UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 25, 2007
RYDER SYSTEM, INC.
(Exact name of registrant as specified in its charter)
 	 	 	 	 	
Florida	 	1-4364	 	59-0739250	
 	 	 	 	 	
(State or other jurisdiction of incorporation)	 	(Commission File Number)	 	(I.R.S. Employer Identification No.)	
 	 	 	
11690 NW 105 th Street	 	 	
Miami, Florida	 	33178	
 	 	 	
(Address of Principal Executive Offices)	 	(Zip Code)	
 	 	 	
Registrant’s telephone number, including area code:	 	(305) 500-3726	
Not Applicable
 
(Former name or former address, if changed since last report)
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

      o   	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

      o   	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

      o   	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

      o   	 	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

   

 
 
Item 2.02 Results of Operations and Financial Condition
On July 25, 2007, we issued a press release reporting our financial results for the three and six months ended June 30, 2007 (the “Press Release”). We also hosted a conference call and webcast on July 25, 2007 during which we made a presentation on our financial results for the three and six months ended June 30, 2007 (the “Presentation”). The Press Release and the Presentation are available on our website at www.ryder.com.
The Press Release and the Presentation include information regarding our 2006 net earnings and earnings per share excluding tax changes, which are non-GAAP financial measures as defined by SEC regulations. We believe that these non-GAAP financial measures provide useful information to investors as the measures exclude from our GAAP earnings and earnings per share tax law changes which provided benefits unrelated to our ongoing business operations. Additional information regarding non-GAAP financial measures can be found in the Press Release, the Presentation and our reports filed with the SEC.
The information in this Report, including Exhibits 99.1 and 99.2, is being furnished pursuant to Item 2.02 of Form 8-K and General Instruction B.2 thereunder and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference to such filing.
Item 9.01(d) Exhibits
     The following exhibits are furnished as part of this Report on Form 8-K:

Exhibit 99.1	 	Press Release, dated July 25, 2007, relating to Ryder System, Inc.’s financial results for the three and six months ended June 30, 2007.	
 	 	 	
Exhibit 99.2	 	Presentation prepared for a conference call and webcast held on July 25, 2007, relating to Ryder System, Inc.’s financial results for the three and six months ended June 30, 2007.	
 2 

 
SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 	 	 	 	 	
Date: July 25, 2007 	RYDER SYSTEM, INC.
(Registrant)

 	 	
 	By:  	/s/ Mark T. Jamieson  	 	
 	 	Mark T. Jamieson, Executive Vice 	 	
 	 	President and Chief Financial Officer 	 	
 	
 3 

EXHIBIT 99.1
News Release
 	 	 	 	 	
Contacts:	 	Media:	 	Investor Relations:	
 	 	David Bruce	 	Bob Brunn	
 	 	(305) 500-4999	 	(305) 500-4053	
RYDER REPORTS SECOND QUARTER 2007 RESULTS

 	•	 	GAAP EPS were $1.07 vs. $1.13 (Prior Period Included $0.11 Tax Benefit)	
 		
 	•	 	Comparable EPS Increased 5% to $1.07 from $1.02 in 2006	
 		
 	•	 	Total Revenue and Operating Revenue Up 4%	
 		
 	•	 	Full-Year EPS Forecast Range Narrowed to $4.30 to $4.35	
      MIAMI, July 25, 2007 — Ryder System, Inc. (NYSE: R), a global leader in transportation and supply chain management solutions, today reported earnings per diluted share (EPS) for the three-month period ended June 30, 2007 were $1.07, compared with $1.13 in the year-earlier period. EPS in the year-earlier period included an $0.11 income tax benefit related to changes in Texas and Canadian income tax laws. Excluding the tax benefit in 2006, EPS for the second quarter were up 5% from comparable EPS of $1.02 in the year-earlier period. EPS in the current period included $0.01 of restructuring costs related primarily to early debt retirement.
     Net earnings for the second quarter of 2007 were $65.1 million, compared with $70.3 million in the year-earlier period. Net earnings in the year-earlier period included an income tax benefit of $6.8 million related to changes in Texas and Canadian income tax laws. Excluding the tax benefit in the prior year, second quarter 2007 net earnings were up 3%.
     Revenue for the second quarter of 2007 was $1.66 billion, up 4% from $1.60 billion in the same period last year driven by contractual revenue growth in the Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS) business segments. Operating revenue (revenue excluding fuel and subcontracted transportation) was $1.16 billion, up 4% compared with $1.11 billion in the year-earlier period. Fleet Management Solutions business segment revenue declined 1% due to substantially lower commercial rental and fuel services revenue which offset contractual revenue growth of 7%. SCS business segment revenue grew 16% in the second quarter, driven by new and expanded business. Dedicated Contract Carriage (DCC) business segment revenue decreased 2% compared with the same period in the prior year driven by lower volumes of managed subcontracted transportation and fuel cost pass-throughs.

 

     Commenting on the Company’s second quarter performance, Ryder Chairman and CEO Greg Swienton said, “Our team was able to deliver a solid quarter despite headwinds from a commercial rental market that is considerably weaker than expected. Results continued to be driven by the growth of our core contractual businesses. In view of market conditions, we’re particularly pleased with the growth of our contractual Fleet Management Solutions business segment which included a 6% increase in full service lease revenue and growth of 18% in contract maintenance revenue. In our Supply Chain Solutions business, which is also contract based, international operations showed significant growth in the quarter.”
Year-to-Date Operating Results
     Revenue for the six months ended June 30, 2007 was $3.25 billion, up 5% from $3.09 billion in the same period of 2006. Operating revenue (revenue excluding fuel and subcontracted transportation) for the first half of 2007 was $2.28 billion, up 5% from $2.17 billion in the first half of 2006. Ryder’s net earnings in the first half of 2007 were $116.4 million, compared with $117.9 million in the year-earlier period. EPS were $1.90 for the first six months of 2007 compared with $1.91 for the same period of 2006. Excluding the previously discussed income tax benefit in 2006, year-to-date 2007 net earnings and EPS were up 5% and 6%, respectively, compared with the year-earlier period. EPS in the first half of 2007 included $0.02 of restructuring costs related primarily to early debt retirement and costs incurred in connection with previously announced cost-savings initiatives. 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.
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 and excludes restructuring items.
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,
 2 

 

maintenance, management, and disposal of vehicles. Ryder’s commercial rental service offers customers a method to expand their fleets in order to address short-term capacity needs.
     In the FMS business segment, revenue in the second quarter of 2007 was $1.04 billion, down 1% compared with $1.05 billion in the year-earlier period. Fuel services revenue in the second quarter of 2007 decreased 8% compared with the same period in 2006 due primarily to reduced volume. Operating revenue (revenue excluding fuel) in the second quarter of 2007 was $742.2 million, up 2% compared with $730.1 million in the year-earlier period. Operating revenue grew primarily as a result of a 7% increase in contractual revenue, which includes full service lease and contract maintenance, largely offset by a decrease in commercial rental revenue. Full service lease revenue increased 6% in the second quarter of 2007 due to growth in all geographic markets served. Contract maintenance revenue increased 18% in the second quarter of 2007 due primarily to new sales activity. Commercial rental revenue, which accounts for less than 10% of the Company’s total revenue, decreased 15% due to weak market demand in North America.
     The FMS business segment’s NBT increased to $97.5 million in the second quarter of 2007, up 3% compared with $94.9 million in the same period of 2006. This increase was related primarily to improved contractual business performance as well as lower pension and incentive-based compensation costs. Those results were partially offset by a decline in commercial rental results and higher carrying costs on the Company’s increased inventory of used vehicles held for sale. Gains from the sale of used vehicles decreased in the second quarter compared with the year-earlier period, driven by lower pricing, partially offset by a greater number of vehicles sold. Business segment NBT as a percentage of operating revenue was 13.1% in the second quarter of 2007, up 10 basis points compared with 13.0% 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 materials and components 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.
 3 

 

     In the SCS business segment, second quarter 2007 revenue totaled $584.0 million, up 16% from $502.1 million in the comparable period in 2006. Revenue grew primarily due to new and expanded business, and higher volumes particularly in international markets served. Second quarter 2007 operating revenue (revenue excluding subcontracted transportation) was $330.0 million, up 13% compared with $291.3 million in the year-earlier period.
     The SCS business segment’s NBT was $15.5 million in the second quarter of 2007, down 14% from $18.1 million in the same quarter of 2006. Excluding a $2.5 million benefit in the year-earlier period related to a contract termination, business segment earnings were flat for the quarter. Comparative business segment earnings benefited from new and expanded business, offset by a significant automotive plant closure. Second quarter 2007 NBT for the business segment as a percentage of operating revenue was 4.7%, compared with 5.3% in the same quarter of 2006 (excluding the contract termination benefit).
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 2007 revenue totaled $141.1 million, down 2% compared with $143.5 million in the second quarter of 2006. Operating revenue (revenue excluding subcontracted transportation) in the second quarter of 2007 was $138.1 million, down 1% from $139.1 million in the year-earlier period. Revenue decreased due to lower subcontracted transportation revenue and fuel cost pass-throughs.
     The DCC business segment’s NBT in the second quarter of 2007 was $12.5 million, up 12% compared with $11.2 million in the second quarter of 2006. Business segment NBT was positively impacted by lower safety and insurance costs and better operating performance. Business segment NBT as a percentage of operating revenue was 9.1% in the second quarter of 2007, up 110 basis points from 8.0% in the year-earlier period.
 4 

 

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 2007, CSS costs were $48.2 million, compared with $48.9 million in the year-earlier period. The second quarter of 2007 reflects lower incentive-based compensation partially offset by a charge of $1.8 million related to an adjustment in the amortization period of restricted stock units. The second quarter 2006 costs included a charge of $1.3 million related to the settlement of litigation associated with a discontinued operation.
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 $788.1 million for the first half of 2007, compared with $814.5 million in the same period of 2006. Net capital expenditures (including proceeds from the sale of assets) were $442.7 million for the first half of 2007, down from $634.8 million in the same period of 2006. The decrease in capital expenditures reflects lower lease vehicle spending for replacement and expansion of customer fleets.
     The Company anticipates full-year 2007 capital expenditures to be approximately $1.26 billion, down from $1.76 billion in 2006, due to planned lower lease replacement activity. This represents a decrease of approximately $70 million from the Company’s previous forecast, due to lower commercial rental spending.
 5 

 

Cash Flow and Leverage
     Operating cash flow through June 30, 2007 was $505.2 million, up 69% from $298.3 million in the same period of 2006. Total cash generated (including proceeds from used vehicle sales) through June 30, 2007, was $883.2 million, up 72% from $513.3 million in the same period of 2006. Free cash flow through June 30, 2007 was a negative $2.0 million compared with negative $266.9 million in the same period of 2006, primarily due to lower income tax payments, which declined by $95.3 million, and a $150.3 million sale-leaseback transaction. On a full-year basis, the Company’s free cash flow forecast is expected to be $305 million, up from a previous forecast of $235 million.
     Balance sheet debt as of June 30, 2007 increased by $83.0 million compared with year-end 2006, due primarily to stock repurchases. The leverage ratio for balance sheet debt as of June 30, 2007 was 161%, compared with 164% at year-end 2006. Total obligations to equity as of June 30, 2007 were 172%, up from 168% at year-end 2006. The full-year forecast for total obligations to equity is 157%, up from a previous forecast of 140%. 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 committed to leveraging our business model improvements and asset management capabilities to navigate effectively through a challenging overall market environment. In Fleet Management Solutions, we’re focused on driving continued growth in our contractual services and have taken appropriate steps to align our commercial rental fleet with demand conditions in the short-term rental market. In Supply Chain Solutions, we anticipate continued revenue expansion, although at a modest rate, partly due to the ongoing impact of a significant automotive plant closure. We also remain particularly attuned to cost management opportunities, in view of the current environment.”
     He continued, “We are narrowing our full-year 2007 EPS forecast to a range of $4.30 to $4.35 from a previous range of $4.30 to $4.40 per share. Additionally, we are establishing a third quarter EPS forecast range of $1.20 to $1.23.” The Company’s third quarter EPS forecast
 6 

 

excludes any charges related to Michigan tax law changes enacted earlier this month, the earnings impact of which is currently being assessed.
About Ryder
     Ryder provides leading-edge transportation, logistics, and supply chain management solutions worldwide. Ryder’s stock is a component of the Dow Jones Transportation Average and the Standard & Poor’s 500 Index. Ryder ranks 362 nd on the Fortune 500 and 1,458 th on the Forbes Global 2000. For more information on Ryder System, Inc., visit 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 sales growth initiatives in our Fleet Management Solutions (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, new accounting pronouncements, rules or interpretations, 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 www.ryder.com .
Conference Call and Webcast Information:
Ryder’s earnings conference call and webcast is scheduled for Wednesday, July 25, 2007, 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.

Þ	 	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 www.mymeetings.com/nc/join/ using the Conference Number: RG7857549 and Passcode: RYDER .	
 7 

 

			
Þ	 	To access audio replays of the conference and view a presentation of Ryder’s earnings results: Dial 1-866-509-3699 (outside U.S. dial 1-203-369-1911) and use the Passcode: 7025, then view the presentation by visiting the Investors area of Ryder’s website at http://investors.ryder.com . A podcast of the call will also be available online within 24 hours after the end of the call at http://investors.ryder.com .	
46-07
 8 

 

RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS — UNAUDITED
Periods ended June 30, 2007 and 2006
(In millions, except per share amounts)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months	 	 	Six Months	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 		
Revenue	 	$	1,658.0	 	 	 	1,595.7	 	 	$	3,252.1	 	 	 	3,092.0	 	

Operating expense	 	 	697.7	 	 	 	703.4	 	 	 	1,361.5	 	 	 	1,364.0	 	
Salaries and employee-related costs	 	 	344.7	 	 	 	344.0	 	 	 	698.9	 	 	 	681.5	 	
Subcontracted transportation	 	 	257.0	 	 	 	215.3	 	 	 	504.2	 	 	 	417.5	 	
Depreciation expense	 	 	202.3	 	 	 	183.4	 	 	 	398.5	 	 	 	361.6	 	
Gains on vehicle sales, net	 	 	(13.5	)	 	 	(15.0	)	 	 	(28.6	)	 	 	(27.8	)	
Equipment rental	 	 	26.0	 	 	 	25.4	 	 	 	49.9	 	 	 	50.9	 	
Interest expense	 	 	40.8	 	 	 	35.0	 	 	 	80.2	 	 	 	66.5	 	
Miscellaneous income, net	 	 	(2.5	)	 	 	(0.4	)	 	 	(3.4	)	 	 	(5.8	)	
Restructuring and other charges (recoveries), net	 	 	1.2	 	 	 	—	 	 	 	1.7	 	 	 	(0.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	1,553.7	 	 	 	1,491.1	 	 	 	3,062.9	 	 	 	2,908.2	 	

Earnings before income taxes	 	 	104.3	 	 	 	104.6	 	 	 	189.2	 	 	 	183.8	 	
Provision for income taxes	 	 	(39.2	)	 	 	(34.3	)	 	 	(72.8	)	 	 	(65.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings	 	$	65.1	 	 	 	70.3	 	 	$	116.4	 	 	 	117.9	 	

Earnings per common share — Diluted:	 	$	1.07	 	 	 	1.13	 	 	$	1.90	 	 	 	1.91	 	

Weighted-average shares outstanding — Diluted	 	 	61.1	 	 	 	62.0	 	 	 	61.1	 	 	 	61.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Note: Certain prior period amounts have been reclassified to conform to current year presentation.
 9 

 

RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
PRELIMINARY AND SUBJECT TO RECLASSIFICATION
(Dollars in millions)
 	 	 	 	 	 	 	 	 	
 	 	(unaudited)	 	 	 	 	
 	 	June 30,	 	 	December 31,	 	
 	 	2007	 	 	2006	 	
 		
Assets:	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	110.0	 	 	 	128.6	 	
Other current assets	 	 	1,140.0	 	 	 	1,133.2	 	
Revenue earning equipment, net	 	 	4,601.9	 	 	 	4,509.3	 	
Operating property and equipment, net	 	 	515.1	 	 	 	499.0	 	
Other assets	 	 	563.0	 	 	 	558.8	 	
 	 	 	 	 	 	 	
 	 	$	6,930.0	 	 	 	6,828.9	 	

Liabilities and shareholders’ equity:	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Short-term debt / current portion of long-term debt	 	$	151.6	 	 	 	332.7	 	
Other current liabilities	 	 	854.2	 	 	 	934.9	 	
Long-term debt	 	 	2,748.4	 	 	 	2,484.2	 	
Other non-current liabilities (including deferred income taxes)	 	 	1,376.7	 	 	 	1,356.3	 	
Shareholders’ equity	 	 	1,799.1	 	 	 	1,720.8	 	
 	 	 	 	 	 	 	
 	 	$	6,930.0	 	 	 	6,828.9	 	
 	 	 	 	 	 	 	
SELECTED KEY RATIOS
 	 	 	 	 	 	 	 	 	
 	 	June 30,	 	 	December 31,	 	
 	 	2007	 	 	2006	 	
 		
Debt to equity	 	 	161	%	 	 	164	%	
Total obligations to equity (a) *	 	 	172	%	 	 	168	%	
 	 	 	 	 	 	 	 	 	
 	 	Twelve months ended June 30,	 	
 	 	2007	 	 	2006	 	
 		
Return on average shareholders’ equity (b)	 	 	14.4	%	 	 	15.3	%	
Return on average assets (b)	 	 	3.6	%	 	 	3.9	%	
Return on capital*	 	 	7.6	%	 	 	8.0	%	

(a)	 	Total obligations represent debt plus off-balance sheet equipment obligations.	
 		
(b)	 	Includes the effect of accounting changes.	
 		
*	 	Non-GAAP financial measure; see reconciliation to closest GAAP financial measure included within this release.	
 10 

 

RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT REVENUE AND EARNINGS — UNAUDITED
Periods ended June 30, 2007 and 2006
(Dollars in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months	 	 	Six Months	 	
 	 	2007	 	 	2006	 	 	B(W)	 	 	2007	 	 	2006	 	 	B(W)	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet Management Solutions:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Full service lease	 	$	489.2	 	 	 	460.1	 	 	 	6	%	 	$	965.2	 	 	 	911.5	 	 	 	6	%	
Contract maintenance	 	 	40.0	 	 	 	34.0	 	 	 	18	%	 	 	77.2	 	 	 	66.8	 	 	 	16	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contractual revenue	 	 	529.2	 	 	 	494.1	 	 	 	7	%	 	 	1,042.4	 	 	 	978.3	 	 	 	7	%	
Contract-related maintenance	 	 	50.1	 	 	 	47.8	 	 	 	5	%	 	 	102.2	 	 	 	95.1	 	 	 	7	%	
Commercial rental	 	 	145.3	 	 	 	170.8	 	 	 	(15	%)	 	 	276.3	 	 	 	320.8	 	 	 	(14	%)	
Other	 	 	17.6	 	 	 	17.4	 	 	 	1	%	 	 	35.2	 	 	 	35.4	 	 	 	(1	%)	
Fuel	 	 	295.1	 	 	 	319.4	 	 	 	(8	%)	 	 	569.3	 	 	 	601.0	 	 	 	(5	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Fleet Management Solutions	 	 	1,037.3	 	 	 	1,049.5	 	 	 	(1	%)	 	 	2,025.4	 	 	 	2,030.6	 	 	 	0	%	
Supply Chain Solutions	 	 	584.0	 	 	 	502.1	 	 	 	16	%	 	 	1,150.4	 	 	 	971.6	 	 	 	18	%	
Dedicated Contract Carriage	 	 	141.1	 	 	 	143.5	 	 	 	(2	%)	 	 	279.6	 	 	 	282.2	 	 	 	(1	%)	
Eliminations	 	 	(104.4	)	 	 	(99.4	)	 	 	(5	%)	 	 	(203.3	)	 	 	(192.4	)	 	 	(6	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	1,658.0	 	 	 	1,595.7	 	 	 	4	%	 	$	3,252.1	 	 	 	3,092.0	 	 	 	5	%	

Operating Revenue: *	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet Management Solutions	 	$	742.2	 	 	 	730.1	 	 	 	2	%	 	$	1,456.1	 	 	 	1,429.6	 	 	 	2	%	
Supply Chain Solutions	 	 	330.0	 	 	 	291.3	 	 	 	13	%	 	 	652.1	 	 	 	563.6	 	 	 	16	%	
Dedicated Contract Carriage	 	 	138.1	 	 	 	139.1	 	 	 	(1	%)	 	 	273.7	 	 	 	272.6	 	 	 	0	%	
Eliminations	 	 	(53.2	)	 	 	(49.4	)	 	 	(8	%)	 	 	(105.6	)	 	 	(97.2	)	 	 	(9	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating revenue	 	$	1,157.1	 	 	 	1,111.1	 	 	 	4	%	 	$	2,276.3	 	 	 	2,168.6	 	 	 	5	%	

Business segment earnings:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings before income taxes:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fleet Management Solutions	 	$	97.5	 	 	 	94.9	 	 	 	3	%	 	$	178.3	 	 	 	169.8	 	 	 	5	%	
Supply Chain Solutions	 	 	15.5	 	 	 	18.1	 	 	 	(14	%)	 	 	26.9	 	 	 	28.7	 	 	 	(6	%)	
Dedicated Contract Carriage	 	 	12.5	 	 	 	11.2	 	 	 	12	%	 	 	22.9	 	 	 	19.6	 	 	 	16	%	
Eliminations	 	 	(8.0	)	 	 	(8.3	)	 	 	4	%	 	 	(16.9	)	 	 	(16.0	)	 	 	(5	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	117.5	 	 	 	115.9	 	 	 	1	%	 	 	211.2	 	 	 	202.1	 	 	 	5	%	
Unallocated Central Support Services	 	 	(12.0	)	 	 	(11.3	)	 	 	(6	%)	 	 	(20.3	)	 	 	(18.5	)	 	 	(10	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings before restructuring and other (charges) recoveries, net and income taxes	 	 	105.5	 	 	 	104.6	 	 	 	1	%	 	 	190.9	 	 	 	183.6	 	 	 	4	%	
Restructuring and other (charges) recoveries, net	 	 	(1.2	)	 	 	—	 	 	NA	 	 	(1.7	)	 	 	0.2	 	 	NA	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings before income taxes	 	 	104.3	 	 	 	104.6	 	 	 	0	%	 	 	189.2	 	 	 	183.8	 	 	 	3	%	
Provision for income taxes	 	 	(39.2	)	 	 	(34.3	)	 	 	(14	%)	 	 	(72.8	)	 	 	(65.9	)	 	 	(10	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings	 	$	65.1	 	 	 	70.3	 	 	 	(7	%)	 	$	116.4	 	 	 	117.9	 	 	 	(1	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Non-GAAP financial measure
Note: Amounts may not recalculate due to rounding.
 11 

 

RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION — UNAUDITED
Periods ended June 30, 2007 and 2006
(Dollars in Millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months	 	 	Six Months	 	
 	 	2007	 	 	2006	 	 	B(W)	 	 	2007	 	 	2006	 	 	B(W)	 	
 		
Fleet Management Solutions	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	1,037.3	 	 	 	1,049.5	 	 	 	(1	%)	 	$	2,025.4	 	 	 	2,030.6	 	 	 	0	%	
Fuel revenue	 	 	(295.1	)	 	 	(319.4	)	 	 	(8	%)	 	 	(569.3	)	 	 	(601.0	)	 	 	(5	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating revenue *	 	$	742.2	 	 	 	730.1	 	 	 	2	%	 	$	1,456.1	 	 	 	1,429.6	 	 	 	2	%	

Segment earnings before income taxes	 	$	97.5	 	 	 	94.9	 	 	 	3	%	 	$	178.3	 	 	 	169.8	 	 	 	5	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings before income taxes as % of total revenue	 	 	9.4	%	 	 	9.0	%	 	 	 	 	 	 	8.8	%	 	 	8.4	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings before income taxes as % of operating revenue *	 	 	13.1	%	 	 	13.0	%	 	 	 	 	 	 	12.2	%	 	 	11.9	%	 	 	 	 	

Supply Chain Solutions	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	584.0	 	 	 	502.1	 	 	 	16	%	 	$	1,150.4	 	 	 	971.6	 	 	 	18	%	
Subcontracted transportation	 	 	(254.0	)	 	 	(210.8	)	 	 	20	%	 	 	(498.3	)	 	 	(408.0	)	 	 	22	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating revenue *	 	$	330.0	 	 	 	291.3	 	 	 	13	%	 	$	652.1	 	 	 	563.6	 	 	 	16	%	

Segment earnings before income taxes	 	$	15.5	 	 	 	18.1	 	 	 	(14	%)	 	$	26.9	 	 	 	28.7	 	 	 	(6	%)	

Earnings before income taxes as % of total revenue	 	 	2.6	%	 	 	3.6	%	 	 	 	 	 	 	2.3	%	 	 	3.0	%	 	 	 	 	

Earnings before income taxes as % of operating revenue *	 	 	4.7	%	 	 	6.2	%	 	 	 	 	 	 	4.1	%	 	 	5.1	%	 	 	 	 	

Memo: Fuel costs	 	$	31.3	 	 	 	27.8	 	 	 	(13	%)	 	$	59.2	 	 	 	52.7	 	 	 	(12	%)	

Dedicated Contract Carriage	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	141.1	 	 	 	143.5	 	 	 	(2	%)	 	$	279.6	 	 	 	282.2	 	 	 	(1	%)	
Subcontracted transportation	 	 	(3.0	)	 	 	(4.4	)	 	 	(33	%)	 	 	(5.9	)	 	 	(9.6	)	 	 	(38	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating revenue *	 	$	138.1	 	 	 	139.1	 	 	 	(1	%)	 	$	273.7	 	 	 	272.6	 	 	 	0	%	

Segment earnings before income taxes	 	$	12.5	 	 	 	11.2	 	 	 	12	%	 	$	22.9	 	 	 	19.6	 	 	 	16	%	

Earnings before income taxes as % of total revenue	 	 	8.9	%	 	 	7.8	%	 	 	 	 	 	 	8.2	%	 	 	7.0	%	 	 	 	 	

Earnings before income taxes as % of operating revenue *	 	 	9.1	%	 	 	8.0	%	 	 	 	 	 	 	8.4	%	 	 	7.2	%	 	 	 	 	

Memo: Fuel costs	 	$	26.5	 	 	 	27.5	 	 	 	4	%	 	$	51.2	 	 	 	52.5	 	 	 	3	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Non-GAAP financial measure
Note: Amounts may not recalculate due to rounding.
 12 

 

RYDER SYSTEM, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS — PRELIMINARY AND UNAUDITED
(In millions, except per share amounts)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
OPERATING REVENUE RECONCILIATION	 	Three Months	 	 	Six Months	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 		
Total revenue	 	$	1,658.0	 	 	 	1,595.7	 	 	$	3,252.1	 	 	 	3,092.0	 	
Fuel services and subcontracted transportation revenue	 	 	(552.1	)	 	 	(534.6	)	 	 	(1,073.5	)	 	 	(1,018.6	)	
Fuel eliminations	 	 	51.2	 	 	 	50.0	 	 	 	97.7	 	 	 	95.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating revenue *	 	$	1,157.1	 	 	 	1,111.1	 	 	$	2,276.3	 	 	 	2,168.6	 	

CASH FLOW RECONCILIATION	 	Six months ended June 30,	 	 	 	 	 	 	 	 	 	
 	 	2007	 	 	2006	 	 	 	 	 	 	 	 	 	
 		
Net cash provided by operating activities	 	$	505.2	 	 	 	298.3	 	 	 	 	 	 	 	 	 	
Proceeds from sales (primarily revenue earning equipment)	 	 	195.1	 	 	 	179.6	 	 	 	 	 	 	 	 	 	
Proceeds from sale & leaseback of assets	 	 	150.3	 	 	 	—	 	 	 	 	 	 	 	 	 	
Collections on direct finance leases	 	 	31.8	 	 	 	33.8	 	 	 	 	 	 	 	 	 	
Other, net	 	 	0.8	 	 	 	1.6	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total cash generated *	 	 	883.2	 	 	 	513.3	 	 	 	 	 	 	 	 	 	
Capital expenditures	 	 	(885.2	)	 	 	(776.1	)	 	 	 	 	 	 	 	 	
Acquisitions	 	 	—	 	 	 	(4.1	)	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Free cash flow *	 	$	(2.0	)	 	 	(266.9	)	 	 	 	 	 	 	 	 	

DEBT TO EQUITY RECONCILIATION	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	June 30,	 	 	 	 	 	 	December 31,	 	 	 	 	
 	 	2007	 	 	% to Equity	 	 	2006	 	 	% to Equity	 	
 		
On-balance sheet debt	 	$	2,900.0	 	 	 	161	%	 	$	2,816.9	 	 	 	164	%	
Off-balance sheet debt — PV of minimum lease payments and guaranteed residual values under operating leases for vehicles (a)	 	 	195.6	 	 	 	 	 	 	 	78.0	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total obligations *	 	$	3,095.6	 	 	 	172	%	 	$	2,894.9	 	 	 	168	%	

NET EARNINGS AND EPS RECONCILIATION	 	Three Months	 	 	Six Months	 	
 	 	2006 Net Earnings	 	 	2006 EPS	 	 	2006 Net Earnings	 	 	2006 EPS	 	
 		
Net earnings	 	$	70.3	 	 	 	1.13	 	 	$	117.9	 	 	 	1.91	 	
Tax changes	 	 	(6.8	)	 	 	(0.11	)	 	 	(6.8	)	 	 	(0.11	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings excluding tax changes *	 	$	63.5	 	 	 	1.02	 	 	$	111.1	 	 	 	1.80	 	

RETURN ON CAPITAL RECONCILIATION	 	Twelve months ended June 30,	 	 	 	 	 	 	 	 	 	
 	 	2007	 	 	2006	 	 	 	 	 	 	 	 	 	
 		
Net earnings (12-month rolling period)	 	$	247.5	 	 	 	240.0	 	 	 	 	 	 	 	 	 	
- Discontinued operations	 	 	—	 	 	 	(1.7	)	 	 	 	 	 	 	 	 	
+ Cumulative effect of change in accounting principle	 	 	—	 	 	 	2.4	 	 	 	 	 	 	 	 	 	
+ Income taxes	 	 	150.9	 	 	 	142.4	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
   Adjusted earnings before income taxes	 	 	398.4	 	 	 	383.1	 	 	 	 	 	 	 	 	 	
+ Adjusted interest expense (b)	 	 	160.4	 	 	 	135.6	 	 	 	 	 	 	 	 	 	
- Adjusted income taxes (c)	 	 	(211.7	)	 	 	(202.2	)	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
= Adjusted net earnings for ROC (numerator)	 	$	347.1	 	 	 	316.5	 	 	 	 	 	 	 	 	 	

Average total debt	 	$	2,755.5	 	 	 	2,264.7	 	 	 	 	 	 	 	 	 	
+ Average off-balance sheet debt	 	 	97.7	 	 	 	124.2	 	 	 	 	 	 	 	 	 	
+ Average adjusted total shareholders’ equity (d)	 	 	1,711.6	 	 	 	1,562.2	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
= Adjusted average total capital (denominator)	 	$	4,564.8	 	 	 	3,951.1	 	 	 	 	 	 	 	 	 	

Adjusted ROC *	 	 	7.6	%	 	 	8.0	%	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
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 were calculated using the effective income tax rate for the period exclusive of benefits from tax law changes recognized in 2006.	
		
(d)	 	Represents shareholders’ equity adjusted for accounting changes and tax benefits in those periods.	
		
*	 	Non-GAAP financial measure
Certain prior period amounts have been reclassified to conform to current year presentation.	
 13 

Exhibit 99.2

Second Quarter 2007 July 25, 2007 Earnings Conference Call	

 

Safe Harbor 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 sales growth initiatives in our Fleet Management Solutions 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, new accounting pronouncements, rules or interpretations, 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.	

 

Contents Second Quarter 2007 Results Overview Asset Management Update Earnings Outlook Q & A	

 

2nd Quarter Results Overview Earnings per diluted share were $1.07 versus $1.13 in 2Q06 2Q06 included an $0.11 income tax benefit Comparable earnings per diluted share were $1.07, up 5% from $1.02 in 2Q06 2Q07 included $0.01 restructuring charge related to early debt retirement Total revenue up 4% (and operating revenue up 4%) primarily as a result of contractual revenue growth in the Supply Chain and Fleet Management Solutions business segments Fleet Management Solutions (FMS) total revenue down 1% (but operating revenue up 2%) vs. prior year Fuel revenue down 8% Contractual revenue increased 7% Full service lease revenue up 6% and contract maintenance revenue up 18% Commercial rental revenue down 15% FMS net before tax earnings (NBT) up 3% FMS NBT percent of operating revenue up 10 basis points to 13.1% FMS earnings positively impacted by improved lease and contract maintenance results as well as lower pension and incentive based compensation costs, partially offset by lower commercial rental and used vehicle sales results	

 

2nd Quarter Results Overview (cont'd) Supply Chain Solutions (SCS) total revenue up 16% (and operating revenue up 13%) vs. prior year, reflecting new/expanded business SCS net before tax earnings (NBT) down 14% Comparable results flat excluding a $2.5 million benefit in 2Q06 related to a contract termination SCS NBT percent of operating revenue of 4.7%, down 150 basis points or down 60 basis points excluding 2Q06 contract termination benefit SCS earnings positively impacted by new/expanded business, offset by a significant automotive plant closure Dedicated Contract Carriage (DCC) total revenue down 2% (and operating revenue down 1%) vs. prior year due to decreased subcontracted transportation revenue and lower fuel cost pass throughs DCC net before tax earnings (NBT) up 12% DCC NBT percent of operating revenue up 110 basis points to 9.1% DCC earnings positively impacted by lower safety and insurance costs as well as improved operating performance	

 

Key Financial Statistics Second Quarter (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the business and as a measure of sales activity. Fuel services revenue net of related intersegment billings, which is directly impacted by fluctuations in market fuel prices, is excluded from the operating revenue computation as fuel is largely a pass through to customers for which the Company realizes minimal changes in profitability during periods of steady market fuel prices. Subcontracted transportation revenue is excluded from the operating revenue computation as it is largely a pass through to customers and the Company realizes minimal changes in profitability as a result of fluctuations in subcontracted transportation. (3) 2006 EPS includes $0.11 benefit from tax law changes ($ Millions, Except Per Share Amounts)	

 

Key Financial Statistics Year-to-Date (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the business and as a measure of sales activity. Fuel services revenue net of related intersegment billings, which is directly impacted by fluctuations in market fuel prices, is excluded from the operating revenue computation as fuel is largely a pass through to customers for which the Company realizes minimal changes in profitability during periods of steady market fuel prices. Subcontracted transportation revenue is excluded from the operating revenue computation as it is largely a pass through to customers and the Company realizes minimal changes in profitability as a result of fluctuations in subcontracted transportation. (3) 2006 EPS includes $0.11 benefit from tax law changes ($ Millions, Except Per Share Amounts)	

 

Business Segment Second Quarter (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Our primary measure of segment financial performance excludes restructuring and other (charges)/recoveries, net; however, the applicable portion of the restructuring and other (charges)/recoveries, net that related to each segment was as follows: FMS - ($1.2) in 2007. ($ Millions)	

 

Business Segment Year-to-Date ($ Millions) (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Our primary measure of segment financial performance excludes restructuring and other (charges)/recoveries, net; however, the applicable portion of the restructuring and other (charges)/recoveries, net that related to each segment was as follows: FMS - ($1.5) and SCS - ($0.2) in 2007; and FMS - $0.1 and SCS - $0.1 in 2006.	

 

Capital Expenditures Year-to-Date ($ Millions)	

 

Cash Flow (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment Year-to-Date ($ Millions)	

 

Debt to Equity Ratio Note: Includes impact of accumulated net pension related equity charge of $185 million as of 6/30/07, $201 million as of 12/31/06, and $221 million as of 6/30/06. (1) Non-GAAP financial measure. Total obligations include the present value of minimum lease payments and guaranteed residual values under operating leases of $196 million at 6/30/07, $78 million at 12/31/06 and $89 million at 6/30/06. (2) Represents long term total obligations to equity target of 250 - 300% while maintaining a strong investment grade rating. (1) (2) ($ Millions)	

 

Financial Indicators Forecast (1) (1) Free Cash Flow and Debt to Equity include acquisitions. Gross Capital Expenditures exclude acquisitions. (2) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (3) Includes $176 million payment to the IRS related to full resolution of 1998 - 2000 tax period matters. ($ Millions) Free Cash Flow 1054 835 949 1091 1381 1183 1255 1635 Total Cash Generated (2) 2000 2001 2002 2003 2004 2005 2007 Forecast Midpoint Significant and predictable cash generation Invest in growth Increase assets under management Increase financial leverage 2006 Total Obligations to Equity Ratio (2) Free Cash Flow Total Obligations 3450 2885 2233 1969 1944 2302 2895 2840 Equity 1253 1231 1108 1344 1510 1527 1721 1816 2000 2001 2002 2003 2004 2006 2007 Forecast Midpoint Memo: Assets Under Management 6,928 6,626 6,751 7,301 7,534 8,205 7,030 275% 201% 146% 129% 234% 151% 157% Total Obligations (2) 2005 168% 8,141 $1,760 2006 (444)	

 

Contents Second Quarter 2007 Results Overview Asset Management Update Earnings Outlook Q & A	

 

Asset Management Update Note: U.S. only The number of used vehicles sold in the second quarter was 6,499, up 22% compared with prior year Retail sales proceeds per unit for tractors and trucks were down 11% and 2%, respectively, in the second quarter compared with prior year Vehicles no longer earning revenue were 10,685 at quarter end; up 4,927 vs. prior year driven primarily by a higher used truck center inventory Units held for sale were 10,371 at quarter end Average commercial rental fleet was down 10% year-over-year	

 

Contents Second Quarter 2007 Results Overview Asset Management Update Earnings Outlook Q & A	

 

EPS Forecast (1) Non-GAAP financial measure. Excludes tax changes and pension charge in 2006. ($ Earnings Per Share) Narrowing full year 2007 earnings forecast range to $4.30 to $4.35 per share Current forecast for EPS is as follows: * Excludes any charges related to Michigan tax law change, the magnitude of which is currently being evaluated.	

 

Q & A	

 

Appendix Business Segment Detail Central Support Services Balance Sheet Asset Management Non-GAAP Financial Measures & Reconciliations	

 

Fleet Management Solutions (FMS) Second Quarter (a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the FMS business segment and as a measure of sales activity. Fuel services revenue, which is directly impacted by fluctuations in market fuel prices, is excluded from the operating revenue computation as fuel is largely a pass-through to customers for which the Company realizes minimal changes in profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by sudden increases or decreases in market fuel prices during a short period of time as customer pricing for fuel services is established based on market fuel costs. ($ Millions)	

 

Fleet Management Solutions (FMS) Year-to-Date (a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the FMS business segment and as a measure of sales activity. Fuel services revenue, which is directly impacted by fluctuations in market fuel prices, is excluded from the operating revenue computation as fuel is largely a pass-through to customers for which the Company realizes minimal changes in profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by sudden increases or decreases in market fuel prices during a short period of time as customer pricing for fuel services is established based on market fuel costs. ($ Millions)	

 

Supply Chain Solutions (SCS) Second Quarter (a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the SCS business segment and as a measure of sales activity. Subcontracted transportation is deducted from total revenue to arrive at operating revenue as subcontracted transportation is largely a pass-through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in subcontracted transportation. ($ Millions)	

 

Supply Chain Solutions (SCS) Year-to-Date (a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the SCS business segment and as a measure of sales activity. Subcontracted transportation is deducted from total revenue to arrive at operating revenue as subcontracted transportation is largely a pass-through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in subcontracted transportation. ($ Millions)	

 

Dedicated Contract Carriage (DCC) Second Quarter ($ Millions) (a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the DCC business segment and as a measure of sales activity. Subcontracted transportation is deducted from total revenue to arrive at operating revenue as subcontracted transportation is largely a pass-through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in subcontracted transportation.	

 

Dedicated Contract Carriage (DCC) Year-to-Date ($ Millions) (a) The Company uses operating revenue, a non-GAAP financial measure, to evaluate the operating performance of the DCC business segment and as a measure of sales activity. Subcontracted transportation is deducted from total revenue to arrive at operating revenue as subcontracted transportation is largely a pass-through to customers. The Company realizes minimal changes in profitability as a result of fluctuations in subcontracted transportation.	

 

Central Support Services (CSS) Second Quarter ($ Millions)	

 

Central Support Services (CSS) Year-to-Date ($ Millions)	

 

Balance Sheet ($ Millions)	

 

Redeployments Extensions Early Terminations Early Replacements 1H02 3357 2983 3284 601 1H03 2895 2444 2684 465 1H04 2977 1544 2354 577 1H05 1959 1728 2341 883 1H06 2037 1985 1952 739 1H07 2102 1800 2296 1326 Asset Management Update (a) (a) U.S. only (b) Excludes early terminations where customer purchases vehicle (b)	

 

Assets Under Management (a) ($ Millions) (a) Assets under management represent the original cost of all vehicles owned and held under lease by Ryder. (b) Excludes impact of foreign exchange movements in 2007.	

 

Non-GAAP Financial Measures This presentation includes "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 and an explanation why management believes that presentation of the non-GAAP financial measure provides useful information to investors. 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:	

 

EPS and Net Earnings Reconciliation ($ Millions or $ Earnings Per Share) * Earnings per share amounts are calculated independently for each component and may not be additive due to rounding	

 

Adjusted Return on Capital Reconciliation (1) Earnings calculated based on a 12-month rolling period. (2) Interest expense includes implied interest on off-balance sheet vehicle obligations. (3) Income taxes were calculated using the effective income tax rate for the period exclusive of benefits from tax law changes recognized in 2006 and 2005. (4) Represents shareholders' equity adjusted for discontinued operations, accounting changes and the tax benefits in those periods. (5) The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (including off-balance sheet debt) and equity should be included in evaluating how effectively capital is utilized across the business. Note: Prior year has been restated to conform with current year presentation ($ Millions)	

 

Cash Flow Reconciliation (1) The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes total cash generated provides investors with an important measure of total cash inflows generated from our on-going business activities which include sales of revenue earning equipment, sales of operating property and equipment, sale and leaseback of revenue earning equipment, collections on direct finance leases and other cash inflows. (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. (3) The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes free cash flow provides investors with an important perspective on the cash available for debt service and shareholders after making capital investments required to support ongoing business operations. The calculation of free cash flow may be different from the calculation used by other companies and therefore comparability may be limited. (4) Amounts have not been recasted to give effect for the impact of foreign exchange movements on cash for which the impact is not expected to be significant. ($ Millions)	

 

Cash Flow Reconciliation (1) The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes total cash generated provides investors with an important measure of total cash inflows generated from our on-going business activities which include sales of revenue earning equipment, sales of operating property and equipment, sale and leaseback of revenue earning equipment, collections on direct finance leases and other cash inflows. (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. (3) The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes free cash flow provides investors with an important perspective on the cash available for debt service and shareholders after making capital investments required to support ongoing business operations. The calculation of free cash flow may be different from the calculation used by other companies and therefore comparability may be limited. ($ Millions)	

 

Cash Flow Reconciliation (1) The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes total cash generated provides investors with an important measure of total cash inflows generated from our on-going business activities which include sales of revenue earning equipment, sales of operating property and equipment, sale and leaseback of revenue earning equipment, collections on direct finance leases and other cash inflows. (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. (3) The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes free cash flow provides investors with an important perspective on the cash available for debt service and shareholders after making capital investments required to support ongoing business operations. The calculation of free cash flow may be different from the calculation used by other companies and therefore comparability may be limited. ($ Millions)	

 

Debt to Equity Reconciliation ($ Millions) Note: In connection with adopting FIN 46 effective July 1, 2003, the Company consolidated the vehicle securitization trusts previously disclosed as off-balance sheet debt. (1) The Company uses total obligations and total obligations to equity, non-GAAP financial measures, which include certain off-balance sheet financial obligations relating to revenue earning equipment. Management believes these non-GAAP financial measures are useful to investors as they are more complete measures of the Company's existing financial obligations and help investors better assess the Company's overall leverage position.	

 

Debt to Equity Reconciliation (1) The Company uses total obligations and total obligations to equity, non-GAAP financial measures, which include certain off-balance sheet financial obligations relating to revenue earning equipment. Management believes these non-GAAP financial measures are useful to investors as they are more complete measures of the Company's existing financial obligations and help investors better assess the Company's overall leverage position. ($ Millions)