- Fourth Quarter EPS from Continuing Operations $0.93, Up 13% from
Comparable EPS of $0.82 in the Same Period Last Year -
- Fourth Quarter Revenue of $1.54 billion, Rises 13% Over
Year-Earlier Period -
- 2006 EPS Forecasted to Increase 10% to 14% Over Comparable 2005 Level -
MIAMI, Feb. 3 /PRNewswire-FirstCall/ -- Ryder System, Inc. (NYSE: R), a
global leader in transportation and supply chain management solutions, today
reported earnings per diluted share (EPS) from continuing operations were
$0.93 for the three-month period ended December 31, 2005, up 13% from $0.82 of
comparable EPS in the year-earlier period. Earnings from continuing
operations were $59.5 million for the fourth quarter of 2005, up 11% from
$53.4 million of comparable earnings in the year-earlier period. All business
segments reported improved results. For comparison purposes, earnings from
continuing operations and EPS for the prior year of 2004 exclude a net tax
benefit of $9.2 million, or $0.14 per share, related to the resolution of
various tax matters.
Net earnings for the fourth quarter of 2005 were $58.8 million, or
$0.92 per share, compared with $62.6 million, or $0.96 per share, in the year-
earlier period. Net earnings for the fourth quarter of 2005 included a
benefit of $1.7 million, or $0.03 per share, for the reduction of insurance
reserves related to discontinued operations and a charge of $2.4 million, or
$0.04 per share, for the cumulative effect of a change in accounting
associated with the adoption of FIN 47 related to the future removal of
underground fuel storage tanks.
Revenue for the fourth quarter of 2005 was $1.54 billion, up 13% from
$1.36 billion in the comparable period last year with all business segments
reporting revenue growth. Fleet Management Solutions (FMS) business segment
revenue grew 7%, driven by higher fuel services revenue. Supply Chain
Solutions (SCS) business segment revenue grew 31%, driven by increased volume
of managed subcontracted transportation as well as new and expanded business
in all industry groups. Dedicated Contract Carriage (DCC) business segment
revenue increased 11%, primarily due to new and expanded business, and pricing
increases associated with higher fuel costs.
"Our continued focus in the fourth quarter enabled us to deliver our
second consecutive quarter of higher earnings and organic operating revenue
growth in every segment," said Ryder Chairman and Chief Executive Officer Greg
Swienton. "Prior to the third quarter, we had not experienced a quarter of
both earnings and revenue growth for all business segments simultaneously in
several years. This consistent performance provides momentum for achieving
our business objectives for 2006."
EPS from continuing operations for the fourth quarter of 2005 included
restructuring costs of $0.04 related primarily to severance and the
termination of an information technology contract related to global cost-
savings initiatives. EPS from continuing operations in the year-earlier
period included restructuring costs of $0.03 related primarily to the
termination of an information technology infrastructure contract.
Full-Year 2005 Results
Revenue for the full-year 2005 was $5.74 billion, up 11% from
$5.15 billion in the comparable period of 2004. Ryder's full-year 2005
earnings from continuing operations were $227.6 million compared with
$215.6 million in the year-earlier period. EPS from continuing operations
were $3.53 for 2005, up 8% compared with $3.28 for the same period of 2004.
EPS from continuing operations in 2005 included a $0.12 income tax benefit
related to a change in Ohio income tax law, as well as $0.03 in net
restructuring costs. EPS from continuing operations in the year-earlier
period of 2004 included a net tax benefit of $0.14 associated with the
resolution of various tax matters, $0.23 of gains from the sale of the
Company's corporate headquarters complex and $0.06 in costs related to
restructuring activities. For comparison purposes, excluding the noted net
tax benefits in 2005 and 2004 and gains from the sale of the corporate
headquarters complex in the year-earlier period of 2004, full-year 2005
earnings from continuing operations were $220.0 million, up 15% from
$191.0 million in 2004. Comparable full-year 2005 EPS from continuing
operations of $3.41 were up 17% from $2.91 in 2004. Ryder's full-year 2005
net earnings also included an after-tax benefit of $1.7 million ($0.03 per
diluted share) related to discontinued operations and an after-tax charge of
$2.4 million ($0.04 per diluted share) for the cumulative effect of a change
in accounting related to the adoption of FIN 47.
Fourth Quarter Business Segment Operating Results
Ryder's primary measurement of business segment financial performance, Net
Before Tax (NBT), allocates Central Support Services to each business segment.
Fleet Management Solutions
Ryder's Fleet Management Solutions (FMS) business segment combines several
capabilities into a comprehensive package that provides one-stop outsourcing
of the acquisition, maintenance, management and disposal of vehicles. Ryder's
commercial rental service offers customers a method to expand their fleets in
order to address specific or short-term capacity needs.
In the FMS business segment, revenue in the fourth quarter of 2005 was
$1.02 billion, up 7% compared with $950.5 million in the year-earlier period.
Operating revenue (revenue excluding fuel) in the fourth quarter of 2005 was
$723.6 million, up 1% compared with $719.3 million in the year-earlier period.
Fuel services revenue for the fourth quarter of 2005 increased 27% compared
with the same period in 2004, due primarily to higher fuel pricing as a result
of market cost increases. Revenue comparisons also benefited from favorable
foreign currency exchange rates. Full service lease revenue for the fourth
quarter of 2005 was up 1% from the year-earlier period due to growth in the
U.S. business. Commercial rental revenue was essentially flat compared with
the year-earlier period, reflecting higher pricing offset by a smaller fleet.
Contract maintenance and contract-related maintenance revenue increased 1% in
the fourth quarter of 2005 compared with the same period last year.
The FMS business segment's NBT increased to $92.0 million in the fourth
quarter of 2005, up 3% compared with $89.5 million in the same period of 2004.
This improvement was related primarily to improved U.S. commercial rental and
lease results and lower overhead costs, partially offset by lower margins in
the Company's U.K. operations. Earnings in the quarter were negatively
affected by lower fuel margins resulting from the marked decrease in fuel
prices (after the unprecedented increases that followed Hurricanes Katrina and
Rita) and lower U.S. used vehicle sales gains resulting from actions taken
during the quarter to reduce used truck inventories. Neither of these impacts
is expected to continue. Business segment NBT as a percentage of operating
revenue was 12.7% in the fourth quarter of 2005, up 30 basis points compared
with 12.4% in the same quarter a year ago.
Supply Chain Solutions
Ryder's Supply Chain Solutions (SCS) business segment enables customers to
improve shareholder value and their customers' satisfaction by enhancing
supply chain performance and reducing costs. The solutions involve management
of the logistics pipeline as a synchronized, integrated process -- from raw
material supply to finished goods distribution. By improving business
processes and employing new technologies, the flow of goods and cash is made
faster and consumes less capital.
In the SCS business segment, fourth quarter 2005 revenue totaled
$482.7 million, up 31% from $367.4 million in the comparable period of 2004.
Revenue grew due to increased volume of managed subcontracted transportation,
as well as new and expanded business in all industry groups. Operating
revenue (revenue excluding subcontracted transportation) was $274.2 million,
up 12% from $245.9 million in the comparable period a year ago.
The SCS business segment's NBT was $14.0 million in the fourth quarter of
2005, up 22% from $11.4 million in the same quarter of 2004. The earnings
increase was related to new and expanded business and lower overhead spending.
Business segment NBT as a percentage of operating revenue was 5.1% in the
fourth quarter of 2005, up 50 basis points compared with 4.6% in the same
quarter of 2004.
Dedicated Contract Carriage
Ryder's Dedicated Contract Carriage (DCC) business segment provides
customers with vehicles, drivers, management and administrative support, with
the assets committed to a specific customer for a contractual term. DCC
supports customers with both basic and sophisticated logistics and
transportation needs including routing and scheduling, specialized driver
services, and logistical engineering support.
In the DCC business segment, fourth quarter 2005 revenue totaled
$142.5 million, up 11% compared with $128.5 million in the fourth quarter of
2004. Operating revenue (revenue excluding subcontracted transportation) in
the fourth quarter of 2005 was $137.8 million, up 10% compared with
$125.5 million in the year-earlier period. Revenue grew due to new and
expanded business and pricing increases associated with higher fuel costs.
The DCC business segment's NBT in the fourth quarter of 2005 was
$10.4 million, up 52% compared with $6.8 million in the fourth quarter of
2004. Business segment NBT was positively impacted by new and expanded
business, as well as lower safety costs. Business segment NBT as a percentage
of operating revenue was 7.5% in the fourth quarter of 2005, up 200 basis
points compared with 5.5% in the year-earlier period.
Corporate Financial Information
Central Support Services
Central Support Services (CSS) are overhead costs incurred to support all
business segments and product lines. The majority of CSS costs are allocated
to the various business segments.
In the fourth quarter of 2005, CSS costs were $53.4 million, down from
$56.4 million in the year-earlier period. The decrease was due primarily to
cost benefits realized from the insourcing and renegotiation of several
information technology infrastructure services agreements. Full-year CSS
costs were $207.3 million, down from $212.4 million in 2004.
Capital Expenditures
In Ryder's business, capital expenditures are generally used to purchase
revenue-earning equipment (trucks, tractors and trailers) primarily to support
the full service lease product line and secondarily to support the commercial
rental product line within Ryder's Fleet Management Solutions business
segment. The level of capital required to support the full service lease
product line varies directly with customer contract signings for replacement
vehicles and growth. These contracts are long-term agreements that result in
predictable cash flows to Ryder typically over a three- to seven-year term.
The commercial rental product line utilizes capital for the purchase of
vehicles to replenish and expand the Company's fleet available for shorter-
term use by contractual or occasional customers.
Capital expenditures excluding acquisition costs were $1.41 billion for
the full-year 2005, compared with $1.17 billion in 2004. Net capital
expenditures (including proceeds from the sale of assets) were $1.08 billion,
up from $833.1 million in 2004. The increase in capital expenditures reflects
higher vehicle replacements primarily related to customer contract extensions
and renewals in the lease product line. Heightened lease extension and
renewal activity in 2005 helped to lengthen the average remaining term among
Ryder's lease customers, thereby improving the overall value of the Company's
portfolio of contractual business.
Leverage and Free Cash Flow
Free cash flow for 2005 was a negative $209.8 million compared with
$146.7 million for 2004, primarily due to the funding requirements associated
with higher capital spending and income tax payments, which included a
$176.0 million payment related to the previously disclosed resolution of the
1998 to 2000 federal tax audit. Balance sheet debt as of December 31, 2005
increased by $402.2 million compared with year-end 2004, due to negative free
cash flow, and stock repurchases including the buy back of $109 million of the
Company's common stock under the recently announced $175 million share
repurchase plan. The leverage ratio for balance sheet debt as of December 31,
2005 was 143% compared with 118% at year-end 2004. Total obligations to
equity as of December 31, 2005 were 151%, up from 129% at year-end 2004. The
Company's long-term target range for total obligations to equity is 250% to
300%, which largely reflects the liquidity of the Company's vehicle portfolio
and the substantial revenue component that is supported by long-term customer
contracts related to those assets.
2006 Forecast
Ryder forecasts full-year 2006 earnings to be in the range of $3.75 to
$3.90 per diluted share. This represents an EPS increase of 10% to 14% over
Ryder's comparable full-year 2005 EPS. Full-year 2006 EPS include an
$0.08 benefit from the forecasted lower number of diluted shares outstanding,
principally driven by the Company's recently announced share repurchase plan;
this was more than offset by $0.10 of incremental costs related to the
expensing of stock-based compensation. The Company also established a first
quarter 2006 EPS forecast of $0.65 to $0.70.
"We are forecasting Ryder's 2006 revenue to grow by 3% to 4%, and
operating revenue to grow by 4% to 5%," said Ryder Chairman and Chief
Executive Officer Greg Swienton. "Having completed another year of
consistently better performance, including progress in revenue and earnings in
every segment, Ryder is well-positioned to deliver on our business objectives
for 2006."
To support the planned replacement of vehicles assigned to long-term lease
customers, the Company anticipates 2006 capital expenditures to be
approximately $1.6 billion; net capital expenditures (including proceeds from
sale of assets) are expected to be approximately $1.2 billion. Free cash flow
is expected to be in the range of negative $90 million to negative
$170 million in 2006, due to funding requirements associated with higher
capital spending.
Commenting on the Company's financial plan for 2006, Ryder Executive Vice
President and Chief Financial Officer Tracy Leinbach said, "We will continue
to utilize our balance sheet capacity to support our growth needs.
Specifically, we plan investments in sales and operational capabilities as
well as building a stronger Asia presence including China Operations to
enhance our operating efficiency and enable growth. We continue to identify
and target process improvements and cost initiatives in areas throughout the
Company. Taken together, these actions should provide additional earnings
leverage in 2006 and beyond."
About Ryder
Ryder provides leading-edge transportation, logistics and supply chain
management solutions worldwide. Ryder's product offerings range from full
service leasing, commercial rental and programmed maintenance of vehicles to
integrated services such as dedicated contract carriage and carrier
management. Additionally, Ryder offers comprehensive supply chain solutions,
consulting, lead logistics management services and e-Business solutions that
support customers' entire supply chains, from inbound raw materials and parts
through distribution and delivery of finished goods. Ryder serves customer
needs throughout North America, in Latin America, Europe and Asia.
The National Safety Council selected Ryder to receive the 2002 Green Cross
for Safety Medal -- its highest honor -- for exemplary commitment to workplace
safety and corporate citizenship. For the ninth consecutive year, Ryder was
featured in the 2005 Fortune Most Admired Companies survey of corporate
reputations. InternetWeek named Ryder as one of the top 100 U.S. companies
for effectiveness in using the Internet to achieve tangible business benefits.
For the eighth consecutive year, Ryder has been named a top five third-party
logistics provider by Inbound Logistics.
Ryder's stock is a component of the Dow Jones Transportation Average and
the Standard & Poor's 500 Index. Ryder ranks 381st on the Fortune 500.
For more information on Ryder System, Inc., visit http://www.ryder.com .
Note Regarding Forward-Looking Statements: Certain statements and
information included in this presentation, including all of the 2006 forecast
information, are "forward-looking statements" under the Federal Private
Securities Litigation Reform Act of 1995. Accordingly, these forward-looking
statements should be evaluated with consideration given to the many risks and
uncertainties inherent in our business that could cause actual results and
events to differ materially from those in the forward-looking statements.
Important factors that could cause such differences include, among others, our
ability to obtain adequate profit margins for our services, our inability to
maintain current pricing levels due to customer acceptance or competition,
customer retention levels, unexpected volume declines, loss of key customers
in the Supply Chain Solutions (SCS) business segment, unexpected reserves or
write-offs due to the deterioration of the credit worthiness or bankruptcy of
certain customers in our SCS business segment, changes in financial, tax or
regulatory requirements or changes in customers' business environments that
limit their ability to commit to long-term vehicle leases, changes in market
conditions affecting the commercial rental market or the sale of used
vehicles, labor strikes or work stoppages affecting our or our customers'
business operations, adequacy of accounting estimates and accruals, changes in
general economic conditions, sudden changes in fuel prices, availability of
qualified drivers, our ability to manage our cost structure, changes in
government regulations, including regulations regarding vehicle emissions and
risks described in our filings with the Securities and Exchange Commission.
The risks included here are not exhaustive. New risks emerge from time to time
and it is not possible for management to predict all such risk factors or to
assess the impact of such risks on our business. Accordingly, we undertake no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise.
Note Regarding Non-GAAP Financial Measures: This news release and the
attached financial schedules include certain non-GAAP financial measures as
defined under SEC rules. We have denoted each non-GAAP financial measure in
the attached financial schedules and have provided a reconciliation of each
such measure to the most comparable GAAP measure. Additional information
regarding non-GAAP financial measures can be found in our investor
presentation for the quarter and in our reports filed with the SEC, which are
available in the investors area of our website at http://www.ryder.com .
Conference Call and Webcast Information:
Ryder's earnings conference call and webcast is scheduled for Friday,
February 3, 2006, from 11:00 a.m. to 12:00 noon Eastern Time. Speakers will
be Chairman and Chief Executive Officer Greg Swienton and Executive Vice
President and Chief Financial Officer Tracy Leinbach.
-- To join the conference call live: Begin 10 minutes prior to the
conference by dialing the audio phone number 1-888-398-5319 (outside
U.S. dial 1-773-681-5795) using the Passcode: RYDER and Conference
Leader: Bob Brunn. Then, access the presentation via the Net
Conference website at http://www.mymeetings.com/nc/join/ using the
Conference Number: RH5989588 and Passcode: RYDER.
-- To access audio replays of the conference and view a presentation of
Ryder's earnings results: Dial 1-866-510-4827 (outside U.S. dial
1-203-369-1936) and use the Passcode: 2226, then view the presentation
by visiting the Investors area of Ryder's website at
http://www.ryder.com .
RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS - UNAUDITED
Periods ended December 31, 2005 and 2004
(In millions, except per share amounts)
Three Months Twelve Months
2005 2004 2005 2004
Revenue $1,544.8 1,363.2 $5,740.8 5,150.3
Operating expense 669.9 615.4 2,572.1 2,305.4
Salaries and employee-related costs 333.6 315.6 1,262.2 1,233.0
Subcontracted transportation 213.2 124.5 638.3 425.0
Depreciation expense 184.1 177.2 740.4 706.0
Gains on vehicle sales, net (9.0) (8.8) (47.1) (34.5)
Equipment rental 25.5 28.3 102.8 108.5
Interest expense 31.3 24.7 120.5 100.1
Miscellaneous income, net (1.6) (2.3) (8.9) (6.6)
Restructuring and other charges
(recoveries), net 4.0 2.8 3.4 (17.7)
1,451.0 1,277.4 5,383.7 4,819.2
Earnings from continuing operations
before income taxes 93.8 85.8 357.1 331.1
Provision for income taxes (34.3) (23.2) (129.5) (115.5)
Earnings from continuing operations 59.5 62.6 227.6 215.6
Discontinued operations, net of tax 1.7 -- 1.7 --
Cumulative effect of change in
accounting principle, net of tax (2.4) -- (2.4) --
Net earnings $58.8 62.6 $226.9 215.6
Earnings per common share -
Diluted:
Continuing operations $0.93 0.96 $3.53 3.28
Discontinued operations 0.03 -- 0.03 --
Cumulative effect of change in
accounting principle (0.04) -- (0.04) --
Net earnings $0.92 0.96 $3.52 3.28
Weighted-average shares outstanding
- Diluted 63.9 65.5 64.6 65.7
Memo: EPS Impact of restructuring
and other (charges) recoveries,
net $(0.04) (0.03) $(0.03) 0.17
Note: Certain prior period amounts have been reclassified to conform to
current year presentation.
RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS - UNAUDITED
PRELIMINARY AND SUBJECT TO RECLASSIFICATION
(Dollars in millions)
December 31, December 31,
2005 2004
Assets:
Cash and cash equivalents $128.7 101.0
Other current assets 1,035.1 951.0
Revenue earning equipment, net 3,794.4 3,506.6
Operating property and equipment, net 486.8 480.4
Other assets 588.3 598.9
$6,033.3 5,637.9
Liabilities and shareholders' equity:
Short-term debt / Current portion of
long-term debt $269.4 389.5
Other current liabilities 984.0 1,065.3
Long-term debt 1,916.0 1,393.7
Other non-current liabilities
(including deferred income taxes) 1,336.4 1,279.2
Shareholders' equity 1,527.5 1,510.2
$6,033.3 5,637.9
SELECTED KEY RATIOS
December 31, December 31,
2005 2004
Debt to equity 143% 118%
Total obligations to equity (a) * 151% 129%
Twelve months ended December 31,
2005 2004
Return on average shareholders'
equity (b) 14.6% 15.3%
Return on average assets (b) 3.9% 3.9%
Average asset turnover 97.6% 94.3%
Return on capital* 7.8% 7.7%
(a) Total obligations represent debt plus off-balance sheet equipment
obligations.
(b) Includes discontinued operations and the effect of accounting
changes.
* Non-GAAP financial measure; see reconciliation to closest GAAP
financial measure included within this release.
Note: Certain prior period amounts have been reclassified to conform
to current year presentation.
RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED
Periods ended December 31, 2005 and 2004
(Dollars in millions)
Three Months
2005 2004 B(W)
Revenue:
Fleet Management Solutions:
Full service lease $451.1 $447.6 0.8%
Contract maintenance 32.6 33.7 (3.3%)
Contract-related maintenance 48.4 46.5 4.0%
Commercial rental 175.3 174.8 0.3%
Other 16.2 16.7 (2.5%)
Fuel 292.5 231.2 26.5%
Total Fleet Management
Solutions 1,016.1 950.5 6.9%
Supply Chain Solutions 482.7 367.4 31.4%
Dedicated Contract Carriage 142.5 128.5 10.9%
Eliminations (96.5) (83.2) (16.0%)
Total revenue $1,544.8 1,363.2 13.3%
Business segment earnings:
Earnings before income taxes:
Fleet Management Solutions $92.0 89.5 2.8%
Supply Chain Solutions 14.0 11.4 22.3%
Dedicated Contract Carriage 10.4 6.8 51.6%
Eliminations (9.5) (9.3) (0.6%)
106.9 98.4 8.6%
Unallocated Central Support
Services (9.1) (9.8) 7.4%
Earnings from continuing operations
before restructuring and other
(charges) recoveries, net and
income taxes 97.8 88.6 10.4%
Restructuring and other (charges)
recoveries, net (4.0) (2.8) (42.5%)
Earnings from continuing operations
before income taxes 93.8 85.8 9.3%
Provision for income taxes (34.3) (23.2) (48.1%)
Earnings from continuing
operations 59.5 62.6 (5.0%)
Discontinued operations, net of tax 1.7 -- NM
Cumulative effect of change in
accounting principle, net of tax (2.4) -- NM
Net earnings $58.8 62.6 (6.1%)
Note: Certain prior period amounts have been reclassified to conform to
current year presentation. Amounts may not recalculate due to
rounding.
RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED
Periods ended December 31, 2005 and 2004
(Dollars in millions)
Twelve Months
2005 2004 B(W)
Revenue:
Fleet Management Solutions:
Full service lease $1,785.6 $1,766.7 1.1%
Contract maintenance 134.5 136.3 (1.3%)
Contract-related maintenance 194.7 178.1 9.3%
Commercial rental 686.3 649.8 5.6%
Other 63.8 69.7 (8.5%)
Fuel 1,056.3 802.2 31.7%
Total Fleet Management
Solutions 3,921.2 3,602.8 8.8%
Supply Chain Solutions 1,637.8 1,354.0 21.0%
Dedicated Contract Carriage 543.3 506.2 7.3%
Eliminations (361.5) (312.7) (15.6%)
Total revenue $5,740.8 5,150.3 11.5%
Business segment earnings:
Earnings before income taxes:
Fleet Management Solutions $354.4 312.7 13.3%
Supply Chain Solutions 39.4 37.1 6.2%
Dedicated Contract Carriage 35.1 29.5 19.3%
Eliminations (32.7) (32.8) 0.2%
396.2 346.5 14.3%
Unallocated Central Support
Services (35.7) (33.1) (8.1%)
Earnings from continuing
operations before restructuring
and other (charges) recoveries,
net and income taxes 360.5 313.4 15.0%
Restructuring and other (charges)
recoveries, net (3.4) 17.7 NM
Earnings from continuing operations
before income taxes 357.1 331.1 7.8%
Provision for income taxes (129.5) (115.5) (12.1%)
Earnings from continuing operations 227.6 215.6 5.6%
Discontinued operations, net of tax 1.7 -- NM
Cumulative effect of change in
accounting principle, net of tax (2.4) -- NM
Net earnings $226.9 215.6 5.3%
Note: Certain prior period amounts have been reclassified to conform to
current year presentation. Amounts may not recalculate due to
rounding.
RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION - UNAUDITED
Periods ended December 31, 2005 and 2004
(Dollars in millions)
Three Months Twelve Months
2005 2004 B(W) 2005 2004 B(W)
Fleet Management
Solutions
Total revenue $1,016.1 950.5 6.9% $3,921.2 3,602.8 8.8%
Fuel revenue (292.5) (231.2) 26.5% (1,056.3) (802.2) 31.7%
Operating revenue* $723.6 719.3 0.6% $2,864.9 2,800.6 2.3%
Segment earnings
before income taxes $92.0 89.5 2.8% $354.4 312.7 13.3%
Earnings before
income taxes as % of
total revenue 9.1% 9.4% 9.0% 8.7%
Earnings before
income taxes as % of
operating revenue * 12.7% 12.4% 12.4% 11.2%
Supply Chain
Solutions
Total revenue $482.7 367.4 31.4% $1,637.8 1,354.0 21.0%
Subcontracted
transportation (208.5) (121.5) 71.6% (622.0) (415.3) 49.8%
Operating revenue* $274.2 245.9 11.5% $1,015.8 938.7 8.2%
Segment earnings
before income taxes $14.0 11.4 22.3% $39.4 37.1 6.2%
Earnings before
income taxes as % of
total revenue 2.9% 3.1% 2.4% 2.7%
Earnings before
income taxes as % of
operating revenue* 5.1% 4.6% 3.9% 4.0%
Memo: Fuel costs $25.5 19.2 (32.6%) $92.0 65.7 (40.0%)
Dedicated Contract
Carriage
Total revenue $142.5 128.5 10.9% $543.3 506.2 7.3%
Subcontracted
transportation (4.7) (3.0) 56.7% (16.3) (9.7) 68.7%
Operating revenue* $137.8 125.5 9.8% $527.0 496.5 6.1%
Segment earnings
before income taxes $10.4 6.8 51.6% $35.1 29.5 19.3%
Earnings before
income taxes as % of
total revenue 7.3% 5.3% 6.5% 5.8%
Earnings before
income taxes as % of
operating revenue* 7.5% 5.5% 6.7% 5.9%
Memo: Fuel costs $26.4 20.2 (30.4%) $94.1 72.5 (29.7%)
* Non-GAAP financial measure
Note: Certain prior period amounts have been reclassified to conform to
current year presentation.
Amounts may not recalculate due to rounding.
RYDER SYSTEM, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - PRELIMINARY AND UNAUDITED
Periods ended December 31, 2005 and 2004
(In millions, except per share amounts)
FREE CASH FLOW RECONCILIATION Twelve Months
2005 2004
Net cash provided by operating
activities $779.1 866.8
Net cash used in investing
activities (988.9) (720.1)
Free cash flow * $(209.8) 146.7
DEBT TO EQUITY RECONCILIATION December 31, December 31,
2005 % to 2004 % to
Equity Equity
On-balance sheet debt $2,185.4 143% $1,783.2 118%
Off-balance sheet debt - PV of
minimum lease payments and
guaranteed residual values under
operating leases for
vehicles (a) 117.0 161.1
Total obligations* $2,302.4 151% $1,944.3 129%
NET EARNINGS Three Months Twelve Months
2005 2004 2005 2004
Earnings from continuing
operations $59.5 $62.6 $227.6 $215.6
Less: Net tax benefits -- 9.2 7.6 9.2
Gain on sale of headquarters
complex, net of tax -- -- -- 15.4
Earnings from continuing
operations excluding net tax
benefits and gain on sale of
headquarters complex* $59.5 $53.4 $220.0 $191.0
EPS RECONCILIATION Three Months Twelve Months
2005 2004 2005 2004
Earnings from continuing
operations $0.93 0.96 $3.53 3.28
Less: Net tax benefits -- 0.14 0.12 0.14
Gain on sale of headquarters
complex, net of tax -- -- -- 0.23
Earnings from continuing
operations excluding net tax
benefits and gain on sale of
headquarters complex* $0.93 $0.82 $3.41 $2.91
RETURN ON CAPITAL RECONCILIATION
Twelve months ended December 31,
2005 2004
Net earnings [1] $226.9 $215.6
Discontinued operations, net
of tax (1.7) --
Cumulative effect of change
in accounting principle, net
of tax 2.4 --
Earnings from continuing
operations 227.6 215.6
Restructuring - Gain on sale
of headquarters complex -- (24.3)
Provision for income taxes 129.5 115.5
Earnings before net
restructuring and income
taxes 357.1 306.8
Interest expense 120.5 100.1
Implied interest expense from
off-balance sheet debt 6.6 6.0
Adjusted earnings before
income taxes 484.2 412.9
Adjusted income taxes (185.9) (155.5)
Adjusted earnings from
continuing operations (Non-
GAAP) [2] $298.3 $257.4
Average total debt $2,147.8 $1,811.5
Average shareholders' equity 1,554.7 1,412.0
Total capital (GAAP) [3] 3,702.6 3,223.5
Adjustments to capital (b) (4.7) (16.4)
Average off-balance sheet
debt 147.9 151.8
Adjusted total capital (Non-
GAAP) [4] $3,845.7 $3,358.9
Return on capital (GAAP)
[1] / [3] 6.13% 6.69%
Return on capital (Non-GAAP)
[2] / [4] 7.76% 7.66%
(a) Discounted at the incremental borrowing rate at lease inception.
(b) Amounts represent adjustments made to equity to conform to the
adjustments to the earnings calculation.
* Non-GAAP financial measure
Note: Earnings per share amounts are calculated independently for each
component and may not be additive due to rounding. Certain prior
period amounts have been reclassified to conform to current year
presentation.
SOURCE Ryder System, Inc.
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http://www.ryder.com
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CONTACT:
Media, David Bruce, +1-305-500-4999, or
Investor Relations, Bob Brunn, +1-305-500-4053, both of Ryder
System, Inc.
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