Ryder System, Inc. reported second quarter earnings and revenue

OREANDA-NEWS. Ryder System, Inc. (NYSE: R), a leader in commercial fleet management, dedicated transportation, and supply chain solutions, today reported second quarter earnings and revenue. Results for the three months ended June 30 were as follows:

(dollars in millions, except EPS)			Earnings Before Taxes									Earnings									Diluted Earnings Per Share
			2016				2015			Change		2016				2015			Change		2016				2015			Change
GAAP			$	116.8			133.4			(12)%		$	74.0			85.9			(14)%		$	1.38			1.61			(14)%
Non-operating pension costs			7.6				4.7					4.4				2.7					0.09				0.05
Pension-related charge			7.7				—					4.8				—					0.09				—
Professional fees			—				1.9					—				1.2					—				0.02
Tax law change			—				—					—				(1.9	)				—				(0.03	)
Comparable (non-GAAP)			$	132.0			140.1			(6)%		$	83.3			88.0			(5)%		$	1.56			1.65			(5)%

The Company reported record second quarter total and operating revenue (revenue excluding all fuel and subcontracted transportation), reflecting higher revenue across all business segments, partially offset by negative impacts from foreign exchange. Increased total revenue was also partially offset by lower fuel costs passed through to customers. Total and operating revenue for the three months ended June 30 were as follows:

(in millions)		Total Revenue												Operating Revenue (non-GAAP)
		2016				2015			% Change		% Change excl. FX (non-GAAP)			2016				2015			% Change		% Change excl. FX
Total		$	1,703.7			1,662.9			2%		3%			$	1,449.7			1,392.6			4%		5%
FMS		$	1,151.5			1,149.3			—		1%			$	995.2			959.1			4%		5%
DTS		$	258.3			223.5			16%		16%			$	194.3			176.8			10%		10%
SCS		$	402.1			396.9			1%		3%			$	331.6			320.1			4%		5%

Commenting on the Company’s second quarter results, Ryder Chairman and CEO Robert Sanchez said, "We modestly outperformed our second quarter forecast, despite a challenging freight transportation environment, primarily due to better full service lease results and lower overheads. We continued to execute well on our long-term strategy, demonstrating solid organic growth in our contractual businesses in the quarter. This revenue growth, along with other items from our 2016 playbook, including overhead reductions and rental fleet right-sizing actions, largely offset weakness in the rental and used vehicle markets. Ryder's largest product line, full service lease, grew 9% with a fleet count that is now up by 3,000 vehicles for 2016. The dedicated transportation business also delivered double-digit growth in both revenue and earnings, as we continued to benefit from converting existing lease customers to expanded,

Second Quarter Business Segment Operating Results

Fleet Management Solutions

In the Fleet Management Solutions (FMS) business segment, total revenue in the second quarter of 2016 was $1.15 billion, consistent with the year-earlier period. Operating revenue (revenue excluding fuel) in the second quarter of 2016 was $995 million, up 4% compared with the year-earlier period. Full service lease revenue increased 9% due to fleet growth and higher prices on replacement vehicles. The number of full service lease vehicles (excluding U.K. trailers) increased by 6,500 from the year-earlier period and increased by 1,300 sequentially from the first quarter of 2016. Commercial rental revenue decreased by 10% from the year-earlier period due to lower demand.

FMS earnings before tax were $111.2 million in the second quarter of 2016, down 9% compared with $122.5 million in the same period of 2015. Decreased earnings reflect lower commercial rental performance as well as lower used vehicle results, partially offset by higher full service lease performance and reduced overhead spending. Commercial rental performance declined due to lower demand and lower fleet utilization particularly with tractors. Rental power fleet utilization was 74.7% for the second quarter, down from 78.1% in the year-earlier period, on a 7% smaller average fleet. Rental pricing decreased 1% from the prior year. Used vehicle results declined due to lower pricing particularly on tractors, partially offset by higher sales volume. Full service lease results benefited from fleet growth. Full service lease and commercial rental results also benefited from lower depreciation associated with increased residual values. FMS earnings before tax as a percentage of total and operating revenue were 9.7% and 11.2%, respectively, in the second quarter of 2016, down 100 and 160 basis points from the same quarter a year ago, reflecting lower used vehicle sales results.

Dedicated Transportation Solutions

In the Dedicated Transportation Solutions (DTS) business segment, total revenue in the second quarter of 2016 was up 16% to $258 million and operating revenue (revenue excluding fuel and subcontracted transportation) was up 10% to $194 million compared with the year-earlier period. DTS total and operating revenue grew as a result of new business, as well as higher pricing and increased volumes.

DTS earnings before tax of $16.5 million increased 32% in the second quarter of 2016 compared with $12.4 million in 2015 due to lower insurance costs and operating revenue growth. DTS earnings before tax as a percentage of total and operating revenue were 6.4% and 8.5%, respectively, in the second quarter of 2016, up 80 and 150 basis points from the year-earlier period.

Supply Chain Solutions

In the Supply Chain Solutions (SCS) business segment, total revenue was up 1% to $402 million and operating revenue (revenue excluding fuel and subcontracted transportation) was up 4% to $332 million compared with the year-earlier period. SCS total and operating revenue grew as a result of new business, increased volumes, and higher pricing, with total revenue partially offset by lower subcontracted transportation and reduced fuel costs passed through to customers.

SCS earnings before tax of $28.4 million in the second quarter of 2016 increased 2% from $27.7 million in 2015, primarily driven by new business. SCS earnings before tax as a percentage of total and operating revenue were 7.1% and 8.6%, respectively, in the second quarter of 2016, up 10 and down 10 basis points from the prior year.

Corporate Financial Information

Central Support Services

Central Support Services (CSS) are overhead costs incurred to support all business segments and product lines. Most CSS costs are allocated to the business segments. In the second quarter of 2016, unallocated CSS costs were $11 million, unchanged from the year-earlier period.

Items Excluded from Comparable Earnings

Non-operating components of pension costs are excluded from both comparable earnings and segment earnings before tax in order to more accurately reflect the operating performance of the business. Non-operating pension costs totaled $7.6 million ($4.4 million after tax) or $0.09 per diluted share in the second quarter of 2016, up from $4.7 million ($2.7 million after tax) or $0.05 per diluted share in the year-earlier period. This increase was largely due to lower asset returns.

During the second quarter of 2016, we determined that certain pension benefit improvements made in 2009 were not fully reflected in our projected benefit obligation. The amounts were not material to the Company's financial statements in any individual period. Accordingly, we recognized a one-time, non-cash charge of $7.7 million in selling, general and administrative expenses ($4.8 million after tax) or $0.09 per diluted share as a cumulative correction related to these benefit improvements.

In the second quarter of 2015, the Company recognized a pre-tax charge of $1.9 million ($1.2 million after tax) or $0.02 per diluted share from professional fees associated with cost saving initiatives. Comparable earnings in the second quarter of 2015 also excluded benefits from state law changes of $1.9 million or $0.03 per diluted share.

Income Taxes

The Company’s effective and comparable income tax rates from continuing operations for the second quarter of 2016 were 36.6% and 36.9%, respectively, compared with 35.6% and 37.1%, in the year-earlier period. The effective tax rates in the prior year benefited from enacted tax law changes in multiple jurisdictions.

Capital Expenditures

Year-to-date capital expenditures decreased to $1.01 billion, compared with $1.45 billion in 2015. The decrease in capital expenditures primarily reflects lower planned investments in the commercial rental fleet. Proceeds primarily from used vehicle sales of $252 million improved 19% compared with $212 million in 2015, due to increased volumes, partially offset by lower vehicle pricing. Net capital expenditures (including proceeds from the sale of assets) were $763 million in 2016, down from $1.24 billion in 2015. The Company now forecasts full-year 2016 gross capital expenditures of $1.9 billion, compared with a prior forecast of $2.0 billion, due to increased usage of used vehicles to fulfill lease sales.

Cash Flow

Year-to-date operating cash flow was $763 million, up 16% from $659 million in 2015 due to a reduction in working capital, partially offset by higher pension contributions. Total cash generated (including proceeds from used vehicle sales) (non-GAAP measure) was $1.06 billion, compared with $904 million in 2015. Free cash flow (non-GAAP measure) was negative $62 million, compared with negative $425 million in 2015, reflecting lower net capital expenditures. The Company’s full-year 2016 forecast for operating cash flow remains unchanged at $1.6 billion. The Company's full-year free cash flow is now forecast at $200 million, up from a prior forecast of $100 million, reflecting lower net capital expenditures from increased usage of used vehicles to fulfill lease sales.

Leverage

Debt increased by $131 million compared with year-end 2015, due primarily to investments in vehicles to fund growth. Debt to equity was 275% compared with 277% at year-end 2015, and within Ryder’s long-term target range of 225% to 275%. The Company's year-end debt to equity forecast is now 255%, compared with its previous estimate of 245%, reflecting the impact of foreign currency and the pension impact of lower interest rates, partially offset by improved free cash flow.

2016 Earnings Forecast

Commenting on the Company’s 2016 outlook, Mr. Sanchez said, "Based on current conditions, we are lowering our expectations for rental demand and used vehicle volumes, particularly tractors. We expect used vehicle sales pricing to be consistent with recent trends. Used vehicle sales inventories peaked in the second quarter and are expected to decline to the high end of our target range by year end. In light of the soft environment, we continue to execute on our playbook by growing our contractual businesses, reducing our rental fleet, maximizing our used truck proceeds while managing inventories, and controlling discretionary spending.

"Although we are experiencing some market softness impacting the transactional parts of our business, we continue to benefit from secular outsourcing trends and deliver on our long-term strategy to drive growth from further penetration of the non-outsourced market. Full-year lease fleet growth is anticipated to be 4,000 vehicles, up from a prior forecast of 3,500, reflecting increased redeployments in the first half of the year. Supply Chain Solutions and Dedicated Transportation Solutions are both anticipated to deliver solid contributions to revenue and earnings, in line with our prior expectations. Lastly, we also expect full-year free cash flow to be $200 million, up $100 million from our prior forecast, due to increased usage of used equipment to fulfill lease sales."

Ryder is revising its full-year 2016 GAAP EPS forecast to a range of $5.49 to $5.64 from a prior forecast of $5.79 to $5.99. Additionally, the Company's full-year 2016 comparable EPS forecast has been revised to a range of $5.90 to $6.05 from a prior range of $6.10 to $6.30. The Company is also establishing a third quarter 2016 GAAP EPS forecast range of $1.57 to $1.64, and a comparable EPS forecast range of $1.65 to $1.72, reflecting unfavorable year-over-year comparisons in both commercial rental and used vehicle sales, partially offset by continuing growth in Ryder's contractual product lines.

Supplemental Company Information
Second Quarter Net Earnings
(dollars in millions, except EPS)			Earnings									Diluted EPS
			2016					2015				2016					2015
Earnings from continuing operations			$		74.0			85.9				$		1.38			1.61
Discontinued operations			(0.3			)		(0.8	)			(0.01			)		(0.01	)
Net earnings			$		73.8			85.2				$		1.38			1.59

Year-to-Date Operating Results
(in millions)		Six months ended June 30
		2016					2015			Change
Total revenue		$		3,333			3,230			3	%
Operating revenue (1)		$		2,856			2,693			6	%
Earnings from continuing operations		$		130.2			139.2			(6	)%
Comparable earnings from continuing operations		$		143.5			145.2			(1	)%
Net earnings		$		129.5			137.9			(6	)%
Earnings per common share (EPS) - Diluted
Continuing operations		$		2.43			2.61			(7	)%
Comparable		$		2.68			2.72			(1	)%
Net earnings		$		2.42			2.59			(7	)%
(1) Excluding all fuel and subcontracted transportation

 

RYDER SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS - UNAUDITED Periods ended June 30, 2016 and 2015 (In millions, except per share amounts)
		Three Months							Six Months
		2016				2015			2016				2015
Lease and rental revenues		$	798.4			779.0			$	1,566.1			1,508.1
Services revenue		785.8				737.2				1,544.9			1,430.9
Fuel services revenue		119.6				146.7				222.4			291.1
Total revenues		1,703.7				1,662.9				3,333.4			3,230.1
Cost of lease and rental		555.3				531.3				1,107.8			1,049.7
Cost of services		646.1				603.5				1,277.8			1,185.8
Cost of fuel services		115.5				142.2				214.4			278.5
Other operating expenses*		27.8				29.6				57.9			62.0
Selling, general and administrative expenses		222.4				214.9				433.7			421.5
Gains on used vehicles, net*		(12.0		)		(30.0	)			(31.1	)		(57.2	)
Interest expense		37.3				39.1				75.2			75.9
Miscellaneous income, net		(5.5		)		(1.0	)			(7.7	)		(3.7	)
		1,587.0				1,529.5				3,127.9			3,012.5
Earnings from continuing operations before income taxes		116.8				133.4				205.5			217.6
Provision for income taxes		42.7				47.5				75.3			78.4
Earnings from continuing operations		74.0				85.9				130.2			139.2
Loss from discontinued operations, net of tax		(0.3		)		(0.8	)			(0.7	)		(1.3	)
Net earnings		$	73.8			85.2			$	129.5			137.9
Earnings (loss) per common share - Diluted
Continuing operations		$	1.38			1.61			$	2.43			2.61
Discontinued operations		(0.01		)		(0.01	)			(0.01	)		(0.03	)
Net earnings		$	1.38			1.59			$	2.42			2.59
Earnings per share information - Diluted
Earnings from continuing operations		$	74.0			85.9			$	130.2			139.2
Less: Distributed and undistributed earnings allocated to unvested stock		(0.2		)		(0.2	)			(0.4	)		(0.4	)
Earnings from continuing operations available to common stockholders		$	73.8			85.7			$	129.8			138.9
Weighted-average shares outstanding - Diluted		53.4				53.3				53.4			53.2
Comparable earnings per share from continuing operations: **
EPS from continuing operations		$	1.38			1.61			$	2.43			2.61
Non-operating pension costs		0.09				0.05				0.16			0.10
Pension-related charge		0.09				—				0.09			—
Professional fees		—				0.02				—			0.04
Tax law change		—				(0.03	)			—			(0.03	)
Comparable EPS from continuing operations **		$	1.56			1.65			$	2.68			2.72
* Losses from fair value adjustments on our used vehicles were reclassified from "Other operating
expenses" to "Gains on used vehicles, net" for the periods presented.
** Non-GAAP financial measure. A reconciliation of GAAP EPS from continuing operations to comparable
EPS from continuing operations is set forth in this table.
Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS - UNAUDITED (Dollars in millions)
		June 30, 2016				December 31, 2015
Assets:
Cash and cash equivalents		$	66.0			60.9
Other current assets		1,060.3				1,037.4
Revenue earning equipment, net		8,300.1				8,184.7
Operating property and equipment, net		741.0				715.0
Other assets		968.7				954.6
		$	11,136.1			10,952.6
Liabilities and shareholders' equity:
Current liabilities		$	970.9			1,045.7
Total debt		5,634.0				5,502.6
Other non-current liabilities (including deferred income taxes)		2,484.2				2,417.1
Shareholders' equity		2,047.1				1,987.1
		$	11,136.1			10,952.6

SELECTED KEY RATIOS AND METRICS
								June 30, 2016			December 31, 2015
Debt to equity								275	%		277	%
Effective interest rate (average cost of debt)								2.7	%		2.9	%

		Six months ended June 30,
		2016				2015
Cash provided by operating activities from continuing operations		$	762.7			658.7
Free cash flow *		(61.6		)		(424.8	)
Capital expenditures paid		1,120.2				1,329.2
Capital expenditures (accrual basis)		$	1,014.7			1,454.0
Less: Proceeds from sales (primarily revenue earning equipment)		(252.0		)		(211.8	)
Net capital expenditures		$	762.7			1,242.2

							Twelve months ended June 30,
							2016			2015
Return on average shareholders' equity							14.9	%		12.3	%
Return on average assets							2.7	%		2.3	%
Adjusted return on capital *							5.4	%		6.0	%
Weighted average cost of capital							4.2	%		4.6	%
Adjusted return on capital spread **							1.2	%		1.4	%

* Non-GAAP financial measure. See reconciliation of the non-GAAP elements of this calculation reconciled

to the corresponding GAAP measures included in the Appendix - Non-GAAP Financial Measures

section at the end of this release.

** Non-GAAP financial measure. Adjusted return on capital spread is calculated as the difference of the

adjusted return on capital and the weighted average cost of capital.

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED Periods ended June 30, 2016 and 2015 (Dollars in millions)
		Three Months										Six Months
		2016				2015			B(W)			2016				2015			B(W)
Total Revenue:
Fleet Management Solutions:
Full service lease		$	646.3			595.7			9	%		$	1,269.2			1,172.8			8	%
Contract maintenance		51.2				49.0			4	%		101.3				94.9			7	%
Contractual revenue		697.5				644.7			8	%		1,370.5				1,267.7			8	%
Commercial rental		214.6				239.1			(10	)%		419.4				444.1			(6	)%
Contract-related maintenance		62.7				56.5			11	%		127.0				109.7			16	%
Other		20.4				18.8			9	%		40.7				36.7			11	%
Fuel services revenue		156.3				190.3			(18	)%		291.9				378.3			(23	)%
Total Fleet Management Solutions		1,151.5				1,149.3			—	%		2,249.4				2,236.5			1	%
Dedicated Transportation Solutions		258.3				223.5			16	%		503.1				436.2			15	%
Supply Chain Solutions		402.1				396.9			1	%		790.8				768.0			3	%
Eliminations		(108.1		)		(106.9	)		(1	)%		(209.9		)		(210.6	)		—	%
Total revenue		$	1,703.7			1,662.9			2	%		$	3,333.4			3,230.1			3	%
Operating Revenue: *
Fleet Management Solutions		$	995.2			959.1			4	%		$	1,957.6			1,858.2			5	%
Dedicated Transportation Solutions		194.3				176.8			10	%		384.6				342.6			12	%
Supply Chain Solutions		331.6				320.1			4	%		654.0				615.5			6	%
Eliminations		(71.4		)		(63.3	)		(13	)%		(140.4		)		(123.5	)		(14	)%
Operating revenue		$	1,449.7			1,392.6			4	%		$	2,855.7			2,692.9			6	%
Business segment earnings:
Earnings from continuing operations
before income taxes:
Fleet Management Solutions		$	111.2			122.5			(9	)%		$	194.1			212.2			(9	)%
Dedicated Transportation Solutions		16.5				12.4			32	%		30.7				21.4			44	%
Supply Chain Solutions		28.4				27.7			2	%		48.2				43.4			11	%
Eliminations		(12.8		)		(11.6	)		(10	)%		(24.5		)		(23.1	)		(6	)%
		143.3				151.0			(5	)%		248.5				253.8			(2	)%
Unallocated Central Support Services		(11.2		)		(10.9	)		(3	)%		(20.9		)		(22.9	)		9	%
Non-operating pension costs		(7.6		)		(4.7	)		(62	)%		(14.5		)		(9.6	)		51	%
Other items		(7.7		)		(1.9	)		NM			(7.7		)		(3.8	)		NM
Earnings from continuing operations
before income taxes		116.8				133.4			(12	)%		205.5				217.6			(6	)%
Provision for income taxes		42.7				47.5			10	%		75.3				78.4			4	%
Earnings from continuing operations		$	74.0			85.9			(14	)%		$	130.2			139.2			(6	)%
* Non-GAAP financial measure. See reconciliation of GAAP total revenue to operating revenue in the
Appendix - Non-GAAP Financial Measures section at the end of this release.
Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION - UNAUDITED Periods ended June 30, 2016 and 2015 (Dollars in millions)
		Three Months										Six Months
		2016				2015			B(W)			2016				2015			B(W)
Fleet Management Solutions
Total revenue		$	1,151.5			1,149.3			—	%		$	2,249.4			2,236.5			1	%
Fuel services revenue(a)		(156.3		)		(190.3	)		(18	)%		(291.9		)		(378.3	)		(23	)%
Operating revenue *		$	995.2			959.1			4	%		$	1,957.6			1,858.2			5	%
Segment earnings before income taxes		$	111.2			122.5			(9	)%		$	194.1			212.2			(9	)%
Earnings before income taxes as % of total
revenue		9.7		%		10.7	%					8.6		%		9.5	%
Earnings before income taxes as % of operating
revenue *		11.2		%		12.8	%					9.9		%		11.4	%
Dedicated Transportation Solutions
Total revenue		$	258.3			223.5			16	%		$	503.1			436.2			15	%
Subcontracted transportation		(37.9		)		(14.5	)		161	%		(69.2		)		(29.2	)		137	%
Fuel(a)		(26.0		)		(32.2	)		(19	)%		(49.4		)		(64.4	)		(23	)%
Operating revenue *		$	194.3			176.8			10	%		$	384.6			342.6			12	%
Segment earnings before income taxes		$	16.5			12.4			32	%		$	30.7			21.4			44	%
Earnings before income taxes as % of total
revenue		6.4		%		5.6	%					6.1		%		4.9	%
Earnings before income taxes as % of operating
revenue *		8.5		%		7.0	%					8.0		%		6.2	%
Supply Chain Solutions
Total revenue		$	402.1			396.9			1	%		$	790.8			768.0			3	%
Subcontracted transportation		(54.7		)		(59.8	)		(9	)%		(106.7		)		(118.0	)		(10	)%
Fuel(a)		(15.8		)		(17.0	)		(7	)%		(30.1		)		(34.5	)		(13	)%
Operating revenue *		$	331.6			320.1			4	%		$	654.0			615.5			6	%
Segment earnings before income taxes		$	28.4			27.7			2	%		$	48.2			43.4			11	%
Earnings before income taxes as % of total
revenue		7.1		%		7.0	%					6.1		%		5.6	%
Earnings before income taxes as % of operating
revenue *		8.6		%		8.7	%					7.4		%		7.0	%
* Non-GAAP financial measure. A reconciliation of (1) GAAP total revenue to operating revenue for each business
segment (FMS, DTS and SCS) and (2) segment earnings before taxes (EBT) as % of total revenue to segment EBT as
% of operating revenue for each business segment is set forth in this table.
Note: Amounts may not be additive due to rounding.
(a) Includes intercompany fuel sales from FMS to DTS and SCS.

RYDER SYSTEM, INC. AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION - UNAUDITED KEY PERFORMANCE INDICATORS
		Three months ended June 30,						Six months ended June 30,						Change 2016/2015
		2016			2015			2016			2015			Three Months		Six Months
Full service lease
Average fleet count		133,800			127,700			133,200			127,100			5%		5%
End of period fleet count		134,300			128,700			134,300			128,700			4%		4%
Miles/unit per day change - %(a)		3.0	%		0.2	%		1.5	%		0.2	%
Commercial rental
Average fleet count		39,600			42,500			40,300			41,300			(7)%		(2)%
End of period fleet count		38,700			43,700			38,700			43,700			(11)%		(11)%
Rental utilization - power units		74.7	%		78.1	%		72.5	%		75.8	%		(340) bps		(330) bps
Rental rate change - %(b)		(0.6	)%		3.7	%		(0.3	)%		4.2	%
Customer vehicles under
contract maintenance
Average fleet count		49,700			43,500			48,900			43,100			14%		13%
End of period fleet count		50,200			42,000			50,200			42,000			20%		20%
Customer vehicles under
on-demand maintenance (c)
Fleet serviced during the period		7,600			8,300			14,700			12,600			(8)%		17%
DTS
Average fleet count (d)		8,200			7,600			8,100			7,600			8%		7%
End of period fleet count(d)		8,300			7,700			8,300			7,700			8%		8%
SCS
Average fleet count (d)		6,900			6,200			6,900			6,100			11%		13%
End of period fleet count(d)		7,300			6,300			7,300			6,300			16%		16%
Used vehicle sales (UVS)
Average UVS inventory		8,800			6,100			8,600			5,800			44%		48%
End of period fleet count		9,100			5,900			9,100			5,900			54%		54%
Used vehicles sold		5,100			4,700			9,800			9,000			9%		9%
UVS pricing change - % (e)
Tractors		(15	)%		10	%		(12	)%		12	%
Trucks		(4	)%		11	%		1	%		11	%

Notes:
(a)		Represents the percentage change compared to prior year period in miles driven per vehicle per
		workday on US lease power units.
(b)		Represents percentage change compared to prior year period in average global rental rate per day
		on power units using constant currency.
(c)		Comprised of the number of vehicles serviced under on-demand maintenance agreements. Vehicles
		included in the end of period count may have been serviced more than one time during the
		respective period.
(d)		These vehicle counts are also included within the average fleet counts for full service lease,
		commercial rental and contract maintenance.
(e)		Represents percentage change compared to prior year period in average sales proceeds on used
		vehicle sales using constant currency.

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

RYDER SYSTEM, INC. AND SUBSIDIARIES APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED (Dollars in millions)
OPERATING REVENUE RECONCILIATION
			Three months ended June 30,							Six months ended June 30,
			2016				2015			2016				2015
Total revenue			$	1,703.7			1,662.9			$	3,333.4			3,230.1
Fuel			(161.4		)		(195.9	)			(301.9	)		(390.0	)
Subcontracted transportation			(92.6		)		(74.4	)			(175.8	)		(147.2	)
Operating revenue *			$	1,449.7			1,392.6			$	2,855.7			2,692.9

OPERATING REVENUE GROWTH EXCLUDING FOREIGN EXCHANGE RECONCILIATION
		Second Quarter									Year-to-Date
		2016 vs 2015 Growth			Fx Impact(a)			Growth excl Fx*			2016 vs 2015 Growth			Fx Impact(a)			Growth excl Fx*
RSI Total Revenue		2	%		(1	)%		3	%		3	%		(1	)%		4	%
RSI Operating Revenue*		4	%		(1	)%		5	%		6	%		(1	)%		7	%
FMS Total Revenue		—	%		(1	)%		1	%		1	%		(1	)%		2	%
FMS Operating Revenue*		4	%		(1	)%		5	%		5	%		(1	)%		6	%
SCS Total Revenue		1	%		(2	)%		3	%		3	%		(2	)%		5	%
SCS Operating Revenue*		4	%		(1	)%		5	%		6	%		(2	)%		8	%
Full Service Lease Revenue		9	%		(1	)%		10	%		8	%		(1	)%		9	%
Commercial Rental Revenue		(10	)%		(1	)%		(9	)%		(6	)%		(1	)%		(5	)%

TOTAL CASH GENERATED/FREE CASH FLOW RECONCILIATION
				Six months ended June 30,
				2016				2015
Net cash provided by operating activities from continuing operations				$	762.7			658.7
Proceeds from sales (primarily revenue earning equipment) (b)				252.0				211.8
Collections on direct finance leases and other items (b)				44.0				33.9
Total cash generated *				1,058.6				904.4
Purchases of property and revenue earning equipment (b)				(1,120.2		)		(1,329.2	)
Free cash flow **				$	(61.6	)		(424.8	)

Notes:
(a)		FX impact was calculated by dividing the results for the current and prior year periods by the
		exchange rates in effect on June 30, 2015, which was the last day of the prior year period,
		rather than the actual exchange rates in effect as of June 30, 2016.
(b)		Included in cash flows from investing activities.

*Non-GAAP financial measure.

** Non-GAAP financial measure. We refer to the net amount of cash generated from operating activities and

investing activities (excluding changes in restricted cash and acquisitions) from continuing operations as

“free cash flow”. We calculate free cash flow as the sum of net cash provided by operating activities and

net cash provided by the sale of revenue earning equipment and operating property and equipment,

collections on direct finance leases and other cash inflows from investing activities, less purchases of

property and revenue earning equipment.

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED (Dollars in millions)
ADJUSTED RETURN ON CAPITAL RECONCILIATION
		Twelve months ended June 30,
		2016				2015
Net earnings (12-month rolling period)		$	297.0			232.6
+ Restructuring and other items		23.4				120.5
+ Income taxes		160.5				126.3
Adjusted earnings before income taxes		481.0				479.4
+ Adjusted interest expense(a)		149.9				149.4
- Adjusted income taxes (b)		(222.8		)		(225.7	)
= Adjusted net earnings for ROC (numerator) [A]		$	408.1			403.1
Average total debt		$	5,498.4			4,851.1
Average off-balance sheet debt		1.5				1.6
Average shareholders' equity		1,991.3				1,887.8
Adjustment to equity (c)		2.8				17.9
Adjusted average total capital (denominator) [B]		$	7,494.0			6,758.4
Adjusted ROC * [A]/[B]		5.4		%		6.0	%

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

* Non-GAAP financial measure. Non-GAAP elements of the calculation have been reconciled to the corresponding

GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average total debt

and average shareholders' equity to adjusted average total capital set forth in this table.

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED (In millions, except per share amounts)
COMPARABLE EARNINGS/EARNINGS BEFORE INCOME TAX/TAX RATE RECONCILIATION
				2016
		Consolidated Statements of Earnings Line Item		Three Months				Six Months
Earnings from continuing operations before income taxes				$	116.8			205.5
Non-operating pension costs		SG&A		7.6				14.5
Pension-related charge		SG&A		7.7				7.7
Comparable earnings from continuing operations before income taxes*				132.0				227.6
Provision for income taxes				(42.7		)		(75.3	)
Income tax effects of non-GAAP adjustments**				(6.0		)		(8.9	)
Comparable provision for income taxes**				(48.7		)		(84.1	)
Earnings from continuing operations				74.0				130.2
Non-operating pension costs		SG&A		4.4				8.4
Pension-related charge		SG&A		4.8				4.8
Comparable earnings from continuing operations*				$	83.3			143.5
Tax rate on continuing operations				36.6		%		36.6	%
Income tax effects of non-GAAP adjustments**				0.3		%		0.4	%
Comparable tax rate on continuing operations**				36.9		%		37.0	%

				2015
		Consolidated Statements of Earnings Line Item		Three Months				Six Months
Earnings from continuing operations before income taxes				$	133.4			217.6
Non-operating pension costs		SG&A		4.7				9.6
Professional fees		SG&A		1.9				3.8
Comparable earnings from continuing operations before income taxes*				140.1				231.0
Provision for income taxes				(47.5		)		(78.4	)
Income tax effects of non-GAAP adjustments**				(2.7		)		(5.5	)
Tax law change		Provision for income taxes		(1.9		)		(1.9	)
Comparable provision for income taxes**				(52.1		)		(85.7	)
Earnings from continuing operations				85.9				139.2
Non-operating pension costs		SG&A		2.7				5.5
Professional fees		SG&A		1.2				2.4
Tax law change		Provision for income taxes		(1.9		)		(1.9	)
Comparable earnings from continuing operations*				$	88.0			145.2
Tax rate on continuing operations				35.6		%		36.0	%
Income tax effects of non-GAAP adjustments**				1.5		%		1.1	%
Comparable tax rate on continuing operations**				37.1		%		37.1	%

* Non-GAAP financial measure.

** The comparable provision for income taxes is computed using the same methodology as the GAAP provision for income taxes.

Income tax effects of non-GAAP adjustments are calculated based on the statutory tax rates of the jurisdictions to which

the non-GAAP adjustments relate.

Note: Amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
COMPARABLE EARNINGS PER SHARE FORECAST RECONCILIATION
Comparable earnings per share from continuing operations forecast:*		Third Quarter 2016		Full Year 2016
EPS from continuing operations		$1.57 - $1.64		$5.49 - 5.64
Non-operating pension costs, net of tax		0.08		0.32
Pension-related charge		—		0.09
Comparable EPS from continuing operations forecast*		$1.65 - 1.72		$5.90 - $6.05
Note: Amounts may not be additive due to rounding.

TOTAL CASH GENERATED/FREE CASH FLOW FORECAST RECONCILIATION
		2016 Forecast
Net Cash Provided by Operating Activities from Continuing Operations		$	1,606
Proceeds from sales (primarily revenue earning equipment) (1)		465
Collections of direct finance leases (1)		82
Other, net (1)		4
Total cash generated*		2,157
Capital expenditures (1)		(1,957		)
Free cash flow **		$	200
Memo:
Net cash used in financing activities		$	183
Net cash used in investing activities		$	1,405
(1)  Included in cash flows from investing activities.

* Non-GAAP financial measure.

** Non-GAAP financial measure. We refer to the net amount of cash generated from operating

activities and investing activities (excluding changes in restricted cash and acquisitions) from

continuing operations as “free cash flow”. We calculate free cash flow as the sum of net cash

provided by operating activities and net cash provided by the sale of revenue earning equipment and

operating property and equipment, collections on direct finance leases and other cash inflows from

investing activities, less purchases of property and revenue earning equipment.