MIAMI, FL, Feb 04, 2009 (MARKET WIRE via COMTEX) -- Ryder System, Inc. (NYSE: R)
-- Q4 EPS of $0.19 Include Restructuring and Other Charges of $0.90
-- Q4 Comparable EPS of $1.09 vs. $1.18 in 2007; Within Forecast Range
-- Q4 Revenue Declines 18%; Operating Revenue Decreases 7%
-- Full-Year EPS of $3.52 Include Restructuring and Other Charges of
$0.97
-- Full-Year Comparable EPS of $4.49 Increase from $4.21 in 2007
-- Full-Year Revenue Decreases 6%; Operating Revenue Increases 1%
-- 2009 Comparable EPS Forecast of $2.70 to $3.40, Excludes $0.10 Carry-
Over Restructuring Charge
-- Pension Expense Increase of $0.69 Per Share Included in 2009 EPS
Forecast
Ryder System, Inc. (NYSE: R), a leader in transportation and supply
chain management solutions, today reported earnings per diluted share
(EPS) were $0.19 for the three-month period ended December 31, 2008,
compared with EPS of $1.24 in the year-earlier period. Net earnings
for the fourth quarter were $10.6 million, compared with $71.9
million in the year-earlier period. EPS and net earnings in the
current period included a charge of $0.90 and $49.7 million,
respectively, related primarily to restructuring and other items
partially offset by the reversal of contingent income tax accruals.
EPS and net earnings in the year-earlier period included a benefit of
$0.06 and $3.6 million, respectively, related primarily to changes in
Canadian income tax laws. Excluding these items, EPS were down 8% to
$1.09 and net earnings were down 12% to $60.3 million.
Revenue for the fourth quarter of 2008 was $1.37 billion, down 18%
from $1.67 billion in the comparable period last year. Revenue was
impacted by a previously announced change from gross to net revenue
reporting in a subcontracted transportation agreement, which has no
impact on operating revenue or earnings. Revenue comparisons were
also adversely impacted by declining fuel prices and unfavorable
foreign exchange rate movements related to international operations.
Operating revenue (revenue excluding Fleet Management Solutions fuel
and all subcontracted transportation) was $1.11 billion, down 7%
compared with $1.19 billion in the year-earlier period. Unfavorable
foreign exchange rates impacted operating revenue by 5%. Fleet
Management Solutions (FMS) business segment revenue decreased 10% due
primarily to lower fuel services revenue. FMS operating revenue
declined 4% due to unfavorable foreign exchange rate movements and
lower commercial rental revenue, which more than offset contractual
revenue growth. Supply Chain Solutions (SCS) business segment revenue
declined 35% largely due to a previously announced change from gross
to net reporting, as noted above. SCS operating revenue declined 13%
due primarily to lower automotive volumes and unfavorable foreign
exchange rate movements. Dedicated Contract Carriage (DCC) business
segment revenue and operating revenue decreased 13% and 12%,
respectively, due to the impact of the non-renewal of certain
customer contracts, lower volumes, and the pass through of lower fuel
costs.
Ryder Chairman and Chief Executive Officer Greg Swienton commented,
"We delivered full-year comparable earnings growth, operating revenue
growth, and positive free cash flow, following more than two full
years of a U.S. freight recession, which began in the third quarter
of 2006. We also successfully completed four accretive acquisitions
in 2008. We are pleased that we delivered fourth quarter earnings
within our previous forecast range. In the quarter, we saw
significant deterioration in general economic conditions,
particularly affecting our transactional commercial rental business.
This more than offset continuing strength in our contractual FMS
business, which grew by 4% in the quarter, adjusted for foreign
exchange. In addition to the steps we took throughout the year to
adjust the size of the commercial rental fleet, we announced
aggressive strategic actions in the quarter to better position us for
the market conditions we anticipate in the coming year."
Full-Year 2008 Results
Revenue for the full-year 2008 was $6.20 billion, a decrease of 6%
from $6.57 billion in the comparable period of 2007. Operating
revenue (revenue excluding FMS fuel and all subcontracted
transportation) of $4.70 billion was up 1% from $4.64 billion in the
same period of 2007. Net earnings were $199.9 million compared with
$253.9 million in the year-earlier period. EPS were $3.52 compared
with $4.24 in the same period of 2007. Comparable net earnings were
$254.8 million, up 1% from $251.9 million in 2007. Comparable EPS of
$4.49 were up 7% from $4.21 in 2007. Comparable earnings and EPS
exclude: second quarter 2008 charges in the Company's SCS operations
in Brazil to adjust accruals and tax deferrals related to prior
years; net restructuring and other items recognized in the fourth
quarter of 2008 and the third quarter of 2007; and income tax benefits
associated with tax law changes in both years and reversals of
contingent tax accruals in 2008.
Operating cash flow for the full-year 2008 was $1.26 billion, up 14%
from $1.10 billion in 2007. Total cash generated (including proceeds
from used vehicle sales) for the full-year 2008, was $1.58 billion,
down 6% from $1.69 billion in 2007, primarily due to proceeds of $150
million from a sale leaseback transaction completed in 2007. Free
cash flow in 2008 was $348.9 million, compared with $374.6 million in
2007.
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, revenue in the fourth quarter of 2008
was $976.3 million, down 10% compared with the year-earlier period.
Fuel services revenue decreased 25% compared with the same period in
2007, due to lower fuel prices and reduced volume. Operating revenue
(revenue excluding fuel) was $736.7 million, down 4% compared with
$764.8 million in the year-earlier period. Both FMS revenue and
operating revenue included an unfavorable foreign exchange impact of
4%. Full service lease revenue was flat with the year-earlier period
reflecting an increase of 5% in the North American market, including
acquisitions, offset by unfavorable foreign exchange rate movements.
Contract maintenance revenue increased 2%, organically, due to new
sales activity partially offset by the impact of unfavorable exchange
rates. Commercial rental revenue decreased 15% compared with the
year-earlier period, due to weak global market demand, lower pricing,
and unfavorable foreign exchange impacts.
The FMS business segment's NBT was $86.6 million, down 15% compared
with $102.3 million in 2007. This decrease was related primarily to a
decline in global commercial rental results partially offset by
improved contractual business performance and acquisitions.
Commercial rental results were impacted by weak market demand which
drove lower utilization and reduced pricing. FMS segment earnings
also included an unfavorable foreign exchange impact of 3%. Business
segment NBT as a percentage of operating revenue was 11.7%, down 170
basis points compared with 13.4% 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 materials and components
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 2008 revenue was $357.2
million, down 35% from $545.8 million in the comparable period of
2007. Revenue declined largely due to a previously announced change in
reporting of a transportation services arrangement from a gross to a
net basis. This change arose from a customer contract modification
effective January 1, 2008, and does not affect operating revenue or
earnings. Excluding this contract change, revenue declined 13%.
Operating revenue (revenue excluding subcontracted transportation)
was $294.8 million, down 13% from $337.2 million in the comparable
period a year ago. Operating revenue declined primarily due to lower
automotive volumes, and an unfavorable foreign exchange impact of 7%.
The SCS business segment's NBT was $15.0 million, down 21% from $18.9
million in the same quarter of 2007, driven by lower international
operating results and, to a lesser extent, the impact of lower
automotive revenue. This was partially offset by lower compensation
costs. Business segment NBT as a percentage of operating revenue
was 5.1%, down 50 basis points compared with 5.6% in 2007.
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 2008 revenue was $126.2
million, down 13% compared with $144.3 million in 2007. Operating
revenue (revenue excluding subcontracted transportation) was $123.6
million, down 12% compared with $140.3 million in the year-earlier
period. Revenue decreased due to the impact of the non-renewal of
customer contracts, lower volumes, as well as the pass through of
lower fuel costs.
The DCC business segment's NBT was $12.7 million, up 4% compared with
$12.3 million in 2007. Business segment NBT was positively impacted
by better operating margins and improved efficiencies. Business
segment NBT as a percentage of operating revenue was 10.3%, up 160
basis points compared with 8.7% 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 2008, CSS costs were $45.3 million, reduced 12% from $51.3 million
in the year-earlier period. The improvement in CSS costs primarily
reflects lower compensation, and prior-year severance expense.
Full-year 2008 CSS costs were $185.5 million, down 3% from $190.5
million in 2007.
Restructuring and Other Items
Earnings for the fourth quarter 2008 included an after-tax charge of
$49.7 million or $0.90 per diluted share related primarily to
restructuring and other items, partially offset by the reversal of
contingent income tax accruals.
Pre-tax restructuring and other items totaled $64.0 million ($57.6
million after tax) for the fourth quarter. A pre-tax charge of $37.5
million ($36.0 million after tax) was recognized for exit costs
associated with a previously announced plan to discontinue current
supply chain operations in Brazil, Argentina, Chile, and Europe. The
exit costs represent employee-related costs, including severance and
other termination benefits, asset impairment charges and contract
termination costs. The Company also recognized a pre-tax
restructuring charge of $10.7 million ($6.9 million after tax)
associated with a previously announced workforce reduction of
approximately 700 positions, primarily in the U.S. In addition, as
previously announced, the Company recognized a non-cash, pre-tax
impairment charge of $10.3 million (also $10.3 million after tax)
related to the write-down of goodwill associated with the European
Fleet Management Solutions business segment. The Company also
recognized a charge of $5.5 million ($4.4 million after tax) for
reserves and impairments related to long-term international assets,
which had not been previously announced.
The Company recognized an income tax benefit of $7.9 million
associated with the reversal of reserves for uncertain tax positions
primarily as a result of expiring statutes of limitation.
Income Taxes
The Company's effective income tax rate in the fourth quarter of 2008
was 67.9% of pre-tax earnings compared to 35.6% in the year-earlier
period. The current period income tax rate was impacted by
non-deductible restructuring and other charges described above. These
adverse impacts were partially offset by the reversal of reserves for
uncertain tax positions described above. The prior 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.
Excluding these items, the Company's comparable effective income tax
rate was 37.9% of pre-tax comparable earnings versus 38.7% in the
year-earlier period.
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 $1.27 billion for the full-year 2008,
compared with $1.20 billion in 2007. The increase in capital
expenditures reflects higher spending on contractual full service
lease vehicles, partially offset by lower spending on transactional
commercial rental vehicles. Net capital expenditures (including
proceeds from the sale of assets) were $1.00 billion, up from $671
million in 2007. The increase reflects higher gross capital
expenditures of $74 million, prior-year proceeds of $150 million from
a sale leaseback transaction, and lower proceeds from used vehicles
sales of $109 million.
The Company completed four acquisitions in 2008. Cash paid for
acquisitions totaled $247 million in 2008, compared with $75 million
in the prior year.
Balance Sheet and Leverage
Balance sheet debt as of December 31, 2008 of $2.86 billion,
increased by $86.7 million compared with year-end 2007, due primarily
to acquisitions and stock repurchases partially offset by free cash
flow. Shareholders' equity of $1.35 billion decreased $542.4 million
due to unrecognized pension plan losses and foreign currency
translation adjustments. Unrecognized pension plan losses represent
the change in the plans' funded status as a result of market declines
in 2008. The leverage ratio for balance sheet debt as of December 31,
2008 was 213%, compared with 147% at year-end 2007. Total
obligations to equity as of December 31, 2008 were 225%, up from 157%
at year-end 2007. The increase in the Company's leverage ratios was
largely driven by unrecognized pension plan losses, stock
repurchases, foreign currency translation adjustments, and
acquisitions. 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. However, in the current uncertain
environment, the Company has temporarily paused share repurchases and
does not expect to reach the higher end of its long-term range.
2009 Forecast
Ryder forecasts full-year 2009 earnings to be in the range of $2.60
to $3.30 per diluted share. Comparable full-year 2009 earnings are
forecast to be in the range of $2.70 to $3.40 per diluted share, and
exclude an anticipated $ 0.10 per share of additional restructuring
costs related to the previously announced restructuring initiatives.
Full-year comparable EPS were $4.49 in 2008. The anticipated
earnings decline is driven by a significant increase in annual
pension expense of $0.69. In addition, we anticipate lower
commercial rental and used vehicle sales results, and a negative
impact from automotive industry production declines. These items are
partially offset by recently announced workforce and other cost
reduction initiatives, benefits from acquisitions, and prior share
repurchases. The Company is also establishing a first quarter 2009
EPS forecast of $0.40 to $0.50, compared with $0.96 in 2008, primarily
due to lower pension expense and stronger market conditions in the
prior year.
Revenue for the full-year 2009 is forecast to be approximately $5.4
billion compared with $6.2 billion in 2008. Operating revenue for the
full-year 2009 is forecast to be $4.3 billion compared with $4.7
billion in 2008. Revenue comparisons are adversely impacted by
forecasted lower fuel prices and foreign exchange rates. In Fleet
Management Solutions, core contractual leasing and maintenance
revenue is expected to grow 1%, or up 4% excluding foreign exchange.
Commercial rental revenue is forecast to be down by 15%. Supply
Chain revenue is forecast to decrease by 22%. SCS operating revenue
is anticipated to decrease by 20%, or 13% excluding the impacts of
foreign exchange and fuel. Dedicated Contract Carriage revenue is
expected to decrease by 8%. DCC operating revenue is expected to
decrease 10%, or 4% excluding the impact of fuel.
Commenting on the Company's outlook, Mr. Swienton said, "We enter
2009 with a strong balance sheet, a lean, effective organizational
structure, and a team that's well prepared to manage through cyclical
impacts of a prolonged recession and market downturn. Our improved
business model, including centralized asset management processes, and
the coordinated responsiveness of our organization continue to serve
us well in tempering the full impact of these unprecedented economic
times. Additionally, we took proactive strategic and tactical steps
in the fourth quarter to further align our cost structure and
resources with what we expect to be a soft economic environment
throughout the year. Clearly we face challenging headwinds that are
directly related to global economic and market conditions. Chief
among them is a significant increase in pension expense driven by
poor performance in the overall stock market in 2008. In addition, we
are experiencing the overall effect of a weak global economy on our
transactional commercial rental and used vehicle sales operations,
and challenges facing our Supply Chain customers in the automotive
industry. Despite these factors, we're targeting new customer
outsourcing opportunities in our contractual product lines, focusing
on strong retention of our existing customers, and evaluating
additional acquisition opportunities. Our strong balance sheet, good
availability of capital, and the free cash flow generated by our
business model are of particular value in enabling Ryder to
capitalize on opportunities in the current environment. While we are
certainly facing a difficult environment in the current period, we
believe that our actions will position the Company well for long-term
profitable growth in the future."
The Company anticipates 2009 capital expenditures to be $940 million;
net capital expenditures (including proceeds from sale of assets) are
expected to be $685 million. Cash from operations is forecast to be
$980 million with total cash generated of $1.30 billion and free cash
flow of $365 million in 2009. Total obligations to equity are
forecast to decline from 225% at year-end 2008 to approximately 183%
at year-end 2009.
About Ryder
Ryder provides leading-edge transportation, logistics and supply
chain management solutions. Ryder's stock (NYSE: R) is a component of
the Dow Jones Transportation Average and the Standard & Poor's 500
Index. Ryder ranks 371st on the FORTUNE 500(R) and 1,631st 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 soft economic conditions, customer acceptance
or competition, customer retention levels, unexpected volume declines,
automotive plant shutdowns and shift eliminations, 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, the timing and impact
of the restructuring activities announced in Q4 2008, 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,
a decrease in credit ratings, increased debt costs resulting from
volatile financial markets, lack of accretive acquisition
opportunities, inability to achieve planned synergies and customer
retention levels from acquisitions, 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, further decline in pension plan returns, 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 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
Wednesday, February 4, 2009, 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: RH7667649 and Passcode: RYDER.
-- To access audio replays of the conference and view a presentation
of Ryder's earnings results: Dial 1-800-754-7906 (outside U.S. dial
1-203-369-3333), 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, 2008 and 2007
(In millions, except per share amounts)
Three Months Year Ended
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Revenue $ 1,373.8 1,666.2 $ 6,203.7 6,566.0
--------- --------- --------- ---------
Operating expense 618.3 713.7 3,029.6 2,776.9
Salaries and employee-related
costs 331.5 363.1 1,399.1 1,410.4
Subcontracted transportation 65.0 212.6 323.4 950.5
Depreciation expense 213.7 209.7 843.5 816.0
Gains on vehicle sales, net (6.3) (7.4) (39.3) (44.1)
Equipment rental 19.0 25.4 80.1 93.3
Interest expense 41.6 39.7 157.3 160.1
Miscellaneous (income) expense,
net (0.6) (2.1) 1.7 (15.9)
Restructuring and other charges
(recoveries), net 58.4 (0.3) 58.4 13.3
--------- --------- --------- ---------
1,340.6 1,554.4 5,853.8 6,160.5
--------- --------- --------- ---------
Earnings before income taxes 33.2 111.8 349.9 405.5
Provision for income taxes (22.6) (39.9) (150.0) (151.6)
--------- --------- --------- ---------
Net earnings $ 10.6 71.9 $ 199.9 253.9
========= ========= ========= =========
Earnings per common share -
Diluted $ 0.19 1.24 $ 3.52 4.24
========= ========= ========= =========
Weighted-average shares
outstanding - Diluted 55.5 58.1 56.8 59.8
========= ========= ========= =========
RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
PRELIMINARY AND SUBJECT TO RECLASSIFICATION
(Dollars in millions)
(unaudited)
December 31, December 31,
2008 2007
------------ ------------
Assets:
Cash and cash equivalents $ 120.3 116.5
Other current assets 830.9 1,105.6
Revenue earning equipment, net 4,565.2 4,501.4
Operating property and equipment, net 546.8 518.7
Other assets 626.3 612.4
------------ ------------
$ 6,689.5 6,854.6
============ ============
Liabilities and shareholders' equity:
Short-term debt / current portion of
long-term debt $ 384.3 222.7
Other current liabilities 726.9 796.7
Long-term debt 2,478.5 2,553.4
Other non-current liabilities (including
deferred income taxes) 1,754.6 1,394.2
Shareholders' equity 1,345.2 1,887.6
------------ ------------
$ 6,689.5 6,854.6
============ ============
SELECTED KEY RATIOS
December 31, December 31,
2008 2007
------------ ------------
Debt to equity 213% 147%
Total obligations to equity (a) * 225% 157%
Twelve months ended
December 31,
2008 2007
------------ ------------
Return on average shareholders' equity 11.2% 14.2%
Return on average assets 2.9% 3.7%
Return on capital* 7.3% 7.4%
(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, 2008 and 2007
(Dollars in millions)
Three Months Year Ended
------------------------ ------------------------
2008 2007 B(W) 2008 2007 B(W)
-------- ------- ---- -------- ------- ----
Revenue:
Fleet Management
Solutions:
Full service lease $ 505.4 503.9 0% $2,042.1 1,965.3 4%
Contract maintenance 42.2 41.6 2% 168.1 159.6 5%
-------- ------- ---- -------- ------- ----
Contractual revenue 547.6 545.5 0% 2,210.2 2,124.9 4%
Contract-related
maintenance 43.7 48.5 (10)% 193.9 198.8 (2)%
Commercial rental 128.7 152.0 (15)% 557.5 583.3 (4)%
Other 16.7 18.8 (11)% 73.1 72.4 1%
Fuel 239.6 320.6 (25)% 1,415.3 1,183.2 20%
-------- ------- ---- -------- ------- ----
Total Fleet
Management
Solutions 976.3 1,085.4 (10)% 4,450.0 4,162.6 7%
Supply Chain
Solutions 357.2 545.8 (35)% 1,643.1 2,250.3 (27)%
Dedicated Contract
Carriage 126.2 144.3 (13)% 547.8 567.6 (4)%
Eliminations (85.9) (109.3) 21 % (437.2) (414.5) (5)%
-------- ------- ---- -------- ------- ----
Total revenue $1,373.8 1,666.2 (18)% $6,203.7 6,566.0 (6)%
======== ======= ==== ======== ======= ====
Operating Revenue: *
Fleet Management
Solutions $ 736.7 764.8 (4)% $3,034.7 2,979.4 2%
Supply Chain
Solutions 294.8 337.2 (13)% 1,330.7 1,314.5 1%
Dedicated Contract
Carriage 123.6 140.3 (12)% 536.8 552.9 (3)%
Eliminations (45.6) (52.7) 13% (197.7) (210.2) 6%
-------- ------- ---- -------- ------- ----
Total operating
revenue $1,109.5 1,189.6 (7)% $4,704.5 4,636.6 1%
======== ======= ==== ======== ======= ====
Business segment
earnings:
Earnings before income
taxes:
Fleet Management
Solutions $ 86.6 102.3 (15)% $ 398.5 373.7 7%
Supply Chain
Solutions 15.0 18.9 (21)% 42.7 63.2 (32)%
Dedicated Contract
Carriage 12.7 12.3 4 % 49.6 47.4 5%
Eliminations (8.4) (8.1) (5)% (31.8) (31.2) (2)%
-------- ------- ---- -------- ------- ----
105.9 125.4 (16)% 459.0 453.1 1%
Unallocated Central
Support Services (8.7) (14.0) 38% (38.7) (44.4) 13%
-------- ------- ---- -------- ------- ----
Earnings before
restructuring and
other (charges) /
recoveries; net and
income taxes 97.2 111.4 (13)% 420.3 408.7 3%
Restructuring and
other (charges) /
recoveries; net and
other items (64.0) 0.4 NM (70.4) (3.2) NM
-------- ------- ---- -------- ------- ----
Earnings before income
taxes 33.2 111.8 (70)% 349.9 405.5 (14)%
Provision for income
taxes (22.6) (39.9) 43% (150.0) (151.6) 1%
-------- ------- ---- -------- ------- ----
Net earnings $ 10.6 71.9 (85)% $ 199.9 253.9 (21)%
======== ======= ==== ======== ======= ====
* 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, 2008 and 2007
(Dollars in millions)
Three Months Year Ended
---------------------- -------------------------
2008 2007 B(W) 2008 2007 B(W)
------ ------- ----- -------- --------- ----
Fleet Management
Solutions
Total revenue $976.3 1,085.4 (10%) $4,450.0 4,162.6 7%
Fuel revenue (239.6) (320.6) (25%) (1,415.3) (1,183.2) 20%
------ ------- ----- -------- --------- ----
Operating revenue * $736.7 764.8 (4%) $3,034.7 2,979.4 2%
====== ======= ===== ======== ========= ====
Segment earnings
before income taxes $ 86.6 102.3 (15%) $ 398.5 373.7 7%
====== ======= ===== ======== ========= ====
Earnings before
income taxes as % of
total revenue 8.9% 9.4% 9.0% 9.0%
====== ======= ======== =========
Earnings before
income taxes as % of
operating revenue * 11.7% 13.4% 13.1% 12.5%
====== ======= ======== =========
Supply Chain
Solutions
Total revenue $357.2 545.8 (35%) $1,643.1 2,250.3 (27%)
Subcontracted
transportation (62.4) (208.6) (70%) (312.4) (935.8) (67%)
------ ------- ----- -------- --------- ----
Operating revenue * $294.8 337.2 (13%) $1,330.7 1,314.5 1%
====== ======= ===== ======== ========= ====
Segment earnings
before income taxes $ 15.0 18.9 (21%) $ 42.7 63.2 (32%)
====== ======= ===== ======== ========= ====
Earnings before
income taxes as % of
total revenue 4.2% 3.5% 2.6% 2.8%
====== ======= ======== =========
Earnings before
income taxes as % of
operating revenue * 5.1% 5.6% 3.2% 4.8%
====== ======= ======== =========
Memo: Fuel costs $ 22.7 35.6 36% $ 147.4 124.5 (18%)
====== ======= ===== ======== ========= ====
Dedicated Contract
Carriage
Total revenue $126.2 144.3 (13%) $ 547.8 567.6 (4%)
Subcontracted
transportation (2.6) (4.0) (35%) (11.0) (14.7) (25%)
------ ------- ----- -------- --------- ----
Operating revenue * $123.6 140.3 (12%) $ 536.8 552.9 (3%)
====== ======= ===== ======== ========= ====
Segment earnings
before income taxes $ 12.7 12.3 4% $ 49.6 47.4 5%
====== ======= ===== ======== ========= ====
Earnings before
income taxes as % of
total revenue 10.1% 8.5% 9.1% 8.4%
====== ======= ======== =========
Earnings before
income taxes as % of
operating revenue * 10.3% 8.7% 9.2% 8.6%
====== ======= ======== =========
Memo: Fuel costs $ 22.4 29.3 24% $ 123.0 107.1 (15%)
====== ======= ===== ======== ========= ====
* 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
(Dollars in millions)
OPERATING REVENUE
RECONCILIATION Three months Year Ended
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Total revenue $1,373.8 1,666.2 $6,203.7 6,566.0
Fuel services and
subcontracted
transportation
revenue (304.6) (533.2) (1,738.7) (2,133.7)
Fuel eliminations 40.3 56.6 239.5 204.3
-------- -------- -------- --------
Operating revenue * $1,109.5 1,189.6 $4,704.5 4,636.6
======== ======== ======== ========
CASH FLOW
RECONCILIATION Year ended
December 31,
------------------
2008 2007
-------- --------
Net cash provided
by operating
activities $1,255.7 1,102.9
Proceeds from
sales (primarily
revenue earning
equipment) 264.9 373.6
Proceeds from
sale & leaseback
of assets - 150.3
Collections on
direct finance
leases 61.9 63.4
Other, net 0.5 1.6
-------- --------
Total cash
generated * 1,583.0 1,691.8
Capital
expenditures (1,234.1) (1,317.2)
-------- --------
Free cash flow * $ 348.9 374.6
======== ========
SCS REVENUE
RECONCILIATION Three months Year Ended
---------------------------- ------------------------
2008 2007 B(W) 2008 2007 B(W)
-------- -------- -------- -------- ------- -----
Total SCS revenue $ 357.2 545.8 (35%) $1,643.1 2,250.3 (27%)
Customer contract
modification - (133.3) (100%) - (640.0) (100%)
-------- -------- -------- -------- ------- -----
Adjusted total
SCS revenue* $ 357.2 412.5 (13%) $1,643.1 1,610.3 2%
======== ======== ======== ======== ======= =====
DEBT TO EQUITY
RECONCILIATION December December
31, % to 31, % to
2008 Equity 2007 Equity
-------- -------- -------- --------
On-balance sheet
debt $2,862.8 213% $2,776.1 147%
Off-balance sheet
debt - PV of
minimum lease
payments and
guaranteed
residual values
under operating
leases for
vehicles (a) 163.0 178.0
-------- --------
Total obligations * $3,025.8 225% $2,954.1 157%
======== ========
RETURN ON CAPITAL
RECONCILIATION Year ended
December 31,
------------------
2008 2007
-------- --------
Net earnings
(12-month
rolling period) $ 199.9 253.9
+ Restructuring
and other items 70.5 1.5
+ Income taxes 150.0 151.6
-------- --------
Adjusted
earnings
before income
taxes 420.4 407.0
+ Adjusted
interest expense
(b) 165.0 169.1
- Adjusted
income taxes
(c) (230.5) (220.0)
-------- --------
= Adjusted net
earnings for ROC
(numerator) $ 354.9 356.1
======== ========
Average total
debt $2,881.9 2,847.7
+ Average
off-balance
sheet debt 170.7 150.1
+ Average
adjusted total
shareholders'
equity (d) 1,788.1 1,791.7
-------- --------
= Adjusted
average total
capital
(denominator) $4,840.7 4,789.5
======== ========
Adjusted ROC * 7.3% 7.4%
======== ========
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 comparable earnings items.
(d) Represents shareholders' equity excluding comparable earnings items
for those periods.
* Non-GAAP financial measure
Note: Amounts may not recalculate due to rounding.
Certain prior period amounts have been reclassified to conform to
current year presentation.
RYDER SYSTEM, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - PRELIMINARY AND UNAUDITED
(In millions, except per share amounts)
December 31, 2008
----------------------------------------------------------
Three Months Year Ended
---------------------------- ----------------------------
Reported Comparable Reported Comparable
Earnings Adjustments Earnings Earnings Adjustments Earnings
-------- -------- -------- -------- -------- --------
Revenue $1,373.8 - 1,373.8 $6,203.7 - 6,203.7
-------- -------- -------- -------- -------- --------
Operating
expense
(exclusive of
items shown
separately)(a) 618.3 (3.9) 614.4 3,029.6 (8.8) 3,020.8
Salaries and
employee-related
costs 331.5 - 331.5 1,399.1 - 1,399.1
Subcontracted
transportation
(b) 65.0 - 65.0 323.4 (1.6) 321.8
Depreciation
expense (c) 213.7 (1.6) 212.1 843.5 (1.6) 841.9
Gains on
vehicle sales,
net (6.3) - (6.3) (39.3) - (39.3)
Equipment
rental 19.0 - 19.0 80.1 - 80.1
Interest
expense 41.6 - 41.6 157.3 - 157.3
Miscellaneous
(income)
expense, net (0.6) - (0.6) 1.7 - 1.7
Restructuring
and other
charges,
net (d) 58.4 (58.4) - 58.4 (58.4) -
-------- -------- -------- -------- -------- --------
1,340.6 (64.0) 1,276.6 5,853.8 (70.4) 5,783.4
-------- -------- -------- -------- -------- --------
Earnings before
income taxes 33.2 64.0 97.2 349.9 70.4 420.3
Provision for
income taxes
(e) (22.6) (14.3) (36.9) (150.0) (15.6) (165.6)
-------- -------- -------- -------- -------- --------
Net earnings $ 10.6 49.7 60.3 $ 199.9 54.9 254.8
======== ======== ======== ======== ======== ========
Tax Rate 67.9% 37.9% 42.9% 39.4%
======== ======== ======== ========
Weighted-average
shares
outstanding -
Diluted 55.5 55.5 56.8 56.8
======== ======== ======== ========
Earnings per
common
share-Diluted $ 0.19 $ 1.09 $ 3.52 $ 4.49
======== ======== ======== ========
December 31, 2007
----------------------------------------------------------
Three Months Year Ended
---------------------------- ----------------------------
Reported Comparable Reported Comparable
Earnings Adjustments Earnings Earnings Adjustments Earnings
-------- -------- -------- -------- -------- --------
Revenue $1,666.2 - 1,666.2 $6,566.0 - 6,566.0
-------- -------- -------- -------- -------- --------
Operating
expense
(exclusive of
items shown
separately)
(a) 713.7 - 713.7 2,776.9 - 2,776.9
Salaries and
employee-related
costs 363.1 - 363.1 1,410.4 - 1,410.4
Subcontracted
transportation 212.6 - 212.6 950.5 - 950.5
Depreciation
expense (c) 209.7 - 209.7 816.0 - 816.0
Gains on
vehicle sales,
net (7.4) - (7.4) (44.1) - (44.1)
Equipment
rental 25.4 - 25.4 93.3 - 93.3
Interest
expense 39.7 - 39.7 160.1 - 160.1
Miscellaneous
income, net
(f) (2.1) 0.1 (2.0) (15.9) 10.1 (5.8)
Restructuring
and other
(recoveries)
charges,
net (d) (0.3) 0.3 - 13.3 (11.6) 1.7
-------- -------- -------- -------- -------- --------
1,554.4 0.4 1,554.8 6,160.5 (1.5) 6,159.0
-------- -------- -------- -------- -------- --------
Earnings before
income taxes 111.8 (0.4) 111.4 405.5 1.5 407.0
Provision for
income taxes
(e) (39.9) (3.2) (43.1) (151.6) (3.4) (155.0)
-------- -------- -------- -------- -------- --------
Net earnings $ 71.9 (3.6) 68.3 $ 253.9 (2.0) 251.9
======== ======== ======== ======== ======== ========
Tax Rate 35.6% 38.7% 37.4% 38.1%
======== ======== ======== ========
Weighted-average
shares
outstanding -
Diluted 58.1 58.1 59.8 59.8
======== ======== ======== ========
Earnings per
common
share-Diluted $ 1.24 $ 1.18 $ 4.24 $ 4.21
======== ======== ======== ========
Notes:
(a) $3.9 million international asset write-off in the fourth quarter
2008.
$4.9 million charge for prior years' adjustments associated
with our Brazilian SCS operation for the year ended 2008.
(b) $1.6 million charge for prior years' adjustments associated with our
Brazilian SCS operation for the year ended 2008.
(c) $1.6 million international impairment charge in the fourth quarter
2008.
(d) $37.5 million of international exit costs in the fourth quarter
2008.
$10.7 million workforce reduction in the fourth quarter
2008.
$10.3 asset impairment, including goodwill in the fourth
quarter 2008.
$0.3 of restructure benefits in the fourth quarter of 2007.
$11.6 million of exit costs for the year ended 2007.
(e) $7.9 million of tax accrual reversals in the fourth quarter 2008.
$1.6 million of tax benefits related to tax law changes for
the year ended 2008.
$3.3 million of tax benefits related to tax law changes for
the year ended 2007.
(f) $0.1 million and $10.1 million gain in the fourth quarter and year
ended 2007, respectively, related to the sale of property.
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.