Ryder System Earnings 2019-09-30

R 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

Comparables ($MM TTM)
Ticker	M Cap	Assets	Liab	Rev	G Profit	Net Inc	EBITDA	EV	G Margin	EV/EBITDA	ROA
UHAL	7,375	12,475	8,606	3,109	2,948	375	1,193	6,855	95%	5.7	3%
I	2,898	12,242	16,339	2,203	0	-3,651	-3,651	16,708	0%	-4.6	-30%
R	2,886	14,522	11,914	8,842	0	318	612	9,413	0%	15.4	2%
ADC	2,873	2,304	837	165	0	66	140	3,590	0%	25.7	3%
CAR	2,643	24,455		9,085	0	286	620	5,593	0%	9.0	1%
HTZ	1,605	26,354	25,287	9,670	0	-61	3	951	0%	317.1	-0%
EHIC	1,594	10,928	6,722	0	0	0	0	5,675			0%
SP	842	1,492	1,110	1,563	209	52	109	1,192	13%	11.0	3%
HYRE	52	6	2	8	7	-8	-8	47	88%	-5.8	-137%

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2019


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 1-4364

RYDER SYSTEM, INC.

(Exact name of registrant as specified in its charter)

Florida

59-0739250

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

11690 N.W. 105th Street

Miami,

Florida

33178

(305)

500-3726

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	R	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☑

The number of shares of Ryder System, Inc. Common Stock ($0.50 par value per share) outstanding at September 30, 2019 was 53,292,045.

RYDER SYSTEM, INC.

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS



		Page No.

PART I FINANCIAL INFORMATION

ITEM 1 Financial Statements (unaudited)

	Consolidated Condensed Statements of Earnings — Three and nine months ended September 30, 2019 and 2018	1

	Consolidated Condensed Statements of Comprehensive Income — Three and nine months ended September 30, 2019 and 2018	2

	Consolidated Condensed Balance Sheets — September 30, 2019 and December 31, 2018	3

	Consolidated Condensed Statements of Cash Flows — Nine months ended September 30, 2019 and 2018	4

	Consolidated Condensed Statements of Shareholders' Equity — Three and nine months ended September 30, 2019 and 2018	5

	Notes to Consolidated Condensed Financial Statements	7

ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations			37

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk			65

ITEM 4 Controls and Procedures			65

PART II OTHER INFORMATION

ITEM 1A Risk Factors			66

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds			66







ITEM 6 Exhibits			67

SIGNATURE			68

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(unaudited)


	Three months ended September 30,					Nine months ended September 30,
	2019		2018	2019		2018
	(In thousands, except per share amounts)
Lease & related maintenance and rental revenues	$	959,189	896,788	$	2,792,581	2,580,369
Services revenue	1,120,900		1,106,107	3,412,048		3,106,575
Fuel services revenue	143,843		156,787	444,623		466,847
Total revenues	2,223,932		2,159,682	6,649,252		6,153,791

Cost of lease & related maintenance and rental	877,767		646,674	2,229,596		1,895,058
Cost of services	948,087		947,925	2,896,182		2,644,775
Cost of fuel services	140,247		153,420	431,885		455,874
Other operating expenses	28,924		30,020	92,213		93,682
Selling, general and administrative expenses	216,037		215,599	673,778		636,039
Non-operating pension costs	6,885		1,161	20,060		3,241
Used vehicle sales, net	22,734		3,203	49,091		16,193
Interest expense	62,475		47,846	178,570		128,757
Miscellaneous (income) loss, net	676		(4,483)	(29,457)		(10,633)
Restructuring and other items, net	11,360		(546)	27,374		17,349
	2,315,192		2,040,819	6,569,292		5,880,335
Earnings (loss) from continuing operations before income taxes	(91,260)		118,863	79,960		273,456
Provision for income taxes	278		27,261	50,156		98,372
Earnings (loss) from continuing operations	(91,538)		91,602	29,804		175,084
Earnings (loss) from discontinued operations, net of tax	83		(760)	(728)		(2,448)
Net earnings (loss)	$	(91,455)	90,842	$	29,076	172,636

Earnings (loss) per common share — Basic:
Continuing operations	$	(1.75)	1.74	$	0.56	3.33
Discontinued operations	—		(0.01)	(0.02)		(0.05)
Net earnings (loss)	$	(1.75)	1.73	$	0.55	3.28

Earnings (loss) per common share — Diluted:
Continuing operations	$	(1.75)	1.73	$	0.56	3.31
Discontinued operations	—		(0.01)	(0.02)		(0.05)
Net earnings (loss)	$	(1.75)	1.72	$	0.55	3.26

See accompanying notes to consolidated condensed financial statements.

Note: EPS amounts may not be additive due to rounding.

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	Three months ended September 30,					Nine months ended September 30,
	2019		2018	2019		2018
	(In thousands)

Net earnings (loss)	$	(91,455)	90,842	$	29,076	172,636

Other comprehensive income (loss):








Changes in currency translation adjustment and other	(21,812)		6,367	(13,813)		(21,866)

Amortization of pension and postretirement items	7,735		7,163	22,580		20,793


Income tax expense related to amortization of pension and postretirement items	(1,689)		(1,897)	(5,084)		(4,771)
Amortization of pension and postretirement items, net of tax	6,046		5,266	17,496		16,022

Change in net actuarial loss and prior service cost	—		—	(9,440)		(1,211)
Income tax benefit related to change in net actuarial loss and prior service cost	—		—	2,237		308
Change in net actuarial loss and prior service cost, net of taxes	—		—	(7,203)		(903)

Other comprehensive income (loss), net of taxes	(15,766)		11,633	(3,520)		(6,747)

Comprehensive income	$	(107,221)	102,475	$	25,556	165,889

See accompanying notes to consolidated condensed financial statements.

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(unaudited)


	September 30, 2019		December 31, 2018
	(In thousands, except share amounts)
Assets:
Current assets:
Cash and cash equivalents	$	75,867	68,111
Receivables, net of allowance of $19,843 and $17,182, respectively	1,274,492		1,242,058
Inventories	83,226		79,228
Prepaid expenses and other current assets	138,553		178,313
Total current assets	1,572,138		1,567,710
Revenue earning equipment, net	10,428,451		9,415,961
Operating property and equipment, net of accumulated depreciation of $1,236,227 and $1,256,037, respectively	891,689		862,054
Goodwill	474,814		475,206
Intangible assets, net of accumulated amortization of $71,298 and $65,048, respectively	52,742		59,075
Sales-type leases and other assets	1,063,010		967,802
Total assets	$	14,482,844	13,347,808

Liabilities and shareholders’ equity:
Current liabilities:
Short-term debt and current portion of long-term debt	$	940,691	937,131
Accounts payable	742,868		731,876
Accrued expenses and other current liabilities	849,293		847,739
Total current liabilities	2,532,852		2,516,746
Long-term debt	6,805,886		5,712,146
Other non-current liabilities	1,451,415		1,402,625
Deferred income taxes	1,215,704		1,179,723
Total liabilities	12,005,857		10,811,240

Shareholders’ equity:
Preferred stock, no par value per share — authorized, 3,800,917; none outstanding, September 30, 2019 and December 31, 2018	—		—
Common stock, $0.50 par value per share — authorized, 400,000,000; outstanding, September 30, 2019 — 53,292,045 and December 31, 2018 — 53,116,485	26,665		26,559
Additional paid-in capital	1,103,120		1,084,391
Retained earnings	2,262,356		2,337,252
Accumulated other comprehensive loss	(915,154)		(911,634)
Total shareholders’ equity	2,476,987		2,536,568
Total liabilities and shareholders’ equity	$	14,482,844	13,347,808

See accompanying notes to consolidated condensed financial statements.

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)


	Nine months ended September 30,
	2019		2018
	(In thousands)
Cash flows from operating activities from continuing operations:
Net earnings	$	29,076	172,636
Less: Loss from discontinued operations, net of tax	(728)		(2,448)
Earnings from continuing operations	29,804		175,084
Depreciation expense	1,342,746		1,021,984
Goodwill impairment charge	—		15,513
Used vehicle sales, net	49,091		16,193

Amortization expense and other non-cash charges, net	125,289		104,871
Non-operating pension costs and share-based compensation expense	41,737		22,072

Deferred income tax expense	32,157		105,893
Collections on sales-type leases	89,995		63,335
Changes in operating assets and liabilities:
Receivables	(17,784)		(126,848)
Inventories	(3,869)		(4,389)
Prepaid expenses and other assets	(19,439)		(104,473)
Accounts payable	(30,241)		3,754
Accrued expenses and other non-current liabilities	(50,300)		(17,429)
Net cash provided by operating activities from continuing operations	1,589,186		1,275,560

Cash flows from financing activities from continuing operations:
Net borrowings (repayments) of commercial paper and revolving credit facilities	182,708		(113,666)
Debt proceeds	2,238,622		1,467,528
Debt repaid	(1,334,044)		(471,700)
Dividends on common stock	(87,039)		(83,506)
Common stock issued	5,554		13,023
Common stock repurchased	(24,426)		(27,680)

Debt issuance costs and other items	(4,815)		(4,763)
Net cash provided by financing activities from continuing operations	976,560		779,236

Cash flows from investing activities from continuing operations:
Purchases of property and revenue earning equipment	(2,957,232)		(2,200,006)
Sales of revenue earning equipment	353,743		279,751

Sales of operating property and equipment	49,726		11,869
Acquisitions, net of cash acquired	—		(167,372)



Net cash used in investing activities from continuing operations	(2,553,763)		(2,075,758)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(3,254)		1,464
Increase (decrease) in cash, cash equivalents, and restricted cash from continuing operations	8,729		(19,498)





Decrease in cash, cash equivalents, and restricted cash from discontinued operations	(973)		(272)

Increase (decrease) in cash, cash equivalents, and restricted cash	7,756		(19,770)
Cash, cash equivalents, and restricted cash at January 1	68,111		83,022
Cash, cash equivalents, and restricted cash at September 30	$	75,867	63,252

See accompanying notes to consolidated condensed financial statements.

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited)


			Three months ended September 30, 2019


	Preferred Stock		Common Stock				Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
	Amount		Shares	Par						Total
	(In thousands, except share amounts)
Balance at July 1, 2019	$	—	53,334,512	$	26,667	1,094,807	2,385,620	(899,388)	2,607,706
Comprehensive income	—		—	—		—	(91,455)	(15,766)	(107,221)
Common stock dividends declared and paid—$0.56 per share	—		—	—		—	(29,886)	—	(29,886)
Common stock issued under employee stock option and stock purchase plans ⁽¹⁾	—		20,238	29		2,811	—	—	2,840
Benefit plan stock sales (purchases), net ⁽²⁾	—		(10)	—		(1)	—	—	(1)
Common stock repurchases	—		(62,695)	(31)		(1,252)	(1,923)	—	(3,206)
Share-based compensation	—		—	—		6,755	—	—	6,755
Balance at September 30, 2019	$	—	53,292,045	$	26,665	1,103,120	2,262,356	(915,154)	2,476,987


			Three months ended September 30, 2018


	Preferred Stock		Common Stock				Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
	Amount		Shares	Par						Total
	(In thousands, except share amounts)
Balance at July 1, 2018	$	—	53,094,736	$	26,547	1,062,561	2,201,534	(829,783)	2,460,859
Comprehensive income	—		—	—		—	90,842	11,633	102,475
Common stock dividends declared and paid—$0.54 per share	—		—	—		—	(28,663)	—	(28,663)
Common stock issued under employee stock option and stock purchase plans ⁽¹⁾	—		127,911

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$0.00	53	$2,886

10-Q	2019-10-30	Quarter: 2019-09-30
10-Q	2019-07-30	Quarter: 2019-06-30
10-Q	2019-05-09	Quarter: 2019-03-31
10-K	2019-02-21	Annual: 2018-12-31
10-Q	2018-10-26	Quarter: 2018-09-30
10-Q	2018-07-25	Quarter: 2018-06-30
10-Q	2018-05-02	Quarter: 2018-03-31
10-K	2018-02-20	Annual: 2017-12-31
10-Q	2017-10-25	Quarter: 2017-09-30
10-Q	2017-07-26	Quarter: 2017-06-30
10-Q	2017-04-25	Quarter: 2017-03-31
10-K	2017-02-14	Annual: 2016-12-31
10-Q	2016-10-25	Quarter: 2016-09-30
10-Q	2016-07-27	Quarter: 2016-06-30
10-Q	2016-04-26	Quarter: 2016-03-31
10-K	2016-02-12	Annual: 2015-12-31
10-Q	2015-10-22	Quarter: 2015-09-30
10-Q	2015-08-07	Quarter: 2015-06-30
10-Q	2015-04-22	Quarter: 2015-03-31
10-K	2015-02-13	Annual: 2014-12-31
10-Q	2014-10-22	Quarter: 2014-09-30
10-Q	2014-07-23	Quarter: 2014-06-30
10-Q	2014-04-23	Quarter: 2014-03-31
10-K	2014-02-14	Annual: 2013-12-31
10-Q	2013-10-22	Quarter: 2013-09-30
10-Q	2013-07-23	Quarter: 2013-06-30
10-Q	2013-04-23	Quarter: 2013-03-31
10-K	2013-02-14	Annual: 2012-12-31
10-Q	2012-07-24	Quarter: 2012-06-30
10-Q	2012-04-24	Quarter: 2012-03-31
10-K	2012-02-16	Annual: 2011-12-31
10-Q	2011-10-26	Quarter: 2011-09-30
10-Q	2011-07-27	Quarter: 2011-06-30
10-Q	2011-04-26	Quarter: 2011-03-31
10-K	2011-02-15	Annual: 2010-12-31
10-Q	2010-10-21	Quarter: 2010-09-30
10-Q	2010-07-23	Quarter: 2010-06-30
10-Q	2010-04-21	Quarter: 2010-03-31
10-K	2010-02-12	Annual: 2009-12-31

8-K	2019-10-29	Earnings, Regulation FD, Exhibits
8-K	2019-08-29	Officers, Regulation FD, Exhibits
8-K	2019-07-30	Earnings, Regulation FD, Exhibits
8-K	2019-05-08	Shareholder Vote, Exhibits
8-K	2019-04-30	Earnings, Regulation FD, Exhibits
8-K	2019-03-27	Officers, Regulation FD, Exhibits
8-K	2019-02-14	Earnings, Regulation FD, Exhibits
8-K	2018-10-26	Earnings, Regulation FD, Exhibits
8-K	2018-09-28	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2018-09-25	Officers, Regulation FD, Exhibits
8-K	2018-07-25	Earnings, Regulation FD, Exhibits
8-K	2018-05-09	Shareholder Vote, Exhibits
8-K	2018-04-24	Earnings, Regulation FD, Exhibits
8-K	2018-02-16	Earnings, Regulation FD, Exhibits
8-K	2018-02-09	Officers, Exhibits
8-K	2018-01-29	Earnings

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EX-31.2	ryderex312-q32019.htm
EX-32	ryderex32-q32019.htm