Financial Data and Key Metrics Changes - Operating revenue for Q4 2021 was $2.1 billion, a 14% increase from the prior year, with comparable earnings per share from continuing operations at $3.52 compared to $0.83 in the prior year [16][17] - Return on equity reached a record 20.9% for 2021, reflecting improved performance in Fleet Management Solutions (FMS) [17][18] - Free cash flow for 2021 was strong at $1.1 billion, although down from the prior year due to higher capital expenditures [13][40] Business Line Data and Key Metrics Changes - FMS operating revenue increased by 9%, driven by a 35% increase in rental revenue, with pre-tax earnings of $255 million, up by $195 million from the prior year [18][19] - Supply Chain Solutions (SCS) operating revenue increased by 21%, with EBT as a percentage of operating revenue at 3.5%, below target due to supply chain disruptions [23] - Dedicated Transportation Solutions (DTS) operating revenue increased by 26%, with EBT as a percentage of operating revenue at 4%, below target due to increased labor and insurance costs [24] Market Data and Key Metrics Changes - The used vehicle market conditions remained robust, with year-over-year proceeds approximately doubling for both tractors and trucks, and average used vehicle pricing well above residual value estimates [21][22] - The company expects robust outsourcing trends to continue, supported by increased awareness of supply chain resiliency [26] Company Strategy and Development Direction - The company completed two acquisitions in January 2022, expected to add approximately $480 million and $135 million to supply chain total revenue, respectively [9][10] - The company plans to enter a new $300 million accelerated share repurchase program, while still expecting capacity for acquisitions [14] - Long-term ROE target is raised from 15% to a range of upper-teens, reflecting higher expected returns in FMS [51] Management's Comments on Operating Environment and Future Outlook - Management noted unprecedented challenges impacting labor, supply chain, and truck production, which are providing growth opportunities [11] - The company expects operating revenue to grow approximately 10% in 2022, with comparable EPS forecasted between $11 and $12, up 15% to 25% over the prior year [27][43] - Management anticipates continued strength in FMS and a recovery of SCS and DTS returns in the second half of 2022 [40] Other Important Information - The company plans to exit the lower return FMS business in the UK over the next 12 to 18 months, which is expected to benefit cash flow [48] - The company is maintaining balance sheet flexibility through moderate lease growth, enabling investments in higher return opportunities [50] Q&A Session Summary Question: Customer acceptance of price increases in FMS segment - Management noted strong customer acceptance of pricing increases due to lower residual expectations and ongoing volatility in the market [60][61] Question: Drivers for EBT margin recovery in Dedicated and Supply Chain - Management highlighted record new contract wins and recovery of pricing related to wage increases as key drivers for margin recovery [71][72] Question: Impact of Omicron on operations - Management acknowledged increased absenteeism due to Omicron but noted strong demand in FMS helped offset the impact [103][104] Question: Expectations for inflation across different segments - Management indicated that CPI increases are included in contracts, allowing for cost pass-throughs to customers, thus mitigating inflation impacts [115][117] Question: Initial performance and strategy for acquisitions - Management expressed excitement about the Whiplash and Midwest acquisitions, emphasizing their strategic importance in expanding e-commerce fulfillment and multi-client warehousing capabilities [128][129]

Fourth Quarter 2021 Earnings & 2022 Outlook Conference Call February 16, 2022 SUPPLY CHAIN Safe Harbor and Non-GAAP Financial Measures 2 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 forecast, expectations regarding market trends and economic environment; impact of COVID-19 effects, including supply chain and labor shortage challenge ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-4364 RYDER SYSTEM, INC. (Exact name of registrant as specified in its charter) Florida 59-0739250 (State or other jurisdiction of incorporation o ...

Ryder System, Inc. (NYSE:R) Q3 2021 Earnings Conference Call October 27, 2021 11:00 AM ET Company Participants Bob Brunn – Senior Vice President, Investor Relations, Corporate Strategy and New Product Strategy Robert Sanchez – Chairman and Chief Executive Officer John Diez – Executive Vice President and Chief Financial Officer Steve Sensing – President of Global Supply Chain Solutions and Dedicated Transportation Tom Havens – President of Global Fleet Management Solutions Conference Call Participants Alliso ...

Third Quarter 2021 Earnings Conference Call October 27, 2021 SUPPLY CHAIN Safe Harbor and Non-GAAP Financial Measures 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 forecast, expectations regarding market trends and economic environment; impact of the COVID-19 pandemic, including ongoing supply chain and labor challenges, on market co ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements%20(unaudited)) The company presents its unaudited condensed consolidated financial statements for the period ending September 30, 2021 [Condensed Consolidated Statements of Earnings](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) Profitability increased significantly in Q3 and the first nine months of 2021, driven by 14% revenue growth and gains on used vehicle sales Consolidated Earnings Highlights (in thousands, except per share amounts) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $2,459,049 | $2,150,575 | $7,062,908 | $6,207,163 | | **Earnings (loss) from continuing operations** | $138,659 | $45,085 | $339,811 | $(137,749) | | **Used vehicle sales, net** | $(69,303) | $(12,919) | $(149,788) | $17,253 | | **Net earnings (loss)** | $138,054 | $35,834 | $337,984 | $(147,878) | | **Diluted EPS from continuing operations** | $2.58 | $0.85 | $6.33 | $(2.64) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets remained stable at $12.9 billion, while lower liabilities led to an increase in shareholders' equity to $2.51 billion Balance Sheet Summary (in thousands) | Metric | Sept 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | $12,896,112 | $12,931,954 | | **Total Liabilities** | $10,382,461 | $10,676,397 | | **Total Shareholders' Equity** | $2,513,651 | $2,255,557 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow remained strong at $1.68 billion, while increased capital expenditures drove higher cash usage in investing activities Cash Flow Summary - Nine Months Ended Sept 30 (in thousands) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,684,891 | $1,696,589 | | **Net cash used in investing activities** | $(860,910) | $(484,419) | | **Net cash provided by (used in) financing activities** | $(768,054) | $(603,715) | | **Increase in cash and cash equivalents** | $51,442 | $610,664 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail revenue disaggregation, a significant increase in gains from used vehicle sales, and new share repurchase programs - The company reports across three business segments: **Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS)**[24](index=24&type=chunk) - **Total debt decreased to $6.0 billion** as of September 30, 2021, from $6.6 billion at year-end 2020[53](index=53&type=chunk) - In October 2021, the Board authorized two new share repurchase programs: a **2.0 million share discretionary program** and a **2.5 million share anti-dilutive program**[57](index=57&type=chunk) - Subsequent to the quarter end, on October 27, 2021, Ryder entered into a definitive agreement to acquire Midwest Warehouse & Distribution System for **approximately $275 million**[82](index=82&type=chunk) Gains on Used Vehicle Sales (in thousands) | Period | 2021 | 2020 | | :--- | :--- | :--- | | **Q3** | $73,865 | $14,852 | | **Nine Months** | $160,458 | $17,204 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes a 14% revenue increase and profitability turnaround, noting segment margin pressures and lower free cash flow - The increase in EBT was primarily due to **higher gains on used vehicles sold** and a declining impact of depreciation expense from prior residual value estimate changes, totaling a **positive impact of $316 million** for the nine months[94](index=94&type=chunk) - Global supply chain disruptions and labor shortages created mixed impacts: **increased demand and pricing for rental and used vehicles**, but also decreased demand from automotive customers and **higher labor and subcontracted transportation costs** for SCS and DTS[95](index=95&type=chunk)[96](index=96&type=chunk) - The **debt-to-equity ratio improved to 238%** at Sept 30, 2021, from 293% at Dec 31, 2020, due to increased earnings and free cash flow[99](index=99&type=chunk) Financial Highlights - Nine Months Ended Sept 30 | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $7,062.9M | $6,207.2M | +14% | | **Operating Revenue (Non-GAAP)** | $5,723.0M | $5,184.7M | +10% | | **EBT** | $457.0M | $(153.6)M | NM | | **Comparable EPS (Non-GAAP)** | $6.05 | $(1.11) | NM | [Consolidated Results](index=28&type=section&id=Consolidated%20Results) Lease & Rental gross margin increased significantly due to strong pricing, while Services margin fell on higher labor and transport costs - Lease & related maintenance and rental gross margin percentage **increased from 19% in Q3 2020 to 28% in Q3 2021**, driven by lower depreciation and higher rental revenue[102](index=102&type=chunk)[104](index=104&type=chunk) - Services gross margin percentage **decreased from 17% in Q3 2020 to 12% in Q3 2021**, reflecting the impact of higher labor and subcontracted transportation costs[105](index=105&type=chunk)[108](index=108&type=chunk) - **Interest expense decreased 16%** for the nine-month period due to lower average outstanding debt[117](index=117&type=chunk) Used Vehicle Proceeds Per Unit Change (Q3 2021 vs Q3 2020) | Vehicle Type | Proceeds Change YoY | | :--- | :--- | | **Tractors** | +100% | | **Trucks** | +103% | [Operating Results by Business Segment](index=33&type=section&id=Operating%20Results%20by%20Business%20Segment) FMS segment EBT surged over 1000% in Q3, while SCS and DTS EBT declined over 50% due to rising operational costs - **FMS EBT growth** was driven by higher gains on used vehicles sold, a declining impact of depreciation, and strong commercial rental results, with rental power fleet **utilization increasing to 83%** from 71% YoY[136](index=136&type=chunk)[137](index=137&type=chunk) - **SCS EBT decreased** primarily due to lower earnings in the automotive sector (impacted by supply chain disruptions), higher labor costs, and strategic investments[149](index=149&type=chunk) - **DTS EBT decreased** due to higher labor costs from driver shortages, increased insurance costs, and strategic investments[153](index=153&type=chunk) Segment EBT (in thousands) | Segment | Q3 2021 | Q3 2020 | Change | | :--- | :--- | :--- | :--- | | **Fleet Management Solutions (FMS)** | $186,391 | $16,152 | +1054% | | **Supply Chain Solutions (SCS)** | $22,161 | $57,848 | -62% | | **Dedicated Transportation Solutions (DTS)** | $11,324 | $24,728 | -54% | [Financial Resources and Liquidity](index=41&type=section&id=Financial%20Resources%20and%20Liquidity) Liquidity remains strong with stable operating cash flow, though free cash flow decreased due to higher capital expenditures in the rental fleet - **Gross capital expenditures increased to $1.5 billion** for the nine months of 2021, up from $765 million in 2020, reflecting higher planned investments in the rental fleet[161](index=161&type=chunk)[162](index=162&type=chunk) - As of September 30, 2021, the company had **$1.2 billion available** under its global revolving credit facility and **$300 million** under its trade receivables financing program[169](index=169&type=chunk) Free Cash Flow (Non-GAAP, in thousands) | Period | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,684,891 | $1,696,589 | | **Cash paid for purchases of property and revenue earning equipment** | $(1,427,684) | $(879,400) | | **Free cash flow** | $828,970 | $1,217,874 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposures since the end of the previous fiscal year - There have been **no material changes** to Ryder's exposures to market risks since December 31, 2020[201](index=201&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls in Q3 2021 - Management, including the CEO and CFO, concluded that Ryder's **disclosure controls and procedures were effective** as of the end of the third quarter of 2021[203](index=203&type=chunk) - There were **no changes in Ryder's internal control over financial reporting** during Q3 2021 that have materially affected or are reasonably likely to materially affect such controls[204](index=204&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=57&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is defending a securities class action lawsuit concerning its vehicle depreciation policy and residual value estimates - Ryder is a defendant in a putative class action lawsuit filed in May 2020, alleging **misrepresentations of its depreciation policy and residual value estimates** for its vehicles between July 2015 and February 2020[72](index=72&type=chunk) - Several related shareholder derivative complaints have also been filed in both state and federal courts, which have been **stayed pending the outcome of a Motion to Dismiss** in the primary securities class action[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - The company believes the claims asserted in the complaints are **without merit** and intends to defend against them vigorously[76](index=76&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=ITEM%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its 2020 Annual Report on Form 10-K - There have been **no material changes** in the risk factors described in the company's Form 10-K for the year ended December 31, 2020[209](index=209&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 97,671 shares of its common stock during Q3 2021 under its anti-dilutive repurchase program - The share repurchases are part of a program authorized in December 2019 intended to **mitigate the dilutive impact** of shares issued under employee stock plans[211](index=211&type=chunk) Share Repurchases - Q3 2021 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | **July 2021** | 30,115 | $76.45 | | **August 2021** | 67,426 | $77.08 | | **September 2021** | 130 | $80.80 | | **Total Q3** | **97,671** | **$76.89** | [Item 6. Exhibits](index=58&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including required CEO/CFO certifications and interactive data files - The exhibits filed include **certifications from CEO Robert E. Sanchez and CFO John J. Diez** pursuant to SEC rules[213](index=213&type=chunk) - **Interactive Data Files (XBRL documents)** are also included as exhibits to comply with SEC reporting requirements[213](index=213&type=chunk) [Signature](index=59&type=section&id=SIGNATURE) The report was officially signed on October 27, 2021, by the company's Principal Financial and Accounting Officers - The report was duly signed on October 27, 2021, by **John J. Diez (Principal Financial Officer)** and **Cristina Gallo-Aquino (Principal Accounting Officer)**[217](index=217&type=chunk)

Proprietary and Confidential Second Quarter 2021 Earnings Conference Call July 28, 2021 Safe Harbor and Non-GAAP Financial Measures 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 forecast, expectations regarding market trends and economic environment; impact of the COVID-19 pandemic on market conditions, e-commerce trends, freight env ...

Ryder System, Inc. (NYSE:R) Q2 2021 Earnings Conference Call July 28, 2021 11:00 AM ET Company Participants Robert Brunn - VP, IR, Corporate Strategy & Product Strategy Robert Sanchez - Chairman, CEO & President John Diez - EVP & CFO John Sensing - President, Global Supply Chain Solutions & Dedicated Transportation Solutions Tom Havens - President, Global Fleet Management Solutions, Senior VP & Global Chief of Operations Conference Call Participants Scott Group - Wolfe Research Todd Fowler - KeyBanc Capital ...

Report Information [Filing Details](index=1&type=section&id=Filing%20Details) Ryder System, Inc.'s Q2 2021 quarterly report (Form 10-Q) details company information and 53.8 million shares outstanding - Ryder System, Inc. submitted its quarterly report (Form 10-Q) for the period ended June 30, 2021[1](index=1&type=chunk) Filing Details Key Data | Metric | Information | | :--- | :--- | | Registrant Name | RYDER SYSTEM, INC. | | State of Incorporation | Florida | | Telephone Number | (305) 500-3726 | | Trading Symbol | R | | Registered Exchange | New York Stock Exchange | | Shares Outstanding (June 30, 2021) | 53,773,599 | | Accelerated Filer Status | Large accelerated filer | PART I. FINANCIAL INFORMATION [ITEM 1. Financial Statements (unaudited)](index=3&type=section&id=ITEM%201.%20Financial%20Statements%20(unaudited)) This section presents the company's unaudited condensed consolidated financial statements and their accompanying notes [Condensed Consolidated Statements of Earnings](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) The company achieved significant revenue and net income growth in Q2 and H1 2021, reversing prior-year losses Condensed Consolidated Statements of Earnings Key Data | Metric (USD thousands) | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Lease and Related Maintenance and Rental Revenue | 986,694 | 868,660 | 1,927,116 | 1,796,416 | | Service Revenue | 1,276,140 | 942,267 | 2,441,628 | 2,054,455 | | Fuel Services Revenue | 119,403 | 84,355 | 235,115 | 205,717 | | **Total Revenue** | **2,382,237** | **1,895,282** | **4,603,859** | **4,056,588** | | Earnings (Loss) from Continuing Operations Before Income Taxes | 203,573 | (94,777) | 273,840 | (208,411) | | Net Earnings (Loss) from Continuing Operations | 149,568 | (73,705) | 201,152 | (182,834) | | **Net Earnings (Loss)** | **149,105** | **(74,099)** | **199,930** | **(183,712)** | | Diluted Earnings (Loss) Per Share from Continuing Operations | 2.78 | (1.41) | 3.75 | (3.50) | - In Q2 and H1 2021, the company achieved net gains from used vehicle sales, contrasting with net losses in the prior-year periods, reflecting improved market conditions[8](index=8&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) The company reported positive comprehensive income in Q2 and H1 2021, reversing prior-year comprehensive losses Condensed Consolidated Statements of Comprehensive Income Key Data | Metric (USD thousands) | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Earnings (Loss) | 149,105 | (74,099) | 199,930 | (183,712) | | Other Comprehensive Income (Loss), Net of Tax | 15,085 | 10,305 | 29,523 | (68,149) | | **Comprehensive Income (Loss)** | **164,190** | **(63,794)** | **229,453** | **(251,861)** | - In H1 2021, changes in cumulative translation adjustments and unrealized losses on cash flow hedges resulted in positive gains, compared to negative losses in the prior-year period[10](index=10&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2021, total assets slightly decreased, while cash and current debt increased, and long-term debt decreased Condensed Consolidated Balance Sheets Key Data | Metric (USD thousands) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 267,992 | 151,294 | | Accounts Receivable, Net | 1,298,905 | 1,182,350 | | Inventories | 62,707 | 61,191 | | Prepaid Expenses and Other Current Assets | 159,260 | 200,694 | | **Total Current Assets** | **1,788,864** | **1,595,529** | | Revenue Earning Equipment, Net | 8,531,099 | 8,777,015 | | **Total Assets** | **12,903,036** | **12,931,954** | | Short-Term Debt and Current Portion of Long-Term Debt | 1,362,669 | 516,581 | | Accounts Payable | 672,553 | 547,389 | | Accrued Expenses and Other Current Liabilities | 1,020,832 | 989,178 | | **Total Current Liabilities** | **3,056,054** | **2,053,148** | | Long-Term Debt | 4,873,002 | 6,093,655 | | **Total Liabilities** | **10,484,822** | **10,676,397** | | Total Shareholders' Equity | 2,418,214 | 2,255,557 | - As of June 30, 2021, cash and cash equivalents increased by **77.1%** compared to December 31, 2020[13](index=13&type=chunk) - As of June 30, 2021, short-term debt and the current portion of long-term debt significantly increased by **163.8%** compared to December 31, 2020, while long-term debt decreased by **20.0%**[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In H1 2021, operating cash flow remained stable, while investing cash outflow increased and financing cash flow turned negative Condensed Consolidated Statements of Cash Flows Key Data | Metric (USD thousands) | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities from Continuing Operations | 1,131,233 | 1,098,785 | | Net Cash Used in Investing Activities from Continuing Operations | (533,408) | (492,266) | | Net Cash Provided by (Used in) Financing Activities from Continuing Operations | (478,971) | 154,732 | | Cash and Cash Equivalents, End of Period | 267,992 | 831,469 | - In H1 2021, net cash provided by operating activities from continuing operations was largely consistent with the prior-year period, but cash outflow from investing activities increased, primarily due to higher expenditures for property and revenue-earning equipment[15](index=15&type=chunk) - In H1 2021, cash outflow from financing activities significantly increased, mainly reflecting higher net repayments of commercial paper and other debt, and reduced debt issuances[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) As of June 30, 2021, total shareholders' equity increased, driven by comprehensive income, despite dividends and share repurchases Condensed Consolidated Statements of Shareholders' Equity Key Data (H1 2021) | Metric (USD thousands) | Balance January 1, 2021 | Comprehensive Income (Loss) | Common Stock Dividends | Stock Issuances | Stock Repurchases | Share-Based Compensation | Balance June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Common Stock (Shares) | 53,732,033 | — | — | 679,567 | (638,001) | — | 53,773,599 | | Common Stock (Amount) | 26,866 | — | — | 339 | (319) | — | 26,886 | | Additional Paid-in Capital | 1,132,954 | — | — | 20,213 | (13,194) | 23,294 | 1,163,267 | | Retained Earnings | 1,912,942 | 199,930 | (61,664) | — | (35,465) | — | 2,015,743 | | Accumulated Other Comprehensive Loss | (817,205) | 29,523 | — | — | — | — | (787,682) | | **Total Shareholders' Equity** | **2,255,557** | **229,453** | **(61,664)** | **20,552** | **(48,978)** | **23,294** | **2,418,214** | - In H1 2021, the company repurchased **638,001** shares of common stock for a total of **USD 48,978 thousand**[20](index=20&type=chunk) - In H1 2021, the company declared and paid common stock dividends of **USD 1.12 per share**, totaling **USD 61,664 thousand**[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering key financial areas and segment performance [1. GENERAL](index=9&type=section&id=1.%20GENERAL) This note outlines the basis of preparation for the company's GAAP-compliant financial statements, noting COVID-19's impact - The company prepares its unaudited condensed consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP)[23](index=23&type=chunk) - The company categorizes its financial performance into three business segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS)[24](index=24&type=chunk) - The COVID-19 pandemic negatively impacted the company's business in H1 2020 and may continue to affect business and financial results, as well as key judgments and estimates regarding goodwill, residual values, and deferred income taxes[25](index=25&type=chunk) [2. RECENT ACCOUNTING PRONOUNCEMENTS](index=9&type=section&id=2.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This note discusses recent FASB accounting standard updates on reference rate reform and leases - FASB issued ASU No. 2020-04, providing simplified accounting for contracts, hedging relationships, and transactions affected by LIBOR or other reference rate reform, effective through December 31, 2022[26](index=26&type=chunk) - FASB issued ASU No. 2021-05, requiring lessors to classify leases with variable lease payments that do not depend on an index or rate as operating leases if they would result in a sales loss when classified as sales-type or direct financing leases, with the company expecting no material impact on financial position, operating results, and cash flows from its adoption[27](index=27&type=chunk) [3. REVENUE](index=10&type=section&id=3.%20REVENUE) This note details the company's revenue disaggregated by geographic market and business segment, showing growth across all segments Total Revenue by Geographic Market (USD thousands) | Geographic Market | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | United States | 2,131,624 | 1,703,799 | 4,114,686 | 3,621,438 | | Canada | 127,291 | 97,536 | 249,449 | 216,882 | | Europe | 68,142 | 56,249 | 135,230 | 128,200 | | Mexico | 55,180 | 37,698 | 104,494 | 90,068 | | **Total Revenue** | **2,382,237** | **1,895,282** | **4,603,859** | **4,056,588** | SCS Business Segment Revenue by Industry (USD thousands) | Industry | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Automotive | 307,499 | 147,749 | 579,054 | 397,674 | | Technology and Healthcare | 109,950 | 84,766 | 207,035 | 175,899 | | Consumer Products and Retail | 286,262 | 236,499 | 559,486 | 466,431 | | Industrial and Other | 71,919 | 50,304 | 136,755 | 107,761 | | **Total SCS Revenue** | **775,630** | **519,318** | **1,482,330** | **1,147,765** | - As of June 30, 2021, Contracted Not Recognized Revenue amounted to **USD 2.5 billion**[34](index=34&type=chunk) [4. RECEIVABLES, NET](index=12&type=section&id=4.%20RECEIVABLES,%20NET) This note provides the composition of receivables and changes in the allowance for credit losses Receivables, Net (USD thousands) | Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Trade Receivables | 1,160,076 | 1,051,618 | | Sales-Type Leases | 137,535 | 132,003 | | Other | 41,926 | 41,753 | | **Total** | **1,339,537** | **1,225,374** | | Allowance for Credit Losses and Other | (40,632) | (43,024) | | **Total** | **1,298,905** | **1,182,350** | Changes in Allowance for Credit Losses (USD thousands) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Beginning Balance | 43,024 | 22,761 | | Changes in Allowance for Credit Losses | (1,076) | 32,600 | | Adoption of New Accounting Standard, Write-offs, and Other Impacts | (1,316) | (10,453) | | **Ending Balance** | **40,632** | **44,908** | [5. REVENUE EARNING EQUIPMENT, NET](index=12&type=section&id=5.%20REVENUE%20EARNING%20EQUIPMENT,%20NET) This note details revenue-earning equipment, depreciation policies, and net gains from used vehicle sales Revenue Earning Equipment, Net (USD thousands) | Equipment Type | Net as of June 30, 2021 | Net as of December 31, 2020 | | :--- | :--- | :--- | | Held for Use: Trucks | 3,250,324 | 3,242,672 | | Held for Use: Tractors | 4,206,413 | 4,160,004 | | Held for Use: Trailers and Other | 996,657 | 1,242,762 | | Held for Sale | 77,705 | 131,577 | | **Total** | **8,531,099** | **8,777,015** | - The company completed its review of residual values and useful lives for revenue-earning equipment in Q2 2021, primarily adjusting residual value estimates for certain tractors and useful lives for certain equipment categories, affecting approximately **15%** of the total fleet, but with no material impact on current operating results[38](index=38&type=chunk) Used Vehicle Sales, Net (USD thousands) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Gains on Vehicle Sales, Net | (54,721) | (1,528) | (86,593) | (2,352) | | Valuation Adjustment Losses | 3,087 | 11,016 | 6,108 | 32,524 | | **Used Vehicle Sales, Net** | **(51,634)** | **9,488** | **(80,485)** | **30,172** | [6. ACCRUED EXPENSES AND OTHER LIABILITIES](index=14&type=section&id=6.%20ACCRUED%20EXPENSES%20AND%20OTHER%20LIABILITIES) This note presents the detailed composition of the company's accrued expenses and other non-current liabilities Accrued Expenses and Other Liabilities (USD thousands) | Liability Type | Total as of June 30, 2021 | Total as of December 31, 2020 | | :--- | :--- | :--- | | Salaries and Wages | 167,568 | 158,122 | | Deferred Compensation | 90,588 | 82,940 | | Pension Benefits | 262,128 | 268,954 | | Other Postretirement Benefits | 18,876 | 21,626 | | Other Employee Benefits | 13,755 | 20,599 | | Insurance Obligations | 474,668 | 462,234 | | Operating Taxes | 215,741 | 205,980 | | Income Taxes | 19,459 | 20,186 | | Interest | 38,129 | 38,887 | | Deposits | 93,363 | 82,854 | | Operating Lease Liabilities | 253,034 | 265,214 | | Deferred Revenue | 613,136 | 629,739 | | Restructuring Liabilities | 3,293 | 7,683 | | Other | 128,147 | 128,021 | | **Total** | **2,391,885** | **2,393,039** | - Insurance obligations primarily include self-insured claims liabilities[44](index=44&type=chunk) - Operating taxes include certain payroll tax deferrals allowed under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)[45](index=45&type=chunk) [7. INCOME TAXES](index=15&type=section&id=7.%20INCOME%20TAXES) This note discloses the company's effective income tax rate from continuing operations, which was 26.5% in Q2 and H1 2021 Effective Income Tax Rate from Continuing Operations | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Effective Income Tax Rate | 26.5% | 22.2% (Benefit) | 26.5% | 12.3% (Benefit) | - In Q2 and H1 2020, the tax rate was impacted by accelerated depreciation expenses and reduced earnings due to the negative economic effects of COVID-19[47](index=47&type=chunk) - In H1 2020, the tax rate was also affected by the recognition of a **USD 13 million** valuation allowance related to UK deferred tax assets and a **USD 7 million** expense related to expiring state net operating losses[47](index=47&type=chunk) [8. LEASES](index=15&type=section&id=8.%20LEASES) This note provides the composition of the company's lease revenue as a lessor, showing growth in Q2 and H1 2021 Lease Revenue Composition (USD thousands) | Lease Type | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Operating Leases: ChoiceLease Rental Revenue | 386,650 | 385,639 | 776,261 | 785,227 | | Operating Leases: Commercial Rental Revenue | 255,098 | 161,220 | 465,382 | 356,915 | | Sales-Type Leases: Interest Income from Net Investment in Leases | 11,040 | 12,080 | 25,455 | 23,724 | | Variable Lease Revenue (Excluding Commercial Rental) | 72,129 | 58,882 | 144,122 | 124,389 | - Commercial rental revenue includes both fixed and variable lease revenue, with variable lease revenue accounting for approximately **15% to 25%** of total commercial rental revenue[48](index=48&type=chunk) [9. DEBT](index=16&type=section&id=9.%20DEBT) This note details the company's debt composition, showing decreased total debt, increased short-term debt, and reduced long-term debt Debt Composition (USD thousands) | Debt Type | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | U.S. Commercial Paper | 55,522 | 214,375 | | Canadian Commercial Paper | 25,004 | 62,800 | | Unsecured U.S. Notes — Medium-Term Notes | 5,152,922 | 5,174,180 | | Asset-Backed U.S. Obligations | 611,275 | 682,383 | | **Total Debt** | **6,235,671** | **6,610,236** | | Short-Term Debt and Current Portion of Long-Term Debt | (1,362,669) | (516,581) | | **Long-Term Debt** | **4,873,002** | **6,093,655** | - As of June 30, 2021, **USD 1.3 billion** was available under global revolving credit facilities, and **USD 300 million** was available under the trade receivables program[53](index=53&type=chunk)[166](index=166&type=chunk) - As of June 30, 2021, the debt-to-equity ratio was **177%**, well below the **300%** maintenance ratio requirement[53](index=53&type=chunk) [10. SHARE REPURCHASE PROGRAMS](index=16&type=section&id=10.%20SHARE%20REPURCHASE%20PROGRAMS) This note describes the company's share repurchase program, authorized in December 2019 to offset employee stock plan dilution - In December 2019, the Board of Directors authorized a share repurchase program to offset the dilutive effect of shares issued under employee stock plans, with a repurchase limit of **1.5 million shares**[55](index=55&type=chunk) Share Repurchase Activity (Thousands of Shares/USD thousands) | Period | Shares Repurchased | Amount Repurchased | | :--- | :--- | :--- | | H1 2021 | 638 | 49,000 | | H1 2020 | 303 | 12,000 | [11. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=17&type=section&id=11.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) This note lists the components of accumulated other comprehensive loss Accumulated Other Comprehensive Loss Components (USD thousands) | Component | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Cumulative Translation Adjustments | (132,115) | (228,121) | | Net Actuarial Losses and Prior Service Costs | (644,008) | (658,866) | | Unrealized Gains (Losses) on Cash Flow Hedges | (11,559) | (17,653) | | **Accumulated Other Comprehensive Loss** | **(787,682)** | **(904,640)** | [12. EARNINGS PER SHARE](index=17&type=section&id=12.%20EARNINGS%20PER%20SHARE) This note details the calculation of basic and diluted earnings per share from continuing operations Earnings Per Share from Continuing Operations Calculation (Thousands of Shares/USD thousands) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Earnings (Loss) from Continuing Operations | 149,568 | (73,705) | 201,152 | (182,834) | | Earnings (Loss) from Continuing Operations Attributable to Common Stockholders | 148,865 | (73,835) | 200,212 | (183,082) | | Basic Weighted-Average Common Shares Outstanding | 52,378 | 52,355 | 52,333 | 52,320 | | Diluted Weighted-Average Common Shares Outstanding | 53,591 | 52,355 | 53,372 | 52,320 | | **Basic EPS from Continuing Operations** | **2.84** | **(1.41)** | **3.83** | **(3.50)** | | **Diluted EPS from Continuing Operations** | **2.78** | **(1.41)** | **3.75** | **(3.50)** | [13. SHARE-BASED COMPENSATION PLANS](index=18&type=section&id=13.%20SHARE-BASED%20COMPENSATION%20PLANS) This note provides information on share-based compensation expense, income tax benefits, and equity awards Share-Based Compensation Expense and Income Tax Benefit (USD thousands) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Share-Based Compensation Expense | 12,617 | 7,539 | 23,294 | 10,630 | | Income Tax Benefit | (1,981) | (1,307) | (3,513) | (1,485) | | **Share-Based Compensation Expense, Net of Tax** | **10,636** | **6,232** | **19,781** | **9,145** | - As of June 30, 2021, total unrecognized pre-tax share-based compensation expense was **USD 64 million**, expected to be recognized over a weighted-average period of **2.1 years**[60](index=60&type=chunk) - Equity awards granted in Q1 2021 included **391 thousand** time-vested restricted stock units and **119 thousand** performance-vested restricted stock units[61](index=61&type=chunk) [14. EMPLOYEE BENEFIT PLANS](index=19&type=section&id=14.%20EMPLOYEE%20BENEFIT%20PLANS) This note lists the components of the company's pension expense, showing significantly lower net pension expense in Q2 and H1 2021 Net Pension Expense Components (USD thousands) | Component | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Service Cost | 180 | 2,741 | 548 | 5,954 | | Interest Cost | 14,483 | 17,353 | 29,018 | 34,885 | | Expected Return on Plan Assets | (21,791) | (23,948) | (43,485) | (48,211) | | Amortization of Net Actuarial Loss and Prior Service Cost | 7,031 | 7,622 | 14,128 | 15,524 | | Multi-Employer Plans | 2,539 | 2,798 | 5,180 | 5,577 | | **Net Pension Expense** | **2,442** | **6,566** | **5,389** | **13,729** | - In H1 2021, the company contributed **USD 2 million** to its pension plans, with total contributions for 2021 expected to be approximately **USD 7 million**[64](index=64&type=chunk) [15. OTHER ITEMS IMPACTING COMPARABILITY](index=19&type=section&id=15.%20OTHER%20ITEMS%20IMPACTING%20COMPARABILITY) This note presents specific items management believes do not represent ongoing segment operating performance Other Items Impacting Comparability (USD thousands) | Item | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Restructuring and Other, Net | 2,577 | 26,168 | 5,605 | 46,789 | | ERP Implementation Costs | 5,090 | 11,032 | 12,721 | 21,358 | | Gains on Property Sales | (35,263) | — | (36,768) | — | | ChoiceLease Liability Insurance Income | — | (7,409) | (777) | (16,767) | | **Other Items Impacting Comparability, Net** | **(27,596)** | **29,792** | **(19,219)** | **51,381** | - In H1 2021, restructuring and other, net, primarily included professional fees related to pursuing specific commercial claims, while in H1 2020, it mainly included costs related to the ChoiceLease liability insurance program and severance costs[71](index=71&type=chunk) - In H1 2021, gains on property sales primarily resulted from the sale of FMS properties in the UK[71](index=71&type=chunk) [16. CONTINGENCIES AND OTHER MATTERS](index=20&type=section&id=16.%20CONTINGENCIES%20AND%20OTHER%20MATTERS) This note discloses various claims, lawsuits, and legal proceedings, with accrued reserves for probable losses - The company is a party to various claims, complaints, and lawsuits, including commercial and employment claims, environmental matters, risk management matters, and administrative assessments[67](index=67&type=chunk) - The company has accrued loss reserves for probable and reasonably estimable losses and believes the resolution of these matters will not materially impact the condensed consolidated financial statements[67](index=67&type=chunk) - The company faces securities class action and shareholder derivative lawsuits related to residual value estimates, which the company believes lack merit and intends to vigorously defend[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[73](index=73&type=chunk) [17. SUPPLEMENTAL CASH FLOW INFORMATION](index=21&type=section&id=17.%20SUPPLEMENTAL%20CASH%20FLOW%20INFORMATION) This note provides supplemental cash flow information, including interest and income taxes paid, and capital expenditures Supplemental Cash Flow Information (USD thousands) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Interest Paid | 104,417 | 123,258 | | Income Taxes Paid | 15,812 | 4,997 | | Right-of-Use Assets Obtained Through Lease Obligations: Finance Leases | 5,622 | 5,511 | | Right-of-Use Assets Obtained Through Lease Obligations: Operating Leases | 30,274 | 52,640 | | Capital Expenditures Incurred But Not Yet Paid | 167,587 | 75,576 | [18. SEGMENT REPORTING](index=22&type=section&id=18.%20SEGMENT%20REPORTING) This note provides financial information for the company's business segments, including revenue, EBT, and capital expenditures - The company categorizes its financial performance into three business segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS)[24](index=24&type=chunk)[80](index=80&type=chunk) Revenue by Business Segment (USD thousands) | Business Segment | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | FMS | 1,408,241 | 1,198,177 | 2,743,726 | 2,538,414 | | SCS | 775,630 | 519,318 | 1,482,330 | 1,147,765 | | DTS | 354,711 | 293,944 | 675,218 | 628,832 | | **Total Revenue** | **2,382,237** | **1,895,282** | **4,603,859** | **4,056,588** | Earnings (Loss) from Continuing Operations Before Income Taxes by Business Segment (USD thousands) | Business Segment | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | FMS | 158,451 | (103,735) | 221,853 | (218,309) | | SCS | 41,041 | 36,916 | 73,998 | 67,941 | | DTS | 13,162 | 21,233 | 26,144 | 33,413 | | **Earnings (Loss) from Continuing Operations Before Income Taxes** | **203,573** | **(94,777)** | **273,840** | **(208,411)** | Capital Expenditures by Business Segment (USD thousands) | Business Segment | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | FMS | 503,874 | 256,216 | 871,582 | 679,332 | | SCS | 14,450 | 13,868 | 22,980 | 19,874 | | DTS | 256 | 339 | 562 | 763 | | Central Support Services | 4,768 | 3,547 | 9,275 | 4,961 | | **Acquisition of Property and Revenue-Earning Equipment** | **523,348** | **273,970** | **904,399** | **704,930** | [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's detailed discussion and analysis of the company's financial condition and operating results [OVERVIEW](index=24&type=section&id=OVERVIEW) This overview introduces Ryder as a leading logistics and transportation company, highlighting significant revenue and EBT growth - Ryder is a leading logistics and transportation company with primary business segments including Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS)[80](index=80&type=chunk) Financial Highlights (USD thousands, except per share amounts) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 2,382,237 | 1,895,282 | 4,603,859 | 4,056,588 | | Operating Revenue (Non-GAAP) | 1,922,820 | 1,623,244 | 3,740,183 | 3,394,491 | | Earnings (Loss) from Continuing Operations Before Income Taxes (EBT) | 203,573 | (94,777) | 273,840 | (208,411) | | Comparable EBT (Non-GAAP) | 175,604 | (64,049) | 254,239 | (154,873) | | Diluted Earnings (Loss) Per Share (EPS) — Continuing Operations | 2.78 | (1.41) | 3.75 | (3.50) | | Comparable EPS (Non-GAAP) | 2.40 | (0.95) | 3.49 | (2.33) | | Comparable EBITDA (Non-GAAP) | 624,055 | 547,644 | 1,191,470 | 1,065,339 | - In Q2 and H1 2021, total revenue grew by **26%** and **13%** respectively, and operating revenue grew by **18%** and **10%** respectively, primarily due to revenue growth across all business segments and recovery in commercial rental and automotive businesses from COVID-19 impacts[88](index=88&type=chunk) - In H1 2021, cash flow provided by operating activities was **USD 1.1 billion**, and free cash flow slightly decreased to **USD 602 million**, mainly due to increased capital expenditures[92](index=92&type=chunk) - As of June 30, 2021, the debt-to-equity ratio was **258%**, a decrease from **293%** as of December 31, 2020[93](index=93&type=chunk) [CONSOLIDATED RESULTS](index=27&type=section&id=CONSOLIDATED%20RESULTS) This section analyzes the company's consolidated revenue and cost items, showing revenue growth and improved gross margins Lease and Related Maintenance and Rental Revenue and Costs (USD thousands) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 986,694 | 868,660 | 1,927,116 | 1,796,416 | | Costs | 708,737 | 775,350 | 1,438,881 | 1,593,642 | | Gross Margin | 277,957 | 93,310 | 488,235 | 202,774 | | Gross Margin Percentage | 28% | 11% | 25% | 11% | Service Revenue and Costs (USD thousands) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,276,140 | 942,267 | 2,441,628 | 2,054,455 | | Costs | 1,091,725 | 793,353 | 2,091,517 | 1,747,782 | | Gross Margin | 184,415 | 148,914 | 350,111 | 306,673 | | Gross Margin Percentage | 14% | 16% | 14% | 15% | Fuel Services Revenue and Costs (USD thousands) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 119,403 | 84,355 | 235,115 | 205,717 | | Costs | 109,450 | 77,980 | 224,156 | 198,429 | | Gross Margin | 9,953 | 6,375 | 10,959 | 7,288 | | Gross Margin Percentage | 8% | 8% | 5% | 4% | - In Q2 and H1 2021, net used vehicle sales resulted in net gains, compared to net losses in the prior-year periods, primarily due to increased gains on used vehicle sales and reduced valuation adjustment losses[109](index=109&type=chunk) Used Vehicle Average Selling Price Change (YoY) | Vehicle Type | Q2 2021 | H1 2021 | | :--- | :--- | :--- | | Tractors | 73% | 47% | | Trucks | 72% | 54% | - In Q2 and H1 2021, interest expense decreased by **20%** and **16%** respectively, primarily reflecting a reduction in average outstanding debt[111](index=111&type=chunk) - In Q2 and H1 2021, miscellaneous (income) loss, net, was positive income, mainly due to increased gains on UK property sales[112](index=112&type=chunk) [OPERATING RESULTS BY BUSINESS SEGMENT](index=32&type=section&id=OPERATING%20RESULTS%20BY%20BUSINESS%20SEGMENT) This section analyzes the operating results of the company's business segments, showing varied revenue and EBT performance Total Revenue by Business Segment (USD thousands) | Business Segment | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | FMS | 1,408,241 | 1,198,177 | 2,743,726 | 2,538,414 | | SCS | 775,630 | 519,318 | 1,482,330 | 1,147,765 | | DTS | 354,711 | 293,944 | 675,218 | 628,832 | | **Total** | **2,382,237** | **1,895,282** | **4,603,859** | **4,056,588** | Earnings (Loss) from Continuing Operations Before Income Taxes by Business Segment (USD thousands) | Business Segment | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | FMS | 158,451 | (103,735) | 221,853 | (218,309) | | SCS | 41,041 | 36,916 | 73,998 | 67,941 | | DTS | 13,162 | 21,233 | 26,144 | 33,413 | | **Total** | **193,468** | **(53,331)** | **290,535** | **(134,769)** | [Fleet Management Solutions (FMS)](index=34&type=section&id=Fleet%20Management%20Solutions) The FMS segment achieved significant revenue growth in Q2 and H1 2021, with EBT shifting from loss to profit FMS Revenue Composition (USD thousands) | Revenue Type | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | ChoiceLease | 802,832 | 766,161 | 1,599,920 | 1,558,367 | | SelectCare | 136,503 | 125,851 | 267,171 | 261,997 | | Commercial Rental | 266,969 | 169,171 | 489,978 | 374,937 | | Fuel Services | 183,568 | 117,253 | 350,163 | 290,588 | | **Total FMS Revenue** | **1,408,241** | **1,198,177** | **2,743,726** | **2,538,414** | | **FMS Operating Revenue** | **1,224,673** | **1,073,515** | **2,392,786** | **2,231,059** | FMS EBT and Margin | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | FMS EBT (USD thousands) | 158,451 | (103,735) | 221,853 | (218,309) | | FMS EBT as % of Total Revenue | 11.3% | (8.7)% | 8.1% | (8.6)% | | FMS EBT as % of Operating Revenue | 12.9% | (9.7)% | 9.3% | (9.8)% | - Commercial rental pricing increased by **13%** in Q2 2021 and **11%** in H1 2021[128](index=128&type=chunk) - Rental power fleet utilization increased from **56% to 80%** in Q2 2021 and from **60% to 76%** in H1 2021[130](index=130&type=chunk) - In Q2 2021, the company adjusted residual value estimates for certain tractors and useful lives for certain categories of revenue-earning equipment, expecting an **USD 18 million** increase in depreciation expense for 2021, with no material impact on current operating results[131](index=131&type=chunk) [Supply Chain Solutions (SCS)](index=37&type=section&id=Supply%20Chain%20Solutions) The SCS segment achieved significant revenue growth in Q2 and H1 2021, with EBT increasing but margins slightly declining SCS Revenue Composition (USD thousands) | Revenue Type | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Automotive | 179,849 | 109,119 | 351,721 | 280,860 | | Technology and Healthcare | 57,529 | 54,950 | 112,234 | 112,616 | | Consumer Products and Retail | 233,791 | 196,683 | 454,277 | 384,719 | | Industrial and Other | 63,389 | 44,305 | 118,924 | 94,173 | | Subcontracted Transportation | 211,879 | 102,208 | 392,013 | 237,936 | | Fuel | 29,193 | 12,053 | 53,161 | 37,461 | | **Total SCS Revenue** | **775,630** | **519,318** | **1,482,330** | **1,147,765** | | **SCS Operating Revenue** | **534,558** | **405,057** | **1,037,156** | **872,368** | SCS EBT and Margin | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | SCS EBT (USD thousands) | 41,041 | 36,916 | 73,998 | 67,941 | | SCS EBT as % of Total Revenue | 5.3% | 7.1% | 5.0% | 5.9% | | SCS EBT as % of Operating Revenue | 7.7% | 9.1% | 7.1% | 7.8% | - The global semiconductor supply shortage impacted automotive client production activities in H1 2021[146](index=146&type=chunk) [Dedicated Transportation Solutions (DTS)](index=38&type=section&id=Dedicated%20Transportation%20Solutions) The DTS segment experienced revenue growth in Q2 and H1 2021, but EBT declined due to rising labor costs DTS Revenue Composition (USD thousands) | Revenue Type | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total DTS Revenue** | **354,711** | **293,944** | **675,218** | **628,832** | | Subcontracted Transportation | (59,765) | (41,827) | (110,902) | (108,052) | | Fuel | (39,097) | (24,186) | (71,628) | (56,164) | | **DTS Operating Revenue** | **255,849** | **227,931** | **492,688** | **464,616** | DTS EBT and Margin | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | DTS EBT (USD thousands) | 13,162 | 21,233 | 26,144 | 33,413 | | DTS EBT as % of Total Revenue | 3.7% | 7.2% | 3.9% | 5.3% | | DTS EBT as % of Operating Revenue | 5.1% | 9.3% | 5.3% | 7.2% | - DTS EBT declined primarily due to increased labor costs driven by a tight driver labor market, higher insurance costs, and strategic investments[149](index=149&type=chunk) [Central Support Services (CSS)](index=39&type=section&id=Central%20Support%20Services) Central Support Services costs significantly increased in Q2 and H1 2021 due to higher incentive compensation and strategic investments Central Support Services Costs (USD thousands) | Cost Type | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Human Resources | 5,954 | 4,651 | 11,542 | 10,504 | | Finance and Procurement | 19,092 | 16,358 | 37,988 | 35,597 | | Information Technology | 29,246 | 22,285 | 55,665 | 47,650 | | Marketing | 7,629 | 3,655 | 16,750 | 8,930 | | **Total CSS Costs** | **93,584** | **63,936** | **182,142** | **137,817** | | CSS Allocated to Business Segments | (75,720) | (53,218) | (145,846) | (117,713) | | **Unallocated CSS** | **17,864** | **10,718** | **36,296** | **20,104** | - Total CSS costs increased by **46%** in Q2 2021 and **32%** in H1 2021, primarily due to higher incentive compensation-related expenses and ongoing strategic investments in technology and marketing[151](index=151&type=chunk) [FINANCIAL RESOURCES AND LIQUIDITY](index=40&type=section&id=FINANCIAL%20RESOURCES%20AND%20LIQUIDITY) This section discusses the company's cash flow, capital expenditures, financing activities, and liquidity Cash Flow Summary (USD thousands) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 1,131,233 | 1,098,785 | | Net Cash Used in Investing Activities | (533,408) | (492,266) | | Net Cash Provided by (Used in) Financing Activities | (478,971) | 154,732 | | Net Change in Cash and Cash Equivalents | 116,485 | 758,229 | Free Cash Flow Calculation (USD thousands) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 1,131,233 | 1,098,785 | | Sales of Revenue-Earning Equipment | 330,277 | 214,189 | | Sales of Operating Property and Equipment | 44,409 | 4,231 | | Other Cash Inflows | 691 | — | | **Total Cash Generated** | **1,506,610** | **1,317,205** | | Acquisition of Property and Revenue-Earning Equipment | (904,399) | (704,930) | | **Free Cash Flow** | **602,211** | **612,275** | - In H1 2021, total capital expenditures increased by **61%** to **USD 963 million**, primarily reflecting increased planned investments in the rental fleet[159](index=159&type=chunk) - As of June 30, 2021, the company held **USD 268 million** in cash and cash equivalents, with approximately **USD 101 million** held outside the U.S.[162](index=162&type=chunk) - As of June 30, 2021, the debt-to-equity ratio was **258%**, down from **293%** as of December 31, 2020[167](index=167&type=chunk) - In July 2021, the Board of Directors declared a quarterly cash dividend of **USD 0.58 per share** of common stock[169](index=169&type=chunk) [NON-GAAP FINANCIAL MEASURES](index=43&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section defines the company's non-GAAP financial measures, reconciles them to GAAP metrics, and explains their usefulness - Operating revenue is defined as total revenue less fuel, subcontracted transportation, and ChoiceLease liability insurance revenue, used to assess core business operating performance[175](index=175&type=chunk) - Comparable EBT, comparable earnings, and comparable EPS exclude non-operating pension costs and other significant items not representative of business operations, to provide better year-over-year comparability[176](index=176&type=chunk) - Comparable EBITDA is used to measure financial performance and debt service capacity, excluding interest, taxes, depreciation, used vehicle sales results, and amortization[177](index=177&type=chunk) - Free cash flow is defined as net cash generated from operating and investing activities (excluding acquisitions), measuring cash available for debt service and shareholders[177](index=177&type=chunk) GAAP to Non-GAAP Earnings Measures Reconciliation (USD thousands, except per share amounts) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | EBT | 203,573 | (94,777) | 273,840 | (208,411) | | Non-Operating Pension Costs, Net | (373) | 936 | (382) | 2,157 | | Restructuring and Other, Net | 2,577 | 26,168 | 5,605 | 46,789 | | ERP Implementation Costs | 5,090 | 11,032 | 12,721 | 21,358 | | Gains on Property Sales | (35,263) | — | (36,768) | — | | ChoiceLease Liability Insurance Income | — | (7,409) | (777) | (16,767) | | **Comparable EBT** | **175,604** | **(64,049)** | **254,239** | **(154,873)** | | Net Earnings (Loss) from Continuing Operations | 149,568 | (73,705) | 201,152 | (182,834) | | **Comparable Earnings** | **129,138** | **(49,457)** | **187,328** | **(121,561)** | | Diluted Earnings (Loss) Per Share | 2.78 | (1.41) | 3.75 | (3.50) | | **Comparable EPS** | **2.40** | **(0.95)** | **3.49** | **(2.33)** | GAAP to Non-GAAP Tax Rate Reconciliation | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Effective Income Tax Rate from Continuing Operations | 26.5% | 22.2% | 26.5% | 12.3% | | **Comparable Tax Rate** | **26.5%** | **22.8%** | **26.3%** | **21.5%** | GAAP Earnings (Loss) to Comparable EBITDA Reconciliation (USD thousands) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Earnings (Loss) | 149,105 | (74,099) | 199,930 | (183,712) | | Earnings (Loss) from Continuing Operations Before Income Taxes (EBT) | 203,573 | (94,777) | 273,840 | (208,411) | | Comparable EBT | 175,604 | (64,049) | 254,239 | (154,873) | | Interest Expense | 54,155 | 67,285 | 108,861 | 129,851 | | Depreciation | 444,259 | 532,947 | 905,420 | 1,056,171 | | Used Vehicle Sales, Net | (51,634) | 9,488 | (80,485) | 30,172 | | Amortization | 1,671 | 1,973 | 3,435 | 4,018 | | **Comparable EBITDA** | **624,055** | **547,644** | **1,191,470** | **1,065,339** | Total Revenue to Operating Revenue Reconciliation (USD thousands) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 2,382,237 | 1,895,282 | 4,603,859 | 4,056,588 | | Subcontracted Transportation | (271,644) | (144,035) | (502,915) | (345,988) | | Fuel | (187,773) | (120,594) | (359,984) | (299,342) | | ChoiceLease Liability Insurance Income | — | (7,409) | (777) | (16,767) | | **Operating Revenue** | **1,922,820** | **1,623,244** | **3,740,183** | **3,394,491** | Adjusted Return on Equity (Trailing 12 Months) | Metric | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Adjusted Net Earnings (Loss) [A] (USD thousands) | 281,007 | (237,108) | | Adjusted Average Shareholders' Equity [B] (USD thousands) | 2,297,571 | 2,420,936 | | **Adjusted Return on Equity [A/B]** | **12.2%** | **(9.8)%** | [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=52&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section contains forward-looking statements about the company's future expectations, subject to risks and uncertainties - Forward-looking statements involve projections of future plans, strategies, anticipated events, or trends, and are not historical facts[191](index=191&type=chunk) - Important risk factors include changes in market conditions (e.g., decreased demand, reduced profit margins), increased competition, impaired profitability (e.g., lower-than-expected sales volumes or customer retention), financing issues (e.g., increased borrowing costs), and accounting matters (e.g., reduced residual values or useful lives)[194](index=194&type=chunk)[195](index=195&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements[197](index=197&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states no material changes in market risk exposures since December 31, 2020 - There have been no material changes in Ryder's market risk exposures since December 31, 2020[198](index=198&type=chunk) - For a complete discussion of market risk, refer to the 2020 Annual Report on Form 10-K[198](index=198&type=chunk) [ITEM 4. Controls and Procedures](index=55&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section discloses the evaluation of disclosure controls and procedures, deemed effective as of Q2 2021 - As of the end of Q2 2021, the company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective[200](index=200&type=chunk) - In Q2 2021, the company implemented a new Enterprise Resource Planning (ERP) system financial module, replacing existing core financial systems, leading to related changes in internal control over financial reporting[201](index=201&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=56&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 16 of the financial statements for a description of the company's significant pending legal proceedings - For a description of the company's significant pending legal proceedings, refer to Note 16, "Contingencies and Other Matters," to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report[204](index=204&type=chunk) [ITEM 1A. Risk Factors](index=56&type=section&id=ITEM%201A.%20Risk%20Factors) This section states no material changes to risk factors from the 2020 Annual Report on Form 10-K - Except for additional factual information disclosed in this quarterly report, there have been no material changes to the risk factors described in the company's 2020 Annual Report on Form 10-K[206](index=206&type=chunk) - The company's operations may also be affected by other risk factors currently unknown or deemed immaterial[206](index=206&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the company's common stock repurchases in Q2 2021, aimed at offsetting the dilutive effect of employee stock plans Common Stock Repurchase Information (Q2 2021) | Period | Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Maximum Number of Shares That May Yet Be Purchased Under Anti-Dilution Plan | | :--- | :--- | :--- | :--- | :--- | | April 1 to April 30 | 8,627 | USD 78.35 | — | 575,045 | | May 1 to May 31 | 350,044 | USD 84.71 | 350,044 | 225,001 | | June 1 to June 30 | 304 | USD 78.37 | — | 225,001 | | **Total** | **358,975** | **USD 84.55** | **350,044** | | - In December 2019, the Board of Directors authorized a share repurchase program to offset the dilutive effect of shares issued under employee stock plans, with a repurchase limit of **1.5 million shares** valid until December 11, 2021[207](index=207&type=chunk) [ITEM 6. Exhibits](index=57&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with this quarterly report, including management certifications and XBRL taxonomy files - Exhibits include management certifications (e.g., certifications by Robert E. Sanchez and John J. Diez) and XBRL instance documents, taxonomy extension schema documents, and others[208](index=208&type=chunk) SIGNATURE [Signature](index=58&type=section&id=Signature) This quarterly report was formally signed by Ryder System, Inc. on July 28, 2021, by its key financial officers - This report was signed on July 28, 2021[212](index=212&type=chunk) - Signatories include Executive Vice President and Chief Financial Officer John J. Diez and Senior Vice President and Controller Cristina Gallo-Aquino[212](index=212&type=chunk)

Ryder System, Inc. (NYSE:R) Q1 2021 Earnings Conference Call April 28, 2021 11:00 AM ET Company Participants Robert Brunn - VP of IR, Corporate Strategy & Product Strategy Robert Sanchez - Chairman, CEO & President Scott Parker - Executive VP & CFO John Diez - President of Global Fleet Management Solutions Steve Sensing - President of Global Supply Chain Solutions & Dedicated Transportation Solutions Conference Call Participants Justin Long - Stephens Scott Group - Wolfe Research Todd Fowler - KeyBanc Capit ...