Ryder System, Inc. (R)

FORM 8-K | Current report
Apr. 25, 2017 10:55 AM
|
About: Ryder System, Inc. (R)View as PDF
RYDER SYSTEM INC (Form: 8-K, Received: 04/25/2017 10:56:39)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934



Date of Report (Date of earliest event reported): April 25, 2017
 
RYDER SYSTEM, INC.
(Exact name of registrant as specified in its charter) 
Florida
1-4364
59-0739250
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
11690 NW 105th Street
Miami, Florida
33178
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (305) 500-3726

Not Applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company     ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ¨





Item 2.02 Results of Operations and Financial Condition

On April 25, 2017, we issued a press release reporting our financial results for the three months ended March 31, 2017 (the Press Release). We will also host a conference call and webcast on April 25, 2017 during which we will make a presentation on our financial results for the three months ended March 31, 2017 (the Presentation). The Press Release and the Presentation are available on our website at http://investors.ryder.com.

The Press Release includes information regarding non-GAAP financial measures, as defined by SEC regulations, as well as a reconciliation of each non-GAAP financial measure to the nearest GAAP measure in the tables following the press release. Set forth in the table below is an explanation of each non-GAAP financial measure and why management believes that presentation of each measure provides useful information to investors:
Non-GAAP Financial Measures
Operating Revenue Measures:
 
 
Operating Revenue
FMS Operating Revenue
DTS Operating Revenue
SCS Operating Revenue
FMS EBT as a % of FMS Operating Revenue
DTS EBT as a % of DTS Operating Revenue
SCS EBT as a % of SCS Operating Revenue
Operating revenue is defined as total revenue for Ryder System, Inc. or each business segment (FMS, DTS and SCS), respectively, excluding any (1) fuel and (2) subcontracted transportation. We believe operating revenue provides useful information to investors as we use it to evaluate the operating performance of our core businesses and as a measure of sales activity at the consolidated level for Ryder System, Inc., as well as for each of our business segments. We also use segment EBT as a percentage of segment operating revenue for each business segment for the same reason. Note: FMS EBT, DTS EBT and SCS EBT, our primary measures of segment performance, are not non-GAAP measures.
Fuel : We exclude FMS, DTS and SCS fuel from the calculation of our operating revenue measures, as fuel is an ancillary service that we provide our customers, which is impacted by fluctuations in market fuel prices, and the costs are largely a pass-through to our customers, resulting in minimal changes in our profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by rapid changes in market fuel prices during a short period of time, as customer pricing for fuel services is established based on trailing market fuel costs.
Subcontracted transportation : We also exclude subcontracted transportation from the calculation of our operating revenue measures, as these services are also typically a pass-through to our customers and, therefore, fluctuations result in minimal changes to our profitability. While our DTS and SCS business segments subcontract certain transportation services to third party providers, our FMS business segment does not engage in subcontracted transportation and, therefore, this item is not applicable to FMS.
Operating Revenue Growth Excluding Foreign Exchange

Operating revenue growth excluding foreign exchange is calculated by dividing the results for the current and prior year periods by the exchange rates in effect on March 31, 2016, which was the last day of the prior year period, rather than the actual exchange rates in effect as of March 31, 2017. Ryder's period-over-period operating revenue growth excluding foreign exchange excludes the effects of changes in foreign currency exchange rates from our operating revenue financial measures. Due to the variability of foreign exchange rates from period to period, we believe operating revenue growth excluding foreign exchange is useful to investors to evaluate period-over-period operating performance.
Comparable Earnings Measures:
 
 
Comparable Earnings Before Income Tax (EBT)
Comparable Earnings
Comparable Earnings per Diluted Common Share (EPS)
Comparable EPS Forecast
Comparable Tax Rate

Comparable EBT, comparable earnings, comparable EPS, comparable EPS forecast and comparable tax rate are defined, respectively, as GAAP EBT, earnings, EPS, EPS forecast and effective tax rate, all from continuing operations, excluding (1) non-operating pension costs and (2) any other items that are not representative of our business operations. We believe these comparable earnings measures provide useful information to investors and allow for better year-over-year comparison of operating performance.
Non-Operating Pension Costs : Our comparable earnings measures exclude non-operating pension costs, which include the amortization of net actuarial loss, interest cost and expected return on plan assets components of pension and postretirement costs. We exclude non-operating pension costs because we consider these to be impacted by financial market performance and outside the operational performance of our business.
Other Items : Our comparable earnings measures also exclude other items that are not representative of our business operations. These other items vary from period to period and, in some periods, there may be no such items. In this reporting period, we exclude the following other item from our comparable earnings measures in this Form 8-K:
(1) Operating tax adjustment  (in the first quarter 2017). In the first quarter of 2017, it was determined that certain operating tax expenses related to prior periods had not been recognized in prior period earnings, resulting in a one-time charge to reflect those expenses.
Calculation of comparable tax rate : The comparable provision for income taxes is computed using the same methodology as the GAAP provision for income taxes. Income tax effects of non-GAAP adjustments are calculated based on the statutory tax rates of the jurisdictions to which the non-GAAP adjustments relate.





Adjusted Return on Average Capital (ROC)
Adjusted ROC Spread

Adjusted ROC : Adjusted ROC is defined as adjusted net earnings divided by average adjusted total capital and represents the rate of return generated by the capital deployed in our business. The adjustments represent the comparable items described above which are excluded, as applicable, from the calculation of net earnings and average shareholder's equity (a component of average total capital).
Adjusted ROC Spread : Adjusted ROC spread is defined as the difference between adjusted ROC and the weighted average cost of capital.
We use adjusted ROC and adjusted ROC spread as internal measures of how effectively we use the capital invested (borrowed or owned) in our operations.
Cash Flow Measures:
 
 
Total Cash Generated
Free Cash Flow
We consider total cash generated and free cash flow to be important measures of comparative operating performance, as our principal sources of operating liquidity are cash from operations and proceeds from the sale of revenue earning equipment.
Total Cash Generated : Total cash generated is defined as the sum of (1) net cash provided by operating activities, (2) net cash provided by the sale of revenue earning equipment and (3) operating property and equipment, (4) collections on direct finance leases and (5) other cash inflows from investing activities. We believe total cash generated is an important measure of total cash flows generated from our ongoing business activities.
Free Cash Flow : We refer to the net amount of cash generated from operating activities and investing activities (excluding changes in restricted cash and acquisitions) from continuing operations as “free cash flow”. We calculate free cash flow as the sum of (1) net cash provided by operating activities, (2) net cash provided by the sale of revenue earning equipment and (3) operating property and equipment, (4) collections on direct finance leases and (5) other cash inflows from investing activities, less (6) purchases of property and revenue earning equipment. We believe free cash flow provides investors with an important perspective on the cash available for debt service and for shareholders, after making capital investments required to support ongoing business operations. Our calculation of free cash flow may be different from the calculation used by other companies and, therefore, comparability may be limited.
Additional information regarding non-GAAP financial measures can be found in the Press Release and our most recent Form 10-K and Form 10-Q filed with the SEC.

The information in this Report, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and General Instruction B.2 thereunder and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference to such filing.

Item 7.01 Regulation FD Disclosure

The Company is hosting a conference call and webcast on April 25, 2017 during which we will make a presentation on our financial results for the three months ended March 31, 2017 (the Presentation). The Presentation has been made available on our website at http://investors.ryder.com .

Item 9.01(d) Exhibits

The following exhibit is furnished as part of this report on Form 8-K:
Exhibit 99.1
Press Release, dated April 25, 2017, relating to Ryder System, Inc.’s financial results for the three months ended March 31, 2017.





SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
 
 
Date: April 25, 2017
RYDER SYSTEM, INC.
(Registrant)
 
By:
/s/    ART A. GARCIA        
 
 
Art A. Garcia, Executive Vice President and Chief Financial Officer



Exhibit 99.1


News Release



Contacts:      Media:                          Investor Relations:
David Bruce                    Bob Brunn
(305) 500-4999                  (305) 500-4053

Ryder Reports First Quarter 2017 Results
Q1 GAAP EPS from Continuing Operations Down $0.34 or 32% to $0.71 , Impacted by Lower Used Vehicle Sales and Rental Results of $0.44
Q1 Comparable EPS (non-GAAP) from Continuing Operations Down $0.30 or 27% to $0.82 Impacted by Items Above
Record Q1 Total Revenue Grows 7% to $1.7 Billion ; Record Q1 Operating Revenue (non-GAAP) Up 3% to $1.4 Billion
Revised Full-Year 2017 GAAP EPS Forecast Range of $3.90 to $4.20 vs. Prior Forecast of $4.78 to $5.08 , Driven by a More Challenging Environment for the Company's Transactional Businesses, Primarily in Commercial Rental
Revised Full-Year 2017 Comparable EPS Forecast Range (non-GAAP) of $4.25 to $4.55 vs. Prior Forecast of $5.10 to $5.40

MIAMI, April 25, 2017 - Ryder System, Inc. (NYSE: R), a leader in commercial fleet management , dedicated transportation , and supply chain solutions, today reported first quarter earnings and revenue. Results for the three months ended March 31 were as follows:

(dollars in millions, except EPS)
Earnings Before Taxes
 
Earnings
 
Diluted Earnings Per Share
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
GAAP
$
60.0

 
88.7

 
(32)%
 
$
38.3

 
56.2

 
(32)%
 
$
0.71

 
1.05

 
(32)%
Non-operating pension costs
7.2

 
6.9

 
 
 
4.2

 
4.0

 
 
 
0.08

 
0.07

 
 
Operating tax adjustment
2.2

 

 
 
 
1.7

 

 
 
 
0.03

 

 
 
Comparable (non-GAAP)
$
69.4

 
95.6

 
(27)%
 
$
44.2

 
60.1

 
(27)%
 
$
0.82

 
1.12

 
(27)%

The Company reported record first quarter total revenue and operating revenue (a non-GAAP measure excluding all fuel and subcontracted transportation). Total revenue increased due to higher operating revenue and subcontracted transportation, reflecting new business and higher volumes. Total revenue also grew due to higher fuel costs passed through to customers, partially offset by negative impacts from foreign exchange. Operating revenue increased due to higher contractual ChoiceLease (lease) revenue and higher revenue in the supply chain solutions and dedicated transportation business segments, partially offset by lower transactional rental revenue and negative impacts from foreign exchange. Total revenue

1

Exhibit 99.1

and operating revenue for the three months ended March 31 were as follows:

(in millions)
Total Revenue
 
Operating Revenue (non-GAAP)
 
2017
 
2016
 
% Change
 
% Change excl. FX (non-GAAP)
 
2017
 
2016
 
% Change
 
% Change excl. FX
Total
$
1,748.2

 
1,629.7

 
7%
 
8%
 
$
1,445.1

 
1,406.0

 
3%
 
4%
FMS
$
1,132.5

 
1,097.9

 
3%
 
4%
 
$
962.2

 
962.3

 
—%
 
1%
DTS
$
266.7

 
244.8

 
9%
 
9%
 
$
193.4

 
190.3

 
2%
 
2%
SCS
$
462.7

 
388.7

 
19%
 
20%
 
$
361.8

 
322.4

 
12%
 
13%

Commenting on the Company’s first quarter results, Ryder Chairman and CEO Robert Sanchez said, "Ryder's results came in at the bottom end of our forecast range, driven by weaker than expected rental demand, which is consistent with the soft freight environment. In addition, used vehicle sales results were slightly below plan, due to modestly lower pricing. Although our transactional business results were below expectations, the solid growth in the contractual parts of our business reflects ongoing secular trends favoring outsourcing, with 45% of our growth now coming from customers who are outsourcing for the first time. Supply Chain Solutions outperformed our expectations, showing solid revenue and earnings growth, driven primarily by new business. Ryder's financial position remains strong, as we delivered positive free cash flow, and leverage is near the midpoint of our target range."

First Quarter Business Segment Operating Results

Fleet Management Solutions
In the Fleet Management Solutions (FMS) business segment, total revenue was $1.13 billion , up 3% compared with $1.10 billion in the year-earlier period. FMS operating revenue (a non-GAAP measure excluding fuel) was $962 million , consistent with the year-earlier period. Lease revenue increased 5% reflecting a larger average fleet size and higher prices on replacement vehicles. The lease fleet (excluding U.K. trailers) increased by 1,700 vehicles year-to-date, partly due to a higher number of vehicles being prepared for sale. Adjusting for these units, the lease fleet grew by 1,200 vehicles year-to-date. Commercial rental revenue decreased by 15% from the year-earlier period due to lower demand.

FMS earnings before tax were $52.1 million , down 37% compared with $83.3 million in the same period of 2016 . Decreased earnings reflect lower used vehicle sales results and commercial rental performance. Results benefited from lower overheads and improved results in lease and SelectCare (maintenance), partially offset by $9 million of accelerated depreciation on vehicles and higher maintenance costs on an

2

Exhibit 99.1

older fleet. Commercial rental performance declined due to lower demand. Rental power fleet utilization was 67.2% for the first quarter , down from 70.4% in the year-earlier period. Used vehicle results declined primarily due to a lower market pricing environment. FMS earnings before tax as a percentage of FMS total revenue and FMS operating revenue (a non-GAAP measure) were 4.6% and 5.4% , respectively, down 300 and 330 basis points, primarily reflecting lower used vehicle sales and commercial rental results.

Dedicated Transportation Solutions
In the Dedicated Transportation Solutions (DTS) business segment, total revenue was up 9% to $267 million and DTS operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) was up 2% to $193 million compared with the year-earlier period. DTS total revenue growth reflects higher operating revenue and increased subcontracted transportation resulting from new business, as well as higher fuel costs passed through to customers. DTS operating revenue grew as a result of higher pricing and increased volumes.

DTS earnings before tax of $11.3 million decreased 21% compared with $14.3 million in 2016 , primarily due to higher insurance costs and increased operating costs on an older fleet. DTS earnings before tax as a percentage of DTS total revenue and DTS operating revenue (a non-GAAP measure) were 4.2% and 5.8% , respectively, down 160 and 170 basis points from the year-earlier period.

Supply Chain Solutions
In the Supply Chain Solutions (SCS) business segment, total revenue was up 19% to $463 million and SCS operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) was up 12% to $362 million compared with the year-earlier period. SCS total revenue growth reflects higher operating revenue and increased subcontracted transportation resulting from new business. SCS operating revenue grew across all industry verticals, primarily as a result of increased volumes, new business, and higher pricing.

SCS earnings before tax of $27.4 million increased 39% from $19.8 million in 2016 , primarily driven by revenue growth. SCS earnings before tax as a percentage of SCS total revenue and SCS operating revenue (a non-GAAP measure) were 5.9% and 7.6% , respectively, up 80 and 150 basis points from the prior year.


3

Exhibit 99.1

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 2017 , unallocated CSS costs were $10 million , consistent with the year-earlier period.

Items Excluded from Segment and Comparable Earnings
Non-operating components of pension costs are excluded from both segment earnings before tax and comparable earnings (a non-GAAP measure) in order to more accurately reflect the operating performance of the business. Non-operating pension costs totaled $7.2 million ( $4.2 million after tax) or $0.08 per diluted share in the first quarter of 2017 , up from $6.9 million ( $4.0 million after tax) or $0.07 per diluted share in the year-earlier period.

During the first quarter of 2017 , the Company identified certain operating tax expenses that had not been recognized in prior period earnings. Accordingly, the Company recognized a one-time charge of $2.2 million ( $1.7 million after tax) or $0.03 per diluted share as a cumulative correction in selling, general and administrative expenses.

Income Taxes
The Company’s effective income tax rate and comparable income tax rate (a non-GAAP measure) from continuing operations for the first quarter of 2017 decreased 50 and 70 basis points, respectively, to 36.2% and 36.4% . The decrease in the effective and comparable income tax rates reflect a reduction of the valuation allowance for foreign deferred taxes.

Capital Expenditures
Year-to-date capital expenditures decreased to $436 million , compared with $498 million in 2016 . The decrease in capital expenditures reflects lower planned investments in the lease fleet, partially offset by higher planned investments to refresh the commercial rental fleet. Proceeds, primarily from used vehicle sales, of $97 million decreased 20% compared with $121 million in 2016 , primarily due to lower vehicle pricing. Net capital expenditures (including proceeds from the sale of assets) were $340 million in 2017 , down from $377 million in 2016 .


4

Exhibit 99.1

Cash Flow and Leverage
Year-to-date operating cash flow was $331 million , down 10% from $368 million in 2016 . Total cash generated (a non-GAAP measure that includes proceeds from used vehicle sales) was $444 million , compared with $514 million in 2016 . Free cash flow (a non-GAAP measure) was $83 million , compared with negative $61 million in 2016 , reflecting lower net capital spending. The Company’s full-year 2017 forecast for operating cash flow remains unchanged at $1.7 billion . The Company's full-year free cash flow forecast remains unchanged at $250 million .

Debt decreased by $65 million compared with year-end 2016 . Debt to equity was 256% compared with 263% at year-end 2016 , and within Ryder’s long-term target range of 225% to 275% . The year-end debt to equity forecast remains unchanged at 240% .


2017 Earnings Forecast

Commenting on the Company’s outlook, Mr. Sanchez said, "We are reducing our full-year earnings forecast, driven by lowered expectations in our transactional businesses, primarily in commercial rental. Although we are seeing a seasonal uptick in commercial rental demand, the weaker than expected demand that we saw in the first quarter is expected to continue through the balance of the year. Based on our demonstrated ability to quickly right size our fleet to shifts in market demand, we expect improved rental utilization comparisons in the second half. Used vehicle sales results are anticipated to be below original expectations due to modestly lower pricing, reflecting continued high levels of inventory in the used vehicle market. We expect Ryder's used vehicle inventories to be near the midpoint of our target range by year end, which better positions us as we enter 2018. We also anticipate maintenance costs to be moderately above our prior forecast due to increased costs on certain older model year vehicles. Supply Chain Solutions is expected to perform generally in line with expectations for the full year, as the first quarter out-performance is not expected to continue in the remainder of the year. We expect Dedicated Transportation Solutions to continue to be negatively impacted by the items we saw in the first quarter but to a lesser degree. Lease sales continue to be strong, especially growth from companies that are outsourcing for the first time, and we expect to meet or exceed our full year fleet growth forecast. The business is generating positive free cash flow and leverage is expected to decline, which provides us with increasing financial flexibility as we move into 2018."

In view of these factors, Ryder is revising its full-year 2017 GAAP EPS forecast to a range of $3.90 to $4.20 from a prior forecast of $4.78 to $5.08 . Additionally, the Company's full-year 2017 comparable EPS

5

Exhibit 99.1

forecast has been revised to a range of $4.25 to $4.55 from a prior range of $5.10 to $5.40 . The Company is also establishing a second quarter 2017 GAAP EPS forecast range of $0.79 to $0.89 , and a comparable EPS forecast range of $0.87 to $0.97 , reflecting unfavorable year-over-year comparisons in both commercial rental and used vehicle sales, as well as from accelerated depreciation on vehicles.


Supplemental Company Information

First Quarter Net Earnings

(dollars in millions, except EPS)
Earnings
 
Diluted EPS
 
2017
 
2016
 
2017
 
2016
Earnings from continuing operations
$
38.3

 
56.2

 
$
0.71

 
1.05

Discontinued operations
(0.1
)
 
(0.4
)
 

 
(0.01
)
Net earnings
$
38.1

 
55.8

 
$
0.71

 
1.04



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 a broad range of services to help businesses of all sizes, across virtually every industry, deliver for their customers. From leasing, maintenance, and fueling, to commercial rental and used vehicle sales, customers rely on Ryder’s expertise to help them lower their costs, redirect capital to other parts of their business, and focus on what they do best - so they can grow.
Dedicated Transportation Solutions - Ryder’s DTS business segment combines the best of Ryder’s leasing and maintenance capability with the safest and most professional drivers in the industry. With a dedicated transportation solution, Ryder helps customers increase their competitive position, reduce risk, and integrate their transportation needs with their overall supply chain.
Supply Chain Solutions - Ryder’s SCS business segment optimizes logistics networks to make them more responsive and able to be leveraged as a competitive advantage. Globally-recognized brands in the automotive, consumer goods, food and beverage, healthcare, industrial, oil and gas,

6

Exhibit 99.1

technology, and retail industries rely on Ryder’s leading-edge technologies and world-class logistics engineers to help them deliver the goods that consumers use every day.

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

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

For more information on Ryder System, Inc., visit http://investors.ryder.com/ .

###

Note Regarding Forward-Looking Statements:
Certain statements and information included in this news release are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995, including our expectations regarding market conditions, earnings performance, revenue in our business segments, fleet size, demand and pricing trends in commercial rental and used vehicle sales, cash flow measures, capital expenditures, debt, adjusted ROC, and our 2017 outlook. 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, further decreases in commercial rental demand or poor acceptance of rental pricing, our ability to right-size our commercial rental fleet in line with demand, availability of labor to maintain our fleet at normalized levels, ability to redeploy and prepare for sale in a cost-efficient manner, worsening of market demand for used vehicles or greater than expected negative effects of excess inventory levels impacting current pricing, residual values and our anticipated proportion of retail versus wholesale sales, lack of customer demand for on-demand maintenance, higher than expected maintenance costs from new engine technology or due to lower than expected benefits from maintenance initiatives, 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, uncertainty and instability in the global economic market, business interruptions or expenditures due to severe weather or natural occurrences, competition from other service providers and new entrants, customer retention levels, loss of key customers, driver and technician shortages resulting in higher procurement costs and turnover rates, unexpected bad debt reserves or write-offs, changes in customers’ business environments that will limit their ability to commit to long-term vehicle leases, a decrease in credit ratings, increased debt costs, adequacy of accounting estimates, reserves and accruals particularly with respect to pension, taxes, depreciation, insurance and revenue, sudden or unusual changes in fuel prices, unanticipated currency exchange rate fluctuations, our ability to manage our cost structure, and the risks described in our filings with the Securities and Exchange Commission. The risks included here are not exhaustive. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. 

7

Exhibit 99.1




Note Regarding Non-GAAP Financial Measures:   This news release includes certain non-GAAP financial measures as defined under SEC rules, including:

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

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

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

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


Conference Call and Webcast Information:

Ryder’s earnings conference call and webcast is scheduled for Tuesday, April 25, 2017 , 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 please click the below URL 5 minutes prior to the start of the webcast. You will need to complete the registration page to gain access to the webcast.
 
Ryder First Quarter Earnings Call Webcast URL: https://pgi.webcasts.com/starthere.jsp?ei=1139157

If you do not have computer speakers or headphones and/or would like to dial-into the webcast, please dial into the phone bridge below. In addition, please click the “listen by phone” option on the webcast player for the optimal viewing experience.

LIVE AUDIO VIA PHONE
Please dial the audio phone number approximately ten minutes prior to the start of the call. 
Toll Free Number:        877-419-6593
USA Toll Number:             719-325-4754
Audio Passcode:                  Ryder
Conference Leader:            Bob Brunn
 
  AUDIO REPLAY VIA PHONE
An audio replay of the call will be available one hour after call ends for 30 days. 
Toll Free Number:       888-203-1112
USA Toll Number:       719-457-0820
Replay Passcode:          8485992
 
AUDIO REPLAY VIA MP3 DOWNLOAD
A podcast of the call will be available within 24 hours after the end of the call at  http://investors.ryder.com . Interested listeners may download the audio file and either save or listen to it on their computer or any portable MP3 player. Go to  http://investors.ryder.com , select Financials/Quarterly Reports and the date in order to access the file.
 
AUDIO & SLIDE REPLAY VIA INTERNET
An audio replay including the slide presentation will be available on the Internet within 2 hours following the call.  Go to  http://investors.ryder.com , select Financials/Quarterly Reports and the date in order to access the file.


8

Exhibit 99.1

RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS - UNAUDITED
Periods ended March 31, 2017 and 2016
(In millions, except per share amounts)
 
Three Months
 
2017
 
2016
 
 
 
 
Lease and rental revenues
$
767.6

 
767.8

Services revenue
851.9

 
759.1

Fuel services revenue
128.7

 
102.8

Total revenues
1,748.2

 
1,629.7

 
 
 
 
Cost of lease and rental
578.8

 
552.5

Cost of services
714.1

 
631.7

Cost of fuel services
125.9

 
98.9

Other operating expenses
31.3

 
30.2

Selling, general and administrative expenses
201.8

 
204.4

Non-service retirement benefit costs
7.3

 
6.8

Used vehicle sales, net
(0.8
)
 
(19.1
)
Interest expense
34.9

 
37.9

Miscellaneous income, net
(5.0
)
 
(2.3
)
 
1,688.2

 
1,541.0

 
 
 
 
Earnings from continuing operations before income taxes
60.0

 
88.7

Provision for income taxes
21.7

 
32.5

Earnings from continuing operations
38.3

 
56.2

Loss from discontinued operations, net of tax
(0.1
)
 
(0.4
)
Net earnings
$
38.1

 
55.8

 
 
 
 
Earnings (loss) per common share - Diluted
 
 
 
Continuing operations
$
0.71

 
1.05

Discontinued operations

 
(0.01
)
Net earnings
$
0.71

 
1.04

 
 
 
 
Earnings per share information - Diluted
 
 
 
Earnings from continuing operations
$
38.3

 
56.2

Less: Distributed and undistributed earnings allocated to unvested stock
(0.1
)
 
(0.2
)
Earnings from continuing operations available to common stockholders
$
38.1

 
56.0

 
 
 
 
Weighted-average shares outstanding - Diluted
53.4

 
53.4

 
 
 
 
EPS from continuing operations
$
0.71

 
1.05

Non-operating pension costs
0.08

 
0.07

Operating tax adjustment

0.03

 

Comparable EPS from continuing operations *
$
0.82

 
1.12


* Non-GAAP financial measure. A reconciliation of GAAP EPS from continuing operations to comparable EPS from continuing operations is set forth in this table.
Note: Amounts may not be additive due to rounding.

9

Exhibit 99.1

RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS - UNAUDITED
(Dollars in millions)

 
March 31,
2017
 
December 31, 2016
 
 
 
 
Assets:
 
 
 
Cash and cash equivalents
$
38.0

 
58.8

Other current assets
1,075.4

 
1,042.8

Revenue earning equipment, net
8,171.2

 
8,147.7

Operating property and equipment, net
754.3

 
745.9

Other assets
935.0

 
907.3

 
$
10,973.8

 
10,902.5

 
 
 
 
Liabilities and shareholders' equity:
 
 
 
Current liabilities
$
1,004.7

 
952.7

Total debt
5,326.2

 
5,391.3

Other non-current liabilities (including deferred income taxes)
2,563.1

 
2,506.2

Shareholders' equity
2,079.8

 
2,052.3

 
$
10,973.8

 
10,902.5



SELECTED KEY RATIOS AND METRICS

 
March 31,
2017
 
December 31, 2016
 
 
 
 
Debt to equity
256
%
 
263
%
Effective interest rate (average cost of debt)
2.6
%
 
2.7
%

 
Three months ended March 31,
 
2017
 
2016
 
 
 
 
Cash provided by operating activities from continuing operations
$
331.3

 
368.0

Free cash flow *
82.8

 
(60.8
)
Capital expenditures paid
361.3

 
575.0

 
 
 
 
Capital expenditures (accrual basis)
$
436.1

 
497.5

Less: Proceeds from sales (primarily revenue earning equipment)
(96.5
)
 
(120.6
)
Net capital expenditures
$
339.6

 
376.9


 
Three months ended March 31,
 
2017
 
2016
 
 
 
 
Return on average shareholders' equity
11.9
%
 
15.8
%
Return on average assets
2.2
%
 
2.9
%
Adjusted return on capital *
4.6
%
 
5.7
%
Weighted average cost of capital
4.3
%
 
4.4
%
Return on capital spread **
0.3
%
 
1.3
%


* Non-GAAP financial measure. See reconciliation of the non-GAAP elements of this calculation reconciled to the corresponding GAAP measures included in the Appendix - Non-GAAP Financial Measures section at the end of this release.
** Non-GAAP financial measure. Adjusted return on capital spread is calculated as the difference of the adjusted return on capital and the weighted average cost of capital.
Note: Amounts may not be additive due to rounding.


10

Exhibit 99.1


RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED
Periods ended March 31, 2017 and 2016
(Dollars in millions)

 
Three Months
 
2017
 
2016
 
B(W)
 
 
 
 
 
 
Total Revenue:
 
 
 
 
 
Fleet Management Solutions:
 
 
 
 
 
ChoiceLease
$
656.3

 
622.9

 
5
 %
SelectCare
113.6

 
114.4

 
(1
)%
Commercial rental
174.0

 
204.8

 
(15
)%
Other
18.3

 
20.2

 
(10
)%
Fuel services revenue
170.3

 
135.6

 
26
 %
Total Fleet Management Solutions
1,132.5

 
1,097.9

 
3
 %
Dedicated Transportation Solutions
266.7

 
244.8

 
9
 %
Supply Chain Solutions
462.7

 
388.7

 
19
 %
Eliminations
(113.7
)
 
(101.8
)
 
(12
)%
Total revenue
$
1,748.2

 
1,629.7

 
7
 %
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenue: *
 
 
 
 
 
Fleet Management Solutions
$
962.2

 
962.3

 
 %
Dedicated Transportation Solutions
193.4

 
190.3

 
2
 %
Supply Chain Solutions
361.8

 
322.4

 
12
 %
Eliminations
(72.2
)
 
(69.0
)
 
(5
)%
Operating revenue
$
1,445.1

 
1,406.0

 
3
 %
 
 
 
 
 
 
 
 
 
 
 
 
Business segment earnings:
 
 
 
 
 
Earnings from continuing operations
 
 
 
 
 
 before income taxes:
 
 
 
 
 
Fleet Management Solutions
$
52.1

 
83.3

 
(37
)%
Dedicated Transportation Solutions
11.3

 
14.3

 
(21
)%
Supply Chain Solutions
27.4

 
19.8

 
39
 %
Eliminations
(11.2
)
 
(11.7
)
 
4
 %
 
79.6

 
105.6

 
(25
)%
Unallocated Central Support Services
(10.2
)
 
(10.0
)
 
(2
)%
Non-operating pension costs
(7.2
)
 
(6.9
)
 
(5
)%
Other items
(2.2
)
 

 
NM

Earnings from continuing operations before income taxes
60.0

 
88.7

 
(32
)%
Provision for income taxes
21.7

 
32.5

 
33
 %
Earnings from continuing operations
$
38.3

 
56.2

 
(32
)%

* Non-GAAP financial measure. See reconciliation of GAAP total revenue to operating revenue in the Appendix - Non-GAAP Financial Measures section at the end of this release.
Note: Amounts may not be additive due to rounding.

11

Exhibit 99.1

RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION - UNAUDITED
Periods ended March 31, 2017 and 2016
(Dollars in millions)

 
Three Months
 
2017
 
2016
 
B(W)
 
 
 
 
 
 
Fleet Management Solutions
 
 
 
 
 
 
 
 
 
 
 
FMS total revenue
$
1,132.5

 
1,097.9

 
3
 %
Fuel services revenue (a)
(170.3
)
 
(135.6
)
 
26
 %
FMS operating revenue *
$
962.2

 
962.3

 
 %
 
 
 
 
 
 
Segment earnings before income taxes
$
52.1

 
83.3

 
(37
)%
 
 
 
 
 
 
FMS earnings before income taxes as % of FMS total revenue
4.6
%
 
7.6
%
 
 
 
 
 
 
 
 
FMS earnings before income taxes as % of FMS operating revenue *
5.4
%
 
8.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dedicated Transportation Solutions
 
 
 
 
 
 
 
 
 
 
 
DTS total revenue
$
266.7

 
244.8

 
9
 %
Subcontracted transportation
(45.3
)
 
(31.2
)
 
45
 %
Fuel (a)
(28.0
)
 
(23.3
)
 
20
 %
DTS operating revenue *
$
193.4

 
190.3

 
2
 %
 
 
 
 
 
 
Segment earnings before income taxes
$
11.3

 
14.3

 
(21
)%
 
 
 
 
 
 
DTS earnings before income taxes as % of DTS total revenue
4.2
%
 
5.8
%
 
 
 
 
 
 
 
 
DTS earnings before income taxes as % of DTS operating revenue *
5.8
%
 
7.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supply Chain Solutions
 
 
 
 
 
 
 
 
 
 
 
SCS total revenue
$
462.7

 
388.7

 
19
 %
Subcontracted transportation
(82.5
)
 
(52.0
)
 
59
 %
Fuel (a)
(18.5
)
 
(14.3
)
 
29
 %
SCS operating revenue *
$
361.8

 
322.4

 
12
 %
 
 
 
 
 
 
Segment earnings before income taxes
$
27.4

 
19.8

 
39
 %
 
 
 
 
 
 
SCS earnings before income taxes as % of SCS total revenue
5.9
%
 
5.1
%
 
 
 
 
 
 
 
 
SCS earnings before income taxes as % of SCS operating revenue *
7.6
%
 
6.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 

* Non-GAAP financial measure. A reconciliation of (1) GAAP total revenue to operating revenue for each business segment (FMS, DTS and SCS) and (2) segment earnings before taxes (EBT) as % of segment total revenue to segment EBT as % of segment operating revenue for each business segment is set forth in this table.
Note: Amounts may not be additive due to rounding.

(a) Includes intercompany fuel sales from FMS to DTS and SCS.

12

Exhibit 99.1

RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION - UNAUDITED
KEY PERFORMANCE INDICATORS
 
Three months ended March 31,
 
Change
 
2017
 
2016
 
2017/2016
 
 
 
 
 
 
ChoiceLease
 
 
 
 
 
Average fleet count
137,100

 
132,600

 
3%
End of period fleet count
137,900

 
133,300

 
3%
Miles/unit per day change - %  (a)
1.5
 %
 
0.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial rental
 
 
 
 
 
Average fleet count
37,300

 
41,000

 
(9)%
End of period fleet count
37,300

 
40,100

 
(7)%
Rental utilization - power units
67.2
 %
 
70.4
 %
 
(320) bps
Rental rate change - %  (b)
1.1
 %
 
0.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer vehicles under
 
 
 
 
SelectCare contracts (c)
 
 
 
 
 
Average fleet count
50,100

 
48,200

 
4%
End of period fleet count
50,400

 
49,500

 
2%
 
 
 
 
 
 
 
 
 
 
 
 
Customer vehicles under
 
 
 
 
SelectCare on-demand (d)
 
 
 
 
 
Fleet serviced during the period
9,300

 
7,100

 
31%
 
 
 
 
 
 
 
 
 
 
 
 
DTS
 
 
 
 
 
Average fleet count (e)
8,200

 
8,000

 
3%
End of period fleet count (e)
8,300

 
8,200

 
1%
 
 
 
 
 
 
 
 
 
 
 
 
SCS
 
 
 
 
 
Average fleet count  (e)
7,700

 
6,900

 
12%
End of period fleet count (e)
7,800

 
7,000

 
11%
 
 
 
 
 
 
 
 
 
 
 
 
Used vehicle sales (UVS)
 
 
 
 
 
Average UVS inventory
7,100

 
8,500

 
(16)%
End of period fleet count
6,700

 
8,600

 
(22)%
Used vehicles sold
4,500

 
4,700

 
(4)%
UVS pricing change - % (f)
 
 
 
 
 
Tractors
(16
)%
 
(8
)%
 
 
Trucks
(20
)%
 
6
 %
 
 

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)
Excludes customer vehicles under SelectCare on-demand contracts.
(d)
Comprised of the number of vehicles serviced under on-demand maintenance agreements. Vehicles included in the end of period count may have been serviced more than one time during the respective period.
(e)
These vehicle counts are also included within the average fleet counts for ChoiceLease, Commercial Rental and SelectCare.
(f)
Represents percentage change compared to prior year period in average sales proceeds on used vehicle sales using constant currency.


13

Exhibit 99.1

RYDER SYSTEM, INC. AND SUBSIDIARIES
APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
This press release and accompanying tables include “non-GAAP financial measures” as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP.
Specifically, the following non-GAAP financial measures are included in this presentation:
Non-GAAP Financial Measure
Comparable GAAP Measure
Reconciliation in Section Entitled
Operating Revenue Measures:
 
 
Operating Revenue
Total Revenue
Appendix - Non-GAAP Financial Measure Reconciliations
FMS Operating Revenue
FMS Total Revenue
Business Segment Information - Unaudited
DTS Operating Revenue
DTS Total Revenue
SCS Operating Revenue
SCS Total Revenue
Operating Revenue Growth Excluding Foreign Exchange
Total Revenue
Appendix - Non-GAAP Financial Measure Reconciliations
FMS EBT as a % of FMS Operating Revenue
FMS EBT as a % of FMS Total Revenue
Business Segment Information - Unaudited
DTS EBT as a % of DTS Operating Revenue
DTS EBT as a % of DTS Total Revenue
SCS EBT as a % of SCS Operating Revenue
SCS EBT as a % of SCS Total Revenue
Comparable Earnings Measures:
 
 
Comparable Earnings Before Income Tax and Comparable Tax Rate
Earnings Before Income Tax and Effective Tax Rate from Continuing Operations
Appendix - Non-GAAP Financial Measure Reconciliations
Comparable Earnings
Earnings from Continuing Operations
Appendix - Non-GAAP Financial Measure Reconciliations
Comparable EPS and Comparable EPS Forecast
EPS from Continuing Operations
EPS Forecast from Continuing Operations
Consolidated Condensed Statements of Earnings - Unaudited
Appendix - Non-GAAP Financial Measure Reconciliations (Forecast)
Adjusted Return on Average Capital (ROC) and Adjusted ROC Spread
Not Applicable. However, non-GAAP elements of the calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average total debt and average shareholders' equity to adjusted average total capital is provided.
Appendix - Non-GAAP Financial Measure Reconciliations
Cash Flow Measures:
 
 
Total Cash Generated and Free Cash Flow
Cash Provided by Operating Activities
Appendix - Non-GAAP Financial Measure Reconciliations


14

Exhibit 99.1

RYDER SYSTEM, INC. AND SUBSIDIARIES
APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
(Dollars in millions)

OPERATING REVENUE RECONCILIATION
 
 
 
 
 
 
 
 
Three months ended March 31,
 
2017
 
2016
 
 
 
 
Total revenue
$
1,748.2

 
1,629.7

Fuel
(175.3
)
 
(140.5
)
Subcontracted transportation
(127.8
)
 
(83.2
)
Operating revenue *
$
1,445.1

 
1,406.0


OPERATING REVENUE GROWTH EXCLUDING FOREIGN EXCHANGE RECONCILIATION
 
 
 
2017 vs 2016 Growth
 
Fx Impact (a)
 
Growth excl Fx*
 
 
 
 
 
 
RSI Total Revenue
7
 %
 
(1
)%
 
8
 %
RSI Operating Revenue*
3
 %
 
(1
)%
 
4
 %
FMS Total Revenue
3
 %
 
(1
)%
 
4
 %
FMS Operating Revenue*
 %
 
(1
)%
 
1
 %
SCS Total Revenue
19
 %
 
(1
)%
 
20
 %
SCS Operating Revenue*
12
 %
 
(1
)%
 
13
 %
ChoiceLease Revenue
5
 %
 
(1
)%
 
6
 %
Commercial Rental Revenue
(15
)%
 
(1
)%
 
(14
)%

TOTAL CASH GENERATED/FREE CASH FLOW RECONCILIATION
 
 
 
 
 
 
 
 
Three months ended March 31,
 
2017
 
2016
 
 
 
 
Net cash provided by operating activities from continuing operations
$
331.3

 
368.0

Proceeds from sales (primarily revenue earning equipment) (b)
96.5

 
120.6

Collections on direct finance leases and other items (b)
16.3

 
25.6

Total cash generated *
444.1

 
514.2

Purchases of property and revenue earning equipment  (b)
(361.3
)
 
(575.0
)
Free cash flow **
$
82.8

 
(60.8
)
 
 
 
 
Memo:
 
 
 
Net cash provided by (used in) financing activities
$
(106.2
)
 
60.5

Net cash used in investing activities
$
(247.1
)
 
(429.0
)

Notes:
(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, 2016, which was the last day of the prior year period, rather than the actual exchange rates in effect as of
March 31, 2017.
(b)
Included in cash flows from investing activities.

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

15

Exhibit 99.1

RYDER SYSTEM, INC. AND SUBSIDIARIES
APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
(Dollars in millions)

ADJUSTED RETURN ON CAPITAL RECONCILIATION
 
 
 
 
 
 
 
 
Twelve months ended March 31,
 
2017
 
2016
 
 
 
 
Net earnings (12-month rolling period)
$
244.5

 
308.2

+ Restructuring and other items
14.7

 
15.8

+ Income taxes
130.8

 
165.3

Adjusted earnings before income taxes
389.9

 
489.3

+ Adjusted interest expense   (a)
145.1

 
151.7

- Adjusted income taxes (b)
(186.5
)
 
(225.5
)
= Adjusted net earnings for ROC (numerator) [A]
$
348.5

 
415.5

 
 
 
 
Average total debt
$
5,496.7

 
5,358.3

Average off-balance sheet debt
1.3

 
1.5

Average shareholders' equity  
2,064.8

 
1,945.2

Adjustment to equity  (c)
1.1

 
3.1

Adjusted average total capital (denominator) [B]
$
7,563.9

 
7,308.1

 
 
 
 
Adjusted ROC *  [A]/[B]
4.6
%
 
5.7
%

Notes:
(a)
Represents reported interest expense plus imputed interest on off-balance sheet obligations.
(b)
Represents provision for income taxes plus income taxes on restructuring and other items and adjusted interest expense.
(c)
Represents the impact to equity of items to arrive at comparable earnings.

* Non-GAAP financial measure. Non-GAAP elements of the calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average total debt and average shareholders' equity to adjusted average total capital set forth in this table.
Note: Amounts may not be additive due to rounding.

16

Exhibit 99.1

RYDER SYSTEM, INC. AND SUBSIDIARIES
APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
(In millions, except per share amounts)
COMPARABLE EARNINGS/EARNINGS BEFORE INCOME TAX/TAX RATE RECONCILIATION
 
 
 
 
 
 
 
2017
 
Consolidated Statements of Earnings Line Item
 
Three Months
 
 
 
 
Earnings from continuing operations before income taxes
 
 
$
60.0

Non-operating pension costs
SG&A
 
7.2

Operating tax adjustment
 
 
2.2

Comparable earnings from continuing operations before income taxes*
 
 
69.4

 
 
 
 
Provision for income taxes  
 
 
(21.7
)
Income tax effects of non-GAAP adjustments**
 
 
(3.6
)
Comparable provision for income taxes**
 
 
(25.2
)
 
 
 
 
Earnings from continuing operations
 
 
38.3

Non-operating pension costs
SG&A
 
4.2

Operating tax adjustment
 
 
1.7

Comparable earnings from continuing operations*
 
 
$
44.2

 
 
 
 
Tax rate on continuing operations
 
 
36.2
%
Income tax effects of non-GAAP adjustments**
 
 
0.2
%
Comparable tax rate on continuing operations**
 
 
36.4
%

 
 
 
2016
 
Consolidated Statements of Earnings Line Item
 
Three Months
 
 
 
 
Earnings from continuing operations before income taxes
 
 
$
88.7

Non-operating pension costs
SG&A
 
6.9

Comparable earnings from continuing operations before income taxes*
 
 
95.6

 
 
 
 
Provision for income taxes
 
 
(32.5
)
Income tax effects of non-GAAP adjustments**
 
 
(2.9
)
Comparable provision for income taxes**
 
 
(35.4
)
 
 
 
 
Earnings from continuing operations
 
 
56.2

Non-operating pension costs
SG&A
 
4.0

Comparable earnings from continuing operations*
 
 
$
60.1

 
 
 
 
Tax rate on continuing operations
 
 
36.7
%
Income tax effects of non-GAAP adjustments**
 
 
0.4
%
Comparable tax rate on continuing operations**
 
 
37.1
%
* Non-GAAP financial measure.
** The comparable provision for income taxes is computed using the same methodology as the GAAP provision for income taxes. Income tax effects of non-GAAP adjustments are calculated based on the statutory tax rates of the jurisdictions to which the non-GAAP adjustments relate.
Note: Amounts may not be additive due to rounding.

17

Exhibit 99.1

RYDER SYSTEM, INC. AND SUBSIDIARIES
APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED


COMPARABLE EARNINGS PER SHARE FORECAST RECONCILIATION
 
 
 
 
 
 
 
Comparable earnings per share from continuing operations forecast:*
Second Quarter 2017
 
Full Year 2017
EPS from continuing operations
$0.79 to $0.89

 
$3.90 to $4. 20

Non-operating pension costs, net of tax
0.08

 
0.32

Operating tax adjustment

 
0.03

Comparable EPS from continuing operations forecast*
$0.87 to $0.97

 
$4.25 to $4. 55


Note: Amounts may not be additive due to rounding.

TOTAL CASH GENERATED/FREE CASH FLOW FORECAST RECONCILIATION
 
 
 
 
2017 Forecast
Net Cash Provided by Operating Activities from Continuing Operations
$
1,700

Proceeds from sales (primarily revenue earning equipment) (1)
390

Collections of direct finance leases (1)
80

    Total cash generated*
2,170

 
 
Capital expenditures (1)
(1,920
)
    Free cash flow **
$
250

 
 
Memo:
 
Net cash used in financing activities
$
250

Net cash used in investing activities
$
1,450


(1)  
Included in cash flows from investing activities.

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



18