-- Fourth Quarter GAAP EPS of $1.24, Includes $0.06 Tax Benefit--
MIAMI, FL, Feb 01, 2008 (MARKET WIRE via COMTEX News Network) -- Ryder System, Inc. (NYSE: R), a global leader in transportation and supply chain management solutions, today reported earnings per diluted share (EPS) were $1.24 for the three-month period ended December 31, 2007, up 15% from EPS of $1.08 in the year-earlier period. Net earnings for the fourth quarter were $71.9 million, up 9% from $65.8 million in the year-earlier period. EPS and net earnings in the current period included a benefit of $0.06 and $3.6 million, respectively, related primarily to changes in Canadian income tax laws. Excluding the benefit, EPS for the fourth quarter were up 9% to $1.18 and net earnings were up 4% to $68.3 million. EPS growth exceeded earnings growth due to a decrease in the average number of shares outstanding, reflecting the impact of share repurchases. Improved contractual business performance as well as lower operating costs more than offset lower volumes in the Company's commercial rental business related to soft marketplace demand. All business segments reported improved revenue and earnings results.
Total revenue for the fourth quarter of 2007 was $1.67 billion, up 5% from $1.59 billion in the comparable period last year. Operating revenue (revenue excluding fuel and subcontracted transportation) was $1.19 billion, up 4% compared with $1.15 billion in the year-earlier period. Both total and operating revenue benefited from favorable foreign exchange rates related to international operations. Fleet Management Solutions (FMS) business segment total revenue increased 8%, due to higher fuel services revenue, as well as contract revenue growth of 7%, which offset a decline in commercial rental revenue for the quarter. Supply Chain Solutions (SCS) business segment total revenue grew 1%, while operating revenue grew 5%. Dedicated Contract Carriage (DCC) business segment total revenue increased 3%, due to the pass through of higher fuel costs.
"We're pleased that we were able to deliver earnings growth in a challenging transportation industry environment in 2007. Our financial performance through these tough conditions reflects the significant improvements we've made to our business mix, processes and business controls since the last market downturn," said Ryder Chairman and Chief Executive Officer Greg Swienton. "We increased both earnings and contractual revenue in 2007, while at the same time taking the necessary steps to position the size and mix of the transactional rental fleet to meet the market demand we anticipate in the coming year."
Full-Year 2007 Operating Results
Total revenue for the full-year 2007 was $6.57 billion, up 4% from $6.31 billion in the comparable period of 2006. Operating revenue of $4.64 billion was also up 4% from $4.45 billion in the same period of 2006. Ryder's full-year 2007 net earnings were $253.9 million compared with $249.0 million in the year-earlier period. EPS were $4.24 for 2007, up 5% compared with $4.04 for the same period of 2006. EPS included a $0.06 income tax benefit related primarily to a change in Canada income tax laws in 2007 and an $0.11 income tax benefit related to a change in Texas and Canada income tax laws in 2006. EPS also included a net charge of $0.03 for restructuring costs partially offset by a gain on sale of property in the third quarter of 2007 and a $0.06 pension accounting charge related to the accounting for prior service costs in 2006. Full-year 2007 comparable net earnings were $251.9 million, up 2% from $245.9 million in 2006. Full-year 2007 comparable EPS of $4.21 were up 6% from $3.99 in 2006.
Fourth Quarter Business Segment Operating Results
Ryder's primary measurement of business segment financial performance, Net Before Tax (NBT), allocates Central Support Services to each business segment and excludes restructuring and other items.
Fleet Management Solutions
Ryder's Fleet Management Solutions (FMS) business segment combines several capabilities into a comprehensive package that provides one-stop outsourcing of the acquisition, maintenance, management, and disposal of vehicles. Ryder's commercial rental service offers customers a method to expand their fleets in order to address short-term capacity needs.
In the FMS business segment, total revenue in the fourth quarter of 2007 was $1.09 billion, up 8% compared with the year-earlier period. Fuel services revenue for the fourth quarter of 2007 increased 21% compared with the same period in 2006, due to higher fuel prices partially offset by reduced volume from lower miles driven within the commercial rental offering. Operating revenue (revenue excluding fuel) in the fourth quarter of 2007 was $764.8 million, up 3% compared with $741.3 million in the year-earlier period. Both FMS total revenue and operating revenue included a favorable foreign exchange impact of 2%. Full service lease revenue for the fourth quarter of 2007 was up 7% from the year-earlier period reflecting growth primarily in the North American market. In the quarter, contract maintenance revenue increased 10% due to new sales activity. Commercial rental revenue decreased 7% compared with the year-earlier period, due to weak U.S. market demand. As a result of the Company's actions to align the fleet size and mix with market demand, U.S. rental fleet utilization in the fourth quarter of 2007 improved over the prior-year period for the first time in the year.
The FMS business segment's NBT increased to $102.3 million in the fourth quarter of 2007, up 8% compared with $94.5 million in the same period of 2006. This increase was related primarily to improved contractual business performance and from lower expenses related to pension, safety and insurance, and sales and marketing. Depreciation expense, although higher, benefited from a previously announced annual depreciation policy change. These results were partially offset by a decline in U.S. commercial rental results, as the Company reduced its fleet size by 12% in response to weak U.S. market demand. Commercial rental results were also impacted, to a lesser extent, by reduced pricing. In addition, used vehicle sales results were negatively impacted by wholesaling activity undertaken to reduce higher used truck inventories. Interest expense also increased in the quarter due primarily to stock repurchases. Business segment NBT as a percentage of operating revenue was 13.4% in the fourth quarter of 2007, up 60 basis points compared with 12.8% in the same quarter a year ago.
Supply Chain Solutions
Ryder's Supply Chain Solutions (SCS) business segment enables customers to improve shareholder value and their customers' satisfaction by enhancing supply chain performance and reducing costs. The solutions involve management of the logistics pipeline as a synchronized, integrated process -- from raw material supply to finished goods distribution. By improving business processes and employing new technologies, the flow of goods and cash is made faster and consumes less capital.
In the SCS business segment, fourth quarter 2007 total revenue was $545.8 million, up 1% from $543.1 million in the comparable period of 2006. Revenue grew primarily due to the favorable impact of foreign exchange rates, as well as new and expanded business. Growth was partially offset by net reporting of customer business previously presented on a gross basis, a previously announced automotive plant closure, and reduced business activity with certain high-tech customers. Operating revenue (revenue excluding subcontracted transportation) was $337.2 million, up 5% from $320.1 million in the comparable period a year ago. SCS total revenue and operating revenue included a favorable foreign exchange impact of 4% and 3%, respectively.
The SCS business segment's NBT was $18.9 million in the fourth quarter of 2007, up 11% from $17.0 million in the same quarter of 2006. Business segment earnings benefited from improved international results, lower safety and insurance costs, and lower incentive-based compensation. These items were partially offset by the impact of lower revenue within the high-tech customer base. Business segment NBT as a percentage of operating revenue was 5.6% in the fourth quarter of 2007, up 30 basis points compared with 5.3% in the same quarter of 2006.
Dedicated Contract Carriage
Ryder's Dedicated Contract Carriage (DCC) business segment provides customers with vehicles, drivers, management, and administrative support, with the assets committed to a specific customer for a contractual term. DCC supports customers with both basic and sophisticated logistics and transportation needs including routing and scheduling, specialized driver services, and logistical engineering support.
In the DCC business segment, fourth quarter 2007 total revenue was $144.3 million, up 3% compared with $140.2 million in the fourth quarter of 2006. Operating revenue (revenue excluding subcontracted transportation) in the fourth quarter of 2007 was $140.3 million, up 3% compared with $135.6 million in the year-earlier period. Revenue increased due primarily to the pass through of higher fuel costs.
The DCC business segment's NBT in the fourth quarter of 2007 was $12.3 million, up 9% compared with $11.2 million in the fourth quarter of 2006. Business segment NBT was positively impacted by better operating performance. Business segment NBT as a percentage of operating revenue was 8.7% in the fourth quarter of 2007, up 40 basis points compared with 8.3% in 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. Substantially all CSS costs are allocated to the various business segments. In the fourth quarter of 2007, CSS costs were $51.3 million, up from $48.9 million in the year-earlier period. CSS costs for the fourth quarter of 2007 include the impact of previously announced executive severance. Full-year 2007 CSS costs were $190.5 million, down from $191.0 million in 2006.
Income Taxes
The Company's effective income tax rate for the fourth quarter of 2007 was 35.6% of pre-tax earnings compared to 35.3% in the year-earlier period. The current period income tax rate reflects a benefit of $3.3 million (3.0% of pre-tax earnings) primarily for the impact of income tax rate changes in Canada. The prior period income tax rate reflects the recognition of tax benefits as a result of audit closures, utilization of foreign net operating losses and adjustments to estimated non-deductible items.
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 Fleet Management Solutions 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 predictable 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.
Capital expenditures were $1.20 billion for the full-year 2007, compared with $1.76 billion in 2006. Net capital expenditures (including proceeds from the sale of assets) were $671 million, down from $1.43 billion in 2006. The decrease in capital expenditures reflects lower lease vehicle spending for replacement and expansion of customer fleets. In addition, approximately $75 million was paid in the fourth quarter of 2007 in connection with the previously announced acquisition of Pollock NationaLease.
Cash Flow and Leverage
Operating cash flow for the full-year 2007 was $1.10 billion, up 29% from $854 million in 2006. Total cash generated (including proceeds from used vehicle sales) for the full-year 2007, was $1.69 billion, up 35% from $1.25 billion in 2006. Free cash flow in 2007 was positive $374.5 million compared with negative $440.4 million in 2006, primarily due to improved operating cash flow, proceeds from a sale-leaseback transaction, and lower capital spending. Free cash flow excludes cash paid for acquisitions.
Balance sheet debt as of December 31, 2007 decreased by $40.8 million compared with year-end 2006, due primarily to improved free cash flow, offset by stock repurchases. The leverage ratio for balance sheet debt as of December 31, 2007 was 147%, compared with 164% at year-end 2006. Total obligations to equity as of December 31, 2007 were 157%, down from 168% at year-end 2006. The Company's long-term target range for total obligations to equity is 250% to 300%, which largely reflects the liquidity of the Company's vehicle portfolio and the substantial revenue component that is supported by long-term customer contracts related to those assets. In December 2007, the Company announced a $300 million share repurchase program to help move the Company's leverage position toward the long-term target range. To date, there have been no repurchases made under this program.
2008 Forecast
Ryder forecasts full-year 2008 earnings to be in the range of $4.50 to $4.65 per diluted share. This represents an EPS increase of 7% to 10% over Ryder's comparable full-year 2007 EPS of $4.21. The Company also is establishing a first quarter 2008 EPS forecast of $0.84 to $0.87. Total revenue for the full-year 2008 is forecast to be $6.18 billion, down 6% from $6.57 billion in 2007. The anticipated decline in total revenue is due to net reporting of revenue (previously reported as gross) related to a certain SCS customer transportation services arrangement, in which Ryder's role in the purchase of subcontracted transportation was modified effective January 1, 2008. Under the terms of the new arrangement, Ryder will act as an agent rather than principal in the purchase of subcontracted transportation services. This change does not affect operating revenue or earnings. For comparison purposes, the amount by which this reporting method would have reduced total revenue in full-year 2007 was $640 million. Excluding this item, total revenue would have been forecast to increase by 4% in 2008.
"We are forecasting Ryder's 2008 operating revenue to grow by 3% to 6%," said Mr. Swienton. "In Fleet Management Solutions, revenue growth is expected to be driven by roughly 5% growth in core contractual leasing and maintenance revenue, with commercial rental revenue that should range from being flat to up by 2%. Supply Chain total revenue is forecast to decrease by 22% to 24%, based on the aforementioned net revenue reporting change, while operating revenue should increase by 5% to 10%. Dedicated Contract Carriage total revenue and operating revenue are expected to increase by 3% to 5%. Based on the progress of our contract-related business in all segments, we enter 2008 reasonably well positioned to deliver on our profitable growth objectives. Even in an anticipated soft overall economic and transportation environment, we expect to continue to deliver solid contractual revenue growth in all of our business segments as well as increased EPS growth for the company."
The Company anticipates 2008 capital expenditures to be $1.44 billion; net capital expenditures (including proceeds from sale of assets) are expected to be $1.10 billion. Cash from operations is forecast to be $1.22 billion with total cash generated of $1.61 billion and free cash flow of $205 million in 2008.
About Ryder
Ryder provides leading-edge transportation, logistics, and supply chain management solutions worldwide. Ryder's stock (NYSE: R) is a component of the Dow Jones Transportation Average and the Standard & Poor's 500 Index. Ryder ranks 362nd on the Fortune 500 and 1,458th on the Forbes Global 2000. For more information on Ryder System, Inc., visit
www.ryder.com.
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. 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 obtain adequate profit margins for our services, our inability to maintain current pricing levels due to customer acceptance or competition, customer retention levels, unexpected volume declines, loss of key customers in the Supply Chain Solutions (SCS) business segment, unexpected reserves or write-offs due to the deterioration of the credit worthiness or bankruptcy of customers, changes in financial, tax or regulatory requirements or changes in customers' business environments that will limit their ability to commit to long-term vehicle leases, changes in economic and market conditions affecting the commercial rental market or the sale of used vehicles, the effect of severe weather events, labor strikes or work stoppages affecting our or our customers' business operations, adequacy of accounting estimates, reserves and accruals particularly with respect to pension, taxes, insurance and revenue, changes in general economic conditions, sudden or unusual changes in fuel prices, availability of qualified drivers, our ability to manage our cost structure, new accounting pronouncements, rules or interpretations, changes in government regulations including regulations regarding vehicle emissions, our ability to create and benefit from synergies and operational improvements from recent FMS acquisitions, 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. Additional information regarding non-GAAP financial measures can be found in our investor presentation for the quarter and in our reports filed with the SEC, which are available in the Investors area of our website at
www.ryder.com.
Conference Call and Webcast Information:
Ryder's earnings conference call and webcast is scheduled for Friday, February 1, 2008, from 11:00 a.m. to 12:00 noon Eastern Time. Speakers will be Chairman and Chief Executive Officer Greg Swienton and Executive Vice President and Chief Financial Officer Robert Sanchez.
-- To join the conference call live: Begin 10 minutes prior to the
conference by dialing the audio phone number 1-888-398-5319 (outside U.S.
dial 1-773-681-5795) using the Passcode: RYDER and Conference Leader: Bob
Brunn. Then, access the presentation via the Net Conference website at
www.mymeetings.com/nc/join/ using the Conference Number: RG8755118 and
Passcode: RYDER.
-- To access audio replays of the conference and view a presentation of
Ryder's earnings results: Dial 1-800-331-1949 (outside U.S. dial 1-402-220-
0191) and use the Passcode: 2018, then 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 CONDENSED STATEMENTS OF EARNINGS - UNAUDITED
Periods ended December 31, 2007 and 2006
(In millions, except per share amounts)
Three Months Year Ended
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Revenue $ 1,666.2 1,594.1 $ 6,566.0 6,306.6
--------- --------- --------- ---------
Operating expense 713.7 661.5 2,776.9 2,735.7
Salaries and employee-related
costs 363.1 361.7 1,410.4 1,397.4
Subcontracted transportation 212.6 227.6 950.5 865.5
Depreciation expense 209.7 193.7 816.0 743.3
Gains on vehicle sales, net (7.4) (11.9) (44.1) (50.8)
Equipment rental 25.4 23.9 93.3 90.1
Interest expense 39.7 37.7 160.1 140.6
Miscellaneous income, net (2.1) (5.5) (15.9) (11.7)
Restructuring and other
(recoveries) charges, net (0.3) 3.6 13.3 3.6
--------- --------- --------- ---------
1,554.4 1,492.3 6,160.5 5,913.7
--------- --------- --------- ---------
Earnings before income taxes 111.8 101.8 405.5 393.0
Provision for income taxes (39.9) (36.0) (151.6) (144.0)
--------- --------- --------- ---------
Net earnings $ 71.9 65.8 $ 253.9 249.0
========= ========= ========= =========
Earnings per common share -
Diluted: $ 1.24 1.08 $ 4.24 4.04
========= ========= ========= =========
Weighted-average shares
outstanding - Diluted: 58.1 61.2 59.8 61.6
========= ========= ========= =========
RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
PRELIMINARY AND SUBJECT TO RECLASSIFICATION
(Dollars in millions)
(unaudited)
December 31, December 31,
2007 2006
------------ ------------
Assets:
Cash and cash equivalents $ 116.5 128.6
Other current assets 1,105.6 1,133.2
Revenue earning equipment, net 4,501.4 4,509.3
Operating property and equipment, net 518.7 499.0
Other assets 612.4 558.8
------------ ------------
$ 6,854.6 6,828.9
============ ============
Liabilities and shareholders' equity:
Short-term debt / current portion of
long-term debt $ 222.7 332.7
Other current liabilities 796.7 934.9
Long-term debt 2,553.4 2,484.2
Other non-current liabilities (including
deferred income taxes) 1,394.2 1,356.3
Shareholders' equity 1,887.6 1,720.8
------------ ------------
$ 6,854.6 6,828.9
============ ============
SELECTED KEY RATIOS
December 31, December 31,
2007 2006
------------ ------------
Debt to equity 147% 164%
Total obligations to equity (a) * 157% 168%
Twelve months ended
December 31,
2007 2006
------------ ------------
Return on average shareholders' equity 14.2% 15.5%
Return on average assets 3.7% 3.9%
Return on capital * 7.4% 7.9%
(a) Total obligations represent debt plus off-balance sheet equipment
obligations.
* Non-GAAP financial measure; see reconciliation to closest GAAP financial
measure included within this release.
RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED
Periods ended December 31, 2007 and 2006
(Dollars in millions)
Three Months Year Ended
---------------------- ----------------------
2007 2006 B(W) 2007 2006 B(W)
-------- ------- ----- -------- ------- -----
Revenue:
Fleet Management Solutions:
Full service lease $ 503.9 472.4 7% $1,965.3 1,848.3 6%
Contract maintenance 41.6 37.9 10% 159.6 141.9 12%
-------- ------- ----- -------- ------- -----
Contractual revenue 545.5 510.3 7% 2,124.9 1,990.2 7%
Contract-related
maintenance 48.5 48.7 (1%) 198.8 193.1 3%
Commercial rental 152.0 163.4 (7%) 583.3 665.7 (12%)
Other 18.8 18.9 (1%) 72.4 72.1 -
Fuel 320.6 264.1 21% 1,183.2 1,174.9 1%
-------- ------- ----- -------- ------- -----
Total Fleet Management
Solutions 1,085.4 1,005.4 8% 4,162.6 4,096.0 2%
Supply Chain Solutions 545.8 543.1 1% 2,250.3 2,028.5 11%
Dedicated Contract
Carriage 144.3 140.2 3% 567.6 568.8 -
Eliminations (109.3) (94.6) (16%) (414.5) (386.7) (7%)
-------- ------- ----- -------- ------- -----
Total revenue $1,666.2 1,594.1 5% $6,566.0 6,306.6 4%
======== ======= ===== ======== ======= =====
Operating Revenue: *
Fleet Management
Solutions $ 764.8 741.3 3% $2,979.4 2,921.1 2%
Supply Chain Solutions 337.2 320.1 5% 1,314.5 1,182.9 11%
Dedicated Contract
Carriage 140.3 135.6 3% 552.9 548.9 1%
Eliminations (52.7) (51.0) (3%) (210.2) (198.7) (6%)
-------- ------- ----- -------- ------- -----
Total operating revenue $1,189.6 1,146.0 4% $4,636.6 4,454.2 4%
======== ======= ===== ======== ======= =====
Business segment earnings:
Earnings before income taxes:
Fleet Management
Solutions $ 102.3 94.5 8% $ 373.7 368.1 2%
Supply Chain Solutions 18.9 17.0 11% 63.2 62.1 2%
Dedicated Contract
Carriage 12.3 11.2 9% 47.4 42.6 11%
Eliminations (8.1) (9.0) 12% (31.2) (33.7) 7%
-------- ------- ----- -------- ------- -----
125.4 113.7 10% 453.1 439.1 3%
Unallocated Central
Support Services (14.0) (11.1) (26%) (44.4) (39.5) (13%)
-------- ------- ----- -------- ------- -----
Earnings before
restructuring and other
items and income taxes 111.4 102.6 9% 408.7 399.6 2%
Restructuring and other
recoveries/(charges), net
and other items 0.4 (0.8) NM (3.2) (6.6) NM
-------- ------- ----- -------- ------- -----
Earnings before income
taxes 111.8 101.8 10% 405.5 393.0 3%
Provision for income taxes (39.9) (36.0) (11%) (151.6) (144.0) (5%)
-------- ------- ----- -------- ------- -----
Net earnings $ 71.9 65.8 9% $ 253.9 249.0 2%
======== ======= ===== ======== ======= =====
* Non-GAAP financial measure
Note: Amounts may not recalculate due to rounding.
RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION - UNAUDITED
Periods ended December 31, 2007 and 2006
(Dollars in Millions)
Three Months Year Ended
---------------------- --------------------------
2007 2006 B(W) 2007 2006 B(W)
-------- ------- ----- --------- --------- -----
Fleet Management Solutions
Total revenue $1,085.4 1,005.4 8% $ 4,162.6 4,096.0 2%
Fuel revenue (320.6) (264.1) 21% (1,183.2) (1,174.9) 1%
-------- ------- ----- --------- --------- -----
Operating revenue * $ 764.8 741.3 3% $ 2,979.4 2,921.1 2%
======== ======= ===== ========= ========= =====
Segment earnings before
income taxes $ 102.3 94.5 8% $ 373.7 368.1 2%
======== ======= ===== ========= ========= =====
Earnings before income
taxes as % of total
revenue 9.4% 9.4% 9.0% 9.0%
======== ======= ========= =========
Earnings before income
taxes as % of
operating revenue * 13.4% 12.8% 12.5% 12.6%
======== ======= ========= =========
Supply Chain Solutions
Total revenue $ 545.8 543.1 1% $ 2,250.3 2,028.5 11%
Subcontracted
transportation (208.6) (223.0) (6%) (935.8) (845.6) 11%
-------- ------- ----- --------- --------- -----
Operating revenue * $ 337.2 320.1 5% $ 1,314.5 1,182.9 11%
======== ======= ===== ========= ========= =====
Segment earnings before
income taxes $ 18.9 17.0 11% $ 63.2 62.1 2%
======== ======= ===== ========= ========= =====
Earnings before income
taxes as % of total
revenue 3.5% 3.1% 2.8% 3.1%
======== ======= ========= =========
Earnings before income
taxes as % of
operating revenue * 5.6% 5.3% 4.8% 5.3%
======== ======= ========= =========
Memo: Fuel costs $ 35.6 24.9 (43%)$ 124.5 104.2 (19%)
======== ======= ===== ========= ========= =====
Dedicated Contract
Carriage
Total revenue $ 144.3 140.2 3% $ 567.6 568.8 -
Subcontracted
transportation (4.0) (4.6) (14%) (14.7) (19.9) (26%)
-------- ------- ----- --------- --------- -----
Operating revenue * $ 140.3 135.6 3% $ 552.9 548.9 1%
======== ======= ===== ========= ========= =====
Segment earnings before
income taxes $ 12.3 11.2 9% $ 47.4 42.6 11%
======== ======= ===== ========= ========= =====
Earnings before income
taxes as % of total
revenue 8.5% 8.0% 8.4% 7.5%
======== ======= ========= =========
Earnings before income
taxes as % of
operating revenue * 8.7% 8.3% 8.6% 7.8%
======== ======= ========= =========
Memo: Fuel costs $ 29.3 24.3 (21%)$ 107.1 104.6 (2%)
======== ======= ===== ========= ========= =====
* Non-GAAP financial measure
Note: Amounts may not recalculate due to rounding.
RYDER SYSTEM, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - PRELIMINARY AND UNAUDITED
(In millions)
OPERATING REVENUE
RECONCILIATION Three Months Year Ended
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Total revenue $ 1,666.2 1,594.1 $ 6,566.0 6,306.6
Fuel services and subcontracted
transportation revenue (533.2) (491.7) (2,133.7) (2,040.4)
Fuel eliminations 56.6 43.6 204.3 188.0
--------- --------- --------- ---------
Operating revenue * $ 1,189.6 1,146.0 $ 4,636.6 4,454.2
========= ========= ========= =========
CASH FLOW RECONCILIATION Year ended
December 31,
--------------------
2007 2006
--------- ---------
Net cash provided by operating
activities $ 1,102.9 853.6
Proceeds from sales (primarily
revenue earning equipment) 373.6 332.7
Proceeds from sale and
leaseback of assets 150.3 -
Collections on direct finance
leases 63.4 66.3
Other, net 1.6 2.1
--------- ---------
Total cash generated * 1,691.8 1,254.7
Capital expenditures (1,317.2) (1,695.1)
--------- ---------
Free cash flow * $ 374.6 (440.4)
========= =========
DEBT TO EQUITY RECONCILIATION December December
31, % to 31, % to
2007 Equity 2006 Equity
--------- --------- --------- ---------
On-balance sheet debt $ 2,776.1 147% $ 2,816.9 164%
Off-balance sheet debt - PV of
minimum lease payments
and guaranteed residual
values under operating leases
for vehicles (a) 178.0 78.0
--------- ---------
Total obligations * $ 2,954.1 157% $ 2,894.9 168%
========= =========
RETURN ON CAPITAL RECONCILIATION Year ended
December 31,
--------------------
2007 2006
--------- ---------
Net earnings (12-month rolling
period) $ 253.9 249.0
+ Restructuring and other items 1.5 -
+ Income taxes 151.6 144.0
--------- ---------
Adjusted earnings before
income taxes 407.0 393.0
+ Adjusted interest expense(b) 169.1 146.6
- Adjusted income taxes (c) (220.0) (207.2)
--------- ---------
= Adjusted net earnings for
ROC (numerator) $ 356.1 332.4
========= =========
Average total debt $ 2,847.7 2,480.3
+ Average off-balance sheet
debt 150.1 98.8
+ Average adjusted total
shareholders' equity (d) 1,791.7 1,605.2
--------- ---------
= Adjusted average total
capital (denominator) $ 4,789.5 4,184.3
========= =========
Adjusted ROC * 7.4% 7.9%
========= =========
Notes:
(a) Discounted at the incremental borrowing rate at lease inception.
(b) Interest expense includes implied interest on off-balance sheet vehicle
obligations.
(c) Income taxes were calculated using the effective income tax rate for
the period exclusive of benefits from tax law changes recognized in
2006 and the fourth quarter of 2007.
(d) Represents shareholders' equity adjusted for tax benefits in those
periods.
* Non-GAAP financial measure
RYDER SYSTEM, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - PRELIMINARY AND UNAUDITED
(In millions, except per share amounts)
NET EARNINGS RECONCILIATION Three Months Year Ended
---------------- ----------------
2007 2006 2007 2006
------- ------- ------- -------
Net earnings $ 71.9 65.8 $ 253.9 249.0
Restructuring (recoveries)/charges (0.3) - 7.5 -
Tax law changes (3.3) - (3.3) (6.8)
Gain on sale of property (0.0) - (6.2) -
2006 pension accounting charge - - - 3.7
------- ------- ------- -------
Comparable net earnings * $ 68.3 65.8 $ 251.9 245.9
======= ======= ======= =======
EPS RECONCILIATION Three Months Year Ended
---------------- ----------------
2007 2006 2007 2006
------- ------- ------- -------
Net earnings $ 1.24 1.08 $ 4.24 4.04
Restructuring charges - - 0.13 -
Tax law changes (0.06) - (0.06) (0.11)
Gain on sale of property - - (0.10) -
2006 pension accounting charge - - - 0.06
------- ------- ------- -------
Comparable net earnings * $ 1.18 1.08 $ 4.21 3.99
======= ======= ======= =======
Consolidated
RESTRUCTURING AND OTHER Condensed
ITEMS RECONCILIATION Statements Three Months Year Ended
of Earnings ---------------- ----------------
Line Item 2007 2006 2007 2006
------------ ------- ------- ------- -------
Severance and employee-
related (costs)/
recoveries Restructuring $ 0.6 $ (1.3) $ (10.4) $ (1.1)
Facilities and related
(costs)/recoveries Restructuring (0.3) (0.1) (1.3) (0.2)
Contract termination and
transition costs Restructuring - (0.2) (0.3) (0.2)
Early retirement
of debt Restructuring - (2.1) (1.3) (2.1)
------- ------- ------- -------
Restructuring and other
recoveries/(charges), net 0.3 (3.7) (13.3) (3.6)
------- ------- ------- -------
Gain on sale of
property Misc. Income 0.1 - 10.1 -
2006 pension accounting
charge Salaries - - - (5.9)
2006 pension remeasurement
benefit Salaries - 4.7 - 4.7
2006 postretirement plan
charge Salaries - (1.8) - (1.8)
------- ------- ------- -------
Restructuring and other
recoveries/(charges), net
and other items $ 0.4 $ (0.8) $ (3.2) $ (6.6)
======= ======= ======= =======
* Non-GAAP financial measure
Earnings per share amounts are calculated independently for each
component and may not be additive due to rounding.
Contacts:
Media:
David Bruce
(305) 500-4999
Investor Relations:
Bob Brunn
(305) 500-4053
SOURCE: Ryder System, Inc.