2015.
© 2015 Ryder System, Inc. All Rights Reserved.
216,500
RYDER IS A FORTUNE 500 COMPANY WITH
FULL YEAR 2014
30,600
VEHICLES
EMPLOYEES
3
6.6 Billion ANNUAL
REVENUE (1)
$
FLEET
MANAGEMENT (FMS)
SUPPLY
CHAIN (SCS)
(1) These amounts result from continuing operations.
(2) Net Earnings from Continuing Operations are $220 million.
$
297 Million COMPARABLE
EARNINGS (1) (2)
9.9 Billion ASSETS
$
35 Million SQUARE FEET OF
WAREHOUSE
SPACE
DEDICATED
TRANSPORTATION (DTS)
Leading provider of outsourced transportation & logistics
© 2015 Ryder System, Inc. All Rights Reserved.
4
Commercial Rental (24% FMS revenue)
Contract
Maintenance (5% FMS revenue)
Sample Clients:
Note: Revenue percents based on segment operating revenue (excludes fuel).
Full Service Lease (63% FMS revenue)
Contract-Related
Maintenance (6% FMS revenue)
Fleet Support
Services (2% FMS revenue)
Maintenance and leasing expertise maximizes fleet uptime
Full Service Lease 63%
Contract Maintenance
5%
Commercial Rental 24%
Contract-Related Maintenance
6%
Fleet Support Services
2%
(as % of FMS revenue)
FLEET
MANAGEMENT (FMS)
© 2015 Ryder System, Inc. All Rights Reserved.
Turnkey transportation solution delivering customer value
5
Supported by IT and Engineering Solutions
Dedicated
Transportation
(97% of DTS Revenue)
Transportation
Management
(3% of DTS Revenue)
DEDICATED
TRANSPORTATION (DTS)
Full Service
Lease Vehicles Professional
Drivers
Routing, Scheduling,
Supervision & Administrative
Support
+ + =
Dedicated
Transportation
Solution
DEDICATED
TRANSPORTATION (DTS)
Sample Clients:
© 2015 Ryder System, Inc. All Rights Reserved.
Industry expertise drives optimized logistics solutions
6
Professional Services (6% SCS revenue)
Transportation Management (10% SCS revenue)
Dedicated (36% SCS revenue)
Distribution Management (48% SCS revenue)
SUPPLY
CHAIN (SCS)
Dedicated
Transportation (36%) Distribution
Management (48%)
Transportation
Transportation (10%)
Professional
Services (6%)
(as % of SCS revenue)
Supported by IT and Engineering Solutions
Sample Clients:
© 2015 Ryder System, Inc. All Rights Reserved.
Large markets with significant growth potential
7
With ~ 10% of transportation and
logistics business currently
outsourced, significant growth
opportunities exist for Ryder.
Note: Vehicle market shown is class 3-8
Sources: Truck Rental and Leasing Association, R.L. Polk, Monitor Group, A.T. Kearney, MacKay & Company
~10%
90%
Outsourced
Private
Market Segment Market Size
Total commercial fleet market – U.S., Canada 8.1 million vehicles
Lease and rental market (outsourced) – U.S., Canada, U.K. 0.9 million vehicles
Maintenance only services – U.S. $35 billion
Dedicated market (outsourced) – U.S. $15 billion
Supply chain logistics market (outsourced) – North America $175 billion
Estimated market sizes are as follows:
© 2015 Ryder System, Inc. All Rights Reserved.
Increased Vehicle Cost & Complexity Increased Government Regulation
Companies have the opportunity to leverage
Ryder’s maintenance, driver and supply chain
expertise in order to comply with safety regulations
Dynamic Supply Chains
Industry expertise and demonstrated execution
enable Ryder to provide value to customers with
sophisticated supply chain needs
Driver & Technician Shortage
NOW
HIRING
NOW
HIRING
NOW
HIRING
NOW
HIRING
NOW
HIRING
NOW
HIRING
Engine technology changes mandated by EPA
favor vehicle financing and maintenance
outsourcing
Well established procedures to recruit, train and
develop drivers and technicians
CSA 2010
FOOD SAFETY
REGULATIONS
2017 2021 2027
2007 2010
Secular trends support outsourcing
8
✔
!
EPA
Secular Trends
that Support
Outsourcing
Decision
© 2015 Ryder System, Inc. All Rights Reserved.
Improved Sales Capabilities Marketing Initiatives
Increased Collaboration New Products
Internal initiatives driving increased outsourcing
9
G R O W T H I N
S AL E S F O R C E
I N S I D E S AL E S
O R G AN I Z AT I O N
G R O W D I G I TAL
L E AD G E N E R AT I O N
N AT U R AL G AS
S H O R T T E R M
L E AS E S
RY D E R
T R AN S Y N C ™
CNG
T O TAL C O S T O F
O W N E R S H I P M O D E L
N AT I O N AL AD
C AM PAI G N
O N D E M AN D
M AI N T E N AN C E
U P S E L L T O
D E D I C AT E D L E V E R AG E
C U S T O M E R
B AS E
T R AN S P O R TAT I O N
M AN AG E M E N T +
D E D I C AT E D
B U I L D T H O U G H T
L E AD E R S H I P F O R
B R AN D
© 2015 Ryder System, Inc. All Rights Reserved.
Highlights of 2015 Progress
10
4,000 vehicles Lease Fleet Growth (ex-UK trailers)
ROC Spread (3)
On-Demand
Maintenance IT work and expansion Launched in August
FMS Operating
Revenue Growth Rate
12% - 15% Comparable EPS
Growth Rate
2015 Forecast (1)
130 - 140 bps 140 bps as of 3Q
150 bps FY Forecast
Where We Are (2)
5,200 YTD 6 - 6.5k FY Forecast
8% 5% YTD
7% ex-FX
11% - 13% FY Forecast
(1) Initial full-year forecast issued on February 3, 2015
(2) Forecast information issued October 22, 2015 and has not subsequently been confirmed or revised
(3) Rolling 12 months
© 2015 Ryder System, Inc. All Rights Reserved.
Focused on profitable growth and capital efficiency
(150)
(100)
(50)
-
50
100
150
200
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2010 2011 2012 2013 2014 2015F
Comp EPS ROC Spread
11
Comparable EPS ROC Spread (bps)
Record Comparable EPS and ROC Spread are forecast for FY2015
Questions & Answers
Robert Sanchez
Chairman & CEO
Contact Information
Bob Brunn
VP – Corporate Strategy & Investor Relations
305-500-4210
Calene Candela
Group Director – Investor Relations
305-500-4764
© 2015 Ryder System, Inc. All Rights Reserved.
► This presentation includes “non-GAAP financial measures” as defined by SEC rules. As required by SEC rules, we
provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP. Non-GAAP financial
measures should be considered in addition to, but not as a substitute for or superior to, other measures of financial
performance prepared in accordance with GAAP.
► Specifically, the following non-GAAP financial measures are included in this presentation:
Non-GAAP Financial Measure Comparable GAAP Measure
Reconciliation & Additional Information
Presented on Slide(s) Titled
Adjusted Return on Capital Net Earnings / Total Capital Appendix - Adjusted Return on Capital
Reconciliation
Comparable EPS from Continuing Operations /
Comparable EPS Forecast
EPS from Continuing Operations / EPS Forecast Appendix - EPS from Continuing Operations
Reconciliation
FMS Operating Revenue FMS Total Revenue Appendix: FMS Total Revenue and Operating
Revenue Reconciliation
Appendix: Non-GAAP Financial Measures
14
© 2015 Ryder System, Inc. All Rights Reserved.
Appendix: Non-GAAP Financial Measures
15
($ Millions)
(1) Earnings calculated based on a 12-month rolling period.
(2) Interest expense includes interest for on and off-balance sheet vehicle obligations.
(3) Income taxes were calculated by excluding taxes related to comparable earnings items and interest expense.
(4) The average is calculated based on the average GAAP balances.
(5) Represents comparable earnings items for those periods.
Adjusted Return on Capital Reconciliation
2010 2011 2012 2013 2014 3Q14 3Q15
Net Earnings (1)
118$ 170$ 210$ 238$ 218$ 272$ 240$
Restructuring and Other Charges, Net and Other Items 6 6 17 - 115 3 116
Income Taxes 61 108 91 126 118 147 130
Adjusted Earnings Before Income Taxes 185 284 318 363 451 423 486
Adjusted Interest Expense(2)
133 135 144 141 145 143 152
Adjusted Income Taxes (3)
(124) (157) (167) (177) (214) (198) (229)
Adjusted Net Earnings 194$ 262$ 295$ 327$ 383$ 367$ 409$
Average Total Debt(4)
2,512$ 3,079$ 3,778$ 4,015$ 4,653$ 4,516$ 4,989$
Average Off-Balance Sheet Debt(4)
114 78 2 1 2 2 2
Average Total Shareholders' Equity(4)
1,402 1,428 1,406 1,594 1,926 1,895 1,878
Average Adjustments to Shareholders' Equity (5)
2 4 (3) (2) 8 (1) 18
Adjusted Average Total Capital 4,030$ 4,588$ 5,182$ 5,608$ 6,589$ 6,411$ 6,887$
Adjusted Return on Capital 4.8% 5.7% 5.7% 5.8% 5.8% 5.7% 5.9%
© 2015 Ryder System, Inc. All Rights Reserved.
Appendix: Non-GAAP Financial Measures
16
($ Earnings Per Share)
Note: Amounts may not recalculate due to rounding.
EPS from Continuing Operations Reconciliation
2010 2011 2012 2013 2014 2015F
GAAP EPS $ 2.37 3.31 3.90 4.63 4.14 6.03
Non-operating pension costs 0.31 0.22 0.37 0.28 0.10 0.20
Pension settlement charges - - - 0.03 1.30 (0.01)
Restructuring charges/(recoveries), net - 0.05 0.11 (0.01) 0.03
Superstorm Sandy vehicle-related losses/(recoveries) - - 0.10 (0.01) -
Professional fees - - - - - 0.04
Foreign currency translation benefit - - - (0.04) -
Tax (benefits)/law changes (0.21) 0.10 (0.08) - (0.03) (0.03)
Acquisition-related transaction costs 0.08 0.03 - 0.04
(Gain) on sale of property (0.02) - - - - -
Comparable EPS $ 2.53 3.71 4.40 4.88 5.58 6.23
© 2015 Ryder System, Inc. All Rights Reserved.
17
Revenue 3Q15 YTD 3Q14 YTD % B/(W)
Full Service Lease 1,782.1$ 1,694.1$ 5%
Contract Maintenance 143.6 136.9 5%
Contractual Revenue 1,925.7 1,831.0 5%
Commercial Rental 694.7 646.1 8%
Contract-related Maintenance 169.6 169.4 -
Other 56.7 53.2 7%
Operating Revenue 2,846.7 2,699.7 5%
Fuel Services Revenue 547.4 803.5 (32)%
Total Revenue 3,394.1$ 3,503.2$ (3)%
3Q15 YTD
3Q15 YTD YOY Growth
YOY Growth Fx Impact (1)
ex-FX
FMS Operating Revenue 5% (2)% 7%
FMS Total Revenue and Operating Revenue Reconciliation ($ Millions)
Appendix: Non-GAAP Financial Measures
(1) Foreign exchange impact was calculated by dividing the results for the current and prior year periods by the exchange rates in effect on September 30, 2014, which
was the last day of the prior year period, rather than the actual exchange rates in effect as of September 30, 2015.
