- Second Quarter EPS of $1.13, Includes an $0.11 Tax Benefit -
- Comparable EPS of $1.02 Increases 19% -
- Revenue Up 15%; Operating Revenue Grows 6% -
- Full Year EPS Forecast Range Raised to $4.00 to $4.10 -
MIAMI, July 27 /PRNewswire-FirstCall/ -- Ryder System, Inc. (NYSE: R),
a global leader in transportation and supply chain management solutions,
today reported net earnings for the three-month period ended June 30, 2006,
were $70.3 million, compared with $63.3 million in the year-earlier period.
Net earnings in the current period included an income tax benefit of $6.8
million related to changes in Texas and Canadian income tax laws. Net
earnings in the year-earlier period included an income tax benefit of $7.6
million related to a change in Ohio income tax law. Excluding the tax
benefit in both years, second quarter 2006 net earnings were up 14% to
$63.5 million. All business segments reported improved results, reflecting
better operating performance and continuing leverage from revenue growth.
Earnings per diluted share (EPS) were $1.13 for the second quarter of
2006, compared with $0.98 in the year-earlier period. EPS in the current
period included an $0.11 income tax benefit related to changes in Texas and
Canadian income tax laws. EPS in the year-earlier period included a $0.12
income tax benefit related to a change in Ohio income tax law. Excluding
the tax benefits in both years, EPS for the second quarter were up 19% to
$1.02, which compares with the Company's previous EPS forecast range of
$0.95 to $1.00. EPS improvement also reflects the impact of a stock
repurchase program completed in February of 2006.
Revenue for the second quarter of 2006 was $1.60 billion, up 15% from
$1.39 billion in the same period last year, with all business segments
reporting revenue growth. Operating revenue (revenue excluding fuel and
subcontracted transportation) was $1.11 billion, up 6% compared with $1.05
billion in the year-earlier period. Fleet Management Solutions (FMS)
business segment revenue grew 8% driven by higher fuel services revenue and
full service lease contract growth. FMS operating revenue increased 2% due
to full service lease contract growth of 3%. Supply Chain Solutions (SCS)
business segment revenue grew 34% in the second quarter, driven by
increased volume of managed subcontracted transportation. SCS operating
revenue increased 17% due to higher volumes and new and expanded business
in all industry groups. Dedicated Contract Carriage (DCC) business segment
revenue and operating revenue both increased 7% due to new and expanded
business and pricing increases associated with higher fuel costs.
"We delivered a 14% increase in comparable earnings from 6% higher
operating revenue, reflecting strong earnings on accelerated contractual
revenue growth," said Ryder Chairman and Chief Executive Officer Greg
Swienton. "This marks another successful growth quarter including higher
operating revenue and increased earnings in every business segment."
Year-to-Date Operating Results
Revenue for the six months ended June 30, 2006 was $3.09 billion, up
14% from $2.71 billion in the same period of 2005. Operating revenue
(revenue excluding fuel and subcontracted transportation) for the first
half of 2006 was $2.17 billion, up 5% from $2.06 billion in the first half
of 2005. Ryder's net earnings in the first half of 2006 were $117.9
million, compared with $104.8 million in the year-earlier period. EPS were
$1.91 for the first six months of 2006 compared with $1.61 for the same
period of 2005. Excluding the previously discussed income tax benefits in
both years, year-to-date 2006 net earnings were up 14% to $111.1 million,
and EPS were up 20% to $1.80, compared with the year-earlier period. EPS
for the first half of 2006 included a one-time recovery of $0.02 associated
with the recognition of common stock received from mutual insurance
companies in a prior year. EPS for the first half of 2005 included a
one-time recovery of $0.02 associated with the reimbursement of project
costs incurred in prior years.
Second 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 second quarter of 2006 was
$1,049.5 million, up 8% compared with $969.6 million in the year-earlier
period. Fuel services revenue for the second quarter of 2006 increased 28%
compared with the same period in 2005 due primarily to higher fuel pricing
as a result of market cost increases. Operating revenue (revenue excluding
fuel) in the second quarter of 2006 was $730.1 million, up 2% compared with
$719.3 million in the year-earlier period. Full service lease revenue for
the quarter was up 3% from the same period last year due primarily to
growth in the U.S. business. Commercial rental revenue decreased 2% from
the year- earlier period, reflecting a 5% smaller average fleet, partially
offset by higher pricing. Contract maintenance and contract-related
maintenance revenue decreased 1% in the second quarter of 2006 compared
with the same period last year due primarily to the non-renewal of customer
contracts in the U.K.
The FMS business segment's NBT increased to $94.9 million in the second
quarter of 2006, up 7% compared with $88.9 million in the same period of
2005. This improvement was related primarily to better North American lease
performance and improved used vehicle sales results (higher gains and lower
carrying costs), as well as lower maintenance and depreciation costs. Those
results were offset partially by higher interest expense due primarily to
planned higher debt levels to support investment in the contractual full
service lease business. To a lesser extent, the FMS business segment's NBT
was impacted by higher compensation-related expenses in North America and
lower margins in the Company's U.K. operations. Business segment NBT as a
percentage of operating revenue was 13.0% in the second quarter of 2006, up
60 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, second quarter 2006 revenue totaled $502.1
million, up 34% from $374.9 million in the comparable period in 2005.
Revenue grew primarily due to increased volume of managed subcontracted
transportation, as well as higher volumes and new and expanded business in
all industry groups. Second quarter 2006 operating revenue (revenue
excluding subcontracted transportation) was $291.3 million, up 17% compared
with $249.2 million in the year-earlier period.
The SCS business segment's NBT was $18.1 million in the second quarter
of 2006, up 117% from $8.3 million in the same quarter of 2005. Second
quarter 2006 NBT for the business segment as a percentage of operating
revenue was 6.2%, compared with 3.3% in the same quarter of 2005. The
earnings increase was due to higher volumes and new and expanded business
in all U.S. industry groups and better margins in the Company's Brazil
operations. Business segment earnings in 2006 also included a $2.5 million
benefit related to a contract termination. Excluding this item, business
segment NBT as a percentage of operating revenue would have been 5.3% in
the second quarter of 2006.
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, second quarter 2006 revenue totaled $143.5
million, up 7% compared with $133.8 million in the second quarter of 2005.
Operating revenue (revenue excluding subcontracted transportation) in the
second quarter of 2006 was $139.1 million, up 7% from $129.8 million in the
year-earlier period. Revenue increased because of pricing increases
associated with higher fuel costs, as well as expanded and new business.
The DCC business segment's NBT in the second quarter of 2006 was $11.2
million, up 16% compared with $9.7 million in the second quarter of 2005.
Business segment NBT was positively impacted by new and expanded business.
Business segment NBT as a percentage of operating revenue was 8.0% in the
second quarter of 2006, up 60 basis points from 7.4% in the year- earlier
period.
Corporate Financial Information
Central Support Services
Central Support Services (CSS) are overhead costs incurred to support
all business segments and product lines. Substantially all CSS costs are
allocated to the various business segments. In the second quarter of 2006,
CSS costs were $49.2 million, compared with $49.1 million in the
year-earlier period. The second quarter 2006 costs included a charge of
$1.3 million related to the settlement of litigation associated with a
discontinued operation. CSS costs in the quarter also included higher
share-based compensation from the expensing of stock options and incentive
compensation. These cost increases were offset by lower information
technology spending principally from ongoing cost containment initiatives.
Capital Expenditures
In Ryder's business, capital expenditures are generally used to
purchase revenue-earning equipment (trucks, tractors, and trailers)
primarily to support the full service lease product line and secondarily to
support the commercial rental product line within Ryder's Fleet Management
Solutions business segment. The level of capital required to support the
full service lease product line varies directly with customer contract
signings for replacement vehicles and growth. These contracts are long-term
agreements that result in predictable revenues and cash flows to Ryder
typically over a three- to ten-year term. The commercial rental product
line utilizes capital for the purchase of vehicles to replenish and expand
the Company's fleet available for shorter-term use by contractual or
occasional customers.
Capital expenditures were $814.5 million for the first half of 2006,
compared with $820.9 million in the same period of 2005. Net capital
expenditures (including proceeds from the sale of assets) were $634.8
million for the first half of 2006, down from $650.3 million in the same
period of 2005. The slight decrease in capital expenditures reflects lower
planned spending for commercial rental vehicles, which was partially offset
by increased lease vehicle spending for replacement and expansion of
customer fleets.
The Company anticipates full-year 2006 capital expenditures to be
approximately $1.8 billion, up from $1.4 billion in 2005, in order to
support the planned replacement and expansion of vehicles assigned to
long-term lease customers. This represents an increase of approximately
$200 million over our previous forecast, due primarily to higher than
expected new sales activity within the full service lease product line.
Capital expenditures net of used vehicle sales proceeds for the full-year
2006 are expected to be approximately $1.4 billion, up from $1.1 billion in
2005.
Cash Flow and Leverage
Operating cash flow as of June 30, 2006 was $298.3 million, up 81% from
$164.8 million in the same period of 2005. Free cash flow as of June 30,
2006 was negative $266.9 million and improved on a comparative basis from
negative $425.3 million for the year-earlier period. The improvement was
due primarily to lower income tax payments, as the year-earlier period
included a $176 million payment related to the 1998 to 2000 tax years,
offset partially by increased pension contributions and working capital
growth.
Balance sheet debt as of June 30, 2006 increased by $303.7 million
compared with year-end 2005, due primarily to increased capital spending
required to support contractual revenue growth. The leverage ratio for
balance sheet debt as of June 30, 2006 was 151%, compared with 143% at
year- end 2005. Total obligations to equity as of June 30, 2006 were 156%,
up from 151% at year-end 2005. 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.
Outlook
Commenting on Ryder's outlook, Mr. Swienton said, "We're seeing
continued, profitable revenue growth across all three of our business
segments. Our teams in Supply Chain Solutions, Dedicated Contract Carriage
and Fleet Management Solutions are retaining, expanding and attracting new
business with quality customers. We are particularly pleased with the
strong contractual sales in full service lease, our largest product line."
He continued, "We are raising our full-year 2006 forecast to a range of
$4.00 to $4.10 per share, including the previously disclosed $0.11 tax
benefit realized in the second quarter. We are also establishing a third
quarter 2006 EPS forecast to be in the range of $1.05 to $1.10."
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, Latin America, Europe
and Asia.
The National Safety Council selected Ryder as the first transportation
company to receive the Green Cross for Safety Medal -- its highest honor --
for exemplary commitment to workplace safety and corporate citizenship. 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 375th on the Fortune 500
and 1,433rd on the Forbes Global 2000.
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 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, our failure to successfully
implement new sales growth initiatives in our FMS 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 will 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, the effect of severe
weather events, labor strikes or work stoppages affecting our or our
customers' business operations, adequacy of accounting estimates and
accruals particularly with respect to pension, taxes and revenue, 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 the risks described in our filings with the Securities and Exchange
Commission. The risks included here are not exhaustive. New risks emerge
from time to time and it is not possible for management to predict all such
risk factors or to assess the impact of such risks on our business.
Accordingly, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Note Regarding Non-GAAP Financial Measures: This news release 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 Thursday,
July 27, 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 Mark Jamieson.
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: RH8944576 and
Passcode: RYDER.
To access audio replays of the conference and view a presentation of
Ryder's earnings results: Dial 1-888-568-0145 (outside U.S. dial
1-402-530-7809) and use the Passcode: 7727, then view the presentation by
visiting the Investors area of Ryder's website at http://www.ryder.com. A podcast of
the call will also be available online within 24 hours after the end of the
call.
RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS - UNAUDITED
Periods ended June 30, 2006 and 2005
(In millions, except per share amounts)
Three Months Six Months
2006 2005 2006 2005
Revenue $1,595.7 1,389.8 $3,092.0 2,705.4
Operating expense 704.4 634.9 1,365.6 1,245.3
Salaries and employee-related costs 344.0 306.4 681.5 613.9
Subcontracted transportation 215.3 129.8 417.5 241.6
Depreciation expense 183.4 186.8 361.6 368.2
Gains on vehicle sales, net (15.0) (13.1) (27.8) (25.8)
Equipment rental 24.4 24.7 49.3 52.1
Interest expense 35.0 30.9 66.5 57.8
Miscellaneous income, net (0.4) (1.0) (5.8) (5.3)
Restructuring and other recoveries,
net -- (0.1) (0.2) (0.2)
1,491.1 1,299.3 2,908.2 2,547.6
Earnings before income taxes 104.6 90.5 183.8 157.8
Provision for income taxes (34.3) (27.2) (65.9) (53.0)
Net earnings $70.3 63.3 $117.9 104.8
Earnings per common share -
Diluted:
Net earnings $1.13 0.98 $1.91 1.61
Weighted-average shares outstanding
- Diluted 62.0 64.7 61.7 64.9
Note: Certain prior period amounts have been reclassified to conform to
current year presentation.
RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
PRELIMINARY AND SUBJECT TO RECLASSIFICATION
(Dollars in millions)
(unaudited)
June 30, December 31,
2006 2005
Assets:
Cash and cash equivalents $82.6 128.7
Other current assets 1,147.8 1,035.1
Revenue earning equipment, net 4,124.7 3,794.4
Operating property and equipment,
net 486.8 486.8
Other assets 579.7 588.3
$6,421.6 6,033.3
Liabilities and shareholders'
equity:
Short-term debt / current portion
of long-term debt $358.2 269.4
Other current liabilities 883.1 984.0
Long-term debt 2,130.9 1,916.0
Other non-current liabilities
(including deferred income taxes) 1,401.2 1,336.4
Shareholders' equity 1,648.2 1,527.5
$6,421.6 6,033.3
SELECTED KEY RATIOS
June 30, December 31,
2006 2005
Debt to equity 151% 143%
Total obligations to equity (a) * 156% 151%
Twelve months ended June 30,
2006 2005
Return on average shareholders'
equity (b) 15.3% 14.9%
Return on average assets (b) 3.9% 3.9%
Return on capital* 8.0% 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 June 30, 2006 and 2005
(Dollars in millions)
Three Months
2006 2005 B(W)
Revenue:
Fleet Management Solutions:
Full service lease $460.1 445.4 3.3%
Contract maintenance 34.0 34.5 (1.3%)
Contract-related maintenance 47.8 47.9 (0.2%)
Commercial rental 170.8 174.9 (2.3%)
Other 17.4 16.6 4.6%
Fuel 319.4 250.3 27.6%
Total Fleet Management Solutions 1,049.5 969.6 8.2%
Supply Chain Solutions 502.1 374.9 33.9%
Dedicated Contract Carriage 143.5 133.8 7.2%
Eliminations (99.4) (88.5) (12.2%)
Total revenue $1,595.7 1,389.8 14.8%
Operating Revenue: *
Fleet Management Solutions $730.1 719.3 1.5%
Supply Chain Solutions 291.3 249.2 16.9%
Dedicated Contract Carriage 139.1 129.8 7.1%
Eliminations (49.4) (49.5) 0.4%
Total 1,111.1 1,048.8 5.9%
Fuel services and subcontracted
transportation revenue 484.6 341.0 42.1%
Total Revenue $1,595.7 1,389.8 14.8%
Business segment earnings:
Earnings before income taxes:
Fleet Management Solutions $94.9 88.9 6.8%
Supply Chain Solutions 18.1 8.3 116.9%
Dedicated Contract Carriage 11.2 9.7 15.7%
Eliminations (8.3) (7.5) (10.5%)
115.9 99.4 16.6%
Unallocated Central Support Services (11.3) (9.0) (26.0%)
Earnings before restructuring and
other recoveries, net and income
taxes 104.6 90.4 15.7%
Restructuring and other recoveries,
net -- 0.1 N/A
Earnings before income taxes 104.6 90.5 15.5%
Provision for income taxes (34.3) (27.2) (25.9%)
Net earnings $70.3 63.3 11.0%
* 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.
Six Months
2006 2005 B(W)
Revenue:
Fleet Management Solutions:
Full service lease $911.5 887.2 2.7%
Contract maintenance 66.8 67.9 (1.7%)
Contract-related maintenance 95.1 95.9 (0.9%)
Commercial rental 320.8 327.6 (2.1%)
Other 35.4 34.1 3.9%
Fuel 601.0 481.5 24.8%
Total Fleet Management Solutions 2,030.6 1,894.2 7.2%
Supply Chain Solutions 971.6 721.7 34.6%
Dedicated Contract Carriage 282.2 261.8 7.8%
Eliminations (192.4) (172.3) (11.6%)
Total revenue $3,092.0 2,705.4 14.3%
Operating Revenue: *
Fleet Management Solutions $1,429.6 1,412.7 1.2%
Supply Chain Solutions 563.6 487.3 15.7%
Dedicated Contract Carriage 272.6 254.6 7.1%
Eliminations (97.2) (98.2) 0.9%
Total 2,168.6 2,056.4 5.5%
Fuel services and subcontracted
transportation revenue 923.4 649.0 42.3%
Total Revenue $3,092.0 2,705.4 14.3%
Business segment earnings:
Earnings before income taxes:
Fleet Management Solutions $169.8 159.8 6.3%
Supply Chain Solutions 28.7 14.8 93.6%
Dedicated Contract Carriage 19.6 15.5 26.3%
Eliminations (16.0) (15.0) (6.9%)
202.1 175.1 15.4%
Unallocated Central Support Services (18.5) (17.5) (5.5%)
Earnings before restructuring and
other recoveries, net and income
taxes 183.6 157.6 16.5%
Restructuring and other recoveries,
net 0.2 0.2 NM
Earnings before income taxes 183.8 157.8 16.5%
Provision for income taxes (65.9) (53.0) (24.4%)
Net earnings $117.9 104.8 12.5%
* 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
BUSINESS SEGMENT INFORMATION - UNAUDITED
Periods ended June 30, 2006 and 2005
(Dollars in millions)
Three Months Six Months
2006 2005 B(W) 2006 2005 B(W)
Fleet Management
Solutions
Total revenue $1,049.5 969.6 8.2% $2,030.6 1,894.2 7.2%
Fuel revenue (319.4) (250.3) 27.6% (601.0) (481.5) 24.8%
Operating revenue * $730.1 719.3 1.5% $1,429.6 1,412.7 1.2%
Segment earnings
before income taxes $94.9 88.9 6.8% $169.8 159.8 6.3%
Earnings before
income taxes as % of
total revenue 9.0% 9.2% 8.4% 8.4%
Earnings before
income taxes as % of
operating revenue * 13.0% 12.4% 11.9% 11.3%
Supply Chain Solutions
Total revenue $502.1 374.9 33.9% $971.6 721.7 34.6%
Subcontracted
transportation (210.8) (125.7) 67.7% (408.0) (234.4) 74.0%
Operating revenue * $291.3 249.2 16.9% $563.6 487.3 15.7%
Segment earnings
before income taxes $18.1 8.3 116.9% $28.7 14.8 93.6%
Earnings before
income taxes as % of
total revenue 3.6% 2.2% 3.0% 2.1%
Earnings before
income taxes as % of
operating revenue * 6.2% 3.3% 5.1% 3.0%
Memo: Fuel costs $27.8 22.4 (24.1%) $52.7 42.7 (23.4%)
Dedicated Contract
Carriage
Total revenue $143.5 133.8 7.2% $282.2 261.8 7.8%
Subcontracted
transportation (4.4) (4.0) 10.1% (9.6) (7.2) 32.3%
Operating revenue * $139.1 129.8 7.1% $272.6 254.6 7.1%
Segment earnings
before income taxes $11.2 9.7 15.7% $19.6 15.5 26.3%
Earnings before
income taxes as % of
total revenue 7.8% 7.2% 7.0% 5.9%
Earnings before
income taxes as % of
operating revenue * 8.0% 7.4% 7.2% 6.1%
Memo: Fuel costs $27.5 22.2 (23.9%) $52.5 42.8 (22.7%)
* 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
(In millions, except per share amounts)
FREE CASH FLOW RECONCILIATION Six months ended June 30
2006 2005
Net cash provided by operating
activities $298.3 $164.8
Capital expenditures (776.1) (779.4)
Acquisitions (4.1) (14.7)
Proceeds from sales (Primarily
revenue earning equipment) 179.6 170.6
Collections of direct finance
leases 33.8 33.4
Other investing, net 1.6 --
$(266.9) $(425.3)
DEBT TO EQUITY RECONCILIATION June 30, December 31,
2006 % to 2005 % to
Equity Equity
On-balance sheet debt $2,489.1 151% $2,185.4 143%
Off-balance sheet debt - PV of
minimum lease payments and
guaranteed residual values under
operating leases for vehicles (a) 88.8 117.0
Total obligations * $2,577.9 156% $2,302.4 151%
RETURN ON CAPITAL RECONCILIATION
Reconciliation of Return On Capital (ROC) to the GAAP
measure net earnings is as follows:
Twelve months ended June 30
2006 2005
Net earnings (12-month
rolling period) $240.0 $221.7
- Discontinued operations (1.7) --
+ Cumulative effect of
changes in accounting
principles 2.4 --
+ Income taxes 142.4 109.3
Adjusted earnings
before income taxes 383.1 331.0
- Restructuring - gain on
sale of headquarters -- (1.2)
+ Adjusted interest expense(b) 135.6 114.5
- Adjusted income taxes (c) (202.2) (169.3)
= Adjusted net earnings for
ROC (numerator) $316.5 $275.0
Average total debt $2,264.7 $1,930.1
+ Average off-balance sheet
debt 124.2 164.6
+ Average adjusted total
shareholders' equity (d) 1,562.2 1,487.4
= Adjusted average total
capital (denominator) $3,951.1 $3,582.1
Adjusted ROC * 8.0% 7.7%
EPS RECONCILIATION Three months Six months
ended June 30 ended June 30
2006 2006
Earnings per share $1.13 $1.91
Less: Tax change 0.11 0.11
Earnings per share excluding tax
change * $1.02 $1.80
Notes:
(a)Discounted at the incremental borrowing rate at lease inception.
(b)Interest expense includes implied interest on off-balance sheet vehicle
obligations.
(c)Income taxes was calculated using the effective income tax rate for the
period exclusive of Canada and Texas tax benefits recognized June 2006
and the Ohio tax benefit recognized June 2005.
(d)Represents shareholders' equity adjusted for discontinued operations,
accounting changes and tax benefits in those periods.
*Non-GAAP financial measure
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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Related links:
http://www.ryder.com
CONTACT:
Media, David Bruce, +1-305-500-4999, or
Investor Relations, Bob Brunn, +1-305-500-4053, both of Ryder
System
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