-
Record Q1 Comparable EPS from Continuing Operations Up 17% to $1.08
-
Record Q1 EPS from Continuing Operations of $1.00 Increased 9%
-
Record Q1 Operating Revenue of $1.3 Billion Grows 5%
-
Total Revenue Down 3% to $1.6 Billion, from Lower Fuel Costs Passed
Through to Customers
-
2015 Comparable EPS Forecast Range Raised to $6.40 to $6.55
MIAMI--(BUSINESS WIRE)--
Ryder System, Inc. (NYSE: R), a leader in commercial fleet
management, dedicated
transportation, and supply
chain solutions, today reported record first quarter comparable
earnings reflecting continued strong performance in Fleet Management
Solutions (FMS) and improved performance in Supply Chain Solutions
(SCS). Earnings and earnings per diluted share (EPS) from continuing
operations for the three months ended March 31 were as follows:
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
Earnings
|
|
|
|
Diluted EPS
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
% Change
|
|
|
|
2015
|
|
|
2014
|
|
|
% Change
|
|
GAAP
|
|
|
|
$
|
53.5
|
|
|
49.1
|
|
|
|
9
|
%
|
|
|
|
$
|
1.00
|
|
|
$
|
0.92
|
|
|
|
9
|
%
|
|
Non-operating pension costs
|
|
|
|
|
2.8
|
|
|
1.9
|
|
|
|
|
|
|
|
|
0.06
|
|
|
|
0.03
|
|
|
|
|
|
Other items
|
|
|
|
|
1.2
|
|
|
(1.8
|
)
|
|
|
|
|
|
|
|
0.02
|
|
|
|
(0.03
|
)
|
|
|
|
|
Comparable
|
|
|
|
$
|
57.4
|
|
|
49.2
|
|
|
|
17
|
%
|
|
|
|
$
|
1.08
|
|
|
$
|
0.92
|
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company reported record first quarter operating revenue, reflecting
higher full
service lease revenue, growth in commercial
rental revenue, as well as new business and increased volumes in SCS
and Dedicated Transportation Solutions (DTS). Beginning this quarter,
operating revenue excludes all fuel and subcontracted transportation.
Total first quarter revenue declined primarily due to lower fuel prices
passed through to customers. Operating and total revenue for the three
months ended March 31 were as follows:
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
Operating Revenue
|
|
|
|
Total Revenue
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
% Change
|
|
|
% Change
excl. FX
|
|
|
|
2015
|
|
|
2014
|
|
|
% Change
|
|
Total
|
|
|
|
$
|
1,300.3
|
|
|
1,242.8
|
|
|
5
|
%
|
|
|
7
|
%
|
|
|
|
$
|
1,567.2
|
|
|
1,610.7
|
|
|
(3
|
%)
|
|
FMS
|
|
|
|
$
|
899.2
|
|
|
859.9
|
|
|
5
|
%
|
|
|
7
|
%
|
|
|
|
$
|
1,087.2
|
|
|
1,135.1
|
|
|
(4
|
%)
|
|
DTS
|
|
|
|
$
|
165.8
|
|
|
156.2
|
|
|
6
|
%
|
|
|
6
|
%
|
|
|
|
$
|
212.7
|
|
|
216.0
|
|
|
(2
|
%)
|
|
SCS
|
|
|
|
$
|
295.4
|
|
|
284.5
|
|
|
4
|
%
|
|
|
6
|
%
|
|
|
|
$
|
371.1
|
|
|
381.4
|
|
|
(3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commenting on the Company’s first quarter performance, Ryder Chairman
and CEO Robert Sanchez said, “We’re pleased to continue our momentum of
record performance into 2015. Operating revenue and earnings improved
across all three business segments, with particularly strong results in
Fleet Management Solutions and Supply Chain Solutions. We also had a
very strong quarter of lease sales, and delivered fleet growth of 2,000
vehicles from year-end 2014. We had better than expected rental demand
and execution on our maintenance productivity initiatives, as well as a
fuel margin benefit early in the quarter. In addition, our focus on
efficient use of capital has resulted in a return on capital spread of
120 basis points, an improvement of 30 basis points.”
First Quarter Business Segment Operating Results
Fleet Management Solutions
In the FMS business segment, operating revenue (revenue excluding fuel)
in the first quarter of 2015 was $899.2 million, up 5% (or 7% excluding
foreign exchange) compared with the year-earlier period. Total revenue
in the first quarter of 2015 was $1.09 billion, down 4% compared with
the year-earlier period, as the operating revenue increase was more than
offset by the impact of lower fuel prices. Full service lease revenue
increased 5% (or 6% excluding foreign exchange) due to higher prices on
replacement vehicles and fleet growth. The number of full service lease
vehicles (excluding U.K. trailers) increased by 4,600 from the
year-earlier period and grew by 2,000 vehicles sequentially from the
fourth quarter of 2014. Commercial rental revenue improved 8% (or 10%
excluding foreign exchange) reflecting increased demand and higher
pricing in North America. Fuel services revenue decreased 32%, primarily
reflecting lower fuel prices passed through to customers.
FMS earnings before tax were $89.9 million in the first quarter of 2015,
up 17% compared with $77.0 million in the same period of 2014. Increased
earnings primarily reflect strong commercial rental performance, higher
full service lease results, and increased fuel margins, partially offset
by one-time benefits in the prior year. Commercial rental performance
improved as a result of increased demand and higher pricing in North
America. Rental power fleet utilization was 73.4% for the first quarter,
consistent with the year-earlier period, on a 6% larger average fleet.
Full service lease results benefited from lower depreciation associated
with increased residual values and fleet growth. The rapid reduction in
fuel costs in the quarter resulted in an atypical increase in fuel
margins. Used vehicle sales benefited from stronger pricing, partially
offset by lower volumes sold. FMS earnings before tax as a percentage of
operating revenue were 10.0% in the first quarter of 2015, up 100 basis
points from 9.0% in the same quarter a year ago.
Dedicated Transportation Solutions
In the DTS business segment, first quarter 2015 operating revenue
(revenue excluding fuel and subcontracted transportation), was $165.8
million, up 6% compared with the year-earlier period. DTS operating
revenue grew as a result of new business and increased volumes. Total
revenue in the first quarter of 2015 was $212.7 million, down 2%
compared with the year-earlier period, as increased operating revenue
was offset by declining fuel prices.
DTS earnings before tax of $9.0 million increased 3% in the first
quarter of 2015 compared with $8.7 million in 2014 due to new business
and higher volumes, partially offset by increased insurance costs. DTS
earnings before tax as a percentage of operating revenue were 5.4% in
the first quarter of 2015, down from 5.6% in the year-earlier period.
Supply Chain Solutions
In the SCS business segment, first quarter 2015 operating revenue
(revenue excluding fuel and subcontracted transportation) was $295.4
million, up 4% (or 6% excluding foreign exchange) compared with the
year-earlier period. SCS operating revenue grew as a result of new
business and increased volumes, particularly in the technology and
consumer packaged goods sectors, partially offset by automotive business
lost in 2014. Prior year volumes were negatively impacted by severe
weather. Total revenue was down 3% to $371.1 million, compared with the
same quarter a year ago, as increased operating revenue was offset by
declining fuel prices passed through to customers and foreign exchange.
SCS earnings before tax of $15.7 million increased 20% in the first
quarter of 2015 compared with $13.1 million in 2014 due to new business,
higher volumes, and lower start-up costs. These improvements were
partially offset by higher insurance costs. SCS earnings before tax as a
percentage of operating revenue were 5.3% in the first quarter of 2015,
up 70 basis points from 4.6% 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. Most CSS costs are allocated to
the business segments. In the first quarter of 2015, CSS costs were
$60.7 million, up from $59.1 million in the year-earlier period,
primarily driven by higher compensation-related expenses, partially
offset by lower marketing-related costs, due to the timing of planned
spending.
Additional Items Excluded from Comparable Earnings
Non-operating components of pension costs are excluded from both
comparable earnings and segment earnings before tax in order to more
accurately reflect the operating performance of the business.
Non-operating pension costs totaled $4.9 million ($2.8 million after
tax) or $0.06 per diluted share in the first quarter of 2015, up from
$3.3 million ($1.9 million after tax) or $0.03 per diluted share in the
year-earlier period. This increase was due to lower expected asset
returns, and new mortality assumptions adopted at year end.
In the first quarter of 2015, the Company recognized a pre-tax charge of
$1.8 million ($1.2 million after tax) or $0.02 per diluted share from
professional fees associated with cost saving initiatives.
Income Taxes
The Company’s effective income tax rate from continuing operations for
the first quarter of 2015 was 36.7% of pre-tax earnings, compared with
34.5% in the year-earlier period. The year-earlier period included a
benefit of $1.8 million (2.4% of pre-tax earnings) related to a
favorable tax law change in the state of New York. The Company’s first
quarter 2015 comparable effective income tax rate was 37.0% of earnings
before tax versus 37.2% in the prior year.
Capital Expenditures
Capital expenditures from continuing operations increased to $653
million for the first quarter of 2015, compared with $596 million in the
same period of 2014. The increase in capital expenditures primarily
reflects planned investments in the commercial rental fleet. Net capital
expenditures (including proceeds from the sale of assets) from
continuing operations were $556 million in 2015, up from $468 million in
the same period of 2014.
The Company now forecasts full-year gross capital expenditures of $2.63
billion, up from the prior forecast of $2.55 billion. The increase
reflects expenditures to support stronger rental demand.
Cash Flow
Operating cash flow from continuing operations through March 31, 2015
was $278 million, up from $238 million in the same period of 2014 due to
higher cash-based earnings. Total cash generated from continuing
operations (including proceeds from used vehicle sales) through March
31, 2015 was $391 million, compared with $380 million in the same period
of 2014. Free cash flow from continuing operations through March 31,
2015 was negative $162 million, compared with negative $198 million for
the same period of 2014.
The Company now forecasts full-year free cash flow of negative $380
million, as compared with a prior forecast of negative $300 million, due
to higher capital expenditures.
Leverage
Balance sheet debt as of March 31, 2015 increased by $191 million
compared with year-end 2014, due primarily to investments in vehicles to
fund growth. Balance sheet debt to equity as of March 31, 2015 was 260%
compared with 248% at year-end 2014. Total obligations to equity as of
March 31, 2015 were 270% compared with 259% at year-end 2014. Total
obligations to equity increased due to foreign exchange impacts and
investments to fund growth. Due to the increase in leverage, the Company
elected to temporarily pause anti-dilutive share repurchase activity
early in the year. The Company is evaluating the timing for resuming
anti-dilutive share repurchase activity in the second half of this year.
Total obligations to equity remain within Ryder’s long-term target range
of 225% to 275%.
The Company now forecasts total obligations to equity at year end of
260% to 270%, as compared with a prior forecast of 260%.
2015 Earnings Forecast
Commenting on the Company’s outlook, Mr. Sanchez said, “We now expect to
exceed our original 2015 forecast, driven by strength in our Fleet
Management Solutions business. We anticipate continued strong
performance in commercial rental, efficiencies from our maintenance
productivity initiatives, and accelerated growth in our full service
lease fleet. Based on strong sales performance, we are now raising our
full-year estimate for lease fleet growth by 1,000 to a new target of
5,000 vehicles. We are also adding rental capacity based on the strong
demand trends we’ve seen to date.
“Longer term, Ryder is well positioned to continue to benefit from macro
trends that favor our value proposition. We are encouraged that
one-third of our new lease sales come from customers that are new to
outsourcing. We’re also pleased with customer receptivity to our new on
demand maintenance product, and are implementing the processes and
technologies required to support the broader launch of this offering,
mid-year.
“We have established a second quarter comparable earnings forecast of
$1.58 to $1.63 per diluted share, including some anticipated higher
insurance-related costs in our Dedicated Transportation Solutions
business. Taking all factors into consideration, we are raising our
comparable full-year 2015 earnings forecast range from $6.25 to $6.40
per diluted share to a new range of $6.40 to $6.55 per diluted share.
Based on our improved earnings outlook, we now expect our full-year
return on capital spread to be 140 to 150 basis points.”
Supplemental Company Information
First Quarter Net Earnings
Net earnings per diluted share (including discontinued operations) for
the three-month period ended March 31, 2015 were $0.99 versus $0.90 in
the year-earlier period. Earnings per diluted share from discontinued
operations (previously announced in 2009) totaled a loss of $0.01 ($0.5
million) in the first quarter of 2015, compared with a loss of $0.02
($0.9 million) in the same period of the prior year. Net earnings for
the first quarter of 2015 were $52.9 million versus $48.2 million in the
year-earlier period.
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 Standard & Poor’s 500 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 one-stop outsourcing of a range of solutions for commercial
truck fleet operators, including vehicle maintenance, leasing and
rental, used vehicle sales, as well as services such as roadside
assistance, fueling, safety, and financing options.
-
Dedicated
Transportation Solutions – Ryder’s DTS business segment
provides customers with vehicles, drivers, management, and
administrative support, with the assets committed to a specific
customer for a contractual term. DTS supports customers with
specialized equipment or product handling needs, complex routes,
rigorous service level agreements or high driver turnover.
-
Supply
Chain Solutions – Ryder’s SCS business segment offers a
broad range of innovative solutions designed to optimize day-to-day
logistics operations and synchronize the supply of parts and finished
goods with customer demand. Solutions are strategically engineered to
address customer requirements and include lead logistics management,
dedicated services, warehousing, transportation management, packaging,
and other value-added services.
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
earnings performance, lease fleet growth, sales activity, performance in
our product lines, including full service lease, commercial rental and
on-demand maintenance, strategic initiatives and anticipated capital
expenditures, total obligations and free cash flow. 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 higher
pricing, fluctuations in market demand for used vehicles impacting
current pricing and our anticipated proportion of retail versus
wholesale sales, 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, 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 operating revenue, operating revenue 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, 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 this quarter, in addition to excluding FMS fuel services
revenue and subcontracted transportation from the calculation of
operating revenue, we will also be excluding SCS and DTS fuel costs
billed to customers.
Conference Call and Webcast Information:
Ryder’s earnings conference call and webcast is scheduled for Wednesday,
April 22, 2015, 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 1-888-398-5319 (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: RG3008556 and Passcode: RYDER.
-
To access audio replays of the conference and
view a presentation of Ryder’s earnings results: Dial 1-800-889-9139
(outside U.S. dial 1-402-220-9120), 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 March 31, 2015 and 2014
|
|
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Lease and rental revenues
|
|
$
|
729.0
|
|
|
689.7
|
|
|
Services revenue
|
|
693.7
|
|
|
709.7
|
|
|
Fuel services revenue
|
|
144.4
|
|
|
211.4
|
|
|
Total revenues
|
|
1,567.2
|
|
|
1,610.7
|
|
|
|
|
|
|
|
|
Cost of lease and rental
|
|
519.2
|
|
|
493.0
|
|
|
Cost of services
|
|
582.3
|
|
|
606.2
|
|
|
Cost of fuel services
|
|
136.3
|
|
|
207.2
|
|
|
Other operating expenses
|
|
34.7
|
|
|
36.6
|
|
|
Selling, general and administrative expenses
|
|
206.6
|
|
|
191.7
|
|
|
Gains on vehicle sales, net
|
|
(29.6
|
)
|
|
(28.8
|
)
|
|
Interest expense
|
|
35.8
|
|
|
35.1
|
|
|
Miscellaneous income, net
|
|
(2.6
|
)
|
|
(5.4
|
)
|
|
|
|
1,482.8
|
|
|
1,535.7
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
84.4
|
|
|
75.0
|
|
|
Provision for income taxes
|
|
30.9
|
|
|
25.9
|
|
|
Earnings from continuing operations
|
|
53.5
|
|
|
49.1
|
|
|
Loss from discontinued operations, net of tax
|
|
(0.5
|
)
|
|
(0.9
|
)
|
|
Net earnings
|
|
$
|
52.9
|
|
|
48.2
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share - Diluted
|
|
|
|
|
|
Continuing operations
|
|
$
|
1.00
|
|
|
0.92
|
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
(0.02
|
)
|
|
Net earnings
|
|
$
|
0.99
|
|
|
0.90
|
|
|
|
|
|
|
|
|
Earnings per share information - Diluted
|
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
53.5
|
|
|
49.1
|
|
|
Less: Distributed and undistributed earnings allocated to nonvested
stock
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
Earnings from continuing operations available to common stockholders
|
|
$
|
53.3
|
|
|
48.8
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding - Diluted
|
|
53.1
|
|
|
53.1
|
|
|
|
|
|
|
|
|
Comparable earnings per share from continuing operations: *
|
|
|
|
|
|
EPS from continuing operations
|
|
$
|
1.00
|
|
|
0.92
|
|
|
Non-operating pension costs
|
|
0.06
|
|
|
0.03
|
|
|
Professional fees
|
|
0.02
|
|
|
—
|
|
|
Benefit from tax law change
|
|
—
|
|
|
(0.03
|
)
|
|
Comparable EPS from continuing operations *
|
|
$
|
1.08
|
|
|
0.92
|
|
|
|
|
|
|
|
|
|
|
|
* Non-GAAP financial measure.
|
|
|
|
|
|
|
|
|
Note: Amounts may not be additive due to rounding.
|
|
|
|
|
|
|
|
|
RYDER SYSTEM, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED CONDENSED BALANCE SHEETS - UNAUDITED
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
March 31,
2015
|
|
December 31,
2014
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
72.2
|
|
|
50.1
|
|
Other current assets
|
|
1,005.8
|
|
|
1,026.1
|
|
Revenue earning equipment, net
|
|
7,208.3
|
|
|
6,994.4
|
|
Operating property and equipment, net
|
|
700.1
|
|
|
699.6
|
|
Other assets
|
|
920.3
|
|
|
905.7
|
|
|
|
$
|
9,906.8
|
|
|
9,676.0
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity:
|
|
|
|
|
|
Current liabilities
|
|
1,115.1
|
|
|
1,081.4
|
|
Total debt
|
|
4,703.9
|
|
|
4,512.5
|
|
Other non-current liabilities (including deferred income taxes)
|
|
2,276.2
|
|
|
2,262.6
|
|
Shareholders' equity
|
|
1,811.5
|
|
|
1,819.5
|
|
|
|
$
|
9,906.8
|
|
|
9,676.0
|
|
SELECTED KEY RATIOS AND METRICS
|
|
|
|
|
|
|
|
|
|
March 31,
2015
|
|
December 31,
2014
|
|
|
|
|
|
|
|
Debt to equity
|
|
260%
|
|
248%
|
|
Total obligations to equity *
|
|
270%
|
|
259%
|
|
Effective interest rate (average cost of debt)
|
|
3.1%
|
|
3.2%
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2015
|
2014
|
|
|
|
|
|
|
Cash provided by operating activities from continuing operations
|
|
$
|
277.9
|
|
237.7
|
|
Free cash flow *
|
|
(162.0
|
)
|
(198.5)
|
|
Capital expenditures paid
|
|
553.2
|
|
578.7
|
|
|
|
|
|
|
Capital expenditures (accrual basis)
|
|
$
|
653.2
|
|
595.6
|
|
Less: Proceeds from sales (primarily revenue earning equipment)
|
|
(97.1
|
)
|
(127.7)
|
|
Net capital expenditures
|
|
$
|
556.1
|
|
468.0
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Return on average shareholders' equity
|
|
11.7%
|
|
14.5%
|
|
Return on average assets
|
|
2.3%
|
|
2.8%
|
|
Adjusted return on capital *
|
|
5.9%
|
|
5.7%
|
|
Weighted average cost of capital
|
|
4.7%
|
|
4.8%
|
|
|
|
|
|
|
|
* Non-GAAP financial measure; see reconciliation to closest GAAP
financial measure included within this release.
|
|
Note: Amounts may not be additive due to rounding.
|
|
RYDER SYSTEM, INC. AND SUBSIDIARIES
|
|
BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED
|
|
Periods ended March 31, 2015 and 2014
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
B(W)
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Fleet Management Solutions:
|
|
|
|
|
|
|
|
Full service lease
|
|
$
|
577.1
|
|
|
552.2
|
|
|
5
|
%
|
|
Contract maintenance
|
|
46.0
|
|
|
43.7
|
|
|
5
|
%
|
|
Contractual revenue
|
|
623.1
|
|
|
595.9
|
|
|
5
|
%
|
|
Commercial rental
|
|
205.1
|
|
|
190.2
|
|
|
8
|
%
|
|
Contract-related maintenance
|
|
53.1
|
|
|
56.1
|
|
|
(5
|
)%
|
|
Other
|
|
17.9
|
|
|
17.7
|
|
|
1
|
%
|
|
Fuel services revenue
|
|
188.0
|
|
|
275.2
|
|
|
(32
|
)%
|
|
Total Fleet Management Solutions
|
|
1,087.2
|
|
|
1,135.1
|
|
|
(4
|
)%
|
|
Dedicated Transportation Solutions
|
|
212.7
|
|
|
216.0
|
|
|
(2
|
)%
|
|
Supply Chain Solutions
|
|
371.1
|
|
|
381.4
|
|
|
(3
|
)%
|
|
Eliminations
|
|
(103.7
|
)
|
|
(121.7
|
)
|
|
15
|
%
|
|
Total revenue
|
|
$
|
1,567.2
|
|
|
1,610.7
|
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenue: *
|
|
|
|
|
|
|
|
Fleet Management Solutions
|
|
$
|
899.2
|
|
|
859.9
|
|
|
5
|
%
|
|
Dedicated Transportation Solutions
|
|
165.8
|
|
|
156.2
|
|
|
6
|
%
|
|
Supply Chain Solutions
|
|
295.4
|
|
|
284.5
|
|
|
4
|
%
|
|
Eliminations
|
|
(60.2
|
)
|
|
(57.9
|
)
|
|
(4
|
)%
|
|
Total operating revenue
|
|
$
|
1,300.3
|
|
|
1,242.8
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business segment earnings:
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
|
|
|
|
|
before income taxes:
|
|
|
|
|
|
|
|
Fleet Management Solutions
|
|
$
|
89.9
|
|
|
77.0
|
|
|
17
|
%
|
|
Dedicated Transportation Solutions
|
|
9.0
|
|
|
8.7
|
|
|
3
|
%
|
|
Supply Chain Solutions
|
|
15.7
|
|
|
13.1
|
|
|
20
|
%
|
|
Eliminations
|
|
(11.5
|
)
|
|
(9.6
|
)
|
|
(20
|
)%
|
|
|
|
103.0
|
|
|
89.1
|
|
|
16
|
%
|
|
Unallocated Central Support Services
|
|
(11.9
|
)
|
|
(10.8
|
)
|
|
(10
|
)%
|
|
Non-operating pension costs
|
|
(4.9
|
)
|
|
(3.3
|
)
|
|
(47
|
)%
|
|
Restructuring and other charges, net
|
|
(1.8
|
)
|
|
—
|
|
|
NM
|
|
|
Earnings from continuing operations before income taxes
|
|
84.4
|
|
|
75.0
|
|
|
12
|
%
|
|
Provision for income taxes
|
|
30.9
|
|
|
25.9
|
|
|
(19
|
)%
|
|
Earnings from continuing operations
|
|
$
|
53.5
|
|
|
49.1
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
* Non-GAAP financial measure; see reconciliation to closest GAAP
financial measure included within this release.
|
|
Note: Amounts may not be additive due to rounding.
|
|
RYDER SYSTEM, INC. AND SUBSIDIARIES
|
|
BUSINESS SEGMENT INFORMATION - UNAUDITED
|
|
Periods ended March 31, 2015 and 2014
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
2015
|
|
|
2014
|
|
|
B(W)
|
|
|
|
|
|
|
|
|
|
Fleet Management Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
1,087.2
|
|
|
1,135.1
|
|
|
(4
|
)%
|
|
Fuel services revenue(a)
|
|
(188.0
|
)
|
|
(275.2
|
)
|
|
(32
|
)%
|
|
Operating revenue *
|
|
$
|
899.2
|
|
|
859.9
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Segment earnings before income taxes
|
|
$
|
89.9
|
|
|
77.0
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes as % of total revenue
|
|
8.3
|
%
|
|
6.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes as % of operating revenue *
|
|
10.0
|
%
|
|
9.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dedicated Transportation Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
212.7
|
|
|
216.0
|
|
|
(2
|
)%
|
|
Subcontracted transportation
|
|
(14.6
|
)
|
|
(16.2
|
)
|
|
(10
|
)%
|
|
Fuel costs(a)
|
|
(32.2
|
)
|
|
(43.5
|
)
|
|
(26
|
)%
|
|
Operating revenue *
|
|
$
|
165.8
|
|
|
156.2
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Segment earnings before income taxes
|
|
$
|
9.0
|
|
|
8.7
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes as % of total revenue
|
|
4.2
|
%
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes as % of operating revenue *
|
|
5.4
|
%
|
|
5.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supply Chain Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
371.1
|
|
|
381.4
|
|
|
(3
|
)%
|
|
Subcontracted transportation
|
|
(58.2
|
)
|
|
(70.0
|
)
|
|
(17
|
)%
|
|
Fuel costs(a)
|
|
(17.5
|
)
|
|
(26.9
|
)
|
|
(35
|
)%
|
|
Operating revenue *
|
|
$
|
295.4
|
|
|
284.5
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
Segment earnings before income taxes
|
|
$
|
15.7
|
|
|
13.1
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes as % of total revenue
|
|
4.2
|
%
|
|
3.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes as % of operating revenue *
|
|
5.3
|
%
|
|
4.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
* Non-GAAP financial measure.
|
|
Note: Amounts may not be additive due to rounding.
|
|
(a) Includes intercompany fuel sales from FMS to SCS and DTS.
|
|
RYDER SYSTEM, INC. AND SUBSIDIARIES
|
|
BUSINESS SEGMENT INFORMATION - UNAUDITED
|
|
KEY PERFORMANCE INDICATORS
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
Change
|
|
|
|
2015
|
|
2014
|
2015/2014
|
|
|
|
|
|
|
|
|
Full service lease
|
|
|
|
|
|
|
Average fleet count
|
|
126,500
|
|
|
123,100
|
|
3%
|
|
End of period fleet count
|
|
127,500
|
|
|
123,300
|
|
3%
|
|
Miles/unit per day change - % (a)
|
|
0.2
|
%
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial rental
|
|
|
|
|
|
|
Average fleet count
|
|
40,100
|
|
|
38,200
|
|
5%
|
|
End of period fleet count
|
|
41,100
|
|
|
38,600
|
|
6%
|
|
Rental utilization - power units
|
|
73.4
|
%
|
|
73.6
|
%
|
(20) bps
|
|
Rental rate change - % (b)
|
|
4.7
|
%
|
|
4.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer vehicles under
|
|
|
|
|
contract maintenance
|
|
|
|
|
|
|
Average fleet count
|
|
42,800
|
|
|
37,400
|
|
14%
|
|
End of period fleet count
|
|
43,400
|
|
|
37,300
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer vehicles under
|
|
|
|
|
transactional maintenance (c)
|
|
|
|
|
|
|
Fleet serviced during the period
|
|
6,500
|
|
|
7,100
|
|
(8)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DTS
|
|
|
|
|
|
|
Average fleet count (d)
|
|
7,200
|
|
|
6,800
|
|
6%
|
|
End of period fleet count(d)
|
|
7,300
|
|
|
6,900
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCS
|
|
|
|
|
|
|
Average fleet count (d)
|
|
5,600
|
|
|
5,600
|
|
—%
|
|
End of period fleet count(d)
|
|
5,800
|
|
|
5,700
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Used vehicle sales (UVS)
|
|
|
|
|
|
|
Average UVS inventory
|
|
5,500
|
|
|
7,700
|
|
(29)%
|
|
End of period fleet count
|
|
5,800
|
|
|
7,200
|
|
(19)%
|
|
Used vehicles sold
|
|
4,300
|
|
|
5,600
|
|
(23)%
|
|
UVS pricing change - % (e)
|
|
|
|
|
|
|
Tractors
|
|
14
|
%
|
|
2
|
%
|
|
|
Trucks
|
|
11
|
%
|
|
12
|
%
|
|
|
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 transactional
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 full service lease and commercial rental.
|
|
(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
|
|
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
|
|
(Dollars in millions)
|
|
|
|
|
|
OPERATING REVENUE RECONCILIATION
|
|
Three months ended March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
1,567.2
|
|
|
1,610.7
|
|
|
Fuel
|
|
(194.1
|
)
|
|
(281.8
|
)
|
|
Subcontracted transportation
|
|
(72.8
|
)
|
|
(86.2
|
)
|
|
Operating revenue *
|
|
$
|
1,300.3
|
|
|
1,242.8
|
|
|
REVENUE GROWTH EXCLUDING FOREIGN EXCHANGE
RECONCILIATION
|
|
|
|
2015 vs 2014
Growth
|
|
Fx Impact (a)
|
|
Growth excl Fx
|
|
|
|
|
|
|
|
|
|
RSI Operating Revenue
|
|
5%
|
|
(2)%
|
|
7%
|
|
FMS Operating Revenue
|
|
5%
|
|
(2)%
|
|
7%
|
|
SCS Operating Revenue
|
|
4%
|
|
(2)%
|
|
6%
|
|
Full Service Lease Revenue
|
|
5%
|
|
(1)%
|
|
6%
|
|
Commercial Rental Revenue
|
|
8%
|
|
(2)%
|
|
10%
|
|
DEBT TO EQUITY RECONCILIATION
|
|
March 31,
2015
|
|
% to
Equity
|
|
December 31,
2014
|
|
% to
Equity
|
|
|
|
|
|
|
|
|
|
|
|
On-balance sheet debt
|
|
$
|
4,703.9
|
|
|
260%
|
|
$
|
4,512.5
|
|
|
248%
|
|
Off-balance sheet debt - PV of minimum lease payments
and
guaranteed residual values under operating leases for vehicles(b)
|
|
186.4
|
|
|
|
|
193.4
|
|
|
|
|
Total obligations *
|
|
$
|
4,890.3
|
|
|
270%
|
|
$
|
4,705.8
|
|
|
259%
|
|
CASH FLOW RECONCILIATION
|
|
Three months ended March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Net cash provided by operating activities from continuing operations
|
|
$
|
277.9
|
|
|
237.7
|
|
|
Proceeds from sales (primarily revenue earning equipment)
|
|
97.1
|
|
|
127.7
|
|
|
Collections on direct finance leases
|
|
16.2
|
|
|
16.2
|
|
|
Other
|
|
—
|
|
|
(1.3
|
)
|
|
Total cash generated *
|
|
391.2
|
|
|
380.3
|
|
|
Capital expenditures
|
|
(553.2
|
)
|
|
(578.7
|
)
|
|
Free cash flow *
|
|
$
|
(162.0
|
)
|
|
(198.5
|
)
|
|
Note:
|
|
|
|
(a)
|
|
FX impact was calculated by dividing the results for the current and
prior year periods by the exchange rates in effect on
|
|
|
|
March 31, 2014, which was the last day of the prior year period,
rather than the actual exchange rates in effect as of
|
|
|
|
March 31, 2015.
|
|
(b)
|
|
Discounted at the incremental borrowing rate at lease inception.
|
|
|
|
|
|
* Non-GAAP financial measure.
|
|
Note: Amounts may not be additive due to rounding.
|
|
RYDER SYSTEM, INC. AND SUBSIDIARIES
|
|
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
|
|
(Dollars in millions)
|
|
|
|
|
|
RETURN ON CAPITAL RECONCILIATION
|
|
Three months ended March 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Net earnings (12-month rolling period)
|
|
$
|
223.3
|
|
|
246.1
|
|
|
+ Restructuring and other items
|
|
116.9
|
|
|
1.8
|
|
|
+ Income taxes
|
|
123.3
|
|
|
129.8
|
|
|
Adjusted earnings before income taxes
|
|
463.4
|
|
|
377.6
|
|
|
+ Adjusted interest expense (b)
|
|
145.9
|
|
|
140.4
|
|
|
- Adjusted income taxes
|
|
218.1
|
|
|
(182.8
|
)
|
|
= Adjusted net earnings for ROC (numerator)
|
|
$
|
391.1
|
|
|
335.2
|
|
|
|
|
|
|
|
|
Average total debt
|
|
$
|
4,578.1
|
|
|
4,071.7
|
|
|
Average off-balance sheet debt
|
|
155.3
|
|
|
118.5
|
|
|
Average shareholders' equity
|
|
1,905.5
|
|
|
1,698.5
|
|
|
Adjustment to equity (c)
|
|
17.2
|
|
|
(1.6
|
)
|
|
Adjusted average total capital (denominator)
|
|
$
|
6,656.0
|
|
|
5,887.2
|
|
|
|
|
|
|
|
|
Adjusted ROC *
|
|
5.9
|
%
|
|
5.7
|
%
|
|
|
|
|
|
|
|
Notes:
|
|
(a) Discounted at the incremental borrowing rate at lease inception.
|
|
(b) Interest expense includes implied interest on off-balance sheet
vehicle obligations.
|
|
(c) Represents comparable earnings items for those periods.
|
|
|
|
* Non-GAAP financial measure.
|
|
Note: Amounts may not be additive due to rounding.
|
|
RYDER SYSTEM, INC. AND SUBSIDIARIES
|
|
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
|
|
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
2015
|
|
|
|
|
Reported
|
|
|
|
Comparable
|
|
|
|
Earnings
|
|
Adjustment
|
|
Earnings *
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,567.2
|
|
|
|
|
$
|
1,567.2
|
|
|
|
|
|
|
|
|
|
|
Cost of lease and rental
|
|
519.2
|
|
|
—
|
|
|
519.2
|
|
|
Cost of services
|
|
582.3
|
|
|
—
|
|
|
582.3
|
|
|
Cost of fuel services
|
|
136.3
|
|
|
—
|
|
|
136.3
|
|
|
Other operating expenses
|
|
34.7
|
|
|
—
|
|
|
34.7
|
|
|
Selling, general and administrative expenses (a)
|
|
206.6
|
|
|
(6.7
|
)
|
|
199.9
|
|
|
Gains on vehicle sales, net
|
|
(29.6
|
)
|
|
—
|
|
|
(29.6
|
)
|
|
Interest expense
|
|
35.8
|
|
|
—
|
|
|
35.8
|
|
|
Miscellaneous income, net
|
|
(2.6
|
)
|
|
—
|
|
|
(2.6
|
)
|
|
|
|
1,482.8
|
|
|
(6.7
|
)
|
|
1,476.1
|
|
|
Earnings from continuing operations before income taxes
|
|
84.4
|
|
|
6.7
|
|
|
91.1
|
|
|
Provision for income taxes (b)
|
|
(30.9
|
)
|
|
(2.8
|
)
|
|
(33.7
|
)
|
|
Earnings from continuing operations
|
|
53.5
|
|
|
4.0
|
|
|
57.4
|
|
|
|
|
|
|
|
|
|
|
Tax rate on continuing operations
|
|
36.7
|
%
|
|
|
|
37.0
|
%
|
|
|
|
|
|
|
|
|
|
Earnings per common share - Diluted:
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
1.00
|
|
|
0.08
|
|
|
$
|
1.08
|
|
|
|
|
Three Months
|
|
|
|
|
2014
|
|
|
|
|
Reported
|
|
|
|
Comparable
|
|
|
|
Earnings
|
|
Adjustment
|
|
Earnings *
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,610.7
|
|
|
|
|
$
|
1,610.7
|
|
|
|
|
|
|
|
|
|
|
Cost of lease and rental
|
|
493.0
|
|
|
—
|
|
|
493.0
|
|
|
Cost of services
|
|
606.2
|
|
|
|
|
606.2
|
|
|
Cost of fuel services
|
|
207.2
|
|
|
—
|
|
|
207.2
|
|
|
Other operating expenses
|
|
36.6
|
|
|
—
|
|
|
36.6
|
|
|
Selling, general and administrative expenses (a)
|
|
191.7
|
|
|
(3.3
|
)
|
|
188.4
|
|
|
Gains on vehicle sales, net
|
|
(28.8
|
)
|
|
—
|
|
|
(28.8
|
)
|
|
Interest expense
|
|
35.1
|
|
|
—
|
|
|
35.1
|
|
|
Miscellaneous income, net
|
|
(5.4
|
)
|
|
—
|
|
|
(5.4
|
)
|
|
|
|
1,535.7
|
|
|
(3.3
|
)
|
|
1,532.4
|
|
|
Earnings from continuing operations before income taxes
|
|
75.0
|
|
|
3.3
|
|
|
78.3
|
|
|
Provision for income taxes (b)
|
|
(25.9
|
)
|
|
(3.2
|
)
|
|
(29.1
|
)
|
|
Earnings from continuing operations
|
|
49.1
|
|
|
0.1
|
|
|
49.2
|
|
|
|
|
|
|
|
|
|
|
Tax rate on continuing operations
|
|
34.5
|
%
|
|
|
|
37.2
|
%
|
|
|
|
|
|
|
|
|
|
Earnings per common share - Diluted:
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.92
|
|
|
—
|
|
|
$
|
0.92
|
|
Notes regarding adjustments:
|
|
|
|
|
(a)
|
|
2015 and 2014 include non-operating pension costs of ($4.9) and
($3.3) respectively. 2015 includes professional fees of ($1.8).
|
|
(b)
|
|
Tax impact of comparable earnings items; 2014 also included benefit
of tax law change in the state of New York.
|
|
|
|
|
|
* Non-GAAP financial measure.
|
|
Note: Amounts may not be additive due to rounding.
|
|
RYDER SYSTEM, INC. AND SUBSIDIARIES
|
|
EARNINGS PER SHARE FORECAST AND OTHER INFORMATION - UNAUDITED
|
|
|
|
|
|
|
|
Comparable earnings per share from continuing operations forecast:*
|
|
Second Quarter
2015
|
|
Full Year
2015
|
|
EPS from continuing operations
|
|
1.51 - 1.56
|
|
6.14 - 6.29
|
|
|
Non-operating pension costs
|
|
0.05
|
|
0.21
|
|
|
Restructuring and other charges, net
|
|
0.02
|
|
0.05
|
|
|
Comparable EPS from continuing operations forecast*
|
|
$1.58 - $1.63
|
|
$6.40 - 6.55
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
|
Depreciation expense
|
$262.4
|
|
|
248.8
|
|
|
Subcontracted transportation
|
$(72.8
|
)
|
|
(86.2
|
)
|
|
|
|
|
|
|
|
* Non-GAAP financial measure.
|
|
Note: Amounts may not be additive due to rounding.
|
Source: Ryder System, Inc.